WINSTON-SALEM, N.C., April 28 /PRNewswire-FirstCall/ -- Triad Guaranty
Inc. (Nasdaq: TGIC) today reported first quarter 2005 net income of $15.8
million compared to $14.0 million in the first quarter of 2004, a 12 percent
increase. Diluted earnings per share increased 11 percent for the quarter to
$1.07 compared to $0.96 in the first quarter of 2004. Realized investment
gains, net of taxes, had no meaningful effect on diluted earnings per share in
the first quarter of 2005 compared to a contribution of $0.03 per share in the
first quarter of 2004.
Darryl W. Thompson, President and Chief Executive Officer, said, "We are
pleased with the level of growth in revenues, insurance in force, and net
earnings in the first quarter of 2005. Production from structured bulk
transactions in the first quarter was approximately equal to our flow
production. We are pleased with the continued penetration in both the flow and
bulk arenas and expect this positive momentum to continue into the remainder
of 2005. Additionally, we were encouraged that delinquent loans at March 31,
2005 were essentially flat when compared to year end."
Insurance in force reached $38.2 billion at March 31, 2005, an increase of
13 percent over a year ago. Total insurance written for the first quarter was
$4.3 billion, down from $4.7 billion in the first quarter of 2004. Insurance
written on flow business in the first quarter totaled $2.2 billion, down from
$2.4 billion in the first quarter of 2004. Insurance written attributable to
structured bulk transactions totaled $2.1 billion in the first quarter of 2005
compared to $2.3 billion for the same period of 2004. Refinance business
represented 35 percent of new originations on flow business in the first
quarter of 2005, the same as the first quarter of 2004.
Earned premiums for the first quarter of 2005 amounted to $38.8 million,
an increase of 15% over the same period a year ago. The increase in earned
premiums resulted from growth of insurance in force, reflecting continued
solid production coupled with an increase in persistency. Persistency, or the
percentage of insurance remaining in force compared to one year prior, was
67.8 percent at March 31, 2005 compared to 54.6 percent at March 31, 2004.
The Company's expense ratio was 28.1 percent for the first quarter of 2005
compared to 29.4 percent in the first quarter of 2004. The loss ratio was
27.4 percent for the first quarter of 2005 compared to 26.3 percent for the
first quarter of 2004. The Company's ratio of delinquent loans to total
policies in force was 2.00 percent at March 31, 2005 compared to 1.89 percent
at March 31, 2004. Incurred losses amounted to $10.6 million in the first
quarter of 2005 compared to $8.9 million in the first quarter of 2004.
According to Thompson, "The first quarter of 2005 was another strong
quarter for Triad. We expect continued growth in earned premiums through
further growth of insurance in force. Our loss development for 2005 continues
to meet our expectations based upon the age and the mix of business of our
insurance in force."
Triad Guaranty Inc.'s wholly owned subsidiary, Triad Guaranty Insurance
Corporation, is a nationwide mortgage insurer providing mortgage insurance
(MI) to residential mortgage lenders. Private MI makes homeownership
available to borrowers with equity of less than 20%, facilitates the sale of
mortgage loans in the secondary market and protects lenders from default-
related expenses. For more information about Triad Guaranty Insurance
Corporation, visit the company's web site at http://www.triadguaranty.com .
Diluted realized investment gains/(losses) per share, net of taxes is a
non-GAAP measure. We believe this is relevant and useful information to
investors because, except for losses on impaired securities, it shows the
effect that the Company's discretionary sales of investments had on earnings.
This document contains forward-looking statements which involve various
risks and uncertainties. Actual results may differ from those set forth in
the forward-looking statements. Attention is directed to the discussion of
risks and uncertainties as part of the Safe Harbor Statement under the Private
Securities Litigation Reform Act of 1995 contained in the Company's most
recent annual report, Form 10-K and other reports filed with the Securities
and Exchange Commission.
Triad Guaranty Inc.
