PHILADELPHIA, April 24 /PRNewswire-FirstCall/ -- Radian Group Inc.
(NYSE: RDN) today reported that for the quarter ended March 31, 2007,
Radian earned net income of $113.5 million and diluted net income per share
of $1.42. Book value per share at March 31, 2007, was $52.00, an increase
of 14 percent from a year earlier.
"Our core mortgage insurance and financial guaranty businesses had
strong production performance this quarter, with a 35 percent jump in flow
MI over last year and strong growth in written and earned premium for FG,"
said Chief Executive Officer S.A. Ibrahim.
"Our primary book was not significantly affected by the disruptions in
the sub-prime market in recent months," Mr. Ibrahim added. "I believe this
is a validation of our long-term approach to risk management in all areas,
including sub-prime and Alt A, where we have remained disciplined in
diversifying our book of business across geographies, products, clients and
origination years."
In the Financial Services segment, net income was $10.8 million, down
from $38.7 million for the same period last year, primarily as a result of
an operating loss at C-BASS.
The company also provided an update on its proposed merger with MGIC,
which was announced in February this year. Radian and MGIC currently
anticipate completing the merger late in the third quarter or early in the
fourth quarter of 2007. To do this, both Radian and MGIC must obtain
stockholder approval, with votes scheduled for early next month, as well as
additional regulatory approvals.
The key financial highlights of the quarter ended March 31, 2007, are
as follows:
Key Financial Highlights (dollars in thousands, except per share data)
First quarter
Quarter ended Quarter ended
March 31, March 31, Percent
2007 2006 Change
Revenue $341.5 $353.7 (3.4%)
Net income $113.5 $163.7 (30.7%)
Diluted net income per share $1.42 $1.96 (27.6%)
Net premiums written $277.6 $279.6 (0.7%)
Net premiums earned $249.1 $253.7 (1.8%)
Equity in net income of
affiliates $22.8 $58.3 (60.9%)
Book value per share $52.00 $45.74 13.7%
Radian will hold a conference call on Wednesday, April 25, 2007, at
9:00 a.m. Eastern time to discuss the company's first quarter 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.
About Radian Radian Group Inc. is a global credit risk management
company headquartered in Philadelphia with significant operations in 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 .
Additional Information about the Radian/MGIC Transaction
MGIC Investment Corporation and Radian Group Inc. have filed a joint
proxy statement/prospectus and other relevant documents concerning the
MGIC/Radian merger transaction with the United States Securities and
Exchange Commission (the "SEC"). STOCKHOLDERS ARE URGED TO READ THE JOINT
PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN
CONNECTION WITH THE MERGER TRANSACTION OR INCORPORATED BY REFERENCE IN THE
JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors may obtain these documents free of charge at the
SEC's website (http://www.sec.gov). In addition, documents filed with the
SEC by MGIC are available free of charge by contacting Investor Relations
at MGIC Investment Corporation, 250 East Kilbourn Avenue, Milwaukee, WI
53202. Documents filed with the SEC by Radian are available free of charge
by calling Investor Relations at (215) 231-1486.
Radian and MGIC and their respective directors and executive officers,
certain members of management and other employees are participants in the
solicitation of proxies from Radian stockholders and MGIC stockholders with
respect to the proposed merger transaction. Information regarding the
directors and executive officers of Radian and MGIC and the interests of
such participants are included in the joint proxy statement/prospectus
filed with the SEC which relates to the merger transaction, Radian's 2007
annual meeting of stockholders and MGIC's 2007 annual meeting of
stockholders-and in the other relevant documents filed with the SEC.
