Market Overview

Syncora Holdings Ltd. Announces First Quarter 2017 Interim GAAP Consolidated Financial Results

Share:

HAMILTON, Bermuda, June 21, 2017 (GLOBE NEWSWIRE) -- Syncora Holdings Ltd. ("SHL" or the "Company"), a Bermuda holding company whose subsidiaries primarily provide financial guarantee insurance and reinsurance, today reported financial results for the three months ended March 31, 2017.

                     
  Syncora Holdings Ltd.  
  Summary Results of Consolidated Operations  
  Three Months Ended March 31, 2017 and 2016  
  (U.S. dollars in millions, except per share amounts)  
     2017     2016   
   
  Net premiums earned   $   15.6     $   16.6    
  Net investment income       11.7         10.5    
  Net realized losses on investments       (14.9 )       (3.0 )  
  Net loss on insurance cash flow certificates       (6.3 )       (13.0 )  
  Net earnings (loss) on credit default and other swap contracts       13.5         (31.6 )  
  Net losses and loss adjustment expenses       16.8         35.1    
  Operating expenses       16.7         20.9    
  Net loss attributable to controlling interest   $   (30.8 )   $   (85.7 )  
  GAAP basic and diluted loss per common share   $   (0.36 )   $   (1.52 )  
             
  Non-GAAP operating loss (1)   $   (19.1 )   $   (43.4 )  
  Non-GAAP basic and diluted operating loss per common share (1)   $   (0.22 )   $   (0.77 )  
  Weighted average common shares outstanding       86.6         56.3    
             
       As of     As of   
      March 31, 2017   December 31, 2016  
             
  Adjusted Book Value (1)   $   465.1     $   484.1    
  Common shares outstanding at end of period       86.8         86.6    
  Adjusted Book Value per common share (1)   $   5.36     $   5.59    
             
           
  (1) Non-GAAP operating loss and adjusted book value are non-GAAP financial measures that exclude (or include) amounts that are included in (or excluded from) total Syncora Holdings Ltd. net loss and common shareholders' equity, respectively, which are presented in accordance with GAAP. See below for reconciliations between GAAP and Non-GAAP financial measures.  
                             

First Quarter Results

Consolidated Statements of Operations

Net premiums earned were $15.6 million for the three months ended March 31, 2017, as compared to $16.6 million for the three months ended March 31, 2016.  The decrease was due to the continued run-off of our book of business driven mainly by premium accelerations from refundings and remediation activities. Total premium accelerations were $8.1 million for the three months ended March 31, 2017, as compared to $6.2 million for the three months ended March 31, 2016.

Net realized losses on investments increased by $11.9 million to $14.9 million for the three months ended March 31, 2017 from $3.0 million for the three months ended March 31, 2016. The increase was due to other-than-temporary impairment charges related to foreign currency exchange losses on certain Euro-denominated remediation bonds.

Net loss on insurance cash flow certificates was $6.3 million for the three months ended March 31, 2017, as compared to $13.0 million for the three months ended March 31, 2016.  As this represents future cash flow receipts from certain insurance claim payments the Company anticipates making on policies that have been remediated, the decrease was primarily driven by lower positive RMBS development.

Net earnings (loss) on credit default and other swap contracts was $13.5 million for the three months ended March 31, 2017, as compared to $(31.6) million for the three months ended March 31, 2016.  The increase was primarily due to non-performance risk and yield curve spread widening.

Net losses and loss adjustment expenses were $16.8 million for the three months ended March 31, 2017, as compared to $35.1 million for the three months ended March 31, 2016.  The decrease was primarily due to lower net incurred losses on our Puerto Rico General Obligation exposures, partially offset by continued positive reserve developments on our RMBS exposures.   

Operating expenses were $16.7 million for the three months ended March 31, 2017, as compared to $20.9 million for the three months ended March 31, 2016.  The decrease was primarily due to cost savings associated with headcount reductions.

Consolidated Balance Sheets

Total assets decreased by $26.4 million from $2,394.4 million as of December 31, 2016 to $2,368.0 million as of March 31, 2017 primarily due to lower receivables on insurance cash flow certificates as a result of positive RMBS developments and lower deferred acquisitions costs and premiums receivable as a result of the continued run-off of our book of business.  

Total liabilities decreased by $14.6 million from $1,853.2 million as of December 31, 2016 to $1,838.6 million as of March 31, 2017.  The decrease primarily resulted from lower unearned premium revenue from the continued run-off of our insured portfolio and lower credit default and other swap contract liabilities due to non-performance risk and yield curve spread widening. These decreases were partially offset by higher net losses on Puerto Rico-related exposures and the continued accretion of Syncora Guarantee Inc.'s surplus notes.

 
Syncora Holdings Ltd.  
Consolidated Statements of Operations (Unaudited)  
Three Months Ended March 31, 2017 and 2016  
(U.S. dollars in thousands)  
  2017   2016  
Revenues
               
  Net premiums earned $ 15,588     $ 16,643    
  Net investment income   11,660       10,530    
  Net realized losses on investments   (14,937 )     (2,973 )  
    Net loss on insurance cash flow certificates   (6,332 )     (12,970 )  
  Toll revenue   6,381       5,949    
  Fees and other income   2,161       1,809    
  Net earnings (loss) on credit default and other swap contracts   13,471       (31,631 )  
  Net change in fair value of consolidated variable interest entities    
View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com