Filed by Radian Group Inc.

Pursuant to Rule 425 under the Securities Act of 1933 and

deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934

Subject Companies:

Radian Group Inc.

(Commission File No. 1-11356)

MGIC Investment Corporation

(Commission File No. 1-10816)

On April 24, 2007, Radian Group Inc. issued the following news release:

 

1601 Market Street: Philadelphia Pennsylvania 19103 2337 800 523 1988 215 564 6600		News Release

 

Contact:
For investors:		Mona Zeehandelaar – phone: 215 231.1674
		email: mona.zeehandelaar@radian.biz
For the media:		Michelle Davidson – phone: 215 231.1325
		cell: 215 260.6760
		email: michelle.davidson@radian.biz
		Courtney Robinson – phone: 215 231.1762
		cell: 215 629.6880
		email: courtney.robinson@radian.biz

Radian Reports First Quarter Net Income of $114 Million

PHILADELPHIA, Pa., April 24, 2007 — Radian Group Inc. (NYSE: RDN) today reported that for the quarter ended March 31, 2007, Radian earned net income of $113.5 million and diluted net income per share of $1.42. Book value per share at March 31, 2007, was $52.00, an increase of 14 percent from a year earlier.

“Our core mortgage insurance and financial guaranty businesses had strong production performance this quarter, with a 35 percent jump in flow MI over last year and strong growth in written and earned premium for FG,” said Chief Executive Officer S.A. Ibrahim.

“Our primary book was not significantly affected by the disruptions in the sub-prime market in recent months,” Mr. Ibrahim added. “I believe this is a validation of our long-term approach to risk management in all areas, including sub-prime and Alt A, where we have remained disciplined in diversifying our book of business across geographies, products, clients and origination years.”

 

- 1 -

---

In the Financial Services segment, net income was $10.8 million, down from $38.7 million for the same period last year, primarily as a result of an operating loss at C-BASS.

The company also provided an update on its proposed merger with MGIC, which was announced in February this year. Radian and MGIC currently anticipate completing the merger late in the third quarter or early in the fourth quarter of 2007. To do this, both Radian and MGIC must obtain stockholder approval, with votes scheduled for early next month, as well as additional regulatory approvals.

The key financial highlights of the quarter ended March 31, 2007, are as follows:

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

First quarter

 

		Quarter ended March 31, 2007			Quarter ended March 31, 2006			Percent Change
Revenue		$	341.5		$	353.7		(3.4	%)
Net income		$	113.5		$	163.7		(30.7	%)
Diluted net income per share		$	1.42		$	1.96		(27.6	%)
Net premiums written		$	277.6		$	279.6		(0.7	%)
Net premiums earned		$	249.1		$	253.7		(1.8	%)
Equity in net income of affiliates		$	22.8		$	58.3		(60.9	%)
Book value per share		$	52.00		$	45.74		13.7	%

Radian will hold a conference call on Wednesday, April 25, 2007, at 9:00 a.m. Eastern time to discuss the company’s first quarter results. This call will be broadcast live over the Internet at http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives or at http://www.radian.biz > News. A replay of the Webcast will be available at this site approximately two hours after the live broadcast ends for a period of one year.

 

2

---

Statistical and financial information which is expected to be referred to during the conference call will be available on Radian’s website under Investors > Webcasts, Presentations and Transcripts or by clicking on http://www.ir.radian.biz/phoenix.zhtml?c=112301&p=irol-audioarchives.

About Radian

Radian Group Inc. is a global credit risk management company headquartered in Philadelphia with significant operations in New York and London. Radian develops innovative financial solutions by applying its core mortgage credit risk expertise and structured finance capabilities to the credit enhancement needs of the capital markets worldwide, primarily through credit insurance products. The company also provides credit enhancement for public finance and other corporate and consumer assets on both a direct and reinsurance basis and holds strategic interests in active credit-based consumer asset businesses. Additional information may be found at www.radian.biz.

Additional Information about the Radian/MGIC Transaction

MGIC Investment Corporation and Radian Group Inc. have filed a joint proxy statement/prospectus and other relevant documents concerning the MGIC/Radian merger transaction with the United States Securities and Exchange Commission (the “SEC”). STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER TRANSACTION OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors may obtain these documents free of charge at the SEC’s website (http://www.sec.gov). In addition, documents filed with the SEC by MGIC are available free of charge by contacting Investor Relations at MGIC Investment Corporation, 250 East Kilbourn Avenue, Milwaukee, WI 53202. Documents filed with the SEC by Radian are available free of charge by calling Investor Relations at (215) 231-1486.

