|
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date
of report (Date of earliest event reported) May 1, 2012
Radian Group Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Delaware |
1-11356 |
23-2691170 |
(State or Other Jurisdiction |
(Commission |
(IRS Employer |
1601 Market Street, Philadelphia, Pennsylvania |
19103 |
(Address of Principal Executive Offices) |
(Zip Code) |
(215) 231 - 1000
(Registrant’s
Telephone Number, Including Area Code)
(Former
Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 2.02. Results of Operations and Financial Condition.
On May 1, 2012, Radian Group Inc. issued a news release announcing its financial results for the quarter ended March 31, 2012. A copy of this news release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1* Radian Group Inc. News Release dated May 1, 2012.
_____________________
* Furnished herewith.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
RADIAN GROUP INC. |
|||
(Registrant) | |||
Date: | May 1, 2012 | By: |
/s/ C. Robert Quint |
C. Robert Quint |
|||
Chief Financial Officer |
EXHIBIT INDEX
Exhibit |
Description |
|
99.1* |
Radian Group Inc. News Release dated May 1, 2012. |
* Furnished herewith.
Exhibit 99.1
Radian Reports First Quarter 2012 Financial Results
– Improved risk-to-capital ratio of 20.6:1 with approximately $350 million of available holding company liquidity –
–Writes $6.5 billion of new MI business in the first quarter–
PHILADELPHIA--(BUSINESS WIRE)--May 1, 2012--Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended March 31, 2012, of $169.2 million, or $1.28 per diluted share, which included combined losses from the change in fair value of derivatives and other financial instruments of $90.6 million. This compares to net income of $103.0 million, or $0.77 per diluted share, which included combined gains from the change in fair value of derivatives and other financial instruments of $319.1 million, for the prior-year quarter. Book value per share at March 31, 2012, was $7.65.
“While our financial results for the quarter continue to reflect the challenges of the macroeconomic environment and our legacy portfolio, we are pleased with another quarter of strong volume in new mortgage insurance business and a continued decline in the number of delinquent loans,” said Chief Executive Officer S.A. Ibrahim.
Ibrahim continued, “We remain focused on managing our capital and increasing our new business volume. We improved our risk-to-capital position in the first quarter and opportunistically reduced our outstanding debt. We continued to write a strong share of high-quality business that improves the mix and credit profile of our mortgage insurance portfolio and we believe further strengthens Radian for the future. And we continued our momentum in April by writing approximately $2.6 billion in new business.”
CAPITAL AND LIQUIDITY UPDATE
FIRST QUARTER HIGHLIGHTS
RECENT EVENTS
CONFERENCE CALL
Radian will discuss these items in its conference call today, Tuesday, May 1, 2012, 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 800-230-1951 inside the U.S., or 612-332-1213 for international callers, using passcode 243244 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 243244.
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 March 31, 2012 | |
Exhibit D: | Segment Information Quarter Ended March 31, 2011 | |
Exhibit E: | Financial Guaranty Supplemental Information | |
Exhibit F: | Financial Guaranty Supplemental Information | |
Exhibit G: | Mortgage Insurance Supplemental Information | |
New Insurance Written | ||
Exhibit H: | Mortgage Insurance Supplemental Information | |
Insurance in Force and Risk in Force | ||
Exhibit I: | Mortgage Insurance Supplemental Information | |
Risk in Force by FICO, LTV and Policy Year | ||
Exhibit J: | Mortgage Insurance Supplemental Information | |
Primary, Pool and Other Risk in Force | ||
Exhibit K: | Mortgage Insurance Supplemental Information | |
Claims, Reserves and Reserves per Default | ||
Exhibit L: | Mortgage Insurance Supplemental Information | |
