Printer Friendly Version View printer-friendly version
Radian Reports Fourth Quarter Net Loss of $618 Million
                  Company Maintains Strong Capital Position

PHILADELPHIA, Feb. 15 /PRNewswire-FirstCall/ -- Radian Group Inc. (NYSE: RDN) today reported a net loss of $618 million and a diluted net loss per share of $7.74 for the fourth quarter, ended December 31, 2007. For the full year ended December 31, 2007, Radian reported a net loss of $1.2 billion and a diluted net loss per share of $14.92. Book value per share at December 31, 2007 was $35.10, after the impact of the third and fourth quarter 2007 losses, driven primarily by the C-BASS write-down, credit losses, higher reserves and mark-to-market adjustments.

"2007 was a year of great change for Radian, and I am proud that our team was able to overcome the challenges of unwinding the merger with MGIC while maintaining a solid balance sheet and retaining mortgage customer and GSE confidence," said S.A. Ibrahim, Chief Executive Officer of Radian. "While our disappointing 2007 results clearly illustrate the challenges of the mortgage market, our franchise continues to be strong, which is a testament to the skills and dedication of our workforce."

In the mortgage insurance business, paid claims in the fourth quarter were in-line with the Company's guidance. During the quarter, mortgage insurance loss reserves continued to increase, reflecting the credit, housing and overall economic environment. Radian ended the year with $1.3 billion in mortgage insurance loss reserves.

"We have come through a difficult year and the environment continues to be very challenging," added Mr. Ibrahim. "These challenges will remain with us for the near-term and may intensify, so we are looking at various scenarios and responses. In considering the book value of our company, we think it is important to take into consideration the significant embedded value within our Financial Guaranty business, as well as our ownership stake in Sherman."

"Our claims paying resources in both business segments are strong and we stand to benefit from a stable and well-capitalized financial guaranty business," concluded Mr. Ibrahim.

The market value of Radian's investment portfolio at year-end was $6.41 billion compared to $5.75 billion a year ago.

    The key financial highlights of the quarter and year ended December 31,
2007, are as follows:


                                             Total    Per Share
    9/30/2007 Book Value                     $3.4B       $42.86

                               Pre-tax     After-tax  BV per share    EPS
                                             impact      impact      impact
    C-BASS                      ($50)        ($33)      ($0.41)     ($0.41)
    Change in Fair Value of
     Derivatives*               (459)        (298)       (3.71)      (3.73)
    Mortgage Insurance Incurred
     Losses                     (630)        (410)       (5.10)      (5.13)
    Second Lien Premium
     Deficiency                  (41)         (27)       (0.34)      (0.34)
    FG Credit Loss for CDO of
     ABS transaction             (50)         (33)       (0.41)      (0.41)
    All Other (Premiums,
     Investment Income and
     Expenses)                                201         2.21

    12/31/2007 Book Value                   $2.8B       $35.10
    Quarter Ended 12/31/2007 EPS                                    ($7.74)


    *Includes ($120 Million) related to non-corporate CDO transactions,
     including a small number of AAA-rated CDOs of ABS and CMBS.  This mark
     remains subject to possible adjustment.

Radian will discuss each of these items in its conference call today, Friday, February 15, 2008, at 10:00 a.m. Eastern time. The conference call will be broadcast live over the internet at http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or at http://www.radian.biz News. The call may also be accessed by dialing 866-254-5941 inside the U.S., or 612-234-9959 for international callers, using passcode 907669 or by referencing Radian.

A replay of the webcast will be available at 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 two and a half hours after the call ends for 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 907669.

Radian Group Inc. is a global credit risk management company headquartered in Philadelphia with significant operations in New York and London. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets worldwide, primarily through credit insurance products. The company also provides credit enhancement for public finance and other corporate and consumer assets on both a direct and reinsurance basis and holds strategic interests in credit-based consumer asset businesses. Additional information may be found at www.radian.biz

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

    For the media:  Rick Gillespie - phone: 215 231.1061
                    Email: rick.gillespie@radian.biz

                    Steve Frankel / Tim Lynch
                    Joele Frank, Wilkinson Brimmer Katcher
                    212 355 4449


    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/investors/financial/corporate.aspx.

    Exhibit A:  Condensed Consolidated Statements of Income
    Exhibit B:  Condensed Consolidated Balance Sheets
    Exhibit C:  Segment Information Quarter Ended December 31, 2007
    Exhibit D:  Segment Information Quarter Ended December 31, 2006
    Exhibit E:  Segment Information Twelve Months Ended December 31, 2007
    Exhibit F:  Segment Information Twelve Months Ended December 31, 2006
    Exhibit G:  Financial Guaranty Insurance Supplemental Information -
                Quarter Ended and as of December 31, 2007
    Exhibit H:  Financial Guaranty Insurance Supplemental Information -
                Quarter Ended and as of December 31, 2007
    Exhibit I:  Mortgage Insurance Supplemental Information: New Insurance
                Written and Risk 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 and
                Reserves
    Exhibit M:  Mortgage Insurance Supplemental Information: Defaults
    Exhibit N:  Mortgage Insurance Supplemental Information: Net Premiums
                Written and Earned, Smart Home, Captives and Persistency
    Exhibit O:  Mortgage Insurance Supplemental Information: ALT A
    Exhibit P:  Financial Services Supplemental Information



    Radian Group Inc. and Subsidiaries
    Condensed Consolidated Statements of Income
    Exhibit A

                                   Quarter Ended            Year Ended
                                   December 31              December 31
                                2007          2006       2007         2006
    (In thousands, except
     per-share data)

    Revenues:
    Net premiums written       $309,620     $278,700   $1,184,885  $1,111,985