 

3

---

Radian and MGIC and their respective directors and executive officers, certain members of management and other employees are participants in the solicitation of proxies from Radian stockholders and MGIC stockholders with respect to the proposed merger transaction. Information regarding the directors and executive officers of Radian and MGIC and the interests of such participants are included in the joint proxy statement/prospectus filed with the SEC which relates to the merger transaction, Radian’s 2007 annual meeting of stockholders and MGIC’s 2007 annual meeting of stockholders—and in the other relevant documents filed with the SEC.

Financial Results and Supplemental Information Contents

For trend information on all schedules, refer to Radian’s quarterly financial statistics at http://www.radian.biz/investors/financial/corporate.aspx.

 

Exhibit A:		Condensed Consolidated Statements of Income
Exhibit B:		Condensed Consolidated Balance Sheets
Exhibit C:		Segment Information Quarter Ended March 31, 2007
Exhibit D:		Segment Information Quarter Ended March 31, 2006
Exhibit E:		Financial Guaranty Insurance Supplemental Information – Quarter Ended and as of March 31, 2007
Exhibit F:		Financial Guaranty Insurance Supplemental Information – Quarter Ended and as of March 31, 2007
Exhibit G:		Mortgage Insurance Supplemental Information: New Insurance Written and Risk Written
Exhibit H:		Mortgage Insurance Supplemental Information: Insurance in Force and Risk in Force
Exhibit I:		Mortgage Insurance Supplemental Information: Risk in Force by LTV and Policy Year and Other Risk in Force
Exhibit J:		Mortgage Insurance Supplemental Information: Claims and Reserves
Exhibit K:		Mortgage Insurance Supplemental Information: Defaults
Exhibit L:		Mortgage Insurance Supplemental Information: Net Premiums Written and Earned, Smart Home, Captives and Persistency
Exhibit M:		Mortgage Insurance Supplemental Information: ALT A
Exhibit N:		Financial Services Supplemental Information

 

 

 

 

 

 

 

 

 

 

 

 

4

---

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

Exhibit A

 

		Quarter Ended March 31
(In thousands, except per-share data)		2007			2006
Revenues:
Net premiums written		$	277,634		$	279,605
Net premiums earned—insurance		$	214,507		$	227,234
Net premiums earned—credit derivatives			34,628			26,463
Net premiums earned—total			249,135			253,697
Net investment income			60,996			54,260
Net gains on securities			13,745			22,854
Change in fair value of derivative instruments			13,789			17,630
Other income			3,818			5,211
Total revenues			341,483			353,652
Expenses:
Provision for losses			107,042			78,634
Policy acquisition costs			28,254			27,364
Other operating expenses			54,367			60,277
Merger expenses			3,328			—
Interest expense			13,056			11,840
Total expenses			206,047			178,115
Equity in net income of affiliates			22,772			58,340
Pretax income			158,208			233,877
Provision for income taxes			44,741			70,179
Net income		$	113,467		$	163,698
Diluted net income per share (1)		$	1.42		$	1.96
(1) Weighted average shares outstanding (in thousands)
Average common shares outstanding			79,428			82,937
Increase in shares—potential exercise of options—diluted basis			652			770
Weighted average shares outstanding (in thousands)			80,080			83,707

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

 

Page 1

---

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit B

 

(In thousands, except share and per-share data)		March 31 2007			December 31 2006
Assets:
Cash and investments		$	6,078,573		$	5,803,228
Investments in affiliates			588,323			618,841
Deferred policy acquisition costs			225,597			221,769
Prepaid federal income taxes			788,240			808,740
Other assets			444,175			476,093
Total assets		$	8,124,908		$	7,928,671
Liabilities and stockholders’ equity:
Unearned premiums		$	974,768		$	943,687
Reserve for losses and loss adjustment expenses			852,462			842,283
Long-term debt			747,849			747,770
Current federal income taxes			224,999			—
Deferred federal income taxes			942,167			1,129,740
Other liabilities			207,887			197,634
Total liabilities			3,950,132			3,861,114
Common stock			97			97
Additional paid-in capital			442,368			416,193
Retained earnings			3,584,236			3,489,290
Accumulated other comprehensive income			148,075			161,977
Total common stockholders’ equity			4,174,776			4,067,557
Total liabilities and stockholders’ equity		$	8,124,908		$	7,928,671
Book value per share		$	52.00		$	51.23
Treasury Stock Repurchases (Year-to-Date for Periods Presented)
Total number of shares repurchased			70,968			4,500,000
Average price paid per share		$	56.09		$	58.58
Total cost of repurchased shares		$	3,980,441		$	263,600,341

 

Page 2

---

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended March 31, 2007

Exhibit C

 

