Radian 8K Results of Operations and Financial Condition | RDN 24 Feb 09

Exhibit 99.1




1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600		News Release

	Contact:

	For investors:	Terri Williams-Perry – phone: 215 231.1486
		Email: terri.williams-perry@radian.biz

	For the media:	Rick Gillespie – phone: 215 231.1061
		email: rick.gillespie@radian.biz

	Radian Reports Fourth Quarter and Full Year 2008 Financial Results

	PHILADELPHIA, February 24, 2008 - Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended December 31, 2008 of $250.4 million, or $3.11 per diluted share. This compares to a net loss of $721.0 million, or $9.03 per diluted share, for the prior year quarter. The net loss for the full year 2008 was $410.6 million, or $5.12 per diluted share. This compares to a net loss of $1.3 billion, or $16.22 per diluted share for the prior year. Book value per share at December 31, 2008 was $25.06.

	“The private mortgage insurance industry remains a vital component of the U.S. housing finance system. While Radian and our industry experienced a difficult year, we believe that we have sufficient capital and liquidity to pay all anticipated claims, maintain a strong market position and continue to write new mortgage insurance business throughout 2009,” said S. A. Ibrahim, Chief Executive Officer of Radian. “We were successful in further reducing our credit risk exposure in Financial Guaranty and our non-traditional exposure in mortgage insurance. Furthermore, Radian remains uniquely positioned to benefit from Financial Guaranty as a continuing source of capital support for our MI business.”

	FOURTH QUARTER HIGHLIGHTS

	— Radian Asset Assurance Inc. (Radian Asset), the Company’s principal financial guaranty subsidiary, continues to serve as an important source of capital support for Radian Guaranty Inc. (Radian Guaranty), the Company’s principal mortgage insurance subsidiary, and is expected to continue to provide our core mortgage insurance business with cash infusions over time. Radian Asset had claims-paying resources of $2.8 billion including $965 million in statutory capital as of December 31, 2008.




1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600		— Radian continues to reduce credit risk exposure in the Financial Guaranty (FG) portfolio and to decrease non-traditional mortgage insurance risk in force. — Net par outstanding at FG was reduced to $100.7 billion from $116.0 billion a year ago. — In the fourth quarter, the Company eliminated approximately $4.0 billion of mortgage insurance exposure on a large, international mortgage credit default swap transaction. — The Company reduced its second lien mortgage insurance exposure by $209 million in January 2009, bringing its risk in force down to a current level of approximately $400 million, through a commutation agreement with a large second lien counterparty. — Radian has a 29 percent ownership interest in Sherman Financial and received $35.5 million in dividends from Sherman during 2008 and $6 million in January 2009. Sherman continues to be a source of additional liquidity and a potential source of additional capital. — Fourth quarter and full year first and second-lien MI claims paid came in below expectations at $240 million and $916 million, respectively. First quarter MI claims paid are expected to be approximately $270 million. — The fourth-quarter first-lien primary MI delinquency rate was 12 percent. — The delinquency rate for prime flow insurance was approximately 7.1 percent during the fourth quarter of 2008 and it is expected to continue to rise in the short-term. — Positive trends are occurring in certain vintages with indications of improved performance in 2008 business written. — As a result of reduced mortgage origination volume and the Company’s move to a more traditional high quality focus, total primary new MI insurance written during the fourth quarter was $5 billion, approximately 99.6 percent of which was prime. In addition, the average LTV was 90 percent and the average FICO score was 742 on business written in the fourth quarter. — Radian’s loss management initiatives remain a critical priority to its capital preservation. CONFERENCE CALL Radian will discuss each of these items in its conference call today, Tuesday, February 24 at 10:00 a.m. Eastern time. The conference 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. The call may also be accessed by dialing 888-428-4472 inside the U.S., or 651-291-0344 for international callers, using passcode 986186 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 Web site 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 one week, using the following dial-in numbers and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international callers, passcode 986186. About Radian Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk management products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. 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 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, 2008

	Exhibit D:	Segment Information Quarter Ended December 31, 2007

	Exhibit E:	Segment Information Year Ended December 31, 2008

	Exhibit F:	Segment Information Year Ended December 31, 2007

	Exhibit G:	Financial Guaranty Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008

	Exhibit H:	Financial Guaranty Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008

	Exhibit I:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 New Insurance Written and Risk Written

	Exhibit J:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Insurance in Force and Risk in Force

	Exhibit K:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Risk in Force by LTV and Policy Year and other Risk in Force

	Exhibit L:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Claims and Reserves




1601 Market Street Philadelphia, Pennsylvania 19103-2337 800 523.1988 215 564.6600	Exhibit M:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Defaults
	Exhibit N:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Net Premiums Written and Earned, Smart Home, Captives and Persistency
	Exhibit O:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Reinsurance Progression Toward Attachment – Summary by Book Year

	Exhibit P:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Modified Pool Risk in Force

	Exhibit Q:	Mortgage Insurance Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008 Alt-A

	Exhibit R:	Financial Services Supplemental Information- For the Quarter and Year Ended and as of December 31, 2008

	Schedule 1:	Supplemental Schedule Radian Group Inc. and Subsidiaries-Consolidated

	Schedule 2:	Supplemental Schedule - Segment Information-Financial Guaranty

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)	2008			2007			2008			2007
Revenues:
Net premiums written—insurance	$	147,467		$	286,372		$	816,869		$	1,085,232

Net premiums earned—insurance		231,044		$	234,368		$	971,820		$	912,281
Net investment income		66,711			67,493			263,033			256,098
Change in fair value of derivative instruments (1)		(217,879	)		(580,614	)		710,913			(1,214,379	)
Net (losses) gains on other financial instruments		(22,594	)		(673	)		(149,466	)		53,606
Gain on sale of affiliate		—			—			—			181,734
Other income		2,145			192			11,736			11,711

Total revenues		59,427			(279,234	)		1,808,036			201,051


Expenses:
Provision for losses		618,835			689,903			2,205,340			1,308,090
Provision for premium deficiency (2)		(244,512	)		40,470			(108,785	)		195,646
Policy acquisition costs		15,768			24,981			136,396	(3)		113,176
Other operating expenses		55,726			38,652			255,497			169,444
Merger expenses		—			—			—			14,001
Interest expense		13,337			14,258			53,514			53,068

Total expenses		459,154			808,264			2,541,962			1,853,425

Equity in net income (loss) of affiliates		15,769			(39,896	)		59,797			(416,541	)

Pretax loss		(383,958	)		(1,127,394	)		(674,129	)		(2,068,915	)

Income tax benefit		(133,566	)		(406,409	)		(263,550	)		(778,616	)

Net loss	$	(250,392	)	$	(720,985	)	$	(410,579	)	$	(1,290,299	)

Diluted net loss per share (4)	$	(3.11	)	$	(9.03	)	$	(5.12	)	$	(16.22	)

(1)

Includes premiums earned on derivative contracts.