    Net premiums earned -
     insurance                 $234,368     $217,570     $912,281    $907,042
    Net premiums earned -
     credit derivatives          26,821       31,349      126,329     108,804
    Net premiums earned -
     total                      261,189      248,919    1,038,610   1,015,846
    Net investment income        67,493       60,222      256,098     234,345
    Net gains (losses) on
     securities                    (673)      11,255       53,606      40,842
    Change in fair value of
     derivative instruments    (458,512)      23,097   (1,191,785)     16,066
    Gain on sale of
     affiliates                       -            -      181,734           -
    Other income                    192        4,391       11,711      20,847
      Total revenues           (130,311)     347,884      349,974   1,327,946


    Expenses:
    Provision for losses        687,855       84,389    1,299,363     369,278
    Provision for second-lien
     premium deficiency          40,470            -      195,646           -
    Policy acquisition costs     24,980       31,074      113,175     111,609
    Other operating expenses     40,700       61,552      178,171     242,634
    Merger expenses                   -            -       14,001           -
    Interest expense             14,258       12,256       53,068      48,149
      Total expenses            808,263      189,271    1,853,424     771,670

    Equity in net income
     (loss) of affiliates       (39,896)      70,745     (416,541)    256,993

    Pretax (loss) income       (978,470)     229,358   (1,919,991)    813,269
    Income tax (benefit)
     provision                 (360,444)      70,988     (732,651)    231,097

    Net (loss) income         $(618,026)    $158,370  $(1,187,340)   $582,172

    Diluted net (loss) income
     per share (1)               $(7.74)       $1.96      $(14.92)      $7.08


    (1) Weighted average
     shares outstanding (in
     thousands)

    Average common shares
     outstanding                 79,850       79,923       79,556      81,338
    Increase in shares-
     potential exercise of
     options-diluted basis            -          770            -         923
    Weighted average shares
     outstanding
     (in thousands)              79,850       80,693       79,556      82,261

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



    Radian Group Inc. and Subsidiaries
    Condensed Consolidated Balance Sheets
    Exhibit B

    (In thousands, except share and per-share   December 31       December 31
      data)                                        2007               2006

    Assets:
    Cash and investments                        $6,611,836         $5,803,228
    Investments in affiliates                      104,354            618,841
    Deferred policy acquisition costs              234,955            221,769
    Prepaid federal income taxes                   793,486            808,740
    Other assets                                   459,295            507,832

         Total assets                           $8,203,926         $7,960,410


    Liabilities and stockholders' equity:
    Unearned premiums                           $1,094,710           $943,687
    Reserve for losses and loss
     adjustment expenses                         1,598,756            842,283
    Reserve for second-lien premium
     deficiency                                    195,646                  -
    Long-term debt and other borrowings            948,093            747,770
    Current income taxes                           137,219                  -
    Deferred income taxes                           73,546          1,129,740
    Derivative liabilities                       1,150,479             31,739
    Other liabilities                              182,659            197,634

       Total liabilities                         5,381,108          3,892,853

    Common stock                                        97                 97
    Additional paid-in capital                     442,312            416,193
    Retained earnings                            2,284,150          3,489,290
    Accumulated other comprehensive income          96,259            161,977

       Total common stockholders' equity         2,822,818          4,067,557

         Total liabilities and stockholders'
          equity                                $8,203,926         $7,960,410

    Book value per share                            $35.10             $51.23



    Treasury Stock Repurchases
     (Year-to-Date for Periods Presented)

    Total number of shares repurchased             398,645          4,500,000
    Average price paid per share                    $57.25             $58.58
    Total cost of repurchased shares           $22,822,537       $263,600,341



    Radian Group Inc. and Subsidiaries
    Segment Information
    Quarter Ended December 31, 2007
    Exhibit C

                            Mortgage   Financial  Financial
     (In thousands)        Insurance    Guaranty   Services    Total
    Revenues:
    Net premiums written     $255,292     $54,328        $-    $309,620

    Net premiums earned -
     insurance               $200,430     $33,938        $-    $234,368
    Net premiums earned -
     credit derivatives        13,399      13,422         -      26,821
    Net premiums earned -
     total                    213,829      47,360         -     261,189
    Net investment income      38,970      28,505        18      67,493
    Net gains (losses) on
     securities                   131      (1,468)      664        (673)
    Change in fair value
     of derivative
     instruments              (61,882)   (396,630)        -    (458,512)
    Gain on sale of
     affiliates                     -           -         -           -
    Other income                1,980        (434)   (1,354)        192
    Total revenues            193,028    (322,667)     (672)   (130,311)

    Expenses:
    Provision for losses      629,582      58,273         -     687,855
    Provision for second-
     lien premium
     deficiency                40,470           -         -      40,470
    Policy acquisition
     costs                     13,806      11,174         -      24,980
    Other operating
     expenses                  34,654      12,053    (6,007)     40,700
    Merger expenses                 -           -         -           -
    Interest expense            7,942       5,974       342      14,258
    Total expenses            726,454      87,474    (5,665)    808,263

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

    Pretax loss              (533,426)   (410,136)  (34,908)   (978,470)

    Income tax benefit       (198,806)   (145,084)  (16,554)   (360,444)

    Net loss                $(334,620)  $(265,052) $(18,354)  $(618,026)

     Assets                $5,077,001  $3,020,835  $106,090  $8,203,926
     Total investments      3,815,618   2,595,431         -   6,411,049
     Deferred policy
      acquisition costs        62,266     172,689         -     234,955
     Reserve for losses
      and loss adjustment
      expenses              1,345,453     253,304         -   1,598,757
     Unearned premiums        364,775     729,935         -   1,094,710
     Stockholders' equity   1,590,832   1,111,218   120,768   2,822,818



    Radian Group Inc. and Subsidiaries
    Segment Information
    Quarter Ended December 31, 2006
    Exhibit D

                                 Mortgage   Financial  Financial
      (In thousands)            Insurance    Guaranty   Services    Total
     Revenues:
     Net premiums written         $202,362     $76,338        $-    $278,700

