WINSTON-SALEM, N.C., May 12 /PRNewswire-FirstCall/ -- Triad Guaranty
Inc. (Nasdaq: TGIC) today reported a net loss for the quarter ended March
31, 2008 of $150.0 million compared with net income of $17.3 million for
the same quarter in 2007. The diluted loss per share was $10.09 for the
first quarter of 2008 compared to diluted earnings per share of $1.16 for
the first quarter of 2007. Realized investment gains, net of taxes,
decreased the loss per share by $0.12 in the first quarter of 2008 while
increasing the earnings per share by $0.03 in the first quarter of 2007.
Mark K. Tonnesen, President and Chief Executive Officer, said, "The
negative trends we encountered during the second half of 2007 continued to
impact us during the first quarter of 2008. Housing prices remain under
pressure across the country and the distressed markets of Florida,
California, Arizona and Nevada continue to be particularly affected. Our
reserves for existing defaults increased by $174.6 million during the first
quarter, reflecting continued growth in risk in default, with the
distressed markets contributing 67% of the growth in reserves.
Additionally, we recorded a net $49.8 million pre-tax charge to recognize a
premium deficiency. Also, we have decided to liquidate our Canadian
subsidiary and recorded a $2 million pre-tax charge to reflect the cost
associated with winding down this operation."
Mr. Tonnesen continued, "We have previously disclosed our negotiations
with Lightyear Capital LLC. We believe the transactions that we are
currently negotiating with Lightyear offer the best outcome for our
customers, policyholders, stockholders and employees given the current
industry conditions and capital-raising environment. With the
acknowledgment of the Illinois Division of Insurance, we continue to write
new mortgage insurance business as we work towards the completion of
definitive agreements with Lightyear. While there are many tasks that must
be accomplished before we get to the final agreements, and there can be no
guarantees that we will be successful in getting there, we are pleased with
the progress thus far."
Total insurance in force reached $67.6 billion at March 31, 2008
compared with $61.5 billion at March 31, 2007. The total insurance in force
consisted of Primary of $46.4 billion and Modified Pool of $21.2 billion at
March 31, 2008, compared with $38.0 billion and $23.5 billion,
respectively, at March 31, 2007. Total new insurance written during the
first quarter of 2008, consisting only of Primary business written under
our more restrictive underwriting guidelines, totaled $1.9 billion compared
with $5.7 billion of Primary and $1.9 billion of Modified Pool written in
the first quarter of 2007. We do not anticipate any further production of
Modified Pool in the foreseeable future.
Earned premiums for the first quarter of 2008 were $72.1 million, an
increase of 13% over the same period in 2007 and down slightly compared to
the fourth quarter of 2007. The growth in earned premiums during the 2008
first quarter compared to the 2007 first quarter was principally due to
growth in Primary insurance in force. Annual persistency on the Primary
business was 83% at March 31, 2008, compared with 77% at March 31, 2007,
which contributed to the growth of the insurance in force.
Net losses and loss adjustment expenses of $221.3 million for the first
quarter of 2008, compared to $32.6 million for the first quarter of 2007,
reflect the impact of the significant changes that have occurred in the
housing markets in the past year. Net losses and loss adjustment expenses
for the first quarter of 2008 include a net reserve increase of $174.6
million compared to $14.2 million in the first quarter of 2007. Paid claims
totaled $40.5 million in the first quarter of 2008 compared to $17.7
million for the first quarter of 2007.
Average severity on Primary paid claims was $42,600 in the first
quarter of 2008, up from $31,300 in the first quarter of 2007. The average
severity on Modified Pool paid claims in the first quarter of 2008 was
$65,000, which also was up significantly compared to $23,700 in the first
quarter of 2007. The Primary delinquency rate was 4.89% at March 31, 2008
compared with 2.35% at March 31, 2007. The Modified Pool delinquency rate
rose to 8.45% at March 31, 2008 compared with 2.93% at March 31, 2008.
At March 31, 2008, we recorded a net premium deficiency in our results
of operations reflecting our estimate of the present value of the embedded
future loss in our remaining portfolio that exceeds our recorded net
reserves. A premium deficiency reserve of $96.1 million was established,
which was partially offset by the establishment of a reinsurance
recoverable of $81.1 million. Additionally, and as part of the premium
deficiency computation, all existing DAC as of March 31, 2008 was written
off, which amounted to a $34.8 million pre-tax charge-off.
Our loss ratio, which excludes the impact of the premium deficiency
reserve, was 307.0% for the first quarter of 2008 compared to 50.9% for the
first quarter of 2007. Our expense ratio, which excludes the write off of
the remaining DAC asset resulting from the premium deficiency, was 25.5%
for the first quarter of 2008 compared to 22.8% for the first quarter of
2007.
