Year-to-year book value per share increases 10%
PHILADELPHIA, Jan. 18 /PRNewswire-FirstCall/ -- Radian Group Inc.
(NYSE: RDN) today reported its results for the twelve months and quarter ended
December 31, 2005. The key financial highlights of the twelve months and
quarter ended December 31, 2005 are shown in the following tables:
Key Financial Highlights (dollars in millions, except per share data)
Twelve Months:
Twelve Twelve
Months Ended Months Ended Percent
December 31, December 31, Change
2005 2004
Net income $522.9 $518.7 0.8%
Diluted net income per share $5.91 $5.33 11%
Net premiums written $1,100.7 $1,082.5 2%
Net premiums earned $1,018.7 $1,029.5 (1%)
Revenues $1,298.2 $1,364.1 (5%)
Equity in net income of affiliates $217.7 $180.6 21%
Fourth Quarter:
Quarter Ended Quarter Ended Percent
December 31, December 31, Change
2005 2004
Net income $104.5 $156.0 (33%)
Diluted net income per share $1.24 $1.62 (23%)
Net premiums written $272.7 $287.3 (5%)
Net premiums earned $262.0 $262.8 (0.3%)
Revenues $298.6 $379.1 (21%)
Book value per share (as of 12/31) $44.11 $39.98 10.3%
Equity in net income of affiliates $55.7 $50.0 12%
"Radian has been successful in importing financial guaranty expertise into
our mortgage business," said S.A. Ibrahim, CEO - Radian. "This expertise
presents us with opportunities to provide unique and creative solutions to our
customers in the acquisition, management and distribution of global credit
risk. It also enables us to more effectively manage our own mortgage risk,
using tools like Smart Home. We are pleased to report net income of $523
million for the year and $104 million in the fourth quarter, while our book
value and diluted net income per share both increased by more than 10% over
last year."
Radian will hold a conference call on Thursday, January 19, 2006, at 9:00
a.m. Eastern time to discuss the company's 2005 results. This call will be
broadcast live over the Internet at
http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or at
http://www.radian.biz > News. A replay of the webcast will be available at
this site approximately two hours after the live broadcast ends for a period
of one year.
Statistical and financial information which is expected to be referred to
during the conference call will be available on Radian's website under
Investor Information > Webcasts > Presentations and Transcripts or by clicking
on http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives.
Radian Group Inc. is a global credit risk management company headquartered
in Philadelphia with significant operations in both New York and London.
Radian develops innovative financial solutions by applying its core mortgage
credit risk expertise and structured finance capabilities to the credit
enhancement needs of the capital markets worldwide, primarily through credit
insurance products. The company also provides credit enhancement for public
finance and other corporate and consumer assets on both a direct and
reinsurance basis and holds strategic interests in active credit-based
consumer asset businesses. Additional information may be found at
http://www.radian.biz.
Financial Results and Supplemental Information Contents
For trend information on all schedules, refer to Radian's quarterly
financial statistics at
http://www.radian.biz/pdf/radian_financial_statistics_3Q05.xls or
http://www.radian.biz > Investors > Financial Information > Radian Group, Inc. > 1Q02
through 3Q05.
Exhibit A: Condensed Consolidated Statements of Income
Exhibit B: Condensed Consolidated Balance Sheets
Exhibit C: Segment Information Quarter Ended December 31, 2005
Exhibit D: Segment Information Quarter Ended December 31, 2004
Exhibit E: Segment Information Year Ended December 31, 2005
Exhibit F: Segment Information Year Ended December 31, 2004
Exhibit G: Financial Guaranty Insurance Supplemental Information -
Quarter and Year Ended and as of December 31, 2005
Exhibit H: Financial Guaranty Insurance Supplemental Information -
Quarter and Year Ended and as of December 31, 2005
Exhibit I: Mortgage Insurance Supplemental Information: New Insurance
Written, Risk Written
Exhibit J: Mortgage Insurance Supplemental Information: Insurance in
Force and Risk in Force
Exhibit K: Mortgage Insurance Supplemental Information: Risk in Force by
LTV and Policy Year, Other Risk in Force
