RADIAN GROUP INC - FORM 8-K - EX-99.1 - PRESS RELEASE

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8-K - RADIAN GROUP INC. -- FORM 8-K - RADIAN GROUP INC	d8k.htm

Exhibit 99.1

LOGO

Contact:

Emily Riley – phone: 215.231.1035

email: emily.riley@radian.biz

Radian Reports Fourth Quarter and

Full Year 2010 Financial Results

•

Reported loss includes a valuation allowance against the net deferred tax asset and losses on fair value of derivatives –

•

Mortgage insurance delinquencies declined for fourth consecutive quarter –

•

Improved risk-to-capital ratio of 16.8:1 among lowest in MI industry –

PHILADELPHIA, February 3, 2011 — Radian Group Inc. (NYSE: RDN) today reported a net loss for the quarter ended December 31, 2010, of $1.1 billion, or $8.55 per diluted share. This compares to a net loss of $91.9 million, or $1.12 per diluted share, for the prior-year fourth quarter. The net loss for the full year 2010 was $1.8 billion, or $15.74 per diluted share. This compares to a net loss of $147.9 million, or $1.80 per diluted share, for the prior year. The results for 2010 included the impact of a non-cash, GAAP accounting charge of $841.5 million, or $6.35 per share in the fourth quarter of 2010, related to establishing a valuation allowance against substantially all of the company’s net deferred tax asset (DTA) and also includes a pre-tax loss from the change in fair value of derivatives of $185.9 million for the quarter and $558.7 million for the year. Book value per share at December 31, 2010, was $6.46.

“We were encouraged by the fourth straight quarter of declining mortgage insurance delinquencies, continued signs of credit trend stabilization in our businesses, and a steady 21 percent market share in an environment where private mortgage insurance continues to regain business from the FHA,” said Chief Executive Officer S.A. Ibrahim.

Ibrahim added, “It is important to note that the establishment of a valuation allowance in the quarter does not have any impact on statutory capital, risk-to-capital ratio, liquidity or business operations, and it does not reflect a change in our view of Radian’s long-term financial outlook. We are confident that our capital, financial flexibility and solid customer base position Radian for future success.”

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FOURTH QUARTER HIGHLIGHTS

•

The risk-to-capital ratio for Radian Guaranty Inc., the company’s primary mortgage insurance subsidiary, was 16.8:1 at December 31, 2010, compared to 17.2:1 at September 30, 2010, and 15.4:1 at December 31, 2009. Radian Group contributed $200 million to Radian Guaranty during the fourth quarter and the company has sufficient liquidity to contribute additional capital to its mortgage insurance subsidiaries in 2011, if needed.

•

New mortgage insurance written (NIW) increased for the fourth consecutive quarter to $3.8 billion, compared to $3.2 billion in the third quarter. NIW continued to consist of loans with excellent risk characteristics, and the company maintained a market share of 21 percent.

•

The total number of primary delinquent loans decreased by 4 percent in the fourth quarter, which represented the fourth consecutive quarterly decline. In addition, the number of primary delinquencies declined slightly in January.

•

The mortgage insurance provision for losses was $426.3 million in the fourth quarter of 2010, compared to $459.9 million in the prior-year period. Mortgage insurance loss reserves were approximately $3.5 billion as of December 31, 2010, which was flat to the third quarter of 2010, and up slightly from a year ago. As of December 31, 2010, total first-lien reserves increased to $23,467 per primary default, compared to $20,921 for the prior year-end, and increased to $24,911 per pool default, compared to $16,118 for the prior year-end. The reserve per default totals exclude defaults for which reserves have not been established due to the presence of a deductible.

•

Mortgage insurance claims paid were $392.9 million, which consisted of $389.3 million of first-liens and $3.6 million of second-liens. Net claims paid of $69.2 million were net of recoveries received from captive terminations of $323.7 million. For the full-year 2010, mortgage insurance claims paid were $1.3 billion. The company continues to expect mortgage insurance claims paid of approximately $1.7 billion for the full-year 2011.

LOGO

•

Radian Asset Assurance Inc. continues to serve as an important source of capital support for Radian Guaranty and is expected to continue to provide Radian Guaranty with cash infusions over time.

•

Excluding gains and losses on derivatives and other financial instruments, the financial guaranty segment was profitable on a pre-tax basis in the fourth quarter and for the full-year 2010.

•

As of December 31, 2010, Radian Asset had approximately $1.0 billion in statutory surplus with an additional $1.4 billion in claims-paying resources.

•

Radian Asset is expected to pay an ordinary dividend of approximately $60 million to Radian Guaranty in June 2011.

•

On February 1, 2011, Radian Asset signed an agreement to purchase Municipal and Infrastructure Assurance Corporation (MIAC), a New York domiciled financial guaranty insurance company shell that has not written any business, but has obtained licenses in 36 states and the District of Columbia. The acquisition, which remains subject to regulatory approval, provides Radian Asset with the flexibility to consider using MIAC to pursue strategic alternatives in the public finance market, including possibly partnering with third-party investors to write new public finance insurance and/or reinsuring all or a portion of Radian Asset’s existing public finance business. The company is in early stages of exploring these potential uses, and expects that any new initiative for MIAC would be consistent with its ultimate goal of reducing financial guaranty exposure. The expected purchase price of approximately $82 million is $7 million above the value of the capital base of MIAC, consisting of approximately $75 million of cash, cash equivalents and treasury securities.

•

The valuation allowance of $841.5 million recorded in the quarter represents substantially all of the company’s deferred tax asset. The valuation allowance is primarily a result of the company’s continued history of losses, including the significant loss in the fourth quarter, and the continued uncertainty of future results. While Radian continues to expect a return to profitability in the long-term, this remains uncertain based on macroeconomic factors such as the slower-than-expected pace of the economic recovery as well as the ultimate timing and magnitude of losses. If the company returns to a period of sustained profitability, as it currently expects, all or a portion of this valuation allowance would be reversed.

