— Third quarter net income of $152 million, or
$0.99 per diluted share —
— Return on equity of 13.2% —
— Book value per share growth of 18%
year-over-year to $31.37 —
— Returned $86 million of capital to
stockholders through dividends and share repurchases —
— Holding company debt-to-capital ratio reduced
to 18.5% following retirement of $450 million senior notes —
— $185 million ordinary dividend paid from
Radian Guaranty to holding company during the third quarter —
— Available holding company liquidity of $844
million and PMIERs excess Available Assets of $2.1 billion —
Radian Group Inc. (NYSE: RDN) today reported net income for the
quarter ended September 30, 2024, of $152 million, or $0.99 per
diluted share. This compares with net income for the quarter ended
September 30, 2023, of $157 million, or $0.98 per diluted
share.
Adjusted pretax operating income for the quarter ended September
30, 2024, was $199 million, or $1.03 per diluted share. This
compares with adjusted pretax operating income for the quarter
ended September 30, 2023, of $210 million, or $1.04 per diluted
share.
Key Financial Highlights
Quarter ended
($ in millions, except per-share
amounts)
September 30, 2024
June 30, 2024
September 30, 2023
Total revenues
$334
$321
$313
Net income
$152
$152
$157
Diluted net income per share
$0.99
$0.98
$0.98
Consolidated pretax income
$195
$188
$201
Adjusted pretax operating income
(1)
$199
$193
$210
Adjusted diluted net operating
income per share (1) (2)
$1.03
$0.99
$1.04
Return on equity (3)
13.2%
13.6%
15.0%
Adjusted net operating return on
equity (1) (2)
13.7%
13.6%
16.0%
New Insurance Written (NIW) -
mortgage insurance
$13,493
$13,902
$13,922
Net premiums earned - mortgage
insurance
$235
$235
$237
New defaults
13,708
11,104
11,156
Provision for losses - mortgage
insurance
$6
$(2)
$(8)
As of
($ in millions, except per-share
amounts)
September 30, 2024
June 30, 2024
September 30, 2023
Book value per share
$31.37
$29.66
$26.69
Accumulated other comprehensive
income (loss) value per share (4)
$(1.56)
$(2.50)
$(3.35)
PMIERs Available Assets (5)
$5,984
$5,978
$5,758
PMIERs excess Available Assets
(6)
$2,122
$2,206
$1,670
Available holding company
liquidity (7)
$844
$1,190
$1,004
Total investments
$6,497
$6,588
$5,886
Residential mortgage loans held
for sale, at fair value (8)
$530
$458
$138
Primary mortgage insurance in
force
$274,721
$272,827
$269,511
Percentage of primary loans in
default (9)
2.25%
2.04%
2.03%
Mortgage insurance loss
reserves
$357
$351
$362
(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 after the repayment of our $450 million senior notes
without considering available capacity under its undrawn $275
million unsecured revolving credit facility.
(8)
Included in total investments on our
condensed consolidated balance sheets.
(9)
Represents the number of primary loans in
default as a percentage of the total number of insured primary
loans.
Book value per share at September 30, 2024, was $31.37, compared
to $29.66 at June 30, 2024, and $26.69 at September 30, 2023. This
represents an 18% growth in book value per share at September 30,
2024, as compared to September 30, 2023, and includes accumulated
other comprehensive income (loss) of $(1.56) per share as of
September 30, 2024, and $(3.35) per share as of September 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 were pleased to deliver another quarter of excellent
financial results for Radian, increasing book value per share by
18% year-over-year, generating net income of $152 million, and
growing our primary mortgage insurance in force, which is the main
driver of future earnings for our company, to $275 billion,” said
Radian’s Chief Executive Officer Rick Thornberry. “These results
reflect the economic value of our high-quality mortgage insurance
portfolio, the strength and quality of our investment portfolio,
our strong capital and liquidity positions, the depth of our
customer relationships and the dedication of our team.”
THIRD QUARTER HIGHLIGHTS
- NIW was $13.5 billion in the third quarter of 2024, compared to
$13.9 billion in the second quarter of 2024, and $13.9 billion in
the third quarter of 2023.
- Purchase NIW decreased 3% in the third quarter of 2024 compared
to the second quarter of 2024 and decreased 3% compared to the
third quarter of 2023.
