Radian Reports Fourth Quarter and Full Year 2013 Financial Results

  Radian Reports Fourth Quarter and Full Year 2013 Financial Results   – Reports fourth quarter net income of $36 million, or 19 cents per diluted                                    share –   – Writes $47 billion of new MI business in 2013, a 27% increase from 2012 –  – Earns position as largest MI company with $161 billion in insurance in force                                       –  Business Wire  PHILADELPHIA -- February 5, 2014  Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended December 31, 2013, of $36.4 million, or $0.19 per diluted share, which included $30.6 million of combined net gains from the change in fair value of derivatives and other financial instruments and net losses on investments. This compares to a net loss for the quarter ended December 31, 2012, of $177.3 million, or $1.34 per diluted share, which included $7.4 million of combined net gains from the change in fair value of derivatives and other financial instruments and net gains on investments.  The company has introduced non-GAAP financial measures as performance indicators to facilitate evaluation of its fundamental financial performance. Included in these measures is adjusted pretax operating income which, for the quarter ended December 31, 2013, was $9.1 million, consisting of $1.7 million from the mortgage insurance segment and $7.4 million from the financial guaranty segment. Adjusted diluted net operating income per share for the quarter ended December 31, 2013, was $0.03.  The net loss for the full year 2013 was $197.0 million, or $1.18 per diluted share, which included $186.2 million of combined net losses from the change in fair value of derivatives and other financial instruments and a net loss on investments. This compares to net losses for the full year 2012 of $451.5 million, or $3.41 per diluted share, which included $41.4 million of combined net losses from the change in fair value of derivatives and other financial instruments and net gains on investments. Book value per share at December 31, 2013, was $5.43.  “Radian’s performance in 2013 reflects the solid progress we have made against our top priorities. I am pleased to report that we achieved operating profitability in our mortgage insurance business, and we expect that the size and credit quality of our MI portfolio will fuel improved levels of operating profitability this year,” said Chief Executive Officer S.A. Ibrahim.  Ibrahim continued, “We were successful in writing 27% more new MI business in 2013 than 2012, earning the position as the largest MI company with $161 billion in insurance in force. We also made consistent strides in managing our legacy mortgage insurance and financial guaranty exposure, including a 35% decline in the total number of MI delinquencies and a 29% reduction in our total financial guaranty portfolio from 2012. As we look ahead to 2014, we are encouraged by the improved housing and economic environment that promise new opportunities for Radian.”  CAPITAL AND LIQUIDITY UPDATE  Radian Guaranty’s risk-to-capital ratio was 19.4:1 as of December 31, 2013, which included a contribution of $100 million of capital from Radian Group to Radian Guaranty to support continued growth in the company’s net risk in force. After the $100 million contribution, Radian Group maintains approximately $615 million of currently available liquidity.    *As of December 31, 2013, Radian Guaranty’s statutory capital was $1,346     million compared to $1,256 million at September 30, 2013, and $926 million     a year ago.   *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 under these reinsurance     agreements on a prospective basis from 20 percent to 5 percent. As of     December 31, 2013, a total of $2.6 billion of risk in force had been ceded     under those agreements. Radian will have the option to recapture a portion     of the ceded risk outstanding on December 31, 2014, and on December 31,     2015.  FOURTH QUARTER AND FULL YEAR HIGHLIGHTS    *New mortgage insurance written (NIW) was $9.3 billion during the quarter,     compared to $13.7 billion in the third quarter of 2013 and $11.7 billion     in the fourth quarter of 2012. For the full-year 2013, NIW was $47.3     billion, compared to $37.1 billion for the full-year 2012. Radian wrote an     additional $2.4 billion in NIW in January 2014, compared to $4.0 billion     in January 2013.         *The Home Affordable Refinance Program (HARP) accounted for $0.9          billion of insurance not included in Radian Guaranty’s NIW total for          the quarter. This compares to $1.8 billion in the third quarter of          2013, and $2.9 billion in the fourth quarter of 2012.        *Of the $9.3 billion of new business written in the fourth quarter of          2013, 70 percent was written with monthly premiums and 30 percent          with single premiums. This compares with 65 percent monthly premium          and 35 percent single premium in the fourth quarter of 2012.        *NIW continued to consist of loans with excellent risk          characteristics.    *The total primary mortgage insurance risk-in-force at year-end 2013     consisted of 71 percent of business written after 2008 and 60 percent     excluding HARP volume.   *The mortgage insurance provision for losses was $144.3 million in the     fourth quarter of 2013, compared to $152.0 million in the third quarter of     2013, and $306.9 million in the fourth quarter of 2012.         *The loss ratio in the fourth quarter for Radian Guaranty was 72.0          percent, compared to 76.0 percent in the third quarter of 2013, and          171.0 percent in the fourth quarter of 2012.        *Mortgage insurance loss reserves were approximately $2.2 billion as          of December 31, 2013, which decreased from $2.3 billion in the third          quarter of 2013, and from $3.1 billion a year ago.        *Primary reserves (excluding IBNR and other reserves) per default were          $26,717 as of December 31, 2013. This compares to primary reserves          per default of $27,202 as of September 30, 2013, and $26,408 as of          December 31, 2012.    *The total number of primary delinquent loans decreased by 7 percent in the     fourth quarter from the third quarter of 2013, and by 35 percent from the     fourth quarter of 2012. The total number of primary delinquent loans at     December 31, 2013, excludes loans related to the Master Transaction     Agreement with Freddie Mac entered into on August 29, 2013. In addition,     the total number of primary delinquent loans declined by 3.5 percent in     January 2014. Additional details related to the company’s delinquency     inventory in January 2014 may be found on Slide 20 of the fourth quarter     presentation slides. The primary mortgage insurance delinquency rate     decreased to 7.3 percent in the fourth quarter of 2013, compared to 7.8     percent in the third quarter of 2013, and 12.1 percent in the fourth     quarter of 2012.   *Total mortgage insurance claims paid were $283.4 million in the fourth     quarter, compared to $519.3 million (which included $254.7 million related     to the Freddie Mac Agreement) in the third quarter of 2013 and $263.4     million in the fourth quarter of 2012. Claims paid in the fourth quarter     of 2013 exclude $50.0 million of claims processed in the quarter in     accordance with the terms of the Freddie Mac Agreement. For the full-year     2013, total claims paid were $1.4 billion, compared to $1.0 billion for     the full-year 2012. The company currently expects mortgage insurance net     claims paid for the full-year 2014 of $900 million to $1.0 billion.   *Other operating expenses were $72.5 million in the fourth quarter,     compared to $71.0 million in the third quarter and $55.9 million in the     fourth quarter of last year. In the quarter, $11.8 million represented     long-term incentive compensation, compared to $28.1 million in the third     quarter of 2013. The compensation expense in both periods was impacted by     an increase in the fair value of cash-settled awards. The component of the     fair value change that resulted from the stock price increase was $1.5     million in the fourth quarter of 2013, compared to $16.8 million in the     third quarter of 2013. The reduction in long-term incentive compensation     in the fourth quarter was fully offset by outside legal and consulting     expenses, other year-end compensation expenses, and investments in     technology improvements.   *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 December 31, 2013, Radian Asset had approximately $1.2 billion          in statutory surplus with an additional $400 million in claims-paying          resources.        *Since June 30, 2008, Radian Asset has successfully reduced its total          net par exposure by 79 percent to $23.9 billion as of December 31,          2013, including large declines in the riskier segments of the          portfolio.  CONFERENCE CALL  Radian will discuss these items in its conference call today, Wednesday, February 5, 2014, at 10:00 a.m. Eastern time. The conference call will be broadcast live over the Internet at Webcasts or at www.radian.biz. The call may also be accessed by dialing 800.230.1085 inside the U.S., or 612.288.0337 for international callers, using passcode 317235 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 317235.  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 Quarterly Results.  NON-GAAP FINANCIAL MEASURES  Radian believes that measures of income excluding certain items (“non-GAAP” measures) facilitate evaluation of the company’s fundamental financial performance and provide relevant and meaningful information to investors about the ongoing operating results of the company. Such measurements are not recognized in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and should not be viewed as an alternative to GAAP measures of performance. The measures described below have been established in order to increase transparency for the purpose of evaluating the company’s core operating trends and enable more meaningful comparisons with Radian’s competitors.  Adjusted pretax operating income is defined as earnings excluding the impact of certain items that are not viewed as part of the operating performance of the company’s primary activities, or not expected to result in an economic impact equal to the GAAP measure. See Exhibit O or Radian’s website Non-GAAP Financial Measures for a description of these items, as well as a reconciliation of adjusted pretax operating (loss) income to “pretax (loss) income” and adjusted diluted net operating (loss) income per share to “diluted net (loss) income per share.”  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 Financial Reports.              Exhibit A:   Condensed Consolidated Statements of Income Exhibit B:   Condensed Consolidated Balance Sheets Exhibit C:   Segment Information Quarter Ended December 31, 2013 Exhibit D:   Segment Information Quarter Ended December 31, 2012 Exhibit E:   Segment Information Year Ended December 31, 2013 Exhibit F:   Segment Information Year Ended December 31, 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 Exhibit O:   Use of Non-GAAP Financial Measures              GAAP to Non-GAAP Reconciliations                 Radian Group Inc. and Subsidiaries Condensed Consolidated Statements of Income Exhibit A                                                                        Quarter Ended                Year Ended                       December 31                  December 31 (In thousands, except per-share      2013         2012           2013          2012 data)                                                                    Revenues: Net premiums          $ 231,561    $ 217,743     $ 940,817     $ 686,630   written - insurance                                                                    Net premiums earned   $ 213,198     $ 193,875      $ 830,894      $ 738,982 - insurance Net investment        26,868        23,112         108,088        114,337 income Net (losses) gains    (6,829    )   6,351          (149,720   )   184,888 on investments Net impairment losses recognized     (3        )   (3         )   (3         )   (3         ) in earnings Change in fair value of derivative   38,586        2,912          (31,771    )   (144,025   ) instruments Net losses on other financial             (1,151    )   (1,815     )   (4,736     )   (82,269    ) instruments Gain on sale of       —             —              —              7,708 affiliate Other income          916          1,627         6,235         5,790       Total revenues        271,585      226,059       758,987       825,408                                                                        Expenses: Provision for         137,610       305,797        567,134        959,171 losses Change in reserve for premium           (198      )   (1,464     )   (1,901     )   41 deficiency Policy acquisition    6,505         10,098         41,664         61,876 costs Other operating       72,473        55,896         284,528        196,672 expenses Interest expense      19,747       12,583        74,618        51,832      Total expenses        236,137      382,910       966,043       1,269,592                                                                      Equity in net income (loss) of      —            —             1             (13        ) affiliates                                                                    Pretax income         35,448        (156,851   )   (207,055   )   (444,197   ) (loss) Income tax            (921      )   20,451        (10,070    )   7,271       (benefit) provision                                                                    Net income (loss)     $ 36,369     $ (177,302 )   $ (196,985 )   $ (451,468 )                                                                    Diluted net income    $ 0.19       $ (1.34    )   $ (1.18    )   $ (3.41    ) (loss) per share                                                                                 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                                                                                                                    December 31     December 31 (In thousands, except per-share data)            2013            2012                                                                   Assets: Cash and investments                             $ 4,977,542     $ 5,208,199 Deferred policy acquisition costs                66,926          88,202 Deferred income taxes, net                       17,902          — Reinsurance recoverables                         46,846          89,204 Derivative assets                                16,642          13,609 Other assets                                     495,833        503,986      Total assets                                     $ 5,621,691    $ 5,903,200                                                                    Liabilities and stockholders' equity: Unearned premiums                                $ 768,871       $ 648,682 Reserve for losses and loss adjustment           2,185,421       3,149,936 expenses Reserve for premium deficiency                   1,785           3,685 Long-term debt                                   930,072         663,571 VIE debt                                         94,645          108,858 Derivative liabilities                           307,185         266,873 Other liabilities                                394,067        325,270      Total liabilities                                4,682,046      5,166,875                                                                      Common stock                                     191             151 Additional paid-in capital                       1,454,297       1,075,320 Retained deficit                                 (552,226    )   (355,241    ) Accumulated other comprehensive income           37,383         16,095       Total common stockholders’ equity                939,645        736,325      Total liabilities