Exhibit L: Mortgage Insurance Supplemental Information: Claims, Reserves
Exhibit M: Mortgage Insurance Supplemental Information: Defaults
Exhibit N: Mortgage Insurance Supplemental Information: Net Premiums,
Captives
Exhibit O: Mortgage Insurance Supplemental Information: Alt-A
Exhibit P: Mortgage Insurance Supplemental Information: Affiliates
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
Quarter Ended Year Ended
December 31 December 31
2005 2004 2005 2004
(Thousands of dollars,
except per-share data)
Revenues:
Net premiums written $272,721 $287,260 $1,100,687 $1,082,487
Net premiums earned $262,031 $262,767 $1,018,670 $1,029,484
Net investment income 54,303 52,679 208,422 204,349
Gains on sales of
investments 11,195 9,843 36,638 50,799
Change in fair value of
derivative instruments (36,131) 44,559 9,170 47,135
Other income 7,243 9,290 25,251 32,286
Total revenues 298,641 379,138 1,298,151 1,364,053
Expenses:
Provision for losses 104,865 111,382 390,633 456,834
Policy acquisition costs 27,496 32,272 115,851 121,830
Other operating expenses 62,958 52,445 225,977 205,687
Interest expense 11,940 8,646 43,043 34,660
Total expenses 207,259 204,745 775,504 819,011
Equity in net income of
affiliates 55,746 49,970 217,692 180,550
Pretax income 147,128 224,363 740,339 725,592
Provision for income taxes 42,667 68,394 217,485 206,939
Net income $104,461 $155,969 $522,854 $518,653
Diluted net income per
share (1) $1.24 $1.62 $5.91 $5.33
(1) Net income per share reconciliation
Net income $104,461 $155,969 $522,854 $518,653
Interest expense on
convertible senior
debentures (net of tax) - 804 1,871 3,218
Net income available to
common stockholders $104,461 $156,773 $524,725 $521,871
Weighted average shares
outstanding (in thousands)
Average common shares
outstanding 83,028 92,000 85,637 93,062
Increase in shares-potential
exercise of options-diluted
basis 889 1,022 894 1,036
Increase in shares-
contingently convertible
debt (2) - 3,810 2,215 3,810
Weighted average shares
outstanding (in thousands) 83,917 96,832 88,746 97,908
(2) All periods include the impact of shares underlying convertible debt
that was redeemed on August 1, 2005. The impact on diluted net income per
share of including these shares in the calculation was a reduction of
$0.06 per share for the quarter ended December 31, 2004, and $0.13 and
$0.18 per share for the years ended December 31, 2005 and December 31,
2004.
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
(Thousands of dollars, except December 31 December 31
share and per-share data) 2005 2004
Assets:
Cash and investments $5,521,561 $5,500,748
Investments in affiliates 446,151 393,025
Deferred policy acquisition costs 208,325 211,928
Prepaid federal income taxes 585,514 460,149
Other assets 469,059 434,970
Total assets $7,230,610 $7,000,820
Liabilities and stockholders'
equity:
Unearned premiums $849,360 $770,208
Reserve for losses and loss
adjustment expenses 801,002 801,012
Long-term debt 747,466 717,640
Deferred federal income taxes 961,993 848,224
Other liabilities 207,909 174,681
Total liabilities 3,567,730 3,311,765
Common stock 97 97
Additional paid-in capital 629,019 1,106,191
Retained earnings 2,913,649 2,397,626
Accumulated other comprehensive
income 120,115 185,141
Total common stockholders' equity 3,662,880 3,689,055
Total liabilities and
stockholders' equity $7,230,610 $7,000,820
Book value per share $44.11 $39.98
Treasury Stock Repurchases (Year-to-Date for Periods Presented)
Total number of shares repurchased 10,767,800 (1) 2,817,200
Average price paid per share $49.58 $45.38
Total cost of repurchased shares $533,888,969 $127,831,591
(1) 0.4 million shares were repurchased in the 4th quarter of 2005 at a
cost of $24.8 million, under the new repurchase program.
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended December 31, 2005
Exhibit C
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $205,334 $- $67,387 $272,721
Net premiums earned $209,866 $- $52,165 $262,031
Net investment income 31,309 32 22,962 54,303
Gains on sales of
investments 9,692 215 1,288 11,195
Change in fair value of
derivative instruments (2,831) 24 (33,324) (36,131)
Other income 4,384 2,790 69 7,243
Total revenues 252,420 3,061 43,160 298,641
Expenses:
Provision for losses 99,413 - 5,452 104,865
Policy acquisition costs 14,226 - 13,270 27,496
Other operating expenses 45,286 1,161 16,511 62,958
