News for 'TGIC' - (Triad Guaranty Inc. Reports Second Quarter Results)
WINSTON-SALEM, N.C., Aug. 14, 2012 /PRNewswire via COMTEX/ -- 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 f! irst 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 adjustm! ent expenses for the
second quarter amounted to $68.2 million compa red 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 bus! iness
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 up! on our current expectations and beliefs concerning future
events an d 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. ! ;
Consolidated Statements of Operations
(Unaudited) ! ; &nb sp;
!
&! nbsp; ;
&! nbsp;
Three Months Ended Six Months Ended
! ; &nb sp; June 30, June 30,
! ;
2012 2011 2012 2011 !
& nbsp; (Dollars in thousands except per share amounts)
Revenues: !
Earned premiums $ 36,760 $ 35,394 $ 71,297 ! ; $ 72,522 & nbsp;
Net investment income 5,874 8,126 11,983 16,617
Net realized investment gains 807 &nb! sp; 3,000 980 2,564
Other income 2,513 29 2,516 56 &nbs! p;
; Total revenues 45,954 46,549 86,776 91,759
Losses and Expenses: &! nbsp;
Net settled claims 108,134 111,583 205,266 218,492 &! nbsp;
&nb sp; Decrease in reserves (41,024) (70,752) (71,556) (137,446)
Loss adjustment expenses 1,074 469 &n! bsp; 2,456 1,959
Net losses and loss adjustment expenses 68,184 41,300 136,166 83,005
&! nbsp; ;
Interest expense 4,938 4,469 &nbs! p; 9,919 8,447
Other operating expenses 4,136 5,178 9,720 9,615
Total losses and expenses &nbs! p; &n bsp; 77,258 50,947 155,805 101,067
Loss before income taxes (31,304) (4,398) (69,029) (9,308)
&n! bsp; Income tax expense - - - -
&nb! sp; & nbsp;
Net loss $ (31,304) $ &n! bsp; (4,398) $ (69,029) $ (9,308)
&n! bsp;
Per Share Information:
Diluted loss per share &nb! sp; $ (2.05) $ (0.29) $ (4.52) $ (0.61)
&n! bsp;
Diluted weighted average common stock and common
stock equivalents outstanding (in thousands of shares) 15,293 15,! 258 15,275 15,241
Triad Guaranty Inc.
Consolidated Balance Sheets &nbs! p; &n bsp;
! ;
!
& nbsp; (Unaudited) (Unaudited)
&nb! sp; June 30, December 31, June 30,
2012 2011 2011
&nb! sp; & nbsp; (Dollars in thousands)
Assets: &nbs! p;
Invested assets: &n! bsp;
&nb sp; Fixed maturities, available for sale, at market $ 705,250 $ 746,238 $ 757,124
Short-term investments 34,014 30,102 65,894
&nbs! p;
! ; &nb sp; 739,264 776,340 823,018
! ;
Cash and cash equivalents 36,037 40,590 40,277
Reinsurance recoverable 19,372 &nbs! p; 22,988 &n bsp; 31,230
Other Assets 53,351 56,309 46,141
&n! bsp;
Total assets $ 848,024 $ ! ; 896,227 $ & nbsp; 940,666
Liabilities: &nbs! p;
Losses and loss adjustment expenses $ 779,179 $ 854,188 $ 910,530
&n! bsp; Unearned premiums 7,116 6,871 8,642
Deferred payment obligation 723,551 629,700 517,193 &n! bsp;
Other liabilities 109,576 109,042 97,629
&nbs! p; &n bsp;
Total liabilities 1,619,422 1,599,801 1,533,994
&nb! sp;
Stockholders' deficit: ! &nbs p;
Accumulated deficit (895,844) (826,815) (728,354)
Accumulated other comprehensive income &! nbsp; 10,175 8,977 20,769
Other equity accounts 114,271 114,264 114,257
&nb! sp; & nbsp;
Deficit in assets (771,398) (703,574) (593,328) ! ;
Total liabilities and stockholders' deficit &n! bsp; $ ; 848,024 $ 896,227 $ 940,666
&nbs! p;
! ; &nb sp;
Common shares outstanding (in thousands) 15,368 15,328 15,328
Triad Guaranty Inc. &nb! sp;
Consolidated Statements of Cash Flow
(Unaudited) &nb! sp; & nbsp;
&nb! sp;
Six Months Ended
! ; &nb sp; June 30,
&n! bsp; 2012 2011
(Dolla! rs in thousands)
OPERATING ACTIVITIES ! ;
Net loss $ (69,029) $ (9,308)
Adjustments to reconcile net loss to net cash ! &nbs p;
used in operating activities:
Decrease in loss and unearned premium reserves (74,764) (149,921) &nbs! p;
Decrease in amounts due to/from reinsurer 3,616 9,576
Net realized investment gains (980) (2,564)
Inc! rease in deferred payment obligation &nbs p; 93,851 101,536
Collection of income taxes recoverable - 11,707
Other operating activities 5,269 7,881 &! nbsp;
Net cash used in operating activities (42,037) &nb! sp; (31,093) &nbs p;
&
