8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) January 21, 2004

Radian Group Inc.

(Exact name of registrant as specified in its Charter)

Delaware	1-11356	23-2691170
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification No.)
1601 Market Street, Philadelphia, PA (Address of principal executive offices)		19103 (zip code)

(215) 564-6600

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

On January 21, 2004, Radian Group Inc. (the “Company”) issued a press release announcing its results for the fourth quarter and full year 2003. The press release is furnished herewith as Exhibit 99.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	RADIAN GROUP INC.
Date: January 21, 2004	By:	/s/    C. ROBERT QUINT
		C. Robert Quint
		Chief Financial Officer

EXHIBIT INDEX

Exhibit Number
99	Press release, dated January 21, 2004, by Radian Group Inc.

EX-99

Exhibit 99

Contact:

For investors – Mona Zeehandelaar – phone: 215 231.1674

email: mona.zeehandelaar@radian.biz

For the media – Elizabeth Emmons – phone: 215 231.1334

email: elizabeth.emmons@radian.biz

Radian Reports 2003 Net Income of $385.9 Million

PHILADELPHIA, Pa., January 21, 2004 – Radian Group Inc. (NYSE: RDN) today reported net income of $55.5 million for the fourth quarter of 2003, compared to $107.8 million in the fourth quarter of 2002. Net income per share was $0.58 in the fourth quarter of 2003, compared to $1.14 in the fourth quarter of 2002. For the year, net income and net income per share were $385.9 million and $4.08 respectively, compared to $427.2 million and $4.41 in 2002.

As previously announced, Radian’s fourth quarter results reflect a $0.09 per share charge for the cessation of operations of its RadianExpress.com Inc. subsidiary and a $0.66 per share charge for an increase in loss reserves in anticipation of claims from a manufactured housing transaction originated and serviced by Conseco Finance Corp. The quarter also contained net after tax gains of $0.13 per share.

Premiums written in the fourth quarter were $298.7 million, up 16% compared to $258.1 million in the fourth quarter of 2002. Mortgage insurance accounted for 64% of the premiums written in the quarter, while financial guaranty business represented 36%. Premiums earned in the fourth quarter were $266.0 million, an increase of 22% compared to $217.4 million in 2002. Net investment income for the quarter was $46.1 million, the same as it was a year ago. For the year, premiums written increased 16% to $1.1 billion, premiums earned increased 19% to $1.0 billion and net investment income grew 4% from the prior year, to $186.2 million.

“With the closing of our RadianExpress subsidiary and the extraordinary Conseco loss provision, the fourth quarter was a difficult one for Radian,” stated Chairman and Chief Executive Officer Frank P. Filipps. “Nonetheless 2003 was not without its accomplishments. Our mortgage insurance business continued to generate attractive returns despite the challenging environment and our financial guaranty business had very strong growth in both the direct public finance and direct structured finance products.”

Financial Guaranty

Financial guaranty net premiums written for the quarter were $107.2 million, compared to $78.3 million a year ago, which was led by significant new writings in direct public finance insurance and direct structured finance areas. Net premiums earned were $63.9 million, compared to $56.0 million last year. Insured net debt service outstanding at December 31, 2003, was $117.9 billion, compared to $104.8 billion a year ago.

Mortgage Insurance

New primary mortgage insurance written in the quarter was $12.7 billion, consisting of $1.4 billion of structured and $11.3 billion of flow mortgage insurance. Primary mortgage insurance-in-force was $119.9 billion at December 31, 2003, compared to $110.3 billion a year ago. The delinquency rate on primary loans was 4.72%, compared to 4.06% a year ago.

Financial Services

Net income per share from Radian’s financial services businesses for the fourth quarter, which included a $0.09 per share charge for RadianExpress, was $0.13 per share compared to $0.10 per share for the same period last year.

Radian will hold a conference call to discuss the company’s fourth quarter results on Thursday, January 22, 2004, at 9:00 a.m. Eastern time. This call will be broadcast live over the Internet at www.ir.radiangroupinc.com/phoenix.zhtml?c=112301&p=irol-audioarchives. 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. Other statistical and financial information that is expected to be referred to during the conference call is available on Radian’s website under “Investor Information – Webcasts and Presentations” or can be accessed by clicking on www.ir.radiangroupinc.com/phoenix.zhtml?c=112301&p=irol-audioarchives.

Radian Group Inc. is a leading credit enhancement provider to the global financial and capital markets, headquartered in Philadelphia. Radian’s subsidiaries provide products and services through three business lines: financial guaranty, mortgage insurance and other financial services. Additional information may be found at www.radiangroupinc.com.