Interest expense 6,650 1,039 4,251 11,940
Total expenses 165,575 2,200 39,484 207,259
Equity in net income of
affiliates - 55,746 - 55,746
Pretax income 86,845 56,607 3,676 147,128
Provision for income taxes 25,143 19,812 (2,288) 42,667
Net income $61,702 $36,795 $5,964 $104,461
Assets $4,367,804 $457,572 $2,405,234 $7,230,610
Deferred policy
acquisition costs 67,211 - 141,114 208,325
Reserve for losses and
loss adjustment expenses 596,210 - 204,792 801,002
Unearned premiums 212,875 - 636,485 849,360
Stockholders' equity 2,080,445 331,039 1,251,396 3,662,880
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended December 31, 2004
Exhibit D
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $214,838 $- $72,422 $287,260
Net premiums earned $202,637 $- $60,130 $262,767
Net investment income 31,087 16 21,576 52,679
Gains (losses) on sales of
investments 9,798 (239) 284 9,843
Change in fair value of
derivative instruments 15,761 316 28,482 44,559
Other income 7,646 829 815 9,290
Total revenues 266,929 922 111,287 379,138
Expenses:
Provision for losses 100,774 - 10,608 111,382
Policy acquisition costs 18,730 - 13,542 32,272
Other operating expenses 35,116 1,730 15,599 52,445
Interest expense 5,032 631 2,983 8,646
Total expenses 159,652 2,361 42,732 204,745
Equity in net income of
affiliates - 49,948 22 49,970
Pretax income 107,277 48,509 68,577 224,363
Income tax provision 30,730 16,966 20,698 68,394
Net income $76,547 $31,543 $47,879 $155,969
Assets $4,198,325 $388,975 $2,413,520 $7,000,820
Deferred policy
acquisition costs 69,175 - 142,753 211,928
Reserve for losses and
loss adjustment expenses 559,632 - 241,380 801,012
Unearned premiums 142,853 - 627,355 770,208
Stockholders' equity 2,065,290 316,378 1,307,387 3,689,055
Radian Group Inc. and Subsidiaries
Segment Information
Year Ended December 31, 2005
Exhibit E
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $877,632 $- $223,055 $1,100,687
Net premiums earned $806,897 $- $211,773 $1,018,670
Net investment income 118,325 120 89,977 208,422
Gains (losses) on sales of
investments 27,649 (1,748) 10,737 36,638
Change in fair value of
derivative instruments 4,110 (185) 5,245 9,170
Other income 19,008 5,304 939 25,251
Total revenues 975,989 3,491 318,671 1,298,151
Expenses:
Provision for losses 359,116 - 31,517 390,633
Policy acquisition costs 62,852 - 52,999 115,851
Other operating expenses 152,731 8,268 64,978 225,977
Interest expense 24,191 3,747 15,105 43,043
Total expenses 598,890 12,015 164,599 775,504
Equity in net income of
affiliates - 218,053 (361) 217,692
Pretax income 377,099 209,529 153,711 740,339
Provision for income taxes 108,493 73,335 35,657 217,485
Net income $268,606 $136,194 $118,054 (1) $522,854 (1)
(1) Reflects a $4.1 million net loss from the 1st quarter 2005 recapture
of previously ceded business by one of the primary Financial Guaranty
insurers (in millions):
Incr/(Decr)
Net premiums earned $(4.6)
Policy acquisition costs 1.7
Provision for income taxes (2.2)
Net loss $(4.1)
Radian Group Inc. and Subsidiaries
Segment Information
Year Ended December 31, 2004
Exhibit F
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $866,051 $- $216,436 $1,082,487
Net premiums earned $814,553 $- $214,931 $1,029,484
Net investment income 118,694 98 85,557 204,349
Gains on sales of
investments 44,380 2,424 3,995 50,799
Change in fair value of
derivative instruments 11,940 206 34,989 47,135
Other income 24,247 5,989 2,050 32,286
Total revenues 1,013,814 8,717 341,522 1,364,053
Expenses:
Provision for losses 400,936 - 55,898 456,834
Policy acquisition costs 75,487 - 46,343 121,830
Other operating expenses 141,131 12,229 52,327 205,687
Interest expense 20,138 2,500 12,022 34,660
Total expenses 637,692 14,729 166,590 819,011
Equity in net income of
affiliates - 179,128 1,422 180,550
Pretax income 376,122 173,116 176,354 725,592
Provision for income
taxes 104,240 60,577 42,122 206,939
Net income $271,882 $112,539 $134,232 (1) $518,653 (1)
(1) Reflects a $10.3 million net loss from the 1st quarter 2004 recapture
of previously ceded business by one of the primary Financial Guaranty
insurers (in millions):
Incr/(Decr)
Net premiums earned $(24.9)
Policy acquisition costs (9.8)
Change in fair value of derivative instruments (0.8)
Provision for income taxes (5.6)
Net loss $(10.3)
Radian Group Inc.
