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Radian Announces Ability to Comply with Final PMIERs and Sets First Quarter Conference Call Date

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Radian Guaranty Inc., the mortgage insurance subsidiary of Radian Group Inc., today commented on the final Private Mortgage Insurer Eligibility Requirements (PMIERs) developed by Fannie Mae and Freddie Mac (GSEs) and issued by the Federal Housing Finance Agency (FHFA) earlier today. The PMIERs provide revised requirements for private mortgage insurers (MIs), including Radian Guaranty, to remain eligible insurers of loans purchased by the GSEs. The PMIERs effective date for existing approved insurers is December 31, 2015.

As of March 31, 2015, Radian Guaranty would be able to immediately comply with the financial requirements of the PMIERs by utilizing approximately $330 million of existing holding company liquidity. This estimate includes the net proceeds of $789 million from the recent sale of Radian Asset and assumes that the company

  • converts approximately $130 million of existing liquid assets into PMIERs-compliant Available Assets (as defined in the PMIERs) and
  • receives full PMIERs benefit of approximately $145 million for its outstanding quota-share reinsurance arrangements, following any necessary amendments needed to facilitate GSE approval.

Radian Group maintains approximately $695 million of currently available liquidity, with no significant holding company cash needs before June 2017. Based on the company’s projections, the amount of holding company liquidity required to satisfy the PMIERs as of December 31, 2015 is expected to decrease from the amount estimated as of March 31, 2015.

“Radian is able to comply with the PMIERs using only a portion of our existing holding company cash. We are therefore extremely well positioned to help worthy low-to-moderate income borrowers, including first-time homebuyers, achieve their homeownership dream,” said Radian Guaranty President Teresa Bryce Bazemore. “Now that the PMIERs are finalized and our ability to comply is clear, we are able to provide our lending partners with even greater confidence and support as we work together to expand opportunities for responsible homeownership.”

The proposed PMIERs were issued by the FHFA on July 10, 2014, which began a public comment period that ended on September 8, 2014. The final rules issued today include significant changes to the Minimum Required Asset factors originally published in the draft PMIERs, with those changes primarily impacting the performing 2005 through 2008 vintage loans, as well as pool insurance. The changes resulted in a decrease to Radian Guaranty’s Minimum Required Assets of more than $800 million as of March 31, 2015.

The company will provide additional details regarding the final PMIERs in its first quarter conference call on April 30, 2015. Additional information may be found on Radian’s website at www.radian.biz/pmiers.

FIRST QUARTER CONFERENCE CALL

Radian will discuss first quarter 2015 financial results in a conference call on Thursday, April 30, 2015 at 10:00 a.m. Eastern time. The conference call will be broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The call may also be accessed by dialing 800.288.8961 inside the U.S., or 612.332.0335 for international callers, using passcode 358122 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 358122.

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.

FORWARD-LOOKING STATEMENTS

Some of the statements in this press release may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Words such as “will,” “expects,” “believes,” “projects,” “estimates,” “anticipates” and similar expressions are used to identify these forward-looking statements. These forward-looking statements, which may include without limitation, estimates and 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 that could cause actual results to differ materially from those set forth in the forward-looking statement, including the possibility that we have not estimated accurately Radian Guaranty’s Minimum Required Assets and Available Assets under the financial requirements of the final Private Mortgage Insurer Eligibility Requirements (PMIERs), which serves as a basis for our projections regarding the amount of holding company liquidity that we may need to contribute to Radian Guaranty. Radian Guaranty’s Minimum Required Assets and/or Available Assets (and consequently, the amount of holding company capital required to comply with the final PMIERS) may be impacted by, among other things, (1) our ability to receive GSE approval for the full benefit of our existing reinsurance arrangements under the PMIERs, which may require an amendment to the reinsurance arrangements or a GSE waiver, (2) whether we elect to convert certain liquid assets into PMIERs compliant Available Assets, and (3) on a prospective basis, factors affecting the performance of our mortgage insurance business, including our level of defaults, the losses we incur on new or existing defaults and the credit characteristics of new business that we write. Contributing holding company cash and investments from Radian Group to Radian Guaranty will leave less liquidity to satisfy Radian Group’s future obligations. Depending on the amount of holding company contributions, we may be required or may decide to seek additional capital by incurring additional debt, by issuing additional equity, or by selling assets, which we may not be able to do on favorable terms, if at all.

The forward-looking statements speak only as of the date they were made, and we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 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. 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 the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 and subsequent reports and registration statements filed from time to time with the Securities and Exchange Commission.

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