Triad Guaranty (TGIC) 8-K Triad Guaranty Inc. Reports Earnings of $8.1 Million for the Fourth Quarter and Adds $24.2 Million to Reserves

Exhibit 99

FOR IMMEDIATE RELEASE

NEWS RELEASE
Triad Guaranty Inc.
NASDAQ Symbol: TGIC
www.triadguaranty.com

Contact:	Ken Jones
	Senior Vice President, Chief Financial Officer
	800-451-4872 ext.1105
	kjones@tgic.com

TRIAD GUARANTY INC. REPORTS EARNINGS OF $8.1 MILLION
FOR THE FOURTH QUARTER AND ADDS $24.2 MILLION TO RESERVES

WINSTON-SALEM, N.C., January 25, 2007 — Triad Guaranty Inc. (NASDAQ: TGIC) today reported net income for the quarter ended December 31, 2006 of $8.1 million compared with $12.6 million for the same quarter a year ago, a decrease of 35%. Diluted earnings per share were $0.54 for the fourth quarter of 2006 compared with $0.85 for the fourth quarter of 2005, a decline of 36%. Realized investment losses, net of taxes, did not impact earnings in the fourth quarter of 2006, compared with realized investment gains of $0.01 per share in the same quarter of 2005.

Net income for the full year 2006 was $65.6 million compared with $56.8 million for 2005. Diluted earnings per share were $4.40 for the full year 2006 compared to $3.84 for 2005, an increase of 15%. Realized investment gains, net of taxes, contributed $0.07 per share for the full year 2006 and did not impact earnings per share in 2005.

Mark K. Tonnesen, President and Chief Executive Officer, said, “Despite many positive developments in the fourth quarter, our earnings are disappointing. While the increase in defaults and the number of paid claims was virtually on target, our average cost per paid claim increased significantly. The fundamental cause of the higher loss per claim was the impact of the slowing housing market on our claims mitigation efforts. A larger percentage of our claims paid in the fourth quarter were full option settlements, causing the average severity on both Primary and Modified Pool business to increase from the levels observed over the last five quarters. In response to this change, which emerged in the fourth quarter, we felt it was both prudent and necessary to adjust the severity factors utilized in our reserving methodology, which increased our reserves and, in turn, our incurred losses. The increase in the severity factors was the major driver of the $24.2 million increase in reserves during the quarter, although a portion of the increase was attributable to changes in our frequency factors and the natural growth and seasoning of our portfolio.”

Mr. Tonnesen continued, “Our fundamentals remain strong. Strong production and improved persistency throughout 2006 led to a 28% increase in insurance in force from the end of 2005, with earned premiums increasing 29% for the fourth quarter, and 25% for the full year, compared to the prior year periods. We

also established a number of important new customer relationships.Portfolio performance remained solid with reserved default counts increasing only 5% during 2006 while insurance in force grew at 28%. Our expense ratio for the fourth quarter of 2006 dropped to 22.8% compared to 26.4% during the same quarter last year, primarily the result of the increase in written premiums during the period.”

Total insurance in force reached $56.8 billion at December 31, 2006, compared to $44.4 billion a year ago. Insurance in force included Primary of $34.1 billion and Modified Pool of $22.7 billion at December 31, 2006, compared with $29.8 billion and $14.6 billion, respectively, a year earlier. New insurance written during the fourth quarter of 2006 totaled $6.0 billion compared with $4.5 billion in the fourth quarter of 2005. Primary new insurance written for the fourth quarter of 2006 was $3.9 billion, up from $2.3 billion in the fourth quarter of 2005. New insurance written from Modified Pool transactions, which can vary substantially from quarter to quarter, totaled $2.1 billion in the fourth quarter of 2006 compared with $2.2 billion for the same period of 2005.

Earned premiums for the fourth quarter of 2006 were $58.2 million, an increase of 29% over the same period a year ago and up 8% from the third quarter of 2006. The increase in earned premiums was due to growth in insurance in force, including growth in non-traditional mortgage products that contain higher risk adjusted rates. Annual persistency on the Primary business was 76.6% at December 31, 2006 compared with 70.0% at December 31, 2005.