We have continued to update the supplemental information related
primarily to product differentiation, risk structures, additional portfolio
characteristics and performance on our web site at http://www.triadguaranty.com
for 2008 first quarter results. The supplemental information can be found
under Investors and then under Webcasts and Presentations by the title
"Supplemental Information - First Quarter 2008".
(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 providing credit enhancement
solutions to its lender customers and the capital markets. This allows
buyers to achieve homeownership sooner, facilitates the sale of mortgage
loans in the secondary market and protects lenders from credit
default-related expenses. For more information, please 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 financial measure. The Company believes this is relevant and
useful information to investors because, except for losses on impaired
securities, it shows the effect that the Company's discretionary sale of
investments had on earnings.
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 our ability to enhance our
capital resources, our ability to consummate the proposed transactions with
Lightyear Capital, the possibility of general economic and business
conditions that are different than anticipated, legislative, regulatory,
rating agency and other similar developments, changes in interest rates,
the housing market, the mortgage industry and the stock market, and
stronger than anticipated competitive activity, as well as the factors
described under "Risk Factors" and under "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, 2007 and in other reports and
statements that we file 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
March 31,
(Unaudited) (Unaudited)
2008 2007
(Dollars in thousands except per share amounts)
Premiums written:
Direct $89,386 $78,408
Ceded (15,995) (12,701)
Net premiums written $73,391 $65,707
Earned premiums $72,065 $63,949
Net investment income 9,547 7,349
Net realized investment gains 2,703 761
Other income 2 2
Total revenues 84,317 72,061
Net losses and loss adjustment expenses 221,259 32,581
Net change in premium deficiency reserve 15,000 -
Interest expense on debt 1,476 694
Policy acquisition costs 39,416 4,624
Other operating expenses - net 14,106 10,330
(Loss) income before income taxes (206,940) 23,832
Income taxes (benefit) (56,926) 6,510
Net (loss) income $(150,014) $17,322
Basic (loss) earnings per share $(10.09) $1.17
Diluted (loss) earnings per share $(10.09) $1.16
Average weighted average common and common
stock equivalents outstanding (in thousands)
Basic 14,869 14,819
Diluted 14,869 14,946
CERTAIN NON-GAAP FINANCIAL MEASURES:
Diluted earnings per share contribution from
realized gains
Net realized investment gains $2,703 $761
Income taxes at 35% 946 266
After tax realized gains $1,757 $495
Diluted weighted average
shares outstanding (in thousands) 14,869 14,946
Diluted earnings per share
contribution from realized gains $0.12 $0.03
Diluted realized investment gains per share, net of taxes is a non-
GAAP financial 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 sale of investments had on
earnings.
Triad Guaranty Inc.
Consolidated Balance Sheet
(Unaudited) (Unaudited)
March 31, December 31, March 31,
2008 2007 2007
(Dollars in thousands except per share amounts)
Assets:
Invested assets:
Fixed maturities, available
for sale, at market $746,380 $725,631 $608,945
Equity securities, available
for sale, at market 1,957 2,162 9,921
Other Investments - - 5,000
Short-term investments 11,736 56,746 45,294
760,073 784,539 669,160
Cash and cash equivalents 80,544 124,811 10,429
Deferred policy acquisition costs - 36,243 35,035
Prepaid federal income tax 115,598 116,008 166,693
Reinsurance recoverable 93,244 - -
Other assets 61,565 71,252 50,198
Total assets $1,111,024 $1,132,853 $931,515
Liabilities:
Losses and loss adjustment
expenses $547,766 $359,939 $98,721
Premium deficiency reserve 96,073 - -
Unearned premiums 19,169 17,793 15,022
Revolving line of credit - 80,000 -
Deferred income tax 61,522 123,297 180,232
Long-term debt 34,522 34,519 34,512
Other liabilities 13,530 18,454 15,876
Total liabilities 772,582 634,002 344,363
Stockholders' equity:
Retained earnings 225,604 375,618 470,398
Accumulated other
comprehensive income 2,328 13,405 10,157
Other equity accounts 110,510 109,828 106,597
Total stockholders' equity 338,442 498,851 587,152
Total liabilities and
stockholders' equity $1,111,024 $1,132,853 $931,515
Stockholders' equity per share: $22.39 $33.43 $39.38
Common shares outstanding 15,117,733 14,920,243 14,908,523
Triad Guaranty Inc.
