Continued Growth Achieved in Mortgage Insurance and Financial Guaranty
Sectors, and in Creating Opportunities at MI-FG Intersection
PHILADELPHIA, April 19 /PRNewswire-FirstCall/ -- Radian Group Inc.
(NYSE: RDN) today reported strong results for the quarter ended March 31,
2006, as net income rose sharply to record levels; diluted net income per
share rose to $1.96; book value per share rose 13.9% and return on equity
exceeded the company's targets.
"The first quarter was successful for us in several respects," said
S.A. Ibrahim, Chief Executive Officer. "In reaching a record $163.7
million, our net income reflected important positive trends both in
mortgage insurance and financial guaranty, our two main businesses, as well
as another strong quarter for C-BASS and Sherman. We continue to leverage
our financial guaranty expertise within our mortgage insurance business to
benefit customers that are looking for MI as well as alternative credit
risk solutions. This effort will allow us to more effectively manage and
distribute our own credit risk exposure."
The key financial highlights of the quarter ended March 31, 2006, are
as follows:
Key Financial Highlights (dollars in millions, except per share data)
First quarter
Quarter ended Quarter ended
March 31, March 31, Percent
2006 2005 Change
Revenue $353.7 $306.6 15.4%
Net income $163.7 $115.6 41.6%
Diluted net income per share $1.96 $1.24 58.1%
Net premiums written $279.6 $214.8 30.2%
Net premiums earned $253.7 $247.0 2.7%
Equity in net income of affiliates $58.3 $51.3 13.6%
Book value per share $45.43 $39.89 13.9%
Radian will hold a conference call on Thursday, April 20, 2006, at 9:00
a.m. Eastern time to discuss the company's first quarter 2006 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
Investors > 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/investors/financial/corporate.aspx.
Exhibit A: Condensed Consolidated Statements of Income
Exhibit B: Condensed Consolidated Balance Sheets
Exhibit C: Segment Information Quarter Ended March 31, 2006
Exhibit D: Segment Information Quarter Ended March 31, 2005
Exhibit E: Financial Guaranty Insurance Supplemental Information -
Quarter Ended March 31, 2006
Exhibit F: Financial Guaranty Insurance Supplemental Information -
Quarter Ended March 31, 2006
Exhibit G: Mortgage Insurance Supplemental Information: New Insurance
Written, Risk Written
Exhibit H: Mortgage Insurance Supplemental Information: Insurance in
Force and Risk in Force
Exhibit I: Mortgage Insurance Supplemental Information: Risk in Force by
LTV and Policy Year and Other Risk in Force
Exhibit J: Mortgage Insurance Supplemental Information: Claims and
Reserves
Exhibit K: Mortgage Insurance Supplemental Information: Defaults
Exhibit L: Mortgage Insurance Supplemental Information: Net Premiums
Written, Net Premiums Earned and Captives
Exhibit M: Mortgage Insurance Supplemental Information: Alt-A
Exhibit N: Financial Services Supplemental Information
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
Quarter Ended
March 31
2006 2005
(In thousands, except per-share data)
Revenues:
Net premiums written $279,605 $214,840
Net premiums earned $253,697 $247,025
Net investment income 54,260 50,862
Net gains on securities 22,854 11,526
Change in fair value of derivative
instruments 17,630 (8,960)
Other income 5,211 6,108
Total revenues 353,652 306,561
Expenses:
Provision for losses 78,634 109,500
Policy acquisition costs 27,364 29,356
Other operating expenses 60,277 51,670
Interest expense 11,840 8,958
Total expenses 178,115 199,484
Equity in net income of affiliates 58,340 51,296
Pretax income 233,877 158,373
Provision for income taxes 70,179 42,761
Net income $163,698 $115,612
Diluted net income per share (1) $1.96 $1.24
(1) Net income per share reconciliation
Net income $163,698 $115,612
Interest expense on convertible senior
debentures (net of tax) - 802
Net income available to common
stockholders $163,698 $116,414
Weighted average shares outstanding
(in thousands)
Average common shares outstanding 82,937 89,488
Increase in shares-potential exercise
of options-diluted basis 770 972
Increase in shares-contingently
convertible debt (2) - 3,798
Weighted average shares outstanding
(in thousands) 83,707 94,258
(2) The 2005 period includes 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
$0.04 per share for the quarter ended March 31, 2005.