- Refinances accounted for 4% of total NIW in the third quarter
of 2024, compared to 2% in the second quarter of 2024, and 1% in
the third quarter of 2023.
- Total primary mortgage insurance in force of $274.7 billion as
of September 30, 2024, compared to $272.8 billion as of June 30,
2024, and $269.5 billion as of September 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 September 30, 2024, compared to 84% for the
twelve months ended June 30, 2024, and 84% for the twelve months
ended September 30, 2023.
- Annualized persistency for the three months ended September 30,
2024, was 84%, compared to 84% for the three months ended June 30,
2024, and 84% for the three months ended September 30, 2023.
- Net mortgage insurance premiums earned were $235 million for
the third quarter of 2024, compared to $235 million for the second
quarter of 2024, and $237 million for the third quarter of
2023.
- Mortgage insurance in force portfolio premium yield was 38.2
basis points in the third quarter of 2024. This compares to 38.2
basis points in the second quarter of 2024 and 38.0 basis points in
the third quarter of 2023.
- Total net mortgage insurance premium yield, which includes the
impact of ceded premiums earned and accrued profit commission, was
34.4 basis points in the third quarter of 2024. This compares to
34.5 basis points in the second quarter of 2024, and 35.3 basis
points in the third quarter of 2023.
- Details regarding premiums earned may be found in Exhibit
D.
- The mortgage insurance provision for losses was a provision of
$6 million in the third quarter of 2024, compared to a benefit of
$2 million in the second quarter of 2024 and a benefit of $8
million in the third quarter of 2023.
- Favorable reserve development on prior period defaults was $51
million in the third quarter of 2024, compared to $50 million in
the second quarter of 2024 and $55 million in the third quarter of
2023.
- The number of primary delinquent loans was 22,350 as of
September 30, 2024, compared to 20,276 as of June 30, 2024, and
20,406 as of September 30, 2023. This increase in delinquent loans
is consistent with seasonal credit trends and the natural seasoning
of the insured portfolio, and reflects the growth in the company’s
total primary mortgage insurance in force in recent years.
- The loss ratio in the third quarter of 2024 was 3%, compared to
(1)% in the second quarter of 2024, and (4)% in the third quarter
of 2023.
- Total mortgage insurance claims paid were $3 million in the
third quarter of 2024, compared to $6 million in the second quarter
of 2024 and $5 million in the third quarter of 2023.
- Additional details regarding mortgage insurance provision for
losses may be found in Exhibit D.
- During the third quarter of 2024, Radian Mortgage Capital
closed its inaugural private-label prime jumbo mortgage
securitization transaction of $349 million.
- Radian Group’s wholly owned subsidiary, Radian Investment Group
Inc., retained certificates from the securitization with an initial
fair value of $6 million and is considered to be the primary
beneficiary of the securitization trust. As a result, Radian Group
is consolidating the trust, which is a variable interest entity
(“VIE”), in its financial statements. The consolidation of the VIE
did not have a material impact on Radian Group’s results of
operations in the third quarter of 2024.
- Additional details regarding the income statement and balance
sheet impacts of the VIE can be found in Exhibit A and Exhibit C,
respectively.
- Other operating expenses were $86 million in the third quarter
of 2024, compared to $92 million in the second quarter of 2024, and
$79 million in the third quarter of 2023.
- Other operating expenses decreased in the third quarter of 2024
as compared to the second quarter of 2024. The decrease in other
operating expenses was partially offset by a $10 million impairment
on internal-use software recognized in the third quarter of
2024.
- Additional details regarding other operating expenses may be
found in Exhibit D.
CAPITAL AND LIQUIDITY UPDATE
Radian Group
- As previously announced, Radian Group completed the redemption
of its 2024 senior notes in the amount of $450 million in the third
quarter of 2024. This redemption resulted in a corresponding $450
million reduction in holding company debt and reduced the holding
company debt-to-capital ratio to 18.5% as of September 30,
2024.
- As of September 30, 2024, Radian Group maintained $844 million
of available liquidity. Total holding company liquidity, including
the company’s undrawn $275 million unsecured revolving credit
facility, was $1.1 billion as of September 30, 2024.
- During the third quarter of 2024, the company repurchased 1.5
million shares of Radian Group common stock at a total cost of $49
million. As of September 30, 2024, purchase authority of up to $618
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 September 11,
2024.
