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: | Michelle Davidson – phone: 215 231.1325 | |
| cell: 215 260.6760 | ||
| email:michelle.davidson@radian.biz | ||
| Courtney Robinson – phone: 215 231.1762 | ||
| cell: 215 629.6880 | ||
| email:courtney.robinson@radian.biz | ||
Radian Reports Record 2006 Net Income of $582 Million
| • | Record 2006 diluted EPS increases 19.8 percent to $7.08 |
| • | Grows book value by 16.1 percent over 2005 |
| • | Posts fourth quarter 2006 diluted EPS of $1.96 |
PHILADELPHIA, Pa., January 23, 2007 — Radian Group Inc. (NYSE: RDN) today reported that for the year ended December 31, 2006, Radian earned record net income of $582.2 million and diluted net income per share of $7.08. This represents an increase of 11.3 percent and 19.8 percent, respectively, over 2005. Book value per share at December 31, 2006, was $51.23, an increase of 16.1 percent from a year earlier.
For the fourth quarter, Radian reported net income of $158.4 million and diluted net income per share of $1.96, compared to $104.5 million and $1.24 reported in the fourth quarter of 2005.
“Radian delivered record net income and grew book value by 16.1 percent, despite a challenging operating environment for our businesses including tight credit-spreads and competition from alternative products,” said Chief Executive Officer S.A. Ibrahim. “This performance demonstrates that our strategy to focus on diversification while maintaining a strict risk management culture continues to deliver long-term value.”
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In its mortgage insurance business, Radian said it continued to benefit from its unique capital markets expertise, as well as positive trends in the mortgage market including stable interest rates and strong employment. The company also made strong progress in its international expansion efforts, establishing Radian Australia Limited and announcing a multi-year partnership with St. George Insurance Australia, a wholly owned subsidiary of St. George Bank, Australia’s fifth largest bank.
Mr. Ibrahim noted that the mortgage insurance business experienced a seasonal increase in delinquencies in the fourth quarter of 2006. The loss reserve, while up $57.0 million on a gross basis from year-end 2005, was up only slightly from the third quarter, due in part to an improved economic outlook.
“Forecasts for interest rate stability, strong employment and improved persistency bode well for the mortgage insurance industry,” Mr. Ibrahim added. “In this environment, we believe we are well positioned to benefit over the long-term from both cyclical and structural opportunities in the mortgage market.”
The company’s financial guaranty business continued to perform well in a difficult environment, reporting a 17.9 percent increase in net premiums written year-over-year. Radian also reported progress in international efforts for this business as it finds an attractive, fast-growing synthetic market for the AA credit enhancement solutions that are at the core of its success.
“During the year, we achieved an important milestone for our financial guaranty business when S&P affirmed the AA financial strength rating for Radian Asset Assurance, and revised its outlook upward to stable,” Mr. Ibrahim said. “In the fourth quarter, we exceeded $100 billion in net par outstanding. We believe that these milestones, along with the outstanding performance throughout the year, validate our AA franchise strategy. Our goal in 2007 is to continue to prudently grow our financial guaranty business.”
In the Financial Services segment, both C-BASS and Sherman continued to be important and steady contributors to Radian’s results.
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The key financial highlights of the quarter and year ended December 31, 2006, are as follows:
Key Financial Highlights(dollars in millions, except per share data)
Fourth quarter
| Quarter ended December 31, 2006 | Quarter ended December 31, 2005 | Percent Change | |||||||
Revenue | $ | 347,884 | $ | 298,641 | 16.5 | % | |||
Net income | $ | 158,370 | $ | 104,461 | 51.6 | % | |||
Diluted net income per share | $ | 1.96 | $ | 1.24 | 58.1 | % | |||
Net premiums written | $ | 278,700 | $ | 272,721 | 2.2 | % | |||
Net premiums earned | $ | 248,919 | $ | 262,031 | (5.0 | )% | |||
Equity in net income of affiliates | $ | 70,745 | $ | 55,746 | 26.9 | % | |||
Book value per share | $ | 51.23 | $ | 44.11 | 16.1 | % | |||
Full year
| Year Ended December 31, 2006 | Year Ended December 31, 2005 | Percent Change | |||||||
Revenue | $ | 1,327,946 | $ | 1,298,151 | 2.3 | % | |||
Net income | $ | 582,172 | $ | 522,854 | 11.3 | % | |||
Diluted net income per share | $ | 7.08 | $ | 5.91 | 19.8 | % | |||
Net premiums written | $ | 1,111,985 | $ | 1,100,687 | 1.0 | % | |||
Net premiums earned | $ | 1,015,846 | $ | 1,018,670 | (0.3 | %) | |||
Equity in net income of affiliates | $ | 256,993 | $ | 217,692 | 18.1 | % | |||
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Radian will hold a conference call on Wednesday, January 24, 2007, at 9:00 a.m. Eastern time to discuss the company’s fourth quarter and annual results. This call will be broadcast live over the Internet athttp://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or athttp://www.radian.biz > News. A replay of the Webcast will be available at this site approximately two hours after the live broadcast ends for a period of one year.
Statistical and financial information which is expected to be referred to during the conference call will be available on Radian’s website under Investors > Webcasts, Presentations and Transcripts or by clicking onhttp://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives.
Radian Group Inc. is a global credit risk management company headquartered in Philadelphia with significant operations in New York and London. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets worldwide, primarily through credit insurance products. The company also provides credit enhancement for public finance and other corporate and consumer assets on both a direct and reinsurance basis and holds strategic interests in active credit-based consumer asset businesses. Additional information may be found atwww.radian.biz.
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Financial Results and Supplemental Information Contents
For trend information on all schedules, refer to Radian’s quarterly financial statistics athttp://www.radian.biz/investors/financial/corporate.aspx.
