PHILADELPHIA, July 20 /PRNewswire-FirstCall/ -- Radian Group Inc.
(NYSE: RDN) today reported its results for the quarter ended June 30, 2005.
The key financial highlights of the quarter and six months ended June 30, 2005
are shown in the following tables:
Key Financial Highlights (dollars in millions, except per share data)
Second Quarter:
Quarter Ended Quarter Ended Percent
June 30, 2005 June 30, 2004 Change
Net income $140.2 $120.5 16.4%
Diluted net income per share $1.56 $1.23 26.8%
Net premiums written $299.2 $331.3 (9.7%)
Net premiums earned $244.0 $259.2 (5.9%)
Revenues $310.3 $322.8 (3.9%)
Book value per share (as of
June 30) $41.99 $35.79 17.3%
Equity in net income of
affiliates $63.9 $52.2 22.4%
Persistency (12 months ended
June 30) 56.9%* 53.9%
* Persistency for the 12 months ended June 30, 2005 includes the impact of
a cancellation of a structured transaction that occurred in the second quarter
of 2005 in the amount of $3.6 billion of primary insurance in force, which
reduced persistency by approximately 3 percentage points.
Six Months:
Six Months Six Months Percent
Ended June 30, Ended June 30, Change
2005 2004
Net income $255.8 $240.5 6.4%
Diluted net income per share $2.79 $2.45 13.9%
Net premiums written $514.1 $512.7 0.3%
Net premiums earned $491.0 $502.7 (2.3%)
Revenues $616.9 $655.7 (5.9%)
Equity in net income of
affiliates $115.2 $84.7 36.0%
"We are pleased to report the second highest quarterly net income in the
company's history," said Radian's Chief Executive Officer S.A. Ibrahim. "That
is a reflection of the successful execution of a diversification strategy that
has served us well during cyclical business environments. Also, our ability to
maintain credit discipline and our innovative approach to business
opportunities have enabled us to build a strong foundation for continued
shareholder value creation."
Radian will hold a conference call on Thursday, July 21, 2005, at 9:00
a.m. Eastern time to discuss the company's second quarter results. This call
be accessed by dialing 800.622.9923 and it 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, under "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 leading credit enhancement provider to the global
financial and capital markets, headquartered in Philadelphia. Radian's
subsidiaries provide products and services through three business lines:
financial guaranty, mortgage insurance and other financial services.
Additional information may be found at http://www.radian.biz.
Financial Results and Supplemental Information Contents
Exhibit A: Condensed Consolidated Statements of Income
Exhibit B: Condensed Consolidated Balance Sheets
Exhibit C: Segment Information Quarter Ended June 30, 2005
Exhibit D: Segment Information Quarter Ended June 30, 2004
Exhibit E: Segment Information Six Months Ended June 30, 2005
Exhibit F: Segment Information Six Months Ended June 30, 2004
Exhibit G: Financial Guaranty Insurance Supplemental Information -
Quarter and Six Months Ended and as of June 30, 2005
Exhibit H: Financial Guaranty Insurance Supplemental Information -
Quarter and Six Months Ended and as of June 30, 2005
Exhibit I: Mortgage Insurance Supplemental Information: New Insurance
Written, Risk Written and Captives
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
Exhibit L: Mortgage Insurance Supplemental Information: Claims and
Defaults
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 Six Months Ended
June 30 June 30
2005 2004 2005 2004
(Thousands of dollars,