LOGO

CONFERENCE CALL

The company will discuss each of these items in its conference call today, Thursday, February 3, 2011, 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 800-230-1096 inside the U.S., or 612-332-0342 for international callers, using passcode 190970 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 190970.

In addition to the information provided in the company’s earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian’s website under Investors >Quarterly Results, or by clicking on http://www.radian.biz/page?name=QuarterlyResults.

ABOUT RADIAN

Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance and related risk mitigation products and services to mortgage lenders nationwide through its principal operating subsidiary, Radian Guaranty Inc. These services help promote and preserve homeownership opportunities for homebuyers, while protecting lenders from default-related losses on residential first mortgages and facilitating the sale of low-downpayment mortgages in the secondary market. Additional information may be found at www.radian.biz.

LOGO

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 Income

Exhibit B:		Condensed Consolidated Balance Sheets

Exhibit C:		Segment Information Quarter Ended December 31, 2010

Exhibit D:		Segment Information Quarter Ended December 31, 2009

Exhibit E:		Segment Information Year Ended December 31, 2010

Exhibit F:		Segment Information Year Ended December 31, 2009

Exhibit G:		Financial Guaranty Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010

Exhibit H:		Financial Guaranty Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010

Exhibit I:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		New Insurance Written and Risk Written

Exhibit J:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Insurance in Force and Risk in Force

Exhibit K:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Risk in Force by LTV and Policy Year and Other Risk in Force

Exhibit L:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Claims Paid, Reserves and Reserve per Default

Exhibit M:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Default Statistics

Exhibit N:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Net Premiums Written and Earned, Smart Home, Captives and Persistency

Exhibit O:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Reinsurance Progression Toward Attachment – Summary by Book Year

Exhibit P:		Mortgage Insurance Supplemental Information –
		For the Quarter and Year Ended and as of December 31, 2010
		Modified Pool

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

Exhibit A


	Quarter Ended December 31						Year Ended December 31
	2010			2009			2010			2009
(In thousands, except per-share data)

Revenues:
Net premiums written - insurance	$	201,672		$	163,251		$	691,881		$	443,848	(1)


Net premiums earned - insurance	$	220,082		$	211,570		$	825,733		$	825,901
Net investment income		38,229			50,624			178,760			214,190
Change in fair value of derivative instruments		(185,935	)		142,913			(558,712	)		99,958
Net (losses) gains on other financial instruments		(121,323	)		(7,390	)		(71,737	)		168,572
Net impairment losses recognized in earnings		—			(8,396	)		(90	)		(9,269	)
Gain on sale of affiliate		—			—			34,815			—
Other income		3,042			3,539			8,696			14,026

Total revenues		(45,905	)		392,860			417,465			1,313,378


Expenses:
Provision for losses		415,809			473,166			1,739,244			1,337,574
Provision for premium deficiency		(14,664	)		16,065			(14,621	)		(61,504	)
Policy acquisition costs		10,750			8,920			53,469			63,034
Other operating expenses		48,669			42,499			191,942			203,770
Interest expense		13,226			10,120			41,777			46,010

Total expenses		473,790			550,770			2,011,811			1,588,884


Equity in net income of affiliates		—			9,618			14,668			33,226


Pretax loss		(519,695	)		(148,292	)		(1,579,678	)		(242,280	)
Income tax provision (benefit)		612,922			(56,425	)		226,189			(94,401	)


Net loss	$	(1,132,617	)	$	(91,867	)	$	(1,805,867	)	$	(147,879	)


Diluted net loss per share (2)	$	(8.55	)	$	(1.12	)	$	(15.74	)	$	(1.80	)


(1) Includes the reversal of $185.6 million of premiums written related to commutation of $9.8 billion Financial Guaranty net par outstanding in July 2009.
*(2) Weighted average shares outstanding (In thousands)*

Weighted average common shares outstanding		82,434			81,926			82,505			81,937
Increase in weighted average shares-common stock offering		50,000			—			32,192			—

Weighted average shares outstanding		132,434			81,926			114,697			81,937

For Trend Information, refer to our Quarterly Financial Statistics on Radian’s (RDN) website.

Page 6

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit B


(In thousands, except per-share data)	December 31 2010			December 31 2009

Assets:
Cash and investments	$	6,680,630		$	6,214,376
Investments in affiliates		133			121,480
Deferred policy acquisition costs		148,326			160,281
Deferred income taxes, net		27,531			440,948
Reinsurance recoverables		244,894			628,572
Derivative assets		26,212			68,534
Other assets		493,161			442,115


Total assets	$	7,620,887		$	8,076,306


Liabilities and stockholders’ equity:
Unearned premiums	$	686,364		$	823,621
Reserve for losses and loss adjustment expenses		3,596,735			3,578,982
Reserve for premium deficiency		10,736			25,357
Long-term debt		964,788			698,222
VIE debt		520,114			296,080
Derivative liabilities		723,579			238,697
Other liabilities		258,791			410,353


Total liabilities		6,761,107			6,071,312


Common stock		150			100
Additional paid-in capital		1,071,080			473,759
Retained earnings		(204,926	)		1,602,143
Accumulated other comprehensive loss		(6,524	)		(71,008	)


Total common stockholders’ equity		859,780			2,004,994


Total liabilities and stockholders’ equity	$	7,620,887		$	8,076,306


Book value per share	$	6.46		$	24.22

Page 7

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended December 31, 2010

Exhibit C

(In thousands)

Mortgage
Insurance

Financial
Guaranty

Financial
Services

Total

Revenues:

Net premiums written - insurance

200,549

1,123

—

201,672

Net premiums earned - insurance

200,569

19,513

—

220,082

Net investment income

22,469

15,760

—

38,229

Change in fair value of derivative instruments

26,642

(212,577

)

—

(185,935

)

Net losses on other financial instruments

(44,917

)

(76,406

)

—

(121,323

)

