Thank you, Chelsea, and welcome to our conference call for the full-year 2025 MBIA financial results. Excuse me.

Greg,

do you have a copy of the script?

I had it on here

and

it just went away.

You don't have it there? Do we have another copy of it?

I don't have a hard copy.

Of the script?

It's buried underneath this Outlook problem. Apologies.

After the market closed yesterday, we issued and posted several items on our websites, including our financial results, 10-K, Quarterly Operating Supplement, and statutory financial statements for both MBIA Insurance Corporation and National Public Finance Guarantee Corporation. We also posted updates to the listings of our insurance companies' insurance portfolios.

Regarding today's call, please note that anything said on the call is qualified by the information provided by the company's 10-K and other SEC filings, as our company's definitive disclosures are incorporated in those documents. We urge investors to read our 10-K, as it contains our most current disclosures about the company and its financial and operating results.

The 10-K also contains information that may not be addressed on today's call. The definitions and reconciliations of the non-GAAP terms included in our remarks today are also included in our 10-K, as well as our financial results report in our Quarterly Operating Supplement.

The recorded replay of today's call will become available approximately two hours after the end of the call. Now for our safe harbor disclosure statement.

Our remarks on today's conference call may contain forward-looking statements. Important factors, such as general market conditions and the competitive environment, could cause our actual results to differ materially from the projected results referenced in our forward-looking statements.

Risk factors are detailed in our 10-K, which is available on our website at mbia.com. The company cautions not to place undue reliance on any such forward-looking statements.

The company also undertakes no obligation to publicly correct or update any forward-looking statement if it later becomes aware that such statement is no longer accurate. For our call today, Bill Fallon and Joe Schachinger will provide introductory comments, and then a question-and-answer session will follow.

Now here is Bill Fallon.

Thanks, Greg. Good morning, everyone.

Thank you for being with us today. We had lower net losses for our full-year 2025 financial results versus full-year 2024, and comparable net losses for the fourth quarters of 2025 and 2024.

Comparing the two years' results, National recorded a benefit from losses and loss adjustment expense in 2025 versus incurred losses in 2024. For both years, National's losses and LAE resulted primarily from changes to loss estimates for its PREPA-related exposure.

The 2025 benefit largely resulted from the sale of custodial receipts associated with National's PREPA bankruptcy claims at prices better than National's loss estimates, as well as favorably revised estimates for losses on National's remaining $425 million of PREPA gross par outstanding. Our priority continues to be resolving National's PREPA exposure.

In that regard, there has not been much substantive progress since our last conference call in November. Until the legal issues related to the members of the Financial Oversight and Management Board are resolved, it is unlikely that substantive progress will be made.

Regarding the balance of National's insured portfolio, those credits have continued to perform generally consistent with our expectations. The gross par amount outstanding for National's insured portfolio has declined by approximately $3 billion from year-end 2024 to about $22 billion at the end of 2025.

National's leverage ratio of gross par to statutory capital was 24:1 at the end of 2025, down from 28:1 at year-end 2024. As of December 31st, 2025, National had total claims-paying resources of $1.4 billion and statutory capital and surplus in excess of $900 million.

Now Joe will provide additional comments about our financial results.

Thank you, Bill, and good morning, all. I will begin with a review of our fourth quarter and full-year 2025 GAAP and non-GAAP results and then provide an overview of our statutory results.

The company reported a consolidated GAAP net loss of $51 million, or a negative $1.01 per share, for the fourth quarter of 2025, compared with a consolidated GAAP net loss of also $51 million, or a negative $1.07 per share, for the fourth quarter of 2024. When comparing the fourth quarters of 2025 and 2024, there were a few offsetting items.

Lower revenues in our Corporate segment, which were primarily due to a decrease in foreign exchange gains, were offset by lower interest expense on MBIA Insurance Corp.' s floating-rate surplus notes and lower operating expenses related to consolidated variable interest entities, or VIEs, at MBIA Insurance Corp.