(In thousands)		Mortgage Insurance				Financial Guaranty				Financial Services				Total
Revenues:
Net premiums written		$	222,289			$	55,345			$	—			$	277,634
Net premiums earned—insurance		$	180,243			$	34,264			$	—			$	214,507
Net premiums earned—credit derivatives			15,689				18,939				—				34,628
Net premiums earned—total			195,932				53,203				—				249,135
Net investment income			35,559				25,437				—				60,996
Net gains (losses) on securities			11,123				2,824				(202	)			13,745
Change in fair value of derivative instruments			(11,351	)			25,140				—				13,789
Other income			2,849				140				829				3,818
Total revenues			234,112				106,744				627				341,483
Expenses:
Provision for losses			112,854				(5,812	)			—				107,042
Policy acquisition costs			16,523				11,731				—				28,254
Other operating expenses			36,272				14,235				3,860				54,367
Merger expenses			3,328				—				—				3,328
Interest expense			6,854				4,596				1,606				13,056
Total expenses			175,831				24,750				5,466				206,047
Equity in net income of affiliates			—				—				22,772				22,772
Pretax income			58,281				81,994				17,933				158,208
Provision for income taxes			13,579				24,078				7,084				44,741
Net income		$	44,702			$	57,916			$	10,849			$	113,467
Assets		$	4,774,210			$	2,757,800			$	592,898			$	8,124,908
Deferred policy acquisition costs			67,835				157,762				—				225,597
Reserve for losses and loss adjustment expenses			676,691				175,771				—				852,462
Unearned premiums			277,135				697,633				—				974,768
Stockholders’ equity			2,322,374				1,457,712				394,690				4,174,776

 

Page 3

---

Radian Group Inc. and Subsidiaries

Segment Information

Quarter Ended March 31, 2006

Exhibit D

 

(In thousands)		Mortgage Insurance			Financial Guaranty			Financial Services			Total
Revenues:
Net premiums written		$	223,766		$	55,839		$	—		$	279,605
Net premiums earned—insurance		$	192,971		$	34,263		$	—		$	227,234
Net premiums earned—credit derivatives			9,735			16,728			—			26,463
Net premiums earned—total			202,706			50,991			—			253,697
Net investment income			31,665			22,518			77			54,260
Net gains on securities			13,577			7,178			2,099			22,854
Change in fair value of derivative instruments			9,121			8,509			—			17,630
Other income			3,634			214			1,363			5,211
Total revenues			260,703			89,410			3,539			353,652
Expenses:
Provision for losses			71,097			7,537			—			78,634
Policy acquisition costs			13,345			14,019			—			27,364
Other operating expenses			44,267			14,756			1,254			60,277
Interest expense			6,701			4,026			1,113			11,840
Total expenses			135,410			40,338			2,367			178,115
Equity in net income of affiliates			—			—			58,340			58,340
Pretax income			125,293			49,072			59,512			233,877
Provision for income taxes			37,149			12,200			20,830			70,179
Net income		$	88,144		$	36,872		$	38,682		$	163,698
Assets		$	4,504,282		$	2,456,875		$	449,437		$	7,410,594
Deferred policy acquisition costs			68,619			140,905			—			209,524
Reserve for losses and loss adjustment expenses			587,114			204,576			—			791,690
Unearned premiums			233,364			641,369			—			874,733
Stockholders’ equity			2,186,177			1,278,432			306,611			3,771,220

 

Page 4

---

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit E

 

($ in thousands, except ratios)		Quarter Ended March 31
		2007				2006
Net Premiums Written:
Public finance direct		$	12,780			$	13,438
Public finance reinsurance			18,154				17,983
Structured direct			5,247				3,991
Structured reinsurance			5,912				3,005
Trade credit reinsurance			(74	)			2,978
Net premiums written—insurance			42,019				41,395
Net premiums written—credit derivatives			13,326				14,444
Total Net Premiums Written		$	55,345			$	55,839
Net Premiums Earned:
Public finance direct		$	11,585			$	7,753
Public finance reinsurance			11,100				8,293
Structured direct			4,691				4,912
Structured reinsurance			6,194				4,594
Trade credit reinsurance			694				8,711
Net premiums earned—insurance			34,264				34,263
Net premiums earned—credit derivatives			18,939				16,728
Total Net Premiums Earned		$	53,203			$	50,991
Refundings included in earned premium		$	6,586			$	2,382
Claims paid:
Trade credit reinsurance		$	2,646			$	4,000
Other financial guaranty			(69	)			(110	)
Conseco			3,108				4,317
Total		$	5,685			$	8,207
Incurred losses:
Trade credit reinsurance		$	(3,136	)		$	3,950
Other financial guaranty			(2,676	)			4,619
Conseco			—				(1,032	)
Total		$	(5,812	)		$	7,537
Loss ratio—GAAP Basis			(10.9	%)			14.8	%
Expense ratio—GAAP Basis			48.8	%			56.4	%
			37.9	%			71.2	%
Net (receipts) payments under derivatives contracts		$	(11,228	)		$	66,639

 

Page 5

---

Radian Group Inc.