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, 2007
Exhibit D: Segment Information Quarter Ended March 31, 2006
Exhibit E: Financial Guaranty Insurance Supplemental Information -
Quarter Ended and as of March 31, 2007
Exhibit F: Financial Guaranty Insurance Supplemental Information -
Quarter Ended and as of March 31, 2007
Exhibit G: Mortgage Insurance Supplemental Information: New Insurance
Written and 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 and Earned, Smart Home, Captives and Persistency
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
2007 2006
(In thousands, except per-share data)
Revenues:
Net premiums written $277,634 $279,605
Net premiums earned - insurance $214,507 $227,234
Net premiums earned - credit derivatives 34,628 26,463
Net premiums earned - total 249,135 253,697
Net investment income 60,996 54,260
Net gains on securities 13,745 22,854
Change in fair value of derivative instruments 13,789 17,630
Other income 3,818 5,211
Total revenues 341,483 353,652
Expenses:
Provision for losses 107,042 78,634
Policy acquisition costs 28,254 27,364
Other operating expenses 54,367 60,277
Merger expenses 3,328 -
Interest expense 13,056 11,840
Total expenses 206,047 178,115
Equity in net income of affiliates 22,772 58,340
Pretax income 158,208 233,877
Provision for income taxes 44,741 70,179
Net income $113,467 $163,698
Diluted net income per share (1) $1.42 $1.96
(1) Weighted average shares outstanding
(in thousands)
Average common shares outstanding 79,428 82,937
Increase in shares-potential exercise of
options-diluted basis 652 770
Weighted average shares outstanding
(in thousands) 80,080 83,707
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 and March 31 December 31
per-share data) 2007 2006
Assets:
Cash and investments $6,078,573 $5,803,228
Investments in affiliates 588,323 618,841
Deferred policy acquisition costs 225,597 221,769
Prepaid federal income taxes 788,240 808,740
Other assets 444,175 476,093
Total assets $8,124,908 $7,928,671
Liabilities and stockholders' equity:
Unearned premiums $974,768 $943,687
Reserve for losses and loss adjustment
expenses 852,462 842,283
Long-term debt 747,849 747,770
Current federal income taxes 224,999 -
Deferred federal income taxes 942,167 1,129,740
Other liabilities 207,887 197,634
Total liabilities 3,950,132 3,861,114
Common stock 97 97
Additional paid-in capital 442,368 416,193
Retained earnings 3,584,236 3,489,290
Accumulated other comprehensive income 148,075 161,977
Total common stockholders' equity 4,174,776 4,067,557
Total liabilities and stockholders'
equity $8,124,908 $7,928,671
Book value per share $52.00 $51.23
Treasury Stock Repurchases (Year-to-
Date for Periods Presented)
Total number of shares repurchased 70,968 4,500,000
Average price paid per share $56.09 $58.58
Total cost of repurchased shares $3,980,441 $263,600,341
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2007
Exhibit C
Mortgage Financial Financial
(In thousands) Insurance Guaranty Services Total
Revenues:
Net premiums written $222,289 $55,345 $- $277,634
Net premiums earned -
insurance $180,243 $34,264 $- $214,507
Net premiums earned -
credit derivatives 15,689 18,939 - 34,628
Net premiums earned - total 195,932 53,203 - 249,135
Net investment income 35,559 25,437 - 60,996
Net gains (losses) on
securities 11,123 2,824 (202) 13,745
Change in fair value of
