MBIA Inc., the holding company for municipal bond guarantor MBIA Insurance Corp., announced second-quarter net income of $217.9 million, up 50% from $142.6 million for the same period in 2002.
Net income was $441.2 million for the first six months, also up 50% from $294.9 million in the first half of 2002.
Much of the company's growth stemmed from its ramped-up activity in public finance. In the second quarter MBIA reported that its adjusted direct premiums in public finance totaled $246.0 million, about two-and-a-half times the $98.1 million recorded during the same period last year. For the first six months of this year, the firm reported $409.3 million in adjusted direct premiums, more than double the $196 million from the first half of 2002.
"The market itself is growing nicely," said MBIA chief financial officer Neil G. Budnick. He said the company's increase in public finance activity resulted from recent growth in bond issuance, as well as "increased demand for insurance in softer economic times." In the first half, issuance of long-term bonds totaled $201.2 billion, up 21% from $166.6 billion during the same last year, according to Thomson Financial.
MBIA more than tripled its public finance business outside the United States, though this represented a small slice of its overall bond activity. Non-U.S. public finance adjusted direct premiums jumped to $28.8 million in the second quarter from $6.1 million in the same period last year. The U.S. arena was much larger: second-quarter domestic public finance came to $217.2 million, more than double the $92.0 million from the second quarter of 2002.
The firm reported year-to-year declines in structured finance. "We could not get the price and terms we wanted in the mortgage-backed market," said Budnick. "The spreads on the deals are tight."
Adjusted direct premiums in that area were $122.9 million in the second quarter, down 40% from $206.4 million from the second quarter of 2002. Adjusted direct premiums in structured finance were $203.1 million in the first six months of this year, down 23% from $263.9 million in the first half of 2002.
MBIA is based in Armonk, N.Y., and is triple-A rated by Moody's Investors Service, Standard & Poor's and Fitch Ratings.
