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Radian Group, Inc.$16.13($.20)(1.22%)

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 Radian Announces Fourth Quarter and Full Year 2016 Financial Results
   Thursday, January 26, 2017 6:30:03 AM ET

-- Fourth quarter adjusted diluted net operating income per share of $0.41; full year of $1.56 -

-- $50.5 billion in new MI business for 2016; sets all-time company record for flow MI -

-- Book value per share increases 11% year-over-year to $13.39 -

Radian Group Inc. (RDN ) today reported net income for the quarter ended December 31, 2016, of $61.1 million, or $0.27 per diluted share, which included a net loss on investments and other financial instruments of $38.8 million. Net income for the full year 2016 was $308.3 million, or $1.37 per diluted share, which included net gains on investments and other financial instruments of $30.8 million. This compares to net income for the quarter ended December 31, 2015, of $74.5 million, or $0.32 per diluted share, which included a net loss on investments and other financial instruments of $13.4 million. Net income for the full year 2015 was $286.9 million, or $1.22 per diluted share, which included net gains on investments and other financial instruments of $35.7 million.



Book value per share at December 31, 2016, was $13.39, compared to $13.47 at September 30, 2016, and an increase of 11 percent from $12.07 at December 31, 2015.

Key Financial Highlights (dollars in millions, except per share data)

                                           
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                                               Year Ended             Year Ended                Percent
                                                                           December 31, 2016                         December 31, 2015                                    Change
                                                   -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                      Net income *                 $308.3                 $286.9                     7%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                      Diluted net income per share                  $1.37                  $1.22                    12%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
          Pretax income from continuing operations                 $483.7                 $437.8                    10%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                  Adjusted pretax operating income                 $541.8                 $510.9                     6%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjusted diluted net operating income per share **                  $1.56                  $1.40                    11%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                   Net premiums earned - insurance                 $921.8                 $915.9                     1%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
              New Mortgage Insurance Written (NIW)                $50,530                $41,411                    22%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                              Book value per share                 $13.39                 $12.07                    11%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                           
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                         Quarter Ended          Quarter Ended                Percent
                                                                           December 31, 2016                         December 31, 2015                                    Change
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                        Net income                  $61.1                  $74.5                  (18%)
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                      Diluted net income per share                  $0.27                  $0.32                  (16%)
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                                     Pretax income                  $97.8                 $104.7                   (7%)
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                  Adjusted pretax operating income                 $140.2                 $124.1                    13%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
Adjusted diluted net operating income per share **                  $0.41                  $0.34                    21%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
                   Net premiums earned - insurance                 $233.6                 $226.4                     3%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
              New Mortgage Insurance Written (NIW)                $13,882                 $9,099                    53%
-------------------------------------------------- -------------------- -------------------- -------------------- -------------------- -------------------- --------------------
    
*                       Includes the significant negative impact of the loss on induced
                        conversion and debt extinguishment for both year-end periods
**                      Adjusted diluted net operating income per share is calculated
                        using the company’s statutory tax rate of 35 percent.
                         

Adjusted pretax operating income for the quarter ended December 31, 2016, was $140.2 million, compared to $124.1 million for the same period of 2015. Adjusted diluted net operating income per share for the quarter ended December 31, 2016, was $0.41, compared to $0.34 for the same period of 2015, an increase of 21 percent. Adjusted pretax operating income for the year ended December 31, 2016, was $541.8 million, compared to $510.9 million for the same period of 2015. Adjusted diluted net operating income per share for the twelve months ended December 31, 2016, was $1.56, compared to $1.40 for the same period of 2015, an increase of 11 percent. See "Non-GAAP Financial Measures" below as well as Exhibits F and G for additional details regarding these adjusted measures.

"Our strong fourth quarter performance contributed to a solid 2016 for Radian," said Radian’s Chief Executive Officer S.A. Ibrahim. "In 2016, we successfully grew book value by 11%, improved our capital structure and achieved our targeted expense goals, while setting new records for writing our highest volume of high-quality and profitable flow MI business in Radian’s history."

FOURTH QUARTER AND FULL YEAR HIGHLIGHTS

Mortgage Insurance

-- New mortgage insurance written (NIW) grew to $50.5 billion for the full year 2016, compared to $41.4 billion for the prior year. NIW was $13.9 billion for the quarter, compared to $15.7 billion in the third quarter of 2016 and $9.1 billion in the prior-year quarter. -- NIW for the full year 2016 represented record volume written on a flow basis for the company, and an increase of 22 percent compared to the NIW written for the full year 2015.

-- For the fourth quarter of 2016, NIW grew 53 percent compared to the fourth quarter of 2015.

-- Of the $13.9 billion in new business written in the fourth quarter of 2016, 27 percent was written with single premiums. Net single premiums written, after consideration of the 35 percent ceded under the company’s Single Premium Quota Share Reinsurance Agreement, was 17 percent in the fourth quarter of 2016.

-- Refinances accounted for 27 percent of total NIW in the fourth quarter of 2016, compared to 22 percent in the third quarter of 2016, and 17 percent a year ago.

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

-- Total primary mortgage insurance in force as of December 31, 2016 grew to $183.5 billion, compared to $181.2 billion as of September 30, 2016, and $175.6 billion as of December 31, 2015. -- The composition of Radian’s mortgage insurance portfolio has significantly improved over the past several years: -- 88 percent of primary mortgage insurance risk in force at December 31, 2016 consisted of new business written after 2008, including those loans that successfully completed the Home Affordable Refinance Program (HARP).

-- 58 percent of primary mortgage insurance risk in force at December 31, 2016 consisted of loans with FICO scores greater than or equal to 740, compared to 26 percent of loans at December 31, 2007.

-- 7 percent of primary mortgage insurance risk in force at December 31, 2016 consisted of loans with a loan-to-value (LTV) greater than 95 percent, compared to 24 percent of loans at December 31, 2007.

-- Persistency, which is the percentage of mortgage insurance in force that remains on the company’s books after a twelve-month period, was 76.7 percent as of December 31, 2016, compared to 78.4 percent as of September 30, 2016, and 78.8 percent as of December 31, 2015.

-- Annualized persistency for the three-months ended December 31, 2016 was 76.8 percent, compared to 75.3 percent for the three-months ended September 30, 2016, and 81.8 percent for the three-months ended December 31, 2015.

-- Total net premiums earned were $233.6 million for the quarter ended December 31, 2016, compared to $238.1 million for the quarter ended September 30, 2016, and $226.4 million for the quarter ended December 31, 2015. Notable variable items impacting net premiums earned include: -- Acceleration of premiums related to Single Premium Policy cancellations, which are net of reinsurance, were $15.7 million in the fourth quarter, compared to $18.4 million in the third quarter of 2016, and $13.5 million in the fourth quarter of 2015.

-- Ceded premiums of $18.2 million, $19.9 million and $13.0 million for the quarters ended December 31, 2016, September 30, 2016, and December 31, 2015, respectively, are net of accrued profit commission on reinsurance transactions of $8.5 million in the fourth quarter of 2016, compared to $8.9 million in the third quarter of 2016, and $1.6 million in the fourth quarter of 2015.

-- Additional details may be found in Exhibit D.

-- The mortgage insurance provision for losses was $54.7 million in the fourth quarter of 2016, compared to $56.2 million in the third quarter of 2016, and $56.8 million in the fourth quarter of 2015. -- The loss ratio in the fourth quarter of 2016 was 23.4 percent, compared to 23.6 percent in the third quarter of 2016 and 25.1 percent in the fourth quarter of 2015.

-- Mortgage insurance loss reserves were $760.3 million as of December 31, 2016, compared to $821.9 million as of September 30, 2016, and $976.4 million as of December 31, 2015.

-- Primary reserve per primary default (excluding IBNR and other reserves) was $22,503 as of December 31, 2016. This compares to primary reserve per primary default of $24,049 as of September 30, 2016, and $24,019 as of December 31, 2015.

-- The total number of primary delinquent loans decreased by 1 percent in the fourth quarter from the third quarter of 2016, and by 18 percent from the fourth quarter of 2015. The primary mortgage insurance delinquency rate decreased to 3.2 percent in the fourth quarter of 2016, compared to 3.3 percent in the third quarter of 2016, and 4.0 percent in the fourth quarter of 2015.

-- Total mortgage insurance net claims paid were $116.5 million in the fourth quarter, compared to $82.7 million in the third quarter, and $176.5 million in the fourth quarter of 2015. For the full-year 2016, total net claims paid were $417.6 million, compared to $764.7 million for the full-year 2015. -- Claims paid in the fourth quarter of 2016 were elevated due to increased efficiencies in the company’s claims processing, which resulted in an acceleration of paid claims and contributed to a 38 percent decline in the pending claim inventory from the third quarter of 2016.

-- Claims paid in 2015 included claims related to the September 2014 BofA Settlement Agreement.

Mortgage and Real Estate Services

-- The Services segment provides outsourced services, information-based analytics, residential loan due diligence, valuations, surveillance and specialty consulting for buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities. These services and solutions are provided primarily through Clayton and its subsidiaries, including Green River Capital, Red Bell Real Estate and ValuAmerica.

-- Total revenues for the fourth quarter were $52.6 million, an increase of 10 percent compared to $48.0 million for the third quarter of 2016, and an increase of 33 percent compared to $39.5 million for the fourth quarter of 2015. Total revenues for the full year 2016 were $177.2 million, compared to $163.1 million for the same period of 2015.

-- The adjusted pretax operating loss for the quarter ended December 31, 2016, was $2.6 million, compared to $1.9 million for the quarter ended September 30, 2016, and $1.2 million for the quarter ended December 31, 2015. The adjusted pretax operating loss for the full year 2016 was $20.2 million, compared to $0.2 million for the prior year.

-- Services adjusted earnings before interest, income taxes, depreciation and amortization (Services adjusted EBITDA) for the quarter ended December 31, 2016, was $4.4 million, compared to $5.7 million for the quarter ended September 30, 2016, and $4.8 million for the quarter ended December 31, 2015. Additional details regarding the non-GAAP measure Services adjusted EBITDA may be found in Exhibits F and G.

-- Revenue and expenses for contract underwriting performed on behalf of third parties, formerly reflected in our Mortgage Insurance segment, is now reflected in the Services segment for all periods, based on changes to the company’s personnel reporting lines and management oversight of this function. As a result of this change, for all periods presented, Services revenue, direct cost of services and other operating expenses have increased, with offsetting reductions in Mortgage Insurance other income and other operating expenses. In the fourth quarter, this change increased the Services segment’s revenue, direct cost of services and other operating expenses by $3.8 million, $2.3 million and $1.0 million, respectively.

Consolidated Expenses

Other operating expenses were $62.4 million in the fourth quarter, compared to $62.1 million in the third quarter of 2016, and $58.6 million in the fourth quarter of last year.

-- Notable variable items impacting other operating expenses include: -- The company’s investment to significantly upgrade its technology systems, which represented $3.6 million in the fourth quarter, compared to $2.4 million in the third quarter of 2016, and $1.6 million in the fourth quarter of 2015.

-- Severance charges of $0.9 million in the fourth quarter, compared to $1.1 million in the third quarter, and $0.1 million in the fourth quarter of 2015. A significant portion of the severance charges in the fourth quarter of 2016 was related to the Services segment.

-- Total incentive compensation expense of $9.1 million in the fourth quarter, compared to $12.7 million in the third quarter of 2016, and $4.0 million in the fourth quarter of 2015. The expense in the fourth and third quarters of 2016 was impacted by an increase in accrued short-term incentive compensation based on year-to-date performance. The expense in the fourth quarter of 2015 was impacted by a decrease in accrued short-term incentive compensation based on performance in 2015.

-- Additional details may be found in Exhibit D.

-- Other operating expenses before corporate allocations for the fourth quarter of 2016 were comprised of $37.8 million for the Mortgage Insurance segment, compared to $35.9 million in the third quarter of 2016, and $37.2 million in the fourth quarter of last year.