Radian Guaranty
- Radian Guaranty paid an ordinary dividend to Radian Group of
$185 million in the third quarter of 2024, bringing total
year-to-date ordinary dividends paid to $485 million.
- At September 30, 2024, Radian Guaranty’s Available Assets under
PMIERs totaled $6.0 billion, resulting in PMIERs excess Available
Assets of $2.1 billion.
CONFERENCE CALL
Radian will discuss third quarter 2024 financial results in a
conference call tomorrow, Thursday, November 7, 2024, at 10:00 a.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 those investments and other financial instruments
attributable to our Mortgage Conduit business; (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, real estate, securitization,
and title services. Powered by technology, informed by data and
driven to deliver new and better ways to transact and manage risk,
Radian is shaping the future of mortgage and real estate services.
Learn more at www.radian.com.
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Revenues
Net premiums earned
$
239,133
$
237,731
$
235,857
$
232,649
$
240,262
Services revenue
12,167
13,265
12,588
12,419
10,892
Net investment income
78,396
73,766
69,221
68,824
67,805
Net gains (losses) on investments and
other financial instruments
2,174
(4,487
)
490
13,447
(8,555
)
Income (loss) on consolidated VIEs
465
—
—
—
—
Other income
1,522
872
1,262
1,305
2,109
Total revenues
333,857
321,147
319,418
328,644
312,513
Expenses
Provision for losses
6,889
(1,745
)
(7,034
)
4,170
(8,135
)
Policy acquisition costs
6,724
6,522
6,794
6,147
6,920
Cost of services
9,542
9,535
9,327
8,950
8,886
Other operating expenses
85,919
91,648
82,636
95,218
79,206
Interest expense
29,391
27,064
29,046
23,169
23,282
Impairment of goodwill
—
—
—
9,802
—
Amortization of other acquired intangible
assets
—
—
—
1,371
1,371
Total expenses
138,465
133,024
120,769
148,827
111,530
Pretax income
195,392
188,123
198,649
179,817
200,983
Income tax provision
43,500
36,220
46,295
37,124
44,401
Net income
$
151,892
$
151,903
$
152,354
$
142,693
$
156,582
Diluted net income per share
$
0.99
$
0.98
$
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Net income—basic and diluted
$
151,892
$
151,903
$
152,354
$
142,693
$
156,582
Average common shares
outstanding—basic
151,846
153,110
153,817
155,318
158,461
Dilutive effect of share-based
compensation arrangements (1)
1,227
1,289
2,154
1,909
1,686
Adjusted average common shares
outstanding—diluted
153,073
154,399
155,971
157,227
160,147
Basic net income per share
$
1.00
$
0.99
$
0.99
$
0.92
$
0.99
Diluted net income per share
$
0.99
$
0.98
$
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Shares of common stock equivalents
—
64
—
—
—
Radian Group Inc. and
Subsidiaries
Condensed Consolidated Balance
Sheets
Exhibit C
Sep 30,
Jun 30,
Mar 31,
Dec 31,
Sep 30,
(In thousands, except per-share
amounts)
2024
2024
2024
2023
2023
Assets
Investments
$
6,497,180
$
6,588,149
$
6,327,114
$
6,085,654
$
5,885,652
Cash
28,061
13,791
26,993
18,999
55,489
Restricted cash
2,014
1,993
1,832
1,066
1,305
Accrued investment income
49,707
47,607
46,334
45,783
45,623
Accounts and notes receivable
138,439
137,777
130,095
123,857
144,614
Reinsurance recoverable
34,015
31,064
28,151
25,909
24,148
Deferred policy acquisition costs
18,430
18,566
18,561
18,718
18,817
Property and equipment, net
41,892
56,360
60,521
63,822
74,558
Goodwill and other acquired intangible
assets, net
—
—
—
—
11,173
Prepaid federal income taxes
870,336
837,736
750,320
750,320
696,820
Other assets
384,666
396,600
369,944
459,805
420,483
Consolidated VIE assets (1)
355,031
