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Radian Group, Inc.$16.14($.09)(.55%)

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 Radian Reports Fourth Quarter and Full Year 2014 Financial Results
   Thursday, February 12, 2015 7:01:03 AM ET

--- Reports fourth quarter net income of $428 million or $1.78 per diluted share -

--- Results include reversal of DTA valuation allowance and loss on pending sale of FG business -

Radian Group Inc. (RDN ) today reported net income for the quarter ended December 31, 2014, of $428.3 million, or $1.78 per diluted share. This compares to net income for the quarter ended December 31, 2013, of $36.4 million, or $0.21 per diluted share.

"We made significant progress in 2014 with full year profitability and by reducing Radian’s overall risk profile," said Chief Executive Officer S.A. Ibrahim. "By focusing on our core strengths in mortgage insurance and mortgage and real estate services, we are driving long-term value from our existing and growing portfolio while diversifying our future revenue sources."



Results for the fourth quarter of 2014 include two significant items:

-- A net loss on discontinued operations of $449.7 million, or $1.85 per diluted share, which includes the loss on sale of Radian Asset Assurance Inc., Radian’s financial guaranty insurance subsidiary. Operations for Radian Asset for all periods have been reported as discontinued operations. The completion of the sale is subject to satisfaction of customary closing conditions, including regulatory approvals, and is expected to occur in the first half of 2015. Details regarding the sale of Radian Asset may be found below; the balance sheet and statement of operations associated with discontinued operations may be found in press release Exhibit D.

-- The reversal of substantially all of the company’s deferred tax asset (DTA) valuation allowance, in the amount of $815.6 million, or $3.36 per diluted share, in the fourth quarter of 2014. The DTA valuation allowance reversal, which represented $4.27 in book value per share as of December 31, 2014, is the result of Radian’s sustained profitability in recent quarters as well as the positive outlook for future profitability, driven by the reduction in the company’s legacy exposure and the improved composition of the overall portfolio.

Net income for the full year 2014 was $959.5 million, or $4.16 per diluted share, which included a net loss after tax of $300.1 million from discontinued operations and an income tax benefit of $852.4 million from continuing operations, which was primarily driven by the reversal of the DTA valuation allowance. This compares to a net loss for the full year 2013 of $197.0 million, or $1.18 per diluted share, which included an after-tax loss of $55.1 million from discontinued operations and an income tax benefit of $31.5 million from continuing operations.

Adjusted pretax operating income for the quarter ended December 31, 2014, was $58.4 million, compared to an adjusted pretax operating loss for the quarter ended December 31, 2013, of $13.3 million. Adjusted pretax operating income for the twelve months ended December 31, 2014, was $342.4 million, compared to an adjusted pretax operating loss for the twelve months ended December 31, 2013, of $67.4 million.

Book value per share at December 31, 2014, was $10.98.

Ibrahim continued, "As we look to 2015 and beyond, we believe the combination of our mortgage insurance and mortgage and real estate services platforms will better enable us to sharpen our customer focus and provide a variety of services to meet their needs. This directly aligns with our strategy to serve the entire mortgage finance market and to be well positioned to compete in the next phase of the evolving housing finance market."

FOURTH QUARTER AND FULL YEAR HIGHLIGHTS

-- New mortgage insurance written (NIW) was $10.0 billion during the quarter, compared to $11.2 billion in the third quarter of 2014, and $9.3 billion in the prior-year quarter. -- Of the $10.0 billion in new business written in the fourth quarter of 2014, 69 percent was written with monthly premiums and 31 percent with single premiums. This compares to a mix of 70 percent monthly premiums and 30 percent single premiums in the fourth quarter of 2013.

-- NIW continued to consist of loans with excellent risk characteristics.

-- Total primary mortgage insurance in force was an industry-leading $171.8 billion as of December 31, 2014, compared to $169.2 billion as of September 30, 2014, and $161.2 billion as of December 31, 2013. Persistency, which is the percentage of mortgage insurance in force that remains on the company’s books after a twelve-month period, was 83.4 percent as of December 31, 2014, compared to 83.5 percent as of September 30, 2014, and 81.1 percent as of December 31, 2013.

-- Consistent with the company’s strategy for actively managing and reducing legacy mortgage insurance exposure, on September 16, 2014, Radian Guaranty Inc. entered into a Confidential Settlement Agreement with Countrywide Home Loans and Bank of America (BofA) in order to resolve various actual and potential claims and disputes related to mortgage insurance coverage on legacy loans. In late December 2014, Radian received the necessary consents from Fannie Mae and Freddie Mac to implement the Settlement Agreement. The implementation, which commenced on February 1, 2015, will result in a decrease to future rescissions and denials and an increase in claims paid, but is not expected to impact future net income.

-- The mortgage insurance provision for losses was $83.6 million in the fourth quarter of 2014, compared to $48.9 million in the third quarter of 2014, and $144.1 million in the prior-year period. -- The loss ratio in the fourth quarter was 36.9 percent, compared to 22.5 percent in the third quarter of 2014, and 71.9 percent in the fourth quarter of 2013.

-- Mortgage insurance loss reserves were $1.6 billion as of December 31, 2014, compared to $1.6 billion as of September 30, 2014, and $2.2 billion as of December 31, 2013.

-- Primary reserve per default (excluding IBNR and other reserves) was $27,683 as of December 31, 2014. This compares to primary reserve per default of $27,477 as of September 30, 2014, and $26,717 as of December 31, 2013.

-- The total number of primary delinquent loans decreased by three percent in the fourth quarter from the third quarter of 2014, and by 26 percent from the fourth quarter of 2013. The primary mortgage insurance delinquency rate decreased to 5.2 percent in the fourth quarter of 2014, compared to 5.4 percent in the third quarter of 2014, and 7.3 percent in the fourth quarter of 2013.

-- Total mortgage insurance claims paid were $117.2 million in the fourth quarter of 2014, compared to $173.9 million in the third quarter of 2014, and $283.4 million in the fourth quarter of 2013. Claims paid in the fourth quarter of 2014 exclude -- $15.7 million of claims processed in the quarter in accordance with the terms of the August 2013 Freddie Mac Agreement, for which no cash payment was necessary, and

-- claims expected to be paid of approximately $250 million in the first half of 2015 relating to the September 2014 BofA Settlement Agreement.

For the full-year 2014, total claims paid excluding the Freddie Mac agreement were $838.3 million, compared to $1.2 billion for the full-year 2013. The company currently expects mortgage insurance net claims paid for the full-year 2015 of approximately $600 - $700 million. This includes the approximately $250 million of claims expected to be paid related to the September 2014 BofA Settlement Agreement.

-- Other operating expenses were $85.8 million in the fourth quarter, including $24.4 million related to long-term compensation expenses and other year-end bonus accruals, a significant portion of which was driven by the variable compensation expense related to an increase in the company’s stock price. Other operating expenses in the fourth quarter also included an $11.2 million settlement of remedies related to services provided on legacy business. This compares to $51.2 million in the third quarter, which included $2.1 million of long-term compensation expenses, and $64.1 million in the fourth quarter of 2013, which included $16.1 million of long-term compensation expenses and other year-end bonus accruals.

-- On June 30, 2014, Radian completed the acquisition of Clayton Holdings LLC, which was an important step in its growth and diversification strategy. The Mortgage and Real Estate Services segment is primarily comprised of Clayton’s operations. Total service revenues were $34.5 million and gross profit on services was $14.8 million in the fourth quarter of 2014. This compares to total service revenues of $42.2 million and gross profit on services of $18.3 million in the third quarter of 2014.

-- As previously disclosed, on December 22, 2014, Radian Guaranty, the mortgage insurance subsidiary of Radian Group Inc., entered into a Stock Purchase Agreement to sell 100% of the issued and outstanding shares of Radian Asset, Radian’s financial guaranty insurance subsidiary, to Assured Guaranty Corp., a subsidiary of Assured Guaranty Ltd. (AGO ), for a purchase price of $810 million. -- Expected net proceeds of $790 million will be payable in cash on the closing date.

-- The financial results of Radian Asset are not expected to have an impact on Radian’s consolidated net income after December 31, 2014.

-- Details regarding the assets and liabilities associated with the discontinued operations may be found on press release Exhibit D.

-- As a result of the pending sale of Radian Asset discussed above, the company has reclassified the operating results related to the disposition as discontinued operations for all periods presented in our consolidated statements of operations and no longer presents a Financial Guaranty segment. In addition, certain corporate income and expenses that were previously allocated to the Financial Guaranty segment have been reallocated to the Mortgage Insurance segment for all periods presented.

CAPITAL AND LIQUIDITY UPDATE

Radian Guaranty’s risk-to-capital ratio was 17.9:1 as of December 31, 2014, which included a contribution of $100 million of capital from Radian Group to Radian Guaranty to support continued growth in the company’s net risk in force. After the $100 million contribution, Radian Group maintains approximately $670 million of currently available liquidity.

-- As of December 31, 2014, Radian Guaranty’s statutory capital was $1.7 billion, compared to $1.6 billion at September 30, 2014, and $1.3 billion a year ago.

-- As of December 31, 2014, a total of $2.7 billion of risk in force outstanding had been ceded under quota share reinsurance agreements in order to proactively manage Radian Guaranty’s risk-to-capital position. Effective January 1, 2015, Radian is no longer ceding NIW under these agreements. -- Radian had the option to recapture a portion of the ceded risk on December 31, 2014, however the company chose not to recapture that risk and received a $9.2 million profit commission based on experience to date, which increased net premiums earned in the quarter, and a $15.0 million prepaid supplemental ceding commission, which has been deferred and will be amortized as a reduction to our policy acquisition costs over approximately the next five years.

-- In July 2014, The Federal Housing Finance Agency issued proposed new Private Mortgage Insurer Eligibility Requirements (PMIERs). The public comment period for the proposed PMIERs ended in September 2014, and Radian expects the final PMIERs to be published sometime in the first half of 2015, with an effective date 180 days after publication. The proposed PMIERs state that, subject to the approval of Fannie Mae and Freddie Mac, private mortgage insurers may be granted a transition period of up to two years from the publication date to comply with the PMIERs’ financial requirements. As previously disclosed, the sale of Radian Asset is expected to increase Radian Guaranty’s Available Assets (as defined by PMIERs) by approximately $790.0 million. Assuming that the final PMIERs are published in their current form on June 30, 2015, with an effective date of December 31, 2015, the company currently estimates that Radian Guaranty’s projected net shortfall in Available Assets would be approximately $350 million as of December 31, 2015, after consideration of the company’s holding company cash. Additionally, absent the use of external reinsurance or other potential options available to the company to accelerate PMIERs compliance, the company further projects that Radian Guaranty would have no net shortfall in Available Assets by June 30, 2017, which is the assumed end of the two-year transition period. Radian Guaranty expects to be able to comply fully with the PMIERs without a need to raise additional capital.

CONFERENCE CALL

Radian will discuss fourth quarter and year-end 2014 financial results in its conference call today, Thursday, February 12, 2015 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 800.230.1074 inside the U.S., or 612.234.9960 for international callers, using passcode 351274 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 351274.