Sequential Quarterly Statistical Information
(Unaudited)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007
(Dollars in millions unless otherwise indicated)
Insurance In Force
Primary insurance in force:
- Flow business $42,086 $41,840 $40,610 $38,590 $35,366
- Structured bulk
transactions 4,374 4,525 4,700 4,133 2,616
Total Primary
insurance in force 46,459 46,365 45,310 42,724 37,982
Modified Pool insurance in
force 21,187 21,863 22,737 23,649 23,507
Total insurance in
force $67,646 $68,228 $68,047 $66,373 $61,489
Number of insured loans:
- Primary 272,289 273,798 269,681 258,163 239,326
- Modified Pool 101,723 105,109 109,133 113,725 114,711
Total number of
insured loans 374,012 378,907 378,814 371,888 354,037
Average loan size: ($ in
thousands)
- Primary $170.6 $169.3 $168.0 $165.5 $158.7
- Modified Pool $208.3 $208.0 $208.3 $208.0 $204.9
Credit quality of Primary
insurance in force(1)
Prime 76.5% 75.8% 74.9% 74.8% 77.1%
Alt-A 19.9% 20.5% 21.4% 21.5% 19.1%
A Minus 3.1% 3.2% 3.2% 3.2% 3.2%
Sub Prime 0.5% 0.5% 0.5% 0.6% 0.6%
Primary Alt-A insurance in
force by credit score:
FICO between 620 and 659 7.5% 7.6% 7.7% 8.3% 8.9%
FICO between 660 and 699 29.2% 29.1% 29.3% 29.8% 30.9%
FICO between 700 and 739 35.4% 35.4% 35.1% 34.4% 33.7%
FICO greater than 739 27.9% 28.0% 27.9% 27.5% 26.5%
Potential Negative Amortization
Mortgages (PNAM)
% of Primary Insurance in
force 13.1% 13.4% 14.0% 14.9% 14.3%
% of Modified Pool
Insurance in force 21.2% 20.9% 21.2% 20.8% 19.9%
Credit quality of Primary PNAM
Prime 28.4% 29.0% 28.8% 29.0% 31.3%
Alt-A 71.4% 70.8% 70.9% 70.8% 68.4%
A Minus 0.2% 0.2% 0.2% 0.2% 0.2%
Sub Prime 0.0% 0.0% 0.0% 0.0% 0.0%
Primary flow insurance in
force subject to captive
reinsurance arrangements 58.8% 59.0% 58.0% 56.8% 57.9%
Primary annual persistency rate 83.3% 81.4% 79.1% 77.7% 77.0%
Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006
(Dollars in millions unless otherwise indicated)
Insurance In Force
Primary insurance in force:
- Flow business $32,779 $31,012 $30,064 $29,510
- Structured bulk transactions 1,330 1,094 719 381
Total Primary insurance in
force 34,109 32,106 30,783 29,891
Modified Pool insurance in force 22,719 21,779 20,022 18,309
Total insurance in force $56,828 $53,885 $50,804 $48,200
Number of insured loans:
- Primary 225,531 219,287 216,458 215,736
- Modified Pool 112,555 110,650 107,653 101,934
Total number of insured loans 338,086 329,937 324,111 317,670
Average loan size: ($ in thousands)
- Primary $151.2 $146.4 $142.2 $138.6
- Modified Pool $201.9 $196.8 $186.0 $179.6
Credit quality of Primary insurance in
force(1)
Prime 80.4% 81.5% 82.9% 84.6%
Alt-A 15.4% 14.1% 12.3% 10.4%
A Minus 3.5% 3.6% 3.9% 4.1%
Sub Prime 0.7% 0.8% 0.9% 0.9%
Primary Alt-A insurance in force by
credit score:
FICO between 620 and 659 10.1% 11.6% 14.4% 17.9%
FICO between 660 and 699 32.5% 33.9% 34.4% 34.0%
FICO between 700 and 739 31.9% 30.3% 28.2% 27.1%
FICO greater than 739 25.5% 24.2% 22.9% 21.0%
Potential Negative Amortization
Mortgages (PNAM)
% of Primary Insurance in force 11.7% 9.6% 7.6% 4.7%
% of Modified Pool Insurance in
force 21.2% 18.7% 9.0% 1.7%
Credit quality of Primary PNAM
Prime 35.9% 37.5% 41.0% 50.5%
Alt-A 63.8% 62.3% 58.5% 48.9%