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
(In thousands, except share March 31 December 31 March 31
and per-share data) 2006 2005 2005
Assets:
Cash and investments $5,615,385 $5,521,561 $5,245,701
Investments in affiliates 436,685 446,151 383,023
Deferred policy acquisition
costs 209,524 208,325 199,943
Prepaid federal income taxes 639,704 585,514 481,049
Other assets 469,605 469,059 412,881
Total assets $7,370,903 $7,230,610 $6,722,597
Liabilities and stockholders'
equity:
Unearned premiums $874,733 $849,360 $735,768
Reserve for losses and loss
adjustment expenses 791,690 801,002 797,671
Long-term debt 747,540 747,466 717,038
Deferred federal income taxes 994,227 961,993 823,305
Other liabilities 217,292 207,909 202,223
Total liabilities 3,625,482 3,567,730 3,276,005
Common stock 97 97 97
Additional paid-in capital 591,067 629,019 819,644
Retained earnings 3,075,683 2,913,649 2,511,469
Accumulated other comprehensive
income 78,574 120,115 115,382
Total common stockholders'
equity 3,745,421 3,662,880 3,446,592
Total liabilities and
stockholders' equity $7,370,903 $7,230,610 $6,722,597
Book value per share $45.43 $44.11 $39.89
Treasury Stock Repurchases
(Year-to-Date for Periods
Presented)
Total number of shares
repurchased 1,000,000 10,767,800 (1) 6,143,075
Average price paid per share $60.24 $49.58 $48.55
Total cost of repurchased
shares $60,235,421 $533,888,969 $298,229,529
(1) Represents full year 2005
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2006
Exhibit C
Mortgage Financial Financial
(In thousands) Insurance Guaranty Services Total
Revenues:
Net premiums written $223,766 $55,839 $- $279,605
Net premiums earned $202,706 $50,991 $- $253,697
Net investment income 31,665 22,518 77 54,260
Net gains on securities 13,577 7,178 2,099 22,854
Change in fair value of
derivative instruments 9,121 8,509 - 17,630
Other income 3,634 214 1,363 5,211
Total revenues 260,703 89,410 3,539 353,652
Expenses:
Provision for losses 71,097 7,537 - 78,634
Policy acquisition costs 13,345 14,019 - 27,364
Other operating expenses 44,267 14,756 1,254 60,277
Interest expense 6,701 4,026 1,113 11,840
Total expenses 135,410 40,338 2,367 178,115
Equity in net income of
affiliates - - 58,340 58,340
Pretax income 125,293 49,072 59,512 233,877
Provision for income taxes 37,149 12,200 20,830 70,179
Net income $88,144 $36,872 $38,682 $163,698
Assets $4,466,014 $2,455,452 $449,437 $7,370,903
Deferred policy
acquisition costs 68,619 140,905 - 209,524
Reserve for losses and
loss adjustment expenses 587,114 204,576 - 791,690
Unearned premiums 233,364 641,369 - 874,733
Stockholders' equity 2,162,097 1,276,713 306,611 3,745,421
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2005
Exhibit D
Mortgage Financial Financial
(In thousands) Insurance Guaranty Services Total
Revenues:
Net premiums written $200,237 $14,603 $- $214,840
Net premiums earned $192,465 $54,560 $- $247,025
