RDN Radian Group Inc

Continued Growth Achieved in Mortgage Insurance and Financial Guaranty Sectors, and in Creating Opportunities at MI-FG Intersection PHILADELPHIA, April 19 /PRNewswire-FirstCall/ -- Radian Group Inc. (NYSE:RDN) today reported strong results for the quarter ended March 31, 2006, as net income rose sharply to record levels; diluted net income per share rose to $1.96; book value per share rose 13.9% and return on equity exceeded the company's targets. "The first quarter was successful for us in several respects," said S.A. Ibrahim, Chief Executive Officer. "In reaching a record $163.7 million, our net income reflected important positive trends both in mortgage insurance and financial guaranty, our two main businesses, as well as another strong quarter for C-BASS and Sherman. We continue to leverage our financial guaranty expertise within our mortgage insurance business to benefit customers that are looking for MI as well as alternative credit risk solutions. This effort will allow us to more effectively manage and distribute our own credit risk exposure." The key financial highlights of the quarter ended March 31, 2006, are as follows: Key Financial Highlights (dollars in millions, except per share data) First quarter Quarter ended Quarter ended March 31, March 31, Percent 2006 2005 Change Revenue $353.7 $306.6 15.4% Net income $163.7 $115.6 41.6% Diluted net income per share $1.96 $1.24 58.1% Net premiums written $279.6 $214.8 30.2% Net premiums earned $253.7 $247.0 2.7% Equity in net income of affiliates $58.3 $51.3 13.6% Book value per share $45.43 $39.89 13.9% Radian will hold a conference call on Thursday, April 20, 2006, at 9:00 a.m. Eastern time to discuss the company's first quarter 2006 results. This 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. A replay of the webcast will be available at this site approximately two hours after the live broadcast ends for a period of one year. Statistical and financial information which is expected to be referred to during the conference call will be available on Radian's website under Investors > Webcasts, Presentations and Transcripts or by clicking on http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives. Radian Group Inc. is a global credit risk management company headquartered in Philadelphia with significant operations in both New York and London. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets worldwide, primarily through credit insurance products. The company also provides credit enhancement for public finance and other corporate and consumer assets on both a direct and reinsurance basis and holds strategic interests in active credit-based consumer asset businesses. Additional information may be found at http://www.radian.biz/. Financial Results and Supplemental Information Contents 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 March 31, 2006 Exhibit D: Segment Information Quarter Ended March 31, 2005 Exhibit E: Financial Guaranty Insurance Supplemental Information - Quarter Ended March 31, 2006 Exhibit F: Financial Guaranty Insurance Supplemental Information - Quarter Ended March 31, 2006 Exhibit G: Mortgage Insurance Supplemental Information: New Insurance Written, Risk Written Exhibit H: Mortgage Insurance Supplemental Information: Insurance in Force and Risk in Force Exhibit I: Mortgage Insurance Supplemental Information: Risk in Force by LTV and Policy Year and Other Risk in Force Exhibit J: Mortgage Insurance Supplemental Information: Claims and Reserves Exhibit K: Mortgage Insurance Supplemental Information: Defaults Exhibit L: Mortgage Insurance Supplemental Information: Net Premiums Written, Net Premiums Earned and Captives Exhibit M: Mortgage Insurance Supplemental Information: Alt-A Exhibit N: Financial Services Supplemental Information