RADIAN GROUP INC - FORM 8-K - EX-99.1 - RADIAN GROUP INC. NEWS RELEASE

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Exhibit 99.1

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Contact:


Emily Riley –		phone: 215.231.1035
		email: emily.riley@radian.biz

Radian Reports Second Quarter 2011 Financial

Results

–Diluted net income per share of $1.03 in the quarter includes impact of

fair value gains –

– Sixth consecutive quarterly decline in MI delinquencies –

PHILADELPHIA, August 2, 2011 — Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended June 30, 2011, 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. This compares to a net loss of $475.1 million, or $4.31 per diluted share, for the prior-year quarter, which included combined net losses from the change in fair value of derivatives and other financial instruments of $587.8 million. Book value per share at June 30, 2011, was $8.48.

“As we face an uncertain U.S. economy and housing market, we believe that Radian’s risk-to-capital ratio of 19.8 to 1 and the financial flexibility of our holding company cash position provide a competitive advantage for our mortgage insurance business,” said Chief Executive Officer S.A. Ibrahim. “We were pleased with the continued drop in mortgage insurance delinquencies in the quarter and another period of operating profitability for our financial guaranty business.”

SECOND QUARTER HIGHLIGHTS

•

The mortgage insurance provision for losses was $270.0 million in the second quarter, compared to $414.0 million in the first quarter of 2011 and $427.6 million in the prior-year period, which reflected the relative improvement in the aging and composition of Radian’s delinquent loans. Mortgage insurance loss reserves were approximately $3.3 billion as of June 30, 2011, a decrease from $3.5 billion in the first quarter of 2011, and $3.7 billion a year ago. First-lien reserves were $25,334 per primary default as of June 30, 2011, compared to $25,535 as of March 31, 2011, and $22,957 a year ago.

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•

The total number of primary delinquent loans decreased by 5 percent from the first quarter of 2011, which was the sixth consecutive quarterly decline in delinquent loans. In addition, new delinquencies declined slightly in July.

•

Consistent with Radian’s strategy of actively managing its legacy portfolio and reducing non-core risk, the company terminated four structured mortgage insurance transactions in the quarter that eliminated more than 2,200 loans from its delinquent inventory and reduced pool risk in force by $45 million.

•

The risk-to-capital ratio for Radian Guaranty Inc., the company’s primary mortgage insurance subsidiary, declined to 19.8:1 at June 30, 2011, compared to a ratio of 20.3:1 at March 31, 2011, and 17.9:1 at June 30, 2010.

•

New mortgage insurance written (NIW) was $2.3 billion in the second quarter, compared to $2.6 billion in the first quarter of 2011, and continued to consist of loans with excellent risk characteristics. The company estimates market share of 18-19 percent in the second quarter.

•

Total mortgage insurance claims paid were $512.6 million for the second quarter, compared to $365.2 million in the first quarter of 2011 and $337.3 million a year ago. Excluding the $53.6 million impact from terminations, claims paid were $459.0 million. For 2011, the company continues to expect mortgage insurance claims paid to be approximately $1.7 billion. The company believes that claims paid have peaked and will generally trend down slowly over time.

•

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 cash infusions over time.

•

Excluding gains and losses on derivatives and other financial instruments, the financial guaranty segment was again profitable on an operating basis in the second quarter of 2011.

•

As of June 30, 2011, Radian Asset had approximately $1.0 billion in statutory surplus with an additional $1.2 billion in claims-paying resources.

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•

In June, Radian Asset paid an ordinary dividend of $53.4 million to Radian Guaranty and expects to pay another dividend in 2012.

•

On June 16, 2011, Radian Asset successfully completed the acquisition of Municipal and Infrastructure Assurance Corporation (MIAC), following approval from the New York State Insurance Department.

CONFERENCE CALL

Radian will discuss each of these items in its conference call today, Tuesday, August 2, 2011, at 10:00 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 800-230-1093 inside the U.S., or 612-288-0337 for international callers, using passcode 210097 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 210097.

