Q1 2024 Assured Guaranty Ltd Earnings Call
Operator: Good morning, and welcome to the Assured Guaranty Limited first quarter 2024 earnings conference call. My name is Carla, and I will be your operator for today's call. All participants will be in listening only mode.
Good morning, and welcome to the assured Guaranty limited first quarter 2024 earnings Conference call. My name is Carla and now will be operator for today's call. All participants will be in listen only mode should you need assistance. Please signal a conference specialist by pressing.
Operator: Should you need assistance, please signal a conference specialist by pressing star and then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. To withdraw your question, please press star, then 2. Please note that today's event is being recorded. I would now like to turn the conference call over to you. To your host, Robert Tucker, Senior Managing Director, Investor Relations and Corporate Communication, please go ahead.
And then zero on your telephone keypad. After today's presentation, we will be.
There will be a opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to betray. Your question. Please press Star then two please note that today's event is being recorded I would now like to turn the conference call over.
To your host Robert Tucker Senior managing director Investor Relations and corporate Communications. Please go ahead.
Robert S. Tucker: Thank you, Operator, and thank you all for joining Assured Guarantee for our first quarter 2024 Financial Results Conference Call. Today's presentation is made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The presentation may contain forward-looking statements about our new business and credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, financial results, or other items that may affect our future results. These statements are subject to change due to new information or future events. Therefore, you should not place undue reliance on them, as we do not undertake any obligation to publicly update or revise them, except as required by law.
Robert S. Tucker: Thank you operator, and thank you all for joining assured guaranty for our first quarter 2024 financial results Conference call. Today's presentation is made pursuant to the safe Harbor provisions of the private Securities Litigation Reform Act of 1095.
Robert S. Tucker: The presentation may contain forward looking statements.
Robert S. Tucker: About our new business and credit outlooks market conditions credit spreads financial ratings loss reserves financial results or other items that may affect our future results. These statements are subject to change due to new information or future events. Therefore, you should not place undue reliance on them as we do not undertake.
Robert S. Tucker: Any obligation to publicly update or revise them.
As required by law. If you were listening to a replay of this call or if you're reading the transcript of the call. Please note that our statements made today may have been updated since this call.
Robert S. Tucker: If you are listening to a replay of this call, or if you are reading the transcript of the call, please note that our statements made today may have been updated since this call; please refer to the investor information section of our website for our most recent presentations and SEC filings, our most current financial filings, and for the risk factors. This presentation also includes references to non-GAAP financial measures. We present the GAAP financial measures most directly comparable to the non-GAAP financial measures referenced in this presentation along with a reconciliation between such GAAP and non-GAAP financial measures in our current financial supplement and equity investor presentation, which are on our website at assuredguarantee.com.
Robert S. Tucker: Please refer to the Investor information section of our website for our most recent presentations and SEC filings, most current financial filings and for the risk factors.
Robert S. Tucker: This presentation also includes references to non-GAAP financial measures, we present, the GAAP financial measures most directly comparable to the non-GAAP financial measures referenced in this presentation.
Robert S. Tucker: Along with a reconciliation between such GAAP and non-GAAP financial measures and our current financial supplement and equity Investor presentation, which are on our website at assured guaranty Dot com.
Robert S. Tucker: Turning to the presentation, our speakers today are Dominic Frederico, President and Chief Executive Officer of Assured Guaranty Ltd., Rob Bailenson, our Chief Operating Officer, and Ben Rosenblum, our Chief Financial Officer. After their remarks, we will open the call to your questions. As the webcast is not enabled for Q&A, please dial into the call if you'd like to ask a question. I will now turn the call over to Dominic.
Robert S. Tucker: Turning to the presentation. Our speakers today are Dominic Frederico, President and Chief Executive Officer of assured Guaranty Limited, Rob Bailenson, our Chief operating officer, and Ben Rosenbloom, Our Chief Financial Officer. After their remarks, we will open the call to your questions as the webcast is.
Robert S. Tucker: Not enabled for Q&A, please dial into the call if you'd like to ask a question I will now turn the call over to Dominic.
Dominic John Frederico: Thank you, Robert, and welcome to everyone joining today's call. I wanted to begin with a little history.
