Year-Over-Year Increase of 13.7% in Book Value Per Share
PHILADELPHIA, Oct. 19 /PRNewswire-FirstCall/ -- Radian Group Inc.
(NYSE: RDN) today reported its results for the quarter ended September 30,
2005. The key financial highlights of the quarter and nine months ended
September 30, 2005 are shown in the following tables:
Key Financial Highlights (dollars in millions, except per share data)
Third Quarter:
Quarter Ended Quarter Ended Percent
September 30, 2005 September 30, 2004 Change
Net income $162.6 $122.2 33.1%
Diluted net income per
share $1.88 $1.27 48.0%
Net premiums written $313.9 $282.5 11.1%
Net premiums earned $265.6 $264.0 0.6%
Revenues $382.6 $329.2 16.2%
Book value per share
(as of September 30) $43.08 $37.90 13.7%
Equity in net income
of affiliates $46.8 $45.9 2.0%
Persistency (12 months
ended September 30) 57.1%* 57.4%
* Persistency for the 12 months ended September 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.
Nine Months:
Nine Months Ended Nine Months Ended Percent
September 30, 2005 September 30, 2004 Change
Net income $418.4 $362.7 15.4%
Diluted net income per
share $4.65 $3.72 25.0%
Net premiums written $828.0 $795.2 4.1%
Net premiums earned $756.6 $766.7 (1.3)%
Revenues $999.5 $984.9 1.5%
Equity in net income
of affiliates $161.9 $130.6 24.0%
"The company continues to produce solid financial results, an attractive
ROE and growth in book value," said S.A. Ibrahim, Chief Executive Officer of
Radian. "We continue to steadily grow our existing business as evidenced by
double digit increases in net premiums written over last year, while
identifying and pursuing new and profitable opportunities," Mr. Ibrahim added.
Radian will hold a conference call on Thursday, October 20, 2005, at 9:00
a.m. Eastern time to discuss the company's third quarter results. This call
can be accessed by dialing 800.622.9923, passcode 1295564, and 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. In addition, a replay of the conference call will
be available two hours after the call from October 20, 2005, through
October 27, 2005, using the same dial-in information listed above.
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 September 30, 2005
Exhibit D: Segment Information - Quarter Ended September 30, 2004
Exhibit E: Segment Information - Nine Months Ended September 30, 2005
Exhibit F: Segment Information - Nine Months Ended September 30, 2004
Exhibit G: Financial Guaranty Insurance Supplemental Information -
Quarter and Nine Months Ended and as of September 30, 2005
Exhibit H: Financial Guaranty Insurance Supplemental Information -
Quarter and Nine Months Ended and as of September 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 Nine Months Ended
September 30 September 30
2005 2004 2005 2004
(Thousands of dollars, except
per-share data)
Revenues:
Net premiums written $313,908 $282,530 $827,966 $795,227
Net premiums earned $265,636 $264,048 $756,639 $766,717
Net investment income 53,253 51,086 154,119 151,670
Gains on sales of investments 5,194 8,993 25,443 40,956
Change in fair value of
derivative instruments 53,274 (2,083) 45,301 2,576
Other income 5,265 7,200 18,008 22,996
Total revenues 382,622 329,244 999,510 984,915
Expenses:
Provision for losses 92,441 114,125 285,768 345,452
Policy acquisition costs 27,927 35,903 88,355 89,558
Other operating expenses 58,931 47,659 163,019 153,242
Interest expense 12,167 7,996 31,103 26,014
Total expenses 191,466 205,683 568,245 614,266
Equity in net income of
affiliates 46,772 45,926 161,946 130,580
Pretax income 237,928 169,487 593,211 501,229
Provision for income taxes 75,371 47,316 174,818 138,545
Net income $162,557 $122,171 $418,393 $362,684
Diluted net income per
share (1) $1.88 $1.27 $4.65 $3.72
(1) Net income per share
reconciliation
