— Second quarter net income of $152 million, or
$0.98 per diluted share —
— Return on equity of 13.6% —
— Book value per share growth of 12%
year-over-year to $29.66 —
— Available Holding Company Liquidity increased
to $1.2 billion following $200 million ordinary dividend from
Radian Guaranty during the second quarter —
— Share repurchase authorization increased to
$900 million and extended through June 2026; $50 million of shares
repurchased during the second quarter and $667 million of purchase
authority remaining —
Radian Group Inc. (NYSE: RDN) today reported net income for the
quarter ended June 30, 2024, of $152 million, or $0.98 per diluted
share. This compares with net income for the quarter ended June 30,
2023, of $146 million, or $0.91 per diluted share.
Adjusted pretax operating income for the quarter ended June 30,
2024, was $193 million, or $0.99 per diluted share. This compares
with adjusted pretax operating income for the quarter ended June
30, 2023, of $184 million, or $0.91 per diluted share.
Key Financial Highlights
Quarter ended
($ in millions, except per-share
amounts)
June 30, 2024
March 31, 2024
June 30, 2023
Total revenues
$321
$319
$290
Net income
$152
$152
$146
Diluted net income per share
$0.98
$0.98
$0.91
Consolidated pretax income
$188
$199
$183
Adjusted pretax operating income
(1)
$193
$203
$184
Adjusted diluted net operating
income per share (1) (2)
$0.99
$1.03
$0.91
Return on equity (3)
13.6%
13.8%
14.1%
Adjusted net operating return on
equity (1) (2)
13.6%
14.5%
14.1%
New Insurance Written (NIW) -
mortgage insurance
$13,902
$11,534
$16,946
Net premiums earned - mortgage
insurance
$235
$234
$211
New defaults
11,104
11,756
9,775
Provision for losses - mortgage
insurance
($2)
($7)
($22)
As of
($ in millions, except per-share
amounts)
June 30, 2024
March 31, 2024
June 30, 2023
Book value per share
$29.66
$29.30
$26.51
Accumulated other comprehensive
income (loss) value per share (4)
($2.50)
($2.39)
($2.69)
PMIERs Available Assets (5)
$5,978
$5,989
$5,689
PMIERs excess Available Assets
(6)
$2,206
$2,282
$1,662
Available Holding Company
Liquidity (7)
$1,190
$1,094
$1,010
Total investments
$6,588
$6,327
$5,896
Primary mortgage insurance in
force
$272,827
$270,986
$266,859
Percentage of primary loans in
default (8)
2.0%
2.1%
2.0%
Mortgage insurance loss
reserves
$351
$357
$373
(1)
Adjusted results, including
adjusted pretax operating income, adjusted diluted net operating
income per share and adjusted net operating return on equity, are
non-GAAP financial measures. For definitions and reconciliations of
these measures to the comparable GAAP measures, see Exhibits F and
G.
(2)
Calculated using the Company’s
federal statutory tax rate of 21%.
(3)
Calculated by dividing annualized
net income by average stockholders’ equity, based on the average of
the beginning and ending balances for each period presented.
(4)
Included in book value per share
for each period presented.
(5)
Represents Radian Guaranty’s
Available Assets, calculated in accordance with the Private
Mortgage Insurer Eligibility Requirements (PMIERs) financial
requirements in effect for each date shown.
(6)
Represents Radian Guaranty’s
excess or “cushion” of Available Assets over its Minimum Required
Assets, calculated in accordance with the PMIERs financial
requirements in effect for each date shown.
(7)
Represents Radian Group’s
available liquidity, excluding available capacity under its $275
million unsecured revolving credit facility.
(8)
Represents the number of primary
loans in default as a percentage of the total number of insured
primary loans.
Book value per share at June 30, 2024, was $29.66, compared to
$29.30 at March 31, 2024, and $26.51 at June 30, 2023. This
represents a 12% growth in book value per share at June 30, 2024,
as compared to June 30, 2023, and includes accumulated other
comprehensive income (loss) of $(2.50) per share as of June 30,
2024, and $(2.69) per share as of June 30, 2023. Changes in
accumulated other comprehensive income (loss) are primarily from
net unrealized gains or losses on investments as a result of
decreases or increases, respectively, in market interest rates.
“We reported another quarter with excellent results for Radian.
We increased book value per share by 12% year-over-year, generated
net income of $152 million and delivered a return on equity of
13.6% in the second quarter,” said Radian’s Chief Executive Officer
Rick Thornberry. “Our strong operational performance reflects the
high quality of our mortgage insurance portfolio, the resilience of
our business model, the strength and quality of our investment
portfolio, the depth of our customer relationships and the
commitment of our team.”
SECOND QUARTER HIGHLIGHTS
- NIW was $13.9 billion in the second quarter of 2024, compared
to $11.5 billion in the first quarter of 2024, and $16.9 billion in
the second quarter of 2023.
- Purchase NIW increased 22% in the second quarter of 2024
compared to the first quarter of 2024 and decreased 18% compared to
the second quarter of 2023.
- Refinances accounted for 2% of total NIW in the second quarter
of 2024, compared to 3% in the first quarter of 2024, and 1% in the
second quarter of 2023.
- Total primary mortgage insurance in force of $272.8 billion as
of June 30, 2024, compared to $271.0 billion as of March 31, 2024,
and $266.9 billion as of June 30, 2023.
- Persistency, which is the percentage of mortgage insurance that
remains in force after a twelve-month period, was 84% for the
twelve months ended June 30, 2024, compared to 84% for the twelve
months ended March 31, 2024, and 83% for the twelve months ended
June 30, 2023.
- Annualized persistency for the three months ended June 30,
2024, was 84%, compared to 85% for the three months ended March 31,
2024, and 84% for the three months ended June 30, 2023.
- Net mortgage insurance premiums earned were $235 million for
the second quarter of 2024, an increase compared to $234 million
for the first quarter of 2024, and $211 million for the second
quarter of 2023.
- Mortgage insurance in force portfolio premium yield was 38.2
basis points in the second quarter of 2024. This compares to 38.2
basis points in each of the first quarter of 2024 and the second
quarter of 2023.