Dominic John Frederico: Thank you Robert and welcome to everyone joining today's call towards it again with a little history last month, we celebrated the 20 <unk> anniversary of our IPO since that time through the end of the first quarter of 2024, we produced cumulative net adjusted operating income of almost $9 billion.
Dominic John Frederico: Last month, we celebrated the 20th anniversary of our IPO. Since that time, through the end of the first quarter of 2024, we've produced cumulative net adjusted operating income of almost $9 billion, increased our adjusted book value by 542%, returned $1 billion in dividends to our shareholders, and increased our share price by 385%. Of note, the increase in our share price over that period exceeded those of the S&P 500 financials, the S&P 500, the Dow Jones Industrial Average, and the New York Stock Exchange Composite Index.
Dominic John Frederico: Increase our adjusted book value by 542% returned $1 billion in dividends to our shareholders and increased our share price by 385%.
Dominic John Frederico: Of note the increase in our share price over that period exceeded those of the S&P 500 financials SB 502 dozen industrial average the New York stock Exchange composite index.
Dominic John Frederico: We prove the effectiveness and prudence of our own strategy as well as the resilience of our business model through difficult circumstances. These include the 2008 global financial crisis with its many high-profile municipal and corporate bankruptcies, the increased occurrence and scale of natural disasters, and the impact of the COVID-19 pandemic with its far-reaching global effects.
Dominic John Frederico: We proved the effectiveness and prudence of our ongoing strategy as well as the resilience of our business model through difficult circumstances. These include the 2008 global financial crisis with its many high profile municipal and corporate bankruptcies. The increase occurred in scale with natural disasters and the impacts of the COVID-19 pandemic with its far reaching global effects.
Dominic John Frederico: During those periods, we maintain our ratings and claim-paying resources at high levels and continue to write new business. We also reduce our insured leverage and our single risk exposure while at the same time returning more than $6 billion to our shareholders through shared buybacks and dividends and maintaining significant excess S&P capital. While we sought to reserve sufficient excess capital, we did not lose sight of our shareholders' need for appropriate returns on their investments.
Dominic John Frederico: During those periods, we maintain our ratings and claims paying resources at high levels and continue to write new business. We also reduced our insured leverage but our single risk exposures.
Dominic John Frederico: At the same time, returning more than $6 billion to our shareholders through share buybacks and dividends and maintaining significant excess S&P capital.
Dominic John Frederico: While we saw the reserve sufficient excess capital, we do not lose sight of our shareholders need for appropriate returns on their investments.
Dominic John Frederico: We began our share repurchase program in 2013, and since then, through May 7th of this year, we have repurchased a total of 75% of the shares that were outstanding at that time. This year, we are confidently ramping up our expectations for share buybacks to the level that prevailed in earlier years, when we generally bought back about $500 million per year. In 2024, if we purchase $129 million of common shares in the first quarter alone, which equals 2.7% of the shares outstanding when the year began, and positions us to reach our $500 million target for 2024.
Dominic John Frederico: We began our share repurchase program in 2013 and since then through May 7th of this year, we repurchased a total of 75% of the shares that were outstanding at that time.
Dominic John Frederico: This year, we are currently ramping up our expectations for share buybacks to the level that prevailed in earlier years, when we generally bought back about $500 million per year.
Dominic John Frederico: In 2024, we have repurchased $129 million of common shares in the first quarter alone.
Dominic John Frederico: Equals two 7% of the shares outstanding when the year began.
Dominic John Frederico: And positions us to reach our $500 million target for 2024.
Dominic John Frederico: Additionally, on May 2nd, our Board of Directors authorized an additional $300 million of share purchases in line with our target, which brings us to the other impressive result of the quarter. Adjusted operating income per share came in at $1.96 for the first quarter of 2024, compared with $1.12 in the first quarter of last year. Our key non-GAAP valuation measures again reach new highs on a per share basis, with adjusted operating shareholders equity at $107.69 compared with $94.58 in the first quarter of 2023 and adjusted book value at $157.31, $14 higher than a year ago.
Dominic John Frederico: Additionally, on May 2nd our board of directors authorized an additional $300 million of share repurchases in line with our target.
Dominic John Frederico: Which brings us to the other impressive results for quarter.
Dominic John Frederico: Adjusted operating income per share came in at a $1 96 for first quarter 2024, compared with $1 12 in the first quarter of last year are.
