— First quarter net income of $152 million, or
$0.98 per diluted share —
— Return on equity of 13.8% and adjusted net
operating return on equity of 14.5% —
— Default rate declines to 2.1% with highest
quarterly cure rate in more than 20 years —
— Primary mortgage insurance in force growth of
4% year-over-year to an all-time high of $271 billion —
— Total revenue growth of 3% year-over-year to
$319 million —
— Book value per share growth of 12%
year-over-year to $29.30 —
— Completed $625 million senior notes offering
and redemption of $525 million senior notes in the quarter —
Radian Group Inc. (NYSE: RDN) today reported net income for the
quarter ended March 31, 2024, of $152 million, or $0.98 per diluted
share. This compares with net income for the quarter ended March
31, 2023, of $158 million, or $0.98 per diluted share.
Adjusted pretax operating income for the quarter ended March 31,
2024, was $203 million, or $1.03 per diluted share. This compares
with adjusted pretax operating income for the quarter ended March
31, 2023, of $200 million, or $0.98 per diluted share.
Key Financial Highlights
Quarter ended
($ in millions, except per-share
amounts)
March 31,
2024
December 31,
2023
March 31,
2023
Total revenues
$319
$329
$310
Net income
$152
$143
$158
Diluted net income per share
$0.98
$0.91
$0.98
Consolidated pretax income
$199
$180
$204
Adjusted pretax operating income
(1)
$203
$192
$200
Adjusted diluted net operating
income per share (1) (2)
$1.03
$0.96
$0.98
Return on equity (3)
13.8%
13.4%
15.7%
Adjusted net operating return on
equity (1) (2)
14.5%
14.2%
15.7%
New Insurance Written (NIW) -
mortgage insurance
$11,534
$10,629
$11,261
Net premiums earned - mortgage
insurance
$234
$230
$231
New defaults
11,756
12,452
10,624
Provision for losses - mortgage
insurance
($7)
$5
($17)
As of
($ in millions, except per-share
amounts)
March 31,
2024
December 31,
2023
March 31,
2023
Book value per share
$29.30
$28.71
$26.23
Accumulated other comprehensive
income (loss) value per share (4)
($2.39)
($2.16)
($2.47)
PMIERs Available Assets (5)
$5,989
$5,890
$5,651
PMIERs excess Available Assets
(6)
$2,282
$2,260
$1,740
Total Holding Company Liquidity
(7)
$1,369
$1,267
$1,231
Total investments
$6,327
$6,086
$5,838
Primary mortgage insurance in
force
$270,986
$269,979
$261,450
Percentage of primary loans in
default (8)
2.1%
2.2%
2.1%
Mortgage insurance loss
reserves
$357
$365
$400
(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 total
liquidity, including 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 March 31, 2024, was $29.30, compared to
$28.71 at December 31, 2023, and $26.23 at March 31, 2023. This
represents a 12% growth in book value per share at March 31, 2024,
as compared to March 31, 2023, and includes accumulated other
comprehensive income (loss) of $(2.39) per share as of March 31,
2024, and $(2.47) per share as of March 31, 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 had a strong start to the year with excellent first quarter
operating results for Radian. We increased book value per share by
12% year-over-year and delivered return on equity of approximately
14%. These results demonstrate the embedded economic value of our
high-quality mortgage insurance portfolio, which is the main driver
of future earnings for our company and reached an all-time high of
$271 billion during the quarter,” said Radian’s Chief Executive
Officer Rick Thornberry. “We continue to strategically manage
capital, paying our fifth consecutive quarterly dividend of $100
million from Radian Guaranty to Radian Group and returning capital
to stockholders through dividends and share repurchases.”
FIRST QUARTER HIGHLIGHTS
- NIW was $11.5 billion in the first quarter of 2024, compared to
$10.6 billion in the fourth quarter of 2023, and $11.3 billion in
the first quarter of 2023.
- Purchase NIW increased 6% in the first quarter of 2024 compared
to the fourth quarter of 2023 and increased 2% compared to the
first quarter of 2023.
- Refinances accounted for 3% of total NIW in the first quarter
of 2024, compared to 1% in the fourth quarter of 2023, and 2% in
the first quarter of 2023.