Financial Guaranty Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit G
Quarter Ended Year Ended
(Thousands of dollars, except ratios) December 31 December 31
2005 2004 2005 2004
Net Premiums Written:
Public finance direct 21,832 16,408 73,117 52,279
Public finance reinsurance 16,443 18,575 77,797 74,777
Structured direct 18,923 17,897 71,211 94,423
Structured reinsurance 4,294 8,299 20,649 32,112
Trade credit 5,895 11,243 35,023 59,262
67,387 72,422 277,797 312,853
Impact of recapture (1) - - (54,742) (96,417)
Net Premiums Written 67,387 72,422 223,055 216,436
Net Premiums Earned:
Public finance direct 7,866 7,127 32,533 26,643
Public finance reinsurance 8,752 10,841 34,413 41,651
Structured direct 22,359 20,750 79,617 78,292
Structured reinsurance 4,877 8,053 20,440 33,001
Trade credit 8,311 13,359 49,309 60,236
52,165 60,130 216,312 239,823
Impact of recapture (2) - - (4,539) (24,892)
Net Premiums Earned 52,165 60,130 211,773 214,931
Claims paid:
Trade credit 6,623 5,607 23,401 24,085
Financial guaranty (1,224) 2,597 11,708 27,237
Conseco 6,181 7,350 29,574 30,657
Total 11,580 15,554 64,683 81,979
Impact of recapture (3) - - - 11,488
Claims paid 11,580 15,554 64,683 93,467
Incurred losses:
Trade credit 1,586 5,045 16,019 28,586
Financial guaranty 3,866 5,563 15,498 27,312
Total 5,452 10,608 31,517 55,898
Loss ratio- GAAP Basis 10.5% 17.6% 14.9% 26.0%
Expense ratio- GAAP Basis 57.1% 48.5% 55.7% 45.9%
67.6% 66.1% 70.6% 71.9%
Refundings included in earned premium 3,282 888 12,796 5,055
(1) Reflects the impact on net premiums written of the first quarter 2005
and 2004 recapture of previously ceded business by one of the primary
Financial Guaranty insurers:
(Thousands of dollars)
Public reinsurance 48,238 88,819
Structured reinsurance 6,504 7,596
(2) Reflects the impact on net premiums earned of the first quarter 2005
and 2004 recapture of previously ceded business by one of the primary
Financial Guaranty insurers:
(Thousands of dollars)
Public reinsurance 3,870 23,418
Structured reinsurance 669 1,476
(3) Comprised of claims payments related to the first quarter 2004
recapture of previously ceded business.
Radian Group Inc.
Financial Guaranty Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit H
(Thousands of dollars, except ratios) December 31 December 31
2005 2004
Capital and surplus 1,004,505 1,008,423
Contingency reserve 271,907 251,674
Qualified statutory capital 1,276,412 1,260,097
Unearned premium reserve 751,656 730,604
Loss and loss expense reserve 108,576 132,767
Total policyholders' reserves 2,136,644 2,123,468
Present value of installment premiums 302,953 252,000
Reinsurance and soft capital
facilities 150,000 245,000
Total claims paying resources 2,589,597 2,620,468
Net debt service outstanding 110,344,057 101,619,835
Capital leverage ratio (1) 86 81
Claims paying leverage ratio (2) 43 39
Net par outstanding by product:
Public finance direct 14,043,786 12,250,395
Public finance reinsurance 33,047,512 34,121,358
Structured direct 24,608,489 14,241,265
Structured reinsurance 4,952,146 6,107,040
Total 76,651,933 66,720,058
Reinsurance business net par
outstanding:
Treaty 58% 65%
Facultative 42% 35%
Reserve for losses and LAE
Specific 29,311 52,142
Conseco 50,770 80,343
Non-specific 124,712 108,895
Total 204,793 241,380
(1) Net debt service outstanding divided by qualified statutory capital
(2) Net debt service outstanding divided by total claims paying resources
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit I
Quarter Ended
December 31
2005 % 2004 %
Primary New Insurance Written
($ millions)
Flow $6,740 61.7% $7,966 68.1%
Structured 4,188 38.3% 3,736 31.9%
Total Primary $10,928 100.0% $11,702 100.0%
Flow
Prime $5,025 74.6% $5,352 67.2%
Alt-A 1,159 17.2% 1,888 23.7%
A minus and below 556 8.2% 726 9.1%
Total Flow $6,740 100.0% $7,966 100.0%
Structured
Prime $1,676 40.0% $1,577 42.2%
Alt-A 1,707 40.8% 766 20.5%
A minus and below 805 19.2% 1,393 37.3%
Total Structured $4,188 100.0% $3,736 100.0%
Total
Prime $6,701 61.3% $6,929 59.2%
Alt-A 2,866 26.2% 2,654 22.7%
A minus and below 1,361 12.5% 2,119 18.1%
Total Primary $10,928 100.0% $11,702 100.0%
Total Primary New Insurance Written
by FICO Score
($ millions)
Flow
<=619 $327 4.8% $530 6.6%
620-679 2,000 29.7% 2,613 32.8%
680-739 2,505 37.2% 2,897 36.4%
