Exhibit 99.1
1601 Market Street | News Release | |||
Philadelphia, Pennsylvania | ||||
19103-2337 | ||||
800 523.1988 | ||||
215 564.6600 | ||||
Contact: | ||||
For investors: | Mona Zeehandelaar – phone: 215 231.1674 | |||
email: mona.zeehandelaar@radian.biz | ||||
For the media: | Steve Frankel / Tim Lynch | |||
Joele Frank, Wilkinson Brimmer Katcher | ||||
212 355.4449 | ||||
Radian Reports Third Quarter Net Loss of $704 Million | ||||
Strong Capital Position and Balance Sheet | ||||
PHILADELPHIA, November 1, 2007—Radian Group Inc. (NYSE: RDN) today reported a net loss of $704 million and a diluted net loss per share of $8.78 for the third quarter ended September 30, 2007. | ||||
“The third quarter’s results were disappointing but not unexpected given market conditions,” said S.A. Ibrahim, Chief Executive Officer of Radian. “However, our book value is $42.86 per share and we are well positioned with our strong capital and liquidity position to weather the challenging credit cycle.” Mr. Ibrahim added, “While mortgage insurance credit losses will continue to impact our results for the foreseeable future, I’m encouraged by the positive trends in mortgage insurance penetration and by the resiliency of our financial guaranty business.” |
1601 Market Street Philadelphia, Pennsylvania 19103-2337 800523.1988 215 564.6600 |
The table below shows the significant components of the company’s results for the third quarter:
|
| |||||||||||
($ in millions except per share amounts)
| Total | Per Share | |||||||||||
6/30/2007 Book Value | $4.1B | $51.53 | |||||||||||
Pre-tax | After-tax impact | BV per share impact | EPS impact | ||||||||||
C-BASS Impairment | (468 | )(1) | (304 | ) | (3.78 | ) | $(3.78) | ||||||
NIMS mark-to-market | (366 | )(2) | (238 | ) | (2.96 | ) | (2.96) | ||||||
Financial Guaranty mark-to-market | (256 | ) | (166 | ) | (2.06 | ) | (2.06) | ||||||
Second Lien premium deficiency | (155 | )(3) | (101 | ) | (1.26 | ) | (1.26) | ||||||
FG Reserve for CDO of ABS transaction | (50 | ) | (33 | ) | (0.41 | ) | (0.41) | ||||||
Sherman Gain on Sale | 182 | 118 | 1.47 | 1.47 | |||||||||
All Other | — | 26 | 0.33 | 0.22 | |||||||||
9/30/2007 Book Value | $3.4B | $42.86 | |||||||||||
Quarter Ended 9/30/2007 EPS | $(8.78) | ||||||||||||
(1) Does not include possible write-down of between $0 and $50 million related to our loan to C-BASS.
(2) Includes approximately $270 million of projected future principal credit losses.
(3) Represents an acceleration of the present value of expected future losses (approximately $300 million as previously disclosed) and expenses less expected future premiums. | |||||||||||||
Radian will discuss each of these items in its conference call today, Thursday, November 1, 2007 at 10:00 a.m. Eastern time. The conference call will be broadcast live over the internet at http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or at http://www.radian.biz >News. The call may also be accessed by calling 800-762-6568 inside the U.S., or 480-248-5088 for international callers, using passcode 891232 or by referencing Radian. |
1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600 | A replay of the webcast will be available at the Radian website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available two and a half hours after the call ends for two weeks, using the following dial-in numbers and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international callers, passcode 891232. | |
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 credit-based consumer asset businesses. Additional information may be found atwww.radian.biz. | ||
Financial Results and Supplemental Information Contents (Unaudited) | ||
For trend information on all schedules, refer to Radian’s quarterly financial statistics at http://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 September 30, 2007 | ||
Exhibit D: Segment Information Quarter Ended September 30, 2006 | ||
Exhibit E: Segment Information Nine Months Ended September 30, 2007 | ||
Exhibit F: Segment Information Nine Months Ended September 30, 2006 | ||
Exhibit G: Financial Guaranty Supplemental Information - Quarter and Nine Months Ended and as of September 30, 2007 | ||
Exhibit H: Financial Guaranty Supplemental Information - Quarter and Nine Months Ended and as of September 30, 2007 | ||
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 |
1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600 | 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 |
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Income
Exhibit A
Quarter Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
(In thousands, except per-share data) | 2007 | 2006 | 2007 | 2006 | |||||||||||
Revenues: | |||||||||||||||
Net premiums written | $ | 330,075 | $ | 254,805 | $ | 875,265 | $ | 833,285 | |||||||
Net premiums earned—insurance | $ | 245,396 | $ | 228,711 | $ | 677,913 | $ | 689,472 | |||||||
Net premiums earned—credit derivatives | 28,006 | 25,433 | 99,508 | 77,455 | |||||||||||
Net premiums earned—total | 273,402 | 254,144 | 777,421 | 766,927 | |||||||||||
Net investment income | 64,959 | 60,185 | 188,605 | 174,123 | |||||||||||
Net gains on securities | 14,840 | 1,409 | 54,279 | 29,587 | |||||||||||
Change in fair value of derivative instruments | (643,942 | ) | 626 | (733,273 | ) | (7,031 | ) | ||||||||
Gain on sale of affiliates | 181,734 | — | 181,734 | — | |||||||||||
Other income | 4,599 | 5,467 | 11,519 | 16,456 | |||||||||||
Total revenues | (104,408 | ) | 321,831 | 480,285 | 980,062 | ||||||||||
Expenses: | |||||||||||||||
Provision for losses | 330,504 | 121,395 | 611,508 | 284,889 | |||||||||||
Provision for second-lien premium deficiency | 155,176 | — | 155,176 | — | |||||||||||
Policy acquisition costs | 35,743 | 26,351 | 88,195 | 80,535 | |||||||||||
Other operating expenses | 34,891 | 62,706 | 137,471 | 181,082 | |||||||||||
Merger expenses | 1,278 | — | 14,001 | — | |||||||||||
Interest expense | 13,394 | 11,515 | 38,810 | 35,893 | |||||||||||
Total expenses | 570,986 | 221,967 | 1,045,161 | 582,399 | |||||||||||
Equity in net income of affiliates | 18,876 | 55,870 | 91,155 | 186,248 | |||||||||||
Impairment of affiliates | (467,800 | ) | — | (467,800 | ) | — | |||||||||
Pretax (loss) income | (1,124,318 | ) | 155,734 | (941,521 | ) | 583,911 | |||||||||
Income tax (benefit) provision | (420,454 | ) | 43,775 | (372,207 | ) | 160,109 | |||||||||
Net (loss) income | $ | (703,864 | ) | $ | 111,959 | $ | (569,314 | ) | $ | 423,802 | |||||