- Total primary mortgage insurance in force of $271.0 billion as
of March 31, 2024, increased as compared to $270.0 billion as of
December 31, 2023, and increased 4% compared to $261.5 billion as
of March 31, 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 March 31, 2024, compared to 84% for the twelve
months ended December 31, 2023, and 82% for the twelve months ended
March 31, 2023.
- Annualized persistency for the three months ended March 31,
2024, was 85%, compared to 86% for the three months ended December
31, 2023, and 84% for the three months ended March 31, 2023.
- Net mortgage insurance premiums earned were $234 million for
the first quarter of 2024, an increase compared to $230 million for
the fourth quarter of 2023, and $231 million for the first quarter
of 2023.
- Mortgage insurance in force portfolio premium yield was 38.2
basis points in the first quarter of 2024. This compares to 38.1
basis points in the fourth quarter of 2023, and 38.5 basis points
in the first quarter of 2023.
- The impact of single premium policy cancellations before
consideration of reinsurance represented 0.3 basis points of direct
premium yield in the first quarter of 2024, 0.3 basis points in the
fourth quarter of 2023, and 0.8 basis points in the first quarter
of 2023.
- Total net mortgage insurance premium yield, which includes the
impact of ceded premiums earned and accrued profit commission, was
34.6 basis points in the first quarter of 2024. This compares to
34.2 basis points in the fourth quarter of 2023, and 35.4 basis
points in the first quarter of 2023.
- Details regarding premiums earned may be found in Exhibit
D.
- The mortgage insurance provision for losses was a benefit of $7
million in the first quarter of 2024, compared to a loss of $5
million in the fourth quarter of 2023 and a benefit of $17 million
in the first quarter of 2023.
- Favorable reserve development on prior period defaults was $61
million in the first quarter of 2024, compared to $49 million in
the fourth quarter of 2023 and $67 million in the first quarter of
2023.
- The number of primary delinquent loans was 20,850 as of March
31, 2024, compared to 22,021 as of December 31, 2023, and 20,748 as
of March 31, 2023.
- The loss ratio in the first quarter of 2024 was (2.9)%,
compared to 2.0% in the fourth quarter of 2023, and (7.3)% in the
first quarter of 2023.
- Total mortgage insurance claims paid were $3 million in the
first quarter of 2024, compared to $3 million in the fourth quarter
of 2023, and $3 million in the first quarter of 2023.
- Additional details regarding mortgage insurance provision for
losses may be found in Exhibit D.
- Other operating expenses were $83 million in the first quarter
of 2024, compared to $95 million in the fourth quarter of 2023, and
$83 million in the first quarter of 2023.
- Other operating expenses decreased in the first quarter of 2024
as compared to the fourth quarter of 2023, primarily due to $14
million of impairments of long-lived assets and other non-operating
items recognized in the fourth quarter of 2023, related to
lease-related assets and internal-use software.
- Additional details regarding other operating expenses may be
found in Exhibit D.
CAPITAL AND LIQUIDITY UPDATE
Radian Group
- As of March 31, 2024, Radian Group maintained $1.1 billion of
available liquidity. Total holding company liquidity, including the
company’s $275 million unsecured revolving credit facility, was
$1.4 billion as of March 31, 2024.
- During the first quarter of 2024, the company repurchased 1.8
million shares of Radian Group common stock at a total cost of $50
million, including commissions. As of March 31, 2024, purchase
authority of up to $117 million remained available under the
existing program.
- As previously announced, on February 14, 2024, Radian Group’s
board of directors authorized a regular quarterly dividend on its
common stock in the amount of $0.245 per share, an increase of 9%
from the previous quarterly dividend. The dividend totaling $37
million was paid to stockholders on March 12, 2024.
- During the first quarter of 2024, the Company initiated a
series of transactions to increase its financial strength and
reduce holding company leverage by year-end 2024:
- Issued $625 million aggregate principal amount of 6.200% senior
unsecured notes due May 2029.
- Utilized a portion of the proceeds from the new debt issuance
mentioned above to redeem all of its $525 million aggregate
principal amount of 6.625% senior unsecured notes due March
2025.
- In addition, the Company intends to retire its $450 million
aggregate principal amount of 4.500% senior unsecured notes due
October 2024 at or prior to maturity without incurring any
additional indebtedness, which is expected to reduce the holding
company debt to capital ratio to below 20% by year-end 2024.