Financial Guaranty Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit F

 

($ in thousands, except ratios)		March 31 2007				December 31 2006				March 31 2006
Capital and surplus		$	1,042,548			$	1,014,958			$	983,349
Contingency reserve			357,176				336,719				283,163
Qualified statutory capital			1,399,724				1,351,677				1,266,512
Unearned premium reserve			837,024				829,340				757,245
Loss and loss expense reserve			88,253				96,829				114,177
Total statutory policyholders' reserves			2,325,001				2,277,846				2,137,934
Present value of installment premiums			377,105				345,565				294,872
Reinsurance and soft capital facilities			150,000				150,000				150,000
Total statutory claims paying resources		$	2,852,106			$	2,773,411			$	2,582,806
Net debt service outstanding		$	155,568,589			$	143,728,116			$	117,942,386
Capital leverage ratio (1)			111				106				93
Claims paying leverage ratio (2)			55				52				46
Net par outstanding by product:
Public finance direct		$	16,590,493			$	16,324,170			$	14,391,889
Public finance reinsurance			39,311,697				37,488,972				34,494,004
Structured direct			52,945,169				44,960,360				29,563,075
Structured reinsurance			5,261,220				5,192,122				4,881,345
Total		$	114,108,579			$	103,965,624			$	83,330,313
Reinsurance business net par outstanding:
Treaty			59	%			59	%			59	%
Facultative			41	%			41	%			41	%
Reserve for losses and LAE
Specific		$	33,011			$	35,320			$	43,568
Conseco			30,866				33,975				45,421
Non-specific			111,894				119,752				115,587
Total		$	175,771			$	189,047			$	204,576

 

 

(1)	Net debt service outstanding divided by qualified statutory capital

(2)	Net debt service outstanding divided by total statutory claims paying resources

 

Page 6

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit G

 

		Quarter Ended March 31
		2007				%			2006				%
Primary New Insurance Written ($ in millions)
Flow		$	7,049			53.3	%		$	5,234			40.9	%
Structured			6,178			46.7	%			7,569			59.1	%
Total Primary		$	13,227			100.0	%		$	12,803			100.0	%
Flow
Prime		$	5,050			71.6	%		$	3,771			72.1	%
Alt-A			1,401			19.9	%			1,105			21.1	%
A minus and below			598			8.5	%			358			6.8	%
Total Flow		$	7,049			100.0	%		$	5,234			100.0	%
Structured
Prime		$	93			1.5	%		$	2,264			29.9	%
Alt-A			5,905			95.6	%			3,917			51.8	%
A minus and below			180			2.9	%			1,388			18.3	%
Total Structured		$	6,178			100.0	%		$	7,569			100.0	%
Total
Prime		$	5,143			38.9	%		$	6,035			47.2	%
Alt-A			7,306			55.2	%			5,022			39.2	%
A minus and below			778			5.9	%			1,746			13.6	%
Total Primary		$	13,227			100.0	%		$	12,803			100.0	%
Total Primary New Insurance Written by FICO Score
($ in millions)
Flow
<=619		$	486			6.9	%		$	278			5.3	%
620-679			2,255			32.0	%			1,547			29.6	%
680-739			2,479			35.2	%			1,991			38.0	%
>=740			1,829			25.9	%			1,418			27.1	%
Total Flow		$	7,049			100.0	%		$	5,234			100.0	%
Structured
<=619		$	126			2.0	%		$	1,388			18.3	%
620-679			1,376			22.3	%			2,181			28.8	%
680-739			3,068			49.7	%			2,505			33.1	%
>=740			1,608			26.0	%			1,495			19.8	%
Total Structured		$	6,178			100.0	%		$	7,569			100.0	%
Total
<=619		$	612			4.6	%		$	1,666			13.0	%
620-679			3,631			27.5	%			3,728			29.1	%
680-739			5,547			41.9	%			4,496			35.1	%
>=740			3,437			26.0	%			2,913			22.8	%
Total Primary		$	13,227			100.0	%		$	12,803			100.0	%
Percentage of primary new insurance written
Refinances			37	%						39	%
95.01% LTV and above			16	%						8	%
ARMs
Less than 5 years			42	%						41	%
5 years and longer			5	%						19	%
Primary risk written ($ in millions)
Flow		$	1,746			90.0	%		$	1,329			55.9	%
Structured			194			10.0	%			1,050			44.1	%
Total Primary		$	1,940			100.0	%		$	2,379			100.0	%
Pool risk written (In millions)		$	89						$	61
Other risk written (In millions)
Seconds
1st loss		$	3						$	24
2nd loss			21							132
NIMs			268							89
International
1st loss-Hong Kong primary mortgage insurance			19							17
Reinsurance			17							2
Other
Domestic credit default swaps			—							20
Total other risk written		$	328						$	284

