Radian Reports Third Quarter 2012 Financial Results

  Radian Reports Third Quarter 2012 Financial Results

– Writes $10.6 billion of new MI business in the third quarter alone, compared
         to $9.0 billion written in the first nine months last year –

                 – Improved risk-to-capital ratio of 20.1:1 –

Business Wire

PHILADELPHIA -- November 01, 2012

Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended
September 30, 2012, of $14.3 million, or $0.11 per diluted share, which
included combined losses from the change in fair value of derivatives and
other financial instruments of $41.8 million and net gains on investments of
$84.7 million. This compares to net income of $183.6 million, or $1.37 per
diluted share, which included combined net gains from the change in fair value
of derivatives and other financial instruments of $206.6 million and net gains
on investments of $81.6 million, for the prior-year quarter. Book value per
share at September 30, 2012, was $6.85.

“I am pleased with the strong progress we have made against our top priorities
at Radian by writing new, high-quality mortgage insurance business and
diligently managing our legacy risk,” said Chief Executive Officer S.A.
Ibrahim. “In the third quarter, we successfully improved our risk-to-capital
position and wrote more new business than we did throughout the first nine
months of last year.”

Ibrahim continued, “Our new business volume coupled with the continued decline
in our delinquent loan inventory has improved the credit composition of our
mortgage insurance book and better positions Radian for a future return to
profitability.”

CAPITAL AND LIQUIDITY UPDATE

  *Radian Guaranty’s risk-to-capital ratio improved to 20.1:1 as of September
    30, 2012, compared to 21.0:1 as of June 30, 2012, and 20.6:1 as of March
    31, 2012.

       *The improvement in the risk-to-capital ratio from June 30, 2012, was
         primarily driven by investment gains partially offset by a small
         level of operating losses.
       *Radian expects to remain below a 25:1 risk-to-capital ratio for the
         remainder of 2012. Based on this and existing waivers of other
         risk-based capital requirements in certain states, Radian expects to
         continue to write all of its mortgage insurance business in Radian
         Guaranty, its principal mortgage insurance subsidiary, during this
         period.
       *In order to proactively manage its risk-to-capital position, Radian
         Guaranty entered into a quota share reinsurance agreement earlier
         this year with a third-party reinsurance provider. Radian agreed to
         cede 20 percent of new insurance written beginning with the business
         written in the fourth quarter of 2011, which represented $1.4 billion
         of ceded risk in force as of September 30, 2012. In August, Radian
         and the reinsurer mutually agreed to increase the amount of mortgage
         insurance risk ceded under the agreement to approximately $1.6
         billion and last week agreed to the terms of a new quota share
         arrangement with incremental ceded risk expected to range between
         $750 million and $2 billion. This new arrangement remains subject to
         Freddie Mac approval, as was the case with the previous agreement.
       *As of September 30, 2012, Radian Guaranty’s statutory capital
         increased to $1.0 billion, compared to $923.5 million in the second
         quarter of 2012 and $919.9 million in the first quarter of 2012.

  *Radian Group maintains approximately $330 million of currently available
    liquidity. There is approximately $80 million of the company’s outstanding
    debt due in February 2013.

THIRD QUARTER HIGHLIGHTS

  *New mortgage insurance written (NIW) was $10.6 billion for the quarter,
    compared to $8.3 billion in the second quarter of 2012 and $4.1 billion in
    the prior-year quarter.

       *The product mix of Radian’s NIW has continued the recent shift to an
         increased level of monthly premium business. Of the $25.4 billion in
         new business written in the first nine months of 2012, 66 percent was
         written with monthly premiums and 34 percent with single premiums.
         This compares to a mix of 61 percent monthly premiums and 39 percent
         single premiums in the first nine months of 2011.
       *The Home Affordable Refinance Program (HARP) accounted for $2.7
         billion of insurance not included in Radian Guaranty’s NIW total for
         the quarter. This compares to $2.4 billion in the second quarter of
         2012 and $762.0 million in the prior-year quarter. As of September
         30, 2012, approximately eight percent of the company’s total primary
         mortgage insurance risk in force had successfully completed a HARP
         refinance.
       *NIW continued to consist of loans with excellent risk
         characteristics.

  *The mortgage insurance provision for losses was $171.8 million in the
    third quarter of 2012, compared to $208.1 million in the second quarter
    and $276.6 million in the prior-year period. Mortgage insurance loss
    reserves were approximately $3.0 billion as of September 30, 2012, which
    was down from $3.2 billion as of June 30, 2012, and also as of September
    30, 2011. First-lien reserves per primary default were $28,561 as of
    September 30, 2012, compared to $28,410 as of June 30, 2012, and $25,346
    as of September 30, 2011.

  *The total number of primary delinquent loans decreased by 4 percent in the
    third quarter from the second quarter of 2012, and by 14 percent from the
    third quarter of 2011. The primary mortgage insurance delinquency rate
    decreased to 12.6 percent in the third quarter of 2012, compared to 13.3
    percent in the second quarter and 15.2 percent in the third quarter of
    2011. The company’s primary risk in force on defaulted loans was $4.4
    billion in the third quarter, compared to $4.6 billion in the second
    quarter and $5.2 billion in the third quarter of 2011.