(2)

Includes $(150.1) million for first-lien mortgages and $(94.4) million for second-lien mortgages in the fourth quarter of 2008 and $(108.8) million for second-lien mortgages for the year ended December 31, 2008.

(3)

Includes the acceleration of $50.8 million of deferred policy acquisition cost amortization for the year ended December 31, 2008, as a result of the establishment of a first-lien premium deficiency reserve in the second quarter of 2008.

(4)

Weighted average shares outstanding (in thousands)


Average common shares outstanding	80,642	79,850	80,258	79,556
Increase in shares-potential exercise of options-diluted basis	—	—	—	—

Weighted average shares outstanding (in thousands)	80,642	79,850	80,258	79,556

For Trend Information, refer to our Quarterly Financial Statistics on Radian’s (RDN) website.

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit B


(In thousands, except share and per-share data)	December 31 2008			December 31 2007
Assets:
Cash and investments	$	6,060,601		$	6,611,836
Investments in affiliates		99,712			104,354
Deferred policy acquisition costs		160,526			234,955
Prepaid federal income taxes		248,828			793,486
Deferred income taxes, net		446,102			—
Reinsurance recoverables		492,359			33,960
Other assets		607,991			431,598

Total assets	$	8,116,119		$	8,210,189


Liabilities and stockholders’ equity:
Unearned premiums	$	916,724		$	1,094,710
Reserve for losses and loss adjustment expenses		3,224,542			1,598,756
Reserve for premium deficiency		86,861			195,646
Long-term debt and other borrowings		857,802			953,524
Variable interest entity debt		160,035			—
Deferred income taxes, net		—			26,705
Derivative liabilities		519,260			1,305,665
Other liabilities		320,185			314,447

Total liabilities		6,085,409			5,489,453

Common stock		98			98
Additional paid-in capital		462,647			442,312
Retained earnings		1,766,946			2,181,191
Accumulated other comprehensive income		(198,981	)		97,135

Total common stockholders’ equity		2,030,710			2,720,736

Total liabilities and stockholders’ equity	$	8,116,119		$	8,210,189

Book value per share	$	25.06		$	33.83

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended December 31, 2008

Exhibit C

(In thousands)

Mortgage
Insurance

Financial
Guaranty

Financial
Services

Total

Revenues:

Net premiums written—insurance

188,368

(40,901

) (1)

—

147,467

Net premiums earned—insurance

203,213

27,831

—

231,044

Net investment income

38,804

27,907

—

66,711

Change in fair value of derivative instruments

(3,391

)

(214,488

)

—

(217,879

)

Net (losses) gains on other financial instruments

(16,922

)

(5,702

)

(22,594

)

Other income

2,082

—

2,145

Total revenues

223,786

(164,389

)

59,427

Expenses:

Provision for losses

551,284

67,551

—

618,835

Provision for premium deficiency

(244,512

)

—

(244,512

)

Policy acquisition costs

6,630

9,138

—

15,768

Other operating expenses

28,731

26,867

128

55,726

Interest expense

6,482

6,855

—

13,337

Total expenses

348,615

110,411

128

459,154

Equity in net income of affiliates

—

15,753

15,769

Pretax (loss) income

(124,829

)

(274,784

)

15,655

(383,958

)

Income tax (benefit) provision

(47,784

)

(91,572

)

5,790

(133,566

)

Net (loss) income

(77,045

)

(183,212

)

9,865

(250,392

)

Cash and investments

3,508,018

2,552,583

—

6,060,601

Deferred policy acquisition costs

21,286

139,240

—

160,526

Total Assets

4,800,708

3,151,695

163,716

8,116,119

Unearned premiums

336,126

580,598

—

916,724

Reserve for losses and loss adjustment expenses

2,989,994

234,548

—

3,224,542

Derivative liabilities

161,839

357,421

—

519,260

(1)

See Schedule 1

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended December 31, 2007

Exhibit D


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written—insurance	$	245,064		$	41,308		$	—		$	286,372

Net premiums earned—insurance	$	200,430		$	33,938		$	—		$	234,368
Net investment income		38,970			28,505			18			67,493
Change in fair value of derivative instruments		(48,483	)		(532,131	)		—			(580,614	)
Net gains (losses) on other financial instruments		131			(1,468	)		664			(673	)
Other income		1,980			(434	)		(1,354	)		192

Total revenues		193,028			(471,590	)		(672	)		(279,234	)


Expenses:
Provision for losses		631,630			58,273			—			689,903
Provision for premium deficiency		40,470			—			—			40,470
Policy acquisition costs		13,806			11,175			—			24,981
Other operating expenses		32,606			12,053			(6,007	)		38,652
Interest expense		7,942			5,974			342			14,258

Total expenses		726,454			87,475			(5,665	)		808,264

Equity in net income (loss) of affiliates		—			5			(39,901	)		(39,896	)

Pretax loss		(533,426	)		(559,060	)		(34,908	)		(1,127,394	)

Income tax benefit		(196,800	)		(193,055	)		(16,554	)		(406,409	)

Net loss	$	(336,626	)	$	(366,005	)	$	(18,354	)	$	(720,985	)


Cash and investments	$	4,005,046		$	2,606,790		$	—		$	6,611,836
Deferred policy acquisition costs		62,266			172,689			—			234,955
Total Assets		5,077,001			3,027,098			106,090			8,210,189
Unearned premiums		364,775			729,935			—			1,094,710
Reserve for losses and loss adjustment expenses		1,345,452			253,304			—			1,598,756
Derivative liabilities		520,161	��		785,504			—			1,305,665

Radian Group Inc. and Subsidiaries

Segment Information

Year Ended December 31, 2008

Exhibit E

(In thousands)

Mortgage
Insurance

Financial
Guaranty

Financial
Services

Total

Revenues:

Net premiums written—insurance

787,232

29,637

(2)

—

816,869

Net premiums earned—insurance

808,781

163,039

—

971,820

Net investment income

154,607

108,412

263,033

Change in fair value of derivative instruments

102,157

608,756

—

710,913

Net (losses) gains on other financial instruments

(83,136

)

(66,480

)

150

(149,466

)

Other income

11,133

300

303

11,736

Total revenues

993,542

814,027

467

1,808,036

Expenses:

Provision for losses

2,090,845

114,495

—

2,205,340

Provision for premium deficiency

(108,785

)

—

(108,785

)

Policy acquisition costs

89,103

47,293

—

136,396

Other operating expenses

155,375

99,509

613

255,497

Interest expense

27,622

25,643

249

53,514

Total expenses

2,254,160

286,940

862

2,541,962

Equity in net income of affiliates

—

59,781

59,797

Pretax (loss) income

(1,260,618

)