derivative instruments (11,351) 25,140 - 13,789
Other income 2,849 140 829 3,818
Total revenues 234,112 106,744 627 341,483
Expenses:
Provision for losses 112,854 (5,812) - 107,042
Policy acquisition costs 16,523 11,731 - 28,254
Other operating expenses 36,272 14,235 3,860 54,367
Merger expenses 3,328 - - 3,328
Interest expense 6,854 4,596 1,606 13,056
Total expenses 175,831 24,750 5,466 206,047
Equity in net income of
affiliates - - 22,772 22,772
Pretax income 58,281 81,994 17,933 158,208
Provision for income taxes 13,579 24,078 7,084 44,741
Net income $44,702 $57,916 $10,849 $113,467
Assets $4,774,210 $2,757,800 $592,898 $8,124,908
Deferred policy
acquisition costs 67,835 157,762 - 225,597
Reserve for losses and
loss adjustment expenses 676,691 175,771 - 852,462
Unearned premiums 277,135 697,633 - 974,768
Stockholders' equity 2,322,374 1,457,712 394,690 4,174,776
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended March 31, 2006
Exhibit D
Mortgage Financial Financial
(In thousands) Insurance Guaranty Services Total
Revenues:
Net premiums written $223,766 $55,839 $- $279,605
Net premiums earned -
insurance $192,971 $34,263 $- $227,234
Net premiums earned -
credit derivatives 9,735 16,728 - 26,463
Net premiums earned - total 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 $4,504,282 $2,456,875 $449,437 $7,410,594
Deferred policy
acquisition costs 68,619 140,905 - 209,524
Reserve for losses and
loss adjustment expenses 587,114 204,576 - 791,690
Unearned premiums 233,364 641,369 - 874,733
Stockholders' equity 2,186,177 1,278,432 306,611 3,771,220
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit E
Quarter Ended
($ in thousands, except ratios) March 31
2007 2006
Net Premiums Written:
Public finance direct $12,780 $13,438
Public finance reinsurance 18,154 17,983
Structured direct 5,247 3,991
Structured reinsurance 5,912 3,005
Trade credit reinsurance (74) 2,978
Net premiums written - insurance 42,019 41,395
Net premiums written - credit derivatives 13,326 14,444
Total Net Premiums Written $55,345 $55,839
Net Premiums Earned:
Public finance direct $11,585 $7,753
Public finance reinsurance 11,100 8,293
Structured direct 4,691 4,912
Structured reinsurance 6,194 4,594
Trade credit reinsurance 694 8,711
Net premiums earned - insurance 34,264 34,263
Net premiums earned - credit derivatives 18,939 16,728
Total Net Premiums Earned $53,203 $50,991
Refundings included in earned premium $6,586 $2,382
Claims paid:
Trade credit reinsurance $2,646 $4,000
Other financial guaranty (69) (110)
Conseco 3,108 4,317
Total $5,685 $8,207
Incurred losses:
Trade credit reinsurance $(3,136) $3,950
Other financial guaranty (2,676) 4,619
Conseco - (1,032)
Total $(5,812) $7,537
Loss ratio- GAAP Basis (10.9%) 14.8%
Expense ratio- GAAP Basis 48.8% 56.4%
37.9% 71.2%
Net (receipts) payments under
derivatives contracts $(11,228) $66,639
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit F
($ in thousands, except ratios) March 31 December 31 March 31
2007 2006 2006
Capital and surplus $1,042,548 $1,014,958 $983,349
Contingency reserve 357,176 336,719 283,163
Qualified statutory
capital 1,399,724 1,351,677 1,266,512
Unearned premium reserve 837,024 829,340 757,245
Loss and loss expense reserve 88,253 96,829 114,177
Total statutory policyholders'
reserves 2,325,001 2,277,846 2,137,934
Present value of installment
premiums 377,105 345,565 294,872