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 .

NON-GAAP FINANCIAL MEASURE

Radian believes that adjusted pretax operating income (a non-GAAP measure) facilitates evaluation of the company’s fundamental financial performance and provides relevant and meaningful information to investors about the ongoing operating results of the company. On a consolidated basis, this measure is not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as an alternative to a GAAP measure of performance. The measure described below has been established in order to increase transparency for the purpose of evaluating the company’s core operating trends and enable more meaningful comparisons with Radian’s competitors.

Adjusted pretax operating income is defined as earnings excluding the impact of certain items that are not viewed as part of the operating performance of the company’s primary activities, or not expected to result in an economic impact equal to the GAAP measure. See press release Exhibit F or Radian’s website for a description of these items, as well as a reconciliation of adjusted pretax operating income (loss) to pretax income (loss) from continuing operations.

ABOUT RADIAN

Radian Group Inc. (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 Operations
Exhibit B:                                           Net Income (Loss) Per Share
Exhibit C:                                           Condensed Consolidated Balance Sheets
Exhibit D:                                           Discontinued Operations
Exhibit E:                                           Segment Information Three and Twelve Months Ended December 31, 2014
                                                     and
                                                     Three and Twelve Months Ended December 31, 2013
Exhibit F:                                           Definition of Consolidated Non-GAAP Financial Measure
Exhibit G:                                           Mortgage Insurance Supplemental Information
                                                     New Insurance Written
Exhibit H:                                           Mortgage Insurance Supplemental Information
                                                     Insurance in Force and Risk in Force by Product
Exhibit I:                                           Mortgage Insurance Supplemental Information
                                                     Risk in Force by FICO, LTV and Policy Year
Exhibit J:                                           Mortgage Insurance Supplemental Information
                                                     Pool and Other Risk in Force, Risk-to-Capital
Exhibit K:                                           Mortgage Insurance Supplemental Information
                                                     Claims, Reserves and Reserve per Default
Exhibit L:                                           Mortgage Insurance Supplemental Information
                                                     Default Statistics
Exhibit M:                                           Mortgage Insurance Supplemental Information
                                                     Captives, QSR and Persistency
Exhibit N:                                           Mortgage and Real Estate Services Selected Financial Information
                                                      
 
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (1)
Exhibit A
 
                                                                                                                    Three Months Ended                                                                                                                      Year Ended
                                                                                                                                          December 31,                                                                                                                                           December 31,
                                                                                --------------------------------------------------------------------------------------------------------------------------                            ---------------------------------------------------------------------------------------------------------------------------
(In thousands, except per-share data)                                                                  2014                                                    2013                                                                        2014                                                    2013
----------------------------------------------------------                      ------------------------------------------------                        ------------------------------------------------------                        -------------------------------------------------                        ------------------------------------------------------
                                                                                                                                                                                                                                                                                                                
Revenues:
Net premiums earned - insurance                                                                    $  224,293                                                              $        200,356                                                              $   844,528                                                              $        781,420
Services revenue                                                                                       34,450                                                                --                                                                   76,693                                                                --
Net investment income                                                                                  16,531                                                                        17,723                                                                   65,655                                                                        68,121
Net gains (losses) on investments                                                                      18,658                                                                        (2,631 )                                                                 83,869                                                                       (98,945 )
Net losses on other financial instruments                                                                (675 )                                                                      (2,209 )                                                                 (3,880 )                                                                      (7,580 )
Other income                                                                         1,793                                   1,583                              5,820                                   6,890  
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
   Total revenues                                                                  295,050                                 214,822                          1,072,685                                 749,906  
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                
Expenses:
Provision for losses                                                                                   82,867                                                                       144,072                                                                  246,083                                                                       562,747
Policy acquisition costs                                                                                6,443                                                                         4,413                                                                   24,446                                                                        28,485
Direct cost of services                                                                                19,709                                                                --                                                                   43,605                                                                --
Other operating expenses                                                                               85,800                                                                        64,060                                                                  252,283                                                                       257,402
Interest expense                                                                                       24,200                                                                        19,747                                                                   90,464                                                                        74,618
Amortization and impairment of intangible assets                                     5,354                          --                              8,648                          --  
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
   Total expenses                                                                  224,373                                 232,292                            665,529                                 923,252  
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                
Pretax income (loss) from continuing operations                                                        70,677                                                                       (17,470 )                                                                407,156                                                                      (173,346 )
Income tax benefit                                                                (807,349 )                                                   (1,422 )                                            (852,418 )                                                  (31,495 )
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
Net income (loss) from continuing operations                                                          878,026                                                                       (16,048 )                                                              1,259,574                                                                      (141,851 )
(Loss) income from discontinued operations, net of tax (2)                        (449,691 )                                                   52,417                           (300,057 )                                                  (55,134 )
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
Net income (loss)                                                                                  $  428,335                                           $         36,369                                           $   959,517                                           $       (196,985 )
                                                                                ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                
Diluted net income (loss) per share:
----------------------------------------------------------
                                                                                                                                                                                                                                                                                                                
Net income (loss) from continuing operations                                                       $     3.63                                                              $          (0.09 )                                                            $      5.44                                                              $          (0.85 )
(Loss) income from discontinued operations, net of tax                               (1.85 )                                                     0.30                              (1.28 )                                                    (0.33 )
                                                                                -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
Net income (loss)                                                                                  $     1.78                                           $           0.21                                           $      4.16                                           $          (1.18 )
                                                                                ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                    
(1)                      As a result of the December 22, 2014 Radian Asset Assurance
                                            Stock Purchase Agreement to sell 100% of the issued and
                                            outstanding shares of Radian Asset Assurance, Radian’s financial
                                            guaranty insurance subsidiary, we have reclassified the operating
                                            results related to the disposition as discontinued operations for
                                            all periods presented in our consolidated statements of operations.
(2)                                         The financial results of Radian Asset Assurance are not
                                            expected to have an impact on Radian’s consolidated income after
                                            December 31, 2014, because the purchase price of approximately
                                            $810 million is not subject to adjustment due to Radian Asset
                                            Assurance’s results of operations, changes in valuation or market
                                            conditions occurring between the date of the stock purchase
                                            agreement and the closing date.
                                             
For Trend Information, refer to our Quarterly Financial
Statistics on Radian’s (RDN) website.
                                             
                                                                                                                                                                                                         
Radian Group Inc. and Subsidiaries
Net Income (Loss) Per Share
Exhibit B
                                                                                                                                                                                                                                                 
The calculation of basic and diluted net income (loss) per share
was as follows:
                                                                                                                                                                                                                                                 
                                                                                                                                                 Three Months Ended                                                                                                                                         Year Ended
                                                                                                                                                    December 31,                                                                                                                                           December 31,
                                                                                          --------------------------------------------------------------------------------------------------------------------------                            ---------------------------------------------------------------------------------------------------------------------------
(In thousands, except per share amounts)                                                                         2014                                                    2013                                                                        2014                                                    2013
--------------------------------------------------------------------                      ------------------------------------------------                        ------------------------------------------------------                        -------------------------------------------------                        ------------------------------------------------------
Net income (loss) from continuing operations:
   Net income (loss) from continuing operations - basic                                                      $  878,026                                                              $        (16,048 )                                                            $ 1,259,574                                                              $       (141,851 )
   Adjustment for dilutive Convertible Senior Notes due 2019, net of                           3,641                          --                             14,372                          --  
   tax (1)
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
      Net income (loss) from continuing operations - diluted                                                 $  881,667                                           $        (16,048 )                                                            $ 1,273,946                                           $       (141,851 )
                                                                                          ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                          
Net income (loss):
   Net income (loss) from continuing operations - basic                                                      $  878,026                                                              $        (16,048 )                                                            $ 1,259,574                                                              $       (141,851 )
   (Loss) income from discontinued operations, net of tax                                   (449,691 )                                                   52,417                           (300,057 )                                                  (55,134 )
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
   Net income (loss) - basic                                                                                    428,335                                                                        36,369                                                                  959,517                                                                      (196,985 )
   Adjustment for dilutive Convertible Senior Notes due 2019, net of                           3,641                          --                             14,372                          --  
   tax (1)
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
      Net income (loss) - diluted                                                                            $  431,976                                           $         36,369                                           $   973,889                                           $       (196,985 )
                                                                                          ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                          
Average common shares outstanding--basic                                                            191,053                                                                       173,099                                                                  184,551                                                                       166,366
Dilutive effect of Convertible Senior Notes due 2017                                                             10,590                                                                --                                                                    8,465                                                                --
Dilutive effect of Convertible Senior Notes due 2019                                                             37,736                                                                --                                                                   37,736                                                                --
Dilutive effect of stock-based compensation arrangements (2)                                   3,422                          --                              3,150                          --  
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
Adjusted average common shares outstanding--diluted                              242,801                                 173,099                            233,902                                 166,366  
                                                                                          ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                          
Net income (loss) per share:
--------------------------------------------------------------------
                                                                                                                                                                                                                                                                                                                          
Basic:
   Net income (loss) from continuing operations                                                              $     4.60                                                              $          (0.09 )                                                            $      6.83                                                              $          (0.85 )
   (Loss) income from discontinued operations, net of tax                                      (2.35 )                                                     0.30                              (1.63 )                                                    (0.33 )
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
   Net income (loss)                                                                                         $     2.24                                           $           0.21                                           $      5.20                                           $          (1.18 )
                                                                                          ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                          
Diluted:
   Net income (loss) from continuing operations                                                              $     3.63                                                              $          (0.09 )                                                            $      5.44                                                              $          (0.85 )
   (Loss) income from discontinued operations, net of tax                                      (1.85 )                                                     0.30                              (1.28 )                                                    (0.33 )
                                                                                          -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- --------- --------------------                      -------------------- -------------- --------------------
   Net income (loss)                                                                                         $     1.78                                           $           0.21                                           $      4.16                                           $          (1.18 )
                                                                                          ==================== ======== ====================                      ==================== ============== ====================                      ==================== ========= ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                              
For all calculations, the determination of whether potential
common shares are dilutive or anti-dilutive is based on net income
(loss) from continuing operations.
 