Exhibit A: | Condensed Consolidated Statements of Income | |
Exhibit B: | Condensed Consolidated Balance Sheets | |
Exhibit C: | Segment Information Quarter Ended December 31, 2006 | |
Exhibit D: | Segment Information Quarter Ended December 31, 2005 | |
Exhibit E: | Segment Information Twelve Months Ended December 31, 2006 | |
Exhibit F: | Segment Information Twelve Months Ended December 31, 2005 | |
Exhibit G: | Financial Guaranty Insurance Supplemental Information – Quarter and Twelve Months Ended and as of December 31, 2006 | |
Exhibit H: | Financial Guaranty Insurance Supplemental Information – Quarter and Twelve Months Ended and as of December 31, 2006 | |
Exhibit I: | Mortgage Insurance Supplemental Information: New Insurance Written and Risk Written | |
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 and Other Risk in Force | |
Exhibit L: | Mortgage Insurance Supplemental Information: Claims and Reserves | |
Exhibit M: | Mortgage Insurance Supplemental Information: Defaults | |
Exhibit N: | Mortgage Insurance Supplemental Information: Net Premiums Written and Earned, Smart Home, Captives and Persistency | |
Exhibit O: | Mortgage Insurance Supplemental Information: ALT A | |
Exhibit P: | Financial Services Supplemental Information | |
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Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
Quarter Ended December 31 | Year Ended December 31 | ||||||||||||
| (In thousands, except per-share data) | 2006 | 2005 | 2006 | 2005 | |||||||||
| Revenues: | |||||||||||||
| Net premiums written | $ | 278,700 | $ | 272,721 | $ | 1,111,985 | $ | 1,100,687 | |||||
| Net premiums earned | $ | 248,919 | $ | 262,031 | $ | 1,015,846 | $ | 1,018,670 | |||||
| Net investment income | 60,222 | 54,303 | 234,345 | 208,422 | |||||||||
| Net gains on securities | 11,255 | 11,195 | 40,842 | 36,638 | |||||||||
| Change in fair value of derivative instruments | 23,097 | (36,131 | ) | 16,066 | 9,170 | ||||||||
| Other income | 4,391 | 7,243 | 20,847 | 25,251 | |||||||||
Total revenues | 347,884 | 298,641 | 1,327,946 | 1,298,151 | |||||||||
| Expenses: | |||||||||||||
| Provision for losses | 84,389 | 104,865 | 369,278 | 390,633 | |||||||||
| Policy acquisition costs | 31,074 | 27,496 | 111,609 | 115,851 | |||||||||
| Other operating expenses | 61,552 | 62,958 | 242,634 | 225,977 | |||||||||
| Interest expense | 12,256 | 11,940 | 48,149 | 43,043 | |||||||||
Total expenses | 189,271 | 207,259 | 771,670 | 775,504 | |||||||||
| Equity in net income of affiliates | 70,745 | 55,746 | 256,993 | 217,692 | |||||||||
| Pretax income | 229,358 | 147,128 | 813,269 | 740,339 | |||||||||
| Provision for income taxes | 70,988 | 42,667 | 231,097 | 217,485 | |||||||||
| Net income | $ | 158,370 | $ | 104,461 | $ | 582,172 | $ | 522,854 | |||||
| Diluted net income per share (1) | $ | 1.96 | $ | 1.24 | $ | 7.08 | $ | 5.91 | |||||
(1) Net income per share reconciliation | |||||||||||||
Net income | $ | 158,370 | $ | 104,461 | $ | 582,172 | $ | 522,854 | |||||
Interest expense on convertible senior debentures (net of tax) | — | — | — | 1,871 | |||||||||
Net income available to common stockholders | $ | 158,370 | $ | 104,461 | $ | 582,172 | $ | 524,725 | |||||
Weighted average shares outstanding (in thousands) | |||||||||||||
Average common shares outstanding | 79,923 | 83,028 | 81,338 | 85,637 | |||||||||
Increase in shares-potential exercise of options-diluted basis | 770 | 889 | 923 | 894 | |||||||||
Increase in shares-contingently convertible debt (2) | — | — | — | 2,215 | |||||||||
Weighted average shares outstanding (in thousands) | 80,693 | 83,917 | 82,261 | 88,746 | |||||||||
| (2) | The 2005 period includes 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 $0.13 per share for the year ended December 31, 2005. |
For Trend Information, refer to our Quarterly Financial Statistics on Radian’s (RDN) website.
Page 1
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit B
| (In thousands, except share and per-share data) | December 31 2006 | December 31 2005 | |||||
Assets: | |||||||
Cash and investments | $ | 5,827,344 | $ | 5,521,561 | |||
Investments in affiliates | 618,841 | 446,151 | |||||
Deferred policy acquisition costs | 221,769 | 208,325 | |||||
Prepaid federal income taxes | 808,740 | 585,514 | |||||
Other assets | 451,977 | 469,059 | |||||
Total assets | $ | 7,928,671 | $ | 7,230,610 | |||
Liabilities and stockholders’ equity: | |||||||
Unearned premiums | $ | 943,687 | $ | 849,360 | |||
Reserve for losses and loss adjustment expenses | 842,283 | 801,002 | |||||
Long-term debt | 747,770 | 747,466 | |||||
Deferred federal income taxes | 1,129,740 | 961,993 | |||||
Other liabilities | 197,634 | 207,909 | |||||
Total liabilities | 3,861,114 | 3,567,730 | |||||
Common stock | 97 | 97 | |||||
Additional paid-in capital | 416,193 | 629,019 | |||||
Retained earnings | 3,489,290 | 2,913,649 | |||||
Accumulated other comprehensive income | 161,977 | 120,115 | |||||
Total common stockholders’ equity | 4,067,557 | 3,662,880 | |||||
Total liabilities and stockholders’ equity | $ | 7,928,671 | $ | 7,230,610 | |||
Book value per share | $ | 51.23 | $ | 44.11 | |||
| Treasury Stock Repurchases (Year-to-Date for Periods Presented) | |||||||
Total number of shares repurchased | 4,500,000 | (1) | 10,767,800 | ||||
Average price paid per share | $ | 58.58 | $ | 49.58 | |||
Total cost of repurchased shares | $ | 263,600,341 | $ | 533,888,969 | |||
| (1) | 1.5 million shares were repurchased in the4th quarter of 2006 at a cost of $81.1 million. |
Page 2
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended December 31, 2006
Exhibit C
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | |||||||||
Revenues: | |||||||||||||
Net premiums written | $ | 202,362 | $ | 76,338 | $ | — | $ | 278,700 | |||||
Net premiums earned | $ | 199,207 | $ | 49,712 | $ | — | $ | 248,919 | |||||
Net investment income | 34,947 | 25,268 | 7 | 60,222 | |||||||||
Net gains (losses) on securities | 11,956 | (1,068 | ) | 367 | 11,255 | ||||||||