- Total net mortgage insurance premium yield, which includes the
impact of ceded premiums earned and accrued profit commission, was
34.5 basis points in the second quarter of 2024. This compares to
34.6 basis points in the first quarter of 2024, and 31.9 basis
points in the second quarter of 2023. The second quarter of 2023
included an increase of 3.2 basis points in ceded premiums earned,
as a result of the tender offers by Eagle Re 2019-1 Ltd. and Eagle
Re 2020-1 Ltd, in that quarter.
- Details regarding premiums earned may be found in Exhibit
D.
- The mortgage insurance provision for losses was a benefit of $2
million in the second quarter of 2024, compared to a benefit of $7
million in the first quarter of 2024 and a benefit of $22 million
in the second quarter of 2023.
- Favorable reserve development on prior period defaults was $50
million in the second quarter of 2024, compared to $61 million in
the first quarter of 2024 and $63 million in the second quarter of
2023.
- The number of primary delinquent loans was 20,276 as of June
30, 2024, compared to 20,850 as of March 31, 2024, and 19,880 as of
June 30, 2023.
- The loss ratio in the second quarter of 2024 was (0.8)%,
compared to (2.9)% in the first quarter of 2024, and (10.3)% in the
second quarter of 2023.
- Total mortgage insurance claims paid were $6 million in the
second quarter of 2024, compared to $3 million in each of the first
quarter of 2024 and the second quarter of 2023.
- Additional details regarding mortgage insurance provision for
losses may be found in Exhibit D.
- Other operating expenses were $92 million in the second quarter
of 2024, compared to $83 million in the first quarter of 2024, and
$90 million in the second quarter of 2023.
- Other operating expenses increased in the second quarter of
2024 as compared to the first quarter of 2024, primarily due to the
timing of our annual share-based incentive grants as well as
severance and related expenses recognized in the second quarter of
2024.
- Additional details regarding other operating expenses may be
found in Exhibit D.
CAPITAL AND LIQUIDITY UPDATE
Radian Group
- As of June 30, 2024, Radian Group maintained $1.2 billion of
available liquidity. Total holding company liquidity, including the
company’s $275 million unsecured revolving credit facility, was
$1.5 billion as of June 30, 2024.
- As previously announced, in May 2024, the company’s Board of
Directors authorized an increase to its existing share repurchase
program from $300 million to $900 million and extended the term to
June 30, 2026. This program provides Radian the flexibility to
repurchase shares opportunistically from time to time and to spend
up to $900 million, excluding commissions, based on market and
business conditions, stock price and other factors. During the
second quarter of 2024, the company repurchased 1.6 million shares
of Radian Group common stock at a total cost of $50 million,
including commissions. As of June 30, 2024, purchase authority of
up to $667 million remained available under the existing
program.
- Radian Group paid a dividend on its common stock in the amount
of $0.245 per share, totaling $37 million, on June 20, 2024.
Radian Guaranty
- Radian Guaranty paid an ordinary dividend to Radian Group of
$200 million in the second quarter of 2024, compared to $100
million in the first quarter of 2024 and $100 million in the second
quarter of 2023.
- At June 30, 2024, Radian Guaranty’s Available Assets under
PMIERs totaled approximately $6.0 billion, resulting in PMIERs
excess Available Assets of $2.2 billion.
- In June 2024, consistent with our use of risk distribution
strategies to effectively manage capital and proactively mitigate
risk, Radian Guaranty entered into a quota share reinsurance
arrangement (“2024 QSR Agreement”) with a panel of third-party
reinsurance providers. Under the 2024 QSR Agreement, we expect to
cede 25% of NIW between July 1, 2024, and June 30, 2025, subject to
certain conditions.
RECENT EVENTS
- In July 2024, Radian Mortgage Capital brought to market its
inaugural secondary market securitization, a prime jumbo
transaction of $348.9 million in size.
- In July 2024, Radian Group announced the redemption of its 2024
senior notes in the amount of $450 million, payable in September
2024. Once complete, this redemption will result in a corresponding
$450 million reduction in holding company debt and reduce Radian
Group’s financial leverage.
CONFERENCE CALL
Radian will discuss second quarter 2024 financial results in a
conference call tomorrow, Thursday, August 1, 2024, at 12:00 p.m.
Eastern time. The conference call will be webcast live on the
company’s website at
https://radian.com/who-we-are/for-investors/webcasts or at
www.radian.com. The webcast is listen-only. Those interested in
participating in the question-and-answer session should follow the
conference call dial-in instructions below.
The call may be accessed via telephone by registering for the
call here to receive the dial-in numbers and unique PIN. It is
recommended that you join 10 minutes prior to the event start
(although you may register and dial in at any time during the
call).
A digital replay of the webcast will be available on Radian’s
website approximately two hours after the live broadcast ends for a
period of one year at
https://radian.com/who-we-are/for-investors/webcasts.
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 at www.radian.com, under
Investors.
NON-GAAP FINANCIAL MEASURES
Radian believes that adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity (non-GAAP measures) facilitate
evaluation of the company’s fundamental financial performance and
provide relevant and meaningful information to investors about the
ongoing operating results of the company. On a consolidated basis,
these measures are not recognized in accordance with accounting
principles generally accepted in the United States of America
(GAAP) and should not be considered in isolation or viewed as
substitutes for GAAP measures of performance. The measures
described below have been established in order to increase
transparency for the purpose of evaluating the company’s operating
trends and enabling more meaningful comparisons with Radian’s
competitors.
Adjusted pretax operating income (loss) is defined as GAAP
consolidated pretax income (loss) excluding the effects of: (i) net
gains (losses) on investments and other financial instruments,
except for certain investments and other financial instruments
attributable to our reportable segment or All Other activities;
(ii) amortization and impairment of goodwill and other acquired
intangible assets; and (iii) impairment of other long-lived assets
and other non-operating items, if any, such as gains (losses) from
the sale of lines of business, acquisition-related income
(expenses) and gains (losses) on extinguishment of debt. Adjusted
diluted net operating income (loss) per share is calculated by
dividing adjusted pretax operating income (loss) attributable to
common stockholders, net of taxes computed using the company’s
statutory tax rate, by the sum of the weighted average number of
common shares outstanding and all dilutive potential common shares
outstanding. Adjusted net operating return on equity is calculated
by dividing annualized adjusted pretax operating income (loss), net
of taxes computed using the company’s statutory tax rate, by
average stockholders’ equity, based on the average of the beginning
and ending balances for each period presented.