Net income $162,557 $122,171 $418,393 $362,684
Interest expense on convertible
senior debentures (net of tax) 267 805 1,871 2,413
Net income available to common
stockholders $162,824 $122,976 $420,264 $365,097
Weighted average shares
outstanding (in thousands)
Average common shares
outstanding 84,567 92,384 86,507 93,416
Increase in shares - potential
exercise of options - diluted
basis 860 1,003 895 1,040
Increase in shares - contingently
convertible debt (2) 1,266 3,810 2,954 3,810
Weighted average shares
outstanding (in thousands) 86,693 97,197 90,356 98,266
(2) All periods include the impact of shares underlying convertible debt
that was redeemed on August 1, 2005. The impact on diluted net income
per share of including these shares in the calculation was a reduction
of $0.03 per share and $0.04 per share for the quarters ended
September 30, 2005 and September 30, 2004, respectively, and $0.14 and
$0.12 per share for the nine months ended September 30, 2005 and
September 30, 2004.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit B
(Thousands of dollars,
except share and per- September 30 December 31 September 30
share data) 2005 2004 2004
Assets:
Cash and investments $5,508,189 $5,500,748 $5,303,946
Investments in
affiliates 398,054 393,025 347,404
Deferred policy
acquisition costs 206,013 211,928 207,453
Prepaid federal income
taxes 539,973 460,149 426,813
Other assets 446,068 434,970 414,404
Total assets $7,098,297 $7,000,820 $6,700,020
Liabilities and
stockholders' equity:
Unearned premiums $838,042 $770,208 $742,691
Reserve for losses and
loss adjustment
expenses 792,600 801,012 776,903
Long-term debt 747,393 717,640 717,579
Deferred federal
income taxes 863,859 848,224 769,342
Other liabilities 281,388 174,681 209,901
Total liabilities 3,523,282 3,311,765 3,216,416
Common stock 97 97 96
Additional paid-in
capital 634,901 1,106,191 1,096,793
Retained earnings 2,810,853 2,397,626 2,243,400
Accumulated other
comprehensive income 129,164 185,141 143,315
Total common
stockholders' equity 3,575,015 3,689,055 3,483,604
Total liabilities
and stockholders'
equity $7,098,297 $7,000,820 $6,700,020
Book value per share $43.08 $39.98 $37.90
Treasury Stock
Repurchases (Year-to-
Date for Periods
Presented)
Total number of shares
repurchased 10,344,500 (1) 2,817,200 2,717,200
Average price paid per
share $49.21 $45.38 $45.41
Total cost of
repurchased shares $509,094,714 $127,831,591 $123,380,201
(1) 2.6 million shares were repurchased in the 3rd quarter of 2005 at a
cost of $135.2 million, under the new repurchase program.
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended September 30, 2005
Exhibit C
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $235,790 $- $78,118 $313,908
Net premiums earned $208,902 $- $56,734 $265,636
Net investment income 30,122 62 23,069 53,253
Gains (losses) on sales of
investments 4,185 (2,840) 3,849 5,194
Change in fair value of
derivative instruments 11,675 (18) 41,617 53,274
Other income 4,353 625 287 5,265
Total revenues 259,237 (2,171) 125,556 382,622
Expenses:
Provision for losses 81,551 - 10,890 92,441
Policy acquisition costs 14,742 - 13,185 27,927
Other operating expenses 38,295 1,953 18,683 58,931
Interest expense 6,790 1,095 4,282 12,167
Total expenses 141,378 3,048 47,040 191,466
Equity in net income of
affiliates - 47,146 (374) 46,772
Pretax income 117,859 41,927 78,142 237,928
Provision for income taxes 36,528 14,675 24,168 75,371
Net income $81,331 $27,252 $53,974 $162,557
Assets $4,152,704 $410,915 $2,534,678 $7,098,297
Deferred policy
acquisition costs 67,327 - 138,686 206,013
Reserve for losses and
loss adjustment expenses 580,964 - 211,636 792,600
Unearned premiums 216,603 - 621,439 838,042
Stockholders' equity 1,963,433 300,000 1,311,582 3,575,015