and stockholders’ equity       $ 5,621,691    $ 5,903,200                                                                    Book value per share                             $ 5.43          $ 5.51                                                                                                                                              Radian Group Inc. and Subsidiaries Segment Information Quarter Ended December 31, 2013 Exhibit C                                                                                                      Mortgage        Financial (In thousands)                   Insurance       Guaranty        Total Revenues: Net premiums written -           $ 231,754      $ (193      )   $ 231,561    insurance                                                                     Net premiums earned -            $ 200,356       $ 12,842        $ 213,198 insurance Net investment income              16,379          10,489          26,868 Net losses on investments          (2,818    )     (4,011    )     (6,829    ) Net impairment losses              —               (3        )     (3        ) recognized in earnings Change in fair value of            635             37,951          38,586 derivative instruments Net losses on other financial      (869      )     (282      )     (1,151    ) instruments Other income                      903           13            916        Total revenues                    214,586       56,999        271,585                                                                        Expenses: Provision for losses               144,270         (6,660    )     137,610 Change in reserve for premium      (198      )     —               (198      ) deficiency Policy acquisition costs           4,413           2,092           6,505 Other operating expenses           60,294          12,179          72,473 Interest expense                  7,175          12,572        19,747     Total expenses                    215,954        20,183        236,137                                                                        Pretax (loss) income             $ (1,368    )   $ 36,816       $ 35,448 Income tax benefit                                                (921      )                                                                     Net income                                                       $ 36,369                                                                         Cash and investments             $ 2,683,467     $ 2,294,075     $ 4,977,542 Deferred policy acquisition        29,741          37,185          66,926 costs Total assets                       3,120,904       2,500,787       5,621,691 Unearned premiums                  567,072         201,799         768,871 Reserve for losses and loss        2,164,353       21,068          2,185,421 adjustment expenses VIE Debt                           2,845           91,800          94,645 Derivative liabilities             —               307,185         307,185                                                                                                                                              Radian Group Inc. and Subsidiaries Segment Information Quarter Ended December 31, 2012 Exhibit D                                                                                                      Mortgage        Financial (In thousands)                   Insurance       Guaranty        Total Revenues: Net premiums written -           $ 217,044      $ 699          $ 217,743    insurance                                                                     Net premiums earned -            $ 179,486       $ 14,389        $ 193,875 insurance Net investment income              12,814          10,298          23,112 Net gains on investments           1,447           4,904           6,351 Net impairment losses              —               (3        )     (3        ) recognized in earnings Change in fair value of            (298      )     3,210           2,912 derivative instruments Net losses on other financial      (864      )     (951      )     (1,815    ) instruments Other income                      1,588         39            1,627      Total revenues                    194,173       31,886        226,059                                                                        Expenses: Provision for losses               306,895         (1,098    )     305,797 Change in reserve for premium      (1,464    )     —               (1,464    ) deficiency Policy acquisition costs           7,469           2,629           10,098 Other operating expenses           44,661          11,235          55,896 Interest expense                  2,099         10,484        12,583     Total expenses                    359,660       23,250        382,910                                                                        Pretax (loss) income               (165,487  )     8,636           (156,851  ) Income tax provision              12,279        8,172         20,451                                                                         Net (loss) income                $ (177,766  )   $ 464          $ (177,302  )                                                                     Cash and investments             $ 3,118,153     $ 2,090,046     $ 5,208,199 Deferred policy acquisition        38,478          49,724          88,202 costs Total assets                       3,575,427       2,327,773       5,903,200 Unearned premiums                  382,413         266,269         648,682 Reserve for losses and loss        3,083,608       66,328          3,149,936 adjustment expenses VIE Debt                           9,875           98,983          108,858 Derivative liabilities             —               266,873         266,873                                                                                                                                              Radian Group Inc. and Subsidiaries Segment Information Year Ended December 31, 2013 Exhibit E                                                                                                     Mortgage      Financial (In thousands)                 Insurance     Guaranty             Total Revenues: Net premiums written -         $ 950,998    $ (10,181  )   (1)   $ 940,817   insurance                                                                      Net premiums earned -          $ 781,420     $ 49,474       (1)   $ 830,894 insurance Net investment income            61,615        46,473               108,088 Net losses on investments        (93,821 )     (55,899  )           (149,720 ) Net impairment losses            —             (3       )           (3       ) recognized in earnings Change in fair value of          635           (32,406  )           (31,771  ) derivative instruments Net losses on other              (2,840  )     (1,896   )           (4,736   ) financial instruments Other income                    6,024       211                6,235     Total revenues                  753,033     5,954              758,987                                                                        Expenses: Provision for losses             564,648       2,486                567,134 Change in reserve for            (1,901  )     —                    (1,901   ) premium deficiency Policy acquisition costs         28,485        13,179               41,664 Other operating expenses         236,959       47,569               284,528 Interest expense                17,995      56,623             74,618    Total expenses                  846,186     119,857            966,043                                                                        Equity in net income of         —           1                  1         affiliates                                                                      Pretax loss                    $ (93,153 )   $ (113,902 )         $ (207,055 ) Income tax benefit                                                 (10,070  )                                                                      Net loss                                                          $ (196,985 )                                                                                (1) Reflects the impact of the commutation of reinsurance business.                                                                  