Dominic John Frederico: Our key non-GAAP valuation measures again reached new highs on a per share basis with adjusted operating shareholders' equity on their own.
Dominic John Frederico: $7 69.
Dominic John Frederico: With $94 58, and first quarter of 2023, and adjusted book value of $137 31.
Dominic John Frederico: $14 higher than a year ago shareholders' equity per share at quarters end was a $102 19.
Dominic John Frederico: Shareholders equity per share at quarter's end was $102.19, also $14 higher, also a record. New business production in the quarter was strong, and I'll let Rob give you more details in a moment. Our strategic approach to asset management through our 30% interest in SoundPoint is generating fee-based earnings consistent with our expectations, and our investment portfolio is benefiting from returns on our alternative investments through SoundPoint. As we previously discussed, we resolved all of our non-paying Puerto Rico exposures with the sole exception of the Electric Power Authority, which is currently only $624 million of net power exposure. In fact, PREPA plus all the other below-blessment-grade exposures constitute just 2.1% of our current at-poor exposures.
Dominic John Frederico: Also a $14 higher also a record.
Dominic John Frederico: New business production in the quarter was strong and I'll, let Rob give you more details in a moment.
Dominic John Frederico: <unk> approached asset management through our 30% interest in sound point is generating fee based earnings consistent with our expectations and our investment portfolio is benefiting from returns on our alternative investments through standpoint.
Dominic John Frederico: As we've previously discussed we resolved all of our Nonpaying, Puerto Rico exposures with the sole exception of the electric power Authority PREPA, which is currently only $624 million of net par exposure.
Dominic John Frederico: In fact, PREPA plus all the other below investment grade exposures constitute shows two 1% for our current net par outstanding with regard resolve PREPA consensually if possible, but we'll continue to use the legal process to vigorously oppose any plan of adjustment that was not included a fair treatment of our bond claims.
Dominic John Frederico: We prefer to resolve PREPA consensually, if possible, but will continue to use the legal process to vigorously oppose any plan of adjustment that does not include a fair treatment of our bond quality. Today, I firmly believe our insurance portfolio and financial conditions are stronger than ever. When I reflect on how far our company has come, the development and evolution of our different business strategies, our proactive and strategic approach to running the company, and the way we have protected investors, served issuers, and created value for both our policyholders and shareholders, I am extremely optimistic about not only the rest of the year but also our future for years to come.
Dominic John Frederico: Today, I firmly believe our insured portfolio and financial condition are stronger than ever when I reflect on how far our company has got development and evolution of our different business strategies are proactive and strategic Brooks running the company and the way we are protected investors served issuers and create value for both our policyholders and shareholders I am extremely optimistic about not only the rest of the year.
But also our future for years to come now I will turn the call over to Ross.
Robert Adam Bailenson: Thank you, Dominic, and good morning to everyone on the call. Our financial guarantee new business production was strong in the first quarter of 2024, when we closed $63 million in PVP. U.S. Public Finance led the way with $43 million of PPP, approximately double its PPP for the first quarter last year, even though the corresponding gross par written closed was similar. Supported by growth in the overall municipal market, total first quarter primary market volume sold utilizing bond insurance was up 24% year over year. However, primary market insurance penetration continued to exceed 7% of par sold, as it generally has since 2020, when the COVID-19 pandemic reminded investors of the value of bond insurance in an unpredictable world.
Ross: Thank you Dominic and good morning to everyone on the call.
Ross: Financial guarantee new business production was strong in the first quarter of 2024, and which we closed $63 million of Pvp.
Ross: Public finance led the way with $43 million of Pvp approximately double its pvp for the first quarter last year, even though the corresponding gross par written closed was similar.
Ross: Followed by growth in the overall municipal market total first quarter primary market volumes, so utilizing bond insurance was up 24% year over year.
Ross: I'm Mary market insurance penetration continued to exceed 7% of par sold as it generally has since 2020, when the COVID-19 pandemic reminding investors of the value of bond insurance.
Ross: Predictable world.
Robert Adam Bailenson: It's worth noting that in our target rating category of transactions with single A underlying ratings from S&P and or Moody's, insurance penetration was 27% of par sold and 53% of the number of transactions. Assured Guaranty will remain the market leader in U.S. municipal bond insurance, insuring approximately 53% of all primary market insured parcels during the first quarter of 2021. A $3.8 billion of new issued parts sold with our insurance during the quarter was 12% higher than in the first quarter of 2020.
