Financial Data and Key Metrics Changes - The company reported GAAP revenues of $314 million for Q3 2023, an increase from $290 million in Q2 2023 [26][33] - Net income for the quarter was $157 million, or $0.98 per diluted share, compared to $0.91 per diluted share in the previous quarter [26][85] - Annualized return on equity was 15%, with adjusted net operating return on equity at 16% [26][32] - Book value per share increased by 12% year-over-year to $26.69 [26][32] Business Line Data and Key Metrics Changes - The primary insurance in force grew by 4% year-over-year to $270 billion, generating $237 million in net premiums earned for the mortgage segment in Q3 [14][28] - New insurance written for the quarter was $13.9 billion, down from $16.9 billion in Q2 [28][34] - The persistency rate for insurance in force remained high at 84%, up from 76% a year ago [34] Market Data and Key Metrics Changes - The total mortgage originations for 2023 are projected to be approximately $1.6 trillion, with the private mortgage insurance market expected to be around $300 billion [10] - The investment income grew by 34% year-over-year to $69 million, benefiting from higher yields in a rising interest rate environment [16] Company Strategy and Development Direction - The company continues to focus on capital optimization, balancing organic growth with capital returns to stockholders [12][29] - The mortgage insurance business is expected to benefit from increasing demand, home prices, and purchase volume, maintaining a generally positive outlook [11] - The company is strategically managing capital and liquidity, with a focus on maintaining strong holding company liquidity of $1.3 billion [29][40] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing challenges in the mortgage and real estate markets due to higher interest rates and limited inventory but noted positive credit performance in the mortgage insurance portfolio [8][9] - The company expects the persistency rate to remain strong due to a significant portion of its insurance in force having mortgage rates of 6% or less [35] - Management expressed confidence in the company's ability to navigate the current economic environment while positioning for future opportunities [11][59] Other Important Information - The company paid a $35 million dividend to stockholders, reflecting the highest yielding dividend in the industry [27] - Radian Guaranty paid a $100 million ordinary dividend to the holding company in Q3, with expectations for additional dividends in Q4 [19] Q&A Session Summary Question: What is the outlook for expense reductions? - Management reiterated guidance for full-year expenses between $380 million and $400 million, expecting to be at the top end of that range [63] Question: How is the pricing environment in the mortgage insurance market? - The pricing environment remains rational and disciplined, with normal fluctuations observed throughout the quarter [75] Question: Are lenders maintaining discipline in underwriting? - Management noted that lenders remain disciplined in underwriting, despite some market pressures [67][69]

PART I—FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=10&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Radian Group Inc.'s unaudited condensed consolidated financial statements and accompanying notes [Condensed Consolidated Financial Statements](index=11&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides a snapshot of the company's financial health, detailing assets, liabilities, equity, and net income Condensed Consolidated Balance Sheet Highlights (As of June 30, 2023) | Metric | Amount (in thousands) | | :--- | :--- | | Total Investments | $5,895,871 | | Total Assets | $7,306,543 | | Total Liabilities | $3,135,707 | | Total Stockholders' Equity | $4,170,836 | Condensed Consolidated Statement of Operations Highlights | Metric (in thousands, except per-share) | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | $290,413 | $286,833 | $601,033 | $579,813 | | Pretax Income | $182,676 | $259,880 | $386,687 | $494,020 | | Net Income | $146,087 | $201,193 | $303,844 | $382,324 | | Diluted EPS | $0.91 | $1.15 | $1.89 | $2.16 | - Net cash provided by operating activities for the six months ended June 30, 2023 was **$189.2 million**, compared to **$176.9 million** for the same period in 2022[27](index=27&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=17&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes provide detailed explanations of financial statements, covering segments, accounting, investments, reinsurance, and capital - The company operates through two reportable business segments: **Mortgage** (private mortgage insurance and credit risk management) and **homegenius** (title, real estate, and technology services)[28](index=28&type=chunk)[29](index=29&type=chunk)[33](index=33&type=chunk) - The Mortgage segment's adjusted pretax operating income was **$197.8 million** in Q2 2023, down from **$316.5 million** in Q2 2022. The homegenius segment reported an adjusted pretax operating loss of **$24.4 million** in Q2 