Net impairment losses recognized in earnings

—

Other income

1,916

1,061

3,042

Total revenues

206,679

(253,645

)

1,061

(45,905

)

Expenses:

Provision for losses

426,288

(10,479

)

—

415,809

Provision for premium deficiency

(14,664

)

—

(14,664

)

Policy acquisition costs

7,041

3,709

—

10,750

Other operating expenses

37,610

11,009

48,669

Interest expense

4,748

8,478

—

13,226

Total expenses

461,023

12,717

473,790

Pretax (loss) income

(254,344

)

(266,362

)

1,011

(519,695

)

Income tax provision

424,782

187,787

353

612,922

Net (loss) income

(679,126

)

(454,149

)

658

(1,132,617

)

Cash and investments

4,037,578

2,643,052

—

6,680,630

Deferred policy acquisition costs

41,939

106,387

—

148,326

Total assets

4,801,953

2,818,934

—

7,620,887

Unearned premiums

197,260

489,104

—

686,364

Reserve for losses and loss adjustment expenses

3,524,971

71,764

—

3,596,735

VIE debt

141,006

379,108

—

520,114

Page 8

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended December 31, 2009

Exhibit D


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services		Total
Revenues:
Net premiums written - insurance	$	164,198		$	(947	)	$	—	$	163,251


Net premiums earned - insurance	$	189,634		$	21,936		$	—	$	211,570
Net investment income		32,406			18,217			1		50,624
Change in fair value of derivative instruments		14,027			128,886			—		142,913
Net (losses) gains on other financial instruments		1,365			(8,755	)		—		(7,390	)
Net impairment losses recognized in earnings		(8,396	)		—			—		(8,396	)
Other income		2,393			1,078			68		3,539

Total revenues		231,429			161,362			69		392,860


Expenses:
Provision for losses		459,853			13,313			—		473,166
Provision for premium deficiency		16,065			—			—		16,065
Policy acquisition costs		5,231			3,689			—		8,920
Other operating expenses		29,763			12,604			132		42,499
Interest expense		3,320			6,800			—		10,120

Total expenses		514,232			36,406			132		550,770


Equity in net income of affiliates		—			—			9,618		9,618


Pretax (loss) income		(282,803	)		124,956			9,555		(148,292	)

Income tax (benefit) provision		(103,408	)		43,637			3,346		(56,425	)


Net (loss) income	$	(179,395	)	$	81,319		$	6,209	$	(91,867	)


Cash and investments	$	3,775,682		$	2,438,694		$	—	$	6,214,376
Deferred policy acquisition costs		35,854			124,427			—		160,281
Total assets		4,968,963			2,985,919			121,424		8,076,306
Unearned premiums		240,346			583,275			—		823,621
Reserve for losses and loss adjustment expenses		3,450,538			128,444			—		3,578,982
VIE debt		287,995			8,085			—		296,080

Page 9

Radian Group Inc. and Subsidiaries

Segment Information

Year Ended December 31, 2010

Exhibit E

(In thousands)

Mortgage
Insurance

Financial
Guaranty

Financial
Services

Total

Revenues:

Net premiums written - insurance

699,909

(8,028

)

—

691,881

Net premiums earned - insurance

739,631

86,102

—

825,733

Net investment income

104,030

74,730

—

178,760

Change in fair value of derivative instruments

32,381

(591,093

)

—

(558,712

)

Net (losses) gains on other financial instruments

35,867

(107,604

)

—

(71,737

)

Net impairment losses recognized in earnings

(90

)

—

(90

)

Gain on sale of affiliate

—

34,815

Other income

7,208

364

1,124

8,696

Total revenues

919,027

(537,501

)

35,939

417,465

Expenses:

Provision for losses

1,730,801

8,443

—

1,739,244

Provision for premium deficiency

(14,621

)

—

(14,621

)

Policy acquisition costs

36,102

17,367

—

53,469

Other operating expenses

141,172

50,520

250

191,942

Interest expense

11,668

30,109

—

41,777

Total expenses

1,905,122

106,439

250

2,011,811

Equity in net income of affiliates

—

14,590

14,668

Pretax (loss) income

(986,095

)

(643,862

)

50,279

(1,579,678

)

Income tax provision

157,082

51,509

17,598

226,189

Net (loss) income

(1,143,177

)

(695,371

)

32,681

(1,805,867

)

Page 10

Radian Group Inc. and Subsidiaries

Segment Information

Year Ended December 31, 2009

Exhibit F


(In thousands)	Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written - insurance	$	630,076		$	(186,228	)	$	—		$	443,848


Net premiums earned - insurance	$	724,423		$	101,478		$	—		$	825,901
Net investment income		129,871			84,315			4			214,190
Change in fair value of derivative instruments		(14,428	)		114,386			—			99,958
Net gains on other financial instruments		65,615			102,957			—			168,572
Net impairment losses recognized in earnings		(9,246	)		(23	)		—			(9,269	)
Other income		12,258			1,394			374			14,026

Total revenues		908,493			404,507			378			1,313,378


Expenses:
Provision for losses		1,300,827			36,747			—			1,337,574
Provision for premium deficiency		(61,504	)		—			—			(61,504	)
Policy acquisition costs		27,563			35,471			—			63,034
Other operating expenses		140,487			67,223			(3,940	)		203,770
Interest expense		15,372			30,638			—			46,010

Total expenses		1,422,745			170,079			(3,940	)		1,588,884


Equity in net income of affiliates		—			—			33,226			33,226


Pretax (loss) income		(514,252	)		234,428			37,544			(242,280	)

Income tax (benefit) provision		(176,456	)		68,641			13,414			(94,401	)


Net (loss) income	$	(337,796	)	$	165,787		$	24,130		$	(147,879	)

Page 11

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit G


(In thousands)	Quarter Ended December 31						Year Ended December 31
	2010			2009			2010			2009