     Net premiums earned -
      insurance                   $186,507     $31,063        $-    $217,570
     Net premiums earned -
      credit derivatives            12,700      18,649         -      31,349
     Net premiums earned -
      total                        199,207      49,712         -     248,919
     Net investment income          34,947      25,268         7      60,222
     Net gains (losses) on
      securities                    11,956      (1,068)      367      11,255
     Change in fair value of
      derivative instruments         1,852      21,245         -      23,097
     Other income                    2,967          74     1,350       4,391
     Total revenues                250,929      95,231     1,724     347,884

     Expenses:
     Provision for losses           80,328       4,061         -      84,389
     Policy acquisition costs       20,628      10,446         -      31,074
     Other operating expenses       43,278      13,680     4,594      61,552
     Interest expense                6,581       4,278     1,397      12,256
     Total expenses                150,815      32,465     5,991     189,271

     Equity in net income of
      affiliates                         -           -    70,745      70,745

     Pretax income                 100,114      62,766    66,478     229,358

     Income tax provision           30,004      17,716    23,268      70,988

     Net income                    $70,110     $45,050   $43,210    $158,370

      Assets                    $4,626,850  $2,705,078  $628,482  $7,960,410
      Total investments          3,426,939   2,318,438         -   5,745,377
      Deferred policy
       acquisition costs            68,381     153,388         -     221,769
      Reserve for losses and
       loss adjustment expenses    653,236     189,047         -     842,283
      Unearned premiums            249,293     694,394         -     943,687
      Stockholders' equity       2,259,796   1,377,263   430,498   4,067,557



    Radian Group Inc. and Subsidiaries
    Segment Information
    Year Ended December 31, 2007
    Exhibit E

                                 Mortgage  Financial   Financial
      (In thousands)            Insurance   Guaranty   Services      Total
     Revenues:
     Net premiums written         $955,113   $229,772         $-   $1,184,885

     Net premiums earned -
      insurance                   $779,259   $133,022         $-     $912,281
     Net premiums earned -
      credit derivatives            64,263     62,066                 126,329
     Net premiums earned -
      total                        843,522    195,088          -    1,038,610
     Net investment income         148,253    107,665        180      256,098
     Net gains on securities        39,922     12,525      1,159       53,606
     Change in fair value of
      derivative instruments      (531,842)  (659,943)         -   (1,191,785)
     Gain on sale of affiliates          -          -    181,734      181,734
     Other income                   11,337        349         25       11,711
     Total revenues                511,192   (344,316)   183,098      349,974

     Expenses:
     Provision for losses        1,201,373     97,990          -    1,299,363
     Provision for second-lien
      premium deficiency           195,646          -          -      195,646
     Policy acquisition costs       67,750     45,425          -      113,175
     Other operating expenses      130,423     48,683       (935)     178,171
     Merger expenses                13,434        567          -       14,001
     Interest expense               27,901     19,840      5,327       53,068
     Total expenses              1,636,527    212,505      4,392    1,853,424

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

     Pretax loss                (1,125,335)  (556,816)  (237,840)  (1,919,991)

     Income tax benefit           (431,927)  (217,588)   (83,136)    (732,651)

     Net loss                    $(693,408) $(339,228) $(154,704) $(1,187,340)



    Radian Group Inc. and Subsidiaries
    Segment Information
    Year Ended December 31, 2006
    Exhibit F

                                     Mortgage Financial Financial
      (In thousands)                Insurance  Guaranty  Services    Total
     Revenues:
     Net premiums written            $849,111  $262,874        $-  $1,111,985

     Net premiums earned - insurance $774,752  $132,290        $-    $907,042
     Net premiums earned - credit
      derivatives                      37,263    71,541         -     108,804
     Net premiums earned - total      812,015   203,831         -   1,015,846
     Net investment income            138,310    95,895       140     234,345
     Net gains on securities           30,163     7,827     2,852      40,842
     Change in fair value of
      derivative instruments            3,682    12,384         -      16,066
     Other income                      13,075       692     7,080      20,847
     Total revenues                   997,245   320,629    10,072   1,327,946

     Expenses:
     Provision for losses             348,618    20,660         -     369,278
     Policy acquisition costs          64,964    46,645         -     111,609
     Other operating expenses         172,020    59,772    10,842     242,634
     Interest expense                  26,623    16,590     4,936      48,149
     Total expenses                   612,225   143,667    15,778     771,670

     Equity in net income of
      affiliates                            -         -   256,993     256,993

     Pretax income                    385,020   176,962   251,287     813,269

     Income tax provision             102,266    40,880    87,951     231,097

     Net income                      $282,754  $136,082  $163,336    $582,172



    Radian Group Inc.
    Financial Guaranty Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit G
                                    Quarter Ended         Year Ended
    ($ in thousands, except
      ratios)                        December  31        December  31
                                    2007     2006      2007      2006

    Net Premiums Written:
    Public finance direct          $11,461  $30,302   $60,117   $79,655
    Public finance reinsurance      19,739   20,526    86,821    81,065
    Structured direct                4,567    4,168    16,594    18,772
    Structured reinsurance           5,327    5,902    21,933    18,676
    Trade credit reinsurance           214      245     1,264     4,599
    Net premiums written -
     insurance                      41,308   61,143   186,729   202,767
    Net premiums written - credit
     derivatives                    13,020   15,195    43,043    60,107
    Total Net Premiums Written     $54,328  $76,338  $229,772  $262,874


    Net Premiums Earned:
    Public finance direct          $13,459   $9,136   $45,770   $32,517
    Public finance reinsurance      10,770    9,509    44,667    37,765
    Structured direct                3,878    4,757    17,325    19,446
    Structured reinsurance           5,461    5,467    22,957    21,086
    Trade credit reinsurance           370    2,194     2,303    21,476
    Net premiums earned -
     insurance                      33,938   31,063   133,022   132,290
    Net premiums earned - credit
     derivatives                    13,422   18,649    62,066    71,541
    Total Net Premiums Earned      $47,360  $49,712  $195,088  $203,831


