RDN Radian Group Inc

Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended June 30, 2012, of $119.3 million, or $0.90 per diluted share, which included combined losses from the change in fair value of derivatives and other financial instruments of $95.0 million. This compares to net income of $137.1 million, or $1.03 per diluted share, which included combined gains from the change in fair value of derivatives and other financial instruments of $193.8 million, for the prior-year quarter. Book value per share at June 30, 2012, was $6.75.

“We remain steadfast in executing against our strategy and on managing what we can control in this challenging macroeconomic environment,” said Chief Executive Officer S.A. Ibrahim. “Our success in growing our MI business and managing our capital is evident, as we tripled Radian’s volume of new business and leveraged the capital support of our financial guaranty business to maintain a competitive risk-to-capital ratio of 21.0 to 1.”

Ibrahim continued, “We are encouraged by the continued improvement in our legacy MI portfolio as our number of delinquent loans decline steadily. The improving composition of our overall MI book helps position Radian for future success and a return to profitability.”

CAPITAL AND LIQUIDITY UPDATE

• Radian Guaranty’s risk-to-capital ratio was 21.0:1 as of June 30, 2012, compared to 20.6:1 as of March 31, 2012, and 21.5:1 as of December 31, 2011.
  • The slight change in the risk-to-capital ratio from March 31, 2012, was primarily driven by the increase to the company’s net risk in force resulting from increased volume of new, high-quality mortgage insurance business.
  • Earlier this year, Radian Guaranty entered a quota share reinsurance arrangement to proactively manage its mortgage insurance risk-to-capital position. Radian ceded 20 percent of its new mortgage insurance written beginning with the fourth quarter of 2011, which benefited its risk-to-capital position in the second quarter and represented $922 million of ceded risk in force as of June 30, 2012.
  • As of June 30, 2012, Radian Guaranty had $923.5 million of statutory capital, compared to $919.9 million in the first quarter of 2012 and $1.0 billion in the prior-year quarter.
• Radian Group maintains approximately $340 million of currently available liquidity. Since the end of the first quarter, the company has purchased an additional $24 million of its debt maturing in February 2013 at a discount to face value. There is currently $80 million of remaining debt outstanding and due in February 2013.
• In the event that Radian Guaranty exceeds the risk-based capital requirements imposed by certain states, the company has the ability to continue writing new mortgage insurance business in those states through a combination of state-specific waivers or similar relief and by writing business in its subsidiary, Radian Mortgage Assurance Inc. (RMAI), which has been approved by Fannie Mae and Freddie Mac as an eligible mortgage insurer.

SECOND QUARTER HIGHLIGHTS

• New mortgage insurance written (NIW) grew to $8.3 billion during the quarter, compared to $6.5 billion in the first quarter of 2012 and $2.3 billion in the prior-year quarter.
  • The product mix of Radian’s NIW has continued the recent shift to an increased level of monthly premium business. Of the $8.3 billion in new business written in the second quarter, 67 percent was written with monthly premiums and 33 percent with single premiums. This compares to a mix of 64 percent monthly premiums and 36 percent single premiums in the first quarter of 2012, and 57 percent monthly premiums and 43 percent single premiums in the fourth quarter of 2011.
  • The Home Affordable Refinance Program (HARP) accounted for $2.4 billion of insurance not included in Radian Guaranty’s NIW total for the quarter. This compares to $929.9 million in the first quarter of 2012 and $553.7 in the second quarter of 2011.
  • NIW continued to consist of loans with excellent risk characteristics.
  • In addition, Radian wrote approximately $3.4 billion in NIW in July 2012.
• The net loss for the second quarter was $119.3 million, which included combined losses from the change in fair value of derivatives and other financial instruments of $95.0 million. The largest component of the combined losses of $95 million was a $108 million loss recorded on the April commutation of Radian Asset Assurance’s large CDO of ABS and certain TruPs CDO exposures further explained below. In addition, the quarter’s results included investment gains and a reduced level of operating losses compared to recent prior periods. Results for the second quarter of 2011 included a pre-tax gain recognized on derivatives and other financial instruments of $193.8 million, resulting mainly from a widening of Radian’s credit spread that significantly reduced the fair value of the company’s derivative liabilities.
• The mortgage insurance provision for losses was $208.1 million in the second quarter of 2012, compared to $234.7 million in the first quarter and $270.0 million in the prior-year period. Mortgage insurance loss reserves were approximately $3.2 billion as of June 30, 2012, which was flat to the first quarter and down slightly from $3.3 billion a year ago. First-lien reserves per primary default increased to $28,410 as of June 30, 2012, compared to $27,833 as of March 31, 2012, and $25,334 as of June 30, 2011.
• The total number of primary delinquent loans decreased by 4 percent in the second quarter from the first quarter of 2012, and by 12 percent from the second quarter of 2011. The primary mortgage insurance delinquency rate decreased to 13.3 percent in the second quarter of 2012, compared to 14.1 percent in the first quarter and 15.2 percent in the second quarter of 2011.
• Total mortgage insurance claims paid were $263.4 million, compared to $218.2 million in the first quarter and $512.6 million in the second quarter of 2011. The company continues to expect mortgage insurance net claims paid of approximately $1.1 billion for the full-year 2012.

