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Assured Guaranty sees higher Q2 operating income YOY

Assured Guaranty Ltd. has reported second-quarter operating income of $141 million, or $1.16 per share, an increase from $136 million, or $1.01 per share, in the year-ago period.

Net income totaled $153 million, or $1.24 per share, compared with $146 million, or $1.09 per share, in the second quarter of 2016. The year-over-year increase was mostly the result of lower loss and loss adjustment expenses, a lower effective tax rate and changes in the fair value of committed capital securities and financial guaranty variable interest entities, partly offset by changes in the fair value of credit derivatives and lower net earned premiums from accelerations.

Net earned premiums were $162 million, down from $214 million in the year-ago period. Economic loss development in the quarter was a loss of $47 million, due mostly to Puerto Rico exposures and a drop in discount rates, partly offset by a $29 million benefit in U.S. residential mortgage-backed securities mainly attributable to lower redefault assumptions on modified loans. The economic loss development attributable to the drop in discount rates was a loss of $23 million for the second quarter.

Non-GAAP adjusted book value per share was $73.48 as of June 30, compared with $66.46 as of Dec. 31, 2016.