-- Other operating expenses before corporate allocations for the fourth quarter of 2016 were comprised of $14.8 million for the Services segment, compared to $13.6 million in the third quarter of 2016, and $11.5 million in the fourth quarter of last year.

CAPITAL AND LIQUIDITY UPDATE

Radian Group maintained approximately $460 million of available liquidity as of December 31, 2016. The company successfully completed several capital actions in 2016, utilizing a portion of its liquidity to strengthen its financial position and improve its debt maturity profile, with the objective of better positioning Radian Group for a return to investment grade ratings in the future. This series of actions in 2016 included:

-- Completion of a $100 million share repurchase program of the company’s common stock, at an average price of $10.62 per share, and the approval of an additional share repurchase of up to $125 million

-- Entry into the Radian Guaranty Single Premium QSR transaction, improving the company’s expected return on required capital and effectively managing its PMIERs position in a cost-efficient manner

-- Radian Guaranty’s redemption of its $325 million surplus note due to Radian Group, which immediately resulted in a $325 million increase to Radian Group’s available liquidity

-- Early redemption of the remaining $196 million face value of its 9.00% Senior Notes due 2017

-- Negotiated purchases of aggregate principal amounts of approximately $30 million of the company’s outstanding 3.00% Convertible Senior Notes due 2017 and $322 million of the company’s outstanding 2.25% Convertible Senior Notes due 2019

-- Issuance of $350 million aggregate principal amount of 7.00% Senior Notes due 2021

The combination of these capital actions decreased the company’s total number of diluted shares by 23.3 million in 2016 and improved Radian Group’s debt maturity profile.

RECENT EVENTS

In the fourth quarter of 2016, Radian Group issued a notice of redemption of its remaining 2.25% Convertible Senior Notes due 2019, with settlement scheduled for January 27, 2017. The company has elected to settle in cash any conversions by the holders. When completed, this redemption will further reduce the company’s total number of diluted shares by approximately 6.4 million shares and will reduce holding company liquidity by $110 million.

"We both simplified and strengthened our capital structure in 2016, improving the maturity profile of our debt and significantly reducing our number of diluted shares outstanding," said Radian’s Chief Financial Officer Frank Hall. "We believe the success of our capital activities is an indication of the improved outlook for Radian and for our industry."

CONFERENCE CALL

Radian will discuss fourth quarter and year-end 2016 results in a conference call today, Thursday, January 26, 2017, 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 800.230.1092 inside the U.S., or 612.234.9960 for international callers, using passcode 415619 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 415619.

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 MEASURES

Radian believes that adjusted pretax operating income and adjusted diluted net operating income per share (non-GAAP measures) facilitate evaluation of the company’s fundamental financial performance and provide relevant and meaningful information to investors about the ongoing operating results of the company. On a consolidated basis, these measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as alternatives to GAAP measures of performance. The measures described below have been established in order to increase transparency for the purpose of evaluating the company’s core operating trends and enabling 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 amount reflected in pretax income (loss). Adjusted pretax operating income adjusts GAAP pretax income to remove the effects of: (i) net gains (losses) on investments and other financial instruments; (ii) loss on induced conversion and debt extinguishment; (iii) acquisition-related expenses; (iv) amortization and impairment of intangible assets; and (v) net impairment losses recognized in earnings. Adjusted diluted net operating income per share represents a diluted net income per share calculation using as its basis adjusted pretax operating income, net of taxes at the company’s statutory tax rate for the period.

In addition to the above non-GAAP measures for the consolidated company, the company also presents as supplemental information a non-GAAP measure for the Services segment, representing earnings before interest, income taxes, depreciation and amortization (EBITDA). Services adjusted EBITDA is calculated by using the Services segment’s adjusted pretax operating income as described above, further adjusted to remove the impact of depreciation and corporate allocations for interest and operating expenses. Services adjusted EBITDA is presented to facilitate comparisons with other services companies, since it is a widely accepted measure of performance in the services industry.

See Exhibit F or Radian’s website for a description of these items, as well as Exhibit G for reconciliations to the most comparable consolidated GAAP measures.

ABOUT RADIAN

Radian Group Inc. (RDN ), headquartered in Philadelphia, provides private mortgage insurance, risk management products and real estate services to financial institutions. Radian offers products and services through two business segments:

-- Mortgage Insurance, through its principal mortgage insurance subsidiary Radian Guaranty Inc. This private mortgage insurance protects lenders from default-related losses, facilitates the sale of low-downpayment mortgages in the secondary market and enables homebuyers to purchase homes more quickly with downpayments less than 20%.

-- Mortgage and Real Estate Services, through its principal services subsidiary Clayton, as well as Green River Capital, Red Bell Real Estate and ValuAmerica. These solutions include information and services that financial institutions, investors and government entities use to evaluate, acquire, securitize, service and monitor loans and asset-backed securities.

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 Trend Schedule
Exhibit B:                      Net Income Per Share Trend Schedule
Exhibit C:                      Condensed Consolidated Balance Sheets
Exhibit D:                      Net Premiums Earned - Insurance and Other Operating Expenses
Exhibit E:                      Segment Information
Exhibit F:                      Definition of Consolidated Non-GAAP Financial Measures
Exhibit G:                      Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit H:                      Mortgage Insurance Supplemental Information
                                New Insurance Written
Exhibit I:                      Mortgage Insurance Supplemental Information
                                Primary Insurance in Force and Risk in Force
Exhibit J:                      Mortgage Insurance Supplemental Information
                                Claims and Reserves
Exhibit K:                      Mortgage Insurance Supplemental Information
                                Default Statistics
Exhibit L:                      Mortgage Insurance Supplemental Information
                                Captives, QSR and Persistency
                                 
                                                                                                                                                                                                                                                                            
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations Trend Schedule (1)
Exhibit A (page 1 of 2)
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                        2016                                                                                                                                       2015
                                                                                       -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     ------------------------------------
(In thousands, except per share amounts)                                                               Qtr 4                                Qtr 3                              Qtr 2                              Qtr 1                                                   Qtr 4
-----------------------------------------------------------------                      ----------------------------------                        ------------------------------                        ------------------------------                        ------------------------------                        ---------------------------------
                                                                                                                                                                                                                                                                                                                    
Revenues:
Net premiums earned - insurance                                                              $ 233,585                                             $ 238,149                                             $ 229,085                                             $ 220,950                                                $ 226,443
Services revenue                                                                                49,905                                                45,877                                                40,263                                                32,849                                                   38,338
Net investment income                                                                           28,996                                                28,430                                                28,839                                                27,201                                                   22,833
Net gains (losses) on investments and other financial instruments                              (38,773 )                                               7,711                                                30,527                                                31,286                                                  (13,402 )
Other income                                                                                       736                                716                              1,454                                666                                   670  
                                                                                       ------------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
   Total revenues                                                                              274,449                            320,883                            330,168                            312,952                               274,882  
                                                                                       ------------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
                                                                                                                                                                                                                                                                                                                    
Expenses:
Provision for losses                                                                            54,287                                                55,785                                                49,725                                                42,991                                                   56,805
Policy acquisition costs                                                                         5,579                                                 6,119                                                 5,393                                                 6,389                                                    4,831
Direct cost of services                                                                         33,812                                                29,447                                                27,365                                                23,550                                                   23,187
Other operating expenses                                                                        62,416                                                62,119                                                63,173                                                57,188                                                   58,624
Interest expense                                                                                17,269                                                19,783                                                22,546                                                21,534                                                   20,996
Loss on induced conversion and debt extinguishment                                      --                                                17,397                                                 2,108                                                55,570                                                    2,320
Amortization and impairment of intangible assets                                                 3,290                              3,292                              3,311                              3,328                                 3,409  
                                                                                       ------------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
   Total expenses                                                                              176,653                            193,942                            173,621                            210,550                               170,172  
                                                                                       ------------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
                                                                                                                                                                                                                                                                                                                    
Pretax income                                                                                   97,796                                               126,941                                               156,547                                               102,402                                                  104,710
Income tax provision                                                                            36,707                             44,138                             58,435                             36,153                                30,182  
                                                                                       ------------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
Net income                                                                                   $  61,089                          $  82,803                          $  98,112                          $  66,249                             $  74,528  
                                                                                       ======= ======= ====================                      === ======= ====================                      === ======= ====================                      === ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                                    
Diluted net income per share:                                                                $    0.27                                             $    0.37                                             $    0.44                                             $    0.29                                                $    0.32
                                                                                                                                                                                                                                                                                                                    
Selected Mortgage Insurance Key Ratios
-----------------------------------------------------------------
Loss ratio (2)                                                                                    23.4                    %                             23.6                    %                             21.9                    %                             19.6                    %                                25.1                    %
Expense ratio (2)                                                                                 22.7                    %                             22.7                    %                             23.6                    %                             21.8                    %                                22.6                    %
 
   (1)   For all periods presented, incorporates organizational changes
                            to align our segment reporting structure with recent changes in
                            personnel reporting lines and management oversight related to
                            contract underwriting performed on behalf of third parties.
                            Revenue and expenses for this business is now reflected in the
                            Services segment. As a result, for all periods presented, Services
                            revenue and direct cost of services have increased, with
                            offsetting reductions in Mortgage Insurance other income and other
                            operating expenses.
   (2)                      Calculated on a GAAP basis using net premiums earned.
                                                                   
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (1)
Exhibit A (page 2 of 2)
                                                                                        
                                                                                                                                 Year Ended
                                                                                                                                December 31,
                                                                                       ---------------------------------------------------------------------------------------
(In thousands, except per-share data)                                                                  2016                                   2015
-----------------------------------------------------------------                      ----------------------------------                        ---------------------------------
                                                                                                                                                  
Revenues:
Net premiums earned - insurance                                                              $ 921,769                                                $ 915,908
Services revenue                                                                               168,894                                                  157,216
Net investment income                                                                          113,466                                                   81,537
Net gains (losses) on investments and other financial instruments                               30,751                                                   35,693
Other income                                                                                     3,572                                 2,899  
                                                                                       ------------------------------------                      -----------------------------------
   Total revenues                                                                            1,238,452                             1,193,253  
                                                                                       ------------------------------------                      -----------------------------------
                                                                                                                                                  
Expenses:
Provision for losses                                                                           202,788                                                  198,585
Policy acquisition costs                                                                        23,480                                                   22,424
Direct cost of services                                                                        114,174                                                   93,715
Other operating expenses                                                                       244,896                                                  242,405
Interest expense                                                                                81,132                                                   91,102
Loss on induced conversion and debt extinguishment                                              75,075                                                   94,207
Amortization and impairment of intangible assets                                                13,221                                12,986  
                                                                                       ------------------------------------                      -----------------------------------
   Total expenses                                                                              754,766                               755,424  
                                                                                       ------------------------------------                      -----------------------------------
                                                                                                                                                  
Pretax income from continuing operations                                                       483,686                                                  437,829
Income tax provision                                                                           175,433                               156,290  
                                                                                       ------------------------------------                      -----------------------------------
Net income from continuing operations                                                          308,253                                                  281,539
Income (loss) from discontinued operations, net of tax                                  --                                 5,385  
                                                                                       ------------------------------------                      -----------------------------------
Net income                                                                                   $ 308,253                             $ 286,924  
                                                                                       ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                  
Diluted net income per share:
-----------------------------------------------------------------
Net income from continuing operations                                                        $    1.37                                                $    1.20
Income (loss) from discontinued operations, net of tax                                  --                                  0.02  
                                                                                       ------------------------------------                      -----------------------------------
Net income                                                                                   $    1.37                             $    1.22  
                                                                                       ======= ======= ====================                      ====== ======= ====================
                                                                                                                                                  
Selected Mortgage Insurance Key Ratios
-----------------------------------------------------------------
Loss ratio (2)                                                                                    22.2                    %                                21.7                    %
Expense ratio (2)                                                                                 22.7                    %                                23.7                    %
     
