Triad Guaranty (TGIC) 8-K Triad Guaranty Inc. Reports Fourth Quarter and Year End Results

Exhibit 99.1

Press Release

Triad Guaranty Inc. Reports Fourth Quarter and Year End Results

WINSTON-SALEM, N.C., February 17, 2012 -- Triad Guaranty Inc. (OTCBB: TGIC) today reported a net loss for the quarter ended December 31, 2011 of $60.9 million compared to a net loss of $37.5 million for the third quarter of 2011 and net income of $26.8 million for the fourth quarter of 2010.  The 2011 fourth quarter diluted loss per share was $3.99 compared to a diluted loss per share of $2.46 for the 2011 third quarter and diluted income per share of $1.76 for the fourth quarter of 2010.

The net loss for the year ended December 31, 2011 was $107.8 million compared to net income of $132.1 million for the year ended December 31, 2010.  The diluted loss per share was $7.07 for the year ended December 31, 2011 compared to diluted income per share of $8.72 for the year ended December 31, 2010.

Ken Jones, President and CEO, said, “Stubbornly high unemployment, tight credit and depressed home prices have prevented any meaningful recovery in the housing market, which continues to negatively impact our financial results.  During the fourth quarter of 2011, we increased the frequency factors utilized in our reserve calculation, which added approximately $30 million to the loss for the quarter.  As necessary, we make refinements to our reserve estimate each quarter to reflect actual experience.  Risk in default continued to decline during the fourth quarter, but at a slower rate than we experienced during the previous five quarters.  Settled claims declined 14% from the third quarter while cures and newly reported defaults remained essentially flat during the 2011 fourth quarter.  Persistency, the key driver of our earned premiums, remained at elevated levels compared to historical norms as many borrowers are finding it very difficult to sell 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 $703.6 million at December 31, 2011.  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 2011 fourth 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 – Fourth Quarter 2011”.

(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, 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 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, 2010 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.

SOURCE: Triad Guaranty Inc.

CONTACT: Bob Ogburn, Vice President and Treasurer, at 336.723.1282 ext. 1167 or bogburn@tgic.com

Triad Guaranty Inc.
Consolidated Statements of Operations
(Unaudited)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2011			2010			2011			2010
	(Dollars in thousands except per share amounts)
Revenues:
Earned premiums	$	39,111		$	40,920		$	161,352		$	203,416
Net investment income		6,779			8,658			30,760			38,774
Net realized investment gains (losses)		11,296			(950	)		15,209			12,516
Other income		1			60			67			23
Total revenues		57,187			48,688			207,388			254,729
Losses and Expenses:
Net settled claims		113,936			139,435			464,974			562,007
Decrease in reserves		(5,885	)		(129,993	)		(187,524	)		(462,732	)
Loss adjustment (benefit) expenses		(633	)		322			815			10,358
Net losses and loss adjustment expenses		107,418			9,764			278,265			109,633
Interest expense		4,984			3,836			18,244			11,763
Other operating expenses		4,583			8,319			18,648			30,878
Total losses and expenses		116,985			21,919			315,157			152,274
Income (loss) before income taxes and extraordinary item		(59,798	)		26,769			(107,769	)		102,455
Income tax expense		1,134			-			-			-
Income (loss) before extraordinary item		(60,932	)		26,769			(107,769	)		102,455
Extraordinary item - gain from repurchase and retirement of long-term debt		-			-			-			29,640
Net (loss) income	$	(60,932	)	$	26,769		$	(107,769	)	$	132,095
Per Share Information:
Diluted (loss) income per share before extraordinary item	$	(3.99	)	$	1.76		$	(7.07	)	$	6.76
Diluted income per share for extraordinary item		-			-			-			1.96
Diluted (loss) income per share	$	(3.99	)	$	1.76		$	(7.07	)	$	8.72
Diluted weighted average common stock and common stock equivalents outstanding (in thousands of shares)		15,258			15,204			15,250			15,151

Triad Guaranty Inc.
Consolidated Balance Sheets
(Unaudited)
	December 31,			December 31,
	2011			2010
	(Dollars in thousands)
Assets:
Invested assets:
Fixed maturities, available for sale, at market	$	746,238		$	812,335
Short-term investments		30,102			39,561
		776,340			851,896
Cash and cash equivalents		40,590			38,762
Reinsurance recoverable		22,988			40,806
Other Assets		56,309			60,161
Total assets	$	896,227		$	991,625
Liabilities:
Losses and loss adjustment expenses	$	854,188		$	1,060,036
Unearned premiums		6,871			9,057
Deferred payment obligation		629,700			415,657
Other liabilities		109,042			93,075
Total liabilities		1,599,801			1,577,825
Stockholders' deficit:
Accumulated deficit		(826,815	)		(719,046	)
Accumulated other comprehensive income		8,977			18,609
Other equity accounts		114,264			114,237
Deficit in assets		(703,574	)		(586,200	)
Total liabilities and stockholders' deficit	$	896,227		$	991,625
Common shares outstanding		15,328,128			15,258,128

