Earnings Surprise History RDN currently carries a Zacks Rank #2 (Buy). The stock has gained 22.4% compared with the industry's growth of 24.9% in the past year. Business Tailwinds RDN has been witnessing a declining pattern of claim filings. Thus, we expect paid claims to decrease further. A decline in loss and claims will strengthen the balance sheet and hence improve its financial profile. Other Stocks to Consider The Zacks Consensus Estimate for EVER's 2024 and 2025 revenues implies year-over-year growth ...

Radian Group Inc. (RDN) is poised to grow on the back of an improving mortgage insurance portfolio, declining claims, higher interest rates, a solid capital position and effective capital deployment. Northbound Estimate Revision The Zacks Consensus Estimate for 2024 earnings has moved up nearly 7.6% in the past 30 days, reflecting investors' optimism. Earnings Surprise History Radian Group has a decent earnings surprise history. It surpassed estimates in each of the last four quarters, the average being 22. ...

The board of directors of Radian Group (RDN) authorized a share buyback program to return more value to investors. With the latest authorization, the board increased the authorization by $600 million to $900 million. The program remains active through Jun 30, 2026. Generally, companies see share repurchase as a prudent use of additional cash to buy back their own shares when the stock is undervalued, apart from hiking dividends, paying special dividends and deploying funds for growth initiatives. Radian Gro ...

Core Insights - Radian (RDN) and Zurich Insurance Group Ltd. (ZURVY) are being compared for their value opportunities in the Insurance - Multi line sector [1] Valuation Metrics - RDN has a forward P/E ratio of 9.01, while ZURVY has a forward P/E of 12.55 [5] - RDN's PEG ratio is 1.80, compared to ZURVY's PEG ratio of 3.70 [5] - RDN has a P/B ratio of 1.08, whereas ZURVY has a P/B of 2.89 [6] Analyst Outlook - RDN currently holds a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to ZURVY, which has a Zacks Rank of 3 (Hold) [3][7] - RDN's Value grade is B, while ZURVY's Value grade is C, suggesting RDN is viewed as a better value investment [6][7]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _____________________________ FORM 10-Q _____________________________ (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-11356 _______________________________ Radian Group Inc. (Exact name of ...

Radian Group Inc. (NYSE:RDN) Q1 2024 Results Conference Call May 2, 2024 12:00 PM ET Company Participants John Damian - Senior Vice President of Corporate Development and Investor Relations Richard Thornberry - Chief Executive Officer Sumita Pandit - Chief Financial Officer Derek Brummer - President of Mortgage Insurance Conference Call Participants Bose George - KBW Terry Ma - Barclays Douglas Harter - UBS Soham Bhonsle - BTIG Operator Good day and thank you for standing by. Welcome to the First Quarter 20 ...

Exhibit 99.1 press release May 1, 2024 Radian Announces First Quarter 2024 Financial Results — 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 v ...

PART I [Business](index=12&type=section&id=Item%201%2E%20Business) Radian Group Inc. provides mortgage insurance and real estate services, strategically growing its businesses, diversifying revenue, and optimizing capital across the U.S. housing market - Radian operates through two main business segments: **Mortgage Insurance**, which manages and distributes U.S. mortgage credit risk, and **homegenius**, which provides title, real estate, and technology products and services[32](index=32&type=chunk)[33](index=33&type=chunk) - The company's business strategy is centered on supporting homeownership by **growing its businesses**, **diversifying revenue streams**, **optimizing capital**, and **leveraging data and technology** as a key differentiator[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) 2023 Financial and Operational Highlights | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **Consolidated Pretax Income** | $767 million | $953 million | | **Net Income** | $603 million | $743 million | | **Net Income per Diluted Share** | $3.77 | $4.35 | | **New Insurance Written (NIW)** | $52.7 billion | $68.0 billion | | **Insurance in Force (IIF)** | $270.0 billion | $261.0 billion | | **PMIERs Cushion** | $2.3 billion | $1.7 billion | | **Holding Company Liquidity** | $992 million | $903 million | | **Shares Repurchased** | 5.3 million | - | | **Quarterly Dividend Increase** | 13% (to $0.225/share) | - | [Mortgage Insurance](index=15&type=section&id=Mortgage%20Insurance) The Mortgage Insurance segment provides primary mortgage insurance for residential first-lien loans, protecting lenders from default-related losses, with performance influenced by macroeconomic factors and managed through risk-based pricing and reinsurance strategies - The