(1)                      For all periods presented, incorporates organizational changes
                         to align our segment reporting structure with recent changes in
                         personnel reporting lines and management oversight related to
                         contract underwriting performed on behalf of third parties.
                         Revenue and expenses for this business is now reflected in the
                         Services segment. As a result, for all periods presented, Services
                         revenue and direct cost of services have increased, with
                         offsetting reductions in Mortgage Insurance other income and other
                         operating expenses.
(2)                      Calculated on a GAAP basis using net premiums earned.
                                                                                                                                                                                                                                                                            
Radian Group Inc. and Subsidiaries
Net Income Per Share Trend Schedule
Exhibit B (page 1 of 2)
 
The calculation of basic and diluted net income per share was
as follows:
                                                                                                                                                                                                                                                                                                                    
                                                                                                                                                                                          2016                                                                                                                              2015
                                                                                          ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     ----------------------
(In thousands, except per share amounts)                                                                Qtr 4                             Qtr 3                             Qtr 2                               Qtr 1                                              Qtr 4
--------------------------------------------------------------------                      -----------------------------                        -----------------------------                        -----------------------------                        ----------------------------------                        --------------------
                                                                                                                                                                                                                                                                                                                    
Net income:
   Net income--basic                                                            $ 61,089                                             $ 82,803                                             $ 98,112                                                 $  66,249                                                    $     74,528
   Adjustment for dilutive Convertible Senior Notes due 2019, net of                             665                               848                               913                                  3,390                                        3,664
   tax (1)
                                                                                          ---------  --------------------                      ---------  --------------------                      ---------  --------------------                      --------------  --------------------                      --------------------
      Net income--diluted                                                       $ 61,754                          $ 83,651                          $ 99,025                              $  69,639                                 $     78,192
                                                                                          === ====== ====================                      === ====== ====================                      === ====== ====================                      ======= ======= ====================                      ========== ==========
                                                                                                                                                                                                                                                                                                                    
Average common shares outstanding--basic                                         214,481                                              214,387                                              214,274                                                   203,706                                                         206,872
Dilutive effect of Convertible Senior Notes due 2017 (2)                                         421                                                  178                                                   12                                            --                                                           1,057
Dilutive effect of Convertible Senior Notes due 2019                                           6,417                                                8,274                                                8,928                                                    33,583                                                          37,736
Dilutive effect of stock-based compensation arrangements (2)                                   3,457                             3,129                             2,989                                  2,418                                        2,316
                                                                                          -------------------------------                      -------------------------------                      -------------------------------                      ------------------------------------                      ----------------------
Adjusted average common shares outstanding--diluted                              224,776                           225,968                           226,203                                239,707                                      247,981
                                                                                          ===============================                      ===============================                      ===============================                      ====================================                      ======================
                                                                                                                                                                                                                                                                                                                    
Basic net income per share:                                                                 $   0.28                          $   0.39                          $   0.46                              $    0.33                                 $       0.36
                                                                                          === ====== ====================                      === ====== ====================                      === ====== ====================                      ======= ======= ====================                      ========== ==========
                                                                                                                                                                                                                                                                                                                    
Diluted net income per share:                                                               $   0.27                          $   0.37                          $   0.44                              $    0.29                                 $       0.32
                                                                                          === ====== ====================                      === ====== ====================                      === ====== ====================                      ======= ======= ====================                      ========== ==========
     
(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)                      The following number of shares of our common stock equivalents
                         issued under our stock-based compensation arrangements and
                         convertible debt were not included in the calculation of diluted
                         net income per share because they were anti-dilutive:
                                                                                                                                                                     
                                                                                                                                                                  2016                                                                                 2015
                                                                                                           ------------------------------------------------------------------------------------------------------------------                     --------------
                                          (In thousands)                                                        Qtr 4            Qtr 3            Qtr 2        Qtr 1                          Qtr 4
                                          -------------------------------------------                      --------------                      --------------                      --------------                      -----                      --------------
                                          Shares of Convertible Senior Notes due 2017                      --                      --                      --                      1,902                      --
                                          Shares of common stock equivalents                                        1,042                               1,045                               1,042                        709                                 728
                                                                      
Radian Group Inc. and Subsidiaries
Net Income Per Share
Exhibit B (page 2 of 2)
                                                                                           
                                                                                                                             Year Ended
                                                                                                                            December 31,
                                                                                          --------------------------------------------------------------------------
(In thousands, except per share amounts)                                                                  2016                            2015
--------------------------------------------------------------------                      ----------------------------------                        --------------------
Net income from continuing operations:
   Net income from continuing operations - basic                                                $ 308,253                                                    $    281,539
   Adjustment for dilutive Convertible Senior Notes due 2019, net of                                5,816                                       14,758
   tax (1)
                                                                                          --------------  --------------------                      --------------------
      Net income from continuing operations - diluted                                           $ 314,069                                 $    296,297
                                                                                          ======= ======= ====================                      ========== ==========
                                                                                                                                                     
Net income:
   Net income from continuing operations - basic                                                $ 308,253                                                    $    281,539
   Income (loss) from discontinued operations, net of tax                                  --                                        5,385
                                                                                          ------------------------------------                      ----------------------
   Net income - basic                                                                             308,253                                                         286,924
   Adjustment for dilutive Convertible Senior Notes due 2019, net of                                5,816                                       14,758
   tax (1)
                                                                                          --------------  --------------------                      --------------------
      Net income - diluted                                                                      $ 314,069                                 $    301,682
                                                                                          ======= ======= ====================                      ========== ==========
                                                                                                                                                     
Average common shares outstanding--basic                                              211,789                                                         199,910
Dilutive effect of Convertible Senior Notes due 2017 (2)                                              207                                                           6,293
Dilutive effect of Convertible Senior Notes due 2019                                               14,263                                                          37,736
Dilutive effect of stock-based compensation arrangements (2)                                        2,999                                        2,393
                                                                                          ------------------------------------                      ----------------------
Adjusted average common shares outstanding--diluted                                   229,258                                      246,332
                                                                                          ====================================                      ======================
                                                                                                                                                     
Net income (loss) per share:
--------------------------------------------------------------------
                                                                                                                                                     
Basic:
   Net income from continuing operations                                                        $    1.46                                                    $       1.41
   Income (loss) from discontinued operations, net of tax                                  --                                         0.03
                                                                                          ------------------------------------                      ----------------------
   Net income                                                                                   $    1.46                                 $       1.44
                                                                                          ======= ======= ====================                      ========== ==========
                                                                                                                                                     
Diluted:
   Net income from continuing operations                                                        $    1.37                                                    $       1.20
   Income (loss) from discontinued operations, net of tax                                  --                                         0.02
                                                                                          ------------------------------------                      ----------------------
   Net income                                                                                   $    1.37                                 $       1.22
                                                                                          ======= ======= ====================                      ========== ==========
     
(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)                      The following number of shares of our common stock equivalents
                         issued under our stock-based compensation arrangements were not
                         included in the calculation of diluted net income per share
                         because they were anti-dilutive:
                                        
                                                                                                             Year Ended
                                                                                                            December 31,
                                                                                                  -----------------------------
                                          (In thousands)                                           2016   2015
                                          ----------------------------------                      -----                      ----
                                          Shares of common stock equivalents                      1,042                       728
 
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit C
                                                                                                                                                                                                                                     
                                                                                                       December 31,                                                                      September 30,                                              June 30,                                                 March 31,                                               December 31,
(In thousands, except per share data)                                                                      2016                                                                              2016                                                     2016                                                     2016                                                      2015
---------------------------------------------------------------------                      ---------------------------------                                                 ---------------------------------                        ---------------------------------                        ---------------------------------                        ------------------------------------
                                                                                                                                                                                                                                                                                                                                                         
Assets:
Investments                                                                                   $ 4,462,430                                                                       $ 4,565,748                                              $ 4,636,914                                              $ 4,470,172                                                 $ 4,298,686
Cash                                                                                               52,149                                                                            46,356                                                   55,062                                                   64,844                                                      46,898
Restricted cash                                                                                     9,665                                                                            10,312                                                    9,298                                                   10,060                                                      13,000
Accounts and notes receivable                                                                      77,631                                                                            94,692                                                   77,170                                                   66,340                                                      61,734
Deferred income taxes, net                                                                        411,798                                                                           401,442                                                  444,513                                                  518,059                                                     577,945
Goodwill and other intangible assets, net                                                         276,228                                                                           279,400                                                  282,703                                                  286,069                                                     289,417
Prepaid reinsurance premium                                                                       229,438                                                                           229,754                                                  229,231                                                  228,718                                                      40,491
Other assets                                                                                      343,835                                                        422,123                               332,372                               325,129                                  313,929  
                                                                                           -----------------------------------                                               -----------------------------------                      -----------------------------------                      -----------------------------------                      --------------------------------------
Total assets                                                                                  $ 5,863,174                                                    $ 6,049,827                           $ 6,067,263                           $ 5,969,391                              $ 5,642,100  
                                                                                           ==== ========= ====================                                               ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================                      ======= ========= ====================
                                                                                                                                                                                                                                                                                                                                                         
Liabilities and stockholders’ equity:
Unearned premiums                                                                             $   681,222                                                                       $   680,973                                              $   677,599                                              $   673,887                                                 $   680,300
Reserve for losses and loss adjustment expense                                                    760,269                                                                           821,934                                                  848,379                                                  891,348                                                     976,399
Long-term debt                                                                                  1,069,537                                                                         1,067,666                                                1,278,051                                                1,286,466                                                   1,219,454
Reinsurance funds withheld                                                                        158,001                                                                           177,147                                                  163,360                                                  151,104                                              --
Other liabilities                                                                                 321,859                                                        413,401                               294,507                               306,188                                  269,016  
                                                                                           -----------------------------------                                               -----------------------------------                      -----------------------------------                      -----------------------------------                      --------------------------------------
Total liabilities                                                                               2,990,888                                                      3,161,121                             3,261,896                             3,308,993                                3,145,169  
                                                                                           -----------------------------------                                               -----------------------------------                      -----------------------------------                      -----------------------------------                      --------------------------------------
                                                                                                                                                                                                                                                                                                                                                         
Common stock                                                                                          232                                                                               232                                                      232                                                      232                                                         224
Treasury stock                                                                                   (893,332 )                                                                        (893,197 )                                               (893,176 )                                               (893,176 )                                                  (893,176 )
Additional paid-in capital                                                                      2,779,891                                                                         2,778,860                                                2,781,136                                                2,773,349                                                   2,716,618
Retained earnings                                                                                 997,890                                                                           937,338                                                  855,070                                                  757,202                                                     691,742
Accumulated other comprehensive income (loss)                                                     (12,395 )                                                                          65,473                                62,105                                22,791                                  (18,477 )
                                                                                           -----------------------------------                                               -----------------------------------                      -----------------------------------                      -----------------------------------                      --------------------------------------
Total stockholders’ equity                                           2,872,286                                                      2,888,706                             2,805,367                             2,660,398                                2,496,931  
                                                                                           -----------------------------------                                               -----------------------------------                      -----------------------------------                      -----------------------------------                      --------------------------------------
Total liabilities and stockholders’ equity                         $ 5,863,174                                                    $ 6,049,827                           $ 6,067,263                           $ 5,969,391                              $ 5,642,100  
                                                                                           ==== ========= ====================                                               ==== ========= ====================                      ==== ========= ====================                      ==== ========= ====================                      ======= ========= ====================
                                                                                                                                                                                                                                                                                                                                                         
Shares outstanding                                                                                214,521                                                                           214,405                                                  214,284                                                  214,265                                                     206,872
                                                                                                                                                                                                                                                                                                                                                         
Book value per share                                                                          $     13.39                                                                       $     13.47                                              $     13.09                                              $     12.42                                                 $     12.07
                                                                                                                                                                                                                                                                                                                                                         