Reinsurance and soft capital
facilities 150,000 150,000 150,000
Total statutory claims
paying resources $2,852,106 $2,773,411 $2,582,806
Net debt service outstanding $155,568,589 $143,728,116 $117,942,386
Capital leverage ratio (1) 111 106 93
Claims paying leverage ratio(2) 55 52 46
Net par outstanding by product:
Public finance direct $16,590,493 $16,324,170 $14,391,889
Public finance reinsurance 39,311,697 37,488,972 34,494,004
Structured direct 52,945,169 44,960,360 29,563,075
Structured reinsurance 5,261,220 5,192,122 4,881,345
Total $114,108,579 $103,965,624 $83,330,313
Reinsurance business net par
outstanding:
Treaty 59% 59% 59%
Facultative 41% 41% 41%
Reserve for losses and LAE
Specific $33,011 $35,320 $43,568
Conseco 30,866 33,975 45,421
Non-specific 111,894 119,752 115,587
Total $175,771 $189,047 $204,576
(1) Net debt service outstanding divided by qualified statutory capital
(2) Net debt service outstanding divided by total statutory claims paying
resources
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit G
Quarter Ended
March 31
2007 % 2006 %
Primary New Insurance Written ($ in
millions)
Flow $7,049 53.3% $5,234 40.9%
Structured 6,178 46.7% 7,569 59.1%
Total Primary $13,227 100.0% $12,803 100.0%
Flow
Prime $5,050 71.6% $3,771 72.1%
Alt-A 1,401 19.9% 1,105 21.1%
A minus and below 598 8.5% 358 6.8%
Total Flow $7,049 100.0% $5,234 100.0%
Structured
Prime $93 1.5% $2,264 29.9%
Alt-A 5,905 95.6% 3,917 51.8%
A minus and below 180 2.9% 1,388 18.3%
Total Structured $6,178 100.0% $7,569 100.0%
Total
Prime $5,143 38.9% $6,035 47.2%
Alt-A 7,306 55.2% 5,022 39.2%
A minus and below 778 5.9% 1,746 13.6%
Total Primary $13,227 100.0% $12,803 100.0%
Total Primary New Insurance Written
by FICO Score
($ in millions)
Flow
< = 619 $486 6.9% $278 5.3%
620-679 2,255 32.0% 1,547 29.6%
680-739 2,479 35.2% 1,991 38.0%
> = 740 1,829 25.9% 1,418 27.1%
Total Flow $7,049 100.0% $5,234 100.0%
Structured
< = 619 $126 2.0% $1,388 18.3%
620-679 1,376 22.3% 2,181 28.8%
680-739 3,068 49.7% 2,505 33.1%
> = 740 1,608 26.0% 1,495 19.8%
Total Structured $6,178 100.0% $7,569 100.0%
Total
< = 619 $612 4.6% $1,666 13.0%
620-679 3,631 27.5% 3,728 29.1%
680-739 5,547 41.9% 4,496 35.1%
> = 740 3,437 26.0% 2,913 22.8%
Total Primary $13,227 100.0% $12,803 100.0%
Percentage of primary new insurance
written
Refinances 37% 39%
95.01% LTV and above 16% 8%
ARMs
Less than 5 years 42% 41%
5 years and longer 5% 19%
Primary risk written ($ in millions)
Flow $1,746 90.0% $1,329 55.9%
Structured 194 10.0% 1,050 44.1%
Total Primary $1,940 100.0% $2,379 100.0%
Pool risk written (In millions) $89 $61
Other risk written (In millions)
Seconds
1st loss $3 $24
2nd loss 21 132
NIMs 268 89
International
1st loss-Hong Kong primary
mortgage insurance 19 17
Reinsurance 17 2
Other
Domestic credit default swaps - 20
Total other risk written $328 $284
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit H
March 31 March 31
2007 % 2006 %
Primary insurance in force ($ in
millions)
Flow $85,649 71.5% $81,597 71.6%
Structured 34,063 28.5% 32,316 28.4%
Total Primary $119,712 100.0% $113,913 100.0%
Prime $77,414 64.7% $76,141 66.8%
Alt-A 31,023 25.9% 23,767 20.9%
A minus and below 11,275 9.4% 14,005 12.3%
Total Primary $119,712 100.0% $113,913 100.0%
Primary risk in force ($ in millions)
Flow $21,267 82.7% $20,073 77.0%
Structured 4,446 17.3% 6,003 23.0%
Total Primary $25,713 100.0% $26,076 100.0%
