Radian Reports First Quarter 2013 Financial Results

  Radian Reports First Quarter 2013 Financial Results

       – Writes $10.9 billion of new MI business in the first quarter –

    – Improves risk-to-capital ratio to 18.6:1; More than $800 million of
               currently available holding company liquidity –

– Total number of primary delinquent loans declines by 17% from first quarter
                                  of 2012 –

Business Wire

PHILADELPHIA -- May 01, 2013

Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended
March 31, 2013, of $187.5 million, or $1.30 per diluted share, which included
combined losses from the change in fair value of derivatives and other
financial instruments of $173.3 million. This compares to a net loss for the
quarter ended March 31, 2012, of $169.2 million, or $1.28 per diluted share,
which included combined losses from the change in fair value of derivatives
and other financial instruments of $90.6 million. Book value per share at
March 31, 2013, was $5.39.

“We took the opportunity this quarter to significantly improve our capital and
liquidity positions, providing a competitive advantage for Radian in an
extremely attractive business environment,” said Chief Executive Officer S.A.
Ibrahim. “Building on our momentum with a strong risk-to-capital ratio,
financial flexibility at the holding company, and the number one mortgage
insurance market share position in the fourth quarter of last year, we kicked
off 2013 with a 69% jump in new mortgage insurance business written
year-over-year.”

Ibrahim continued, “As our strong new business volume continues, our
delinquency inventory decreases and the mix of profitable new business begins
to outweigh our legacy mortgage insurance book, we are positioning Radian for
a return to operating profitability.”

CAPITAL AND LIQUIDITY UPDATE

In March, Radian improved its capital and liquidity position through a
successful capital raise, resulting in net proceeds of approximately $689
million. As previously reported, Radian Group contributed $115 million of
capital to Radian Guaranty in the first quarter, in order to support the
company’s strong risk-to-capital position. Radian Guaranty’s risk-to-capital
ratio was 18.6:1 as of March 31, 2013. After the above-mentioned contribution
of $115 million to Radian Guaranty, Radian Group maintains approximately $815
million of currently available liquidity.

  *Radian expects to maintain a risk-to-capital ratio of 20:1 or below at
    Radian Guaranty for the foreseeable future.
  *The improvement in the risk-to-capital ratio from December 31, 2012, was
    primarily driven by the $115 million capital contribution from Radian
    Group and a release of Radian Asset’s contingency reserves of $68 million,
    partially offset by an increase to the company’s net risk in force
    resulting from strong, new mortgage insurance business volume.
  *In order to proactively manage its risk-to-capital position, Radian
    Guaranty entered into two quota share reinsurance agreements in 2012 with
    the same third-party reinsurance provider. As of March 31, 2013, a total
    of $2.4 billion of risk in force was ceded under those agreements.
    Beginning April 1, the company reduced the amount of new business that
    will be ceded to the reinsurer on a prospective basis from 20 percent to 5
    percent. On December 31, 2014, and on December 31, 2015, Radian has the
    ability, at its option, to recapture a portion of the business that was
    reinsured.
  *As of March 31, 2013, Radian Guaranty’s statutory capital was $1.1 billion
    compared to $926 million at year-end 2012, and $920 million a year ago.

FIRST QUARTER HIGHLIGHTS

  *New mortgage insurance written (NIW) was $10.9 billion for the quarter,
    compared to $11.7 billion in the fourth quarter of 2012 and $6.5 billion
    in the prior-year quarter. Radian wrote an additional $4.1 billion in NIW
    in April 2013, compared to $2.5 billion in April 2012.

       *The Home Affordable Refinance Program (HARP) accounted for $2.5
         billion of insurance not included in Radian Guaranty’s NIW total for
         the quarter. This compares to $2.9 billion in the fourth quarter of
         2012 and $929.9 million in the prior-year quarter. As of March 31,
         2013, more than 10 percent of the company’s total primary mortgage
         insurance risk in force had successfully completed a HARP refinance.

       *Of the $10.9 billion in new business written in the first quarter of
         2013, 64 percent was written with monthly premiums and 36 percent
         with single premiums.
       *NIW continued to consist of loans with excellent risk
         characteristics, with 75 percent consisting of loans with FICO scores
         of 740 or greater.