• Radian Asset Assurance Inc. continues to serve as an important source of capital support for Radian Guaranty and is expected to continue to provide Radian Guaranty with dividends over time.
  • As previously disclosed, Radian Asset paid an ordinary dividend of $54.0 million to Radian Guaranty in July 2012. Radian Asset has paid a total of $384 million in dividends to Radian Guaranty since 2008, and expects to pay another dividend of approximately $40 million in 2013.
  • As of June 30, 2012, Radian Asset had approximately $1.2 billion in statutory surplus with an additional $600 million in claims-paying resources.
  • On April 11, 2012, as previously disclosed, Radian Asset successfully executed a commutation of its distressed CDO of ABS transaction. The company expected to pay claims for substantially all of the $450.2 million of net par outstanding on this transaction. Radian Asset also commuted its credit protection on six directly insured TruPs CDO transactions, representing $699.0 million of net par outstanding. In consideration for these commutations, Radian Asset paid $210.0 million, a significant portion of which has been deposited with a limited purpose vehicle to cover potential future losses on the terminated TruPs bonds. As previously reported, the fair value liability on the transactions prior to the commutations was impacted by Radian’s credit spread, therefore the company recognized a $108 million GAAP loss on these transactions in the second quarter, as anticipated.
  • As previously reported, Radian Asset released $55 million of contingency reserves in May, which benefited Radian Guaranty’s statutory capital position in the second quarter.
  • Radian Asset completed the sale of Municipal and Infrastructure Assurance Corporation (MIAC) in the second quarter for a gain of $7.7 million.
  • Since June 30, 2008, Radian Asset has successfully reduced its total net par exposure by 64 percent to $41.5 billion as of June 30, 2012, including large declines in the riskier segments of the portfolio.

CONFERENCE CALL

Radian will discuss these items in its conference call today, Wednesday, August 1, 2012, at 11:00 a.m. Eastern time. The conference call will be broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The call may also be accessed by dialing 800-288-8961 inside the U.S., or 612-288-0337 for international callers, using passcode 254001 or by referencing Radian.

A replay of the webcast will be available on 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 approximately two and a half hours after the call ends for a period of 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 254001.

In addition to the information provided in the company's earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian's website under Investors >Quarterly Results, or by clicking on http://www.radian.biz/page?name=QuarterlyResults.

ABOUT RADIAN

Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation 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 at www.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/page?name=FinancialReportsCorporate.

Exhibit A:   Condensed Consolidated Statements of Income Exhibit B: Condensed Consolidated Balance Sheets Exhibit C: Segment Information Quarter Ended June 30, 2012 Exhibit D: Segment Information Quarter Ended June 30, 2011 Exhibit E: Segment Information Six Months Ended June 30, 2012 Exhibit F: Segment Information Six Months Ended June 30, 2011   Exhibit G: Financial Guaranty Supplemental Information Exhibit H: Financial Guaranty Supplemental Information Exhibit G: Mortgage Insurance Supplemental Information New Insurance Written Exhibit I: Mortgage Insurance Supplemental Information NIW by Product, FICO and LTV Exhibit J: Mortgage Insurance Supplemental Information Insurance in Force and Risk in Force by Product Exhibit K: Mortgage Insurance Supplemental Information Risk in Force by FICO, LTV and Policy Year Exhibit L: Mortgage Insurance Supplemental Information Primary, Pool and Other Risk in Force Exhibit M: Mortgage Insurance Supplemental Information Claims, Reserves and Reserves per Default Exhibit N: Mortgage Insurance Supplemental Information Default Statistics Exhibit O: Mortgage Insurance Supplemental Information Net Premiums Written and Earned, Captives and Persistency     Radian Group Inc. and Subsidiaries Condensed Consolidated Statements of Income Exhibit A  

