Assured Guaranty Ltd., the largest municipal bond insurer, reported gains in second-quarter profit, boosted by share repurchases and lower reserve additions for Puerto Rico losses.

Net income rose to $153 million, or $1.24 a share, in the second quarter, from $146 million, or $1.09 a share a year earlier, according to a Wednesday press release. Repurchases totaled $135 million or 3.5 million shares in the second quarter alone

Operating income reported on an non-generally accepted accounting principle basis climbed to $141 million or $1.16 a share, for the quarter, from $136 million, or $1.01 a share.

The insurer said the increase was primarily attributable to lower loss and loss adjustment expenses, a lower effective tax rate and changes in fair value of committed capital securities and financial guaranty variable Interest entities, offset in part by changes in fair value of credit derivatives and lower net earned premiums from accelerations.

Dominic Frederico, president and CEO of Assured Guaranty.
Dominic Frederico

“The second quarter of 2017 was highly successful for Assured Guaranty,” said Dominic Frederico, president and CEO of Assured. “We saw an increase in our financial strength, as well as in net income and operating income, versus last year’s second quarter. With the additional benefit of our share repurchase program over the last year, net income and operating income per share grew 14% and 15%, respectively. Additionally, our [present value of new business production] increased 71% for the quarter and 114% for the half, while we widened our lead in the U.S. public finance primary market to 62% of par insured and continued our success in writing new business in international infrastructure and structured finance.”

Assured’s Loss and loss adjustment expense was $72 million in second quarter 2017, compared with $102 million in second quarter 2016, with the decrease mainly due to lower reserve additions on Puerto Rico exposures.

Assured said it set new records for shareholders' equity per share, non-GAAP operating shareholders' equity per share and non-GAAP adjusted book value per share at $56.40, $54.34 and $73.48, respectively.

Repurchases totaled $135 million or 3.5 million shares in the second quarter alone.

Other highlights from the first quarter include a reported $79 million in gross written premiums and present value of new business production for the second quarter of 2017 was $70 million, representing increases of 119% and 71%, respectively over the quarter.

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