 

Page 7

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit H

 

		March 31							March 31
		2007				%			2006				%
Primary insurance in force ($ in millions)
Flow		$	85,649			71.5	%		$	81,597			71.6	%
Structured			34,063			28.5	%			32,316			28.4	%
Total Primary		$	119,712			100.0	%		$	113,913			100.0	%
Prime		$	77,414			64.7	%		$	76,141			66.8	%
Alt-A			31,023			25.9	%			23,767			20.9	%
A minus and below			11,275			9.4	%			14,005			12.3	%
Total Primary		$	119,712			100.0	%		$	113,913			100.0	%
Primary risk in force ($ in millions)
Flow		$	21,267			82.7	%		$	20,073			77.0	%
Structured			4,446			17.3	%			6,003			23.0	%
Total Primary		$	25,713			100.0	%		$	26,076			100.0	%
Flow
Prime		$	16,653			78.3	%		$	15,595			77.7	%
Alt-A			3,015			14.2	%			2,948			14.7	%
A minus and below			1,599			7.5	%			1,530			7.6	%
Total Flow		$	21,267			100.0	%		$	20,073			100.0	%
Structured
Prime		$	1,797			40.4	%		$	2,379			39.6	%
Alt-A			1,442			32.4	%			1,623			27.1	%
A minus and below			1,207			27.2	%			2,001			33.3	%
Total Structured		$	4,446			100.0	%		$	6,003			100.0	%
Total
Prime		$	18,450			71.8	%		$	17,974			68.9	%
Alt-A			4,457			17.3	%			4,571			17.5	%
A minus and below			2,806			10.9	%			3,531			13.6	%
Total Primary		$	25,713			100.0	%		$	26,076			100.0	%
Total Primary Risk in Force by FICO Score
($ in millions)
Flow
<=619		$	1,381			6.5	%		$	1,281			6.4	%
620-679			6,574			30.9	%			6,224			31.0	%
680-739			7,733			36.4	%			7,383			36.8	%
>=740			5,579			26.2	%			5,185			25.8	%
Total Flow		$	21,267			100.0	%		$	20,073			100.0	%
Structured
<=619		$	1,205			27.1	%		$	2,002			33.3	%
620-679			1,539			34.6	%			2,170			36.2	%
680-739			1,130			25.4	%			1,268			21.1	%
>=740			572			12.9	%			563			9.4	%
Total Structured		$	4,446			100.0	%		$	6,003			100.0	%
Total
<=619		$	2,586			10.0	%		$	3,283			12.6	%
620-679			8,113			31.6	%			8,394			32.2	%
680-739			8,863			34.5	%			8,651			33.2	%
>=740			6,151			23.9	%			5,748			22.0	%
Total Primary		$	25,713			100.0	%		$	26,076			100.0	%
Percentage of primary risk in force
Refinances			33	%						36	%
95.01% LTV and above			19	%						14	%
ARMs
Less than 5 years			18	%						24	%
5 years and longer			9	%						9	%
Pool risk in force ($ in millions)
Prime		$	2,207			72.0	%		$	2,098			76.3	%
Alt-A			301			9.8	%			272			9.9	%
A minus and below			558			18.2	%			380			13.8	%
Total		$	3,066			100.0	%		$	2,750			100.0	%

 

Page 8

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit I

 

		March 31						March 31
		2007			%			2006			%
Total Primary Risk in Force by LTV ($ in millions)
95.01% and above		$	4,795		18.6	%		$	3,680		14.1	%
90.01% to 95.00%			7,965		31.0	%			8,473		32.5	%
85.01% to 90.00%			9,157		35.6	%			9,476		36.3	%
85.00% and below			3,796		14.8	%			4,447		17.1	%
Total		$	25,713		100.0	%		$	26,076		100.0	%
Total Primary Risk in Force by Policy Year ($ in millions)
2003 and prior			6,653		25.9	%		$	9,288		35.6	%
2004			4,198		16.3	%			6,407		24.6	%
2005			6,137		23.9	%			8,015		30.7	%
2006			6,815		26.5	%			2,366		9.1	%
2007			1,910		7.4	%			—		0.0	%
Total		$	25,713		100.0	%		$	26,076		100.0	%
Total Pool Risk in Force by Policy Year ($ in millions)
2003 and prior			1,749		57.0	%		$	1,815		66.0	%
2004			290		9.5	%			293		10.7	%
2005			650		21.2	%			581		21.1	%
2006			285		9.3	%			61		2.2	%
2007			92		3.0	%			—		—
Total Pool risk in Force		$	3,066		100.0	%		$	2,750		100.0	%
Other risk in force (In millions)
Seconds
1st loss		$	555					$	594
2nd loss			605						756
NIMs			783						303
International
1st loss—Hong Kong primary mortgage insurance			353						288
Reinsurance			61						29
Credit default swaps			7,875						7,581
Other
Domestic credit default swaps			212						200
Financial guaranty wrap			—						205
Total other risk in force		$	10,444					$	9,956
Risk to capital ratio—STAT Basis			10.4:1						11.1:1