Diluted net (loss) income per share (1) | $ | (8.78 | ) | $ | 1.36 | $ | (7.09 | ) | $ | 5.12 | |||||
(1) Weighted average shares outstanding (in thousands) | |||||||||||||||
Average common shares outstanding | 79,800 | 81,233 | 79,467 | 81,995 | |||||||||||
Increase in shares-potential exercise of options-diluted basis | 359 | 817 | 808 | 754 | |||||||||||
Weighted average shares outstanding (in thousands) | 80,159 | 82,050 | 80,275 | 82,749 |
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) | September 30 2007 | December 31 2006 | September 30 2006 | ||||||
Assets: | |||||||||
Cash and investments | $ | 6,575,797 | $ | 5,803,228 | $ | 5,761,912 | |||
Investments in affiliates | 94,144 | 618,841 | 560,570 | ||||||
Deferred policy acquisition costs | 233,582 | 221,769 | 219,573 | ||||||
Prepaid federal income taxes | 861,809 | 808,740 | 760,963 | ||||||
Other assets | 449,528 | 476,093 | 434,303 | ||||||
Total assets | $ | 8,214,860 | $ | 7,928,671 | $ | 7,737,321 | |||
Liabilities and stockholders’ equity: | |||||||||
Unearned premiums | $ | 1,045,267 | $ | 943,687 | $ | 914,422 | |||
Reserve for losses and loss adjustment expenses | 1,094,704 | 842,283 | 840,938 | ||||||
Reserve for second-lien premium deficiency | 155,176 | — | — | ||||||
Long-term debt and other borrowings | 948,010 | 747,770 | 747,692 | ||||||
Current income taxes | 280,971 | — | — | ||||||
Deferred income taxes | 383,172 | 1,129,740 | 1,071,002 | ||||||
Derivative liabilities, net | 675,432 | — | — | ||||||
Other liabilities | 184,636 | 197,634 | 196,234 | ||||||
Total liabilities | 4,767,368 | 3,861,114 | 3,770,288 | ||||||
Common stock | 97 | 97 | 97 | ||||||
Additional paid-in capital | 436,828 | 416,193 | 489,389 | ||||||
Retained earnings | 2,903,798 | 3,489,290 | 3,332,517 | ||||||
Accumulated other comprehensive income | 106,769 | 161,977 | 145,030 | ||||||
Total common stockholders’ equity | 3,447,492 | 4,067,557 | 3,967,033 | ||||||
Total liabilities and stockholders’ equity | $ | 8,214,860 | $ | 7,928,671 | $ | 7,737,321 | |||
Book value per share | $ | 42.86 | $ | 51.23 | $ | 49.11 | |||
Treasury Stock Repurchases (Year-to-Date for Periods Presented) | |||||||||
Total number of shares repurchased | 398,645 | 4,500,000 | 3,000,000 | ||||||
Average price paid per share | $ | 57.25 | $ | 58.58 | $ | 60.85 | |||
Total cost of repurchased shares | $ | 22,822,537 | $ | 263,600,341 | $ | 182,548,056 |
Page 2
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended September 30, 2007
Exhibit C
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | ||||||||||||
Revenues: | ||||||||||||||||
Net premiums written | $ | 260,492 | $ | 69,583 | $ | — | $ | 330,075 | ||||||||
Net premiums earned—insurance | $ | 212,998 | $ | 32,398 | $ | — | $ | 245,396 | ||||||||
Net premiums earned—credit derivatives | 14,085 | 13,921 | — | 28,006 | ||||||||||||
Net premiums earned—total | 227,083 | 46,319 | — | 273,402 | ||||||||||||
Net investment income | 37,437 | 27,403 | 119 | 64,959 | ||||||||||||
Net gains on securities | 9,312 | 5,474 | 54 | 14,840 | ||||||||||||
Change in fair value of derivative instruments | (388,109 | ) | (255,833 | ) | — | (643,942 | ) | |||||||||
Gain on sale of affiliates | — | — | 181,734 | 181,734 | ||||||||||||
Other income | 3,782 | 517 | 300 | 4,599 | ||||||||||||
Total revenues | (110,495 | ) | (176,120 | ) | 182,207 | (104,408 | ) | |||||||||
Expenses: | ||||||||||||||||
Provision for losses | 278,785 | 51,719 | — | 330,504 | ||||||||||||
Provision for second-lien premium deficiency | 155,176 | — | — | 155,176 | ||||||||||||
Policy acquisition costs | 24,865 | 10,878 | — | 35,743 | ||||||||||||
Other operating expenses | 25,460 | 9,863 | (432 | ) | 34,891 | |||||||||||
Merger expenses | 1,116 | 162 | — | 1,278 | ||||||||||||
Interest expense | 6,764 | 4,808 | 1,822 | 13,394 | ||||||||||||
Total expenses | 492,166 | 77,430 | 1,390 | 570,986 | ||||||||||||
Equity in net income of affiliates | — | — | 18,876 | 18,876 | ||||||||||||
Impairment of affiliates | — | — | (467,800 | ) | (467,800 | ) | ||||||||||
Pretax loss | (602,661 | ) | (253,550 | ) | (268,107 | ) | (1,124,318 | ) | ||||||||
Income tax benefit | (227,374 | ) | (99,350 | ) | (93,730 | ) | (420,454 | ) | ||||||||
Net loss | $ | (375,287 | ) | $ | (154,200 | ) | $ | (174,377 | ) | $ | (703,864 | ) | ||||
Assets | $ | 5,282,832 | $ | 2,830,271 | $ | 101,757 | $ | 8,214,860 | ||||||||
Total investments | 3,956,943 | 2,556,054 | — | 6,512,997 | ||||||||||||
Deferred policy acquisition costs | 62,371 | 171,211 | — | 233,582 | ||||||||||||
Reserve for losses and loss adjustment expenses | 884,985 | 209,719 | — | 1,094,704 | ||||||||||||
Unearned premiums | 322,109 | 723,158 | — | 1,045,267 | ||||||||||||
Stockholders’ equity | 1,924,609 | 1,429,248 | 93,635 | 3,447,492 |
Page 3
Radian Group Inc. and Subsidiaries
Segment Information
Quarter Ended September 30, 2006
Exhibit D
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | |||||||||
Revenues: | |||||||||||||
Net premiums written | $ | 205,933 | $ | 48,872 | $ | — | $ | 254,805 | |||||
Net premiums earned—insurance | $ | 194,633 | $ | 34,078 | $ | — | $ | 228,711 | |||||
Net premiums earned—credit derivatives | 6,799 | 18,634 | — | 25,433 | |||||||||
Net premiums earned—total | 201,432 | 52,712 | — | 254,144 | |||||||||
Net investment income | 35,548 | 24,589 | 48 | 60,185 | |||||||||
Net gains on securities | 946 | 8 | 455 | 1,409 | |||||||||
Change in fair value of derivative instruments | (3,293 | ) | 3,919 | — | 626 | ||||||||
Other income | 2,999 | 284 | 2,184 | 5,467 | |||||||||
Total revenues | 237,632 | 81,512 | 2,687 | 321,831 | |||||||||
Expenses: | |||||||||||||
Provision for losses | 119,616 | 1,779 | — | 121,395 | |||||||||
Policy acquisition costs | 15,271 | 11,080 | — | 26,351 | |||||||||
Other operating expenses | 43,933 | 16,039 | 2,734 | 62,706 | |||||||||
Interest expense | 6,357 | 3,961 | 1,197 | 11,515 | |||||||||
Total expenses | 185,177 | 32,859 | 3,931 | 221,967 | |||||||||
Equity in net income of affiliates | — | — | 55,870 | 55,870 | |||||||||
Pretax income | 52,455 | 48,653 | 54,626 | 155,734 | |||||||||
Income tax provision | 11,127 | 13,529 | 19,119 | 43,775 | |||||||||
Net income | $ | 41,328 | $ | 35,124 | $ | 35,507 | $ | 111,959 | |||||
Assets | $ | 4,598,975 | $ | 2,572,079 | $ | 566,267 | $ | 7,737,321 | |||||
Total investments | 3,412,282 | 2,303,412 | — | 5,715,694 | |||||||||
Deferred policy acquisition costs | 71,691 | 147,882 | — | 219,573 | |||||||||
