–New MI volume triples in first half of 2012 compared to first half of
–Risk-to-capital ratio of 21.0:1–
Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter
ended June 30, 2012, of $119.3 million, or $0.90 per diluted share,
which included combined losses from the change in fair value of
derivatives and other financial instruments of $95.0 million. This
compares to net income of $137.1 million, or $1.03 per diluted share,
which included combined gains from the change in fair value of
derivatives and other financial instruments of $193.8 million, for the
prior-year quarter. Book value per share at June 30, 2012, was $6.75.
“We remain steadfast in executing against our strategy and on managing
what we can control in this challenging macroeconomic environment,” said
Chief Executive Officer S.A. Ibrahim. “Our success in growing our MI
business and managing our capital is evident, as we tripled Radian’s
volume of new business and leveraged the capital support of our
financial guaranty business to maintain a competitive risk-to-capital
ratio of 21.0 to 1.”
Ibrahim continued, “We are encouraged by the continued improvement in
our legacy MI portfolio as our number of delinquent loans decline
steadily. The improving composition of our overall MI book helps
position Radian for future success and a return to profitability.”
CAPITAL AND LIQUIDITY UPDATE
SECOND QUARTER HIGHLIGHTS
Radian will discuss these items in its conference call today, Wednesday,
August 1, 2012, at 11:00 a.m. Eastern time. The conference call will be
broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts
or at www.radian.biz.
The call may also be accessed by dialing 800-288-8961 inside the U.S.,
or 612-288-0337 for international callers, using passcode 254001 or by
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,
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.
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.
Quarter EndedJune 30
Six Months EndedJune 30
(In thousands, except per-share data)
For Trend Information, refer to our Quarterly Financial Statistics on
Radian's (RDN) website.
Public finance direct
The impact of the Assured Transaction for the
Six Months Ended June 30, 2012, was as follows:
Statement of Operations
($ in thousands, except ratios)
The capital leverage ratio is derived by dividing net debt
service outstanding by qualified statutory capital.
The claims paying leverage ratio is derived by dividing net
debt service outstanding by total statutory claims paying
Included in public finance net par outstanding is $1.0 billion,
$1.4 billion and $1.8 billion at June 30, 2012, December 31, 2011,
and June 30, 2011, respectively, for legally defeased bond issues
where our financial guaranty policy has not been extinguished but
cash or securities have been deposited in an escrow account for
the benefit of bondholders.
Reductions in par caused by the following: $15.6 billion in
connection with the Assured Transaction, $9.4 billion in
connection with the CDO terminations, and $1.2 billion in
connection with the Commutation Transactions.
($ in millions)
Primary new insurance written
Total primary new insurance written by
Percentage of primary new insurance
Primary insurance in force
Primary risk in force
Total primary risk in force by FICO score
Total primary risk in force by LTV
Total primary risk in force by policy year
Percentage of primary risk in force
Pool risk in force
Total pool risk in force by policy year
Other risk in force
($ in thousands)
Calculated net of reinsurance recoveries and without giving
effect to the impact of first-lien, second-lien and captive
Calculated without giving effect to the impact of terminations
of captive reinsurance and first- and second-lien transactions.
Before reinsurance recoveries.
Represents ceded losses on captive transactions and Smart Home.
Calculated as total reserves divided by total defaults.
If calculated before giving effect to deductibles and stop
losses in pool transactions, the pool reserve per default at June
30, 2012 and 2011, would be $27,949 and $28,277, respectively.
A minus and below
Net Premiums Written
Net Premiums Earned
1st Lien Captives
Quota Share Reinsurance ("QSR")
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.
Included in primary risk in force.
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 that could cause actual results to
differ materially from those set forth in the forward-looking statements
Other risks and uncertainties that could cause actual results to differ
materially from those contained in the forward-looking statements
include 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
Radian Group Inc.Emily Riley,email@example.com
Source: Radian Group Inc.