527,103

59,386

(674,129

)

Income tax (benefit) provision

(475,970

)

187,965

24,455

(263,550

)

Net (loss) income

(784,648

)

339,138

34,931

(410,579

)

(2)

See Schedule 2

Radian Group Inc. and Subsidiaries

Segment Information

Year Ended December 31, 2007

Exhibit F


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written—insurance	$	898,503		$	186,729		$	—		$	1,085,232

Net premiums earned—insurance	$	779,259		$	133,022		$	—		$	912,281
Net investment income		148,253			107,665			180			256,098
Change in fair value of derivative instruments		(467,579	)		(746,800	)		—			(1,214,379	)
Net gains on other financial instruments		39,922			12,525			1,159			53,606
Gain on sale of affiliate		—			—			181,734			181,734
Other income		11,337			349			25			11,711

Total revenues		511,192			(493,239	)		183,098			201,051


Expenses:
Provision for losses		1,210,100			97,990			—			1,308,090
Provision for premium deficiency		195,646			—			—			195,646
Policy acquisition costs		67,750			45,426			—			113,176
Other operating expenses		121,696			48,683			(935	)		169,444
Merger expenses		13,434			567			—			14,001
Interest expense		27,901			19,840			5,327			53,068

Total expenses		1,636,527			212,506			4,392			1,853,425

Equity in net income (loss) of affiliates		—			5			(416,546	)		(416,541	)

Pretax loss		(1,125,335	)		(705,740	)		(237,840	)		(2,068,915	)

Income tax benefit		(429,921	)		(265,559	)		(83,136	)		(778,616	)

Net loss	$	(695,414	)	$	(440,181	)	$	(154,704	)	$	(1,290,299	)

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit G


($ in thousands, except ratios)	Quarter Ended December 31						Year Ended December 31
($ in thousands, except ratios)	2008			2007			2008			2007
Net Premiums Written: (1)
Public finance direct	$	20		$	11,461		$	15,558		$	60,117
Public finance reinsurance		3,258			19,739			34,066			86,821
Structured direct		1,605			4,567			12,151			16,594
Structured reinsurance		5,134			5,327			18,735			21,933
Trade credit reinsurance		132			214			177			1,264

		10,149			41,308			80,687			186,729
Impact of recapture (5)		(51,050	)		—			(51,050	)		—

Total Net Premiums Written—insurance	$	(40,901	)	$	41,308		$	29,637		$	186,729


Net Premiums Earned: (2)
Public finance direct	$	12,997		$	13,459		$	56,191		$	45,770
Public finance reinsurance		24,082			10,770			89,227			44,667
Structured direct		3,207			3,878			14,418			17,325
Structured reinsurance		4,527			5,461			19,690			22,957
Trade credit reinsurance		162			370			657			2,303

		44,975			33,938			180,183			133,022
Impact of recaptures (5)		(17,144	)		—			(17,144	)		—

Total Net Premiums Earned—insurance	$	27,831		$	33,938		$	163,039		$	133,022

Refundings included in earned premium	$	19,443		$	7,492		$	75,090		$	23,309


Claims paid:
Trade credit reinsurance	$	2,008		$	1,557		$	3,440		$	8,579
Financial guaranty		14,932			13,269			128,972	(3)		24,263

Total	$	16,940		$	14,826		$	132,412		$	32,842


Incurred losses:
Trade credit reinsurance	$	(2,509	)	$	(2,967	)	$	(9,808	)	$	(16,511	)
Financial guaranty		74,060			61,240			128,303			114,501

Subtotal		71,551			58,273			118,495			97,990
Impact of recaptures (5)		(4,000	)		—			(4,000	)		—

Total	$	67,551		$	58,273		$	114,495		$	97,990

Loss ratio—GAAP Basis		165.0	%		123.0	%		52.7	%		50.2	%
Expense ratio—GAAP Basis (4)		88.0	%		49.0	%		67.6	%		48.2	%

		253.0	%		172.0	%		120.3	%		98.4	%

Net payments (receipts) under derivative contracts (6)	$	55		$	(255	)	$	9,383		$	(31,188	)

(1)

Premiums written on credit derivatives for the quarter and year ended December 31, 2008 were $12.1 million and $50.1 million, respectively, compared to $13.0 million and $43.0 million, respectively, for the quarter and year ended December 31, 2007.

(2)

Premiums earned on credit derivatives for the quarter and year ended December 31, 2008 were $13.1 million and $54.1 million, respectively, compared to $13.4 million and $62.0 million, respectively, for the quarter and year ended December 31, 2007. Premiums earned on credit derivatives are included in change of fair value of derivative instruments.

(3)

Includes a $100 million payment related to one credit that is a CDO of an ABS that was fully reserved for in 2007.

(4)

Excludes merger expenses.

(5)

Amounts recorded related to the recaptures of previously ceded business by primary insurer customers of the financial guaranty insurance business in the fourth quarter of 2008.

(6)

Comprised of loss payments, premium payments or negotiated settlement receipts.

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit H


($ in thousands, except ratios)	December 31 2008		December 31 2007
Capital and surplus	$	968,197	$	1,158,537
Contingency reserve		515,023		433,296

Qualified statutory capital		1,483,220		1,591,833

Unearned premium reserve		729,274		886,024
Loss and loss expense reserve		82,340		61,038

Total statutory policyholders’ reserves		2,294,834		2,538,895

Present value of installment premiums		380,666		461,806
Soft capital facilities		150,000		150,000

Total statutory claims paying resources	$	2,825,500	$	3,150,701

Net debt service outstanding	$	138,430,925	$	164,346,659

Capital leverage ratio (1)		93		103
Claims paying leverage ratio (2)		49		52

Net par outstanding by product:
Public finance direct	$	17,836,221	$	18,228,946
Public finance reinsurance		31,578,163		43,822,781
Structured direct		46,001,355		47,878,168
Structured reinsurance		5,310,004		6,091,717

Total	$	100,725,743	$	116,021,612


Reserve for losses and LAE
Allocated	$	76,689	$	49,317
Non-specific		157,859		203,987

Total	$	234,548	$	253,304

(1)

Net debt service outstanding divided by qualified statutory capital

(2)

Net debt service outstanding divided by total statutory claims paying resources

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit I


($ in millions)	Quarter Ended December 31								Year Ended December 31
($ in millions)	2008		%		2007		%		2008		%		2007		%
Primary New Insurance Written
Flow	$	5,025	99.7	%	$	10,422	76.7	%	$	31,265	96.2	%	$	40,335	70.6	%
Structured		14	0.3	%		3,174	23.3	%		1,248	3.8	%		16,797	29.4	%