>=740 1,908 28.3% 1,926 24.2%
Total Flow $6,740 100.0% $7,966 100.0%
Structured
<=619 $808 19.3% $1,392 37.3%
620-679 1,369 32.7% 1,435 38.4%
680-739 1,337 31.9% 661 17.7%
>=740 674 16.1% 248 6.6%
Total Structured $4,188 100.0% $3,736 100.0%
Total
<=619 $1,135 10.4% $1,922 16.4%
620-679 3,369 30.8% 4,048 34.6%
680-739 3,842 35.2% 3,558 30.4%
>=740 2,582 23.6% 2,174 18.6%
Total Primary $10,928 100.0% $11,702 100.0%
Percentage of primary new insurance
written
Monthlies 94% 95%
Refinances 37% 45%
95.01% LTV and above 10% 9%
ARMs
Less than 5 years 31% 40%
5 years and longer 17% 11%
Primary risk written ($ millions)
Flow $1,702 70.0% $1,983 66.3%
Structured 729 30.0% 1,007 33.7%
Total Primary $2,431 100.0% $2,990 100.0%
Pool risk written ($ millions) $102 $65
Other risk written ($ millions)
Seconds
1st loss $40 $5
2nd loss 247 17
NIMs 33 9
International
1st loss-Hong Kong primary
mortgage insurance 27 -
2nd loss 2 11
Credit-default swaps 7,303 -
Other
Domestic credit-default swaps 30 -
Financial guaranty wrap - -
Total other risk written $7,682 $42
Year Ended
December 31
2005 % 2004 %
Primary New Insurance Written
($ millions)
Flow $25,596 60.1% $36,358 81.1%
Structured 16,996 39.9% 8,462 18.9%
Total Primary $42,592 100.0% $44,820 100.0%
Flow
Prime $19,177 74.9% $24,765 68.1%
Alt-A 4,093 16.0% 8,429 23.2%
A minus and below 2,326 9.1% 3,164 8.7%
Total Flow $25,596 100.0% $36,358 100.0%
Structured
Prime $5,657 33.3% $3,626 42.9%
Alt-A 7,147 42.0% 1,748 20.7%
A minus and below 4,192 24.7% 3,088 36.4%
Total Structured $16,996 100.0% $8,462 100.0%
Total
Prime $24,834 58.3% $28,391 63.3%
Alt-A 11,240 26.4% 10,177 22.7%
A minus and below 6,518 15.3% 6,252 14.0%
Total Primary $42,592 100.0% $44,820 100.0%
Total Primary New Insurance Written
by FICO Score
($ millions)
Flow
<=619 $1,489 5.8% $2,216 6.1%
620-679 7,680 30.0% 11,678 32.1%
680-739 9,322 36.4% 13,556 37.3%
>=740 7,105 27.8% 8,908 24.5%
Total Flow $25,596 100.0% $36,358 100.0%
Structured
<=619 $4,207 24.8% $3,087 36.5%
620-679 5,302 31.2% 3,094 36.6%
680-739 4,833 28.4% 1,612 19.0%
>=740 2,654 15.6% 669 7.9%
Total Structured $16,996 100.0% $8,462 100.0%
Total
<=619 $5,696 13.4% $5,303 11.8%
620-679 12,982 30.5% $14,772 33.0%
680-739 14,155 33.2% 15,168 33.8%
>=740 9,759 22.9% 9,577 21.4%
Total Primary $42,592 100.0% $44,820 100.0%
Percentage of primary new insurance
written
Monthlies 90% 93%
Refinances 41% 40%
95.01% LTV and above 10% 11%
ARMs
Less than 5 years 35% 32%
5 years and longer 16% 10%
Primary risk written ($ millions)
Flow $6,384 68.3% $9,179 78.9%
Structured 2,961 31.7% 2,455 21.1%
Total Primary $9,345 100.0% $11,634 100.0%
Pool risk written ($ millions) $569 $304
Other risk written ($ millions)
Seconds
1st loss $97 $80
2nd loss 571 74
NIMs 99 100
International
1st loss-Hong Kong primary
mortgage insurance 271 -
2nd loss 9 24
Credit-default swaps 7,303 149
Other -
Domestic credit-default swaps 180 -
Financial guaranty wrap 511 -
Total other risk written $9,041 $427
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year and as of December 31, 2005
Exhibit J
December 31 December 31
2005 % 2004 %
Primary insurance in force
($ millions)
Flow $82,700 75.4% $89,741 77.8%
Structured 26,984 24.6% 25,574 22.2%
Total Primary $109,684 100.0% $115,315 100.0%
Prime $74,940 68.3% $79,628 69.0%
Alt-A 21,223 19.4% 22,092 19.2%
A minus and below 13,521 12.3% 13,595 11.8%
Total Primary $109,684 100.0% $115,315 100.0%
Primary risk in force ($ millions)
Flow $20,330 79.0% $21,991 81.4%
Structured 5,399 21.0% 5,021 18.6%
Total Primary $25,729 100.0% $27,012 100.0%
Flow
Prime $15,630 76.9% $16,317 74.2%
Alt-A 3,131 15.4% 3,972 18.1%
A minus and below 1,569 7.7% 1,702 7.7%
Total Flow $20,330 100.0% $21,991 100.0%
Structured
Prime $2,208 40.9% $2,105 41.9%
Alt-A 1,358 25.1% 1,174 23.4%
A minus and below 1,833 34.0% 1,742 34.7%
Total Structured $5,399 100.0% $5,021 100.0%
Total
Prime $17,838 69.3% $18,422 68.2%
Alt-A 4,489 17.5% 5,146 19.1%
A minus and below 3,402 13.2% 3,444 12.7%
Total Primary $25,729 100.0% $27,012 100.0%
Total Primary Risk in Force by FICO
Score
($ millions)
Flow
<=619 $1,321 6.5% $1,546 7.0%
620-679 6,352 31.2% 7,045 32.0%
680-739 7,459 36.7% 8,109 36.9%
>=740 5,198 25.6% 5,291 24.1%
Total Flow $20,330 100.0% $21,991 100.0%
Structured