  *The mortgage insurance provision for losses was $132.0 million in the
    first quarter of 2013, compared to $306.9 million in the fourth quarter of
    2012, and $234.7 million in the prior-year period. The loss ratio in the
    first quarter for Radian Guaranty was 72.1 percent, compared to 171.0 in
    the fourth quarter of 2012 and 135.3 percent in the first quarter of 2012.
    Mortgage insurance loss reserves were approximately $2.9 billion as of
    March 31, 2013, which decreased from $3.1 billion as of December 31, 2012,
    and from $3.2 billion as of March 31, 2012. First-lien reserves per
    primary default increased to $30,426 as of March 31, 2013, compared to
    $29,510 as of December 31, 2012, and $27,833 as of March 31, 2012.
  *The total number of primary delinquent loans decreased by 9 percent in the
    first quarter from the fourth quarter of 2012, and by 17 percent from the
    first quarter of 2012. The primary mortgage insurance delinquency rate
    decreased to 10.9 percent in the first quarter of 2013, compared to 12.1
    percent in the fourth quarter of 2012, and 14.1 percent in the first
    quarter of 2012. The company’s primary risk in force on defaulted loans
    was $4.0 billion in the first quarter, compared to $4.3 billion in the
    fourth quarter of 2012, and $4.9 billion in the first quarter of 2012.
  *Total mortgage insurance claims paid were $309.9 million in the first
    quarter, compared to $263.4 million in the fourth quarter, and $218.2
    million in the first quarter of 2012.

  *$38.0 million of other operating expenses in the first quarter represented
    compensation expenses related to an increase in the estimated future value
    of performance awards that are impacted by changes in the company’s stock
    price. This increased compensation expense primarily reflects Radian’s
    higher stock price in the first quarter. In 2012, such compensation
    expenses were $13.5 million in the fourth quarter and $8.0 million in the
    first quarter.
  *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 March 31, 2013, Radian Asset had approximately $1.2 billion in
         statutory surplus with an additional $0.5 billion in claims-paying
         resources.
       *In January, Radian Asset completed the commutation of its remaining
         reinsurance risk from Financial Guaranty Insurance Corporation (FGIC)
         of $822 million, which resulted in a $7 million contingency reserve
         release in the first quarter.
       *In February, Radian Asset received regulatory approval to release an
         additional $61 million of contingency reserves, which benefited
         Radian Guaranty's statutory capital position in the first quarter.
         The reserve release was based on a reduction in Radian Asset’s net
         par outstanding, resulting from the maturing of exposures and other
         terminations of coverage.
       *Radian Asset has paid a total of $384 million in dividends to Radian
         Guaranty since 2008, and expects to pay another dividend of
         approximately $37 million in 2013.
       *Since June 30, 2008, Radian Asset has successfully reduced its total
         net par exposure by 76 percent to $28.2 billion as of March 31, 2013,
         including large declines in many of the riskier segments of the
         portfolio.

CONFERENCE CALL

Radian will discuss these items in its conference call today, Wednesday, May
1, 2013, at 11:00 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 800-230-1096 inside
the U.S., or 612-288-0329 for international callers, using passcode 290876 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 290876.

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 March 31, 2013
Exhibit D:     Segment Information Quarter Ended March 31, 2012
Exhibit E:     Financial Guaranty Supplemental Information
Exhibit F:     Mortgage Insurance Supplemental Information
               New Insurance Written
Exhibit G:     Mortgage Insurance Supplemental
               Information Insurance in Force and Risk in Force by Product
Exhibit H:     Mortgage Insurance Supplemental Information
               Risk in Force by FICO, LTV and Policy Year
Exhibit I:     Mortgage Insurance Supplemental Information
               Pool and Other Risk in Force, Risk-to-Capital
Exhibit J:     Mortgage Insurance Supplemental Information
               Claims, Reserves and Reserve per Default
Exhibit K:     Mortgage Insurance Supplemental Information
               Default Statistics
Exhibit L:     Mortgage Insurance Supplemental Information
               Captives, QSR and Persistency
               


Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
                                              
                                                 Quarter Ended
                                                 March 31,
(In thousands, except per-share data)            2013           2012
                                                                  
Revenues:
Net premiums written - insurance                 $ 207,185       $ 77,678   
                                                                  
Net premiums earned - insurance                  $ 192,588        $ 167,365
Net investment income                            26,873           34,713
Net (losses) gains on investments                (5,505     )     67,459
Change in fair value of derivative               (167,670   )     (72,757    )
instruments
Net losses on other financial instruments        (5,675     )     (17,852    )
Other income                                     1,771           1,440      
Total revenues                                   42,382          180,368    
                                                                  
Expenses:
Provision for losses                             132,059          266,154
Change in reserve for premium deficiency         (629       )     (20        )
Policy acquisition costs                         17,195           28,046
Other operating expenses                         80,100           50,154
Interest expense                                 15,881          14,148     
Total expenses                                   244,606         358,482    
                                                                  
Equity in net income (loss) of affiliates        1               (11        )
                                                                  
Pretax loss                                      (202,223   )     (178,125   )
Income tax benefit                               (14,723    )     (8,893     )
                                                                  
Net loss                                         $ (187,500 )     $ (169,232 )
                                                                  