company's primary product is first-lien Primary Mortgage Insurance, with **$52.7 billion of NIW in 2023**, resulting in a total **Insurance in Force (IIF) of $270.0 billion** at year-end[53](index=53&type=chunk) - Pricing has shifted from standard rate-cards to more granular, risk-based "black box" frameworks, making **price the predominant competitive factor** in the industry[63](index=63&type=chunk)[64](index=64&type=chunk) Underwriting Methods by IIF (as of Dec 31, 2023) | Underwriting Method | Percentage of IIF | | :--- | :--- | | Delegated Underwriting | 71% | | Non-Delegated Underwriting | 25% | | Contract Underwriting | 4% | - The company utilizes reinsurance as a key capital and risk management tool to lower the risk profile and financial volatility of its mortgage insurance portfolio, distributing risk through quota share and excess-of-loss arrangements[159](index=159&type=chunk) [homegenius](index=22&type=section&id=homegenius) The homegenius segment offers title, real estate, and technology services, with transactional revenues highly dependent on mortgage and real estate market activity, which has been negatively impacted by higher interest rates - The homegenius segment offers **title insurance, real estate asset management, valuation products, and a proprietary real estate technology platform**[102](index=102&type=chunk)[104](index=104&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk) - Revenues are primarily transactional and are subject to fluctuations based on overall activity in the mortgage and real estate markets. The higher interest rate environment led to a **significant decrease in new title policies**, particularly from refinance transactions[104](index=104&type=chunk)[111](index=111&type=chunk) [Competition](index=24&type=section&id=Competition) Radian faces intense competition in the mortgage insurance industry from private insurers and government agencies, with price being the primary competitive factor and the FHA's market share increasing - The company competes with **five other active private mortgage insurers**: Arch, Enact, Essent, MGIC, and NMI Holdings[118](index=118&type=chunk)[124](index=124&type=chunk) - Radian's estimated market share of new insurance written (NIW) in the private mortgage insurance market was approximately **19% for 2023**[121](index=121&type=chunk) - Competition also comes from government entities. The FHA's share of the total insured mortgage market grew to **34% in 2023** from 27% in 2022, while the VA's share was **22% in 2023**[124](index=124&type=chunk)[126](index=126&type=chunk) [Regulation](index=32&type=section&id=Regulation) Radian is subject to comprehensive state and federal regulations, including state capital requirements and the critical PMIERs set by GSEs, along with other consumer protection laws - Radian Guaranty must comply with state-level statutory capital requirements. As of December 31, 2023, its **Risk-to-capital ratio was 10.4 to 1**, compliant with the common maximum of 25 to 1[198](index=198&type=chunk) - The ability of insurance subsidiaries to pay dividends to the holding company is restricted. Radian Guaranty paid **$400 million in ordinary dividends** to Radian Group in 2023 after its unassigned surplus became positive[200](index=200&type=chunk) - Compliance with the GSEs' **Private Mortgage Insurer Eligibility Requirements (PMIERs) is crucial**. The PMIERs set extensive financial and operational standards that Radian Guaranty must meet to insure loans purchased by the GSEs[219](index=219&type=chunk) - The Dodd-Frank Act's Qualified Mortgage (QM) Rule impacts the mortgage market. The rule provides a safe harbor for lenders originating low-risk mortgages, and most loans insured by Radian are expected to meet QM standards[247](index=247&type=chunk)[248](index=248&type=chunk)[249](index=249&type=chunk) [Risk Factors](index=44&type=section&id=Item%201A%2E%20Risk%20Factors) The company faces material risks from regulatory compliance, intense market competition, macroeconomic conditions impacting its portfolio, liquidity constraints, and cybersecurity threats - A primary regulatory risk is Radian Guaranty's ability to remain eligible under the **PMIERs** to insure loans for the GSEs, as failure to do so would have a **material adverse impact** on the business[285](index=285&type=chunk)[292](index=292&type=chunk) - The mortgage insurance business faces **intense competition**, primarily on price, from other private insurers and government entities like the FHA and VA, which could negatively impact NIW and profitability[327](index=327&type=chunk)[329](index=329&type=chunk) - The credit performance of the mortgage insurance portfolio is highly sensitive to **macroeconomic conditions**, including home prices, interest rates, and unemployment levels, which are beyond the company's control[356](index=356&type=chunk) - The company's holding company