News for 'TGIC' - (Triad Guaranty reports third-quarter loss)
Nov 11, 2011 (Winston-Salem Journal - McClatchy-Tribune Information Services
via COMTEX) -- Increasing efforts by financial institutions to flush
non-salvageable residential mortgages through the foreclosure pipeline
contributed t! o another large loss for Triad Guaranty Inc.
The company, based in Winston-Salem, reported today a loss of $37.5 million in
the third quarter compared with net income of $54 million a year ago.
The profit in the third quarter of 2010 was bolstered by a one-time gain of
$29.6 million from the repurchase and retirement of long-term debt.
Triad had an earnings loss of $2.46 a share compared with diluted earnings of
$3.56 a share a year ago.
"High unemployment, tight credit and depressed home prices have prevented any
meaningful recovery in the housing market, which continues to negatively impact
our financial results," said Ken Jones, Triad's president and chief executive.
Triad was one of the first victims of the financial crisis that began in late
2007.
It said in June 2008 it would discontinue writing new mortgage-insurance
business and would conduct "an orderly transition of its business to runoff."
That mea! ns that the company's revenue would come from existing policies thateventually will expire.
Triad said it expects to exist for another four to six years. Since the company
went into runoff, only handling past accounts, it has not had analyst coverage.
In the past two quarters, more financial institutions have opted to accelerate
the pace of foreclosure proceedings for homeowners they've determined as unable
to catch up on their mortgages and mortgage-insurance premiums.
When financial institutions have to reserve money for a nonperforming mortgage,
the cost directly affects their bottom lines.
Triad said it spent $132.5 million on settled claims in the third quarter
compared with $111.6 million in the second quarter.
The company said it had a 37 percent decrease in its reserves to $44.2 million
in the third quarter.
It had revenue of $49.7 million in the third quarter compared with $35.4 million
in the second quarter and $44.3 million a year ago.
Jones said the company's! deficit in assets was $631 million on Sept. 30 compared
with $593.3 million on June 30 and $595.4 million on Sept. 30, 2010.
Triad cautioned again it can't guarantee it will be able to meet current and
future policy obligations with its revenue stream.
Triad has 70 employees, down from 250 when it made the runoff announcement.
Jones said the company's work force will remain in balance with the amount of
work required.
___ (c)2011 Winston-Salem Journal (Winston Salem, N.C.) Visit Winston-Salem
Journal (Winston Salem, N.C.) at www2.journalnow.com Distributed by MCT
Information Services
Richard Craver
Copyright (C) 2011, Winston-Salem Journal, N.C.
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