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended September 30, 2004
Exhibit D
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $209,085 $- $73,445 $282,530
Net premiums earned $205,313 $- $58,735 $264,048
Net investment income 29,391 8 21,687 51,086
Gains on sales of
investments 6,359 64 2,570 8,993
Change in fair value of
derivative instruments (7,035) (145) 5,097 (2,083)
Other income 5,381 1,438 381 7,200
Total revenues 239,409 1,365 88,470 329,244
Expenses:
Provision for losses 101,000 - 13,125 114,125
Policy acquisition costs 22,538 - 13,365 35,903
Other operating expenses 31,817 2,184 13,658 47,659
Interest expense 4,694 559 2,743 7,996
Total expenses 160,049 2,743 42,891 205,683
Equity in net income of
affiliates - 43,893 2,033 45,926
Pretax income 79,360 42,515 47,612 169,487
Income tax provision 21,212 14,879 11,225 47,316
Net income $58,148 $27,636 $36,387 $122,171
Assets $4,003,276 $328,072 $2,368,672 $6,700,020
Deferred policy
acquisition costs 72,076 - 135,377 207,453
Reserve for losses and
loss adjustment expenses 533,060 - 243,843 776,903
Unearned premiums 129,873 - 612,818 742,691
Stockholders' equity 1,958,326 284,300 1,240,978 3,483,604
Radian Group Inc. and Subsidiaries
Segment Information
Nine Months Ended September 30, 2005
Exhibit E
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $672,298 $- $155,668 $827,966
Net premiums earned $597,031 $- $159,608 $756,639
Net investment income 87,016 88 67,015 154,119
Gains (losses) on
sales of
investments 17,957 (1,963) 9,449 25,443
Change in fair value of
derivative instruments 6,941 (209) 38,569 45,301
Other income 14,624 2,514 870 18,008
Total revenues 723,569 430 275,511 999,510
Expenses:
Provision for losses 259,703 - 26,065 285,768
Policy acquisition
costs 48,626 - 39,729 88,355
Other operating
expenses 107,445 7,107 48,467 163,019
Interest expense 17,541 2,708 10,854 31,103
Total expenses 433,315 9,815 125,115 568,245
Equity in net income of
affiliates - 162,307 (361) 161,946
Pretax income 290,254 152,922 150,035 593,211
Provision for
income taxes 83,350 53,523 37,945 174,818
Net income $206,904 $99,399 $112,090 (1) $418,393 (1)
(1) Reflects a $4.1 million net loss from the 1st quarter 2005 recapture
of previously ceded business by one of the primary Financial Guaranty
insurers (in millions):
Incr/(Decr)
Net premiums earned $(4.6)
Policy acquisition costs 1.7
Provision for income taxes (2.2)
Net loss $(4.1)
Radian Group Inc. and Subsidiaries
Segment Information
Nine Months Ended September 30, 2004
Exhibit F
Mortgage Financial Financial
(Thousands of dollars) Insurance Services Guaranty Total
Revenues:
Net premiums written $651,213 $- $144,014 $795,227
Net premiums earned $611,916 $- $154,801 $766,717
Net investment income 87,607 82 63,981 151,670
Gains on sales of
investments 34,582 2,663 3,711 40,956
Change in fair value of
derivative instruments (3,821) (110) 6,507 2,576
Other income 16,601 5,160 1,235 22,996
Total revenues 746,885 7,795 230,235 984,915
Expenses:
Provision for losses 300,162 - 45,290 345,452
Policy acquisition
costs 56,757 - 32,801 89,558
Other operating
expenses 106,015 10,499 36,728 153,242
Interest expense 15,106 1,869 9,039 26,014
Total expenses 478,040 12,368 123,858 614,266
Equity in net income of
affiliates - 129,180 1,400 130,580
Pretax income 268,845 124,607 107,777 501,229
Provision for
income taxes 73,510 43,611 21,424 138,545
Net income $195,335 $80,996 $86,353 (1) $362,684 (1)
(1) Reflects a $10.3 million net loss from the 1st quarter 2004 recapture
of previously ceded business by one of the primary Financial Guaranty
insurers (in millions):
Incr/(Decr)
Net premiums earned $(24.9)
Policy acquisition costs (9.8)
Change in fair value of
derivative instruments (0.8)
Provision for income taxes (5.6)
Net loss $(10.3)
Radian Group Inc.