See Exhibit F or Radian’s website for a description of these
items, as well as Exhibit G for reconciliations to the most
comparable consolidated GAAP measures.
ABOUT RADIAN
Radian Group Inc. (NYSE: RDN) is ensuring the American dream of
homeownership responsibly and sustainably through products and
services that include industry-leading mortgage insurance and a
comprehensive suite of mortgage, risk, title, valuation, asset
management and other real estate services. We are powered by
technology, informed by data and driven to deliver new and better
ways to transact and manage risk. Visit www.radian.com and
homegenius.com to learn more about how Radian and its pioneering
homegenius platform are building a smarter future for mortgage and
real estate services.
FINANCIAL RESULTS AND SUPPLEMENTAL
INFORMATION CONTENTS (Unaudited)
Exhibit A:
Condensed Consolidated Statements of
Operations
Exhibit B:
Net Income Per Share
Exhibit C:
Condensed Consolidated Balance Sheets
Exhibit D:
Condensed Consolidated Statements of
Operations Detail
Exhibit E:
Segment Information
Exhibit F:
Definition of Consolidated Non-GAAP
Financial Measures
Exhibit G:
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit H:
Mortgage Insurance Supplemental
Information - New Insurance Written
Exhibit I:
Mortgage Insurance Supplemental
Information - Primary Insurance in Force and Risk in
Force
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations (1)
Exhibit A
2024
2023
(In thousands, except per-share
amounts)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Revenues
Net premiums earned
$
237,731
$
235,857
$
232,649
$
240,262
$
213,429
Services revenue
13,265
12,588
12,419
10,892
11,797
Net investment income
73,766
69,221
68,824
67,805
63,348
Net gains (losses) on investments and
other financial instruments
(4,487
)
490
13,447
(8,555
)
(236
)
Other income
872
1,262
1,305
2,109
1,241
Total revenues
321,147
319,418
328,644
312,513
289,579
Expenses
Provision for losses
(1,745
)
(7,034
)
4,170
(8,135
)
(21,632
)
Policy acquisition costs
6,522
6,794
6,147
6,920
5,218
Cost of services
9,535
9,327
8,950
8,886
10,257
Other operating expenses
91,648
82,636
95,218
79,206
89,885
Interest expense
27,064
29,046
23,169
23,282
21,805
Impairment of goodwill
—
—
9,802
—
—
Amortization of other acquired intangible
assets
—
—
1,371
1,371
1,370
Total expenses
133,024
120,769
148,827
111,530
106,903
Pretax income
188,123
198,649
179,817
200,983
182,676
Income tax provision
36,220
46,295
37,124
44,401
36,589
Net income
$
151,903
$
152,354
$
142,693
$
156,582
$
146,087
Diluted net income per share
$
0.98
$
0.98
$
0.91
$
0.98
$
0.91
(1) See Exhibit D for additional
details.
Radian Group Inc. and
Subsidiaries
Net Income Per Share
Exhibit B
The calculation of basic and diluted net
income per share is as follows.
2024
2023
(In thousands, except per-share
amounts)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net income—basic and diluted
$
151,903
$
152,354
$
142,693
$
156,582
$
146,087
Average common shares
outstanding—basic
153,110
153,817
155,318
158,461
159,010
Dilutive effect of share-based
compensation arrangements (1)
1,289
2,154
1,909
1,686
1,734
Adjusted average common shares
outstanding—diluted
154,399
155,971
157,227
160,147
160,744
Basic net income per share
$
0.99
$
0.99
$
0.92
$
0.99
$
0.92
Diluted net income per share
$
0.98
$
0.98
$
0.91
$
0.98
$
0.91
(1)
The following number of shares of our
common stock equivalents issued under our share-based compensation
arrangements are not included in the calculation of diluted net
income per share because their effect would be anti-dilutive.
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Shares of common stock equivalents
64
—
—
—
112
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
Exhibit C
June 30, 2024
March 31, 2024
December 31,
2023
September 30, 2023
June 30, 2023
(In thousands, except per-share
amounts)
Assets
Investments
$
6,588,149
$
6,327,114
$
6,085,654
$
5,885,652
$
5,895,871
Cash
13,791
26,993
18,999
55,489
61,142
Restricted cash
1,993
1,832
1,066
1,305
1,317
Accrued investment income
47,607
46,334
45,783
45,623
42,650
Accounts and notes receivable
137,777
130,095
123,857
144,614
138,432
Reinsurance recoverable
31,064
28,151
25,909
24,148
22,979
Deferred policy acquisition costs
18,566
18,561
18,718
18,817
19,272
Property and equipment, net
56,360
60,521
63,822
74,558
73,885
Goodwill and other acquired intangible
assets, net
—
—
—
11,173
12,543
Prepaid federal income taxes
837,736
750,320
750,320
696,820
663,320
Other assets
396,600
369,944
459,805
420,483
375,132
Total assets
$
8,129,643
$
7,759,865
$
7,593,933
$
7,378,682
$
7,306,543
Liabilities and stockholders’ equity
Unearned premiums
$
206,094
$
215,124
$
225,396
$
236,400
$
246,666
Reserve for losses and loss adjustment
expense
357,470
361,833
370,148
367,568
379,434
Senior notes
1,513,782
1,512,860
1,417,781
1,416,687
1,415,610
Secured borrowings
484,665
207,601
119,476
241,753
178,762
Reinsurance funds withheld
135,849
133,460
130,564
156,114
154,354
Net deferred tax liability
656,113
626,353
589,564
497,560
479,754
Other liabilities
293,351
262,902
343,199
309,701
281,127
Total liabilities
3,647,324
3,320,133
3,196,128
3,225,783
3,135,707
Common stock
172
171
173
175
177
Treasury stock
(967,218
)
(946,202
)
(945,870
)
(945,504
)
(945,032
)
Additional paid-in capital
1,356,341
1,390,436
1,430,594
1,482,712
1,522,895
Retained earnings
4,470,335
4,357,823
4,243,759
4,136,598
4,016,482
Accumulated other comprehensive income
(loss)
(377,311
)
(362,496
)
(330,851
)
(521,082
)
(423,686
)
Total stockholders’ equity
4,482,319
4,439,732
4,397,805
4,152,899
4,170,836
Total liabilities and stockholders’
equity
$
8,129,643
$
7,759,865
$
7,593,933
$
7,378,682
$
7,306,543
Shares outstanding
151,148
151,509
153,179
155,582
157,350
Book value per share
$
29.66
$
29.30
$
28.71
$
26.69
$
26.51
Holding company debt-to-capital ratio
(1)
25.2
%
25.4
%
24.4
%
25.4
%
25.3
%
(1)
Calculated as carrying value of senior
notes, which were issued and are owed by our holding company,
divided by carrying value of senior notes and stockholders’ equity.
