Greetings, and welcome to the Ambac Financial Group, Inc. Fourth Quarter 2023 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to Charles Sebaski, Head of Investor Relations.

Thank you. Good morning, and welcome to Ambac's fourth quarter 2023 call to discuss financial results. Speaking today will be Claude LeBlanc, President and CEO; and David Trick, Chief Financial Officer. They will discuss the financial results of our business and the current market environment. And after prepared remarks, we'll take your questions. For those of you following along on the webcast, during the prepared remarks, we'll be highlighting some slides from the investor presentation, which can be located on our website. Our call today includes forward-looking statements. The company cautions investors that any forward-looking statement involves risks and uncertainties and is not a guarantee of future performance. Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under the forward-looking statements in our earnings press release and our most recent 10-Q and 10-K filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also in our prepared remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliation to those non-GAAP measures are included in our recent earnings press release, operating supplement and other materials available in the Investor Relations section of our website, ambac.com. I would now like to turn the call over to Mr. Claude LeBlanc.

Thank you, Chuck, and welcome to everyone joining today's call. On a consolidated basis, for the full year 2023, we generated net income of $4 million and adjusted net income of $93 million. Book value per share stands at $30.13, up 8% from the start of the year. David will discuss our fourth quarter financial results shortly. Turning to our strategic priorities for 2023. Our focus during the year was twofold: one, scaling our Specialty P&C Insurance platform; and two, progressing additional value-enhancing initiatives for our Legacy Financial Guarantee business. With regards to our Specialty P&C Insurance platform, I am pleased to report that we exceeded our strategic objectives for 2023, including generating over $0.5 billion of premium for the year, a 79% increase over 2022. Our results were driven by our Specialty P&C Insurance franchises, Everspan and Cirrata. Each platform produced positive net income for the quarter and year in line with our projections. And while it's early days, both are on target to deliver strong results in 2024. As we look ahead to the future, we are well positioned to leverage the strong growth generated in 2023, and we believe that our specialty insurance platform is poised to deliver significant incremental value for Ambac's shareholders. Our vision is to create the premier destination for MGA and program operators, and I believe we have built a strong foundation to deliver on that goal. The MGA program market remains attractive to us for a number of reasons. Firstly, the MGA market has nearly doubled in size over the last 5 years, meaningfully outgrowing the P&C market at large. Forecasts predict the specialty market to nearly double in size again to $160 billion by 2030. Secondly, MGAs are more aligned with the E&S market, which has been generating superior underwriting results…

Thank you, Claude, and good morning, everyone. For the first quarter of 2023, Ambac reported a net loss of $16 million or $0.24 per diluted share, compared to net income of $175 million or $3.86 per diluted share in the fourth quarter of 2022. Adjusted net income was $10 million or $0.32 per diluted share, compared to adjusted net income of $183 million or $4.03 per diluted share in the fourth quarter of 2022. The change in net income and adjusted net income was mainly driven by a $193 million of gains related to the Bank of America and Nomura RMBS litigation settlement recognized in the fourth quarter of 2022. Everspan's net premiums written in the quarter of $37 million were up 269% over the prior year period. Growth in existing programs and the addition of new programs, including assumed reinsurance programs, accounted for the significant advance. Everspan's retention rate was approximately 40% of gross premium compared to 19% last year. The increased retention level stemmed mostly from workers' compensation in nonstandard auto programs written in the third and fourth quarters, respectively, as assumed reinsurance. Earned premiums and program fees were $25 million and $2.5 million, up 341% and 77%, respectively, from the fourth quarter of 2022. The loss ratio of 67.4% in the fourth quarter of 2023 was up from 65.1% last year. The increase was primarily driven by higher commercial auto liability claim frequency in 2023. For the full year 2023, the loss ratio was 70.7% compared to 65.4% for 2022. The increase for 2023, entirely related to the 2023 losses, particularly commercial auto liability frequency, as previously noted as well as the addition of the assumed nonstandard auto program. Several of our programs benefit from a sliding scale commission structure, which helps moderate loss activity within certain…

Thank you, David. I am very excited about our prospects for 2024. For our Specialty P&C Insurance business, we remain focused on delivering strong earnings growth in coming periods. Our 3-year plan aims to scale our premium production to over $1.5 billion, with over $100 million of EBITDA on a combined basis from Everspan and Cirrata. We are well positioned to meet our goals with the strong foundation we have built and leadership talent we continue to attract. We are also laser-focused on progressing the legacy business strategic review process launched in December, and we will update you when we have more information to share. 2024 is positioned to be a year of transformational change for Ambac, and I look forward to updating you on our progress in the coming quarters. Operator, please open the call for questions.

[Operator Instructions] Our first question is coming from the line of Dennis Chua with Repertoire Partners.

Claude, congrats on a great quarter and a great execution on both the legacy business and the spec P&C businesses. And I think we weren't expecting an update on the AAC review, but looking forward to that. But on the OCI process, it sounds like the capital model framework -- capital model itself is finalized. And maybe help us think about whether the OCI approved contingency reserve release at AAC has any impact on thinking about distributions from AAC?

Thanks, Dennis. I'll pass that one over to David.

Dennis, thanks for the question. So the impact of the contingency reserve release is not on the capital model. So the capital model is quite comprehensive and factored in those contingency reserves as part of the capital structure of AAC. I think the contingency reserve release for us, there’s a couple of things. It helps progress the clean up of the balance sheet at AAC. It also is indicative of, I believe, our recognition and OCI’s recognition of the derisking of AAC’s balance sheet. So I think it puts us in a little simpler position from an understanding of our statutory statements. And also, we also don’t expect to be contributing to additional contingency reserves in the future. So overall, I think it’s a positive for us, but it was – has been factored into the OCI contingency capital model that doesn’t have a direct impact on distributions in the short term.

[Operator Instructions] There are no further questions at this time. This concludes today's teleconference. We thank you for your participation. You may disconnect your lines at this time.