  *Total mortgage insurance claims paid were $272.4 million in the third
    quarter, compared to $263.4 million in the second quarter and $329.9
    million in the third quarter of 2011. The company expects mortgage
    insurance net claims paid of approximately $250 million in the fourth
    quarter and $1.0 billion for the full-year 2012.

  *Radian Asset Assurance Inc. continues to serve as an important source of
    capital support for Radian Guaranty and is expected to continue to provide
    Radian Guaranty with dividends over time.

       *As of September 30, 2012, Radian Asset had approximately $1.1 billion
         in statutory surplus with an additional $700 million in claims-paying
         resources.
       *Radian Asset has paid a total of $384 million in dividends to Radian
         Guaranty since 2008, and expects to pay another dividend of
         approximately $40 million in 2013.
       *Since June 30, 2008, Radian Asset has successfully reduced its total
         net par exposure by 66 percent to $39 billion as of September 30,
         2012, including large declines in the riskier segments of the
         portfolio.

CONFERENCE CALL

Radian will discuss these items in its conference call today, Thursday,
November 1, at 10:00 a.m. Eastern time. The conference call will be broadcast
live over the Internet at http://www.radian.biz/page?name=Webcasts or at
www.radian.biz. The call may also be accessed by dialing 800-398-9386 inside
the U.S., or 612-332-0523 for international callers, using passcode 267306 or
by referencing Radian.

A replay of the webcast will be available on the Radian website approximately
two hours after the live broadcast ends for a period of one year. A replay of
the conference call will be available approximately two and a half hours after
the call ends for a period of two weeks, using the following dial-in numbers
and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international
callers, passcode 267306.

In addition to the information provided in the company's earnings news
release, other statistical and financial information, which is expected to be
referred to during the conference call, will be available on Radian's website
under Investors >Quarterly Results, or by clicking on
http://www.radian.biz/page?name=QuarterlyResults.

ABOUT RADIAN

Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private
mortgage insurance and related risk mitigation products and services to
mortgage lenders nationwide through its principal operating subsidiary, Radian
Guaranty Inc. These services help promote and preserve homeownership
opportunities for homebuyers, while protecting lenders from default-related
losses on residential first mortgages and facilitating the sale of
low-downpayment mortgages in the secondary market. Additional information may
be found at www.radian.biz.

Financial Results and Supplemental Information Contents (Unaudited)

For trend information on all schedules, refer to Radian’s quarterly financial
statistics at http://www.radian.biz/page?name=FinancialReportsCorporate.

             
Exhibit A:       Condensed Consolidated Statements of Income
Exhibit B:       Condensed Consolidated Balance Sheets
Exhibit C:       Segment Information Quarter Ended September 30, 2012
Exhibit D:       Segment Information Quarter Ended September 30, 2011
Exhibit E:       Segment Information Nine Months Ended September 30, 2012
Exhibit F:       Segment Information Nine Months Ended September 30, 2011
Exhibit G:       Financial Guaranty Supplemental Information
Exhibit H:       Financial Guaranty Supplemental Information
Exhibit I:       Mortgage Insurance Supplemental Information
                 New Insurance Written
Exhibit J:       Mortgage Insurance Supplemental Information
                 Insurance in Force and Risk in Force by Product
Exhibit K:       Mortgage Insurance Supplemental Information
                 Risk in Force by FICO, LTV and Policy Year
Exhibit L:       Mortgage Insurance Supplemental Information
                 Primary, Pool and Other Risk in Force
Exhibit M:       Mortgage Insurance Supplemental Information
                 Claims, Reserves and Reserves per Default
Exhibit N:       Mortgage Insurance Supplemental Information
                 Default Statistics
Exhibit O:       Mortgage Insurance Supplemental Information
                 Net Premiums Written and Earned, Captives,QSR and
                 Persistency
                 

                                            
                                                


Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

Exhibit A
                                                
                                                
                   Quarter Ended September 30   Nine Months Ended September 30
(In thousands,
except             2012          2011          2012              2011
per-share
data)
                                                                   
Revenues:
Net premiums
written -          $  209,277    $ 178,287    $  468,887        $ 513,814 
insurance
                                                                   
Net premiums
earned -           $  190,963     $ 179,655     $  545,107         $ 571,612
insurance
Net investment     25,635         38,763        91,225             124,826
income
Net gains on       84,659         81,640        178,537            163,311
investments
Net impairment
losses             —              (20       )   —                  (31       )
recognized in
earnings
Change in fair
value of           (41,056    )   126,008       (146,937     )     558,626
derivative
instruments
Net (losses)
gains on other     (740       )   80,602        (80,454      )     160,900
financial
instruments
Gain on sale       —              —             7,708              —
of affiliate
Other income       1,328         1,404        4,163             4,048     
Total revenues     260,789       508,052      599,349           1,583,292 
                                                                   
