Enhanced benefits in PREPA benefit: MBIA’s 2025 GAAP net loss decreased to $177 million ($3.58/sh) from $447 million in 2024 and adjusted results turned to a profit of $23 million, driven mainly by LAE’s national profit after the sale of the storage receipt and the favorable PREPA review.
The value of the book remains deeply negative: MBIA’s book value per share decreased negative $44.27 at the end of the year 2025, MBIA Insurance Corp. gives negative $53.35highlighting continued financial difficulties despite improved operating results.
PREPA is the key to unaddressed risk: The National is still holding on $425 million of PREPA’s total amount remaining and management expects limited near-term progress due to regulatory issues, as the insured portfolio continues (total down to ~$22 billion) and national statutory funds (~$937 million) offer little flexibility in benefits or strategic options.
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MBIA (NYSE:MBI) reported a lower net loss for the full year of 2025 compared to 2024, as management pointed to a positive change in loss and loss expense (LAE) related largely to exposure to the National Public Finance Guarantee Corporation’s Puerto Rico Electric Power Authority (PREPA). Fourth-quarter results were compared to the prior period on a GAAP basis, according to management on the company’s year-end earnings call.
CEO Bill Fallon said MBIA posted “a much smaller loss” in 2025 compared to 2024, and the fourth quarter of 2025 and 2024 were “comparable.” The key driver was the National LAE line, where 2025 included a profit compared to the loss obtained in 2024.
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Fallon said National’s LAE in both years “primarily resulted in changes in loss estimates due to its PREPA-related exposure.” He pointed out that the 2025 gain was largely offset by the sale of a custodial receipt associated with National’s PREPA bankruptcy claims at “better than National’s loss estimates,” and “well-revised” loss estimates on National’s remaining PREPA exposure.
CFO Joe Schinger provided a GAAP comparison:
Fourth quarter 2025 GAAP loss: $51 million, or $(1.01) per share, compared to a loss of $51 million, or $(1.07) per share, in the fourth quarter of 2024.
Net loss for the year 2025 GAAP: $177 million, or $(3.58) per share, compared to a loss of $447 million, or $(9.43) per share, in 2024.
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Schicher said the lower GAAP net loss for the full year was due to lower expenses and, to a lesser extent, higher revenue. He calculated the profit related to LAE’s PREPA in 2025 compared to the cost in 2024, and said that the profit in 2025 reflects the sale of PREPA applications above the company’s average loss recovery and the adjustment of PREPA loss conditions.
On a GAAP basis, MBIA’s adjusted results improved year over year. Schichinger said the adjusted net loss for the fourth quarter of 2025 was $12 million, or $(0.24) per share, compared to an adjusted loss of $22 million, or $(0.48) per share, a year ago. He attributed this improvement to the reduction of the national LAE associated with PREPA.
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For the full year 2025, MBIA reported adjusted net income of $23 million, or $0.46 per share, compared to an adjusted loss of $184 million, or $(3.90) per share, in 2024. Schicher also highlighted LAE’s 2025 National PREPA-related benefit as a key driver.
Schicher also said that MBIA’s book value per share will decline by $3.28 by 2025 to negative $44.27 from Dec. 31, 2025, primarily due to a net loss for the year. He added that the book value of MBIA Insurance Corp. contribute negative $53.35 per share to the book value of MBIA Inc. at the end of the year.
Fallon said resolving the National PREPA disclosure remains a priority for the company, but noted “substantial progress” since the company’s November call. He said the administration does not expect tangible progress until legal issues involving members of the Financial Supervisory and Financial Management Board are resolved.
Aside from PREPA, Fallon said the rest of National’s insured portfolio performed “generally in line with our expectations.” He also said that the National insurance portfolio continues to work:
Total nationally insured amount remaining: decrease by about $3 billion from the end of 2024 to about $22 billion by the end of 2025.
National average: A total of 24 to 1 official currency by the end of 2025, down from 28 to 1 by the end of 2024.
National claims settlement services: $1.4 billion as of Dec. 31, 2025.
Official national currency surplus: over $900 million as of Dec. 31, 2025.
In the Q&A, Fallon clarified that National still had $425 million of PREPA gross par outstanding, but said the remaining exposure could not be sold using the same receipt method used previously because the previous sale involved “fully paid” securities. He also said that maturity will come later in 2026.
Schicher said MBIA’s business unit—mainly the holding company—had assets of $653 million as of Dec. 31, 2025, including $357 million in cash and liquid assets, down from $380 million a year earlier. He said this decrease was mainly due to the payment of MBIA Inc.’s debt. of 7% maturing in December 2025 and operating expenses, which were partially paid for by National’s earnings.
Schinger said National announced and paid a $63 million as-of-right dividend to MBIA Inc. in December 2025. He also noted the business segment holding approximately $183 million of pledged assets at market value that support holders of guaranteed investment contracts.
Regarding official reporting, Schinger said:
Official national income: $5 million in Q4 2025 versus a loss of $10 million in Q4 2024; $88 million in the full year of 2025 compared to a loss of $133 million in 2024.
Official national currency: $937 million in Dec. 31, 2025, increased by $25 million year over year, with the increase driven by net statutory income and partially offset by $63 million in profits.
At MBIA Insurance Corp., Schichinger said official results were worse for the quarter but improved for the full year:
Legal losses of MBIA Insurance Corp.: $7 million in Q4 2025 compared to $4 million of net statutory income in Q4 2024, driven by a reclassified loss from the surplus related to the liquidation of its Mexican subsidiary and higher LAE.
Statutory net annual loss: $26 million in 2025 compared to a loss of $64 million in 2024, reflecting a lower LAE that is largely related to measuring the recovery of claims related to Zohar’s CDOs.
Legal capital: $79 million by the end of 2025 vs. $88 million by the end of 2024.
Services that pay claims: $317 million by the end of the year 2025.
The total sum insured is equal to the premium: nearly $2 billion in Dec. 31, 2025, down about 13% from year-end 2024 due to depreciation.
Analysts have questioned the possibility of additional cash returns, including a special dividend from National. Fallon said National has only requested and received one special dividend historically, which occurred in the fourth quarter of 2023, and emphasized that the timing is not tied to any particular quarter. He said the company is evaluating the possibility “all the time,” and added that as the portfolio is depleted and PREPA’s exposure is reduced, “the opportunity and the amount of potential special interest increases.” However, management did not provide a timeline, saying they will declare the special dividend only after it is approved and distributed by law.
Fallon also answered questions about a possible sale of the company. He said MBIA explored selling the company “a few years ago,” and concluded that it would be beneficial to pursue a special dividend and make progress on PREPA. Looking ahead, he said “all options are on the table,” including selling the entire company or selling parts like National, depending on what’s best for shareholders.
MBIA Inc is a financial insurance company specializing in credit enhancement and risk mitigation solutions for public finance and structured finance activities. The company provides guarantee insurance for municipal bonds, asset-backed securities and other debt-sensitive obligations, to protect investors against the risk of default. Through its primary insurance company, MBIA Insurance Corp., the company provides financial guarantees, reinsurance support and customized credit solutions designed to improve the marketability and pricing of credit instruments.
Founded in 1973 as the Municipal Bond Insurance Association, MBIA built its reputation by insuring the US.
The article “MBIA Q4 Earnings Call Highlights” was first published by MarketBeat.