Total Primary	$	5,039	100.0	%	$	13,596	100.0	%	$	32,513	100.0	%	$	57,132	100.0	%

Flow
Prime	$	5,003	99.6	%	$	8,629	82.8	%	$	29,359	93.9	%	$	29,800	73.9	%
Alt-A		16	0.3	%		832	8.0	%		1,170	3.7	%		6,847	17.0	%
A minus and below		6	0.1	%		961	9.2	%		736	2.4	%		3,688	9.1	%

Total Flow	$	5,025	100.0	%	$	10,422	100.0	%	$	31,265	100.0	%	$	40,335	100.0	%

Structured
Prime	$	13	92.9	%	$	1,795	56.6	%	$	1,245	99.8	%	$	3,436	20.5	%
Alt-A		1	7.1	%		1,378	43.4	%		3	0.2	%		12,515	74.5	%
A minus and below		—	—			1	0.0	%		—	—			846	5.0	%

Total Structured	$	14	100.0	%	$	3,174	100.0	%	$	1,248	100.0	%	$	16,797	100.0	%

Total
Prime	$	5,016	99.6	%	$	10,424	76.6	%	$	30,604	94.1	%	$	33,236	58.2	%
Alt-A		17	0.3	%		2,210	16.3	%		1,173	3.6	%		19,362	33.9	%
A minus and below		6	0.1	%		962	7.1	%		736	2.3	%		4,534	7.9	%

Total Primary	$	5,039	100.0	%	$	13,596	100.0	%	$	32,513	100.0	%	$	57,132	100.0	%

Total Primary New Insurance Written by FICO Score
Flow
<=619	$	1	—		$	518	5.0	%	$	377	1.2	%	$	2,348	5.8	%
620-679		419	8.4	%		2,830	27.1	%		4,642	14.9	%		11,988	29.7	%
680-739		1,725	34.3	%		3,914	37.6	%		11,454	36.6	%		14,891	36.9	%
>=740		2,880	57.3	%		3,160	30.3	%		14,792	47.3	%		11,108	27.6	%

Total Flow	$	5,025	100.0	%	$	10,422	100.0	%	$	31,265	100.0	%	$	40,335	100.0	%

Structured
<=619	$	—	—		$	—	—		$	—	—		$	538	3.2	%
620-679		—	—			185	5.8	%		17	1.4	%		3,947	23.5	%
680-739		4	28.6	%		963	30.3	%		441	35.3	%		7,123	42.4	%
>=740		10	71.4	%		2,026	63.9	%		790	63.3	%		5,189	30.9	%

Total Structured	$	14	100.0	%	$	3,174	100.0	%	$	1,248	100.0	%	$	16,797	100.0	%

Total
<=619	$	1	—		$	518	3.8	%	$	377	1.2	%	$	2,886	5.1	%
620-679		419	8.3	%		3,015	22.2	%		4,659	14.3	%		15,935	27.9	%
680-739		1,729	34.3	%		4,877	35.9	%		11,895	36.6	%		22,014	38.5	%
>=740		2,890	57.4	%		5,186	38.1	%		15,582	47.9	%		16,297	28.5	%

Total Primary	$	5,039	100.0	%	$	13,596	100.0	%	$	32,513	100.0	%	$	57,132	100.0	%

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit I (continued)


($ in millions)	Quarter Ended December 31										Year Ended December 31
($ in millions)	2008			%		2007			%		2008			%		2007			%
Percentage of primary new insurance written
Refinances		17	%				27	%				30	%				37	%
95.01% LTV and above		1	%				32	%				11	%				25	%
ARMs
Less than 5 years		1	%				1	%				1	%				13	%
5 years and longer		3	%				14	%				8	%				11	%
Primary risk written
Flow	$	1,177		99.8	%	$	2,684		77.9	%	$	7,494		95.9	%	$	10,325		85.3	%
Structured		2		0.2	%		763		22.1	%		318		4.1	%		1,785		14.7	%

Total Primary	$	1,179		100.0	%	$	3,447		100.0	%	$	7,812		100.0	%	$	12,110		100.0	%

Pool risk written	$	—				$	34				$	60				$	261

Other risk written
Second-lien
1st loss	$	—				$	—				$	—				$	9
2nd loss		—					—					—					21
NIMs		—					—					—					377
International
1st loss-Hong Kong primary mortgage insurance		—					34					51					130
Reinsurance		18					18					62					67

Total other risk written	$	18				$	52				$	113				$	604

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit J


($ in millions)	December 31				December 31
($ in millions)	2008		%		2007		%
Primary insurance in force
Flow	$	121,439	78.2	%	$	105,246	73.6	%
Structured		33,800	21.8	%		37,820	26.4	%

Total Primary	$	155,239	100.0	%	$	143,066	100.0	%

Prime	$	111,558	71.9	%	$	93,577	65.4	%
Alt-A		32,623	21.0	%		37,031	25.9	%
A minus and below		11,058	7.1	%		12,458	8.7	%
				��
Total Primary	$	155,239	100.0	%	$	143,066	100.0	%

Primary risk in force
Flow	$	30,388	86.9	%	$	26,531	83.9	%
Structured		4,563	13.1	%		5,091	16.1	%

Total Primary	$	34,951	100.0	%	$	31,622	100.0	%

Flow
Prime	$	24,815	81.7	%	$	20,616	77.7	%
Alt-A		3,584	11.8	%		3,810	14.4	%
A minus and below		1,989	6.5	%		2,105	7.9	%

Total Flow	$	30,388	100.0	%	$	26,531	100.0	%

Structured
Prime	$	2,390	52.4	%	$	2,116	41.5	%
Alt-A		1,412	30.9	%		1,978	38.9	%
A minus and below		761	16.7	%		997	19.6	%

Total Structured	$	4,563	100.0	%	$	5,091	100.0	%

Total
Prime	$	27,205	77.8	%	$	22,732	71.9	%
Alt-A		4,996	14.3	%		5,788	18.3	%
A minus and below		2,750	7.9	%		3,102	9.8	%

Total Primary	$	34,951	100.0	%	$	31,622	100.0	%

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit J (continued)


($ in millions)	December 31					December 31
($ in millions)	2008			%		2007			%
Total Primary Risk in Force by FICO Score
Flow
<=619	$	1,504		4.9	%	$	1,639		6.2	%
620-679		8,195		27.0	%		8,059		30.4	%
680-739		11,253		37.0	%		9,773		36.8	%
>=740		9,436		31.1	%		7,060		26.6	%

Total Flow	$	30,388		100.0	%	$	26,531		100.0	%

Structured
<=619	$	703		15.4	%	$	936		18.4	%
620-679		1,205		26.4	%		1,490		29.3	%
680-739		1,422		31.2	%		1,488		29.2	%
>=740		1,233		27.0	%		1,177		23.1	%