Default Statistics | ||
Exhibit M: | Mortgage Insurance Supplemental Information | |
Net Premiums Written and Earned, Captives and Persistency | ||
Exhibit N: | Mortgage Insurance Supplemental Information | |
Modified Pool |
Radian Group Inc. and Subsidiaries | ||||||||||||
Condensed Consolidated Statements of Income | ||||||||||||
Exhibit A | ||||||||||||
Quarter Ended | ||||||||||||
March 31 | ||||||||||||
(In thousands, except per-share data) |
2012 | 2011 | ||||||||||
Revenues: | ||||||||||||
Net premiums written - insurance | $ | 77,678 | $ | 182,749 | ||||||||
Net premiums earned - insurance | $ | 167,365 | $ | 203,023 | ||||||||
Net investment income | 34,713 | 42,240 | ||||||||||
Net gains on investments | 67,459 | 37,435 | ||||||||||
Net impairment losses recognized in earnings | — | — | ||||||||||
Change in fair value of derivative instruments | (72,757 | ) | 243,892 | |||||||||
Net (losses) gains on other financial instruments | (17,852 | ) | 75,251 | |||||||||
Other income | 1,440 | 1,448 | ||||||||||
Total revenues | 180,368 | 603,289 | ||||||||||
Expenses: | ||||||||||||
Provision for losses | 266,154 | 427,373 | ||||||||||
Change in reserve for premium deficiency | (20 | ) | (1,383 | ) | ||||||||
Policy acquisition costs | 28,046 | 14,131 | ||||||||||
Other operating expenses | 50,154 | 46,219 | ||||||||||
Interest expense | 14,148 | 17,024 | ||||||||||
Total expenses | 358,482 | 503,364 | ||||||||||
Equity in net (loss) income of affiliates | (11 | ) | 65 | |||||||||
Pretax (loss) income | (178,125 | ) | 99,990 | |||||||||
Income tax benefit | (8,893 | ) | (3,016 | ) | ||||||||
Net (loss) income | $ | (169,232 | ) | $ | 103,006 | |||||||
Diluted net (loss) income per share (1) | $ | (1.28 | ) | $ | 0.77 | |||||||
(1) Weighted average shares outstanding (in thousands) | |||||||||
Weighted average common shares outstanding | 132,465 | 132,427 | |||||||
Increase in weighted average shares-common stock equivalents-diluted basis | — | 1,276 | |||||||
Weighted average shares outstanding | 132,465 | 133,703 | |||||||
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 | |||||||||||
March 31 | December 31 | ||||||||||
(In thousands, except per-share data) |
2012 | 2011 | |||||||||
Assets: | |||||||||||
Cash and investments | $ | 5,651,824 | $ | 5,846,168 | |||||||
Deferred policy acquisition costs | 107,941 | 139,906 | |||||||||
Deferred income taxes, net | 15,975 | 15,975 | |||||||||
Reinsurance recoverables | 122,512 | 157,985 | |||||||||
Derivative assets | 16,202 | 17,212 | |||||||||
Receivable for securities sold | 54,417 | 18,702 | |||||||||
Other assets | 479,650 | 460,817 | |||||||||
Total assets | $ | 6,448,521 | $ | 6,656,765 | |||||||
Liabilities and stockholders' equity: | |||||||||||
Unearned premiums | $ | 572,565 | $ | 637,372 | |||||||
Reserve for losses and loss adjustment expenses | 3,316,364 | 3,310,902 | |||||||||
Reserve for premium deficiency | 3,624 | 3,644 | |||||||||
Long-term debt | 674,857 | 818,584 | |||||||||
VIE debt | 255,234 | 228,240 | |||||||||
Derivative liabilities | 202,100 | 126,006 | |||||||||
Payable for securities purchased | 105,321 | 46,368 | |||||||||
Other liabilities | 299,028 | 303,358 | |||||||||
Total liabilities | 5,429,093 | 5,474,474 | |||||||||
Common stock | 151 | 151 | |||||||||
Additional paid-in capital | 1,073,278 | 1,074,513 | |||||||||
Retained (deficit) earnings | (73,005 | ) | 96,227 | ||||||||
Accumulated other comprehensive income | 19,004 | 11,400 | |||||||||
Total common stockholders’ equity | 1,019,428 | 1,182,291 | |||||||||
Total liabilities and stockholders’ equity | $ | 6,448,521 | $ | 6,656,765 | |||||||
Book value per share | $ | 7.65 | $ | 8.88 | |||||||
Radian Group Inc. and Subsidiaries | ||||||||||||||||||
Segment Information | ||||||||||||||||||
Quarter Ended March 31, 2012 | ||||||||||||||||||
Exhibit C | ||||||||||||||||||
Mortgage | Financial | |||||||||||||||||
(In thousands) |
Insurance | Guaranty | Total | |||||||||||||||
Revenues: | ||||||||||||||||||
Net premiums written - insurance | $ | 196,853 | $ | (119,175 | ) | $ | 77,678 | |||||||||||