Incurred losses for the fourth quarter of 2006 were $41.3 million, up 114% from the third quarter 2006 and up 88% from the fourth quarter of 2005. Total paid claims for the fourth quarter of 2006 were $16.6 million, up from $13.6 million in the third quarter of 2006, and up 34% compared with the fourth quarter of 2005. Overall severity on paid claims was $27,900 in the fourth quarter of 2006, up from $25,300 in the third quarter of 2006 and $25,400 in the fourth quarter of 2005. Total defaults at December 31, 2006 were 8,566, up 13% from 7,588 at September 30, 2006, and up from 7,753 reported at December 31, 2005, with the continued seasoning of the Modified Pool portfolio accounting for the majority of the increase. The Primary delinquency rate was 2.47% at December 31, 2006 compared with 2.37% at September 30, 2006 and 2.58% at December 31, 2005. The Modified Pool delinquency rate was 2.67% at December 31, 2006 compared with 2.16% and 2.51% at September 30, 2006 and December 31, 2005, respectively.

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 athttp://www.triadguaranty.com

Operating income, which is net income excluding realized gains and losses, and diluted realized investment gains/(losses) per share, net of taxes, are non-GAAP measures. We believe these measures are relevant and useful information to investors because, except for losses on impaired securities, it shows the effect the Company’s discretionary sales of investments had on earnings. This document may contain forward-looking statements that 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 risk 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.

-### -
(Relevant Triad Guaranty Inc. financial statistics and supplemental information follow this news release.)

Triad Guaranty Inc.
Consolidated Income Statement
(Unaudited)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2006			2005			2006			2005
	(Dollars in thousands except per share amounts)
Premiums written:
Direct	$	70,605		$	55,102		$	256,706		$	207,260
Ceded		(11,642	)		(10,781	)		(46,140	)		(40,644	)
Net premiums written	$	58,963		$	44,321		$	210,566		$	166,616
Earned premiums	$	58,222		$	44,971		$	210,856		$	168,997
Net investment income		7,178			5,944			26,696			22,998
Net realized investment gains (losses)		(52	)		160			1,584			36
Other income		2			2			8			15
Total revenues		65,350			51,077			239,144			192,046
Net losses and loss adjustment expenses		41,300			21,979			94,227			66,855
Interest expense on debt		694			693			2,774			2,773
Amortization of deferred policy acquisition costs		4,179			3,836			16,268			14,902
Other operating expenses — net		9,268			7,882			35,556			29,610
Income before income taxes		9,909			16,687			90,319			77,906
Income taxes		1,806			4,127			24,684			21,093
Net income	$	8,103		$	12,560		$	65,635		$	56,813
Basic earnings per share	$	0.55		$	0.85		$	4.44		$	3.87
Diluted earnings per share	$	0.54		$	0.85		$	4.40		$	3.84
Weighted average common and common stock equivalents outstanding (in thousands)
Basic		14,777			14,724			14,770			14,691
Diluted		14,950			14,804			14,913			14,808
NON-GAAP INFORMATION:
Diluted realized investment gains (losses) per share, net of taxes	$	—		$	0.01		$	0.07		$	—

Triad Guaranty Inc.
Consolidated Balance Sheet

	(Unaudited)
	December 31,		December 31,
	2006		2005
	(Dollars in thousands except per share amounts)
Assets:
Invested assets:
Fixed maturities, available for sale, at market	$	586,595	$	534,064
Equity securities, available for sale, at market		10,417		8,159
Other Investments		5,000		—
Short-term investments		5,300		4,796
		607,312		547,019
Cash and cash equivalents		38,609		8,934
Deferred policy acquisition costs		35,143		33,684
Prepaid federal income tax		166,908		139,465
Other assets		47,659		38,401
Total assets	$	895,631	$	767,503
Liabilities:
Losses and loss adjustment expenses	$	84,352	$	51,074
Unearned premiums		13,193		13,494
Deferred income tax		176,483		155,189
Long-term debt		34,510		34,501
Other liabilities		16,869		14,054
Total liabilities		325,407		268,312
Stockholders’ equity:
Retained earnings		453,076		387,441
Accumulated other comprehensive income		12,018		11,106
Other equity accounts		105,130		100,644
Total stockholders’ equity		570,224		499,191
Total liabilities and stockholders’ equity	$	895,631	$	767,503
Stockholders’ equity per share:
Including unrealized investment gains	$	38.38	$	33.79
Excluding unrealized investment gains	$	37.57	$	33.04
Common shares outstanding		14,856,401		14,774,153

Triad Guaranty Inc.
Sequential Quarterly Statistical Information
(Unaudited)