Diluted net loss per share (1)                   $ (1.30    )     $ (1.28    )
                                                                             



(1) Weighted average shares outstanding (in thousands)
                                                                 
Weighted average common shares outstanding               132,625       132,465
Increase in weighted average shares - common stock       11,730       —
offering
Weighted average shares outstanding                      144,355      132,465
                                                                

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
                                                            
                                               March 31          December 31
(In thousands, except per-share data)          2013              2012
                                                                 
Assets:
Cash and investments                           $ 5,672,888       $ 5,208,199
Deferred policy acquisition costs              74,601            88,202
Deferred income taxes, net                     17,902            —
Reinsurance recoverables                       78,770            89,204
Derivative assets                              6,429             13,609
Other assets                                   520,359          503,986     
Total assets                                   $ 6,370,949      $ 5,903,200 
                                                                 
Liabilities and stockholders’ equity:
Unearned premiums                              $ 673,849         $ 648,682
Reserve for losses and loss adjustment         2,919,073         3,149,936
expenses
Reserve for premium deficiency                 3,056             3,685
Long-term debt                                 906,105           663,571
VIE debt                                       107,401           108,858
Derivative liabilities                         430,898           266,873
Payable for securities purchased               37,491            697
Other liabilities                              362,030          324,573     
Total liabilities                              5,439,903        5,166,875   
                                                                 
Common stock                                   190               151
Additional paid-in capital                     1,450,057         1,075,320
Retained deficit                               (542,741    )     (355,241    )
Accumulated other comprehensive income         23,540           16,095      
Total common stockholders’ equity              931,046          736,325     
Total liabilities and stockholders’ equity     $ 6,370,949      $ 5,903,200 
                                                                 
Book value per share                           $ 5.39            $ 5.51
                                                                             


Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2013
Exhibit C
                                                          
                         Mortgage          Financial
(In thousands)           Insurance         Guaranty              Total
Revenues:
Net premiums written     $ 217,286        $ (10,101   ) (1)     $ 207,185   
- insurance
                                                                 
Net premiums earned      $ 182,992         $ 9,596       (1)     $ 192,588
- insurance
Net investment           15,102            11,771                26,873
income
Net losses on            (3,237      )     (2,268      )         (5,505      )
investments
Net impairment
losses recognized in     —                 —                     —
earnings
Change in fair value
of derivative            —                 (167,670    )         (167,670    )
instruments
Net losses on other
financial                (1,877      )     (3,798      )         (5,675      )
instruments
Other income             1,712            59                    1,771       
Total revenues           194,692          (152,310    )         42,382      
                                                                 
Expenses:
Provision for losses     131,956           103                   132,059
Change in reserve
for premium              (629        )     —                     (629        )
deficiency
Policy acquisition       11,732            5,463                 17,195
costs
Other operating          65,780            14,320                80,100
expenses
Interest expense         2,669            13,212                15,881      
Total expenses           211,508          33,098                244,606     
                                                                 
Equity in net income     —                1                     1           
of affiliates
                                                                 
Pretax loss              $ (16,816   )     $ (185,407  )         $ (202,223  )
Income tax benefit                                               (14,723     )
                                                                 
Net loss                                                         $ (187,500  )
                                                                 
Cash and investments     $ 3,186,871       $ 2,486,017           $ 5,672,888
Deferred policy          29,920            44,681                74,601
acquisition costs
Total assets             3,663,552         2,707,397             6,370,949
Unearned premiums        428,574           245,275               673,849
Reserve for losses
and loss adjustment      2,894,500         24,573                2,919,073
expenses
VIE debt                 11,062            96,339                107,401
Derivative               —                 430,898               430,898
liabilities

    
(1)   Reflects the impact of the commutation of reinsurance business.
      


Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2012
Exhibit D
                                                          
                         Mortgage          Financial
(In thousands)           Insurance         Guaranty              Total
Revenues:
Net premiums written     $ 196,853        $ (119,175  ) (1)     $ 77,678    
- insurance
                                                                 
Net premiums earned      $ 173,451         $ (6,086    ) (1)     $ 167,365
- insurance
Net investment           18,011            16,702                34,713
income
Net gains on             32,178            35,281                67,459
investments
Change in fair value
of derivative            21                (72,778     )         (72,757     )
instruments
Net losses on other
financial                (709        )     (17,143     )         (17,852     )
instruments
Other income             1,344            96                    1,440       
Total revenues           224,296          (43,928     )         180,368     
                                                                 
Expenses:
Provision for losses     234,729           31,425                266,154
Change in reserve
for premium              (20         )     —                     (20         )
deficiency
Policy acquisition       8,646             19,400                28,046
costs
Other operating          36,265            13,889                50,154
expenses
Interest expense         1,722            12,426                14,148      
Total expenses           281,342          77,140                358,482     
                                                                 