Total Structured	$	4,563		100.0	%	$	5,091		100.0	%

Total
<=619	$	2,207		6.3	%	$	2,575		8.1	%
620-679		9,400		26.9	%		9,549		30.2	%
680-739		12,675		36.3	%		11,261		35.6	%
>=740		10,669		30.5	%		8,237		26.1	%

Total Primary	$	34,951		100.0	%	$	31,622		100.0	%

Percentage of primary risk in force
Refinances		30	%				31	%
95.01% LTV and above		22	%				24	%
ARMs
Less than 5 years		9	%				12	%
5 years and longer		9	%				10	%
Pool risk in force
Prime	$	2,090		70.8	%	$	2,111		70.3	%
Alt-A		291		9.9	%		293		9.7	%
A minus and below		569		19.3	%		600		20.0	%

Total	$	2,950		100.0	%	$	3,004		100.0	%

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit K


	December 31				December 31
($ in millions)	2008		%		2007		%
Total Primary Risk in Force by LTV
95.01% and above	$	7,805	22.3	%	$	7,529	23.8	%
90.01% to 95.00%		11,217	32.1	%		9,674	30.6	%
85.01% to 90.00%		12,331	35.3	%		10,600	33.5	%
85.00% and below		3,598	10.3	%		3,819	12.1	%

Total	$	34,951	100.0	%	$	31,622	100.0	%

Total Primary Risk in Force by Policy Year
2004 and prior	$	7,297	20.9	%	$	8,871	28.0	%
2005		4,229	12.1	%		5,112	16.2	%
2006		5,196	14.9	%		6,016	19.0	%
2007		10,711	30.6	%		11,623	36.8	%
2008		7,518	21.5	%		—	—

Total	$	34,951	100.0	%	$	31,622	100.0	%

Total Pool Risk in Force by Policy Year
2004 and prior	$	1,818	61.6	%	$	1,889	62.9	%
2005		584	19.8	%		595	19.8	%
2006		252	8.6	%		265	8.8	%
2007		237	8.0	%		255	8.5	%
2008		59	2.0	%		—	—

Total Pool risk in Force	$	2,950	100.0	%	$	3,004	100.0	%

Other risk in force
Second-lien
1st loss	$	267			$	377
2nd loss		355				548
NIMs		438				604
International
1st loss-Hong Kong primary mortgage insurance		413				465
Reinsurance		153				103
Credit default swaps		3,361				8,202
Other
Domestic credit default swaps		132				212

Total other risk in force	$	5,119			$	10,511

Risk to capital ratio-Radian Guaranty only		16.0:1				14.9:1

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit L


	Quarter Ended December 31						Year Ended December 31
($ in thousands)	2008			2007			2008			2007
Direct claims paid
Prime	$	87,990		$	56,015		$	310,965		$	166,967
Alt-A		58,262			37,017			210,700			107,672
A minus and below		48,701			49,538			211,612			152,670
Second-lien and other		44,778			30,825			182,872			90,799

Total	$	239,731		$	173,395		$	916,149		$	518,108

Average claim paid
Prime	$	43.4		$	36.8		$	40.9		$	31.8
Alt-A		57.3			51.6			54.8			45.4
A minus and below		40.4			38.5			39.0			33.8
Second-lien and other		36.8			40.7			35.5			32.4
Total	$	43.9		$	40.5		$	41.6		$	34.7

Loss ratio—GAAP Basis		268.4	%		295.4	%		250.4	%		143.5	%
Expense ratio—GAAP Basis (1)		17.2	%		21.7	%		29.3	%		22.4	%

		285.6	%		317.1	%		279.7	%		165.9	%

Reserve for losses by category
Prime	$	829,097		$	343,705
Alt-A		977,177			450,106
A minus and below		446,193			361,240
Pool insurance		107,441			54,394
Second-lien		136,591			112,751
Other		1,659			1,268

Reserve for losses, net		2,498,158			1,323,464
Reinsurance recoverable		491,836	(2)		21,988

Total	$	2,989,994		$	1,345,452

(1)

(2)

Reinsurance recoverable on ceded losses related to captives ($400.7 million) and Smart Home ($91.1 million).

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit M


	December 31		December 31
	2008		2007
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans	624,970		565,563
Number of loans in default	44,575		20,632
Percentage of loans in default	7.13	%	3.65	%

Alt-A
Number of insured loans	68,948		74,559
Number of loans in default	16,959		7,980
Percentage of loans in default	24.60	%	10.70	%

A minus and below
Number of insured loans	59,189		63,853
Number of loans in default	15,768		10,087
Percentage of loans in default	26.64	%	15.80	%

Total Flow
Number of insured loans	753,107		703,975
Number of loans in default	77,302		38,699
Percentage of loans in default	10.26	%	5.50	%

Structured
Prime
Number of insured loans	67,165		64,789
Number of loans in default	6,692		4,707
Percentage of loans in default	9.96	%	7.27	%

Alt-A
Number of insured loans	80,491		97,526
Number of loans in default	18,747		8,783
Percentage of loans in default	23.29	%	9.01	%

A minus and below
Number of insured loans	22,315		28,747
Number of loans in default	7,812		8,659
Percentage of loans in default	35.01	%	30.12	%

Total Structured
Number of insured loans	169,971		191,062
Number of loans in default	33,251		22,149
Percentage of loans in default	19.56	%	11.59	%

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit M (continued)


	December 31		December 31
	2008		2007
Total Primary Insurance
Prime
Number of insured loans	692,135		630,352
Number of loans in default	51,267		25,339
Percentage of loans in default	7.41	%	4.02	%

Alt-A
Number of insured loans	149,439		172,085
Number of loans in default	35,706		16,763
Percentage of loans in default	23.89	%	9.74	%

A minus and below
Number of insured loans	81,504		92,600
Number of loans in default	23,580		18,746
Percentage of loans in default	28.93	%	20.24	%

Total Primary Insurance
Number of insured loans	923,078		895,037
Number of loans in default	110,553	(1)	60,848	(1)
Percentage of loans in default	11.98	%	6.80	%

Pool insurance:
Number of loans in default	32,677	(2)	26,526	(2)

(1)

Includes approximately 539 and 2,595 defaults at December 31, 2008 and December 31, 2007, respectively, where reserves have not been established because no claim payment is currently anticipated.

(2)

Includes approximately 21,719 and 20,193 defaults at December 31, 2008 and December 31, 2007, respectively, where reserves have not been established because no claim payment is currently anticipated.

