Triad Guaranty Inc. Reports First Quarter Loss Reflecting Continued Deterioration in the Housing Markets

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 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.

First Call Analyst:
FCMN Contact:

Source: Triad Guaranty Inc.

CONTACT: Ken Jones, Senior Vice President and Chief Financial Officer,
Triad Guaranty Inc., +1-336-723-1282 ext. 1105, kjones@tgic.com

Web site: http://www.triadguaranty.com/

2008-05-12 18:30:35 0359421 PRNEWSWIRE