A Minus 0.3% 0.2% 0.5% 0.6%
Sub Prime 0.0% 0.0% 0.0% 0.0%
Primary flow insurance in force
subject to captive reinsurance
arrangements 61.0% 63.0% 62.7% 59.9%
Primary annual persistency rate 76.6% 75.3% 72.7% 71.1%
(1) The credit quality of loans notated above are defined as follows:
Prime - All business that is not Alt-A, A Minus, or Sub Prime; Alt A -
Loans with credit scores >= 620 and that were underwritten with low or
no documentation;
A Minus - Loans with credit scores >= 575 and <= 619; Sub-Prime - Loans
with credit scores < 575
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007
(Dollars in millions unless otherwise indicated)
Risk In Force - Primary
Primary net risk in force:
- Flow business $9,671 $9,642 $9,350 $8,866 $8,094
- Structured bulk business 1,470 1,525 1,583 1,373 843
Total Primary net risk in
force $11,141 $11,166 $10,933 $10,239 $8,937
Primary risk in force by credit
score
FICO less than 575 0.4% 0.5% 0.5% 0.5% 0.5%
FICO between 575 and 619 3.1% 3.1% 3.2% 3.2% 3.2%
FICO between 620 and 659 15.5% 15.6% 15.6% 15.6% 15.9%
FICO between 660 and 699 25.0% 24.9% 24.9% 24.9% 24.7%
FICO between 700 and 739 26.4% 26.4% 26.4% 26.2% 25.9%
FICO greater than 739 29.6% 29.5% 29.4% 29.5% 29.8%
Primary risk in force by policy
year
2001 and prior 2.3% 2.5% 2.7% 3.0% 3.7%
2002 2.8% 3.0% 3.3% 3.7% 4.6%
2003 9.2% 9.6% 10.3% 11.7% 14.3%
2004 8.8% 9.2% 10.0% 11.3% 13.9%
2005 12.9% 13.5% 14.4% 16.2% 19.6%
2006 21.6% 22.4% 23.6% 26.0% 30.5%
2007 39.3% 39.8% 35.8% 28.0% 13.5%
2008 3.1% - - - -
Primary risk in force by loan
type:
- Fixed 65.6% 64.7% 63.5% 62.6% 64.4%
- Interest Only 10.6% 10.7% 11.0% 9.6% 7.4%
- ARM (amortizing) Fixed
Period 5 Years or Greater 9.1% 9.4% 10.3% 11.0% 11.0%
- ARM (amortizing) Fixed
Period Less than 5 Years 2.3% 2.4% 2.3% 2.7% 3.6%
- ARM (potential negative
amortization) 12.5% 12.8% 13.0% 14.0% 13.6%
Primary risk in force by
property type:
- Condominium 10.5% 10.4% 10.4% 10.3% 10.1%
- Other (principally single-
family detached) 89.5% 89.6% 89.6% 89.7% 89.9%
Primary risk in force by
occupancy status:
- Primary residence 87.7% 87.7% 87.7% 87.7% 88.1%
- Second home 7.9% 7.9% 7.9% 7.9% 7.7%
- Non-owner occupied 4.4% 4.4% 4.5% 4.5% 4.2%
Primary risk in force by
mortgage amount:
- $200,000 or less 47.5% 48.0% 48.6% 49.8% 53.5%
- Greater than $200,000 52.5% 52.0% 51.4% 50.2% 46.5%
Potential Negative Amortization
Mortgages (PNAM)
% of total Primary risk in
force - Flow business 13.0% 13.3% 13.9% 14.7% 13.7%
% of total Primary risk in
force - Bulk business 9.7% 9.5% 9.6% 11.3% 16.1%
% of total Primary risk in
force - Total business 12.6% 12.8% 13.3% 14.3% 13.9%
Primary PNAM risk in force by
credit score
FICO less than 575 0.0% 0.0% 0.0% 0.0% 0.0%
FICO between 575 and 619 0.1% 0.1% 0.1% 0.1% 0.1%
FICO between 620 and 659 10.4% 10.2% 10.3% 10.0% 9.0%
FICO between 660 and 699 29.1% 29.1% 28.9% 28.6% 28.8%
FICO between 700 and 739 33.7% 33.7% 33.5% 33.6% 33.7%
FICO greater than 739 26.6% 26.8% 27.2% 27.6% 28.4%
Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006
(Dollars in millions unless otherwise indicated)
Risk In Force - Primary
Primary net risk in force:
- Flow business $7,447 $7,016 $6,781 $6,652