Financial Guaranty Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
Exhibit G
Quarter Ended Nine Months Ended
(Thousands of dollars, except ratios) September 30 September 30
2005 2004 2005 2004
Net Premiums Written:
Public finance direct 22,539 10,006 51,285 35,871
Public finance reinsurance 23,374 19,305 61,354 56,202
Structured direct 19,872 23,293 52,288 76,526
Structured reinsurance 3,092 6,407 16,355 23,813
Trade credit 9,241 14,434 29,128 48,019
78,118 73,445 210,410 240,431
Impact of recapture (1) - - (54,742) (96,417)
Net Premiums Written 78,118 73,445 155,668 144,014
Net Premiums Earned:
Public finance direct 7,651 7,327 24,667 19,516
Public finance reinsurance 10,058 9,725 25,661 30,810
Structured direct 20,158 19,961 57,258 57,542
Structured reinsurance 4,544 7,285 15,563 24,948
Trade credit 14,323 14,437 40,998 46,877
56,734 58,735 164,147 179,693
Impact of recapture (2) - - (4,539) (24,892)
Net Premiums Earned 56,734 58,735 159,608 154,801
Claims paid:
Trade credit 6,550 3,288 16,778 18,478
Financial guaranty 1,015 7,474 12,932 24,640
Conseco 7,443 8,225 23,393 23,307
Total 15,008 18,987 53,103 66,425
Impact of recapture (3) - - - 11,488
Claims paid 15,008 18,987 53,103 77,913
Incurred losses:
Trade credit 7,120 6,907 14,433 23,541
Financial guaranty 3,770 6,218 11,632 21,749
Total 10,890 13,125 26,065 45,290
Loss ratio - GAAP Basis 19.2% 22.3% 16.3% 29.3%
Expense ratio - GAAP Basis 56.2% 46.0% 55.3% 44.9%
75.4% 68.3% 71.6% 74.2%
Refundings included in earned premium 4,419 1,895 9,514 4,167
(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 Nine Months Ended and as of September 30, 2005
Exhibit H
(Thousands of dollars, except
ratios) September 30 December 31 September 30
2005 2004 2004
Capital and surplus 1,069,988 1,008,423 996,657
Contingency reserve 282,389 251,674 239,493
Qualified statutory capital 1,352,377 1,260,097 1,236,150
Unearned premium reserve 731,505 730,604 709,302
Loss and loss expense reserve 116,256 132,767 126,466
Total policyholders' reserves 2,200,138 2,123,468 2,071,918
Present value of installment
premiums 284,511 252,000 363,166
Reinsurance and soft capital
facilities 150,000 245,000 245,000
Total claims paying resources 2,634,649 2,620,468 2,680,084
Net debt service outstanding 103,260,772 101,619,835 100,219,130
Capital leverage ratio (1) 76 81 81
Claims paying leverage ratio (2) 39 39 37
Reserve for losses and LAE
Specific 33,609 52,142 48,437
Conseco 56,950 80,343 87,693
Non-specific 121,077 108,895 107,713
Total 211,636 241,380 243,843
(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 Nine Months Ended and as of September 30, 2005
Exhibit I
Quarter Ended
September 30
2005 % 2004 %
Primary New Insurance Written ($
millions)
Flow $7,066 55.7% $9,123 78.1%
Structured 5,612 44.3% 2,563 21.9%
Total $12,678 100.0% $11,686 100.0%
Prime $7,191 56.7% $7,181 61.5%
Alt-A 3,719 29.3% 2,633 22.5%
A minus and below 1,768 14.0% 1,872 16.0%
Total $12,678 100.0% $11,686 100.0%
Total Primary New Insurance Written by
FICO Score ($ millions)
<=619 $1,532 12.1% $1,581 13.5%
620-679 3,858 30.4% 3,914 33.5%
680-739 4,332 34.2% 3,796 32.5%
>=740 2,956 23.3% 2,395 20.5%
Total $12,678 100.0% $11,686 100.0%
Percentage of primary new insurance
written
Monthlies 88% 94%
Refinances 38% 37%
95.01% LTV and above 9% 11%
ARMs 52% 46%
Primary risk written ($ millions)
Flow $1,752 67.6% $2,287 73.9%
Structured 840 32.4% 809 26.1%
Total $2,592 100.0% $3,096 100.0%
Other risk written ($ millions)
Pool $163 $52
Seconds 322 70
NIMs - 20
International 33 13
Other 150 -
Total other risk written $668 $155
Net Premiums Written ($ thousands)
Primary and Pool Insurance $197,645 $177,818
Seconds 18,370 15,130
NIMs 12,350 12,875
International 4,067 2,377
Other 3,358 885
Net Premiums Written $235,790 $209,085