(1)                        As applicable, includes coupon interest, amortization of
                                              discount and fees, and other changes in income or loss that would
                                              result from the assumed conversion.
(2)                                           For the three months and year ended December 31, 2014, 541,720
                                              shares of our common stock equivalents issued under our
                                              stock-based compensation arrangements were not included in the
                                              calculations of diluted net income per share as of such dates
                                              because they were anti-dilutive.
                                               
                                                                                                        
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit C
                                                                                                                                                
                                                                                                    December 31,                                                     December 31,
                                                                                                        2014                                                             2013
(In thousands, except per share data)
---------------------------------------------------------------------
                                                                                                                                                
Assets:
Investments                                                                                                   $ 3,629,299                                         $      3,361,678
Cash                                                                                                               30,465                                                   22,880
Restricted cash                                                                                                    14,031                                                   22,527
Accounts and notes receivable                                                                                      85,792                                                   46,440
Deferred income taxes, net                                                                                        700,201                                                   17,902
Goodwill and other intangible assets, net                                                                         288,240                                                    2,300
Other assets                                                                                                      375,491                                                  379,903
Assets held for sale                                                                         1,736,444                             1,768,061  
                                                                                           -------------------- ---------                      -------------------- -------------- --------------------
Total assets                                                                                                  $ 6,859,963                                         $      5,621,691  
                                                                                           ==================== =========                      ==================== ============== ====================
                                                                                                                                                
Liabilities and stockholders’ equity:
Unearned premiums                                                                                             $   644,504                                         $        567,072
Reserve for losses and loss adjustment expenses                                                                 1,560,032                                                2,164,353
Long-term debt                                                                                                  1,209,926                                                  930,072
Other liabilities                                                                                                 326,743                                                  377,930
Liabilities held for sale                                                                      947,008                               642,619  
                                                                                           -------------------- ---------                      -------------------- -------------- --------------------
Total liabilities                                                                            4,688,213                             4,682,046  
                                                                                           -------------------- ---------                      -------------------- -------------- --------------------
                                                                                                                                                
Equity component of currently redeemable convertible senior notes                                                  74,690                                           --
                                                                                                                                                
Common stock                                                                                                          209                                                      191
Additional paid-in capital                                                                                      1,638,552                                                1,454,297
Retained earnings (deficit)                                                                                       406,814                                                 (552,226 )
Accumulated other comprehensive income                                                          51,485                                37,383  
                                                                                           -------------------- ---------                      -------------------- -------------- --------------------
Total common stockholders’ equity                                 2,097,060                               939,645  
                                                                                           -------------------- ---------                      -------------------- -------------- --------------------
Total liabilities and stockholders’ equity                                         $ 6,859,963                                         $      5,621,691  
                                                                                           ==================== =========                      ==================== ============== ====================
                                                                                                                                                
Shares outstanding, end of period                                                                                 191,054                                                  173,100
                                                                                                                                                
Book value per share                                                                                          $     10.98                                         $           5.43
                                                                                                                                                                                    
 
Radian Group Inc. and Subsidiaries
Discontinued Operations
Exhibit D
 
The (loss) income from discontinued operations, net of tax consisted
of the following components for the periods indicated:
 
                                                                                                                      Three Months Ended                                                                                                                           Year Ended
                                                                                                                                            December 31,                                                                                                                                                December 31,
                                                                               --------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                           2014                                                       2013                                                                          2014                                                       2013
---------------------------------------------------------                      ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
Net premiums earned                                                                               $         10,494                                                              $         12,842                                                              $         37,194                                                              $         49,474
Net investment income                                                                                        8,614                                                                         9,145                                                                        35,633                                                                        39,966
Net gains (losses) on investments                                                                           12,788                                                                        (4,198 )                                                                      51,409                                                                       (50,775 )
Impairment losses on investments                                                                    --                                                                            (3 )                                                              --                                                                            (3 )
Change in fair value of derivative instruments                                                               3,694                                                                        37,951                                                                       130,617                                                                       (32,406 )
Net gains on other financial instruments                                                                       927                                                                         1,058                                                                         3,903                                                                         2,845
Other income                                                                     --                                     (33 )                                                       88                                     (20 )
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total revenues                                                                     36,517                                  56,762                                 258,844                                   9,081  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                          
Provision for losses                                                                                        (1,458 )                                                                      (6,660 )                                                                       2,853                                                                         2,486
Policy acquisition costs                                                                                     1,274                                                                         2,092                                                                         6,340                                                                        13,178
Other operating expense                                                                   8,487                                   8,412                                  23,726                                  27,127  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
      Total expenses                                                                      8,303                                   3,844                                  32,919                                  42,791  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                          
Equity in net (loss) income of affiliates                                        --                          --                                     (13 )                                                        1  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Income (loss) from operations of businesses held for sale                                                   28,214                                                                        52,918                                                                       225,912                                                                       (33,709 )
Loss on classification as held for sale                                                                   (467,527 )                                                              --                                                                      (467,527 )                                                              --
Income tax provision                                                                     10,378                                     501                                  58,442                                  21,425  
                                                                               -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
(Loss) income from discontinued operations, net of tax                                            $       (449,691 )                                                            $         52,417                                           $       (300,057 )                                                            $        (55,134 )
                                                                               ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                          
The assets and liabilities associated with the discontinued
operations have been segregated in the consolidated balance sheets.
The following table summarizes the major components of Radian Asset
Assurance’s assets and liabilities held for sale on the consolidated
balance sheets as of December 31, 2014 and 2013:
 
                                                                                        December 31,
                                                                     ----------------------------------------------------------------------------------------
(In thousands)                                                                    2014                                2013
-----------------------------------------------                      -----------------------------                       ----------------------------------
Fixed-maturity investments                                                              $   224,552                                         $         85,408
Equity securities                                                                             3,749                                           --
Trading securities                                                                          689,887                                                  884,696
Short-term investments                                                                      435,413                                                  493,376
Other invested assets                                                                       108,206                                                  106,000
Other assets                                                             274,637                               198,581
                                                                     -------------------- ---------                      -------------------- --------------
      Total assets held for sale                                                        $ 1,736,444                                         $      1,768,061
                                                                     ==================== =========                      ==================== ==============
                                                                                                                          
Unearned premiums                                                                       $   158,921                                         $        201,798
Reserve for losses and loss adjustment expenses                                              31,558                                                   21,069
VIE debt                                                                                     85,016                                                   91,800
Derivative liabilities                                                                      183,370                                                  307,185
Other liabilities                                                        488,143                                20,767
                                                                     -------------------- ---------                      -------------------- --------------
      Total liabilities held for sale                                                   $   947,008                                         $        642,619
                                                                     ==================== =========                      ==================== ==============
                                                                                                                          
 
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 1 of 6)
 
Summarized financial information concerning our operating segments
and reconciliations to consolidated pretax income (loss) from
continuing operations as of and for the periods indicated, is as
follows:
 
                                                                                                                                           Three Months Ended December 31, 2014
                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                             Mortgage                                       Mortgage and                                      Total
                                                                                                           Insurance                                                          Real Estate
                                                                                                                                                                             Services (1)
-------------------------------------------------------------                      ------------------------------------------------------                        ----------------------------------                       -------------------------------------------------
Net premiums written - insurance                                                                      $        244,506                                                              $ --                                         $   244,506
Increase in unearned premiums                                                               (20,213 )                                           --                          (20,213 )
                                                                                   -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- --------- --------------------
Net premiums earned - insurance                                                                                224,293                                                                --                                             224,293
Services revenue (2)                                                                                    --                                                                        34,466                                              34,466
Net investment income (3)                                                                                       16,531                                                                --                                              16,531
Other income (3) (4)                                                                          1,668                                     891                            2,559  
                                                                                   -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- --------- --------------------
   Total revenues                                                                           242,492                                  35,357                          277,849  
                                                                                   -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                           
Provision for losses (5)                                                                                        83,649                                                                --                                              83,649
Estimated present value of net credit recoveries incurred (6)                                                      (16 )                                                              --                                                 (16 )
Policy acquisition costs                                                                                         6,443                                                                --                                               6,443
Direct cost of services                                                                                 --                                                                        19,709                                              19,709
Other operating expenses (3)                                                                                    76,320                                                                         9,100                                              85,420
Interest expense (3)                                                                         19,760                                   4,440                           24,200  
                                                                                   -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- --------- --------------------
   Total expenses                                                                           186,156                                  33,249                          219,405  
                                                                                   -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- --------- --------------------
                                                                                                                                                                                                                           
Adjusted pretax operating income                                                                      $         56,336                                           $          2,108                                         $    58,444  
                                                                                   ==================== ============== ====================                      ==================== ==============                      ==================== ========= ====================
                                                                                    
                                                                                                                                                                      At December 31, 2014
                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                             Mortgage                                                          Mortgage and                                                         Total
                                                                                                           Insurance                                                          Real Estate
                                                                                                                                                                             Services (1)
-------------------------------------------------------------                      ------------------------------------------------------                        ----------------------------------                       -------------------------------------------------
Cash & Investments                                                                                    $      3,649,582                                                              $         10,182                                         $ 3,659,764
Restricted cash                                                                                                 11,508                                                                         2,523                                              14,031
Goodwill                                                                                                --                                                                       191,931                                             191,931
Other intangible assets, net                                                                                       137                                                                        96,172                                              96,309
Assets held for sale (7)                                                                                --                                                                --                                           1,736,444
Total assets                                                                                                 4,786,641                                                                       336,878                                           6,859,963
Unearned premiums                                                                                              644,504                                                                --                                             644,504
Reserve for losses and loss adjustment expenses                                                              1,560,032                                                                --                                           1,560,032
Liabilities held for sale (7)                                                                           --                                                                --                                             947,008
                                                                                                                                                                                                                           
(1)   Includes the acquisition of Clayton Holdings, effective June
                         30, 2014.
(2)                      Includes a de minimis amount of intersegment revenues in the
                         Mortgage and Real Estate Services segment.
(3)                      Includes amounts that have been reallocated to the Mortgage
                         Insurance segment that were previously allocated to the Financial
                         Guaranty segment, but were not reclassified to discontinued
                         operations. Please see Exhibit E page 5 for details on these
                         reallocations.
(4)                      Includes intersegment revenues of $0.8 million in the Mortgage
                         and Real Estate Services segment.
(5)                      Includes intersegment expenses of $0.8 million in the Mortgage
                         Insurance segment.
(6)                      Please see Exhibit F for the definition of this line item.
(7)                      Assets and liabilities held for sale are not part of the
                         Mortgage Insurance or Mortgage and Real Estate Services segments.
                          
                                                           
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 2 of 6)
                                                                                
                                                                                                                                                             Year Ended December 31, 2014
                                                                               -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                         Mortgage                                       Mortgage and                                     Total
                                                                                                       Insurance                                                          Real Estate
                                                                                                                                                                         Services (1)
---------------------------------------------------------                      ------------------------------------------------------                        ----------------------------------                       -----------------------------------------------
Net premiums written - insurance                                                                  $        925,181                                                              $ --                                         $ 925,181
Increase in unearned premiums                                                           (80,653 )                                           --                        (80,653 )
                                                                               -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- ------- --------------------
Net premiums earned - insurance                                                                            844,528                                                                --                                           844,528
Services revenue (2)                                                                                --                                                                        76,709                                            76,709
Net investment income (3)                                                                                   65,655                                                                --                                            65,655
Other income (3) (4)                                                                      5,321                                   1,265                          6,586  
                                                                               -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- ------- --------------------
   Total revenues                                                                       915,504                                  77,974                        993,478  
                                                                               -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                       
Provision for losses (5)                                                                                   246,865                                                                --                                           246,865
Estimated present value of net credit losses incurred (6)                                                      113                                                                --                                               113
Policy acquisition costs                                                                                    24,446                                                                --                                            24,446
Direct cost of services                                                                             --                                                                        43,605                                            43,605
Other operating expenses (3)                                                                               225,544                                                                        20,059                                           245,603
Interest expense (3)                                                                     81,600                                   8,864                         90,464  
                                                                               -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- ------- --------------------
   Total expenses                                                                       578,568                                  72,528                        651,096  
                                                                               -------------------- -------------- --------------------                      -------------------- --------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                       
Adjusted pretax operating income                                                                  $        336,936                                           $          5,446                                         $ 342,382  
                                                                               ==================== ============== ====================                      ==================== ==============                      ==================== ======= ====================
                                                                                                                                                                                                                                                    
(1)   Includes the acquisition of Clayton Holdings, effective June
                         30, 2014.
(2)                      Includes a de minimis amount of intersegment revenues in the
                         Mortgage and Real Estate Services segment.
(3)                      Includes amounts that have been reallocated to the Mortgage
                         Insurance segment that were previously allocated to the Financial
                         Guaranty segment, but were not reclassified to discontinued
                         operations. Please see Exhibit E page 5 for details on these
                         reallocations.
(4)                      Includes intersegment revenues of $0.8 million in the Mortgage
                         and Real Estate Services segment.
(5)                      Includes intersegment expenses of $0.8 million in the Mortgage
                         Insurance segment.
(6)                      Please see Exhibit F for the definition of this line item.
                          