- Structured bulk business 377 305 185 127
Total Primary net risk in force $7,824 $7,321 $6,966 $6,779
Primary risk in force by credit score
FICO less than 575 0.6% 0.7% 0.7% 0.8%
FICO between 575 and 619 3.6% 3.7% 3.9% 4.1%
FICO between 620 and 659 16.4% 16.7% 17.3% 17.8%
FICO between 660 and 699 24.5% 24.5% 24.5% 24.5%
FICO between 700 and 739 25.2% 24.7% 24.2% 23.9%
FICO greater than 739 29.7% 29.8% 29.3% 28.9%
Primary risk in force by policy year
2001 and prior 4.4% 5.0% 5.7% 6.4%
2002 5.5% 6.3% 7.1% 8.0%
2003 17.1% 19.4% 22.0% 24.6%
2004 16.8% 19.3% 21.9% 24.4%
2005 23.4% 26.3% 29.1% 31.3%
2006 32.8% 23.7% 14.2% 5.3%
2007 - - - -
2008 - - - -
Primary risk in force by loan type:
- Fixed 68.9% 70.2% 72.0% 73.3%
- Interest Only 5.9% 5.0% 3.6% 3.3%
- ARM (amortizing) Fixed Period 5
Years or Greater 9.4% 10.0% 10.7% 11.5%
- ARM (amortizing) Fixed Period Less
than 5 Years 4.5% 5.4% 6.3% 7.1%
- ARM (potential negative
amortization) 11.3% 9.4% 7.4% 4.9%
Primary risk in force by property type:
- Condominium 9.6% 9.2% 8.7% 8.2%
- Other (principally single-family
detached) 90.4% 90.8% 91.3% 91.8%
Primary risk in force by occupancy
status:
- Primary residence 89.4% 89.6% 90.3% 91.3%
- Second home 7.4% 7.0% 6.2% 5.3%
- Non-owner occupied 3.2% 3.3% 3.4% 3.4%
Primary risk in force by mortgage
amount:
- $200,000 or less 57.9% 60.8% 63.8% 66.2%
- Greater than $200,000 42.1% 39.2% 36.2% 33.8%
Potential Negative Amortization
Mortgages (PNAM)
% of total Primary risk in force -
Flow business 10.7% 8.7% 6.8% 5.0%
% of total Primary risk in force -
Bulk business 30.9% 32.2% 39.0% 0.3%
% of total Primary risk in force -
Total business 11.6% 9.6% 7.6% 4.9%
Primary PNAM risk in force by credit
score
FICO less than 575 0.0% 0.0% 0.0% 0.0%
FICO between 575 and 619 0.2% 0.2% 0.2% 0.1%
FICO between 620 and 659 7.9% 8.0% 9.1% 11.6%
FICO between 660 and 699 29.7% 31.2% 31.7% 31.5%
FICO between 700 and 739 33.6% 32.5% 30.6% 29.7%
FICO greater than 739 28.6% 28.0% 28.3% 27.0%
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007
(Dollars in millions unless otherwise indicated)
Risk In Force - Modified Pool
Modified Pool risk in force
net of stop loss $903 $913 $922 $935 $933
Deductibles on modified pool
risk $108 $112 $115 $117 $114
Modified Pool risk in force by
credit score(2):
FICO less than 575 0.1% 0.1% 0.1% 0.1% 0.1%
FICO between 575 and 619 0.7% 0.7% 0.7% 0.7% 0.7%
FICO between 620 and 659 10.7% 10.7% 10.7% 10.8% 10.9%
FICO between 660 and 699 31.3% 31.3% 31.3% 31.3% 31.3%
FICO between 700 and 739 29.9% 29.9% 29.9% 29.8% 29.8%
FICO greater than 739 27.3% 27.3% 27.3% 27.3% 27.2%
Modified Pool risk in force by
policy year
2001 and prior 2.3% 2.4% 2.5% 2.6% 2.8%
2002 2.6% 2.8% 3.0% 3.1% 3.4%
2003 13.9% 14.0% 14.5% 14.5% 14.7%
2004 16.0% 16.3% 16.2% 16.1% 16.0%
2005 27.7% 29.9% 28.7% 29.1% 29.2%
2006 33.7% 30.9% 31.3% 31.1% 29.9%
2007 3.9% 3.8% 3.7% 3.5% 4.0%
Modified Pool risk in force by
loan type(2):
- Fixed 26.1% 26.2% 26.8% 26.8% 28.1%
- Interest Only 23.4% 23.3% 23.0% 22.9% 23.0%
- ARM (amortizing) Fixed
Period 5 Years or Greater 31.5% 31.4% 33.7% 33.6% 32.5%
- ARM (amortizing) Fixed Period
Less than 5 Years 5.8% 6.1% 4.0% 4.1% 4.3%
- ARM (potential negative