liquidity could be insufficient to fund obligations, which include debt service, dividends, share repurchases, and potential capital contributions to subsidiaries to maintain PMIERs compliance[367](index=367&type=chunk)[369](index=369&type=chunk) - Cybersecurity threats pose a significant risk. A breach of the company's or its vendors' IT systems could result in **significant liability, reputational harm, and the loss of confidential information**[382](index=382&type=chunk)[388](index=388&type=chunk) [Cybersecurity](index=62&type=section&id=Item%201C%2E%20Cybersecurity) Radian maintains a comprehensive Information Security Program based on the NIST Cybersecurity Framework, with no material cybersecurity incidents reported during the period - The company's Information Security Program is managed by a **Chief Information Security Officer**, with oversight from the Board of Directors' Risk Committee[400](index=400&type=chunk)[403](index=403&type=chunk) - Radian uses the **National Institute of Standards and Technology (NIST) Cybersecurity Framework** as a guideline for managing its cybersecurity-related risks[401](index=401&type=chunk) - During the reporting period, the company was **not impacted by any cybersecurity incidents** deemed reasonably likely to have a material effect on its business strategy, results of operations, or financial condition[405](index=405&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=64&type=section&id=Item%205%2E%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Radian Group Inc.'s common stock trades on the NYSE, with the company increasing its quarterly dividend and repurchasing shares under its authorization program - The company's common stock is listed on the NYSE under the ticker symbol **RDN**[414](index=414&type=chunk) - In February 2024, the quarterly cash dividend was increased from **$0.225 to $0.245 per share**[415](index=415&type=chunk) Share Repurchase Activity (Q4 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approximate Dollar Value Remaining Under Program | | :--- | :--- | :--- | :--- | | Oct 2023 | 2,447,222 | $25.86 | $166,739,000 | | Nov 2023 | 0 | - | $166,739,000 | | Dec 2023 | 0 | - | $166,739,000 | | **Total Q4** | **2,447,222** | **$25.86** | **$166,739,000** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=65&type=section&id=Item%207%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the impact of macroeconomic conditions on its segments, highlighting growth in Mortgage Insurance IIF, a benefit from loss provision, homegenius revenue declines, and strong liquidity and capital positions - The current operating environment is characterized by **inflationary pressures and elevated interest rates**, which have reduced mortgage transaction volumes but increased persistency rates for existing mortgage insurance policies[429](index=429&type=chunk)[430](index=430&type=chunk) - Strong home price appreciation and a favorable credit environment have positively impacted default and cure trends, with an estimated **82% of defaulted loans having at least 20% embedded equity** as of year-end 2023[431](index=431&type=chunk)[432](index=432&type=chunk) Consolidated Results of Operations Summary | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Total Revenues | $1,240.6M | $1,190.7M | | Provision for Losses (Benefit) | $(42.5)M | $(338.2)M | | Pretax Income | $767.5M | $952.8M | | Net Income | $603.1M | $742.9M | | Diluted Net Income per Share | $3.77 | $4.35 | - The company uses non-GAAP measures like 'adjusted pretax operating income' to evaluate performance, which excludes items like net gains/losses on investments and goodwill impairment. For 2023, adjusted pretax operating income was **$786.4 million**[510](index=510&type=chunk)[513](index=513&type=chunk)[516](index=516&type=chunk) [Mortgage Insurance Portfolio](index=70&type=section&id=Mortgage%20Insurance%20Portfolio) The mortgage insurance portfolio grew in 2023, driven by high persistency and strong credit quality, despite lower new insurance written, with risk actively managed through reinsurance programs New Insurance Written (NIW) Summary | Metric | 2023 | 2022 | | :--- | :--- | :--- | | **NIW** | $52.7B | $68.0B | | **NIW by Loan Purpose (Purchases)** | 98.5% | 96.1% | | **NIW by FICO >=740** | 65.4% | 59.8% | | **NIW by LTV >95%** | 16.9% | 16.6% | Insurance in Force (IIF) and Risk in Force (RIF) Summary | Metric | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Primary IIF** | $270.0B | $261.0B | | **Primary RIF** | $69.7B | $66.1B | | **12-month Persistency Rate** | 84.0% | 79.6% | | **Primary RIF by FICO >=740** | 58.5% | 57.4% | - The **12-month persistency rate increased to 84.0%** at year-end 2023 from 79.6% in 2022, primarily due to decreased refinance activity in the higher mortgage interest rate environment[478](index=478&type=chunk) - Risk distribution programs, including XOL and QSR