<=619 $1,833 34.0% $1,750 34.9%
620-679 1,957 36.2% 1,805 35.9%
680-739 1,111 20.6% 992 19.8%
>=740 498 9.2% 474 9.4%
Total Structured $5,399 100.0% $5,021 100.0%
Total
<=619 $3,154 12.3% $3,296 12.2%
620-679 8,309 32.3% 8,850 32.8%
680-739 8,570 33.3% 9,101 33.7%
>=740 5,696 22.1% 5,765 21.3%
Total Primary $25,729 100.0% $27,012 100.0%
Percentage of primary risk in force
Monthlies 91% 92%
Refinances 37% 37%
95.01% LTV and above 14% 13%
ARMs
Less than 5 years 23% 23%
5 years and longer 9% 8%
Pool risk in force ($ millions)
Prime $2,098 77.4% $1,946 81.6%
Alt-A 272 10.0% 263 11.0%
A minus and below 341 12.6% 175 7.4%
Total $2,711 100.0% $2,384 100.0%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit K
December 31 December 31
2005 % 2004 %
Total Primary Risk in Force by LTV
($ millions)
95.01% and above $3,599 14.0% $3,429 12.7%
90.01% to 95.00% 8,616 33.5% 9,822 36.4%
85.01% to 90.00% 9,551 37.1% 10,290 38.1%
85.00% and below 3,963 15.4% 3,471 12.8%
Total $25,729 100.0% $27,012 100.0%
Total Primary Risk in Force by
Policy Year ($ millions)
2001 and prior $2,669 10.4% $4,202 15.6%
2002 1,989 7.7% 3,410 12.6%
2003 5,511 21.4% 9,046 33.5%
2004 7,091 27.6% 10,354 38.3%
2005 8,469 32.9% - -
Total $25,729 100.0% $27,012 100.0%
Total Pool Risk in Force by Policy
Year ($ millions)
2001 and prior $1,579 58.3% $1,659 69.6%
2002 85 3.1% 89 3.7%
2003 172 6.4% 331 13.9%
2004 294 10.8% 305 12.8%
2005 581 21.4% - 0.0%
Total Pool risk in Force $2,711 100.0% $2,384 100.0%
Other risk in force (in millions)
Seconds
1st loss 591 598
2nd loss 638 75
NIMs 261 318
International
1st loss-Hong Kong primary
mortgage insurance 271 -
2nd loss 29 25
Credit-default swaps 7,469 189
Other -
Domestic credit-default swaps 180 -
Financial guaranty wrap 270 -
Total other risk in force $9,709 $1,205
Risk to capital ratio-STAT Basis 11.6:1 10.0:1
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit L
Quarter Ended Year Ended
December 31 December 31
2005 2004 2005 2004
Direct claims paid ($ thousands)
Prime $33,156 $35,139 $121,297 $140,822
Alt-A 19,968 21,099 79,371 85,124
A Minus and below 23,762 23,772 85,980 95,438
Seconds 7,044 9,835 33,699 42,969
Total $83,930 $89,845 $320,347 $364,353
Average claim paid ($ thousands)
Prime $25.7 $25.2 $24.1 $24.1
Alt-A 38.4 37.4 36.5 38.6
A Minus and below 28.1 27.8 27.0 27.1
Seconds 20.5 26.1 22.0 27.0
Total $28.0 $28.2 $26.9 $27.7
Loss ratio - GAAP Basis 47.4% 49.7% 44.5% 49.2%
Expense ratio - GAAP Basis 28.4% 26.6% 26.7% 26.6%
75.8% 76.3% 71.2% 75.8%
Reserve for losses by category
($ thousands):
Primary insurance:
Prime $179,152 $165,936
Alt-A 137,430 160,815
A minus and below 190,312 147,604
Pool Insurance 44,135 43,023
Seconds 35,876 37,547
NIMs/Other 9,305 4,707
Total $596,210 $559,632
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit M
December 31 December 31
2005 2004
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans 508,117 553,688
Number of loans in default 18,045 17,477
Percentage of loans in default 3.55% 3.16%
Alt A
Number of insured loans 67,339 83,264
Number of loans in default 4,946 6,006
Percentage of loans in default 7.34% 7.21%
A Minus and below
Number of insured loans 54,066 58,635
Number of loans in default 7,543 6,755
Percentage of loans in default 13.95% 11.52%
Total Flow
Number of insured loans 629,522 695,587
Number of loans in default 30,534 30,238
Percentage of loans in default 4.85% 4.35%
Structured
Prime
Number of insured loans 59,457 56,792
Number of loans in default 2,640 1,957
Percentage of loans in default 4.44% 3.45%
Alt A
Number of insured loans 50,997 44,746
Number of loans in default 2,564 2,333
Percentage of loans in default 5.03% 5.21%
A Minus and below
Number of insured loans 47,348 46,037
Number of loans in default 8,472 5,923
Percentage of loans in default 17.89% 12.87%
Total Structured
Number of insured loans 157,802 147,575
Number of loans in default 13,676 10,213
Percentage of loans in default 8.67% 6.92%
Total Primary Insurance
Prime
Number of insured loans 567,574 610,480
Number of loans in default 20,685 19,434
Percentage of loans in default 3.64% 3.18%
Alt A
Number of insured loans 118,336 128,010
Number of loans in default 7,510 8,339
Percentage of loans in default 6.35% 6.51%
A Minus and below
Number of insured loans 101,414 104,672