Expenses:
Provision for      176,352        249,598       653,374            940,537
losses
Change in
reserve for        966            (1,942    )   1,505              (6,427    )
premium
deficiency
Policy
acquisition        12,927         11,449        51,778             39,967
costs
Other
operating          50,429         45,240        140,776            137,413
expenses
Interest           12,520        14,094       39,249            47,197    
expense
Total expenses     253,194       318,439      886,682           1,158,687 
                                                                   
Equity in net
(loss) income      —             —            (13          )     65        
of affiliates
                                                                   
Pretax income      7,595          189,613       (287,346     )     424,670
(loss)
Income tax
(benefit)          (6,730     )   6,045        (13,180      )     981       
provision
                                                                   
Net income         $  14,325     $ 183,568    $  (274,166  )     $ 423,689 
(loss)
                                                                   
Diluted net
income (loss)      $  0.11       $ 1.37       $  (2.07     )     $ 3.16    
per share (1)
                                                                             
                                                                             

(1) Weighted average shares                                  
outstanding (in thousands)
                        
Weighted average
common shares                132,521       132,364       132,530       132,366
outstanding
Increase in weighted
average
shares-common stock          1,512        1,149        —            1,501
equivalents-diluted
basis
Weighted average             134,033      133,513      132,530      133,867
shares outstanding
                                                                       
                                                                       

For Trend Information, refer to our Quarterly Financial Statistics on Radian’s
(RDN) website.

                                                        
                                                                 




Radian Group Inc.
and Subsidiaries

Condensed
Consolidated Balance
Sheets

Exhibit B
                                                                 
                                                                 
                             September 30      December 31       September 30
(In thousands,
except per-share             2012              2011              2011
data)
                                                                 
Assets:
Cash and investments         $ 5,291,795       $ 5,846,168       $ 5,936,586
Deferred policy              91,271            139,906           138,962
acquisition costs
Deferred income              15,975            15,975            19,244
taxes, net
Reinsurance                  94,584            157,985           166,483
recoverables
Derivative assets            14,857            17,212            20,315
Receivable for               52,438            18,702            504,584
securities sold
Other assets                 480,437          460,817          460,111     
Total assets                 $ 6,041,357      $ 6,656,765      $ 7,246,285 
                                                                 
Liabilities and
stockholders’
equity:
Unearned premiums            $ 614,455         $ 637,372         $ 628,400
Reserve for losses
and loss adjustment          3,119,597         3,310,902         3,260,556
expenses
Reserve for premium          5,149             3,644             4,309
deficiency
Long-term debt               659,119           818,584           814,901
VIE debt                     109,651           228,240           273,379
Derivative                   267,323           126,006           188,921
liabilities
Payable for                  45,583            46,368            532,451
securities purchased
Other liabilities            305,227          303,358          254,932     
Total liabilities            5,126,104        5,474,474        5,957,849   
                                                                 
Common stock                 151               151               151
Additional paid-in           1,075,151         1,074,513         1,074,201
capital
Retained (deficit)           (177,939    )     96,227            218,095
earnings
Accumulated other
comprehensive income         17,890           11,400           (4,011      )
(loss)
Total common                 915,253          1,182,291        1,288,436   
stockholders’ equity
Total liabilities
and stockholders’            $ 6,041,357      $ 6,656,765      $ 7,246,285 
equity
                                                                 
Book value per share         $ 6.85            $ 8.88            $ 9.67
                                                                             
                                                                             

                                                        
                                                                 


Radian Group Inc.
and Subsidiaries

Segment Information

Quarter Ended
September 30, 2012

Exhibit C
                                                                 
                                                                 
                             Mortgage          Financial
(In thousands)               Insurance         Guaranty          Total
Revenues:
Net premiums written         $ 209,890        $ (613      )     $ 209,277   
- insurance
                                                                 
Net premiums earned          $ 178,685         $ 12,278          $ 190,963
- insurance
Net investment               14,758            10,877            25,635
income
Net gains on                 43,379            41,280            84,659
investments
Net impairment
losses recognized in         —                 —                 —
earnings
Change in fair value
of derivative                (1          )     (41,055     )     (41,056     )
instruments
Net (losses) gains
on other financial           (1,960      )     1,220             (740        )
instruments
Other income                 1,280            48               1,328       
Total revenues               236,141          24,648           260,789     
                                                                 
Expenses:
Provision for losses         171,805           4,547             176,352
Change in reserve
for premium                  966               —                 966
deficiency
Policy acquisition           10,126            2,801             12,927
costs
Other operating              40,250            10,179            50,429
expenses
Interest expense             1,910            10,610           12,520      
Total expenses               225,057          28,137           253,194     
                                                                 
Equity in net loss           —                —                —           
of affiliates
                                                                 
Pretax income (loss)         11,084            (3,489      )     7,595
Income tax (benefit)         (20,316     )     13,586           (6,730      )
provision
                                                                 
Net income (loss)            $ 31,400         $ (17,075   )     $ 14,325    
                                                                 
Cash and investments         $ 3,192,341       $ 2,099,454       $ 5,291,795
Deferred policy              39,148            52,123            91,271
acquisition costs
Total assets                 3,651,849         2,389,508         6,041,357
Unearned premiums            333,144           281,311           614,455
Reserve for losses
and loss adjustment          3,046,706         72,891            3,119,597
expenses
VIE debt                     9,448             100,203           109,651
Derivative                   —                 267,323           267,323
liabilities
                                                                             