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)

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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, 2011

Exhibit D:		Segment Information Quarter Ended June 30, 2010

Exhibit E:		Segment Information Six Months Ended June 30, 2011

Exhibit F:		Segment Information Six Months Ended June 30, 2010

Exhibit G:		Financial Guaranty Supplemental Information

Exhibit H:		Financial Guaranty Supplemental Information

Exhibit I:		Mortgage Insurance Supplemental Information New Insurance Written

Exhibit J:		Mortgage Insurance Supplemental Information Insurance in Force and Risk in Force

Exhibit K:		Mortgage Insurance Supplemental Information Risk in Force by LTV and Policy Year and Other Risk in Force

Exhibit L:		Mortgage Insurance Supplemental Information Claims, Reserves and Reserve Per Default

Exhibit M:		Mortgage Insurance Supplemental Information Default Statistics

Exhibit N:		Mortgage Insurance Supplemental Information Net Premiums Written and Earned, Smart Home, Captives and Persistency

Exhibit O:		Mortgage Insurance Supplemental Information Modified Pool

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

Exhibit A


	Quarter Ended						Six Months Ended
	June 30						June 30
	2011			2010			2011			2010
(In thousands, except per-share data)

Revenues:
Net premiums written - insurance	$	152,778		$	159,901		$	335,527		$	315,402


Net premiums earned - insurance	$	188,934		$	203,446		$	391,957		$	401,714
Net investment income		43,823			48,619			86,063			93,977
Net gains on investments		44,236			57,262			81,671			115,210
Net impairment losses recognized in earnings		(11	)		(38	)		(11	)		(56	)
Change in fair value of derivative instruments		188,726			(524,606	)		432,618			(602,560	)
Net gains (losses) on other financial instruments		5,047			(63,200	)		80,298			(164,764	)
Gain on sale of affiliate		—			34,815			—			34,815
Other income		1,196			(2,072	)		2,644			3,703

Total revenues		471,951			(245,774	)		1,075,240			(117,961	)


Expenses:
Provision for losses		263,566			435,166			690,939			979,046
Change in reserve for premium deficiency		(3,102	)		(7,354	)		(4,485	)		(8,585	)
Policy acquisition costs		14,387			16,797			28,518			31,665
Other operating expenses		45,954			35,165			92,173			100,221
Interest expense		16,079			8,245			33,103			19,049

Total expenses		336,884			488,019			840,248			1,121,396


Equity in net income of affiliates		—			6,570			65			14,668


Pretax income (loss)		135,067			(727,223	)		235,057			(1,224,689	)
Income tax benefit		(2,048	)		(252,143	)		(5,064	)		(439,254	)


Net income (loss)	$	137,115		$	(475,080	)	$	240,121		$	(785,435	)


Diluted net income (loss) per share (1)	$	1.03		$	(4.31	)	$	1.80		$	(8.15	)


*(1) Weighted average shares outstanding (In thousands)*

Weighted average common shares outstanding		132,185			110,282			132,185			96,420
Increase in weighted average shares-common stock equivalents-diluted basis		1,429			—			1,539			—

Weighted average shares outstanding		133,614			110,282			133,724			96,420

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

Page 1

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit B


(In thousands, except per-share data)	June 30 2011		December 31 2010			June 30 2010

Assets:
Cash and investments	$	6,038,529	$	6,680,630		$	7,277,607
Deferred policy acquisition costs		138,926		148,326			148,623
Deferred income taxes, net		27,531		27,531			815,674
Reinsurance recoverables		179,573		244,894			585,938
Derivative assets		27,266		26,212			21,977
Other assets		516,971		493,294			498,669


Total assets	$	6,928,796	$	7,620,887		$	9,348,488


Liabilities and stockholders’ equity:
Unearned premiums	$	629,813	$	686,364		$	736,675
Reserve for losses and loss adjustment expenses		3,343,624		3,596,735			3,781,240
Reserve for premium deficiency		6,251		10,736			16,772
Long-term debt		811,319		964,788			665,381
VIE debt		393,740		520,114			627,638
Derivative liabilities		313,708		723,579			748,094
Payable for securities purchased		48,707		9,112			660,805
Other liabilities		252,324		249,679			332,254


Total liabilities		5,799,486		6,761,107			7,568,859


Common stock		151		150			150
Additional paid-in capital		1,073,703		1,071,080			1,002,501
Retained earnings (deficit)		34,861		(204,926	)		816,172
Accumulated other comprehensive income (loss)		20,595		(6,524	)		(39,194	)


Total common stockholders’ equity		1,129,310		859,780			1,779,629


Total liabilities and stockholders’ equity	$	6,928,796	$	7,620,887		$	9,348,488


Book value per share	$	8.48	$	6.46		$	13.40

Page 2

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended June 30, 2011

Exhibit C

(In thousands)

Mortgage
Insurance

Financial
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 gains (losses) on other financial instruments

(631

)

5,678

5,047

Other income

1,124

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 income (loss)

(92,207

)

227,274

135,067

Income tax (benefit) provision

5,374

(7,422

)

