Radian (RDN) came out with quarterly earnings of $0.99 per share, beating the Zacks Consensus Estimate of $0.95 per share. This compares to earnings of $1.03 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.21%. A quarter ago, it was expected that this mortgage insurer would post earnings of $0.95 per share when it actually produced earnings of $1.09, delivering a surprise of 14.74%.Over the last four quarters, the company ha ...

Shares of Radian Group Inc. (RDN) have gained 7.2% in the past year, outperforming its industry’s growth of 7.1%. It, however, underperformed the Finance sector and the Zacks S&P 500 composite’s growth of 15.8% and 8.1%, respectively. The insurer has a market capitalization of $4.43 billion. The average volume of shares traded in the last three months was 1.8 million. Radian Group’s bottom line surpassed earnings estimates in each of the last four quarters, the average being 17.42%.RDN vs. Industry, Sector, ...

Group 1 - Radian Group Inc. (NYSE: RDN) has shown moderate performance over the past year, with a 10% increase in share price, but has been declining over the last six months due to concerns that results may have peaked [1] - The company has a history of making contrarian bets based on macro views and stock-specific turnaround stories, aiming for outsized returns with a favorable risk/reward profile [1]

Financial Performance - The company reported a total revenue of $1.5 billion for the fiscal year, representing a 10% increase year-over-year[7] - The company reported a net income of $250 million, a 5% increase compared to the previous year[7] - Consolidated pretax income for 2024 was $771 million, with net income of $604 million, or $3.92 net income per diluted share, compared to $767 million and $603 million, or $3.77 per diluted share in 2023[44] - Adjusted pretax operating income was $803 million in 2024, up from $786 million in 2023, resulting in adjusted diluted net operating income per share of $4.11 for 2024, compared to $3.88 for 2023[44] User Growth and Market Expansion - User data showed a growth in active users to 5 million, up from 4.5 million in the previous year, indicating an 11% increase[7] - The company provided guidance for the next fiscal year, projecting revenue growth of 12% to $1.68 billion[7] - The company plans to expand its market presence in Europe, targeting a 15% market share by the end of the next fiscal year[7] - New product launches are expected to contribute an additional $200 million in revenue, with a focus on innovative technology solutions[7] Strategic Initiatives - A strategic acquisition of a smaller competitor was completed, expected to enhance the company's service offerings and increase market penetration[7] - The company is exploring new partnerships to leverage synergies and drive growth in emerging markets[7] - Radian's business strategy focuses on expanding and diversifying revenue streams while leveraging data, analytics, and technology as a strategic differentiator[38] Research and Development - Research and development expenses increased by 20% to $300 million, reflecting the company's commitment to innovation[7] Customer Metrics - The customer retention rate improved to 85%, up from 80% last year, showcasing enhanced customer satisfaction[7] - The Persistency Rate, which impacts revenues and profitability, is influenced by policy cancellations and has a significant effect on the premiums received from Recurring Premium Policies[68] Risk Management and Compliance - Radian's eligibility under the PMIERs is crucial for insuring loans purchased by government-sponsored enterprises (GSEs)[19] - Radian Guaranty is compliant with the NAIC's amended Model Act for mortgage insurers, which may influence future statutory capital requirements[185] - The company employs a centralized enterprise risk management (ERM) function to oversee risk identification, assessment, management, and mitigation across the organization[134] Capital Management - The company has a total of $450 million in senior notes due in October 2024, which were fully redeemed in September 2024[16] - Radian Guaranty had a positive unassigned surplus of $223 million at the end of 2024, allowing it to pay ordinary dividends totaling $675 million in cash and marketable securities throughout 2024[189] - Radian Guaranty expects to distribute an additional $200 million to Radian Group before the end of February 2025[189] Market Competition - The company faces competition from the FHA and VA, as well as price competition in the private mortgage insurance industry[20] - The competitive landscape includes six active participants in the private mortgage insurance industry, with competition based on price, service, and underwriting guidelines[102] Investment Strategy - The investment portfolio had a cost basis of $6.3 billion and a carrying value of $5.9 billion as of December 31, 2024, with 97% rated investment grade[130] - The company’s investment strategy aims to optimize after-tax returns while preserving capital, with a focus on maintaining sufficient liquidity levels[127] Regulatory Environment - The PMIERs financial requirements mandate that a mortgage insurer's Available Assets must meet or exceed its Minimum Required Assets, with recent updates refining the standards for Available Assets[214] - The FHFA has adopted the ERCF, significantly increasing capital requirements and decreasing capital credit for credit risk transfer transactions[229] Corporate Responsibility - The company prioritizes corporate responsibility through charitable contributions, matching gifts, and community connection initiatives[170] Employee Metrics - As of December 31, 2024, Radian Group had approximately 1,000 employees, reflecting its commitment to human capital management[157]