Statutory Capital Ratios
---------------------------------------------------------------------
Risk to capital ratio-Radian Guaranty only                                                           13.5                   :1                      (1)                                13.7                   :1                                14.0                   :1                                12.5                   :1                                   14.3                   :1
Risk to capital ratio-Mortgage Insurance combined                                                    13.6                   :1                      (1)                                13.9                   :1                                14.2                   :1                                12.9                   :1                                   14.6                   :1
                                                                                                                                                                                                                                                                                                                                                                           
(1) Preliminary.
                                                                                                                                                                                                                                                                                                                                                                           
 
Radian Group Inc. and Subsidiaries
Net Premiums Earned - Insurance and Other Operating Expenses
Exhibit D (page 1 of 2)
                                                                                                                                                                                                                                                                
                                                                                                                                                                              2016                                                                                                                                     2015
                                                                               ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     ------------------------------------
(In thousands)                                                                               Qtr 4                              Qtr 3                              Qtr 2                              Qtr 1                                                   Qtr 4
---------------------------------------------------------                      ------------------------------                        ------------------------------                        ------------------------------                        ------------------------------                        ---------------------------------
                                                                                                                                                                                                                                                                                                        
Premiums earned - insurance:
  Direct                                                                         $ 251,751                                             $ 258,074                                             $ 248,938                                             $ 240,330                                                $ 239,424
  Assumed                                                                                8                                                     9                                                     9                                                     9                                                       10
  Ceded                                                                            (18,174 )                                             (19,934 )                                             (19,862 )                                             (19,389 )                                                (12,991 )
                                                                               --------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
    Net premiums earned - insurance                                              $ 233,585                          $ 238,149                          $ 229,085                          $ 220,950                             $ 226,443  
                                                                               === ======= ====================                      === ======= ====================                      === ======= ====================                      === ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                        
Notable variable items: (1)
  Single Premium Policy cancellations, net of reinsurance                        $  15,702                                             $  18,448                                             $  14,841                                             $   9,783                                                $  13,520
  Profit commission - reinsurance (2)                                                8,458                              8,922                              7,891                              6,134                                 1,559  
                                                                               --------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
    Total                                                                        $  24,160                          $  27,370                          $  22,732                          $  15,917                             $  15,079  
                                                                               === ======= ====================                      === ======= ====================                      === ======= ====================                      === ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                        
Other operating expenses (3)                                                     $  62,416                          $  62,119                          $  63,173                          $  57,188                             $  58,624  
                                                                               === ======= ====================                      === ======= ====================                      === ======= ====================                      === ======= ====================                      ====== ======= ====================
                                                                                                                                                                                                                                                                                                        
Notable variable items: (4)
  Technology upgrade project (5)                                                 $   3,648                                             $   2,440                                             $   2,443                                             $   2,271                                                $   1,558
  Severance costs                                                                      888                                                 1,137                                                   277                                                 3,040                                                      116
  Incentive compensation (6) (7)                                                     9,072                                                12,652                                                14,183                                                 6,235                                                    4,013
  Ceding commissions (8)                                                            (5,105 )                                              (5,460 )                                              (5,006 )                                              (4,413 )                                                 (1,229 )
                                                                               --------------------------------                      --------------------------------                      --------------------------------                      --------------------------------                      -----------------------------------
    Total                                                                        $   8,503                          $  10,769                          $  11,897                          $   7,133                             $   4,458  
                                                                               === ======= ====================                      === ======= ====================                      === ======= ====================                      === ======= ====================                      ====== ======= ====================
     
(1)                      Affecting net premiums earned-insurance.
(2)                      For 2016, the amounts represent the profit commission on the
                         Single Premium QSR Transaction. For 2015, the amount represents an
                         accrual for the profit commission on the Second QSR Transaction.
(3)                      For all periods presented, incorporates organizational changes
                         to align our segment reporting structure with recent changes in
                         personnel reporting lines and management oversight related to
                         contract underwriting performed on behalf of third parties.
                         Revenue and expenses for this business is now reflected in the
                         Services segment. As a result, for all periods presented, Services
                         revenue and direct cost of services have increased, with
                         offsetting reductions in Mortgage Insurance other income and other
                         operating expenses.
(4)                      Affecting other operating expenses.
(5)                      Represents the expense impact of certain costs incurred in our
                         initiative to significantly upgrade our technology systems.
(6)                      The expense relates to short- and long-term incentive
                         compensation programs. For our equity-settled long-term incentive
                         awards the annual grants for 2016 were made in the second quarter
                         of 2016. Therefore, expense in the second quarter of 2016 was
                         elevated, primarily due to the required acceleration of expense
                         recognition for retirement-eligible employees, who are considered
                         effectively vested immediately in grants that would otherwise vest
                         over a period of 3 or 4 years. The expense in the third and fourth
                         quarter of 2016 remained elevated, primarily due to adjustments to
                         accrued short-term incentives based on year-to-date performance.
(7)                      Incentive compensation expense is shown net of deferred policy
                         acquisition costs.
(8)                      Ceding commissions are shown net of deferred policy acquisition
                         costs.
                          
 
Radian Group Inc. and Subsidiaries
Net Premiums Earned - Insurance and Other Operating Expenses
Exhibit D (page 2 of 2)
                                                           
                                                                                                                        Year Ended
                                                                                                                       December 31,
                                                                               ---------------------------------------------------------------------------------------------
(In thousands)                                                                                 2016                                  2015
---------------------------------------------------------                      ---------------------------------                        ---------------------------------
                                                                                                                                         
Premiums earned - insurance:
  Direct                                                                            $ 999,093                                                $ 973,645
  Assumed                                                                                  35                                                       43
  Ceded                                                                               (77,359 )                                                (57,780 )
                                                                               -----------------------------------                      -----------------------------------
                                                                                    $ 921,769                             $ 915,908  
    Net premiums earned - insurance
                                                                               ====== ======= ====================                      ====== ======= ====================
                                                                                                                                         
Notable variable items: (1)
  Single Premium Policy cancellations, net of reinsurance                           $  58,774                                                $  68,267
  Profit commission - reinsurance (2)                                                  31,405                                 7,993  
                                                                               -----------------------------------                      -----------------------------------
    Total                                                                           $  90,179                             $  76,260  
                                                                               ====== ======= ====================                      ====== ======= ====================
                                                                                                                                         
Other operating expenses (3)                                                        $ 244,896                             $ 242,405  
                                                                               ====== ======= ====================                      ====== ======= ====================
                                                                                                                                         
Notable variable items: (4)
  Technology upgrade project (5)                                                    $  10,802                                                $   7,108
  Severance costs                                                                       5,342                                                    1,517
  Incentive compensation (6) (7)                                                       42,142                                                   40,186
  Ceding commissions (8)                                                              (19,984 )                                                 (5,482 )
                                                                               -----------------------------------                      -----------------------------------
    Total                                                                           $  38,302                             $  43,329  
                                                                               ====== ======= ====================                      ====== ======= ====================
     
(1)                      Affecting net premiums earned-insurance.
(2)                      For 2016, the amounts represent the profit commission on the
                         Single Premium QSR Transaction. For 2015, the amount represents an
                         accrual for the profit commission on the Second QSR Transaction.
(3)                      For all periods presented, incorporates organizational changes
                         to align our segment reporting structure with recent changes in
                         personnel reporting lines and management oversight related to
                         contract underwriting performed on behalf of third parties.
                         Revenue and expenses for this business is now reflected in the
                         Services segment. As a result, for all periods presented, Services
                         revenue and direct cost of services have increased, with
                         offsetting reductions in Mortgage Insurance other income and other
                         operating expenses.
(4)                      Affecting other operating expenses.
(5)                      Represents the expense impact of certain costs incurred in our
                         initiative to significantly upgrade our technology systems.
(6)                      The expense relates to short- and long-term incentive
                         compensation programs.
(7)                      Incentive compensation expense is shown net of deferred policy
                         acquisition costs.
(8)                      Ceding commissions are shown net of deferred policy acquisition
                         costs.
                          
 
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 1 of 3)
 
Summarized financial information concerning our operating segments
as of and for the periods indicated is as follows. For a definition
of adjusted pretax operating income and Services adjusted EBITDA,
along with reconciliations to consolidated GAAP measures, see
Exhibits F and G.
 
                                                                                                                                                                                                                                                               Mortgage Insurance (1)
                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                         2016                                                                                                                                                                                              2015
                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                         --------------------------------------------------
(In thousands)                                                                                                                 Qtr 4                                                 Qtr 3                                                 Qtr 2                                                 Qtr 1                                                                      Qtr 4
-------------------------------------------------------------                                           -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                            -----------------------------------------------
Net premiums written - insurance                                                                                           $ 234,172                                                                                   $ 240,999                                                                                   $ 232,353                                                                                   $  26,310                      (2)                                         $ 233,347
Decrease (increase) in unearned premiums                                                                     (587 )                                                                 (2,850 )                                                                 (3,268 )                                                                194,640                               (6,904 )
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
Net premiums earned - insurance                                                                                              233,585                                                                                     238,149                                                                                     229,085                                                                                     220,950                                                                    226,443
Net investment income                                                                                                         28,996                                                                                      28,430                                                                                      28,839                                                                                      27,201                                                                     22,833
Other income                                                                                                  736                                                   716                                                 1,454                                                   666                                  670  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
     Total                                                                                                263,317                                               267,295                                               259,378                                               248,817                              249,946  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Provision for losses                                                                                                          54,675                                                                                      56,151                                                                                      50,074                                                                                      43,275                                                                     56,817
Policy acquisition costs                                                                                                       5,579                                                                                       6,119                                                                                       5,393                                                                                       6,389                                                                      4,831
Other operating expenses before corporate allocations                                                      37,773                                                35,940                                                34,365                                                32,546                               37,156  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
     Total (3)                                                                                             98,027                                                98,210                                                89,832                                                82,210                               98,804  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
Adjusted pretax operating income before corporate allocations                                                                165,290                                                                                     169,085                                                                                     169,546                                                                                     166,607                                                                    151,142
     Allocation of corporate operating expenses                                                                                9,652                                                                                      11,911                                                                                      14,286                                                                                       9,329                                                                      9,251
     Allocation of interest expense                                                                        12,843                                                15,360                                                18,124                                                17,112                               16,582  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
Adjusted pretax operating income                                                                                           $ 142,795                                                                $ 141,814                                                                $ 137,136                                                                $ 140,166                                               $ 125,309  
                                                                                                        ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                          ==================== ======= ====================
                                                                                                         
                                                                                                         
                                                                                                                                                                                                                                                                                                          Services (1)
                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                                                                                                                         2016                                                                                                                                                                                                                 2015
                                                                                                        ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                         --------------------------------------------------
(In thousands)                                                                                                                 Qtr 4                                                                                       Qtr 3                                                                                       Qtr 2                                                                                       Qtr 1                                                                      Qtr 4
-------------------------------------------------------------                                           -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                            -----------------------------------------------
Services revenue (3)                                                                                                       $  52,558                                                                $  48,033                                                                $  42,210                                                                $  34,448                                               $  39,498  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
Direct cost of services                                                                                                       34,130                                                                                      29,655                                                                                      27,730                                                                                      23,854                                                                     23,826
Other operating expenses before corporate allocations                                                      14,842                                                13,575                                                13,030                                                14,368                               11,492  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
     Total                                                                                                 48,972                                                43,230                                                40,760                                                38,222                               35,318  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
Adjusted pretax operating income (loss) before corporate                                                                       3,586                                                                                       4,803                                                                                       1,450                                                                                      (3,774 )                                                                    4,180
allocations (4)
     Allocation of corporate operating expenses                                                                                1,738                                                                                       2,265                                                                                       2,779                                                                                       1,751                                                                        968
     Allocation of interest expense                                                                         4,426                                                 4,423                                                 4,422                                                 4,422                                4,414  
                                                                                                        -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                          -------------------- ------- --------------------
Adjusted pretax operating income (loss)                                                                                    $  (2,578 )                                                                                 $  (1,885 )                                                                                 $  (5,751 )                                                                                 $  (9,947 )                                                                $  (1,202 )
                                                                                                        ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                          ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
(1)   For all periods presented, incorporates organizational changes
                         to align our segment reporting structure with recent changes in
                         personnel reporting lines and management oversight related to
                         contract underwriting performed on behalf of third parties.
                         Revenue and expenses for this business is now reflected in the
                         Services segment. As a result, for all periods presented, Services
                         revenue, direct cost of services and other operating expenses have
                         increased, with offsetting reductions in Mortgage Insurance other
                         income and other operating expenses.
(2)                      Net of ceded premiums written under the Single Premium QSR
                         transaction of $197.6 million.
(3)                      Inter-segment information:
                          