Ross: It's worth noting that in our target rating category of transactions with single a underlying ratings from S&P and Moody's insurance penetration was 27% of parcels and 63% of the number of transactions sold.
Ross: Assured guaranty remain the market leader in U S municipal bond insurance.
Ross: During approximately 53% of all primary market insured par sold.
Ross: During the first quarter of 2024, a $3 8 billion of new issue par sold with our insurance during the quarter was 12% higher than in first quarter of 2023.
Robert Adam Bailenson: We continue to benefit from institutional investor demand for Short Guaranteed Insurance on larger transactions. During the quarter, we insured seven transactions with $100 million or more in insured PAR, totaling approximately $1.4 billion, including the two transactions sold with the largest insured PAR amounts during the quarter, the $340 million of insured revenue bonds for the North Carolina Turnpike Authority Triangle Expressway System and the $318 million of insured revenue bonds for the Lower Colorado River Authority.
Ross: We continued to benefit from institutional investor demand.
Ross: For assured guaranty insurance on larger transactions.
Ross: During the quarter, we insured seven transactions with a $100 million of more insured par totaling approximately $1 $4 billion, including the two transaction so with the largest insured par amounts during the quarter of $340 million of.
Ross: Insured revenue bonds for the North Carolina Turnpike Authority Triangle Expressway system, and the $318 million of insured revenue bonds for the lower Colorado River Authority.
Robert Adam Bailenson: We also continued to add value on AA credits during the first quarter, as we insured $605 million of par on 23 such deals. We believe investors in these transactions are expressing both a high regard for our financial strength and an understanding of the range of benefits in our value proposition, including potential mitigation of downgrade risk. The second quarter is off to a great start, including our participation in Florida's Brightline high-speed rail refinancing, expected to close on May 9th, where we will insure an amount exceeding 1.1 billion dollars of senior bonds, representing more than half of the 2.2 billion dollars of senior bonds to be issued. The Indeline Project, a 235-mile high-speed rail system between Miami and Orlando, is the first private passenger rail system built in the United States in over a century.
Ross: We also continue to add value on top of late credits during the first quarter as we insured $605 million of par on 'twenty three such deals. We believe investors in these transactions are exhibiting both a high regard for our financial strength and an understanding of the range of benefits and our value proposition.
Ross: Including potential mitigation of downgrade risk.
Ross: The second quarter is off to a great start, including our participation in Florida, It's brightline high speed rail refinancing expected to close on May nine where we will ensure an amount exceeding $1 1 billion.
Ross: Of senior bonds, representing more than half of the $2 2 billion of senior bonds to be issued.
Ross: The underlying project of 235 mile High speed rail system between Miami and Orlando is the first private passenger rail system built.
Ross: States in over a century.
Robert Adam Bailenson: This transaction demonstrates the value investors place on Assured Guaranty's extensive due diligence, underwriting experience, and financial strength. We have unrivaled capacity and transaction experience to guarantee large-scale investment grade municipal bonds and infrastructure finance. We expect our public finance business to continue to perform well in the current environment as municipalities prioritize much needed infrastructure repair and development. Our product can help them optimize their bond executions so they can accomplish more with a lower financing burden.
Ross: This transaction demonstrates the value investors place on a short guaranty has extensive due diligence underwriting experience and financial strength we.
Ross: We have unrivalled capacity and transaction experience to guarantee large scale investment grades municipal bonds and infrastructure financings.
Ross: We expect our public finance business to continue to perform well in the current environment as municipalities prioritize much needed infrastructure repair and development.
Ross: Our product can help them optimize their bond executions. So they can accomplish more with a lower financing burden.
Ross: Yes.
Robert Adam Bailenson: In other financial security business, during the first quarter, global structured finance made a significant contribution of $19 million of PVP from 11 transactions across primarily the insurance securitization and subscription finance sectors. This group has expanded the application of our guarantee into various new sectors, and I believe they will continue to develop additional product applications to further support our business growth. Non-U.S. public finance generated an additional $2 million from renewals of two liquidity facilities that involved no increase in our insurance exposure.