Equity in net loss       —                (11         )         (11         )
of affiliates
                                                                 
Pretax loss              (57,046     )     (121,079    )         (178,125    )
Income tax (benefit)     (11,799     )     2,906                 (8,893      )
provision
                                                                 
Net loss                 $ (45,247   )     $ (123,985  )         $ (169,232  )
                                                                 
Cash and investments     $ 3,259,204       $ 2,392,620           $ 5,651,824
Deferred policy          49,786            58,155                107,941
acquisition costs
Total assets             3,476,732         2,971,789             6,448,521
Unearned premiums        256,809           315,756               572,565
Reserve for losses
and loss adjustment      3,230,938         85,426                3,316,364
expenses
VIE debt                 8,625             246,609               255,234
Derivative               —                 202,100               202,100
liabilities

(1)  Reflects the impact of the commutation of reinsurance business.
      


Radian Group Inc. and Subsidiaries
Financial Guaranty Supplemental Information
Exhibit E
                                      
                                         Quarter Ended March 31,
(In thousands)                           2013                 2012
                                                                
Net Premiums Earned:
Total Premiums Earned - insurance        $ 12,043               $ 16,178
Impact of commutations and               (2,447       )         (22,264      )
reinsurance
Net Premiums Earned - insurance          $ 9,596               $ (6,086     )
                                                                
Refundings included in earned            $ 4,753               $ 8,224      
premium
                                                                
Net premiums earned - derivatives        $ 4,992               $ 8,648      
(1)
                                                                
Claims paid                              $ 41,858      (2)     $ 9,000      
                                                                
                                         March 31               December 31
($ in thousands, except ratios)          2013                   2012
                                                                
Statutory Information:
                                                                
Capital and surplus                      $ 1,206,578            $ 1,144,112
Contingency reserve                      240,303               300,138      
Qualified statutory capital              1,446,881              1,444,250
                                                                
Unearned premium reserve                 233,192                256,920
Loss and loss expense reserve            (93,276      )         (53,441      )
Total statutory policyholders’           1,586,797              1,647,729
reserves
                                                                
Present value of installment             104,913               114,292      
premiums
Total statutory claims paying            $ 1,691,710           $ 1,762,021  
resources
                                                                
Net debt service outstanding             $ 36,412,556          $ 42,526,289 
                                                                
Capital leverage ratio (3)               25                     29
Claims paying leverage ratio (4)         22                     24
                                                                
Net par outstanding by product:
Public finance direct                    $ 9,531,501            $ 9,796,131
Public finance reinsurance               4,646,397              5,542,217
Structured direct                        13,405,544             17,615,383
Structured reinsurance                   635,210               787,758      
Total (5)                                $ 28,218,652          $ 33,741,489 

(1)  Included in change in fair value of derivative instruments.
(2)   Primarily related to commutation of reinsurance business.
(3)   The capital leverage ratio is derived by dividing net debt service
      outstanding by qualified statutory capital.
(4)   The claims paying leverage ratio is derived by dividing net debt service
      outstanding by total statutory claims paying resources.
      Included in public finance net par outstanding is $0.9 billion and $1.0
      billion at March 31, 2013 and December 31, 2012, respectively, for
(5)   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.
      

                              
Radian Group Inc. and
Subsidiaries
Mortgage Insurance
Supplemental Information
Exhibit F
                               
                                  Quarter Ended March 31,                    
                                  2013                   2012
($ in millions)                   $           %           $          %
Primary new insurance written                                       
Prime                             $ 10,905     100.0 %     $ 6,460     99.9  %
Alt-A and A minus and below       1          —          5         0.1   
Total Flow                        $ 10,906   100.0 %     $ 6,465   100.0 %
                                                                       
Total primary new insurance
written by FICO score
>=740                             $ 8,210      75.3  %     $ 4,920     76.1  %
680-739                           2,398        22.0        1,400       21.7
620-679                           298        2.7        145       2.2   
Total Flow                        $ 10,906   100.0 %     $ 6,465   100.0 %
                                                                       
Percentage of primary new
insurance written
Monthly premiums                  64       %               64      %
Single premiums                   36       %               36      %
                                                                       
Refinances                        48       %               47      %
LTV
95.01% and above                  1.7      %               1.8     %
90.01% to 95.00%                  39.8     %               38.7    %
85.01% to 90.00%                  39.3     %               41.6    %
85.00% and below                  19.2     %               17.9    %
                                                                       


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit G
                                                  
                           March 31                    March 31
                           2013                        2012
($ in millions)            $             %           $             %
Primary insurance in                                              
force
Flow                       $ 133,693       92.4  %     $ 115,127       90.3  %
Structured                 10,950       7.6        12,399       9.7   
Total Primary              $ 144,643    100.0 %     $ 127,526    100.0 %
                                                                       