                                                                                                                                                                                                                                           
                                                                                                                                                                                           2016                                                                                                                                   2015
                                                                                                            ------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------
                                                                                                              Qtr 4        Qtr 3        Qtr 2        Qtr 1                                                      Qtr 4
                                                                                                            ---------                                          ---------                                          ---------                                          ---------                                          ------------------------
     Inter-segment expense included in Mortgage Insurance segment                                            $ 2,653                                            $ 2,156                                            $ 1,947                                            $ 1,599                                            $                1,160
     Inter-segment revenue included in Services segment                                                        2,653                                              2,156                                              1,947                                              1,599                                                             1,160
                                                                                                                                                                                                                                                                                                                            
 
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 2 of 3)
             
(4)                              Supplemental information for Services adjusted EBITDA (see
                                 definition in Exhibit F):
                                                                                                                                                                                                                                                                                                               
                                                                                                                                                                                                                                                           2016                                                                                                                                                                                                            2015
                                                                                                             ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          ------------------------------------------
                                                                                                                                     Qtr 4                                                     Qtr 3                                      Qtr 2                                     Qtr 1                                                                                   Qtr 4
                                                                                                             ----------------------------------------------------                         ----------------------------------------------------                                          ---------------------------                                          -------------------------------------------------                                          ------------------------------------------
     Adjusted pretax operating income before corporate allocations                                                              $     3,586                                                                  $     4,803                                                                                   $ 1,450                                                              $ (3,774 )                                                                                 $                4,180
          Depreciation and amortization                                                                              829                                    884                                                 749                                                663                                                                612
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------                                           -------------------- -----                                           -------------------- ------ --------------------                                           -------------------- --------------------
     Services EBITDA                                                                                                            $     4,415                                               $     5,687                                                                $ 2,199                                                              $ (3,111 )                                                                                 $                4,792
                                                                                                             ==================== ========= ====================                          ==================== ========= ====================                                           ==================== =====                                           ==================== ====== ====================                                           ==================== ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                  Mortgage Insurance (1)
                                                                                                             ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                        Year Ended
                                                                                                                                                                       December 31,
                                                                                                             -------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                       2016                                                                         2015
------------------------------------------------------------------                                           -------------------------------------------------                            -------------------------------------------------
Net premiums written - insurance                                                                                                $   733,834                      (2)                                         $   968,505
Decrease (increase) in unearned premiums                                                                         187,935                                (52,597 )
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
Net premiums earned - insurance                                                                                                     921,769                                                                      915,908
Net investment income (3)                                                                                                           113,466                                                                       81,537
Other income (3)                                                                                                   3,572                                  2,899  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
     Total                                                                                                     1,038,807                              1,000,344  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Provision for losses                                                                                                                204,175                                                                      198,433
Policy acquisition costs                                                                                                             23,480                                                                       22,424
Other operating expenses before corporate allocations                                                            140,624                                148,619  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
     Total (4)                                                                                                   368,279                                369,476  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
Adjusted pretax operating income before corporate allocations                                                                       670,528                                                                      630,868
     Allocation of corporate operating expenses (3)                                                                                  45,178                                                                       46,418
     Allocation of interest expense (3)                                                                           63,439                                 73,402  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
Adjusted pretax operating income                                                                                                $   561,911                                               $   511,048  
                                                                                                             ==================== ========= ====================                          ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
                                                                                                                                                                       Services (1)
                                                                                                             ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                                                        Year Ended
                                                                                                                                                                       December 31,
                                                                                                             -------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                       2016                                                                         2015
------------------------------------------------------------------                                           -------------------------------------------------                            -------------------------------------------------
Services revenue (4)                                                                                                            $   177,249                                               $   163,140  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
Direct cost of services                                                                                                             115,369                                                                       97,256
Other operating expenses before corporate allocations                                                             55,815                                 43,515  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
     Total                                                                                                       171,184                                140,771  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
Adjusted pretax operating income (loss) before corporate                                                                              6,065                                                                       22,369
allocations (5)
     Allocation of corporate operating expenses                                                                                       8,533                                                                        4,823
     Allocation of interest expense                                                                               17,693                                 17,700  
                                                                                                             -------------------- --------- --------------------                          -------------------- --------- --------------------
Adjusted pretax operating income (loss)                                                                                         $   (20,161 )                                                                $      (154 )
                                                                                                             ==================== ========= ====================                          ==================== ========= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
(1)   For all periods presented, incorporates organizational changes
                         to align our segment reporting structure with recent changes in
                         personnel reporting lines and management oversight related to
                         contract underwriting performed on behalf of third parties.
                         Revenue and expenses for this business is now reflected in the
                         Services segment. As a result, for all periods presented, Services
                         revenue, direct cost of services and other operating expenses have
                         increased, with offsetting reductions in Mortgage Insurance other
                         income and other operating expenses.
                          
 
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 3 of 3)
             
(2)                              Net of ceded premiums written under the Single Premium QSR
                                 transaction of $197.6 million.
                                  
(3)                              For periods prior to the quarter ended June 30, 2015, includes
                                 certain corporate income and expenses that have been reallocated
                                 from our prior financial guaranty segment to the Mortgage
                                 Insurance segment and that were not reclassified to discontinued
                                 operations.
                                  
(4)                              Inter-segment information:
     
                                                                                                                                         Year Ended
                                                                                                                                                                              December 31,
                                                                                                                                 ------------------------------------------------------------------------------------------------
                                                                                                                                             2016                              2015
                                                                                                                                 ----------------------------                                          --------------------------------
                         Inter-segment expense included in Mortgage Insurance segment                                                               $  8,355                                                              $      5,924
                         Inter-segment revenue included in Services segment                                                                            8,355                                                                     5,924
                                                                                                                                                                                                        
                          
(5)                      Supplemental information for Services adjusted EBITDA (see
                         definition in Exhibit F)
                          
                                                                                                                                                                               Year Ended
                                                                                                                                                                              December 31,
                                                                                                                                 ------------------------------------------------------------------------------------------------
                                                                                                                                             2016                                                                    2015
                                                                                                                                 ----------------------------                                          --------------------------------
                         Adjusted pretax operating income before corporate allocations                                                              $  6,065                                                              $     22,369
                          Depreciation and amortization                                                                             3,125                                                  2,098
                                                                                                                                 -------------------- ------                                           -------------------- ----------
                         Services EBITDA                                                                                                            $  9,190                                                              $     24,467
                                                                                                                                 ==================== ======                                           ==================== ==========
                              
Selected balance sheet information for our segments, as of the
periods indicated, is a follows:
 
                                                                                                                                                                                                                                                At December 31, 2016
                                                                                                                                                                                       ---------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                                                                            Mortgage          Services                Total
                                                                                                                                                                                          Insurance
--------------                                                                                                                                                                         ------------                                             ---------                                             ----------------------
Total assets                                                                                                                                                                             $ 5,506,338                                             $ 356,836                                             $            5,863,174
                                                                                                                                                                                        
                                                                                                                                                                                        
                                                                                                                                                                                                                                                At December 31, 2015
                                                                                                                                                                                       ---------------------------------------------------------------------------------------------------------------------------------------
(In thousands)                                                                                                                                                                            Mortgage                                                Services                                                      Total
                                                                                                                                                                                          Insurance
--------------                                                                                                                                                                         ------------                                             ---------                                             ----------------------
Total assets                                                                                                                                                                             $ 5,290,422                                             $ 351,678                                             $            5,642,100
                                                                                                                                                                                                                                                                                                          
 
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measures
Exhibit F (page 1 of 2)
 
 
Use of Non-GAAP Financial Measures
 
In addition to the traditional GAAP financial measures, we have
presented "adjusted pretax operating income" and "adjusted diluted
net operating income per share," non-GAAP financial measures for the
consolidated company, among our key performance indicators to
evaluate our fundamental financial performance. These non-GAAP
financial measures align with the way the Company’s business
performance is evaluated by both management and the board of
directors. These measures have been established in order to increase
transparency for the purposes of evaluating our operating trends and
enabling more meaningful comparisons with our peers. Although on a
consolidated basis "adjusted pretax operating income" and "adjusted
diluted net operating income per share" are non-GAAP financial
measures, we believe these measures aid 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.
 
Adjusted pretax operating income is defined as GAAP consolidated
pretax income from continuing operations excluding the effects of
net gains (losses) on investments and other financial instruments,
loss on induced conversion and debt extinguishment,
acquisition-related expenses, amortization and impairment of
intangible assets and net impairment losses recognized in earnings.
Adjusted diluted net operating income per share is calculated by
dividing (i) adjusted pretax operating income attributable to common
shareholders, net of taxes computed using the company’s statutory
tax rate, by (ii) the sum of the weighted average number of common
shares outstanding and all dilutive potential common shares
outstanding. Interest expense on convertible debt, share dilution
from convertible debt and the impact of stock-based compensation
arrangements have been reflected in the per share calculations
consistent with the accounting standard regarding earnings per
share, whenever the impact is dilutive.
 
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 amount reflected in consolidated pretax income (loss)
from continuing operations. These adjustments, along with the
reasons for their treatment, are described below.
 
        
(1)                         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.
                             
                            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. We do not view them to be
                            indicative of our fundamental operating activities. Therefore, these
                            items are excluded from our calculation of adjusted pretax operating
                            income (loss). However, we include the change in expected economic
                            loss or recovery associated with our consolidated VIEs, if any, in
                            the calculation of adjusted pretax operating income (loss).
 
(2)                         Loss on induced conversion and debt extinguishment. Gains
                            or losses on early extinguishment of debt and losses incurred to
                            purchase our convertible debt prior to maturity are discretionary
                            activities that are undertaken in order to take advantage of
                            market opportunities to strengthen our financial and capital
                            positions; therefore, we do not view these activities as part of
                            our operating performance. Such transactions do not reflect
                            expected future operations and do not provide meaningful insight
                            regarding our current or past operating trends. Therefore, these
                            items are excluded from our calculation of adjusted pretax
                            operating income (loss).
                             
(3)                         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 strategic 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).
                             
(4)                         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 Measures
Exhibit F (page 2 of 2)
 
(5)                                     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).
                                         
In addition to the above non-GAAP measures for the consolidated
company, we also have presented as supplemental information a
non-GAAP measure for our Services segment, representing a measure of
earnings before interest, income taxes, depreciation and
amortization ("EBITDA"). We calculate Services adjusted EBITDA by
using adjusted pretax operating income as described above, further
adjusted to remove the impact of depreciation and corporate
allocations for interest and operating expenses. We have presented
Services adjusted EBITDA to facilitate comparisons with other
services companies, since it is a widely accepted measure of
performance in the services industry.
 
See Exhibit G for the reconciliation of the most comparable GAAP
measures, consolidated pretax income from continuing operations and
diluted net income per share from continuing operations, to our
non-GAAP financial measures for the consolidated company, adjusted
pretax operating income and adjusted diluted net operating income
per share, respectively. Exhibit G also contains the reconciliation
of the most comparable GAAP measure, net income, to Services
adjusted EBITDA.
 
Total adjusted pretax operating income, adjusted diluted net
operating income per share and Services adjusted EBITDA are not
measures of total profitability, and therefore should not be viewed
as substitutes for GAAP pretax income, diluted net income per share
or net income. Our definitions of adjusted pretax operating income,
adjusted diluted net operating income per share or Services adjusted
EBITDA may not be comparable to similarly-named measures reported by
other companies.
 
