Radian (RDN) 8-K Radian Reports Record Quarterly Earnings of $111.7 Million

EXHIBIT 99

Contact:

For investors	–	Mona Zeehandelaar –phone: 215 231.1674
		email:mona.zeehandelaar@radianmi.com
For the media	–	Emily Riley –phone: 215 231.1328
		email:emily.riley@radianmi.com

Radian Reports Record Quarterly Earnings of $111.7 Million

PHILADELPHIA, Pa., July 16, 2003 — Radian Group Inc. (NYSE: RDN) today reported net income of $111.7 million for the second quarter of 2003, compared to $108.9 million in the second quarter of 2002. Net income per share was $1.18, compared to $1.12 in the second quarter of 2002. For the first six months of 2003, net income and net income per share were $216.4 million and $2.29 respectively, compared to $212.9 million and $2.20 in 2002.

Premiums written in the second quarter were $273.9 million, up 15% compared to $237.6 million in the second quarter of 2002. Mortgage insurance accounted for 69% of this total, while financial guaranty business represented 31%. Premiums earned in the second quarter were $255.0 million, an increase of 21% compared to $211.0 million in 2002. Net investment income for the quarter was $47.0 million, up 6% from $44.5 million a year ago. For the first six months of 2003, premiums written increased 14% to $526.3 million, premiums earned increased 15% to $481.1 million and net investment income grew 7% from the prior year, to $93.7 million.

“Radian achieved record earnings in the second quarter,” stated Chairman and CEO Frank P. Filipps. “Strong business volumes in both mortgage insurance and financial guaranty combined to produce a 15% increase in written premium, and a 21% jump in premiums earned. Our strategy to extend and expand our business platform continues to deliver solid, consistent results.”

Financial Guaranty

Financial guaranty net premiums written for the quarter were $83.7 million, compared to $73.3 million a year ago, which was led by significant new writings in the public finance reinsurance and structured product areas. Net premiums earned were $65.3 million, compared to $43.2 million last year. Insured net debt service outstanding at June 30, 2003 was $114.7 billion, compared to $102.4 billion a year ago.

Mortgage Insurance

New primary mortgage insurance written in the quarter was $18.1 billion, including $4.8 billion of structured and $13.3 of flow mortgage insurance. Primary mortgage insurance-in-force was $122.1 billion at June 30, 2003, compared to $111.4 billion a year ago. The delinquency rate on primary loans was 4.04%, compared to 4.06% at December 31, 2002, and 3.50% a year ago.

Mortgage Services

Net income per share for the second quarter included $0.13 per share from Radian’s mortgage services businesses, primarily C-BASS and Sherman Financial, compared to $0.15 per share for the same period last year.

Radian will hold a conference call to discuss the company’s second quarter results on Thursday, July 17, 2003, at 9:00 a.m. Eastern time. This call will be broadcast live over the Internet atwww.firstcallevents.com/service/ajwz384158631gf12.html. A replay of the call will be available at this site approximately two hours after the live broadcast ends. Other statistical and financial information that is expected to be referred to during the conference call is available on Radian’s website under “Investor Information – Conference Calls” or can be accessed by clicking onwww.radiangroupinc.com/RadianGroup/grp_invest_conf.asp.

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 mortgage services. Additional information may be found atwww.radiangroupinc.com.

The following is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

The statements contained in this release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including but not limited to, the following risks: changes in the business practices of Fannie Mae and Freddie Mac; general economic developments such as extended national or regional economic recessions (or expansions), changes in housing values, interest rate changes or volatility; 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; the potential for more severe or more frequent 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; 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; and changes in Radian’s ability to maintain sufficient reinsurance capacity in an increasingly concentrated reinsurance market. Investors are also directed to other risks discussed in documents filed by Radian with the Securities and Exchange Commission.

