WINSTON-SALEM, N.C., Nov. 10 /PRNewswire-FirstCall/ -- Triad
Guaranty Inc. (NASDAQ:TGIC) today reported a net loss for the
quarter ended September 30, 2009 of $101.9 million compared to a
net loss of $359.4 million for the second quarter of 2009 and a net
loss of $160.1 million for the third quarter of 2008. The 2009
third quarter diluted loss per share was $6.78 compared to a
diluted loss per share of $23.91 for the 2009 second quarter and
$10.69 for the third quarter of 2008. The net loss for the nine
months ended September 30, 2009 was $516.5 million compared to a
net loss of $508.9 million for the nine months ended September 30,
2008. The diluted loss per share was $34.44 for the nine months
ended September 30, 2009 compared to a diluted loss per share of
$34.14 for the nine months ended September 30, 2008. Ken Jones,
President and CEO, said, "The third quarter continued to be a very
difficult environment for our business. First-time defaults were
down slightly from the second quarter of 2009, but continued at a
high volume. Compounding the problem, the cure rates on existing
defaults were at historic lows and have shown little sign of
improving. As a company in run-off, our primary focus remains the
efficient and effective servicing of our insured portfolio,
particularly with respect to loss management, in order to maximize
our claims-paying ability." Mr. Jones continued, "Our financial
position continued to deteriorate during the third quarter and we
reported a deficit in assets of $625 million at September 30, 2009.
To meet all of our existing obligations, we will need to earn at
least $625 million during the run-off of our existing business."
For additional information concerning our results for the third
quarter of 2009 and our financial position at September 30, 2009,
please see our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2009, which will be filed today with the Securities
and Exchange Commission and will be available at
http://www.sec.gov/ or via our web site
http://www.triadguaranty.com/. We have updated the quarterly
statistical and supplemental information for the 2009 third quarter
results on our web site at http://www.triadguaranty.com/. The
supplemental information can be found under "Investors" and then
under "Webcasts and Presentations" by the title "Supplemental
Information - Third Quarter 2009". (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 voluntary
run-off of its existing in-force book of business. For more
information, please visit the Company's web site at
http://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, 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; our ability to maintain the listing of our
common stock on The NASDAQ Stock Market; 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, 2008 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. Triad
Guaranty Inc. Consolidated Statement of Operations Three Months
Ended Nine Months Ended September 30, September 30, (Unaudited)
(Unaudited) 2009 2008 2009 2008 ---- ---- ---- ---- (Dollars in
thousands except per share amounts) Earned premiums $35,576 $65,654
$144,767 $207,583 Net investment income 12,342 10,349 34,393 29,071
Net realized investment gains (losses) 3,253 (6,519) 705 (7,615)
Other income 127 2 131 6 --- --- --- --- Total revenues 51,298
69,486 179,996 229,045 Losses and loss adjustment expenses: Net
settled claims 157,881 59,357 361,664 167,708 Change in reserves
(15,836) 165,958 302,748 559,469 Loss adjustment expenses 3,713
5,879 14,291 18,025 ----- ----- ------ ------ Net losses and loss
adjustment expenses 145,758 231,194 678,703 745,202 Interest
expense 1,202 691 3,791 2,863 Policy acquisition costs - - - 39,416
Other operating expenses - net 9,659 8,726 27,750 50,070 -----
----- ------ ------ Loss before income taxes (105,321) (171,125)
(530,248) (608,506) Income tax benefit (3,426) (11,030) (13,760)
(99,586) ------ ------- ------- ------- Net loss $(101,895)
$(160,095) $(516,488) $(508,920) ========= ========= =========
========= Diluted loss per share $(6.78) $(10.69) $(34.44) $(34.14)
Diluted weighted average common and common stock equivalents
outstanding (in thousands) 15,033 14,973 14,995 14,907 Triad
Guaranty Inc. Consolidated Balance Sheet (Unaudited) (Unaudited)
September 30, December 31, September 30, 2009 2008 2008 ---- ----
---- (Dollars in thousands except per share amounts) Assets:
Invested assets: Fixed maturities, available for sale, at market
$814,821 $854,186 $862,486 Equity securities, available for sale,
at market 56 583 615 Short-term investments 32,028 40,653 27,619
