Breaking News

Sun Hung Kai's Thomas Kwok Sentenced to 5 Years in Jail
Tweet TWEET

Radian Reports Second Quarter 2013 Financial Results

  Radian Reports Second Quarter 2013 Financial Results

 – MI business achieves profitability, absent the impact of fair value gains
                                 and losses –

 – New mortgage insurance written jumps 60% year-over-year to $13.4 billion –

  – MI business written after 2008 outweighs legacy book; represents 53% of
                              total portfolio –

Business Wire

PHILADELPHIA -- July 24, 2013

Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended
June 30, 2013, of $33.2 million, or $0.19 per diluted share, which included
net losses on investments of $130.3 million and combined net gains from the
change in fair value of derivatives and other financial instruments of $87.7
million. This compares to a net loss for the quarter ended June 30, 2012, of
$119.3 million, or $0.90 per diluted share, which included net gains on
investments of $26.4 million and combined net losses from the change in fair
value of derivatives and other financial instruments of $95.0 million. Book
value per share at June 30, 2013, was $5.22.

“We are pleased with our improved financial results in the quarter and the
first half of the year,” said Chief Executive Officer S.A. Ibrahim. “Compared
to the second quarter of last year, our new mortgage insurance business
written grew 60% and we reduced our inventory of primary delinquent loans by
21%. The loss ratio for our mortgage insurance business was approximately 70%
for the second consecutive quarter, and the mortgage insurance loss provision
for the first half of 2013 reached its lowest level since the first half of
2007.”

Ibrahim continued, “Also in the second quarter, we achieved an important
milestone with our high quality, profitable new business written after 2008
now representing 53% of our primary risk in force, outweighing our legacy
mortgage insurance book. This improved composition has helped our mortgage
insurance business achieve profitability, absent the impact of fair value
gains and losses, for the quarter and six months.”

CAPITAL AND LIQUIDITY UPDATE

  *Radian Guaranty’s risk-to-capital ratio was 19.7:1 as of June 30, 2013.

       *The increase in the risk-to-capital ratio from March 31, 2013, was
         primarily driven by the increase to the company’s net risk in force
         resulting from strong volume of new, high-quality mortgage insurance
         business.
       *In 2012, Radian Guaranty entered into two quota share reinsurance
         agreements with the same third-party reinsurance provider, in order
         to proactively manage its risk-to-capital position. On April 1, 2013,
         Radian reduced the amount of new business ceded to the reinsurer on a
         prospective basis from 20 percent to 5 percent. As of June 30, 2013,
         a total of $2.5 billion of risk in force had been ceded under those
         agreements. On December 31, 2014, and on December 31, 2015, Radian
         will have the option to recapture a portion of the business that has
         been reinsured.
       *As of June, 2013, Radian Guaranty’s statutory capital was $1.2
         billion compared to $1.1 billion at March 31, 2013, and $0.9 billion
         a year ago.

  *Radian Group maintains approximately $816 million of currently available
    liquidity.

SECOND QUARTER HIGHLIGHTS

  *New mortgage insurance written (NIW) grew to $13.4 billion during the
    quarter, compared to $10.9 billion in the first quarter of 2013 and $8.3
    billion in the second quarter of 2012.

       *The Home Affordable Refinance Program (HARP) accounted for $2.4
         billion of insurance not included in Radian Guaranty’s NIW total for
         the quarter. This compares to $2.5 billion in the first quarter of
         2013, and $2.4 billion in the second quarter of 2012.
       *NIW continued to consist of loans with excellent risk
         characteristics.