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
	2006			2006			2006			2006			2005			2005			2005			2005			2004
	(Dollars in millions unless otherwise indicated)
Insurance In Force
Primary insurance in force:
- Flow business	$	32,779		$	31,012		$	30,064		$	29,510		$	29,364		$	29,327		$	28,904		$	28,314		$	28,191
- Structured bulk transactions		1,330			1,094			719			381			428			492			585			687			773
Total Primary insurance in force		34,109			32,106			30,783			29,891			29,792			29,820			29,489			29,001			28,964
Modified Pool insurance in force		22,719			21,779			20,022			18,309			14,615			13,406			10,018			9,217			7,863
Total insurance in force	$	56,828		$	53,885		$	50,804		$	48,200		$	44,407		$	43,225		$	39,507		$	38,218		$	36,827
Number of insured loans:
- Primary		225,531			219,287			216,458			215,736			217,397			219,159			219,256			217,657			218,011
- Modified Pool		112,555			110,650			107,653			101,934			85,091			78,241			59,581			55,182			48,563
Total number of insured loans		338,086			329,937			324,111			317,670			302,488			297,400			278,837			272,839			266,574
Average loan size:
- Primary	$	151.2		$	146.4		$	142.2		$	138.6		$	137.0		$	136.1		$	134.5		$	133.2		$	132.9
- Modified Pool	$	201.9		$	196.8		$	186.0		$	179.6		$	171.8		$	171.3		$	168.1		$	167.0		$	161.9
Credit quality of primary insurance in force(1)
Prime		80.4	%		81.5	%		82.9	%		84.6	%		84.9	%		85.5	%		86.2	%		87.2	%		87.7	%
Alt-A		15.4	%		14.1	%		12.3	%		10.4	%		9.9	%		9.2	%		8.4	%		7.6	%		7.3	%
A Minus		3.5	%		3.6	%		3.9	%		4.1	%		4.2	%		4.3	%		4.4	%		4.3	%		4.2	%
Sub Prime		0.7	%		0.8	%		0.9	%		0.9	%		1.0	%		1.0	%		1.0	%		1.0	%		0.9	%
Primary Alt A insurance in force by credit score:
FICO between 620 and 659		10.1	%		11.6	%		14.4	%		17.9	%		19.2	%		20.0	%		21.6	%		22.7	%		22.9	%
FICO between 660 and 699		32.5	%		33.9	%		34.4	%		34.0	%		33.9	%		34.4	%		36.6	%		38.0	%		38.4	%
FICO between 700 and 739		31.9	%		30.3	%		28.2	%		27.1	%		26.4	%		26.0	%		23.8	%		22.7	%		22.4	%
FICO greater than 739		25.5	%		24.2	%		22.9	%		21.0	%		20.5	%		19.6	%		18.0	%		16.5	%		16.3	%
Primary flow insurance in force subject to captive reinsurance arrangements		61.0	%		62.9	%		62.7	%		59.7	%		59.0	%		58.3	%		57.2	%		56.7	%		56.6	%
Primary annual persistency rate		76.6	%		75.3	%		72.7	%		71.1	%		70.0	%		69.7	%		70.9	%		69.0	%		68.5	%

(1) The Credit Quality of loans notated above are defined as followed: Prime — All business that is not Alt A, A-, or subprime; 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; Subprime — Loans with credit scores less than 575

Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con’t.)
(Unaudited)