Number of loans in default 16,015 12,678
Percentage of loans in default 15.79% 12.11%
Total Primary Insurance
Number of insured loans 787,324 843,162
Number of loans in default 44,210(1) 40,451
Percentage of loans in default 5.62% 4.80%
Pool insurance:
Number of insured loans 651,051 583,568
Number of loans in default 10,194(2) 6,749
Percentage of loans in default 1.57% 1.16%
(1) Includes approximately 300 defaults where we are in a second-loss
position.
(2) Includes approximately 2,400 defaults where we are in a second-loss
position.
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit N
Quarter Ended Year Ended
December 31 December 31
2005 2004 % 2005 2004 %
Net Premiums Written
($ thousands)
Primary and Pool
Insurance $179,658 $188,442 $746,483 $751,604
Seconds 14,102 14,169 61,803 62,480
NIMs 8,170 11,622 40,318 48,421
International 2,901 605 25,612 3,546
Credit-default swaps 408 - 3,132 -
Financial guaranty wrap 95 - 284 -
Net Premiums Written $205,334 $214,838 $877,632 $866,051
Net Premiums Earned
($ thousands)
Primary and Pool
Insurance $184,985 $174,536 $710,361 $688,875
Seconds 15,447 14,686 52,220 64,777
NIMs 7,513 12,945 39,877 59,555
International 1,228 470 3,338 1,346
Credit-default swaps 598 - 817 -
Financial guaranty wrap 95 - 284 -
Net Premiums Earned $209,866 $202,637 $806,897 $814,553
Captives
Premiums ceded to
captives($ millions) $25.3 $22.8 $92.9 $87.3
% of total premiums 12.0% 11.6% 11.5% 11.3%
NIW subject to captives($
millions) $4,223 $3,991 $12,221 $17,777
% of primary NIW 38.6% 34.1% 28.7% 39.7%
IIF subject to captives 38.6% 33.2%
RIF subject to captives 35.6% 34.9%
Persistency (twelve months
ended December 31) 58.2% 58.8%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
ALT-A
Exhibit O
Quarter Ended
($ millions) December 31
2005 % 2004 %
Primary New Insurance Written by FICO
Score
<=619 $3 0.1% $12 0.4%
620-659 440 15.4% 599 22.7%
660-679 407 14.2% 499 18.9%
680-739 1,302 45.4% 1,071 40.4%
>=740 714 24.9% 473 17.6%
Total $2,866 100.0% $2,654 100.0%
Primary Risk in Force by FICO Score
<=619 $44 1.0% $70 1.4%
620-659 936 20.9% 1,110 21.6%
660-679 767 17.0% 919 17.8%
680-739 1,903 42.4% 2,157 41.9%
>=740 839 18.7% 890 17.3%
Total $4,489 100.0% $5,146 100.0%
Primary Risk in Force by LTV
95.01% and above $190 4.2% $370 7.2%
90.01% to 95.00% 1,425 31.7% 1,816 35.3%
85.01% to 90.00% 1,938 43.2% 2,191 42.6%
85.00% and below 936 20.9% 769 14.9%
Total $4,489 100.0% $5,146 100.0%
Primary Risk in Force by Policy Year
2001 and prior $192 4.3% $372 7.2%
2002 328 7.3% 653 12.7%
2003 874 19.5% 1,758 34.2%
2004 1,432 31.9% 2,363 45.9%
2005 1,663 37.0% - -
Total $4,489 100.0% $5,146 100.0%
Year Ended
($ millions) December 31
2005 % 2004 %
Primary New Insurance Written by FICO
Score
<=619 $34 0.3% $93 0.9%
620-659 1,903 16.9% 1,854 18.3%
660-679 1,513 13.5% 1,855 18.2%
680-739 4,990 44.4% 4,475 44.0%
>=740 2,800 24.9% 1,900 18.6%
Total $11,240 100.0% $10,177 100.0%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2005
Exhibit P
Quarter Ended Year Ended
($ thousands) December 31 December 31
2005 2004 2005 2004
Investment in Affiliates-
Selected Information
C-BASS
Balance, beginning of period $343,344 $266,854 $290,073 $226,710
Net income for period 27,520 23,219 107,791 95,863
Dividends received 6,500 - 33,500 32,500
Balance, end of period $364,364 $290,073 $364,364 $290,073
Sherman
Balance, beginning of period $53,313 $73,593 $101,492 $65,979
Net income for period 28,225 26,729 110,261 83,265
Dividends received - - 110,661 49,800
Other comprehensive income 215 1,170 1,683 2,048
Sale of ownership interest - - (18,947) -
Warrant repurchase - - (2,075) -
Balance, end of period $81,753 $101,492 $81,753 $101,492
Portfolio Information:
C-BASS
Servicing portfolio $43,058,000 $33,680,000
Total assets 7,694,294 4,353,652
Servicing income 65,415 47,439 $250,838 $160,397
Net interest income 53,878 40,875 190,716 150,082
Total revenues 168,749 125,058 624,825 479,232
Sherman
Total assets $989,341 $486,193
Net revenues $226,844 $127,654 $799,195 $480,968
Radian owns a 46% interest in C-BASS and a 34.58% interest in Sherman.
All statements made in this press release that address events or
developments 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 U.S. Private Securities Litigation Reform Act of 1995. These statements