    Refundings included in earned
     premium                        $7,492   $3,111   $23,309   $11,778

    Claims paid:
         Trade credit reinsurance   $1,557   $1,338    $8,579   $15,144
         Other financial guaranty   10,602      248    12,814     7,529
         Conseco                     2,667    3,513    11,449    15,763
           Total                   $14,826   $5,099   $32,842   $38,436

    Incurred losses:
         Trade credit reinsurance  $(2,967)    $(30) $(16,511)   $4,991
         Other financial guaranty   61,240    4,091   114,501    16,701
         Conseco                         -        -         -    (1,032) (2)
           Total                   $58,273   $4,061   $97,990   $20,660

    Loss ratio - GAAP Basis         123.0%     8.2%     50.2%     10.1%
    Expense ratio - GAAP Basis (1)   49.0%    48.5%     48.2%     52.2%
                                    172.0%    56.7%     98.4%     62.3%

    Net (receipts) payments under
     derivatives contracts           $(255)   $(729) $(31,188)  $63,548


    (1) Excludes merger expenses.
    (2) Resulted from favorable loss development



    Radian Group Inc.
    Financial Guaranty Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit H

    ($ in thousands, except ratios)            December 31       December 31
                                                    2007              2006

    Capital and surplus                         $1,158,537        $1,014,958
    Contingency reserve                            433,296           336,719
         Qualified statutory capital             1,591,833         1,351,677

    Unearned premium reserve                       886,024           829,340
    Loss and loss expense reserve                   61,038            96,829
         Total statutory policyholders'
          reserves                               2,538,895         2,277,846

    Present value of installment premiums          461,806           345,565
    Reinsurance and soft capital facilities        150,000           150,000
        Total statutory claims paying
         resources                              $3,150,701        $2,773,411

    Net debt service outstanding              $164,346,659      $143,728,116

    Capital leverage ratio (1)                         103               106
    Claims paying leverage ratio (2)                    52                52

    Net par outstanding by product:
        Public finance direct                  $18,228,946       $16,324,170
        Public finance reinsurance              43,822,781        37,488,972
        Structured direct                       47,878,168        44,960,360
        Structured reinsurance                   6,091,717         5,192,122
    Total                                     $116,021,612      $103,965,624

    Reinsurance business net par outstanding:
        Treaty                                         59%               59%
        Facultative                                    41%               41%

    Reserve for losses and LAE
       Specific                                    $26,791           $35,320
       Conseco                                      22,526            33,975
       Non-specific                                203,987           119,752
        Total                                     $253,304          $189,047


    (1) Net debt service outstanding divided by qualified statutory capital
    (2) Net debt service outstanding divided by total statutory claims paying
        resources



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit I

                                                      Quarter Ended
                                                       December 31
                                           2007        %      2006       %

    Primary New Insurance Written ($ in
     millions)
      Flow                                 $10,422    76.7%   $6,451    85.2%
      Structured                             3,174    23.3%    1,123    14.8%
    Total Primary                          $13,596   100.0%   $7,574   100.0%

    Flow
       Prime                                $8,629    82.8%   $4,608    71.4%
       Alt-A                                   832     8.0%    1,276    19.8%
       A minus and below                       961     9.2%      567     8.8%
    Total Flow                             $10,422   100.0%   $6,451   100.0%

    Structured
       Prime                                $1,795    56.6%     $341    30.4%
       Alt-A                                 1,378    43.4%      685    61.0%
       A minus and below                         1     0.0%       97     8.6%
    Total Structured                        $3,174   100.0%   $1,123   100.0%

    Total
       Prime                               $10,424    76.6%   $4,949    65.3%
       Alt-A                                 2,210    16.3%    1,961    25.9%
       A minus and below                       962     7.1%      664     8.8%
    Total Primary                          $13,596   100.0%   $7,574   100.0%

    Total Primary New Insurance Written
     by FICO Score
    ($ in millions)
    Flow
      <=619                                   $518     5.0%     $498     7.7%
      620-679                                2,830    27.1%    2,049    31.8%
      680-739                                3,914    37.6%    2,246    34.8%
      >=740                                  3,160    30.3%    1,658    25.7%
    Total Flow                             $10,422   100.0%   $6,451   100.0%

    Structured
      <=619                                     $-     0.0%      $98     8.7%
      620-679                                  185     5.8%      333    29.7%
      680-739                                  963    30.3%      428    38.1%
      >=740                                  2,026    63.9%      264    23.5%
    Total Structured                        $3,174   100.0%   $1,123   100.0%

    Total
      <=619                                   $518     3.8%     $596     7.9%
      620-679                                3,015    22.2%    2,382    31.4%
      680-739                                4,877    35.9%    2,674    35.3%
      >=740                                  5,186    38.1%    1,922    25.4%
    Total Primary                          $13,596   100.0%   $7,574   100.0%

    Percentage of primary new insurance
     written
     Refinances                                27%               38%
     95.01% LTV and above                      32%               24%
     ARMs
         Less than 5 years                      1%               16%
         5 years and longer                    14%                7%


    Primary risk written ($ in millions)
      Flow                                  $2,684    77.9%   $1,590    91.8%
      Structured                               763    22.1%      142     8.2%
    Total Primary                           $3,447   100.0%   $1,732   100.0%


    Pool risk written (In millions)            $34               $26

    Other risk written (In millions)
      Seconds
         1st loss                               $-                $4
         2nd loss                                -                27
      NIMs                                       -               264
      International
         1st loss-Hong Kong primary
          mortgage insurance                    34                34
         Reinsurance                            18                14
      Other
         Domestic credit default swaps           -                 -
    Total other risk written                   $52              $343