Ross: And other financial guarantee business during the first quarter global structured finance made a significant contribution of $19 million of Pvp from 11 transactions across primarily the insurance securitization and subscription finance sectors. This group has expanded the application of our guarantee into various new sectors.
Ross: And I believe they will continue to develop additional product applications to further support our business growth.
Ross: Non U S public finance produced an additional $2 million.
Ross: From renewals of two liquidity facilities and about no increase to our insurance exposure.
Robert Adam Bailenson: We have a large pipeline of international infrastructure transactions, and we expect certain transactions to generate significant PVP, especially in the second half of this year. Outside of the U.S., we are working hard to extend our reach more broadly beyond the United Kingdom with personnel in France, Spain, and Australia focused on additional new business opportunities. I'll now turn the call over to Ben. Thank you, Rob and Dominic.
Ross: We have a large pipeline of international infrastructure transactions, and we expect certain transactions to generate significant pvp, especially in the second half of this year.
Ross: Outside of the U S. We are working hard to extend our reach more broadly beyond the United Kingdom with personnel in France, Spain, and Australia focused on additional new business opportunities.
Ross: Now I'll turn the call over to Ben.
Benjamin G. Rosenblum: Thank you, Rob and Dominic, and good morning. I am pleased to report first quarter 2024 adjusted operating income of $113 million or $1.96 per share compared with $68 billion or $1.12 per share in the first quarter of 2023. On a per share basis, this represents a year over year increase of 75%. The insurance segment contributed $149 million of adjusted operating income in the first quarter of 2024, compared with $117 million in the same period last year.
Benjamin G. Rosenblum: Thank you Robyn Dominic and good morning, I am pleased to report first quarter 2024, and adjusted operating income of $113 million or $1 96 per share compared with $68 million or $1 12 per share in the first quarter of 2023.
Benjamin G. Rosenblum: This segment is the largest component of Adjusted Operating Income and had a few notable items driving the quarter-over-quarter increase. First, net earned premiums were $38 million higher compared with last year, primarily due to the refunding of one large transaction. Second, mark-to-market gains on Puerto Rico's contingent value industry were $26 million compared with a loss of $2 million in the first quarter of 2023. Our remaining CBIs have a fair value of $272 million as of March 31st, 2024.
Benjamin G. Rosenblum: On a per share basis. This represents a year over year increase of 75%.
Benjamin G. Rosenblum: The insurance segment contributed $149 million of adjusted operating income in the first quarter of 2024 compared with $117 million in the same period last year.
Benjamin G. Rosenblum: This segment is the largest component of adjusted operating income and had a few notable items driving the quarter over quarter increase.
Benjamin G. Rosenblum: <unk> net earned premiums were $38 million higher compared with last year, primarily due to the refunding of one large transaction.
Second mark to market gains on Puerto Rico contingent on the instruments were $26 million compared with a loss of $2 million.
Benjamin G. Rosenblum: In the first quarter of 2023, our remaining CVI have a fair value of $272 million as of March 31, 2024, and less equity in earnings from our alternative investments with a gain of $40 million compared with a gain of 30 million.
Benjamin G. Rosenblum: And last, equity and earnings from our alternative investments was a gain of $40 million, compared with a gain of $30 million in the first quarter of 2023. Investments in CLO equity tranches were the primary component of the alternative investment gains in both periods. Fair value changes of assets underlying the alternative investments may cause volatility in adjusted operating income from quarter to quarter. However, on an inception to date basis, they have generated an annualized internal rate of return of 14.4%. These year-over-year increases in the insurance segment were partially offset by a decline in other income, which included a non-recurring benefit related to the release of a litigation accrual in the first quarter of 2023.
Benjamin G. Rosenblum: In the first quarter of 2023.
Benjamin G. Rosenblum: Investments in CLO equity tranches were the primary component of the alternative investment gains in both periods fair value changes in assets underlying the alternatives investment may cause volatility in adjusted operating income from quarter to quarter. However, on an inception to date basis they have generate.
Benjamin G. Rosenblum: At an annualized internal rate of return of 44%.
Benjamin G. Rosenblum: These year over year increases in the insurance segment were partially offset by a decline in other income which included a nonrecurring benefit related to the release of a litigation accrual in the first quarter of 2023.