are made on the basis of management's current views and assumptions with
respect to future events. The forward-looking statements, as well as Radian's
prospects as a whole, are subject to risks and uncertainties, including the
following: changes in general financial and political conditions such as
extended national or regional economic recessions (or expansions), changes in
housing values, population trends and changes in household formation patterns,
changes in unemployment rates, changes or volatility in interest rates, or
other political instability; changes in investor perception of the strength of
private mortgage insurers or financial guaranty providers, and risks faced by
the businesses, municipalities or pools of assets covered by Radian's
insurance; the loss of a customer with whom Radian has a concentration of its
insurance in force; rising delinquencies in mortgage loans insured by Radian
resulting from increased consolidation of mortgage lenders and servicers;
increased severity or frequency of losses associated with certain Radian
products that are riskier than traditional mortgage insurance and municipal
guaranty insurance policies; material changes in persistency rates of Radian's
mortgage insurance policies; downgrades of Radian's credit ratings or the
insurance financial-strength ratings assigned by the major ratings agencies to
Radian's operating subsidiaries; heightened competition from other insurance
providers and from alternative products to private mortgage insurance and
financial guaranty insurance; changes in the charters or business practices of
Fannie Mae and Freddie Mac; the application of existing federal or state
consumer lending, insurance and other applicable laws and regulations, or
unfavorable changes in these laws and regulations or the way they are
interpreted or applied, including: (i) the possibility of private lawsuits or
investigations by state insurance departments and state attorneys general
alleging that services offered by the mortgage insurance industry, such as
captive reinsurance, pool insurance and contract underwriting, are violative
of the Real Estate Settlement Procedures Act and/or similar state regulations
(particularly in light of public reports that some state insurance departments
may review or investigate captive reinsurance arrangements used in the
mortgage insurance industry), or (ii) legislative and regulatory changes
affecting demand for private mortgage insurance or financial guaranty
insurance; 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 financial guaranty
contracts in determining gains and losses on these contracts; changes in
accounting guidance from the SEC or the Financial Accounting Standards Board
regarding income recognition and the treatment of loss reserves in the
mortgage insurance or financial guaranty industries; changes in claims against
mortgage insurance products resulting from the aging of Radian's mortgage
insurance policies; vulnerability to the performance of Radian's strategic
investments; changes in the availability of affordable or adequate reinsurance
for our non-prime risk; and international expansion of our mortgage insurance
and financial guaranty businesses into new markets and risks associated with
our international business activities. Investors are also directed to other
risks discussed in documents filed by Radian with the SEC, including the
factors detailed in our annual report on Form 10-K for the year ended December
31, 2004 in the section immediately preceding Part I of the report. We caution
you not to place undue reliance on these forward-looking statements, which are
current only as of the date of this press release. Radian does not intend to
and disclaims any duty or obligation to update or revise any forward-looking
statements made in this press release to reflect new information, future
events or for any other reason.
SOURCE Radian Group Inc.
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Related links:
http://www.radian.biz
CONTACT:
For investors, Mona Zeehandelaar,
+1-215-231-1674, or mona.zeehandelaar@radian.biz, or For the
media, Corporate Communications, +1-888-NEWS-520, or
media@radian.biz, both of Radian Group Inc.
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