except per share data)
Revenues:
Net premiums written $299,218 $331,269 $514,058 $512,697
Net premiums earned 243,978 259,249 491,003 502,669
Net investment income 50,004 50,879 100,866 100,584
Gains on sales of
investments 8,723 5,287 20,249 31,963
Change in fair value of
derivative instruments 987 12 (7,973) 4,659
Other income 6,635 7,396 12,743 15,796
Total revenues 310,327 322,823 616,888 655,671
Expenses:
Provision for losses 83,827 116,560 193,327 231,327
Policy acquisition costs 31,072 31,372 60,428 53,655
Other operating expenses 52,418 52,424 104,088 105,583
Interest expense 9,978 8,364 18,936 18,018
Total expenses 177,295 208,720 376,779 408,583
Equity in net income of
affiliates 63,878 52,172 115,174 84,654
Pretax income 196,910 166,275 355,283 331,742
Provision for income taxes 56,686 45,772 99,447 91,229
Net income $140,224 $120,503 $255,836 $240,513
Diluted net income per
share (1) $1.56 $1.23 $2.79 $2.45
(1) Net income per share
reconciliation
Net income $140,224 $120,503 $255,836 $240,513
Interest expense on
convertible senior
debentures (net of tax) 802 804 1,604 1,608
Net income available to
common stockholders $141,026 $121,307 $257,440 $242,121
Weighted average shares
outstanding (in thousands)
(2) 90,116 98,713 92,187 98,801
(2) In conformity with the current period presentation, the prior period
presentation has been adjusted to reflect the inclusion of 3.8 million shares
underlying contingently convertible debt as required by newly issued
accounting rules. The impact on diluted net income per share of including
these shares in the calculation was a reduction of $0.06 per share and $0.04
per share for the quarters ended June 30, 2005 and June 30, 2004,
respectively, and $0.10 and $0.08 per share for the six months ended June 30,
2005 and June 30, 2004. The contingently convertible debt is scheduled to be
redeemed, after the conclusion of the second quarter, on August 1, 2005.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit B
(Thousands of dollars, June 30 December 31 June 30
except per share data) 2005 2004 2004
Assets:
Cash and investments $5,580,578 $5,500,748 $5,115,709
Investments in
affiliates 437,765 393,025 337,795
Deferred policy
acquisition costs 201,253 211,928 207,508
Prepaid federal income
taxes 530,549 460,149 420,840
Other assets 418,058 434,970 448,860
Total assets $7,168,203 $7,000,820 $6,530,712
Liabilities and
stockholders' equity:
Unearned premiums $789,878 $770,208 $726,689
Reserve for losses and
loss adjustment
expenses 786,942 801,012 775,375
Long-term debt 966,658 717,640 717,514
Deferred federal income
taxes 870,129 848,224 700,252
Other liabilities 187,021 174,681 265,188
Total liabilities 3,600,628 3,311,765 3,185,018
Common stock 97 97 96
Additional paid-in
capital 748,205 1,106,191 1,168,271
Retained earnings 2,649,991 2,397,626 2,123,201
Accumulated other
comprehensive income 169,282 185,141 54,126
Total common
stockholders' equity 3,567,575 3,689,055 3,345,694
Total liabilities
and stockholders'
equity $7,168,203 $7,000,820 $6,530,712
Book value per share $41.99 $39.98 $35.79
Treasury Stock
Repurchases (Year-to-
Date for Periods
Presented)
Total number of shares
repurchased 7,767,800 (1) 2,817,200 1,163,000
Average price paid per
share $48.13 $45.38 $45.45
Total cost of
repurchased shares $373,856,933 $127,831,591 $52,862,675
(1) 1.5 million shares were repurchased in the 2nd quarter of 2005 at a
cost of $68.4 million, completing the current repurchase program.