Change in fair value of derivative instruments | 1,852 | 21,245 | — | 23,097 | |||||||||
Other income | 2,967 | 74 | 1,350 | 4,391 | |||||||||
Total revenues | 250,929 | 95,231 | 1,724 | 347,884 | |||||||||
Expenses: | |||||||||||||
Provision for losses | 80,328 | 4,061 | — | 84,389 | |||||||||
Policy acquisition costs | 20,628 | 10,446 | — | 31,074 | |||||||||
Other operating expenses | 43,278 | 13,680 | 4,594 | 61,552 | |||||||||
Interest expense | 6,581 | 4,278 | 1,397 | 12,256 | |||||||||
Total expenses | 150,815 | 32,465 | 5,991 | 189,271 | |||||||||
Equity in net income of affiliates | — | — | 70,745 | 70,745 | |||||||||
Pretax income | 100,114 | 62,766 | 66,478 | 229,358 | |||||||||
Provision for income taxes | 30,004 | 17,716 | 23,268 | 70,988 | |||||||||
Net income | $ | 70,110 | $ | 45,050 | $ | 43,210 | $ | 158,370 | |||||
Assets | $ | 4,619,451 | $ | 2,680,738 | $ | 628,482 | $ | 7,928,671 | |||||
Deferred policy acquisition costs | 68,381 | 153,388 | — | 221,769 | |||||||||
Reserve for losses and loss adjustment expenses | 653,236 | 189,047 | — | 842,283 | |||||||||
Unearned premiums | 249,293 | 694,394 | — | 943,687 | |||||||||
Stockholders’ equity | 2,259,796 | 1,377,263 | 430,498 | 4,067,557 | |||||||||
Page 3
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended December 31, 2005
Exhibit D
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | |||||||||||
Revenues: | |||||||||||||||
Net premiums written | $ | 205,334 | $ | 67,387 | $ | — | $ | 272,721 | |||||||
Net premiums earned | $ | 209,866 | $ | 52,165 | $ | — | $ | 262,031 | |||||||
Net investment income | 31,309 | 22,962 | 32 | 54,303 | |||||||||||
Net gains on securities | 9,692 | 1,288 | 215 | 11,195 | |||||||||||
Change in fair value of derivative instruments | (2,831 | ) | (33,324 | ) | 24 | (36,131 | ) | ||||||||
Other income | 4,384 | 69 | 2,790 | 7,243 | |||||||||||
Total revenues | 252,420 | 43,160 | 3,061 | 298,641 | |||||||||||
Expenses: | |||||||||||||||
Provision for losses | 99,413 | 5,452 | — | 104,865 | |||||||||||
Policy acquisition costs | 14,226 | 13,270 | — | 27,496 | |||||||||||
Other operating expenses | 45,286 | 16,511 | 1,161 | 62,958 | |||||||||||
Interest expense | 6,650 | 4,251 | 1,039 | 11,940 | |||||||||||
Total expenses | 165,575 | 39,484 | 2,200 | 207,259 | |||||||||||
Equity in net income of affiliates | — | — | 55,746 | 55,746 | |||||||||||
Pretax income | 86,845 | 3,676 | 56,607 | 147,128 | |||||||||||
Provision for income taxes | 25,143 | (2,288 | ) | 19,812 | 42,667 | ||||||||||
Net income | $ | 61,702 | $ | 5,964 | $ | 36,795 | $ | 104,461 | |||||||
Assets | $ | 4,367,804 | $ | 2,405,234 | $ | 457,572 | $ | 7,230,610 | |||||||
Deferred policy acquisition costs | 67,211 | 141,114 | — | 208,325 | |||||||||||
Reserve for losses and loss adjustment expenses | 596,210 | 204,792 | — | 801,002 | |||||||||||
Unearned premiums | 212,875 | 636,485 | — | 849,360 | |||||||||||
Stockholders’ equity | 2,080,445 | 1,251,396 | 331,039 | 3,662,880 | |||||||||||
Page 4
Radian Group Inc. and Subsidiaries
Segment Information
Year Ended December 31, 2006
Exhibit E
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | ||||||||
Revenues: | ||||||||||||
Net premiums written | $ | 849,111 | $ | 262,874 | $ | — | $ | 1,111,985 | ||||
Net premiums earned | $ | 812,015 | $ | 203,831 | $ | — | $ | 1,015,846 | ||||
Net investment income | 138,310 | 95,895 | 140 | 234,345 | ||||||||
Net gains on securities | 30,163 | 7,827 | 2,852 | 40,842 | ||||||||
Change in fair value of derivative instruments | 3,682 | 12,384 | — | 16,066 | ||||||||
Other income | 13,075 | 692 | 7,080 | 20,847 | ||||||||
Total revenues | 997,245 | 320,629 | 10,072 | 1,327,946 | ||||||||
Expenses: | ||||||||||||
Provision for losses | 348,618 | 20,660 | — | 369,278 | ||||||||
Policy acquisition costs | 64,964 | 46,645 | — | 111,609 | ||||||||
Other operating expenses | 172,020 | 59,772 | 10,842 | 242,634 | ||||||||
Interest expense | 26,623 | 16,590 | 4,936 | 48,149 | ||||||||
Total expenses | 612,225 | 143,667 | 15,778 | 771,670 | ||||||||
Equity in net income of affiliates | — | — | 256,993 | 256,993 | ||||||||
Pretax income | 385,020 | 176,962 | 251,287 | 813,269 | ||||||||
Provision for income taxes | 102,266 | 40,880 | 87,951 | 231,097 | ||||||||
Net income | $ | 282,754 | $ | 136,082 | $ | 163,336 | $ | 582,172 | ||||
Page 5
Radian Group Inc. and Subsidiaries
Segment Information
Year Ended December 31, 2005
Exhibit F
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | ||||||||||||
Revenues: | ||||||||||||||||
Net premiums written | $ | 877,632 | $ | 223,055 | $ | — | $ | 1,100,687 | ||||||||
Net premiums earned | $ | 806,897 | $ | 211,773 | $ | — | $ | 1,018,670 | ||||||||
Net investment income | 118,325 | 89,977 | 120 | 208,422 | ||||||||||||
Net gains (losses) on securities | 27,649 | 10,737 | (1,748 | ) | 36,638 | |||||||||||
Change in fair value of derivative instruments | 4,110 | 5,245 | (185 | ) | 9,170 | |||||||||||
Other income | 19,008 | 939 | 5,304 | 25,251 | ||||||||||||
Total revenues | 975,989 | 318,671 | 3,491 | 1,298,151 | ||||||||||||
Expenses: | ||||||||||||||||
Provision for losses | 359,116 | 31,517 | — | 390,633 | ||||||||||||
Policy acquisition costs | 62,852 | 52,999 | — | 115,851 | ||||||||||||
Other operating expenses | 152,731 | 64,978 | 8,268 | 225,977 | ||||||||||||
Interest expense | 24,191 | 15,105 | 3,747 | 43,043 | ||||||||||||
Total expenses | 598,890 | 164,599 | 12,015 | 775,504 | ||||||||||||
Equity in net income (loss) of affiliates | — | (361 | ) | 218,053 | 217,692 | |||||||||||
Pretax income | 377,099 | 153,711 | 209,529 | 740,339 | ||||||||||||
Provision for income taxes | 108,493 | 35,657 | 73,335 | 217,485 | ||||||||||||
Net income | $ | 268,606 | $ | 118,054 | (1) | $ | 136,194 | $ | 522,854 | (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 | ) | |||||||||||||
Page 6
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit G
($ in thousands, except ratios) | Quarter Ended December 31 | Year Ended December 31 | ||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Premiums Written: | ||||||||||||||||