                                                           
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 3 of 6)
                                                                                
                                                                                                                                    Mortgage Insurance
                                                                               ---------------------------------------------------------------------------------------------------------------------
                                                                                                Three Months Ended                                       Year Ended
                                                                               -------------------------------------------------   -------------------- ------------------------------------------------
(In thousands)                                                                                                                       December 31, 2013
---------------------------------------------------------                      ---------------------------------------------------------------------------------------------------------------------
Net premiums written - insurance                                                                  $   231,754                                           $  950,998
Increase in unearned premiums                                                      (31,398 )                                           (169,578 )
                                                                               -------------------- --------- --------------------                      -------------------- -------- --------------------
Net premiums earned - insurance                                                                       200,356                                                                 781,420
Net investment income (1)                                                                              17,723                                                                  68,121
Other income (1)                                                                       948                             6,255  
                                                                               -------------------- --------- --------------------                      -------------------- -------- --------------------
   Total revenues                                                                  219,027                           855,796  
                                                                               -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                         
Provision for losses                                                                                  144,072                                                                 562,747
Estimated present value of net credit losses (recoveries)                                                  29                                                                     (21 )
incurred (2)
Policy acquisition costs                                                                                4,413                                                                  28,485
Other operating expenses (1)                                                                           64,060                                                                 257,402
Interest expense (1)                                                                19,747                            74,618  
                                                                               -------------------- --------- --------------------                      -------------------- -------- --------------------
   Total expenses                                                                  232,321                           923,231  
                                                                               -------------------- --------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                         
Adjusted pretax operating loss                                                                    $   (13,294 )                                                            $  (67,435 )
                                                                               ==================== ========= ====================                      ==================== ======== ====================
                                                                                                                                                         
                                                                                
                                                                                                Mortgage Insurance
                                                                               -------------------------------------------------
                                                                                               At December 31, 2013
                                                                               -------------------------------------------------
Cash & Investments                                                                                $ 3,384,558
Restricted cash                                                                                        22,527
Total assets (3)                                                                                    3,853,630
Unearned premiums                                                                                     567,072
Reserve for losses and loss adjustment expenses                                                     2,164,353
                                                                                                                                                         
(1)   Includes amounts that have been reallocated to the Mortgage
                         Insurance segment that were previously allocated to the Financial
                         Guaranty segment, but were not reclassified to discontinued
                         operations. Please see Exhibit E page 6 for details on these
                         reallocations.
(2)                      Please see Exhibit F for the definition of this line item.
(3)                      Does not include assets held for sale or liabilities held for
                         sale of $1.8 billion and $0.6 billion, respectively, which are not
                         a part of the Mortgage Insurance segment.
                          
                                                                                                                                                                                                              
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 4 of 6)
                                                                                                                                                                                                                                                      
                                                                                                                                                                Reconciliation of Adjusted Pretax Operating Income (Loss) to
                                                                                                                                                                              Consolidated Pretax Income (Loss)
                                                                                                                                                                                 from Continuing Operations
                                                                                                                                                                                                                                                      
                                                                                                                                                   Three Months Ended                                                                                                                                              Year Ended
                                                                                                                                                      December 31,                                                                                                                                                December 31,
                                                                                         --------------------------------------------------------------------------------------------------------------------------------                            --------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                     2014                                                       2013                                                                          2014                                                       2013
-------------------------------------------------------------------                      ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------------
Adjusted pretax operating income (loss):
   Mortgage Insurance (1) (2)                                                                               $         56,336                                                              $        (13,294 )                                                            $        336,936                                                              $        (67,435 )
   Mortgage and Real Estate Services (3) (4)                                                        2,108                          --                                   5,446                          --  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Total adjusted pretax operating income (loss)                                                      58,444                                 (13,294 )                                                  342,382                                 (67,435 )
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
                                                                                                                                                                                                                                                                                                                                    
Change in fair value of derivative instruments                                                                --                                                                           635                                                                --                                                                           635
    Less: Estimated present value of net credit recoveries (losses)                                    16                                     (29 )                                                     (113 )                                                       21  
    incurred (5)
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Change in fair value of derivative instruments expected to                                            (16 )                                                      664                                     113                                     614  
reverse over time
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Net gains (losses) on investments                                                                                     18,658                                                                        (2,631 )                                                                      83,869                                                                       (98,945 )
Net losses on other financial instruments                                                                               (675 )                                                                      (2,209 )                                                                      (3,880 )                                                                      (7,580 )
Acquisition-related expenses (5)                                                                                        (380 )                                                              --                                                                        (6,680 )                                                              --
Amortization and impairment of intangible assets (5)                                               (5,354 )                                           --                                  (8,648 )                                           --  
                                                                                         -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------------- --------------------
Consolidated pretax income (loss) from continuing operations                                                $         70,677                                           $        (17,470 )                                                            $        407,156                                           $       (173,346 )
                                                                                         ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================                      ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                    
(1)   Includes amounts that have been reallocated to the Mortgage
                         Insurance segment that were previously allocated to the Financial
                         Guaranty segment, but were not reclassified to discontinued
                         operations. Please see Exhibit E pages 5 and 6 for details on
                         these reallocations.
(2)                      Includes intersegment expenses of $0.8 million for both the
                         three months and year ended December 31, 2014.
(3)                      Includes the acquisition of Clayton Holdings, effective June
                         30, 2014.
(4)                      Includes intersegment revenues of $0.8 million for both the
                         three months and year ended December 31, 2014.
(5)                      Please see Exhibit F for the definition of this line item.
                          
On a consolidated basis, "adjusted pretax operating income (loss)"
is a measure not determined in accordance with GAAP. Total adjusted
pretax operating income (loss) is not a measure of total
profitability, and therefore should not be viewed as a substitute
for GAAP pretax income (loss) from continuing operations. Our
definition of adjusted pretax operating income (loss) may not be
comparable to similarly-named measures reported by other companies.
See Exhibit F for additional information on our consolidated
non-GAAP financial measure.
 
                                                               
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 5 of 6)
                                                                                    
                                                                                                                   Impact of Reallocations to Mortgage Insurance Segment
                                                                                    
                                                                                                                                                                    Three Months Ended December 31, 2014
                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                        Original (1)                                         Reallocations (2)                                           Currently
                                                                                                                                                                                                                                                           Reported (3)
-------------------------------------------------------------                      -----------------------------------------------                        ------------------------------------------------------                        -----------------------------------------------
Net premiums written - insurance                                                                      $ 244,506                                                              $ --                                                              $ 244,506
Increase in unearned premiums                                                        (20,213 )                                           --                          (20,213 )
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
Net premiums earned - insurance                                                                         224,293                                                                --                                                                224,293
Net investment income                                                                                    15,641                                                                           890                                                                 16,531
Other income                                                                           1,619                                      49                            1,668  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
   Total revenues                                                                    241,553                                     939                          242,492  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                         
Provision for losses                                                                                     83,649                                                                --                                                                 83,649
Estimated present value of net credit recoveries incurred (4)                                               (16 )                                                              --                                                                    (16 )
Policy acquisition costs                                                                                  6,443                                                                --                                                                  6,443
Other operating expenses                                                                                 73,061                                                                         3,259                                                                 76,320
Interest expense                                                                       8,619                                  11,141                           19,760  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
   Total expenses                                                                    171,756                                  14,400                          186,156  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                         
Adjusted pretax operating income (loss)                                                               $  69,797                                           $        (13,461 )                                                            $  56,336  
                                                                                   ==================== ======= ====================                      ==================== ============== ====================                      ==================== ======= ====================
                                                                                    
                                                                                                                                                                        Year Ended December 31, 2014
                                                                                   -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                        Original (1)                                                            Reallocations (2)                                                              Currently
                                                                                                                                                                                                                                                           Reported (3)
-------------------------------------------------------------                      -----------------------------------------------                        ------------------------------------------------------                        -----------------------------------------------
Net premiums written - insurance                                                                      $ 925,181                                                              $ --                                                              $ 925,181
Increase in unearned premiums                                                        (80,653 )                                           --                          (80,653 )
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
Net premiums earned - insurance                                                                         844,528                                                                --                                                                844,528
Net investment income                                                                                    60,837                                                                         4,818                                                                 65,655
Other income                                                                           5,058                                     263                            5,321  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
   Total revenues                                                                    910,423                                   5,081                          915,504  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                         
Provision for losses                                                                                    246,865                                                                --                                                                246,865
Estimated present value of net credit losses incurred (4)                                                   113                                                                --                                                                    113
Policy acquisition costs                                                                                 24,446                                                                --                                                                 24,446
Other operating expenses                                                                                212,098                                                                        13,446                                                                225,544
Interest expense                                                                      28,332                                  53,268                           81,600  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
   Total expenses                                                                    511,854                                  66,714                          578,568  
                                                                                   -------------------- ------- --------------------                      -------------------- -------------- --------------------                      -------------------- ------- --------------------
                                                                                                                                                                                                                                         
Adjusted pretax operating income (loss)                                                               $ 398,569                                           $        (61,633 )                                                            $ 336,936  
                                                                                   ==================== ======= ====================                      ==================== ============== ====================                      ==================== ======= ====================
                                                                                                                                                                                                                                                                      
(1)   Represents segment results with corporate expense and income
                         allocations calculated under prior allocation methodology, without
                         giving effect to the reallocation of those corporate income and
                         expenses that were previously allocated to the Financial Guaranty
                         segment.
(2)                      Adjustments to segment allocations resulting from the
                         reallocation of certain corporate income and expenses to the
                         Mortgage Insurance segment. These allocations were previously
                         allocated to the Financial Guaranty segment, but were not
                         reclassified to discontinued operations.
(3)                      Represents segment results including the reallocation of
                         certain corporate income and expenses that were previously
                         allocated to the Financial Guaranty segment.
(4)                      Please see Exhibit F for the definition of this line item.
                          