  *The net loss for the second quarter was $33.2 million which included net
    losses on investments of $130.3 million and combined net gains from the
    change in fair value of derivatives and other financial instruments of
    $87.7 million. Included in the net losses on investments were net
    unrealized losses of $139.1 million, driven by rising interest rates,
    which reduced the market value of the company’s fixed-income portfolio.
  *The mortgage insurance provision for losses was $136.4 million in the
    second quarter of 2013, compared to $132.0 million in the first quarter of
    2013, and $208.1 million in the second quarter of 2012. The loss ratio in
    the second quarter for Radian Guaranty was 68.9 percent, compared to 72.1
    percent in the first quarter of 2013, and 121.9 percent in the second
    quarter of 2012. Mortgage insurance loss reserves were approximately $2.7
    billion as of June 30, 2013, which decreased from $2.9 billion in the
    first quarter of 2013, and from $3.2 billion a year ago. First-lien
    reserves per primary default were $30,932 as of June 30, 2013, compared to
    $30,426 as of March 31, 2013, and $28,410 as of June 30, 2012.
  *The total number of primary delinquent loans decreased by 8 percent in the
    second quarter from the first quarter of 2013, and by 21 percent from the
    second quarter of 2012. The primary mortgage insurance delinquency rate
    decreased to 9.7 percent in the second quarter of 2013, compared to 10.9
    percent in the first quarter of 2013, and 13.3 percent in the second
    quarter of 2012.
  *Total mortgage insurance claims paid were $326.4 million, compared to
    $309.9 million in the first quarter of 2013, and $263.4 million in the
    second quarter of 2012. The company continues to expect mortgage insurance
    net claims paid of approximately $1.4 billion for the full-year 2013.
  *$19.0 million of other operating expenses in the second quarter
    represented long-term incentive compensation, compared to $38.0 million in
    the first quarter of 2013. The expense in both periods was impacted by an
    increase in the liability for cash-settled awards, which was driven
    primarily by an increase in the company’s stock price and represented $7.0
    million in the second quarter, compared to $32.3 million in the first
    quarter of 2013.
  *Radian Asset Assurance Inc. serves 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 June 30, 2013, Radian Asset had approximately $1.2 billion in
         statutory surplus with an additional $0.4 billion in claims-paying
         resources.
       *In July 2013, Radian Asset paid a dividend of $36 million to Radian
         Guaranty. Since 2008, Radian Asset has paid a total of $420 million
         in dividends to Radian Guaranty.
       *Since June 30, 2008, Radian Asset has successfully reduced its total
         net par exposure by 76 percent to $27.3 billion as of June 30, 2013,
         including large declines in the riskier segments of the portfolio.

CONFERENCE CALL

Radian will discuss these items in its conference call today, Wednesday, July
24, 2013, 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 800-230-1074 inside
the U.S., or 612-234-9959 for international callers, using passcode 297533 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 297533.

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 June 30, 2013
Exhibit D:   Segment Information Quarter Ended June 30, 2012
Exhibit E:   Segment Information Six Months Ended June 30, 2013
Exhibit F:   Segment Information Six Months Ended June 30, 2012
Exhibit G:   Financial Guaranty Supplemental Information
Exhibit H:   Mortgage Insurance Supplemental Information
             New Insurance Written
Exhibit I:   Mortgage Insurance Supplemental Information
             Insurance in Force and Risk in Force by Product
Exhibit J:   Mortgage Insurance Supplemental Information
             Risk in Force by FICO, LTV and Policy Year
Exhibit K:   Mortgage Insurance Supplemental Information
             Pool and Other Risk in Force, Risk-to-Capital
Exhibit L:   Mortgage Insurance Supplemental Information
             Claims, Reserves and Reserve per Default
Exhibit M:   Mortgage Insurance Supplemental Information
             Default Statistics
Exhibit N:   Mortgage Insurance Supplemental Information
             Captives, QSR and Persistency
             

                                                
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
                                                                
                      Quarter Ended                Six Months Ended
                      June 30,                     June 30,
(In thousands,
except per-share      2013         2012           2013          2012
data)
                                                                  
Revenues:
Net premiums          $ 251,229    $ 181,932     $ 458,414     $ 259,610  
written - insurance
                                                                  
Net premiums earned   $ 213,124     $ 186,779      $ 405,712      $ 354,144
- insurance
Net investment        27,615        30,877         54,488         65,590
income
Net (losses) gains    (130,254  )   26,419         (135,759   )   93,878
on investments
Change in fair
value of derivative   86,535        (33,124    )   (81,135    )   (105,881   )
instruments
Net gains (losses)
on other financial    1,188         (61,862    )   (4,487     )   (79,714    )
instruments
Gain on sale of       —             7,708          —              7,708
affiliate
Other income          2,234        1,395         4,005         2,835      
Total revenues        200,442      158,192       242,824       338,560    
                                                                  
Expenses:
Provision for         140,291       210,868        272,350        477,022
losses
Change in reserve
for premium           1,251         559            622            539
deficiency
Policy acquisition    10,006        10,805         27,201         38,851
costs
Other operating       60,981        40,193         141,081        90,347
expenses
Interest expense      19,420       12,581        35,301        26,729     
Total expenses        231,949      275,006       476,555       633,488    
                                                                  
Equity in net
(loss) income of      —            (2         )   1             (13        )
affiliates
                                                                  