The following is a “Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995:

The statements contained in this release that are not historical facts are forward-looking statements. Actual results may differ materially from those projected in the forward-looking statements. These forward-looking statements involve risks and uncertainties, including but not limited to, the following risks: changes in the business practices of Fannie Mae and Freddie Mac; general economic developments such as extended national or regional economic recessions (or expansions), changes in housing values, interest rate changes or volatility; changes in investor perception of the strength of private mortgage insurers or financial guaranty providers, and risks faced by the businesses, municipalities or pools of assets covered by Radian’s insurance; the loss of significant customers with whom Radian has a concentration of its insurance in force; the potential for more severe or more frequent losses associated with certain Radian products that are riskier than traditional mortgage insurance and municipal guaranty insurance policies; material

changes in persistency rates of Radian’s mortgage insurance policies; downgrades of the insurance financial-strength ratings assigned by the major ratings agencies to Radian’s operating subsidiaries; intense competition from others and from alternative products to private mortgage insurance and financial guaranty insurance; legislative and regulatory changes affecting demand for private mortgage insurance and financial guaranty insurance; changes in claims against mortgage insurance products resulting from the aging of Radian’s mortgage insurance policies; and changes in Radian’s ability to maintain sufficient reinsurance capacity in an increasingly concentrated reinsurance market. Investors are also directed to other risks discussed in documents filed by Radian with the Securities and Exchange Commission.

###

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Income

	Quarter Ended December 31				Year End December 31
	2003		2002		2003		2002
(Thousands of dollars, except share data)
Revenues:
Net premiums written	$	298,704	$	258,057	$	1,110,477	$	954,919
Premiums earned		265,999		217,393		1,008,183		847,125
Net investment income		46,122		46,100		186,163		178,841
Equity in net income of affiliates		35,442		23,361		105,476		81,749
Other income		14,873		13,927		63,322		44,375
Total revenues		362,436		300,781		1,363,144		1,152,090
Expenses:
Provision for losses		211,994		70,406		476,054		243,332
Policy acquisition costs		32,346		27,053		128,518		100,818
Other operating expenses		58,648		47,025		211,077		175,313
Interest expense		9,654		7,253		37,542		28,824
Total expenses		312,642		151,737		853,191		548,287
Gains and losses:
Gain/loss on sales of investments		8,760		1,694		17,387		10,462
Change in fair value of derivative instruments		10,794		1,107		4,139		(12,989	)
Total gains and losses		19,554		2,801		21,526		(2,527	)
Pretax income		69,348		151,845		531,479		601,276
Provision for income taxes		13,871		44,093		145,578		174,107
Net income	$	55,477	$	107,752	$	385,901	$	427,169
Dividends to preferred stockholder		0		0		0		2,475
Premium paid to redeem preferred stock		0		0		0		3,003
Net income available to common stockholders	$	55,477	$	107,752	$	385,901	$	421,691
Net income per share	$	0.58	$	1.14	$	4.08	$	4.41
Weighted average shares outstanding (in thousands)		95,028		94,521		94,643		95,706

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	December 31 2003		December 31 2002
(Thousands of dollars, except share data)
Assets:
Cash and investments	$	5,074,531	$	4,222,296
Investments in affiliates		328,478		259,120
Deferred policy acquisition costs		218,779		183,587
Prepaid federal income taxes		358,840		294,136
Other assets		465,139		434,266
Total assets	$	6,445,767	$	5,393,405
Liabilities and stockholders’ equity:
Unearned premiums	$	718,649	$	618,050
Reserve for losses		790,380		624,577
Short-term and long-term debt		717,404		544,145
Deferred federal income taxes		712,354		570,279
Other liabilities		281,136		282,919
Total liabilities		3,219,923		2,639,970
Common stock		96		95
Additional paid-in capital		1,199,056		1,186,830
Retained earnings		1,886,548		1,508,138
Accumulated other comprehensive income		140,144		58,372
Total common stockholders’ equity		3,225,844		2,753,435
Total liabilities and stockholders’ equity	$	6,445,767	$	5,393,405
Book value per share	$	34.31	$	29.42

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Year Ended December 31, 2003