                                                               
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 6 of 6)
                                                                                    
                                                                                                                    Impact of Reallocations to Mortgage Insurance Segment
                                                                                    
                                                                                                                                                                     Three Months Ended December 31, 2013
                                                                                   ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                        Original (1)                                          Reallocations (2)                                           Currently
                                                                                                                                                                                                                                                            Reported (3)
-------------------------------------------------------------                      ------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------
Net premiums written - insurance                                                                      $  231,754                                                              $ --                                                              $  231,754
Increase in unearned premiums                                                         (31,398 )                                           --                           (31,398 )
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
Net premiums earned - insurance                                                                          200,356                                                                --                                                                 200,356
Net investment income                                                                                     16,379                                                                         1,344                                                                  17,723
Other income                                                                              903                                      45                               948  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
   Total revenues                                                                     217,638                                   1,389                           219,027  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                                                                          
Provision for losses                                                                                     144,072                                                                --                                                                 144,072
Estimated present value of net credit losses incurred (4)                                                     29                                                                --                                                                      29
Policy acquisition costs                                                                                   4,413                                                                --                                                                   4,413
Other operating expenses                                                                                  60,294                                                                         3,766                                                                  64,060
Interest expense                                                                        7,175                                  12,572                            19,747  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
   Total expenses                                                                     215,983                                  16,338                           232,321  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                                                                          
Adjusted pretax operating income (loss)                                                               $    1,655                                           $        (14,949 )                                                            $  (13,294 )
                                                                                   ==================== ======== ====================                      ==================== ============== ====================                      ==================== ======== ====================
                                                                                    
                                                                                                                                                                         Year Ended December 31, 2013
                                                                                   ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                        Original (1)                                                             Reallocations (2)                                                              Currently
                                                                                                                                                                                                                                                            Reported (3)
-------------------------------------------------------------                      ------------------------------------------------                        ------------------------------------------------------                        ------------------------------------------------
Net premiums written - insurance                                                                      $  950,998                                                              $ --                                                              $  950,998
Increase in unearned premiums                                                        (169,578 )                                           --                          (169,578 )
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
Net premiums earned - insurance                                                                          781,420                                                                --                                                                 781,420
Net investment income                                                                                     61,615                                                                         6,506                                                                  68,121
Other income                                                                            6,024                                     231                             6,255  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
   Total revenues                                                                     849,059                                   6,737                           855,796  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                                                                          
Provision for losses                                                                                     562,747                                                                --                                                                 562,747
Estimated present value of net credit recoveries incurred (4)                                                (21 )                                                              --                                                                     (21 )
Policy acquisition costs                                                                                  28,485                                                                --                                                                  28,485
Other operating expenses                                                                                 236,959                                                                        20,443                                                                 257,402
Interest expense                                                                       17,995                                  56,623                            74,618  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
   Total expenses                                                                     846,165                                  77,066                           923,231  
                                                                                   -------------------- -------- --------------------                      -------------------- -------------- --------------------                      -------------------- -------- --------------------
                                                                                                                                                                                                                                          
Adjusted pretax operating income (loss)                                                               $    2,894                                           $        (70,329 )                                                            $  (67,435 )
                                                                                   ==================== ======== ====================                      ==================== ============== ====================                      ==================== ======== ====================
                                                                                                                                                                                                                                                                        
(1)   Represents segment results with corporate expense and income
                         allocations calculated under prior allocation methodology, without
                         giving effect to the reallocation of those corporate income and
                         expenses that were previously allocated to the Financial Guaranty
                         segment.
(2)                      Adjustments to segment allocations resulting from the
                         reallocation of certain corporate income and expenses to the
                         Mortgage Insurance segment. These allocations were previously
                         allocated to the Financial Guaranty segment, but were not
                         reclassified to discontinued operations.
(3)                      Represents segment results including the reallocation of
                         certain corporate income and expenses that were previously
                         allocated to the Financial Guaranty segment.
(4)                      Please see Exhibit F for the definition of this line item.
                          
 
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measure
Exhibit F (page 1 of 2)
 
Use of Non-GAAP Financial Measure
 
In addition to the traditional GAAP financial measures, we have
presented a non-GAAP financial measure for the consolidated company,
"adjusted pretax operating income (loss)," among our key performance
indicators to evaluate our fundamental financial performance. This
non-GAAP financial measure aligns with the way the Company’s
business performance is evaluated by both management and the board
of directors. This measure has been established in order to increase
transparency for the purposes of evaluating our core operating
trends and enabling more meaningful comparisons with our peers.
Although on a consolidated basis "adjusted pretax operating income
(loss)" is a non-GAAP financial measure, we believe this measure
aids in understanding the underlying performance of our operations.
Our senior management, including our Chief Executive Officer (the
Company’s chief operating decision maker), uses adjusted pretax
operating income (loss) as our primary measure to evaluate the
fundamental financial performance of the Company’s business segments
and to allocate resources to the segments. Management’s use of this
measure as its primary measure to evaluate segment performance began
with the quarter ended March 31, 2014. Accordingly, for comparison
purposes, we also present the applicable measures from the
corresponding periods of 2013 on a basis consistent with the current
year presentation.
 
Adjusted pretax operating income (loss) adjusts GAAP pretax income
(loss) to remove the effects of net gains (losses) on investments
and other financial instruments, acquisition-related expenses,
amortization and impairment of intangible assets and net impairment
losses recognized in earnings. It also excludes gains and losses
related to changes in fair value estimates on insured credit
derivatives and instead includes the impact of changes in the
present value of insurance claims and recoveries on insured credit
derivatives, based on our ongoing insurance loss monitoring.
 
Although adjusted pretax operating income (loss) excludes certain
items that have occurred in the past and are expected to occur in
the future, the excluded items represent those that are: (1) not
viewed as part of the operating performance of our primary
activities; or (2) not expected to result in an economic impact
equal to the GAAP measure. These adjustments, along with the reasons
for their treatment, are described below.
 
(1)                      Change in fair value of derivative instruments. Gains and
                                            losses related to changes in the fair value of insured credit
                                            derivatives are subject to significant fluctuation based on
                                            changes in interest rates, credit spreads, credit ratings and
                                            other market, asset-class and transaction-specific conditions and
                                            factors that may be unrelated or only indirectly related to our
                                            obligation to pay future claims. With the exception of the
                                            estimated present value of net credit (losses) recoveries incurred
                                            discussed in item 2 below, we believe these gains and losses will
                                            reverse over time and consequently these changes are not expected
                                            to result in economic gains or losses. Therefore, these gains and
                                            losses are excluded from our calculation of adjusted pretax
                                            operating income (loss).
                                             
(2)                                         Estimated present value of net credit (losses) recoveries
                                            incurred. The change in present value of insurance claims we
                                            expect to pay or recover on insured credit derivatives represents
                                            the amount of the change in credit derivatives from item 1 above,
                                            that we expect to result in an economic loss or recovery based on
                                            our ongoing loss monitoring analytics. Therefore, this item is
                                            expected to have an economic impact and is included in our
                                            calculation of adjusted pretax operating income (loss). Also
                                            included in this item is the change in expected economic loss or
                                            recovery associated with our consolidated VIEs.
                                             
(3)                                         Net gains (losses) on investments and other financial
                                            instruments. The recognition of realized investment gains or
                                            losses can vary significantly across periods as the activity is
                                            highly discretionary based on the timing of individual securities
                                            sales due to such factors as market opportunities, our tax and
                                            capital profile and overall market cycles. Unrealized investment
                                            gains and losses arise primarily from changes in the market value
                                            of our investments that are classified as trading. These valuation
                                            adjustments may not necessarily result in economic gains or
                                            losses. We do not view them to be indicative of our fundamental
                                            operating activities. Trends in the profitability of our
                                            fundamental operating activities can be more clearly identified
                                            without the fluctuations of these realized and unrealized gains or
                                            losses. Therefore, these items are excluded from our calculation
                                            of adjusted pretax operating income (loss).
                                             
(4)                                         Acquisition-related expenses. Acquisition-related expenses
                                            represent the costs incurred to effect an acquisition of a
                                            business (i.e., a business combination). Because we pursue
                                            acquisitions on a limited and selective basis and not in the
                                            ordinary course of our business, we do not view
                                            acquisition-related expenses as a consequence of a primary
                                            business activity. Therefore, we do not consider these expenses to
                                            be part of our operating performance and they are excluded from
                                            our calculation of adjusted pretax operating income (loss).
                                             
(5)                                         Amortization and impairment of intangible assets.
                                            Amortization of intangible assets represents the periodic expense
                                            required to amortize the cost of intangible assets over their
                                            estimated useful lives. Intangible assets with an indefinite
                                            useful life are also periodically reviewed for potential
                                            impairment and impairment adjustments are made whenever
                                            appropriate. These charges are not viewed as part of the operating
                                            performance of our primary activities and therefore are excluded
                                            from our calculation of adjusted pretax operating income (loss).
                                             
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measure
Exhibit F (page 2 of 2)
                                             
(6)                                         Net impairment losses recognized in earnings. The
                                            recognition of net impairment losses on investments can vary
                                            significantly in both size and timing, depending on market credit
                                            cycles. We do not view these impairment losses to be indicative of
                                            our fundamental operating activities. Therefore, whenever these
                                            losses occur, we exclude them from our calculation of adjusted
                                            pretax operating income (loss).
                                             
See Exhibit E, page 4, for the reconciliation of our non-GAAP
financial measure for the consolidated company, adjusted pretax
operating income (loss), to the most comparable GAAP measure,
pretax income (loss) from continuing operations.
                                             
Total adjusted pretax operating income (loss) is not a measure of
total profitability, and therefore should not be viewed as a
substitute for GAAP pretax income (loss) from continuing
operations. Our definition of adjusted pretax operating income
(loss) may not be comparable to similarly-named measures reported
by other companies.
                                             