 

Page 9

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit J

 

		Quarter Ended March 31
		2007				2006
Direct claims paid (In thousands)
Prime		$	33,125			$	30,109
Alt-A			19,998				18,790
A minus and below			29,080				23,391
Seconds and other			13,621				7,903
Total		$	95,824			$	80,193
Average claim paid (In thousands)
Prime		$	28.1			$	26.9
Alt-A			39.7				40.4
A minus and below			29.6				29.1
Seconds			28.8				22.9
Total			30.6				29.4
Loss ratio—GAAP Basis			57.6	%			35.1	%
Expense ratio—GAAP Basis			26.9	%			28.4	%
			84.5	%			63.5	%
Reserve for losses by category (In thousands):
Prime		$	200,262			$	181,001
Alt-A			146,329				135,336
A minus and below			228,066				195,246
Pool Insurance			34,599				36,199
Seconds			38,347				30,144
Other			900				9,188
Reserve for losses, net			648,503				587,114
Reinsurance recoverable			28,188	(1)			—
Total		$	676,691			$	587,114

 

(1)	Reinsurance recoverable on a first-loss second lien captive.

 

Page 10

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit K

 

		March 31 2007			December 31 2006			March 31 2006
Default Statistics
Primary insurance:
Flow
Prime
Number of insured loans		504,941			500,464			501,632
Number of loans in default		14,013			15,141			15,117
Percentage of loans in default		2.78	%		3.03	%		3.01	%
Alt-A
Number of insured loans		65,075			63,469			64,555
Number of loans in default		4,513			4,348			4,468
Percentage of loans in default		6.94	%		6.85	%		6.92	%
A minus and below
Number of insured loans		53,379			52,440			52,700
Number of loans in default		6,704			7,250			6,833
Percentage of loans in default		12.56	%		13.83	%		12.97	%
Total Flow
Number of insured loans		623,395			616,373			618,887
Number of loans in default		25,230			26,739			26,418
Percentage of loans in default		4.05	%		4.34	%		4.27	%
Structured
Prime
Number of insured loans		59,194			62,680			67,353
Number of loans in default		3,231			3,300			2,414
Percentage of loans in default		5.46	%		5.26	%		3.58	%
Alt-A
Number of insured loans		84,050			70,164			63,800
Number of loans in default		3,922			3,647			2,491
Percentage of loans in default		4.67	%		5.20	%		3.90	%
A minus and below
Number of insured loans		34,429			36,597			51,277
Number of loans in default		7,971			9,014			7,859
Percentage of loans in default		23.15	%		24.63	%		15.33	%
Total Structured
Number of insured loans		177,673			169,441			182,430
Number of loans in default		15,124			15,961			12,764
Percentage of loans in default		8.51	%		9.42	%		7.00	%
Total Primary Insurance
Prime
Number of insured loans		564,135			563,144			568,985
Number of loans in default		17,244			18,441			17,531
Percentage of loans in default		3.06	%		3.27	%		3.08	%
Alt-A
Number of insured loans		149,125			133,633			128,355
Number of loans in default		8,435			7,995			6,959
Percentage of loans in default		5.66	%		5.98	%		5.42	%
A minus and below
Number of insured loans		87,808			89,037			103,977
Number of loans in default		14,675			16,264			14,692
Percentage of loans in default		16.71	%		18.27	%		14.13	%
Total Primary Insurance
Number of insured loans		801,068			785,814			801,317
Number of loans in default		40,354	(1)		42,700	(1)		39,182	(1)
Percentage of loans in default		5.04	%		5.43	%		4.89	%
Pool insurance:
Number of loans in default		17,989	(2)		18,681	(2)		15,072	(2)

 

(1)	Includes approximately 1,541, 1,161 and 439 defaults at March 31, 2007, December 31, 2006 and March 31, 2006, respectively, where reserves have not been established because no claim payment is currently anticipated.

(2)	Includes approximately 13,036, 13,309 and 9,019 defaults at March 31, 2007, December 31, 2006 and March 31, 2006, respectively, where reserves have not been established because no claim payment is currently anticipated.