Pretax loss           (31,507   )   (116,816   )   (233,730   )   (294,941   )
Income tax            1,665        2,443         (13,058    )   (6,450     )
provision (benefit)
                                                                  
Net loss              $ (33,172 )   $ (119,259 )   $ (220,672 )   $ (288,491 )
                                                                  
Diluted net loss      $ (0.19   )   $ (0.90    )   $ (1.40    )   $ (2.18    )
per share
                                                                  
                                                                  

Weighted average
shares outstanding    171,783      132,346       158,180       132,350    
(in thousands)
                                                                  

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
                                                                 
                                                 June 30,        December 31,
(In thousands, except per-share data)            2013            2012
                                                                 
Assets:
Cash and investments                             $ 5,366,633     $ 5,208,199
Deferred policy acquisition costs                70,427          88,202
Deferred income taxes, net                       17,902          —
Reinsurance recoverables                         65,750          89,204
Derivative assets                                9,379           13,609
Other assets                                     523,909        503,986     
Total assets                                     $ 6,054,000    $ 5,903,200 
                                                                 
Liabilities and stockholders’ equity:
Unearned premiums                                $ 712,706       $ 648,682
Reserve for losses and loss adjustment           2,716,490       3,149,936
expenses
Reserve for premium deficiency                   4,308           3,685
Long-term debt                                   913,952         663,571
VIE debt                                         106,767         108,858
Derivative liabilities                           350,576         266,873
Other liabilities                                346,335        325,270     
Total liabilities                                5,151,134      5,166,875   
                                                                 
Common stock                                     191             151
Additional paid-in capital                       1,454,122       1,075,320
Retained deficit                                 (575,913    )   (355,241    )
Accumulated other comprehensive income           24,466         16,095      
Total common stockholders’ equity                902,866        736,325     
Total liabilities and stockholders’ equity       $ 6,054,000    $ 5,903,200 
                                                                 
Book value per share                             $ 5.22          $ 5.51

                                                             
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended June 30, 2013
Exhibit C
                                                                 
                                 Mortgage        Financial
(In thousands)                   Insurance       Guaranty        Total
Revenues:
Net premiums written -           $ 251,159      $ 70           $ 251,229   
insurance
                                                                 
Net premiums earned -            $ 197,952       $ 15,172        $ 213,124
insurance
Net investment income            15,266          12,349          27,615
Net losses on investments        (83,386     )   (46,868     )   (130,254    )
Change in fair value of          —               86,535          86,535
derivative instruments
Net gains on other financial     74              1,114           1,188
instruments
Other income                     2,159          75             2,234       
Total revenues                   132,065        68,377         200,442     
                                                                 
Expenses:
Provision for losses             136,410         3,881           140,291
Change in reserve for premium    1,251           —               1,251
deficiency
Policy acquisition costs         6,501           3,505           10,006
Other operating expenses         51,295          9,686           60,981
Interest expense                 3,704          15,716         19,420      
Total expenses                   199,161        32,788         231,949     
                                                                 
Pretax (loss) income             $ (67,096   )   $ 35,589       $ (31,507   )
Income tax provision                                             1,665       
                                                                 
Net loss                                                         $ (33,172   )
                                                                 
Cash and investments             $ 2,962,997     $ 2,403,636     $ 5,366,633
Deferred policy acquisition      29,138          41,289          70,427
costs
Total assets                     3,431,444       2,622,556       6,054,000
Unearned premiums                483,303         229,403         712,706
Reserve for losses and loss      2,690,861       25,629          2,716,490
adjustment expenses
VIE debt                         10,963          95,804          106,767
Derivative liabilities           —               350,576         350,576

                                                             
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended June 30, 2012
Exhibit D
                                                                 
                             Mortgage        Financial
(In thousands)               Insurance       Guaranty            Total
Revenues:
Net premiums written -       $ 182,518      $ (586      ) (1)   $ 181,932   
insurance
                                                                 
Net premiums earned -        $ 170,763       $ 16,016      (1)   $ 186,779
insurance
Net investment income        17,608          13,269              30,877
Net gains (losses) on        26,662          (243        )       26,419
investments
Change in fair value of      (52         )   (33,072     )       (33,124     )
derivative instruments
Net gains (losses) on
other financial              42              (61,904     )       (61,862     )
instruments
Gain on sale of affiliate    —               7,708               7,708
Other income                 1,304          91                 1,395       
Total revenues               216,327        (58,135     )       158,192     
                                                                 