                                                                             

                                                        
                                                                 




Radian Group Inc.
and Subsidiaries

Segment Information

Quarter Ended
September 30, 2011

Exhibit D
                                                                 
                                                                 
                             Mortgage          Financial
(In thousands)               Insurance         Guaranty          Total
Revenues:
Net premiums written         $ 178,215        $ 72             $ 178,287   
- insurance
                                                                 
Net premiums earned          $ 163,436         $ 16,219          $ 179,655
- insurance
Net investment               21,642            17,121            38,763
income
Net gains on                 53,263            28,377            81,640
investments
Net impairment
losses recognized in         (20         )     —                 (20         )
earnings
Change in fair value
of derivative                200               125,808           126,008
instruments
Net gains on other
financial                    2,486             78,116            80,602
instruments
Other income                 1,357            47               1,404       
Total revenues               242,364          265,688          508,052     
                                                                 
Expenses:
Provision for losses         276,599           (27,001     )     249,598
Change in reserve
for premium                  (1,942      )     —                 (1,942      )
deficiency
Policy acquisition           7,834             3,615             11,449
costs
Other operating              36,082            9,158             45,240
expenses
Interest expense             2,015            12,079           14,094      
Total expenses               320,588          (2,149      )     318,439     
                                                                 
Equity in net income         —                —                —           
of affiliates
                                                                 
Pretax (loss) income         (78,224     )     267,837           189,613
Income tax (benefit)         (36,033     )     42,078           6,045       
provision
                                                                 
Net (loss) income            $ (42,191   )     $ 225,759        $ 183,568   
                                                                 
Cash and investments         $ 3,176,860       $ 2,759,726       $ 5,936,586
Deferred policy              47,863            91,099            138,962
acquisition costs
Total assets                 3,731,978         3,514,307         7,246,285
Unearned premiums            206,477           421,923           628,400
Reserve for losses
and loss adjustment          3,214,854         45,702            3,260,556
expenses
VIE debt                     31,164            242,215           273,379
Derivative                   —                 188,921           188,921
liabilities
                                                                             
                                                                             

                                                         
                                                                  




Radian Group Inc. and
Subsidiaries

Segment Information

Nine Months Ended
September 30, 2012

Exhibit E
                                                                  
                                                                  
                                                                  
                                 Mortgage        Financial
(In thousands)                   Insurance       Guaranty         Total
Revenues:
Net premiums written -           $ 589,261      $ (120,374 )     $ 468,887  
insurance
                                                                  
Net premiums earned -            $ 522,899       $ 22,208         $ 545,107
insurance
Net investment income            50,377          40,848           91,225
Net gains on investments         102,219         76,318           178,537
Net impairment losses            —               —                —
recognized in earnings
Change in fair value of          (32       )     (146,905   )     (146,937   )
derivative instruments
Net losses on other              (2,627    )     (77,827    )     (80,454    )
financial instruments
Gain on sale of                  —               7,708            7,708
affiliate
Other income                     3,928          235             4,163      
Total revenues                   676,764        (77,415    )     599,349    
                                                                  
Expenses:
Provision for losses             614,612         38,762           653,374
Change in reserve for            1,505           —                1,505
premium deficiency
Policy acquisition costs         26,662          25,116           51,778
Other operating expenses         107,787         32,989           140,776
Interest expense                 5,355          33,894          39,249     
Total expenses                   755,921        130,761         886,682    
                                                                  
Equity in net loss of            —              (13        )     (13        )
affiliates
                                                                  
Pretax loss                      (79,157   )     (208,189   )     (287,346   )
Income tax (benefit)             (42,324   )     29,144          (13,180    )
provision
                                                                  
Net loss                         $ (36,833 )     $ (237,333 )     $ (274,166 )
                                                                             
                                                                             

                                                          
                                                                   


Radian Group Inc. and
Subsidiaries

Segment Information

Nine Months Ended
September 30, 2011

Exhibit F
                                                                   
                                                                   
                                  Mortgage         Financial
(In thousands)                    Insurance        Guaranty        Total
Revenues:
Net premiums written -            $ 523,255       $ (9,441  )     $ 513,814 
insurance
                                                                   
Net premiums earned -             $ 513,895        $ 57,717        $ 571,612
insurance
Net investment income             73,328           51,498          124,826
Net gains on investments          98,450           64,861          163,311
Net impairment losses             (31        )     —               (31       )
recognized in earnings
Change in fair value of           64               558,562         558,626
derivative instruments
Net gains on other                4,321            156,579         160,900
financial instruments
Other income                      3,881           167            4,048     
Total revenues                    693,908         889,384        1,583,292 
                                                                   
Expenses:
Provision for losses              960,564          (20,027   )     940,537
Change in reserve for             (6,427     )     —               (6,427    )
premium deficiency
Policy acquisition costs          26,651           13,316          39,967
Other operating expenses          104,132          33,281          137,413
Interest expense                  11,950          35,247         47,197    
Total expenses                    1,096,870       61,817         1,158,687 
                                                                   
