Ambac FinancialGroup Inc. reported first-quarter net income attributable to commonshareholders of $9.4 million, or 21 cents per share, compared with $387.0 million,or $8.56 per share, in the fourth quarter of 2015.
Operating earnings were $218.1 million, or $4.82 per share, versus$481.0 million, or $10.64 per share, in the prior quarter.
In a May 10 earnings release, the company said the sequentialdecline in operating earnings and net income in the first quarter was mainly dueto lower accelerated premiums and a lower benefit in RMBS loss and loss expensesincurred. The lower RMBS benefit was due to the positive impact in the fourth quarterof 2015 from the $995 million RMBS settlement with JP Morgan.
Results for the quarter saw a positive impact from a $108.7 millionRMBS incurred benefit and a $77.4 million student loan incurred benefit mainly drivenby the commutation of $387 million of student loan distressed net par. The RMBSand student loan incurred benefits were also favorably impacted by lower interestrates. Partially offsetting the favorable RMBS and student loan results were incurredlosses in the public finance portfolio mainly driven by additional Puerto Rico reserves.
First-quarter operating earnings also saw a positive impact fromthe cancellation of $354 million net par of Local Insight Media bonds during thequarter and the expected cancellation of an additional $105 million net par of thebonds that were canceled in April. Of these bonds, $198 million net par were acquiredin the first quarter. Local Insight Media is an asset-backed transaction whose bondsare issued by a consolidated variable interest entity.
Other-than-temporary impairment losses for the quarter were $9.3million, compared with $12.4 million in the fourth quarter of 2015. Total net premiumsearned were $52.8 million, versus $114.5 million in the fourth quarter of 2015.
Net investment income for the quarter totaled $60.8 million,compared with $64.4 million in the previous quarter. Loss and loss expenses forthe first quarter were a benefit of $105.3 million, compared with a benefit of $337.1million for the fourth quarter of 2015.