Consolidated Income Statement
(Unaudited)
Three Months Ended
March 31,
2005 2004
(Dollars in thousands except per
share amounts)
Premiums written:
Direct $48,327 $40,317
Ceded (9,616) (7,971)
Net premiums written $38,711 $32,346
Earned premiums $38,777 $33,812
Net investment income 5,415 4,586
Net realized investment gains 7 577
Other income 9 3
Total revenues 44,208 38,978
Net losses and loss adjustment
expenses 10,630 8,883
Interest expense on debt 693 693
Amortization of deferred policy
acquisition costs 3,657 3,185
Other operating expenses - net 7,217 6,340
Income before income taxes 22,011 19,877
Income taxes 6,251 5,833
Net income $15,760 $14,044
Basic earnings per share $1.08 $0.97
Diluted earnings per share $1.07 $0.96
Weighted average common and common
stock equivalents outstanding
(in thousands)
Basic 14,618 14,459
Diluted 14,778 14,671
NON-GAAP INFORMATION:
Diluted realized investment gains
per share, net of taxes $- $0.03
Triad Guaranty Inc.
Consolidated Balance Sheet
(Unaudited) (Unaudited)
March 31, December 31, March 31,
2005 2004 2004
(Dollars in thousands except per
share amounts)
Assets:
Invested assets:
Fixed maturities, available for
sale, at market $472,990 $454,121 $403,568
Equity securities, available for
sale, at market 10,118 10,272 12,477
Short-term investments 15,354 16,095 12,863
498,462 480,488 428,908
Cash 4,123 6,865 4,736
Deferred policy acquisition costs 33,023 32,453 30,863
Prepaid federal income tax 118,777 119,132 98,124
Other assets 32,222 33,097 32,935
Total assets $686,607 $672,035 $595,566
Liabilities:
Losses and loss adjustment expenses $34,825 $34,042 $29,945
Unearned premiums 15,843 15,942 14,158
Deferred income tax 141,702 137,925 121,480
Long-term debt 34,495 34,493 34,488
Other liabilities 8,937 12,290 9,236
Total liabilities 235,802 234,692 209,307
Stockholders' equity:
Retained earnings 346,388 330,628 286,256
Accumulated other comprehensive
income 9,912 13,218 12,811
Other equity accounts 94,505 93,497 87,192
Total stockholders' equity 450,805 437,343 386,259
Total liabilities and stockholders'
equity $686,607 $672,035 $595,566
Stockholders' equity per share:
Including unrealized investment
gains $30.70 $29.89 $26.68
Excluding unrealized investment
gains $30.02 $28.99 $25.80
Common shares outstanding 14,684,648 14,631,678 14,476,623
Triad Guaranty Inc.
Sequential Quarterly Statistical Information
(Unaudited except for year-end periods)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2005 2004 2004 2004 2004
(Dollars in millions unless otherwise indicated)
Direct insurance in force $38,218 $36,827 $35,821 $34,757 $33,886
- Flow business $28,314 $28,191 $27,936 $27,385 $27,224
- Bulk business $9,904 $8,636 $7,885 $7,372 $6,662
Alt-A insurance in force $11,632 $10,136 $9,092 $8,202 $7,345
- Flow business $2,004 $1,836 $1,600 $1,315 $1,238
- Bulk business $9,628 $8,300 $7,492 $6,887 $6,107
Direct risk in force (gross) $7,705 $7,627 $7,506 $7,309 $7,207
Net risk in force $7,099 $7,049 $6,956 $6,797 $6,734
Risk-to-capital ratio 13.7:1 14.0:1 14.4:1 14.6:1 15.2:1
Number of insured loans 272,839 266,574 260,591 254,510 249,683
- Flow business 212,754 212,596 211,300 208,384 207,314
- Bulk business 60,085 53,978 49,291 46,126 42,369
Annual persistency 67.8% 67.6% 66.8% 59.9% 54.6%
Quarterly persistency run
rate 68.8% 61.9% 63.0% 56.9% 68.5%
Average loan size
($ thousands)
- Flow business $133.1 $132.6 $132.2 $131.4 $131.3
- Bulk business $164.8 $160.0 $160.0 $159.8 $157.2
Average severity
($ thousands)
- Flow business $25.4 $24.1 $21.2 $25.6 $27.4
- Bulk business $27.4 $27.0 $17.6 $22.5 $30.2
Net paid claims and LAE
($ thousands) $9,848 $8,551 $7,453 $6,879 $6,124
- Flow business $8,454 $6,339 $6,368 $6,024 $5,355
- Bulk business $1,394 $2,212 $1,085 $855 $769
Note: The Company periodically enters into structured transactions
involving loans that have insurance effective dates within the current
reporting period but for which detailed loan information regarding the
insured loans is not provided until later. When this occurs, the Company
accrues due premium in the reporting period based on each loan's
insurance effective date; however, the loans are not reflected in the
Company's inforce and related data totals until the loan level detail is
reported to the Company. At March 31, 2005, the Company had approximately
$877 million of structured transactions with effective dates within the
first quarter for which loan level detail had not been received.
