EX-99
2
exhibit99.txt
12/31/2005 EARNINGS RELEASE AND STATISTICAL DATA

                                                                      EXHIBIT 99
FOR IMMEDIATE RELEASE

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

Contact: Eric B. Dana
         Senior Vice President, Chief Financial Officer
         800-451-4872 ext.1105
         edana@tgic.com
         --------------

               TRIAD GUARANTY INC. REPORTS FOURTH QUARTER RESULTS,
               2006 GUIDANCE, AND AUTHORIZATION FOR STOCK BUYBACK

WINSTON-SALEM, N.C., January 26, 2006-- Triad Guaranty Inc. (NASDAQ: TGIC) today
reported net income for the quarter  ended  December  31, 2005 of $12.6  million
compared  to $15.2  million  for the same  quarter a year ago, a decline of 17%.
Diluted earnings per share were $0.85 for the fourth quarter of 2005 compared to
$1.03 for the fourth  quarter of 2004,  a decrease of 18%.  Realized  investment
gains, net of taxes, increased diluted earnings per share by $0.01 in the fourth
quarter  of 2005  while not  impacting  diluted  earnings  per share in the same
quarter of 2004.

Net income for the full year 2005 was $56.8  million  compared to $58.4  million
for 2004.  Diluted  earnings  per  share  for the full  year were  $3.84 in 2005
compared  to $3.98  for  2004.  Realized  investment  gains  and  losses  had no
meaningful  impact on  earnings  per share for the full year 2005  compared to a
contribution of $0.02 in 2004.

Mark K. Tonnesen,  President and Chief Executive  Officer,  said,  "While we are
pleased with the continued growth of Triad, we are obviously disappointed in the
financial  performance  for the  quarter;  a quarter in which we took  action to
ensure a strong  balance  sheet  reflecting  the  fundamentals  in our  business
particularly with regard to the Katrina/Rita FEMA-designated areas.

During the fourth  quarter,  we  experienced  an increase in  defaults.  A large
portion of the increase  can be  explained by the jump in total  defaults in the
FEMA-designated  areas from 270 at  September  30, 2005 to 891 at  December  31,
2005,  for which we reserved at our normal levels  without  regard to the unique
circumstances surrounding that situation. This reserve increase was $3.4 million
and  accounted  for a reduction  in earnings per share of $0.15 for the quarter.
There was also an  increase in  non-hurricane  affected  defaults,  which may be
seasonal in nature. Lastly we increased the severity utilized in the calculation
of our reserves to reflect our long-term underlying trends."





Mr. Tonnesen continued,  "We currently estimate 2006 earnings to be in the range
of $4.65 to $4.90  per  share on a  fully-diluted  basis.  This is  premised  on
anticipated  earned  premium  increases  of 10% to 15%, a targeted  increase  in
operating  expenses  of less  than  10% and  assumes  no  economic  downturn  or
broad-based  decline in the  housing  market."  He also stated that the Board of
Directors has  authorized  the  repurchase  of up to 1,000,000  shares of common
stock.

Total  insurance in force reached $44.4  billion at year-end  2005,  compared to
$36.8 billion a year ago.  Insurance in force included  Primary of $29.8 billion
and  Modified  Pool of $14.6  billion at  December  31,  2005  compared to $29.0
billion and $7.8 billion a year earlier. New insurance written during the fourth
quarter of 2005  totaled $4.5  billion  compared to $4.1 billion  written in the
fourth quarter of 2004.  Primary new insurance written for the fourth quarter of
2005 was $2.3 billion,  down from $2.5 billion  written in the fourth quarter of
2004. New insurance written  attributable to Modified Pool transactions  totaled
$2.2  billion in the fourth  quarter of 2005,  up from $1.6 billion for the same
period of 2004.

Earned  premiums for the fourth quarter of 2005 were $45.0 million,  an increase
of 21% over the same period a year ago. The increase in earned  premiums was due
primarily  to the growth in Modified  Pool  insurance in force and the change in
the mix of Primary business. Persistency was 70.0% at December 31, 2005 compared
to 68.5% at December 31, 2004.

Incurred  losses for the fourth  quarter  were $22.0  million,  including a $9.3
million reserve increase, up from $17.0 million in the third quarter of 2005 and
significantly  up from $10.0 million in the fourth  quarter of 2004. The reserve
increase is  attributable  to the rise in defaults  from  Katrina/Rita  affected
areas,  the  increase in other  defaults  reported in the fourth  quarter and an
increase in the assumed severity utilized in our calculation of reserves.  Total
paid claims for the fourth quarter of 2005 were $12.4  million,  down from $13.5
million in the third quarter of 2005 but up  significantly  from $8.3 million in
the fourth quarter of 2004.  Primary severity on paid claims was $26,200 in both
the fourth and third  quarters of 2005, up from $24,100 in the fourth quarter of
2004.  The Primary  delinquency  rate was 2.45% at December 31, 2005 compared to
1.97% at September  30, 2005 and 1.93% at December 31, 2004,  while the Modified
Pool  delinquency  rates for the same  periods  were  2.15%,  1.71%  and  2.56%,
respectively. Adjusting for the Katrina/Rita affected area defaults, the Primary
and Modified Pool  delinquency  rates at December 31, 2005 would have been 2.25%
and 1.89%, respectively.