Net Premiums Earned:
Public finance direct	$	13,898		$	14,215		$	54,734		$	49,965
Public finance reinsurance		4,362			5,935			25,297			44,232
Structured direct		443			1,208			2,498			6,364
Structured reinsurance		815			584			3,544			15,714
Trade credit reinsurance		(5	)		17			46			191

Net Premiums Earned - insurance		19,513			21,959			86,119			116,466
Impact of commutations		0			(23	)		(17	)		(14,988	)

Total Net Premiums Earned - insurance	$	19,513		$	21,936		$	86,102		$	101,478


Refundings included in earned premium	$	7,442		$	8,913		$	35,782		$	40,989


Net premiums earned - derivatives (1)	$	11,259		$	12,633		$	46,431		$	53,423


Claims paid:
Trade credit reinsurance	$	13		$	(136	)	$	1,091		$	776
Financial Guaranty		6,536			10,258			64,032			134,019

Total	$	6,549		$	10,122		$	65,123		$	134,795

Impact of adoption of amendment to accounting standard regarding VIEs on January 1, 2010:

(In millions)
Balance Sheet Increase (Decrease):
Investments	$	89.4
Other assets		121.0
VIE debt		321.0
Derivative liabilities		(128.6	)
Derivative liabilities-VIE		17.4
Other liabilities		0.6

Income Statement Increase (Decrease):
Net investment income	$	2.7
Net (losses) gains on other financial instruments		(58.2	)
Change in fair value of derivative instruments		57.5
Other operating expenses		2.0

(1)

Included in change in fair value of derivative instruments.

Page 12

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit H


($ in thousands, except ratios)	December 31 2010		December 31 2009
Statutory Information:

Capital and surplus	$	1,040,679	$	1,062,637
Contingency reserve		392,589		366,108

Qualified statutory capital		1,433,268		1,428,745

Unearned premium reserve		517,516		595,819
Loss and loss expense reserve		70,129		128,754

Total statutory policyholders’ reserves		2,020,913		2,153,318

Present value of installment premiums		202,386		260,662
Soft capital facilities		150,000		150,000

Total statutory claims paying resources	$	2,373,299	$	2,563,980


Net debt service outstanding	$	101,168,759	$	110,207,923


Capital leverage ratio (1)		71		77
Claims paying leverage ratio (2)		43		43

Net par outstanding by product:
Public finance direct	$	15,727,252	$	17,536,616
Public finance reinsurance		21,907,290		24,180,588
Structured direct		39,315,801		43,528,366
Structured reinsurance		1,805,295		2,174,433

Total (3)	$	78,755,638	$	87,420,003

(1)

The capital leverage ratio is derived by dividing net debt service outstanding by qualified statutory capital.

(2)

The claims paying leverage ratio is derived by dividing net debt service outstanding by total statutory claims paying resources.

(3)

Included in public finance net par outstanding is $1.9 billion and $2.2 billion at December 31, 2010 and December 31, 2009, respectively, for legally defeased bond issues where our financial guaranty policy has not been extinguished but cash or securities have been deposited in an escrow account for the benefit of bondholders. The accounting standard for financial guarantee insurance contracts requires that these contracts continue to be accounted for as outstanding contracts despite the elimination of substantially all risk.

Page 13

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit I


	Quarter Ended December 31												Year Ended December 31
($ in millions)	2010						2009						2010						2009
	$			%			$			%			$			%			$			%

Primary new insurance written
Flow	$	3,781			100.0	%	$	2,414			100.0	%	$	11,558			100.0	%	$	16,969			100.0	%

Total Primary	$	3,781			100.0	%	$	2,414			100.0	%	$	11,558			100.0	%	$	16,969			100.0	%


Total
Prime	$	3,779			99.9	%	$	2,412			99.9	%	$	11,553			100.0	%	$	16,942			99.8	%
Alt-A		—			—			—			—			—			—			11			0.1	%
A minus and below		2			0.1	%		2			0.1	%		5			—			16			0.1	%

Total Flow	$	3,781			100.0	%	$	2,414			100.0	%	$	11,558			100.0	%	$	16,969			100.0	%


Total primary new insurance written by FICO score

Total
>=740	$	3,112			82.3	%	$	1,829			75.8	%	$	9,294			80.4	%	$	12,293			72.5	%
680-739		669			17.7	%		581			24.1	%		2,261			19.6	%		4,403			25.9	%
620-679		—			—			4			0.1	%		3			—			272			1.6	%
<=619		—			—			—			—			—			—			1			—

Total Flow	$	3,781			100.0	%	$	2,414			100.0	%	$	11,558			100.0	%	$	16,969			100.0	%


Percentage of primary new insurance written
Refinances		58	%					26	%					42	%					41	%
95.01% LTV and above		0.7	%					0.2	%					0.4	%					0.1	%
ARMs
Less than 5 years		0.1	%					0.1	%					0.1	%					0.1	%
5 years and longer		4.1	%					5.8	%					5.3	%					1.6	%

Primary risk written
Flow	$	852			100.0	%	$	533			100.0	%	$	2,663			100.0	%	$	3,663			100.0	%

Total Primary	$	852			100.0	%	$	533			100.0	%	$	2,663			100.0	%	$	3,663			100.0	%

Page 14

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit J


($ in millions)	December 31 2010						December 31 2009
	$			%			$			%
Primary insurance in force
Flow	$	115,532			89.2	%	$	121,596			84.3	%
Structured		14,034			10.8	%		22,672			15.7	%

Total Primary	$	129,566			100.0	%	$	144,268			100.0	%


Prime	$	106,466			82.2	%	$	111,398			77.2	%
Alt-A		14,542			11.2	%		22,941			15.9	%
A minus and below		8,558			6.6	%		9,929			6.9	%

Total Primary	$	129,566			100.0	%	$	144,268			100.0	%


Primary risk in force
Flow	$	28,397			90.3	%	$	29,971			88.8	%
Structured		3,064			9.7	%		3,794			11.2	%