Prime                      $ 128,361       88.8  %     $ 108,507       85.1  %
Alt-A                      10,027          6.9         11,828          9.3
A minus and below          6,255        4.3        7,191        5.6   
Total Primary              $ 144,643    100.0 %     $ 127,526    100.0 %
                                                                       
Primary risk in force
Flow                       $ 33,027        93.2  %     $ 28,348        91.3  %
Structured                 2,419        6.8        2,691        8.7   
Total Primary              $ 35,446     100.0 %     $ 31,039     100.0 %
                                                                       
Flow
Prime                      $ 30,146        91.3  %     $ 24,962        88.1  %
Alt-A                      1,780           5.4         2,104           7.4
A minus and below          1,101        3.3        1,282        4.5   
Total Flow                 $ 33,027     100.0 %     $ 28,348     100.0 %
                                                                       
Structured
Prime                      $ 1,419         58.7  %     $ 1,570         58.3  %
Alt-A                      535             22.1        608             22.6
A minus and below          465          19.2       513          19.1  
Total Structured           $ 2,419      100.0 %     $ 2,691      100.0 %
                                                                       
Total
Prime                      $ 31,565        89.1  %     $ 26,532        85.5  %
Alt-A                      2,315           6.5         2,712           8.7
A minus and below          1,566        4.4        1,795        5.8   
Total Primary              $ 35,446     100.0 %     $ 31,039     100.0 %
                                                                             


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit H
                                                   
                             March 31                   March 31
                             2013                       2012
($ in millions)              $            %           $            %
Total primary risk in                                             
force by FICO score
Flow
>=740                        $ 17,556       53.2  %     $ 12,889       45.5  %
680-739                      9,865          29.9        9,184          32.4
620-679                      4,801          14.5        5,328          18.8
<=619                        805         2.4        947         3.3   
Total Flow                   $ 33,027    100.0 %     $ 28,348    100.0 %
                                                                       
Structured
>=740                        $ 647          26.7  %     $ 712          26.5  %
680-739                      698            28.9        781            29.0
620-679                      642            26.5        721            26.8
<=619                        432         17.9       477         17.7  
Total Structured             $ 2,419     100.0 %     $ 2,691     100.0 %
                                                                       
Total
>=740                        $ 18,203       51.3  %     $ 13,601       43.8  %
680-739                      10,563         29.8        9,965          32.1
620-679                      5,443          15.4        6,049          19.5
<=619                        1,237       3.5        1,424       4.6   
Total Primary                $ 35,446    100.0 %     $ 31,039    100.0 %
                                                                       
Total primary risk in
force by LTV
95.01% and above             $ 4,494        12.7  %     $ 5,165        16.6  %
90.01% to 95.00%             13,988         39.5        11,072         35.7
85.01% to 90.00%             13,473         38.0        11,983         38.6
85.00% and below             3,491       9.8        2,819       9.1   
Total                        $ 35,446    100.0 %     $ 31,039    100.0 %
                                                                       
Total primary risk in
force by policy year
2005 and prior               $ 5,362        15.1  %     $ 6,574        21.2  %
2006                        2,635          7.4         3,057          9.8
2007                        5,876          16.6        6,722          21.7
2008                        4,436          12.5        5,042          16.2
2009                        1,855          5.2         2,511          8.1
2010                        1,573          4.5         2,147          6.9
2011                        2,735          7.7         3,463          11.2
2012                        8,397          23.7        1,523          4.9
2013                        2,577       7.3        —           —     
Total                        $ 35,446    100.0 %     $ 31,039    100.0 %
                                                                       
Primary risk in force on     $ 3,953                   $ 4,866  
defaulted loans
                                                                       


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit I
                                                    
                             March 31                    March 31
                             2013                        2012
($ in millions)              $             %           $           %
                                                                   
Pool risk in force
Prime                        $ 1,393         77.3  %     $ 1,505       76.8  %
Alt-A                        99              5.5         117           6.0
A minus and below            309          17.2       338        17.2  
Total                        $ 1,801      100.0 %     $ 1,960    100.0 %

Total pool risk in force
by policy year
2005 and prior               $ 1,646         91.4  %     $ 1,757       89.6  %
2006                        68              3.8         87            4.4
2007                        80              4.4         99            5.1
2008                        7            0.4        17         0.9   
Total pool risk in force     $ 1,801      100.0 %     $ 1,960    100.0 %
                                                                       
Other risk in force
Second-lien
1st loss                     $ 75                        $ 96
2nd loss                     12                          27
NIMS                         14                          15
1st loss-Hong Kong
primary mortgage             33                         55      
insurance
Total other risk in          $ 134                      $ 193   
force
                                                                       
