News for 'TGIC' - (Triad Guaranty Inc. Reports First Quarter Results)
WINSTON-SALEM, N.C., May 11, 2012 /PRNewswire via COMTEX/ -- Triad Guaranty
Inc. (OTCBB: TGIC) today reported a net loss for the quarter ended March 31,
2012 of $37.7 million compared to a net loss of $60.9 million for the fo! urth
quarter of 2011 and a net loss of $4.9 million during the first quarter of 2011.
The 2012 first quarter diluted loss per share was $2.47 compared to a diluted
loss per share of $3.99 for the 2011 fourth quarter and $0.32 for the first
quarter of 2011.
Ken Jones, President and CEO, said, "During the 2012 first quarter, we
experienced the anticipated positive seasonal impact of lower first notices of
defaults and increased cure rates normally attributed to income tax refunds and,
to a lesser extent, year-end bonuses. As a result, primary risk in default
declined by 7.4% sequentially compared to a sequential decline of 4.7% in the
fourth quarter of 2011. Net losses and loss adjustment expenses for the first
quarter were $67.9 million, down from the $107.4 million reported in the fourth
quarter of 2011 which reflected an increase in the frequency factors utilized in
our reserve calculation. Settled claims were $99.4 million during! the 2012 first
quarter compared to $118.3 million in the 2011 four th quarter and $111.9 million
in the first 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 $737.8 million at March 31, 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 first quarter results on our web site at www.triadguaranty.c! om. The
supplemental information can be found under "Investors" and then under "Webcasts
and Presentations" by the title "Supplemental Information - First 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 ar! e, in many instances, beyond our
control and they have been made ba sed 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 pro! ceedings
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.
Triad Guaranty Inc. &n! bsp;
Consolidated Statements of Operations
(Unaud! ited)
&nb! sp; & nbsp;
!
&! nbsp; ; Three Months Ended
March 31,
!
2012 &n! bsp; 2011
(Dollars in thousands except per share amounts)
Revenues: &nb! sp;
Earned premiums $ 34,537 $ 37,128
Net investment income ! ; &nb sp; 6,109 8,491
Net realized investment gains (losses) 173 (436)
Other income &! nbsp; 3 27
Total revenues 40,822 45,210
Losses and Expenses: &! nbsp; ;
Net settled claims 97,131 106,909 &nbs! p;
Decrease in reserves (30,531) (66,694)
Loss adjustment expenses 1,382 1,490 &n! bsp;
&nbs p; Net losses and loss adjustment expenses 67,982 41,705
&n! bsp;
Interest expense 4,981 3,978
Other operating expenses 5,584 &nbs! p; 4, 437
Total losses and expenses 78,547 50,120
Loss before income taxes (37,725) &nbs! p; (4,910)
Income tax expense - -
! ; &nb sp;
Net loss $ (37,725) $ (4,910)
!
Per Share Information: &nb! sp; & nbsp;
Diluted loss per share $ (2.47) $ (0.32)
&nbs! p;
Diluted weighted average common stock and common
stock equivalents outstanding (in thousands of shares) 15,258 &! nbsp; 15,225&nbs p;
Triad Guaranty Inc. &n! bsp;
Consolidated Balance Sheets &! nbsp; ;
! ;
! &nbs p; (Unaudited) (Unaudited)
March 31, December 31, March 31,
&! nbsp; 2012 2011 2011
(! Dollars in thousands) & nbsp;
Assets:
&! nbsp; Invested assets:
Fixed maturities, available for sale, at market $ 740,802 $ 746,238 $ 810,439
&! nbsp; ; Short-term investments 44,094 30,102 32,469
&nb! sp;
784,896 776,340 842,908
&! nbsp; ;
Cash and cash equivalents 17,355 ! 40,590 39,073
Reinsurance recoverable 19,712 22,988 33,499
Other Assets &! nbsp; ; 53,732 56,309 48,528
&! nbsp;
Total assets $ 875,695 $ 896,227 $ 964,008
&nb! sp; & nbsp;
Liabilities: &nb! sp;
Losses and loss adjustment expenses $ 821,512 $ 854,188 $ 990,494
Unearned premiums 7,171 6,871&nb! sp; 9,220
Deferred payment obligation 674,191 629,700 464,342
Other liabilities 110,600 &nbs! p; 109,042 93,691
! &nbs p; Total liabilities 1,613,474 1,599,801 1,557,747
&n! bsp;
Stockholders' deficit:
&n! bsp; Accumulated deficit ; (864,540) (826,815) (723,956)
Accumulated other comprehensive income 12,493 8,977 15,963
Other equity accounts ! 114,268 114,264 114,254
&n! bsp;
Deficit in assets (737,779) (703,574) (593,739)
&! nbsp;
Total liabilities and stockholders' deficit $ 875,695 $ 896,227 $ 964,008
&nb! sp; & nbsp;
&nb! sp;
&nbs! p;
; Common shares outstanding (in thousands) 15,328 15,328 15,258
&nb! sp;
Triad Guaranty Inc.
Consolidated Statements of Cash Flow &! nbsp; ;
(Unaudited)
!
&! nbsp; Three Months Ended &nbs p;
March 31,
!
2012 2011 &nb! sp;
&nbs p; (Dollars in thousands)
&n! bsp;
OPERATING ACTIVITIES
Net loss &n! bsp; $ (37,725) $ (4,910)
Adjustments to reconcile net loss to net cash
used in operating activities: &nbs! p;
Decrease in loss and unearned premium reserves (32,376) (69,379)
Decrease in amounts due to/from reinsurer 3,276 7,307
! &nbs p; Net realized investment (gains) losses (173) 436
Increase in deferred payment obligation 44,491 48,685
Income taxes recoverable &! nbsp; - 11,707
Other operating activities 4,800 1,128
&nb! sp; & nbsp;
Net cash used in operating activities (17,707) (5,026)
&n! bsp;
INVESTING ACTIVITIES &! nbsp;
&n bsp; Purchases of investment securities (19,837) (27,539)
Sales and maturities of investment securities 28,062 26,514
Decrease (increase) in short-term investments&n! bsp; (13,970) 7,092
Other investing activities 217 (730)
Net cash (used in) provided by investing activities (5,528) 5,337 &nbs! p;