Expenses:
Provision for losses         208,078         2,790               210,868
Change in reserve for        559             —                   559
premium deficiency
Policy acquisition costs     7,890           2,915               10,805
Other operating expenses     31,272          8,921               40,193
Interest expense             1,723          10,858             12,581      
Total expenses               249,522        25,484             275,006     
                                                                 
Equity in net loss of        —              (2          )       (2          )
affiliates
                                                                 
Pretax loss                  (33,195     )   (83,621     )       (116,816    )
Income tax (benefit)         (10,209     )   12,652             2,443       
provision
                                                                 
Net loss                     $ (22,986   )   $ (96,273   )       $ (119,259  )
                                                                 
Cash and investments         $ 3,176,027     $ 2,137,956         $ 5,313,983
Deferred policy              44,240          55,146              99,386
acquisition costs
Total assets                 3,388,524       2,643,006           6,031,530
Unearned premiums            290,880         297,551             588,431
Reserve for losses and       3,155,343       94,937              3,250,280
loss adjustment expenses
VIE debt                     7,500           100,333             107,833
Derivative liabilities       —               219,960             219,960
                                                                             

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

                                                              
Radian Group Inc. and Subsidiaries
Segment Information
Six Months Ended June 30, 2013
Exhibit E
                                                                  
                                 Mortgage      Financial
(In thousands)                   Insurance     Guaranty           Total
Revenues:
Net premiums written -           $ 468,445    $ (10,031  ) (1)   $ 458,414  
insurance
                                                                  
Net premiums earned -            $ 380,944     $ 24,768     (1)   $ 405,712
insurance
Net investment income            30,368        24,120             54,488
Net losses on investments        (86,623   )   (49,136    )       (135,759   )
Change in fair value of          —             (81,135    )       (81,135    )
derivative instruments
Net losses on other financial    (1,803    )   (2,684     )       (4,487     )
instruments
Other income                     3,871        134               4,005      
Total revenues                   326,757      (83,933    )       242,824    
                                                                  
Expenses:
Provision for losses             268,366       3,984              272,350
Change in reserve for premium    622           —                  622
deficiency
Policy acquisition costs         18,233        8,968              27,201
Other operating expenses         117,075       24,006             141,081
Interest expense                 6,373        28,928            35,301     
Total expenses                   410,669      65,886            476,555    
                                                                  
Equity in net income of          —            1                 1          
affiliates
                                                                  
Pretax loss                      $ (83,912 )   $ (149,818 )       $ (233,730 )
Income tax benefit                                                (13,058    )
                                                                  
Net loss                                                          $ (220,672 )
                                                                             

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

                                                              
Radian Group Inc. and Subsidiaries
Segment Information
Six Months Ended June 30, 2012
Exhibit F
                                                                  
                                 Mortgage      Financial
(In thousands)                   Insurance     Guaranty           Total
Revenues:
Net premiums written -           $ 379,371    $ (119,761 ) (1)   $ 259,610  
insurance
                                                                  
Net premiums earned -            $ 344,214     $ 9,930      (1)   $ 354,144
insurance
Net investment income            35,619        29,971             65,590
Net gains on investments         58,840        35,038             93,878
Change in fair value of          (31       )   (105,850   )       (105,881   )
derivative instruments
Net losses on other financial    (667      )   (79,047    )       (79,714    )
instruments
Gain on sale of affiliate        —             7,708              7,708
Other income                     2,648        187               2,835      
Total revenues                   440,623      (102,063   )       338,560    
                                                                  
Expenses:
Provision for losses             442,807       34,215             477,022
Change in reserve for premium    539           —                  539
deficiency
Policy acquisition costs         16,536        22,315             38,851
Other operating expenses         67,537        22,810             90,347
Interest expense                 3,445        23,284            26,729     
Total expenses                   530,864      102,624           633,488    
                                                                  
Equity in net loss of            —            (13        )       (13        )
affiliates
                                                                  
Pretax loss                      (90,241   )   (204,700   )       (294,941   )
Income tax (benefit) provision   (22,008   )   15,558            (6,450     )
                                                                  
Net loss                         $ (68,233 )   $ (220,258 )       $ (288,491 )
                                                                             

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

                                                
Radian Group Inc. and Subsidiaries

Financial Guaranty Supplemental Information

Exhibit G
                                                   
                     Quarter Ended                 Six Months Ended
                     June 30,                      June 30,
(In thousands)       2013        2012             2013            2012
                                                                    