The company's adjusted net loss, a non-GAAP measure, was $12 million, or a negative 24 cents per share, for the fourth quarter of 2025, compared with an adjusted net loss of $22 million, or a negative 48 cents per share, for the fourth quarter of 2024. The favorable change was primarily due to lower losses and LAE at National, largely related to its PREPA exposure.

For full-year 2025, the company reported a consolidated GAAP net loss of $177 million, or a negative $3.58 per share, compared with a consolidated net loss of $447 million, or a negative $9.43 per share, for the full-year 2024. The lower consolidated GAAP net loss for full-year 2025 was driven by lower expenses and, to a lesser extent, higher revenues compared with full-year 2024.

Our lower expenses were primarily driven by a loss and LAE benefit on our PREPA exposure in 2025 compared with an expense in 2024. The benefit in 2025 primarily resulted from our sale of PREPA bankruptcy claims at an amount that exceeded National's loss recovery estimate and the impacts of adjustments to our PREPA loss scenarios.

Contributing to our higher revenues were lower losses related to VIEs at MBIA Insurance Corp. In 2024, VIE losses resulted from the repurchase of VIE debt and the deconsolidation of a VIE, with no comparable activity in 2025.

In addition, we recorded lower fair value losses in 2025 on assets acquired in connection with recoveries of paid claims related to the Zohar CDOs, offset by higher foreign exchange losses as a result of the dollar weakening, and lower net investment income. The company's adjusted net income was $23 million, or 46 cents per share, for full-year 2025, compared with an adjusted net loss of $184 million, or a negative $3.90 per share, for full-year 2024.

The favorable change was primarily due to the loss and LAE benefit at National in 2025 related to its PREPA exposure. MBIA Inc.'

s book value per share decreased $3.28 to a negative $44.27 per share as of December 31st, 2025. This decrease was primarily due to our consolidated net loss for full-year 2025.

In addition, included in MBIA Inc.' s book value as of December 31st, 2025, is a negative $53.35 per share of MBIA Insurance Corp.'

s book value. I will now spend a few minutes on our Corporate segment balance sheet.

The Corporate segment, which primarily comprises the activities of the holding company, MBIA Inc., had total assets of approximately $653 million as of December 31st, 2025. Within this total are the following material assets.

Unencumbered cash and liquid assets held by MBIA Inc. totaled $357 million, compared with $380 million as of December 31st, 2024.

The decrease was largely due to the repayment of MBIA Inc.' s 7% debt that matured in December of 2025, and the payment of operating expenses, partially offset by a dividend received from National.

In December of 2025, National declared and paid an as-of-right dividend of $63 million to MBIA Inc. In addition to these unencumbered cash and liquid assets, the Corporate segment's assets included approximately $183 million of assets at market value pledged to guaranteed investment agreement contract holders, which fully collateralize those contracts.

Now I'll turn to the insurance company's statutory results. National reported statutory net income of $5 million for the fourth quarter of 2025, compared with a statutory net loss of $10 million for the fourth quarter of 2024.

The favorable variance was driven by lower loss and LAE in the fourth quarter of 2025 related to National's PREPA exposure. For full-year 2025, National reported statutory net income of $88 million, compared with a statutory net loss of $133 million for full-year 2024.

The favorable change was primarily due to a loss and LAE benefit of $35 million in 2025, compared with an expense of $196 million in 2024. The loss and LAE activity in both years were mostly related to National's PREPA exposure.

National's statutory capital as of December 31st, 2025, was $937 million, which was up $25 million compared with December 31st, 2024. The increase was largely due to National's statutory net income for full-year 2025, partially offset by the $63 million as-of-right dividend paid to MBIA Inc.

As of year-end 2025, claims-paying resources were $1.4 billion. Now I'll turn to MBIA Insurance Corp.

MBIA Insurance Corp. reported a statutory net loss of $7 million for the fourth quarter of 2025, compared with statutory net income of $4 million for the fourth quarter of 2024.

The net loss for the fourth quarter of 2025 was driven by losses reclassified from surplus related to the dissolution of MBIA Insurance Corp.' s Mexican subsidiary, and higher losses and LAE compared with the fourth quarter of 2024.