                                                     Year Ended
                                                     December 31
                                           2007      %      2006      %

    Primary New Insurance Written ($ in
     millions)
      Flow                                $40,335   70.6%  $25,364   63.2%
      Structured                           16,797   29.4%   14,753   36.8%
    Total Primary                         $57,132  100.0%  $40,117  100.0%

    Flow
       Prime                              $29,800   73.9%  $18,578   73.2%
       Alt-A                                6,847   17.0%    4,836   19.1%
       A minus and below                    3,688    9.1%    1,950    7.7%
    Total Flow                            $40,335  100.0%  $25,364  100.0%

    Structured
       Prime                               $3,436   20.5%   $4,000   27.1%
       Alt-A                               12,515   74.5%    9,222   62.5%
       A minus and below                      846    5.0%    1,531   10.4%
    Total Structured                      $16,797  100.0%  $14,753  100.0%

    Total
       Prime                              $33,236   58.2%  $22,578   56.3%
       Alt-A                               19,362   33.9%   14,058   35.0%
       A minus and below                    4,534    7.9%    3,481    8.7%
    Total Primary                         $57,132  100.0%  $40,117  100.0%

    Total Primary New Insurance Written
     by FICO Score
    ($ in millions)
    Flow
      <=619                                $2,348    5.8%   $1,603    6.3%
      620-679                              11,988   29.7%    7,693   30.3%
      680-739                              14,891   36.9%    9,210   36.4%
      >=740                                11,108   27.6%    6,858   27.0%
    Total Flow                            $40,335  100.0%  $25,364  100.0%

    Structured
      <=619                                  $538    3.2%   $1,545   10.5%
      620-679                               3,947   23.5%    4,303   29.2%
      680-739                               7,123   42.4%    5,760   39.0%
      >=740                                 5,189   30.9%    3,145   21.3%
    Total Structured                      $16,797  100.0%  $14,753  100.0%

    Total
      <=619                                $2,886    5.1%   $3,148    7.9%
      620-679                              15,935   27.9%   11,996   29.9%
      680-739                              22,014   38.5%   14,970   37.3%
      >=740                                16,297   28.5%   10,003   24.9%
    Total Primary                         $57,132  100.0%  $40,117  100.0%

    Percentage of primary new insurance
     written
     Refinances                               37%              35%
     95.01% LTV and above                     25%              15%
     ARMs
         Less than 5 years                    13%              24%
         5 years and longer                   11%              14%


    Primary risk written ($ in millions)
      Flow                                $10,325   85.3%   $6,386   82.0%
      Structured                            1,785   14.7%    1,404   18.0%
    Total Primary                         $12,110  100.0%   $7,790  100.0%


    Pool risk written (In millions)          $261             $359

    Other risk written (In millions)
      Seconds
         1st loss                              $9              $47
         2nd loss                              21              233
      NIMs                                    377              502
      International
         1st loss-Hong Kong primary
          mortgage insurance                  130               65
         Reinsurance                           67               21
      Other
         Domestic credit default swaps          -               32
    Total other risk written                 $604             $900



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit J

                                             December 31       December 31
                                            2007       %      2006       %
    Primary insurance in force ($ in
     millions)
      Flow                                 $105,246   73.6%   $83,529   73.3%
      Structured                             37,820   26.4%    30,374   26.7%
    Total Primary                          $143,066  100.0%  $113,903  100.0%

       Prime                                $93,577   65.4%   $76,854   67.5%
       Alt-A                                 37,031   25.9%    25,571   22.4%
       A minus and below                     12,458    8.7%    11,478   10.1%
    Total Primary                          $143,066  100.0%  $113,903  100.0%

    Primary risk in force ($ in millions)
      Flow                                  $26,531   83.9%   $20,724   81.9%
      Structured                              5,091   16.1%     4,587   18.1%
    Total Primary                           $31,622  100.0%   $25,311  100.0%

    Flow
      Prime                                 $20,616   77.7%   $16,283   78.6%
      Alt-A                                   3,810   14.4%     2,880   13.9%
      A minus and below                       2,105    7.9%     1,561    7.5%
    Total Flow                              $26,531  100.0%   $20,724  100.0%

    Structured
      Prime                                  $2,116   41.5%    $1,903   41.5%
      Alt-A                                   1,978   38.9%     1,354   29.5%
      A minus and below                         997   19.6%     1,330   29.0%
    Total Structured                         $5,091  100.0%    $4,587  100.0%

    Total
      Prime                                 $22,732   71.9%   $18,186   71.9%
      Alt-A                                   5,788   18.3%     4,234   16.7%
      A minus and below                       3,102    9.8%     2,891   11.4%
    Total Primary                           $31,622  100.0%   $25,311  100.0%

    Total Primary Risk in Force by FICO
     Score
    ($ in millions)
    Flow
      <=619                                  $1,639    6.2%    $1,342    6.5%
      620-679                                 8,059   30.4%     6,391   30.8%
      680-739                                 9,773   36.8%     7,556   36.5%
      >=740                                   7,060   26.6%     5,435   26.2%
    Total Flow                              $26,531  100.0%   $20,724  100.0%

    Structured
      <=619                                    $936   18.4%    $1,331   29.0%
      620-679                                 1,490   29.3%     1,619   35.3%
      680-739                                 1,488   29.2%     1,095   23.9%
      >=740                                   1,177   23.1%       542   11.8%
    Total Structured                         $5,091  100.0%    $4,587  100.0%

    Total
      <=619                                  $2,575    8.1%    $2,673   10.6%
      620-679                                 9,549   30.2%     8,010   31.6%
      680-739                                11,261   35.6%     8,651   34.2%
      >=740                                   8,237   26.1%     5,977   23.6%
    Total Primary                           $31,622  100.0%   $25,311  100.0%