Reserve for losses and loss adjustment expenses | 651,249 | 189,689 | — | 840,938 | |||||||||
Unearned premiums | 246,033 | 668,389 | — | 914,422 | |||||||||
Stockholders’ equity | 2,232,606 | 1,339,627 | 394,800 | 3,967,033 |
Page 4
Radian Group Inc. and Subsidiaries
Segment Information
Nine Months Ended September 30, 2007
Exhibit E
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | ||||||||||||
Revenues: | ||||||||||||||||
Net premiums written | $ | 699,821 | $ | 175,444 | $ | — | $ | 875,265 | ||||||||
Net premiums earned—insurance | $ | 578,829 | $ | 99,084 | $ | — | $ | 677,913 | ||||||||
Net premiums earned—credit derivatives | 50,864 | 48,644 | — | 99,508 | ||||||||||||
Net premiums earned—total | 629,693 | 147,728 | — | 777,421 | ||||||||||||
Net investment income | 109,283 | 79,160 | 162 | 188,605 | ||||||||||||
Net gains on securities | 39,791 | 13,993 | 495 | 54,279 | ||||||||||||
Change in fair value of derivative instruments | (469,960 | ) | (263,313 | ) | — | (733,273 | ) | |||||||||
Gain on sale of affiliates | — | — | 181,734 | 181,734 | ||||||||||||
Other income | 9,357 | 783 | 1,379 | 11,519 | ||||||||||||
Total revenues | 318,164 | (21,649 | ) | 183,770 | 480,285 | |||||||||||
Expenses: | ||||||||||||||||
Provision for losses | 571,791 | 39,717 | — | 611,508 | ||||||||||||
Provision for second-lien premium deficiency | 155,176 | — | — | 155,176 | ||||||||||||
Policy acquisition costs | 53,944 | 34,251 | — | 88,195 | ||||||||||||
Other operating expenses | 95,769 | 36,630 | 5,072 | 137,471 | ||||||||||||
Merger expenses | 13,434 | 567 | — | 14,001 | ||||||||||||
Interest expense | 19,959 | 13,866 | 4,985 | 38,810 | ||||||||||||
Total expenses | 910,073 | 125,031 | 10,057 | 1,045,161 | ||||||||||||
Equity in net income of affiliates | — | — | 91,155 | 91,155 | ||||||||||||
Impairment of affiliates | — | — | (467,800 | ) | (467,800 | ) | ||||||||||
Pretax loss | (591,909 | ) | (146,680 | ) | (202,932 | ) | (941,521 | ) | ||||||||
Income tax (benefit) provision | (233,121 | ) | (72,504 | ) | (66,582 | ) | (372,207 | ) | ||||||||
Net loss | $ | (358,788 | ) | $ | (74,176 | ) | $ | (136,350 | ) | $ | (569,314 | ) | ||||
Page 5
Radian Group Inc. and Subsidiaries
Segment Information
Nine Months Ended September 30, 2006
Exhibit F
(In thousands) | Mortgage Insurance | Financial Guaranty | Financial Services | Total | ||||||||||
Revenues: | ||||||||||||||
Net premiums written | $ | 646,749 | $ | 186,536 | $ | — | $ | 833,285 | ||||||
Net premiums earned—insurance | $ | 588,245 | $ | 101,227 | $ | — | $ | 689,472 | ||||||
Net premiums earned—credit derivatives | 24,563 | 52,892 | — | 77,455 | ||||||||||
Net premiums earned—total | 612,808 | 154,119 | — | 766,927 | ||||||||||
Net investment income | 103,363 | 70,627 | 133 | 174,123 | ||||||||||
Net gains on securities | 18,207 | 8,895 | 2,485 | 29,587 | ||||||||||
Change in fair value of derivative instruments | 1,830 | (8,861 | ) | — | (7,031 | ) | ||||||||
Other income | 10,108 | 618 | 5,730 | 16,456 | ||||||||||
Total revenues | 746,316 | 225,398 | 8,348 | 980,062 | ||||||||||
Expenses: | ||||||||||||||
Provision for losses | 268,290 | 16,599 | — | 284,889 | ||||||||||
Policy acquisition costs | 44,336 | 36,199 | — | 80,535 | ||||||||||
Other operating expenses | 128,742 | 46,092 | 6,248 | 181,082 | ||||||||||
Interest expense | 20,042 | 12,312 | 3,539 | 35,893 | ||||||||||
Total expenses | 461,410 | 111,202 | 9,787 | 582,399 | ||||||||||
Equity in net income of affiliates | — | — | 186,248 | 186,248 | ||||||||||
Pretax income | 284,906 | 114,196 | 184,809 | 583,911 | ||||||||||
Income tax provision | 72,262 | 23,164 | 64,683 | 160,109 | ||||||||||
Net income | $ | 212,644 | $ | 91,032 | $ | 120,126 | $ | 423,802 | ||||||
Page 6
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit G
($ in thousands, except ratios) | Quarter Ended September 30 | Nine Months Ended September 30 | ||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net Premiums Written: | ||||||||||||||||
Public finance direct | $ | 17,746 | $ | 11,107 | $ | 48,656 | $ | 49,353 | ||||||||
Public finance reinsurance | 31,433 | 13,844 | 67,082 | 60,539 | ||||||||||||
Structured direct | 3,991 | 4,172 | 12,027 | 14,604 | ||||||||||||
Structured reinsurance | 5,001 | 4,365 | 16,606 | 12,774 | ||||||||||||
Trade credit reinsurance | 319 | (97 | ) | 1,050 | 4,354 | |||||||||||
Net premiums written—insurance | 58,490 | 33,391 | 145,421 | 141,624 | ||||||||||||
Net premiums written—credit derivatives | 11,093 | 15,481 | 30,023 | 44,912 | ||||||||||||
Total Net Premiums Written | $ | 69,583 | $ | 48,872 | $ | 175,444 | $ | 186,536 | ||||||||
Net Premiums Earned: | ||||||||||||||||
Public finance direct | $ | 10,765 | $ | 8,227 | $ | 32,311 | $ | 23,381 | ||||||||
Public finance reinsurance | 11,105 | 12,098 | 33,897 | 28,256 | ||||||||||||
Structured direct | 4,367 | 4,403 | 13,447 | 14,689 | ||||||||||||
Structured reinsurance | 5,560 | 5,431 | 17,496 | 15,619 | ||||||||||||
Trade credit reinsurance | 601 | 3,919 | 1,933 | 19,282 | ||||||||||||
Net premiums earned—insurance | 32,398 | 34,078 | 99,084 | 101,227 | ||||||||||||
Net premiums earned—credit derivatives | 13,921 | 18,634 | 48,644 | 52,892 | ||||||||||||
Total Net Premiums Earned | $ | 46,319 | $ | 52,712 | $ | 147,728 | $ | 154,119 | ||||||||
Refundings included in earned premium | $ | 4,054 | $ | 5,357 | $ | 15,817 | $ | 8,667 | ||||||||
Claims paid: | ||||||||||||||||
Trade credit reinsurance | $ | 1,751 | $ | 5,452 | $ | 7,022 | $ | 13,806 | ||||||||
Other financial guaranty | 1,478 | 472 | 2,212 | 7,281 | ||||||||||||
Conseco | 2,663 | 3,505 | 8,782 | 12,250 | ||||||||||||
Total | $ | 5,892 | $ | 9,429 | $ | 18,016 | $ | 33,337 | ||||||||
Incurred losses: | ||||||||||||||||
Trade credit reinsurance | $ | (1,928 | ) | $ | (2,173 | ) | $ | (13,544 | ) | $ | 5,021 | |||||
Other financial guaranty | 53,647 | 3,952 | 53,261 | 12,610 | ||||||||||||
Conseco | — | — | — | (1,032 | )(2) | |||||||||||
Total | $ | 51,719 | $ | 1,779 | $ | 39,717 | $ | 16,599 | ||||||||
Loss ratio—GAAP Basis | 111.7 | % | 3.4 | % | 26.9 | % | 10.8 | % | ||||||||
Expense ratio—GAAP Basis (1) | 44.8 | % | 51.4 | % | 48.0 | % | 53.4 | % | ||||||||
156.5 | % | 54.8 | % | 74.9 | % | 64.2 | % | |||||||||
Net (receipts) payments under derivatives contracts | $ | (3,558 | ) | $ | (1,136 | ) | $ | (30,933 | ) | $ | 64,277 | |||||
(1) | Excludes merger expenses. |
(2) | Resulted from favorable loss development |
Page 7
Radian Group Inc.
