Posted on 19 May 2010
Ambac Financial Group, Inc. today announced first quarter 2010 net loss of $690.1 million, or net loss of $2.39 per share. This compares to a first quarter 2009 net loss of $392.2 million, or net loss of $1.36 per share.
The first quarter 2010 results reflect a loss reported as a result of a new consolidations accounting standard. In 2009, Ambac's first quarter results reflected a large positive change in fair value of credit derivatives offset by loss and loss adjustment expenses primarily related to residential mortgage-backed securities (RMBS) exposure, other than temporary impairment write downs of RMBS securities in the investment portfolios and a $600 million increase in the deferred tax asset valuation allowance.
First Quarter 2010 Summary
* Recorded a $495.1 million loss related to the new consolidations accounting standard as described under "Implementation of New Accounting Standards," below. The loss is considered to be non-recurring as it results from the deconsolidation of a number of variable interest entities. Excluding the effect of this non-recurring item, Ambac would have reported a net loss of $195.0 million, or net loss of $0.68 per share.
* Net change in fair value of credit derivatives was negative $167.1 million.
* Net loss and loss expenses incurred amounted to $89.2 million for the current quarter, down considerably from the first quarter of 2009.
* Statutory surplus of Ambac Assurance Corporation ("AAC") was reduced to approximately $160 million at March 31, 2010 from $801.9 million at December 31, 2009.