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit N


	Quarter Ended December 31						Year Ended December 31
	2008			2007			2008			2007
Net Premiums Written (In thousands) (1)
Primary and Pool Insurance	$	181,173		$	223,372		$	759,943		$	835,961
Second-lien		3,028			4,896			11,458			27,236
International		4,167			16,796			15,831			35,306

Total Net Premiums Written—insurance	$	188,368		$	245,064		$	787,232		$	898,503

Net Premiums Earned (In thousands) (2)
Primary and Pool Insurance	$	193,706		$	189,170		$	768,723		$	730,966
Second-lien		4,349			7,579			18,727			32,744
International		5,158			3,681			21,331			15,549

Total Net Premiums Earned—insurance	$	203,213		$	200,430		$	808,781		$	779,259

SMART HOME (In millions)
Ceded Premiums Written	$	3.0		$	1.3		$	13.0		$	11.0
Ceded Premiums Earned	$	3.0		$	2.1		$	13.0		$	11.4

1st Lien Captives
Premiums ceded to captives (In millions)	$	33.9		$	33.2		$	138.3		$	121.6
% of total premiums		14.7	%		14.8	%		15.0	%		14.1	%
NIW subject to captives (In millions)	$	1,557		$	6,776		$	11,825		$	23,322
% of primary NIW		30.9	%		49.8	%		36.4	%		40.8	%
IIF included in captives (3)		34.8	%		36.5	%
RIF included in captives (3)		43.8	%		41.6	%

Persistency (twelve months ended December 31)		85.8	%		75.4	%

	December 31 2008			December 31 2007
SMART HOME
% of Primary RIF included in Smart Home Transactions (3)		3.7	%		5.3	%

(1)

Premiums written on credit derivatives for the quarter and year ended December 31, 2008 were $1.8 million and $18.7 million, respectively, compared to $10.2 million and $56.6 million, respectively, for the quarter and year ended December 31, 2007.

(2)

Premiums earned on credit derivatives for the quarter and year ended December 31, 2008 were $2.2 million and $26.1 million, respectively, compared to $13.4 million and $64.3 million, respectively, for the quarter and year ended December 31, 2007. Premiums earned on credit derivatives are included in change of fair value of derivative instruments.

(3)

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.

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of December 31, 2008

Exhibit O

Reinsurance Progression Toward Attachment—Summary by Book Year (1)


($ in millions)					December 31 2008						December 31 2007
Book Year (2):	Original Book RIF as of December 31 2008		Progression to Attachment Point		Current RIF		Ever-to- Date Incurred Losses		Captive Benefit (3)		Current RIF		Ever-to- Date Incurred Losses		Captive Benefit (3)
Pre-2005			0-50	%	$	1,046	$	236			$	2,209	$	279
Pre-2005			50-75	%		844		137				1,145		144
Pre-2005			75-99	%		775		143				32		19
Pre-2005			Attached			59		9	$	1		12		3	$	1

Pre-2005 Total	$	25,517			$	2,724	$	525	$	1	$	3,398	$	445	$	1

2005			0-50	%	$	74	$	3			$	697	$	13
2005			50-75	%		98		5				429		15
2005			75-99	%		309		18				945		53
2005			Attached			1,296		175	$	74		11		2	$	—

2005 Total	$	3,309			$	1,777	$	201	$	74	$	2,082	$	83	$	—

2006			0-50	%	$	32	$	1			$	851	$	12
2006			50-75	%		62		3				332		10
2006			75-99	%		310		17				1,470		71
2006			Attached			2,074		291	$	161		210		10	$	1

2006 Total	$	3,532			$	2,478	$	312	$	161	$	2,863	$	103	$	1

2007			0-50	%	$	31	$	—			$	4,058	$	36
2007			50-75	%		225		8				580		12
2007			75-99	%		71		3				4		—
2007			Attached			4,329		350	$	147		1		—	$	—

2007 Total	$	5,251			$	4,656	$	361	$	147	$	4,643	$	48	$	—

2008			0-50	%	$	2,167	$	25			$	—	$	—
2008			50-75	%		42		1				—		—
2008			75-99	%		—		—				—		—
2008			Attached			190		16	$	9		—		—	$	—

2008 Total	$	2,494			$	2,399	$	42	$	9	$	—	$	—	$	—

(1)

Data presented in aggregate for all trusts for captives active at each period end only. Actual trust attachment and exit points vary by individual contract. Attachment is calculated at the contract/deal level and is based on Total Incurred Losses which are defined as claims paid ever-to-date plus loss reserves.

(2)

Book year figures may include loans from additional periods pursuant to reinsurance agreement terms and conditions.

(3)

Captive Benefit is defined as ceded reserves at period end plus ever-to-date claims paid by the trust.

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of December 31, 2008

Exhibit O (continued)

Reinsurance Progression Toward Attachment—Summary by Book Year (1)


($ in millions)					December 31 2008						December 31 2007
Quota Share			0-50	%	$	—	$	—			$	20	$	—
Quota Share			50-75	%		—		—				7		1
Quota Share			75-99	%		—		—				—		—
Quota Share			Attached			116		27	$	12		90		9	$	4

Quota Share Total	$	313			$	116	$	27	$	12	$	117	$	10	$	4

Total Captive (Including Quota Share)	$	40,416			$	14,150	$	1,468	$	404	$	13,103	$	689	$	6

SmartHome			0-50	%	$	117	$	27			$	142	$	23
SmartHome			50-75	%		—		—				693		92
SmartHome			75-99	%		—		—				—		—
SmartHome			Attached			1,188		346	$	91		833		112	$	10

Total SmartHome	$	3,900			$	1,305	$	373	$	91	$	1,668	$	227	$	10

(1)

(2)

Book year figures may include loans from additional periods pursuant to reinsurance agreement terms and conditions.

(3)

Captive Benefit is defined as ceded reserves at period end plus ever-to-date claims paid by the trust.

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit P


($ in millions)	December 31				December 31
($ in millions)	2008		%		2007		%
Modified Pool Risk in Force
Prime
2004 and prior	$	45	29.2	%	$	47	28.8	%
2005		39	25.3	%		47	28.8	%
2006		44	28.6	%		44	27.0	%
2007		22	14.3	%		25	15.4	%
2008		4	2.6	%		—	—

Total	$	154	100.0	%	$	163	100.0	%

Alt-A
2004 and prior	$	97	14.5	%	$	103	15.0	%
2005		99	14.8	%		116	16.9	%
2006		164	24.6	%		165	24.0	%
2007		304	45.5	%		304	44.1	%
2008		4	0.6	%		—	—

Total	$	668	100.0	%	$	688	100.0	%

A minus and below
2004 and prior	$	9	36.0	%	$	10	37.1	%
2005		6	24.0	%		7	25.9	%
2006		3	12.0	%		3	11.1	%
2007		7	28.0	%		7	25.9	%
2008		—	—			—	—

Total	$	25	100.0	%	$	27	100.0	%

Total
2004 and prior	$	151	17.8	%	$	160	18.2	%
2005		144	17.0	%		170	19.4	%
2006		211	24.9	%		212	24.1	%
2007		333	39.3	%		336	38.3	%
2008		8	1.0	%		—	—