reinsurance, provided a total PMIERs benefit by reducing Minimum Required Assets by **$1.60 billion** as of December 31, 2023[498](index=498&type=chunk) [Results of Operations—Mortgage Insurance](index=81&type=section&id=Results%20of%20Operations%E2%80%94Mortgage%20Insurance) The Mortgage Insurance segment's adjusted pretax operating income decreased in 2023 due to a smaller benefit from the provision for losses and lower net premiums earned, while primary loans in default remained stable Mortgage Insurance Segment Financial Summary | (In thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Net Premiums Earned** | $909,363 | $957,213 | | **Provision for Losses (Benefit)** | $(42,136) | $(339,374) | | **Adjusted Pretax Operating Income** | $829,824 | $1,131,943 | - The provision for losses was a benefit of **$42.1 million in 2023**, a significant reduction from the $339.4 million benefit in 2022. This was driven by a smaller favorable development on prior year defaults (**$220.8 million in 2023** vs. $499.4 million in 2022)[543](index=543&type=chunk) Primary Loans in Default Rollforward | (Number of loans) | 2023 | 2022 | | :--- | :--- | :--- | | Beginning Inventory | 21,913 | 29,061 | | New Defaults | 44,007 | 37,738 | | Cures | (43,354) | (44,136) | | **Ending Inventory** | **22,021** | **21,913** | [Results of Operations—homegenius](index=87&type=section&id=Results%20of%20Operations%E2%80%94homegenius) The homegenius segment reported an adjusted pretax operating loss in 2023, with significant revenue declines due to reduced mortgage transaction volumes, partially offset by cost management efforts homegenius Segment Financial Summary | (In thousands) | 2023 | 2022 | | :--- | :--- | :--- | | **Net Premiums Earned (Title)** | $10,215 | $23,918 | | **Services Revenue** | $45,394 | $85,158 | | **Total Revenues** | $57,640 | $109,975 | | **Total Expenses** | $143,910 | $198,173 | | **Adjusted Pretax Operating Loss** | $(86,270) | $(88,198) | - The significant decline in revenues was primarily caused by a **decrease in new title policies** and lower real estate and title services volume, resulting from the macroeconomic environment and reduced mortgage originations[566](index=566&type=chunk)[567](index=567&type=chunk) - Operating expenses decreased due to cost-saving measures, including reductions in headcount, to better align the workforce with business needs. Severance expenses of **$2 million** were recorded in 2023, compared to $6 million in 2022[569](index=569&type=chunk) [Liquidity and Capital Resources](index=89&type=section&id=Liquidity%20and%20Capital%20Resources) Radian maintained strong liquidity and capital in 2023, with increased holding company liquidity and a robust PMIERs cushion, while returning capital to shareholders and managing a high-quality investment portfolio - Radian Group (holding company) had available liquidity of **$992 million** as of December 31, 2023, an increase from $903 million at year-end 2022[589](index=589&type=chunk)[590](index=590&type=chunk) - Radian Guaranty's **PMIERs cushion increased to $2.3 billion** (62% over minimum required assets) at year-end 2023, up from $1.7 billion at year-end 2022[614](index=614&type=chunk) - The investment portfolio had a fair value of **$6.3 billion** as of December 31, 2023, with **95% rated investment grade** and a weighted-average duration of **4.1 years**[583](index=583&type=chunk)[646](index=646&type=chunk)[649](index=649&type=chunk) Holding Company Capital Structure | (In thousands, except ratios) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Debt** | $1,417,781 | $1,413,504 | | **Stockholders' Equity** | $4,397,805 | $3,919,327 | | **Total Capitalization** | $5,815,586 | $5,332,831 | | **Debt-to-Capital Ratio** | 24.4% | 26.5% | [Quantitative and Qualitative Disclosures About Market Risk](index=97&type=section&id=Item%207A%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest-rate and credit-spread risks within its fixed income investment portfolio, with sensitivity analysis indicating potential fair value decreases from hypothetical market changes - The primary market risks are **interest-rate risk and credit-spread risk** for the company's fixed income securities portfolio[645](index=645&type=chunk) - The average duration of the total fixed income portfolio was **4.1 years** as of December 31, 2023[646](index=646&type=chunk) Market Risk Sensitivity Analysis (as of Dec 31, 2023) | Risk Factor | Hypothetical Change | Estimated Decrease in Fair Value | | :--- | :--- | :--- | | Interest Rates | +100 basis points | $244 million | | Credit Spreads | +100 basis points | $205 million | [Financial Statements and Supplementary Data](index=99&type=section&id=Item%208%2E%20Financial%20Statements%20and%20Supplementary%20Data) This section presents Radian's audited consolidated financial statements for 2023, including balance sheets, income statements, and cash