Quarter EndedJune 30

Six Months EndedJune 30

(In thousands, except per-share data)

2012   2011 2012   2011   Revenues: Net premiums written - insurance $ 181,932   $ 152,778   $ 259,610   $ 335,527     Net premiums earned - insurance $ 186,779 $ 188,934 $ 354,144 $ 391,957 Net investment income 30,877 43,823 65,590 86,063 Net gains on investments 26,419 44,236 93,878 81,671 Net impairment losses recognized in earnings — (11 ) — (11 ) Change in fair value of derivative instruments (33,124 ) 188,726 (105,881 ) 432,618 Net (losses) gains on other financial instruments (61,862 ) 5,047 (79,714 ) 80,298 Gain on sale of affiliate 7,708 — 7,708 — Other income 1,395   1,196   2,835   2,644   Total revenues 158,192   471,951   338,560   1,075,240     Expenses: Provision for losses 210,868 263,566 477,022 690,939 Change in reserve for premium deficiency 559 (3,102 ) 539 (4,485 ) Policy acquisition costs 10,805 14,387 38,851 28,518 Other operating expenses 40,193 45,954 90,347 92,173 Interest expense 12,581   16,079   26,729   33,103   Total expenses 275,006   336,884   633,488   840,248     Equity in net (loss) income of affiliates (2 ) —   (13 ) 65     Pretax (loss) income (116,816 ) 135,067 (294,941 ) 235,057 Income tax provision (benefit) 2,443   (2,048 ) (6,450 ) (5,064 )   Net (loss) income $ (119,259 ) $ 137,115   $ (288,491 ) $ 240,121     Diluted net (loss) income per share (1) $ (0.90 ) $ 1.03   $ (2.18 ) $ 1.80                       (1) Weighted average shares outstanding (in thousands)       Weighted average common shares outstanding 132,346 132,185 132,350 132,185 Increase in weighted average shares-common stock equivalents-diluted basis —   1,429   —   1,539   Weighted average shares outstanding 132,346   133,614   132,350   133,724                            

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   June 30 December 31 June 30

(In thousands, except per-share data)

2012 2011 2011   Assets: Cash and investments $ 5,313,983 $ 5,846,168 $ 6,038,529 Deferred policy acquisition costs 99,386 139,906 138,926 Deferred income taxes, net 15,975 15,975 27,531 Reinsurance recoverables 103,143 157,985 179,573 Derivative assets 14,229 17,212 27,266 Other assets 484,814   479,519   516,971 Total assets $ 6,031,530   $ 6,656,765   $ 6,928,796   Liabilities and stockholders' equity: Unearned premiums $ 588,431 $ 637,372 $ 629,813 Reserve for losses and loss adjustment expenses 3,250,280 3,310,902 3,343,624 Reserve for premium deficiency 4,183 3,644 6,251 Long-term debt 666,806 818,584 811,319 VIE debt 107,833 228,240 393,740 Derivative liabilities 219,960 126,006 313,708 Payable for securities purchased 3,767 46,368 48,707 Other liabilities 289,382   303,358   252,324 Total liabilities 5,130,642   5,474,474   5,799,486   Common stock 151 151 151 Additional paid-in capital 1,074,683 1,074,513 1,073,703 Retained (deficit) earnings (192,264 ) 96,227 34,861 Accumulated other comprehensive income 18,318   11,400   20,595 Total common stockholders’ equity 900,888   1,182,291   1,129,310 Total liabilities and stockholders’ equity $ 6,031,530   $ 6,656,765   $ 6,928,796   Book value per share $ 6.75 $ 8.88 $ 8.48       Radian Group Inc. and Subsidiaries Segment Information Quarter Ended June 30, 2012 Exhibit C   Mortgage Financial

(In thousands)

