Exhibit 99.1
Press Release
Triad Guaranty Inc. Reports Second Quarter Loss as Reported Defaults and Foreclosures Continue to Rise
WINSTON-SALEM, N.C., August 4, 2008 — Triad Guaranty Inc. (NASDAQ GS: TGIC) today reported a net loss for the quarter ended June 30, 2008 of $198.8 million compared with net income of $12.0 million for the same quarter in 2007. The loss per share was $13.36 for the second quarter of 2008 compared to diluted earnings per share of $0.80 for the second quarter of 2007. The net loss for the six months ended June 30, 2008 was $348.8 million compared to net income of $29.3 million for the same period in 2007. The loss per share was $23.45 for the first six months of 2008 compared to diluted earnings per share of $1.96 for the same period last year.
William T. Ratliff, III, President and CEO, said, “As I take on these new positions, Triad and the entire mortgage industry are facing significant challenges. During the past quarter, our company was not able to complete the proposed Lightyear transaction, and as result we stopped issuing new commitments for mortgage insurance coverage effective July 15, 2008 and are in the process of transitioning our business into run-off. Concurrent with the move to run-off, we announced staff reductions of approximately 45% of the workforce and are focusing our efforts on the efficient and effective servicing of the insured portfolio. Going forward, our primary focus will be effective loss mitigation. We will accomplish this by examining all aspects of the default management and claim process including servicer effectiveness, real estate acquisitions, and diligence in investigating potential fraud in recent policy years.”
Mr. Ratliff continued, “The size of our second quarter loss reflects the depth and breadth of the collapse of the real estate and mortgage markets. The continued growth in the number of defaults and foreclosures during the quarter required a significant increase in reserves. The distressed markets of California, Florida, Arizona and Nevada continue to be adversely impacted by declining home prices and reserves for defaults in these states and this comprised approximately 68% of the increase in reserves for the quarter.”
To understand and assess the future performance of Triad requires information about the risk in our insured portfolio and performance to date. We have updated the supplemental information for the 2008 second quarter results related to product differentiation, risk structures, additional portfolio characteristics and performance 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 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 pursuing a voluntary run-off of its existing in-force book of business. For more information, please visit the Company's web site at 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 transition our business into run-off, the possibility of general economic and business conditions that are different than anticipated, legislative, regulatory, and other similar developments, changes in interest rates, the housing market, the mortgage industry and the stock market, 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.
SOURCE: Triad Guaranty Inc.
CONTACT: Ken Jones, Senior Vice President and Chief Financial Officer, Triad Guaranty Inc., 336.723.1282 ext. 1105 or kjones@tgic.com
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