                                                                                                                                                                                                                                                                                                         
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 1 of 4)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                     Reconciliation of Consolidated Pretax Income to Adjusted Pretax
                                                                                                                                                                                                                                     Operating Income
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
                                                                                                                                                                                                                                                                                     2016                                                                                                                                                                                                                                      2015
                                                                                                                 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------
(In thousands)                                                                                                                             Qtr 4                                                                                           Qtr 3                                                                                       Qtr 2                                                                                       Qtr 1                                                                                       Qtr 4
----------------------------------------------------------------------                                           ------------------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------
Consolidated pretax income                                                                                                          $         97,796                                                                                   $ 126,941                                                                                   $ 156,547                                                                                   $ 102,402                                                                                   $ 104,710
Less income (expense) items:
     Net gains (losses) on investments and other financial instruments                                                                       (38,773 )                                                                                     7,711                                                                                      30,527                                                                                      31,286                                                                                     (13,402 )
     Loss on induced conversion and debt extinguishment                                                                               --                                                                                     (17,397 )                                                                                    (2,108 )                                                                                   (55,570 )                                                                                    (2,320 )
     Acquisition-related expenses (1)                                                                                                           (358 )                                                                                       (10 )                                                                                        54                                                                                        (205 )                                                                                      (266 )
     Amortization and impairment of intangible assets                                                                      (3,290 )                                                                 (3,292 )                                                                 (3,311 )                                                                 (3,328 )                                                                 (3,409 )
                                                                                                                 -------------------- -------------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
Total adjusted pretax operating income (2)                                                                                          $        140,217                                                                $ 139,929                                                                $ 131,385                                                                $ 130,219                                                                $ 124,107  
                                                                                                                 ==================== ============== ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================
 
(1) Please see Exhibit F for the definition of this line item.
(2) Total adjusted pretax operating income consists of adjusted
pretax operating income for each segment as follows:
 
                                                                                                                                                                                                                                                                                     2016                                                                                                                                                                                                                                      2015
                                                                                                                 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                                          --------------------------------------------------
                                                                                                                                           Qtr 4                                                                                           Qtr 3                                                                                       Qtr 2                                                                                       Qtr 1                                                                                       Qtr 4
    (In thousands)
----------------------------------------------------------------------                                           ------------------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------                                             -----------------------------------------------
    Adjusted pretax operating income (loss):
         Mortgage Insurance                                                                                                         $        142,795                                                                                   $ 141,814                                                                                   $ 137,136                                                                                   $ 140,166                                                                                   $ 125,309
         Services                                                                                                          (2,578 )                                                                 (1,885 )                                                                 (5,751 )                                                                 (9,947 )                                                                 (1,202 )
                                                                                                                 -------------------- -------------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------                                           -------------------- ------- --------------------
    Total adjusted pretax operating income                                                                                          $        140,217                                                                $ 139,929                                                                $ 131,385                                                                $ 130,219                                                                $ 124,107  
                                                                                                                 ==================== ============== ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================                                           ==================== ======= ====================
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
 
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 2 of 4)
 
                                                                                                                                                      Reconciliation of Diluted Net Income Per Share to Adjusted
                                                                                                                                                                Diluted Net Operating Income Per Share
                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                                 2016                                                                                                                                             2015
                                                                                          -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -------------------------------------
                                                                                                          Qtr 4                                  Qtr 3                                  Qtr 2                                  Qtr 1                                                     Qtr 4
                                                                                          -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------                     -------------------------------------
Diluted net income per share                                                                    $    0.27                                                 $    0.37                                                 $    0.44                                                 $    0.29                                                 $    0.32
                                                                                                                                                                                                                                                                                                                                   
Less per-share impact of debt items:
  Loss on induced conversion and debt extinguishment                                       --                                                     (0.08 )                                                   (0.01 )                                                   (0.23 )                                                   (0.01 )
  Income tax provision (benefit) (1)                                                       --                                  (0.03 )                                          --                                  (0.03 )                                                   (0.04 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Per-share impact of debt items                                                        --                                  (0.05 )                                                   (0.01 )                                                   (0.20 )                                                    0.03  
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
                                                                                                                                                                                                                                                                                                                                   
Less per-share impact of other income (expense) items:
  Net gains (losses) on investments and other financial instruments                                 (0.17 )                                                    0.03                                                      0.13                                                      0.13                                                     (0.05 )
  Acquisition-related expenses                                                             --                                            --                                            --                                            --                                            --
  Amortization and impairment of intangible assets                                                  (0.02 )                                                   (0.01 )                                                   (0.01 )                                                   (0.01 )                                                   (0.01 )
  Income tax provision (benefit) on other income (expense) items (2)                                (0.07 )                                                    0.01                                                      0.04                                                      0.04                                                     (0.02 )
  Difference between statutory and effective tax rate                                               (0.02 )                                          --                                  (0.01 )                                                    0.04                                  (0.01 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
     Per-share impact of other income (expense) items                                               (0.14 )                                                    0.01                                   0.07                                   0.12                                  (0.05 )
                                                                                          ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------                      ------------------------------------
Adjusted diluted net operating income per share (2)                                             $    0.41                              $    0.41                              $    0.38                              $    0.37                              $    0.34  
                                                                                          ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                                                   
(1)   A portion of the loss on induced conversion and debt
                         extinguishment is non-deductible for tax purposes. The income tax
                         benefit is based on the tax deductible loss using the company’s
                         federal statutory tax rate.
(2)                      Calculated using the company’s federal statutory tax rate. Any
                         permanent tax adjustments and state income taxes on these items
                         have been deemed immaterial and are not included.
                          
 
                                                           Reconciliation of Consolidated Pretax Income from Continuing
                                                                  Operations to Adjusted Pretax Operating Income
                                                                  
                                                                                                                               Year Ended
                                                                                                                              December 31,
                                                                                      --------------------------------------------------------------------------------------
                                                                                                      2016                                  2015
     (In thousands)
----------------------------------------------------------------                      ---------------------------------                        ---------------------------------
     Consolidated pretax income from continuing operations                                 $ 483,686                                                $ 437,829
     Less income (expense) items:
        Net gains on investments and other financial instruments                              30,751                                                   35,693
        Loss on induced conversion and debt extinguishment                                   (75,075 )                                                (94,207 )
        Acquisition-related expenses (1)                                                        (519 )                                                 (1,565 )
        Amortization and impairment of intangible assets                                     (13,221 )                                                (12,986 )
                                                                                      -----------------------------------                      -----------------------------------
     Total adjusted pretax operating income (2)                                            $ 541,750                             $ 510,894  
                                                                                      ====== ======= ====================                      ====== ======= ====================
                                                                                                                                                               
(1)   Please see Exhibit F for the definition of this line item.
(2)                      Total adjusted pretax operating income consists of adjusted
                         pretax operating income for each segment as follows:
                                                                                 Year Ended
                                                                                                   December 31,
                                                              -------------------------------------------------------------------------------
(In thousands)                                                              2016                               2015
----------------------------------------                      ------------------------------                        -----------------------------
Adjusted pretax operating income (loss):
   Mortgage Insurance *                                         $ 561,911                                            $ 511,048
   Services                                                       (20,161 )                                               (154 )
                                                              --------------------------------                      -------------------------------
Total adjusted pretax operating income                          $ 541,750                         $ 510,894  
                                                              === ======= ====================                      == ======= ====================
*   For periods prior to the quarter ended June 30, 2015, includes
                       certain corporate income and expenses that have been reallocated
                       from our prior financial guaranty segment to the Mortgage
                       Insurance segment and that were not reclassified to discontinued
                       operations.
                        
 
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 3 of 4)
 
                                                                Reconciliation of Diluted Net Income Per Share from Continuing
                                                                 Operations to Adjusted Diluted Net Operating Income Per Share
                                                                           
                                                                                                                                         Year Ended
                                                                                                                                        December 31,
                                                                                               ----------------------------------------------------------------------------------------
                                                                                                               2016                                   2015
                                                                                               -------------------------------------                     -------------------------------------
     Diluted net income per share from continuing operations                                         $    1.37                                                 $    1.20
                                                                                                                                                          
     Less per-share impact of debt items:
       Loss on induced conversion and debt extinguishment                                                (0.33 )                                                   (0.38 )
       Income tax provision (benefit) (1)                                                                (0.07 )                                                   (0.13 )
                                                                                               ------------------------------------                      ------------------------------------
         Per-share impact of debt items                                                                  (0.26 )                                                   (0.25 )
                                                                                               ------------------------------------                      ------------------------------------
                                                                                                                                                          
     Less per-share impact of other income (expense) items:
       Net gains (losses) on investments and other financial instruments                                  0.14                                                      0.14
       Acquisition-related expenses                                                             --                                                     (0.01 )
       Amortization and impairment of intangible assets                                                  (0.06 )                                                   (0.05 )
       Income tax provision (benefit) on other income (expense) items (2)                                 0.03                                                      0.03
       Difference between statutory and effective tax rate                                                0.02                         --  
                                                                                               ------------------------------------                      ------------------------------------
         Per-share impact of other income (expense) items                                                 0.07                                   0.05  
                                                                                               ------------------------------------                      ------------------------------------
     Adjusted diluted net operating income per share (2)                                             $    1.56                              $    1.40  
                                                                                               ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                          
(1)   A portion of the loss on induced conversion and debt
                         extinguishment is non-deductible for tax purposes. The income tax
                         benefit is based on the tax deductible loss using the company’s
                         federal statutory tax rate.
(2)                      Calculated using the company’s federal statutory tax rate. Any
                         permanent tax adjustments and state income taxes on these items
                         have been deemed immaterial and are not included.
                          
 
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 4 of 4)
 
 
                                                                                                                                             Reconciliation of Net Income to Services Adjusted EBITDA
                                                                                                                                                                                                                                                                           
                                                                                                                                                                                         2016                                                                                                                                   2015
                                                                                         ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     --------------------------------
(In thousands)                                                                                           Qtr 4                                Qtr 3                             Qtr 2                             Qtr 1                                                Qtr 4
-------------------------------------------------------------------                      ----------------------------------                        -----------------------------                        -----------------------------                        -----------------------------                        -----------------------------
Net income                                                                                     $  61,089                                             $ 82,803                                             $ 98,112                                             $ 66,249                                             $ 74,528
Less income (expense) items:
  Net gains (losses) on investments and other financial instruments                              (38,773 )                                              7,711                                               30,527                                               31,286                                              (13,402 )
  Loss on induced conversion and debt extinguishment                                      --                                              (17,397 )                                             (2,108 )                                            (55,570 )                                             (2,320 )
  Acquisition-related expenses                                                                      (358 )                                                (10 )                                                 54                                                 (205 )                                               (266 )
  Amortization and impairment of intangible assets                                                (3,290 )                                             (3,292 )                                             (3,311 )                                             (3,328 )                                             (3,409 )
  Income tax provision                                                                            36,707                                               44,138                                               58,435                                               36,153                                               30,182
  Mortgage Insurance adjusted pretax operating income                                            142,795                           141,814                           137,136                           140,166                           125,309  
                                                                                         ------------------------------------                      -------------------------------                      -------------------------------                      -------------------------------                      -------------------------------
Services adjusted pretax operating income (loss)                                                  (2,578 )                                             (1,885 )                                             (5,751 )                                             (9,947 )                                             (1,202 )
Less income (expense) items:
  Allocation of corporate operating expenses to Services                                          (1,738 )                                             (2,265 )                                             (2,779 )                                             (1,751 )                                               (968 )
  Allocation of corporate interest expenses to Services                                           (4,426 )                                             (4,423 )                                             (4,422 )                                             (4,422 )                                             (4,414 )
  Services depreciation and amortization                                                            (829 )                                               (884 )                                               (749 )                                               (663 )                                               (612 )
                                                                                         ------------------------------------                      -------------------------------                      -------------------------------                      -------------------------------                      -------------------------------
Services adjusted EBITDA                                                                       $   4,415                          $  5,687                          $  2,199                          $ (3,111 )                                           $  4,792  
                                                                                         ======= ======= ====================                      === ====== ====================                      === ====== ====================                      === ====== ====================                      === ====== ====================
                                                                                                                                                                                                                                                                                                                              
On a consolidated basis, "adjusted pretax operating income" and
"adjusted diluted net operating income per share" are measures not
determined in accordance with GAAP. "Services adjusted EBITDA" is
also a non-GAAP measure. These measures are not representative of
total profitability, and therefore should not be viewed as
substitutes for GAAP pretax income or diluted net income per share.
Our definitions of adjusted pretax operating income, adjusted
diluted net operating income per share or Services adjusted EBITDA
may not be comparable to similarly-named measures reported by other
companies. See Exhibit F for additional information on our
consolidated non-GAAP financial measures.
 