Net investment
income 28,793 22,059 10 50,862
Net gains on
securities 7,119 3,573 834 11,526
Change in fair value
of derivative
instruments 3,186 (11,957) (189) (8,960)
Other income 4,592 316 1,200 6,108
Total revenues 236,155 68,551 1,855 306,561
Expenses:
Provision for losses 97,927 11,573 - 109,500
Policy acquisition
costs 14,678 14,678 - 29,356
Other operating
expenses 33,669 14,394 3,607 51,670
Interest expense 5,124 3,099 735 8,958
Total expenses 151,398 43,744 4,342 199,484
Equity in net income
of affiliates - - 51,296 51,296
Pretax income 84,757 24,807 48,809 158,373
Provision for income
taxes 22,036 3,641 17,084 42,761
Net income $62,721 $21,166 (1) $31,725 $115,612 (1)
Assets $3,972,942 $2,354,209 $395,446 $6,722,597
Deferred policy
acquisition costs 70,873 129,070 - 199,943
Reserve for losses
and loss
adjustment
expenses 571,128 226,543 - 797,671
Unearned premiums 149,258 586,510 - 735,768
Stockholders'
equity 1,900,760 1,246,876 298,956 3,446,592
(1) Reflects a $4.1 million net loss from 1st quarter 2005 recapture of
previously ceded business by one of the primary Financial Guaranty
insurers:
Net premiums earned $(4.6)
Policy acquisition costs (1.7)
Benefit for income
taxes 2.2
Net loss $(4.1)
Radian Group Inc.
Financial Guaranty Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit E
Quarter Ended
($ in thousands, except ratios) March 31
2006 2005
Net Premiums Written:
Public finance direct $13,553 $15,433
Public finance reinsurance 17,983 17,026
Structured direct 18,272 15,057
Structured reinsurance 3,053 8,510
Trade credit reinsurance 2,978 13,319
55,839 69,345
Impact of recapture (1) - (54,742)
Net Premiums Written $55,839 $14,603
Net Premiums Earned:
Public finance direct $7,843 $8,963
Public finance reinsurance 8,293 8,513
Structured direct 21,503 18,219
Structured reinsurance 4,641 7,266
Trade credit reinsurance 8,711 16,138
50,991 59,099
Impact of recapture (2) - (4,539)
Net Premiums Earned $50,991 $54,560
Refundings included in earned premium $2,382 $2,441
Claims paid:
Trade credit reinsurance $4,000 $4,998
Other financial guaranty (110) 12,484
Conseco 4,317 7,969
Total $8,207 $25,451
Incurred losses:
Trade credit reinsurance $3,950 $7,041
Other financial guaranty 4,619 4,532
Conseco (1,032) -
Total $7,537 $11,573
Loss ratio - GAAP Basis 14.8% 21.2%
Expense ratio - GAAP Basis 56.4% 53.3%
71.2% 74.5%
Claims paid under derivatives contracts $66,639 $(2,236)
(1) Reflects the impact on net premiums written of the first quarter 2005
recapture of previously ceded business by one of the primary Financial
Guaranty insurers:
(In thousands)
Public reinsurance 48,238
Structured reinsurance 6,504
(2) Reflects the impact on net premiums earned of the first quarter 2005
recapture of previously ceded business by one of the primary Financial
Guaranty insurers:
(in thousands)
Public reinsurance 3,870
Structured reinsurance 669
Radian Group Inc.