flows, with an unqualified opinion from PricewaterhouseCoopers LLP - The independent auditor, PricewaterhouseCoopers LLP, issued an **unqualified opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2023[657](index=657&type=chunk)[658](index=658&type=chunk) - The critical audit matter identified was the **valuation of first-lien primary case reserves** for mortgage insurance policies, due to the significant management judgment involved in estimating Default to Claim Rates and Claim Severity[665](index=665&type=chunk) [Consolidated Financial Statements](index=102&type=section&id=Consolidated%20Financial%20Statements) The consolidated financial statements detail Radian's financial position with total assets of $7.6 billion and stockholders' equity of $4.4 billion, reporting $1.24 billion in revenues and $603.1 million in net income for 2023 Key Balance Sheet Items (as of Dec 31, 2023) | Account | Amount (in thousands) | | :--- | :--- | | Total Investments | $6,085,654 | | **Total Assets** | **$7,593,933** | | Total Liabilities | $3,196,128 | | **Total Stockholders' Equity** | **$4,397,805** | Key Income Statement Items (Year Ended Dec 31, 2023) | Account | Amount (in thousands) | | :--- | :--- | | Total Revenues | $1,240,588 | | Pretax Income | $767,487 | | **Net Income** | **$603,119** | [Notes to Consolidated Financial Statements](index=108&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes provide detailed disclosures on segment reporting, fair value measurements, investment portfolio, reinsurance programs, loss reserves, debt, and statutory capital for insurance subsidiaries - The company's reinsurance programs include Quota Share (QSR) and Excess-of-Loss (XOL) arrangements. The **2023 QSR agreement cedes 22.5% of NIW** from July 2023 to June 2024. The XOL program utilizes mortgage insurance-linked notes issued by Eagle Re entities[841](index=841&type=chunk)[847](index=847&type=chunk)[856](index=856&type=chunk) - The reserve for mortgage insurance losses and LAE was **$364.9 million** at year-end 2023, down from $421.0 million at year-end 2022. The decrease was driven by favorable development on prior-year defaults[897](index=897&type=chunk)[899](index=899&type=chunk) - Radian Guaranty's statutory policyholders' surplus was **$619.6 million** as of December 31, 2023. It maintained a **positive unassigned surplus of $120 million**, enabling it to pay ordinary dividends[977](index=977&type=chunk)[986](index=986&type=chunk) - The company's outstanding senior notes total **$1.42 billion** in carrying value, with maturities in 2024 ($450M), 2025 ($525M), and 2027 ($450M)[920](index=920&type=chunk)

Financial Performance - The company reported a net income of $603 million for 2023, with a return on equity of 15% and a 15% year-over-year increase in book value per share [3][8][90] - Total revenues for 2023 reached over $1.2 billion, representing a 4% increase compared to 2022 [20][85] - The investment income grew by 32% year-over-year to $258 million in 2023, benefiting from higher yields due to the interest rate environment [30][90] Business Line Performance - The primary mortgage insurance in force grew by 3% year-over-year to an all-time high of $270 billion, generating $230 million in net premiums earned in the fourth quarter and $909 million for the full year [9][85] - The persistency rate for the insurance in force remained high at 84% in the fourth quarter, up from 80% a year ago, indicating strong retention despite market challenges [11][28] - The homegenius segment generated $46 million in services revenue for 2023, with expectations of benefiting from a declining interest rate environment [31][88] Market Dynamics - The company anticipates the private mortgage insurance market to be between $300 billion and $350 billion in 2024, driven by expected increases in purchase volume and declining mortgage rates [17][87] - The overall housing market is projected to see a 15% to 20% increase in purchase originations in 2024, supported by lower mortgage rates [87] Strategic Direction and Industry Competition - The company received a ratings upgrade from S&P, now rated investment grade by all three primary rating agencies, enhancing its financial flexibility [4] - The strategic focus remains on capital optimization, with $400 million in ordinary dividends paid from Radian Guaranty to Radian Group in 2023, and plans to increase dividends in 2024 [37][38][44] - The company continues to leverage proprietary analytics to capture economic value in the market, indicating a proactive approach to competition [16] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the positive credit performance of the mortgage insurance portfolio, citing significant equity in homes as a mitigating factor against loss [5][6] - The company remains optimistic about the mortgage insurance business outlook, despite challenges for first-time homebuyers due