Radian Guaranty
- In the first quarter of 2024, Radian Guaranty paid an ordinary
dividend to Radian Group of $100 million.
- At March 31, 2024, Radian Guaranty’s Available Assets under
PMIERs totaled approximately $6.0 billion, resulting in PMIERs
excess Available Assets of $2.3 billion.
RECENT EVENTS AND OTHER MATTERS
- As previously disclosed, on January 8, 2024, S&P Global
Ratings (“S&P”) upgraded the insurance financial strength (IFS)
rating of Radian Guaranty to A- from BBB+. In the same rating
action, S&P also upgraded the senior unsecured debt rating of
Radian Group Inc. to BBB- from BB+. The outlook for the ratings is
stable.
- In the first quarter of 2024, the Company made a change to the
way that it aggregates and reports its segment results. Whereas
previously Radian had aggregated the results of its title, real
estate services and real estate technology operating segments and
reflected them as a separate reportable segment named homegenius,
the results of these immaterial operating segments and the
company’s mortgage conduit business (the other operating segment
that does not meet the reportable segment materiality thresholds)
are now reported in the All Other category, along with certain
corporate and other activities. This change is reflected in the
segment operating results for all periods presented.
CONFERENCE CALL
Radian will discuss first quarter 2024 financial results in a
conference call tomorrow, Thursday, May 2, 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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Revenues
Net premiums earned
$
235,857
$
232,649
$
240,262
$
213,429
$
233,238
Services revenue
12,588
12,419
10,892
11,797
10,984
Net investment income
69,221
68,824
67,805
63,348
58,453
Net gains (losses) on investments and
other financial instruments
490
13,447
(8,555
)
(236
)
5,585
Other income
1,262
1,305
2,109
1,241
1,592
Total revenues
319,418
328,644
312,513
289,579
309,852
Expenses
Provision for losses
(7,034
)
4,170
(8,135
)
(21,632
)
(16,929
)
Policy acquisition costs
6,794
6,147
6,920
5,218
6,293
Cost of services
9,327
8,950
8,886
10,257
10,398
Other operating expenses
82,636
95,218
79,206
89,885
83,269
Interest expense
29,046
23,169
23,282
21,805
21,439
Impairment of goodwill
—
9,802
—
—
—
Amortization of other acquired intangible
assets
—
1,371
1,371
1,370
1,371
Total expenses
120,769
148,827
111,530
106,903
105,841
Pretax income
198,649
179,817
200,983
182,676
204,011
Income tax provision
46,295
37,124
44,401
36,589
46,254
Net income
$
152,354
$
142,693
$
156,582
$
146,087
$
157,757
Diluted net income per share
$
0.98
$
0.91
$
0.98
$
0.91
$
0.98
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Net income—basic and diluted
$
152,354
$
142,693
$
156,582
$
146,087
$
157,757
Average common shares
outstanding—basic
153,817
155,318
158,461
159,010
158,304
Dilutive effect of share-based
compensation arrangements (1)
2,154
1,909
1,686
1,734
3,045
Adjusted average common shares
outstanding—diluted
155,971
157,227
160,147
160,744
161,349
Basic net income per share
$
0.99
$
0.92
$
0.99
$
0.92
$
1.00
Diluted net income per share
$
0.98
$
0.91
$
0.98
$
0.91
$
0.98
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Shares of common stock equivalents
—
—
—
112
25
Radian Group Inc. and Subsidiaries Condensed
Consolidated Balance Sheets Exhibit C
March 31,
December 31,
September 30,
June 30,
March 31,
(In thousands, except per-share
amounts)
2024
2023
2023
2023
2023
Assets
Investments
$
6,327,114
$
6,085,654
$
5,885,652
$
5,895,871
$
5,837,892
Cash
26,993
18,999
55,489
61,142
50,167
Restricted cash
1,832
1,066
1,305
1,317
577
Accrued investment income
46,334
45,783
45,623
42,650
42,567