Public finance direct | $ | 30,636 | $ | 21,832 | $ | 80,234 | $ | 73,117 | ||||||||
Public finance reinsurance | 20,526 | 16,443 | 81,065 | 77,797 | ||||||||||||
Structured direct | 18,981 | 18,923 | 78,107 | 71,211 | ||||||||||||
Structured reinsurance | 5,950 | 4,294 | 18,869 | 20,649 | ||||||||||||
Trade credit reinsurance | 245 | 5,895 | 4,599 | 35,023 | ||||||||||||
| 76,338 | 67,387 | 262,874 | 277,797 | |||||||||||||
Impact of recapture (1) | — | — | — | (54,742 | ) | |||||||||||
Net Premiums Written | $ | 76,338 | $ | 67,387 | $ | 262,874 | $ | 223,055 | ||||||||
Net Premiums Earned: | ||||||||||||||||
Public finance direct | $ | 9,336 | $ | 7,866 | $ | 33,017 | $ | 32,533 | ||||||||
Public finance reinsurance | 9,510 | 8,752 | 37,765 | 34,413 | ||||||||||||
Structured direct | 23,156 | 22,359 | 90,295 | 79,617 | ||||||||||||
Structured reinsurance | 5,516 | 4,877 | 21,278 | 20,440 | ||||||||||||
Trade credit reinsurance | 2,194 | 8,311 | 21,476 | 49,309 | ||||||||||||
| 49,712 | 52,165 | 203,831 | 216,312 | |||||||||||||
Impact of recapture (2) | — | — | — | (4,539 | ) | |||||||||||
Net Premiums Earned | $ | 49,712 | $ | 52,165 | $ | 203,831 | $ | 211,773 | ||||||||
Refundings included in earned premium | $ | 3,111 | $ | 3,282 | $ | 11,778 | $ | 12,796 | ||||||||
Claims paid: | ||||||||||||||||
Trade credit reinsurance | $ | 1,338 | $ | 6,623 | $ | 15,144 | $ | 23,401 | ||||||||
Other financial guaranty | 248 | (1,224 | ) | 7,529 | 11,708 | |||||||||||
Conseco | 3,513 | 6,181 | 15,763 | 29,574 | ||||||||||||
Total | $ | 5,099 | $ | 11,580 | $ | 38,436 | $ | 64,683 | ||||||||
Incurred losses: | ||||||||||||||||
Trade credit reinsurance | $ | (30 | ) | $ | 1,586 | $ | 4,991 | $ | 16,019 | |||||||
Other financial guaranty | 4,091 | 3,866 | 16,701 | 15,498 | ||||||||||||
Conseco | — | — | (1,032 | ) | — | |||||||||||
Total | $ | 4,061 | $ | 5,452 | $ | 20,660 | $ | 31,517 | ||||||||
Loss ratio- GAAP Basis | 8.2 | % | 10.5 | % | 10.1 | % | 14.9 | % | ||||||||
Expense ratio- GAAP Basis | 48.5 | % | 57.1 | % | 52.2 | % | 55.7 | % | ||||||||
| 56.7 | % | 67.6 | % | 62.3 | % | 70.6 | % | |||||||||
Net claims paid (received) under derivatives contracts | $ | (729 | ) | $ | (1,419 | ) | $ | 63,548 | $ | (7,594 | ) | |||||
(1) Reflects the impact on net premiums written of the first quarter 2005 recapture of previously ceded business by one of the primary Financial Guaranty insurers: |
| |||||||||||||||
| (In thousands) | ||||||||||||||||
Public reinsurance | 48,238 | |||||||||||||||
Structured reinsurance | 6,504 | |||||||||||||||
(2) Reflects the impact on net premiums earned of the first quarter 2005 recapture of previously ceded business by one of the primary Financial Guaranty insurers: |
| |||||||||||||||
| (In thousands) | ||||||||||||||||
Public reinsurance | 3,870 | |||||||||||||||
Structured reinsurance | 669 | |||||||||||||||
Page 7
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit H
($ in thousands, except ratios) | December 31 2006 | December 31 2005 | ||||||
Capital and surplus | $ | 1,014,958 | $ | 1,004,505 | ||||
Contingency reserve | 336,719 | 271,907 | ||||||
Qualified statutory capital | 1,351,677 | 1,276,412 | ||||||
Unearned premium reserve | 829,340 | 751,656 | ||||||
Loss and loss expense reserve | 96,829 | 108,576 | ||||||
Total policyholders’ reserves | 2,277,846 | 2,136,644 | ||||||
Present value of installment premiums | 345,565 | 302,953 | ||||||
Reinsurance and soft capital facilities | 150,000 | 150,000 | ||||||
Total claims paying resources | $ | 2,773,411 | $ | 2,589,597 | ||||
Net debt service outstanding | $ | 143,728,116 | $ | 110,344,057 | ||||
Capital leverage ratio (1) | 106 | 86 | ||||||
Claims paying leverage ratio (2) | 52 | 43 | ||||||
Net par outstanding by product: | ||||||||
Public finance direct | $ | 16,324,170 | $ | 14,043,786 | ||||
Public finance reinsurance | 37,488,972 | 33,047,512 | ||||||
Structured direct | 44,960,360 | 24,608,489 | ||||||
Structured reinsurance | 5,192,122 | 4,952,146 | ||||||
Total | $ | 103,965,624 | $ | 76,651,933 | ||||
Reinsurance business net par outstanding: | ||||||||
Treaty | 59 | % | 58 | % | ||||
Facultative | 41 | % | 42 | % | ||||
Reserve for losses and LAE | ||||||||
Specific | $ | 35,320 | $ | 29,311 | ||||
Conseco | 33,975 | 50,770 | ||||||
Non-specific | 119,752 | 124,711 | ||||||
Total | $ | 189,047 | $ | 204,792 | ||||
| (1) | Net debt service outstanding divided by qualified statutory capital |
| (2) | Net debt service outstanding divided by total claims paying resources |
Page 8
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit I
Quarter Ended December 31 | Year Ended December 31 | |||||||||||||||||||||||||||
| 2006 | % | 2005 | % | 2006 | % | 2005 | % | |||||||||||||||||||||
Primary New Insurance Written ($ in millions) | ||||||||||||||||||||||||||||
Flow | $ | 6,451 | 85.2 | % | $ | 6,740 | 61.7 | % | $ | 25,364 | 63.2 | % | $ | 25,596 | 60.1 | % | ||||||||||||
Structured | 1,123 | 14.8 | % | 4,188 | 38.3 | % | 14,753 | 36.8 | % | 16,996 | 39.9 | % | ||||||||||||||||
Total Primary | $ | 7,574 | 100.0 | % | $ | 10,928 | 100.0 | % | $ | 40,117 | 100.0 | % | $ | 42,592 | 100.0 | % | ||||||||||||
Flow | ||||||||||||||||||||||||||||
Prime | $ | 4,608 | 71.4 | % | $ | 5,025 | 74.6 | % | $ | 18,578 | 73.2 | % | $ | 19,177 | 74.9 | % | ||||||||||||
Alt-A | 1,276 | 19.8 | % | 1,159 | 17.2 | % | 4,836 | 19.1 | % | 4,093 | 16.0 | % | ||||||||||||||||
A minus and below | 567 | 8.8 | % | 556 | 8.2 | % | 1,950 | 7.7 | % | 2,326 | 9.1 | % | ||||||||||||||||
Total Flow | $ | 6,451 | 100.0 | % | $ | 6,740 | 100.0 | % | $ | 25,364 | 100.0 | % | $ | 25,596 | 100.0 | % | ||||||||||||
Structured | ||||||||||||||||||||||||||||
Prime | $ | 341 | 30.4 | % | $ | 1,676 | 40.0 | % | $ | 4,000 | 27.1 | % | $ | 5,657 | 33.3 | % | ||||||||||||
Alt-A | 685 | 61.0 | % | 1,707 | 40.8 | % | 9,222 | 62.5 | % | 7,147 | 42.0 | % | ||||||||||||||||
