Greetings, and welcome to Ambac Financial Group, Inc. Second Quarter 2022 Earnings Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Charles Sebaski, Head of Investor Relations; Claude LeBlanc, Chief Executive Officer; and David Trick, Chief Financial Officer. I will now turn the call over to Charles.

Thank you. Good morning, and thank you all for joining today's conference call to discuss Ambac Financial Group's second quarter 2022 financial results. We'd like to remind you that today's presentation may contain forward-looking statements about our business, including but not limited to new business, credit outlooks, market conditions, credit spreads, financial ratings, loss reserves, loss mitigation, loss recoveries, investment returns, or other items that may affect our future results. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstance. Any forward-looking statements are not guarantees of future performance or events. Actual performance and events may differ, possibly materially, from such forward-looking statements. Factors that could cause this include factors described in our most recently filed SEC annual report under management's discussion and analysis of financial condition and results of operation and other risk factors. Ambac is not under any obligation and expressly disclaims any obligation to update any forward-looking statements whether as a result of new information, future events, or otherwise. Today's presentation contains non-GAAP financial measures. The reconciliation of such measures to the most comparable GAAP figures are included in our earnings press release, which is available on our website at ambac.com. Please note the presentations have been posted to our Events and Presentations section of our IR website which support our comments today. Now, I would like to turn our call over to Mr. Claude Leblanc.

Thank you, Chuck, and welcome to everyone joining today's call. For the quarter ending June 30, 2022, Ambac reported net income of $5 million or $0.11 per diluted share and adjusted earnings of $13 million or $0.28 per diluted share. Book value at quarter end was $784 million and adjusted book value was $773 million. During the quarter, we repurchased $1.6 million shares of our common stock under our share repurchase program at an average price of $8.86 per share. David will discuss our financial results in more detail shortly. There are several performance and strategic highlights I would like to touch on this morning. This quarter, we continued to advance our goals of building a leading specialty P&C platform, while simultaneously reducing volatility and exposure in our legacy financial guarantee business. Our specialty P&C business had gross insurance production of $65 million, representing a 168% increase from the second quarter of last year. We believe gross insurance production, which is the combined gross premiums written for Everspan and the premiums placed by our Insurance Distribution segment to be one key metric for how the business is growing and performing. Turning to Everspan, during the quarter, Everspan Group led our insurance production with another strong quarter of growth, with gross premium written up over 70% from the first quarter of this year. This quarter's results represent an annualized gross premiums written run rate of over $160 million compared to our first quarter run rate of $100 million. Everspan currently has 11 MGA program partners, up from 10 last quarter and has signed three new programs this quarter. The operating environment for specialty insurance continues to be robust and supportive of the strong pipeline of new MGA partners Everspan continues to see. In addition, commercial P&C pricing, while moderating from 14%…

Thank you, Claude, and good morning everyone. Before I discuss our second quarter results, I'd like to remind everyone that as of last quarter we began disclosing our results through three segments: legacy financial guarantee insurance; specialty, property and casualty insurance; and insurance distribution. For the second quarter of 2022, Ambac reported net income of $5 million or $0.11 per diluted share compared to a net loss of $29 million or $0.63 per diluted share in the second quarter of 2021. Adjusted earnings for the second quarter of 2022 were $13 million or $0.28 per diluted share compared to an adjusted loss of $13 million or $0.30 per diluted share in the second quarter of 2021. The difference between adjusted earnings and GAAP net income for the second quarter of 2022 and 2021 related mostly to the exclusion of $13 million of insurance intangible amortization from adjusted income. The $34 million increase in net income for the second quarter 2022 as compared to the second quarter of 2021 related mostly to a $57 million gain on extinguishment of debt and a $29 million gain on derivatives, which includes our macro interest rate hedge. These gains are somewhat offset by a $21 million net investment loss in the quarter compared to a $42 million net investment gain in second quarter of 2021. Other notable variances relative to the prior period include a lower loss and loss expense benefit and lower tax expense. Premiums earned were $14 million in the second quarter compared to $11 million in the second quarter of 2021. As it continues to build momentum, growth in Everspan's earned premium more than offset the contract contraction in the legacy financial guarantee portfolio. Active derisking and organic runoff of the legacy financial guarantee insured portfolio will continue to result in…

In conclusion, we've made significant progress this quarter in advancing our key strategic priorities. We continue to see very attractive opportunities to deploy capital in our insurance distribution business. We also see meaningful opportunities to capture growth and expense synergies across our growing businesses through our dedicated business services unit, supporting the existing and future technology, distribution and infrastructure needs of our partners. As we continue this transition and expansion of our P&C platform, we believe the company's value will be increasingly defined by our two core strategic segments, the specialty P&C insurance business, Everspan Group, and the insurance distribution business, Cirrata. As a reminder, these new businesses are characterized by capital-light models, EBITDA managed, and growth-focused. I look forward to continuing to update you on our progress in the coming quarters. Operator, please open the call for questions.