This holding company ratio does not include the effects of amounts
owed by our subsidiaries related to secured borrowings
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations Detail
Exhibit D (page 1 of 3)
Net Premiums Earned
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Direct - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
$
259,342
$
258,593
$
256,632
$
254,903
$
252,537
Single Premium Policy cancellations
2,076
2,114
2,058
3,304
3,980
Total direct - Mortgage insurance
261,418
260,707
258,690
258,207
256,517
Ceded - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
(39,925
)
(38,997
)
(40,065
)
(32,363
)
(57,916
)
(1)
Single Premium Policy cancellations
(2)
732
(112
)
(444
)
(873
)
(1,114
)
Profit commission - other (3)
12,593
12,401
12,199
11,830
13,245
Total ceded premiums - Mortgage
insurance
(26,600
)
(26,708
)
(28,310
)
(21,406
)
(45,785
)
Net premiums earned - Mortgage
insurance
234,818
233,999
230,380
236,801
210,732
Net premiums earned - Title insurance
2,913
1,858
2,269
3,461
2,697
Net premiums earned
$
237,731
$
235,857
$
232,649
$
240,262
$
213,429
(1)
Includes the impact of the completed
tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to
purchase the mortgage insurance-linked notes that supported their
reinsurance agreements with Radian Guaranty. As a result, Radian
Guaranty incurred additional ceded premiums earned during the
second quarter of 2023 of $21 million.
(2)
Includes the impact of related profit
commissions.
(3)
The amounts represent the profit
commission under our QSR Program, excluding the impact of Single
Premium Policy cancellations.
Services Revenue
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Mortgage Insurance
Contract underwriting services
$
309
$
210
$
202
$
266
$
284
All Other
Real estate services
8,777
9,193
8,888
7,046
7,598
Title
3,540
2,573
2,713
2,964
3,233
Real estate technology
639
612
616
616
682
Total services revenue
$
13,265
$
12,588
$
12,419
$
10,892
$
11,797
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations Detail
Exhibit D (page 2 of 3)
Net Investment Income
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Fixed-maturities
$
57,924
$
57,259
$
58,669
$
58,599
$
56,439
Equity securities
3,067
2,539
3,753
3,222
3,512
Mortgage loans held for sale
5,411
1,793
1,725
1,719
574
Short-term investments
8,614
8,958
5,871
5,405
3,976
Other (1)
(1,250
)
(1,328
)
(1,194
)
(1,140
)
(1,153
)
Net investment income
$
73,766
$
69,221
$
68,824
$
67,805
$
63,348
(1)
Includes investment management expenses,
as well as the net impact from our securities lending
activities.
Provision for Losses
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Mortgage insurance
Current period defaults (1)
$
47,918
$
53,688
$
53,981
$
46,630
$
41,223
Prior period defaults (2)
(49,687
)
(60,574
)
(49,373
)
(54,887
)
(62,846
)
Total Mortgage insurance
(1,769
)
(6,886
)
4,608
(8,257
)
(21,623
)
Title insurance
24
(148
)
(438
)
122
(9
)
Total provision for losses
$
(1,745
)
$
(7,034
)
$
4,170
$
(8,135
)
$
(21,632
)
(1)
Related to defaulted loans with the most
recent default notice dated in the period indicated. For example,
if a loan had defaulted in a prior period, but then subsequently
cured and later re-defaulted in the current period, the default
would be considered a current period default.
(2)
Related to defaulted loans with a default
notice dated in a period earlier than the period indicated, which
have been continuously in default since that time.
Other Operating
Expenses
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Salaries and other base employee
expenses
$
41,431
$
39,723
$
34,182
$
33,272
$
39,032
Variable and share-based incentive
compensation
23,223
17,515
20,262
19,546
18,908
Other general operating expenses
31,623
30,262
45,186
(1)
29,812
35,655
Ceding commissions
(5,957
)
(5,644
)
(5,327
)
(5,153
)
(4,824
)
Title agent commissions
1,328
780
915
1,729
1,114
Total
$
91,648
$
82,636
$
95,218
$
79,206
$
89,885
(1)
Includes $14 million of impairment of
long-lived assets, primarily from impairments to our lease-related
assets and internal-use software.
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Statements of
Operations Detail
Exhibit D (page 3 of 3)
Interest Expense
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Senior notes
$
21,156
$
22,128
$
20,335
$
20,320
$
20,303
Loss on extinguishment of debt (1)
—
4,275
—
—
—
Mortgage loan financing facilities
5,108
1,438
1,421
1,609
400
FHLB advances
544
945
1,059
1,039
611
Revolving credit facility
256
260
354
310
399
Other
—
—
—
4
92
Total interest expense
$
27,064
$
29,046
$
23,169
$
23,282
$
21,805
(1)
Primarily comprised of the acceleration of
remaining unamortized issuance costs related to the March 2024
redemption of our Senior Notes due 2025.
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 1 of 4)
Summarized financial information
concerning our operating segments as of and for the periods
indicated is as follows. For a definition of adjusted pretax
operating income (loss), along with a reconciliation to its
consolidated GAAP measure, see Exhibits F and G.