                                                                                                                                                                                                                                                                                         
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit G
                                                                                                                                                                                                                                                                                                                                 
                                                                                                                                                                                            Three Months Ended                                                                                                                                                                                                                Year Ended
                                                                                                                                                                                               December 31,                                                                                                                                                                                                                  December 31,
                                                                                                ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                  ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                          2014                                                                                         2013                                                                                                            2014                                                                                       2013
                                                                                                ----------------------------------------------------------------------------------------                     ----------------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------                     -----------------------------------------------------------------------------------------
($ in millions)                                                                                                $                                   %                                                        $                                      %                                                      $                                   %                                                      $                                   %
--------------------------------------------------------------------------                      ----------------------------   -------------------- ----------------------------------                       ----------------------------------   -------------------- ----------------------------------                       -----------------------------   -------------------- ----------------------------------                       -----------------------------   -------------------- ----------------------------------
Primary new insurance written                                                                                                                                                                                                                                                                                                                                                                                         
--------------------------------------------------------------------------
Prime                                                                                            $ 10,008                                                    100.0                    %                            $   9,252                                                    100.0                    %                        $ 37,346                                                    100.0                    %                        $ 47,251                                                    100.0                    %
Alt -A and A minus and below                                                                            1     --                         --     --                                 3     --                                 4     --  
                                                                                                ------------------------------ -------------------- -------------- --------------------                      ------------------------------------ -------------------- -------------- --------------------                      ------------------------------- -------------------- -------------- --------------------                      ------------------------------- -------------------- -------------- --------------------
Total Primary                                                                                    $ 10,009              100.0                    %                            $   9,252              100.0                    %                        $ 37,349              100.0                    %                        $ 47,255              100.0                    %
                                                                                                == ====== ==================== ==================== ============== ====================                      ======= ======= ==================== ==================== ============== ====================                      === ====== ==================== ==================== ============== ====================                      === ====== ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Total primary new insurance written by
FICO score
--------------------------------------------------------------------------
>=740</b>                                                                                        $  6,029                                                     60.2                    %                            $   6,082                                                     65.7                    %                        $ 23,043                                                     61.7                    %                        $ 33,466                                                     70.8                    %
680-739                                                                                             3,266                                                     32.6                                                     2,675                                                     28.9                                               11,737                                                     31.4                                               11,971                                                     25.3
620-679                                                                                               714                7.2                                    495                5.4                             2,569                6.9                             1,818                3.9  
                                                                                                ------------------------------ -------------------- -------------- --------------------                      ------------------------------------ -------------------- -------------- --------------------                      ------------------------------- -------------------- -------------- --------------------                      ------------------------------- -------------------- -------------- --------------------
Total Primary                                                                                    $ 10,009              100.0                    %                            $   9,252              100.0                    %                        $ 37,349              100.0                    %                        $ 47,255              100.0                    %
                                                                                                == ====== ==================== ==================== ============== ====================                      ======= ======= ==================== ==================== ============== ====================                      === ====== ==================== ==================== ============== ====================                      === ====== ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Percentage of primary new insurance
written
--------------------------------------------------------------------------
Monthly premiums                                                                                       69                    %                                                                                            70                    %                                                                                       72                    %                                                                                       68                    %
Single premiums                                                                                        31                    %                                                                                            30                    %                                                                                       28                    %                                                                                       32                    %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
Refinances                                                                                             22                    %                                                                                            17                    %                                                                                       17                    %                                                                                       30                    %
Loan to value ("LTV")
   95.01% and above                                                                                   0.5                    %                                                                                           3.4                    %                                                                                      0.4                    %                                                                                      2.6                    %
   90.01% to 95.00%                                                                                  51.7                    %                                                                                          48.7                    %                                                                                     52.9                    %                                                                                     45.4                    %
   85.01% to 90.00%                                                                                  33.2                    %                                                                                          36.0                    %                                                                                     33.8                    %                                                                                     37.3                    %
   85.00% and below                                                                                  14.6                    %                                                                                          11.9                    %                                                                                     12.9                    %                                                                                     14.7                    %
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
                                                                                                                                                                                             
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit H
                                                                                                                                                                                                                                     
                                                                                                                                                          December 31,                                                                                                December 31,
                                                                                                                                                              2014                                                                                                        2013
                                                                                                                 ----------------------------------------------------------------------------------------------                     ---------------------------------------------------------------------------------
($ in millions)                                                                                                                         $                                     %                                                  $                               %
-------------------------------------------------------------------------------------------                      -------------------------------------------   -------------------- -------------------------                       ------------------------------   -------------------- -------------------------
Primary insurance in force ("IIF") (1)                                                                                                                                                        
-------------------------------------------------------------------------------------------
  Flow                                                                                                             $              162,302                                            94.5                    %                        $ 151,383                                            93.9                    %
  Structured                                                                                                                        9,508       5.5                              9,857       6.1  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Primary                                                                                                      $              171,810     100.0                    %                        $ 161,240     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                                                                                                                                                                                                                 
  Prime                                                                                                            $              159,647                                            92.9                    %                        $ 147,072                                            91.2                    %
  Alt-A                                                                                                                             7,412                                             4.3                                                 8,634                                             5.4
  A minus and below                                                                                                                 4,751       2.8                              5,534       3.4  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Primary                                                                                                      $              171,810     100.0                    %                        $ 161,240     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                                                                                                                                                                                                                 
Primary risk in force ("RIF") (1)
-------------------------------------------------------------------------------------------
  Flow                                                                                                             $               41,071                                            95.0                    %                        $  37,792                                            94.4                    %
  Structured                                                                                                                        2,168       5.0                              2,225       5.6  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Primary                                                                                                      $               43,239     100.0                    %                        $  40,017     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                                                                                                                                                                                                                 
Flow
  Prime                                                                                                            $               38,977                                            94.9                    %                        $  35,294                                            93.4                    %
  Alt-A                                                                                                                             1,295                                             3.2                                                 1,541                                             4.1
  A minus and below                                                                                                                   799       1.9                                957       2.5  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Flow                                                                                                         $               41,071     100.0                    %                        $  37,792     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                                                                                                                                                                                                                 
Structured
  Prime                                                                                                            $                1,349                                            62.2                    %                        $   1,319                                            59.3                    %
  Alt-A                                                                                                                               425                                            19.6                                                   476                                            21.4
  A minus and below                                                                                                                   394      18.2                                430      19.3  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Structured                                                                                                   $                2,168     100.0                    %                        $   2,225     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                                                                                                                                                                                                                 
Total
  Prime                                                                                                            $               40,326                                            93.3                    %                        $  36,613                                            91.5                    %
  Alt-A                                                                                                                             1,720                                             4.0                                                 2,017                                             5.0
  A minus and below                                                                                                                 1,193       2.7                              1,387       3.5  
                                                                                                                 --------------------------------------------- -------------------- ----- --------------------                      -------------------------------- -------------------- ----- --------------------
Total Primary                                                                                                      $               43,239     100.0                    %                        $  40,017     100.0                    %
                                                                                                                 === ==================== ==================== ==================== ===== ====================                      === ======= ==================== ==================== ===== ====================
                                                                                                   
(1) Includes amounts related to the Freddie Mac Agreement.
 
                                                                                                                                           
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit I
                                                                                                                                                                                   
                                                                                                            December 31, 2014                                                                                            December 31, 2013
                                                                            ---------------------------------------------------------------------------                           ----------------------------------------------------------------------------------------
($ in millions)                                                                             $                               %                                                    $                                      %
------------------------------------------------------                      ------------------------------   -------------------- -------------------------                       ----------------------------------   -------------------- ----------------------------------
Total primary RIF by FICO score                                                                                                                                                                      
------------------------------------------------------
Flow
>=740</b>                                                                      $ 23,855                                            58.1                    %                            $  21,525                                                     57.0                    %
680-739                                                                          12,199                                            29.7                                                    11,019                                                     29.2
620-679                                                                           4,446                                            10.8                                                     4,555                                                     12.0
<=619                                                                               571       1.4                                    693                1.8  
                                                                            -------------------------------- -------------------- ----- --------------------                      ------------------------------------ -------------------- -------------- --------------------
Total Flow                                                                     $ 41,071     100.0                    %                            $  37,792              100.0                    %
                                                                            ==== ====== ==================== ==================== ===== ====================                      ======= ======= ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                            
Structured
>=740</b>                                                                      $    656                                            30.3                    %                            $     602                                                     27.0                    %
680-739                                                                             618                                            28.5                                                       640                                                     28.8
620-679                                                                             527                                            24.3                                                       585                                                     26.3
<=619                                                                               367      16.9                                    398               17.9  
                                                                            -------------------------------- -------------------- ----- --------------------                      ------------------------------------ -------------------- -------------- --------------------
Total Structured                                                               $  2,168     100.0                    %                            $   2,225              100.0                    %
                                                                            ==== ====== ==================== ==================== ===== ====================                      ======= ======= ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                            
Total
>=740</b>                                                                      $ 24,511                                            56.7                    %                            $  22,127                                                     55.3                    %
680-739                                                                          12,817                                            29.6                                                    11,659                                                     29.1
620-679                                                                           4,973                                            11.6                                                     5,140                                                     12.9
<=619                                                                               938       2.1                                  1,091                2.7  
                                                                            -------------------------------- -------------------- ----- --------------------                      ------------------------------------ -------------------- -------------- --------------------
Total Primary                                                                  $ 43,239     100.0                    %                            $  40,017              100.0                    %
                                                                            ==== ====== ==================== ==================== ===== ====================                      ======= ======= ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                            
Total primary RIF by LTV
------------------------------------------------------
  95.01% and above                                                             $  3,547                                             8.2                    %                            $   4,171                                                     10.4                    %
  90.01% to 95.00%                                                               20,521                                            47.5                                                    17,239                                                     43.1
  85.01% to 90.00%                                                               15,307                                            35.4                                                    14,750                                                     36.9
  85.00% and below                                                                3,864       8.9                                  3,857                9.6  
                                                                            -------------------------------- -------------------- ----- --------------------                      ------------------------------------ -------------------- -------------- --------------------
Total                                                                          $ 43,239     100.0                    %                            $  40,017              100.0                    %
                                                                            ==== ====== ==================== ==================== ===== ====================                      ======= ======= ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                            
Total primary RIF by policy year
------------------------------------------------------
  2005 and prior                         $  3,540                                             8.2                    %                            $   4,461                                                     11.1                    %
  2006                                      2,001                                             4.6                                                     2,326                                                      5.8
  2007                                      4,592                                            10.6                                                     5,247                                                     13.1
  2008                                      3,394                                             7.9                                                     3,950                                                      9.9
  2009                                      1,081                                             2.5                                                     1,448                                                      3.6
  2010                                        925                                             2.1                                                     1,206                                                      3.0
  2011                                      1,809                                             4.2                                                     2,263                                                      5.7
  2012                                      6,534                                            15.1                                                     7,710                                                     19.3
  2013                                     10,265                                            23.8                                                    11,406                                                     28.5
  2014                                      9,098      21.0                         --     --  
                                                                            ----------  -------------------- -------------------- ----- --------------------                      --------------  -------------------- -------------------- -------------- --------------------
Total                                                                          $ 43,239     100.0                    %                            $  40,017              100.0                    %
                                                                            ==== ====== ==================== ==================== ===== ====================                      ======= ======= ==================== ==================== ============== ====================
                                                                                                                                                                                                                                                            
Primary RIF on defaulted loans (1)                                             $  2,089                                                                                                 $   2,786
                                                                                                                                                                                                                                                            
(1) Excludes risk related to loans subject to the Freddie Mac
Agreement.
 