Radian Group Inc. and Subsidiaries Condensed Consolidated Statements of Income Exhibit A Quarter Ended March 31 2006 2005 (In thousands, except per-share data) Revenues: Net premiums written $279,605 $214,840 Net premiums earned $253,697 $247,025 Net investment income 54,260 50,862 Net gains on securities 22,854 11,526 Change in fair value of derivative instruments 17,630 (8,960) Other income 5,211 6,108 Total revenues 353,652 306,561 Expenses: Provision for losses 78,634 109,500 Policy acquisition costs 27,364 29,356 Other operating expenses 60,277 51,670 Interest expense 11,840 8,958 Total expenses 178,115 199,484 Equity in net income of affiliates 58,340 51,296 Pretax income 233,877 158,373 Provision for income taxes 70,179 42,761 Net income $163,698 $115,612 Diluted net income per share (1) $1.96 $1.24 (1) Net income per share reconciliation Net income $163,698 $115,612 Interest expense on convertible senior debentures (net of tax) - 802 Net income available to common stockholders $163,698 $116,414 Weighted average shares outstanding (in thousands) Average common shares outstanding 82,937 89,488 Increase in shares-potential exercise of options-diluted basis 770 972 Increase in shares-contingently convertible debt (2) - 3,798 Weighted average shares outstanding (in thousands) 83,707 94,258 (2) The 2005 period includes the impact of shares underlying convertible debt that was redeemed on August 1, 2005. The impact on diluted net income per share of including these shares in the calculation was a reduction of $0.04 per share for the quarter ended March 31, 2005. 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 March 31 December 31 March 31 and per-share data) 2006 2005 2005 Assets: Cash and investments $5,615,385 $5,521,561 $5,245,701 Investments in affiliates 436,685 446,151 383,023 Deferred policy acquisition costs 209,524 208,325 199,943 Prepaid federal income taxes 639,704 585,514 481,049 Other assets 469,605 469,059 412,881 Total assets $7,370,903 $7,230,610 $6,722,597 Liabilities and stockholders' equity: Unearned premiums $874,733 $849,360 $735,768 Reserve for losses and loss adjustment expenses 791,690 801,002 797,671 Long-term debt 747,540 747,466 717,038 Deferred federal income taxes 994,227 961,993 823,305 Other liabilities 217,292 207,909 202,223 Total liabilities 3,625,482 3,567,730 3,276,005 Common stock 97 97 97 Additional paid-in capital 591,067 629,019 819,644 Retained earnings 3,075,683 2,913,649 2,511,469 Accumulated other comprehensive income 78,574 120,115 115,382 Total common stockholders' equity 3,745,421 3,662,880 3,446,592 Total liabilities and stockholders' equity $7,370,903 $7,230,610 $6,722,597 Book value per share $45.43 $44.11 $39.89 Treasury Stock Repurchases (Year-to-Date for Periods Presented) Total number of shares repurchased 1,000,000 10,767,800 (1) 6,143,075 Average price paid per share $60.24 $49.58 $48.55 Total cost of repurchased shares $60,235,421 $533,888,969 $298,229,529 (1) Represents full year 2005 Radian Group Inc. and Subsidiaries Segment Information Quarter Ended March 31, 2006 Exhibit C Mortgage Financial Financial (In thousands) Insurance Guaranty Services Total Revenues: Net premiums written $223,766 $55,839 $- $279,605 Net premiums earned $202,706 $50,991 $- $253,697 Net investment income 31,665 22,518 77 54,260 Net gains on securities 13,577 7,178 2,099 22,854 Change in fair value of derivative instruments 9,121 8,509 - 17,630 Other income 3,634 214 1,363 5,211 Total revenues 260,703 89,410 3,539 353,652 Expenses: Provision for losses 71,097 7,537 - 78,634 Policy acquisition costs 13,345 14,019 - 27,364 Other operating expenses 44,267 14,756 1,254 60,277 Interest expense 6,701 4,026 1,113 11,840 Total expenses 135,410 40,338 2,367 178,115 Equity in net income of affiliates - - 58,340 