Financial Guaranty	Quarter Ended December 31						Year Ended December 31
(Thousands of dollars)	2003			2002			2003		2002
Net premiums written	$	107,223		$	78,348		$	368,637	$	286,336
Premiums earned	$	63,916		$	55,952		$	248,563	$	186,633
Net investment income		19,640			18,783			78,437		71,541
Equity in net income of affiliates		2,362			406			9,969		(123	)
Other income		629			432			3,639		1,514
Total revenues		86,547			75,573			340,608		259,565
Expenses:
Provision for losses		115,000			15,417			166,782		48,846
Policy acquisition costs		15,448			10,240			58,323		34,004
Other operating expenses		10,247			4,493			38,068		27,554
Interest expense		3,436			2,294			12,913		9,559
Total expenses		144,131			32,444			276,086		119,963
Gains and losses:
Gain/loss on sales of investments		2,626			336			11,548		2,369
Change in fair value of derivative instruments		6,858			(5,793	)		774		(13,451	)
Total gains and losses		9,484			(5,457	)		12,322		(11,082	)
Pretax (loss) income		(48,100	)		37,672			76,844		128,520
Income tax (benefit) provision		(20,594	)		10,451			13,252		35,430
Net (loss) income	$	(27,506	)	$	27,221		$	63,592	$	93,090
Assets	$	2,281,929		$	1,884,508
Deferred policy acquisition costs		139,237			107,914
Reserve for losses		276,907			139,872
Unearned premiums		625,234			505,475
Equity		1,114,130			912,803

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Year Ended December 31, 2003

Mortgage Insurance	Quarter Ended December 31				Year Ended December 31
(Thousands of dollars)	2003		2002		2003		2002
Net premiums written	$	191,481	$	179,709	$	741,840	$	668,583
Premiums earned	$	202,083	$	161,441	$	759,620	$	660,492
Net investment income		26,482		27,256		107,690		107,138
Equity in net income of affiliates		—		—		—		—
Other income		6,858		6,411		32,003		20,390
Total revenues		235,423		195,108		899,313		788,020
Expenses:
Provision for losses		96,994		54,989		309,272		194,486
Policy acquisition costs		16,898		16,813		70,195		66,814
Other operating expenses		29,509		27,807		125,951		109,043
Interest expense		5,402		4,359		21,467		17,155
Total expenses		148,803		103,968		526,885		387,498
Gains and losses:
Gain/loss on sales of investments		6,752		509		8,123		4,643
Change in fair value of derivative instruments		3,881		6,900		3,275		462
Total gains and losses		10,633		7,409		11,398		5,105
Pretax income		97,253		98,549		383,826		405,627
Income tax provision		26,399		27,392		104,013		111,823
Net income	$	70,854	$	71,157	$	279,813	$	293,804
Assets	$	3,849,210	$	3,262,741
Deferred policy acquisition costs		79,542		75,673
Reserve for losses		513,473		484,705
Unearned premiums		93,415		112,575
Equity		1,850,796		1,639,205

Radian Group Inc. and Subsidiaries

Segment Information

For the Quarter and Year Ended December 31, 2003

Financial Services (Thousands of dollars)	Quarter Ended December 31					Year Ended December 31
	2003			2002		2003			2002
Net premiums written	$	—		$	—	$	—		$	—
Premiums earned	$	—		$	—	$	—		$	—
Net investment income		—			61		36			162
Equity in net income of affiliates		33,080			22,955		95,507			81,872
Other income		7,386			7,084		27,680			22,471
Total revenues		40,466			30,100		123,223			104,505
Expenses:
Provision for losses		—			—		—			—
Policy acquisition costs		—			—		—			—
Other operating expenses		18,892			14,725		47,058			38,716
Interest expense		816			600		3,162			2,110
Total expenses		19,708			15,325		50,220			40,826
Gains and losses:
Gain/loss on sales of investments		(618	)		849		(2,284	)		3,450
Change in fair value of derivative instruments		55			—		90			—
Total gains and losses		(563	)		849		(2,194	)		3,450
Pretax income		20,195			15,624		70,809			67,129
Income tax provision		8,066			6,250		28,313			26,854
Net income	$	12,129		$	9,374	$	42,496		$	40,275
Assets	$	314,628		$	246,156
Deferred policy acquisition costs		—			—
Reserve for losses		—			—
Unearned premiums		—			—
Equity		260,918			201,427

Radian Group Inc.