Flow
Prime $16,653 78.3% $15,595 77.7%
Alt-A 3,015 14.2% 2,948 14.7%
A minus and below 1,599 7.5% 1,530 7.6%
Total Flow $21,267 100.0% $20,073 100.0%
Structured
Prime $1,797 40.4% $2,379 39.6%
Alt-A 1,442 32.4% 1,623 27.1%
A minus and below 1,207 27.2% 2,001 33.3%
Total Structured $4,446 100.0% $6,003 100.0%
Total
Prime $18,450 71.8% $17,974 68.9%
Alt-A 4,457 17.3% 4,571 17.5%
A minus and below 2,806 10.9% 3,531 13.6%
Total Primary $25,713 100.0% $26,076 100.0%
Total Primary Risk in Force by FICO
Score
($ in millions)
Flow
< = 619 $1,381 6.5% $1,281 6.4%
620-679 6,574 30.9% 6,224 31.0%
680-739 7,733 36.4% 7,383 36.8%
> = 740 5,579 26.2% 5,185 25.8%
Total Flow $21,267 100.0% $20,073 100.0%
Structured
< = 619 $1,205 27.1% $2,002 33.3%
620-679 1,539 34.6% 2,170 36.2%
680-739 1,130 25.4% 1,268 21.1%
> = 740 572 12.9% 563 9.4%
Total Structured $4,446 100.0% $6,003 100.0%
Total
< = 619 $2,586 10.0% $3,283 12.6%
620-679 8,113 31.6% 8,394 32.2%
680-739 8,863 34.5% 8,651 33.2%
> = 740 6,151 23.9% 5,748 22.0%
Total Primary $25,713 100.0% $26,076 100.0%
Percentage of primary risk in force
Refinances 33% 36%
95.01% LTV and above 19% 14%
ARMs
Less than 5 years 18% 24%
5 years and longer 9% 9%
Pool risk in force ($ in millions)
Prime $2,207 72.0% $2,098 76.3%
Alt-A 301 9.8% 272 9.9%
A minus and below 558 18.2% 380 13.8%
Total $3,066 100.0% $2,750 100.0%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit I
March 31 March 31
2007 % 2006 %
Total Primary Risk in Force by LTV
($ in millions)
95.01% and above $4,795 18.6% $3,680 14.1%
90.01% to 95.00% 7,965 31.0% 8,473 32.5%
85.01% to 90.00% 9,157 35.6% 9,476 36.3%
85.00% and below 3,796 14.8% 4,447 17.1%
Total $25,713 100.0% $26,076 100.0%
Total Primary Risk in Force by
Policy Year ($ in millions)
2003 and prior 6,653 25.9% $9,288 35.6%
2004 4,198 16.3% 6,407 24.6%
2005 6,137 23.9% 8,015 30.7%
2006 6,815 26.5% 2,366 9.1%
2007 1,910 7.4% - 0.0%
Total $25,713 100.0% $26,076 100.0%
Total Pool Risk in Force by Policy
Year ($ in millions)
2003 and prior 1,749 57.0% $1,815 66.0%
2004 290 9.5% 293 10.7%
2005 650 21.2% 581 21.1%
2006 285 9.3% 61 2.2%
2007 92 3.0% - -
Total Pool risk in Force $3,066 100.0% $2,750 100.0%
Other risk in force (In millions)
Seconds
1st loss $555 $594
2nd loss 605 756
NIMs 783 303
International
1st loss-Hong Kong primary
mortgage insurance 353 288
Reinsurance 61 29
Credit default swaps 7,875 7,581
Other
Domestic credit default swaps 212 200
Financial guaranty wrap - 205
Total other risk in force $10,444 $9,956
Risk to capital ratio-STAT Basis 10.4:1 11.1:1
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit J
Quarter Ended
March 31
2007 2006
Direct claims paid (In thousands)
Prime $33,125 $30,109
Alt-A 19,998 18,790
A minus and below 29,080 23,391
Seconds and other 13,621 7,903
Total $95,824 $80,193
Average claim paid (In thousands)
Prime $28.1 $26.9
Alt-A 39.7 40.4
A minus and below 29.6 29.1
Seconds 28.8 22.9
Total 30.6 29.4
Loss ratio -GAAP Basis 57.6% 35.1%
Expense ratio - GAAP Basis 26.9% 28.4%
84.5% 63.5%
Reserve for losses by category (In thousands):
Prime $200,262 $181,001
Alt-A 146,329 135,336
A minus and below 228,066 195,246
Pool Insurance 34,599 36,199
Seconds 38,347 30,144
Other 900 9,188
Reserve for losses, net 648,503 587,114
Reinsurance recoverable 28,188(1) -
Total $676,691 $587,114
(1) Reinsurance recoverable on a first-loss second lien captive.
