Exhibit 99.1
1601 Market Street | ||
Philadelphia, Pennsylvania | ||
19103-2337 | ||
800 523.1988 | ||
215 564.6600 | News Release | |
Contact: | ||
For investors: | Mona Zeehandelaar – phone: 215 231.1674 | |
email:mona.zeehandelaar@radian.biz | ||
For the media: | David Cheung – phone: 215 231.1362 | |
email:david.cheung@radian.biz |
Radian Reports 27% Increase in Net Income Per Share, Year-Over-Year Increase of 17% in Book Value Per Share
PHILADELPHIA, Pa., July 20, 2005 — 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 June 30, 2005 | Quarter Ended June 30, 2004 | Percent 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 Ended June 30, 2005 | Six Months Ended June 30, 2004 | Percent Change | |||||||
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 atwww.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or atwww.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
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 atwww.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
(Thousands of dollars, except per share data) | Quarter Ended June 30 | Six Months Ended June 30 | |||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
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, except per share data) | June 30 2005 | December 31 2004 | June 30 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
(Thousands of dollars) | Mortgage Insurance | Financial Services | Financial 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
(Thousands of dollars) | Mortgage Insurance | Financial Services | Financial 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
(Thousands of dollars) | Mortgage Insurance | Financial Services | Financial 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
(Thousands of dollars) | Mortgage Insurance | Financial Services | Financial 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, except ratios) | Quarter Ended June 30 | Six Months Ended 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 2005 | December 31 2004 | June 30 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 | Six Months Ended June 30 | |||||||||||||||||||||||||||
2005 | % | 2004 | % | 2005 | % | 2004 | % | |||||||||||||||||||||
Primary New Insurance Written ($ millions) | �� | |||||||||||||||||||||||||||
Flow | $ | 6,128 | 47.3 | % | $ | 10,427 | 88.6 | % | $ | 11,790 | 62.1 | % | $ | 19,269 | 89.9 | % | ||||||||||||
Structured | 6,814 | 52.7 | % | 1,339 | 11.4 | % | 7,196 | 37.9 | % | 2,163 | 10.1 | % | ||||||||||||||||
Total | $ | 12,942 | 100.0 | % | $ | 11,766 | 100.0 | % | $ | 18,986 | 100.0 | % | $ | 21,432 | 100.0 | % | ||||||||||||
Prime | $ | 6,659 | 51.5 | % | $ | 8,010 | 68.1 | % | $ | 10,942 | 57.6 | % | $ | 14,281 | 66.6 | % | ||||||||||||
Alt-A | 3,512 | 27.1 | % | 2,403 | 20.4 | % | 4,655 | 24.5 | % | 4,890 | 22.8 | % | ||||||||||||||||
A minus and below | 2,771 | 21.4 | % | 1,353 | 11.5 | % | 3,389 | 17.9 | % | 2,261 | 10.6 | % | ||||||||||||||||
Total | $ | 12,942 | 100.0 | % | $ | 11,766 | 100.0 | % | $ | 18,986 | 100.0 | % | $ | 21,432 | 100.0 | % | ||||||||||||
Total Primary New Insurance Written by FICO Score($ millions) | ||||||||||||||||||||||||||||
<=619 | $ | 2,586 | 20.0 | % | $ | 1,095 | 9.3 | % | $ | 3,029 | 16.0 | % | $ | 1,800 | 8.4 | % | ||||||||||||
620-679 | 3,791 | 29.3 | % | 3,601 | 30.6 | % | 5,741 | 30.2 | % | 6,810 | 31.8 | % | ||||||||||||||||
680-739 | 3,987 | 30.8 | % | 4,128 | 35.1 | % | 6,131 | 32.3 | % | 7,814 | 36.4 | % | ||||||||||||||||