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended June 30, 2005
Exhibit C
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $236,271 $- $62,947 $299,218
Net premiums earned $195,664 $- $48,314 $243,978
Net investment income 28,101 16 21,887 50,004
Gains on sales of
investments 6,653 43 2,027 8,723
Change in fair value of
derivative instruments (7,920) (2) 8,909 987
Other income 5,679 689 267 6,635
Total revenues 228,177 746 81,404 310,327
Expenses:
Provision for losses 80,225 - 3,602 83,827
Policy acquisition costs 19,206 - 11,866 31,072
Other operating expenses 35,481 1,547 15,390 52,418
Interest expense 5,627 878 3,473 9,978
Total expenses 140,539 2,425 34,331 177,295
Equity in net income of
affiliates - 63,865 13 63,878
Pretax income 87,638 62,186 47,086 196,910
Provision for income taxes 24,786 21,764 10,136 56,686
Net income $62,852 $40,422 $36,950 $140,224
Assets $4,290,331 $450,186 $2,427,686 $7,168,203
Deferred policy
acquisition costs 66,456 - 134,797 201,253
Reserve for losses and
loss adjustment expenses 571,127 - 215,815 786,942
Unearned premiums 189,699 - 600,179 789,878
Stockholders' equity 1,920,283 337,684 1,309,608 3,567,575
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended June 30, 2004
Exhibit D
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $236,459 $- $94,810 $331,269
Net premiums earned $199,487 $- $59,762 $259,249
Net investment income 29,703 26 21,150 50,879
Gains (losses) on sales of
investments 4,101 (574) 1,760 5,287
Change in fair value of
derivative instruments (1,212) (14) 1,238 12
Other income 5,734 848 814 7,396
Total revenues 237,813 286 84,724 322,823
Expenses:
Provision for losses 101,039 - 15,521 116,560
Policy acquisition costs 17,077 - 14,295 31,372
Other operating expenses 36,452 4,336 11,636 52,424
Interest expense 4,909 586 2,869 8,364
Total expenses 159,477 4,922 44,321 208,720
Equity in net income of
affiliates - 51,885 287 52,172
Pretax income 78,336 47,249 40,690 166,275
Income tax provision 21,651 16,537 7,584 45,772
Net income $56,685 $30,712 $33,106 $120,503
Assets $3,910,910 $314,756 $2,305,046 $6,530,712
Deferred policy
acquisition costs 79,359 - 128,149 207,508
Reserve for losses and
loss adjustment expenses 527,059 - 248,316 775,375
Unearned premiums 128,190 - 598,499 726,689
Stockholders' equity 1,907,478 255,175 1,183,041 3,345,694
Radian Group Inc. and Subsidiaries
Segment Information
Six Months Ended June 30, 2005
Exhibit E
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $436,508 $- $77,550 $514,058
Net premiums earned $388,129 $- $102,874 $491,003
Net investment income 56,894 26 43,946 100,866
Gains on sales
of investments 13,772 877 5,600 20,249
Change in fair value of
derivative instruments (4,734) (191) (3,048) (7,973)
Other income 10,271 1,889 583 12,743
Total revenues 464,332 2,601 149,955 616,888
Expenses:
Provision for losses 178,152 - 15,175 193,327
Policy acquisition costs 33,884 - 26,544 60,428
Other operating expenses 69,150 5,154 29,784 104,088
Interest expense 10,751 1,613 6,572 18,936
Total expenses 291,937 6,767 78,075 376,779
Equity in net income of
affiliates - 115,161 13 115,174
Pretax income 172,395 110,995 71,893 355,283
Provision for income taxes 46,822 38,848 13,777 99,447
Net income $125,573 $72,147 $58,116 (1) $255,836 (1)
(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 (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
Six Months Ended June 30, 2004
Exhibit F
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $442,128 $- $70,569 $512,697
Net premiums earned $406,603 $- $96,066 502,669