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
	2006			2006			2006			2006			2005			2005			2005			2005			2004
	(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		$	6,624		$	6,647		$	6,509		$	6,351		$	6,337
- Structured bulk business		377			305			185			127			143			159			191			223			250
Total Primary net risk in force	$	7,824		$	7,321		$	6,966		$	6,779		$	6,767		$	6,806		$	6,700		$	6,574		$	6,587
Primary risk in force by credit score
FICO less than 575		0.6	%		0.7	%		0.7	%		0.8	%		0.8	%		0.9	%		1.0	%		1.0	%		1.1	%
FICO between 575 and 619		3.6	%		3.7	%		3.9	%		4.1	%		4.3	%		4.4	%		4.6	%		4.6	%		4.6	%
FICO between 620 and 659		16.4	%		16.7	%		17.3	%		17.8	%		17.9	%		18.2	%		18.3	%		18.1	%		17.9	%
FICO between 660 and 699		24.5	%		24.5	%		24.5	%		24.5	%		24.4	%		24.4	%		24.6	%		24.7	%		24.7	%
FICO between 700 and 739		25.2	%		24.7	%		24.2	%		23.9	%		23.9	%		23.8	%		23.7	%		23.8	%		23.8	%
FICO greater than 739		29.7	%		29.8	%		29.3	%		28.9	%		28.7	%		28.3	%		27.9	%		27.8	%		27.8	%
Primary risk in force by policy year
2001 and prior		4.4	%		5.0	%		5.7	%		6.4	%		6.9	%		7.6	%		8.6	%		9.7	%		10.7	%
2002		5.5	%		6.3	%		7.1	%		8.0	%		8.6	%		9.5	%		11.1	%		12.6	%		14.0	%
2003		17.1	%		19.4	%		22.0	%		24.6	%		26.6	%		29.3	%		33.4	%		37.3	%		40.5	%
2004		16.8	%		19.3	%		21.9	%		24.4	%		26.1	%		28.2	%		31.4	%		34.2	%		34.8	%
2005		23.4	%		26.3	%		29.1	%		31.3	%		31.8	%		25.4	%		15.5	%		6.2	%		—
2006		32.8	%		23.7	%		14.2	%		5.3	%		—			—			—			—			—
Primary risk in force by loan type:
- Fixed		70.1	%		71.0	%		72.6	%		73.8	%		73.7	%		73.6	%		74.1	%		75.6	%		76.4	%
- ARM (positive amortization)		18.3	%		19.4	%		19.8	%		21.3	%		22.2	%		23.1	%		23.9	%		23.7	%		23.1	%
- ARM (potential negative amortization)		11.6	%		9.6	%		7.6	%		4.9	%		4.1	%		3.3	%		2.0	%		0.7	%		0.5	%
Primary risk in force by property type:
- Condominium		9.6	%		9.2	%		8.7	%		8.3	%		7.8	%		7.5	%		7.2	%		7.1	%		6.9	%
- Other (principally single-family detached)		90.4	%		90.8	%		91.3	%		91.7	%		92.2	%		92.5	%		92.8	%		92.9	%		93.1	%
Primary risk in force by occupancy status:												��
- Primary residence		89.4	%		89.7	%		90.3	%		91.3	%		91.9	%		92.7	%		92.9	%		93.3	%		93.5	%
- Second home		7.4	%		7.0	%		6.2	%		5.3	%		4.6	%		3.9	%		3.7	%		3.4	%		3.3	%
- Non-owner occupied		3.2	%		3.3	%		3.5	%		3.4	%		3.5	%		3.4	%		3.4	%		3.3	%		3.2	%
Primary risk in force by mortgage amount:
- $200,000 or less		58.4	%		61.3	%		64.3	%		66.7	%		67.7	%		68.5	%		69.9	%		70.9	%		71.2	%
- Greater than $200,000		41.6	%		38.7	%		35.7	%		33.3	%		32.3	%		31.5	%		30.1	%		29.1	%		28.8	%

Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con’t.)
(Unaudited)

