Countrywide Reports Q1 Insurance Net Earnings of $180 Million

Countrywide Financial Corp., Calasbas, Calif., reported net earnings of $434 million for the first quarter ended March 31, 2007, compared to net earnings of $684 for the same period in 2006. Pre-tax earnings in the insurance sector were $180 million for the first quarter of 2007, compared with $65 million for the same period in 2006.

“While the Company’s core operations delivered what was otherwise a strong quarter, earnings were impacted by charges relating to our subprime activities as well as increases to our loss reserves and related asset valuation adjustments stemming from higher delinquencies and softer housing markets,” said Angelo R. Mozilo, chairman and CEO.

Countrywide’s Insurance segment includes Balboa Insurance Group, whose companies are national providers of property, life and casualty insurance; and Balboa Reinsurance Co., a captive mortgage guaranty reinsurance company.

For the first quarter of 2007, insurance segment pre-tax results increased $105 million from the fourth quarter of 2006 and $115 million year over year. This growth resulted from increases at Balboa Reinsurance of $75 million from the fourth quarter and $85 million from the first quarter of 2006. In addition, earnings at Balboa Life and Casualty doubled when compared to the sequential and year-over-year quarters, the company stated. The increases at Balboa Life & Casualty stemmed from an increase in net earned premiums, primarily in the lender-placed lines, as well as improved claims experience.

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