Insurance Guaranty Total Revenues: Net premiums written - insurance $ 182,518   $ (586 ) $ 181,932     Net premiums earned - insurance $ 170,763 $ 16,016 $ 186,779 Net investment income 17,608 13,269 30,877 Net gains (losses) on investments 26,662 (243 ) 26,419 Net impairment losses recognized in earnings — — — Change in fair value of derivative instruments (52 ) (33,072 ) (33,124 ) Net gains (losses) on other financial instruments 42 (61,904 ) (61,862 ) Gain on sale of affiliate — 7,708 7,708 Other income 1,304   91   1,395   Total revenues 216,327   (58,135 ) 158,192     Expenses: Provision for losses 208,078 2,790 210,868 Change in reserve for premium deficiency 559 — 559 Policy acquisition costs 7,890 2,915 10,805 Other operating expenses 31,272 8,921 40,193 Interest expense 1,723   10,858   12,581   Total expenses 249,522   25,484   275,006     Equity in net loss of affiliates —   (2 ) (2 )   Pretax loss (33,195 ) (83,621 ) (116,816 ) Income tax (benefit) provision (10,209 ) 12,652   2,443     Net loss $ (22,986 ) $ (96,273 ) $ (119,259 )   Cash and investments $ 3,176,027 $ 2,137,956 $ 5,313,983 Deferred policy acquisition costs 44,240 55,146 99,386 Total assets 3,388,524 2,643,006 6,031,530 Unearned premiums 290,880 297,551 588,431 Reserve for losses and loss adjustment expenses 3,155,343 94,937 3,250,280 VIE debt 7,500 100,333 107,833 Derivative liabilities — 219,960 219,960       Radian Group Inc. and Subsidiaries Segment Information Quarter Ended June 30, 2011 Exhibit D   Mortgage Financial

(In thousands)

Insurance Guaranty Total Revenues: Net premiums written - insurance $ 164,194   $ (11,416 ) $ 152,778     Net premiums earned - insurance $ 164,325 $ 24,609 $ 188,934 Net investment income 24,853 18,970 43,823 Net gains on investments 27,425 16,811 44,236 Net impairment losses recognized in earnings (11 ) — (11 ) Change in fair value of derivative instruments 258 188,468 188,726 Net (losses) gains on other financial instruments (631 ) 5,678 5,047 Other income 1,124   72   1,196   Total revenues 217,343   254,608   471,951     Expenses: Provision for losses 269,992 (6,426 ) 263,566 Change in reserve for premium deficiency (3,102 ) — (3,102 ) Policy acquisition costs 8,601 5,786 14,387 Other operating expenses 33,913 12,041 45,954 Interest expense 146   15,933   16,079   Total expenses 309,550   27,334   336,884     Equity in net income of affiliates —   —   —     Pretax (loss) income (92,207 ) 227,274 135,067 Income tax provision (benefit) 5,374   (7,422 ) (2,048 )   Net (loss) income $ (97,581 ) $ 234,696   $ 137,115     Cash and investments $ 3,334,789 $ 2,703,740 $ 6,038,529 Deferred policy acquisition costs 44,509 94,417 138,926 Total assets 3,688,720 3,240,076 6,928,796 Unearned premiums 191,737 438,076 629,813 Reserve for losses and loss adjustment expenses 3,268,582 75,042 3,343,624 VIE debt 56,239 337,501 393,740 Derivative liabilities — 313,708 313,708       Radian Group Inc. and Subsidiaries Segment Information Six Months Ended June 30, 2012 Exhibit E   Mortgage Financial

(In thousands)

Insurance Guaranty Total Revenues: Net premiums written - insurance $ 379,371   $ (119,761 ) $ 259,610     Net premiums earned - insurance $ 344,214 $ 9,930 $ 354,144 Net investment income 35,619 29,971 65,590 Net gains on investments 58,840 35,038 93,878 Net impairment losses recognized in earnings — — — Change in fair value of derivative instruments (31 ) (105,850 ) (105,881 ) Net losses on other financial instruments (667 ) (79,047 ) (79,714 ) Gain on sale of affiliate — 7,708 7,708 Other income 2,648   187   2,835   Total revenues 440,623   (102,063 ) 338,560     Expenses: Provision for losses 442,807 34,215 477,022 Change in reserve for premium deficiency 539 — 539 Policy acquisition costs 16,536 22,315 38,851 Other operating expenses 67,537 22,810 90,347 Interest expense 3,445   23,284   26,729   Total expenses 530,864   102,624   633,488     Equity in net loss of affiliates —   (13 ) (13 )   Pretax loss (90,241 ) (204,700 ) (294,941 ) Income tax (benefit) provision (22,008 ) 15,558   (6,450 )   Net loss $ (68,233 ) $ (220,258 ) $ (288,491 )       Radian Group Inc. and Subsidiaries Segment Information Six Months Ended June 30, 2011 Exhibit F   Mortgage Financial

(In thousands)