Financial Guaranty Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit H
($ in thousands, except ratios) | September 30 2007 | December 31 2006 | September 30 2006 | |||||||||
Capital and surplus | $ | 1,172,141 | $ | 1,014,958 | $ | 1,011,787 | ||||||
Contingency reserve | 407,542 | 336,719 | 311,642 | |||||||||
Qualified statutory capital | 1,579,683 | 1,351,677 | 1,323,429 | |||||||||
Unearned premium reserve | 874,380 | 829,340 | 797,019 | |||||||||
Loss and loss expense reserve | 67,127 | 96,829 | 97,272 | |||||||||
Total statutory policyholders’ reserves | 2,521,190 | 2,277,846 | 2,217,720 | |||||||||
Present value of installment premiums | 433,428 | 345,565 | 335,571 | |||||||||
Reinsurance and soft capital facilities | 150,000 | 150,000 | 150,000 | |||||||||
Total statutory claims paying resources | $ | 3,104,618 | $ | 2,773,411 | $ | 2,703,291 | ||||||
Net debt service outstanding | $ | 156,743,014 | $ | 143,728,116 | $ | 133,144,153 | ||||||
Capital leverage ratio (1) | 99 | 106 | 101 | |||||||||
Claims paying leverage ratio (2) | 50 | 52 | 49 | |||||||||
Net par outstanding by product: | ||||||||||||
Public finance direct | $ | 18,168,866 | $ | 16,324,170 | $ | 15,130,925 | ||||||
Public finance reinsurance | 41,592,621 | 37,488,972 | 36,617,518 | |||||||||
Structured direct | 47,704,089 | 44,960,360 | 39,538,488 | |||||||||
Structured reinsurance | 5,300,388 | 5,192,122 | 4,775,458 | |||||||||
Total | $ | 112,765,964 | $ | 103,965,624 | $ | 96,062,389 | ||||||
Reinsurance business net par outstanding: | ||||||||||||
Treaty | 58 | % | 59 | % | 59 | % | ||||||
Facultative | 42 | % | 41 | % | 41 | % | ||||||
Reserve for losses and LAE | ||||||||||||
Specific | $ | 27,979 | $ | 35,320 | $ | 33,649 | ||||||
Conseco | 25,193 | 33,975 | 37,487 | |||||||||
Non-specific | 156,547 | 119,752 | 118,553 | |||||||||
Total | $ | 209,719 | $ | 189,047 | $ | 189,689 | ||||||
(1) | Net debt service outstanding divided by qualified statutory capital |
(2) | Net debt service outstanding divided by total statutory claims paying resources |
Page 8
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit I
Quarter Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||||
2007 | % | 2006 | % | 2007 | % | 2006 | % | |||||||||||||||||||||
Primary New Insurance Written ($ in millions) |
| |||||||||||||||||||||||||||
Flow | $ | 12,225 | 90.8 | % | $ | 7,017 | 85.7 | % | $ | 29,913 | 68.7 | % | $ | 18,913 | 58.1 | % | ||||||||||||
Structured | 1,234 | 9.2 | % | 1,175 | 14.3 | % | 13,623 | 31.3 | % | 13,630 | 41.9 | % | ||||||||||||||||
Total Primary | $ | 13,459 | 100.0 | % | $ | 8,192 | 100.0 | % | $ | 43,536 | 100.0 | % | $ | 32,543 | 100.0 | % | ||||||||||||
Flow | ||||||||||||||||||||||||||||
Prime | $ | 8,448 | 69.1 | % | $ | 5,320 | 75.8 | % | $ | 21,171 | 70.8 | % | $ | 13,970 | 73.9 | % | ||||||||||||
Alt-A | 2,588 | 21.2 | % | 1,189 | 16.9 | % | 6,015 | 20.1 | % | 3,560 | 18.8 | % | ||||||||||||||||
A minus and below | 1,189 | 9.7 | % | 508 | 7.3 | % | 2,727 | 9.1 | % | 1,383 | 7.3 | % | ||||||||||||||||
Total Flow | $ | 12,225 | 100.0 | % | $ | 7,017 | 100.0 | % | $ | 29,913 | 100.0 | % | $ | 18,913 | 100.0 | % | ||||||||||||
Structured | ||||||||||||||||||||||||||||
Prime | $ | 967 | 78.4 | % | $ | 108 | 9.2 | % | $ | 1,641 | 12.0 | % | $ | 3,659 | 26.8 | % | ||||||||||||
Alt-A | 32 | 2.6 | % | 1,065 | 90.6 | % | 11,137 | 81.8 | % | 8,537 | 62.7 | % | ||||||||||||||||
A minus and below | 235 | 19.0 | % | 2 | 0.2 | % | 845 | 6.2 | % | 1,434 | 10.5 | % | ||||||||||||||||
Total Structured | $ | 1,234 | 100.0 | % | $ | 1,175 | 100.0 | % | $ | 13,623 | 100.0 | % | $ | 13,630 | 100.0 | % | ||||||||||||
Total | ||||||||||||||||||||||||||||
Prime | $ | 9,415 | 69.9 | % | $ | 5,428 | 66.3 | % | $ | 22,812 | 52.4 | % | $ | 17,629 | 54.1 | % | ||||||||||||
Alt-A | 2,620 | 19.5 | % | 2,254 | 27.5 | % | 17,152 | 39.4 | % | 12,097 | 37.2 | % | ||||||||||||||||
A minus and below | 1,424 | 10.6 | % | 510 | 6.2 | % | 3,572 | 8.2 | % | 2,817 | 8.7 | % | ||||||||||||||||
Total Primary | $ | 13,459 | 100.0 | % | $ | 8,192 | 100.0 | % | $ | 43,536 | 100.0 | % | $ | 32,543 | 100.0 | % | ||||||||||||
Total Primary New Insurance Written by FICO Score ($ in millions) |
| |||||||||||||||||||||||||||
Flow | ||||||||||||||||||||||||||||
<=619 | $ | 703 | 5.7 | % | $ | 440 | 6.3 | % | $ | 1,830 | 6.1 | % | $ | 1,105 | 5.8 | % | ||||||||||||
620-679 | 3,506 | 28.7 | % | 2,087 | 29.7 | % | 9,158 | 30.6 | % | 5,644 | 29.8 | % | ||||||||||||||||
680-739 | 4,644 | 38.0 | % | 2,525 | 36.0 | % | 10,977 | 36.7 | % | 6,964 | 36.9 | % | ||||||||||||||||
>=740 | 3,372 | 27.6 | % | 1,965 | 28.0 | % | 7,948 | 26.6 | % | 5,200 | 27.5 | % | ||||||||||||||||
Total Flow | $ | 12,225 | 100.0 | % | $ | 7,017 | 100.0 | % | $ | 29,913 | 100.0 | % | $ | 18,913 | 100.0 | % | ||||||||||||
Structured | ||||||||||||||||||||||||||||