Risk to capital
ratio-Radian Guaranty        18.6:1    (1)              20.6:1
only
Risk to capital
ratio-Mortgage Insurance     25.7:1    (1)              29.0:1
combined
                                                                       
(1) Preliminary
                                                                       


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit J
                                            
                                               Quarter Ended March 31,
($ in thousands)                               2013            2012
                                                                 
Net claims paid
Prime                                          $ 200,517         $ 127,101
Alt-A                                          49,091            36,651
A minus and below                              27,486           26,080      
Total primary claims paid                      277,094           189,832
Pool                                           30,949            24,926
Second-lien and other                          1,884            3,583       
Subtotal                                       309,927           218,341
Impact of first-lien terminations              —                 —
Impact of captive terminations                 —                 (148        )
Impact of second-lien terminations             —                —           
Total                                          $ 309,927        $ 218,193   
                                                                 
Average claim paid (1)
Prime                                          $ 49.0            $ 48.6
Alt-A                                          60.1              59.4
A minus and below                              37.6              40.6
Total primary average claims paid              49.1              49.0
Pool                                           73.5              67.7
Second-lien and other                          22.2              26.9
Total                                          $ 50.4            $ 49.9
                                                                 
Average primary claim paid (2) (3)             $ 51.4            $ 52.0
Average total claim paid (2) (3)               $ 52.6            $ 52.5
                                                                 
Loss ratio - GAAP basis                        72.1        %     135.3       %
Expense ratio - GAAP basis                     42.4        %     25.9        %
                                               114.5       %     161.2       %
                                                                 
Reserve for losses by category
Prime                                          $ 1,640,504       $ 1,776,426
Alt-A                                          539,321           603,998
A minus and below                              337,584           369,006
Reinsurance recoverable (4)                    72,101           118,071     
Total primary reserves                         2,589,510         2,867,501
Pool insurance                                 295,283          354,133     
Total 1st lien reserves                        2,884,793         3,221,634
Second lien and other                          9,707            10,747      
Total reserves                                 $ 2,894,500      $ 3,232,381 
                                                                 
1st lien reserve per default (5)
Primary reserve per primary default            $ 30,426          $ 27,833
Primary reserve per default excluding IBNR     27,517            26,038
Pool reserve per pool default (6)              17,629            17,580
Total 1st lien reserve per default             28,321            26,156

(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, Smart Home and quota
      share reinsurance transactions.
(5)   Calculated as total reserves divided by total defaults.
      If calculated before giving effect to deductibles and stop losses in
(6)   pool transactions, the pool reserve per default at March 31, 2013 and
      2012, would be $28,402 and $27,299, respectively.
      


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit K
                                                          
                                   March 31      December 31     March 31
                                   2013          2012            2012
Default Statistics
Primary Insurance:
                                                                 
Flow
Prime
Number of insured loans            646,497       630,094         575,769
Number of loans in default         50,496        55,483          60,785
Percentage of loans in default     7.81    %     8.81     %      10.56   %

Alt-A
Number of insured loans            36,236        37,754          42,591
Number of loans in default         10,910        11,798          13,642
Percentage of loans in default     30.11   %     31.25    %      32.03   %
                                                                 
A minus and below
Number of insured loans            33,811        35,150          39,461
Number of loans in default         10,044        11,211          12,241
Percentage of loans in default     29.71   %     31.89    %      31.02   %
                                                                 
Total Flow
Number of insured loans            716,544       702,998         657,821
Number of loans in default         71,450        78,492          86,668
Percentage of loans in default     9.97    %     11.17    %      13.18   %
                                                                 
Structured
Prime
Number of insured loans            36,730        37,528          40,367
Number of loans in default         4,994         5,371           5,856
Percentage of loans in default     13.60   %     14.31    %      14.51   %
                                                                 
Alt-A
Number of insured loans            15,745        16,315          17,977
Number of loans in default         3,923         4,207           5,251
Percentage of loans in default     24.92   %     25.79    %      29.21   %
                                                                 
A minus and below
Number of insured loans            13,845        14,157          15,171
Number of loans in default         4,742         5,099           5,252
Percentage of loans in default     34.25   %     36.02    %      34.62   %
                                                                 
Total Structured
Number of insured loans            66,320        68,000          73,515
Number of loans in default         13,659        14,677          16,359
Percentage of loans in default     20.60   %     21.58    %      22.25   %
                                                                 
Total Primary Insurance
Prime
Number of insured loans            683,227       667,622         616,136
Number of loans in default         55,490        60,854          66,641
Percentage of loans in default     8.12    %     9.12     %      10.82   %
                                                                 
Alt-A
Number of insured loans            51,981        54,069          60,568
Number of loans in default         14,833        16,005          18,893
Percentage of loans in default     28.54   %     29.60    %      31.19   %
                                                                 