Radian Group Inc. and Subsidiaries Segment Information Year Ended December 31, 2012 Exhibit F                                                                                                        Mortgage       Financial (In thousands)                      Insurance      Guaranty       Total Revenues: Net premiums written - insurance    $ 806,305     $ (119,675 )   $ 686,630                                                                      Net premiums earned - insurance     $ 702,385      $ 36,597       $ 738,982 Net investment income               63,191         51,146         114,337 Net gains on investments            103,666        81,222         184,888 Net impairment losses recognized    —              (3         )   (3         ) in earnings Change in fair value of             (330       )   (143,695   )   (144,025   ) derivative instruments Net losses on other financial       (3,491     )   (78,778    )   (82,269    ) instruments Gain on sale of affiliate           —              7,708          7,708 Other income                        5,516         274           5,790       Total revenues                      870,937       (45,529    )   825,408                                                                        Expenses: Provision for losses                921,507        37,664         959,171 Change in reserve for premium       41             —              41 deficiency Policy acquisition costs            34,131         27,745         61,876 Other operating expenses            152,448        44,224         196,672 Interest expense                    7,454         44,378        51,832      Total expenses                      1,115,581     154,011       1,269,592                                                                      Equity in net loss of affiliates    —             (13        )   (13        )                                                                    Pretax loss                         (244,644   )   (199,553   )   (444,197   ) Income tax (benefit) provision      (30,045    )   37,316        7,271                                                                          Net loss                            $ (214,599 )   $ (236,869 )   $ (451,468 )                                                                                                                                                              Radian Group Inc. and Subsidiaries Financial Guaranty Supplemental Information Exhibit G                                                                       Quarter Ended             Year Ended                        December 31               December 31 (In thousands)         2013        2012         2013             2012                                                                               Total Premiums         $ 12,842     $ 14,389     $ 51,921           $ 58,861 Earned - insurance Impact of commutations and       —           —           (2,447   )         (22,264  ) reinsurance Net Premiums Earned    $ 12,842    $ 14,389    $ 49,474          $ 36,597  - insurance                                                                               Refundings included    $ 8,573     $ 7,956     $ 30,593          $ 33,985  in earned premium                                                                               Net premiums earned    $ 3,879     $ 5,652     $ 17,898          $ 28,693  - derivatives (1)                                                                               Claims paid            $ 4,365     $ 5,465     $ 47,745    (2)   $ 34,338                                                                                                                                                                                    December 31,     December 31, ($ in thousands, except ratios)           2013             2012                                                             Statutory Information:                                                             Capital and surplus                       $ 1,198,034      $ 1,144,112 Contingency reserve                       263,963         300,138       Qualified statutory capital               1,461,997        1,444,250                                                             Unearned premium reserve                  195,303          256,920 Loss and loss expense reserve             (180,168     )   (53,441      ) Total statutory policyholders' reserves   1,477,132        1,647,729                                                             Present value of installment premiums     90,852          114,292       Total statutory claims paying resources   $ 1,567,984     $ 1,762,021                                                               Net debt service outstanding              $ 30,778,401    $ 42,526,289                                                              Capital leverage ratio (3)                21               29 Claims paying leverage ratio (4)          20               24                                                             Net par outstanding by product: Public finance direct                     $ 8,051,124      $ 9,796,131 Public finance reinsurance                4,383,643        5,542,217 Structured direct                         10,872,379       17,615,383 Structured reinsurance                    547,733         787,758       Total (5)                                 $ 23,854,879    $ 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 $1.0       billion at December 31, 2013 and December 31, 2012, respectively, for (5)   legally defeased bond issues where our financial guaranty policy has not       been extinguished but cash or securities have been deposited in an       escrow account for the benefit of bondholders.          Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit H                                                                      Quarter Ended                                Year Ended              December 31                                  December 31              2013                 2012                   2013                  2012 ($ in        $          %         $           %         $           %         $           % millions) Primary new                                                                                       insurance written Prime        $ 9,252     100.0 %   $ 11,657     99.9  %   $ 47,251     100.0 %   $ 37,041     99.9  % Alt -A and A minus      —         —        6          0.1      4          —        20         0.1    and below Total Flow   $ 9,252   100.0 %   $ 11,663   100.0 %   $ 47,255   100.0 %   $ 37,061   100.0 %                                                                                                Total primary new insurance written by FICO score >=740        $ 6,082     65.7  %   $ 8,838      75.8  %   $ 33,466     70.8  %   $ 28,151     75.9  % 680-739      2,675       28.9      2,519        21.6      11,971       25.3      7,994        21.6 620-679      495       5.4      306        2.6      1,818      3.9      916        2.5    Total Flow   $ 9,252   100.0 %   $ 11,663   100.0 %   $ 47,255   100.0 %   $ 37,061   100.0 %  Percentage of primary new insurance written Monthly      70      %             65       %             68       %             65       % premiums Single       30      %             35       %             32       %             35       % premiums                                                                                                Refinances   17      %             44       %             30       %             40       % LTV 95.01% and   3.4     %             1.5      %             2.6      %             1.4      % above 90.01% to    48.7    %             40.5     %             45.4     %             41.2     % 95.00% 85.01% to    36.0    %             40.5     %             37.3     %             41.0     % 90.00% 85.00% and   11.9    %             17.5     %             14.7     %             16.4     % below                                                                                                                                                        Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit I                                                                                            December 31             December 31                                  2013                    2012 ($ in millions)                  $            %         $            % Primary insurance in force (1)                                       Flow                             $ 151,383     93.9  %   $ 129,079     92.0  % Structured                       9,857       6.1      11,284      8.0    Total Primary                    $ 161,240   100.0 %   $ 140,363   100.0 %                                                                         Prime                            $ 147,072     91.2  %   $ 123,437     87.9  % Alt-A                            8,634         5.4       10,447        7.5 A minus and below                5,534       3.4      6,479       4.6    Total Primary                    $ 161,240   100.0 %   $ 140,363   100.0 %                                                                         Primary risk in force (1) Flow                             $ 37,792      94.4  %   $ 31,891      92.8  % Structured                       2,225       5.6      2,481       7.2    Total Primary                    $ 40,017    100.0 %   $ 34,372    100.0 %                                                                         Flow Prime                            $ 35,294      93.4  %   $ 28,898      90.6  % Alt-A                            1,541         4.1       1,852         5.8 A minus and below                957         2.5      1,141       3.6    Total Flow                       $ 37,792    100.0 %   $ 31,891    100.0 %                                                                         Structured Prime                            $ 1,319       59.3  %   $ 1,450       58.5  % Alt-A                            476           21.4      552           22.2 A minus and below                430         19.3     479         19.3   Total Structured                 $ 2,225     100.0 %   $ 2,481     100.0 %                                                                         Total Prime                            $ 36,613      91.5  %   $ 30,348      88.3  % Alt-A                            2,017         5.0       2,404         7.0 A minus and below                1,387       3.5      1,620       4.7    Total Primary                    $ 40,017    100.0 %   $ 34,372    100.0 %                                                                                (1) Includes amounts related to the Freddie Mac Agreement.    Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit J                                                                                        December 31                December 31                                2013                       2012 ($ in millions)                $              %         $           % Total primary risk in force                                          by FICO score Flow >=740                          $ 21,525         57.0  %   $ 16,448     51.6  % 680-739                        11,019           29.2      9,686        30.4 620-679                        4,555            12.0      4,918        15.4 <=619                          693           1.8      839        2.6    Total Flow                     $ 37,792      100.0 %   $ 31,891   100.0 %                                                                         Structured >=740                          $ 602            27.0  %   $ 661        26.6  % 680-739                        640              28.8      716          28.9 620-679                        585              26.3      661          26.6 <=619                          398           17.9     443        17.9   Total Structured               $ 2,225       100.0 %   $ 2,481    100.0 %                                                                         Total >=740                          $ 22,127         55.3  %   $ 17,109     49.8  % 680-739                        11,659           29.1      10,402       30.3 620-679                        5,140            12.9      5,579        16.2 <=619                          1,091         2.7      1,282      3.7    Total Primary                  $ 40,017      100.0 %   $ 34,372   100.0 %                                                                         Total primary risk in force by LTV 95.01% and above               $ 4,171          10.4  %   $ 4,643      13.5  % 90.01% to 95.00%               17,239           43.1      13,303       38.7 85.01% to 90.00%               14,750           36.9      13,134       38.2 85.00% and below               3,857         9.6      3,292      9.6    Total                          $ 40,017      100.0 %   $ 34,372   100.0 %                                                                         Total primary risk in force by policy year 2005 and prior                 $ 4,461          11.1  %   $ 5,657      16.5  % 2006                           2,326            5.8       2,735        8.0 2007                           5,247            13.1      6,059        17.6 2008                           3,950            9.9       4,582        13.3 2009                           1,448            3.6       2,021        5.9 2010                           1,206            3.0       1,726        5.0 2011                           2,263            5.7       2,956        8.6 2012                           7,710            19.3      8,636        25.1 2013                           11,406        28.5     —          —      Total                          $ 40,017      100.0 %   $ 34,372   100.0 %                                                                         Primary risk in force on       $ 2,786    (1)            $ 4,320 defaulted loans                                                                          (1) Excludes risk related to loans subject to the Freddie Mac Agreement.                                                             Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit K                                                                                             December 31                  December 31 ($ in millions)                2013                         2012                                $               %         $         % Pool risk in force                                                  Prime                          $ 1,252            78.1  %   $ 1,411    76.9  % Alt-A                            74               4.6         104      5.7 A minus and below               278          17.3      319     17.4   Total                          $ 1,604        100.0 %   $ 1,834   100.0 %                                                                         Total pool risk in force by policy year 2005 and prior                 $ 1,503            93.7  %   $ 1,663    90.7  % 2006                          31               1.9         76       4.1 2007                          68               4.2         85       4.6 2008                         2            0.2       10      0.6    Total pool risk in force       $ 1,604        100.0 %   $ 1,834   100.0 %                                                                         Other risk in force Second-lien 1st loss                       $ 56                         $ 81 2nd loss                         17                           13 NIMS                             5                            14 1st loss-Hong Kong primary      19                         40 mortgage insurance Total other risk in force      $ 97                        $ 148                                                                         Risk to capital ratio-Radian     19.4  :1   (1)             20.8:1 Guaranty only Risk to capital