Net investment income 58,216 74 42,294 100,584
Gains on sales of
investments 28,223 2,599 1,141 31,963
Change in fair value of
derivative instruments 3,214 35 1,410 4,659
Other income 11,220 3,722 854 15,796
Total revenues 507,476 6,430 141,765 655,671
Expenses:
Provision for losses 199,162 - 32,165 231,327
Policy acquisition costs 34,219 - 19,436 53,655
Other operating expenses 74,198 8,315 23,070 105,583
Interest expense 10,412 1,310 6,296 18,018
Total expenses 317,991 9,625 80,967 408,583
Equity in net income (loss)
of affiliates - 85,287 (633) 84,654
Pretax income 189,485 82,092 60,165 331,742
Provision for income taxes 52,298 28,732 10,199 91,229
Net income $137,187 $53,360 $49,966 (1) $240,513 (1)
(1) Reflects a $10.3 million net loss from 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 Six Months Ended and as of June 30, 2005
Exhibit G
(Thousands of dollars, Quarter Ended Six Months Ended
except ratios) June 30 June 30
2005 2004 2005 2004
Net Premiums Written:
Public finance direct 13,313 17,678 28,746 25,865
Public finance reinsurance 20,954 16,429 37,980 36,897
Structured direct 17,359 35,486 32,416 53,233
Structured reinsurance 4,753 8,594 13,263 17,406
Trade credit 6,568 16,623 19,887 33,585
62,947 94,810 132,292 166,986
Impact of recapture (1) - - (54,742) (96,417)
Net Premiums Written 62,947 94,810 77,550 70,569
Net Premiums Earned:
Public finance direct 8,053 6,390 17,016 12,189
Public finance reinsurance 7,090 9,883 15,603 21,085
Structured direct 18,881 19,135 37,100 37,581
Structured reinsurance 3,753 7,931 11,019 17,663
Trade credit 10,537 16,423 26,675 32,440
48,314 59,762 107,413 120,958
Impact of recapture (2) - - (4,539) (24,892)
Net Premiums Earned 48,314 59,762 102,874 96,066
Claims paid:
Trade credit 5,230 8,562 10,228 15,190
Financial guaranty (567) 14,529 11,917 17,166
Conseco 7,981 7,677 15,950 15,082
Total 12,644 30,768 38,095 47,438
Impact of recapture (3) - - - 11,488
Claims paid 12,644 30,768 38,095 58,926
Incurred losses:
Trade credit 272 8,432 7,313 16,634
Financial guaranty 3,330 7,089 7,862 15,531
Total 3,602 15,521 15,175 32,165
Loss ratio - GAAP Basis 7.5% 26.0% 14.7% 33.5%
Expense ratio - GAAP Basis 56.4% 43.4% 54.8% 44.2%
63.9% 69.4% 69.5% 77.7%
Refundings included in earned premium 2,654 366 5,095 2,272
(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 Six Months Ended and as of June 30, 2005
Exhibit H
(Thousands of dollars, except ratios) June 30 December 31 June 30
2005 2004 2004
Capital and surplus 1,057,364 1,008,423 1,004,704
Contingency reserve 266,775 251,674 225,255
Qualified statutory capital 1,324,139 1,260,097 1,229,959
Unearned premium reserve 708,425 730,604 690,627
Loss and loss expense reserve 119,796 132,767 163,322
Total policyholders' reserves 2,152,360 2,123,468 2,083,908
Present value of installment premiums 249,901 252,000 339,211
Reinsurance and soft capital
facilities 150,000 245,000 245,000
Total claims paying resources 2,552,261 2,620,468 2,668,119
Net debt service outstanding 96,731,753 101,619,835 98,840,898
Capital leverage ratio (1) 73 81 80
Claims paying leverage ratio (2) 38 39 37
Reserve for losses and LAE
Specific 36,582 52,142 54,363
Conseco 64,393 80,343 95,918
Non-specific 114,840 108,895 98,035
Total 215,815 241,380 248,316
(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 Six Months Ended and as of June 30, 2005
Exhibit I
Quarter Ended
June 30
2005 % 2004 %
Primary New Insurance Written ($ millions)
Flow $6,128 47.3% $10,427 88.6%
Structured 6,814 52.7% 1,339 11.4%
Total $12,942 100.0% $11,766 100.0%
Prime $6,659 51.5% $8,010 68.1%
Alt-A 3,512 27.1% 2,403 20.4%