Financial Guaranty Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit F
($ in thousands, except ratios) March 31 December 31 March 31
2006 2005 2005
Capital and surplus $983,349 $1,004,505 $1,044,603
Contingency reserve 283,163 271,907 252,508
Qualified statutory capital 1,266,512 1,276,412 1,297,111
Unearned premium reserve 757,245 751,656 694,379
Loss and loss expense reserve 114,177 108,576 132,843
Total policyholders'
reserves 2,137,934 2,136,644 2,124,333
Present value of installment
premiums 294,872 302,953 239,181
Reinsurance and soft capital
facilities 150,000 150,000 150,000
Total claims paying resources $2,582,806 $2,589,597 $2,513,514
Net debt service outstanding $117,942,386 $110,344,057 $94,647,865
Capital leverage ratio (1) 93 86 73
Claims paying leverage ratio (2) 46 43 38
Net par outstanding by product:
Public finance direct $14,391,889 $14,043,786 $12,303,648
Public finance reinsurance 34,364,344 33,047,512 30,906,909
Structured direct 29,563,075 24,608,489 15,360,714
Structured reinsurance 5,011,005 4,952,146 5,032,401
Total $83,330,313 $76,651,933 $63,603,672
Reinsurance business net par
outstanding:
Treaty 59% 58% 59%
Facultative 41% 42% 41%
Reserve for losses and LAE
Specific $43,568 $29,311 $40,503
Conseco 45,421 50,770 72,374
Non-specific 115,587 124,712 113,666
Total $204,576 $204,793 $226,543
(1) Net debt service outstanding divided by qualified statutory capital
(2) Net debt service outstanding divided by total claims paying resources
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit G
Quarter Ended
March 31
2006 % 2005 %
Primary New Insurance Written ($ in
millions)
Flow $5,234 40.9% $5,662 93.7%
Structured 7,569 59.1% 382 6.3%
Total Primary $12,803 100.0% $6,044 100.0%
Flow
Prime $3,771 72.1% $4,155 73.4%
Alt-A 1,105 21.1% 944 16.7%
A minus and below 358 6.8% 563 9.9%
Total Flow $5,234 100.0% $5,662 100.0%
Structured
Prime $2,264 29.9% $128 33.5%
Alt-A 3,917 51.8% 199 52.1%
A minus and below 1,388 18.3% 55 14.4%
Total Structured $7,569 100.0% $382 100.0%
Total
Prime $6,035 47.2% $4,283 70.9%
Alt-A 5,022 39.2% 1,143 18.9%
A minus and below 1,746 13.6% 618 10.2%
Total Primary $12,803 100.0% $6,044 100.0%
Total Primary New Insurance Written
by FICO Score
($ in millions)
Flow
<=619 $278 5.3% $387 6.8%
620-679 1,547 29.6% 1,782 31.5%
680-739 1,991 38.0% 2,043 36.1%
>=740 1,418 27.1% 1,450 25.6%
Total Flow $5,234 100.0% $5,662 100.0%
Structured
<=619 $1,388 18.3% $56 14.7%
620-679 2,181 28.8% 168 44.0%
680-739 2,505 33.1% 101 26.4%
>=740 1,495 19.8% 57 14.9%
Total Structured $7,569 100.0% $382 100.0%
Total
<=619 $1,666 13.0% $443 7.3%
620-679 3,728 29.1% 1,950 32.3%
680-739 4,496 35.1% 2,144 35.5%
>=740 2,913 22.8% 1,507 24.9%
Total Primary $12,803 100.0% $6,044 100.0%
Percentage of primary new insurance
written
Monthlies 85% 93%
Refinances 39% 37%
95.01% LTV and above 8% 14%
ARMs
Less than 5 years 41% 23%
5 years and longer 19% 13%
Primary risk written ($ in millions)
Flow $1,329 55.9% $1,414 96.0%
Structured 1,050 44.1% 60 4.0%
Total Primary $2,379 100.0% $1,474 100.0%
Pool risk written (In millions) $61 $56
Other risk written (In millions)
Seconds
1st loss $24 $4
2nd loss 132 6
NIMs 89 28
International
1st loss-Hong Kong primary
mortgage insurance 17 50
Reinsurance 2 10