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit K
March 31 December 31 March 31
2007 2006 2006
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans 504,941 500,464 501,632
Number of loans in default 14,013 15,141 15,117
Percentage of loans in default 2.78% 3.03% 3.01%
Alt-A
Number of insured loans 65,075 63,469 64,555
Number of loans in default 4,513 4,348 4,468
Percentage of loans in default 6.94% 6.85% 6.92%
A minus and below
Number of insured loans 53,379 52,440 52,700
Number of loans in default 6,704 7,250 6,833
Percentage of loans in default 12.56% 13.83% 12.97%
Total Flow
Number of insured loans 623,395 616,373 618,887
Number of loans in default 25,230 26,739 26,418
Percentage of loans in default 4.05% 4.34% 4.27%
Structured
Prime
Number of insured loans 59,194 62,680 67,353
Number of loans in default 3,231 3,300 2,414
Percentage of loans in default 5.46% 5.26% 3.58%
Alt-A
Number of insured loans 84,050 70,164 63,800
Number of loans in default 3,922 3,647 2,491
Percentage of loans in default 4.67% 5.20% 3.90%
A minus and below
Number of insured loans 34,429 36,597 51,277
Number of loans in default 7,971 9,014 7,859
Percentage of loans in default 23.15% 24.63% 15.33%
Total Structured
Number of insured loans 177,673 169,441 182,430
Number of loans in default 15,124 15,961 12,764
Percentage of loans in default 8.51% 9.42% 7.00%
Total Primary Insurance
Prime
Number of insured loans 564,135 563,144 568,985
Number of loans in default 17,244 18,441 17,531
Percentage of loans in default 3.06% 3.27% 3.08%
Alt-A
Number of insured loans 149,125 133,633 128,355
Number of loans in default 8,435 7,995 6,959
Percentage of loans in default 5.66% 5.98% 5.42%
A minus and below
Number of insured loans 87,808 89,037 103,977
Number of loans in default 14,675 16,264 14,692
Percentage of loans in default 16.71% 18.27% 14.13%
Total Primary Insurance
Number of insured loans 801,068 785,814 801,317
Number of loans in default 40,354 (1) 42,700 (1) 39,182 (1)
Percentage of loans in default 5.04% 5.43% 4.89%
Pool insurance:
Number of loans in default 17,989 (2) 18,681 (2) 15,072 (2)
(1) Includes approximately 1,541, 1,161 and 439 defaults at March 31,
2007, December 31, 2006 and March 31, 2006, respectively, where
reserves have not been established because no claim payment is
currently anticipated.
(2) Includes approximately 13,036, 13,309 and 9,019 defaults at March 31,
2007, December 31, 2006 and March 31, 2006, 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, 2007
Exhibit L
Quarter Ended
March 31
2007 2006
Net Premiums Written (In thousands)
Primary and Pool Insurance $192,108 $193,446
Seconds 11,179 10,539
International 3,124 1,920
Net premiums written - insurance 206,411 205,905
Net premiums written - credit derivatives 15,878 17,861
Total Net Premiums Written $222,289 $223,766
Net Premiums Earned (In thousands)
Primary and Pool Insurance $167,155 $175,808
Seconds 9,172 14,910
International 3,916 2,253
Net premiums earned - insurance 180,243 192,971
Net premiums earned - credit derivatives 15,689 9,735
Total Net Premiums Earned $195,932 $202,706
SMART HOME (In millions)
Ceded Premiums Written $3.2 $2.2
Ceded Premiums Earned $2.9 $2.4
Captives
Premiums ceded to captives (In millions) $28.1 $22.9
% of total premiums 14.2% 11.4%
NIW subject to captives (In millions) $4,994 $2,776
% of primary NIW 37.8% 21.7%
IIF included in captives (1) 34.3% 32.2%
RIF included in captives (1) 39.7% 35.2%
Persistency (twelve months ended March 31) 69.5% 58.6%
March 31 March 31
2007 2006
SMART HOME
% of Primary RIF included in Smart
Home Transactions (1) 9.0% 7.1%
(1) Radian reinsures the middle layer risk positions, while retaining a
significant portion of the total risk comprising the first loss and
most remote risk positions.