Net Premiums
Earned:
Total Premiums       $ 15,172     $ 16,016         $ 27,215         $ 32,194
Earned - insurance
Impact of
commutations and     —           —               (2,447   )       (22,264  )
reinsurance
Net Premiums         $ 15,172    $ 16,016        $ 24,768        $ 9,930  
Earned - insurance
                                                                    
Refundings
included in earned   $ 10,288    $ 10,483        $ 15,041        $ 18,707 
premium
                                                                    
Net premiums
earned -             $ 4,857     $ 7,224         $ 9,849         $ 15,872 
derivatives (1)
                                                                    
Claims paid          $ 2,825     $ (6,720 ) (3)   $ 44,683  (2)   $ 2,280  

                                                        
                                          June 30,         December 31,
($ in thousands, except ratios)           2013             2012
                                                           
Statutory Information:
                                                           
Capital and surplus                       $ 1,241,146      $ 1,144,112
Contingency reserve                       247,988         300,138      
Qualified statutory capital               1,489,134        1,444,250
                                                           
Unearned premium reserve                  216,582          256,920
Loss and loss expense reserve             (170,538     )   (53,441      )
Total statutory policyholders’ reserves   1,535,178        1,647,729
                                                           
Present value of installment premiums     101,481         114,292      
Total statutory claims paying resources   $ 1,636,659     $ 1,762,021  
                                                           
Net debt service outstanding              $ 34,603,058    $ 42,526,289 
                                                           
Capital leverage ratio (4)                23               29
Claims paying leverage ratio (5)          21               24
                                                           
Net par outstanding by product:
Public finance direct                     $ 9,066,976      $ 9,796,131
Public finance reinsurance                4,352,058        5,542,217
Structured direct                         13,249,796       17,615,383
Structured reinsurance                    600,810         787,758      
Total (6)                                 $ 27,269,640    $ 33,741,489 

    
(1)   Included in change in fair value of derivative instruments.
(2)   Primarily related to commutation of reinsurance business.
(3)   Reduction primarily due to salvage recovery on a prior claim.
(4)   The capital leverage ratio is derived by dividing net debt service
      outstanding by qualified statutory capital.
(5)   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 $1.0 billion at both
      June 30, 2013 and December 31, 2012, for legally defeased bond issues
(6)   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 H
                                                                                                    
             Quarter Ended                                Six Months Ended
             June 30,                                     June 30,
             2013                  2012                  2013                  2012
($ in        $           %         $          %         $           %         $           %
millions)
Primary
new                                                                                      
insurance
written
Prime        $ 13,376     100.0 %   $ 8,330     99.9  %   $ 24,281     100.0 %   $ 14,790     99.9  %
Alt-A and
A minus      1          —        5         0.1      2          —        10         0.1   
and below
Total Flow   $ 13,377   100.0 %   $ 8,335   100.0 %   $ 24,283   100.0 %   $ 14,800   100.0 %
                                                                                              
Total primary new insurance written by FICO score
>=740        $ 9,666      72.3  %   $ 6,326     75.9  %   $ 17,876     73.6  %   $ 11,246     76.0  %
680-739      3,256        24.3      1,816       21.8      5,654        23.3      3,216        21.7
620-679      455        3.4      193       2.3      753        3.1      338        2.3   
Total Flow   $ 13,377   100.0 %   $ 8,335   100.0 %   $ 24,283   100.0 %   $ 14,800   100.0 %
                                                                                              
Percentage of primary new insurance written
Monthly      67       %             67      %             66       %             66       %
premiums
Single       33       %             33      %             34       %             34       %
premiums
                                                                                              
Refinances   34       %             34      %             40       %             39       %
LTV
95.01% and   2.3      %             1.3     %             2.1      %             1.5      %
above
90.01% to    44.8     %             42.6    %             42.5     %             40.9     %
95.00%
85.01% to    37.5     %             41.4    %             38.3     %             41.5     %
90.00%
85.00% and   15.4     %             14.7    %             17.1     %             16.1     %
below

                                                  
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit I
                                                                         
                             June 30,                June 30,
                             2013                    2012
($ in millions)              $            %         $            %
Primary insurance in force                                      
Flow                         $ 140,776     93.0  %   $ 118,420     90.8  %
Structured                   10,596      7.0      11,991      9.2   
Total Primary                $ 151,372   100.0 %   $ 130,411   100.0 %
                                                                   