<=619 | $ | 129 | 10.5 | % | $ | 2 | 0.2 | % | $ | 538 | 4.0 | % | $ | 1,447 | 10.6 | % | ||||||||||||
620-679 | 296 | 24.0 | % | 185 | 15.7 | % | 3,762 | 27.6 | % | 3,970 | 29.2 | % | ||||||||||||||||
680-739 | 331 | 26.8 | % | 613 | 52.2 | % | 6,160 | 45.2 | % | 5,332 | 39.1 | % | ||||||||||||||||
>=740 | 478 | 38.7 | % | 375 | 31.9 | % | 3,163 | 23.2 | % | 2,881 | 21.1 | % | ||||||||||||||||
Total Structured | $ | 1,234 | 100.0 | % | $ | 1,175 | 100.0 | % | $ | 13,623 | 100.0 | % | $ | 13,630 | 100.0 | % | ||||||||||||
Total | ||||||||||||||||||||||||||||
<=619 | $ | 832 | 6.2 | % | $ | 442 | 5.4 | % | $ | 2,368 | 5.4 | % | $ | 2,552 | 7.9 | % | ||||||||||||
620-679 | 3,802 | 28.2 | % | 2,272 | 27.7 | % | 12,920 | 29.7 | % | 9,614 | 29.5 | % | ||||||||||||||||
680-739 | 4,975 | 37.0 | % | 3,138 | 38.3 | % | 17,137 | 39.4 | % | 12,296 | 37.8 | % | ||||||||||||||||
>=740 | 3,850 | 28.6 | % | 2,340 | 28.6 | % | 11,111 | 25.5 | % | 8,081 | 24.8 | % | ||||||||||||||||
Total Primary | $ | 13,459 | 100.0 | % | $ | 8,192 | 100.0 | % | $ | 43,536 | 100.0 | % | $ | 32,543 | 100.0 | % | ||||||||||||
Percentage of primary new insurance written |
| |||||||||||||||||||||||||||
Refinances | 27 | % | 28 | % | 40 | % | 35 | % | ||||||||||||||||||||
95.01% LTV and above | 31 | % | 22 | % | 22 | % | 13 | % | ||||||||||||||||||||
ARMs | ||||||||||||||||||||||||||||
Less than 5 years | 4 | % | 21 | % | 17 | % | 26 | % | ||||||||||||||||||||
5 years and longer | 13 | % | 9 | % | 9 | % | 16 | % | ||||||||||||||||||||
Primary risk written ($ in millions) | ||||||||||||||||||||||||||||
Flow | $ | 3,196 | 91.7 | % | $ | 1,772 | 94.4 | % | $ | 7,641 | 88.2 | % | $ | 4,796 | 79.2 | % | ||||||||||||
Structured | 291 | 8.3 | % | 105 | 5.6 | % | 1,022 | 11.8 | % | 1,262 | 20.8 | % | ||||||||||||||||
Total Primary | $ | 3,487 | 100.0 | % | $ | 1,877 | 100.0 | % | $ | 8,663 | 100.0 | % | $ | 6,058 | 100.0 | % | ||||||||||||
Pool risk written (In millions) | $ | 42 | $ | 64 | $ | 227 | $ | 333 | ||||||||||||||||||||
Other risk written (In millions) | ||||||||||||||||||||||||||||
Seconds | ||||||||||||||||||||||||||||
1st loss | $ | 3 | $ | 1 | $ | 9 | $ | 43 | ||||||||||||||||||||
2nd loss | — | 29 | 21 | 206 | ||||||||||||||||||||||||
NIMs | — | 132 | 377 | 238 | ||||||||||||||||||||||||
International | ||||||||||||||||||||||||||||
1st loss-Hong Kong primary mortgage insurance | 46 | 9 | 96 | 31 | ||||||||||||||||||||||||
Reinsurance | 15 | 2 | 49 | 7 | ||||||||||||||||||||||||
Other | ||||||||||||||||||||||||||||
Domestic credit default swaps | — | — | — | 32 | ||||||||||||||||||||||||
Total other risk written | $ | 64 | $ | 173 | $ | 516 | $ | 557 | ||||||||||||||||||||
Page 9
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit J
September 30 | September 30 | |||||||||||||
2007 | % | 2006 | % | |||||||||||
Primary insurance in force ($ in millions) | ||||||||||||||
Flow | $ | 98,985 | 73.3 | % | $ | 82,561 | 71.6 | % | ||||||
Structured | 36,030 | 26.7 | % | 32,700 | 28.4 | % | ||||||||
Total Primary | $ | 135,015 | 100.0 | % | $ | 115,261 | 100.0 | % | ||||||
Prime | $ | 86,530 | 64.1 | % | $ | 77,030 | 66.8 | % | ||||||
Alt-A | 36,266 | 26.9 | % | 25,906 | 22.5 | % | ||||||||
A minus and below | 12,219 | 9.0 | % | 12,325 | 10.7 | % | ||||||||
Total Primary | $ | 135,015 | 100.0 | % | $ | 115,261 | 100.0 | % | ||||||
Primary risk in force ($ in millions) | ||||||||||||||
Flow | $ | 24,856 | 84.5 | % | $ | 20,464 | 79.9 | % | ||||||
Structured | 4,545 | 15.5 | % | 5,141 | 20.1 | % | ||||||||
Total Primary | $ | 29,401 | 100.0 | % | $ | 25,605 | 100.0 | % | ||||||
Flow | ||||||||||||||
Prime | $ | 19,117 | 76.9 | % | $ | 16,072 | 78.5 | % | ||||||
Alt-A | 3,799 | 15.3 | % | 2,857 | 14.0 | % | ||||||||
A minus and below | 1,940 | 7.8 | % | 1,535 | 7.5 | % | ||||||||
Total Flow | $ | 24,856 | 100.0 | % | $ | 20,464 | 100.0 | % | ||||||
Structured | ||||||||||||||
Prime | $ | 1,791 | 39.4 | % | $ | 2,065 | 40.2 | % | ||||||
Alt-A | 1,668 | 36.7 | % | 1,492 | 29.0 | % | ||||||||
A minus and below | 1,086 | 23.9 | % | 1,584 | 30.8 | % | ||||||||
Total Structured | $ | 4,545 | 100.0 | % | $ | 5,141 | 100.0 | % | ||||||
Total | ||||||||||||||
Prime | $ | 20,908 | 71.1 | % | $ | 18,137 | 70.8 | % | ||||||
Alt-A | 5,467 | 18.6 | % | 4,349 | 17.0 | % | ||||||||
A minus and below | 3,026 | 10.3 | % | 3,119 | 12.2 | % | ||||||||
Total Primary | $ | 29,401 | 100.0 | % | $ | 25,605 | 100.0 | % | ||||||
Total Primary Risk in Force by FICO Score | ||||||||||||||
($ in millions) | ||||||||||||||
Flow | ||||||||||||||
<=619 | $ | 1,573 | 6.3 | % | $ | 1,296 | 6.3 | % | ||||||
620-679 | 7,632 | 30.7 | % | 6,297 | 30.8 | % | ||||||||
680-739 | 9,122 | 36.7 | % | 7,506 | 36.7 | % | ||||||||
>=740 | 6,529 | 26.3 | % | 5,365 | 26.2 | % | ||||||||
Total Flow | $ | 24,856 | 100.0 | % | $ | 20,464 | 100.0 | % | ||||||
Structured | ||||||||||||||
<=619 | $ | 1,025 | 22.6 | % | $ | 1,585 | 30.8 | % | ||||||