Accounts and notes receivable
130,095
123,857
144,614
138,432
129,565
Reinsurance recoverable
28,151
25,909
24,148
22,979
24,396
Deferred policy acquisition costs
18,561
18,718
18,817
19,272
18,236
Property and equipment, net
60,521
63,822
74,558
73,885
72,111
Goodwill and other acquired intangible
assets, net
—
—
11,173
12,543
13,914
Prepaid federal income taxes
750,320
750,320
696,820
663,320
596,368
Other assets
369,944
459,805
420,483
375,132
418,609
Total assets
$
7,759,865
$
7,593,933
$
7,378,682
$
7,306,543
$
7,204,402
Liabilities and stockholders’ equity
Unearned premiums
$
215,124
$
225,396
$
236,400
$
246,666
$
257,735
Reserve for losses and loss adjustment
expense
361,833
370,148
367,568
379,434
405,651
Senior notes
1,512,860
1,417,781
1,416,687
1,415,610
1,414,549
Secured borrowings
207,601
119,476
241,753
178,762
121,642
Reinsurance funds withheld
133,460
130,564
156,114
154,354
153,099
Net deferred tax liability
626,353
589,564
497,560
479,754
455,517
Other liabilities
262,902
343,199
309,701
281,127
289,731
Total liabilities
3,320,133
3,196,128
3,225,783
3,135,707
3,097,924
Common stock
171
173
175
177
176
Treasury stock
(946,202
)
(945,870
)
(945,504
)
(945,032
)
(931,313
)
Additional paid-in capital
1,390,436
1,430,594
1,482,712
1,522,895
1,515,852
Retained earnings
4,357,823
4,243,759
4,136,598
4,016,482
3,908,396
Accumulated other comprehensive income
(loss)
(362,496
)
(330,851
)
(521,082
)
(423,686
)
(386,633
)
Total stockholders’ equity
4,439,732
4,397,805
4,152,899
4,170,836
4,106,478
Total liabilities and stockholders’
equity
$
7,759,865
$
7,593,933
$
7,378,682
$
7,306,543
$
7,204,402
Shares outstanding
151,509
153,179
155,582
157,350
156,547
Book value per share
$
29.30
$
28.71
$
26.69
$
26.51
$
26.23
Holding company debt-to-capital ratio
(1)
25.4
%
24.4
%
25.4
%
25.3
%
25.6
%
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Premiums earned
Direct - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
$
258,593
$
256,632
$
254,903
$
252,537
$
251,166
Single Premium Policy cancellations
2,114
2,058
3,304
3,980
5,361
Total direct - Mortgage insurance
260,707
258,690
258,207
256,517
256,527
Ceded - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
(38,997
)
(40,065
)
(32,363
)
(57,916
)
(1)
(35,526
)
Single Premium Policy cancellations
(2)
(112
)
(444
)
(873
)
(1,114
)
(1,472
)
Profit commission - other (3)
12,401
12,199
11,830
13,245
11,921
Total ceded premiums - Mortgage
insurance
(26,708
)
(28,310
)
(21,406
)
(45,785
)
(25,077
)
Net premiums earned - Mortgage
insurance
233,999
230,380
236,801
210,732
231,450
Net premiums earned - Title insurance
1,858
2,269
3,461
2,697
1,788
Net premiums earned
$
235,857
$
232,649
$
240,262
$
213,429
$
233,238
(1)
Includes the result of the 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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Mortgage Insurance
Contract underwriting services
$
210
$
202
$
266
$
284
$
336
All Other
Real estate services
9,193
8,888
7,046
7,598
7,395
Title
2,573
2,713
2,964
3,233
2,554
Real estate technology
612
616
616
682
699
Total services revenue
$
12,588
$
12,419
$
10,892
$
11,797
$
10,984
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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Fixed-maturities
$
57,259
$
58,669
$
59,599
$
56,439
$
52,948
Equity securities
2,539
3,753
3,222
3,512
2,932
Mortgage loans held for sale
1,793
1,725
1,719
574
194
Short-term investments
8,958
5,871
5,405
3,976
3,588
Other (1)
(1,328
)
(1,194
)
(1,140
)
(1,153
)
(1,209
)
Net investment income
$
69,221
$
68,824
$
67,805
$
63,348
$
58,453
(1)
Includes investment management expenses,
as well as the net impact from our securities lending
activities.