—
—
—
—
Total assets
$
8,419,771
$
8,129,643
$
7,759,865
$
7,593,933
$
7,378,682
Liabilities and stockholders’ equity
Unearned premiums
$
198,007
$
206,094
$
215,124
$
225,396
$
236,400
Reserve for losses and loss adjustment
expense
363,225
357,470
361,833
370,148
367,568
Senior notes
1,064,718
1,513,782
1,512,860
1,417,781
1,416,687
Secured borrowings
551,916
484,665
207,601
119,476
241,753
Reinsurance funds withheld
138,810
135,849
133,460
130,564
156,114
Net deferred tax liability
737,605
656,113
626,353
589,564
497,560
Other liabilities
318,345
293,351
262,902
343,199
309,701
Consolidated VIE liabilities (1)
348,292
—
—
—
—
Total liabilities
3,720,918
3,647,324
3,320,133
3,196,128
3,225,783
Common stock
171
172
171
173
175
Treasury stock
(967,717
)
(967,218
)
(946,202
)
(945,870
)
(945,504
)
Additional paid-in capital
1,315,046
1,356,341
1,390,436
1,430,594
1,482,712
Retained earnings
4,584,453
4,470,335
4,357,823
4,243,759
4,136,598
Accumulated other comprehensive income
(loss)
(233,100
)
(377,311
)
(362,496
)
(330,851
)
(521,082
)
Total stockholders’ equity
4,698,853
4,482,319
4,439,732
4,397,805
4,152,899
Total liabilities and stockholders’
equity
$
8,419,771
$
8,129,643
$
7,759,865
$
7,593,933
$
7,378,682
Shares outstanding
149,776
151,148
151,509
153,179
155,582
Book value per share
$
31.37
$
29.66
$
29.30
$
28.71
$
26.69
Holding company debt-to-capital ratio
(2)
18.5
%
25.2
%
25.4
%
24.4
%
25.4
%
(1)
Reflects the consolidation of
Radian Mortgage Capital’s inaugural private label securitization,
net of our retained interest in the transaction. We determined that
we are the primary beneficiary of this securitization trust, which
is considered to be a variable interest entity (“VIE”), thereby
requiring us to consolidate the VIE.
(2)
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Direct - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
$
261,726
$
259,342
$
258,593
$
256,632
$
254,903
Single Premium Policy cancellations
1,783
2,076
2,114
2,058
3,304
Total direct - Mortgage insurance
263,509
261,418
260,707
258,690
258,207
Ceded - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
(41,894
)
(39,925
)
(38,997
)
(40,065
)
(32,363
)
Single Premium Policy cancellations
(1)
818
732
(112
)
(444
)
(873
)
Profit commission - other (2)
12,711
12,593
12,401
12,199
11,830
Total ceded premiums - Mortgage
insurance
(28,365
)
(26,600
)
(26,708
)
(28,310
)
(21,406
)
Net premiums earned - Mortgage
insurance
235,144
234,818
233,999
230,380
236,801
Net premiums earned - Title insurance
3,989
2,913
1,858
2,269
3,461
Net premiums earned
$
239,133
$
237,731
$
235,857
$
232,649
$
240,262
(1)
Includes the impact of related
profit commissions.
(2)
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Mortgage Insurance
Contract underwriting services
$
244
$
309
$
210
$
202
$
266
All Other
Real estate services
7,876
8,777
9,193
8,888
7,046
Title
3,427
3,540
2,573
2,713
2,964
Real estate technology
620
639
612
616
616
Total services revenue
$
12,167
$
13,265
$
12,588
$
12,419
$
10,892
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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Fixed-maturities
$
59,348
$
57,924
$
57,259
$
58,669
$
58,599
Equity securities
3,047
3,067
2,539
3,753
3,222
Mortgage loans held for sale
7,828
5,411
1,793
1,725
1,719
Short-term investments
9,686
8,614
8,958
5,871
5,405
Other (1)
(1,513
)
(1,250
)
(1,328
)
(1,194
)
(1,140
)
Net investment income
$
78,396
$
73,766
$
69,221
$
68,824
$
67,805
(1)
Includes investment management
expenses, as well as the net impact from our securities lending
activities.