A minus and below
Number of insured loans            47,656        49,307          54,632
Number of loans in default         14,786        16,310          17,493
Percentage of loans in default     31.03   %     33.08    %      32.02   %
                                                                 
Total Primary
Number of insured loans            782,864       770,998         731,336
Number of loans in default         85,109        93,169          103,027
Percentage of loans in default     10.87   %     12.08    %      14.09   %
                                                                 
Pool insurance
Number of loans in default         16,750        18,147          20,144
                                                                         


Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit L
                                                
                                                   Quarter Ended March 31,
($ in thousands)                                   2013            2012
                                                                     
1st Lien Captives
Premiums ceded to captives                         $ 5,152           $ 6,429
% of total premiums                                2.6         %     3.6     %
IIF included in captives (1)                       5.8         %     8.4     %
RIF included in captives (1)                       5.7         %     8.2     %
                                                                     
Initial Quota Share Reinsurance ("QSR")
Transaction
QSR ceded premiums written                         $ 6,122
% of premiums written                              2.5         %
QSR ceded premiums earned                          $ 7,833
% of premiums earned                               4.0         %
Ceding commissions                                 $ 1,530
RIF included in QSR (2)                            $ 1,471,580
                                                                     
Second QSR Transaction
QSR ceded premiums written                         $ 16,440
% of premiums written                              6.7         %
QSR ceded premiums earned                          $ 2,838
% of premiums earned                               1.4         %
Ceding commissions                                 $ 5,754
RIF included in QSR (2)                            $ 900,378
                                                                     
Persistency (twelve months ended March 31)         80.9        %     84.5    %

      Radian reinsures the middle layer risk positions, while retaining a
(1)  significant portion of the total risk comprising the first loss and most
      remote risk positions.
(2)   Included in primary risk in force.
      

FORWARD-LOOKING STATEMENTS

All statements in this press release that address events, developments or
results that we expect or anticipate may occur in the future are
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and
the United States (“U.S.”) Private Securities Litigation Reform Act of 1995.
In most cases, forward-looking statements may be identified by words such as
“anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,”
“plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” or the negative or other variations on these words
and other similar expressions. These statements, which may include, without
limitation, projections regarding our future performance and financial
condition, are made on the basis of management’s current views and assumptions
with respect to future events. Any forward-looking statement is not a
guarantee of future performance and actual results could differ materially
from those contained in the forward-looking statement. These statements speak
only as of the date they were made, and we undertake no obligation to publicly
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise. We operate in a changing environment.
New risks emerge from time to time and it is not possible for us to predict
all risks that may affect us. The forward-looking statements, as well as our
prospects as a whole, are subject to risks and uncertainties that could cause
actual results to differ materially from those set forth in the
forward-looking statements including:

  *changes in general economic and political conditions, including high
    unemployment rates and weakness in the U.S. housing and mortgage credit
    markets, a significant downturn in the U.S. or global economies, a lack of
    meaningful liquidity in the capital or credit markets, changes or
    volatility in interest rates or consumer confidence and changes in credit
    spreads, each of which may be accelerated or intensified by, among other
    things, legislative activity or inactivity or actual or threatened
    downgrades of U.S. credit ratings;
  *changes in the way customers, investors, regulators or legislators
    perceive the strength of private mortgage insurers or financial guaranty
    providers, in particular in light of developments in the private mortgage
    insurance and financial guaranty industries in which certain of our former
    competitors have ceased writing new insurance business and have been
    placed under supervision or receivership by insurance regulators;
  *catastrophic events or economic changes in certain geographic regions,
    including those affecting governments and municipalities, where our
    mortgage insurance exposure is more concentrated or where we have
    financial guaranty exposure;
  *our ability to maintain sufficient holding company liquidity to meet our
    short- and long-term liquidity needs;
  *a reduction in, or prolonged period of depressed levels of, home mortgage
    originations due to reduced liquidity in the lending market, tighter
    underwriting standards, and general reduced housing demand in the U.S.,
    which may be exacerbated by regulations impacting home mortgage
    originations, including requirements established under the Dodd-Frank Wall
    Street Reform and Consumer Protection Act (the “Dodd-Frank Act”);
  *the potential adverse impact on the mortgage origination market and on
    private mortgage insurers due to increased capital requirements for
    mortgage loans under proposed interagency rules to implement the third
    Basel Capital Accord, including in particular, the possibility that loans
    insured by the Federal Housing Administration (“FHA”) will receive more
    favorable regulatory capital treatment than loans with private mortgage
    insurance;