Benjamin G. Rosenblum: Our deferred premium and credit derivative revenue, which represents the storehouse of future earnings in the insurance segment, remains strong at $3.8 billion. In the asset management segment, the 2023 partnership distribution from our 30% ownership interest in SoundPoint was $17 million and was received in 2024. On the capital management front, in the first quarter of 2024, we bought back 1.5 million shares for $129 million at an average price of $84.07 per share.
Benjamin G. Rosenblum: Our deferred premiums and credit derivative revenue, which represents the storehouse of future earnings in the insurance segment remained strong at $3 $8 billion and the asset management segment. The 2023 partnership distributions from our 30% ownership interest in some point was 17.
Benjamin G. Rosenblum: $1 million and was received in 2024 on the capital management front in the first quarter of 2024, we bought back one 5 million shares for $129 million at an average price of $84 <unk> per share we continue to believe.
Benjamin G. Rosenblum: We continue to believe that this is one of our most accretive strategies. As a result, our Board of Directors last week authorized an additional $300 million of share repurchase, which brings our current remaining authorization to approximately $414 million. In terms of our holding company liquidity position, we have cash and investments of approximately $239 million, of which $67 million resides in AGL. The Sharing Purchase Program, along with Adjusted Operating Income and New Business Production, collectively contributed to new records for Adjusted Operating Shareholders Equity per share of over $107 and Adjusted Book Value per share of over $157.
Benjamin G. Rosenblum: That this is one of our most accretive strategies as a result, our board of directors last week authorized an additional $300 million of share repurchases, which brings our current remaining authorization to approximately $414 million.
Benjamin G. Rosenblum: In terms of our holding company liquidity position, we had cash and investments of approximately $239 million of which $67 million resides in AGL the share repurchase program, along with adjusted operating income and new business production collectively contributed.
Benjamin G. Rosenblum: To new records for adjusted operating shareholders' equity per share of over $107 and adjusted book value per share of over $157.
Benjamin G. Rosenblum: While adjusted operating income varies from period to period, the consistent quarterly increases in these book value metrics reflect how the successful execution of our key strategic initiatives builds shareholder value over the long term. One other positive development to note is that, on April 30th, Moody's upgraded the insurance financial strength rating of AGC and affirmed the rating of AGM, both with a stable outlook. In the report, Moody cited AGC's strong risk-adjusted capital adequacy, the significant improvement in the credit quality of the insured portfolio, and an increased strategic role within Assured Guarantee. Regarding AGM, Moody's noted AGM's strong capital profile and leading market position in the financial guarantee sector. I'll now turn the call over to our operator to give you the instructions for the Q&A period. Thank you.
Benjamin G. Rosenblum: While adjusted operating income there is comparing the period that consistent quarterly increases in these book value metrics reflect how the successful execution of our key strategic initiatives build shareholder value over the long term.
Benjamin G. Rosenblum: One other positive development to note on April 30th Moody's upgraded the insurance financial strength rating of AGC and affirmed the rating of AGM, both with a stable outlook and the report Moody's cited agc's strong risk adjusted capital adequacy the significant improved.
Benjamin G. Rosenblum: <unk> and the credit quality of the insured portfolio and an increased strategic role within assured guaranty.
Benjamin G. Rosenblum: About AGM, Moody's noted agm's strong capital profile and leading market position in the financial Guaranty sector.
Speaker Change: I'll now turn the call over to our operator to give you the instructions for the Q&A period.
Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. If you're using a speakerphone, please pick up your handset before pressing the keys. At this time, we will pause momentarily to assemble our roster. Our first question comes from Tommy Mcjoynt from KBW.
Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Speaker Change: You are using a speaker phone please pickup your handset before pressing the key at <unk>.
Speaker Change: This time, we will pause momentarily to assemble our roster.
Speaker Change: Okay.
Speaker Change: Our first question comes from Tommy Moll join from K B W.
Thomas Patrick Mcjoynt: Okay, good morning, guys. Thanks for taking my questions. The first question is on the net investment income line. So it looks like it had been averaging, looking at the insurance segment, around $99 million per quarter in the second half of last year, and it dropped sequentially to $83 million. Can you walk through some of the puts and takes for what drove that decline? And then how should we think about the run rate from that going forward?
Tommy Moll: Hey, good morning, guys. Thanks for taking my question.