Provision for Losses
2024
2023
(In thousands)
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Mortgage insurance
Current period defaults (1)
$
57,032
$
47,918
$
53,688
$
53,981
$
46,630
Prior period defaults (2)
(50,686
)
(49,687
)
(60,574
)
(49,373
)
(54,887
)
Total Mortgage insurance
6,346
(1,769
)
(6,886
)
4,608
(8,257
)
Title insurance
543
24
(148
)
(438
)
122
Total provision for losses
$
6,889
$
(1,745
)
$
(7,034
)
$
4,170
$
(8,135
)
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Salaries and other base employee
expenses
$
32,851
$
41,431
$
39,723
$
34,182
$
33,272
Variable and share-based incentive
compensation
17,581
23,223
17,515
20,262
19,546
Other general operating expenses (1)
39,984
31,623
30,262
45,186
29,812
Ceding commissions
(6,276
)
(5,957
)
(5,644
)
(5,327
)
(5,153
)
Title agent commissions
1,779
1,328
780
915
1,729
Total
$
85,919
$
91,648
$
82,636
$
95,218
$
79,206
(1)
Includes $10 million and $14
million in the third quarter of 2024 and the fourth quarter of
2023, respectively, of impairment of long-lived assets, consisting
of 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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Senior notes
$
20,945
$
21,156
$
22,128
$
20,335
$
20,320
Mortgage loan financing facilities
7,500
5,107
1,438
1,421
1,609
Loss on extinguishment of debt
—
—
4,275
—
—
FHLB advances
538
544
945
1,059
1,039
Revolving credit facility
408
257
260
354
310
Other
—
—
—
—
4
Total interest expense
$
29,391
$
27,064
$
29,046
$
23,169
$
23,282
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 September
30, 2024
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
233,648
$
3,989
$
—
$
237,637
(Increase) decrease in unearned
premiums
1,496
—
—
1,496
Net premiums earned
235,144
3,989
—
239,133
Services revenue
244
12,001
(78
)
12,167
Net investment income
50,236
28,160
—
78,396
Net gains (losses) on investments and
other financial instruments
—
(4,611
)
—
(4,611
)
Income (loss) on consolidated VIEs
—
465
—
465
Other income
1,948
(399
)
(27
)
1,522
Total
287,572
39,605
(105
)
327,072
Provision for losses
6,346
543
—
6,889
Policy acquisition costs
6,724
—
—
6,724
Cost of services
126
9,416
—
9,542
Other operating expenses before allocated
corporate operating expenses
16,408
23,583
(105
)
39,886
Interest expense
21,891
7,500
—
29,391
Total
51,495
41,042
(105
)
92,432
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
236,077
(1,437
)
—
234,640
Allocation of corporate operating
expenses
32,534
3,438
—
35,972
Adjusted pretax operating income (loss)
(2)
$
203,543
$
(4,875
)
$
—
$
198,668
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 2 of 4)
Three Months Ended September
30, 2023
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
235,169
$
3,461
$
—
$
238,630
(Increase) decrease in unearned
premiums
1,632
—
—
1,632
Net premiums earned
236,801
3,461
—
240,262
Services revenue
266
10,723
(97
)
10,892
Net investment income
49,953
17,852
—
67,805
Net gains (losses) on investments and
other financial instruments
—
283
—
283
Other income
1,237
9
(5
)
1,241
Total
288,257
32,328
(102
)
320,483
Provision for losses
(8,257
)
122
—
(8,135
)
Policy acquisition costs
6,920
—
—
6,920
Cost of services
172
8,714
—
8,886
Other operating expenses before allocated
corporate operating expenses
16,776
26,062
(102
)
42,736
Interest expense
21,673
1,609
—
23,282
Total
37,284
36,507
(102
)
73,689
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
250,973
(4,179
)
—
246,794
Allocation of corporate operating
expenses
31,744
4,595
—
36,339
Adjusted pretax operating income (loss)
(2)
$
219,229
$
(8,774
)
$
—
$
210,455
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Net premiums written
$
233,648
$
232,645
$
231,877
$
225,112