Prime                        $ 135,818     89.7  %   $ 112,112     86.0  %
Alt-A                        9,557         6.3       11,383        8.7
A minus and below            5,997       4.0      6,916       5.3   
Total Primary                $ 151,372   100.0 %   $ 130,411   100.0 %

Primary risk in force
Flow                         $ 34,842      93.7  %   $ 29,200      91.8  %
Structured                   2,355       6.3      2,609       8.2   
Total Primary                $ 37,197    100.0 %   $ 31,809    100.0 %
                                                                   
Flow
Prime                        $ 32,099      92.1  %   $ 25,951      88.9  %
Alt-A                        1,696         4.9       2,022         6.9
A minus and below            1,047       3.0      1,227       4.2   
Total Flow                   $ 34,842    100.0 %   $ 29,200    100.0 %
                                                                   
Structured
Prime                        $ 1,385       58.8  %   $ 1,520       58.2  %
Alt-A                        515           21.9      589           22.6
A minus and below            455         19.3     500         19.2  
Total Structured             $ 2,355     100.0 %   $ 2,609     100.0 %
                                                                   
Total
Prime                        $ 33,484      90.0  %   $ 27,471      86.4  %
Alt-A                        2,211         6.0       2,611         8.2
A minus and below            1,502       4.0      1,727       5.4   
Total Primary                $ 37,197    100.0 %   $ 31,809    100.0 %

                                                       
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit J
                                                                             
                                   June 30,               June 30,
                                   2013                   2012
($ in millions)                    $           %         $           %
Total primary risk in force by                                      
FICO score
Flow
>=740                              $ 19,120     54.9  %   $ 13,868     47.5  %
680-739                            10,258       29.4      9,265        31.7
620-679                            4,700        13.5      5,162        17.7
<=619                              764        2.2      905        3.1   
Total Flow                         $ 34,842   100.0 %   $ 29,200   100.0 %
                                                                       
Structured
>=740                              $ 632        26.8  %   $ 690        26.4  %
680-739                            678          28.8      757          29.0
620-679                            623          26.5      698          26.8
<=619                              422        17.9     464        17.8  
Total Structured                   $ 2,355    100.0 %   $ 2,609    100.0 %
                                                                       
Total
>=740                              $ 19,752     53.1  %   $ 14,558     45.8  %
680-739                            10,936       29.4      10,022       31.5
620-679                            5,323        14.3      5,860        18.4
<=619                              1,186      3.2      1,369      4.3   
Total Primary                      $ 37,197   100.0 %   $ 31,809   100.0 %
                                                                       
Total primary risk in force by
LTV
95.01% and above                   $ 4,349      11.7  %   $ 4,960      15.6  %
90.01% to 95.00%                   15,154       40.8      11,648       36.6
85.01% to 90.00%                   13,996       37.6      12,265       38.6
85.00% and below                   3,698      9.9      2,936      9.2   
Total                              $ 37,197   100.0 %   $ 31,809   100.0 %
                                                                       
Total primary risk in force by
policy year
2005 and prior                     $ 5,073      13.6  %   $ 6,250      19.7  %
2006                               2,526        6.8       2,944        9.3
2007                               5,650        15.2      6,471        20.3
2008                               4,277        11.5      4,870        15.3
2009                               1,706        4.6       2,362        7.4
2010                               1,433        3.8       2,035        6.4
2011                               2,549        6.9       3,352        10.5
2012                               8,157        21.9      3,525        11.1
2013                               5,826      15.7     —          —     
Total                              $ 37,197   100.0 %   $ 31,809   100.0 %
                                                                       
Primary risk in force on           $ 3,624               $ 4,628  
defaulted loans

                                                       
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit K
                                                                             
                                 June 30,                  June 30,
                                 2013                      2012
($ in millions)                  $            %           $          %
                                                                     
Pool risk in force
Prime                            $ 1,346       77.5  %     $ 1,471     76.8  %
Alt-A                            90            5.2         113         5.9
A minus and below                301         17.3       331       17.3  
Total                            $ 1,737     100.0 %     $ 1,915   100.0 %
                                                                       
Total pool risk in force by
policy year
2005 and prior                   $ 1,599       92.1  %     $ 1,722     89.9  %
2006                            58            3.3         85          4.4
2007                            75            4.3         93          4.9
2008                            5           0.3        15        0.8   
Total pool risk in force         $ 1,737     100.0 %     $ 1,915   100.0 %
                                                                       