###

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(Thousands of dollars, except share amounts)	June 30 2003		December 31 2002		June 30 2002
Assets:
Cash and investments	$	4,769,202	$	4,222,296	$	4,047,885
Investments in affiliates		282,765		259,120		223,284
Deferred policy acquisition costs		206,613		183,587		171,546
Prepaid federal income taxes		310,736		294,136		270,150
Other assets		483,642		434,266		382,376
Total assets	$	6,052,958	$	5,393,405	$	5,095,241
Liabilities and stockholders’ equity:
Unearned premiums	$	662,292	$	618,050	$	552,311
Reserve for losses		653,382		624,577		603,221
Short-term and long-term debt		717,291		544,145		544,110
Deferred federal income taxes		659,252		570,279		478,536
Other liabilities		334,737		282,919		323,554
Total liabilities		3,026,954		2,639,970		2,501,732
Preferred stock	$	—	$	—		40,000
Common stock		95		95		95
Additional paid-in capital		1,180,701		1,186,830		1,227,676
Retained earnings		1,720,843		1,508,138		1,301,006
Accumulated other comprehensive income		124,365		58,372		24,732
Total common stockholders’ equity		3,026,004		2,753,435		2,553,509
Total liabilities and stockholders’ equity	$	6,052,958	$	5,393,405	$	5,095,241
Book value per share	$	32.40	$	29.42	$	26.88

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

	Quarter Ended June 30						Six Months Ended June 30
(Thousands of dollars, except share data)	2003			2002			2003			2002
Revenues:
Net premiums written	$	273,896		$	237,610		$	526,256		$	462,248
Premiums earned		255,012			211,031			481,141			420,220
Net investment income		47,004			44,485			93,676			87,238
Equity in net income of affiliates		33,859			26,774			48,747			45,394
Other income		15,403			10,965			29,960			22,247
Total revenues		351,278			293,255			653,524			575,099
Expenses:
Provision for losses		95,540			57,576			163,298			115,003
Policy acquisition costs		31,368			25,603			62,385			49,050
Other operating expenses		56,565			44,500			101,006			89,245
Interest expense		9,652			7,239			18,236			14,393
Total expenses		193,125			134,918			344,925			267,691
Gains and losses:
Gain/Loss on disposition of investments		2,824			2,462			6,849			3,083
Change in fair value of derivative instruments		(4,829	)		(5,764	)		(12,727	)		(9,006	)
		(2,005	)		(3,302	)		(5,878	)		(5,923	)
Pretax income		156,148			155,035			302,721			301,485
Provision for income taxes		44,474			46,113			86,275			88,630
Net income	$	111,674		$	108,922			216,446		$	212,855
Dividends to preferred stockholder		0			825			0			1,650
Net income available to common stockholders	$	111,674		$	108,097			216,446		$	211,205
Net income per share	$	1.18		$	1.12		$	2.29		$	2.20
Weighted average shares outstanding (in thousands)		94,360			96,387			94,328			96,134

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Six Months Ended June 30, 2003

Mortgage Insurance	Quarter Ended June 30					Six Months Ended June 30
(Thousands of dollars)	2003		2002			2003			2002
Net premiums written	$	190,227	$	164,328		$	354,999		$	326,390
Premiums earned	$	189,718	$	167,873		$	357,750		$	336,912
Net investment income		26,753		26,963			54,582			52,814
Equity in net income of affiliates		—		—			—			—
Other income		7,817		4,393			14,416			8,410
Total revenues		224,288		199,229			426,748			398,136
Expenses
Provision for losses		76,037		47,318			130,204			92,416
Policy acquisition costs		17,444		17,326			34,923			32,898
Other operating expenses		33,188		27,248			62,596			56,054
Interest expense		5,562		4,633			10,662			8,675
Total expenses		132,231		96,525			238,385			190,043
Gains and losses
Gain/Loss on disposition of investments		475		2,423			865			3,383
Change in fair value of derivative instruments		3,558		(3,039	)		(26	)		(4,314	)
Total gains and losses		4,033		(616	)		839			(931	)
Pretax income		96,090		102,088			189,202			207,162
Income tax provision		25,904		28,439			51,358			57,387
Net income	$	70,186	$	73,649		$	137,844		$	149,775
Assets	$	3,626,022	$	3,114,928
Deferred policy acquisition costs		76,404		79,243
Reserve for losses		490,579		475,288
Unearned premiums		108,819		94,402
Equity		1,689,161		1,539,185