Core Viewpoint - Radian (RDN) has experienced a bearish trend recently, losing 6.5% over the past two weeks, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be increasing [1][2]. Technical Analysis - The hammer chart pattern indicates a possible bottoming out with reduced selling pressure, suggesting a bullish outlook for RDN [2][4]. - A hammer pattern forms when there is a small candle body with a long lower wick, indicating that despite a downtrend, buying interest emerges to push the stock price up towards the opening price [3][4]. - The occurrence of a hammer pattern at the bottom of a downtrend signals that bears may have lost control, indicating a potential trend reversal [4]. Fundamental Analysis - Recent upward revisions in earnings estimates for RDN serve as a bullish indicator, as trends in earnings estimate revisions are closely correlated with stock price movements [6]. - The consensus EPS estimate for RDN has increased by 3% over the last 30 days, reflecting analysts' agreement on the company's potential for better earnings [7]. - RDN holds a Zacks Rank of 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which typically outperform the market [8].

Core Insights - The article discusses the current volatility in the stock market due to rising inflation, uncertainty regarding Federal Reserve rate cuts, and trade war fears, suggesting that dividend-paying stocks may be a safer investment option during this period [2][3][4][5][6][8]. Group 1: Market Conditions - Wall Street has experienced volatility in 2025, influenced by unexpected inflation surges, uncertainty over Federal Reserve rate cuts, and trade war concerns stemming from new tariffs imposed by President Trump [2][3]. - The consumer price index (CPI) rose by 0.5% month-over-month in January 2025, marking the highest increase since August 2023 and exceeding economists' expectations of a 0.3% rise [4]. - Year-over-year, the CPI increased by 3% in January 2025, the largest gain since June 2024, indicating a resurgence in inflation after a decline in 2024 [4][5]. Group 2: Federal Reserve and Rate Cuts - The Federal Reserve has indicated fewer rate cuts for 2025, maintaining its benchmark policy rate in the range of 4.25-4.5% during its January meeting [6][7]. - Experts now believe that only one 25 basis point rate cut may occur in 2025 unless inflation shows significant signs of decline [7]. Group 3: Trade War Concerns - Trade war fears are exacerbated by the imposition of tariffs, including a 10% tariff on Chinese goods and potential tariffs on Canadian and Mexican imports, which could further increase inflation [8]. - The uncertainty surrounding these tariffs is expected to keep markets volatile for an extended period [8]. Group 4: Dividend-Paying Stocks - In light of current market conditions, investing in dividend-paying stocks is recommended as they tend to provide stability and consistent income [3][9]. - Radian Group Inc. announced a dividend of $0.26 per share with a yield of 3.01%, having increased its dividend five times over the past five years [10]. - Urban Edge Properties declared a dividend of $0.19 per share with a yield of 3.28%, having increased its dividend four times in the last five years [12]. - Middlefield Banc Corp. announced a dividend of $0.21 per share with a yield of 3.10%, also increasing its dividend five times over the past five years [14].

Financial Results Q4 2024 NYSE: RDN www.radian.com Safe Harbor Statements All statements in this presentation 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," " ...