Equity in net income of           —               65             65        
affiliates
                                                                   
Pretax (loss) income              (402,962   )     827,632         424,670
Income tax (benefit)              (27,158    )     28,139         981       
provision
                                                                   
Net (loss) income                 $ (375,804 )     $ 799,493      $ 423,689 
                                                                             
                                                                             

                                              
                                                     


Radian Group
Inc. and
Subsidiaries

Financial
Guaranty
Supplemental
Information

Exhibit G
                                                     
                      Quarter Ended September 30     Nine Months Ended
                                                     September 30
(In                   2012            2011           2012            2011
thousands)
                                                                      
Net Premiums
Earned:
Public
finance               $  8,644        $ 9,708        $  33,004        $ 29,124
direct
Public
finance               5,350           5,238          10,942           21,304
reinsurance
Structured            242             399            870              1,781
direct
Structured            (1,958    )     875            (342       )     2,639
reinsurance
Trade credit          —              (1       )     (2         )     40
reinsurance
Net Premiums
Earned -              12,278          16,219         44,472           54,888
insurance
Impact of
commutations          —              —             (22,264    )     2,829
and
reinsurance
Total Net
Premiums              $  12,278      $ 16,219      $  22,208       $ 57,717
Earned -
insurance
                                                                      
Refundings
included in           $  7,322       $ 4,597       $  26,029       $ 18,728
earned
premium
                                                                      
Net premiums
earned -              $  7,169       $ 10,343      $  23,041       $ 31,699
derivatives
(1)
                                                                      
Claims paid           $  26,593  (2) $ 2,339       $  28,873       $ 6,035
                                                                        
                                                                        

(1) Included in change in fair value of derivative instruments.
(2) Primarily represents the settlement of obligations related to our insured
sovereign indebtedness to Greece.


The impact of the Assured Transaction for the Nine Months Ended September 30,
2012, was as follows:

(In millions)                                                  
Statement of Operations
Decrease in premiums written                                        $ (119.8 )
Decrease in premiums earned                                         $ (22.2  )
Increase in change in fair value of derivative                      1.4
instruments—gain
Gain on sale of affiliate                                           7.7
Increase in amortization of policy acquisition costs                (15.7    )
Decrease in pre-tax income                                          $ (28.8  )
                                                                    
Balance Sheet
Decrease in:
Cash                                                                $ 93.6
Deferred policy acquisition costs                                   26.2
Accounts and notes receivable                                       1.1
Derivative assets                                                   0.6
Unearned premiums                                                   71.6
Derivative liabilities                                              2.1
Increase in other assets                                            19.1
                                                                             
                                                                             

                                                          
                                                                  


Radian Group Inc.
and Subsidiaries

Financial
Guaranty
Supplemental
Information

Exhibit H
                                                                  
                          September 30         December 31        September 30
($ in thousands,          2012                 2011               2011
except ratios)
                                                                  
Statutory
Information:
                                                                  
Capital and               $ 1,139,842          $ 974,874          $ 1,038,290
surplus
Contingency               290,877             421,406           431,715
reserve
Qualified                 1,430,719            1,396,280          1,470,005
statutory capital
                                                                  
Unearned premium          275,172              448,669            469,956
reserve
Loss and loss             (50,089      )       161,287           13,026
expense reserve
Total statutory
policyholders’            1,655,802            2,006,236          1,952,987
reserves
                                                                  
Present value of
installment               107,046             148,641           162,766
premiums
Total statutory
claims paying             $ 1,762,848         $ 2,154,877       $ 2,115,753
resources
                                                                  
Net debt service          $ 48,302,271        $ 88,202,630      $ 91,717,192
outstanding
                                                                  
Capital leverage          34                   63                 62
ratio (1)
Claims paying
leverage ratio            27                   41                 43
(2)
                                                                  
Net par
outstanding by
product:
Public finance            $ 10,288,776         $ 13,838,427       $ 14,530,364
direct
Public finance            5,590,189            19,097,057         19,789,862
reinsurance
Structured direct         22,360,606           34,760,869         35,939,194
Structured                800,936             1,492,859         1,630,317
reinsurance
Total (3)                 $ 39,040,507  (4)   $ 69,189,212      $ 71,889,737
                                                                    
                                                                    


(1)  The capital leverage ratio is derived by dividing net debt service
      outstanding by qualified statutory capital.
(2)   The claims paying leverage ratio is derived by dividing net debt service
      outstanding by total statutory claims paying
      resources.
(3)   Included in public finance net par outstanding is $0.9 billion, $1.4
      billion and $1.6 billion at September 30, 2012,
      December 31, 2011, and September 30, 2011, respectively, for legally
      defeased bond issues where our financial guaranty policy has
      not been extinguished but cash or securities have been deposited in an
      escrow account for the benefit of bondholders.
(4)   Reductions in par caused by the following: $15.6 billion in connection
      with the Assured Transaction, $10.2 billion in connection
      with the CDO terminations, and $1.2 billion in connection with the
      Commutation Transactions.
      