Three Months Ended June 30,
2024
(In thousands)
Mortgage Insurance
All Other (1)
Inter-segment
Total
Net premiums written
$
232,645
$
2,913
$
—
$
235,558
(Increase) decrease in unearned
premiums
2,173
—
—
2,173
Net premiums earned
234,818
2,913
—
237,731
Services revenue
309
13,064
(108
)
13,265
Net investment income
50,102
23,664
—
73,766
Net gains (losses) on investments and
other financial instruments
—
(49
)
—
(49
)
Other income
754
130
(12
)
872
Total
285,983
39,722
(120
)
325,585
Provision for losses
(1,769
)
24
—
(1,745
)
Policy acquisition costs
6,522
—
—
6,522
Cost of services
156
9,379
—
9,535
Other operating expenses before allocated
corporate operating expenses
17,157
26,615
(120
)
43,652
Interest expense
21,957
5,107
—
27,064
Total
44,023
41,125
(120
)
85,028
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
241,960
(1,403
)
—
240,557
Allocation of corporate operating
expenses
43,197
4,677
—
47,874
Adjusted pretax operating income (loss)
(2)
$
198,763
$
(6,080
)
$
—
$
192,683
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 2 of 4)
Three Months Ended June 30,
2023
(In thousands)
Mortgage Insurance
All Other (1)
Inter-segment
Total
Net premiums written
$
214,540
$
2,697
$
—
$
217,237
(Increase) decrease in unearned
premiums
(3,808
)
—
—
(3,808
)
Net premiums earned
210,732
2,697
—
213,429
Services revenue
284
11,617
(104
)
11,797
Net investment income
48,070
15,278
—
63,348
Net gains (losses) on investments and
other financial instruments
—
95
—
95
Other income
1,246
(1
)
(4
)
1,241
Total
260,332
29,686
(108
)
289,910
Provision for losses
(21,623
)
(9
)
—
(21,632
)
Policy acquisition costs
5,218
—
—
5,218
Cost of services
143
10,114
—
10,257
Other operating expenses before allocated
corporate operating expenses
20,009
27,537
(108
)
47,438
Interest expense
21,405
400
—
21,805
Total
25,152
38,042
(108
)
63,086
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
235,180
(8,356
)
—
226,824
Allocation of corporate operating
expenses
37,081
5,368
—
42,449
Adjusted pretax operating income (loss)
(2)
$
198,099
$
(13,724
)
$
—
$
184,375
(1)
All Other activities include: (i) income
(losses) from assets held by our holding company; (ii) related
general corporate operating expenses not attributable or allocated
to our reportable segments; and (iii) the operating results from
certain other immaterial activities and operating segments,
including our mortgage conduit, title, real estate services and
real estate technology businesses.
(2)
See Exhibits F and G for additional
information on the use and definition of this term and a
reconciliation to consolidated net income.
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 3 of 4)
Mortgage Insurance
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net premiums written
$
232,645
$
231,877
$
225,112
$
235,169
$
214,540
(Increase) decrease in unearned
premiums
2,173
2,122
5,268
1,632
(3,808
)
Net premiums earned
234,818
233,999
230,380
236,801
210,732
Services revenue
309
210
202
266
284
Net investment income
50,102
49,574
51,061
49,953
48,070
Other income
754
1,240
1,302
1,237
1,246
Total
285,983
285,023
282,945
288,257
260,332
Provision for losses
(1,769
)
(6,886
)
4,608
(8,257
)
(21,623
)
Policy acquisition costs
6,522
6,794
6,147
6,920
5,218
Cost of services
156
153
157
172
143
Other operating expenses before allocated
corporate operating expenses
17,157
17,270
15,559
16,776
20,009
Interest expense
21,957
23,333
21,748
21,673
21,405
Total
44,023
40,664
48,219
37,284
25,152
Adjusted pretax operating income before
allocated corporate operating expenses
241,960
244,359
234,726
250,973
235,180
Allocation of corporate operating
expenses
43,197
34,509
36,929
31,744
37,081
Adjusted pretax operating income (1)
$
198,763
$
209,850
$
197,797
$
219,229
$
198,099
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 4 of 4)
All Other (2)
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net premiums earned
$
2,913
$
1,858
$
2,269
$
3,461
$
2,697
Services revenue
13,064
12,493
12,311
10,723
11,617
Net investment income
23,664
19,647
17,763
17,852
15,278
Net gains (losses) on investments and
other financial instruments
(49
)
383
356
283
95
Other income
130
25
14
9
(1
)
Total (3)
39,722
34,406
32,713
32,328
29,686
Provision for losses
24
(148
)
(438
)
122
(9
)
Cost of services
9,379
9,174
8,793
8,714
10,114
Other operating expenses before allocated
corporate operating expenses
26,615
27,264
23,660
26,062
27,538
Interest expense
5,107
1,438
1,421
1,609
400
Total
41,125
37,728
33,436
36,507
38,043
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
(1,403
)
(3,322
)
(723
)
(4,179
)
(8,357
)
Allocation of corporate operating
expenses
4,677
3,711
5,340
4,595
5,367
Adjusted pretax operating income (loss)
(1)
$
(6,080
)
$
(7,033
)
$
(6,063
)
$
(8,774
)
$
(13,724
)
(1)
See Exhibits F and G for additional information on the use and
definition of this term and a reconciliation to consolidated net
income.
(2)
All Other activities include: (i) income (losses) from assets held
by our holding company; (ii) related general corporate operating
expenses not attributable or allocated to our reportable segments;
and (iii) the operating results from certain other immaterial
activities and operating segments, including our mortgage conduit,
title, real estate services and real estate technology businesses.
(3)
Details of All Other revenue are as follows.
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Holding company (a)
$
17,042
$
16,536
$
15,374
$
15,601
$
14,202
Real estate services
9,110
9,517
9,014
7,126
7,676
Title
7,047
4,997
5,516
6,948
6,422
Mortgage conduit
5,815
2,690
2,171
2,020
678
Real estate technology
708
666
638
633
708
Total
$
39,722
$
34,406
$
32,713
$
32,328
$
29,686
(a)
Consists of net investment income earned
from assets held by Radian Group, our holding company, that are not
attributable or allocated to our underlying businesses.
Selected Mortgage Insurance
Key Ratios
2024
2023
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Loss ratio (1)
(0.8
)%
(2.9
)%
2.0
%
(3.5
)%
(10.3
)%
Expense ratio (2)
28.5
%
25.0
%
25.5
%
23.4
%
29.6
%
(1)
For our Mortgage Insurance segment,
calculated as provision for losses expressed as a percentage of net
premiums earned.
(2)
For our Mortgage Insurance segment,
calculated as operating expenses, (which consist of policy
acquisition costs and other operating expenses, as well as
allocated corporate operating expenses), expressed as a percentage
of net premiums earned.
