News

05/03/2012

Radian Receives Approval to Release Financial Guaranty Contingency Reserves

PHILADELPHIA, May 03, 2012 (BUSINESS WIRE) --Radian Group Inc. today announced that its financial guaranty insurance subsidiary, Radian Asset Assurance Inc., received regulatory approval yesterday to release $55 million of contingency reserves, which will benefit Radian Guaranty's statutory capital position. This reserve release was based on a reduction in Radian Asset's net par outstanding, resulting from the maturing of exposures and other terminations of coverage. The company had anticipated the reserve release and included the impact in its risk-to-capital projections for Radian Guaranty.

"As we mentioned in our earnings call earlier this week, at the end of the first quarter an additional $323 million in financial guaranty contingency reserves remained to support Radian Asset's existing risk, representing a potential opportunity to add to Radian Guaranty's statutory capital through future exposure reductions," stated Chief Executive Officer S.A. Ibrahim. "The approval to release $55 million is another example of our ability to support Radian Guaranty's risk-to-capital position as we continue to write strong volume of high-quality new business."

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.

Forward-looking Statements

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

• changes in general economic and political conditions, including high unemployment and continued weakness in the U.S. housing and mortgage credit markets, the U.S. economy reentering a recessionary period, a lack of meaningful liquidity in the capital markets or in the credit markets, changes or volatility in interest rates or consumer confidence, and changes in credit spreads, each of which may be accelerated or intensified by, among other things, further actual or threatened downgrades of U.S. credit ratings;
• our ability to successfully execute upon our capital plan, including our capital management initiatives, 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 our mortgage insurance business and the long-term liquidity needs of our holding company;
• our ability to maintain an adequate risk-to-capital position and surplus requirements in our mortgage insurance business in light of ongoing losses in this business and potential further 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 or waivers are required and may not be obtained;
• 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 applied or interpreted, including, without limitation, legislative and regulatory changes limiting or restricting our use of (or increasing requirements for) additional capital and the products we may offer and requirements, restrictions or limitations resulting from audits or examinations conducted by state and federal regulators; and
• 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 determining gains and losses on these contracts.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2011, and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

SOURCE: Radian Group Inc.

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