Insurance Guaranty Total Revenues: Net premiums written - insurance $ 345,040   $ (9,513 ) $ 335,527     Net premiums earned - insurance $ 350,459 $ 41,498 $ 391,957 Net investment income 51,686 34,377 86,063 Net gains on investments 45,187 36,484 81,671 Net impairment losses recognized in earnings (11 ) — (11 ) Change in fair value of derivative instruments (136 ) 432,754 432,618 Net gains on other financial instruments 1,835 78,463 80,298 Other income 2,524   120   2,644   Total revenues 451,544   623,696   1,075,240     Expenses: Provision for losses 683,965 6,974 690,939 Change in reserve for premium deficiency (4,485 ) — (4,485 ) Policy acquisition costs 18,817 9,701 28,518 Other operating expenses 68,050 24,123 92,173 Interest expense 9,935   23,168   33,103   Total expenses 776,282   63,966   840,248     Equity in net income of affiliates —   65   65     Pretax (loss) income (324,738 ) 559,795 235,057 Income tax provision (benefit) 8,875   (13,939 ) (5,064 )   Net (loss) income $ (333,613 ) $ 573,734   $ 240,121       Radian Group Inc. and Subsidiaries Financial Guaranty Supplemental Information Exhibit G   Quarter Ended Six Months Ended June 30 June 30

(In thousands)

2012   2011 2012   2011   Net Premiums Earned:

Public finance direct

$ 14,147 $ 11,580 $ 24,360 $ 19,416 Public finance reinsurance 822 8,262 5,592 16,066 Structured direct 246 941 628 1,382 Structured reinsurance 803 955 1,616 1,764 Trade credit reinsurance (2 ) 42   (2 ) 41 Net Premiums Earned - insurance 16,016 21,780 32,194 38,669 Impact of commutations and reinsurance —   2,829   (22,264 ) 2,829 Total Net Premiums Earned - insurance $ 16,016   $ 24,609   $ 9,930   $ 41,498   Refundings included in earned premium $ 10,483   $ 9,300   $ 18,707   $ 14,131   Net premiums earned - derivatives (1) $ 7,224   $ 10,473   $ 15,872   $ 21,356   Claims paid $ (6,720 ) (2) $ 3,430   $ 2,280   $ 3,696   (1) Included in change in fair value of derivative instruments. (2) Reduction due to salvage recovery on a prior claim.  

The impact of the Assured Transaction for the Six Months Ended June 30, 2012, was as follows:

  (In millions)

Statement of Operations

Decrease in premiums written $ (119.8 ) Decrease in premiums earned $ (22.2 ) Increase in change in fair value of derivative instruments—gain 1.4 Gain on sale of affiliate 7.7 Increase in amortization of policy acquisition costs (15.7 ) Decrease in pre-tax income $ (28.8 )  

Balance Sheet

Decrease in: Cash $ 93.6 Deferred policy acquisition costs 26.2 Accounts and notes receivable 1.1 Derivative assets 0.6 Unearned premiums 71.6 Derivative liabilities 2.1 Increase in other assets 19.1 Radian Group Inc. and Subsidiaries       Financial Guaranty Supplemental Information Exhibit H   June 30 December 31 June 30

($ in thousands, except ratios)

2012 2011 2011  

Statutory Information:

  Capital and surplus $ 1,153,339 $ 974,874 $ 1,002,337 Contingency reserve 288,145   421,406   414,462 Qualified statutory capital 1,441,484 1,396,280 1,416,799   Unearned premium reserve 288,142 448,669 486,589 Loss and loss expense reserve (47,532 ) 161,287   80,378 Total statutory policyholders' reserves 1,682,094 2,006,236 1,983,766   Present value of installment premiums 112,824   148,641   171,397 Total statutory claims paying resources $ 1,794,918   $ 2,154,877   $ 2,155,163   Net debt service outstanding $ 51,128,082   $ 88,202,630   $ 95,107,674   Capital leverage ratio (1) 35 63 67 Claims paying leverage ratio (2) 28 41 44   Net par outstanding by product: Public finance direct $ 10,709,855 $ 13,838,427 $ 15,084,460 Public finance reinsurance 5,658,564 19,097,057 20,548,760 Structured direct 24,267,242 34,760,869 37,351,096 Structured reinsurance 830,121   1,492,859   1,703,261 Total (3) $ 41,465,782   (4) $ 69,189,212   $ 74,687,577  

(1)

 

The capital leverage ratio is derived by dividing net debt service outstanding by qualified statutory capital.

(2)

The claims paying leverage ratio is derived by dividing net debt service outstanding by total statutory claims paying resources.