Triad Guaranty Inc.
Sequential Quarterly Statistical Information
(Unaudited except for year-end periods)
Dec 31, Sep 30, Jun 30, Mar 31,
2003 2003 2003 2003
(Dollars in millions unless otherwise indicated)
Direct insurance in force $31,748 $29,291 $26,914 $26,004
- Flow business $26,901 $25,918 $24,680 $23,400
- Bulk business $4,847 $3,373 $2,234 $2,604
Alt-A insurance in force $5,436 $3,986 $2,871 $2,824
- Flow business $1,203 $1,117 $978 $811
- Bulk business $4,233 $2,869 $1,893 $2,013
Direct risk in force (gross) $7,024 $6,610 $6,245 $6,002
Net risk in force $6,590 $6,210 $5,893 $5,699
Risk-to-capital ratio 15.3:1 15.1:1 15.0:1 15.2:1
Number of insured loans 236,234 221,053 205,046 195,928
- Flow business 205,033 198,366 189,161 178,868
- Bulk business 31,201 22,687 15,885 17,060
Annual persistency 50.7% 49.0% 54.6% 59.1%
Quarterly persistency run rate 46.3% 19.3% 33.6% 50.8%
Average loan size ($ thousands)
- Flow business $131.2 $130.7 $130.5 $130.8
- Bulk business $155.4 $148.7 $140.7 $152.7
Average severity ($ thousands)
- Flow business $28.2 $25.0 $22.5 $22.5
- Bulk business $26.9 $20.0 $12.3 $27.5
Net paid claims and LAE ($ thousands) $5,466 $4,933 $4,046 $3,560
- Flow business $4,632 $4,070 $3,800 $3,419
- Bulk business $834 $863 $246 $141
Note: The Company periodically enters into structured transactions
involving loans that have insurance effective dates within the current
reporting period but for which detailed loan information regarding the
insured loans is not provided until later. When this occurs, the Company
accrues due premium in the reporting period based on each loan's
insurance effective date; however, the loans are not reflected in the
Company's inforce and related data totals until the loan level detail is
reported to the Company. At March 31, 2005, the Company had approximately
$877 million of structured transactions with effective dates within the
first quarter for which loan level detail had not been received.