                                                                                                                                         
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit J
                                                                                                                                                                                 
                                                                                                           December 31, 2014                                                                                   December 31, 2013
($ in millions)
------------------------------------------------------
                                                                                           $                              %                                                 $                              %
                                                                            --------------------------------------------------- ---------------------------                     --------------------------------------------------- ---------------------------
Pool RIF                                                                                                                                                                                     
------------------------------------------------------
  Prime                                                                       $ 1,134                                            78.5                    %                        $ 1,252                                            78.1                    %
  Alt-A                                                                            56                                             3.9                                                  74                                             4.6
  A minus and below                                                               255      17.6                              278      17.3  
                                                                            ------------------------------ -------------------- ----- --------------------                      ------------------------------ -------------------- ----- --------------------
Total                                                                         $ 1,445     100.0                    %                        $ 1,604     100.0                    %
                                                                            === ===== ==================== ==================== ===== ====================                      === ===== ==================== ==================== ===== ====================
                                                                                                                                                                                                                                           
Total pool RIF by policy year
------------------------------------------------------
  2005 and prior                        $ 1,373                                            95.0                    %                        $ 1,503                                            93.7                    %
  2006                                        9                                             0.6                                                  31                                             1.9
  2007                                       62                                             4.3                                                  68                                             4.2
  2008                                        1       0.1                                2       0.2  
                                                                            --------  -------------------- -------------------- ----- --------------------                      --------  -------------------- -------------------- ----- --------------------
Total pool RIF                                                                $ 1,445     100.0                    %                        $ 1,604     100.0                    %
                                                                            === ===== ==================== ==================== ===== ====================                      === ===== ==================== ==================== ===== ====================
                                                                                                                                                                                                                                           
Other RIF
------------------------------------------------------
  Second-lien
    1st loss                                                                  $    44                                                                                             $    56
    2nd loss                                                                       13                                                                                                  17
  NIMS                                                                              5                                                                                                   5
    1st loss-Hong Kong primary mortgage insurance                                  11                                                                               19  
                                                                            ------------------------------                                                                      ------------------------------
Total other RIF                                                               $    73                                                                          $    97  
                                                                            === ===== ====================                                                                      === ===== ====================
                                                                                                                                                                                                                                           
Risk to capital ratio - Radian Guaranty only                                     17.9                   :1                      (1)                                                  19.5                   :1
Risk to capital ratio - Mortgage Insurance combined                              20.3                   :1                      (1)                                                  24.0                   :1
                                                                                                                                                                                                                                           
                                                                                                                                                                                                                                           
                                                                                                          Three Months Ended                                                                                      Year Ended
                                                                                                             December 31,                                                                                        December 31,
                                                                            -------------------------------------------------------------------------------                     -------------------------------------------------------------------------------
                                                                                         2014                           2013                                              2014                           2013
                                                                            ----------------------------   -------------------- -------------------------                       ----------------------------   -------------------- -------------------------
                                                                                                                                                                                                                                           
Loss ratio (2)                                                                   36.9                    %                       71.9                    %                           29.1                    %                       72.0                    %
Expense ratio - NPE basis (2)                                                    36.9                    %                       34.2                    %                           29.6                    %                       36.6                    %
Expense ratio - NPW basis (3)                                                    33.8                    %                       29.5                    %                           27.0                    %                       30.1                    %
                                                                                                                                                                                                                                           
     
(1)                      Preliminary.
(2)                      Calculated on a GAAP basis using net premiums earned ("NPE").
                         For the three months ended December 31, 2014 and 2013, the expense
                         ratio includes 1.5% and 1.9%, respectively, and for the years
                         ended December 31, 2014 and 2013, the expense ratio includes 1.6%
                         and 2.6%, respectively, of expenses that were previously allocated
                         to the Financial Guaranty segment, because these corporate items
                         were not reclassified to discontinued operations. These expenses
                         have been reallocated to the Mortgage Insurance segment.
(3)                      Calculated on a GAAP basis using net premiums written ("NPW").
                         For the three months ended December 31, 2014 and 2013, includes
                         1.3% and 1.6%, respectively, and for the years ended December 31,
                         2014 and 2013, includes 1.5% and 2.1%, respectively, of expenses
                         that were previously allocated to the Financial Guaranty segment,
                         because these corporate items were not reclassified to
                         discontinued operations. These expenses have been reallocated to
                         the Mortgage Insurance segment.
                          
 
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit K
                                                                                                                                                                     
                                                                                                                            Three Months Ended                                                                                                 Year Ended
                                                                                                                               December 31,                                                                                                   December 31,
                                                                                    ---------------------------------------------------------------------------------------------------                     --------------------------------------------------------------------------------
($ in thousands)                                                                           2014                  2013                                    2014                   2013
--------------------------------------------------------------                      ----------------  --------------------                      ----------------  --------------------                      --------------  --------------------                      --------------------
                                                                                                                                                                                                          
Net claims paid
  Prime                                                                                   $    74,342                                                 $   192,014                                                 $ 532,835                                                    $    770,500
  Alt-A                                                                                        21,909                                                      42,222                                                   132,350                                                         183,846
  A minus and below                                                                            12,600                                   26,286                                 92,219                                      111,828
                                                                                    --------------------------------------                      --------------------------------------                      ------------------------------------                      ----------------------
Total primary claims paid                                                                     108,851                                                     260,522                                                   757,404                                                       1,066,174
  Pool                                                                                          8,086                                                      22,451                                                    64,191                                                         115,192
  Second-lien and other                                                                           283                                      417                                  2,011                                        2,995
                                                                                    --------------------------------------                      --------------------------------------                      ------------------------------------                      ----------------------
Subtotal                                                                                      117,220                                                     283,390                                                   823,606                                                       1,184,361
  Impact of Freddie Mac Agreement                                                      --                                              --                                            --                                                         254,667
  Impact of captive terminations                                                       --                                              --                                                     1,156                                                  --
  Impact of settlements                                                                --                           --                                 13,500                               --
                                                                                    --------------------------------------                      --------------------------------------                      ------------------------------------                      ----------------------
Total                                                                                     $   117,220                              $   283,390                              $ 838,262                                 $  1,439,028
                                                                                    ======= ========= ====================                      ======= ========= ====================                      ======= ======= ====================                      ========== ==========
                                                                                                                                                                                                                                                                       
Average claim paid (1)
  Prime                                                                                   $      48.7                                                 $      47.7                                                 $    46.3                                                    $       47.4
  Alt-A                                                                                          58.7                                                        56.4                                                      56.2                                                            56.3
  A minus and below                                                                              39.3                                                        37.8                                                      38.1                                                            37.0
Total primary average claims paid                                                                49.0                                                        47.6                                                      46.5                                                            47.3
  Pool                                                                                           46.5                                                        54.2                                                      56.9                                                            65.6
  Second-lien and other                                                                           7.6                                                        13.0                                                      15.6                                                            15.9
Total                                                                                     $      48.2                                                 $      47.9                                                 $    47.0                                                    $       48.4
                                                                                                                                                                                                                                                                       
Average primary claim paid (2)                                                            $      50.4                                                 $      50.0                                                 $    47.9                                                    $       49.6
Average total claim paid (2)                                                              $      49.4                                                 $      50.1                                                 $    48.2                                                    $       50.5
                                                                                                                                                                                                                                                                       
Reserve for losses by category
  Prime                                                                                   $   700,174                                                 $   937,307
  Alt-A                                                                                       292,293                                                     384,841
  A minus and below                                                                           179,103                                                     215,545
  IBNR and other                                                                              223,114                                                     347,698
  LAE                                                                                          56,164                                                      51,245
  Reinsurance recoverable (3)                                                                  26,665                                   38,363  
                                                                                    --------------------------------------                      --------------------------------------
Total primary reserves                                                                      1,477,513                                1,974,999  
                                                                                    --------------------------------------                      --------------------------------------
  Pool insurance                                                                               75,785                                                     169,682
  IBNR and other                                                                                1,775                                                       8,938
  LAE                                                                                           3,542                                    5,439  
                                                                                    --------------------------------------                      --------------------------------------
Total pool reserves                                                                            81,102                                  184,059  
                                                                                    --------------------------------------                      --------------------------------------
Total 1st lien reserves                                                                     1,558,615                                2,159,058  
                                                                                    --------------------------------------                      --------------------------------------
  Second lien and other                                                                         1,417                                    5,295  
                                                                                    --------------------------------------                      --------------------------------------
Total reserves                                                                            $ 1,560,032                              $ 2,164,353  
                                                                                    ======= ========= ====================                      ======= ========= ====================
                                                                                                                                                                                                                                                                       
1st lien reserve per default (4)
  Primary reserve per primary default excluding IBNR and other                                $27,683                                                     $26,717
  Pool reserve per pool default excluding IBNR and other                                        9,556                                                      14,690
                                                                                                                                                                                                                                                                       
(1)   Net of reinsurance recoveries and without giving effect to the
                         impact of the Freddie Mac Agreement, captive terminations and
                         settlements.
(2)                      Before reinsurance recoveries and without giving effect to the
                         impact of the Freddie Mac Agreement, captive terminations and
                         settlements.
(3)                      Primarily represents ceded losses on captive transactions and
                         quota share reinsurance transactions.
(4)                      If calculated before giving effect to deductibles and stop
                         losses in pool transactions, this would be $15,881 and $24,640 at
                         December 31, 2014 and 2013, respectively.
                          
                                                  
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit L
                                                       December 31,                          December 31,
                                                           2014                                  2013
                                                       -----------                       -------------------
Default Statistics
---------------------------------
Primary Insurance:
                                                                                          
  Prime
---------------------------------
   Number of insured loans                             790,056                              741,554
   Number of loans in default                           28,246                               37,932
   Percentage of loans in default                         3.58 %                               5.12 %
                                                                                          
  Alt-A
---------------------------------
   Number of insured loans                              38,553                               44,905
   Number of loans in default                            8,136                               11,209
   Percentage of loans in default                        21.10 %                              24.96 %
                                                                                          
  A minus and below
---------------------------------
   Number of insured loans                              35,367                               40,930
   Number of loans in default                            8,937                               11,768
   Percentage of loans in default                        25.27 %                              28.75 %
                                                                                          
Total Primary
   Number of insured loans (1)                         873,077                              839,249
   Number of loans in default (2)                       45,319                               60,909
   Percentage of loans in default                         5.19 %                               7.26 %
                                                                                          
Pool insurance
 Number of loans in default                              8,297                               11,921
                                                                                          
(1)   Includes 9,101 and 11,860 insured loans subject to the Freddie
                         Mac Agreement at December 31, 2014 and 2013, respectively.
(2)                      Excludes 4,467 and 7,221 loans subject to the Freddie Mac
                         Agreement that are in default at December 31, 2014 and 2013,
                         respectively, as we no longer have claims exposure on these loans.
                          