(2,048

)

Net income (loss)

(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

Page 3

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended June 30, 2010

Exhibit D


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services		Total
Revenues:
Net premiums written - insurance	$	167,909		$	(8,008	)	$	—	$	159,901


Net premiums earned - insurance	$	179,992		$	23,454		$	—	$	203,446
Net investment income		28,544			20,075			—		48,619
Net gains on investments		34,441			22,821			—		57,262
Net impairment losses recognized in earnings		(38	)		—			—		(38	)
Change in fair value of derivative instruments		(1,310	)		(523,296	)		—		(524,606	)
Net losses on other financial instruments		(7,973	)		(55,227	)		—		(63,200	)
Gain on sale of affiliate		—			—			34,815		34,815
Other income		1,623			(3,695	)		—		(2,072	)

Total revenues		235,279			(515,868	)		34,815		(245,774	)


Expenses:
Provision for losses		427,622			7,544			—		435,166
Change in reserve for premium deficiency		(7,354	)		—			—		(7,354	)
Policy acquisition costs		12,113			4,684			—		16,797
Other operating expenses		25,639			9,476			50		35,165
Interest expense		1,549			6,696			—		8,245

Total expenses		459,569			28,400			50		488,019


Equity in net income of affiliates		—			—			6,570		6,570


Pretax (loss) income		(224,290	)		(544,268	)		41,335		(727,223	)

Income tax (benefit) provision		(71,763	)		(194,848	)		14,468		(252,143	)


Net (loss) income	$	(152,527	)	$	(349,420	)	$	26,867	$	(475,080	)


Cash and investments	$	3,886,819		$	3,390,788		$	—	$	7,277,607
Deferred policy acquisition costs		35,220			113,403			—		148,623
Total assets		5,367,065			3,981,423			—		9,348,488
Unearned premiums		207,354			529,321			—		736,675
Reserve for losses and loss adjustment expenses		3,656,746			124,494			—		3,781,240
VIE debt		253,178			374,460			—		627,638
Derivative liabilities		358			747,736			—		748,094

Page 4

Radian Group Inc. and Subsidiaries

Segment Information

Six Months Ended June 30, 2011

Exhibit E

(In thousands)

Mortgage
Insurance

Financial
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

—

Pretax income (loss)

(324,738

)

559,795

235,057

Income tax (benefit) provision

8,875

(13,939

)

(5,064

)

Net income (loss)

(333,613

)

573,734

240,121

Page 5

Radian Group Inc. and Subsidiaries

Segment Information

Six Months Ended June 30, 2010

Exhibit F


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services		Total
Revenues:
Net premiums written - insurance	$	324,941		$	(9,539	)	$	—	$	315,402


Net premiums earned - insurance	$	357,331		$	44,383		$	—	$	401,714
Net investment income		54,903			39,074			—		93,977
Net gains on investments		63,222			51,988			—		115,210
Net impairment losses recognized in earnings		(56	)		—			—		(56	)
Change in fair value of derivative instruments		(1,033	)		(601,527	)		—		(602,560	)
Net losses on other financial instruments		(38,173	)		(126,591	)		—		(164,764	)
Gain on sale of affiliate		—			—			34,815		34,815
Other income		3,422			218			63		3,703

Total revenues		439,616			(592,455	)		34,878		(117,961	)


Expenses:
Provision for losses		956,713			22,333			—		979,046
Change in reserve for premium deficiency		(8,585	)		—			—		(8,585	)
Policy acquisition costs		22,617			9,048			—		31,665
Other operating expenses		71,872			28,149			200		100,221
Interest expense		3,669			15,380			—		19,049

Total expenses		1,046,286			74,910			200		1,121,396


Equity in net income of affiliates		—			78			14,590		14,668


Pretax (loss) income		(606,670	)		(667,287	)		49,268		(1,224,689	)

Income tax (benefit) provision		(217,610	)		(238,889	)		17,245		(439,254	)


Net (loss) income	$	(389,060	)	$	(428,398	)	$	32,023	$	(785,435	)

Page 6

Radian Group Inc.