Total Primary	$	31,461			100.0	%	$	33,765			100.0	%


Flow
Prime	$	24,213			85.3	%	$	25,036			83.5	%
Alt-A		2,618			9.2	%		3,121			10.4	%
A minus and below		1,566			5.5	%		1,814			6.1	%

Total Flow	$	28,397			100.0	%	$	29,971			100.0	%


Structured
Prime	$	1,788			58.4	%	$	2,059			54.3	%
Alt-A		702			22.9	%		1,083			28.5	%
A minus and below		574			18.7	%		652			17.2	%

Total Structured	$	3,064			100.0	%	$	3,794			100.0	%


Total
Prime	$	26,001			82.6	%	$	27,095			80.2	%
Alt-A		3,320			10.6	%		4,204			12.5	%
A minus and below		2,140			6.8	%		2,466			7.3	%

Total Primary	$	31,461			100.0	%	$	33,765			100.0	%


Total primary risk in force by FICO score
Flow
>=740	$	11,039			38.9	%	$	10,526			35.1	%
680-739		9,849			34.7	%		10,790			36.0	%
620-679		6,359			22.4	%		7,329			24.5	%
<=619		1,150			4.0	%		1,326			4.4	%

Total Flow	$	28,397			100.0	%	$	29,971			100.0	%


Structured
>=740	$	825			26.9	%	$	1,036			27.3	%
680-739		892			29.1	%		1,168			30.8	%
620-679		815			26.6	%		990			26.1	%
<=619		532			17.4	%		600			15.8	%

Total Structured	$	3,064			100.0	%	$	3,794			100.0	%


Total
>=740	$	11,864			37.7	%	$	11,562			34.3	%
680-739		10,741			34.1	%		11,958			35.4	%
620-679		7,174			22.8	%		8,319			24.6	%
<=619		1,682			5.4	%		1,926			5.7	%

Total Primary	$	31,461			100.0	%	$	33,765			100.0	%


Percentage of primary risk in force
Refinances		31	%					31	%
95.01% LTV and above		19	%					21	%
ARMs
Less than 5 years		6	%					8	%
5 years and longer		7	%					8	%

Pool risk in force
Prime	$	1,828			74.5	%	$	1,918			71.1	%
Alt-A		165			6.7	%		246			9.1	%
A minus and below		460			18.8	%		534			19.8	%

Total	$	2,453			100.0	%	$	2,698			100.0	%

Page 15

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit K


($ in millions)	December 31 2010						December 31 2009
	$			%			$		%
Total primary risk in force by LTV
85.00% and below	$	2,816			8.9	%	$	3,263		9.6	%
85.01% to 90.00%		12,102			38.5	%		12,589		37.3	%
90.01% to 95.00%		10,506			33.4	%		10,996		32.6	%
95.01% and above		6,037			19.2	%		6,917		20.5	%

Total	$	31,461			100.0	%	$	33,765		100.0	%


Total primary risk in force by policy year
2005 and prior	$	8,145			25.9	%	$	9,709		28.7	%
2006		3,690			11.7	%		4,390		13.0	%
2007		8,072			25.7	%		9,443		28.0	%
2008		5,935			18.9	%		6,725		19.9	%
2009		3,099			9.8	%		3,498		10.4	%
2010		2,520			8.0	%		—		—

Total	$	31,461			100.0	%	$	33,765		100.0	%


Total pool risk in force by policy year
2005 and prior	$	2,038			83.1	%	$	2,183		80.9	%
2006		179			7.3	%		236		8.7	%
2007		190			7.7	%		223		8.3	%
2008		46			1.9	%		56		2.1	%

Total pool risk in force	$	2,453			100.0	%	$	2,698		100.0	%


Other risk in force
Second-lien
1st loss	$	114					$	147
2nd loss		79						116
NIMs		136						353
International
1st loss-Hong Kong primary mortgage insurance		126						257
Credit default swaps		—						127

Total other risk in force	$	455					$	1,000


Risk to capital ratio-Radian Guaranty only		16.8:1	⁽¹⁾					15.4:1

(1)	Preliminary.

Page 16

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit L


($ in thousands)	Quarter Ended December 31						Year Ended December 31
	2010			2009			2010			2009

Claims paid
Prime	$	226,106		$	113,386		$	691,922		$	344,760
Alt-A		81,681			67,458			308,113			215,350
A minus and below		50,593			40,562			180,078			150,466

Total primary claims paid		358,380			221,406			1,180,113			710,576
Pool		30,882			18,090			147,667			40,858
Second-lien and other		3,644			14,848			20,630			66,583

Subtotal		392,906			254,344			1,348,410			818,017
Impact of first-lien terminations		—			197,692			223,099			197,692
Impact of captive terminations		(323,716	)		(25,194	)		(324,365	)		(132,941	)
Impact of second-lien terminations		—			—			10,834			87,323

Total	$	69,190		$	426,842		$	1,257,978		$	970,091


Average claim paid (1)
Prime	$	47.0		$	44.4		$	44.6		$	43.5
Alt-A		59.8			56.6			57.5			55.2
A minus and below		39.4			38.0			37.6			38.6
Total primary claims paid		48.0			46.0			46.0			45.2
Pool		68.5			47.2			71.7			38.4
Second-lien and other		32.8			38.0			35.3			41.2
Total	$	49.0		$	45.5		$	47.7		$	44.5

Average primary claim paid before reinsurance recoveries	$	51.7		$	51.6		$	52.5		$	47.9
Average total claim paid before reinsurance recoveries	$	52.4		$	50.3		$	53.6		$	46.8

Loss ratio - GAAP Basis		212.5	%		242.5	%		234.0	%		179.6	%
Expense ratio - GAAP Basis		22.3	%		18.5	%		24.0	%		23.2	%

		234.8	%		261.0	%		258.0	%		202.8	%


Reserve for losses by category
Prime	$	1,607,741		$	1,265,859
Alt-A		687,960			767,043
A minus and below		413,137			456,281
Reinsurance recoverable		223,254	(2)		621,644

Total primary reserves		2,932,092			3,110,827
Pool insurance		566,565			295,996

Total 1st lien reserves		3,498,657			3,406,823
Second-lien		26,161			43,579
Other		153			136

Total reserves	$	3,524,971		$	3,450,538


1st lien reserve per default (3)
Primary reserve per primary default	$	23,467		$	20,921
Pool reserve per pool default		24,911			16,118
Total 1st lien reserve per default		23,689			20,393

(1)

Calculated net of reinsurance recoveries and without giving effect to the impact of first-lien, second-lien and captive terminations.