A minus and below 2,771 21.4% 1,353 11.5%
Total $12,942 100.0% $11,766 100.0%
Total Primary New Insurance Written by
FICO Score
($ millions)
<=619 $2,586 20.0% $1,095 9.3%
620-679 3,791 29.3% 3,601 30.6%
680-739 3,987 30.8% 4,128 35.1%
>=740 2,578 19.9% 2,942 25.0%
Total $12,942 100.0% $11,766 100.0%
Percentage of primary new insurance written
Monthlies 85% 90%
Refinances 48% 41%
95.01% LTV and above 9% 10%
ARMs 56% 36%
Primary risk written ($ millions)
Flow $1,516 53.2% $2,596 87.6%
Structured 1,332 46.8% 367 12.4%
Total $2,848 100.0% $2,963 100.0%
Other risk written ($ millions)
Pool $248 $238
Seconds 49 10
NIMs 38 15
International 158 37
Other - -
Total other risk written $493 $300
Net Premiums Written ($ thousands)
Primary and Pool Insurance $191,012 $206,180
Seconds 17,530 15,904
NIMs 10,573 13,048
International 16,442 363
Other 714 964
Net Premiums Written $236,271 $236,459
Net Premiums Earned ($ thousands)
Primary and Pool Insurance $172,623 $164,326
Seconds 11,568 16,496
NIMs 9,737 17,358
International 1,022 343
Other 714 964
Net Premiums Earned $195,664 $199,487
Captives
Premiums ceded to captives ($ millions) $21.8 $22.7
% of total premiums 11.2% 12.1%
NIW subject to captives ($ millions) $3,011 $5,057
% of primary NIW 23.3% 43.0%
IIF subject to captives 33.6% 31.7%
RIF subject to captives 34.7% 33.7%
Persistency (twelve months ended
June 30) 56.9% 53.9%
Six Months Ended
June 30
2005 % 2004 %
Primary New Insurance Written ($ millions)
Flow $11,790 62.1% $19,269 89.9%
Structured 7,196 37.9% 2,163 10.1%
Total $18,986 100.0% $21,432 100.0%
Prime $10,942 57.6% $14,281 66.6%
Alt-A 4,655 24.5% 4,890 22.8%
A minus and below 3,389 17.9% 2,261 10.6%
Total $18,986 100.0% $21,432 100.0%
Total Primary New Insurance Written by
FICO Score
($ millions)
<=619 $3,029 16.0% $1,800 8.4%
620-679 5,741 30.2% 6,810 31.8%
680-739 6,131 32.3% 7,814 36.4%
>=740 4,085 21.5% 5,008 23.4%
Total $18,986 100.0% $21,432 100.0%
Percentage of primary new insurance written
Monthlies 87% 92%
Refinances 45% 42%
95.01% LTV and above 11% 11%
ARMs 50% 35%
Primary risk written ($ millions)
Flow $2,930 67.8% $4,909 88.5%
Structured 1,392 32.2% 639 11.5%
Total $4,322 100.0% $5,548 100.0%
Other risk written ($ millions)
Pool $304 $324
Seconds 59 62
NIMs 66 71
International 218 149
Other 511 -
Total other risk written $1,158 $606
Net Premiums Written ($ thousands)
Primary and Pool Insurance $367,196 $382,458
Seconds 29,331 33,181
NIMs 19,867 23,924
International 18,644 564
Other 1,470 2,001
Net Premiums Written $436,508 $442,128
Net Premiums Earned ($ thousands)
Primary and Pool Insurance $341,644 $341,769
Seconds 23,963 34,368
NIMs 19,525 28,089
International 1,527 376
Other 1,470 2,001
Net Premiums Earned $388,129 $406,603
Captives
Premiums ceded to captives($ millions) $45.6 $41.9
% of total premiums 11.7% 10.9%
NIW subject to captives($ millions) $5,297 $9,406
% of primary NIW 27.9% 43.9%
IIF subject to captives
RIF subject to captives
Persistency (twelve months ended June
30)
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Six Months Ended and as of June 30, 2005
Exhibit J
June 30 December 31 June 30
2005 % 2004 % 2004 %
Primary insurance in
force ($ millions)
Flow $85,093 78.5% $89,741 77.8% $91,449 78.7%
Structured 23,334 21.5% 25,574 22.2% 24,730 21.3%
Total $108,427 100.0% $115,315 100.0% $116,179 100.0%
Prime $74,555 68.8% $79,628 69.0% $80,931 69.6%
Alt-A 19,869 18.3% 22,092 19.2% 22,519 19.4%
A minus and below 14,003 12.9% 13,595 11.8% 12,729 11.0%
Total $108,427 100.0% $115,315 100.0% $116,179 100.0%
Primary risk in
force ($ millions)