Credit default swaps - -
Other
Domestic credit default swaps 20 -
Financial guaranty wrap - 511
Total other risk written $284 $609
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit H
March 31 March 31
2006 % 2005 %
Primary insurance in force ($ in
millions)
Flow $81,597 71.6% $87,308 79.3%
Structured 32,316 28.4% 22,838 20.7%
Total Primary $113,913 100.0% $110,146 100.0%
Prime $76,141 66.8% $77,048 70.0%
Alt-A 23,767 20.9% 20,377 18.5%
A minus and below 14,005 12.3% 12,721 11.5%
Total Primary $113,913 100.0% $110,146 100.0%
Primary risk in force ($ in millions)
Flow $20,073 77.0% $21,367 82.6%
Structured 6,003 23.0% 4,496 17.4%
Total Primary $26,076 100.0% $25,863 100.0%
Flow
Prime $15,595 77.7% $15,999 74.9%
Alt-A 2,948 14.7% 3,701 17.3%
A minus and below 1,530 7.6% 1,667 7.8%
Total Flow $20,073 100.0% $21,367 100.0%
Structured
Prime $2,379 39.6% $1,903 42.3%
Alt-A 1,623 27.1% 1,044 23.2%
A minus and below 2,001 33.3% 1,549 34.5%
Total Structured $6,003 100.0% $4,496 100.0%
Total
Prime $17,974 68.9% $17,902 69.3%
Alt-A 4,571 17.5% 4,745 18.3%
A minus and below 3,531 13.6% 3,216 12.4%
Total Primary $26,076 100.0% $25,863 100.0%
Total Primary Risk in Force by FICO
Score
($ in millions)
Flow
<=619 $1,281 6.4% $1,492 7.0%
620-679 6,224 31.0% 6,828 31.9%
680-739 7,383 36.8% 7,862 36.8%
>=740 5,185 25.8% 5,185 24.3%
Total Flow $20,073 100.0% $21,367 100.0%
Structured
<=619 $2,002 33.3% $1,552 34.5%
620-679 2,170 36.2% 1,610 35.8%
680-739 1,268 21.1% 896 19.9%
>=740 563 9.4% 438 9.8%
Total Structured $6,003 100.0% $4,496 100.0%
Total
<=619 $3,283 12.6% $3,044 11.8%
620-679 8,394 32.2% 8,438 32.7%
680-739 8,651 33.2% 8,758 33.8%
>=740 5,748 22.0% 5,623 21.7%
Total Primary $26,076 100.0% $25,863 100.0%
Percentage of primary risk in force
Monthlies 90% 91%
Refinances 36% 37%
95.01% LTV and above 14% 13%
ARMs
Less than 5 years 24% 22%
5 years and longer 9% 8%
Pool risk in force ($ in millions)
Prime $2,098 76.3% $1,971 82.7%
Alt-A 272 9.9% 238 10.0%
A minus and below 380 13.8% 174 7.3%
Total $2,750 100.0% $2,383 100.0%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit I
March 31 March 31
2006 % 2005 %
Total Primary Risk in Force by LTV
($ in millions)
95.01% and above $3,680 14.1% $3,416 13.2%
90.01% to 95.00% 8,473 32.5% 9,408 36.4%
85.01% to 90.00% 9,476 36.3% 9,872 38.2%
85.00% and below 4,447 17.1% 3,167 12.2%
Total $26,076 100.0% $25,863 100.0%
Total Primary Risk in Force by
Policy Year ($ in millions)
2002 and prior $4,275 16.4% $6,700 26.0%
2003 5,013 19.2% 8,103 31.3%
2004 6,407 24.6% 9,627 37.2%
2005 8,015 30.7% 1,433 5.5%
2006 2,366 9.1% - -
Total $26,076 100.0% $25,863 100.0%
Total Pool Risk in Force by Policy
Year ($ in millions)
2002 and prior $1,657 60.3% $1,737 72.9%
2003 158 5.7% 284 11.9%
2004 293 10.7% 304 12.8%
2005 581 21.1% 58 2.4%
2006 61 2.2% - -
Total Pool risk in Force $2,750 100.0% $2,383 100.0%
Other risk in force (In millions)
Seconds
1st loss $594 $586
2nd loss 756 73
NIMs 303 315
International
1st loss-Hong Kong primary
mortgage insurance 288 50
Reinsurance 29 28
Credit default swaps 7,581 181
Other
Domestic credit default swaps 200 -
Financial guaranty wrap 205 511
Total other risk in force $9,956 $1,744
Risk to capital ratio-STAT Basis 11.1:1 9.9:1