(2)

Reinsurance recoverable on ceded losses related to captives ($130 million) and Smart Home ($93 million).

(3)

Excludes defaults for which reserves have not been established because they were associated with transactions where no claim payment was anticipated primarily due to deductibles or where a partial reserve has been recorded that is less than the gross calculated reserve due to the presence of a deductible.

Page 17

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit M


	December 31 2010			December 31 2009
Default Statistics
Primary insurance:

Flow
Prime
Number of insured loans		584,213			614,590
Number of loans in default		71,196			78,130
Percentage of loans in default		12.19	%		12.71	%

Alt-A
Number of insured loans		51,765			60,616
Number of loans in default		17,934			22,177
Percentage of loans in default		34.65	%		36.59	%

A minus and below
Number of insured loans		47,044			53,932
Number of loans in default		16,401			20,911
Percentage of loans in default		34.86	%		38.77	%

Total Flow
Number of insured loans		683,022			729,138
Number of loans in default		105,531			121,218
Percentage of loans in default		15.45	%		16.62	%

Structured
Prime
Number of insured loans		42,131			52,629
Number of loans in default		6,735			7,520
Percentage of loans in default		15.99	%		14.29	%

Alt-A
Number of insured loans		20,234			43,615
Number of loans in default		6,635			15,295
Percentage of loans in default		32.79	%		35.07	%

A minus and below
Number of insured loans		16,716			19,287
Number of loans in default		6,569			7,965
Percentage of loans in default		39.30	%		41.30	%

Total Structured
Number of insured loans		79,081			115,531
Number of loans in default		19,939			30,780
Percentage of loans in default		25.21	%		26.64	%

Total Primary Insurance
Prime
Number of insured loans		626,344			667,219
Number of loans in default		77,931			85,650
Percentage of loans in default		12.44	%		12.84	%

Alt-A
Number of insured loans		71,999			104,231
Number of loans in default		24,569			37,472
Percentage of loans in default		34.12	%		35.95	%

A minus and below
Number of insured loans		63,760			73,219
Number of loans in default		22,970			28,876
Percentage of loans in default		36.03	%		39.44	%

Total Primary Insurance
Number of insured loans		762,103			844,669
Number of loans in default (1)		125,470			151,998
Percentage of loans in default		16.46	%		17.99	%

Pool insurance:
Number of loans in default (2)		32,456			36,397

(1)

Includes an estimated 525 and 3,302 defaults at December 31, 2010 and December 31, 2009, respectively, for which reserves have not been established because they were associated with transactions where no claim payment was anticipated primarily due to deductibles or where a partial reserve has been recorded that is less than the gross calculated reserve due to the presence of a deductible.

(2)

Includes an estimated 9,712 and 18,033 defaults at December 31, 2010 and December 31, 2009, respectively, for which reserves have not been established because they were associated with transactions where no claim payment was anticipated primarily due to deductibles or where a partial reserve has been recorded that is less than the gross calculated reserve due to the presence of a deductible.

Page 18

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit N


	Quarter Ended December 31						Year Ended December 31
	2010			2009			2010			2009
Net Premiums Written (In thousands)
Primary and Pool Insurance	$	199,610		$	166,188		$	698,078		$	650,060
Second-lien (1)		647			709			1,535			(41	)
International (1)		292			(2,699	)		296			(19,943	)

Total Net Premiums Written - Insurance	$	200,549		$	164,198		$	699,909		$	630,076


Net Premiums Earned (In thousands)
Primary and Pool Insurance	$	198,196		$	185,306		$	727,484		$	703,076
Second-lien		646			972			2,501			5,621
International		1,727			3,356			9,646			15,726

Total Net Premiums Earned - Insurance	$	200,569		$	189,634		$	739,631		$	724,423


SMART HOME (In millions)
Ceded Premiums Written and Earned	$	2.4		$	2.9		$	9.8		$	10.9


Net premiums earned - derivatives (In thousands) (2)	$	276		$	470		$	692		$	2,257


1st Lien Captives
Premiums ceded to captives (In thousands)	$	8,834		$	26,832		$	83,384		$	129,808
% of total premiums		4.2	%		12.5	%		10.2	%		15.4	%
NIW subject to captives (In thousands)	$	—		$	39,989		$	129		$	1,655,642
% of primary NIW		—			1.7	%		<1	%		9.8	%
IIF included in captives (3)		10.6	%		29.3	%
RIF included in captives (3)		10.4	%		31.5	%

Persistency (twelve months ended December 31)		81.8	%		82.0	%

	December 31 2010			December 31 2009
SMART HOME

% of Primary RIF included in Smart Home Transactions (3)		3.2	%		3.4	%

(1)

Reflects the impact of second-lien and international terminations.

(2)

Included in change in fair value of derivative instruments.

(3)

Radian reinsures the middle layer risk positions, while retaining a significant portion of the total risk comprising the first loss and most remote risk positions.