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,
	2006			2006			2006			2006			2005			2005			2005			2005
	(Dollars in millions unless otherwise indicated)
Risk In Force — Modified Pool
Modified Pool gross risk in force	$	890		$	837		$	764		$	751		$	616		$	579		$	489		$	462
Deductibles on gross risk	$	101		$	94		$	90		$	83		$	71		$	68		$	59		$	53
Modified pool risk in force by credit score(2):
FICO less than 575		0.2	%		0.2	%		0.2	%		0.2	%		0.2	%		0.2	%		0.3	%		0.3	%
FICO between 575 and 619		0.8	%		0.9	%		1.0	%		1.0	%		1.1	%		1.2	%		1.6	%		1.8	%
FICO between 620 and 659		11.3	%		11.6	%		12.0	%		12.2	%		14.2	%		14.8	%		17.4	%		18.3	%
FICO between 660 and 699		31.0	%		30.6	%		30.2	%		29.9	%		31.1	%		31.5	%		33.2	%		33.1	%
FICO between 700 and 739		29.4	%		29.4	%		29.5	%		29.7	%		28.4	%		28.1	%		27.2	%		26.7	%
FICO greater than 739		27.3	%		27.3	%		27.1	%		27.1	%		25.0	%		24.1	%		20.2	%		19.7	%
Modified pool risk in force by loan type(2):
- Fixed		31.0	%		32.1	%		35.5	%		32.5	%		41.3	%		43.2	%		47.9	%		49.9	%
- ARM (positive amortization)		55.6	%		56.1	%		58.7	%		65.8	%		58.7	%		56.8	%		52.1	%		50.1	%
- ARM (potential negative amortization)		13.4	%		11.8	%		5.8	%		1.7	%		0.0	%		0.0	%		0.0	%		0.0	%
Modified pool risk in force by property type(2):
- Condominium		8.0	%		7.3	%		7.2	%		6.7	%		5.9	%		4.8	%		2.2	%		1.4	%
- Other (principally single-family detached)		92.0	%		92.7	%		92.8	%		93.3	%		94.1	%		95.2	%		97.8	%		98.6	%
Modified pool risk in force by occupancy status(2):
- Primary residence		73.7	%		73.7	%		73.9	%		74.2	%		74.2	%		74.7	%		74.9	%		75.0	%
- Second home		6.2	%		6.0	%		5.9	%		5.9	%		5.7	%		5.7	%		5.7	%		5.3	%
- Non-owner occupied		20.1	%		20.3	%		20.2	%		19.9	%		20.1	%		19.6	%		19.4	%		19.7	%
Modified pool risk in force by mortgage amount(2):
- $200,000 or less		38.4	%		39.6	%		41.9	%		42.9	%		46.4	%		46.3	%		47.1	%		47.5	%
- Greater than $200,000		61.6	%		60.4	%		58.1	%		57.1	%		53.6	%		53.7	%		52.9	%		52.5	%

(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)

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
	2006			2006			2006			2006			2005			2005			2005			2005			2004
	(Dollars in millions unless otherwise indicated)
Production
New insurance written (NIW):
- Primary flow business	$	3,612		$	2,844		$	2,559		$	1,947		$	2,263		$	3,091		$	2,941		$	2,161		$	2,456
- Primary structured bulk business		304			436			385			1			—			2			—			30			20
Total Primary		3,916			3,280			2,944			1,948			2,263			3,093			2,941			2,191			2,476
- Modified Pool		2,130			2,956			2,980			4,606			2,255			4,526			1,798			2,103			1,606
Total NIW	$	6,046		$	6,236		$	5,924		$	6,553		$	4,518		$	7,619		$	4,739		$	4,294		$	4,082
New risk written:
- Primary (gross)	$	991		$	865		$	730		$	490		$	583		$	822		$	723		$	540		$	642
- Modified Pool		78			106			92			142			55			97			46			62			46
Total new risk written	$	1,069		$	971		$	822		$	633		$	638		$	919		$	769		$	602		$	688
Primary NIW by loan-to-value ratio (LTV):
- Greater than 95%		16.2	%		20.7	%		12.2	%		10.1	%		11.0	%		14.1	%		11.6	%		13.2	%		13.7	%
- 90.01% to 95.00%		25.3	%		23.3	%		22.0	%		25.0	%		35.9	%		43.0	%		30.7	%		30.1	%		32.9	%
- 90.00% and below		58.5	%		56.0	%		65.8	%		64.9	%		53.1	%		42.9	%		57.7	%		56.7	%		53.4	%
Percent of Primary NIW from refinancings		41.5	%		28.9	%		32.5	%		33.5	%		28.6	%		26.5	%		33.6	%		34.9	%		30.1	%
Percent of Primary flow NIW subject to captive reinsurance arrangements		31.9	%		61.5	%		61.2	%		55.1	%		55.1	%		58.1	%		54.6	%		47.4	%		52.8	%

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 in force and related data totals until the loan level detail is reported to the Company. At December 31, 2006, the Company had approximately $119 million of structured transactions with effective dates within the fourth quarter for which loan level detail had not been received.

Triad Guaranty Inc.
Sequential Quarterly Statistical Information (con’t.)
(Unaudited)

	Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,			Sep 30,			Jun 30,			Mar 31,			Dec 31,
	2006			2006			2006			2006			2005			2005			2005			2005			2004
	(Dollars in millions unless otherwise indicated)
Delinquencies and Claim Information
Total primary delinquent loans		5,565			5,201			5,001			5,302			5,617			4,537			4,189			4,319			4,430
- Flow business		5,265			4,892			4,666			4,908			5,147			4,097			3,752			3,872			3,940
- Bulk business		300			309			335			394			470			440			437			447			490
											��
Total modified pool delinquent loans		3,001			2,387			1,944			2,055			2,136			1,565			1,549			1,553			1,492
- Structured with deductibles		1,897			1,578			1,330			1,383			1,388			920			829			748			634
- Structured without deductibles		1,104			809			614			672			748			645			720			805			858
Total primary delinquency rate		2.47	%		2.37	%		2.31	%		2.46	%		2.58	%		2.07	%		1.91	%		1.98	%		2.03	%
Modified Pool delinquency rate		2.67	%		2.16	%		1.81	%		2.02	%		2.51	%		2.00	%		2.60	%		2.81	%		3.07	%
Primary average severity ($ thousands)	$	28.1		$	25.7		$	25.8		$	26.2		$	26.2		$	26.2		$	28.9		$	24.7		$	24.1
- Flow business	$	27.9		$	25.0		$	25.0		$	26.0		$	24.9		$	26.1		$	29.0		$	24.9		$	23.6
- Bulk business	$	29.8		$	37.6		$	32.5		$	27.4		$	40.5		$	27.4		$	27.6		$	21.0		$	28.4
Primary net paid claims ($ thousands)	$	15,100		$	13,016		$	13,501		$	13,305		$	11,562		$	11,982		$	12,147		$	8,681		$	7,138
- Flow business	$	13,880		$	11,887		$	11,614		$	11,444		$	10,021		$	10,555		$	10,931		$	8,283		$	6,172
- Bulk business	$	1,220		$	1,129		$	1,887		$	1,861		$	1,540		$	1,427		$	1,216		$	398		$	966
Modified Pool average severity ($ thousands)	$	26.2		$	18.8		$	19.4		$	16.4		$	18.0		$	22.0		$	24.5		$	17.6		$	14.7
Modified Pool net paid claims ($ thousands)	$	1,493		$	603		$	930		$	1,100		$	862		$	1,475		$	1,150		$	970		$	1,193
Financial Information
Loss ratio — GAAP		70.9	%		35.7	%		34.1	%		34.1	%		48.9	%		38.4	%		42.0	%		27.4	%		27.0	%
Expense ratio — GAAP		22.8	%		24.8	%		25.6	%		25.6	%		26.4	%		26.1	%		26.4	%		28.1	%		27.8	%
Combined ratio — GAAP		93.7	%		60.5	%		59.7	%		59.7	%		75.3	%		64.5	%		68.4	%		55.5	%		54.8	%
Risk-to-capital ratio		12.5:1			12.0:1			11.8:1			12.3:1			12.6:1			13.0:1			13.1:1			13.7:1			14.0:1

SUPPLEMENTAL INFORMATION FOR DECEMBER 31, 2006

Exhibit 1 Review of Fourth Quarter Reserve Increase

Exhibit 2 Incurred Losses Supplemental Information

a.	Paid Loss and Reserve Analysis for the Nine Quarters Ended December 2006
b.	Rollforward of Reserve Change From September 30, 2006 to December 31, 2006
c.	Overall Severity for Last Five Quarters
d.	Claims Settlement Methods — Mitigation Impact for Last Five Quarters
e.	Average Severity by Claims Settlement Method for the Last 5 Quarters
f.	Average Paid Claim Severity as Percent of Risk on Paid Claims

Exhibit 1

REVIEW OF FOURTH QUARTER RESERVE INCREASE

     There are many positive and encouraging trends to be found in the fourth quarter numbers – 29% premium growth from excellent production and strong persistency, solid portfolio performance, and an improving expense ratio. However, the reserve increase may overshadow our quarterly performance, since the size of the increase was not anticipated. We hope this summary will provide Triad’s perspective on the reserve increase and explain what occurred during the quarter that led us to make the increase.

     Exhibit 2b included with this earnings release illustrates that the reserve change this quarter is a function of three separate components – 1) $5.8 million is associated with the normal change in the default inventory in terms of count and mix; 2) $4.9 million has to do with changing expectations and model refinements on frequency; and 3) the largest portion of the increase, $12.6 million, is a function of new trends in severity which first became apparent this quarter. Comments regarding each of the components of the quarterly reserve change follows.

     In regards to the change in default inventory, we are fortunate to have avoided some of the most problematic areas of the lending business, such as sub prime and second liens. We believe the quality of our portfolio remains strong, evidenced by the fact that our year-end reserved defaults are up just 5% from December 31, 2005, even with our recent growth over the past few years. A review of the portfolio’s credit quality, in terms of FICO scores and delinquency rates, demonstrates that the portfolio credit quality has remained steady. The net message is that default counts showed a moderate increase for the quarter and reflect the consistent quality of our portfolio. The normal changes in the default inventory added $5.8 million to reserves this quarter.