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measures Exhibit F
(page 1 of 2)
Use of Non-GAAP Financial Measures
In addition to the traditional GAAP financial measures, we have
presented “adjusted pretax operating income (loss),” “adjusted
diluted net operating income (loss) per share” and “adjusted net
operating return on equity,” which are non-GAAP financial measures
for the consolidated company, among our key performance indicators
to evaluate our fundamental financial performance. These non-GAAP
financial measures align with the way our business performance is
evaluated by both management and by our board of directors. These
measures have been established in order to increase transparency
for the purposes of evaluating our operating trends and enabling
more meaningful comparisons with our peers. Although on a
consolidated basis adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity are non-GAAP financial measures, we
believe these measures aid in understanding the underlying
performance of our operations. Our senior management, including our
Chief Executive Officer (Radian’s chief operating decision maker),
uses adjusted pretax operating income (loss) as our primary measure
to evaluate the fundamental financial performance of our businesses
and to allocate resources to them.
Adjusted pretax operating income (loss) is defined as GAAP
consolidated pretax income (loss) excluding the effects of: (i) net
gains (losses) on investments and other financial instruments,
except for certain investments and other financial instruments
attributable to our reportable segment or All Other activities;
(ii) amortization and impairment of goodwill and other acquired
intangible assets; and (iii) impairment of other long-lived assets
and other non-operating items, if any, such as gains (losses) from
the sale of lines of business, acquisition-related income
(expenses) and gains (losses) on extinguishment of debt. Adjusted
diluted net operating income (loss) per share is calculated by
dividing adjusted pretax operating income (loss) attributable to
common stockholders, net of taxes computed using the company’s
statutory tax rate, by the sum of the weighted average number of
common shares outstanding and all dilutive potential common shares
outstanding. Adjusted net operating return on equity is calculated
by dividing annualized adjusted pretax operating income (loss), net
of taxes computed using the company’s statutory tax rate, by
average stockholders’ equity, based on the average of the beginning
and ending balances for each period presented.
Although adjusted pretax operating income (loss) excludes
certain items that have occurred in the past and are expected to
occur in the future, the excluded items represent those that are:
(i) not viewed as part of the operating performance of our primary
activities or (ii) not expected to result in an economic impact
equal to the amount reflected in pretax income (loss). These
adjustments, along with the reasons for their treatment, are
described below.
(1)
Net gains (losses) on investments and
other financial instruments. The recognition of realized
investment gains or losses can vary significantly across periods as
the activity is highly discretionary based on the timing of
individual securities sales due to such factors as market
opportunities, our tax and capital profile and overall market
cycles. Unrealized gains and losses arise primarily from changes in
the market value of our investments that are classified as trading
or equity securities. These valuation adjustments may not
necessarily result in realized economic gains or losses.
Trends in the profitability of our
fundamental operating activities can be more clearly identified
without the fluctuations of these realized and unrealized gains or
losses and changes in fair value of other financial instruments.
Except for certain investments and other financial instruments
attributable to specific operating segments, we do not view them to
be indicative of our fundamental operating activities.
(2)
Amortization and impairment of goodwill
and other acquired intangible assets. Amortization of acquired
intangible assets represents the periodic expense required to
amortize the cost of acquired intangible assets over their
estimated useful lives. Acquired intangible assets are also
periodically reviewed for potential impairment, and impairment
adjustments are made whenever appropriate. We do not view these
charges as part of the operating performance of our primary
activities.
(3)
Impairment of other long-lived assets
and other non-operating items, if any. Impairment of other
long-lived assets and other non-operating items includes activities
that we do not view to be indicative of our fundamental operating
activities, such as: (i) impairment of internal-use software and
other long-lived assets; (ii) gains (losses) from the sale of lines
of business; (iii) acquisition-related income and expenses; and
(iv) gains (losses) on extinguishment of debt.
Radian Group Inc. and
Subsidiaries
Definition of Consolidated Non-GAAP
Financial Measures
Exhibit F (page 2 of 2)
See Exhibit G for the reconciliations of the most comparable
GAAP measures, consolidated pretax income (loss), diluted net
income (loss) per share and return on equity to our non-GAAP
financial measures for the consolidated company, adjusted pretax
operating income (loss), adjusted diluted net operating income
(loss) per share and adjusted net operating return on equity,
respectively.
Total adjusted pretax operating income (loss), adjusted diluted
net operating income (loss) per share and adjusted net operating
return on equity should not be considered in isolation or viewed as
substitutes for GAAP pretax income (loss), diluted net income
(loss) per share, return on equity or net income (loss). Our
definitions of adjusted pretax operating income (loss) and adjusted
diluted net operating income (loss) per share may not be comparable
to similarly-named measures reported by other companies.
Radian Group Inc. and
Subsidiaries
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit G (page 1 of 2)
Reconciliation of Consolidated
Pretax Income to Adjusted Pretax Operating Income
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Consolidated pretax income
$
188,123
$
198,649
$
179,817
$
200,983
$
182,676
Less reconciling income (expense)
items
Net gains (losses) on investments and
other financial instruments (1)
(4,438
)
107
13,091
(8,838
)
(331
)
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
(11,173
)
(1,371
)
(1,370
)
Impairment of other long-lived assets and
other non-operating items
(122
)
(4,275
)
(2)
(13,835
)
(3)
737
2
Total adjusted pretax operating income
(4)
$
192,683
$
202,817
$
191,734
$
210,455
$
184,375
(1)
Excludes certain net gains (losses), if
any, on investments and other financial instruments that are
attributable to specific operating segments and therefore included
in adjusted pretax operating income (loss).
(2)
This amount is included in interest expense on the Condensed
Consolidated Statement of Operations in Exhibit A and relates to
the loss on extinguishment of debt.
(3)
This amount is included in other operating
expenses on the Condensed Consolidated Statement of Operations in
Exhibit A and primarily relates to impairment of other long-lived
assets.
(4)
Total adjusted pretax operating income consists of adjusted pretax
operating income (loss) for our reportable segment and All Other
activities as follows.