Triad Guaranty Inc.
Consolidated Statements of Cash Flow
(Unaudited)
	Twelve Months Ended December 31,
	2011			2010
	(Dollars in thousands)
OPERATING ACTIVITIES
Net (loss) income	$	(107,769	)	$	132,095
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Decrease in loss and unearned premium reserves		(208,034	)		(480,103	)
Decrease in amounts due to/from reinsurer		17,818			192,693
Net realized investment gains		(15,209	)		(12,516	)
Extraordinary gain on repurchase of long-term debt		-			(29,640	)
Increase in deferred payment obligation		214,043			247,271
Collection of income tax recoverable		11,707			-
Other operating activities		10,830			8,058
Net cash (used in) provided by operating activities		(76,614	)		57,858
INVESTING ACTIVITIES
Purchases of investment securities		(277,829	)		(469,283	)
Sales and maturities of investment securities		347,150			445,545
Decrease (increase) in short-term investments		9,459			(12,911	)
Other investing activities		(338	)		620
Net cash provided by (used in) investing activities		78,442			(36,029	)
FINANCING ACTIVITIES
Repurchase of long-term debt		-			(4,906	)
Net cash used in financing activities		-			(4,906	)
Net increase in cash		1,828			16,923
Cash at beginning of year		38,762			21,839
Cash at end of period	$	40,590		$	38,762

Triad Guaranty Inc.
Sequential Quarterly Financial Statements
(unaudited)
	Condensed Statements of Operations For The Quarter Ended
(Dollars in thousands)	Dec. 31,			Sept. 30,			Jun. 30,			Mar. 31,			Dec. 31,
	2011			2011			2011			2011			2010
Revenue:
Earned premiums	$	39,111		$	49,719		$	35,394		$	37,128		$	40,920
Net investment income		6,779			7,364			8,126			8,491			8,658
Net realized investment gains (losses)		11,296			1,349			3,000			(436	)		(950	)
Other income		1			10			29			27			60
Total revenues		57,187			58,442			46,549			45,210			48,688
Losses and Expenses:
Net settled claims		113,936			132,545			111,583			106,909			139,435
Decrease in reserves		(5,885	)		(44,192	)		(70,752	)		(66,694	)		(129,993	)
Loss adjustment (benefit) expenses		(633	)		(511	)		469			1,490			322
Net losses and LAE expense		107,418			87,842			41,300			41,705			9,764
Interest expense		4,984			4,813			4,469			3,978			3,836
Other operating expenses		4,583			4,450			5,178			4,437			8,319
Total losses and expenses		116,985			97,105			50,947			50,120			21,919
Income (loss) before taxes		(59,798	)		(38,663	)		(4,398	)		(4,910	)		26,769
Income tax expense (benefit)		1,134			(1,134	)		-			-			-
Net (loss) income	$	(60,932	)	$	(37,529	)	$	(4,398	)	$	(4,910	)	$	26,769
	Condensed Balance Sheets As Of
	Dec. 31,			Sept. 30,			Jun. 30,			Mar. 31,			Dec. 31,
	2011			2011			2011			2011			2010
Assets
Invested assets	$	776,340		$	773,078		$	823,018		$	842,908		$	851,896
Cash and cash equivalents		40,590			65,051			40,277			39,073			38,762
Reinsurance recoverable		22,988			23,719			31,230			33,499			40,806
Other assets		56,309			56,897			46,141			48,528			60,161
Total assets	$	896,227		$	918,745		$	940,666		$	964,008		$	991,625
Liabilities and stockholders' deficit
Liabilities:
Losses and loss adjustment expenses	$	854,188		$	864,049		$	910,530		$	990,494		$	1,060,036
Deferred payment obligation		629,700			576,510			517,193			464,342			415,657
Accrued expenses and other liabilities		115,913			109,095			106,271			102,911			102,132
Total liabilities		1,599,801			1,549,654			1,533,994			1,557,747			1,577,825
Deficit in assets		(703,574	)		(630,909	)		(593,328	)		(593,739	)		(586,200	)
Total liabilities and stockholders' deficit	$	896,227		$	918,745		$	940,666		$	964,008		$	991,625