A minus and below | 97 | 8.6 | % | 805 | 19.2 | % | 1,531 | 10.4 | % | 4,192 | 24.7 | % | ||||||||||||||||
Total Structured | $ | 1,123 | 100.0 | % | $ | 4,188 | 100.0 | % | $ | 14,753 | 100.0 | % | $ | 16,996 | 100.0 | % | ||||||||||||
Total | ||||||||||||||||||||||||||||
Prime | $ | 4,949 | 65.3 | % | $ | 6,701 | 61.3 | % | $ | 22,578 | 56.3 | % | $ | 24,834 | 58.3 | % | ||||||||||||
Alt-A | 1,961 | 25.9 | % | 2,866 | 26.2 | % | 14,058 | 35.0 | % | 11,240 | 26.4 | % | ||||||||||||||||
A minus and below | 664 | 8.8 | % | 1,361 | 12.5 | % | 3,481 | 8.7 | % | 6,518 | 15.3 | % | ||||||||||||||||
Total Primary | $ | 7,574 | 100.0 | % | $ | 10,928 | 100.0 | % | $ | 40,117 | 100.0 | % | $ | 42,592 | 100.0 | % | ||||||||||||
| Total Primary New Insurance Written by FICO Score ($ in millions) | ||||||||||||||||||||||||||||
Flow | ||||||||||||||||||||||||||||
<=619 | $ | 498 | 7.7 | % | $ | 327 | 4.8 | % | $ | 1,603 | 6.3 | % | $ | 1,489 | 5.8 | % | ||||||||||||
620-679 | 2,049 | 31.8 | % | 2,000 | 29.7 | % | 7,693 | 30.3 | % | 7,680 | 30.0 | % | ||||||||||||||||
680-739 | 2,246 | 34.8 | % | 2,505 | 37.2 | % | 9,210 | 36.4 | % | 9,322 | 36.4 | % | ||||||||||||||||
>=740 | 1,658 | 25.7 | % | 1,908 | 28.3 | % | 6,858 | 27.0 | % | 7,105 | 27.8 | % | ||||||||||||||||
Total Flow | $ | 6,451 | 100.0 | % | $ | 6,740 | 100.0 | % | $ | 25,364 | 100.0 | % | $ | 25,596 | 100.0 | % | ||||||||||||
Structured | ||||||||||||||||||||||||||||
<=619 | $ | 98 | 8.7 | % | $ | 808 | 19.3 | % | $ | 1,545 | 10.5 | % | $ | 4,207 | 24.8 | % | ||||||||||||
620-679 | 333 | 29.7 | % | 1,369 | 32.7 | % | 4,303 | 29.2 | % | 5,302 | 31.2 | % | ||||||||||||||||
680-739 | 428 | 38.1 | % | 1,337 | 31.9 | % | 5,760 | 39.0 | % | 4,833 | 28.4 | % | ||||||||||||||||
>=740 | 264 | 23.5 | % | 674 | 16.1 | % | 3,145 | 21.3 | % | 2,654 | 15.6 | % | ||||||||||||||||
Total Structured | $ | 1,123 | 100.0 | % | $ | 4,188 | 100.0 | % | $ | 14,753 | 100.0 | % | $ | 16,996 | 100.0 | % | ||||||||||||
Total | ||||||||||||||||||||||||||||
<=619 | $ | 596 | 7.9 | % | $ | 1,135 | 10.4 | % | $ | 3,148 | 7.9 | % | $ | 5,696 | 13.4 | % | ||||||||||||
620-679 | 2,382 | 31.4 | % | 3,369 | 30.8 | % | 11,996 | 29.9 | % | 12,982 | 30.5 | % | ||||||||||||||||
680-739 | 2,674 | 35.3 | % | 3,842 | 35.2 | % | 14,970 | 37.3 | % | 14,155 | 33.2 | % | ||||||||||||||||
>=740 | �� | 1,922 | 25.4 | % | 2,582 | 23.6 | % | 10,003 | 24.9 | % | 9,759 | 22.9 | % | |||||||||||||||
Total Primary | $ | 7,574 | 100.0 | % | $ | 10,928 | 100.0 | % | $ | 40,117 | 100.0 | % | $ | 42,592 | 100.0 | % | ||||||||||||
| Percentage of primary new insurance written | ||||||||||||||||||||||||||||
Refinances | 38 | % | 37 | % | 35 | % | 41 | % | ||||||||||||||||||||
95.01% LTV and above | 24 | % | 10 | % | 15 | % | 10 | % | ||||||||||||||||||||
ARMs | ||||||||||||||||||||||||||||
Less than 5 years | 16 | % | 31 | % | 24 | % | 35 | % | ||||||||||||||||||||
5 years and longer | 7 | % | 17 | % | 14 | % | 16 | % | ||||||||||||||||||||
Primary risk written ($ in millions) | ||||||||||||||||||||||||||||
Flow | $ | 1,590 | 91.8 | % | $ | 1,702 | 70.0 | % | $ | 6,386 | 82.0 | % | $ | 6,384 | 68.3 | % | ||||||||||||
Structured | 142 | 8.2 | % | 729 | 30.0 | % | 1,404 | 18.0 | % | 2,961 | 31.7 | % | ||||||||||||||||
Total Primary | $ | 1,732 | 100.0 | % | $ | 2,431 | 100.0 | % | $ | 7,790 | 100.0 | % | $ | 9,345 | 100.0 | % | ||||||||||||
Pool risk written (In millions) | $ | 26 | $ | 102 | $ | 359 | $ | 569 | ||||||||||||||||||||
Other risk written (In millions) | ||||||||||||||||||||||||||||
Seconds | ||||||||||||||||||||||||||||
1st loss | $ | 4 | $ | 40 | $ | 47 | $ | 97 | ||||||||||||||||||||
2nd loss | 27 | 247 | 233 | 571 | ||||||||||||||||||||||||
NIMs | 264 | 33 | 502 | 99 | ||||||||||||||||||||||||
International | ||||||||||||||||||||||||||||
1st loss-Hong Kong primary mortgage insurance | 34 | 27 | 65 | 271 | ||||||||||||||||||||||||
Reinsurance | 14 | 2 | 21 | 9 | ||||||||||||||||||||||||
Credit-default swaps | — | 7,303 | — | 7,303 | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Domestic credit default swaps | — | 30 | 32 | 180 | ||||||||||||||||||||||||
Financial guaranty wrap | — | — | — | 511 | ||||||||||||||||||||||||
Total other risk written | $ | 343 | $ | 7,682 | $ | 900 | $ | 9,041 | ||||||||||||||||||||
Page 9
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit J
| December 31 | December 31 | |||||||||||||
| 2006 | % | 2005 | % | |||||||||||
Primary insurance in force ($ in millions) | ||||||||||||||
Flow | $ | 83,529 | 73.3 | % | $ | 82,700 | 75.4 | % | ||||||
Structured | 30,374 | 26.7 | % | 26,984 | 24.6 | % | ||||||||
Total Primary | $ | 113,903 | 100.0 | % | $ | 109,684 | 100.0 | % | ||||||
Prime | $ | 76,854 | 67.5 | % | $ | 74,940 | 68.3 | % | ||||||
Alt-A | 25,571 | 22.4 | % | 21,223 | 19.4 | % | ||||||||
A minus and below | 11,478 | 10.1 | % | 13,521 | 12.3 | % | ||||||||
Total Primary | $ | 113,903 | 100.0 | % | $ | 109,684 | 100.0 | % | ||||||
Primary risk in force ($ in millions) | ||||||||||||||
Flow | $ | 20,724 | 81.9 | % | $ | 20,330 | 79.0 | % | ||||||
Structured | 4,587 | 18.1 | % | 5,399 | 21.0 | % | ||||||||
Total Primary | $ | 25,311 | 100.0 | % | $ | 25,729 | 100.0 | % | ||||||
Flow | ||||||||||||||
Prime | $ | 16,283 | 78.6 | % | $ | 15,630 | 76.9 | % | ||||||
Alt-A | 2,880 | 13.9 | % | 3,131 | 15.4 | % | ||||||||
A minus and below | 1,561 | 7.5 | % | 1,569 | 7.7 | % | ||||||||
Total Flow | $ | 20,724 | 100.0 | % | $ | 20,330 | 100.0 | % | ||||||
Structured | ||||||||||||||
Prime | $ | 1,903 | 41.5 | % | $ | 2,208 | 40.9 | % | ||||||
Alt-A | 1,354 | 29.5 | % | 1,358 | 25.1 | % | ||||||||
A minus and below | 1,330 | 29.0 | % | 1,833 | 34.0 | % | ||||||||
Total Structured | $ | 4,587 | 100.0 | % | $ | 5,399 | 100.0 | % | ||||||
Total | ||||||||||||||
Prime | $ | 18,186 | 71.9 | % | $ | 17,838 | 69.3 | % | ||||||
Alt-A | 4,234 | 16.7 | % | 4,489 | 17.5 | % | ||||||||
A minus and below | 2,891 | 11.4 | % | 3,402 | 13.2 | % | ||||||||
Total Primary | $ | 25,311 | 100.0 | % | $ | 25,729 | 100.0 | % | ||||||
Total Primary Risk in Force by FICO Score | ||||||||||||||