to low inventory and strong market demand [6][42] - Management highlighted the importance of maintaining operational excellence and cost management, achieving a 17% reduction in operating expenses in 2023 [24][25] Other Important Information - The company repurchased 5.3 million shares at a total cost of $133 million in 2023, with $157 million remaining under the current share repurchase authorization [40][44] - The company has a strong liquidity position with approximately $1 billion in available holding company liquidity and a $275 million undrawn credit facility [39] Q&A Session Summary Question: Expectations on new notices and defaults - Management indicated that the development of the book is favorable, with a low default rate of around 2.2% and significant embedded equity in new defaults [59][60] Question: Increase in ceded premiums - The increase in ceded premiums is attributed to risk distribution deals, with no one-time costs impacting the run rate [50][65] Question: Future capital distribution and debt management - The company plans to balance capital returns to shareholders with potential debt reduction, supported by strong liquidity and capital position [61][64] Question: Regulatory developments and industry impact - Management noted a quiet period regarding regulatory changes impacting mortgage insurance, with ongoing evaluation of opportunities arising from Basel III changes [104][130]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for Radian Group Inc. as of September 30, 2023, and for the three and nine-month periods then ended [Condensed Consolidated Balance Sheets](index=11&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of September 30, 2023, Radian Group's total assets increased to $7.38 billion from $7.06 billion at year-end 2022, primarily driven by growth in investments and mortgage loans held for sale Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | September 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$7,378,682** | **$7,063,729** | | Total Investments | $5,885,652 | $5,693,491 | | Mortgage loans held for sale | $138,289 | $3,549 | | **Total Liabilities** | **$3,225,783** | **$3,144,402** | | Senior notes | $1,416,687 | $1,413,504 | | **Total Stockholders' Equity** | **$4,152,899** | **$3,919,327** | [Condensed Consolidated Statements of Operations](index=13&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the third quarter of 2023, Radian reported net income of $156.6 million, a decrease from $198.3 million in Q3 2022, primarily due to a smaller benefit from the provision for losses Consolidated Statements of Operations Highlights (Unaudited) | (In thousands, except per-share amounts) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$313,533** | **$296,189** | **$914,566** | **$876,002** | | Net Premiums Earned | $240,262 | $240,222 | $686,929 | $748,304 | | Net Investment Income | $68,825 | $51,414 | $192,228 | $136,567 | | **Provision for Losses** | **($8,135)** | **($96,964)** | **($46,696)** | **($294,640)** | | **Net Income** | **$156,582** | **$198,280** | **$460,426** | **$580,604** | | **Diluted EPS** | **$0.98** | **$1.20** | **$2.86** | **$3.34** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes provide detailed explanations of the company's business segments, accounting policies, and financial statement line items, including segment performance and investment portfolio composition - The company operates through two reportable business segments: Mortgage (private mortgage insurance and credit risk management) and homegenius (title, real estate, and technology services) - Total direct primary mortgage insurance in force (IIF) was **$269.5 billion** as of September 30, 2023, up from **$261.0 billion** at December 31, 2022[31](index=31&type=chunk) - The company uses adjusted pretax operating income as its primary measure to evaluate segment performance, which excludes items like certain investment gains/losses and amortization of acquired intangibles[53](index=53&type=chunk)[54](index=54&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=43&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition and results of operations, detailing the impact of the macroeconomic environment on its segments [Overview](index=43&type=section&id=Overview) Management discusses the current operating environment, characterized by high inflation and interest rates, which has negatively impacted the housing market but benefited persistency rates and net investment income - The high interest rate environment has reduced housing market activity and refinance demand, leading to a **24%** decrease in NIW for the first nine months of 2023 compared to 2022[195](index=195&type=chunk)[196](index=196&type=chunk) - Higher interest rates have increased policy persistency, contributing to growth in Insurance in Force (IIF) and favorably impacting future premium earnings[196](index=196&type=chunk) - The