Flow $20,795 80.0% $21,991 81.4% $22,301 83.8%
Structured 5,192 20.0% 5,021 18.6% 4,305 16.2%
Total $25,987 100.0% $27,012 100.0% $26,606 100.0%
Prime $17,823 68.6% $18,422 68.2% $18,327 68.9%
Alt-A 4,651 17.9% 5,146 19.1% 5,159 19.4%
A minus and below 3,513 13.5% 3,444 12.7% 3,120 11.7%
Total $25,987 100.0% $27,012 100.0% $26,606 100.0%
Total Primary Risk
in Force by FICO
Score
($ millions)
<=619 $3,319 12.8% $3,296 12.2% $3,098 11.6%
620-679 8,442 32.5% 8,850 32.8% 8,586 32.3%
680-739 8,643 33.3% 9,101 33.7% 9,099 34.2%
>=740 5,583 21.4% 5,765 21.3% 5,823 21.9%
Total $25,987 100.0% $27,012 100.0% $26,606 100.0%
Percentage of primary
risk in force
Monthlies 91% 92% 91%
Refinances 38% 37% 36%
95.01% LTV and above 13% 13% 13%
ARMs 32% 31% 26%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Six Months Ended and as of June 30, 2005
Exhibit K
June 30 December 31 June 30
2005 % 2004 % 2004 %
Total Primary Risk in
Force by LTV ($ millions)
95.01% and above $3,442 13.3% $3,429 12.7% $3,324 12.5%
90.01% to 95.00% 9,106 35.0% 9,822 36.4% 9,954 37.4%
85.01% to 90.00% 9,902 38.1% 10,290 38.1% 9,903 37.2%
85.00% and below 3,537 13.6% 3,471 12.8% 3,425 12.9%
Total $25,987 100.0% $27,012 100.0% $26,606 100.0%
Total Primary Risk in
Force by Policy Year
($ millions)
2001 and prior $3,292 12.7% $4,202 15.6% $5,615 21.1%
2002 2,580 9.9% 3,410 12.6% 4,609 17.3%
2003 7,180 27.6% 9,046 33.5% 11,100 41.7%
2004 8,792 33.8% 10,354 38.3% 5,282 19.9%
2005 4,143 16.0% - - - -
Total $25,987 100.0% $27,012 100.0% $26,606 100.0%
Other risk in force ($
millions)
Pool $2,558 $2,384 $2,567
Seconds 680 673 657
NIMs 311 312 297
International 416 214 170
Other 448 6 14
Total other risk in
force $4,413 $3,589 $3,705
Risk to capital ratio-
STAT Basis 9.9:1 10.0:1 10.5:1
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Six Months Ended and as of June 30, 2005
Exhibit L
Quarter Ended Six Months Ended
June 30 June 30
2005 2004 2005 2004
Direct claims paid ($ thousands)
Prime $31,901 $37,588 $63,772 $69,647
Alt-A 19,573 22,377 41,905 42,902
A Minus and below 20,024 23,809 40,908 46,443
Seconds 8,165 9,899 18,772 23,298
Total $79,663 $93,673 $165,357 $182,290
Average claim paid ($ thousands)
Prime $22.7 $24.4 $23.6 $24.4
Alt-A 34.3 38.4 35.7 40.3
A Minus and below 25.6 26.6 26.0 27.1
Seconds 20.0 25.6 22.7 28.0
Total $25.2 $27.5 $26.3 $28.2
Loss ratio - GAAP Basis 41.0% 50.7% 45.9% 49.0%
Expense ratio - GAAP Basis 28.0% 26.8% 26.5% 26.6%
69.0% 77.5% 72.4% 75.6%
June 30 December 31 June 30
2005 2004 2004
Default Statistics
Primary insurance:
Prime
Number of insured loans 580,194 610,480 624,055
Number of loans in default 16,881 19,434 18,830
Percentage of loans in default 2.91% 3.18% 3.02%
Alt A
Number of insured loans 117,490 128,010 131,694
Number of loans in default 7,387 8,339 7,997
Percentage of loans in default 6.29% 6.51% 6.07%
A Minus and below
Number of insured loans 106,064 104,672 99,980
Number of loans in default 13,238 12,678 12,083
Percentage of loans in default 12.48% 12.11% 12.09%
Total
Number of insured loans 803,748 843,162 855,729
Number of loans in default 37,506 40,451 38,910
Percentage of loans in default 4.67% 4.80% 4.55%
Pool insurance:
Number of insured loans 619,526 583,568 575,934
Number of loans in default 6,691 6,749 6,206
Percentage of loans in default 1.08% 1.16% 1.08%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter Ended and as of June 30, 2005
ALT-A
Exhibit M
Quarter Ended Six Months Ended
($ millions) June 30 June 30
2005 % 2004 % 2005 % 2004 %
Primary New
Insurance
Written by
FICO Score
<=619 $1 0.0% $25 1.0% $7 0.1% $45 0.9%