($ in millions) | ||||||||||||||
Flow | ||||||||||||||
<=619 | $ | 1,342 | 6.5 | % | $ | 1,321 | 6.5 | % | ||||||
620-679 | 6,391 | 30.8 | % | 6,352 | 31.2 | % | ||||||||
680-739 | 7,556 | 36.5 | % | 7,459 | 36.7 | % | ||||||||
>=740 | 5,435 | 26.2 | % | 5,198 | 25.6 | % | ||||||||
Total Flow | $ | 20,724 | 100.0 | % | $ | 20,330 | 100.0 | % | ||||||
Structured | ||||||||||||||
<=619 | $ | 1,331 | 29.0 | % | $ | 1,833 | 34.0 | % | ||||||
620-679 | 1,619 | 35.3 | % | 1,957 | 36.2 | % | ||||||||
680-739 | 1,095 | 23.9 | % | 1,111 | 20.6 | % | ||||||||
>=740 | 542 | 11.8 | % | 498 | 9.2 | % | ||||||||
Total Structured | $ | 4,587 | 100.0 | % | $ | 5,399 | 100.0 | % | ||||||
Total | ||||||||||||||
<=619 | $ | 2,673 | 10.5 | % | $ | 3,154 | 12.3 | % | ||||||
620-679 | 8,010 | 31.7 | % | 8,309 | 32.3 | % | ||||||||
680-739 | 8,651 | 34.2 | % | 8,570 | 33.3 | % | ||||||||
>=740 | 5,977 | 23.6 | % | 5,696 | 22.1 | % | ||||||||
Total Primary | $ | 25,311 | 100.0 | % | $ | 25,729 | 100.0 | % | ||||||
Percentage of primary risk in force | ||||||||||||||
Refinances | 33 | % | 37 | % | ||||||||||
95.01% LTV and above | 18 | % | 14 | % | ||||||||||
ARMs | ||||||||||||||
Less than 5 years | 19 | % | 23 | % | ||||||||||
5 years and longer | 9 | % | 9 | % | ||||||||||
Pool risk in force ($ in millions) | ||||||||||||||
Prime | $ | 2,182 | 72.9 | % | $ | 2,098 | 77.4 | % | ||||||
Alt-A | 295 | 9.9 | % | 272 | 10.0 | % | ||||||||
A minus and below | 514 | 17.2 | % | 341 | 12.6 | % | ||||||||
Total | $ | 2,991 | 100.0 | % | $ | 2,711 | 100.0 | % | ||||||
Page 10
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit K
| December 31 | December 31 | |||||||||||
| 2006 | % | 2005 | % | |||||||||
Total Primary Risk in Force by LTV ($ in millions) | ||||||||||||
95.01% and above | $ | 4,441 | 17.6 | % | $ | 3,599 | 14.0 | % | ||||
90.01% to 95.00% | 8,005 | 31.6 | % | 8,616 | 33.5 | % | ||||||
85.01% to 90.00% | 9,062 | 35.8 | % | 9,551 | 37.1 | % | ||||||
85.00% and below | 3,803 | 15.0 | % | 3,963 | 15.4 | % | ||||||
Total | $ | 25,311 | 100.0 | % | $ | 25,729 | 100.0 | % | ||||
Total Primary Risk in Force by Policy Year ($ in millions) | ||||||||||||
2002 and prior | $ | 3,313 | 13.1 | % | $ | 4,658 | 18.1 | % | ||||
2003 | 3,800 | 15.0 | % | 5,511 | 21.4 | % | ||||||
2004 | 4,565 | 18.1 | % | 7,091 | 27.6 | % | ||||||
2005 | 6,538 | 25.8 | % | 8,469 | 32.9 | % | ||||||
2006 | 7,095 | 28.0 | % | — | — | |||||||
Total | $ | 25,311 | 100.0 | % | $ | 25,729 | 100.0 | % | ||||
Total Pool Risk in Force by Policy Year ($ in millions) | ||||||||||||
2002 and prior | $ | 1,624 | 54.3 | % | $ | 1,664 | 61.4 | % | ||||
2003 | 134 | 4.5 | % | 172 | 6.3 | % | ||||||
2004 | 290 | 9.7 | % | 294 | 10.9 | % | ||||||
2005 | 651 | 21.7 | % | 581 | 21.4 | % | ||||||
2006 | 292 | 9.8 | % | — | — | |||||||
Total Pool risk in Force | $ | 2,991 | 100.0 | % | $ | 2,711 | 100.0 | % | ||||
Other risk in force (In millions) | ||||||||||||
Seconds | ||||||||||||
1st loss | $ | 592 | $ | 591 | ||||||||
2nd loss | 610 | 638 | ||||||||||
NIMs | 592 | 261 | ||||||||||
International | ||||||||||||
1st loss-Hong Kong primary mortgage insurance | 335 | 271 | ||||||||||
Reinsurance | 47 | 29 | ||||||||||
Credit default swaps | 7,897 | 7,469 | ||||||||||
Other | ||||||||||||
Domestic credit default swaps | 212 | 180 | ||||||||||
Financial guaranty wrap | 37 | 270 | ||||||||||
Total other risk in force | $ | 10,322 | $ | 9,709 | ||||||||
Risk to capital ratio-STAT Basis | 10.4:1 | 11.6:1 | ||||||||||
Page 11
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit L
| Quarter Ended | Year Ended | |||||||||||||||
| December 31 | December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Direct claims paid (In thousands) | ||||||||||||||||
Prime | $ | 28,903 | $ | 33,156 | $ | 117,471 | $ | 121,297 | ||||||||
Alt-A | 16,654 | 19,968 | 64,018 | 79,371 | ||||||||||||
A minus and below | 25,996 | 23,762 | 93,662 | 85,980 | ||||||||||||
Seconds and other | 9,590 | 7,044 | 38,204 | 33,699 | ||||||||||||
Total | $ | 81,143 | $ | 83,930 | $ | 313,355 | $ | 320,347 | ||||||||
Average claim paid (In thousands) | ||||||||||||||||
Prime | $ | 26.7 | $ | 25.7 | $ | 26.1 | $ | 24.1 | ||||||||
Alt-A | 37.9 | 38.4 | 35.6 | 36.5 | ||||||||||||
A minus and below | 30.2 | 28.1 | 28.3 | 27.0 | ||||||||||||
Seconds | 29.2 | 20.5 | 26.8 | 22.0 | ||||||||||||
Total | $ | 29.9 | $ | 28.0 | $ | 28.4 | $ | 26.9 | ||||||||
Loss ratio -GAAP Basis | 40.3 | % | 47.4 | % | 42.9 | % | 44.5 | % | ||||||||
Expense ratio-GAAP Basis | 32.1 | % | 28.4 | % | 29.2 | % | 26.7 | % | ||||||||
| 72.4 | % | 75.8 | % | 72.1 | % | 71.2 | % | |||||||||
Reserve for losses by category (In thousands): | ||||||||||||||||
Prime | $ | 200,429 | $ | 179,152 | ||||||||||||
Alt-A | 135,073 | 137,430 | ||||||||||||||
A minus and below | 227,203 | 190,312 | ||||||||||||||
Pool Insurance | 31,116 | 44,135 | ||||||||||||||
Seconds | 36,166 | 35,876 | ||||||||||||||
Other | 1,635 | 9,305 | ||||||||||||||
Reserve for losses, net | 631,622 | 596,210 | ||||||||||||||
Reinsurance recoverable | 21,614 | (1) | — | |||||||||||||
Total | $ | 653,236 | $ | 596,210 | ||||||||||||
| (1) | Reinsurance recoverable on a first-loss second lien captive. |
Page 12
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit M
| December 31 2006 | December 31 2005 | |||||
Default Statistics | ||||||
Primary insurance: | ||||||
Flow | ||||||
Prime | ||||||
Number of insured loans | 500,464 | 508,117 | ||||
Number of loans in default | 15,141 | 18,045 | ||||
Percentage of loans in default | 3.03 | % | 3.55 | % | ||
Alt-A | ||||||
Number of insured loans | 63,469 | 67,339 | ||||
Number of loans in default | 4,348 | 4,946 | ||||
Percentage of loans in default | 6.85 | % | 7.34 | % | ||
A minus and below | ||||||
Number of insured loans | 52,440 | 54,066 | ||||
Number of loans in default | 7,250 | 7,543 | ||||
Percentage of loans in default | 13.83 | % | 13.95 | % | ||
| Total Flow | ||||||
Number of insured loans | 616,373 | 629,522 | ||||