The Company's loss ratio was 48.9% for the fourth quarter of 2005,  inclusive of
the increased reserve levels, compared to 38.4% in the third quarter of 2005 and
27.0% for the fourth quarter of 2004. The Company's  expense ratio was 26.4% for
the fourth  quarter of 2005  compared to 26.1% in the third  quarter of 2005 and
27.8% in the fourth quarter of 2004.


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
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 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 follow this news release.)


                               Triad Guaranty Inc.
                          Consolidated Income Statement
                                   (Unaudited)
Three Months Ended Twelve Months Ended December 31. December 31. 2005 2004 2005 2004 ---- ---- ---- ---- (Dollars in thousands except per share amounts) Premiums written: Direct $ 55,102 $ 47,898 $ 207,260 $ 176,696 Ceded (10,781) (9,506) (40,644) (35,365) --------- --------- --------- --------- Net premiums written $ 44,321 $ 38,392 $ 166,616 $ 141,331 ========= ========= ========= ========= Earned premiums $ 44,971 $ 37,178 $ 168,997 $ 140,992 Net investment income 5,944 5,315 22,998 19,754 Net realized investment gains 160 88 36 504 Other income 2 6 15 16 --------- --------- --------- --------- Total revenues 51,077 42,587 192,046 161,266 Net losses and loss adjustment expenses 21,979 10,046 66,855 35,864 Interest expense on debt 693 693 2,773 2,772 Amortization of deferred policy acquisition costs 3,836 3,951 14,902 14,256 Other operating expenses - net 7,882 6,715 29,610 26,484 --------- --------- --------- --------- Income before income taxes 16,687 21,182 77,906 81,890 Income taxes 4,127 5,980 21,093 23,473 --------- --------- --------- --------- Net income $ 12,560 $ 15,202 $ 56,813 $ 58,417 ========= ========= ========= ========= Basic earnings per share $ 0.85 $ 1.05 $ 3.87 $ 4.04 Diluted earnings per share $ 0.85 $ 1.03 $ 3.84 $ 3.98 Weighted average common and common stock equivalents outstanding (in thousands) Basic 14,724 14,504 14,691 14,458 Diluted 14,804 14,725 14,808 14,681 NON-GAAP INFORMATION: Diluted realized investment gains per share, net of taxes $ 0.01 $ - $ - $ 0.02
Triad Guaranty Inc. Consolidated Balance Sheet
(Unaudited) December 31, December 31, 2005 2004 ---- ---- (Dollars in thousands except per share amounts) Assets: Invested assets: Fixed maturities, available for sale, at market $ 534,064 $ 454,121 Equity securities, available for sale, at market 8,159 10,272 Short-term investments 14,755 16,095 ---------- ---------- 556,978 480,488 Cash (1,025) 6,865 Deferred policy acquisition costs 33,684 32,453 Prepaid federal income tax 139,465 119,132 Other assets 38,401 33,097 ---------- ---------- Total assets $ 767,503 $ 672,035 ========== ========== Liabilities: Losses and loss adjustment expenses $ 51,074 $ 34,042 Unearned premiums 13,494 15,942 Deferred income tax 155,189 137,925 Long-term debt 34,501 34,493 Other liabilities 14,054 12,290 ---------- ---------- Total liabilities 268,312 234,692 Stockholders' equity: Retained earnings 387,441 330,628 Accumulated other comprehensive income 11,106 13,218 Other equity accounts 100,644 93,497 ---------- ---------- Total stockholders' equity 499,191 437,343 ---------- ---------- Total liabilities and stockholders' equity $ 767,503 $ 672,035 ========== ========== Stockholders' equity per share: Including unrealized investment gains $ 33.79 $ 29.89 Excluding unrealized investment gains $ 33.04 $ 28.99 Common shares outstanding 14,774,153 14,631,678