2024
2023
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Adjusted pretax operating income
(loss)
Mortgage Insurance segment
$
198,763
$
209,850
$
197,797
$
219,229
$
198,099
All Other activities
(6,080
)
(7,033
)
(6,063
)
(8,774
)
(13,724
)
Total adjusted pretax operating income
$
192,683
$
202,817
$
191,734
$
210,455
$
184,375
Reconciliation of Diluted Net
Income Per Share to Adjusted Diluted Net Operating Income Per
Share
2024
2023
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Diluted net income per share
$
0.98
$
0.98
$
0.91
$
0.98
$
0.91
Less per-share impact of reconciling
income (expense) items
Net gains (losses) on investments and
other financial instruments
(0.03
)
—
0.08
(0.06
)
—
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
(0.07
)
(0.01
)
(0.01
)
Impairment of other long-lived assets and
other non-operating items
—
(0.03
)
(0.09
)
0.01
—
Income tax (provision) benefit on
reconciling income (expense) items (1)
—
0.01
0.02
0.01
—
Difference between statutory and effective
tax rates
0.02
(0.03
)
0.01
(0.01
)
0.01
Per-share impact of reconciling income
(expense) items
(0.01
)
(0.05
)
(0.05
)
(0.06
)
—
Adjusted diluted net operating income per
share (1)
$
0.99
$
1.03
$
0.96
$
1.04
$
0.91
(1)
Calculated using the company’s federal
statutory tax rate of 21%.
Radian Group Inc. and
Subsidiaries
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit G (page 2 of 2)
Reconciliation of Return on
Equity to Adjusted Net Operating Return on Equity (1)
2024
2023
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Return on equity (1)
13.6
%
13.8
%
13.4
%
15.0
%
14.1
%
Less impact of reconciling income
(expense) items (2)
Net gains (losses) on investments and
other financial instruments
(0.4
)
—
1.2
(0.9
)
—
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
(1.0
)
(0.2
)
(0.1
)
Impairment of other long-lived assets and
other non-operating items
—
(0.4
)
(1.3
)
0.1
—
Income tax (provision) benefit on
reconciling income (expense) items (3)
0.1
0.1
0.2
0.2
(0.1
)
Difference between statutory and effective
tax rates
0.3
(0.4
)
0.1
(0.2
)
0.2
Impact of reconciling income (expense)
items
—
(0.7
)
(0.8
)
(1.0
)
—
Adjusted net operating return on equity
(3)
13.6
%
14.5
%
14.2
%
16.0
%
14.1
%
(1)
Calculated by dividing annualized net
income by average stockholders’ equity, based on the average of the
beginning and ending balances for each period presented.
(2)
Annualized, as a percentage of average
stockholders’ equity.
(3)
Calculated using the company’s federal
statutory tax rate of 21%.
On a consolidated basis, “adjusted pretax operating income
(loss),” “adjusted diluted net operating income (loss) per share”
and “adjusted net operating return on equity” are measures not
determined in accordance with GAAP. These measures should not be
considered in isolation or viewed as substitutes for GAAP pretax
income (loss), diluted net income (loss) per share, return on
equity or net income (loss).
Our definitions of adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity may not be comparable to
similarly-named measures reported by other companies. See Exhibit F
for additional information on our consolidated non-GAAP financial
measures.
Radian Group Inc. and
Subsidiaries
Mortgage Insurance Supplemental
Information - New Insurance Written
Exhibit H
2024
2023
($ in millions)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
NIW
$
13,902
$
11,534
$
10,629
$
13,922
$
16,946
NIW by premium type
Direct monthly and other recurring
premiums
96.5
%
96.7
%
96.4
%
96.0
%
96.5
%
Direct single premiums
3.5
%
3.3
%
3.6
%
4.0
%
3.5
%
NIW for purchases
98.3
%
96.9
%
98.8
%
98.7
%
98.6
%
NIW for refinances
1.7
%
3.1
%
1.2
%
1.3
%
1.4
%
NIW by FICO score (1)
>=740
69.4
%
67.3
%
66.5
%
67.3
%
66.1
%
680-739
25.5
27.1
27.9
27.4
28.4
620-679
5.1
5.6
5.6
5.3
5.5
<=619
0.0
0.0
0.0
0.0
0.0
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
NIW by LTV (2)
95.01% and above
16.5
%
15.4
%
15.4
%
16.5
%
17.9
%
90.01% to 95.00%
37.2
40.8
40.0
38.6
39.1
85.01% to 90.00%
32.4
31.3
31.3
30.2
29.5
85.00% and below
13.9
12.5
13.3
14.7
13.5
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
(1)
For loans with multiple borrowers, the
percentage of NIW by FICO score represents the lowest of the
borrowers’ FICO scores at origination.
(2)
At origination.
Radian Group Inc. and
Subsidiaries
Mortgage Insurance Supplemental
Information - Primary Insurance in Force and Risk in Force
Exhibit I
June 30, 2024
March 31, 2024
December 31, 2023
September 30, 2023
June 30, 2023
($ in millions)
Primary insurance in force
$
272,827
$
270,986
$
269,979
$
269,511
$
266,859
Primary risk in force (“RIF”)
$
71,109
$
70,299
$
69,710
$
69,298
$
68,323
Primary RIF by premium type
Direct monthly and other recurring
premiums
89.5
%
89.2
%
88.9
%
88.6
%
88.2
%
Direct single premiums
10.5
%
10.8
%
11.1
%
11.4
%
11.8
%
Primary RIF by FICO score (1)
>=740
59.2
%
58.8
%
58.5
%
58.2
%
57.8
%
680-739
33.3
33.6
33.9
34.0
34.3
620-679
7.2
7.3
7.3
7.4
7.5
<=619
0.3
0.3
0.3
0.4
0.4
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Primary RIF by LTV (2)
95.01% and above
19.2
%
18.9
%
18.6
%
18.4
%
18.0
%
90.01% to 95.00%
48.1
48.2
48.2
48.2
48.4
85.01% to 90.00%
27.3
27.1
27.1
27.0
26.9
85.00% and below
5.4
5.8
6.1
6.4
6.7
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Persistency Rate (12 months ended)
84.3
%
84.3
%
84.0
%
83.6
%
82.8
%
Persistency Rate (quarterly, annualized)
(3)
83.5
%
85.3
%
85.8
%
84.2
%
83.5
%
(1)
For loans with multiple borrowers, the
percentage of primary RIF by FICO score represents the lowest of
the borrowers’ FICO scores at origination.
(2)
At origination.