Number of loans in default | 26,739 | 30,534 | ||||
Percentage of loans in default | 4.34 | % | 4.85 | % | ||
Structured | ||||||
Prime | ||||||
Number of insured loans | 62,680 | 59,457 | ||||
Number of loans in default | 3,300 | 2,640 | ||||
Percentage of loans in default | 5.26 | % | 4.44 | % | ||
Alt-A | ||||||
Number of insured loans | 70,164 | 50,997 | ||||
Number of loans in default | 3,647 | 2,564 | ||||
Percentage of loans in default | 5.20 | % | 5.03 | % | ||
A minus and below | ||||||
Number of insured loans | 36,597 | 47,348 | ||||
Number of loans in default | 9,014 | 8,472 | ||||
Percentage of loans in default | 24.63 | % | 17.89 | % | ||
Total Structured | ||||||
Number of insured loans | 169,441 | 157,802 | ||||
Number of loans in default | 15,961 | 13,676 | ||||
Percentage of loans in default | 9.42 | % | 8.67 | % | ||
Total Primary Insurance | ||||||
Prime | ||||||
Number of insured loans | 563,144 | 567,574 | ||||
Number of loans in default | 18,441 | 20,685 | ||||
Percentage of loans in default | 3.27 | % | 3.64 | % | ||
Alt-A | ||||||
Number of insured loans | 133,633 | 118,336 | ||||
Number of loans in default | 7,995 | 7,510 | ||||
Percentage of loans in default | 5.98 | % | 6.35 | % | ||
A minus and below | ||||||
Number of insured loans | 89,037 | 101,414 | ||||
Number of loans in default | 16,264 | 16,015 | ||||
Percentage of loans in default | 18.27 | % | 15.79 | % | ||
Total Primary Insurance | ||||||
Number of insured loans | 785,814 | 787,324 | ||||
Number of loans in default | 42,700 | (1) | 44,210 | (1) | ||
Percentage of loans in default | 5.43 | % | 5.62 | % | ||
Pool insurance: | ||||||
Number of loans in default | 18,681 | (2) | 10,194 | (2) |
| (1) | Includes approximately 1,161 and 452 defaults at December 31, 2006 and December 31, 2005, respectively, where reserves have not been established because no claim payment is currently anticipated. |
| (2) | Includes approximately 13,309 and 3,699 defaults at December 31, 2006 and December 31, 2005, respectively, where reserves have not been established because no claim payment is currently anticipated. |
Page 13
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit N
Quarter Ended December 31 | Year Ended December 31 | |||||||||||||||
| 2006 | 2005 | 2006 | 2005 | |||||||||||||
Net Premiums Written (In thousands) | ||||||||||||||||
Primary and Pool Insurance | $ | 162,875 | $ | 185,369 | $ | 723,213 | $ | 752,194 | ||||||||
Seconds | 15,469 | 8,391 | 57,935 | 56,092 | ||||||||||||
NIMs | 11,564 | 8,170 | 34,215 | 40,318 | ||||||||||||
International | 11,614 | 2,901 | 23,861 | 25,612 | ||||||||||||
Domestic credit default swaps | 821 | 408 | 9,778 | 3,132 | ||||||||||||
Financial guaranty wrap | 19 | 95 | 109 | 284 | ||||||||||||
Net Premiums Written | $ | 202,362 | $ | 205,334 | $ | 849,111 | $ | 877,632 | ||||||||
Net Premiums Earned (In thousands) | ||||||||||||||||
Primary and Pool Insurance | $ | 173,413 | $ | 187,162 | $ | 715,136 | $ | 712,538 | ||||||||
Seconds | 11,564 | 13,270 | 52,588 | 50,043 | ||||||||||||
NIMs | 10,228 | 7,513 | 28,251 | 39,877 | ||||||||||||
International | 2,448 | 1,228 | 10,644 | 3,338 | ||||||||||||
Domestic credit default swaps | 1,535 | 598 | 5,287 | 817 | ||||||||||||
Financial guaranty wrap | 19 | 95 | 109 | 284 | ||||||||||||
Net Premiums Earned | $ | 199,207 | $ | 209,866 | $ | 812,015 | $ | 806,897 | ||||||||
SMART HOME (In millions) | ||||||||||||||||
Ceded Premiums Written | $ | 3.5 | $ | 1.0 | $ | 12.0 | $ | 3.5 | ||||||||
Ceded Premiums Earned | $ | 3.7 | $ | 0.9 | $ | 12.3 | $ | 3.0 | ||||||||
Captives | ||||||||||||||||
Premiums ceded to captives (In millions) | $ | 25.4 | $ | 25.3 | $ | 96.7 | $ | 92.9 | ||||||||
% of total premiums | 12.6 | % | 12.0 | % | 11.7 | % | 11.5 | % | ||||||||
NIW subject to captives (In millions) | $ | 3,457 | $ | 4,223 | $ | 13,157 | $ | 12,221 | ||||||||
% of primary NIW | 45.6 | % | 38.6 | % | 32.8 | % | 28.7 | % | ||||||||
IIF included in captives (1) | 34.1 | % | 38.6 | % | ||||||||||||
RIF included in captives (1) | 38.9 | % | 35.6 | % | ||||||||||||
Persistency (twelve months ended December 31) | 67.3 | % | 58.2 | % | ||||||||||||
| December 31 2006 | December 31 2005 | |||||||||||||||
SMART HOME | ||||||||||||||||
% of Primary RIF included in Smart Home Transactions (1) | 10.1 | % | 7.8 | % | ||||||||||||
| (1) | Radian reinsures the middle layer risk positions, while retaining a significant portion of the total risk comprising the first loss and most remote risk positions. |
Page 14
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
ALT-A
Exhibit O
| ($ in millions) | Quarter Ended December 31 | Year Ended December 31 | ||||||||||||||||||||||
| 2006 | % | 2005 | % | 2006 | % | 2005 | % | |||||||||||||||||
Primary New Insurance Written by FICO Score | ||||||||||||||||||||||||
<=619 | $ | 3 | 0.2 | % | $ | 3 | 0.1 | % | $ | 28 | 0.2 | % | $ | 34 | 0.3 | % | ||||||||
620-659 | 208 | 10.6 | % | 440 | 15.4 | % | 1,600 | 11.4 | % | 1,903 | 16.9 | % | ||||||||||||
660-679 | 351 | 17.9 | % | 407 | 14.2 | % | 2,019 | 14.4 | % | 1,513 | 13.5 | % | ||||||||||||
680-739 | 903 | 46.0 | % | 1,302 | 45.4 | % | 6,756 | 48.0 | % | 4,990 | 44.4 | % | ||||||||||||
>=740 | 496 | 25.3 | % | 714 | 24.9 | % | 3,655 | 26.0 | % | 2,800 | 24.9 | % | ||||||||||||
Total | $ | 1,961 | 100.0 | % | $ | 2,866 | 100.0 | % | $ | 14,058 | 100.0 | % | $ | 11,240 | 100.0 | % | ||||||||
Primary Risk in Force by FICO Score | ||||||||||||||||||||||||
<=619 | $ | 24 | 0.6 | % | $ | 44 | 1.0 | % | ||||||||||||||||
620-659 | 729 | 17.2 | % | 936 | 20.9 | % | ||||||||||||||||||
660-679 | 681 | 16.1 | % | 767 | 17.0 | % | ||||||||||||||||||
680-739 | 1,897 | 44.8 | % | 1,903 | 42.4 | % | ||||||||||||||||||
>=740 | 903 | 21.3 | % | 839 | 18.7 | % | ||||||||||||||||||
Total | $ | 4,234 | 100.0 | % | $ | 4,489 | 100.0 | % | ||||||||||||||||
Primary Risk in Force by LTV | ||||||||||||||||||||||||
95.01% and above | $ | 120 | 2.8 | % | $ | 190 | 4.2 | % | ||||||||||||||||
90.01% to 95.00% | 1,237 | 29.2 | % | 1,425 | 31.7 | % | ||||||||||||||||||