>=740 | 2,578 | 19.9 | % | 2,942 | 25.0 | % | 4,085 | 21.5 | % | 5,008 | 23.4 | % | ||||||||||||||||
Total | $ | 12,942 | 100.0 | % | $ | 11,766 | 100.0 | % | $ | 18,986 | 100.0 | % | $ | 21,432 | 100.0 | % | ||||||||||||
Percentage of primary new insurance written | ||||||||||||||||||||||||||||
Monthlies | 85 | % | 90 | % | 87 | % | 92 | % | ||||||||||||||||||||
Refinances | 48 | % | 41 | % | 45 | % | 42 | % | ||||||||||||||||||||
95.01% LTV and above | 9 | % | 10 | % | 11 | % | 11 | % | ||||||||||||||||||||
ARMs | 56 | % | 36 | % | 50 | % | 35 | % | ||||||||||||||||||||
Primary risk written ($ millions) | ||||||||||||||||||||||||||||
Flow | $ | 1,516 | 53.2 | % | $ | 2,596 | 87.6 | % | $ | 2,930 | 67.8 | % | $ | 4,909 | 88.5 | % | ||||||||||||
Structured | 1,332 | 46.8 | % | 367 | 12.4 | % | 1,392 | 32.2 | % | 639 | 11.5 | % | ||||||||||||||||
Total | $ | 2,848 | 100.0 | % | $ | 2,963 | 100.0 | % | $ | 4,322 | 100.0 | % | $ | 5,548 | 100.0 | % | ||||||||||||
Other risk written ($ millions) | ||||||||||||||||||||||||||||
Pool | $ | 248 | $ | 238 | $ | 304 | $ | 324 | ||||||||||||||||||||
Seconds | 49 | 10 | 59 | 62 | ||||||||||||||||||||||||
NIMs | 38 | 15 | 66 | 71 | ||||||||||||||||||||||||
International | 158 | 37 | 218 | 149 | ||||||||||||||||||||||||
Other | — | — | 511 | — | ||||||||||||||||||||||||
Total other risk written | $ | 493 | $ | 300 | $ | 1,158 | $ | 606 | ||||||||||||||||||||
Net Premiums Written ($ thousands) | ||||||||||||||||||||||||||||
Primary and Pool Insurance | $ | 191,012 | $ | 206,180 | $ | 367,196 | $ | 382,458 | ||||||||||||||||||||
Seconds | 17,530 | 15,904 | 29,331 | 33,181 | ||||||||||||||||||||||||
NIMs | 10,573 | 13,048 | 19,867 | 23,924 | ||||||||||||||||||||||||
International | 16,442 | 363 | 18,644 | 564 | ||||||||||||||||||||||||
Other | 714 | 964 | 1,470 | 2,001 | ||||||||||||||||||||||||
Net Premiums Written | $ | 236,271 | $ | 236,459 | $ | 436,508 | $ | 442,128 | ||||||||||||||||||||
Net Premiums Earned ($ thousands) | ||||||||||||||||||||||||||||
Primary and Pool Insurance | $ | 172,623 | $ | 164,326 | $ | 341,644 | $ | 341,769 | ||||||||||||||||||||
Seconds | 11,568 | 16,496 | 23,963 | 34,368 | ||||||||||||||||||||||||
NIMs | 9,737 | 17,358 | 19,525 | 28,089 | ||||||||||||||||||||||||
International | 1,022 | 343 | 1,527 | 376 | ||||||||||||||||||||||||
Other | 714 | 964 | 1,470 | 2,001 | ||||||||||||||||||||||||
Net Premiums Earned | $ | 195,664 | $ | 199,487 | $ | 388,129 | $ | 406,603 | ||||||||||||||||||||
Captives | ||||||||||||||||||||||||||||
Premiums ceded to captives($ millions) | $ | 21.8 | $ | 22.7 | $ | 45.6 | $ | 41.9 | ||||||||||||||||||||
% of total premiums | 11.2 | % | 12.1 | % | 11.7 | % | 10.9 | % | ||||||||||||||||||||
NIW subject to captives($ millions) | $ | 3,011 | $ | 5,057 | $ | 5,297 | $ | 9,406 | ||||||||||||||||||||
% of primary NIW | 23.3 | % | 43.0 | % | 27.9 | % | 43.9 | % | ||||||||||||||||||||
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 | % |
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 June 30 | Six Months Ended 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 2005 | December 31 2004 | June 30 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
($ millions) | Quarter Ended June 30 | Six Months Ended 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
($ thousands ) | Quarter Ended June 30 | Six Months Ended 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.
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