Provision for Losses
2024
2023
(In thousands)
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Mortgage insurance
Current period defaults (1)
$
53,688
$
53,981
$
46,630
$
41,223
$
50,578
Prior period defaults (2)
(60,574
)
(49,373
)
(54,887
)
(62,846
)
(67,442
)
Total Mortgage insurance
(6,886
)
4,608
(8,257
)
(21,623
)
(16,864
)
Title insurance
(148
)
(438
)
122
(9
)
(65
)
Total provision for losses
$
(7,034
)
$
4,170
$
(8,135
)
$
(21,632
)
$
(16,929
)
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Other operating expenses by type
Salaries and other base employee
expenses
$
39,723
$
34,182
$
33,272
$
39,032
$
35,064
Variable and share-based incentive
compensation
17,515
20,262
19,546
18,908
18,273
Other general operating expenses
30,262
45,186
(1)
29,812
35,655
33,863
Ceding commissions
(5,644
)
(5,327
)
(5,153
)
(4,824
)
(4,628
)
Title agent commissions
780
915
1,729
1,114
697
Total
$
82,636
$
95,218
$
79,206
$
89,885
$
83,269
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Senior notes
$
22,128
$
20,335
$
20,320
$
20,303
$
20,288
Loss on extinguishment of debt(1)
4,275
—
—
—
—
Mortgage loan financing facilities
1,438
1,421
1,609
400
77
FHLB advances
945
1,059
1,039
611
745
Revolving credit facility
260
354
310
399
311
Other
—
—
4
92
18
Total interest expense
$
29,046
$
23,169
$
23,282
$
21,805
$
21,439
(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 March 31,
2024
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
231,877
$
1,858
$
—
$
233,735
(Increase) decrease in unearned
premiums
2,122
—
—
2,122
Net premiums earned
233,999
1,858
—
235,857
Services revenue
210
12,493
(115
)
12,588
Net investment income
49,574
19,647
—
69,221
Net gains (losses) on investments and
other financial instruments
—
383
—
383
Other income
1,240
25
(3
)
1,262
Total
285,023
34,406
(118
)
319,311
Provision for losses
(6,886
)
(148
)
—
(7,034
)
Policy acquisition costs
6,794
—
—
6,794
Cost of services
153
9,174
—
9,327
Other operating expenses before allocated
corporate operating expenses
17,270
27,264
(118
)
44,416
Interest expense
23,333
1,438
—
24,771
Total
40,664
37,728
(118
)
78,274
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
244,359
(3,322
)
—
241,037
Allocation of corporate operating
expenses
34,509
3,711
—
38,220
Adjusted pretax operating income (loss)
(2)
$
209,850
$
(7,033
)
$
—
$
202,817
Radian Group Inc. and Subsidiaries Segment
Information Exhibit E (page 2 of 4)
Three Months Ended March 31,
2023
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
229,419
$
1,788
$
—
$
231,207
(Increase) decrease in unearned
premiums
2,031
—
—
2,031
Net premiums earned
231,450
1,788
—
233,238
Services revenue
336
10,743
(95
)
10,984
Net investment income
45,993
12,460
—
58,453
Net gains (losses) on investments and
other financial instruments
—
80
—
80
Other income
1,587
5
—
1,592
Total
279,366
25,076
(95
)
304,347
Provision for losses
(16,864
)
(65
)
—
(16,929
)
Policy acquisition costs
6,293
—
—
6,293
Cost of services
241
10,157
—
10,398
Other operating expenses before allocated
corporate operating expenses
18,806
21,770
(95
)
40,481
Interest expense
21,362
77
—
21,439
Total
29,838
31,939
(95
)
61,682
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
249,528
(6,863
)
—
242,665
Allocation of corporate operating
expenses
34,829
7,973
—
42,802
Adjusted pretax operating income (loss)
(2)
$
214,699
$
(14,836
)
$
—
$
199,863
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Net premiums written
$
231,877
$
225,112
$
235,169
$
214,540
$
229,419
(Increase) decrease in unearned
premiums
2,122
5,268
1,632
(3,808
)
2,031
Net premiums earned
233,999
230,380