58,340 Pretax income 125,293 49,072 59,512 233,877 Provision for income taxes 37,149 12,200 20,830 70,179 Net income $88,144 $36,872 $38,682 $163,698 Assets $4,466,014 $2,455,452 $449,437 $7,370,903 Deferred policy acquisition costs 68,619 140,905 - 209,524 Reserve for losses and loss adjustment expenses 587,114 204,576 - 791,690 Unearned premiums 233,364 641,369 - 874,733 Stockholders' equity 2,162,097 1,276,713 306,611 3,745,421 Radian Group Inc. and Subsidiaries Segment Information Quarter Ended March 31, 2005 Exhibit D Mortgage Financial Financial (In thousands) Insurance Guaranty Services Total Revenues: Net premiums written $200,237 $14,603 $- $214,840 Net premiums earned $192,465 $54,560 $- $247,025 Net investment income 28,793 22,059 10 50,862 Net gains on securities 7,119 3,573 834 11,526 Change in fair value of derivative instruments 3,186 (11,957) (189) (8,960) Other income 4,592 316 1,200 6,108 Total revenues 236,155 68,551 1,855 306,561 Expenses: Provision for losses 97,927 11,573 - 109,500 Policy acquisition costs 14,678 14,678 - 29,356 Other operating expenses 33,669 14,394 3,607 51,670 Interest expense 5,124 3,099 735 8,958 Total expenses 151,398 43,744 4,342 199,484 Equity in net income of affiliates - - 51,296 51,296 Pretax income 84,757 24,807 48,809 158,373 Provision for income taxes 22,036 3,641 17,084 42,761 Net income $62,721 $21,166 (1) $31,725 $115,612 (1) Assets $3,972,942 $2,354,209 $395,446 $6,722,597 Deferred policy acquisition costs 70,873 129,070 - 199,943 Reserve for losses and loss adjustment expenses 571,128 226,543 - 797,671 Unearned premiums 149,258 586,510 - 735,768 Stockholders' equity 1,900,760 1,246,876 298,956 3,446,592 (1) Reflects a $4.1 million net loss from 1st quarter 2005 recapture of previously ceded business by one of the primary Financial Guaranty insurers: Net premiums earned $(4.6) Policy acquisition costs (1.7) Benefit for income taxes 2.2 Net loss $(4.1) Radian Group Inc. Financial Guaranty Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit E Quarter Ended ($ in thousands, except ratios) March 31 2006 2005 Net Premiums Written: Public finance direct $13,553 $15,433 Public finance reinsurance 17,983 17,026 Structured direct 18,272 15,057 Structured reinsurance 3,053 8,510 Trade credit reinsurance 2,978 13,319 55,839 69,345 Impact of recapture (1) - (54,742) Net Premiums Written $55,839 $14,603 Net Premiums Earned: Public finance direct $7,843 $8,963 Public finance reinsurance 8,293 8,513 Structured direct 21,503 18,219 Structured reinsurance 4,641 7,266 Trade credit reinsurance 8,711 16,138 50,991 59,099 Impact of recapture (2) - (4,539) Net Premiums Earned $50,991 $54,560 Refundings included in earned premium $2,382 $2,441 Claims paid: Trade credit reinsurance $4,000 $4,998 Other financial guaranty (110) 12,484 Conseco 4,317 7,969 Total $8,207 $25,451 Incurred losses: Trade credit reinsurance $3,950 $7,041 Other financial guaranty 4,619 4,532 Conseco (1,032) - Total $7,537 $11,573 Loss ratio - GAAP Basis 14.8% 21.2% Expense ratio - GAAP Basis 56.4% 53.3% 71.2% 74.5% Claims paid under derivatives contracts $66,639 $(2,236) (1) Reflects the impact on net premiums written of the first quarter 2005 recapture of previously ceded business by one of the primary Financial Guaranty insurers: (In thousands) Public reinsurance 48,238 Structured reinsurance 6,504 (2) Reflects the impact on net premiums earned of the first quarter 2005 recapture of previously ceded business by one of the primary Financial Guaranty insurers: (in thousands) Public reinsurance 3,870 Structured reinsurance 669 Radian Group Inc. Financial Guaranty Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit F ($ in thousands, except ratios) March 31 December 31 March 31 2006 2005 2005 Capital and surplus $983,349 $1,004,505 $1,044,603 