Net premiums earned - insurance | 173,451 | (6,086 | ) | 167,365 | ||||||||||||||
Net investment income | 18,011 | 16,702 | 34,713 | |||||||||||||||
Net gains on investments | 32,178 | 35,281 | 67,459 | |||||||||||||||
Net impairment losses recognized in earnings | — | — | — | |||||||||||||||
Change in fair value of derivative instruments | 21 | (72,778 | ) | (72,757 | ) | |||||||||||||
Net losses on other financial instruments | (709 | ) | (17,143 | ) | (17,852 | ) | ||||||||||||
Other income | 1,344 | 96 | 1,440 | |||||||||||||||
Total revenues | 224,296 | (43,928 | ) | 180,368 | ||||||||||||||
Expenses: | ||||||||||||||||||
Provision for losses | 234,729 | 31,425 | 266,154 | |||||||||||||||
Change in reserve for premium deficiency | (20 | ) | — | (20 | ) | |||||||||||||
Policy acquisition costs | 8,646 | 19,400 | 28,046 | |||||||||||||||
Other operating expenses | 36,265 | 13,889 | 50,154 | |||||||||||||||
Interest expense | 1,722 | 12,426 | 14,148 | |||||||||||||||
Total expenses | 281,342 | 77,140 | 358,482 | |||||||||||||||
Equity in net loss of affiliates | — | (11 | ) | (11 | ) | |||||||||||||
Pretax loss | (57,046 | ) | (121,079 | ) | (178,125 | ) | ||||||||||||
Income tax (benefit) provision | (11,799 | ) | 2,906 | (8,893 | ) | |||||||||||||
Net loss | $ | (45,247 | ) | $ | (123,985 | ) | $ | (169,232 | ) | |||||||||
Cash and investments | $ | 3,259,204 | $ | 2,392,620 | $ | 5,651,824 | ||||||||||||
Deferred policy acquisition costs | 49,786 | 58,155 | 107,941 | |||||||||||||||
Total assets | 3,476,732 | 2,971,789 | 6,448,521 | |||||||||||||||
Unearned premiums | 256,809 | 315,756 | 572,565 | |||||||||||||||
Reserve for losses and loss adjustment expenses | 3,230,938 | 85,426 | 3,316,364 | |||||||||||||||
VIE debt | 8,625 | 246,609 | 255,234 | |||||||||||||||
Derivative liabilities | — | 202,100 | 202,100 | |||||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||||||||
Segment Information | ||||||||||||||||||
Quarter Ended March 31, 2011 | ||||||||||||||||||
Exhibit D | ||||||||||||||||||
Mortgage | Financial | |||||||||||||||||
(In thousands) |
Insurance | Guaranty | Total | |||||||||||||||
Revenues: | ||||||||||||||||||
Net premiums written - insurance | $ | 180,846 | $ | 1,903 | $ | 182,749 | ||||||||||||
Net premiums earned - insurance | 186,134 | 16,889 | 203,023 | |||||||||||||||
Net investment income | 26,833 | 15,407 | 42,240 | |||||||||||||||
Net gains on investments | 17,762 | 19,673 | 37,435 | |||||||||||||||
Change in fair value of derivative instruments | (394 | ) | 244,286 | 243,892 | ||||||||||||||
Net gains on other financial instruments | 2,466 | 72,785 | 75,251 | |||||||||||||||
Other income | 1,400 | 48 | 1,448 | |||||||||||||||
Total revenues | 234,201 | 369,088 | 603,289 | |||||||||||||||
Expenses: | ||||||||||||||||||
Provision for losses | 413,973 | 13,400 | 427,373 | |||||||||||||||
Change in reserve for premium deficiency | (1,383 | ) | — | (1,383 | ) | |||||||||||||
Policy acquisition costs | 10,216 | 3,915 | 14,131 | |||||||||||||||
Other operating expenses | 34,137 | 12,082 | 46,219 | |||||||||||||||
Interest expense | 9,789 | 7,235 | 17,024 | |||||||||||||||
Total expenses | 466,732 | 36,632 | 503,364 | |||||||||||||||
Equity in net income of affiliates | — | 65 | 65 | |||||||||||||||
Pretax (loss) income | (232,531 | ) | 332,521 | 99,990 | ||||||||||||||
Income tax provision (benefit) | 3,501 | (6,517 | ) | (3,016 | ) | |||||||||||||
Net (loss) income | $ | (236,032 | ) | $ | 339,038 | $ | 103,006 | |||||||||||
Cash and investments | $ | 3,977,445 | $ | 2,464,819 | $ | 6,442,264 | ||||||||||||
Deferred policy acquisition costs | 42,322 | 103,399 | 145,721 | |||||||||||||||
Total assets | 4,471,425 | 2,880,138 | 7,351,563 | |||||||||||||||
Unearned premiums | 191,910 | 474,109 | 666,019 | |||||||||||||||
Reserve for losses and loss adjustment expenses | 3,542,797 | 84,898 | 3,627,695 | |||||||||||||||
VIE debt | 72,369 | 300,638 | 373,007 | |||||||||||||||
Derivative liabilities | — | 487,345 | 487,345 | |||||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||