     We continually monitor reserves and claim development. As new data emerges, we consider its impact on our reserve calculation and, when necessary, make changes to our estimates. During the first three quarters of 2006 we refined our segmentation for the reserve calculation and monitored emerging trends. The result of the changes through the

1

Exhibit 1

first three quarters of the year was an 18% increase in reserves compared to a 5% decline in reserved defaults over the same period. During the first nine months of the year, we were adjusting our reserves upward. In the fourth quarter, these changes continued. We increased the frequency factors, which had a $3.8 million impact and, at the same time, eliminated a lag in processing that had a $1.1 million impact on reserves. The total change resulting from the continuous review process added $4.9 million to reserves in the quarter.

     The severity increase in the reserves had the most impact and reflects a new view we have for the future. As shown in Exhibit 2d, during the fourth quarter we saw a significant change in our ability to reduce claims through our traditional mitigation processes, which we believe is related to problems in the housing market. In many cases we are able to pay less than the full amount of our coverage because the property is sold during the foreclosure process, and these presales prior to foreclosure generally serve to reduce our loss. When the property does not sell prior to foreclosure, we often pay the full amount of our coverage, which we call a full option settlement. In the fourth quarter, full option settlements became a larger percent of our paid claims, creating an increase in severity. A little over half of the severity increase on paid claims during the quarter was due to the increase in the percentage of full option settlements compared to those which were mitigated. The remainder of the increase in the quarter’s severity is due to the increase in our risk exposure that we have anticipated because of growth in our loan size over the past few years. While the impact on paid claims for the quarter due to the severity increase was between $1 million and $2 million, it focused our attention on the potential effect on our future claim payments should this trend continue. We believe the primary cause of the shift towards full option settlement was the general weakness in the housing market reducing our opportunities to mitigate the claims through pre-sales prior to foreclosure, or through our own purchase of the property. As a direct result of the emergence of this new trend during the fourth quarter, and in light of the deteriorating housing market, it was determined that the prudent course of action was to increase our severity factors utilized in our reserving methodology.

2

Exhibit 1

     To place this into perspective, the new data suggests that future severity per paid claim will be in the vicinity of $31,000 based on the current default inventory. This required that reserves be increased this quarter by $12.6 million, in addition to the roughly $1 million to $2 million increase in paid claims.

     In summary, given the information that we were presented with in the fourth quarter, we believe it was necessary to increase our severity factors to reflect the current conditions. Ignoring the signals from the housing market was not an option. House price declines on a year-over-year basis and the inventory of existing homes increasing from 5.1 months supply at December 2005 to 7.4 months at the end of October 2006 are facts that cannot be dismissed. We see nothing in the current economic environment that would lead us to believe that the severity factors will improve during the expected period of claim development on the existing defaults. Going forward, we will continue to monitor our claim development and adjust our factors as new information becomes available to us.

- ### -

     This document may contain forward-looking statements that 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 risk 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.