620-679 | 1,515 | 33.3 | % | 1,839 | 35.8 | % | ||||||||
680-739 | 1,282 | 28.2 | % | 1,175 | 22.9 | % | ||||||||
>=740 | 723 | 15.9 | % | 542 | 10.5 | % | ||||||||
Total Structured | $ | 4,545 | 100.0 | % | $ | 5,141 | 100.0 | % | ||||||
Total | ||||||||||||||
<=619 | $ | 2,598 | 8.8 | % | $ | 2,881 | 11.2 | % | ||||||
620-679 | 9,147 | 31.1 | % | 8,136 | 31.8 | % | ||||||||
680-739 | 10,404 | 35.4 | % | 8,681 | 33.9 | % | ||||||||
>=740 | 7,252 | 24.7 | % | 5,907 | 23.1 | % | ||||||||
Total Primary | $ | 29,401 | 100.0 | % | $ | 25,605 | 100.0 | % | ||||||
Percentage of primary risk in force | ||||||||||||||
Refinances | 32 | % | 34 | % | ||||||||||
95.01% LTV and above | 22 | % | 16 | % | ||||||||||
ARMs | ||||||||||||||
Less than 5 years | 14 | % | 21 | % | ||||||||||
5 years and longer | 9 | % | 9 | % | ||||||||||
Pool risk in force ($ in millions) | ||||||||||||||
Prime | $ | 2,088 | 69.9 | % | $ | 2,190 | 73.2 | % | ||||||
Alt-A | 294 | 9.8 | % | 301 | 10.1 | % | ||||||||
A minus and below | 605 | 20.3 | % | 501 | 16.7 | % | ||||||||
Total | $ | 2,987 | 100.0 | % | $ | 2,992 | 100.0 | % | ||||||
Page 10
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit K
September 30 | September 30 | |||||||||||
2007 | % | 2006 | % | |||||||||
Total Primary Risk in Force by LTV ($ in millions) | ||||||||||||
95.01% and above | $ | 6,543 | 22.3 | % | $ | 4,182 | 16.3 | % | ||||
90.01% to 95.00% | 8,929 | 30.4 | % | 8,174 | 31.9 | % | ||||||
85.01% to 90.00% | 10,040 | 34.1 | % | 9,187 | 35.9 | % | ||||||
85.00% and below | 3,889 | 13.2 | % | 4,062 | 15.9 | % | ||||||
Total | $ | 29,401 | 100.0 | % | $ | 25,605 | 100.0 | % | ||||
Total Primary Risk in Force by Policy Year ($ in millions) | ||||||||||||
2003 and prior | $ | 5,829 | 19.8 | % | $ | 7,743 | 30.2 | % | ||||
2004 | 3,570 | 12.1 | % | 5,137 | 20.1 | % | ||||||
2005 | 5,364 | 18.3 | % | 7,072 | 27.6 | % | ||||||
2006 | 6,246 | 21.3 | % | 5,653 | 22.1 | % | ||||||
2007 | 8,392 | 28.5 | % | — | — | |||||||
Total | $ | 29,401 | 100.0 | % | $ | 25,605 | 100.0 | % | ||||
Total Pool Risk in Force by Policy Year ($ in millions) | ||||||||||||
2003 and prior | $ | 1,722 | 57.7 | % | $ | 1,785 | 59.6 | % | ||||
2004 | 171 | 5.7 | % | 291 | 9.7 | % | ||||||
2005 | 598 | 20.0 | % | 651 | 21.8 | % | ||||||
2006 | 269 | 9.0 | % | 265 | 8.9 | % | ||||||
2007 | 227 | 7.6 | % | — | — | |||||||
Total Pool risk in Force | $ | 2,987 | 100.0 | % | $ | 2,992 | 100.0 | % | ||||
Other risk in force (In millions) | ||||||||||||
Seconds | ||||||||||||
1st loss | $ | 436 | $ | 621 | ||||||||
2nd loss | 571 | 723 | ||||||||||
NIMs | 712 | 382 | ||||||||||
International | ||||||||||||
1st loss-Hong Kong primary mortgage insurance | 432 | 301 | ||||||||||
Reinsurance | 85 | 33 | ||||||||||
Credit default swaps | 8,108 | 7,678 | ||||||||||
Other | ||||||||||||
Domestic credit default swaps | 212 | 212 | ||||||||||
Financial guaranty wrap | — | 125 | ||||||||||
Total other risk in force | $ | 10,556 | $ | 10,075 | ||||||||
Risk to capital ratio-STAT Basis | 11.9:1 | 10.4:1 | ||||||||||
Risk to capital ratio-STAT Basis excluding AAA-rated CDS | 9.7:1 | 8.3:1 |
Page 11
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit L
Quarter Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Direct claims paid (In thousands) | ||||||||||||||||
Prime | $ | 43,601 | $ | 28,737 | $ | 110,952 | $ | 88,568 | ||||||||
Alt-A | 28,902 | 13,343 | 70,655 | 47,364 | ||||||||||||
A minus and below | 39,025 | 21,885 | 103,132 | 67,666 | ||||||||||||
Seconds and other | 25,282 | 10,447 | 59,974 | 28,614 | ||||||||||||
Total | $ | 136,810 | $ | 74,412 | $ | 344,713 | $ | 232,212 | ||||||||
Average claim paid (In thousands) | ||||||||||||||||
Prime | $ | 32.3 | $ | 25.5 | $ | 29.7 | $ | 25.9 | ||||||||
Alt-A | 46.8 | 30.3 | 42.7 | 34.9 | ||||||||||||
A minus and below | 34.7 | 27.1 | 31.9 | 27.6 | ||||||||||||
Seconds | 31.2 | 26.9 | 29.4 | 26.2 | ||||||||||||
Total | $ | 35.1 | $ | 26.9 | $ | 32.3 | $ | 27.9 | ||||||||
Loss ratio—GAAP Basis | 122.8 | % | 59.4 | % | 90.8 | % | 43.8 | % | ||||||||
Expense ratio—GAAP Basis (2) | 22.1 | % | 29.4 | % | 23.8 | % | 28.2 | % | ||||||||
144.9 | % | 88.8 | % | 114.6 | % | 72.0 | % | |||||||||
Reserve for losses by category (In thousands): | ||||||||||||||||
Prime | $ | 246,531 | $ | 187,223 | ||||||||||||
Alt-A | 246,792 | 143,006 | ||||||||||||||
A minus and below | 279,320 | 222,399 | ||||||||||||||
Pool insurance | 42,582 | 33,500 | ||||||||||||||
Seconds | 41,985 | 38,510 | ||||||||||||||
Other | 1,341 | 7,650 | ||||||||||||||
Reserve for losses, net | 858,551 | 632,288 | ||||||||||||||
Reinsurance recoverable | 26,434 | (1) | 18,961 | (1) | ||||||||||||
Total | $ | 884,985 | $ | 651,249 | ||||||||||||
(1) | Reinsurance recoverable on a first-loss second lien captive. |
(2) | Excludes merger expenses. |
Page 12
Radian Group Inc.