Financial Guaranty Supplemental Information

Exhibit G


(In thousands)	Quarter Ended June 30					Six Months Ended June 30
	2011		2010			2011		2010

Net Premiums Earned:
Public finance direct	$	11,580	$	15,897		$	19,416	$	28,233
Public finance reinsurance		8,262		6,196			16,066		13,109
Structured direct		941		443			1,382		1,160
Structured reinsurance		955		932			1,764		1,847
Trade credit reinsurance		42		3			41		51

Net Premiums Earned - insurance		21,780		23,471			38,669		44,400
Impact of commutations		2,829		(17	)		2,829		(17	)

Total Net Premiums Earned - insurance	$	24,609	$	23,454		$	41,498	$	44,383


Refundings included in earned premium	$	9,300	$	10,205		$	14,131	$	19,738


Net premiums earned - derivatives (1)	$	10,473	$	11,814		$	21,356	$	23,837

Claims paid:
Trade credit reinsurance	$	285	$	(2	)	$	261	$	1,084
Financial Guaranty		3,145		21,841			3,435		25,198

Total	$	3,430	$	21,839		$	3,696	$	26,282

(1)

Included in change in fair value of derivative instruments.

Page 7

Radian Group Inc.

Financial Guaranty Supplemental Information

Exhibit H


($ in thousands, except ratios)	June 30 2011		December 31 2010		June 30 2010
Statutory Information:

Capital and surplus	$	1,002,337	$	1,049,664	$	974,174
Contingency reserve		414,462		392,589		400,615

Qualified statutory capital		1,416,799		1,442,253		1,374,789

Unearned premium reserve		486,589		517,516		550,952
Loss and loss expense reserve		80,378		70,129		102,831

Total statutory policyholders’ reserves		1,983,766		2,029,898		2,028,572

Present value of installment premiums		171,397		202,386		227,634
Soft capital facilities		—		—		150,000

Total statutory claims paying resources	$	2,155,163	$	2,232,284	$	2,406,206


Net debt service outstanding	$	95,107,674	$	101,168,759	$	102,502,428


Capital leverage ratio (1)		67		70		75
Claims paying leverage ratio (2)		44		45		43

Net par outstanding by product:
Public finance direct	$	15,084,460	$	15,727,252	$	16,718,347
Public finance reinsurance		20,548,760		21,907,290		22,774,238
Structured direct		37,351,096		39,315,801		39,902,271
Structured reinsurance		1,703,261		1,805,295		1,872,802

Total (3)	$	74,687,577	$	78,755,638	$	81,267,658

(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 $1.8 billion, $1.9 billion and $2.0 billion at June 30, 2011, December 31, 2010 and June 30, 2010, 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. The accounting standard for financial guarantee insurance contracts requires that these contracts continue to be accounted for as outstanding contracts despite the elimination of substantially all risk.

Page 8

Radian Group Inc.

Mortgage Insurance Supplemental Information

Exhibit I


($ in millions)	Quarter Ended June 30												Six Months Ended June 30
	2011			%			2010			%			2011			%			2010			%

Primary new insurance written
Prime	$	2,280			100.0	%	$	2,653			100.0	%	$	4,863			99.9	%	$	4,549			100.0	%
A minus and below		—			—			1			—			3			0.1	%		2			—

Total Flow	$	2,280			100.0	%	$	2,654			100.0	%	$	4,866			100.0	%	$	4,551			100.0	%


Total primary new insurance written by FICO score
>=740	$	1,846			81.0	%	$	2,100			79.1	%	$	3,927			80.7	%	$	3,561			78.2	%
680-739		434			19.0	%		552			20.8	%		936			19.2	%		987			21.7	%
620-679		—			—			2			0.1	%		3			0.1	%		3			0.1	%

Total Flow	$	2,280			100.0	%	$	2,654			100.0	%	$	4,866			100.0	%	$	4,551			100.0	%


Percentage of primary new insurance written
Refinances		23	%					22	%					38	%					27	%
95.01% LTV and above		1.4	%					0.2	%					1.3	%					0.4	%
ARMs
Less than 5 years		0.1	%					0.2	%					0.1	%					0.1	%
5 years and longer		6.9	%					7.0	%					5.8	%					6.2	%

Page 9

Radian Group Inc.

Mortgage Insurance Supplemental Information

Exhibit J


($ in millions)	June 30						June 30
	2011			%			2010			%
Primary insurance in force
Flow	$	111,510			89.1	%	$	118,486			86.3	%
Structured		13,600			10.9	%		18,799			13.7	%

Total Primary	$	125,110			100.0	%	$	137,285			100.0	%


Prime	$	103,860			83.0	%	$	108,488			79.0	%
Alt-A		13,318			10.7	%		19,580			14.3	%
A minus and below		7,932			6.3	%		9,217			6.7	%