Contingency reserve 283,163 271,907 252,508 Qualified statutory capital 1,266,512 1,276,412 1,297,111 Unearned premium reserve 757,245 751,656 694,379 Loss and loss expense reserve 114,177 108,576 132,843 Total policyholders' reserves 2,137,934 2,136,644 2,124,333 Present value of installment premiums 294,872 302,953 239,181 Reinsurance and soft capital facilities 150,000 150,000 150,000 Total claims paying resources $2,582,806 $2,589,597 $2,513,514 Net debt service outstanding $117,942,386 $110,344,057 $94,647,865 Capital leverage ratio (1) 93 86 73 Claims paying leverage ratio (2) 46 43 38 Net par outstanding by product: Public finance direct $14,391,889 $14,043,786 $12,303,648 Public finance reinsurance 34,364,344 33,047,512 30,906,909 Structured direct 29,563,075 24,608,489 15,360,714 Structured reinsurance 5,011,005 4,952,146 5,032,401 Total $83,330,313 $76,651,933 $63,603,672 Reinsurance business net par outstanding: Treaty 59% 58% 59% Facultative 41% 42% 41% Reserve for losses and LAE Specific $43,568 $29,311 $40,503 Conseco 45,421 50,770 72,374 Non-specific 115,587 124,712 113,666 Total $204,576 $204,793 $226,543 (1) Net debt service outstanding divided by qualified statutory capital (2) Net debt service outstanding divided by total claims paying resources Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit G Quarter Ended March 31 2006 % 2005 % Primary New Insurance Written ($ in millions) Flow $5,234 40.9% $5,662 93.7% Structured 7,569 59.1% 382 6.3% Total Primary $12,803 100.0% $6,044 100.0% Flow Prime $3,771 72.1% $4,155 73.4% Alt-A 1,105 21.1% 944 16.7% A minus and below 358 6.8% 563 9.9% Total Flow $5,234 100.0% $5,662 100.0% Structured Prime $2,264 29.9% $128 33.5% Alt-A 3,917 51.8% 199 52.1% A minus and below 1,388 18.3% 55 14.4% Total Structured $7,569 100.0% $382 100.0% Total Prime $6,035 47.2% $4,283 70.9% Alt-A 5,022 39.2% 1,143 18.9% A minus and below 1,746 13.6% 618 10.2% Total Primary $12,803 100.0% $6,044 100.0% Total Primary New Insurance Written by FICO Score ($ in millions) Flow =740 1,418 27.1% 1,450 25.6% Total Flow $5,234 100.0% $5,662 100.0% Structured =740 1,495 19.8% 57 14.9% Total Structured $7,569 100.0% $382 100.0% Total =740 2,913 22.8% 1,507 24.9% Total Primary $12,803 100.0% $6,044 100.0% Percentage of primary new insurance written Monthlies 85% 93% Refinances 39% 37% 95.01% LTV and above 8% 14% ARMs Less than 5 years 41% 23% 5 years and longer 19% 13% Primary risk written ($ in millions) Flow $1,329 55.9% $1,414 96.0% Structured 1,050 44.1% 60 4.0% Total Primary $2,379 100.0% $1,474 100.0% Pool risk written (In millions) $61 $56 Other risk written (In millions) Seconds 1st loss $24 $4 2nd loss 132 6 NIMs 89 28 International 1st loss-Hong Kong primary mortgage insurance 17 50 Reinsurance 2 10 Credit default swaps - - Other Domestic credit default swaps 20 - Financial guaranty wrap - 511 Total other risk written $284 $609 Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit H March 31 March 31 2006 % 2005 % Primary insurance in force ($ in millions) Flow $81,597 71.6% $87,308 79.3% Structured 32,316 28.4% 22,838 20.7% Total Primary $113,913 100.0% $110,146 100.0% Prime $76,141 66.8% $77,048 70.0% Alt-A 23,767 20.9% 20,377 18.5% A minus and below 14,005 12.3% 12,721 11.5% Total Primary $113,913 100.0% $110,146 100.0% Primary risk in force ($ in millions) Flow $20,073 77.0% $21,367 82.6% Structured 6,003 23.0% 4,496 17.4% Total Primary $26,076 100.0% $25,863 100.0% Flow Prime $15,595 77.7% $15,999 74.9% Alt-A 2,948 14.7% 3,701 17.3% A minus and below 1,530 7.6% 1,667 7.8% Total Flow $20,073 100.0% $21,367 100.0% Structured Prime $2,379 39.6% $1,903 42.3% Alt-A 1,623 27.1% 1,044 23.2% A minus and below 2,001 33.3% 1,549 34.5% Total Structured $6,003 100.0% $4,496 100.0% Total Prime $17,974 68.9% $17,902 