Tommy Moll: First question is on the net investment income line. So it looks like it had been averaging looking at the insurance segment around $99 million per quarter in the second half of last year and it dropped sequentially to $83 million.
Tommy Moll: Walk through some of the puts and takes for what drove that decline and then how we should think about the run rate for <unk> going forward.
Dominic John Frederico: Sure, Dominic.
Benjamin G. Rosenblum: Sure, Tommy, thanks for the question. So this is Ben speaking.
Tommy Moll: Sure Tommy Thanks for the question. So this is Dan speaking I think the answer is if you look back a couple of quarters before and Youll say it was a little lower will happened at the end of last year. The last two quarters. We had income from some loss mitigation bonds that came through I would say that we are observing this quarter is probably a relatively consistent run rate of what I would expect throughout the year.
Benjamin G. Rosenblum: I think the answer is if you look back a couple quarters beforehand, you'll see it was a little lower. What happened at the end of the last year, the last two quarters, we had income from some loss mitigation bonds that came through. I would say that what you're observing this quarter is probably a relatively consistent run rate of what I would expect throughout the year.
Tommy Moll: Okay.
Benjamin G. Rosenblum: Okay, got it. Thanks for that. And then can you remind me what is happening in the other segment in terms of the, I forget kind of mechanically how it works with the large negative equity and net earnings of investees the last couple quarters. I think that's offsetting some of the fair value gains on the CIVs.
Speaker Change: Okay got it thanks for that.
Speaker Change: And then can you remind me what is happening in the other segment.
Speaker Change: In terms of the I forget kind of mechanically how it works with the large negative equity in net earnings of Investees. The last couple of quarters, I think thats offsetting some of that fair value gains on our CIB, but can you just remind us mechanically with what's happening there.
Thomas Patrick Mcjoynt: But can you just remind me?
Benjamin G. Rosenblum: Sure, I think what you're looking at is the impact of some of the consolidation of the FGE and CBI.
Speaker Change: Sure I think anybody looking at you're looking at the impact of some of that consolidation.
The FTE tenancy in CVI, and they're coming through some of the volatility coming through those that consolidation.
Benjamin G. Rosenblum: Okay, there's not. It's just a reclass, not a bottom line. Yeah, that's what it looked like.
Speaker Change: Okay got it.
Speaker Change: On the bottom line and to complement.
Benjamin G. Rosenblum: Okay. And then just last question. I think there's still a special dividend request pending in New York for AGM. Is there any status update on that or anything you want to share there?
Speaker Change: Yes, that's what it looked like okay.
Speaker Change: And then just last question I think there is still a special dividend request pending in New York for AGM is there any status update on that or anything you want to share there.
Benjamin G. Rosenblum: Sure, as you know, we filed a request back in the fall of last year, and New York's going through its process to approve the dividend. We don't have any expectation of issues, so it's just them going through their process at this point in time. Hopefully, we'll hear something in the very near future.
Speaker Change: Sure as you know we filed a request back in the fall last year in Europe is going through its process to approve a dividend we don't have any expectation of issues such as them going through their process at this point in time.
Speaker Change: Hopefully, we'll hear something in the near future.
Benjamin G. Rosenblum: Understood. Thank you. Thank you.
Speaker Change: Understood. Thank you.
Speaker Change: Thank you.
Operator: As a reminder, to ask a question, please press star followed by 1 on your telephone keypad. This concludes the question and answer session. I would now like to turn the conference back over to your host, Robert Tucker, for closing remarks.
Speaker Change: As a reminder to ask a question. Please press star followed by one on your telephone keypad.
Speaker Change: Okay.
This.
Speaker Change: The question and answer session I would now like to turn the conference back over to your host Robert Tucker for closing remarks.
Robert S. Tucker: Thank you, operator. I'd like to thank everyone for joining us on today's call. If you have additional questions, please feel free to give us a call. Thank you very much.
Robert S. Tucker: Thank you operator, I'd like to thank everyone for joining us on today's call. If you have additional questions. Please feel free to give us a call. Thank you very much.
Operator: This concludes today's conference call. Thank you all for attending. You may now disconnect your lines. Have a great day.
Speaker Change: This concludes today's conference call. Thank you all for attending you may now disconnect your lines have a great day.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.