 

Page 11

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit L

 

		Quarter Ended March 31
		2007				2006
Net Premiums Written (In thousands)
Primary and Pool Insurance		$	192,108			$	193,446
Seconds			11,179				10,539
International			3,124				1,920
Net premiums written—insurance			206,411				205,905
Net premiums written—credit derivatives			15,878				17,861
Total Net Premiums Written		$	222,289			$	223,766
Net Premiums Earned (In thousands)
Primary and Pool Insurance		$	167,155			$	175,808
Seconds			9,172				14,910
International			3,916				2,253
Net premiums earned—insurance			180,243				192,971
Net premiums earned—credit derivatives			15,689				9,735
Total Net Premiums Earned		$	195,932			$	202,706
SMART HOME (In millions)
Ceded Premiums Written		$	3.2			$	2.2
Ceded Premiums Earned		$	2.9			$	2.4
Captives
Premiums ceded to captives (In millions)		$	28.1			$	22.9
% of total premiums			14.2	%			11.4	%
NIW subject to captives (In millions)		$	4,994			$	2,776
% of primary NIW			37.8	%			21.7	%
IIF included in captives (1)			34.3	%			32.2	%
RIF included in captives (1)			39.7	%			35.2	%
Persistency (twelve months ended March 31)			69.5	%			58.6	%
		March 31 2007				March 31 2006
SMART HOME
% of Primary RIF included in Smart Home Transactions (1)			9.0	%			7.1	%

 

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

 

Page 12

---

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter Ended and as of March 31, 2007

ALT-A

Exhibit M

 

($ in millions)		Quarter Ended March 31
		2007			%			2006			%
Primary New Insurance Written by FICO Score
<=619		$	8		0.1	%		$	6		0.1	%
620-659			589		8.1	%			709		14.1	%
660-679			1,165		15.9	%			634		12.6	%
680-739			3,640		49.8	%			2,324		46.3	%
>=740			1,904		26.1	%			1,349		26.9	%
Total		$	7,306		100.0	%		$	5,022		100.0	%
Primary Risk in Force by FICO Score
<=619		$	22		0.5	%		$	34		0.7	%
620-659			708		15.9	%			937		20.5	%
660-679			723		16.2	%			766		16.8	%
680-739			2,019		45.3	%			1,961		42.9	%
>=740			985		22.1	%			873		19.1	%
Total		$	4,457		100.0	%		$	4,571		100.0	%
Primary Risk in Force by LTV
95.01% and above		$	150		3.4	%		$	161		3.5	%
90.01% to 95.00%			1,225		27.5	%			1,360		29.8	%
85.01% to 90.00%			1,916		43.0	%			1,930		42.2	%
85.00% and below			1,166		26.1	%			1,120		24.5	%
Total		$	4,457		100.0	%		$	4,571		100.0	%
Primary Risk in Force by Policy Year
2003 and prior		$	779		17.5	%		$	1,206		26.4	%
2004			622		14.0	%			1,180		25.8	%
2005			1,056		23.7	%			1,538		33.6	%
2006			1,478		33.1	%			647		14.2	%
2007			522		11.7	%			—		—
Total		$	4,457		100.0	%		$	4,571		100.0	%

 

Page 13

---

Radian Group Inc.

Financial Services Supplemental Information

For the Quarter Ended and as of March 31, 2007

Exhibit N

 

		Quarter Ended March 31
(In thousands )		2007				2006
Investment in Affiliates-Selected Information
C-BASS
Balance, beginning of period		$	451,395			$	364,364
Net (loss) income for period			(6,804	)			30,026
Dividends received			—				7,347
Balance, end of period		$	444,591			$	387,043
Sherman
Balance, beginning of period		$	167,412			$	81,753
Net income for period			29,576				28,315
Dividends received			51,512				60,515
Other comprehensive income			(1,778	)			55
Balance, end of period		$	143,698			$	49,608
Portfolio Information:
C-BASS
Servicing portfolio		$	59,600,000			$	53,340,000
Total assets			6,867,894				4,704,015
Servicing income			43,126				74,069
Net interest income			78,852				65,040
Total revenues			38,981				171,124
Sherman
Total assets		$	1,234,046			$	1,010,930
Net revenues		$	251,995			$	237,672

Radian owns a 46% interest in C-BASS and an interest in Sherman, consisting of 40.96% of the Class A Common Units of Sherman (Class A Common Units represent 94% of the total equity in Sherman) and 50% of the Preferred Units of Sherman.