(3)
The Persistency Rate on a quarterly,
annualized basis is calculated based on loan-level detail for the
quarter ending as of the date shown. It may be impacted by
seasonality or other factors, including the level of refinance
activity during the applicable periods and may not be indicative of
full-year trends.
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 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,” “seek,” “strategy,” “future,” “likely” 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. These
statements speak only as of the date they were made, and we
undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. We operate in a changing environment where new risks
emerge from time to time and it is not possible for us to predict
all risks that may affect us. The forward-looking statements are
not guarantees of future performance, and 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 statements.
These risks and uncertainties include, without limitation:
- the health of the U.S. housing market generally and changes in
economic conditions that impact the size of the insurable mortgage
market, the credit performance of our insured mortgage portfolio
and our business prospects, including changes resulting from
inflationary pressures, the higher interest rate environment and
the risk of higher unemployment rates, as well as other
macroeconomic stresses and uncertainties, including potential
impacts resulting from political and geopolitical events;
- changes in the way customers, investors, ratings agencies,
regulators or legislators perceive our performance, financial
strength and future prospects;
- Radian Guaranty’s ability to remain eligible under the PMIERs
to insure loans purchased by the GSEs;
- our ability to maintain an adequate level of capital in our
insurance subsidiaries to satisfy current and future regulatory
requirements;
- changes in the charters or business practices of, or rules or
regulations imposed by or applicable to, the GSEs or loans
purchased by the GSEs, or changes in the requirements for Radian
Guaranty to remain an approved insurer to the GSEs, such as changes
in the PMIERs or the GSEs’ interpretation and application of the
PMIERs or other applicable requirements;
- the effects of the Enterprise Regulatory Capital Framework,
finalized in February 2022, which establishes a new regulatory
capital framework for the GSEs, and which, as finalized, increases
the capital requirements for the GSEs, and among other things,
could impact the GSEs’ operations and pricing as well as the size
of the insurable mortgage market;
- changes in the current housing finance system in the United
States, including the roles of the FHA, the VA, the GSEs and
private mortgage insurers in this system;
- our ability to successfully execute and implement our capital
plans, including our risk distribution strategy through the capital
markets and traditional reinsurance markets, and to maintain
sufficient holding company liquidity to meet our liquidity
needs;
- our ability to successfully execute and implement our business
plans and strategies, including plans and strategies that may
require GSE and/or regulatory approvals and licenses, that are
subject to complex compliance requirements that we may be unable to
satisfy, or that may expose us to new risks, including those that
could impact our capital and liquidity positions;
- risks related to the quality of third-party mortgage
underwriting and mortgage loan servicing;
- a decrease in the Persistency Rates of our mortgage insurance
on Monthly Premium Policies;
- competition in the private mortgage insurance industry
generally, and more specifically: price competition in our mortgage
insurance business and competition from the FHA and the VA as well
as from other forms of credit enhancement, such as any potential
GSE-sponsored alternatives to traditional mortgage insurance;
- U.S. political conditions, which may be more volatile and
present a heightened risk in Presidential election years, and
legislative and regulatory activity (or inactivity), including
adoption of (or failure to adopt) new laws and regulations, or
changes in existing laws and regulations, or the way they are
interpreted or applied;
- legal and regulatory claims, assertions, actions, reviews,
audits, inquiries and investigations that could result in adverse
judgments, settlements, fines, injunctions, restitutions or other
relief that could require significant expenditures, new or
increased reserves or have other effects on our business;
- the amount and timing of potential payments or adjustments
associated with federal or other tax examinations;
- the possibility that we may fail to estimate accurately,
especially in the event of an extended economic downturn or a
period of extreme market volatility and economic uncertainty, the
likelihood, magnitude and timing of losses in establishing loss
reserves for our mortgage insurance business or to accurately
calculate and/or project our Available Assets and Minimum Required
Assets under the PMIERs, which could be impacted by, among other
things, the size and mix of our IIF, future changes to the PMIERs,
the level of defaults in our portfolio, the reported status of
defaults in our portfolio (including whether they are subject to
mortgage forbearance, a repayment plan or a loan modification trial
period), the level of cash flow generated by our insurance
operations and our risk distribution strategies;
- volatility in our financial results caused by changes in the
fair value of our assets and liabilities, including with respect to
our use of derivatives and within our investment portfolio;
- changes in GAAP or SAP rules and guidance, or their
interpretation;
- risks associated with investments to grow our existing
businesses, or to pursue new lines of business or new products and
services, including our ability and related costs to develop,
launch and implement new and innovative technologies and digital
products and services, whether these products and services receive
broad customer acceptance or disrupt existing customer
relationships, and additional financial risks related to these
investments, including required changes in our investment,
financing and hedging strategies, risks associated with our
increased use of financial leverage, which could expose us to
liquidity risks resulting from changes in the fair values of
assets, and the risk that we may fail to achieve forecasted
results, which could result in lower or negative earnings
contribution;
- the effectiveness and security of our information technology
systems and digital products and services, including the risk that
these systems, products or services fail to operate as expected or
planned or expose us to cybersecurity or third-party risks,
including due to malware, unauthorized access, cyberattack,
ransomware or other similar events;
- our ability to attract and retain key employees;
- the amount of dividends, if any, that our insurance
subsidiaries may distribute to us, which under applicable
regulatory requirements is based primarily on the financial
performance of our insurance subsidiaries, and therefore, may be
impacted by general economic, competitive and other factors, many
of which are beyond our control; and
- the ability of our operating subsidiaries to distribute amounts
to us under our internal tax- and expense-sharing arrangements,
which for our insurance subsidiaries are subject to regulatory
review and could be terminated at the discretion of such
regulators.
For more information regarding these risks and uncertainties as
well as certain additional risks that we face, you should refer to
“Item 1A. Risk Factors” in our Annual Report on Form 10-K for the
year ended December 31, 2023, and to subsequent reports and
registration statements filed from time to time with the U.S.
Securities and Exchange Commission. 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 to reflect new
information or future events or for any other reason.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240726283220/en/
For Investors Dan Kobell - Phone: 215.231.1113 email:
daniel.kobell@radian.com
For Media Rashi Iyer - Phone: 215.231.1167 email:
rashi.iyer@radian.com
Radian (NYSE:RDN)
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