Financial Guaranty Supplemental Information | ||||||||||||
Exhibit E | ||||||||||||
Quarter Ended |
||||||||||||
March 31 |
||||||||||||
(In thousands) |
2012 | 2011 | ||||||||||
Net Premiums Earned: | ||||||||||||
Public finance direct | $ | 10,213 | $ | 7,836 | ||||||||
Public finance reinsurance | 4,770 | 7,804 | ||||||||||
Structured direct | 382 | 441 | ||||||||||
Structured reinsurance | 813 | 809 | ||||||||||
Trade credit reinsurance | — | (1 | ) | |||||||||
Net Premiums Earned - insurance | 16,178 | 16,889 | ||||||||||
Impact of commutations and reinsurance | (22,264 | ) | — | |||||||||
Total Net Premiums Earned - insurance | $ | (6,086 | ) | $ | 16,889 | |||||||
Refundings included in earned premium | $ | 8,224 | $ | 4,831 | ||||||||
Net premiums earned - derivatives (1) | $ | 8,648 | $ | 10,883 | ||||||||
Claims paid: | ||||||||||||
Trade credit reinsurance | $ | 111 | $ | (24 | ) | |||||||
Financial Guaranty | 8,889 | 290 | ||||||||||
Total | $ | 9,000 | $ | 266 | ||||||||
(1) Included in change in fair value of derivative instruments. |
||||||||||||
The impact of the Assured Transaction in Q1 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 | |||||
Increase in amortization of policy acquisition costs | (15.7 | ) | ||||
Decrease in pre-tax income | $ | (36.5 | ) | |||
|
||||||
Balance Sheet |
||||||
Decrease in: | ||||||
Cash | $ | 108.3 | ||||
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 | 26.0 | |||||
Radian Group Inc. and Subsidiaries | ||||||||||||||||||
Financial Guaranty Supplemental Information | ||||||||||||||||||
Exhibit F | ||||||||||||||||||
March 31 | December 31 | March 31 | ||||||||||||||||
($ in thousands, except ratios) |
2012 | 2011 | 2011 | |||||||||||||||
Statutory Information: |
||||||||||||||||||
Capital and surplus | $ | 1,099,955 | $ | 974,874 | $ | 1,050,208 | ||||||||||||
Contingency reserve | 323,418 | 421,406 | 397,930 | |||||||||||||||
Qualified statutory capital | 1,423,373 | 1,396,280 | 1,448,138 | |||||||||||||||
Unearned premium reserve | 314,289 | 448,669 | 506,566 | |||||||||||||||
Loss and loss expense reserve | 158,985 | 161,287 | 81,743 | |||||||||||||||
Total statutory policyholders' reserves | 1,896,647 | 2,006,236 | 2,036,447 | |||||||||||||||
Present value of installment premiums | 133,035 | 148,641 | 193,424 | |||||||||||||||
Total statutory claims paying resources | $ | 2,029,682 | $ | 2,154,877 | $ | 2,229,871 | ||||||||||||
Net debt service outstanding | $ | 55,762,116 | $ | 88,202,630 | $ | 98,976,819 | ||||||||||||
Capital leverage ratio (1) | 39 | 63 | 68 | |||||||||||||||
Claims paying leverage ratio (2) | 27 | 41 | 44 | |||||||||||||||
Net par outstanding by product: | ||||||||||||||||||
Public finance direct | $ | 11,563,195 | $ | 13,838,427 | $ | 15,324,283 | ||||||||||||
Public finance reinsurance | 5,811,922 | 19,097,057 | 21,349,837 | |||||||||||||||
Structured direct | 26,370,156 | 34,760,869 | 39,078,572 | |||||||||||||||
Structured reinsurance | 856,594 | 1,492,859 | 1,760,573 | |||||||||||||||
Total (3) | $ | 44,601,867 | (4 | ) | $ | 69,189,212 | $ | 77,513,265 | ||||||||||
(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 $0.7 billion, $1.4 billion and $2.0 billion at March 31, 2012, December 31, 2011, and March 31, 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) | $15.6 billion reduction in par in connection with the Assured Transaction and $8.3 billion reduction in par in connection with CDO terminations. | |
Radian Group Inc. and Subsidiaries | ||||||||||||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||||||||||||
Exhibit G | ||||||||||||||||||||||
Quarter Ended | ||||||||||||||||||||||
March 31 | ||||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
($ in millions) |
$ | % | $ | % | ||||||||||||||||||
Primary new insurance written |
||||||||||||||||||||||
Prime | $ | 6,460 | 99.9 | % | $ | 2,583 | 99.9 | % | ||||||||||||||
Alt-A | — | — | 1 | — | ||||||||||||||||||
A minus and below | 5 | 0.1 | % | 2 | 0.1 | % | ||||||||||||||||
