Assured Guaranty 1Q income down 61%

Assured Guaranty‘s (AGO) first-quarter income fell 61% hurt by losses on credit derivatives. The bond insurer earned $125.4 million, or 67 cents a share, for the three months ended March 31, down from $322 million, or $1.69 a share, a year earlier. Excluding items, the company said first-quarter operating income was $248.9 million, or $1.33 a share. First-quarter revenue decreased 62% to $254.1 million from $667.3 million. Lower premiums on structured finance transactions pushed net earned premiums for the quarter down to $254 million from $319.6 million a year earlier. During the quarter, Assured Guaranty settled with Bank of America (BAC) for $1.6 billion over representation and warranty claims on residential mortgage-backed securities transactions. Assured said the settlement effected first-quarter results by $146.8 million, or 78 cents a share. “Reaching an agreement with Bank of America was a major accomplishment and a significant contributor to our financial results for the quarter,” said President and Chief Executive Dominic Frederico. “This agreement, accomplished without litigation, confirms our loan-by-loan approach to our R&W claims and allows us to focus more intently on others who have not fulfilled their contractual obligations,” Frederico said. “It is also a major accomplishment in our strategy of enhancing our capital position, and puts us in a better position to address any potential changes in rating agency capital requirements.” Write to Jason Philyaw.