Total Primary	$	125,110			100.0	%	$	137,285			100.0	%


Primary risk in force
Flow
Prime	$	23,637			86.1	%	$	24,615			84.3	%
Alt-A		2,374			8.7	%		2,873			9.9	%
A minus and below		1,437			5.2	%		1,700			5.8	%

Total Flow	$	27,448			100.0	%	$	29,188			100.0	%


Structured
Prime	$	1,702			58.4	%	$	1,926			55.4	%
Alt-A		665			22.8	%		945			27.2	%
A minus and below		546			18.8	%		606			17.4	%

Total Structured	$	2,913			100.0	%	$	3,477			100.0	%


Total
Prime	$	25,339			83.5	%	$	26,541			81.2	%
Alt-A		3,039			10.0	%		3,818			11.7	%
A minus and below		1,983			6.5	%		2,306			7.1	%

Total Primary	$	30,361			100.0	%	$	32,665			100.0	%


Total primary risk in force by FICO score
Flow
>=740	$	11,196			40.8	%	$	10,712			36.7	%
680-739		9,327			34.0	%		10,354			35.5	%
620-679		5,865			21.4	%		6,878			23.6	%
<=619		1,060			3.8	%		1,244			4.2	%

Total Flow	$	27,448			100.0	%	$	29,188			100.0	%


Structured
>=740	$	776			26.6	%	$	956			27.5	%
680-739		848			29.1	%		1,061			30.5	%
620-679		781			26.8	%		901			25.9	%
<=619		508			17.5	%		559			16.1	%

Total Structured	$	2,913			100.0	%	$	3,477			100.0	%


Total
>=740	$	11,972			39.4	%	$	11,668			35.7	%
680-739		10,175			33.5	%		11,415			35.0	%
620-679		6,646			21.9	%		7,779			23.8	%
<=619		1,568			5.2	%		1,803			5.5	%

Total Primary	$	30,361			100.0	%	$	32,665			100.0	%


Percentage of primary risk in force
Refinances		31	%					31	%
95.01% LTV and above		19	%					20	%
ARMs
Less than 5 years		5	%					7	%
5 years and longer		7	%					8	%

Pool risk in force
Prime	$	1,676			75.6	%	$	1,867			73.5	%
Alt-A		132			6.0	%		179			7.0	%
A minus and below		408			18.4	%		495			19.5	%

Total	$	2,216			100.0	%	$	2,541			100.0	%

Page 10

Radian Group Inc.

Mortgage Insurance Supplemental Information

Exhibit K


($ in millions)	June 30						June 30
	2011			%			2010		%
Total primary risk in force by LTV
85.00% and below	$	2,753			9.1	%	$	3,051		9.3	%
85.01% to 90.00%		11,722			38.6	%		12,355		37.8	%
90.01% to 95.00%		10,268			33.8	%		10,737		32.9	%
95.01% and above		5,618			18.5	%		6,522		20.0	%

Total	$	30,361			100.0	%	$	32,665		100.0	%


Total primary risk in force by policy year
2005 and prior	$	7,519			24.7	%	$	8,936		27.4	%
2006		3,396			11.2	%		4,055		12.4	%
2007		7,435			24.5	%		8,867		27.1	%
2008		5,549			18.3	%		6,398		19.6	%
2009		2,915			9.6	%		3,363		10.3	%
2010		2,419			8.0	%		1,046		3.2	%
2011		1,128			3.7	%		—		—

Total	$	30,361			100.0	%	$	32,665		100.0	%


Total pool risk in force by policy year
2005 and prior	$	1,894			85.5	%	$	2,075		81.6	%
2006		131			5.9	%		210		8.3	%
2007		154			6.9	%		206		8.1	%
2008		37			1.7	%		50		2.0	%

Total pool risk in force	$	2,216			100.0	%	$	2,541		100.0	%


Other risk in force
Second-lien
1st loss	$	109					$	129
2nd loss		33						86
NIMs		59						268
International
1st loss-Hong Kong primary mortgage insurance		89						185
Credit default swaps		—						109

Total other risk in force	$	290					$	777


Risk to capital ratio-Radian Guaranty only		19.8:1	(1)					17.9:1

(1)

Preliminary

Page 11

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Six Months Ended and as of June 30, 2011

Exhibit L


	Quarter Ended						Six Months Ended
($ in thousands)	June 30						June 30
	2011			2010			2011			2010
Net claims paid
Prime	$	256,020		$	164,043		$	464,215		$	290,007
Alt-A		88,140			81,030			163,270			146,061
A minus and below		52,794			48,645			97,379			85,029