69.3% Alt-A 4,571 17.5% 4,745 18.3% A minus and below 3,531 13.6% 3,216 12.4% Total Primary $26,076 100.0% $25,863 100.0% Total Primary Risk in Force by FICO Score ($ in millions) Flow =740 5,185 25.8% 5,185 24.3% Total Flow $20,073 100.0% $21,367 100.0% Structured =740 563 9.4% 438 9.8% Total Structured $6,003 100.0% $4,496 100.0% Total =740 5,748 22.0% 5,623 21.7% Total Primary $26,076 100.0% $25,863 100.0% Percentage of primary risk in force Monthlies 90% 91% Refinances 36% 37% 95.01% LTV and above 14% 13% ARMs Less than 5 years 24% 22% 5 years and longer 9% 8% Pool risk in force ($ in millions) Prime $2,098 76.3% $1,971 82.7% Alt-A 272 9.9% 238 10.0% A minus and below 380 13.8% 174 7.3% Total $2,750 100.0% $2,383 100.0% Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit I March 31 March 31 2006 % 2005 % Total Primary Risk in Force by LTV ($ in millions) 95.01% and above $3,680 14.1% $3,416 13.2% 90.01% to 95.00% 8,473 32.5% 9,408 36.4% 85.01% to 90.00% 9,476 36.3% 9,872 38.2% 85.00% and below 4,447 17.1% 3,167 12.2% Total $26,076 100.0% $25,863 100.0% Total Primary Risk in Force by Policy Year ($ in millions) 2002 and prior $4,275 16.4% $6,700 26.0% 2003 5,013 19.2% 8,103 31.3% 2004 6,407 24.6% 9,627 37.2% 2005 8,015 30.7% 1,433 5.5% 2006 2,366 9.1% - - Total $26,076 100.0% $25,863 100.0% Total Pool Risk in Force by Policy Year ($ in millions) 2002 and prior $1,657 60.3% $1,737 72.9% 2003 158 5.7% 284 11.9% 2004 293 10.7% 304 12.8% 2005 581 21.1% 58 2.4% 2006 61 2.2% - - Total Pool risk in Force $2,750 100.0% $2,383 100.0% Other risk in force (In millions) Seconds 1st loss $594 $586 2nd loss 756 73 NIMs 303 315 International 1st loss-Hong Kong primary mortgage insurance 288 50 Reinsurance 29 28 Credit default swaps 7,581 181 Other Domestic credit default swaps 200 - Financial guaranty wrap 205 511 Total other risk in force $9,956 $1,744 Risk to capital ratio-STAT Basis 11.1:1 9.9:1 Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit J Quarter Ended March 31 2006 2005 Direct claims paid ($ in thousands) Prime $29,965 $31,871 Alt-A 18,707 22,332 A minus and below 23,263 20,884 Seconds 7,865 10,607 Total $79,800 $85,694 Average claim paid ($ in thousands) Prime $26.8 $24.5 Alt-A 40.2 37.0 A minus and below 29.0 26.4 Seconds 22.8 25.3 Total $29.2 $27.5 Loss ratio -GAAP Basis 35.1% 50.9% Expense ratio - GAAP Basis 28.4% 25.1% 63.5% 76.0% Reserve for losses by category ($ in thousands): Prime $181,001 $164,847 Alt-A 135,336 161,102 A minus and below 195,246 150,802 Pool Insurance 36,199 42,800 Seconds 30,144 45,611 Other 9,188 5,966 Total $587,114 $571,128 Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit K March 31 December 31 March 31 2006 2005 2005 Default Statistics Primary insurance: Flow Prime Number of insured loans 501,632 508,117 540,847 Number of loans in default 15,117 18,045 15,816 Percentage of loans in default 3.01% 3.55% 2.92% Alt-A Number of insured loans 64,555 67,339 78,682 Number of loans in default 4,468 4,946 5,453 Percentage of loans in default 6.92% 7.34% 6.93% A minus and below Number of insured loans 52,700 54,066 57,637 Number of loans in default 6,833 7,543 6,342 Percentage of loans in default 12.97% 13.95% 11.00% Total Flow Number of insured loans 618,887 629,522 677,166 Number of loans in default 26,418 30,534 27,611 Percentage of loans in default 4.27% 4.85% 4.08% Structured Prime Number of insured loans 67,353 59,457 51,125 Number of loans in default 2,414 2,640 1,934 Percentage of loans in default 3.58% 4.44% 3.78% Alt-A Number of insured loans 63,800 50,997 40,326 Number of loans in default 2,491 2,564 2,373 Percentage of loans in default 3.90% 5.03% 5.88% A minus and below Number of insured loans 51,277 47,348 41,269 Number of loans in default 7,859 8,472 6,149 Percentage of loans in default 15.33% 