      

                                                                   
                                                                                                                         




Radian Group
Inc. and
Subsidiaries

Mortgage
Insurance
Supplemental
Information

Exhibit I
                                                                                                                         
                     Quarter Ended                                        Nine Months Ended
                     September 30                                        September 30                                   
                     2012                    2011                     2012                    2011                
($ in                $            %           $           %           $            %           $           %
millions)
Primary new
insurance                                                                                                 
written
Prime                $ 10,594       100.0 %     $ 4,104       99.9  %     $ 25,384       99.9  %     $ 8,967       99.9  %
Alt-A                1              —           —             —           2              —           —             —
A minus and          3           —          3          0.1        12          0.1        6          0.1   
below
Total Flow           $ 10,598    100.0 %     $ 4,107    100.0 %     $ 25,398    100.0 %     $ 8,973    100.0 %
                                                                                                                   
Total
primary new
insurance
written by
FICO score
>=740                $ 8,067        76.1  %     $ 3,164       77.0  %     $ 19,313       76.0  %     $ 7,091       79.0  %
680-739              2,259          21.3        892           21.7        5,475          21.6        1,828         20.4
620-679              272         2.6        51         1.3        610         2.4        54         0.6   
Total Flow           $ 10,598    100.0 %     $ 4,107    100.0 %     $ 25,398    100.0 %     $ 8,973    100.0 %
                                                                                                                   
Percentage
of primary
new
insurance
written
Monthly              66       %                 56      %                 66       %                 61      %
premiums
Single               34       %                 44      %                 34       %                 39      %
premiums
Refinances           35       %                 28      %                 38       %                 34      %
LTV
95.01% and           1.3      %                 2.2     %                 1.4      %                 1.7     %
above
90.01% to            42.5     %                 38.0    %                 41.5     %                 35.3    %
95.00%
ARMS
Less than 5          <1%                        <1      %                 <1       %                 <1      %
years
5 years and          1.7      %                 6.0     %                 2.2      %                 5.9     %
longer
                                                                                                                   
                                                                                                                   

                                               
                                                                             




Radian Group
Inc. and
Subsidiaries

Mortgage
Insurance
Supplemental
Information

Exhibit J
                                                                             
                         September 30                  September 30
                         2012                         2011                  
($ in millions)          $             %             $             %
Primary
insurance in
force
Flow                     $ 123,438       91.4  %       $ 111,493       89.5  %
Structured               11,622       8.6          13,143       10.5  
Total Primary            $ 135,060    100.0 %       $ 124,636    100.0 %
                                                                       
Prime                    $ 117,509       87.0  %       $ 104,185       83.6  %
Alt-A                    10,883          8.1           12,775          10.2
A minus and              6,668        4.9          7,676        6.2   
below
Total Primary            $ 135,060    100.0 %       $ 124,636    100.0 %
                                                                       
Primary risk in
force
Flow                     $ 30,480        92.3  %       $ 27,473        90.7  %
Structured               2,540        7.7          2,825        9.3   
Total Primary            $ 33,020     100.0 %       $ 30,298     100.0 %
                                                                       
Flow
Prime                    $ 27,372        89.8  %       $ 23,813        86.7  %
Alt-A                    1,928           6.3           2,275           8.3
A minus and              1,180        3.9          1,385        5.0   
below
Total Flow               $ 30,480     100.0 %       $ 27,473     100.0 %
                                                                       
Structured
Prime                    $ 1,482         58.3  %       $ 1,651         58.4  %
Alt-A                    571             22.5          641             22.7
A minus and              487          19.2         533          18.9  
below
Total Structured         $ 2,540      100.0 %       $ 2,825      100.0 %
                                                                       
Total
Prime                    $ 28,854        87.4  %       $ 25,464        84.1  %
Alt-A                    2,499           7.6           2,916           9.6
A minus and              1,667        5.0          1,918        6.3   
below
Total Primary            $ 33,020     100.0 %       $ 30,298     100.0 %
                                                                             
                                                                             

                                                 
                                                                             


Radian Group Inc.
and Subsidiaries

Mortgage Insurance
Supplemental
Information

Exhibit K
                                                                             
                             September 30               September 30
                             2012                       2011
($ in millions)              $            %           $            %
Total primary risk
in force by FICO                                                  
score
Flow
>=740                        $ 15,141       49.7  %     $ 11,566       42.1  %
680-739                      9,449          31.0        9,213          33.5
620-679                      5,022          16.5        5,671          20.7
<=619                        868         2.8        1,023       3.7   
Total Flow                   $ 30,480    100.0 %     $ 27,473    100.0 %
                                                                       
Structured
>=740                        $ 674          26.5  %     $ 752          26.6  %
680-739                      736            29.0        822            29.1
620-679                      678            26.7        756            26.8
<=619                        452         17.8       495         17.5  
Total Structured             $ 2,540     100.0 %     $ 2,825     100.0 %
                                                                       
Total
>=740                        $ 15,815       47.9  %     $ 12,318       40.7  %
680-739                      10,185         30.8        10,035         33.1
620-679                      5,700          17.3        6,427          21.2
<=619                        1,320       4.0        1,518       5.0   
Total Primary                $ 33,020    100.0 %     $ 30,298    100.0 %
                                                                       