Mortgage Insurance Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit M
September 30 2007 | December 31 2006 | September 30 2006 | |||||||
Default Statistics | |||||||||
Primary insurance: | |||||||||
Flow | |||||||||
Prime | |||||||||
Number of insured loans | 542,819 | 500,464 | 499,623 | ||||||
Number of loans in default | 16,908 | 15,141 | 14,761 | ||||||
Percentage of loans in default | 3.11 | % | 3.03 | % | 2.95 | % | |||
Alt-A | |||||||||
Number of insured loans | 74,927 | 63,469 | 63,156 | ||||||
Number of loans in default | 6,029 | 4,348 | 4,236 | ||||||
Percentage of loans in default | 8.05 | % | 6.85 | % | 6.71 | % | |||
A minus and below | |||||||||
Number of insured loans | 60,826 | 52,440 | 51,875 | ||||||
Number of loans in default | 8,638 | 7,250 | 6,970 | ||||||
Percentage of loans in default | 14.20 | % | 13.83 | % | 13.44 | % | |||
Total Flow | |||||||||
Number of insured loans | 678,572 | 616,373 | 614,654 | ||||||
Number of loans in default | 31,575 | 26,739 | 25,967 | ||||||
Percentage of loans in default | 4.65 | % | 4.34 | % | 4.22 | % | |||
Structured | |||||||||
Prime | |||||||||
Number of insured loans | 59,163 | 62,680 | 66,982 | ||||||
Number of loans in default | 4,072 | 3,300 | 2,845 | ||||||
Percentage of loans in default | 6.88 | % | 5.26 | % | 4.25 | % | |||
Alt-A | |||||||||
Number of insured loans | 93,494 | 70,164 | 73,511 | ||||||
Number of loans in default | 6,512 | 3,647 | 2,940 | ||||||
Percentage of loans in default | 6.97 | % | 5.20 | % | 4.00 | % | |||
A minus and below | |||||||||
Number of insured loans | 31,034 | 36,597 | 41,889 | ||||||
Number of loans in default | 8,496 | 9,014 | 8,693 | ||||||
Percentage of loans in default | 27.38 | % | 24.63 | % | 20.75 | % | |||
Total Structured | |||||||||
Number of insured loans | 183,691 | 169,441 | 182,382 | ||||||
Number of loans in default | 19,080 | 15,961 | 14,478 | ||||||
Percentage of loans in default | 10.39 | % | 9.42 | % | 7.94 | % | |||
Total Primary Insurance | |||||||||
Prime | |||||||||
Number of insured loans | 601,982 | 563,144 | 566,605 | ||||||
Number of loans in default | 20,980 | 18,441 | 17,606 | ||||||
Percentage of loans in default | 3.49 | % | 3.27 | % | 3.11 | % | |||
Alt-A | |||||||||
Number of insured loans | 168,421 | 133,633 | 136,667 | ||||||
Number of loans in default | 12,541 | 7,995 | 7,176 | ||||||
Percentage of loans in default | 7.45 | % | 5.98 | % | 5.25 | % | |||
A minus and below | |||||||||
Number of insured loans | 91,860 | 89,037 | 93,764 | ||||||
Number of loans in default | 17,134 | 16,264 | 15,663 | ||||||
Percentage of loans in default | 18.65 | % | 18.27 | % | 16.70 | % | |||
Total Primary Insurance | |||||||||
Number of insured loans | 862,263 | 785,814 | 797,036 | ||||||
Number of loans in default | 50,655 | (1) | 42,700 | (1) | 40,445 | (1) | |||
Percentage of loans in default | 5.87 | % | 5.43 | % | 5.07 | % | |||
Pool insurance: | |||||||||
Number of loans in default | 23,810 | (2) | 18,681 | (2) | 18,096 | (2) |
(1) | Includes approximately 2,796, 1,161 and 800 defaults at September 30, 2007, December 31, 2006 and September 30, 2006, respectively, where reserves have not been established because no claim payment is currently anticipated. |
(2) | Includes approximately 18,124, 13,309 and 12,634 defaults at September 30, 2007, December 31, 2006 and September 30, 2006, 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 Nine Months Ended and as of September 30, 2007
Exhibit N
Quarter Ended September 30 | Nine Months Ended September 30 | |||||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||||
Net Premiums Written (In thousands) | ||||||||||||||||
Primary and Pool Insurance | $ | 235,989 | $ | 179,206 | $ | 612,589 | $ | 560,338 | ||||||||
Seconds | 4,711 | 16,682 | 22,340 | 42,466 | ||||||||||||
International | 8,821 | 5,483 | 18,510 | 9,679 | ||||||||||||
Net premiums written—insurance | 249,521 | 201,371 | 653,439 | 612,483 | ||||||||||||
Net premiums written—credit derivatives | 10,971 | 4,562 | 46,382 | 34,266 | ||||||||||||
Total Net Premiums Written | $ | 260,492 | $ | 205,933 | $ | 699,821 | $ | 646,749 | ||||||||
Net Premiums Earned (In thousands) | ||||||||||||||||
Primary and Pool Insurance | $ | 200,467 | $ | 180,895 | $ | 541,796 | $ | 541,723 | ||||||||
Seconds | 7,270 | 12,266 | 25,165 | 41,024 | ||||||||||||
International | 5,261 | 1,472 | 11,868 | 5,498 | ||||||||||||
Net premiums earned—insurance | 212,998 | 194,633 | 578,829 | 588,245 | ||||||||||||
Net premiums earned—credit derivatives | 14,085 | 6,799 | 50,864 | 24,563 | ||||||||||||
Total Net Premiums Earned | $ | 227,083 | $ | 201,432 | $ | 629,693 | $ | 612,808 | ||||||||
SMART HOME (In millions) | ||||||||||||||||
Ceded Premiums Written | $ | 3.3 | $ | 3.5 | $ | 9.7 | $ | 8.5 | ||||||||
Ceded Premiums Earned | $ | 3.3 | $ | 3.3 | $ | 9.3 | $ | 8.6 | ||||||||
Captives | ||||||||||||||||
Premiums ceded to captives (In millions) | $ | 30.3 | $ | 24.1 | $ | 88.4 | $ | 71.3 | ||||||||
% of total premiums | 13.0 | % | 11.6 | % | 13.8 | % | 11.5 | % | ||||||||
NIW subject to captives (In millions) | $ | 5,406 | $ | 3,160 | $ | 16,546 | $ | 9,700 | ||||||||
% of primary NIW | 40.2 | % | 38.6 | % | 38.0 | % | 29.8 | % | ||||||||
IIF included in captives (1) | 35.3 | % | 34.2 | % | ||||||||||||
RIF included in captives (1) | 40.6 | % | 38.9 | % | ||||||||||||
Persistency (twelve months ended September 30) | 72.8 | % | 65.7 | % | ||||||||||||
September 30 2007 | September 30 2006 | |||||||||||||||
SMART HOME | ||||||||||||||||
% of Primary RIF included in Smart Home Transactions (1) | 6.2 | % | 10.9 | % |
(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 Ended and as of September 30, 2007
ALT-A
Exhibit O
($ in millions) | Quarter Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
2007 | % | 2006 | % | 2007 | % | 2006 | % | |||||||||||||||||
Primary New Insurance Written by FICO Score | ||||||||||||||||||||||||
<=619 | $ | 15 | 0.6 | % | $ | 2 | 0.1 | % | $ | 107 | 0.6 | % | $ | 25 | 0.2 | % | ||||||||
620-659 | 167 | 6.4 | % | 133 | 5.9 | % | 1,846 | 10.8 | % | 1,392 | 11.5 | % | ||||||||||||
660-679 | 303 | 11.6 | % | 280 | 12.4 | % | 2,689 | 15.7 | % | 1,668 | 13.8 | % | ||||||||||||