$
235,169
(Increase) decrease in unearned
premiums
1,496
2,173
2,122
5,268
1,632
Net premiums earned
235,144
234,818
233,999
230,380
236,801
Services revenue
244
309
210
202
266
Net investment income
50,236
50,102
49,574
51,061
49,953
Other income
1,948
754
1,240
1,302
1,237
Total
287,572
285,983
285,023
282,945
288,257
Provision for losses
6,346
(1,769
)
(6,886
)
4,608
(8,257
)
Policy acquisition costs
6,724
6,522
6,794
6,147
6,920
Cost of services
126
156
153
157
172
Other operating expenses before allocated
corporate operating expenses
16,408
17,157
17,270
15,559
16,776
Interest expense
21,891
21,957
23,333
21,748
21,673
Total
51,495
44,023
40,664
48,219
37,284
Adjusted pretax operating income before
allocated corporate operating expenses
236,077
241,960
244,359
234,726
250,973
Allocation of corporate operating
expenses
32,534
43,197
34,509
36,929
31,744
Adjusted pretax operating income (1)
$
203,543
$
198,763
$
209,850
$
197,797
$
219,229
Radian Group Inc. and
Subsidiaries
Segment Information
Exhibit E (page 4 of 4)
All Other (2)
2024
2023
(In thousands)
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Net premiums earned
$
3,989
$
2,913
$
1,858
$
2,269
$
3,461
Services revenue
12,001
13,064
12,493
12,311
10,723
Net investment income
28,160
23,664
19,647
17,763
17,852
Net gains (losses) on investments and
other financial instruments
(4,611
)
(49
)
383
356
283
Income (loss) on consolidated VIEs
465
—
—
—
—
Other income
(399
)
130
25
14
9
Total (3)
39,605
39,722
34,406
32,713
32,328
Provision for losses
543
24
(148
)
(438
)
122
Cost of services
9,416
9,379
9,174
8,793
8,714
Other operating expenses before allocated
corporate operating expenses
23,583
26,615
27,264
23,660
26,062
Interest expense
7,500
5,107
1,438
1,421
1,609
Total
41,042
41,125
37,728
33,436
36,507
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
(1,437
)
(1,403
)
(3,322
)
(723
)
(4,179
)
Allocation of corporate operating
expenses
3,438
4,677
3,711
5,340
4,595
Adjusted pretax operating income (loss)
(1)
$
(4,875
)
$
(6,080
)
$
(7,033
)
$
(6,063
)
$
(8,774
)
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Holding company (a)
$
19,113
$
17,042
$
16,536
$
15,374
$
15,601
Real estate services
8,185
9,110
9,517
9,014
7,126
Title
7,973
7,047
4,997
5,516
6,948
Mortgage conduit
3,658
5,815
2,690
2,171
2,020
Real estate technology
676
708
666
638
633
Total
$
39,605
$
39,722
$
34,406
$
32,713
$
32,328
(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
(In thousands)
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Loss ratio (1)
2.7
%
(0.8
)%
(2.9
)%
2.0
%
(3.5
)%
Expense ratio (2)
23.7
%
28.5
%
25.0
%
25.5
%
23.4
%
(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 those investments and other financial instruments
attributable to our Mortgage Conduit business; (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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Consolidated pretax income
$
195,392
$
188,123
$
198,649
$
179,817
$
200,983
Less reconciling income (expense)
items
Net gains (losses) on investments and
other financial instruments (1)
6,785
(4,438
)
107
13,091
(8,838
)
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
—
(11,173
)
(1,371
)
Impairment of other long-lived assets and
other non-operating items
(10,061
)
(2)
(122
)
(4,275
)
(3)
(13,835
)
(2)
737
Total adjusted pretax operating income
(4)
$
198,668
$
192,683
$
202,817
$
191,734
$
210,455
(1)
Excludes net gains (losses) on
investments and other financial instruments that are attributable
to our Mortgage Conduit business, which are included in adjusted
pretax operating income (loss).
(2)
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.
(3)
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.