In last year's fourth quarter, losses and LAE related to RMBS exposure were mostly offset by a benefit related to recovery estimates on the Zohar CDOs. For full-year 2025, MBIA Insurance Corp.

reported a statutory net loss of $26 million, compared with a statutory net loss of $64 million for full-year 2024. The lower net loss in 2025 was primarily driven by lower losses and LAE, largely related to estimating recoveries of paid claims associated with the Zohar CDOs.

As of December 31st, 2025, the statutory capital of MBIA Insurance Corp. was $79 million, down from $88 million at year-end 2024, due to its net loss for full-year 2025, partially offset by an increase in the value of investments recorded directly to surplus.

As of year-end 2025, claims-paying resources totaled $317 million. MBIA Insurance Corp.'

s insured gross par outstanding was approximately $2 billion as of December 31st, 2025, down about 13% from year-end 2024. The decrease in gross par outstanding was primarily driven by regular amortization of the insured portfolio.

Now we will turn the call over to the operator to begin the question-and-answer session.

Hey, good morning. The fourth quarter often presents a time or opportunity for a special dividend, and that's based off of the special dividend that we saw out of National in the fourth quarter of 2023.

This most recent fourth quarter, did you guys explore the potential for a special dividend, or are you having conversations with your regulators about potentially distributing some of the excess capital beyond just the as-of-right dividend?

Tommy. With regard to special dividends, first of all, there's nothing in particular about the fourth quarter.

National, just given its history, has only actually requested and had one special dividend, which happened to be in the fourth quarter of 2023 a couple of years ago. It's something that we are looking at all the time.

As you know and can appreciate, as the portfolio runs off, and in particular as our PREPA exposure comes down, which it did substantially in the second half of last year, the likelihood and the amount of a potential special dividend goes up. It's something that we're looking at all the time.

There's no information we have at this point. The information that we would provide is that we have received approval for a special dividend and have distributed to the holding company.

It's something that again we're looking at all the time, and I think since the last special dividend, circumstances have improved in terms of the likelihood of a special dividend.

Thanks for that. The other important story that people are focused on just around the strategic process potentially including a sale of the company, what's the latest updates there in that process as you explore that opportunity?

I've asked this before and I'll ask it again, do you think in a scenario where there is a sale, does the company just sell National and then take the proceeds and sort of wind down the rest of the operation, or would the strategic action be to sell the entire holding company and its subsidiaries included? Thanks.

As and just as a reminder to other people, we did look at selling the company a few years ago. Based on the feedback during that process, we concluded that it would be beneficial for our shareholders for us to go get a special dividend and then distribute money to the shareholders, and also to hopefully further resolve or make progress with regard to the PREPA restructuring.

We obviously were successful with the dividend. PREPA, we reduced our exposure.

I can't say that there's been much real progress in terms of resolving PREPA. We are optimistic that something will [coughs] excuse me, develop this year.

With regard to whether to sell the entire company or whether we would sell just National and then, to your point, deal with all the other pieces, whatever is best for the shareholders is what we will do. In a sense, all options are on the table.

A sale of the company, in a sense, is the cleanest way to do it. Again, if there is more value for shareholders by doing it by its components, then that's what we'll do.

Thanks.

Thank you. Bill, I have a couple of quick questions.

With regard to PREPA and the bonds that you sold, is there a bid out there to sell the rest of your exposure, and if so, how would it compare to the price you got the last time? Yeah.

With regard to the PREPA exposure that we sold last year, John, those were fully paid CUSIPs. We are now in a situation where we really don't have much left.

In fact, we've got a maturity coming up later this year.

Oh, you're still paying? Okay.

Yeah. We have the $425 million of exposure.

That's not something that can be sold via the custodial receipts that we did last year. The answer is we wouldn't do a sale like that

in the near [unclear] for that full amount. I understand.

Secondly, with some of the political trends that are happening, particularly New York, California, all the nonsense up in Minnesota, are you getting any pressure from your auditors of higher valuation reserves related to non-Puerto Rican credits?