Total Flow | $ | 6,465 | 100.0 | % | $ | 2,586 | 100.0 | % | ||||||||||||||
Total primary new insurance written by FICO score |
||||||||||||||||||||||
>=740 | $ | 4,920 | 76.1 | % | $ | 2,081 | 80.5 | % | ||||||||||||||
680-739 | 1,400 | 21.7 | % | 502 | 19.4 | % | ||||||||||||||||
620-679 | 145 | 2.2 | % | 3 | 0.1 | % | ||||||||||||||||
Total Flow | $ | 6,465 | 100.0 | % | $ | 2,586 | 100.0 | % | ||||||||||||||
Percentage of primary new insurance written |
||||||||||||||||||||||
Refinances | 47 | % | 51 | % | ||||||||||||||||||
LTV | ||||||||||||||||||||||
95.01% and above | 1.8 | % | 1.2 | % | ||||||||||||||||||
90.01% to 95.00% | 38.7 | % | 30.9 | % | ||||||||||||||||||
ARMS | ||||||||||||||||||||||
Less than 5 years | <1% | <1% | ||||||||||||||||||||
5 years and longer | 2.6 | % | 4.9 | % | ||||||||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||||||||||||
Exhibit H | ||||||||||||||||||||||
March 31 | March 31 | |||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
($ in millions) |
$ | % | $ | % | ||||||||||||||||||
Primary insurance in force |
||||||||||||||||||||||
Flow | $ | 115,127 | 90.3 | % | $ | 113,853 | 89.0 | % | ||||||||||||||
Structured | 12,399 | 9.7 | % | 14,100 | 11.0 | % | ||||||||||||||||
Total Primary | $ | 127,526 | 100.0 | % | $ | 127,953 | 100.0 | % | ||||||||||||||
Prime | $ | 108,507 | 85.1 | % | $ | 105,645 | 82.6 | % | ||||||||||||||
Alt-A | 11,828 | 9.3 | % | 14,023 | 10.9 | % | ||||||||||||||||
A minus and below | 7,191 | 5.6 | % | 8,285 | 6.5 | % | ||||||||||||||||
Total Primary | $ | 127,526 | 100.0 | % | $ | 127,953 | 100.0 | % | ||||||||||||||
Primary risk in force |
||||||||||||||||||||||
Flow | $ | 28,348 | 91.3 | % | $ | 27,981 | 90.3 | % | ||||||||||||||
Structured | 2,691 | 8.7 | % | 3,008 | 9.7 | % | ||||||||||||||||
Total Primary | $ | 31,039 | 100.0 | % | $ | 30,989 | 100.0 | % | ||||||||||||||
Flow | ||||||||||||||||||||||
Prime | $ | 24,962 | 88.1 | % | $ | 23,963 | 85.6 | % | ||||||||||||||
Alt-A | 2,104 | 7.4 | % | 2,510 | 9.0 | % | ||||||||||||||||
A minus and below | 1,282 | 4.5 | % | 1,508 | 5.4 | % | ||||||||||||||||
Total Flow | $ | 28,348 | 100.0 | % | $ | 27,981 | 100.0 | % | ||||||||||||||
Structured | ||||||||||||||||||||||
Prime | $ | 1,570 | 58.3 | % | $ | 1,753 | 58.3 | % | ||||||||||||||
Alt-A | 608 | 22.6 | % | 692 | 23.0 | % | ||||||||||||||||
A minus and below | 513 | 19.1 | % | 563 | 18.7 | % | ||||||||||||||||
Total Structured | $ | 2,691 | 100.0 | % | $ | 3,008 | 100.0 | % | ||||||||||||||
Total | ||||||||||||||||||||||
Prime | $ | 26,532 | 85.5 | % | $ | 25,716 | 83.0 | % | ||||||||||||||
Alt-A | 2,712 | 8.7 | % | 3,202 | 10.3 | % | ||||||||||||||||
A minus and below | 1,795 | 5.8 | % | 2,071 | 6.7 | % | ||||||||||||||||
Total Primary | $ | 31,039 | 100.0 | % | $ | 30,989 | 100.0 | % | ||||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||||||||||||
Exhibit I | ||||||||||||||||||||||
March 31 | March 31 | |||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
($ in millions) |
$ | % | $ | % | ||||||||||||||||||
Total primary risk in force by FICO score |
||||||||||||||||||||||
Flow | ||||||||||||||||||||||
>=740 | $ | 12,889 | 45.5 | % | $ | 11,128 | 39.8 | % | ||||||||||||||
680-739 | 9,184 | 32.4 | % | 9,611 | 34.3 | % | ||||||||||||||||
620-679 | 5,328 | 18.8 | % | 6,131 | 21.9 | % | ||||||||||||||||
<=619 | 947 | 3.3 | % | 1,111 | 4.0 | % | ||||||||||||||||
Total Flow | $ | 28,348 | 100.0 | % | $ | 27,981 | 100.0 | % | ||||||||||||||
Structured | ||||||||||||||||||||||
>=740 | $ | 712 | 26.5 | % | $ | 803 | 26.7 | % | ||||||||||||||
680-739 | 781 | 29.0 | % | 874 | 29.1 | % | ||||||||||||||||
620-679 | 721 | 26.8 | % | 807 | 26.8 | % | ||||||||||||||||
<=619 | 477 | 17.7 | % | 524 | 17.4 | % | ||||||||||||||||
Total Structured | $ | 2,691 | 100.0 | % | $ | 3,008 | 100.0 | % | ||||||||||||||
Total | ||||||||||||||||||||||
>=740 | $ | 13,601 | 43.8 | % | $ | 11,931 | 38.5 | % | ||||||||||||||
680-739 | 9,965 | 32.1 | % | 10,485 | 33.8 | % | ||||||||||||||||
620-679 | 6,049 | 19.5 | % | 6,938 | 22.4 | % | ||||||||||||||||