620-659 724 20.6% 309 12.9% 867 18.6% 773 15.8%
660-679 419 11.9% 435 18.1% 618 13.3% 879 18.0%
680-739 1,536 43.8% 1,133 47.1% 2,056 44.2% 2,257 46.2%
>=740 832 23.7% 501 20.9% 1,107 23.8% 936 19.1%
Total $3,512 100.0% $2,403 100.0% $4,655 100.0% $4,890 100.0%
Primary Risk
in Force by
FICO Score
<=619 $54 1.2% $85 1.6%
620-659 1,002 21.5% 1,154 22.4%
660-679 824 17.7% 889 17.2%
680-739 1,953 42.0% 2,133 41.4%
>=740 818 17.6% 898 17.4%
Total $4,651 100.0% $5,159 100.0%
Primary Risk
in Force by
LTV
95.01% and
above $274 5.9% $463 9.0%
90.01% to
95.00% 1,549 33.3% 1,842 35.7%
85.01% to
90.00% 2,023 43.5% 2,098 40.7%
85.00% and
below 805 17.3% 756 14.6%
Total $4,651 100.0% $5,159 100.0%
Primary Risk
in Force by
Policy Year
2001 and
prior $250 5.4% $526 10.2%
2002 458 9.8% 981 19.0%
2003 1,243 26.7% 2,381 46.2%
2004 1,879 40.4% 1,271 24.6%
2005 821 17.7% - -
Total $4,651 100.0% $5,159 100.0%
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter and Six Months Ended and as of June 30, 2005
Exhibit N
Quarter Ended Six Months Ended
($ thousands ) June 30 June 30
2005 2004 2005 2004
Investment in Affiliates-
Selected Information
C-BASS
Balance, beginning of period $309,690 $235,086 $290,073 $226,710
Net income for period 31,427 33,673 59,544 54,549
Dividends received 8,750 20,000 17,250 32,500
Balance, end of period $332,367 $248,759 $332,367 $248,759
Sherman
Balance, beginning of period $71,874 $48,217 $101,492 $65,979
Net income for period 32,439 18,212 55,618 30,738
Dividends received - 20,750 51,875 49,800
Other comprehensive income (482) 3,030 671 1,792
Warrant repurchase - - (2,075) -
Balance, end of period $103,831 $48,709 $103,831 $48,709
Portfolio Information:
C-BASS
Servicing portfolio $33,400,000 $20,400,000
Total assets 3,694,071 3,860,941
Servicing income 63,419 38,413 $123,213 $74,027
Net interest income 44,306 35,230 85,558 72,182
Total revenues 174,237 144,330 321,537 249,059
Sherman
Total assets $826,810 $463,587
Net revenues $209,927 $124,678 $358,552 $223,653
All statements in this press release that address operating performance,
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, 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 significant customers 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 the insurance financial-strength
ratings assigned by the major ratings agencies to Radian's operating
subsidiaries; intense competition from others and from alternative products to
private mortgage insurance and financial guaranty insurance; changes in the
business practices of Fannie Mae and Freddie Mac; the application of existing
federal or state consumer lending and insurance laws and regulations, or
unfavorable changes in these laws and regulations or the way they are
interpreted or applied, including 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); legislative and regulatory changes affecting
demand for private mortgage insurance and financial guaranty insurance;
changes in claims against mortgage insurance products resulting from the aging
of Radian's mortgage insurance policies; changes in Radian's ability to
maintain sufficient reinsurance capacity in an increasingly concentrated
reinsurance market; vulnerability to the performance of Radian's strategic
investments; and the loss of executive officers or other key personnel.
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. 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, mona.zeehandelaar@radian.biz, or For the media:
David Cheung, +1-215-231-1362, david.cheung@radian.biz, both of
Radian
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