Total primary claims paid		396,954			293,718			724,864			521,097
Pool		58,341			39,063			92,699			70,472
Second-lien and other		3,736			4,494			6,619			12,473

Subtotal		459,031			337,275			824,182			604,042
Impact of first-lien terminations		38,198			239			38,198			80,349
Impact of captive terminations		(1,166	)		(191	)		(1,166	)		(627	)
Impact of second-lien terminations		16,550			—			16,550			10,834

Total net claims paid	$	512,613		$	337,323		$	877,764		$	694,598


Average net claim paid (1)
Prime	$	49.9		$	44.2		$	49.0		$	44.9
Alt-A		62.0			56.9			60.9			58.1
A minus and below		40.8			36.9			39.0			38.1
Total average net primary claim paid		50.6			45.5			49.5			46.5
Pool		80.2			74.3			75.7			69.8
Second-lien and other		27.7			32.3			28.9			33.9
Total average net claim paid	$	52.7		$	47.4		$	51.2		$	47.9

Average direct primary claim paid (2) (3)	$	55.3		$	53.3		$	54.8		$	53.5
Average total direct claim paid (2) (3)	$	56.9		$	54.4		$	56.0		$	54.2

Loss ratio - GAAP Basis		164.3	%		237.6	%		195.2	%		267.7	%
Expense ratio - GAAP Basis		25.9	%		21.0	%		24.8	%		26.4	%

		190.2	%		258.6	%		220.0	%		294.1	%


Reserve for losses by category
Prime	$	1,635,206		$	1,386,271
Alt-A		652,577			815,055
A minus and below		374,647			400,679
Reinsurance recoverable (4)		160,664			565,737

Total primary reserves		2,823,094			3,167,742
Pool insurance		436,948			457,129

Total 1st lien reserves		3,260,042			3,624,871
Second-lien		8,522			31,795
Other		18			80

Total reserves	$	3,268,582		$	3,656,746


1st lien reserve per default (5)
Primary reserve per primary default	$	25,334		$	22,957
Pool reserve per pool default (6)		16,795			14,072
Total 1st lien reserve per default		23,718			21,264

(1)

Calculated net of reinsurance recoveries.

(2)

Calculated without giving effect to the impact of terminations of captive reinsurance transactions and first- and second-lien transactions.

(3)

Before reinsurance recoveries.

(4)

Represents ceded losses on captive transactions and Smart Home.

(5)

Calculated as total reserves divided by total defaults.

(6)

If calculated before giving effect to deductibles and stop losses in pool transactions, the pool reserve per default at June 30, 2011 and June 30, 2010 would be $28,277 and $24,082, respectively.

Page 12

Radian Group Inc.

Mortgage Insurance Supplemental Information

Exhibit M


	June 30 2011			December 31 2010			June 30 2010
Default Statistics
Primary insurance:

Flow
Prime
Number of insured loans		564,839			584,213			599,909
Number of loans in default		64,143			71,196			74,800
Percentage of loans in default		11.36	%		12.19	%		12.47	%

Alt-A
Number of insured loans		47,491			51,765			56,323
Number of loans in default		15,329			17,934			20,289
Percentage of loans in default		32.28	%		34.65	%		36.02	%

A minus and below
Number of insured loans		43,597			47,044			50,719
Number of loans in default		14,098			16,401			18,100
Percentage of loans in default		32.34	%		34.86	%		35.69	%

Total Flow
Number of insured loans		655,927			683,022			706,951
Number of loans in default		93,570			105,531			113,189
Percentage of loans in default		14.27	%		15.45	%		16.01	%

Structured
Prime
Number of insured loans		43,429			42,131			45,201
Number of loans in default		6,248			6,735			6,548
Percentage of loans in default		14.39	%		15.99	%		14.49	%

Alt-A
Number of insured loans		19,600			20,234			31,852
Number of loans in default		5,930			6,635			11,485
Percentage of loans in default		30.26	%		32.79	%		36.06	%

A minus and below
Number of insured loans		16,159			16,716			17,593
Number of loans in default		5,686			6,569			6,793
Percentage of loans in default		35.19	%		39.30	%		38.61	%

Total Structured
Number of insured loans		79,188			79,081			94,646
Number of loans in default		17,864			19,939			24,826
Percentage of loans in default		22.56	%		25.21	%		26.23	%

Total Primary Insurance
Prime
Number of insured loans		608,268			626,344			645,110
Number of loans in default		70,391			77,931			81,348
Percentage of loans in default		11.57	%		12.44	%		12.61	%

