Triad Guaranty Inc., the Winston-Salem, N.C. mortgage insurer currently in run-off, made a $79 million net profit in the second quarter. But president and chief executive Ken Jones cautioned the profit was due to items unlikely to reoccur in the future and thus it is doubtful for Triad to report a similar level of profitability in the future, or any profits at all for that matter.
In the second quarter 2009, Triad lost $359 million.
Higher cures in the first half of the year, Jones explained, allowed Triad to adjust its reserve factors. This was coupled with "modestly higher rescission expectations," and the combination allowed it to reduce its estimated reserves for losses.
"The impact of the change in reserve factors on our second quarter financial results, coupled with an additional accrual of earned premiums during the quarter, were the primary drivers of our net income reported for the quarter," said Jones.
Even with the profit, Triad is operating with a $648 million deficit in assets, which means for it to meet all of its existing obligations, it has to earn $649 million during the remaining run-off period, Jones said.