Total primary risk
in force by LTV
85.00% and below             $ 3,092        9.3   %     $ 2,731        9.0   %
85.01% to 90.00%             12,679         38.4        11,717         38.7
90.01% to 95.00%             12,473         37.8        10,390         34.3
95.01% and above             4,776       14.5       5,460       18.0  
Total                        $ 33,020    100.0 %     $ 30,298    100.0 %
                                                                       
Total primary risk
in force by policy
year
2005 and prior               $ 5,947        18.0  %     $ 7,207        23.8  %
2006                         2,827          8.6         3,276          10.8
2007                         6,239          18.9        7,175          23.7
2008                         4,715          14.3        5,376          17.7
2009                         2,200          6.7         2,812          9.3
2010                         1,887          5.7         2,354          7.8
2011                         3,181          9.6         2,098          6.9
2012                         6,024       18.2       —           —     
Total                        $ 33,020    100.0 %     $ 30,298    100.0 %
                                                                       
Primary risk in
force on defaulted           $ 4,417                   $ 5,210  
loans
                                                                       
                                                                       

                                                  
                                                                             




Radian Group Inc.
and Subsidiaries

Mortgage Insurance
Supplemental
Information

Exhibit L
                                                                             
                             September 30                September 30
                             2012                        2011
($ in millions)              $             %           $           %
                                                                   
Percentage of
primary risk in
force
Refinances                   31      %                   31      %
ARMS
Less than 5 years            4       %                   5       %
5 years and longer           5       %                   7       %
                                                                       
Pool risk in force
Prime                        $ 1,432         76.8  %     $ 1,652       76.6  %
Alt-A                        108             5.8         126           5.9
A minus and below            324          17.4       378        17.5  
Total                        $ 1,864      100.0 %     $ 2,156    100.0 %
                                                                       
Total pool risk in
force by policy year
2005 and prior               $ 1,684         90.3  %     $ 1,877       87.1  %
2006                        79              4.2         113           5.2
2007                        89              4.8         134           6.2
2008                        12           0.7        32         1.5   
Total pool risk in           $ 1,864      100.0 %     $ 2,156    100.0 %
force
                                                                       
Other risk in force
Second-lien
1st loss                     $ 85                        $ 107
2nd loss                     23                          31
NIMS                         14                          38
1st loss-Hong Kong
primary mortgage             45                         72      
insurance
Total other risk in          $ 167                      $ 248   
force
                                                                       
Risk to capital
ratio-Radian                 20.1:1    (1)              21.4:1
Guaranty only
                                                                       
(1) Preliminary

                                                  
                                                         




Radian Group
Inc. and
Subsidiaries

Mortgage
Insurance
Supplemental
Information

Exhibit M
                                                         
                     Quarter Ended                       Nine Months Ended
                     September 30                        September 30
($ in                2012            2011              2012          2011
thousands)
                                                                         
Net claims
paid
Prime                $ 169,641         $ 180,523         $ 467,093       $ 644,738
Alt-A                45,058            57,244            121,970         220,514
A minus and          28,042           37,015           85,234         134,394     
below
Total
primary              242,741           274,782           674,297         999,646
claims paid
Pool                 26,546            52,771            71,846          145,470
Second-lien          3,111            2,342            8,043          8,961       
and other
Subtotal             272,398           329,895           754,186         1,154,077
Impact of
first-lien           —                 —                 —               38,198
terminations
Impact of
captive              —                 —                 (148      )     (1,166      )
terminations
Impact of
second-lien          —                —                —              16,550      
terminations
Total                $ 272,398        $ 329,895        $ 754,038      $ 1,207,659 
                                                                         
Average
claim paid
(1)
Prime                $ 48.0            $ 51.3            $ 48.6          $ 49.6
Alt-A                59.9              61.8              58.6            61.1
A minus and          38.1              43.1              38.0            40.1
below
Total
primary              48.4              51.8              47.9            50.1
average
claims paid
Pool                 66.2              79.8              66.6            77.1
Second-lien          29.6              25.7              27.5            28.0
and other
Total                $ 49.3            $ 54.4            $ 48.8          $ 52.1
                                                                         
Average
primary              $ 50.8            $ 55.8            $ 50.5          $ 55.1
claim paid
(2) (3)
Average
total claim          $ 51.5            $ 57.9            $ 51.2          $ 56.5
paid (2) (3)
                                                                         
Loss ratio -         96.1        %     169.2       %     117.5     %     186.9       %
GAAP basis
Expense
ratio - GAAP         28.2        %     26.9        %     25.7      %     25.4        %
basis
                     124.3       %     196.1       %     143.2     %     212.3       %
                                                                         
Reserve for
losses by
category
Prime                $ 1,693,579       $ 1,655,992
Alt-A                570,055           622,568
A minus and          355,018           368,034
below
Reinsurance
recoverable          89,801           160,233     
(4)
Total
primary              2,708,453         2,806,827
reserves
Pool                 327,020          397,919     
insurance
Total 1st
lien                 3,035,473         3,204,746
reserves
Second lien          8,203             10,074
Other                3,030            34          
Total                $ 3,046,706      $ 3,214,854 
reserves
                                                                         