The short answer is no. As you can appreciate, we look at everything in the portfolio constantly.

We're quite comfortable with the way everything is proceeding at this point, and there's been nothing that's been identified, I understand what you're talking about, but nothing identified with regard to specific credits that would cause us to take additional reserves because of those activities that you refer to.

All right. With regard to MBIA Insurance, where its statutory capital is dwarfed by its guarantees that are still out there, whatever, it was $2 billion or something like that, what has to happen for you to wrap that up so that's no longer a part of you have Puerto Rico, you have that subsidiary in which there's no liability back to MBIA Inc.

Why don't you just get rid of it, wrap it, liquidate it, or whatever you have to do, or is it regulators? Regulators won't let you do that?

There's some of both of those things. The runoff has occurred sort of as we expected.

To your point, there's $2 billion left. There is one major restructuring in there, which is referred to as Zohar, which was a deal that we had wrapped.

That's one that's going to take a little bit of time. Once that's resolved, then to your point, there's not much left with regard to the remaining runoff of that company, and so there may be ways after that to accelerate the runoff of MBIA Insurance Corp.

You're still managing a recovery process related to collateral with Zohar?

That's correct.

Oh, I got it. Okay.

I know that the Judge Swain, as I understand it, is pushing for the private parties to resolve things. I thought Trump may have done something with the Republican governor there, but what the hell is keeping this thing from being wrapped up?

Puerto Rico is still being denied access to the municipal market and electricity is still going off. It just seems so crazy.

They're sitting there with all that money down there. I don't understand what's stopping them.

Is it just politics?

I think in the near term, as I referred to in my comments, you've got the situation with the oversight board, which is the one negotiating the PREPA restructuring on behalf of the Commonwealth. There are four board members, as you know.

There was the administration action last year to remove six of the board members. Three took it to court and were reinstated.

Either the four existing board members need to in a sense take the initiative and start negotiating again with the bondholders, or when the administration names people to those open three spots, perhaps then that will be the catalyst to restarting negotiations. That's really I think what the creditors are waiting for, and as soon as that happens, I think then you'll see some real progress.

Is there political pressure that you're aware of to get those six seats filled? Is there somebody who's an advocate for that in Congress?

There's two parts to it. With regard to the three that challenged their termination in court, there are lawsuits going on to remove those three still.

I think the administration is taking the position that they should be removed, and therefore those three spots perhaps are a little uncertain for a period of time. With regard to the other three spots, I don't have an answer for you as to when the administration will fill those.

Again, we would hope it would be sooner rather than later.

Okay. All right.

Then the issue gets down again to presidential authority.

The president needs to approve all appointments to the board.

He also took part of them, and so somehow or other some guys figured out that they still should be on the board. It's amazing to me.

It must be driving you nuts.

We understand your frustration, trust me.

Okay. Thank you, Bill, very much.

Thank you.

Good morning.

Good morning.

Just a question on the extraordinary dividend, because it's been seven months since the custodial receipts were sold and kind of de-risked the whole PREPA exposure. I'm just curious, what is the gating item to actually trying to get one, given that you've said the circumstances have improved and all of it, and you're looking at it, but what is going to take you from looking at it to acting on it, especially with other progress somewhat stalled on PREPA?

Thank you.

As I mentioned, with regard to a special dividend, it's something we're looking at all the time. We don't get into where we are in the process, whether we've started a process, feedback from the regulator.

Our view is those are discussions between us and our regulator. We talk to our regulator about lots of issues on a regular basis.

When we have approval for a special dividend and when it's been distributed, as I mentioned earlier, we'll announce that that has taken place. Again, I think the things to look at are the runoff in the portfolio and, in particular, the reduction in the PREPA exposure.

Again, for those people who are familiar, it is a process you go through with the regulator, which does take some time.

I think he dropped.

Oh, yeah. No.

Thank you.

Thank you, Chelsea. Thanks to those listening to our call today.

Please contact us directly if you have any additional questions. We also recommend that you visit our website at mbia.com for additional information about our company.

Thank you for your interest in MBIA. Good day, and goodbye.