Net Premiums Earned ($ thousands)
Primary and Pool Insurance $181,748 $169,684
Seconds 12,812 15,723
NIMs 12,906 18,521
International 583 500
Other 853 885
Net Premiums Earned $208,902 $205,313
Captives
Premiums ceded to captives ($ millions) $22.0 $22.6
% of total premiums 10.8% 11.6%
NIW subject to captives ($ millions) $2,701 $3,988
% of primary NIW 21.3% 34.1%
IIF subject to captives 32.1% 32.8%
RIF subject to captives 34.0% 34.6%
Persistency (twelve months ended
September 30) 57.1% 57.4%
Nine Months Ended
September 30
2005 % 2004 %
Primary New Insurance Written ($
millions)
Flow $18,856 59.6% $28,392 85.7%
Structured 12,808 40.4% 4,726 14.3%
Total $31,664 100.0% $33,118 100.0%
Prime $18,133 57.3% $21,462 64.8%
Alt-A 8,374 26.4% 7,523 22.7%
A minus and below 5,157 16.3% 4,133 12.5%
Total $31,664 100.0% $33,118 100.0%
Total Primary New Insurance Written by
FICO Score ($ millions)
<=619 $4,561 14.4% $3,381 10.2%
620-679 9,599 30.3% 10,724 32.4%
680-739 10,463 33.1% 11,610 35.0%
>=740 7,041 22.2% 7,403 22.4%
Total $31,664 100.0% $33,118 100.0%
Percentage of primary new insurance
written
Monthlies 87% 93%
Refinances 42% 38%
95.01% LTV and above 10% 11%
ARMs 51% 39%
Primary risk written ($ millions)
Flow $4,682 67.7% $7,196 83.2%
Structured 2,232 32.3% 1,448 16.8%
Total $6,914 100.0% $8,644 100.0%
Other risk written ($ millions)
Pool $467 $376
Seconds 381 132
NIMs 66 91
International 251 162
Other 661 -
Total other risk written $1,826 $761
Net Premiums Written ($ thousands)
Primary and Pool Insurance $564,841 $560,276
Seconds 47,701 48,311
NIMs 32,217 36,799
International 22,711 2,941
Other 4,828 2,886
Net Premiums Written $672,298 $651,213
Net Premiums Earned ($ thousands)
Primary and Pool Insurance $523,392 $511,453
Seconds 36,775 50,091
NIMs 32,431 46,610
International 2,110 876
Other 2,323 2,886
Net Premiums Earned $597,031 $611,916
Captives
Premiums ceded to captives ($ millions) $67.6 $64.5
% of total premiums 11.4% 11.2%
NIW subject to captives ($ millions) $7,998 $13,394
% of primary NIW 25.3% 40.4%
IIF subject to captives
RIF subject to captives
Persistency (twelve months ended
September 30)
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
Exhibit J
September 30 December 31 September 30
2005 % 2004 % 2004 %
Primary insurance in
force ($ millions)
Flow $82,827 75.8% $89,741 77.8% $90,964 78.8%
Structured 26,457 24.2% 25,574 22.2% 24,516 21.2%
Total $109,284 100.0% $115,315 100.0% $115,480 100.0%
Prime $74,207 67.9% $79,628 69.0% $79,900 69.2%
Alt-A 21,137 19.3% 22,092 19.2% 22,393 19.4%
A minus and below 13,940 12.8% 13,595 11.8% 13,187 11.4%
Total $109,284 100.0% $115,315 100.0% $115,480 100.0%
Primary risk in
force ($ millions)
Flow $20,283 79.1% $21,991 81.4% $22,234 83.0%
Structured 5,374 20.9% 5,021 18.6% 4,562 17.0%
Total $25,657 100.0% $27,012 100.0% $26,796 100.0%
Prime $17,642 68.8% $18,422 68.2% $18,349 68.5%
Alt-A 4,518 17.6% 5,146 19.1% 5,166 19.3%
A minus and below 3,497 13.6% 3,444 12.7% 3,281 12.2%
Total $25,657 100.0% $27,012 100.0% $26,796 100.0%
Total Primary Risk
in Force by FICO
Score ($ millions)
<=619 $3,278 12.8% $3,296 12.2% $3,169 11.8%
620-679 8,325 32.4% 8,850 32.8% 8,701 32.5%
680-739 8,524 33.2% 9,101 33.7% 9,135 34.1%
>=740 5,530 21.6% 5,765 21.3% 5,791 21.6%
Total $25,657 100.0% $27,012 100.0% $26,796 100.0%
Percentage of primary
risk in force
Monthlies 91% 92% 92%
Refinances 37% 37% 37%
95.01% LTV and above 14% 13% 13%
ARMs 32% 31% 28%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
Exhibit K
September 30 December 31 September 30
2005 % 2004 % 2004 %
Total Primary Risk in
Force by LTV ($
millions)
95.01% and above $3,550 13.8% $3,429 12.7% $3,381 12.6%
90.01% to 95.00% 8,736 34.1% 9,822 36.4% 9,911 37.0%
85.01% to 90.00% 9,606 37.4% 10,290 38.1% 10,119 37.8%