Page 19

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Exhibit O

Reinsurance Progression Toward Attachment - Summary by Book Year (1)


($ in millions)						December 31 2010										December 31 2009
Book Year (2):	Original Book RIF		Progression to Attachment Point			Gross Current RIF		Ceded Current RIF(3)		Net Current RIF		Ever-to-Date Incurred Losses		Reinsurance Benefit (4)		Gross Current RIF		Ceded Current RIF(3)		Net Current RIF		Ever-to-Date Incurred Losses		Reinsurance Benefit (4)

Pre-2006				0-50	%	$	193	$	38	$	155	$	77			$	375	$	62	$	313	$	142
Pre-2006				50-75	%		166		94		72		50				325		185		140		86
Pre-2006				75-99	%		146		83		63		59				557		231		326		127
Pre-2006				Attached			578		168		410		139	$	51		1,673		452		1,221		381	$	139

Pre-2006 Total	$	11,983				$	1,083	$	383	$	700	$	325	$	51	$	2,930	$	930	$	2,000	$	736	$	139


2006				0-50	%	$	2	$	—	$	2	$	—			$	1	$	—	$	1	$	—
2006				50-75	%		—		—		—		—				16		1		15		1
2006				75-99	%		11		1		10		1				13		1		12		1
2006				Attached			369		40		329		95	$	45		1,695		242		1,453		355	$	163

2006 Total	$	773				$	382	$	41	$	341	$	96	$	45	$	1,725	$	244	$	1,481	$	357	$	163


2007				0-50	%	$	—	$	—	$	—	$	—			$	1	$	—	$	1	$	—
2007				50-75	%		—		—		—		—				12		1		11		—
2007				75-99	%		9		1		8		1				15		1		14		1
2007				Attached			830		57		773		189	$	78		3,446		391		3,055		437	$	191

2007 Total	$	1,243				$	839	$	58	$	781	$	190	$	78	$	3,474	$	393	$	3,081	$	438	$	191


2008				0-50	%	$	122	$	8	$	114	$	4			$	298	$	22	$	276	$	6
2008				50-75	%		34		2		32		1				149		8		141		6
2008				75-99	%		22		1		21		1				1,454		166		1,288		56
2008				Attached			454		45		409		51	$	17		159		14		145		19	$	11

2008 Total	$	881				$	632	$	56	$	576	$	57	$	17	$	2,060	$	210	$	1,850	$	87	$	11


2009				0-50	%	$	242	$	12	$	230	$	1			$	284	$	12	$	272	$	—
2009				50-75	%		—		—		—		—				—		—		—		—
2009				75-99	%		—		—		—		—				—		—		—		—
2009				Attached			—		—		—		—	$	—		—		—		—		—	$	—

2009 Total	$	288				$	242	$	12	$	230	$	1	$	—	$	284	$	12	$	272	$	—	$	—


Quota Share				0-50	%	$	—	$	—	$	—	$	—			$	—	$	—	$	—	$	—
Quota Share				50-75	%		—		—		—		—				—		—		—		—
Quota Share				75-99	%		—		—		—		—				—		—		—		—
Quota Share				Attached			89		29		60		26	$	11		102		33		69		37	$	17

Quota Share Total	$	313				$	89	$	29	$	60	$	26	$	11	$	102	$	33	$	69	$	37	$	17


Total Captive (Including Quota Share)	$	15,481				$	3,267	$	579	$	2,688	$	695	$	202	$	10,575	$	1,822	$	8,753	$	1,655	$	521


SmartHome				0-50	%	$	28	$	12	$	16	$	14			$	32	$	14	$	18	$	12
SmartHome				50-75	%		—		—		—		—				71		29		42		23
SmartHome				75-99	%		63		29		34		26				—		—		—		—
SmartHome				Attached			909		445		464		475	$	137		1,029		492		537		435	$	143

Total SmartHome	$	3,900				$	1,000	$	486	$	514	$	515	$	137	$	1,132	$	535	$	597	$	470	$	143

(1)

Data is presented in the aggregate for all trusts for captives with risk in force at each period end only. Actual trust attachment points and exit points vary by individual contract. The attachment point is calculated at the contract/deal level and is based on Total Incurred Losses which are defined as claims paid ever-to-date plus loss reserves.

(2)

Book year figures may include loans from additional periods pursuant to reinsurance agreement terms and conditions.

(3)

Risk ceded to reinsurers based on individual contract terms.

(4)

Captive Benefit is defined as ceded reserves at period end plus ever-to-date claims paid by the trust for captives with risk in force at period end only. Reinsurance benefit excludes $324 million and $71 million of recoveries recognized from the terminations of certain captive reinsurance agreements during the years ended December 31, 2010 and December 31, 2009, respectively.

Page 20

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2010

Modified Pool

Exhibit P


($ in millions)	December 31 2010					December 31 2009
	$		%			$		%

Primary risk in force by policy year
2005 and prior	$	186		64.4	%	$	243		41.7	%
2006		41		14.2	%		98		16.8	%
2007		55		19.0	%		235		40.3	%
2008		7		2.4	%		7		1.2	%

Total	$	289		100.0	%	$	583		100.0	%


Primary risk in force by product
Prime	$	74		25.6	%	$	104		17.8	%
Alt-A		197		68.2	%		456		78.2	%
A minus and below		18		6.2	%		23		4.0	%

Total	$	289		100.0	%	$	583		100.0	%


Primary insurance in force by product
Prime	$	671		22.2	%	$	1,508		16.0	%
Alt-A		2,216		73.1	%		7,649		81.2	%
A minus and below		143		4.7	%		258		2.8	%

Total	$	3,030		100.0	%	$	9,415		100.0	%


Reserve for losses (in thousands)	$	87,218				$	239,824

Default Statistics:

Primary Insurance:
Total modified pool (1)
Number of insured loans				15,487					42,509
Number of loans in default				4,009					12,677
Percentage of loans in default				25.89	%				29.82	%

(1)

Impacted by the termination of transactions in 2009 and 2010.