Financial Data and Key Metrics Changes - The company reported a net income of $604 million for the full year 2024, with a diluted earnings per share of $3.92, reflecting a strong financial performance [10][17] - Book value per share increased by 9% year over year to $31.33, indicating solid growth in shareholder value [10][18] - The return on equity was reported at 13.4%, showcasing effective capital utilization [10][18] Business Line Data and Key Metrics Changes - Primary mortgage insurance in force reached an all-time high of $275 billion, a 2% increase year over year, which is a key driver for future earnings [11][20] - Net premiums earned for the fourth quarter were $235 million, with a total of $939 million for the full year, marking a 3% increase from the previous year [20] - The investment portfolio stood at $6.5 billion, generating net investment income of $71 million in the fourth quarter [22][24] Market Data and Key Metrics Changes - The private mortgage insurance market has remained relatively flat at approximately $300 billion over the past two years, but a slightly larger market is expected based on industry forecasts [14] - The persistency rate of existing insurance in force was high at 83.6%, indicating stability in the portfolio [21] Company Strategy and Development Direction - The company aims to achieve targeted reductions in run-rate operating expenses, with expectations of reducing expenses by $20 to $25 million in 2025 [34] - The strategic focus remains on managing operational efficiency and returning capital to shareholders, with $376 million returned through share repurchases and dividends in 2024 [12][37] - The company is well-positioned to support affordable homeownership through its mortgage insurance business model, which is strengthened by the PMIERs Capital framework [15] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the housing market and mortgage insurance business, supported by a constrained supply of existing homes [13][14] - The company anticipates continued strong performance in credit trends, with low claim levels and high cure rates for defaults [25][28] - Management highlighted the importance of bipartisan support for the private mortgage insurance industry in promoting sustainable homeownership [15][76] Other Important Information - The company received a ratings upgrade from Fitch to an A financial strength rating for Radian Guaranty and a BBB credit rating for Radian Group, both with a stable outlook [38] - A leadership transition was announced, with Sumita Pandit set to assume the role of President and Chief Financial Officer following Derek Brummer's retirement [40][41] Q&A Session Summary Question: Outlook for credit and default rates in 2025 - Management expects typical seasonal impacts on default rates, with a potential increase but not significantly above 3% unless macroeconomic conditions change [45][47] Question: Cure activity details - Cure activity has been strong across various vintages, with recent accident vintages showing the most cures [51] Question: Assumed claim rate in the quarter - The assumed claim rate was reduced to 7.5% for all new defaults, reflecting strong cure trends [54] Question: Changes in loan characteristics entering default - No material changes in loan characteristics have been observed, with embedded equity remaining strong [56][102] Question: Capital return and leverage strategy - The company is comfortable with its current leverage and plans to continue managing capital effectively, with a focus on returning capital to shareholders [62][66] Question: GSE reform and its impact on the private MI market - Management believes the private MI industry is well-positioned to support affordable housing, with ongoing dialogue with the new administration [72][76] Question: HomeGenius restructuring and margin improvement - The company expects to see improvements in margins for the HomeGenius segment as restructuring efforts continue [80][86] Question: Radian Mortgage Capital issuance plans - The company aims to grow its Radian Mortgage Capital business, with expectations for increased securitization activity in 2025 [108][110]

Core Insights - Radian Group Inc. reported fourth-quarter 2024 adjusted operating income of $1.09 per share, exceeding the Zacks Consensus Estimate by 14.7% and reflecting a year-over-year increase of 13.5% [1][2] Financial Performance - Operating revenues decreased by 4% year over year to $316 million, primarily due to lower services revenues [3] - Net premiums earned were $238.5 million, marking a 2.5% increase year over year [3] - Net investment income rose by 3.6% year over year to $71.3 million [3] - New Insurance Written increased by 24% year over year to $13.2 billion [3] - Primary mortgage insurance in force reached an all-time high of $275.1 billion, up 2% year over year [3] Expense Management - Total expenses decreased by 14.8% year over year to $126.7 million, attributed to lower other operating expenses and interest expense [5] - The expense ratio improved by 130 basis points to 24.2 compared to the year-ago quarter [5] Segment Performance - The Mortgage segment's total revenues increased by 2.1% year over year to $288.7 million, with net premiums earned rising by 2.1% to $235.2 million [6] - Claims paid in the Mortgage segment increased by 66.7% year over year to $5 million, while the loss ratio improved to 0% from 2% in the prior year [6] - The All Other segment's revenues grew by 3.8% year over year to $33.9 million, with net premiums earned increasing by 44.8% to $3.3 million [7] Full-Year Highlights - For the full year, adjusted operating income was $4.11 per share, beating the Zacks Consensus Estimate by 2.7% and reflecting a 6% year-over-year increase [8] - Total revenues for the year reached $1.2 billion, up 4% year over year [8] - New insurance written for the year was $51.9 billion, a decline of 1.3% from 2023 [8] - The loss ratio was negative 0.2 compared to negative 4.6 in 2023, while the expense ratio improved to 25.3 from 70 basis points in 2022 [8] Financial Position - As of December 31, 2024, Radian Group had a cash balance of $38.8 million, doubling from the previous year [10] - The debt-to-capital ratio improved by 570 basis points to 18.7% [10] - Book value per share increased by 9.1% year over year to $31.33 [10] - The adjusted net operating return on equity remained stable at 14.2% year over year [10] Shareholder Returns - In the fourth quarter of 2024, Radian repurchased 2.2 million shares for $75 million, with remaining purchase authority of up to $543 million [12] - A quarterly dividend of 24.5 cents per share was paid in the fourth quarter of 2024 [12]