    Percentage of primary risk in force
     Refinances                                 31%               33%
     95.01% LTV and above                       24%               18%
     ARMs
         Less than 5 years                      12%               19%
         5 years and longer                     10%                9%


    Pool risk in force ($ in millions)
    Prime                                    $2,111   70.2%    $2,182   72.9%
    Alt-A                                       293    9.8%       295    9.9%
    A minus and below                           600   20.0%       514   17.2%
    Total                                    $3,004  100.0%    $2,991  100.0%



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit K

                                              December 31      December 31
                                             2007      %      2006      %
     Total Primary Risk in Force by LTV
      ($ in millions)
       95.01% and above                    $7,529   23.8%   $4,441   17.6%
       90.01% to 95.00%                     9,674   30.6%    8,005   31.6%
       85.01% to 90.00%                    10,600   33.5%    9,062   35.8%
       85.00% and below                     3,819   12.1%    3,803   15.0%
    Total                                 $31,622  100.0%  $25,311  100.0%

     Total Primary Risk in Force by
      Policy Year ($ in millions)
        2003 and prior                     $5,521   17.5%   $7,113   28.1%
        2004                                3,350   10.6%    4,565   18.1%
        2005                                5,112   16.2%    6,538   25.8%
        2006                                6,016   19.0%    7,095   28.0%
        2007                               11,623   36.7%        -       -
    Total                                 $31,622  100.0%  $25,311  100.0%

     Total Pool Risk in Force by Policy
      Year ($ in millions)
        2003 and prior                     $1,723   57.4%   $1,758   58.8%
        2004                                  166    5.5%      290    9.7%
        2005                                  595   19.8%      651   21.7%
        2006                                  265    8.8%      292    9.8%
        2007                                  255    8.5%        -       -
    Total Pool risk in Force               $3,004  100.0%   $2,991  100.0%

    Other risk in force (In millions)
      Seconds
         1st loss                            $377             $592
         2nd loss                             548              610
      NIMs                                    604              592
      International
         1st loss-Hong Kong primary
          mortgage insurance                  465              335
         Reinsurance                          103               47
         Credit default swaps               8,202            7,897
      Other
         Domestic credit default swaps        212              212
         Financial guaranty wrap                -               37
    Total other risk in force             $10,511          $10,322


    Risk to capital ratio-STAT Basis        14.4:1           10.4:1
    Risk to capital ratio-STAT Basis
     excluding AAA-rated CDS                11.6:1            8.3:1



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit L
                                    Quarter Ended               Year Ended
                                     December 31                December 31
                                 2007           2006          2007      2006
    Direct claims paid
     (In thousands)
      Prime                     $53,203       $28,903      $164,155  $117,471
      Alt-A                      35,203        16,654       105,858    64,018
      A minus and below          46,966        25,996       150,098    93,662
      Seconds and other          29,295         9,590        89,269    38,204
    Total                      $164,667       $81,143      $509,380  $313,355

    Average claim paid (In
     thousands)
      Prime                       $35.0         $26.7         $31.2     $26.1
      Alt-A                        49.0          37.9          44.6      35.6
      A minus and below            36.5          30.2          33.2      28.3
      Seconds                      38.6          29.2          31.9      26.8
    Total                         $38.4         $29.9         $34.1     $28.4

    Loss ratio - GAAP Basis      294.4%         40.3%        142.4%     42.9%
    Expense ratio - GAAP
     Basis (2)                    22.7%         32.1%         23.5%     29.2%
                                 317.1%         72.4%        165.9%     72.1%

    Reserve for losses by
     category (In thousands):
       Prime                   $343,705      $198,133
          Alt-A                 450,106       136,411
          A minus and below     361,240       228,012
          Pool insurance         54,394        31,116
          Seconds               112,751        36,166
          Other                   1,268         1,635
    Reserve for losses, net   1,323,464       631,473
          Reinsurance
           recoverable           21,989 (1)    21,763 (1)
    Total                    $1,345,453      $653,236


    (1) Reinsurance recoverable on ceded losses.
    (2) Excludes merger expenses.



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit M
                                           December 31          December 31
                                               2007                 2006
    Default Statistics
    Primary insurance:

    Flow
     Prime
      Number of insured loans                 565,563              500,464
      Number of loans in default               20,632               15,141
      Percentage of loans in default            3.65%                3.03%

    Alt-A
      Number of insured loans                  74,559               63,469
      Number of loans in default                7,980                4,348
      Percentage of loans in default           10.70%                6.85%

    A minus and below
      Number of insured loans                  63,853               52,440
      Number of loans in default               10,087                7,250
      Percentage of loans in default           15.80%               13.83%

    Total Flow
      Number of insured loans                 703,975              616,373
      Number of loans in default               38,699               26,739
      Percentage of loans in default            5.50%                4.34%

    Structured
     Prime
      Number of insured loans                  64,789               62,680
      Number of loans in default                4,707                3,300
      Percentage of loans in default            7.27%                5.26%

    Alt-A
      Number of insured loans                  97,526               70,164
      Number of loans in default                8,783                3,647
      Percentage of loans in default            9.01%                5.20%

    A minus and below
      Number of insured loans                  28,747               36,597
      Number of loans in default                8,659                9,014
      Percentage of loans in default           30.12%               24.63%

    Total Structured
      Number of insured loans                 191,062              169,441
      Number of loans in default               22,149               15,961
      Percentage of loans in default           11.59%                9.42%

    Total Primary Insurance
     Prime
      Number of insured loans                 630,352              563,144
      Number of loans in default               25,339               18,441
      Percentage of loans in default            4.02%                3.27%

    Alt-A
      Number of insured loans                 172,085              133,633
      Number of loans in default               16,763                7,995
      Percentage of loans in default            9.74%                5.98%

    A minus and below
      Number of insured loans                  92,600               89,037
      Number of loans in default               18,746               16,264
      Percentage of loans in default           20.24%               18.27%

    Total Primary Insurance
      Number of insured loans                 895,037              785,814
      Number of loans in default               60,848 (1)           42,700 (1)
    Percentage of loans in default              6.80%                5.43%

    Pool insurance:
      Number of loans in default               26,526 (2)           18,681 (2)

    (1) Includes approximately 2,595 and 1,161 defaults at December 31, 2007
        and December 31, 2006 respectively, where reserves have not been
        established because no claim payment is currently anticipated.
    (2) Includes approximately 20,193 and 13,309 defaults at December 31,
        2007 and December 31, 2006, respectively, where reserves have not been
        established because no claim payment is currently anticipated.