ratio-Mortgage Insurance         23.9  :1   (1)             29.9:1 combined                                                                         (1) Preliminary                                                                                                                         Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit L                                                                    Quarter Ended                   Year Ended                  December 31                     December 31 ($ in            2013           2012            2013           2012 thousands)                                                                   Net claims paid Prime            $ 192,014       $ 171,727       $ 770,500       $ 638,820 Alt-A            42,222          43,806          183,846         165,776 A minus and      26,286         26,982         111,828        112,216      below Total primary    260,522         242,515         1,066,174       916,812 claims paid Pool             22,451          20,360          115,192         92,206 Second-lien      417            555            2,995          8,598        and other Subtotal         283,390         263,430         1,184,361       1,017,616 Impact of Freddie Mac      —               —               254,667         — Agreement Impact of captive          —              —              —              (148        ) terminations Total            $ 283,390      $ 263,430      $ 1,439,028    $ 1,017,468                                                                    Average claim paid (1) Prime            $ 47.7          $ 48.0          $ 47.4          $ 48.6 Alt-A            56.4            56.3            56.3            57.9 A minus and      37.8            36.7            37.0            37.7 below Total primary average claims   47.6            47.6            47.3            47.8 paid Pool             54.2            73.0            65.6            67.9 Second-lien      13.0            11.1            15.9            25.1 and other Total            $ 47.9          $ 48.6          $ 48.4          $ 48.7                                                                   Average primary claim    $ 50.0          $ 50.0          $ 49.6          $ 50.4 paid (2) (3) Average total claim paid (2)   $ 50.1          $ 50.8          $ 50.5          $ 51.1 (3)                                                                   Loss ratio -     72.0        %   171.0       %   72.3        %   131.2       % GAAP basis Expense ratio    32.3        %   29.0        %   34.0        %   26.6        % - GAAP basis                  104.3       %   200.0       %   106.3       %   157.8       %                                                                   Reserve for losses by category Prime            $ 937,307       $ 1,508,140 Alt-A            384,841         490,728 A minus and      215,545         314,068 below IBNR and other   347,698         289,032 LAE              51,245          64,252 Reinsurance recoverable      38,363         83,238       (4) Total primary    1,974,999      2,749,458    reserves Pool insurance   169,682         281,937 IBNR and other   8,938           34,000 LAE              5,439          7,466        Total pool       184,059        323,403      reserves Total 1st lien   2,159,058      3,072,861    reserves Second lien      5,295          10,747       and other Total reserves   $ 2,164,353    $ 3,083,608                                                                    1st lien reserve per default (5) Primary reserve per primary          26,717          26,408 default excluding IBNR and other Pool reserve per pool default          14,690          15,948 excluding IBNR and other                                                                    (1)  Calculated net of reinsurance recoveries and without giving effect to       the impact of the Freddie Mac Agreement and captive terminations. (2)   Calculated without giving effect to the impact of the Freddie Mac       Agreement and captive terminations. (3)   Before reinsurance recoveries. (4)   Represents ceded losses on captive transactions, Smart Home and quota       share reinsurance transactions.       If calculated before giving effect to deductibles and stop losses in (5)   pool transactions, this would be $24,640 and $28,125 at December 31,       2013 and 2012, respectively.                                                      Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit M                                                                                                               December 31         December 31                                               2013                2012 Default Statistics Primary Insurance:                                                                    Prime Number of insured loans                       741,554             667,622 Number of loans in default                    37,932              60,854 Percentage of loans in default                5.12     %          9.12     %                                                                    Alt-A Number of insured loans                       44,905              54,069 Number of loans in default                    11,209              16,005 Percentage of loans in default                24.96    %          29.60    %                                                                    A minus and below Number of insured loans                       40,930              49,307 Number of loans in default                    11,768              16,310 Percentage of loans in default                28.75    %          33.08    %                                                                    Total Primary Number of insured loans                       839,249     (1)     770,998 Number of loans in default                    60,909      (2)     93,169 Percentage of loans in default                7.26     %          12.08    %                                                                    Pool insurance Number of loans in default                    11,921              18,147                                                                     (1)  Includes 11,860 insured loans subject to the Freddie Mac Agreement.       Excludes 7,221 loans subject to the Freddie Mac Agreement that are in (2)   default at December 31, 2013, as we no longer have claims exposure on       these loans.                                                              Radian Group Inc. and Subsidiaries Mortgage Insurance Supplemental Information Exhibit N                                                                                Quarter Ended                   Year Ended                        December 31                     December 31 ($ in thousands)       2013           2012            2013        2012                                                                      1st Lien Captives Premiums ceded to      $ 3,801         $ 5,371         $ 17,901     $ 23,416 captives % of total premiums    1.8         %   2.8         %   2.1      %   3.2      % IIF included in        4.0         %   6.5         % captives (1) RIF included in        3.8         %   6.3         % captives (1)                                                                      Initial Quota Share Reinsurance ("QSR") Transaction QSR ceded premiums     $ 5,474         $ 10,296        $ 23,047     $ 52,151 written % of premiums          2.2         %   4.3         %   2.2      %   5.9      % written QSR ceded premiums     $ 7,035         $ 7,700         $ 29,746     $ 16,088 earned % of premiums earned   3.2         %   4.0         %   3.5      %   2.2      % Ceding commissions     $ 1,369         $ 2,574         $ 5,762      $ 13,038 RIF included in QSR    $ 1,329,544     $ 1,525,840 (2)                                                                      Second QSR Transaction QSR ceded premiums     $ 7,972         $ 9,648         $ 40,225     $ 9,648 written % of premiums          3.2         %   4.0         %   3.9      %   1.1      % written QSR ceded premiums     $ 6,137         $ 504           $ 18,356     $ 504 earned % of premiums earned   2.8         %   0.3         %   2.2      %   0.1      % Ceding commissions     $ 2,790         $ 3,377         $ 14,079     $ 3,377 RIF included in QSR    $ 1,298,631     $ 368,429 (2)                                                                      Persistency (twelve months ended           81.1        %   81.8        % December 31)                                                                             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.          