Total Modified Pool Risk in Force	$	847	100.0	%	$	878	100.0	%

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

ALT-A

Exhibit Q


($ in millions)	Quarter Ended December 31								Year Ended December 31
($ in millions)	2008		%		2007		%		2008		%		2007		%
Primary New Insurance Written by FICO Score
<=619	$	—	—		$	3	0.1	%	$	3	0.3	%	$	110	0.6	%
620-659		—	—			43	1.9	%		26	2.2	%		1,889	9.7	%
660-679		1	5.9	%		94	4.3	%		64	5.4	%		2,783	14.4	%
680-739		10	58.8	%		785	35.5	%		571	48.7	%		9,158	47.3	%
>=740		6	35.3	%		1,285	58.2	%		509	43.4	%		5,422	28.0	%

Total	$	17	100.0	%	$	2,210	100.0	%	$	1,173	100.0	%	$	19,362	100.0	%

Primary Risk in Force by FICO Score
<=619	$	33	0.6	%	$	38	0.7	%
620-659		603	12.1	%		725	12.5	%
660-679		734	14.7	%		826	14.3	%
680-739		2,399	48.0	%		2,653	45.8	%
>=740		1,227	24.6	%		1,546	26.7	%

Total	$	4,996	100.0	%	$	5,788	100.0	%

Primary Risk in Force by LTV
95.01% and above	$	349	7.0	%	$	379	6.6	%
90.01% to 95.00%		1,295	25.9	%		1,668	28.8	%
85.01% to 90.00%		2,077	41.6	%		2,317	40.0	%
85.00% and below		1,275	25.5	%		1,424	24.6	%

Total	$	4,996	100.0	%	$	5,788	100.0	%

Primary Risk in Force by Policy Year
2004 and prior	$	907	18.1	%	$	1,102	19.0	%
2005		676	13.5	%		846	14.6	%
2006		1,109	22.2	%		1,273	22.0	%
2007		2,051	41.1	%		2,567	44.4	%
2008		253	5.1	%		—	—

Total	$	4,996	100.0	%	$	5,788	100.0	%

Radian Group Inc.

Financial Services Supplemental Information

For the Quarter and Year Ended and as of December 31, 2008

Exhibit R


	Quarter Ended December 31					Year Ended December 31
(In thousands)	2008			2007		2008			2007
Investment in Affiliates-Selected Information

C-BASS
Balance, beginning of period	$	—		$	—	$	—		$	451,395
Net income for period		—			—		—			(451,395	)

Balance, end of period	$	—		$	—	$	—		$	—


Sherman
Balance, beginning of period	$	87,217		$	94,110	$	104,315		$	167,412
Net income for period		15,754			10,098		59,782			84,848
Dividends received		—			—		35,460			51,512
Other comprehensive (loss) income		(3,315	)		107		(3,195	)		(567	)
Sale of ownership interest		—			—		—			(95,866	)
Adjustment to investment related to buyback of MGIC interest		—			—		(25,786	)		—

Balance, end of period	$	99,656		$	104,315	$	99,656		$	104,315

Portfolio Information:

Sherman
Total assets	$	2,355,660		$	2,242,087
Total revenues	$	325,354		$	364,635	$	1,504,368		$	1,245,248

Radian owns a 46% interest in C-BASS and a 28.7% interest in Sherman. Prior to August 2008, we owned 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.

Supplemental Schedule

Radian Group Inc. and Subsidiaries-Consolidated

Schedule 1

The following schedules show selected lines from the Consolidated Income Statement as reported (Column 1) and adjustments (Column 2) to reflect the income statement impact of the recaptures of business previously ceded to the Company by primary insurer customers of the financial guaranty segment. The adjusted numbers are shown in Column 3.

The impact of the recaptures (Column 2) reflects the recapture of business ceded to the Company in prior periods. These recaptures only affected the fourth quarter (and, as a result, the year-to-date period) of 2008. Accordingly, management believes that Column 3 provides useful information to investors by presenting a more meaningful basis of comparison for the Company’s past and future results.


(Thousands of dollars, except per share data)	As Reported Quarter Ended December 31 2008			Impact of Recaptures			As Adjusted Quarter Ended December 31, 2008 Excluding Recaptures			Quarter Ended December 31 2007
Net premiums written—insurance	$	147,467		$	(51,050	)	$	198,517		$	286,372
Net premiums earned—insurance		231,044			(17,144	)		248,188			234,368
Total revenues		59,427			(17,144	)		76,571			(279,234	)
Provision for losses		618,835			(4,000	)		622,835			689,903
Policy acquisition costs		15,768			(2,395	)		18,163			24,981
Total expenses		459,154			(6,395	)		465,549			808,264
Pretax loss		(383,958	)		(10,749	)		(373,209	)		(1,127,394	)
Income tax benefit		(133,566	)		(3,762	)		(129,804	)		(406,409	)
Net loss	$	(250,392	)	$	(6,987	)	$	(243,405	)	$	(720,985	)
Diluted net loss per share	$	(3.11	)	$	(0.09	)	$	(3.02	)	$	(9.03	)

(Thousands of dollars, except per share data)	As Reported Year Ended December 31 2008			Impact of Recaptures			As Adjusted Year Ended December 31, 2008 Excluding Recaptures			Year Ended December 31 2007
Net premiums written—insurance	$	816,869		$	(51,050	)	$	867,919		$	1,085,232
Net premiums earned—insurance		971,820			(17,144	)		988,964			912,281
Total revenues		1,808,036			(17,144	)		1,825,180			201,051
Provision for losses		2,205,340			(4,000	)		2,209,340			1,308,090
Policy acquisition costs		136,396			(2,395	)		138,791			113,176
Total expenses		2,541,962			(6,395	)		2,548,357			1,853,425
Pretax loss		(674,129	)		(10,749	)		(663,380	)		(2,068,915	)
Income tax benefit		(263,550	)		(3,762	)		(259,788	)		(778,616	)
Net loss	$	(410,579	)	$	(6,987	)	$	(403,592	)	$	(1,290,299	)
Diluted net loss per share	$	(5.12	)	$	(0.09	)	$	(5.03	)	$	(16.22	)

Supplemental Schedule

Segment Information-Financial Guaranty

Radian Group Inc. and Subsidiaries

Schedule 2

The following schedules show selected lines from the Financial Guaranty Segment Income Statement as reported (Column 1) and adjustments (Column 2) to reflect the income statement impact of the recaptures of business previously ceded to the Company by primary insurer customers of the financial guaranty segment. The adjusted numbers are shown in Column 3. The impact of the recaptures (Column 2) reflects the recapture of business ceded to the Company in prior periods.