    Radian Group Inc.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit N
                                         Quarter Ended         Year Ended
                                          December 31          December 31
                                        2007      2006       2007      2006

    Net Premiums Written
     (In thousands)
      Primary and Pool Insurance       $223,372  $162,875  $835,961  $723,213
      Seconds                             4,896    15,469    27,236    57,935
      International                      16,796    10,696    35,306    20,375
    Net premiums written - insurance    245,064   189,040   898,503   801,523
    Net premiums written - credit
     derivatives                         10,228    13,322    56,610    47,588
    Total Net Premiums Written         $255,292  $202,362  $955,113  $849,111

    Net Premiums Earned (In thousands)
      Primary and Pool Insurance       $189,170  $173,413  $730,966  $715,136
      Seconds                             7,579    11,564    32,744    52,588
      International                       3,681     1,530    15,549     7,028
    Net premiums earned - insurance     200,430   186,507   779,259   774,752
    Net premiums earned - credit
     derivatives                         13,399    12,700    64,263    37,263
    Total Net Premiums Earned          $213,829  $199,207  $843,522  $812,015

    SMART HOME (In millions)
    Ceded Premiums Written                 $1.3      $3.5     $11.0     $12.0
    Ceded Premiums Earned                  $2.1      $3.7     $11.4     $12.3

    Captives
    Premiums ceded to captives
     (In millions)                        $33.2     $25.4    $121.6     $96.7
    % of total premiums                   14.8%     12.6%     14.1%     11.7%
    NIW subject to captives
     (In millions)                       $6,776    $3,457   $23,322   $13,157
    % of primary NIW                      49.8%     45.6%     40.8%     32.8%
    IIF included in captives (1)          36.5%     34.1%
    RIF included in captives (1)          41.6%     38.9%

    Persistency (twelve months ended
     December 31)                         75.4%     67.3%



                                    December 31  December 31
                                         2007      2006
    SMART HOME

    % of Primary RIF included in Smart
     Home Transactions (1)                 5.3%     10.1%

    (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.
    Mortgage Insurance Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    ALT-A
    Exhibit O
                                                      Quarter Ended
    ($ in millions)                                    December 31
                                             2007       %      2006       %
    Primary New Insurance Written by FICO
     Score
      <=619                                    $3     0.1%       $3     0.2%
      620-659                                  43     1.9%      208    10.6%
      660-679                                  94     4.3%      351    17.9%
      680-739                                 785    35.5%      903    46.0%
      >=740                                 1,285    58.2%      496    25.3%
    Total                                  $2,210   100.0%   $1,961   100.0%


    Primary Risk in Force by FICO Score
      <=619                                   $38     0.7%      $24     0.6%
      620-659                                 725    12.5%      729    17.2%
      660-679                                 826    14.3%      681    16.1%
      680-739                               2,653    45.8%    1,897    44.8%
      >=740                                 1,546    26.7%      903    21.3%
    Total                                  $5,788   100.0%   $4,234   100.0%


    Primary Risk in Force by LTV
      95.01% and above                       $379     6.6%     $120     2.8%
      90.01% to 95.00%                      1,668    28.8%    1,237    29.2%
      85.01% to 90.00%                      2,317    40.0%    1,832    43.3%
      85.00% and below                      1,424    24.6%    1,045    24.7%
    Total                                  $5,788   100.0%   $4,234   100.0%


    Primary Risk in Force by Policy Year
      2003 and prior                         $641    11.1%     $846    20.0%
      2004                                    461     8.0%      712    16.8%
      2005                                    846    14.6%    1,157    27.3%
      2006                                  1,273    22.0%    1,519    35.9%
      2007                                  2,567    44.3%        -        -
    Total                                  $5,788   100.0%   $4,234   100.0%


                                                      Year Ended
    ($ in millions)                                   December 31
                                          2007       %       2006       %
    Primary New Insurance Written by
     FICO Score
      <=619                                 $110      0.6%      $28     0.2%
      620-659                              1,889      9.7%    1,600    11.4%
      660-679                              2,783     14.4%    2,019    14.4%
      680-739                              9,158     47.3%    6,756    48.0%
      >=740                                5,422     28.0%    3,655    26.0%
    Total                                $19,362    100.0%  $14,058   100.0%



    Radian Group Inc.
    Financial Services Supplemental Information
    For the Quarter and Year Ended and as of December 31, 2007
    Exhibit P
                                      Quarter Ended            Year Ended
                                       December 31             December 31
    (In thousands)                  2007         2006        2007        2006

    Investment in Affiliates-
     Selected Information

              C-BASS

    Balance, beginning of
     period                            -     $431,472    $451,395    $364,364
    Net income (loss) for
     period                            -       31,598    (451,395)    133,900
    Dividends received                 -       11,675           -      46,869
    Balance, end of period            $-     $451,395          $-    $451,395


              Sherman

    Balance, beginning of
     period                      $94,110     $129,064    $167,412     $81,753
    Net income for period         10,098       39,146      84,848     123,835
    Dividends received                 -            -      51,512     103,740
    Other comprehensive
     income (loss)                   107         (798)       (567)       (743)
    (Sale) purchase of
     ownership interest                             -     (95,866)     66,307
    Balance, end of period      $104,315     $167,412    $104,315    $167,412