  *our ability to maintain an adequate risk-to-capital position, minimum
    policyholder position and other surplus requirements for Radian Guaranty
    Inc. (“Radian Guaranty”), our principal mortgage insurance subsidiary;
  *our ability to continue to effectively mitigate our mortgage insurance and
    financial guaranty losses;
  *a more rapid than expected decrease in the current elevated levels of
    mortgage insurance rescissions and claim denials, which have reduced our
    paid losses and resulted in a significant reduction in our loss reserves,
    including a decrease in net rescissions or denials resulting from an
    increase in the number of successful challenges to previously rescinded
    policies or claim denials, or caused by the government-sponsored entities
    intervening in mortgage insurers’ loss mitigation practices, including
    settlements of disputes regarding loss mitigation activities;
  *the negative impact that our loss mitigation activities may have on our
    relationships with customers and potential customers, including the
    potential loss of business and the heightened risk of disputes and
    litigation;
  *the need, in the event that we are unsuccessful in defending our
    rescissions, denials or claim curtailments, to increase our loss reserves
    for, and reassume risk on, rescinded loans or denied claims, and to pay
    additional claims, including amounts previously curtailed;
  *any disruption in the servicing of mortgages covered by our insurance
    policies, as well as poor servicer performance;
  *adverse changes in the severity or frequency of losses associated with
    certain products that we formerly offered (and which remain in our insured
    portfolio) that are riskier than traditional mortgage insurance or
    financial guaranty insurance policies;
  *a decrease in the persistency rates of our mortgage insurance policies,
    which has the effect of reducing our premium income on our monthly premium
    policies and could decrease the profitability of our mortgage insurance
    business;
  *heightened competition for our mortgage insurance business from others
    such as the FHA, the U.S. Department of Veterans Affairs and other private
    mortgage insurers, including in particular, those that have been assigned
    higher ratings than we have, that may have access to greater amounts of
    capital than we do, or that are new entrants to the industry and are
    therefore not burdened by legacy obligations;
  *changes in the charters or business practices of, or rules or regulations
    applicable to, Fannie Mae and Freddie Mac, the largest purchasers of
    mortgage loans that we insure, and our ability to remain an eligible
    provider to both Fannie Mae and Freddie Mac;
  *changes to the current system of housing finance, including the
    possibility of a new system in which private mortgage insurers are not
    required or their products are significantly limited in effect or scope;
  *the effect of the Dodd-Frank Act on the financial services industry in
    general, and on our mortgage insurance and financial guaranty businesses
    in particular, including whether and to what extent loans with private
    mortgage insurance may be considered “qualified residential mortgages” for
    purposes of the Dodd-Frank Act securitization provisions;
  *the application of existing federal or state laws and regulations, or
    changes in these laws and regulations or the way they are interpreted,
    including, without limitation: (i)the resolution of existing, or the
    possibility of additional, lawsuits or investigations (including in
    particular investigations and litigation relating to captive reinsurance
    arrangements under the Real Estate Settlement Practices Act of 1974); and
    (ii)legislative and regulatory changes (a)impacting the demand for
    private mortgage insurance, (b)limiting or restricting the products we
    may offer or increasing the amount of capital we are required to hold,
    (c)affecting the form in which we execute credit protection, or (d)
    otherwise impacting our existing businesses;

  *the amount and timing of potential payments or adjustments associated with
    federal or other tax examinations;
  *the possibility that we may fail to estimate accurately the likelihood,
    magnitude and timing of losses in connection with establishing loss
    reserves for our mortgage insurance or financial guaranty businesses, or
    to estimate accurately the fair value amounts of derivative instruments in
    determining gains and losses on these instruments;
  *volatility in our earnings caused by changes in the fair value of our
    assets and liabilities carried at fair value, including our derivative
    instruments, and the impact of variable accounting for certain of our
    performance-based long-term compensation awards;
  *our ability to realize some or all of the tax benefits associated with our
    gross deferred tax assets, which will depend on our ability to generate
    sufficient sustainable taxable income in future periods;
  *changes in accounting principles generally accepted in the United States
    of America or statutory accounting principles, rules and guidance, or
    their interpretation; and
  *legal and other limitations on amounts we may receive from our
    subsidiaries as dividends or through our tax- and expense-sharing
    arrangements with our subsidiaries.

For more information regarding these risks and uncertainties as well as
certain additional risks that we face, you should refer to the Risk Factors
detailed in Item1A of Part I of our Annual Report on Form 10-K for the year
ended December31, 2012, and those risks detailed in subsequent reports and
registration statements filed from time to time with the U.S. Securities and
Exchange Commission. We caution you not to place undue reliance on these
forward-looking statements, which are current only as of the date on which we
filed this report. We do not intend to, and we disclaim any duty or obligation
to, update or revise any forward-looking statements made in this report to
reflect new information or future events or for any other reason.

Contact:

Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.biz