------ ------ ------ 846,905 895,422 890,720 Cash and cash
equivalents 7,480 39,940 47,818 Prepaid federal income tax - 15 15
Reinsurance recoverable 245,436 150,848 111,827 Other assets 54,331
44,309 51,576 ------ ------ ------ Total assets $1,154,152
$1,130,534 $1,101,956 ========== ========== ========== Liabilities:
Losses and loss adjustment expenses $1,576,303 $1,187,840
$1,042,053 Unearned premiums 13,385 15,863 16,870 Deferred income
tax - - 22,889 Long-term debt 34,537 34,529 34,527 Deferred payment
obligation 97,048 - - Other liabilities 57,906 28,968 14,016 ------
------ ------ Total liabilities 1,779,179 1,267,200 1,130,355
Stockholders' equity: Accumulated deficit (771,997) (255,509)
(133,302) Accumulated other comprehensive income 33,626 6,063
(7,913) Other equity accounts 113,344 112,780 112,816 -------
------- ------- Total stockholders' deficit in assets (625,027)
(136,666) (28,399) -------- -------- ------- Total liabilities and
stockholders' equity $1,154,152 $1,130,534 $1,101,956 ==========
========== ========== Stockholders' deficit in assets per share:
$(40.96) $(9.01) $(1.88) Common shares outstanding 15,258,128
15,161,259 15,116,259 Triad Guaranty Inc. Consolidated Statement of
Cash Flow Nine Months Ended September 30, (Unaudited) 2009 2008
---- ---- (Dollars in Thousands) OPERATING ACTIVITIES Net loss
$(516,488) $(508,920) Adjustments to reconcile net loss to net cash
provided by operating activities: Increase in loss and unearned
premium reserves 385,985 681,191 Amounts due to/ from reinsurer
(95,275) (111,419) Net realized investment (gains) losses (705)
7,615 Policy acquisition costs deferred - (3,173) Amortization of
policy acquisition costs - 39,416 Deferred income taxes (14,841)
(94,991) Redemption of Tax and Loss Bonds 15 115,993 Deferred
payment obligation 97,048 - Other operating activities 29,192
24,926 ------ ------ Net cash provided by operating activities
(115,069) 150,638 -------- ------- INVESTING ACTIVITIES Purchases
of investment securities (171,049) (782,316) Sales and maturities
of investment securities 245,225 612,418 Net change in short- term
investments 8,538 26,692 Other investing activities (105) (1,348)
---- ------ Net cash provided by (used in) investing activities
82,609 (144,554) ------ -------- FINANCING ACTIVITIES Repayments on
credit facility - (80,000) ---- ------- Net cash used in financing
activities - (80,000) ---- ------- Foreign currency translation
adjustment - (3,077) ---- ------ Net decrease in cash (32,460)
(76,993) Cash at beginning of period 39,940 124,811 ------ -------
Cash at end of period $7,480 $47,818 ====== ======= TRIAD GUARANTY
INC. Sequential Quarterly Financial Statements (unaudited)
Condensed Statements of Operations For The Quarter Ended (Dollars
in thousands) ---------------------- Sept 30, Jun 30, Mar 31, 2009
2009 2009 ---- ---- ---- Revenue: Earned premiums $35,576 $64,833
$44,358 Net investment income 12,342 10,859 11,192 Realized
investment gains (losses) 3,253 2,017 (4,565) Other income (loss)
127 2 2 --- --- --- Total revenues 51,298 77,711 50,987 ------
------ ------ Losses and expenses: Net settled claims 157,881
149,863 53,920 Change in reserves (15,836) 278,956 39,628 Loss
adjustment expenses 3,713 2,549 8,029 ----- ----- ----- Net losses
and LAE 145,758 431,368 101,577 Change in premium deficiency
reserve - - - Interest expense 1,202 1,895 694 Amortization of DAC
- - - Other operating expenses 9,659 8,680 9,411 ----- ----- -----
Total losses and expenses 156,619 441,943 111,682 ------- -------
------- Income (loss) before income taxes (105,321) (364,232)
(60,695) Income taxes (benefit) (3,426) (4,813) (5,521) ------
------ ------ Net income (loss) $(101,895) $(359,419) $(55,174)
========= ========= ======== Dec 31, Sep 30, Jun 30, Mar 31, 2008
2008 2008 2008 ---- ---- ---- ---- Revenue: Earned premiums $49,840
$65,654 $69,864 $72,065 Net investment income 10,509 10,349 9,175
9,547 Realized investment gains (losses) (18,944) (6,519) (3,799)
2,703 Other income (loss) 2 2 2 2 --- --- --- --- Total revenues
41,407 69,486 75,242 84,317 ------ ------ ------ ------ Losses and
expenses: Net settled claims 69,372 59,357 68,263 40,471 Change in
reserves 106,080 165,958 218,568 174,561 Loss adjustment expenses
2,647 5,879 5,918 6,227 ----- ----- ----- ----- Net losses and LAE
178,099 231,194 292,749 221,259 Change in premium deficiency
reserve - - (15,000) 15,000 Interest expense 694 691 696 1,476
Amortization of DAC - - - 39,416 Other operating expenses 8,639
8,726 27,238 14,106 ----- ----- ------ ------ Total losses and