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Six Months Ended June 30, 2003

Mortgage Services	Quarter Ended June 30					Six Months Ended June 30
(Thousands of dollars)	2003			2002		2003			2002
Net premiums written
Premiums earned
Net investment income	$	2		$	11	$	36		$	54
Equity in net income of affiliates		28,345			26,909		43,289			45,413
Other income		6,424			6,310		12,785			13,006
Total revenues		34,771			33,230		56,110			58,473
Expenses
Provision for losses		—			—		—			—
Policy acquisition costs		—			—		—			—
Other operating expenses		13,063			9,461		20,224			16,699
Interest expense		861			477		1,473			985
Total expenses		13,924			9,938		21,697			17,684
Gains and losses
Gain/Loss on disposition of investments		(1,037	)		857		(918	)		789
Change in fair value of derivative instruments		27			—		27			—
Total gains and losses		(1,010	)		857		(891	)		789
Pretax income		19,837			24,149		33,522			41,578
Income tax provision		7,925			9,660		13,399			16,632
Net income	$	11,912		$	14,489	$	20,123		$	24,946
Assets	$	272,263		$	216,852
Deferred policy acquisition costs
Reserve for losses
Unearned premiums
Equity		220,753			174,689

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Six Months Ended June 30, 2003

Financial Guaranty	Quarter Ended June 30						Six Months Ended June 30
(Thousands of dollars)	2003			2002			2003			2002
Net premiums written	$	83,669		$	73,282		$	171,257		$	135,858
Premiums earned	$	65,294		$	43,158		$	123,391		$	83,308
Net investment income		20,249			17,511			39,058			34,370
Equity in net income (loss) of affiliates		5,514			(135	)		5,458			(19	)
Other income		1,162			262			2,759			831
Total revenues		92,219			60,796			170,666			118,490
Expenses
Provision for losses		19,503			10,258			33,094			22,587
Policy acquisition costs		13,924			8,277			27,462			16,152
Other operating expenses		10,314			7,791			18,186			16,492
Interest expense		3,229			2,129			6,101			4,733
Total expenses		46,970			28,455			84,843			59,964
Gains and losses
Gain/Loss on disposition of investments		3,386			(818	)		6,902			(1,089	)
Change in fair value of derivative instruments		(8,414	)		(2,725	)		(12,728	)		(4,692	)
Total gains and losses		(5,028	)		(3,543	)		(5,826	)		(5,781	)
Pretax income		40,221			28,798			79,997			52,745
Income tax provision		10,645			8,014			21,518			14,611
Net income	$	29,576		$	20,784		$	58,479		$	38,134
Assets	$	2,154,673		$	1,763,462
Deferred policy acquisition costs		130,209			92,303
Reserve for losses		162,803			127,933
Unearned premiums		553,473			457,909
Equity		1,116,090			839,636

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Six Months Ended and as of June 30, 2003

	Quarter Ended June 30				Six Months Ended June 30
(Thousands of dollars, except ratios)	2003		2002		2003		2002
New insurance written-flow ($millions)	13,267		8,503		23,856		17,562
New insurance written-structured ($millions)	4,859		1,644		15,546		6,448
Total primary new insurance written	18,126		10,147		39,402		24,010
Primary risk written ($millions)	4,549		2,501		9,933		6,092
Pool risk written ($millions)	502		35		565		121
Direct claims paid ($thousands)
Prime	32,271		24,099		56,334		44,125
Non-Prime:
Alt A	12,091		5,977		20,699		10,616
A Minus and below	17,169		6,591		31,104		12,930
Seconds	6,336		2,584		13,042		8,549
Total	67,867		39,251		121,179		76,220
Average claim paid	27.8		26.3		26.5		26.4
Loss ratio—GAAP Basis	40.1	%	28.2	%	36.4	%	27.4	%
Expense ratio—GAAP Basis	26.7	%	25.5	%	27.3	%	26.4	%
	66.8	%	53.7	%	63.7	%	53.8	%
Persistency (twelve months ended June 30)	52.0	%	59.3	%
Percentage of primary new insurance written:
Monthlies	85	%	98	%	90	%	96	%
Refinances	53	%	44	%	55	%	40	%
95% LTV and above	23	%	37	%	18	%	37	%
ARMs	24	%	26	%	38	%	20	%