amortization) 13.2% 13.0% 12.6% 12.5% 12.0%
Modified Pool risk in force by
property type(2):
- Condominium 9.5% 9.4% 9.3% 9.3% 8.9%
- Other (principally single-
family detached) 90.5% 90.6% 90.7% 90.7% 91.1%
Modified Pool risk in force by
occupancy status(2):
- Primary residence 73.5% 73.6% 73.6% 73.7% 73.8%
- Second home 6.2% 6.2% 6.2% 6.2% 6.1%
- Non-owner occupied 20.4% 20.3% 20.2% 20.1% 20.1%
Modified Pool risk in force by
mortgage amount(2):
- $200,000 or less 35.4% 35.5% 35.5% 35.7% 36.5%
- Greater than $200,000 64.6% 64.5% 64.5% 64.3% 63.5%
Potential Negative Amortization
Mortgages (PNAM)(2):
% of total Modified Pool risk
in force 13.2% 13.0% 13.2% 13.0% 12.4%
Modified Pool PNAM risk in force
by credit score(2):
FICO less than 575 0.0% 0.0% 0.0% 0.0% 0.0%
FICO between 575 and 619 0.1% 0.1% 0.1% 0.1% 0.1%
FICO between 620 and 659 9.0% 8.9% 8.8% 8.8% 8.6%
FICO between 660 and 699 34.1% 33.9% 33.3% 33.1% 32.5%
FICO between 700 and 739 29.1% 29.1% 29.1% 29.0% 29.3%
FICO greater than 739 27.7% 28.0% 28.8% 29.1% 29.5%
Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006
(Dollars in millions unless otherwise indicated)
Risk In Force - Modified Pool
Modified Pool risk in force net of
stop loss $890 $837 $764 $751
Deductibles on modified pool risk $101 $94 $90 $83
Modified Pool risk in force by credit
score(2):
FICO less than 575 0.2% 0.2% 0.2% 0.2%
FICO between 575 and 619 0.8% 0.9% 1.0% 1.0%
FICO between 620 and 659 11.3% 11.6% 12.0% 12.2%
FICO between 660 and 699 31.0% 30.6% 30.2% 29.9%
FICO between 700 and 739 29.4% 29.4% 29.5% 29.7%
FICO greater than 739 27.3% 27.3% 27.1% 27.1%
Modified Pool risk in force by policy
year
2001 and prior 3.1% 3.7% 4.3% 4.7%
2002 3.7% 4.3% 5.2% 5.8%
2003 15.4% 16.4% 18.1% 18.4%
2004 16.6% 17.6% 19.5% 19.6%
2005 30.4% 32.3% 35.6% 35.9%
2006 30.8% 25.7% 17.3% 15.4%
2007 - - - -
Modified Pool risk in force by loan
type(2):
- Fixed 30.8% 31.8% 35.0% 32.0%
- Interest Only 24.5% 26.4% 28.8% 31.9%
- ARM (amortizing) Fixed Period 5
Years or Greater 27.2% 25.2% 24.8% 27.8%
- ARM (amortizing) Fixed Period Less
than 5 Years 4.5% 5.0% 5.7% 6.6%
- ARM (potential negative amortization) 13.1% 11.6% 5.7% 1.7%
Modified Pool risk in force by property
type(2):
- Condominium 8.0% 7.3% 7.2% 6.7%
- Other (principally single-family
detached) 92.0% 92.7% 92.8% 93.3%
Modified Pool risk in force by occupancy
status(2):
- Primary residence 73.7% 73.7% 73.9% 74.2%
- Second home 6.2% 6.0% 5.9% 5.9%
- Non-owner occupied 20.1% 20.3% 20.1% 19.9%
Modified Pool risk in force by mortgage
amount(2):
- $200,000 or less 37.8% 39.1% 41.4% 42.5%
- Greater than $200,000 62.2% 60.9% 58.6% 57.5%
Potential Negative Amortization
Mortgages (PNAM)(2):
% of total Modified Pool risk in force 13.4% 11.8% 5.8% 1.7%
Modified Pool PNAM risk in force by
credit score(2):
FICO less than 575 0.0% 0.0% 0.0% 0.0%
FICO between 575 and 619 0.1% 0.1% 0.2% 0.0%
FICO between 620 and 659 8.5% 8.4% 7.8% 3.2%
FICO between 660 and 699 32.2% 31.8% 30.3% 28.5%
FICO between 700 and 739 29.3% 28.8% 30.1% 34.8%
FICO greater than 739 29.9% 30.9% 31.6% 33.5%
(2) Percentages represent distribution of direct risk in force (RIF) on a
per policy basis and do not account for applicable stop loss amounts.