85.00% and below 3,765 14.7% 3,471 12.8% 3,385 12.6%
Total $25,657 100.0% $27,012 100.0% $26,796 100.0%
Total Primary Risk in
Force by Policy Year
($ millions)
2001 and prior $2,927 11.4% $4,202 15.6% $4,764 17.8%
2002 2,262 8.8% 3,410 12.6% 3,977 14.8%
2003 6,224 24.3% 9,046 33.5% 10,094 37.7%
2004 7,808 30.4% 10,354 38.3% 7,961 29.7%
2005 6,436 25.1% - - - -
Total $25,657 100.0% $27,012 100.0% $26,796 100.0%
Other risk in force ($
millions)
Pool $2,639 $2,384 $2,363
Seconds 971 673 693
NIMs 283 312 365
International 436 214 186
Other 508 6 8
Total other risk in
force $4,837 $3,589 $3,615
Risk to capital ratio-
STAT Basis 9.8:1 10.0:1 10.1:1
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
Exhibit L
Quarter Ended Nine Months Ended
September 30 September 30
2005 2004 2005 2004
Direct claims paid ($ thousands)
Prime $24,369 $36,036 $88,141 $105,683
Alt-A 17,498 21,123 59,403 64,025
A Minus and below 21,310 25,223 62,218 71,666
Seconds 7,883 9,836 26,655 33,134
Total $71,060 $92,218 $236,417 $274,508
Average claim paid ($ thousands)
Prime $23.6 $22.5 $23.6 $23.8
Alt-A 36.5 36.5 35.9 39.0
A Minus and below 27.6 26.3 26.5 26.8
Seconds 22.0 25.7 22.5 27.3
Total $26.9 $26.2 $26.5 $27.5
Loss ratio - GAAP Basis 39.0% 49.2% 43.5% 49.1%
Expense ratio - GAAP Basis 25.4% 26.5% 26.1% 26.6%
64.4% 75.7% 69.6% 75.7%
Sept. 30 Dec. 31 Sept. 30
2005 2004 2004
Default Statistics
Primary insurance:
Prime
Number of insured loans 571,496 610,480 616,468
Number of loans in default 17,629 19,434 19,199
Percentage of loans in default 3.08% 3.18% 3.11%
Alt A
Number of insured loans 121,115 128,010 130,860
Number of loans in default 7,571 8,339 8,213
Percentage of loans in default 6.25% 6.51% 6.28%
A Minus and below
Number of insured loans 104,920 104,672 102,599
Number of loans in default 14,831 12,678 12,078
Percentage of loans in default 14.14% 12.11% 11.77%
Total
Number of insured loans 797,531 843,162 849,927
Number of loans in default 40,031 40,451 39,490
Percentage of loans in default 5.02% 4.80% 4.65%
Pool insurance:
Number of insured loans 685,648 583,568 580,533
Number of loans in default 7,683 6,749 6,489
Percentage of loans in default 1.12% 1.16% 1.12%
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
ALT-A
Exhibit M
Quarter Ended Nine Months Ended
($ millions) September 30 September 30
2005 % 2004 % 2005 % 2004 %
Primary New
Insurance
Written by
FICO Score
<=619 $24 0.7% $36 1.4% $31 0.4% $81 1.1%
620-659 596 16.0% 482 18.3% 1,463 17.5% 1,255 16.7%
660-679 488 13.1% 477 18.1% 1,106 13.2% 1,356 18.0%
680-739 1,632 43.9% 1,147 43.6% 3,688 44.0% 3,404 45.2%
>=740 979 26.3% 491 18.6% 2,086 24.9% 1,427 19.0%
Total $3,719 100.0% $2,633 100.0% $8,374 100.0% $7,523 100.0%
Primary Risk
in Force by
FICO Score
<=619 $50 1.1% $80 1.5%
620-659 974 21.6% 1,117 21.6%
660-679 783 17.3% 903 17.5%
680-739 1,898 42.0% 2,175 42.1%
>=740 813 18.0% 891 17.3%
Total $4,518 100.0% $5,166 100.0%
Primary Risk
in Force by
LTV
95.01% and
above $228 5.0% $415 8.0%
90.01% to
95.00% 1,462 32.4% 1,842 35.7%
85.01% to
90.00% 1,958 43.3% 2,154 41.7%
85.00% and
below 870 19.3% 755 14.6%
Total $4,518 100.0% $5,166 100.0%
Primary Risk
in Force by
Policy Year
2001 and
prior $217 4.8% $443 8.6%
2002 391 8.7% 799 15.5%
2003 1,034 22.9% 2,067 39.9%
2004 1,619 35.8% 1,857 36.0%
2005 1,257 27.8% - -
Total $4,518 100.0% $5,166 100.0%
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2005
Exhibit N
Quarter Ended Nine Months Ended
($ thousands ) September 30 September 30
2005 2004 2005 2004
Investment in Affiliates -
Selected Information
C-BASS
Balance, beginning of period $332,367 $248,759 $290,073 $226,710
Net income for period 20,727 18,095 80,271 72,644
Dividends received 9,750 - 27,000 32,500
Balance, end of period $343,344 $266,854 $343,344 $266,854