1st lien
reserve per
default (5)
Primary
reserve per          $ 28,561          $ 25,346
primary
default
Primary
reserve per
default              26,100            24,436
excluding
IBNR
Pool reserve
per pool             17,538            15,325
default (6)
Total 1st
lien reserve         26,750            23,443
per default
                                                                         
                                                                         

    
(1)   Calculated net of reinsurance recoveries and without giving effect to
      the impact of first-lien, second-lien and captive terminations.
(2)   Calculated without giving effect to the impact of terminations of
      captive reinsurance and first- and second-lien transactions.
(3)   Before reinsurance recoveries.
(4)   Represents ceded losses on captive transactions and Smart Home.
(5)   Calculated as total reserves divided by total defaults.
(6)   If calculated before giving effect to deductibles and stop losses in
      pool transactions, the pool reserve per default at September 30,
      2012 and 2011, would be $27,842 and $26,513, respectively.
      
      

                                                              
                                                                  


Radian Group Inc. and Subsidiaries

Mortgage Insurance Supplemental
Information

Exhibit N
                                                                  
                                     September 30   December 31   September 30
                                     2012           2011          2011
Default Statistics
Primary Insurance:
                                                                  
Flow
Prime
Number of insured loans              608,765        569,190       563,226
Number of loans in default           55,859         65,238        64,426
Percentage of loans in default       9.18      %    11.46    %    11.44     %
                                                                  
Alt-A
Number of insured loans              39,274         44,355        45,818
Number of loans in default           12,254         14,481        14,832
Percentage of loans in default       31.20     %    32.65    %    32.37     %
                                                                  
A minus and below
Number of insured loans              36,347         40,884        42,246
Number of loans in default           11,273         13,560        13,749
Percentage of loans in default       31.01     %    33.17    %    32.55     %
                                                                  
Total Flow
Number of insured loans              684,386        654,429       651,290
Number of loans in default           79,386         93,279        93,007
Percentage of loans in default       11.60     %    14.25    %    14.28     %
                                                                  
Structured
Prime
Number of insured loans              38,427         41,248        42,249
Number of loans in default           5,510          6,308         6,229
Percentage of loans in default       14.34     %    15.29    %    14.74     %
                                                                  
Alt-A
Number of insured loans              16,893         18,484        18,990
Number of loans in default           4,809          5,563         5,745
Percentage of loans in default       28.47     %    30.10    %    30.25     %
                                                                  
A minus and below
Number of insured loans              14,505         15,477        15,807
Number of loans in default           5,126          5,711         5,759
Percentage of loans in default       35.34     %    36.90    %    36.43     %
                                                                  
Total Structured
Number of insured loans              69,825         75,209        77,046
Number of loans in default           15,445         17,582        17,733
Percentage of loans in default       22.12     %    23.38    %    23.02     %
                                                                  
Total Primary Insurance
Prime
Number of insured loans              647,192        610,438       605,475
Number of loans in default           61,369         71,546        70,655
Percentage of loans in default       9.48      %    11.72    %    11.67     %
                                                                  
Alt-A
Number of insured loans              56,167         62,839        64,808
Number of loans in default           17,063         20,044        20,577
Percentage of loans in default       30.38     %    31.90    %    31.75     %
                                                                  
A minus and below
Number of insured loans              50,852         56,361        58,053
Number of loans in default           16,399         19,271        19,508
Percentage of loans in default       32.25     %    34.19    %    33.60     %
                                                                  
Total Primary
Number of insured loans              754,211        729,638       728,336
Number of loans in default           94,831         110,861       110,740
Percentage of loans in default       12.57     %    15.19    %    15.20     %
                                                                  
Pool insurance
Number of loans in default           18,646         21,685        25,966
                                                                            
                                                                            

<t*Story too large*
                                               
                                                      




Radian Group
Inc. and
Subsidiaries

Mortgage
Insurance
Supplemental
Information

Exhibit O
                                                      
                     Quarter Ended                   Nine Months Ended
                      September 30                    September 30
($ in                 2012          2011            2012          2011
thousands)
                                                                      
Net Premiums
Written
Primary and
Pool                  $ 209,445       $ 177,642       $ 587,762       $ 521,455
Insurance
Second-lien           452             565             1,445           1,777
International         (7        )     8              54             23        
Total Net
Premiums              $ 209,890      $ 178,215      $ 589,261      $ 523,255 
Written -
Insurance
                                                                      
Net Premiums
Earned
Primary and
Pool                  $ 177,929       $ 161,779       $ 520,308       $ 507,636
Insurance
Second-lien           452             565             1,445           1,777
International         304            1,092          1,146          4,482     
Total Net
Premiums              $ 178,685      $ 163,436      $ 522,899      $ 513,895 
Earned -
Insurance
                                                                      
1st Lien
Captives
Premiums
ceded to              $ 5,327         $ 7,068         $ 18,045        $ 21,921
captives
% of total            2.8       %     4.1       %     3.3       %     4.1       %
premiums
IIF included
in captives           7.1
(1)

[TRUNCATED]