MBIA Inc. (NYSE:MBI) posted a consolidated GAAP net loss of $267 million for Q3 2017 versus consolidated GAAP net income of $31 million, for Q3 2016. Bill Fallon, the Chief Executive Officer, expressed that the damage caused to infrastructure of Puerto Rico by Hurricane Maria will need significant effort and time to remediate and repair, which led them to withdraw two of their adversary complaints and further hike their Puerto Rico loss reserves.
The eventual resolution of Puerto Rico credits will be based mainly on the island’s economic activity over the several years to come. In the meanwhile, they consider that lower MBIA stock prices offers the firm with a prospect to further enhance value to company shareholders through their share repurchase activities.
MBIA reported that book value per share came at $13.88 as of the close of September 30, 2017 versus $23.87 as of the close of December 31, 2016. The decline in book value a share since year-end 2016 was primarily due to the full valuation allowance on the firm’s deferred tax asset that was set in the Q2 2017 and additional loss adjustment expense reserves and loss, partially offset by the decline of shares outstanding leading from the repurchase of 11.7 million common shares of MBIA during the initial nine months of 2017.
Following the quarter-end, MBIA exhausted its share repurchase authorization worth $250 million that was permitted in June 2017 by acquiring, via its subsidiary, National, an additional common shares amounting to 31.3 million at an average price of $7.17 a share.
MBIA also posted a Combined Operating Loss of $113 million for Q3 2017 as against Combined Operating Income of $5 million for the Q3 2016. The negative outcome for Q3 2017 was mainly due to increased loss adjustment expenses and losses at National, mainly due to its Puerto Rico exposures.