 
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information
Exhibit M
                                                                                                                                                                              
                                                                                                                                                Three Months Ended                                                                         Year Ended
                                                                                                                                                   December 31,                                                                           December 31,
                                                                                                                  ------------------------------------------------------------------------------                     -------------------------------------------------------
($ in thousands)                                                                                                        2014                    2013                               2014               2013
--------------------------------------------------------------------------------------------                      -------------                                                 -------------                        ----------                        ------------------
                                                                                                                                                                                                                                                        
1st Lien Captives
--------------------------------------------------------------------------------------------
Premiums ceded to captives                                                                                         $     3,078                                                   $     3,801                          $ 12,996                              $ 17,901
% of total premiums                                                                                                        1.3 %                                                         1.8 %                             1.4 %                                 2.1 %
IIF included in captives (1)                                                                                               2.8 %                                                         4.0 %
RIF included in captives (1)                                                                                               2.7 %                                                         3.8 %
                                                                                                                                                                                                                                                        
Initial Quota Share Reinsurance ("QSR")
Transaction
--------------------------------------------------------------------------------------------
QSR ceded premiums written                                                                                         $    (4,801 )                        (2)                      $     5,474                          $ 10,217                              $ 23,047
% of premiums written                                                                                                     (1.9 )%                       (2)                              2.2 %                             1.0 %                                 2.2 %
QSR ceded premiums earned                                                                                          $    (2,869 )                        (2)                      $     7,035                          $ 17,319                              $ 29,746
% of premiums earned                                                                                                      (1.2 )%                       (2)                              3.2 %                             1.9 %                                 3.5 %
Ceding commissions                                                                                                 $     1,108                                                   $     1,369                          $  4,862                              $  5,762
RIF included in QSR (3)                                                                                            $ 1,105,545                                                   $ 1,329,544
                                                                                                                                                                                                                                                        
Second QSR Transaction
--------------------------------------------------------------------------------------------
QSR ceded premiums written                                                                                         $     9,303                                                   $     7,972                          $ 33,750                              $ 40,225
% of premiums written                                                                                                      3.7 %                                                         3.2 %                             3.4 %                                 3.9 %
QSR ceded premiums earned                                                                                          $     8,339                                                   $     6,137                          $ 29,820                              $ 18,356
% of premiums earned                                                                                                       3.6 %                                                         2.8 %                             3.3 %                                 2.2 %
Ceding commissions                                                                                                 $     3,256                                                   $     2,790                          $ 11,813                              $ 14,079
RIF included in QSR (3)                                                                                            $ 1,615,554                                                   $ 1,298,631
                                                                                                                                                                                                                                                        
Persistency (twelve months ended December 31)                                                                             83.4 %                                                        81.1 %
                                                                                                                                                                                                                                                        
(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.
(2)                      Reflects the receivable for profit commission under a new
                         Initial QSR Transaction agreement.
(3)                      Included in primary RIF.
                          
 
Radian Group Inc. and Subsidiaries
Mortgage and Real Estate Services Selected Financial Information
Exhibit N
 
The following table shows additional information for the Mortgage
and Real Estate Services segment for the three months and year ended
December 31, 2014:
 
                                                                      
                                                             Three Months Ended                                        Year Ended
                                                              December 31, 2014                                     December 31, 2014
                                                     -----------------------------------                     ------------------------------
(In thousands)
-------------------------------
Services revenue:
  Loan Review and Due Diligence                           $ 11,189                                                  $               27,860
  Component services                                         7,672                                                                  17,462
  REO Management                                             5,670                                                                  12,284
  Surveillance                                               6,876                                                                  13,276
  EuroRisk                                                   3,059                                                5,827
                                                     ----------------------------------                      ------------------------------
Total                                                       34,466                                                                  76,709
Direct cost of services                                     19,709                                               43,605
                                                     ----------------------------------                      ------------------------------
  Gross profit on services                                $ 14,757                               $               33,104
                                                     ====== ====== ====================                      ======== ====================
                                                                                                                       
The selected unaudited financial information presented below
represents unaudited quarterly historical information for the
businesses of Clayton Holdings LLC ("Clayton") for periods prior to
our acquisition on June 30, 2014. Financial information for periods
after the acquisition is included in the table above and in Exhibit
E as part of our Mortgage and Real Estate Services segment.
 
                                                                                                                                                    
                                                ---------------------------------------------                     -----------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------
                                                                    2012                                                                                             2013                                                                                                    2014
                                                ---------------------------------------------                     -----------------------------------------------------------------------------------------------------------                     -----------------------------------------------------------
(In thousands)                                      Qtr 3         Qtr 4                           Qtr 1        Qtr 2        Qtr 3        Qtr 4                            Qtr 1                Qtr 2
--------------------------                      ----------                       ----------                       ---------                       ---------                       ---------                       ---------                       ----------                       ------------------------
Services revenue                                   $ 32,514                         $ 31,524                        $ 37,041                        $ 39,115                        $ 32,718                        $ 25,593                         $ 28,043                         $               36,347
Direct cost of services                              18,951                           19,251                          20,173                          22,028                          18,015                          14,957                           15,469                                         19,956
                                                ------------                     ------------                     -----------                     -----------                     -----------                     -----------                     ------------                     --------------------------
  Gross profit on services                         $ 13,563                         $ 12,273                        $ 16,868                        $ 17,087                        $ 14,703                        $ 10,636                         $ 12,574                         $               16,391
                                                ==== ======                      ==== ======                      === ======                      === ======                      === ======                      === ======                      ==== ======                      ==== ====================
                                                                                                                                                                                                                                                                                         

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," "seek," "strategy," "future," "likely" 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 statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment. New risks emerge from time to time and it is not possible for us to predict all risks that may affect us. 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 including:

-- changes in general economic and political conditions, including unemployment rates, changes in the U.S. housing and mortgage credit markets (including declines in home prices and property values), the performance of the U.S. or global economies, the amount of liquidity in the capital or credit markets, changes or volatility in interest rates or consumer confidence and changes in credit spreads, all of which may be impacted by, among other things, legislative activity or inactivity, actual or threatened downgrades of U.S. government credit ratings, or actual or threatened defaults on U.S. government obligations;

-- changes in the way customers, investors, regulators or legislators perceive the strength of private mortgage insurers, in particular in light of the fact that certain of our former competitors have ceased writing new insurance business and have been placed under supervision or receivership by insurance regulators;

-- catastrophic events, increased unemployment, home price depreciation or other negative economic changes in geographic regions where our mortgage insurance exposure is more concentrated;

-- our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs;

-- our ability to maintain an adequate Risk-to-capital position, minimum policyholder position and other surplus requirements for Radian Guaranty, our principal mortgage insurance subsidiary, and an adequate minimum policyholder position and surplus for our insurance subsidiaries that provide reinsurance or capital support to Radian Guaranty;

-- Radian Guaranty’s ability to comply with the financial requirements of the PMIERs (once adopted) within the applicable transition period which, based on the proposed PMIERs, may require us to contribute a substantial portion of our holding company cash and investments to Radian Guaranty, and could depend on our ability to, among other things: (1) successfully consummate the transactions contemplated by the Radian Asset Assurance Stock Purchase Agreement; and (2) successfully leverage other options such as commutations or external reinsurance for a portion of our mortgage insurance risk in force in a manner that provides capital relief that is compliant with the PMIERs. Contributing a substantial portion of our holding company cash and investments to Radian Guaranty would leave Radian Group with less liquidity to satisfy its obligations, and we may be required or we may decide to seek additional capital by incurring additional debt, by issuing additional equity, or by selling assets, which we may not be able to do on favorable terms, if at all. The ultimate form of the PMIERs and the timeframe for their implementation remain uncertain;

-- changes in the charters or business practices of, or rules or regulations applicable to the GSEs, including the adoption of the PMIERs, which in their current proposed form: (1) would require Radian Guaranty to hold significantly more capital than is currently required and could negatively impact our returns on equity; (2) could limit the type of business that Radian Guaranty and other private mortgage insurers are willing to write, which could reduce our NIW; (3) could increase the cost of private mortgage insurance, including as compared to the FHA’s pricing, or result in the emergence of other forms of credit enhancement; and (4) could require changes to our business practices that may result in substantial additional costs in order to achieve and maintain compliance with the PMIERs;

-- the possibility that we have not accurately projected our net shortfall under the PMIERs which may be impacted by, among other things: our understanding and interpretation of the PMIERs financial requirements which may differ from the interpretation that the Government Sponsored Enterprises (GSEs) apply; and the performance of our mortgage insurance business, including our level of defaults, the losses we incur on new and existing defaults, the projected roll-off of our existing risk in force, and the amount and credit characteristics of new business we write;

-- our ability to continue to effectively mitigate our mortgage insurance losses, including the possibility of a decrease in net rescissions or denials resulting from an increase in the number of successful challenges to previously rescinded policies or claim denials (including as part of one or more settlements of disputed rescissions or denials), or as a result of the GSEs intervening in or otherwise limiting our loss mitigation practices, including settlements of disputes regarding loss mitigation activities;

-- the negative impact that our loss mitigation activities may have on our relationships with our customers and potential customers, including the potential loss of current or future business and the heightened risk of disputes and litigation;

-- any disruption in the servicing of mortgages covered by our insurance policies, as well as poor servicer performance;

-- adverse changes in the severity or frequency of losses associated with certain products that we formerly offered (and which constitute a small part of our insured portfolio) that are riskier than traditional mortgage insurance policies;

-- a substantial decrease in the persistency rates of our mortgage insurance policies, which has the effect of reducing our premium income on our Monthly Premium policies and could decrease the profitability of our mortgage insurance business;

-- heightened competition for our mortgage insurance business from others such as the FHA, the U.S. Department of Veterans Affairs and other private mortgage insurers (including with respect to other private mortgage insurers, those that have been assigned higher ratings than we have, that may be perceived as having a greater ability to comply with the PMIERs Financial Requirements than we do, that may have access to greater amounts of capital than we do, that are less dependent on capital support from their subsidiaries than we are or that are new entrants to the industry, and therefore, are not burdened by legacy obligations) and the impact such heightened competition may have on our returns and our NIW;

-- 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 products are significantly limited in effect or scope;

-- the effect of the Dodd-Frank Act on the financial services industry in general, and on our businesses in particular;

-- the adoption of new or application of existing federal or state laws and regulations, or changes in these laws and regulations or the way they are interpreted, including, without limitation: (i) the resolution of existing, or the possibility of additional, lawsuits or investigations; (ii) changes to the Mortgage Guaranty Insurers Model Act being considered by the NAIC that could include more stringent capital and other requirements for Radian Guaranty in states that adopt the new Mortgage Guaranty Insurers Model Act in the future; and (iii) legislative and regulatory changes (a) impacting the demand for our products, (b) limiting or restricting the products we may offer or increasing the amount of capital we are required to hold, (c) affecting the form in which we execute credit protection, or (d) otherwise impacting our existing businesses or future prospects;

-- the amount and timing of potential payments or adjustments associated with federal or other tax examinations, including deficiencies assessed by the IRS resulting from the examination of our 2000 through 2007 tax years, which we are currently contesting;

-- 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 businesses;

-- volatility in our earnings caused by changes in the fair value of our assets and liabilities carried at fair value, including a significant portion of our investment portfolio and certain of our long-term incentive compensation awards;

-- changes in GAAP or SAP, rules and guidance, or their interpretation;

-- 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;

-- the possibility that we may need to impair the estimated fair value of goodwill established in connection with our acquisition of Clayton, the valuation of which requires the use of significant estimates and assumptions with respect to the estimated future economic benefits arising from certain assets acquired in the transaction such as the value of expected future cash flows of Clayton, Clayton’s workforce, expected synergies with our other affiliates and other unidentifiable intangible assets; and

-- our ability to consummate the transactions contemplated by the Stock Purchase Agreement which depends on, among other things, obtaining certain regulatory approvals.

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, 2013 and in our subsequent reports and registration statements filed from time to time with the U.S. Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.

http://cts.businesswire.com/ct/CT?id=bwnews&sty=20150212005197r1&sid=cmtx6&distro=nx&lang=en

SOURCE: Radian Group Inc.

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


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