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, 2005 2005 2005 2005 2004 2004 2004 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- ---- (Dollars in millions unless otherwise indicated) Insurance In Force ------------------ Primary insurance in force $ 29,792 $ 29,820 $ 29,489 $ 29,001 $ 28,964 $ 28,811 $ 28,367 $ 28,272 $ 27,929 - Flow business $ 29,364 $ 29,327 $ 28,904 $ 28,314 $ 28,191 $ 27,936 $ 27,385 $ 27,224 $ 26,901 - Bulk business $ 428 $ 492 $ 585 $ 687 $ 773 $ 875 $ 982 $ 1,048 $ 1,028 Alt-A insurance in force - primary $ 2,935 $ 2,751 $ 2,479 $ 2,190 $ 2,100 $ 1,916 $ 1,646 $ 1,557 $ 1,451 Alt A insurance in force - primary FICO between 620 and 660 19.2% 20.8% 22.5% 23.9% 23.9% 22.4% 21.1% 22.2% 24.1% FICO greater than 660 80.8% 79.2% 77.5% 76.1% 76.1% 77.6% 78.9% 77.8% 75.9% Primary flow insurance in force subject to captive reinsurance arrangements 59.0% 58.3% 57.2% 56.7% 56.6% 56.1% 55.0% 53.5% 51.5% Modified Pool insurance in force $ 14,615 $ 13,406 $ 10,018 $ 9,217 $ 7,863 $ 7,010 $ 6,390 $ 5,614 $ 3,819 Risk In Force ------------- Primary net risk in force $ 6,767 $ 6,806 $ 6,700 $ 6,574 $ 6,587 $ 6,540 $ 6,409 $ 6,378 $ 6,295 - Flow business $ 6,624 $ 6,647 $ 6,509 $ 6,351 $ 6,337 $ 6,257 $ 6,095 $ 6,047 $ 5,977 - Bulk business $ 143 $ 159 $ 191 $ 223 $ 250 $ 283 $ 314 $ 331 $ 318 Total primary risk in force by credit score FICO less than 575 0.8% 0.9% 1.0% 1.0% 1.1% 1.1% 1.3% 1.4% 1.5% FICO between 575 and 619 4.3% 4.4% 4.6% 4.6% 4.6% 4.7% 4.9% 4.9% 5.1% FICO greater than 619 94.9% 94.7% 94.4% 94.4% 94.3% 94.2% 93.9% 93.7% 93.5% Flow primary risk in force by credit score FICO less than 575 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.7% 0.8% 0.8% FICO between 575 and 619 4.0% 4.2% 4.3% 4.3% 4.2% 4.2% 4.2% 4.1% 4.1% FICO greater than 619 95.3% 95.1% 94.9% 95.0% 95.1% 95.1% 95.1% 95.1% 95.1% Primary flow risk in force subject to captive reinsurance arrangements 60.4% 58.3% 56.7% 55.8% 55.6% 54.8% 52.9% 51.9% 49.8% Modified Pool gross risk in force $ 616 $ 579 $ 489 $ 462 $ 416 $ 388 $ 374 $ 350 $ 293 Deductibles on gross risk $ 71 $ 68 $ 59 $ 53 $ 42 $ 35 $ 31 $ 25 $ 13 Modified pool risk in force by credit score FICO less than 575 0.2% 0.2% 0.3% 0.3% 0.4% 0.5% 0.6% 0.7% 0.9% FICO between 575 and 619 1.1% 1.2% 1.6% 1.8% 2.2% 2.3% 2.5% 3.1% 3.8% FICO greater than 619 98.6% 98.6% 98.1% 97.9% 97.4% 97.2% 96.9% 96.2% 95.3%
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, 2005 2005 2005 2005 2004 2004 2004 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- ---- (Dollars in millions unless otherwise indicated) Production ---------- Primary new insurance written (NIW) $ 2,263 $ 3,093 $ 2,941 $ 2,191 $ 2,476 $ 2,716 $ 3,019 $ 2,497 $ 3,669 - Flow business $ 2,263 $ 3,091 $ 2,941 $ 2,161 $ 2,456 $ 2,665 $ 2,950 $ 2,380 $ 3,255 - Bulk business $ - $ 2 $ - $ 30 $ 20 $ 51 $ 69 $ 117 $ 414 NIW subject to captive reinsurance arrangements - Primary flow business 55.1% 58.1% 54.6% 47.4% 52.8% 51.3% 58.7% 60.3% 50.3% Product mix as a % of primary flow NIW: - Greater than 95% LTV's 11.2% 13.8% 11.6% 12.8% 13.7% 13.9% 11.8% 10.0% 7.2% - ARMs 30.4% 35.9% 43.7% 38.1% 36.7% 37.0% 33.2% 26.9% 26.1% - Monthly premium 99.5% 96.8% 94.3% 93.1% 93.5% 93.3% 90.7% 91.1% 83.1% - Annual premium 0.2% 3.0% 5.4% 5.7% 6.1% 6.2% 9.0% 8.5% 