17.89% 14.90% Total Structured Number of insured loans 182,430 157,802 132,720 Number of loans in default 12,764 13,676 10,456 Percentage of loans in default 7.00% 8.67% 7.88% Total Primary Insurance Prime Number of insured loans 568,985 567,574 591,972 Number of loans in default 17,531 20,685 17,750 Percentage of loans in default 3.08% 3.64% 3.00% Alt-A Number of insured loans 128,355 118,336 119,008 Number of loans in default 6,959 7,510 7,826 Percentage of loans in default 5.42% 6.35% 6.58% A minus and below Number of insured loans 103,977 101,414 98,906 Number of loans in default 14,692 16,015 12,491 Percentage of loans in default 14.13% 15.79% 12.63% Total Primary Insurance Number of insured loans 801,317 787,324 809,886 Number of loans in default 39,182 (1) 44,210 (1) 38,067 Percentage of loans in default 4.89% 5.62% 4.70% Pool insurance: Number of insured loans 627,815 651,051 589,934 Number of loans in default 15,072 (2) 10,194 (2) 6,249 Percentage of loans in default 2.40% 1.57% 1.06% (1) Includes approximately 439 and 452 defaults at March 31, 2006 and December 31, 2005, respectively, where reserves have not been established because no claim payment is currently anticipated. (2) Includes approximately 9,019 and 3,699 defaults at March 31, 2006 and December 31, 2005, respectively, where reserves have not been established because no claim payment is currently anticipated. Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit L Quarter Ended March 31 2006 2005 Net Premiums Written (in thousands) Primary and Pool Insurance $187,971 $176,874 Seconds 16,014 11,801 NIMs 12,623 9,360 International 2,561 2,202 Domestic credit default swaps 4,549 - Financial guaranty wrap 48 - Net Premiums Written $223,766 $200,237 Net Premiums Earned (in thousands) Primary and Pool Insurance $173,239 $169,711 Seconds 17,479 12,395 NIMs 7,798 9,854 International 3,211 505 Domestic credit default swaps 931 - Financial guaranty wrap 48 - Net Premiums Earned $202,706 $192,465 Captives Premiums ceded to captives (in millions) $25.5 $23.8 % of total premiums 12.7% 12.2% NIW subject to captives (in millions) $2,776 $2,286 % of primary NIW 21.7% 37.8% IIF subject to captives 32.2% 33.7% RIF subject to captives 35.2% 35.5% Persistency (twelve months ended March 31) 58.6% 58.4% Radian Group Inc. Mortgage Insurance Supplemental Information For the Quarter Ended and as of March 31, 2006 ALT-A Exhibit M Quarter Ended ($ millions) March 31 2006 % 2005 % Primary New Insurance Written by FICO Score =740 1,349 26.9% 275 24.1% Total $5,022 100.0% $1,143 100.0% Primary Risk in Force by FICO Score =740 873 19.1% 848 17.9% Total $4,571 100.0% $4,745 100.0% Primary Risk in Force by LTV 95.01% and above $161 3.5% $324 6.8% 90.01% to 95.00% 1,360 29.8% 1,683 35.5% 85.01% to 90.00% 1,930 42.2% 2,051 43.2% 85.00% and below 1,120 24.5% 687 14.5% Total $4,571 100.0% $4,745 100.0% Primary Risk in Force by Policy Year 2002 and prior $448 9.8% $847 17.8% 2003 758 16.6% 1,500 31.6% 2004 1,180 25.8% 2,134 45.0% 2005 1,538 33.6% 264 5.6% 2006 647 14.2% - - Total $4,571 100.0% $4,745 100.0% Radian Group Inc. Financial Services Supplemental Information For the Quarter Ended and as of March 31, 2006 Exhibit N Quarter Ended March 31 (In thousands) 2006 2005 Investment in Affiliates-Selected Information C-BASS Balance, beginning of period $364,364 $290,073 Net income for period 30,026 28,117 Dividends received 7,347 8,500 Balance, end of period $387,043 $309,690 Sherman Balance, beginning of period $81,753 $101,492 Net income for period 28,315 23,179 Dividends received 60,515 51,875 Other comprehensive income 55 1,153 Sale of ownership interest - - Warrant repurchase - (2,075) Balance, end of period $49,608 $71,874 Portfolio Information: C-BASS Servicing portfolio $53,340,000 $36,530,000 Total assets 