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited except for year-end periods)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2005 2004 2004 2004 2004
(Dollars in millions unless otherwise
indicated)
Total delinquent loans 5,463 5,445 5,008 4,765 4,722
- Flow business 3,694 3,739 3,469 3,319 3,343
- Bulk business 1,769 1,706 1,539 1,446 1,379
With deductibles 538 410 197 121 66
Without deductibles 1,231 1,296 1,342 1,325 1,313
Total delinquency rate 2.00% 2.04% 1.92% 1.87% 1.89%
- Flow business 1.74% 1.76% 1.64% 1.59% 1.61%
- Bulk business 2.94% 3.16% 3.12% 3.13% 3.25%
Risk Inforce by credit score - Flow
Under 575 0.7% 0.7% 0.7% 0.8% 0.8%
575 - 619 4.8% 4.7% 4.7% 4.7% 4.6%
620 and above 94.5% 94.6% 94.6% 94.5% 94.6%
Risk Inforce by credit score - Bulk
Under 575 1.1% 1.4% 1.8% 2.3% 2.8%
575 - 619 3.2% 3.9% 4.5% 5.2% 6.5%
620 and above 95.7% 94.7% 93.7% 92.5% 90.7%
Insurance in force subject to
captive reinsurance arrangements 42.0% 43.3% 43.7% 43.3% 43.0%
Loss ratio - GAAP 27.4% 27.0% 25.8% 22.5% 26.3%
Expense ratio - GAAP 28.1% 27.8% 28.6% 29.7% 29.4%
Combined ratio - GAAP 55.5% 54.8% 54.4% 52.2% 55.7%
Total insurance written $4,294 $4,082 $4,013 $4,414 $4,663
- Flow $2,161 $2,456 $2,665 $2,950 $2,380
- Bulk $2,133 $1,626 $1,348 $1,464 $2,282
NIW subject to captive reinsurance
arrangements
- Flow business 47.5% 52.8% 51.3% 58.7% 60.3%
New risk written (gross) $602 $688 $751 $805 $693
Product mix as a % of flow
insurance written:
95% LTV's 43.1% 46.5% 50.0% 47.2% 45.0%
ARMs 38.1% 36.7% 37.0% 33.2% 26.9%
Monthly premium 93.1% 93.5% 93.3% 90.7% 91.1%
Annual premium 5.7% 6.1% 6.2% 9.0% 8.5%
Refinances 35.0% 30.1% 22.0% 32.3% 35.4%
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited except for year-end periods)
Dec 31, Sep 30, Jun 30, Mar 31,
2003 2003 2003 2003
Total delinquent loans 4,242 3,700 3,351 3,009
- Flow business 3,053 2,675 2,510 2,280
- Bulk business 1,189 1,025 841 729
With deductibles 17 - - -
Without deductibles 1,172 1,025 841 729
Total delinquency rate 1.80% 1.67% 1.63% 1.54%
- Flow business 1.49% 1.35% 1.33% 1.27%
- Bulk business 3.81% 4.52% 5.29% 4.27%
Risk Inforce by credit score - Flow
Under 575 0.8% 0.8% 0.8% 0.7%
575 - 619 4.6% 4.5% 4.6% 4.5%
620 and above 94.6% 94.7% 94.6% 94.8%
Risk Inforce by credit score - Bulk
Under 575 4.1% 4.4% 3.8% 3.7%
575 - 619 8.5% 10.3% 12.5% 12.2%
620 and above 87.4% 85.3% 83.7% 84.1%
Insurance in force subject to captive
reinsurance arrangements 43.6% 43.9% 43.4% 41.4%
Loss ratio - GAAP 21.6% 20.0% 19.0% 18.7%
Expense ratio - GAAP 34.0% 32.7% 29.3% 32.9%
Combined ratio - GAAP 55.6% 52.7% 48.3% 51.6%
Total insurance written $5,224 $6,652 $4,853 $3,766
- Flow $3,255 $5,028 $4,667 $3,630
- Bulk $1,969 $1,624 $186 $136
NIW subject to captive reinsurance
arrangements
- Flow business 50.3% 44.1% 43.3% 48.5%
New risk written (gross) $991 $1,305 $1,094 $869
Product mix as a % of flow insurance
written:
95% LTV's 45.0% 42.3% 39.5% 37.4%
ARMs 26.1% 18.3% 14.5% 14.1%
Monthly premium 83.1% 75.8% 71.4% 76.3%
Annual premium 16.4% 23.7% 28.2% 23.3%
Refinances 38.5% 52.3% 55.1% 57.2%
SOURCE Triad Guaranty Inc.
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Related links:
http://www.triadguaranty.com
CONTACT:
Ron Kessinger, Senior Executive Vice
President, Chief Operating Officer of Triad Guaranty Inc.,
+1-800-451-4872, ext. 1104, or rkessinger@tgic.com
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