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FORWARD-LOOKING STATEMENTS

All statements in this new release that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the United States (“U.S.”) Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties, including the following:

•

changes in general financial and political conditions, such as the failure or significant delay of the U.S. economy to recover from the most recent recession or the U.S. economy reentering a recessionary period following a brief period of stabilization or even growth, the lack of meaningful liquidity in the capital markets or in the credit markets, a prolonged period of high unemployment rates and limited home price appreciation or further depreciation (which has resulted in some borrowers voluntarily defaulting on their mortgages when their mortgage balances exceed the value of their homes), changes or volatility in interest rates or consumer confidence, changes in credit spreads, changes in the way investors perceive the strength of private mortgage insurers or financial guaranty providers, or investor concern over the credit quality and specific risks faced by the particular businesses, municipalities or pools of assets covered by our insurance;

•

catastrophic events or further economic changes in geographic regions where our mortgage insurance or financial guaranty insurance is more concentrated;

•

our ability to successfully execute upon our capital plan for our mortgage insurance business (which depends, in part, on the performance of our financial guaranty portfolio), and if necessary, to obtain additional capital to support new business writings in our mortgage insurance business and the long-term liquidity needs of our holding company;

•

a further reduction in, or prolonged period of depressed levels of, home mortgage originations due to reduced liquidity in the lending market, tighter underwriting standards and the decrease in housing demand throughout the U.S.;

•

our ability to maintain adequate risk-to-capital ratios and surplus requirements in our mortgage insurance business in light of ongoing losses in this business and continued deterioration in our financial guaranty portfolio, which, in the absence of new capital, could depend on our ability to execute strategies for which regulatory and other approvals are required and may not be obtained;

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•

our ability to continue to effectively mitigate our mortgage insurance and financial guaranty losses;

•

reduced opportunities for loss mitigation in markets where housing values do not appreciate or continue to decline;

•

a more rapid than expected decrease in the level of future insurance rescissions and claim denials from the current elevated levels, which rescissions and denials have materially mitigated our paid losses and resulted in a significant reduction in our loss reserves;

•

the negative impact our insurance rescissions and claim denials may have on our relationships with customers, including the potential loss of customers and the heightened risk of disputes and litigation, and, in the event that we are unsuccessful in defending our rescissions or denials, the need to reestablish loss reserves for, and reassume risk on, rescinded loans and pay additional claims;

•

the concentration of our mortgage insurance business among a relatively small number of large customers;

•

disruption in the servicing of mortgages covered by our insurance policies;

•

the aging of our mortgage insurance portfolio and changes in severity or frequency of losses associated with certain of our products that are riskier than traditional mortgage insurance or financial guaranty insurance policies;

•

the performance of our insured portfolio of higher risk loans, such as Alternative-A (“Alt-A”) and subprime loans, and of adjustable rate products, such as adjustable rate mortgages and interest-only mortgages;

•

a decrease in persistency rates of our mortgage insurance policies;

•

an increase in the risk profile of our existing mortgage insurance portfolio due to mortgage refinancing in the current housing market;

•

further downgrades or threatened downgrades of, or other ratings actions with respect to, our credit ratings or the ratings assigned by the major rating agencies to any of our rated insurance subsidiaries at any time (in particular, the credit rating of Radian Group Inc. and the financial strength ratings assigned to Radian Guaranty Inc.);

•

heightened competition for our mortgage insurance business from others such as the Federal Housing Administration, the Veterans’ Administration and private mortgage insurers (in particular, the FHA and those private mortgage insurers that have been assigned higher ratings from the major rating agencies or new entrants to the industry that are not burdened by legacy obligations);

•

changes in the charters or business practices of Federal National Mortgage Association (“Fannie Mae”) and Freddie Mac (together, the “GSEs”), the largest purchasers of mortgage loans that we insure, and our ability to remain an eligible provider to both Freddie Mac and Fannie Mae;

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•

changes to the current system of housing finance, including the possibility of a new system in which private mortgage insurers are not required or their services are significantly limited in scope;

•

the effect of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) on the financial services industry in general, and on our mortgage insurance and financial guaranty businesses in particular, including whether and to what extent loans with mortgage insurance are considered “qualified residential mortgages” for purposes of the Dodd-Frank Act securitization provisions (a draft rule that defines “qualified residential mortgages” is expected shortly and the final rule is required by the Dodd-Frank Act on April 17, 2011) or “qualified mortgages” for purposes of the ability to repay provisions;

•

the application of existing federal or state consumer, lending, insurance, tax, securities and other applicable laws and regulations, or changes in these laws and regulations or the way they are interpreted; including, without limitation: (i) the outcome of existing, or the possibility of additional, lawsuits or investigations, and (ii) legislative and regulatory changes (a) affecting demand for private mortgage insurance, (b) limiting or restricting our use of (or increasing requirements for) additional capital and the products we may offer, or (c) affecting the form in which we execute credit protection or affecting our existing financial guaranty portfolio;

•

the possibility that we may fail to estimate accurately the likelihood, magnitude and timing of losses in connection with establishing loss reserves for our mortgage insurance or financial guaranty businesses or premium deficiencies for our mortgage insurance business, or to estimate accurately the fair value amounts of derivative instruments in our mortgage insurance and financial guaranty businesses in determining gains and losses on these contracts;

•

the ability of our primary insurance customers in our financial guaranty reinsurance business to provide appropriate surveillance and to mitigate losses adequately with respect to our assumed insurance portfolio;

•

volatility in our earnings caused by changes in the fair value of our derivative instruments and our need to reevaluate the possibility of a premium deficiency in our mortgage insurance business on a quarterly basis;

•

our ability to return to a period of sustained profitability, which would allow us to reverse all or a portion of the valuation allowance that was established against substantially all of our net deferred tax asset (DTA);

•

our ability to obtain the necessary regulatory approval to consummate the purchase of MIAC and to successfully develop and implement a strategy to utilize MIAC in the public finance financial guaranty market, which strategy may depend on, among other items, our ability to obtain necessary regulatory or other approvals, to attract third-party capital and to obtain ratings sufficient to support such strategy;

•

changes in accounting guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board; and

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•

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

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 1A of Part II of our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2010. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements made in this press release to reflect new information or future events or for any other reason.

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