                                                                                                                                                                                                                                 
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - New Insurance
Written
Exhibit H
                                                                                                                                                    2016                                                                                                                               2015
                                                         ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -----------------------------------
($ in millions)                                                       Qtr 4                            Qtr 3                            Qtr 2                            Qtr 1                                                Qtr 4
-----------------------------------                      ----------------------------                        ----------------------------                        ----------------------------                        ---------------------------                        --------------------------------
                                                                                                                                                                                                                                                                         
Total primary new insurance written                       $ 13,882                         $ 15,656                         $ 12,921                         $ 8,071                             $  9,099  
                                                         == ====== ====================                      == ====== ====================                      == ====== ====================                      == ===== ====================                      ====== ====== ====================
                                                                                                                                                                                                                                                                         
Percentage of primary new insurance
written by FICO score
-----------------------------------
>=740</b>                                                     63.4 %                                              64.2 %                                              60.9 %                                             58.4 %                                                  60.3 %
680-739                                                       31.4                                                30.4                                                32.2                                               33.7                                                    32.2
620-679                                                        5.2                              5.4                              6.9                             7.9                                  7.5  
                                                         ------------------------------                      ------------------------------                      ------------------------------                      -----------------------------                      ----------------------------------
Total Primary                                                100.0 %                                             100.0 %                                             100.0 %                                            100.0 %                                                 100.0 %
                                                         ========  ====================                      ========  ====================                      ========  ====================                      =======  ====================                      ============  ====================
                                                                                                                                                                                                                                                                         
Percentage of primary new insurance
written
-----------------------------------
Monthly and other premiums                                      73 %                                                73 %                                                74 %                                               71 %                                                    71 %
Single premiums                                                 27 %                                                27 %                                                26 %                                               29 %                                                    29 %
                                                                                                                                                                                                                                                                         
Net single premiums (1)                                         17 %                                                17 %                                                17 %                                               19 %                                                    29 %
                                                                                                                                                                                                                                                                         
Refinances                                                      27 %                                                22 %                                                18 %                                               19 %                                                    17 %
                                                                                                                                                                                                                                                                         
LTV
  95.01% and above                                             7.4 %                                               6.0 %                                               4.8 %                                              3.7 %                                                   3.6 %
  90.01% to 95.00%                                            43.6 %                                              47.1 %                                              50.2 %                                             50.5 %                                                  49.5 %
  85.01% to 90.00%                                            32.3 %                                              31.4 %                                              31.8 %                                             33.1 %                                                  34.4 %
  85.00% and below                                            16.7 %                                              15.5 %                                              13.2 %                                             12.7 %                                                  12.5 %
(1)   In 2016, represents the percentage of direct single premiums
                         written, after consideration of the 35% single premium NIW ceded
                         under the Single Premium QSR Transaction.
                                                                                                                                                                                            
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - Primary Insurance
in Force and Risk in Force
Exhibit I
                                                                                                                                                                                                                                                                                             
                                                                             December 31,                                           September 30,                                           June 30,                                              March 31,                                             December 31,
($ in millions)                                                                  2016                                                   2016                                                  2016                                                  2016                                                    2015
                                                                  ----------------------------------                     ----------------------------------                     ---------------------------------                     ---------------------------------                     -------------------------------------
Primary insurance in force (1)
--------------------------------------------
  Prime                                                              $ 174,927                                              $ 172,178                                             $ 168,259                                             $ 165,526                                                 $ 165,291
  Alt-A                                                                  5,064                                                  5,363                                                 5,627                                                 5,907                                                     6,176
  A minus and below                                                      3,459                               3,624                              3,786                              3,953                                  4,117  
                                                                  ---------------------------------                      ---------------------------------                      --------------------------------                      --------------------------------                      ------------------------------------
Total Primary                                                        $ 183,450                           $ 181,165                          $ 177,672                          $ 175,386                              $ 175,584  
                                                                  ==== ======= ====================                      ==== ======= ====================                      === ======= ====================                      === ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                             
Primary risk in force (1) (2)
--------------------------------------------
  Prime                                                              $  44,708                                              $  44,075                                             $  43,076                                             $  42,312                                                 $  42,170
  Alt-A                                                                  1,168                                                  1,241                                                 1,302                                                 1,366                                                     1,427
  A minus and below                                                        865                                 906                                946                                988                                  1,030  
                                                                  ---------------------------------                      ---------------------------------                      --------------------------------                      --------------------------------                      ------------------------------------
Total Primary                                                        $  46,741                           $  46,222                          $  45,324                          $  44,666                              $  44,627  
                                                                  ==== ======= ====================                      ==== ======= ====================                      === ======= ====================                      === ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                             
Percentage of primary risk in force
--------------------------------------------
Direct monthly and other premiums                                           69 %                                                   69 %                                                  69 %                                                  69 %                                                      69 %
Direct single premiums                                                      31 %                                                   31 %                                                  31 %                                                  31 %                                                      31 %
                                                                                                                                                                                                                                                                                             
Net single premiums (3)                                                     25 %                                                   25 %                                                  25 %                                                  25 %                                                      30 %
                                                                                                                                                                                                                                                                                             
Percentage of primary risk in force by
FICO score
--------------------------------------------
>=740</b>                                                                 57.6 %                                                 57.4 %                                                57.1 %                                                57.0 %                                                    57.1 %
680-739                                                                   31.0                                                   30.9                                                  30.8                                                  30.6                                                      30.3
620-679                                                                    9.9                                                   10.2                                                  10.5                                                  10.7                                                      10.8
<=619                                                                      1.5                                 1.5                                1.6                                1.7                                    1.8  
                                                                  ---------------------------------                      ---------------------------------                      --------------------------------                      --------------------------------                      ------------------------------------
Total Primary                                                            100.0 %                                                100.0 %                                               100.0 %                                               100.0 %                                                   100.0 %
                                                                  =================================                      =================================                      ================================                      ================================                      ====================================
                                                                                                                                                                                                                                                                                             
Percentage of primary risk in force by LTV
--------------------------------------------
  95.01% and above                                                         7.4 %                                                  7.2 %                                                 7.1 %                                                 7.2 %                                                     7.3 %
  90.01% to 95.00%                                                        52.3                                                   52.1                                                  51.6                                                  50.9                                                      50.4
  85.01% to 90.00%                                                        32.5                                                   32.8                                                  33.3                                                  33.7                                                      34.0
  85.00% and below                                                         7.8                                 7.9                                8.0                                8.2                                    8.3  
                                                                  ---------------------------------                      ---------------------------------                      --------------------------------                      --------------------------------                      ------------------------------------
Total                                                                    100.0 %                                                100.0 %                                               100.0 %                                               100.0 %                                                   100.0 %
                                                                  =================================                      =================================                      ================================                      ================================                      ====================================
                                                                                                                                                                                                                                                                                             
Percentage of primary risk in force by
policy year
--------------------------------------------
  2005 and prior                                                           4.8 %                                                  5.1 %                                                 5.5 %                                                 6.0 %                                                     6.3 %
                                                                           2.9                                                    3.1                                                   3.4                                                   3.6                                                       3.7
  2006
                                                                           7.0                                                    7.4                                                   7.9                                                   8.4                                                       8.7
  2007
                                                                           4.8                                                    5.2                                                   5.6                                                   6.0                                                       6.3
  2008
                                                                           1.0                                                    1.2                                                   1.3                                                   1.5                                                       1.7
  2009
                                                                           0.9                                                    1.0                                                   1.2                                                   1.3                                                       1.4
  2010
                                                                           2.0                                                    2.2                                                   2.5                                                   2.7                                                       2.9
  2011
                                                                           8.0                                                    8.8                                                   9.7                                                  10.6                                                      11.2
  2012
                                                                          12.6                                                   13.9                                                  15.5                                                  17.0                                                      18.1
  2013
                                                                          12.0                                                   13.4                                                  14.9                                                  16.3                                                      17.1
  2014
                                                                          18.1                                                   19.4                                                  21.0                                                  22.0                                                      22.6
  2015
                                                                          25.9                                19.3                               11.5                                4.6                         --  
  2016
                                                                  -----------  --------------------                      -----------  --------------------                      ----------  --------------------                      ----------  --------------------                      --------------  --------------------
Total                                                                    100.0 %                                                100.0 %                                               100.0 %                                               100.0 %                                                   100.0 %
                                                                  =================================                      =================================                      ================================                      ================================                      ====================================
                                                                                                                                                                                                                                                                                             
Primary risk in force on defaulted loans (4)                         $   1,363                                              $   1,381                                             $   1,398                                             $   1,562                                                 $   1,625
(1)   Includes amounts ceded under our reinsurance agreements, as
                         well as amounts related to the Freddie Mac Agreement.
(2)                      Does not include pool risk in force or other risk in force,
                         which combined represent less than 3.0% of our total risk in force
                         for all periods presented.
(3)                      Represents the percentage of Single Premium RIF, after giving
                         effect to all reinsurance ceded.
(4)                      Excludes risk related to loans subject to the Freddie Mac
                         Agreement.
                                                                                                                                                                                                                                                                               
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - Claims and
Reserves
Exhibit J
                                                                                                                                                                                                                                                                                                                       
                                                                                                                                                                                         2016                                                                                                                                         2015
                                                                                     ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------                     -------------------------------------
($ in thousands)                                                                                     Qtr 4                                 Qtr 3                              Qtr 2                                Qtr 1                                                     Qtr 4
---------------------------------------------------------------                      ----------------------------------                        -------------------------------                        ------------------------------                        ----------------------------------                        ----------------------------------
                                                                                                                                                                                                                                                                                                                       
Net claims paid: (1)
  Prime                                                                                    $  70,151                                              $  51,964                                             $  56,036                                                 $  74,432                                                 $  56,900
  Alt-A                                                                                       27,558                                                 16,334                                                18,349                                                    28,929                                                    21,343
  A minus and below                                                                           13,760                               9,615                             12,315                                 13,196                                 11,530  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total primary claims paid                                                                    111,469                                                 77,913                                                86,700                                                   116,557                                                    89,773
  Pool                                                                                         4,788                                                  4,492                                                 5,451                                                     7,389                                                     6,477
  Second-lien and other                                                                         (264 )                                                 (234 )                                                (231 )                                                     345                                   (143 )
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Subtotal                                                                                     115,993                                                 82,171                                                91,920                                                   124,291                                                    96,107
  Impact of captive terminations                                                                 492                                                   (171 )                                              (2,619 )                                                    (120 )                                                     (65 )
  Impact of settlements (2)                                                           --                                 705                              1,400                                  3,500                                 80,426  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total net claims paid                                                                      $ 116,485                           $  82,705                          $  90,701                              $ 127,671                              $ 176,468  
                                                                                     ======= ======= ====================                      ==== ======= ====================                      === ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                       
Average net claims paid (3)
  Prime                                                                                    $    45.5                                              $    48.3                                             $    48.6                                                 $    47.7                                                 $    46.9
  Alt-A                                                                                         65.5                                                   65.3                                                  63.5                                                      63.0                                                      61.7
  A minus and below                                                                             37.7                                                   41.3                                                  39.9                                                      36.8                                                      40.6
Total average net primary claims paid                                                           47.9                                                   50.0                                                  49.5                                                      49.0                                                      48.7
  Pool                                                                                          45.6                                                   51.0                                                  58.0                                                      53.2                                                      56.3
Total average net claims paid                                                              $    47.6                                              $    49.7                                             $    49.6                                                 $    48.9                                                 $    48.9
                                                                                                                                                                                                                                                                                                                       
