PHILADELPHIA, May 04, 2010 (BUSINESS WIRE) --Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended March 31, 2010, of $310.4 million, or $3.77 per diluted share. This compares to a net loss of $217.4 million, or $2.69 per diluted share, for the prior-year quarter. Book value per share at March 31, 2010, was $20.65.

On May 3, 2010, Radian Guaranty sold its remaining equity interest in Sherman Financial, a consumer asset and servicing firm, for approximately $172 million in cash. The impact of the sale, which is expected to result in a pre-tax gain of approximately $70 million, will be reflected in the company's second quarter results. Prior to the sale, Radian had received a $28 million dividend from Sherman in early April.

"The strength of our core mortgage insurance business remains the top priority at Radian," said Chief Executive Officer S.A. Ibrahim. "We are encouraged by the decline in our delinquency count this quarter, the first in nearly four years."

FIRST QUARTER HIGHLIGHTS

• Radian Guaranty Inc.'s risk-to-capital ratio was 16.9:1 at March 31, 2010, compared to a ratio of 15.4:1 at December 31, 2009, and 17.6:1 at March 31, 2009.
• The mortgage insurance provision for losses was $529.1 million in the first quarter, which includes an increase in mortgage insurance reserves of $146.5 million since December 31, 2009, to $3.6 billion. This increase in reserves, when coupled with the decline in delinquent loans, strengthens Radian's reserve per delinquency for both primary and pool loans. The reserve increase primarily resulted from an increase in our severity estimates and the continued aging of our default inventory.
• The number of primary and pool delinquent loans decreased by 5.3 percent and 6.8 percent, respectively, from the fourth quarter of 2009. This included mortgage insurance terminations that reduced Radian's primary delinquency count by 4,429 loans. Excluding this termination, the number of primary delinquent loans decreased by 2.4 percent from the fourth quarter of 2009, the first decline in nearly four years. In addition, the number of Radian's primary delinquent loans declined slightly in April. Radian continues to expect a lower number of delinquent loans at the end of 2010 compared to year-end 2009.
• The company continues to project sufficient holding company liquidity through 2012. As a result of losses generated in the quarter and in order to maintain the minimum surplus requirements for two subsidiaries that reinsure risk from Radian Guaranty, Radian Group contributed $56 million and Radian Guaranty contributed $30 million of capital to these subsidiaries.

• Consistent with Radian's strategy of actively managing the legacy portfolio and reducing non-core risk, the company terminated a set of structured transactions in the quarter that eliminated $102 million of its modified pool risk in force.
• Total mortgage insurance claims paid were $357.3 million for the first quarter. Excluding the $80.1 million impact from first-lien terminations, the $10.8 million impact from second-lien terminations and net of proceeds received from captive terminations of $0.4 million, claims paid were $266.8 million, which consisted of $258.8 million of first-liens and $8.0 million of second-liens. For 2010, the company continues to expect mortgage insurance claims paid to be approximately $1.5 billion.

• As a result of reduced mortgage industry origination volume and mortgage insurance penetration, new mortgage insurance written (NIW) was $1.9 billion in the quarter. NIW in the quarter continued to consist of loans with excellent risk characteristics, and the company maintained market share of more than 21 percent.
• Combined losses recognized on derivatives and other financial instruments totaled $121.6 million in the quarter. This was primarily attributable to unrealized losses resulting from the significant tightening of Radian's credit default swap spread, partially offset by investment portfolio gains.
• Since the launch of the Home Affordable Modification Program (HAMP) last year, nearly 6,000 Radian-insured loans have been completed, including 1,769 loans in 2009 and 4,159 in the first quarter of 2010. As of March 31, 2010, more than 28,000 Radian-insured primary loans were pending completion of a modification program, including HAMP, which represents nearly 20 percent of Radian's primary delinquencies. This compares to more than 22,000, or approximately 15 percent of primary delinquencies, as of December 31, 2009.
• Radian Asset Assurance Inc. continues to serve as an important source of capital support for Radian Guaranty, the company's mortgage insurance subsidiary, and is expected to continue to provide Radian Guaranty with cash infusions over time.
  • As of March 31, 2010, Radian Asset had approximately $1.0 billion in statutory surplus with an additional $1.5 billion in claims-paying resources.
  • In June, Radian Asset is expected to pay another ordinary dividend of approximately $70 million to Radian Guaranty.

CONFERENCE CALL

Radian will discuss each of these items in its conference call today, Tuesday, May 4, 2010, at 8:30 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 800-230-1766 inside the U.S., or 612-234-9959 for international callers, using passcode 153957 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 two and a half hours after the call ends for one week, using the following dial-in numbers and passcode: 800-475-6701 inside the U.S., or 320-365-3844 for international callers, passcode 153957.

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.