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007
(Dollars in millions unless otherwise indicated)
Production
New insurance written (NIW):
- Primary flow business $1,913 $2,680 $3,720 $5,089 $4,372
- Primary structured bulk
business - - 694 1,702 1,327
Total Primary 1,913 2,680 4,414 6,791 5,699
- Modified Pool - - - 1,406 1,925
Total NIW $1,913 $2,680 $4,414 $8,196 $7,624
New risk written:
- Primary (gross) $451 $678 $1,203 $1,860 $1,576
- Modified Pool - - - 51 69
Total new risk written $451 $678 $1,203 $1,912 $1,645
Primary NIW by loan-to-value ratio
(LTV):
- Greater than 95.00% 9.6% 29.7% 37.4% 36.1% 26.2%
- 90.01% to 95.00% 29.1% 25.8% 23.1% 23.3% 23.8%
- 90.00% and below 61.3% 44.5% 39.5% 40.7% 50.0%
Potential Negative Amortization
Mortgages (PNAM):
% of total Primary NIW 0.2% 2.9% 5.0% 16.8% 29.2%
% of total Modified Pool NIW 0.0% 0.0% 0.0% 38.1% 3.0%
Primary PNAM NIW by LTV:
- Greater than 95.00% 0.0% 0.3% 0.9% 1.6% 1.7%
- 90.01% to 95.00% 0.0% 20.5% 17.3% 29.7% 25.4%
- 90.00% and below 100.0% 79.2% 81.8% 68.7% 72.9%
Modified Pool PNAM NIW by LTV:
- 80.00% and below - - - 100.0% 100.0%
Percent of Primary NIW from
refinancings 43.1% 27.6% 25.7% 36.9% 44.1%
Percent of Primary flow NIW
subject to captive
reinsurance arrangements 43.9% 53.2% 47.6% 34.3% 28.1%
Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006
(Dollars in millions unless otherwise indicated)
Production
New insurance written (NIW):
- Primary flow business $3,612 $2,844 $2,559 $1,947
- Primary structured bulk business 304 436 385 1
Total Primary 3,916 3,280 2,944 1,948
- Modified Pool 2,130 2,956 2,980 4,606
Total NIW $6,046 $6,236 $5,924 $6,553
New risk written:
- Primary (gross) $991 $865 $730 $490
- Modified Pool 78 106 92 142
Total new risk written $1,069 $971 $822 $633
Primary NIW by loan-to-value ratio
(LTV):
- Greater than 95.00% 16.2% 20.7% 12.2% 10.1%
- 90.01% to 95.00% 25.3% 23.3% 22.0% 25.0%
- 90.00% and below 58.5% 56.0% 65.8% 64.9%
Potential Negative Amortization
Mortgages (PNAM):
% of total Primary NIW 28.6% 27.0% 34.3% 16.7%
% of total Modified Pool NIW 40.3% 80.7% 51.0% 6.9%
Primary PNAM NIW by LTV:
- Greater than 95.00% 5.3% 10.1% 6.9% 10.9%
- 90.01% to 95.00% 17.3% 15.1% 0.9% 1.5%
- 90.00% and below 77.5% 74.8% 92.2% 87.6%
Modified Pool PNAM NIW by LTV:
- 80.00% and below 100.0% 100.0% 100.0% 100.0%
Percent of Primary NIW from
refinancings 41.5% 28.9% 32.5% 33.5%
Percent of Primary flow NIW subject
to captive reinsurance arrangements 31.9% 61.5% 61.2% 55.1%
Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con't.)
