Assured Guaranty back in the driving seat with solid first quarter

Assured Guaranty heralds a solid first quarter, with new business and a rating upgrade from S&P cementing a strong start to 2014.

The company reported first quarter 2014 operating income of $132 million compared with $260 million for the first quarter of 2013. Operating income was higher in Q1 2013 because that quarter included: a $71 million benefit from a settlement with one of Assured Guaranty’s largest R&W providers; higher net earned premiums arising from refundings and terminations; and higher scheduled net earned premiums and credit derivative revenues due to a larger insured structured finance portfolio.

First quarter 2014 net income was $42 million, compared with first quarter 2013 net loss of $144 million. The main driver of the increase was lower non-economic net unrealized fair value losses on credit derivatives.

“We've begun the year with a solid first quarter, reaching a new high in operating shareholders' equity per share and increasing our new business production," says Dominic Frederico, president and CEO. "Importantly, in March, S&P raised the financial strength ratings of our operating subsidiaries to AA with a stable outlook – an acknowledgment of our financial strength, the improvement in our risk profile, the fundamental market acceptance of our guarantees and our strong competitive position.

Frederico continues, “In addition, we resumed repurchasing our shares, a critical component of our capital management. It is our intent to fully utilize the remaining capacity under our current share repurchase authorization by September 30th of this year and, at that time, to request further authorization from our board of directors. As in the past, our capital management execution is contingent on our available free cash and capital position, the maintenance of our strong financial strength ratings, and other factors."