Other risk in force
Second-lien
1st loss                         $ 71                      $ 91
2nd loss                         11                        25
NIMS                             14                        14
1st loss-Hong Kong primary       29                       49      
mortgage insurance
Total other risk in force        $ 125                    $ 179   
                                                                       
Risk to capital ratio-Radian     19.7:1    (1)            21.0:1
Guaranty only
Risk to capital ratio-Mortgage   25.9:1    (1)            28.4:1
Insurance combined
                                                                       
(1) Preliminary
                                                                       

                                                 
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit L
                                                     
                   Quarter Ended                     Six Months Ended
                   June 30,                          June 30,
($ in thousands)   2013           2012              2013         2012
                                                                   
Net claims paid
Prime              $ 217,878       $ 170,351         $ 418,395     $ 297,452
Alt-A              46,059          40,261            95,150        76,912
A minus and        33,213         31,112           60,699       57,192    
below
Total primary      297,150         241,724           574,244       431,556
claims paid
Pool               28,610          20,374            59,559        45,300
Second-lien and    614            1,349            2,498        4,932     
other
Subtotal           326,374         263,447           636,301       481,788
Impact of
captive            —              —                —            (148      )
terminations
Total              $ 326,374      $ 263,447        $ 636,301    $ 481,640 
                                                                   
Average claim
paid (1)
Prime              $ 46.0          $ 47.1            $ 47.4        $ 48.6
Alt-A              52.5            56.4              56.1          57.8
A minus and        34.1            36.0              35.6          38.0
below
Total primary
average claims     45.1            46.6              46.9          47.6
paid
Pool               74.9            65.9              74.2          66.9
Second-lien and    11.8            24.5              18.2          26.2
other
Total              $ 46.5          $ 47.4            $ 48.3        $ 48.5
                                                                   
Average primary
claim paid (2)     $ 47.2          $ 49.2            $ 49.2        $ 50.4
(3)
Average total
claim paid (2)     $ 48.5          $ 49.9            $ 50.4        $ 51.0
(3)
                                                                   
Loss ratio -       68.9        %   121.9       %     70.4      %   128.6     %
GAAP basis
Expense ratio -    29.2        %   22.9        %     35.5      %   24.4      %
GAAP basis
                   98.1        %   144.8       %     105.9     %   153.0     %
                                                                   
Reserve for
losses by
category
Prime              $ 1,521,888     $ 1,740,492
Alt-A              522,396         597,570
A minus and        317,964         361,104
below
Reinsurance        58,427         97,845      
recoverable (4)
Total primary      2,420,675       2,797,011
reserves
Pool insurance     265,114        348,288     
Total 1st lien     2,685,789       3,145,299
reserves
Second lien and    5,072          10,044      
other
Total reserves     $ 2,690,861    $ 3,155,343 
                                                                   
1st lien reserve
per default (5)
Primary reserve
per primary        $ 30,932        $ 28,410
default
Primary reserve
per default        27,293          26,157
excluding IBNR
Pool reserve per   17,428          18,012
pool default (6)
Total 1st lien
reserve per        28,735          26,704
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, 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 June 30, 2013 and
      2012, would be $29,846 and $27,949, respectively.
      

                                                           
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit M
                                                                  
                                   June 30,      December 31,     June 30,
                                   2013          2012             2012
Default Statistics
Primary Insurance:
                                                                  
Flow
Prime
Number of insured loans            675,246       630,094          588,335
Number of loans in default         45,899        55,483           57,961
Percentage of loans in default     6.80    %     8.81      %      9.85    %
                                                                  
Alt-A
Number of insured loans            34,589        37,754           40,976
Number of loans in default         10,024        11,798           13,001
Percentage of loans in default     28.98   %     31.25     %      31.73   %
                                                                  
A minus and below
Number of insured loans            32,204        35,150           37,755
Number of loans in default         9,240         11,211           11,688
Percentage of loans in default     28.69   %     31.89     %      30.96   %
                                                                  
Total Flow
Number of insured loans            742,039       702,998          667,066
Number of loans in default         65,163        78,492           82,650
Percentage of loans in default     8.78    %     11.17     %      12.39   %
                                                                  
Structured
Prime
Number of insured loans            35,796        37,528           39,278
Number of loans in default         4,676         5,371            5,608
Percentage of loans in default     13.06   %     14.31     %      14.28   %

Alt-A
Number of insured loans            15,156        16,315           17,435
Number of loans in default         3,707         4,207            5,053
Percentage of loans in default     24.46   %     25.79     %      28.98   %
                                                                  