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Adjusted pretax operating income
(loss)
Mortgage Insurance segment
$
203,543
$
198,763
$
209,850
$
197,797
$
219,229
All Other activities
(4,875
)
(6,080
)
(7,033
)
(6,063
)
(8,774
)
Total adjusted pretax operating income
$
198,668
$
192,683
$
202,817
$
191,734
$
210,455
Reconciliation of Diluted Net
Income Per Share to Adjusted Diluted Net Operating Income Per
Share
2024
2023
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Diluted net income per share
$
0.99
$
0.98
$
0.98
$
0.91
$
0.98
Less per-share impact of reconciling
income (expense) items
Net gains (losses) on investments and
other financial instruments
0.04
(0.03
)
—
0.08
(0.06
)
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
—
(0.07
)
(0.01
)
Impairment of other long-lived assets and
other non-operating items
(0.06
)
—
(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
)
0.02
(0.03
)
0.01
(0.01
)
Per-share impact of reconciling income
(expense) items
(0.04
)
(0.01
)
(0.05
)
(0.05
)
(0.06
)
Adjusted diluted net operating income per
share (1)
$
1.03
$
0.99
$
1.03
$
0.96
$
1.04
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Return on equity (1)
13.2
%
13.6
%
13.8
%
13.4
%
15.0
%
Less impact of reconciling income
(expense) items (2)
Net gains (losses) on investments and
other financial instruments
0.6
%
(0.4
)%
—
%
1.2
%
(0.9
)%
Amortization and impairment of goodwill
and other acquired intangible assets
—
%
—
%
—
%
(1.0
)%
(0.2
)%
Impairment of other long-lived assets and
other non-operating items
(0.9
)%
—
%
(0.4
)%
(1.3
)%
0.1
%
Income tax (provision) benefit on
reconciling income (expense) items (3)
—
%
0.1
%
0.1
%
0.2
%
0.2
%
Difference between statutory and effective
tax rates
(0.2
)%
0.3
%
(0.4
)%
0.1
%
(0.2
)%
Impact of reconciling income (expense)
items
(0.5
)%
—
%
(0.7
)%
(0.8
)%
(1.0
)%
Adjusted net operating return on equity
(3)
13.7
%
13.6
%
14.5
%
14.2
%
16.0
%
(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 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
NIW
$
13,493
$
13,902
$
11,534
$
10,629
$
13,922
NIW by premium type
Direct monthly and other
recurring premiums
95.9
%
96.5
%
96.7
%
96.4
%
96.0
%
Direct single premiums
4.1
%
3.5
%
3.3
%
3.6
%
4.0
%
NIW for purchases
95.6
%
98.3
%
96.9
%
98.8
%
98.7
%
NIW for refinances
4.4
%
1.7
%
3.1
%
1.2
%
1.3
%
NIW by FICO score (1)
>=740
69.5
%
69.4
%
67.3
%
66.5
%
67.3
%
680-739
24.8
%
25.5
%
27.1
%
27.9
%
27.4
%
620-679
5.7
%
5.1
%
5.6
%
5.6
%
5.3
%
<=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
%
16.5
%
15.4
%
15.4
%
16.5
%
90.01% to 95.00%
37.1
%
37.2
%
40.8
%
40.0
%
38.6
%
85.01% to 90.00%
31.5
%
32.4
%
31.3
%
31.3
%
30.2
%
85.00% and below
14.9
%
13.9
%
12.5
%
13.3
%
14.7
%
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
2024
2023
($ in millions)
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Primary insurance in force
$
274,721
$
272,827
$
270,986
$
269,979
$
269,511
Primary risk in force (“RIF”)
$
71,834
$
71,109
$
70,299
$
69,710
$
69,298
Primary RIF by premium type
Direct monthly and other
recurring premiums
89.8
%
89.5
%
89.2
%
88.9
%
88.6
%
Direct single premiums
10.2
%
10.5
%
10.8
%
11.1
%
11.4
%
Primary RIF by FICO score (1)
>=740
59.6
%
59.2
%
58.8
%
58.5
%
58.2
%
680-739
33.0
%
33.3
%
33.6
%
33.9
%
34.0
%
620-679
7.1
%
7.2
%
7.3
%
7.3
%
7.4
%
<=619
0.3
%
0.3
%
0.3
%
0.3
%
0.4
%
Total RIF
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Primary RIF by LTV (2)
95.01% and above
19.5
%
19.2
%
18.9
%
18.6
%
18.4
%
90.01% to 95.00%
48.0
%
48.1
%
48.2
%
48.2
%
48.2
%
85.01% to 90.00%
27.3
%
27.3
%
27.1
%
27.1
%
27.0
%
85.00% and below
5.2
%
5.4
%
5.8
%
6.1
%
6.4
%
Total RIF
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Persistency Rate (12 months
ended)
84.4
%
84.3
%
84.3
%
84.0
%
83.6
%
Persistency Rate (quarterly,
annualized) (3)
84.1
%
83.5
%
85.3
%
85.8
%
84.2
%
(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,
the returns on our investments in residential mortgage loans
acquired through our Mortgage Conduit business and other
investments held in our investment portfolio, as well as our
business prospects, including: changes resulting from inflationary
pressures, the interest rate environment and the risk of higher
unemployment rates; other macroeconomic stresses and uncertainties,
including potential impacts resulting from political and
geopolitical events, civil disturbances and endemics/pandemics or
extreme weather events and other natural disasters that may
adversely affect regional economic conditions and housing
markets;
- 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 carried at fair
value;
- 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/20241101415115/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
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