Ambac Financial reports Q4 adjusted EPS $4.18 vs. (16c) last year

Ambac Financial reported net income attributable to common stockholders of $175M or $3.86 per diluted share and adjusted earnings of $190M or $4.18 per diluted share for the quarter, which compares to a net loss attributable to common stockholders of $22M or 42c per diluted share and an adjusted loss of $10M or (16c) per diluted share in the fourth quarter of 2021. Book value per share increased $5.42 to $27.85 and adjusted book value per share increased $5.16 to $28.29 from September 30, 2022, to December 31, 2022. For the quarter ended December 31, 2022, a $78 million net gain [$126 million litigation recovery plus a $5 million gain on Sitka notes owned in the investment portfolio less $53 million of debt call premium and accelerated unamortized discount] was recorded related to the previously announced $1.84B RMBS representation and warranty litigation settlement with Bank of America. In addition, on December 29, 2022, Ambac agreed to a $140M RMBS representation and warranty litigation settlement with Nomura resulting in an additional fourth quarter 2022 gain of $43M. The Nomura settlement proceeds along with $6M of cash on hand was used to repay the remaining outstanding balance of the Tier 2 Notes effective January 15, 2023. Claude LeBlanc, President and CEO, stated, "Ambac ended 2022 in a substantially improved financial and strategic position relative to the start of the year. During the fourth quarter we took additional steps and materially improved our financial position with the settlement of our last remaining legacy RMBS litigations for approximately $2 billion. We also resolved HTA, our final remaining Puerto Rico exposure, and significantly reduced our financial leverage by redeeming and repurchasing $1.8 billion of debt and accrued interest. These accomplishments helped deliver a 24% growth in our book value in the quarter."