A minus and below
Number of insured loans            13,476        14,157           14,816
Number of loans in default         4,711         5,099            5,139
Percentage of loans in default     34.96   %     36.02     %      34.69   %
                                                                  
Total Structured
Number of insured loans            64,428        68,000           71,529
Number of loans in default         13,094        14,677           15,800
Percentage of loans in default     20.32   %     21.58     %      22.09   %
                                                                  
Total Primary Insurance
Prime
Number of insured loans            711,042       667,622          627,613
Number of loans in default         50,575        60,854           63,569
Percentage of loans in default     7.11    %     9.12      %      10.13   %
                                                                  
Alt-A
Number of insured loans            49,745        54,069           58,411
Number of loans in default         13,731        16,005           18,054
Percentage of loans in default     27.60   %     29.60     %      30.91   %
                                                                  
A minus and below
Number of insured loans            45,680        49,307           52,571
Number of loans in default         13,951        16,310           16,827
Percentage of loans in default     30.54   %     33.08     %      32.01   %
                                                                  
Total Primary
Number of insured loans            806,467       770,998          738,595
Number of loans in default         78,257        93,169           98,450
Percentage of loans in default     9.70    %     12.08     %      13.33   %
                                                                  
Pool insurance
Number of loans in default         15,212        18,147           19,336
                                                                          

                                                   
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit N
                                                       
                       Quarter Ended                   Six Months Ended
                       June 30,                        June 30,
($ in thousands)       2013           2012            2013        2012
                                                                    
1st Lien Captives
Premiums ceded to      $ 4,787         $ 6,289         $ 9,939      $ 12,718
captives
% of total premiums    2.2         %   3.5       %     2.4      %   3.6      %
IIF included in        5.2         %   8.9       %
captives (1)
RIF included in        5.0         %   7.7       %
captives (1)
                                                                    
Initial Quota Share
Reinsurance ("QSR")
Transaction
QSR ceded premiums     $ 5,900         $ 25,477        $ 12,022     $ 25,477
written
% of premiums          2.2         %   12.0      %     2.3      %   12.0     %
written
QSR ceded premiums     $ 7,662         $ 3,098         $ 15,495     $ 3,098
earned
% of premiums earned   3.6         %   1.7       %     3.8      %   1.7      %
Ceding commissions     $ 1,475         $ 6,369         $ 3,005      $ 6,369
RIF included in QSR    $ 1,421,096     $ 922,497
(2)
                                                                    
Second QSR
Transaction
QSR ceded premiums     $ 7,580                         $ 24,020
written
% of premiums          2.8         %                   4.7      %
written
QSR ceded premiums     $ 4,283                         $ 7,121
earned
% of premiums earned   2.0         %                   1.7      %
Ceding commissions     $ 2,653                         $ 8,407
RIF included in QSR    $ 1,046,041
(2)
                                                                    
Persistency (twelve
months ended June      80.3        %   83.9      %
30)
                                                                    

      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 the fact that 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 geographic regions 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”);
  *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, and
    an adequate minimum policyholder position and surplus for those insurance
    subsidiaries that provide reinsurance to Radian Guaranty;
  *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 by the government-sponsored entities
    (“GSEs”) intervening in or otherwise limiting our 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 our customers and potential customers, including the
    potential loss of current or future business and the heightened risk of
    disputes and litigation;
  *the need, in the event that we are unsuccessful in defending our loss
    mitigation activities, to increase our loss reserves for, and reassume
    risk on, rescinded or cancelled 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, that are less dependent on capital support from their
    subsidiaries than we are or that are new entrants to the industry, and
    therefore, are not burdened by legacy obligations;
  *changes in requirements to remain an eligible insurer to the GSEs
    (expected to be released by the end of 2013 and implemented following a
    transition period), which may include more stringent risk-to-capital ratio
    requirements, higher capital requirements for loans insured prior to 2009
    and a limitation on the amount of capital credit available for
    subsidiaries, including capital attributable to our financial guaranty
    business;
  *changes in the charters or business practices of, or rules or regulations
    applicable to, the GSEs;
  *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, including adjustments proposed by the
    IRS resulting from the examination of our 2000 through 2007 tax years;
  *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 by 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 Item 1A of Part I of our Annual Report on Form 10-K for the year
ended December 31, 2012, and 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
 
Press spacebar to pause and continue. Press esc to stop.