    Portfolio Information:

              C-BASS

    Servicing portfolio          N/A      $60,600,000
    Total assets                 N/A        8,799,261
    Servicing income             N/A           40,589     N/A        $142,407
    Net interest income          N/A           73,836     N/A         285,844
    Total revenues               N/A          144,479     N/A         571,162


              Sherman

    Total assets              $2,242,087   $1,213,049
    Net revenues                $379,320     $329,293  $1,259,933  $1,059,381


    Radian owns a 46% interest in C-BASS and a 21.8% interest in Sherman.
    Prior to September 2007, we owned an interest in Sherman consisting of
    40.96% of the Class A Common Units of Sherman (Class A Common Units
    represent 94% of the total equity in Sherman) and 50% of the Preferred
    Units of Sherman.

All statements in this news release that address events, developments or results that we expect or anticipate may occur in the future are "forward- looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. These statements, which include, without limitation, projections regarding our future performance and financial condition are made on the basis of management's current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward looking information. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following: actual or perceived changes in general financial and political conditions, such as extended national or regional economic recessions, changes in housing demand or mortgage originations, changes in housing values (in particular, further deterioration in the housing, mortgage and related credit markets, which would harm our future consolidated results of operations and, if more severe than our current predictions, could cause our ultimate projected losses for our mortgage insurance business to be worse than expected), changes in the liquidity in the capital markets and the further contraction of credit markets, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates or consumer confidence, changes in credit spreads, changes in the way investors perceive the strength of private mortgage insurers or financial guaranty providers, investor concern over the credit quality and specific risks faced by the particular businesses, municipalities or pools of assets covered by our insurance; actual or perceived economic changes or catastrophic events in geographic regions (both domestic and international) where our mortgage insurance or financial guaranty insurance in force is more concentrated; our ability to successfully acquire additional capital in the event that capital is required to support our long- term liquidity needs and to protect our credit and financial strength ratings; a decrease in the volume of home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards and a deterioration in housing markets throughout the United States; the loss of a customer for whom we write a significant amount of mortgage insurance or financial guaranty insurance or the influence of large customers; disruption in the servicing of mortgages covered by our insurance policies; the aging of our mortgage insurance portfolio, which could cause losses to increase, 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 Alt-A and sub-prime loans, and adjustable rate products, such as adjustable rate mortgages and interest-only mortgages, which have resulted in increased losses in 2007 and may result in further losses; reduced opportunities for loss mitigation in markets where housing values fail to appreciate or begin to decline; changes in persistency rates of our mortgage insurance policies caused by changes in refinancing activity, appreciating or depreciating home values and changes in the mortgage insurance cancellation requirements of mortgage lenders and investors; downgrades or threatened downgrades of, or other ratings actions with respect to, our credit ratings or the insurance financial strength ratings assigned by the major rating agencies to any of our rated insurance subsidiaries at any time (in particular, our credit rating and the financial strength ratings of our mortgage insurance subsidiaries that are currently under review for possible downgrade); heightened competition for our mortgage insurance business from others such as the Federal Housing Administration and the Veterans' Administration or other private mortgage insurers, from alternative products such as "80-10-10" loans or other forms of simultaneous second loan structures used by mortgage lenders, from investors using forms of credit enhancement other than mortgage insurance as a partial or complete substitution for private mortgage insurance and from mortgage lenders that demand increased participation in revenue sharing arrangements such as captive reinsurance arrangements; changes in the charters or business practices of Federal National Mortgage Association and Federal Home Loan Mortgage Corp., the largest purchasers of mortgage loans that we insure; heightened competition for financial guaranty business from other financial guaranty insurers, including those recently downgraded to ratings equal to or lower than our ratings, from other forms of credit enhancement such as letters of credit, guaranties and credit default swaps provided by foreign and domestic banks and other financial institutions and from alternative structures that may permit insurers to securitize assets more cost-effectively without the need for the types of credit enhancement we offer, or result in our having to reduce the premium we charge for our products; the application of existing federal or state consumer, lending, insurance, securities and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; including, without limitation: (i) the possibility of private lawsuits or investigations by state insurance departments and state attorneys general alleging that services offered by the mortgage insurance industry, such as captive reinsurance, pool insurance and contract underwriting, are violative of the Real Estate Settlement Procedures Act and/or similar state regulations, or (ii) legislative and regulatory changes affecting demand for private mortgage insurance or financial guaranty insurance; the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses, the premium deficiency for our second-lien mortgage insurance business or to estimate accurately the fair value amounts of derivative contracts in our mortgage insurance and financial guaranty businesses in determining gains and losses on these contracts; changes in accounting guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board (in particular changes regarding income recognition and the treatment of loss reserves in the financial guaranty industries); our ability to profitably grow our insurance businesses in international markets, which depends on a number of factors such as foreign governments' monetary policies and regulatory requirements, foreign currency exchange rate fluctuations, and our ability to develop and market products appropriate to foreign markets; legal and other limitations on the amount of dividends we may receive from our subsidiaries; and vulnerability to the performance of our strategic investments, including in particular, our investment in Sherman Financial Services Group LLC. 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 Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2006 as well as the updates to these risks included in Item 1A of Part II of our quarterly report on Form 10-Q for the quarter ended September 30, 2007. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this news release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements made in this report to reflect new information or future events or for any other reason.

SOURCE Radian Group Inc.

CONTACT: Investors: Terri Williams-Perry +1-215-231-1486 terri.williams-perry@radian.biz Media: Rick Gillespie
+1-215-231-1061
rick.gillespie@radian.biz
Steve Frankel
or
Tim Lynch
both of Joele Frank, Wilkinson Brimmer Katcher
+1-212-355-4449

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding Radian Group Inc.'s business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.