Average direct primary claims paid (3) (4)                                                 $    48.2                                              $    50.3                                             $    49.9                                                 $    49.6                                                 $    50.5
Average total direct claims paid (3) (4)                                                   $    47.9                                              $    50.0                                             $    50.0                                                 $    49.5                                                 $    50.6
                                                                                                                                                                                                                                                                                                                       
($ in thousands, except primary reserve                                                          December 31,                                             September 30,                                           June 30,                                                March 31,                                               December 31,
per
---------------------------------------------------------------
                                                                                                     2016                                                     2016                                                  2016                                                    2016                                                      2015
 primary default amounts)
---------------------------------------------------------------                      ----------------------------------                        -------------------------------                        ------------------------------                        ----------------------------------                        ----------------------------------
                                                                                                                                                                                                                                                                                                                       
Reserve for losses by category
   Prime                                                                                   $ 379,845                                              $ 409,438                                             $ 420,281                                                 $ 438,598                                                 $ 480,481
   Alt-A                                                                                     148,006                                                166,349                                               173,284                                                   183,189                                                   203,706
   A minus and below                                                                         101,653                                                106,678                                               112,001                                                   116,835                                                   129,352
   IBNR and other                                                                             71,107                                                 73,057                                                74,639                                                    79,051                                                    83,066
   LAE                                                                                        18,630                                                 21,255                                                22,389                                                    23,600                                                    26,108
   Reinsurance recoverable (5)                                                                 6,816                               6,448                              6,044                                  8,239                                  8,286  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total primary reserves                                                                       726,057                             783,225                            808,638                                849,512                                930,999  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
   Pool insurance                                                                             31,853                                                 36,065                                                36,982                                                    38,843                                                    42,084
   IBNR and other                                                                                673                                                    823                                                   897                                                     1,050                                                     1,118
   LAE                                                                                           933                                                  1,112                                                 1,163                                                     1,227                                                     1,335
   Reinsurance recoverable (5)                                                                    34                                  36                                 33                         --                         --  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total pool reserves                                                                           33,493                              38,036                             39,075                                 41,120                                 44,537  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total 1st lien reserves                                                                      759,550                                                821,261                                               847,713                                                   890,632                                                   975,536
   Second-lien and other                                                                         719                                 673                                666                                    716                                    863  
                                                                                     ------------------------------------                      ---------------------------------                      --------------------------------                      ------------------------------------                      ------------------------------------
Total reserves                                                                             $ 760,269                           $ 821,934                          $ 848,379                              $ 891,348                              $ 976,399  
                                                                                     ======= ======= ====================                      ==== ======= ====================                      === ======= ====================                      ======= ======= ====================                      ======= ======= ====================
                                                                                                                                                                                                                                                                                                                       
1st lien reserve per default
   Primary reserve per primary default excluding IBNR and other                            $  22,503                                              $  24,049                                             $  24,609                                                 $  24,959                                                 $  24,019
(1)   Net of reinsurance recoveries.
(2)                      For 2015, includes the impact of the BofA Settlement Agreement.
(3)                      Calculated without giving effect to the impact of the
                         termination of captive transactions and settlements.
(4)                      Before reinsurance recoveries.
(5)                      Represents ceded losses on captive transactions and quota share
                         reinsurance transactions.
                                                                                                
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - Default Statistics
Exhibit K
                                                                                                                                                                              
                                    December 31,                       September 30,                       June 30,                          March 31,                           December 31,
                                        2016                               2016                              2016                              2016                                  2015
                                    -------------                     --------------                     -------------                     -------------                     ---------------------
Default Statistics
-----------------------------------
Primary Insurance:
  Prime
-----------------------------------
     Number of insured loans        849,227                           840,534                            826,511                           817,236                              816,797
     Number of loans in default      19,101                            19,100                             19,025                            19,510                               22,223
     Percentage of loans in default    2.25 %                            2.27 %                             2.30 %                            2.39 %                               2.72 %
                                                                                                                                                                              
  Alt-A
-----------------------------------
     Number of insured loans         26,536                            28,080                             29,445                            30,990                               32,411
     Number of loans in default       4,193                             4,545                              4,820                             5,138                                5,813
     Percentage of loans in default   15.80 %                           16.19 %                            16.37 %                           16.58 %                              17.94 %
                                                                                                                                                                              
  A minus and below
-----------------------------------
     Number of insured loans         27,115                            28,313                             29,450                            30,681                               31,902
     Number of loans in default       5,811                             5,885                              5,982                             6,221                                7,267
     Percentage of loans in default   21.43 %                           20.79 %                            20.31 %                           20.28 %                              22.78 %
                                                                                                                                                                              
Total Primary
     Number of insured loans        902,878                           896,927                            885,406                           878,907                              881,110
     Number of loans in default (1)  29,105                            29,530                             29,827                            30,869                               35,303
     Percentage of loans in default    3.22 %                            3.29 %                             3.37 %                            3.51 %                               4.01 %
(1)   Excludes the following number of loans subject to the Freddie
                         Mac Agreement that are in default as we no longer have claims
                         exposure on these loans:
                             December 31,    September 30,  June 30,    March 31,  December 31,
                                                    2016                               2016                            2016                           2016                            2015
                                                -------------                     --------------                     ---------                     ----------                     ------------
Number of loans in default                       1,639                             1,888                             2,180                         2,339                                 2,821
                                                                                                                                                                                                                                                   
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - Captives, QSR and
Persistency
Exhibit L
                                                                                                                                                                                                                                                                                           
                                                                                                                                                                                     2016                                                                                                         2015
                                                                                                          -----------------------------------------------------------------------------------------------------------------------------------------------------------                     ---------------------
($ in thousands)                                                                                                   Qtr 4                    Qtr 3                    Qtr 2                    Qtr 1                                      Qtr 4
------------------------------------------------------------------------------------                      --------------------                        --------------------                        --------------------                        --------------------                        ------------------
                                                                                                                                                                                                                                                                                           
Initial and Second Quota Share
Reinsurance ("QSR") Transaction
------------------------------------------------------------------------------------
QSR ceded premiums written (1)                                                                              $          6,049                            $          6,730                            $          7,356                            $          7,962                               $     6,934
% of premiums written                                                                                                    2.4 %                                       2.6 %                                       2.9 %                                       3.4 %                                     2.9   %
QSR ceded premiums earned (1)                                                                               $          9,421                            $         10,597                            $         11,172                            $         11,325                               $    10,523
% of premiums earned                                                                                                     3.8 %                                       4.1 %                                       4.5 %                                       4.7 %                                     4.4   %
Ceding commissions written                                                                                  $          1,728                            $          1,922                            $          2,099                            $          2,270                               $     2,553
Ceding commissions earned (2)                                                                               $          4,374                            $          3,974                            $          3,779                            $          4,446                               $     3,466
Profit commission                                                                                           $ --                            $ --                            $ --                            $ --                               $     1,559
Risk in force included in QSR (3)                                                                           $      1,578,300                            $      1,718,031                            $      1,872,017                            $      2,018,468                               $ 2,131,030
                                                                                                                                                                                                                                                                                           
Single Premium QSR Transaction
------------------------------------------------------------------------------------
QSR ceded premiums written (1)                                                                              $         11,121                            $         13,004                            $         11,488                            $        197,593                                           N/A
% of premiums written                                                                                                    4.4 %                                       5.0 %                                       4.6 %                                      84.7 %                                         N/A
QSR ceded premiums earned (1)                                                                               $          8,060                            $          8,608                            $          7,146                            $          5,994                                           N/A
% of premiums earned                                                                                                     3.2 %                                       3.3 %                                       2.9 %                                       2.5 %                                         N/A
Ceding commissions written                                                                                  $          4,895                            $          5,482                            $          4,844                            $         50,932                                           N/A
Ceding commissions earned (2)                                                                               $          4,130                            $          4,382                            $          3,759                            $          3,032                                           N/A
Profit commission                                                                                           $          8,458                            $          8,922                            $          7,891                            $          6,134                                           N/A
Risk in force included in QSR (3)                                                                           $      3,761,648                            $      3,621,993                            $      3,461,464                            $      3,308,057                                           N/A
                                                                                                                                                                                                                                                                                           
Total risk in force included in QSRs                                                                        $      5,339,948                            $      5,340,024                            $      5,333,481                            $      5,326,525                               $ 2,131,030
                                                                                                                                                                                                                                                                                           
1st Lien Captives
------------------------------------------------------------------------------------
Premiums earned ceded to captives                                                                           $            503                            $            537                            $          1,346                            $          1,869                               $     2,268
% of total premiums earned                                                                                               0.2 %                                       0.2 %                                       0.5 %                                       0.8 %                                     1.0   %
                                                                                                                                                                                                                                                                                           
Persistency Rate (twelve months ended)                                                                                  76.7 %                                      78.4 %                                      79.9 %                                      79.4 %                                    78.8   %
Persistency Rate (quarterly, annualized) (4)                                                                            76.8 %                                      75.3 %                                      78.0 %                                      82.3 %                                    81.8   %
(1)   Net of profit commission.
(2)                      Includes amounts reported in policy acquisition costs and other
                         operating expenses.
(3)                      Included in primary risk in force.
(4)                      The Persistency Rate on a quarterly, annualized basis may be
                         impacted by seasonality or other factors, and may not be
                         indicative of full-year trends.

FORWARD-LOOKING STATEMENTS

All statements in this report that address events, developments or results that we expect or anticipate may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the 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 in particular but without limitation, unemployment rates, interest rates and changes in housing and mortgage credit markets, that impact the size of the insurable market and the credit performance of our insured portfolio;

-- changes in the way customers, investors, regulators or legislators perceive the performance and financial strength of private mortgage insurers;

-- Radian Guaranty’s ability to remain eligible under the PMIERs and other applicable requirements imposed by the Federal Housing Finance Agency and by the GSEs to insure loans purchased by the GSEs;

-- our ability to successfully execute and implement our capital plans and to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs;

-- our ability to successfully execute and implement our business plans and strategies, including in particular but without limitation, plans and strategies that require GSE and/or regulatory approvals;

-- our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy existing and future state regulatory requirements;

-- changes in the charters or business practices of, or rules or regulations imposed by or applicable to the GSEs, including the GSEs’ interpretation and application of the PMIERs to our mortgage insurance business;

-- changes in the current housing finance system in the U.S., including in particular but without limitation, the role of the FHA, the GSEs and private mortgage insurers in this system;

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

-- a significant decrease in the persistency rates of our mortgage insurance policies;

-- competition in our mortgage insurance business, including in particular but without limitation, price competition and competition from the FHA, VA and other forms of credit enhancement;

-- the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act on the financial services industry in general, and on our businesses in particular;

-- the adoption of new laws and regulations, or changes in existing laws and regulations, or the way they are interpreted or applied;

-- the outcome of legal and regulatory actions, reviews, audits, inquiries and investigations that could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures or have other effects on our business;

-- the amount and timing of potential payments or adjustments associated with federal or other tax examinations, including deficiencies assessed by the IRS resulting from its 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 business;

-- volatility in our results of operations caused by changes in the fair value of our assets and liabilities, including a significant portion of our investment portfolio;

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

-- our ability to attract and retain key employees;

-- legal and other limitations on dividends and other amounts we may receive from our subsidiaries; and

-- the possibility that we may need to impair the carrying value of goodwill established in connection with our acquisition of Clayton.

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 our 2015 Form 10-K, and in our subsequent quarterly and other reports filed from time to time with the SEC. 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 report. 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=20170126005250r1&sid=cmtx6&distro=nx&lang=en

View source version on businesswire.com: http://www.businesswire.com/news/home/20170126005250/en/

SOURCE: Radian Group Inc.

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


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