News

09/07/2010

Radian CEO to Provide Commentary during KBW Insurance Conference

PHILADELPHIA, Sep 07, 2010 (BUSINESS WIRE) --

During a presentation at the Keefe, Bruyette & Woods Insurance Conference today, Radian Chief Executive Officer S.A. Ibrahim will provide the following commentary:

"We believe Radian is well positioned to capitalize on what we see as a gradual improvement in the fundamentals of our industry. This will be important to the strength and growth of our business in the long term, given the near-term uncertainties surrounding losses in our mortgage insurance legacy book and the challenging macroeconomic forecast for the remainder of 2010."

"There are important positive trends in both our mortgage insurance and financial guaranty businesses, including signs of credit stabilization such as eight consecutive months of declining mortgage insurance delinquencies."

Mr. Ibrahim will also offer insights into the company's financial position and business strategy. Highlights from these remarks will include:

• Continued signs of credit stabilization as mortgage insurance delinquencies declined slightly in both July and August, and by approximately 1.7 percent for the two month period. The company emphasized that while this trend is clearly positive, there are many other factors affecting Radian's loss reserve estimate, including default composition, the aging of defaults, severity, and the rate at which defaults will roll to claim including rescission and denial assumptions.
• The gradual shift of market share to the private mortgage insurance industry from FHA mortgage insurance that began in February, and has slowly increased each month.
• Radian Guaranty Inc., the company's mortgage insurance subsidiary, had a risk-to-capital ratio of 17.9:1 at June 30, 2010, and Radian's recent capital raise provides additional support if needed.
• The company maintained a share of the high-quality mortgage insurance market of 21 percent in the second quarter, which compares to historical share for Radian in the 12-15 percent range. The credit quality of this business is excellent, with nearly 80 percent of the $2.7 billion in new business written in the second quarter having FICO scores of 740 or better.

The presentation will be webcast live from the conference today at 1:05 p.m. Eastern time and may be accessed by visiting Radian's website at http://www.radian.biz/page?name=Webcasts. The slide presentation will also be available on Radian's website one hour prior to the event and can be accessed by visiting http://www.radian.biz/page?name=Presentations. A video recap of Radian's second quarter financial results and business trends may be found at www.radianfinancials.com.

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.com.

Forward-Looking Statements

All statements in this report 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 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 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. These statements speak only as of the date of this news release, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following:

• changes in general financial and political conditions, such as the failure or significant delay of the U.S. economy to recover from the most recent recession or the U.S. economy reentering a recessionary period following a brief period of stabilization or even growth, the lack of meaningful liquidity in the capital markets or in the credit markets, a prolonged period of high unemployment rates and limited home price appreciation or further depreciation (which has resulted in some borrowers voluntarily defaulting on their mortgages when their mortgage balances exceed the value of their homes), changes or volatility in interest rates or consumer confidence, 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;
• catastrophic events or further economic changes in geographic regions where our mortgage insurance or financial guaranty insurance is more concentrated;
• our ability to successfully execute upon our capital plan for our mortgage insurance business (which depends, in part, on the performance of our financial guaranty portfolio), and if necessary, to obtain additional capital to support new business writings in our mortgage insurance business and the long-term liquidity needs of our holding company;
• a further decrease in the volume of home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards and the decrease in housing demand throughout the U.S.;
• our ability to maintain adequate risk-to-capital ratios and surplus requirements in our mortgage insurance business in light of ongoing losses in this business and continued deterioration in our financial guaranty portfolio which, in the absence of new capital, may depend on our ability to execute strategies for which regulatory and other approvals are required and may not be obtained;
• our ability to continue to effectively mitigate our mortgage insurance and financial guaranty losses;
• reduced opportunities for loss mitigation in markets where housing values do not appreciate or continue to decline;
• changes in the level of future rescissions and claim denials, which have materially mitigated our paid losses and resulted in a significant reduction in our loss reserves;
• the negative impact our increased levels of insurance rescissions and claim denials may have on our relationships with customers, including the heightened risk of potential disputes and litigation; and, in the event that we are unsuccessful in defending our rescissions or denials, the need to reestablish loss reserves for, and reassume risk on, rescinded loans and pay additional claims;
• the concentration of our mortgage insurance business among a relatively small number of large customers;
• disruption in the servicing of mortgages covered by our insurance policies;
• the aging of our mortgage insurance portfolio and changes in severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance or financial guaranty insurance policies;
• the performance of our insured portfolio of higher risk loans, such as Alternative-A ("Alt-A") and subprime loans, and of adjustable rate products, such as adjustable rate mortgages and interest-only mortgages;
• a decrease in persistency rates of our mortgage insurance policies;
• an increase in the risk profile of our existing mortgage insurance portfolio due to mortgage refinancing in the current housing market;
• further downgrades or threatened downgrades of, or other ratings actions with respect to, our credit ratings or the ratings assigned by the major rating agencies to any of our rated insurance subsidiaries at any time (in particular, the credit rating of Radian Group Inc. and the financial strength ratings assigned to Radian Guaranty Inc.);
• heightened competition for our mortgage insurance business from others such as the Federal Housing Administration and the Veterans' Administration or other private mortgage insurers (in particular those that have been assigned higher ratings from the major rating agencies) or new entrants to the industry;
• changes in the charters or business practices of Federal National Mortgage Association ("Fannie Mae") and Freddie Mac, the largest purchasers of mortgage loans that we insure, and our ability to remain an eligible provider to both Freddie Mac and Fannie Mae;
• changes to the current system of housing finance, including the possibility of a new system in which private mortgage insurers are not required or their services are significantly limited in scope;
• the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the financial services industry in general, and our mortgage insurance and financial guaranty businesses in particular;
• the application of existing federal or state consumer, lending, insurance, tax, securities and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; including, without limitation: (i) the outcome of existing, or the possibility of additional, lawsuits or investigations, and (ii) legislative and regulatory changes (a) affecting demand for private mortgage insurance, (b) limiting or restricting our use of (or requirements for) additional capital and the products we may offer, or (c) affecting the form in which we execute credit protection or affecting our existing financial guaranty portfolio;
• the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or premium deficiencies for our mortgage insurance business, or to estimate accurately the fair value amounts of derivative instruments in our mortgage insurance and financial guaranty businesses in determining gains and losses on these contracts;
• the ability of our primary insurance customers in our financial guaranty reinsurance business to provide appropriate surveillance and to mitigate losses adequately with respect to our assumed insurance portfolio;
• volatility in our earnings caused by changes in the fair value of our derivative instruments and our need to reevaluate the possibility of a premium deficiency in our mortgage insurance business on a quarterly basis;
• changes in accounting guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board; and

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

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should review the "Risk Factors" detailed in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2010, and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

SOURCE: Radian Group Inc.

Radian Group Inc.
Emily Riley,215-231-1035
emily.riley@radian.com