Financial Performance - Fourth quarter net income was $148 million, or $0.98 per diluted share, compared to $143 million, or $0.91 per diluted share in Q4 2023[1][2] - Full year net income for 2024 was $604 million, or $3.92 per diluted share, slightly up from $603 million, or $3.77 per diluted share in 2023[2][3] - Adjusted pretax operating income for Q4 2024 was $209 million, an increase from $192 million in Q4 2023[2][4] - Total revenues for the full year 2024 were $1.29 billion, compared to $1.24 billion in 2023[4] - Total revenues for Q4 2024 were $315.861 million, a decrease of 5.4% from Q3 2024's $333.857 million[22] - Net income for Q4 2024 was $148.291 million, compared to $151.892 million in Q3 2024, reflecting a decrease of 2.1%[22] - For the full year 2024, total revenues reached $1.290 billion, an increase of 4% from $1.241 billion in 2023[23] - The company reported a net income of $604.440 million for the year 2024, slightly up from $603.119 million in 2023[23] - The consolidated pretax income for 2024 was $771.29 million, slightly higher than $767.49 million in 2023, indicating a growth of 0.2%[83] Revenue and Premiums - New Insurance Written (NIW) for Q4 2024 was $13.2 billion, compared to $10.6 billion in Q4 2023[9] - Net premiums earned for Q4 2024 were $238,562 thousand, compared to $232,649 thousand in Q4 2023, reflecting an increase of 2.5% year-over-year[31] - Net premiums earned for mortgage insurance increased to $939,237,000 in 2024 from $909,363,000 in 2023, representing a growth of 3.0%[45] - The company reported a total of $1,049,014,000 in direct mortgage insurance premiums earned in 2024, compared to $1,029,941,000 in 2023, a growth of 1.8%[45] - Net premiums written for the year ended December 31, 2024, reached $942,195, an increase from $914,455 in 2023, reflecting a growth of approximately 3%[63] - The net premiums earned for the year ended December 31, 2024, were $951,283, compared to $919,578 in 2023, showing an increase of about 3.4%[61] Expenses and Liabilities - Total expenses for Q4 2024 were $126.735 million, down from $138.465 million in Q3 2024, marking a decrease of 8.5%[22] - Interest expense for Q4 2024 was $22.513 million, a decrease from $29.391 million in Q3 2024[22] - The total operating expenses for the year ended December 31, 2024, were $331,856, compared to $280,008 in 2023, representing an increase of about 18.5%[61] - Total liabilities increased to $4,040,130 thousand as of December 31, 2024, compared to $3,196,128 thousand a year earlier, marking a rise of 26.5%[28] Assets and Book Value - Total assets increased to $8,663,988 thousand as of December 31, 2024, up from $7,593,933 thousand a year earlier, representing a growth of 14.1%[28] - Book value per share grew by 9% year-over-year to $31.33, compared to $28.71 at the end of 2023[5][7] - The book value per share was $31.33 as of December 31, 2024, up from $28.71 a year earlier, representing an increase of 9.0%[28] Ratings and Market Position - Fitch Ratings upgraded Radian Guaranty's insurance financial strength rating to A from A- on January 16, 2025[11] - The company anticipates potential impacts from economic conditions, including inflation and interest rates, on its future performance[95] - Radian Group is focused on maintaining eligibility under PMIERs to insure loans purchased by GSEs, which is critical for its business operations[95] - The company faces competition from FHA and VA, as well as price competition in the private mortgage insurance industry[95] Operational Highlights - The company maintained $885 million of available liquidity as of December 31, 2024[15] - The company plans to continue focusing on market expansion and new product development in the upcoming quarters[22] - The loss ratio for Q4 2024 was 0.0%, compared to 2.7% in Q3 2024, indicating improved performance[70] - The expense ratio for Q4 2024 was 24.2%, slightly higher than 23.7% in Q3 2024[70] Shareholder Returns - Radian Group paid $675 million in ordinary dividends during 2024, including $190 million in Q4 2024[15] - The diluted net income per share for Q4 2024 was $0.98, compared to $0.91 in Q4 2023, reflecting a year-over-year increase of 7.7%[80] - Adjusted diluted net operating income per share for Q4 2024 was $1.09, up from $0.96 in Q4 2023, representing a 13.5% increase[80]