Assured Guaranty (AGO) 8 Aug 24 2024 Q2 Earnings call transcript

In the latest earnings call for the second quarter of 2024, Assured Guaranty Limited showcased a remarkable performance, with exceptional growth and strategic moves that underscore its strong financial health and strategic foresight. The company's leadership team, including Dominic Frederico, President and CEO; Rob Bailenson, COO; and Ben Rosenblum, CFO, provided a comprehensive update on the company's performance, mergers, production, and financial results.

Strong Financial Performance and Shareholder Valuation

Assured Guaranty's financial performance in Q2 2024 was robust, with adjusted operating income per share reaching $1.44, a significant increase from the $0.60 in the same quarter last year. This impressive growth was reflected in the company's key shareholder valuation measures, which hit new per share highs. Shareholders' equity rose by 16%, adjusted operating shareholders' equity by 15%, and adjusted book value by 12%.

Merger of Assured Guaranty Municipal into Assured Guaranty Inc.

A significant development in the company's strategy was the completion of the merger of Assured Guaranty Municipal into Assured Guaranty Inc. This move aimed to achieve more efficient utilization of capital and increase operating efficiencies. By merging the two companies, Assured Guaranty Inc. now operates with a more streamlined brand and a more diversified portfolio, enhancing its overall global platform and scale.

Strong Production and Market Leadership

Assured Guaranty's production in Q2 2024 was particularly noteworthy, with a first-half PVP of $218 million, the largest amount since 2009. The company's market leadership position was evident, with its primary market insured par increasing by 11% year-over-year, and representing 56% of the insured pars sold in the primary market. This strong production was driven by the company's ability to insure large, high-margin transactions, as seen in the $1.1 billion insurance for the Brightline Florida passenger rail project, and the $800 million for the new Terminal 1 at John F. Kennedy Airport.

Financial Results and Capital Management

The financial results for the second quarter of 2024 were equally impressive, with adjusted operating income of $80 million or $1.44 per share. This was more than double the $36 million or $0.60 per share in the same quarter last year. The insurance segment contributed significantly to this growth, with a $116 million of adjusted operating income in Q2 2024. The company's capital management strategy, including share repurchases, also contributed to the strong financial position.

Outlook and Future Growth

Looking ahead, Assured Guaranty remains optimistic about its future growth, particularly in its worldwide financial guarantee business. With a more efficient organizational structure and a strong financial position, the company is well-positioned to serve its clients, protect its policyholders, and create value for its shareholders. The company's commitment to its share repurchase program, with a target of $500 million for 2024, further underscores its confidence in its growth prospects.

In conclusion, Assured Guaranty's Q2 2024 earnings call highlighted the company's exceptional financial performance, strategic mergers, and strong production results. With a robust financial position, a clear growth strategy, and a commitment to its shareholders, Assured Guaranty is poised for continued success in the future.