	June 30 2003		December 31 2002		June 30 2002
Direct primary insurance in force ($millions)	122,086		110,273		111,424
Direct primary risk in force ($millions)	27,815		26,273		26,716
GSE pool risk in force ($millions)	1,212		1,218		1,222
Total pool risk in force ($millions)	2,340		1,732		1,745
Primary insurance:
Prime:
Number of insured loans	683,734		698,910		749,065
Number of loans in default	20,889		21,483		20,012
Percentage of loans in default	3.06	%	3.07	%	2.67	%
Non-Prime:
Alt A
Number of insured loans	120,943		102,839		85,018
Number of loans in default	5,272		5,300		3,790
Percentage of loans in default	4.36	%	5.15	%	4.46	%
A Minus and below
Number of insured loans	112,646		79,871		71,503
Number of loans in default	10,941		9,005		7,853
Percentage of loans in default	9.71	%	11.27	%	10.98	%
Total Prime and Non-Prime
Number of insured loans	917,323		881,620		905,586
Number of loans in default	37,102		35,788		31,655
Percentage of loans in default	4.04	%	4.06	%	3.50	%
Pool insurance:
Number of insured loans	599,428		593,405		795,412
Number of loans in default	5,554		6,554		7,353
Percentage of loans in default	0.93	%	1.10	%	0.92	%
Risk to capital ratio	11.5:1		11.5:1		13.7:1

Radian Group Inc.

Financial Guaranty Insurance Supplemental Information

For the Quarter and Six Months Ended and as of June 30, 2003

	Quarter Ended June 30				Six Months Ended June 30
(Thousands of dollars, except ratios)	2003		2002		2003		2002
Net Premiums Written:
Public finance direct	11,280		15,956		21,548		30,540
Public finance reinsurance	24,019		7,212		47,550		23,194
Structured direct	19,892		21,669		37,702		29,684
Structured reinsurance	13,364		15,256		27,732		30,970
Trade credit	15,114		13,189		36,725		21,470
	83,669		73,282		171,257		135,858
Net Premiums Earned:
Public finance direct	4,388		3,314		8,275		6,833
Public finance reinsurance	12,775		10,840		23,853		18,505
Structured direct	20,062		8,944		38,474		15,499
Structured reinsurance	13,066		12,565		25,349		27,605
Trade credit	15,003		7,495		27,440		14,866
	65,294		43,158		123,391		83,308
Loss ratio—GAAP Basis	29.9	%	23.8	%	26.8	%	27.1	%
Expense ratio—GAAP Basis	37.1	%	37.2	%	37.0	%	38.0	%
	67.0	%	61.0	%	63.8	%	65.1	%
Refundings included in earned premium	3,296		3,264		4,905		3,903

	June 30 2003	December 31 2002	June 30 2002
Capital and surplus	767,856	581,185	496,019
Contingency reserve	306,773	319,648	337,629
Qualified statutory capital	1,074,629	900,833	833,648
Unearned premium reserve	658,738	604,942	551,034
Loss and loss expense reserve	84,626	84,096	73,774
Total policyholders’ reserves	1,817,993	1,589,871	1,458,456
Present value of installment premiums	452,976	400,140	381,992
Reinsurance and soft capital facilities	125,000	165,000	155,000
Total claims paying resources	2,395,969	2,155,011	1,995,448
Net debt service outstanding	114,744,064	104,755,801	102,362,692
Capital leverage ratio (1)	107	116	123
Claims paying leverage ratio (2)	48	49	51

(1) Net debt service outstanding divided by qualified statutory capital

(2) Net debt service outstanding divided by total claims paying resources