4,704,015 3,617,911 Servicing income 74,069 59,794 Net interest income 65,040 41,252 Total revenues 171,124 147,300 Sherman Total assets $1,010,930 $740,604 Net revenues $237,672 $148,625 Radian owns a 46% interest in C-BASS and a 34.58% interest in Sherman. All statements made in this news release that address events or developments that we expect or anticipate may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management's current views and assumptions with respect to future events. The forward-looking statements, as well as Radian's prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in housing values, population trends and changes in household formation patterns, changes in unemployment rates, and changes or volatility in interest rates; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers, and risks faced by the businesses, municipalities or pools of assets covered by Radian's insurance; the loss of a customer with whom Radian has a concentration of its insurance in force; increased severity or frequency of losses associated with certain Radian products that are riskier than traditional mortgage insurance and municipal guaranty insurance policies; material changes in persistency rates of Radian's mortgage insurance policies; downgrades of Radian's credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to Radian's operating subsidiaries; heightened competition from other insurance providers and from alternative products to private mortgage insurance and financial guaranty insurance; changes in the charters or business practices of Fannie Mae and Freddie Mac; the application of federal or state consumer- lending, insurance and other applicable laws and regulations, or unfavorable changes in these laws and regulations or the way they are interpreted, including: (i) the possibility of private lawsuits or investigations by state insurance departments and state attorneys general alleging that services offered by the mortgage insurance industry, such as captive reinsurance, pool insurance and contract underwriting, are violative of the Real Estate Settlement Procedures Act and/or similar state regulations (particularly in light of public reports that some state insurance departments are investigating captive reinsurance arrangements used in the mortgage insurance industry), or (ii) legislative and regulatory changes affecting demand for private mortgage insurance or financial guaranty insurance; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the mortgage insurance or financial guaranty industries; changes in claims against mortgage insurance products resulting from the aging of Radian's mortgage insurance policies; vulnerability to the performance of Radian's strategic investments; changes in the availability of affordable or adequate reinsurance for our non-prime risk; and international expansion of our mortgage insurance and financial guaranty businesses into new markets and risks associated with our international business activities. For more information regarding these risks and uncertainties, as well as certain additional risks that we face, investors should refer to the risk factors detailed in Part I, Item 1A in our annual report on Form 10-K for the year ended December 31, 2005. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this press release. Radian does not intend to and disclaims any duty or obligation to update or revise any forward-looking statements made in this press release to reflect new information, future events or for any other reason. DATASOURCE: Radian Group Inc. CONTACT: For investors, Mona Zeehandelaar, +1-215-231-1674, or , or For the media, Corporate Communications, +1-888-NEWS-520, or , both of Radian Group Inc. Web site: http://www.radian.biz/

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