236,801
210,732
231,450
Services revenue
210
202
266
284
336
Net investment income
49,574
51,061
49,953
48,070
45,993
Other income
1,240
1,302
1,237
1,246
1,587
Total
285,023
282,945
288,257
260,332
279,366
Provision for losses
(6,886
)
4,608
(8,257
)
(21,623
)
(16,864
)
Policy acquisition costs
6,794
6,147
6,920
5,218
6,293
Cost of services
153
157
172
143
241
Other operating expenses before allocated
corporate operating expenses
17,270
15,559
16,776
20,009
18,806
Interest expense
23,333
21,748
21,673
21,405
21,362
Total
40,664
48,219
37,284
25,152
29,838
Adjusted pretax operating income before
allocated corporate operating expenses
244,359
234,726
250,973
235,180
249,528
Allocation of corporate operating
expenses
34,509
36,929
31,744
37,081
34,829
Adjusted pretax operating income (1)
$
209,850
$
197,797
$
219,229
$
198,099
$
214,699
Radian Group Inc. and Subsidiaries Segment
Information Exhibit E (page 4 of 4)
All Other (2)
2024
2023
(In thousands)
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Net premiums earned
$
1,858
$
2,269
$
3,461
$
2,697
$
1,788
Services revenue
12,493
12,311
10,723
11,617
10,743
Net investment income
19,647
17,763
17,852
15,278
12,460
Net gains (losses) on investments and
other financial instruments
383
356
283
95
80
Other income
25
14
9
(1
)
5
Total (3)
34,406
32,713
32,328
29,686
25,076
Provision for losses
(148
)
(438
)
122
(9
)
(65
)
Cost of services
9,174
8,793
8,714
10,114
10,157
Other operating expenses before allocated
corporate operating expenses
27,264
23,660
26,062
27,538
21,770
Interest expense
1,438
1,421
1,609
400
77
Total
37,728
33,436
36,507
38,043
31,939
Adjusted pretax operating income before
allocated corporate operating expenses
(3,322
)
(723
)
(4,179
)
(8,357
)
(6,863
)
Allocation of corporate operating
expenses
3,711
5,340
4,595
5,367
7,973
Adjusted pretax operating income (loss)
(1)
$
(7,033
)
$
(6,063
)
$
(8,774
)
$
(13,724
)
$
(14,836
)
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Holding company (a)
$
16,536
$
15,374
$
15,601
$
14,202
$
11,840
Real estate services
9,517
9,014
7,126
7,676
7,484
Title
4,997
5,516
6,948
6,422
4,776
Mortgage conduit
2,690
2,171
2,020
678
275
Real estate technology
666
638
633
708
701
Total
$
34,406
$
32,713
$
32,328
$
29,686
$
25,076
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Loss ratio (1)
(2.9
)%
2.0
%
(3.5
)%
(10.3
)%
(7.3
)%
Expense ratio (2)
25.0
%
25.5
%
23.4
%
29.6
%
25.9
%
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Consolidated pretax income
$
198,649
$
179,817
$
200,983
$
182,676
$
204,011
Less reconciling income (expense)
items
Net gains (losses) on investments and
other financial instruments (1)
107
13,091
(8,838
)
(331
)
5,505
Amortization and impairment of goodwill
and other acquired intangible assets
—
(11,173
)
(1,371
)
(1,370
)
(1,371
)
Impairment of other long-lived assets and
other non-operating items
(4,275
)
(2)
(13,835
)
(3)
737
2
14
Total adjusted pretax operating income
(4)
$
202,817
$
191,734
$
210,455
$
184,375
$
199,863
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Adjusted pretax operating income
(loss)
Mortgage Insurance segment
$
209,850
$
197,797
$
219,229
$
198,099
$
214,699
All Other activities
(7,033
)
(6,063
)
(8,774
)
(13,724
)
(14,836
)
Total adjusted pretax operating income
$
202,817
$
191,734
$
210,455
$
184,375
$
199,863
Reconciliation of Diluted Net
Income Per Share to Adjusted Diluted Net Operating Income Per
Share
2024
2023
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Diluted net income per share
$
0.98
$
0.91
$
0.98
$
0.91
$
0.98
Less per-share impact of reconciling
income (expense) items