3

Exhibit 2a

PAID LOSSES AND RESERVE ANALYSIS

	As of and for the Quarter Ended
	12/31/06			09/30/06			06/30/06			03/31/06			12/31/05			09/30/05			06/30/05			03/31/05			12/31/04
	(in 000s except counts)
PAID LOSS INFORMATION
Primary
Paid Claims excluding Loss Adjustment Expenses	$	15,100		$	13,016		$	13,502		$	13,305		$	11,562		$	11,982		$	12,147		$	8,681		$	7,138
Average Severity	$	27.9		$	25.0		$	25.0		$	26.0		$	24.9		$	26.1		$	29.0		$	24.9		$	23.6
Number of Paid Claims		538			506			523			506			441			457			451			352			296
Trailing 12 Months Number of Paid Claims		2,073			1,976			1,927			1,855			1,701			1,556			1,438			1,248			1,104
Modified Pool
Paid Claims excluding Loss Adjustment Expenses	$	1,493		$	603		$	930		$	1,078		$	862		$	1,475		$	1,150		$	970		$	1,193
Average Severity	$	27.7		$	27.9		$	26.6		$	21.8		$	27.9		$	24.4		$	26.0		$	18.5		$	18.8
Number of Paid Claims		57			32			48			67			48			67			47			55			81
Trailing 12 Months Number of Paid Claims		204			195			230			229			217			250			242			224			186
Total Paid Losses
Paid Claims excluding Loss Adjustment Expenses	$	16,593		$	13,619		$	14,432		$	14,383		$	12,424		$	13,457		$	13,297		$	9,651		$	8,331
Average Severity	$	27.9		$	25.3		$	25.3		$	25.1		$	25.4		$	25.7		$	26.7		$	23.7		$	22.1
Number of Paid Claims		595			538			571			573			489			524			498			407			377
Trailing 12 Months Number of Paid Claims		2,277			2,171			2,157			2,084			1,918			1,806			1,680			1,472			1,290
RESERVE INFORMATION
TOTAL RESERVES	$	84,352		$	60,123		$	54,905		$	52,614		$	51,074		$	41,823		$	38,576		$	34,825		$	34,042
Reserves per Default
Number of Defaults Without Deductibles (1)		6,668			6,009			5,614			5,973			6,364			5,182			4,909			5,124			5,288
Reserves per Defaults without Deductibles	$	12.7		$	10.0		$	9.8		$	8.8		$	8.0		$	8.1		$	7.9		$	6.8		$	6.4
Reserves as Percent of Risk in Default
Risk in Default (without deductibles)	$	265,415		$	220,204		$	197,014		$	204,934		$	220,030		$	180,154		$	168,368		$	179,605		$	184,678
Average Risk per Default (without deductibles)	$	39.8		$	36.6		$	35.1		$	34.3		$	34.6		$	34.8		$	34.3		$	35.1		$	34.9
Reserves as Percent of Risk at Default		32	%		27	%		28	%		26	%		23	%		23	%		23	%		19	%		18	%
Reserves to Paid Loss Ratios
Most Recent Quarter Annualized Net Paid Losses and LAE	$	68,283											$	50,910											$	34,203
Ratio of Reserve to Most Recent Quarter Annualized Paid Losses		1.24												1.00												1.00
Paid Losses for Trailing 12 Months	$	60,949											$	49,822											$	29,007
Ratio of Reserve to Paid Losses for Trailing 12 Months		1.38												1.03												1.17

(1) Reserves for defaults under Modified Pool transactions with deductibles are not recorded until the losses for submitted claims plus the calculated reserve for defaults exceed the amount of deductible under the transaction. At December 31, 2006 there are no transactions where the submitted losses plus reserve for defaults exceed the deductible.

Exhibit 2b

RESERVE ROLLFORWARD —September 30, 2006 to December 31, 2006
Reserve Change Analysis used in Estimating Components of Fourth Quarter 2006 Reserve Increase
($ in thousands)

Reserve Reported at September 30, 2006	$	60,123
Change in and Seasoning of the Default Inventory		5,800	(1)
Frequency Factor and Process Changes:
Elimination of lag in processing		1,101	(2)
Frequency Factor update		3,837	(3)
Total Factor and Process Change		4,938
Increase in Severity Factors		12,590	(4)
Increase in Reserve for Loss Adjustment Expense		901
Change from September 30, 2006 to December 31, 2006		24,229
Reported Reserve at December 31, 2006	$	84,352

(1)	Represents the change in reserve from applying the actual reserve factors used at September 30, 2006 against the December 31, 2006 default inventory
(2)	During the fourth quarter a process change was made to eliminate lag in reporting for information received from servicers near quarter end. An estimated reserve for these defaults was included in the incurred but not reported reserve, but the defaults were not included in the default counts
(3)	Represents the change in reserve from applying December 31, 2006 frequency factors to the September 30, 2006 default inventory
(4)	The change was derived by multiplying the increase in the average reserve per default by line of business from September 30, 2006 to December 31, 2006, times the December 31, 2006 defaults by line of business and then subtracting the change generated by the frequency factor update described in item (3)

PAID CLAIMS AVERAGE SEVERITY Five Quarters Ended December 2006

Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Average Severity $ 25.4 $ 25.1 $ 25.3 $ 25.3 $ 27.9

CLAIMS SETTLEMENT METHODS Five Quarters Ended December 2006

AVERAGE SEVERITY BY SETTLEMENT METHOD Five Quarters ended December 31, 2006

PAID CLAIMS AS PERCENT OF RISK Five Quarters Ended December 31, 2006

Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Percent of Risk Paid 80.5% 84.3% 81.5% 81.8% 89.7%