Alt-A
Number of insured loans		67,091			71,999			88,175
Number of loans in default		21,259			24,569			31,774
Percentage of loans in default		31.69	%		34.12	%		36.04	%

A minus and below
Number of insured loans		59,756			63,760			68,312
Number of loans in default		19,784			22,970			24,893
Percentage of loans in default		33.11	%		36.03	%		36.44	%

Total Primary Insurance
Number of insured loans		735,115			762,103			801,597
Number of loans in default		111,434			125,470			138,015
Percentage of loans in default		15.16	%		16.46	%		17.22	%

Pool insurance:
Number of loans in default		26,016			32,456			32,486

Page 13

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Six Months Ended and as of June 30, 2011

Exhibit N


	Quarter Ended June 30						Six Months Ended June 30
	2011			2010			2011			2010

Net Premiums Written (In thousands)
Primary and Pool Insurance	$	163,556		$	167,250		$	343,813		$	324,663
Second-lien (1)		592			734			1,212			279
International		46			(75	)		15			(1	)

Total Net Premiums Written - Insurance	$	164,194		$	167,909		$	345,040		$	324,941


Net Premiums Earned (In thousands)
Primary and Pool Insurance	$	162,388		$	176,622		$	345,857		$	350,734
Second-lien		592			734			1,212			1,245
International		1,345			2,636			3,390			5,352

Total Net Premiums Earned - Insurance	$	164,325		$	179,992		$	350,459		$	357,331


SMART HOME (In millions)
Ceded Premiums Written and Earned	$	2.2		$	2.6		$	4.4		$	4.9

Net premiums earned - derivatives (In thousands) (2)	$	—		$	140		$	—		$	279

1st Lien Captives
Premiums ceded to captives (In thousands)	$	7,266		$	24,684		$	14,853		$	50,158
% of total premiums		4.2	%		12.1	%		4.1	%		12.4	%
NIW subject to captives (In thousands)	$	—		$	(204	)	$	—		$	129
% of primary NIW		—			(< 1	%)		—			< 1	%
IIF included in captives (3)		9.9	%		28.8	%
RIF included in captives (3)		9.7	%		30.5	%

Persistency (twelve months ended June 30)		82.5	%		81.7	%

	June 30 2011			June 30 2010

SMART HOME

% of Primary RIF included in Smart Home Transactions (3)		2.8	%		3.3	%

(1)

Reflects the impact of second-lien terminations.

(2)

Included in change in 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.

Page 14

Radian Group Inc.

Mortgage Insurance Supplemental Information

Modified Pool (1)

Exhibit O


($ in millions)	June 30					June 30
	2011		%			2010		%
Modified pool risk in force by policy year
2005 and prior	$	200		69.4	%	$	195		42.7	%
2006		35		12.2	%		45		9.8	%
2007		46		16.0	%		210		46.0	%
2008		7		2.4	%		7		1.5	%

Total	$	288		100.0	%	$	457		100.0	%


Modified pool risk in force by product
Prime	$	85		29.5	%	$	77		16.8	%
Alt-A		185		64.2	%		362		79.2	%
A minus and below		18		6.3	%		18		4.0	%

Total	$	288		100.0	%	$	457		100.0	%


Modified pool insurance in force by product
Prime	$	1,021		31.6	%	$	722		11.4	%
Alt-A		2,060		63.7	%		5,441		86.2	%
A minus and below		151		4.7	%		152		2.4	%

Total	$	3,232		100.0	%	$	6,315		100.0	%


Reserve for losses - modified pool (in thousands)	$	73,187				$	244,628

Default Statistics:

Modified pool:
Total modified pool
Number of insured loans				18,725					25,325
Number of loans in default				3,714					7,759
Percentage of loans in default				19.83	%				30.64	%

(1)

Included in primary insurance amounts.

Page 15

LOGO

FORWARD-LOOKING STATEMENTS

All statements in this press 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 United States (“U.S.”) Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” or the negative or other variations on these words and other similar expressions. These statements, which may 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 failure of the U.S. economy to fully recover from the most recent recession or the U.S. economy reentering a recessionary period, a lack of meaningful liquidity in the capital markets or in the credit markets, a prolonged period of high unemployment rates and limited home price appreciation or further depreciation (which has resulted in some borrowers voluntarily defaulting on their mortgages when their mortgage balances exceed the value of their homes), changes or volatility in interest rates or consumer confidence, and changes in credit spreads, each of which may be accelerated or intensified by the actual or threatened downgrade of U.S. credit ratings or other consequences of a failure of the U.S. Congress to increase the U.S. debt ceiling or as a result of any legislation resulting from such Congressional debates.