Radian Group Inc. and Subsidiaries Use of Non-GAAP Financial Measures Exhibit O (page 1 of 4)  In addition to the traditional GAAP financial measures, the Company has begun to include certain non-GAAP financial measures, “adjusted pretax operating income,” “adjusted net operating income” and “adjusted diluted net operating income per share” among its key performance indicators to facilitate evaluation of its fundamental financial performance. These measures have been established in order to increase transparency for the purpose of evaluating our core operating trends and enable more meaningful comparisons with our competitors. We believe these measures aid in understanding the underlying performance of our operations.  Adjusted pretax operating income adjusts GAAP pretax income to remove the effects of net gains (losses) on investments and other financial instruments and net impairment losses recognized in earnings. It also excludes gains and losses related to changes in fair value estimates on insured credit derivatives and includes the impact of changes in the present value of insurance claims and recoveries on insured credit derivatives, based on the Company's ongoing insurance loss monitoring, as well as premiums earned on insured credit derivatives.  Although this measure excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are (1) not viewed as part of the operating performance of the Company’s primary activities, or (2) not expected to result in an economic impact equal to the GAAP measure. These adjustments, along with the reasons for their treatment, are described below.                   Net gains (losses) on investments and other financial instruments.           The recognition of realized investment gains or losses can vary           significantly across periods as the activity is highly discretionary           based on the timing of individual securities sales due to such           factors as market opportunities, the Company’s tax and capital           profile and overall market cycles. Unrealized investment gains and           losses arise primarily from changes in the market value of the     (1)   Company’s investments that are classified as trading. These           valuation adjustments may not necessarily result in economic gains           or losses. The Company does not view them to be indicative of its           fundamental operating activities. Trends in the profitability of the           Company’s fundamental operating activities can be more clearly           identified without the fluctuations of these realized and unrealized           gains or losses. Therefore, these items are excluded from the           Company’s calculation of adjusted pretax operating income.                      Net impairment losses recognized in earnings. The recognition of net           impairment losses on investments can vary significantly in both size     (2)   and timing, depending on market credit cycles. The Company does not           view them to be indicative of its fundamental operating activities.           Therefore, these losses are excluded from the Company’s calculation           of adjusted pretax operating income.                      Change in fair value of derivative instruments. Gains and losses           related to changes in the fair value of insured credit derivatives           are subject to significant fluctuation based on changes in interest           rates, credit spreads (of both the underlying collateral as well as           the Company's credit spread), credit ratings and other market,           asset-class and transaction-specific conditions and factors that may     (3)   be unrelated or only indirectly related to our obligation to pay           future claims. With the exception of the change in present value of           estimated credit loss payments (recoveries) and net premiums earned           on derivatives, discussed in items 4 and 5 below, the Company           believes these gains and losses will reverse over time and           consequently these changes are not expected to result in economic           gains or losses. Therefore, these gains and losses are excluded from           the Company’s calculation of adjusted pretax operating income.                      Change in present value of estimated credit loss payments           (recoveries). The change in present value of insurance claims the           Company expects to pay or recover on insured credit derivatives     (4)   represents the amount of the change in credit derivatives from item           3, above, that the Company expects to result in an economic loss or           recovery based on its ongoing loss monitoring analytics. Therefore,           this item is expected to have an economic impact and is included in           the Company’s calculation of adjusted pretax operating income.                      Net premiums earned on derivatives. The net premiums earned on           insured credit derivatives are classified as part of the change in           fair value of derivative instruments discussed in item 3 above.     (5)   However, since net premiums earned on derivatives are considered           part of the Company’s fundamental operating activities, these           premiums are included in the Company’s calculation of adjusted           pretax operating income.             Adjusted pretax operating income is not a measure of total profitability, and therefore should not be viewed as a substitute for GAAP pretax income. The Company’s definition of adjusted pretax operating income may not be comparable to similarly-named measures reported by other companies.  Adjusted net operating income consists of adjusted pretax operating income reduced by income taxes computed at the statutory tax rate of 35%. Adjusted diluted net operating income per share consists of adjusted net operating income divided by the weighted-average number of common and common equivalent shares outstanding on a diluted basis. Interest expense on convertible debt, share dilution from convertible debt and the impact of stock-based compensation arrangements have been reflected in the per share calculations consistent with the accounting standard regarding earnings per share, whenever the impact is dilutive.  These non-GAAP financial measures align with the way the Company’s business performance is evaluated by both management and the board of directors. The following tables provide reconciliations of pretax income (loss) to adjusted pretax operating income (loss) for each business segment and the consolidated company, in addition to a reconciliation of net income (loss) to adjusted net operating income (loss) for the consolidated company.                  