 

Page 14

---

All statements made in this news release that address events or developments 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 U.S. Private Securities Litigation Reform Act of 1995. These statements are made on the basis of management’s current views and assumptions with respect to future events. The forward-looking statements, as well as Radian’s prospects as a whole, are subject to risks and uncertainties, including the following: changes in general financial and political conditions such as extended national or regional economic recessions (or expansions), changes in housing demand or mortgage originations, changes in housing values, population trends and changes in household formation patterns, changes in unemployment rates, changes or volatility in interest rates, consumer confidence, or changes in credit spreads; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers; risks faced by the businesses, municipalities or pools of assets covered by Radian’s insurance; the loss of a customer with whom Radian has a concentration of its insurance in force or the influence of large customers; increased severity or frequency of losses associated with certain Radian products that are riskier than traditional mortgage insurance and financial guaranty insurance policies; material changes in persistency rates of Radian’s mortgage insurance policies; changes in Radian’s credit ratings or the insurance financial-strength ratings assigned by the major ratings agencies to Radian’s operating subsidiaries; heightened competition from other insurance providers and from alternative products to private mortgage insurance and financial guaranty insurance; changes in the charters or business practices of Fannie Mae and Freddie Mac; the application of federal or state consumer, lending, insurance and other applicable laws and regulations, or unfavorable changes in these laws and regulations or the way they are interpreted, including: (i) the possibility of private lawsuits or investigations by state insurance departments and state attorneys general alleging that services offered by the mortgage insurance industry, such as captive reinsurance, pool insurance and contract underwriting, are violative of the Real Estate Settlement Procedures Act and/or similar state regulations (particularly in light of inquiries that we and other mortgage insurers have received from the New York Insurance Department and public reports that other state insurance departments are investigating or planning to investigate captive reinsurance arrangements used in the mortgage insurance industry) or (ii) legislative and regulatory changes affecting demand for private mortgage insurance or financial guaranty insurance; 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 to estimate accurately the fair value amounts of derivative financial guaranty contracts in determining gains and losses on these contracts; changes in accounting guidance from the SEC or the Financial Accounting Standards Board regarding income recognition and the treatment of loss reserves in the mortgage insurance or financial guaranty industries; changes in claims against mortgage insurance products resulting from the aging of Radian’s mortgage insurance policies; vulnerability to the performance of Radian’s strategic investments; changes in the availability of affordable or adequate reinsurance for our non-prime risk; legal and other limitations on the amount of dividends we may receive from our insurance subsidiaries; international expansion of our mortgage insurance and financial guaranty businesses into new markets and risks associated with our international business activities; and risks and uncertainties associated with our proposed merger with MGIC Investment Corporation, including, without limitation: the ability to complete the transaction on the proposed terms and schedule; the risk that the two companies and their businesses will not be integrated successfully; customer attrition and disruption from the transaction making it more difficult to maintain relationships with customers, employees or other business relationships; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; the risk that potential sales of assets in connection with the merger may negatively impact the financial performance of the combined company; and the possibility that

 

---

the merger may not be completed, whether due to the failure to receive the requisite stockholder or regulatory approvals or otherwise, which may have an adverse effect on our customers, employees and other business relationships, and may have a materially adverse impact on our financial results and prospects. For more information regarding these risks and uncertainties, as well as certain additional risks that we face, investors should refer to the risk factors detailed in Part I, Item 1A of our annual report on Form 10-K for the year ended December 31, 2006 and in the joint proxy statement/prospectus for our 2007 annual meeting. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date of this news release. Radian does not intend to, and disclaims any duty or obligation to, update or revise any forward-looking statements made in this news release to reflect new information, future events or for any other reason.

***

Additional Information about the Radian/MGIC Transaction

MGIC Investment Corporation and Radian Group Inc. have filed a joint proxy statement/prospectus and other relevant documents concerning the MGIC/Radian merger transaction with the United States Securities and Exchange Commission (the “SEC”). STOCKHOLDERS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE MERGER TRANSACTION OR INCORPORATED BY REFERENCE IN THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors may obtain these documents free of charge at the SEC’s website (http://www.sec.gov). In addition, documents filed with the SEC by MGIC are available free of charge by contacting Investor Relations at MGIC Investment Corporation, 250 East Kilbourn Avenue, Milwaukee, WI 53202. Documents filed with the SEC by Radian are available free of charge by calling Investor Relations at (215) 231-1486.

Radian and MGIC and their respective directors and executive officers, certain members of management and other employees are participants in the solicitation of proxies from Radian stockholders and MGIC stockholders with respect to the proposed merger transaction. Information regarding the directors and executive officers of Radian and MGIC and the interests of such participants are included in the joint proxy statement/prospectus filed with the SEC which relates to the merger transaction, Radian’s 2007 annual meeting of stockholders and MGIC’s 2007 annual meeting of stockholders—and in the other relevant documents filed with the SEC.