<=619 | 1,424 | 4.6 | % | 1,635 | 5.3 | % | ||||||||||||||||
Total Primary | $ | 31,039 | 100.0 | % | $ | 30,989 | 100.0 | % | ||||||||||||||
Total primary risk in force by LTV |
||||||||||||||||||||||
85.00% and below | $ | 2,819 | 9.1 | % | $ | 2,819 | 9.1 | % | ||||||||||||||
85.01% to 90.00% | 11,983 | 38.6 | % | 11,942 | 38.6 | % | ||||||||||||||||
90.01% to 95.00% | 11,072 | 35.7 | % | 10,391 | 33.5 | % | ||||||||||||||||
95.01% and above | 5,165 | 16.6 | % | 5,837 | 18.8 | % | ||||||||||||||||
Total | $ | 31,039 | 100.0 | % | $ | 30,989 | 100.0 | % | ||||||||||||||
Total primary risk in force by policy year |
||||||||||||||||||||||
2005 and prior | $ | 6,574 | 21.2 | % | $ | 7,874 | 25.4 | % | ||||||||||||||
2006 | 3,057 | 9.8 | % | 3,549 | 11.5 | % | ||||||||||||||||
2007 | 6,722 | 21.7 | % | 7,772 | 25.1 | % | ||||||||||||||||
2008 | 5,042 | 16.2 | % | 5,740 | 18.5 | % | ||||||||||||||||
2009 | 2,511 | 8.1 | % | 3,004 | 9.6 | % | ||||||||||||||||
2010 | 2,147 | 6.9 | % | 2,469 | 8.0 | % | ||||||||||||||||
2011 | 3,463 | 11.2 | % | 581 | 1.9 | % | ||||||||||||||||
2012 | 1,523 | 4.9 | % | — | — | |||||||||||||||||
Total | $ | 31,039 | 100.0 | % | $ | 30,989 | 100.0 | % | ||||||||||||||
Radian Group Inc. and Subsidiaries | |||||||||||||||||||||||
Mortgage Insurance Supplemental Information | |||||||||||||||||||||||
Exhibit J | |||||||||||||||||||||||
March 31 | March 31 | ||||||||||||||||||||||
2012 | 2011 | ||||||||||||||||||||||
($ in millions) |
$ | % | $ | % | |||||||||||||||||||
Percentage of primary risk in force |
|||||||||||||||||||||||
Refinances | 32 | % | 32 | % | |||||||||||||||||||
ARMS | |||||||||||||||||||||||
Less than 5 years | 5 | % | 6 | % | |||||||||||||||||||
5 years and longer | 6 | % | 7 | % | |||||||||||||||||||
Pool risk in force |
|||||||||||||||||||||||
Prime | $ | 1,505 | 76.8 | % | $ | 1,753 | 75.3 | % | |||||||||||||||
Alt-A | 117 | 6.0 | % | 139 | 6.0 | % | |||||||||||||||||
A minus and below | 338 | 17.2 | % | 437 | 18.7 | % | |||||||||||||||||
Total | $ | 1,960 | 100.0 | % | $ | 2,329 | 100.0 | % | |||||||||||||||
Total pool risk in force by policy year |
|||||||||||||||||||||||
2005 and prior | $ | 1,757 | 89.6 | % | $ | 1,943 | 83.4 | % | |||||||||||||||
2006 | 87 | 4.4 | % | 165 | 7.1 | % | |||||||||||||||||
2007 | 99 | 5.1 | % | 179 | 7.7 | % | |||||||||||||||||
2008 | 17 | 0.9 | % | 42 | 1.8 | % | |||||||||||||||||
Total pool risk in force | $ | 1,960 | 100.0 | % | $ | 2,329 | 100.0 | % | |||||||||||||||
Other risk in force |
|||||||||||||||||||||||
Second-lien | |||||||||||||||||||||||
1st loss | $ | 96 | $ | 108 | |||||||||||||||||||
2nd loss | 27 | 76 | |||||||||||||||||||||
NIMS | 15 | 69 | |||||||||||||||||||||
1st loss-Hong Kong primary mortgage insurance | 55 | 104 | |||||||||||||||||||||
Total other risk in force | $ | 193 | $ | 357 | |||||||||||||||||||
Risk to capital ratio-Radian Guaranty only | 20.6:1 |
(1) |
|
|
|
20.3:1 | |||||||||||||||||
(1) Preliminary | |||||||||||||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||
Exhibit K | ||||||||||||
Quarter Ended |
||||||||||||
March 31 | ||||||||||||
($ in thousands) |
2012 | 2011 | ||||||||||
Net claims paid | ||||||||||||
Prime | $ | 127,101 | $ | 208,195 | ||||||||
Alt-A | 36,651 | 75,130 | ||||||||||
A minus and below | 26,080 | 44,585 | ||||||||||
Total primary claims paid | 189,832 | 327,910 | ||||||||||
Pool | 24,926 | 34,358 | ||||||||||
Second-lien and other | 3,583 | 2,883 | ||||||||||
Subtotal | 218,341 | 365,151 | ||||||||||
Impact of captive terminations | (148 | ) | — | |||||||||
Total | $ | 218,193 | $ | 365,151 | ||||||||
Average claim paid (1) | ||||||||||||
Prime | $ | 48.6 | $ | 47.8 | ||||||||
Alt-A | 59.4 | 59.6 | ||||||||||
A minus and below | 40.6 | 37.1 | ||||||||||
Total primary average claims paid | 49.0 | 48.1 | ||||||||||
Pool | 67.7 | 69.0 | ||||||||||
Second-lien and other | 26.9 | 30.7 | ||||||||||
Total | $ | 49.9 | $ | 49.3 | ||||||||
Average primary claim paid (2) (3) | $ | 52.0 | $ | 54.3 | ||||||||
Average total claim paid (2) (3) | $ | 52.5 | $ | 55.0 | ||||||||