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit J
Quarter Ended
March 31
2006 2005
Direct claims paid ($ in thousands)
Prime $29,965 $31,871
Alt-A 18,707 22,332
A minus and below 23,263 20,884
Seconds 7,865 10,607
Total $79,800 $85,694
Average claim paid ($ in thousands)
Prime $26.8 $24.5
Alt-A 40.2 37.0
A minus and below 29.0 26.4
Seconds 22.8 25.3
Total $29.2 $27.5
Loss ratio -GAAP Basis 35.1% 50.9%
Expense ratio - GAAP Basis 28.4% 25.1%
63.5% 76.0%
Reserve for losses by category
($ in thousands):
Prime $181,001 $164,847
Alt-A 135,336 161,102
A minus and below 195,246 150,802
Pool Insurance 36,199 42,800
Seconds 30,144 45,611
Other 9,188 5,966
Total $587,114 $571,128
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit K
March 31 December 31 March 31
2006 2005 2005
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans 501,632 508,117 540,847
Number of loans in default 15,117 18,045 15,816
Percentage of loans in default 3.01% 3.55% 2.92%
Alt-A
Number of insured loans 64,555 67,339 78,682
Number of loans in default 4,468 4,946 5,453
Percentage of loans in default 6.92% 7.34% 6.93%
A minus and below
Number of insured loans 52,700 54,066 57,637
Number of loans in default 6,833 7,543 6,342
Percentage of loans in default 12.97% 13.95% 11.00%
Total Flow
Number of insured loans 618,887 629,522 677,166
Number of loans in default 26,418 30,534 27,611
Percentage of loans in default 4.27% 4.85% 4.08%
Structured
Prime
Number of insured loans 67,353 59,457 51,125
Number of loans in default 2,414 2,640 1,934
Percentage of loans in default 3.58% 4.44% 3.78%
Alt-A
Number of insured loans 63,800 50,997 40,326
Number of loans in default 2,491 2,564 2,373
Percentage of loans in default 3.90% 5.03% 5.88%
A minus and below
Number of insured loans 51,277 47,348 41,269
Number of loans in default 7,859 8,472 6,149
Percentage of loans in default 15.33% 17.89% 14.90%
Total Structured
Number of insured loans 182,430 157,802 132,720
Number of loans in default 12,764 13,676 10,456
Percentage of loans in default 7.00% 8.67% 7.88%
Total Primary Insurance
Prime
Number of insured loans 568,985 567,574 591,972
Number of loans in default 17,531 20,685 17,750
Percentage of loans in default 3.08% 3.64% 3.00%
Alt-A
Number of insured loans 128,355 118,336 119,008
Number of loans in default 6,959 7,510 7,826
Percentage of loans in default 5.42% 6.35% 6.58%
A minus and below
Number of insured loans 103,977 101,414 98,906
Number of loans in default 14,692 16,015 12,491
Percentage of loans in default 14.13% 15.79% 12.63%
Total Primary Insurance
Number of insured loans 801,317 787,324 809,886
Number of loans in default 39,182 (1) 44,210 (1) 38,067
Percentage of loans in default 4.89% 5.62% 4.70%
Pool insurance:
Number of insured loans 627,815 651,051 589,934
Number of loans in default 15,072 (2) 10,194 (2) 6,249
Percentage of loans in default 2.40% 1.57% 1.06%
(1) Includes approximately 439 and 452 defaults at March 31, 2006 and
December 31, 2005, respectively, where reserves have not been
established because no claim payment is currently anticipated.
(2) Includes approximately 9,019 and 3,699 defaults at March 31, 2006
and December 31, 2005, respectively, where reserves have not been
established because no claim payment is currently anticipated.