16.4% - Refinances 28.6% 26.5% 33.6% 35.0% 30.1% 22.0% 32.3% 35.4% 38.5% Primary new risk written (gross) $ 609 $ 822 $ 723 $ 540 $ 642 $ 724 $ 775 $ 634 $ 937 - Flow business $ 609 $ 821 $ 723 $ 530 $ 635 $ 706 $ 751 $ 594 $ 797 - Bulk business $ - $ 1 $ - $ 10 $ 7 $ 18 $ 24 $ 40 $ 140 Modified Pool NIW $ 2,255 $ 4,526 $ 1,798 $ 2,103 $ 1,606 $ 1,297 $ 1,394 $ 2,165 $ 1,555 Modified Pool new risk written $ 55 $ 97 $ 46 $ 62 $ 46 $ 27 $ 30 $ 59 $ 54 Loan Statistics --------------- Primary number of insured loans 217,397 219,159 219,256 217,657 218,011 217,305 214,991 214,273 211,805 - Flow business 214,127 215,481 214,964 212,754 212,596 211,300 208,384 207,314 205,033 - Bulk business 3,270 3,678 4,292 4,903 5,415 6,005 6,607 6,959 6,772 Primary average loan size ($ thousands) - Flow business $ 137.1 $ 136.1 $ 134.5 $ 133.1 $ 132.6 $ 132.2 $ 131.4 $ 131.3 $ 131.2 - Bulk business $ 131.0 $ 133.8 $ 136.3 $ 140.1 $ 142.8 $ 145.7 $ 148.6 $ 150.6 $ 151.8 Modified Pool number of insured loans 85,091 78,241 59,581 55,182 48,563 43,286 39,519 35,410 24,429 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, 2005, the Company had approximately $979 million of structured transactions with effective dates within the fourth quarter for which loan level detail had not been received.
Triad Guaranty Inc. Sequential Quarterly Statistical Information (con't.) (Unaudited)
Dec 31, Sep 30 Jun 30, Mar 31, Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 2005 2005 2005 2005 2004 2004 2004 2004 2003 ---- ---- ---- ---- ---- ---- ---- ---- ---- (Dollars in millions unless otherwise indicated) Delinquencies and Claim Information ----------------------------------- Total primary delinquent loans 5,336 4,312 4,013 4,134 4,203 3,902 3,709 3,728 3,397 - Flow business 4,894 3,892 3,593 3,694 3,739 3,469 3,319 3,343 3,053 - Bulk business 442 420 420 440 464 433 390 385 344 Total modified pool delinquent loans 1,827 1,341 1,312 1,329 1,242 1,106 1,056 994 845 - With deductibles 1,090 709 612 538 410 197 121 66 17 - Without deductibles 737 632 700 791 832 909 935 928 828 Total primary delinquency rate 2.45% 1.97% 1.83% 1.90% 1.93% 1.80% 1.73% 1.74% 1.60% Modified Pool delinquency rate 2.15% 1.71% 2.20% 2.41% 2.56% 2.56% 2.67% 2.81% 3.46% Primary average severity ($ thousands) $ 26.2 $ 26.2 $ 28.9 $ 24.7 $ 24.1 $ 19.3 $ 24.2 $ 27.4 $ 28.3 - Flow business $ 24.9 $ 26.1 $ 29.0 $ 24.9 $ 23.6 $ 19.7 $ 24.6 $ 26.9 $ 28.2 - Bulk business $ 40.5 $ 27.4 $ 27.6 $ 21.0 $ 28.4 $ 14.1 $ 19.4 $ 34.4 $ 29.3 Primary net paid claims ($ thousands) - Flow business $ 10,021 $ 10,555 $ 10,931 $ 8,283 $ 6,172 $ 6,224 $ 5,883 $ 5,254 $ 4,511 - Bulk business $ 1,540 $ 1,427 $ 1,216 $ 398 $ 966 $ 324 $ 426 $ 447 $ 381 Modified Pool net paid claims ($ thousands) $ 862 $ 1,475 $ 1,150 $ 970 $ 1,193 $ 733 $ 406 $ 308 $ 454 Financial Information --------------------- Loss ratio - GAAP 48.9% 38.4% 42.0% 27.4% 27.0% 25.8% 22.5% 26.3% 21.6% Expense ratio - GAAP 26.4% 26.1% 26.4% 28.1% 27.8% 28.6% 29.7% 29.4% 34.0% Combined ratio - GAAP 75.3% 64.5% 68.4% 55.5% 54.8% 54.4% 52.2% 55.7% 55.6% Risk-to-capital ratio 12.6:1 13.0:1 13.1:1 13.7:1 14.0:1 14.4:1 14.6:1 15.2:1 15.3:1 Annual persistency - primary 70.0% 69.7% 70.9% 69.0% 68.5% 67.8% 60.9% 56.2% 52.2%

The following information was filed by Triad Guaranty Inc (TGICQ) on Thursday, January 26, 2006 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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