Net gains (losses) on investments and
other financial instruments
—
0.08
(0.06
)
—
0.03
Amortization and impairment of goodwill
and other acquired intangible assets
—
(0.07
)
(0.01
)
(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
—
(0.01
)
Difference between statutory and effective
tax rates
(0.03
)
0.01
(0.01
)
0.01
(0.01
)
Per-share impact of reconciling income
(expense) items
(0.05
)
(0.05
)
(0.06
)
—
—
Adjusted diluted net operating income per
share (1)
$
1.03
$
0.96
$
1.04
$
0.91
$
0.98
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Return on equity (1)
13.8
%
13.4
%
15.0
%
14.1
%
15.7
%
Less impact of reconciling income
(expense) items (2)
Net gains (losses) on investments and
other financial instruments
—
1.2
(0.9
)
—
0.5
Amortization and impairment of goodwill
and other acquired intangible assets
—
(1.0
)
(0.2
)
(0.1
)
(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
0.2
0.2
(0.1
)
(0.1
)
Difference between statutory and effective
tax rates
(0.4
)
0.1
(0.2
)
0.2
(0.3
)
Impact of reconciling income (expense)
items
(0.7
)
(0.8
)
(1.0
)
—
—
Adjusted net operating return on equity
(3)
14.5
%
14.2
%
16.0
%
14.1
%
15.7
%
(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 1
Qtr 4
Qtr 3
Qtr 2
Qtr 1
NIW
$
11,534
$
10,629
$
13,922
$
16,946
$
11,261
NIW by premium type
Direct monthly and other recurring
premiums
96.7
%
96.4
%
96.0
%
96.5
%
94.9
%
Direct single premiums
3.3
%
3.6
%
4.0
%
3.5
%
5.1
%
NIW for purchases
96.9
%
98.8
%
98.7
%
98.6
%
97.6
%
NIW for refinances
3.1
%
1.2
%
1.3
%
1.4
%
2.4
%
NIW by FICO score (1)
>=740
67.3
%
66.5
%
67.3
%
66.1
%
60.7
%
680-739
27.1
27.9
27.4
28.4
32.8
620-679
5.6
5.6
5.3
5.5
6.5
<=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
15.4
%
15.4
%
16.5
%
17.9
%
17.7
%
90.01% to 95.00%
40.8
40.0
38.6
39.1
40.2
85.01% to 90.00%
31.3
31.3
30.2
29.5
28.7
85.00% and below
12.5
13.3
14.7
13.5
13.4
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
March 31,
December 31,
September 30,
June 30,
March 31,
($ in millions)
2024
2023
2023
2023
2023
Primary insurance in force
$
270,986
$
269,979
$
269,511
$
266,859
$
261,450
Primary risk in force (“RIF”)
$
70,299
$
69,710
$
69,298
$
68,323
$
66,580
Primary RIF by premium type
Direct monthly and other
recurring premiums
89.2
%
88.9
%
88.6
%
88.2
%
87.6
%
Direct single premiums
10.8
%
11.1
%
11.4
%
11.8
%
12.4
%
Primary RIF by FICO score (1)
>=740
58.8
%
58.5
%
58.2
%
57.8
%
57.4
%
680-739
33.6
33.9
34.0
34.3
34.6
620-679
7.3
7.3
7.4
7.5
7.6
<=619
0.3
0.3
0.4
0.4
0.4
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Primary RIF by LTV (2)
95.01% and above
18.9
%
18.6
%
18.4
%
18.0
%
17.5
%
90.01% to 95.00%
48.2
48.2
48.2
48.4
48.5
85.01% to 90.00%
27.1
27.1
27.0
26.9
27.0
85.00% and below
5.8
6.1
6.4
6.7
7.0
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Primary RIF by policy year
2008 and prior
2.7
%
2.8
%
2.9
%
3.1
%
3.3
%
2009 - 2018
9.1
9.7
10.4
11.3
12.4
2019
5.1
5.4
5.6
5.9
6.4
2020
15.7
16.6
17.5
18.7
20.3
2021
23.3
24.5
25.6
26.9
28.6
2022
21.8
22.4
22.8
23.6
24.7
2023
18.1
18.6
15.2
10.5
4.3
2024
4.2
—
—
—
—
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Persistency Rate (12 months ended)
84.3
%
84.0
%
83.6
%
82.8
%
81.6
%
Persistency Rate (quarterly, annualized)
(3)
85.3
%
85.8
%
84.2
%
83.5
%
84.4
%
(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 ERCF, 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/20240426300947/en/
For Investors John Damian - Phone: 215.231.1383 email:
john.damian@radian.com
For Media Rashi Iyer - Phone: 215.231.1167 email:
rashi.iyer@radian.com
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