Ambac Financial Group (AMBC) Financials

Ambac Financial Group (NYSE:AMBC) has experienced a volatile financial performance over the past four years based on their quarterly financial statements. Here’s a summary of key trends and insights from their income statements, cash flows, and balance sheets:

• In Q3 2023, Ambac recorded a strong net income of $66 million attributable to common shareholders, representing an EPS of $1.44 basic and $1.41 diluted, showing improvements compared to prior quarters.
• The company generated positive net cash from continuing operating activities of $35.9 million in Q4 2023 and had a very strong net cash inflow from operating activities of $97.4 million for the quarter.
• Total assets have grown from roughly $9.4 billion in late 2022 to approximately $13.5 billion by Q1 2024, driven by increases in trading account securities (from ~$8.2B in Q3 2022 to ~$10.1B in Q1 2024) and goodwill/intangible assets, indicating expansion or acquisitions.
• The company’s common equity increased from about $1.0 billion in Q3 2022 to approximately $1.47 billion in Q1 2024, reflecting stronger equity position amid fluctuating earnings.
• Net realized & unrealized capital gains on investments were robust in some quarters such as +$45 million in Q1 2024 and +$36 million in Q3 2023, contributing positively to non-interest income.

• Interest expense related to long-term debt consistently remained high (e.g., $20 million in Q1 2024 and $48 million expense in Q4 2023), reflecting significant leverage on the balance sheet with long-term debt around $3.5 billion as of Q1 2024.
• Premiums earned and unearned premiums assets/liabilities have fluctuated but generally represent a meaningful part of the company's income and balance sheet respectively (e.g., $33 million premiums earned in Q1 2024; unearned premiums asset at $584 million and liability at $458 million in Q1 2024).
• The company's cash and due from banks decreased from $290 million in Q3 2022 to $187 million in Q1 2024, while restricted cash also varied, possibly due to liquidity management and operational needs.
• Accumulated other comprehensive loss remains significant, more than $80 million in Q1 2024 and was as large as ($315) million in Q3 2022, indicating exposure to market or other comprehensive items.

• The most recent quarter (Q1 2024) reported a consolidated net loss of $29 million, or -$0.63 per share, continuing a negative earnings trend following losses in recent quarters (e.g., -$43 million in Q4 2023, -$13 million in Q2 2023).
• Total non-interest expenses and claims & claim expenses remain very high; Q1 2024 non-interest expenses were $112 million compared to total revenue of $96 million, indicating operational challenges or elevated claims costs.
• Significant quarterly swings in net realized & unrealized capital gains/losses occur, contributing to volatility; for example, a large negative impact of -$80 million in Q4 2023 contrasted with gains in other quarters.
• Long-term debt has substantially increased over the period, from around $2.2 billion in Q3 2022 to $3.5 billion in Q1 2024, which may add pressure on interest expenses and financial leverage risks.
• Net cash from continuing operating activities dropped to zero in Q1 2024, raising concerns about current cash generation capabilities despite positive earnings in past quarters.

Summary: Ambac Financial Group shows signs of expansion with increased assets and equity, alongside periods of strong net income in 2023, especially Q3. However, the firm faces persistent challenges including significant quarterly volatility in investment gains/losses, high claims and operating expenses, and rising debt levels. Most recently, the company reported a loss in Q1 2024 with no operating cash flow, which investors should monitor closely for future quarters. The financials suggest a company in transition, balancing growth opportunities with financial and operational risks.