Triad Guaranty Inc. Reports Second Quarter Results

WINSTON-SALEM, N.C., Aug. 14, 2012 /PRNewswire/ -- Triad Guaranty Inc. (OTCBB: TGIC) today reported a net loss for the quarter ended June 30, 2012 of $31.3 million compared to a net loss of $37.7 million for the first quarter of 2012 and a net loss of $4.4 million during the second quarter of 2011.  The 2012 second quarter diluted loss per share was $2.05 compared to a diluted loss per share of $2.47 for the 2012 first quarter and $0.29 for the second quarter of 2011.

The net loss for the six months ended June 30, 2012 was $69.0 million compared to a net loss of $9.3 million for the six months ended June 30, 2011.  The diluted loss per share was $4.52 for the six months ended June 30, 2012 compared to a diluted loss per share of $0.61 for the six months ended June 30, 2011.

Ken Jones, President and CEO, said, "During the second quarter, we continued to see a drop in the number of new defaults as well as the total risk in default.  Primary risk in default declined by 8.2% during the second quarter of 2012 compared to a sequential decline of 7.4% in the first quarter of 2012 and 6.9% in the second quarter of 2011. Net losses and loss adjustment expenses for the second quarter amounted to $68.2 million compared to $67.9 million in the first quarter of 2012, and up substantially from the $41.3 million reported in the second quarter of 2011.  Comparisons to the second quarter of 2011 is difficult due to the positive impact of reserve adjustments during that period.  Settled claims were $108.1 million in the second quarter of 2012 compared to $97.1 million during the 2012 first quarter and $111.6 million in the second quarter of 2011. Persistency, the key driver of our earned premiums, remained at elevated levels compared to historical norms as many borrowers are finding it difficult to sell or refinance their homes."

Mr. Jones continued, "As a company in run-off, our primary focus remains on the efficient and effective servicing of our insured portfolio, particularly with respect to loss management, in order to maximize our claims-paying ability.  Our deficit in assets remains substantial and was $771.4 million at June 30, 2012.  We believe that, absent significant positive changes in the economy and the residential real estate market, our existing assets and future premiums likely will not be sufficient to meet our current and future policyholder obligations."

We have updated the quarterly statistical and supplemental information for the 2012 second quarter results on our web site at www.triadguaranty.com.  The supplemental information can be found under "Investors" and then under "Webcasts and Presentations" by the title "Supplemental Information – Second Quarter 2012".

(Relevant Triad Guaranty Inc. financial and statistical information follows)

Triad Guaranty Inc.'s wholly owned subsidiary, Triad Guaranty Insurance Corporation, is a nationwide mortgage insurer pursuing a run-off of its existing in-force book of business.  For more information, please visit the Company's web site at www.triadguaranty.com.

Certain of the statements contained in this release are "forward-looking statements" and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements include estimates and assumptions related to economic, competitive, regulatory, operational and legislative developments. These forward-looking statements are subject to change, uncertainty and circumstances that are, in many instances, beyond our control and they have been made based upon our current expectations and beliefs concerning future developments and their potential effect on us. Actual developments and their results could differ materially from those expected by us, depending on the outcome of a number of factors, including: the possibility that the Illinois Department of Insurance may take various actions regarding Triad if it does not operate its business in accordance with its revised financial and operating plan and the corrective orders, or for other reasons, including seeking receivership proceedings; our ability to operate our business in run-off and maintain a solvent run-off; our ability to continue as a going concern; the possibility of general economic and business conditions that are different than anticipated; legislative, regulatory, and other similar developments; changes in interest rates, employment rates, the housing market, the mortgage industry and the stock market; legal and other proceedings regarding modifications and refinancing of mortgages and/or foreclosure proceedings; the possibility that there will not be adequate interest in our common stock on the over the counter markets to ensure efficient pricing; and various factors described under "Risk Factors" and in the "Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995" in our Annual Report on Form 10-K for the year ended December 31, 2011 and in other reports and statements filed with the Securities and Exchange Commission.  Forward-looking statements are based upon our current expectations and beliefs concerning future events and we undertake no obligation to update or revise any forward-looking statements to reflect the impact of circumstances or events that arise after the date the forward-looking statements are made, except as otherwise required by law.

SOURCE Triad Guaranty Inc.