680-739 | 1,350 | 51.5 | % | 1,160 | 51.5 | % | 8,373 | 48.8 | % | 5,853 | 48.4 | % | ||||||||||||
>=740 | 785 | 30.0 | % | 679 | 30.1 | % | 4,137 | 24.1 | % | 3,159 | 26.1 | % | ||||||||||||
Total | $ | 2,620 | 100.0 | % | $ | 2,254 | 100.0 | % | $ | 17,152 | 100.0 | % | $ | 12,097 | 100.0 | % | ||||||||
Primary Risk in Force by FICO Score | ||||||||||||||||||||||||
<=619 | $ | 39 | 0.7 | % | $ | 27 | 0.6 | % | ||||||||||||||||
620-659 | 756 | 13.8 | % | 790 | 18.2 | % | ||||||||||||||||||
660-679 | 839 | 15.4 | % | 701 | 16.1 | % | ||||||||||||||||||
680-739 | 2,558 | 46.8 | % | 1,931 | 44.4 | % | ||||||||||||||||||
>=740 | 1,275 | 23.3 | % | 900 | 20.7 | % | ||||||||||||||||||
Total | $ | 5,467 | 100.0 | % | $ | 4,349 | 100.0 | % | ||||||||||||||||
Primary Risk in Force by LTV | ||||||||||||||||||||||||
95.01% and above | $ | 382 | 7.0 | % | $ | 126 | 2.9 | % | ||||||||||||||||
90.01% to 95.00% | 1,424 | 26.0 | % | 1,272 | 29.3 | % | ||||||||||||||||||
85.01% to 90.00% | 2,216 | 40.6 | % | 1,840 | 42.3 | % | ||||||||||||||||||
85.00% and below | 1,445 | 26.4 | % | 1,111 | 25.5 | % | ||||||||||||||||||
Total | $ | 5,467 | 100.0 | % | $ | 4,349 | 100.0 | % | ||||||||||||||||
Primary Risk in Force by Policy Year | ||||||||||||||||||||||||
2003 and prior | $ | 679 | 12.4 | % | $ | 945 | 21.7 | % | ||||||||||||||||
2004 | 503 | 9.2 | % | 841 | 19.3 | % | ||||||||||||||||||
2005 | 897 | 16.4 | % | 1,287 | 29.6 | % | ||||||||||||||||||
2006 | 1,325 | 24.3 | % | 1,276 | 29.4 | % | ||||||||||||||||||
2007 | 2,063 | 37.7 | % | — | — | |||||||||||||||||||
Total | $ | 5,467 | 100.0 | % | $ | 4,349 | 100.0 | % | ||||||||||||||||
Page 15
Radian Group Inc.
Financial Services Supplemental Information
For the Quarter and Nine Months Ended and as of September 30, 2007
Exhibit P
Quarter Ended September 30 | Nine Months Ended September 30 | |||||||||||||
(In thousands ) | 2007 | 2006 | 2007 | 2006 | ||||||||||
Investment in Affiliates-Selected Information | ||||||||||||||
C-BASS | ||||||||||||||
Balance, beginning of period | $ | 467,800 | $ | 415,351 | $ | 451,395 | $ | 364,364 | ||||||
Net income for period | — | 27,421 | 16,405 | 102,302 | ||||||||||
Dividends received | — | 11,300 | — | 35,194 | ||||||||||
Impairment of investment | (467,800 | ) | — | (467,800 | ) | — | ||||||||
Balance, end of period | $ | — | $ | 431,472 | $ | — | $ | 431,472 | ||||||
Sherman | ||||||||||||||
Balance, beginning of period | $ | 171,737 | $ | 76,790 | $ | 167,412 | $ | 81,753 | ||||||
Net income for period | 18,876 | 29,192 | 74,750 | 84,689 | ||||||||||
Dividends received | — | 43,225 | 51,512 | 103,740 | ||||||||||
Other comprehensive income | (637 | ) | — | (674 | ) | 55 | ||||||||
(Sale) purchase of ownership interest | (95,866 | ) | 66,307 | (95,866 | ) | 66,307 | ||||||||
Balance, end of period | $ | 94,110 | $ | 129,064 | $ | 94,110 | $ | 129,064 | ||||||
Portfolio Information: | ||||||||||||||
C-BASS | ||||||||||||||
Servicing portfolio | $ | 57,700,000 | $ | 60,400,000 | ||||||||||
Total assets | 8,431,888 | |||||||||||||
Servicing income | 30,362 | $ | 101,818 | |||||||||||
Net interest income | 77,096 | 212,008 | ||||||||||||
Total revenues | 126,479 | 426,683 | ||||||||||||
Sherman | ||||||||||||||
Total assets | $ | 2,093,168 | $ | 1,078,387 | ||||||||||
Total revenues | $ | 261,204 | $ | 233,166 | $ | 791,124 | $ | 726,736 |
Radian owns a 46% interest in C-BASS and a 21.8% interest in Sherman. Prior to September 2007, we owned 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
1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600 | 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, which include projections regarding revenues and losses as well as other statements regarding our future financial condition, are made on the basis of management’s current views and assumptions with respect to future events. These forward-looking statements, as well as our 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, consumer confidence, or credit spreads; future credit market disruptions – in particular, further deterioration in the housing, mortgage and related credit markets, which would negatively impact our future consolidated results of operations and, if more severe than our current predictions, could cause our ultimate projected losses on our existing mortgage insurance portfolio to be inaccurate; adverse changes in the liquidity in the capital markets and the contraction of credit markets; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers; risks faced by the businesses, municipalities or pools of assets covered by our insurance; the loss of a customer with whom we have a concentration of our insurance in force or the influence of large customers; increased severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance and financial guaranty insurance policies; material changes in the persistency rates of our mortgage insurance policies; losses associated with the aging of our mortgage insurance portfolio; ratings actions with respect to our credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to our operating subsidiaries – in particular, our ratings that are currently under review for possible downgrade by Moody’s; heightened competition from other insurance providers, from federal and state governmental or quasi-governmental entities such as the FHA 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 changes in these laws and regulations or the way they are interpreted; 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; vulnerability to the performance of our strategic investments; proceeds we may receive from a sale of our interests in C-BASS or the assets of C-BASS or in connection with the exercise of the outstanding option to purchase our remaining interests in Sherman; legal and other |
1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600 | limitations on the amount of dividends that we may receive from our insurance subsidiaries; 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 of our annual report on Form 10-K for the year ended December 31, 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. We do not intend to, and disclaim 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. |