85.01% to 90.00% | 1,832 | 43.3 | % | 1,938 | 43.2 | % | ||||||||||||||||||
85.00% and below | 1,045 | 24.7 | % | 936 | 20.9 | % | ||||||||||||||||||
Total | $ | 4,234 | 100.0 | % | $ | 4,489 | 100.0 | % | ||||||||||||||||
Primary Risk in Force by Policy Year | ||||||||||||||||||||||||
2002 and prior | $ | 317 | 7.5 | % | $ | 520 | 11.6 | % | ||||||||||||||||
2003 | 529 | 12.5 | % | 874 | 19.5 | % | ||||||||||||||||||
2004 | 712 | 16.8 | % | 1,432 | 31.9 | % | ||||||||||||||||||
2005 | 1,157 | 27.3 | % | 1,663 | 37.0 | % | ||||||||||||||||||
2006 | 1,519 | 35.9 | % | — | — | |||||||||||||||||||
Total | $ | 4,234 | 100.0 | % | $ | 4,489 | 100.0 | % | ||||||||||||||||
Page 15
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter and Year Ended and as of December 31, 2006
Exhibit P
Quarter Ended December 31 | Year Ended December 31 | ||||||||||||||
| (In thousands ) | 2006 | 2005 | 2006 | 2005 | |||||||||||
Investment in Affiliates-Selected Information | |||||||||||||||
C-BASS | |||||||||||||||
Balance, beginning of period | $ | 431,472 | $ | 343,344 | $ | 364,364 | $ | 290,073 | |||||||
Net income for period | 31,598 | 27,520 | 133,900 | 107,791 | |||||||||||
Dividends received | 11,675 | 6,500 | 46,869 | 33,500 | |||||||||||
Balance, end of period | $ | 451,395 | $ | 364,364 | $ | 451,395 | $ | 364,364 | |||||||
Sherman | |||||||||||||||
Balance, beginning of period | $ | 129,064 | $ | 53,313 | $ | 81,753 | $ | 101,492 | |||||||
Net income for period | 39,146 | 28,225 | 123,835 | 110,261 | |||||||||||
Dividends received | — | — | 103,740 | 110,661 | |||||||||||
Other comprehensive income | (798 | ) | 215 | (743 | ) | 1,683 | |||||||||
Purchase (sale) of ownership interest | — | — | 66,307 | (18,947 | ) | ||||||||||
Warrant repurchase | — | — | — | (2,075 | ) | ||||||||||
Balance, end of period | $ | 167,412 | $ | 81,753 | $ | 167,412 | $ | 81,753 | |||||||
Portfolio Information: | |||||||||||||||
C-BASS | |||||||||||||||
Servicing portfolio | $ | 60,600,000 | $ | 44,830,000 | |||||||||||
Total assets | 8,799,261 | 7,694,294 | |||||||||||||
Servicing income | 77,905 | 65,415 | $ | 309,508 | $ | 250,838 | |||||||||
Net interest income | 73,836 | 53,878 | 285,844 | 190,716 | |||||||||||
Total revenues | 189,645 | 168,749 | 746,113 | 624,825 | |||||||||||
Sherman | |||||||||||||||
Total assets | $ | 1,213,049 | $ | 979,215 | |||||||||||
Net revenues | $ | 230,916 | $ | 226,844 | $ | 934,536 | $ | 799,195 | |||||||
Radian owns a 46% interest in C-BASS and an interest in Sherman, consisting of 40.96% of the Class A Common Units of Sherman (Class A Common Units represent 94% of the total equity in Sherman) and 50% of the Preferred Units of Sherman .
Page 16
All statements made in this news release that address events or developments that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s current views and assumptions with respect to future events. The forward-looking statements, as well as Radian’s prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in housing demand or mortgage originations, changes in housing values, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates or consumer confidence, or changes in credit spreads; 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 or the influence of large customers; increased severity or frequency of losses associated with certain Radian products that are riskier than traditional mortgage insurance and municipal guaranty insurance policies; material changes in persistency rates of Radian’s mortgage insurance policies; downgrades of Radian’s credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to Radian’s operating subsidiaries; heightened competition from other insurance providers and from alternative products to private mortgage insurance and financial guaranty insurance; changes in the charters or business practices of Fannie Mae and Freddie Mac; the application of federal or state consumer-lending, insurance and other applicable laws and regulations, or unfavorable changes in these laws and regulations or the way they are interpreted, including: (i) the possibility of private lawsuits or investigations by state insurance departments and state attorneys general alleging that services offered by the mortgage insurance industry, such as captive reinsurance, pool insurance and contract underwriting, are violative of the Real Estate Settlement Procedures Act and/or similar state regulations (particularly in light of public reports that some state insurance departments are investigating captive reinsurance arrangements used in the mortgage insurance industry), or (ii) legislative and regulatory changes affecting demand for private mortgage insurance or financial guaranty insurance; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the mortgage insurance or financial guaranty industries; changes in claims against mortgage insurance products resulting from the aging of Radian’s mortgage insurance policies; vulnerability to the performance of Radian’s strategic investments; changes in the availability of affordable or adequate reinsurance for our non-prime risk; legal and other limitations on the amount of dividends we may receive from our insurance subsidiaries; and international expansion of our mortgage insurance and financial guaranty businesses into new markets and risks associated with our international business activities. For more information regarding these risks and uncertainties, as well as certain additional risks that we face, investors should refer to the risk factors detailed in Part I, Item 1A in our annual report on Form 10-K for the year ended December 31, 2005 and the material changes to these risks identified in our quarterly report on Form 10-Q for the quarter ended June 30, 2006. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this news release. Radian does not intend to and disclaims any duty or obligation to update or revise any forward-looking statements made in this news release to reflect new information, future events or for any other reason.