Loss ratio - GAAP basis | 135.3 | % | 222.4 | % | ||||||||
Expense ratio - GAAP basis | 25.9 | % | 23.8 | % | ||||||||
161.2 | % | 246.2 | % | |||||||||
Reserve for losses by category | ||||||||||||
Prime | $ | 1,776,426 | $ | 1,684,039 | ||||||||
Alt-A | 603,998 | 704,751 | ||||||||||
A minus and below | 369,006 | 403,248 | ||||||||||
Reinsurance recoverable (4) | 118,071 | 192,258 | ||||||||||
Total primary reserves | 2,867,501 | 2,984,296 | ||||||||||
Pool insurance | 354,133 | 531,903 | ||||||||||
Total 1st lien reserves | 3,221,634 | 3,516,199 | ||||||||||
Second lien | 9,243 | 26,470 | ||||||||||
Other | 61 | 128 | ||||||||||
Total reserves | $ | 3,230,938 | $ | 3,542,797 | ||||||||
1st lien reserve per default (5) | ||||||||||||
Primary reserve per primary default | $ | 27,833 | $ | 25,535 | ||||||||
Pool reserve per pool default (6) | 17,580 | 18,314 | ||||||||||
Total 1st lien reserve per default | 26,156 | 24,098 | ||||||||||
(1) | Calculated net of reinsurance recoveries and without giving effect to the impact of first-lien, second-lien and captive terminations. | |
(2) | Calculated without giving effect to the impact of terminations of captive reinsurance 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 March 31, 2012 and 2011, would be $27,299 and $29,745, respectively. | |
Radian Group Inc. and Subsidiaries | |||||||||||||||
Mortgage Insurance Supplemental Information | |||||||||||||||
Exhibit L | |||||||||||||||
March 31 | December 31 | March 31 | |||||||||||||
2012 | 2011 | 2011 | |||||||||||||
Default Statistics | |||||||||||||||
Primary Insurance: | |||||||||||||||
Flow | |||||||||||||||
Prime |
|||||||||||||||
Number of insured loans | 575,769 | 569,190 | 576,388 | ||||||||||||
Number of loans in default | 60,785 | 65,238 | 66,615 | ||||||||||||
Percentage of loans in default | 10.56 | % | 11.46 | % | 11.56 | % | |||||||||
Alt-A |
|||||||||||||||
Number of insured loans | 42,591 | 44,355 | 49,866 | ||||||||||||
Number of loans in default | 13,642 | 14,481 | 16,720 | ||||||||||||
Percentage of loans in default | 32.03 | % | 32.65 | % | 33.53 | % | |||||||||
A minus and below |
|||||||||||||||
Number of insured loans | 39,461 | 40,884 | 45,522 | ||||||||||||
Number of loans in default | 12,241 | 13,560 | 14,713 | ||||||||||||
Percentage of loans in default | 31.02 | % | 33.17 | % | 32.32 | % | |||||||||
Total Flow | |||||||||||||||
Number of insured loans | 657,821 | 654,429 | 671,776 | ||||||||||||
Number of loans in default | 86,668 | 93,279 | 98,048 | ||||||||||||
Percentage of loans in default | 13.18 | % | 14.25 | % | 14.60 | % | |||||||||
Structured | |||||||||||||||
Prime |
|||||||||||||||
Number of insured loans |
40,367 | 41,248 | 44,700 | ||||||||||||
Number of loans in default | 5,856 | 6,308 | 6,519 | ||||||||||||
Percentage of loans in default | 14.51 | % | 15.29 | % | 14.58 | % | |||||||||
Alt-A |
|||||||||||||||
Number of insured loans | 17,977 | 18,484 | 20,315 | ||||||||||||
Number of loans in default | 5,251 | 5,563 | 6,380 | ||||||||||||
Percentage of loans in default | 29.21 | % | 30.10 | % | 31.41 | % | |||||||||
A minus and below |
|||||||||||||||
Number of insured loans | 15,171 | 15,477 | 16,589 | ||||||||||||
Number of loans in default | 5,252 | 5,711 | 5,949 | ||||||||||||
Percentage of loans in default | 34.62 | % | 36.90 | % | 35.86 | % | |||||||||
Total Structured | |||||||||||||||
Number of insured loans | 73,515 | 75,209 | 81,604 | ||||||||||||
Number of loans in default | 16,359 | 17,582 | 18,848 | ||||||||||||
Percentage of loans in default | 22.25 | % | 23.38 | % | 23.10 | % | |||||||||
Total Primary Insurance |
|||||||||||||||
Prime |
|||||||||||||||
Number of insured loans | 616,136 | 610,438 | 621,088 | ||||||||||||
Number of loans in default | 66,641 | 71,546 | 73,134 | ||||||||||||
Percentage of loans in default | 10.82 | % | 11.72 | % | 11.78 | % | |||||||||
Alt-A |
|||||||||||||||
Number of insured loans | 60,568 | 62,839 | 70,181 | ||||||||||||
Number of loans in default | 18,893 | 20,044 | 23,100 | ||||||||||||