Sherman
Balance, beginning of period $103,831 $48,709 $101,492 $65,979
Net income for period 26,418 25,798 82,036 56,536
Dividends received 58,786 - 110,661 49,800
Other comprehensive income 797 (914) 1,468 878
Sale of ownership interest (18,947) - (18,947) -
Warrant repurchase - - (2,075) -
Balance, end of period $53,313 $73,593 $53,313 $73,593
Portfolio Information:
C-BASS
Servicing portfolio $36,500,000 $22,270,000
Total assets 3,765,804 4,466,115
Servicing income 62,210 38,931 $185,423 $112,958
Net interest income 51,280 37,025 136,838 109,207
Total revenues 134,539 105,115 456,076 354,174
Sherman
Total assets $868,957 $444,368
Net revenues $213,799 $129,661 $572,351 $353,314
All statements made in this press release that address events or
developments that we expect or anticipate may occur in the future are
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and
the U.S. Private Securities Litigation Reform Act of 1995. These statements
are made on the basis of management's current views and assumptions with
respect to future events. The forward-looking statements, as well as Radian's
prospects as a whole, are subject to risks and uncertainties, including the
following: changes in general financial and political conditions such as
extended national or regional economic recessions (or expansions), changes in
housing values, population trends and changes in household formation patterns,
changes in unemployment rates, changes or volatility in interest rates, or
other political instability; changes in investor perception of the strength of
private mortgage insurers or financial guaranty providers, and risks faced by
the businesses, municipalities or pools of assets covered by Radian's
insurance; the loss of a customer with whom Radian has a concentration of its
insurance in force; rising delinquencies in mortgage loans insured by Radian
resulting from increased consolidation of mortgage lenders and servicers;
increased severity or frequency of losses associated with certain Radian
products that are riskier than traditional mortgage insurance and municipal
guaranty insurance policies; material changes in persistency rates of Radian's
mortgage insurance policies; downgrades of 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 business practices of Fannie Mae and Freddie Mac;
the application of existing federal or state consumer lending, insurance and
other applicable laws and regulations, or unfavorable changes in these laws
and regulations or the way they are interpreted or applied, including: (i) the
possibility of private lawsuits or investigations by state insurance
departments and state attorneys general alleging that services offered by the
mortgage insurance industry, such as captive reinsurance, pool insurance and
contract underwriting, are violative of the Real Estate Settlement Procedures
Act and/or similar state regulations (particularly in light of public reports
that some state insurance departments may review or investigate captive
reinsurance arrangements used in the mortgage insurance industry), (ii) the
outcome of private lawsuits that have been brought against us and other
mortgage insurers under the Fair Credit Reporting Act or (iii) 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; international expansion of our mortgage
insurance and financial guaranty businesses into new markets and risks
associated with our international business activities; 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. 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:
Investors: Mona Zeehandelaar,
+1-215-231-1674, mona.zeehandelaar@radian.biz, or Media:
Corporate Communications, +1-888-NEWS-520, media@radian.biz, both
of Radian Group
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