MBIA Inc. reported yesterday that net income declined 10% in the first quarter from the same period a year ago, dropping to $65.7 million, or $1.56 per share, from $72.7 million, or $1.71 per share.

Profits for the municipal bond industry's biggest player rose 10% for the quarter when the effect of a nonrecuring accounting change in 1993 is excluded.

Meanwhile, Capital Guaranty Insurance Co. also reported a decline in net income yesterday, with profits falling about 6% during the period, to $3.7 million, or 40 cents per share, from nearly $4 million, or 45 cents per share in the first three months of 1993.

Excluding an accounting change affecting 1993's results, Capital Guaranty's net income rose 5%, to $3.7 million from $3.5 million, the company said.

The two company's performance results are in line with the other major players in the industry, as the radical slowdown in refunding volume so far this year begins showing up on company balance sheets.

Last month, AMBAC Inc. and Financial Guaranty Insurance Co. reported net income declines of 11% and almost 4%, respectively.

David H. Elliott, MBIA's chairman, president and chief executive officer, said the fact that net income continues to grow [excluding accounting changes] "demonstrates MBIA's ability to generate growing earnings even during periods of reduced municipal issuance and despite lower refunding volume." Elliott particularly stressed the "annuity-like financial dynamics" of the industry. Unearned premiums, for example, continue to boost net income years after the initial business is written.

Premiums earned in the first three months of 1994 were up 2%, to $54.5 million from $53.5 million last year, while premiums written in the first quarter declined 14%, to $84.3 million from $98 million in the same period in 1993.

MBIA closed down 7/8 on the New York Stock Exchange yesterday, at 56 3/4, while Capital Guaranty dropped 1/8 to finish at 16 1/8.

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