Percentage of loans in default | 31.19 | % | 31.90 | % | 32.91 | % | |||||||||
A minus and below |
|||||||||||||||
Number of insured loans | 54,632 | 56,361 | 62,111 | ||||||||||||
Number of loans in default | 17,493 | 19,271 | 20,662 | ||||||||||||
Percentage of loans in default | 32.02 | % | 34.19 | % | 33.27 | % | |||||||||
Total Primary | |||||||||||||||
Number of insured loans | 731,336 | 729,638 | 753,380 | ||||||||||||
Number of loans in default | 103,027 | 110,861 | 116,896 | ||||||||||||
Percentage of loans in default | 14.09 | % | 15.19 | % | 15.52 | % | |||||||||
Pool insurance | |||||||||||||||
Number of loans in default | 20,144 | 21,685 | 29,044 | ||||||||||||
Radian Group Inc. and Subsidiaries | ||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||
Exhibit M | ||||||||||||
Quarter Ended | ||||||||||||
March 31 | ||||||||||||
($ in thousands) |
2012 | 2011 | ||||||||||
Net Premiums Written |
||||||||||||
Primary and Pool Insurance | $ | 196,321 | $ | 180,257 | ||||||||
Second-lien | 511 | 620 | ||||||||||
International | 21 | (31 | ) | |||||||||
Total Net Premiums Written - Insurance | $ | 196,853 | $ | 180,846 | ||||||||
Net Premiums Earned |
||||||||||||
Primary and Pool Insurance | $ | 172,481 | $ | 183,469 | ||||||||
Second-lien | 511 | 620 | ||||||||||
International | 459 | 2,045 | ||||||||||
Total Net Premiums Earned - Insurance | $ | 173,451 | $ | 186,134 | ||||||||
1st Lien Captives |
||||||||||||
Premiums ceded to captives | $ | 6,429 | $ | 7,587 | ||||||||
% of total premiums | 3.6 | % | 3.9 | % | ||||||||
IIF included in captives (1) | 8.4 | % | 10.2 | % | ||||||||
RIF included in captives (1) | 8.2 | % | 10.1 | % | ||||||||
Persistency (twelve months ended March 31) | 84.5 | % | 83.0 | % | ||||||||
(1) | Radian reinsures the middle layer risk positions, while retaining a significant portion of the total risk comprising the first loss and most remote risk positions. | |
Radian Group Inc. and Subsidiaries | ||||||||||||||||||||||
Mortgage Insurance Supplemental Information | ||||||||||||||||||||||
Modified Pool (1) | ||||||||||||||||||||||
Exhibit N | ||||||||||||||||||||||
March 31 | March 31 | |||||||||||||||||||||
2012 | 2011 | |||||||||||||||||||||
($ in millions) |
$ | % | $ | % | ||||||||||||||||||
Modified pool risk in force by policy year |
||||||||||||||||||||||
2005 and prior | $ | 192 | 72.4 | % | $ | 203 | 68.1 | % | ||||||||||||||
2006 |
30 | 11.3 | % | 37 | 12.4 | % | ||||||||||||||||
2007 | 37 | 14.0 | % | 51 | 17.1 | % | ||||||||||||||||
2008 | 6 | 2.3 | % | 7 | 2.4 | % | ||||||||||||||||
Total | $ | 265 | 100.0 | % | $ | 298 | 100.0 | % | ||||||||||||||
Modified pool risk in force by product |
||||||||||||||||||||||
Prime | $ | 80 | 30.2 | % | $ | 87 | 29.2 | % | ||||||||||||||
Alt-A | 168 | 63.4 | % | 192 | 64.4 | % | ||||||||||||||||
A minus and below | 17 | 6.4 | % | 19 | 6.4 | % | ||||||||||||||||
Total | $ | 265 | 100.0 | % | $ | 298 | 100.0 | % | ||||||||||||||
Modified pool insurance in force by product |
||||||||||||||||||||||
Prime | $ | 883 | 31.3 | % | $ | 1,065 | 31.5 | % | ||||||||||||||
Alt-A | 1,804 | 63.8 | % | 2,163 | 63.9 | % | ||||||||||||||||
A minus and below | 139 | 4.9 | % | 157 | 4.6 | % | ||||||||||||||||
Total | $ | 2,826 | 100.0 | % | $ | 3,385 | 100.0 | % | ||||||||||||||
Reserve for losses - modified pool (in thousands) | $ | 59,360 | $ | 79,571 | ||||||||||||||||||
Default Statistics: |
||||||||||||||||||||||
Modified pool: | ||||||||||||||||||||||
Total modified pool |
||||||||||||||||||||||
Number of insured loans | 16,930 | 19,424 | ||||||||||||||||||||
Number of loans in default | 3,287 | 3,963 | ||||||||||||||||||||
Percentage of loans in default | 19.42 | % | 20.40 | % | ||||||||||||||||||
(1) Included in primary insurance amounts. |
||||||||||||||||||||||
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:
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, 2011, and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.
CONTACT:
Radian Group Inc.
Emily Riley, 215-231-1035
emily.riley@radian.biz