homegenius segment has experienced ongoing losses due to declining revenues caused by the sharp drop in mortgage purchase and refinance volumes[199](index=199&type=chunk) - In October 2023, Radian entered into two new excess-of-loss (XOL) reinsurance agreements, providing an additional **$599 million** in combined coverage (**$353 million** with Eagle Re 2023-1 Ltd. and **$246 million** with a panel of reinsurers)[208](index=208&type=chunk)[209](index=209&type=chunk) [Mortgage Insurance Portfolio](index=46&type=section&id=Mortgage%20Insurance%20Portfolio) New Insurance Written (NIW) declined due to higher mortgage rates, but Insurance-in-Force (IIF) grew to $269.5 billion, driven by a significant increase in the 12-month persistency rate to 83.6% New Insurance Written (NIW) | ($ in millions) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | NIW | $13,922 | $17,616 | $42,076 | $55,134 | Insurance in Force (IIF) and Persistency | ($ in millions, except rates) | September 30, 2023 | December 31, 2022 | September 30, 2022 | | :--- | :--- | :--- | :--- | | Primary IIF | $269,511 | $260,994 | $259,121 | | Primary RIF | $69,298 | $66,094 | $65,288 | | Persistency Rate (12 months) | 83.6% | 79.6% | 75.9% | - As of September 30, 2023, **72%** of the company's primary Risk in Force (RIF) is subject to some form of risk distribution[198](index=198&type=chunk) - This figure increases to **79%** when including the October 2023 transactions[198](index=198&type=chunk) [Results of Operations—Consolidated](index=50&type=section&id=Results%20of%20Operations%E2%80%94Consolidated) Consolidated net income for Q3 2023 was $156.6 million, down from $198.3 million in Q3 2022, primarily due to a smaller benefit from the provision for losses Reconciliation to Adjusted Pretax Operating Income | (In thousands) | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2023 | | :--- | :--- | :--- | | **Consolidated pretax income (GAAP)** | **$200,983** | **$587,670** | | Less: Net gains on investments | ($8,838) | ($3,664) | | Less: Amortization of intangibles | ($1,371) | ($4,112) | | Less: Other non-operating items | $737 | $753 | | **Total adjusted pretax operating income (Non-GAAP)** | **$210,455** | **$594,693** | - The provision for losses decreased from a **$97.0 million** benefit in Q3 2022 to an **$8.1 million** benefit in Q3 2023, primarily due to a reduction in favorable development on prior period defaults[235](index=235&type=chunk)[240](index=240&type=chunk) - Net investment income increased to **$68.8 million** in Q3 2023 from **$51.4 million** in Q3 2022, driven by higher market interest rates[235](index=235&type=chunk)[238](index=238&type=chunk) [Results of Operations—Mortgage](index=56&type=section&id=Results%20of%20Operations%E2%80%94Mortgage) The Mortgage segment reported adjusted pretax operating income of $218.6 million for Q3 2023, down from $295.7 million in Q3 2022, mainly due to a smaller benefit from the provision for losses Mortgage Segment - Summary Results of Operations | (In thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Total Revenues** | **$288,649** | **$281,033** | | Net Premiums Earned | $236,801 | $235,197 | | **Total Expenses** | **$70,048** | **($14,642)** | | Provision for Losses | ($8,257) | ($97,493) | | **Adjusted Pretax Operating Income** | **$218,601** | **$295,675** | - Favorable reserve development on prior period defaults was **$54.9 million** in Q3 2023, significantly lower than the **$136.7 million** benefit in Q3 2022, driving the change in the provision for losses[278](index=278&type=chunk) - New primary defaults increased by **16%** in Q3 2023 compared to Q3 2022, rising from **9,601** to **11,156**, consistent with portfolio seasoning and growth[280](index=280&type=chunk)[284](index=284&type=chunk) [Results of Operations—homegenius](index=63&type=section&id=Results%20of%20Operations%E2%80%94homegenius) The homegenius segment reported an adjusted pretax operating loss of ($20.9) million in Q3 2023, an improvement from a ($25.5) million loss in Q3 2022, driven by lower operating expenses despite declining revenues homegenius Segment - Summary Results of Operations | (In thousands) | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | **Total Revenues** | **$14,707** | **$25,083** | | Services Revenue | $10,723 | $19,812 | | **Total Expenses** | **$35,639** | **$50,619** | | Cost of Services | $8,714 | $18,344 | | Other Operating Expenses | $26,803 | $31,840 | | **Adjusted Pretax Operating Loss** | **($20,932)** | **($25,536)** | - The decrease in the operating loss was primarily due to a reduction in total expenses to **$35.6 million** from **$50.6 million**, reflecting cost management actions[302](index=302&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) [Results of Operations—All Other](index=65&type=section&id=Results%20of%20Operations%E2%80%94All%20Other) The 'All