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of March 31, 2007
ALT-A
Exhibit M
Quarter Ended
($ in millions) March 31
2007 % 2006 %
Primary New Insurance Written by FICO
Score
< = 619 $8 0.1% $6 0.1%
620-659 589 8.1% 709 14.1%
660-679 1,165 15.9% 634 12.6%
680-739 3,640 49.8% 2,324 46.3%
> = 740 1,904 26.1% 1,349 26.9%
Total $7,306 100.0% $5,022 100.0%
Primary Risk in Force by FICO Score
< = 619 $22 0.5% $34 0.7%
620-659 708 15.9% 937 20.5%
660-679 723 16.2% 766 16.8%
680-739 2,019 45.3% 1,961 42.9%
> = 740 985 22.1% 873 19.1%
Total $4,457 100.0% $4,571 100.0%
Primary Risk in Force by LTV
95.01% and above $150 3.4% $161 3.5%
90.01% to 95.00% 1,225 27.5% 1,360 29.8%
85.01% to 90.00% 1,916 43.0% 1,930 42.2%
85.00% and below 1,166 26.1% 1,120 24.5%
Total $4,457 100.0% $4,571 100.0%
Primary Risk in Force by Policy Year
2003 and prior 779 17.5% $1,206 26.4%
2004 622 14.0% 1,180 25.8%
2005 1,056 23.7% 1,538 33.6%
2006 1,478 33.1% 647 14.2%
2007 522 11.7% - -
Total $4,457 100.0% $4,571 100.0%
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter Ended and as of March 31, 2007
Exhibit N
Quarter Ended
March 31
(In thousands ) 2007 2006
Investment in Affiliates-Selected
Information
C-BASS
Balance, beginning of period $451,395 $364,364
Net (loss) income for period (6,804) 30,026
Dividends received - 7,347
Balance, end of period $444,591 $387,043
Sherman
Balance, beginning of period $167,412 $81,753
Net income for period 29,576 28,315
Dividends received 51,512 60,515
Other comprehensive income (1,778) 55
Balance, end of period $143,698 $49,608
Portfolio Information:
C-BASS
Servicing portfolio $59,600,000 $53,340,000
Total assets 6,867,894 4,704,015
Servicing income 43,126 74,069
Net interest income 78,852 65,040
Total revenues 38,981 171,124
Sherman
Total assets $1,234,046 $1,010,930
Net revenues $251,995 $237,672
Radian owns a 46% interest in C-BASS and an interest in Sherman,
consisting of 40.96% of the Class A Common Units of Sherman (Class A
Common Units represent 94% of the total equity in Sherman) and 50% of the
Preferred Units of 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 demand or mortgage
originations, changes in housing values, population trends and changes in
household formation patterns, changes in unemployment rates, changes or
volatility in interest rates, consumer confidence, or changes in credit
spreads; changes in investor perception of the strength of private mortgage
insurers or financial guaranty providers; 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 or the influence of large customers; increased severity or frequency
of losses associated with certain Radian products that are riskier than
traditional mortgage insurance and financial guaranty insurance policies;
material changes in persistency rates of Radian's mortgage insurance
policies; changes in 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 inquiries that
we and other mortgage insurers have received from the New York Insurance
Department and public reports that other state insurance departments are
investigating or planning to 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;
legal and other limitations on the amount of dividends we may receive from
our insurance subsidiaries; international expansion of our mortgage
insurance and financial guaranty businesses into new markets and risks
associated with our international business activities; and risks and
uncertainties associated with our proposed merger with MGIC Investment
Corporation, including, without limitation: the ability to complete the
transaction on the proposed terms and schedule; the risk that the two
companies and their businesses will not be integrated successfully;
customer attrition and disruption from the transaction making it more
difficult to maintain relationships with customers, employees or other
business relationships; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer
to realize than expected; the risk that potential sales of assets in
connection with the merger may negatively impact the financial performance
of the combined company; and the possibility that the merger may not be
completed, whether due to the failure to receive the requisite stockholder
or regulatory approvals or otherwise, which may have an adverse effect on
our customers, employees and other business relationships, and may have a
materially adverse impact on our financial results and prospects. 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 of our annual report on Form 10-K for the year
ended December 31, 2006 and in the joint proxy statement/prospectus for our
2007 annual meeting. We caution you not to place undue reliance on these
forward-looking statements, which are current only as of the date of this
news release. Radian does not intend to, and disclaims any duty or
obligation to, update or revise any forward-looking statements made in this
news 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:
investors, Mona Zeehandelaar,
+1-215-231-1674, mona.zeehandelaar@radian.biz , media, Michelle
Davidson, +1-215-231-1325, cell, +1-215-260-6760,
michelle.davidson@radian.biz , or Courtney Robinson,
+1-215-231-1762, cell, +1-215-629-6880,
courtney.robinson@radian.biz , both of Radian Group Inc.
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