Financial Guaranty Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2003

(Thousands of dollars, except ratios)	Quarter Ended December 31				Year Ended December 31
	2003		2002		2003		2002
Net premiums written:
Public direct	42,060		19,402		85,178		62,849
Public reinsurance	14,947		13,901		81,877		48,130
Structured direct	25,608		15,052		88,053		66,644
Structured reinsurance	10,221		16,140		48,702		60,297
Trade credit	14,387		13,853		64,827		48,416
	107,223		78,348		368,637		286,336
Net premiums earned:
Public direct	5,203		3,937		18,277		14,717
Public reinsurance	13,464		10,829		51,118		39,228
Structured direct	18,127		15,015		73,720		42,534
Structured reinsurance	11,866		16,353		48,497		57,597
Trade credit	15,256		9,818		56,951		32,557
	63,916		55,952		248,563		186,633
Claims paid:
Trade credit	5,068		6,926		20,663		18,025
Financial guaranty	2,698		3,374		9,228		16,108
Total	7,766		10,300		29,891		34,133
Incurred losses:
Trade credit	12,133		9,133		35,671		32,020
Financial guaranty	6,867		6,284		20,111		16,827
Conseco	96,000		—		111,000		—
Total	115,000		15,417		166,782		48,847
Loss ratio-GAAP Basis	179.9	%	27.6	%	67.1	%	26.2	%
Expense ratio – GAAP Basis	40.2	%	26.3	%	38.8	%	33.0	%
	220.1	%	53.9	%	105.9	%	59.2	%
Refundings included in earned premium	1,637		2,979		7,942		7,823
	December 31 2003		December 31 2002
Capital and surplus	826,550		581,185
Contingency reserve	321,312		319,648
Qualified statutory capital	1,147,862		900,833
Unearned premium reserve	735,156		604,942
Loss and loss expense reserve	95,130		84,096
Total policyholders’ reserves	1,978,148		1,589,871
Present value of installment premiums	444,368		400,140
Reinsurance and soft capital facilities	275,000		165,000
Total claims paying resources	2,697,516		2,155,011
Net debt service outstanding	117,900,058		104,755,801
Capital leverage ratio (1)	103		116
Claims paying leverage ratio (2)	44		49

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

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

Radian Group Inc.

Mortgage Insurance Supplemental Information

For the Quarter and Year Ended and as of December 31, 2003

	Quarter Ended December 31				Year Ended December 31
	2003		2002		2003		2002
(Thousands of dollars, except ratios)
New insurance written-flow ($millions)	11,321		10,284		49,488		36,946
New insurance written-structured ($millions)	1,371		4,985		18,874		11,821
Total primary new insurance written	12,692		15,269		68,362		48,767
Primary risk written ($millions)	3,306		3,728		17,102		12,063
Pool risk written ($millions)	279		25		933		174
Direct claims paid ($thousands)
Prime	31,404		23,995		120,150		89,095
Non-prime:
Alt A	20,432		8,547		56,203		27,281
A minus and below	21,376		11,283		71,655		32,114
Seconds	5,546		3,705		23,148		16,502
Total	78,758		47,530		271,156		164,992
Average Claim Paid	28.2		25.9		27.1		26.0
Loss ratio—GAAP Basis	48.0	%	34.1	%	40.7	%	29.4	%
Expense Ratio-GAAP Basis	23.0	%	27.6	%	25.8	%	26.6	%
	71.0	%	61.7	%	66.5	%	56.0	%
Persistency (twelve months ended December 31)	46.7	%	57.0	%
Percentage of primary new insurance written:
Monthlies	95	%	81	%	88	%	92	%
Refinances	37	%	50	%	50	%	41	%
95% LTV and above	31	%	34	%	22	%	38	%
ARMs	31	%	24	%	31	%	21	%

	December 31 2003		December 31 2002
Direct primary insurance in force ($millions)	119,887		110,273
Direct primary risk in force ($millions)	27,106		26,273
GSE pool risk in force ($millions)	1,393		1,218
Total pool risk in force ($millions)	2,415		1,732
Other risk in force ($millions)	1,053		463
Primary insurance:
Prime
Number of insured loans	640,778		698,910
Number of loans in default	22,156		21,483
Percentage of loans in default	3.46	%	3.07	%
Non-prime
Alt A
Number of insured loans	138,571		102,839
Number of loans in default	7,343		5,300
Percentage of loans in default	5.30	%	5.15	%
A minus and below
Number of insured loans	110,054		79,871
Number of loans in default	12,497		9,005
Percentage of loans in default	11.36	%	11.27	%
Total prime and non-prime
Number of insured loans	889,403		881,620
Number of loans in default	41,996		35,788
Percentage of loans in default	4.72	%	4.06	%
Pool insurance:
Number of insured loans	599,140		593,405
Number of loans in default	5,738		6,554
Percentage of loans in default	0.96	%	1.10	%
Risk to capital ratio-STAT Basis	11.4:1		11.5:1