expenses 187,432 240,611 305,683 291,257 ------- ------- -------
------- Income (loss) before income taxes (146,025) (171,125)
(230,441) (206,940) Income taxes (benefit) (23,818) (11,030)
(31,630) (56,926) ------- ------- ------- ------- Net income (loss)
$(122,207) $(160,095) $(198,811) $(150,014) ========= =========
========= ========= Dec 31, Sep 30, 2007 2007 ---- ---- Revenue:
Earned premiums $73,130 $72,090 Net investment income 9,544 8,370
Realized investment gains (losses) (29) 85 Other income (loss) 2 2
--- --- Total revenues 82,647 80,547 ------ ------ Losses and
expenses: Net settled claims 36,341 28,471 Change in reserves
150,687 76,612 Loss adjustment expenses 4,624 1,730 ----- ----- Net
losses and LAE 191,652 106,813 Change in premium deficiency reserve
- - Interest expense 1,828 1,161 Amortization of DAC 4,637 4,567
Other operating expenses 10,895 11,686 ------ ------ Total losses
and expenses 209,012 124,227 ------- ------- Income (loss) before
income taxes (126,365) (43,680) Income taxes (benefit) (51,406)
(11,831) ------- ------- Net income (loss) $(74,959) $(31,849)
======== ======== Condensed Balance Sheets As Of (Dollars in
thousands) ---------------------- Sept 30, Jun 30, Mar 31, 2009
2009 2009 ---- ---- ---- Assets Invested assets $846,905 $851,640
$918,531 Cash 7,480 31,600 21,394 Real estate acquired - - 526
Deferred policy acquisition costs - - - Prepaid federal income tax
- - 15 Reinsurance recoverable 245,436 234,248 182,589 Other assets
54,331 57,650 52,307 ------ ------ ------ Total assets $1,154,152
$1,175,138 $1,175,362 ========== ========== ========== Liabilities
and stockholders' equity Liabilities: Losses and loss adjustment
expenses $1,576,303 $1,591,207 $1,262,746 Premium deficiency
reserve - - - Deferred income taxes - - - Borrowing under credit
facility - - - Long term debt 34,537 34,535 34,532 Deferred payment
obligation 97,048 27,020 - Accrued expenses and other liabilities
71,291 52,066 59,477 ------ ------ ------ Total liabilities
1,779,179 1,704,828 1,356,755 Total stockholders' equity (deficit
in assets) (625,027) (529,690) (181,393) -------- -------- --------
Total liabilities and stockholders' equity $1,154,152 $1,175,138
$1,175,362 ========== ========== ========== Dec 31, Sep 30, Jun 30,
Mar 31, 2008 2008 2008 2008 ---- ---- ---- ---- Assets Invested
assets $895,422 $890,720 $869,022 $760,073 Cash 39,940 47,818
19,669 80,544 Real estate acquired 713 3,661 6,202 8,993 Deferred
policy acquisition costs - - - - Prepaid federal income tax 15 15
63,184 115,598 Reinsurance recoverable 150,848 111,827 55,316
93,244 Other assets 43,596 47,915 50,405 52,572 ------ ------
------ ------ Total assets $1,130,534 $1,101,956 $1,063,798
$1,111,024 ========== ========== ========== ========== Liabilities
and stockholders' equity Liabilities: Losses and loss adjustment
expenses $1,187,840 $1,042,053 $817,262 $547,766 Premium deficiency
reserve - - - 96,073 Deferred income taxes - 22,889 30,386 61,522
Borrowing under credit facility - - - - Long term debt 34,529
34,527 34,527 34,522 Deferred payment obligation - - - - Accrued
expenses and other liabilities 44,830 30,887 40,714 32,699 ------
------ ------ ------ Total liabilities 1,267,199 1,130,356 922,889
772,582 Total stockholders' equity (deficit in assets) (136,665)
(28,400) 140,909 338,442 -------- ------- ------- ------- Total
liabilities and stockholders' equity $1,130,534 $1,101,956
$1,063,798 $1,111,024 ========== ========== ========== ==========
Dec 31, Sep 30, 2007 2007 ---- ---- Assets Invested assets $784,539
$794,373 Cash 124,811 30,617 Real estate acquired 10,860 12,566
Deferred policy acquisition costs 36,243 35,574 Prepaid federal
income tax 116,008 168,817 Reinsurance recoverable 5,815 2 Other
assets 54,577 54,724 ------ ------ Total assets $1,132,853
$1,096,673 ========== ========== Liabilities and stockholders'
equity Liabilities: Losses and loss adjustment expenses $359,939
$200,455 Premium deficiency reserve - - Deferred income taxes
123,297 170,477 Borrowing under credit facility 80,000 80,000 Long
term debt 34,519 34,517 Deferred payment obligation - - Accrued
expenses and other liabilities 36,247 39,754 ------ ------ Total
liabilities 634,002 525,203 Total stockholders' equity (deficit in
assets) 498,851 571,470 ------- ------- Total liabilities and
stockholders' equity $1,132,853 $1,096,673 ========== ==========
DATASOURCE: Triad Guaranty Inc. CONTACT: Bob Ogburn, Vice President
and Treasurer, Triad Guaranty Inc., +1-336-723-1282 ext. 1167 or
Web Site: http://www.triadguaranty.com/
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