(3)

Included in public finance net par outstanding is $1.0 billion, $1.4 billion and $1.8 billion at June 30, 2012, December 31, 2011, and June 30, 2011, respectively, for legally defeased bond issues where our financial guaranty policy has not been extinguished but cash or securities have been deposited in an escrow account for the benefit of bondholders.

(4)

Reductions in par caused by the following: $15.6 billion in connection with the Assured Transaction, $9.4 billion in connection with the CDO terminations, and $1.2 billion in connection with the Commutation Transactions.

  Radian Group Inc. and Subsidiaries   Mortgage Insurance Supplemental Information Exhibit I   Quarter Ended Six Months Ended June 30 June 30 2012   2011 2012   2011

($ in millions)

$ % $ % $ % $ %

Primary new insurance written

Prime $ 8,330 99.9 % $ 2,280 100.0 % $ 14,790 99.9 % $ 4,863 99.9 % Alt-A 1 — — — 1 — — — A minus and below 4   0.1 % —   —   9   0.1 % 3   0.1 % Total Flow $ 8,335   100.0 % $ 2,280   100.0 % $ 14,800   100.0 % $ 4,866   100.0 %  

Total primary new insurance written by FICO score

>=740 $ 6,326 75.9 % $ 1,846 81.0 % $ 11,246 76.0 % $ 3,927 80.7 % 680-739 1,816 21.8 % 434 19.0 % 3,216 21.7 % 936 19.2 % 620-679 193   2.3 % —   —   338   2.3 % 3   0.1 % Total Flow $ 8,335   100.0 % $ 2,280   100.0 % $ 14,800   100.0 % $ 4,866   100.0 %  

Percentage of primary new insurance written

Monthly premiums 67 % 63 % 66 % 65 % Single premiums 33 % 37 % 34 % 35 % Refinances 34 % 23 % 39 % 38 % LTV 95.01% and above 1.3 % 1.4 % 1.5 % 1.3 % 90.01% to 95.00% 42.6 % 35.5 % 40.9 % 33.1 % ARMS Less than 5 years 0.1 % 0.1 % 0.1 % 0.1 % 5 years and longer 2.5 % 6.9 % 2.5 % 5.8 %   Radian Group Inc. and Subsidiaries   Mortgage Insurance Supplemental Information Exhibit J   June 30 June 30 2012 2011

($ in millions)

$   % $   %

Primary insurance in force

    Flow $ 118,420 90.8 % $ 111,510 89.1 % Structured 11,991     9.2 % 13,600     10.9 % Total Primary $ 130,411     100.0 % $ 125,110     100.0 %   Prime $ 112,112 86.0 % $ 103,860 83.0 % Alt-A 11,383 8.7 % 13,318 10.7 % A minus and below 6,916     5.3 % 7,932     6.3 % Total Primary $ 130,411     100.0 % $ 125,110     100.0 %  

Primary risk in force

Flow $ 29,200 91.8 % $ 27,448 90.4 % Structured 2,609     8.2 % 2,913     9.6 % Total Primary $ 31,809     100.0 % $ 30,361     100.0 %   Flow Prime $ 25,951 88.9 % $ 23,637 86.1 % Alt-A 2,022 6.9 % 2,374 8.7 % A minus and below 1,227     4.2 % 1,437     5.2 % Total Flow $ 29,200     100.0 % $ 27,448     100.0 %   Structured Prime $ 1,520 58.2 % $ 1,702 58.4 % Alt-A 589 22.6 % 665 22.8 % A minus and below 500     19.2 % 546     18.8 % Total Structured $ 2,609     100.0 % $ 2,913     100.0 %   Total Prime $ 27,471 86.4 % $ 25,339 83.5 % Alt-A 2,611 8.2 % 3,039 10.0 % A minus and below 1,727     5.4 % 1,983     6.5 % Total Primary $ 31,809     100.0 % $ 30,361     100.0 %   Radian Group Inc. and Subsidiaries   Mortgage Insurance Supplemental Information Exhibit K   June 30 June 30 2012 2011

($ in millions)

$   % $   %

Total primary risk in force by FICO score

    Flow >=740 $ 13,868 47.5 % $ 11,196 40.8 % 680-739 9,265 31.7 % 9,327 34.0 % 620-679 5,162 17.7 % 5,865 21.4 % =740 $ 690 26.4 % $ 776 26.6 % 680-739 757 29.0 % 848 29.1 % 620-679 698 26.8 % 781 26.8 % =740 $ 14,558 45.8 % $ 11,972 39.4 % 680-739 10,022 31.5 % 10,175 33.5 % 620-679 5,860 18.4 % 6,646 21.9 %