These recaptures only affected the fourth quarter (and, as a result, the year-to-date period) of 2008. Accordingly, management believes that Column 3 provides useful information to investors by presenting a more meaningful basis of comparison for the Company’s past and future results.


(Thousands of dollars)	As Reported Quarter Ended December 31 2008			Impact of Recaptures			As Adjusted Quarter Ended December 31, 2008 Excluding Recaptures			Quarter Ended December 31 2007
Net premiums written—insurance	$	(40,901	)	$	(51,050	)	$	10,149		$	41,308
Net premiums earned—insurance	$	27,831		$	(17,144	)	$	44,975		$	33,938
Total revenues		(164,389	)		(17,144	)		(147,245	)		(471,590	)
Provision for losses		67,551			(4,000	)		71,551			58,273
Policy acquisition costs		9,138			(2,395	)		11,533			11,175
Total expenses		110,411			(6,395	)		116,806			87,475
Pretax loss		(274,784	)		(10,749	)		(264,035	)		(559,060	)
Income tax benefit		(91,572	)		(3,762	)		(87,810	)		(193,055	)
Net loss	$	(183,212	)	$	(6,987	)	$	(176,225	)	$	(366,005	)
Loss ratio-excluding Recaptures								123.2	%		123.0	%
Expense ratio-excluding Recaptures								66.1	%		49.0	%

								189.3	%		172.0	%


(Thousands of dollars)	As Reported Year Ended December 31 2008			Impact of Recaptures			As Adjusted Year Ended December 31, 2008 Excluding Recaptures			Year Ended December 31 2007
Net premiums written—insurance	$	29,637		$	(51,050	)	$	80,687		$	186,729
Net premiums earned—insurance	$	163,039		$	(17,144	)	$	180,183		$	133,022
Total revenues		814,027			(17,144	)		831,171			(493,239	)
Provision for losses		114,495			(4,000	)		118,495			97,990
Policy acquisition costs		47,293			(2,395	)		49,688			45,426
Total expenses		286,940			(6,395	)		293,335			212,507
Pretax income (loss)		527,103			(10,749	)		537,852			(705,741	)
Income tax provision (benefit)		187,965			(3,762	)		191,727			(265,559	)
Net income (loss)	$	339,138		$	(6,987	)	$	346,125		$	(440,182	)
Loss ratio-excluding Recaptures								50.6	%		50.2	%
Expense ratio-excluding Recaptures								63.7	%		48.2	%

								114.3	%		98.4	%

Forward Looking Statement

All statements in this news release that address events, developments or results 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, without limitation, projections regarding our future performance and financial condition are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking information. The 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 a deepening of the existing national economic recession, further decreases in housing demand, mortgage originations or housing values (in particular, further deterioration in the housing, mortgage and related credit markets, which would harm our future consolidated results of operations and could cause losses for our businesses to be worse than expected), a further reduction in the liquidity in the capital markets and further contraction of credit markets, further increases in unemployment rates, changes or volatility in interest rates or consumer confidence, changes in credit spreads, changes in the way investors perceive the strength of private mortgage insurers or financial guaranty providers, investor concern over the credit quality and specific risks faced by the particular businesses, municipalities or pools of assets covered by our insurance;

•

Further economic changes or catastrophic events in geographic regions where our mortgage insurance or financial guaranty insurance in force is more concentrated;

•

our ability to successfully execute upon our internally sourced capital plan (which depends, in part, on the performance of our financial guaranty portfolio), and if necessary, to obtain additional capital to support new business writings in our mortgage insurance business and our long-term liquidity needs and to protect our credit ratings and the financial strength ratings of Radian Guaranty Inc., our primary mortgage insurance subsidiary, from further downgrades;

•

a further decrease in the volume of home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards and the on-going deterioration in housing markets throughout the U.S.;

•

our ability to maintain adequate risk-to-capital ratios and surplus requirements in our mortgage insurance business in light of on-going losses in this business;

•

the concentration of our mortgage insurance business among a relatively small number of large customers;

•

disruption in the servicing of mortgages covered by our insurance policies;

•

the aging of our mortgage insurance portfolio and changes in severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance or financial guaranty insurance policies;

•

the performance of our insured portfolio of higher risk loans, such as Alternative-A (“Alt-A”) and subprime loans, and adjustable rate products, such as adjustable rate mortgages and interest-only mortgages, which have resulted in increased losses in 2007 and 2008 and are expected to result in further losses;

•

reduced opportunities for loss mitigation in markets where housing values fail to appreciate or continue to decline;

•

changes in persistency rates of our mortgage insurance policies caused by changes in refinancing activity, in the rate of appreciation or depreciation of home values and changes in the mortgage insurance cancellation requirements of mortgage lenders and investors;

•

further downgrades or threatened downgrades of, or other ratings actions with respect to, our credit ratings or the ratings assigned by the major rating agencies to any of our rated insurance subsidiaries at any time (in particular, the credit rating of Radian Group Inc. and the financial strength ratings assigned to Radian Guaranty Inc.);

•

heightened competition for our mortgage insurance business from others such as the Federal Housing Administration and the Veterans’ Administration or other private mortgage insurers (in particular those that have been assigned higher ratings from the major rating agencies);

•

changes in the charters or business practices of Federal National Mortgage Association (“Fannie Mae”) and Freddie Mac, the largest purchasers of mortgage loans that we insure, and our ability to remain an eligible provider to both Freddie Mac and Fannie Mae;

•

the application of existing federal or state consumer, lending, insurance, securities and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted, including without limitation: (i) the outcome of existing investigations or the possibility of private lawsuits or other formal 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, (ii) legislative and regulatory changes affecting demand for private mortgage insurance, or (iii) legislation and regulatory changes limiting or restricting our use of (or requirements for) additional capital, the products we may offer, the form in which we may execute the credit protection we provide or the aggregate notional amount of any product we may offer for any one transaction or in the aggregate;

•

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 the premium deficiencies for our first- and second-

lien mortgage insurance business, or to estimate accurately the fair value amounts of derivative contracts in our mortgage insurance and financial guaranty businesses in determining gains and losses on these contracts;

•

volatility in our earnings caused by changes in the fair value of our derivative instruments and our need to reevaluate the premium deficiencies in our mortgage insurance business on a quarterly basis;

•

changes in accounting guidance from the Securities and Exchange Commission (“SEC”) or the Financial Accounting Standards Board;

•

legal and other limitations on amounts we may receive from our subsidiaries as dividends or through tax and expense sharing arrangements with our subsidiaries; and

•

the performance of our investment in Sherman Financial Group LLC.

We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this news release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements made in this news release to reflect new information or future events or for any other reason.

SOURCE: Radian Group Inc.

Radian (RDN) 8-KResults of Operations and Financial Condition