Radian Group Inc. and Subsidiaries GAAP to Non-GAAP Reconciliation by Segment Exhibit O (page 2 of 4)                                    2013 Quarters (In thousands)   First         Second       Third       Fourth      Year Mortgage Insurance: Pretax loss      $ (16,816  )   $ (67,096 )   $ (7,873 )   $ (1,368 )   $ (93,153  ) Less: Net losses on    (3,237     )   (83,386   )   (4,380   )   (2,818   )   (93,821    ) investments Net impairment losses           —              —             —            —            — recognized in earnings Change in fair value of         —              —             —            635          635 derivative instruments Net (losses) gains on other   (1,877     )   74           (168     )   (869     )   (2,840     ) financial instruments Total            (5,114     )   (83,312   )   (4,548   )   (3,052   )   (96,026    ) exclusions Plus: Change in present value of estimated     299            (323      )   74           (29      )   21 credit loss payments (recoveries) Net premiums earned on        —             —            —           —           —           derivatives Total            299           (323      )   74          (29      )   21          additions Adjusted pretax operating        $ (11,403  )   $ 15,893     $ (3,251 )   $ 1,655     $ 2,894     (loss) income - Mortgage Insurance                                                                          Financial Guaranty: Pretax (loss)    $ (185,407 )   $ 35,589     $ (900   )   $ 36,816    $ (113,902 ) income Less: Net losses on    (2,268     )   (46,868   )   (2,752   )   (4,011   )   (55,899    ) investments Net impairment losses           —              —             —            (3       )   (3         ) recognized in earnings Change in fair value of         (167,670   )   86,535        10,778       37,951       (32,406    ) derivative instruments Net (losses) gains on other   (3,798     )   1,114        1,070       (282     )   (1,896     ) financial instruments Total            (173,736   )   40,781       9,096       33,655      (90,204    ) exclusions Plus: Change in present value of estimated     2,845          618           (3,347   )   393          509 credit loss payments (recoveries) Net premiums earned on        4,992         4,857        4,170       3,879       17,898      derivatives Total            7,837         5,475        823         4,272       18,407      additions Adjusted pretax operating        $ (3,834   )   $ 283        $ (9,173 )   $ 7,433     $ (5,291   ) (loss) income - Financial Guaranty                                                                                                      Radian Group Inc. and Subsidiaries GAAP to Non-GAAP Reconciliation Consolidated Exhibit O (page 3 of 4)                                    2013 Quarters (In thousands)   First         Second       Third        Fourth      Year Consolidated: Pretax (loss)    $ (202,223 )   $ (31,507 )   $ (8,773  )   $ 35,448    $ (207,055 ) income Less: Net losses on    (5,505     )   (130,254  )   (7,132    )   (6,829   )   (149,720   ) investments Net impairment losses           —              —             —             (3       )   (3         ) recognized in earnings Change in fair value of         (167,670   )   86,535        10,778        38,586       (31,771    ) derivative instruments Net (losses) gains on other   (5,675     )   1,188        902          (1,151   )   (4,736     ) financial instruments Total            (178,850   )   (42,531   )   4,548        30,603      (186,230   ) exclusions Plus: Change in present value of estimated     3,144          295           (3,273    )   364          530 credit loss payments (recoveries) Net premiums earned on        4,992         4,857        4,170        3,879       17,898      derivatives Total            8,136         5,152        897          4,243       18,428      additions Adjusted pretax operating        $ (15,237  )   $ 16,176     $ (12,424 )   $ 9,088     $ (2,397   ) (loss) income - Consolidated                                                                           Consolidated: Net (loss)       $ (187,500 )   $ (33,172 )   $ (12,682 )   $ 36,369    $ (196,985 ) income Less: Net losses on    (5,505     )   (130,254  )   (7,132    )   (6,829   )   (149,720   ) investments Net impairment losses           —              —             —             (3       )   (3         ) recognized in earnings Change in fair value of         (167,670   )   86,535        10,778        38,586       (31,771    ) derivative instruments Net (losses) gains on other   (5,675     )   1,188         902           (1,151   )   (4,736     ) financial instruments Income tax benefit          14,723        (1,665    )   (3,909    )   921         10,070      (provision) Total            (164,127   )   (44,196   )   639          31,524      (176,160   ) exclusions Plus: Change in present value of estimated     3,144          295           (3,273    )   364          530 credit loss payments (recoveries) Net premiums earned on        4,992          4,857         4,170         3,879        17,898 derivatives Income tax benefit (provision)      5,333         (5,661    )   4,348        (3,181   )   839         computed at the statutory tax rate Total            13,469        (509      )   5,245        1,062       19,267      additions Adjusted net operating        $ (9,904   )   $ 10,515     $ (8,076  )   $ 5,907     $ (1,558   ) (loss) income - Consolidated                                                                                                            Radian Group Inc. and Subsidiaries GAAP to Non-GAAP Reconciliation Consolidated Exhibit O (page 4 of 4)                                              2013 Quarters                       First      Second     Third      Fourth    Year Consolidated: Diluted net (loss)    $ (1.30 )   $ (0.19 )   $ (0.07 )   $ 0.19     $ (1.18 ) income per share Adjustments: Total adjustments from net (loss) income to adjusted    1.23        0.25        0.02        (0.14  )   1.17 net operating (loss) income (1) Change in dilutive impact of convertible debt      —          —          —          (0.02  )   —        and stock-based compensation arrangements (2) Adjusted diluted net operating         $ (0.07 )   $ 0.06     $ (0.05 )   $ 0.03    $ (0.01 ) (loss) income per share (2)                                                                                (1)  EPS impact of adjustments from net (loss) income to adjusted net       operating (loss) income as detailed in the previous table.       “Adjusted diluted net operating (loss) income per share” consists of       “Adjusted net operating (loss) income” divided by the weighted-average       number of common and common equivalent shares outstanding on a diluted       basis. Interest expense, shares issuable on convertible debt and the       impact of stock-based compensation arrangements have been reflected in (2)   the per share calculations consistent with the accounting standard       regarding earnings per share, whenever the impact is dilutive. The       “Change in dilutive impact of convertible debt and stock-based       compensation arrangements” reflects the change in dilution due to the       impact of the “Total adjustments from net (loss) income to adjusted net       operating (loss) income.”         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, actual or threatened     downgrades of U.S. government credit ratings, or actual or threatened     defaults on U.S. government obligations;   *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, municipal and sovereign bankruptcy filings or other     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 our 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 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 (including as part of one or more settlements of disputed     rescissions or 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 Federal Housing Administration, 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 (which     are expected to be released in 2014 and implemented following a transition     period), which may include more onerous 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 our     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     Internal Revenue Service 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, substantially all of our investment portfolio and certain of     our long-term incentive compensation awards;   *our ability to realize some or all of the tax benefits associated with our     gross deferred tax assets, which will depend, in part, 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, Item 1A of Part II of our Quarterly Reports on Form 10-Q filed in 2013 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 issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements 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