(Unaudited)
Mar 31, Dec 31, Sep 30, Jun 30, Mar 31,
2008 2007 2007 2007 2007
(Dollars in millions unless otherwise indicated)
Delinquencies and
Claim Information
Total Primary
delinquent loans 13,322 10,419 7,541 5,940 5,632
- Flow business 11,576 9,166 6,807 5,504 5,335
- Bulk business 1,746 1,253 734 436 297
Total Modified Pool
delinquent loans 8,594 6,402 4,826 3,913 3,366
- Structured with
deductibles (3) 5,128 4,072 3,104 2,508 2,176
- Structured without
deductibles 3,466 2,330 1,722 1,405 1,190
Total Primary
delinquency rate 4.89% 3.81% 2.80% 2.30% 2.35%
Modified Pool
delinquency rate 8.45% 6.09% 4.42% 3.44% 2.93%
Potential Negative
Amortization
Mortgages (PNAM)
Primary PNAM
delinquent loans 2,325 1,395 703 393 227
Primary PNAM
delinquency rate
(of total Primary
PNAM loans) 13.08% 7.57% 3.71% 2.05% 1.37%
Modified Pool PNAM
delinquent loans 1,018 577 274 149 64
Modified Pool PNAM
delinquency rate
(of total Modified
Pool PNAM loans) 8.73% 4.82% 2.16% 1.14% 0.51%
Primary average paid
severity ($ thousands) $42.6 $41.6 $36.9 $30.9 $31.3
- Flow business $41.4 $40.9 $36.9 $30.9 $31.1
- Bulk business $68.3 $63.9 $35.9 $30.1 $34.0
Primary net paid
claims ($ thousands) $29,209 $27,012 $23,058 $16,687 $16,447
- Flow business $27,091 $25,798 $22,090 $15,965 $15,122
- Bulk business $2,119 $1,214 $968 $722 $1,325
Modified Pool average
paid severity ($thousands) $65.0 $57.9 $41.3 $26.6 $23.7
Modified Pool net paid
claims ($ thousands) $10,852 $9,328 $5,413 $1,386 $1,281
Risk in default
(without deductibles)
($ thousands) $1,039,070 $732,087 $479,407 $345,252 $285,620
Reserves as percent of
risk in default 52.7% 49.2% 41.8% 35.4% 34.6%
Financial Information (4)
Loss ratio - GAAP 307.0% 262.1% 148.2% 60.1% 50.9%
Expense ratio - GAAP 25.5% 20.8% 22.4% 21.9% 22.8%
Combined ratio - GAAP 332.5% 282.9% 170.6% 82.0% 73.7%
Risk-to-capital ratio 27.7:1 20.5:1 17.8:1 16.0:1 13.8:1
Dec 31, Sep 30, Jun 30, Mar 31,
2006 2006 2006 2006
(Dollars in millions unless otherwise indicated)
Delinquencies and Claim
Information
Total Primary delinquent loans 5,565 5,201 5,001 5,302
- Flow business 5,265 4,892 4,666 4,908
- Bulk business 300 309 335 394
Total Modified Pool delinquent loans 3,001 2,387 1,944 2,055
- Structured with deductibles (3) 1,897 1,578 1,330 1,383
- Structured without deductibles 1,104 809 614 672
Total Primary delinquency rate 2.47% 2.37% 2.31% 2.46%
Modified Pool delinquency rate 2.67% 2.16% 1.81% 2.02%
Potential Negative Amortization
Mortgages (PNAM)
Primary PNAM delinquent loans 142 66 40 33
Primary PNAM delinquency rate
(of total Primary PNAM loans) 1.12% 0.64% 0.49% 0.60%
Modified Pool PNAM delinquent loans 37 7 - -
Modified Pool PNAM delinquency rate
(of total Modified Pool PNAM loans) 0.28% 0.06% 0.00% 0.00%
Primary average paid severity
($ thousands) $28.1 $25.7 $25.8 $26.2
- Flow business $27.9 $25.0 $25.0 $26.0
- Bulk business $29.8 $37.6 $32.5 $27.4
Primary net paid claims ($
thousands) $15,100 $13,016 $13,501 $13,305
- Flow business $13,880 $11,887 $11,614 $11,444
- Bulk business $1,220 $1,129 $1,887 $1,861
Modified Pool average paid
severity ($ thousands) $26.2 $18.8 $19.4 $16.4
Modified Pool net paid claims ($
thousands) $1,493 $603 $930 $1,100
Risk in default (without
deductibles) ($ thousands) $258,422 $220,204 $197,014 $204,934
Reserves as percent of risk in
default 32.6% 27.3% 27.9% 25.7%
Financial Information (4)
Loss ratio - GAAP 70.9% 35.7% 34.1% 34.1%
Expense ratio - GAAP 22.8% 24.8% 25.6% 25.6%
Combined ratio - GAAP 93.7% 60.5% 59.7% 59.7%
Risk-to-capital ratio 12.5:1 12.0:1 11.8:1 12.3:1
(3) There were approximately 1,001 defaults that were in structures in
which the incurred losses had exceeded the deductible for which
reserves were provided in the first quarter of 2008.
(4) The Loss & Expense Ratios do not reflect any impact from establishment
of Premium Deficiency Reserve.
SOURCE Triad Guaranty Inc.
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Related links:
http://www.triadguaranty.com/
CONTACT:
Ken Jones, Senior Vice President and Chief
Financial Officer, Triad Guaranty Inc., +1-336-723-1282 ext.
1105, kjones@tgic.com
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