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit L
Quarter Ended
March 31
2006 2005
Net Premiums Written (in thousands)
Primary and Pool Insurance $187,971 $176,874
Seconds 16,014 11,801
NIMs 12,623 9,360
International 2,561 2,202
Domestic credit default swaps 4,549 -
Financial guaranty wrap 48 -
Net Premiums Written $223,766 $200,237
Net Premiums Earned (in thousands)
Primary and Pool Insurance $173,239 $169,711
Seconds 17,479 12,395
NIMs 7,798 9,854
International 3,211 505
Domestic credit default swaps 931 -
Financial guaranty wrap 48 -
Net Premiums Earned $202,706 $192,465
Captives
Premiums ceded to captives (in millions) $25.5 $23.8
% of total premiums 12.7% 12.2%
NIW subject to captives (in millions) $2,776 $2,286
% of primary NIW 21.7% 37.8%
IIF subject to captives 32.2% 33.7%
RIF subject to captives 35.2% 35.5%
Persistency (twelve months ended March 31) 58.6% 58.4%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2006
ALT-A
Exhibit M
Quarter Ended
($ millions) March 31
2006 % 2005 %
Primary New Insurance Written by FICO
Score
<=619 $6 0.1% $6 0.5%
620-659 709 14.1% 143 12.5%
660-679 634 12.6% 199 17.4%
680-739 2,324 46.3% 520 45.5%
>=740 1,349 26.9% 275 24.1%
Total $5,022 100.0% $1,143 100.0%
Primary Risk in Force by FICO Score
<=619 $34 0.7% $62 1.3%
620-659 937 20.5% 982 20.7%
660-679 766 16.8% 849 17.9%
680-739 1,961 42.9% 2,004 42.2%
>=740 873 19.1% 848 17.9%
Total $4,571 100.0% $4,745 100.0%
Primary Risk in Force by LTV
95.01% and above $161 3.5% $324 6.8%
90.01% to 95.00% 1,360 29.8% 1,683 35.5%
85.01% to 90.00% 1,930 42.2% 2,051 43.2%
85.00% and below 1,120 24.5% 687 14.5%
Total $4,571 100.0% $4,745 100.0%
Primary Risk in Force by Policy Year
2002 and prior $448 9.8% $847 17.8%
2003 758 16.6% 1,500 31.6%
2004 1,180 25.8% 2,134 45.0%
2005 1,538 33.6% 264 5.6%
2006 647 14.2% - -
Total $4,571 100.0% $4,745 100.0%
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter Ended and as of March 31, 2006
Exhibit N
Quarter Ended
March 31
(In thousands) 2006 2005
Investment in Affiliates-Selected Information
C-BASS
Balance, beginning of period $364,364 $290,073
Net income for period 30,026 28,117
Dividends received 7,347 8,500
Balance, end of period $387,043 $309,690
Sherman
Balance, beginning of period $81,753 $101,492
Net income for period 28,315 23,179
Dividends received 60,515 51,875
Other comprehensive income 55 1,153
Sale of ownership interest - -
Warrant repurchase - (2,075)
Balance, end of period $49,608 $71,874
Portfolio Information:
C-BASS
Servicing portfolio $53,340,000 $36,530,000
Total assets 4,704,015 3,617,911
Servicing income 74,069 59,794
Net interest income 65,040 41,252
Total revenues 171,124 147,300
Sherman
Total assets $1,010,930 $740,604
Net revenues $237,672 $148,625
Radian owns a 46% interest in C-BASS and a 34.58% interest in Sherman.
All statements made in this news 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,
and changes or volatility in interest rates; 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; 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
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, 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 are investigating 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. For more information regarding these
risks and uncertainties, as well as certain additional risks that we face,
investors should refer to the risk factors detailed in Part I, Item 1A in
our annual report on Form 10-K for the year ended December 31, 2005. 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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