Other' category reported adjusted pretax operating income of $12.8 million in Q3 2023, up from $2.6 million in Q3 2022, primarily due to higher net investment income at the holding company - Adjusted pretax operating income for All Other increased to **$12.8 million** in Q3 2023 from **$2.6 million** in Q3 2022[312](index=312&type=chunk) - The improvement was mainly due to a rise in net investment income to **$18.0 million** from **$6.3 million**, reflecting higher interest rates and increased investment balances at the holding company[312](index=312&type=chunk)[313](index=313&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) Radian Group maintained a strong liquidity position with $1.0 billion in available cash and liquid investments, and Radian Guaranty remained compliant with all regulatory capital requirements - Radian Group (holding company) had **$1.0 billion** in available, unrestricted cash and liquid investments as of September 30, 2023[321](index=321&type=chunk) - Radian Guaranty's Available Assets under PMIERs were **$5.8 billion**, resulting in a PMIERs Cushion of **$1.7 billion**, or **41%** over its Minimum Required Assets[345](index=345&type=chunk) - Radian Guaranty paid **$300 million** in ordinary dividends (**$100 million** per quarter) to Radian Group in the first nine months of 2023[322](index=322&type=chunk)[349](index=349&type=chunk) - The company repurchased **2.8 million shares** for **$70 million** and paid **$111 million** in dividends to common stockholders during the first nine months of 2023[330](index=330&type=chunk)[331](index=331&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=71&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company states that its market risk exposures, primarily related to interest rate and credit spread risk in its investment portfolio, have not materially changed from those disclosed in its 2022 Form 10-K - The company's market risk exposures as of September 30, 2023, have not materially changed from those identified in the 2022 Form 10-K[359](index=359&type=chunk) [Item 4. Controls and Procedures](index=71&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures and concluded they were effective as of September 30, 2023, with no material changes in internal control over financial reporting - The CEO and CFO concluded that as of September 30, 2023, the company's disclosure controls and procedures were effective[361](index=361&type=chunk) - No changes in internal control over financial reporting occurred during Q3 2023 that materially affected, or are reasonably likely to materially affect, internal controls[362](index=362&type=chunk) PART II—OTHER INFORMATION [Item 1. Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company is routinely involved in various legal actions and regulatory proceedings in the ordinary course of business, with management not expecting a material adverse effect on financial condition or results of operations - Management does not expect currently pending or threatened legal actions to have a material adverse effect on the company's consolidated financial condition or results of operations[161](index=161&type=chunk)[363](index=363&type=chunk) [Item 1A. Risk Factors](index=71&type=page&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to its risk factors from those previously disclosed in its 2022 Form 10-K - There have been no material changes to the risk factors from those disclosed in the 2022 Form 10-K[364](index=364&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=72&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) During Q3 2023, the company did not sell any unregistered equity securities, but purchased 1.9 million shares for approximately $50 million under its repurchase program, with $230 million remaining available Issuer Purchases of Equity Securities (Q3 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program | | :--- | :--- | :--- | :--- | | Jul 2023 | 3,630 | $24.88 | $280,000,000 | | Aug 2023 | 1,882,874 | $26.71 | $230,000,000 | | Sep 2023 | 4,142 | $27.23 | $230,000,000 | | **Total Q3** | **1,890,646** | - | **$230,000,000** | - In January 2023, the board approved a **$300 million** share repurchase program, which expires in January 2025[368](index=368&type=chunk) - During Q3 2023, **1.9 million shares** were purchased under this program[368](index=368&type=chunk) [Item 5. Other Information](index=72&type=section&id=Item%205.%20Other%20Information) The company reports that none of its directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the third quarter of 2023 - No directors or officers adopted or terminated a Rule 10b5-1 trading plan during the reporting period[370](index=370&type=chunk) [Item 6. Exhibits](index=73&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including amendments to master repurchase agreements, an amended employment agreement for the CEO, and required certifications