•

changes in the way customers, investors or regulators perceive the strength of private mortgage insurers or financial guaranty providers, or investor concern over the credit quality and specific risks faced by the particular businesses, municipalities or pools of assets covered by our insurance;

•

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

•

our ability to successfully execute upon our capital plan for our mortgage insurance business (which depends, in part, on the performance of our financial guaranty portfolio), and if necessary, to obtain additional capital to support our mortgage insurance business and the long-term liquidity needs of our holding company;

•

a further reduction in, or prolonged period of depressed levels of, home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards, the risk retention requirements established under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) and the decrease in housing demand throughout the U.S.;

•

our ability to maintain adequate risk-to-capital ratios and surplus requirements in our mortgage insurance business in light of ongoing losses in this business and further deterioration in our financial guaranty portfolio which, in the absence of new capital, could depend on our ability to execute strategies for which regulatory and other approvals are required and may not be obtained;

•

our ability to continue to effectively mitigate our mortgage insurance and financial guaranty losses;

LOGO

•

reduced opportunities for loss mitigation in markets where housing values do not appreciate or continue to decline;

•

a more rapid than expected decrease in the level of insurance rescissions and claim denials from the current elevated levels (including as a result of successful challenges to previously rescinded policies or claim denials), which rescissions and denials have materially mitigated our paid losses and resulted in a significant reduction in our loss reserves;

•

the negative impact our insurance rescissions and claim denials may have on our relationships with customers and potential customers, including the potential loss of business and the heightened risk of disputes and litigation; the need, in the event that we are unsuccessful in defending our rescissions or denials, to reestablish loss reserves for, and reassume risk on, rescinded loans and pay additional claims;

•

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

•

the 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 and subprime loans, and of adjustable rate products, such as adjustable rate mortgages and interest-only mortgages;

•

a decrease in persistency rates of our mortgage insurance policies;

•

an increase in the risk profile of our existing mortgage insurance portfolio due to the availability of mortgage refinancing to only the most qualified borrowers in the current mortgage and housing market;

•

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 rating assigned to Radian Guaranty Inc.);

•

heightened competition for our mortgage insurance business from others such as the Federal Housing Administration (the “FHA”), the Veterans’ Administration and private mortgage insurers (in particular, the FHA and those private mortgage insurers that have been assigned higher ratings from the major rating agencies or new entrants to the industry that are not burdened by legacy obligations);

•

changes in the charters or business practices of, or rules or regulations applicable to, Federal National Mortgage Association (“Fannie Mae”) and Freddie Mac, the largest

LOGO

purchasers of mortgage loans that we insure, and our ability to remain an eligible provider to both Freddie Mac and Fannie Mae;

•

changes to the current system of housing finance, including the possibility of a new system in which private mortgage insurers are not required or their products are significantly limited in scope;

•

the effect of the Dodd-Frank Act on the financial services industry in general, and on our mortgage insurance and financial guaranty businesses in particular, including whether and to what extent loans with mortgage insurance are considered “qualified residential mortgages” for purposes of the Dodd-Frank Act securitization provisions or “qualified mortgages” for purposes of the ability to repay provisions and potential obligations to post collateral on our existing insured derivatives portfolio;

•

the application of existing federal or state consumer, lending, insurance, tax, 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, or the possibility of additional, lawsuits or investigations, and (ii) legislative and regulatory changes (a) affecting demand for private mortgage insurance, (b) limiting or restricting our use of (or increasing requirements for) additional capital and the products we may offer, or (c) affecting the form in which we execute credit protection or affecting our existing financial guaranty portfolio;

•

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

•

the ability of our primary insurance customers in our financial guaranty reinsurance business to provide appropriate surveillance and to mitigate losses adequately with respect to our assumed insurance portfolio;

•

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

•

our ability to realize the tax benefits associated with our deferred tax assets, which will depend on our ability to generate sufficient sustainable taxable income in future periods;

•

our ability to obtain the necessary regulatory approval to consummate our purchase of Municipal and Infrastructure Assurance Corporation (the “FG Insurance Shell”) and to successfully develop and implement a strategy to utilize the FG Insurance Shell in the public finance financial guaranty market, which strategy may depend on, among other

LOGO

items, our ability to obtain further necessary regulatory or other approvals, to attract third-party capital and to obtain ratings sufficient to support such a strategy;

•

changes in accounting guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board; and

•

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

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2010 and in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we filed this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements made in this press release to reflect new information or future events or for any other reason.

###

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