2023, compared to a loss of **$17.7 million** in Q2 2022[57](index=57&type=chunk) - In Q2 2023, the company incurred **$21 million** in additional ceded premiums related to tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to terminate portions of their reinsurance agreements[96](index=96&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - As of June 30, 2023, Radian Guaranty was in compliance with all PMIERs financial requirements, with a PMIERs cushion of **$1.7 billion**, or **41%** over its Minimum Required Assets[179](index=179&type=chunk)[332](index=332&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition and operating results, highlighting economic impacts on key metrics and capital - The current economic environment of high inflation and interest rates has negatively impacted **NIW** and **homegenius revenues**, but positively impacted **persistency rates** and **net investment income**[191](index=191&type=chunk) - New Insurance Written (NIW) for the first half of 2023 was **$28.2 billion**, a **25% decrease** from the first half of 2022, due to reduced housing market activity[192](index=192&type=chunk)[204](index=204&type=chunk) - As of June 30, 2023, **71%** of the company's primary risk in force (RIF) is subject to some form of risk distribution, enhancing financial strength and flexibility[196](index=196&type=chunk) - Radian Group (holding company) had available liquidity of **$1.0 billion** in unrestricted cash and liquid investments as of June 30, 2023[309](index=309&type=chunk) [Mortgage Insurance Portfolio](index=43&type=section&id=Mortgage%20Insurance%20Portfolio) This section details the mortgage insurance portfolio, including NIW, IIF, persistency rates, and risk distribution strategies New Insurance Written (NIW) | Period | NIW ($ in millions) | YoY Change | | :--- | :--- | :--- | | Q2 2023 | $16,946 | -11% | | H1 2023 | $28,191 | -25% | Insurance in Force (IIF) and Persistency | Metric | June 30, 2023 | Dec 31, 2022 | June 30, 2022 | | :--- | :--- | :--- | :--- | | Primary IIF ($ in billions) | $266.9 | $261.0 | $254.2 | | 12-month Persistency Rate | 82.8% | 79.6% | 71.7% | - Risk distribution programs reduced the company's PMIERs Minimum Required Assets by **$1.08 billion** as of June 30, 2023, representing **21.1%** of the gross requirement[224](index=224&type=chunk) [Results of Operations—Consolidated](index=47&type=section&id=Results%20of%20Operations%E2%80%94Consolidated) Consolidated net income decreased in Q2 2023 due to lower premiums and services revenue, partially offset by investment income Consolidated Results of Operations (Q2 2023 vs Q2 2022) | Metric (in thousands) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Premiums Earned | $213,429 | $253,892 | | Services Revenue | $11,797 | $27,281 | | Net Investment Income | $64,182 | $46,957 | | Provision for Losses | $(21,632) | $(113,922) | | Net Income | $146,087 | $201,193 | - The decrease in net premiums earned was primarily due to **higher ceded premiums** related to **reinsurance tender offers** in the mortgage segment[231](index=231&type=chunk) - The provision for losses provided a **smaller benefit** compared to the prior year, driven by a **reduction in favorable reserve development** on prior period defaults[236](index=236&type=chunk) [Results of Operations—Mortgage](index=52&type=section&id=Results%20of%20Operations%E2%80%94Mortgage) The Mortgage segment's adjusted pretax operating income declined due to lower net premiums earned and a reduced loss provision Mortgage Segment Results (Q2 2023 vs Q2 2022) | Metric (in thousands) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Net Premiums Earned | $210,732 | $246,909 | | Provision for Losses | $(21,623) | $(114,179) | | Adjusted Pretax Operating Income | $197,750 | $316,520 | - Ceded premiums earned increased significantly, driven by a **$21 million** cost related to tender offers for mortgage insurance-linked notes under the Excess-of-Loss Program[257](index=257&type=chunk)[260](index=260&type=chunk)[265](index=265&type=chunk) - The number of primary loans in default at quarter-end was **19,880**, down from **21,913** at the end of 2022, with new defaults in H1 2023 totaling **20,399**[277](index=277&type=chunk)[278](index=278&type=chunk) [Results of Operations—homegenius](index=58&type=section&id=Results%20of%20Operations%E2%80%94homegenius) The homegenius segment's adjusted pretax operating loss widened due to sharp revenue declines from reduced title and real estate services homegenius Segment Results (Q2 2023 vs Q2 2022) | Metric (in thousands) | Q2 2023 | Q2 2022 | | :--- | :--- | :--- | | Total Revenues | $14,806 | $32,343 | | Cost of Services | $10,114 | $20,800 | | Adjusted Pretax Operating Loss | $(24,421) | $(17,690) | - The decline in revenue was primarily due to a **decrease in new title policies** and **lower real estate services revenue**, reflecting the **sharp drop in industry-wide refinance volumes**[291](index=291&type=chunk)[293](index=293&type=chunk)[294](index=294&type=chunk) - The segment incurred **$2.0 million** in severance expenses during Q2 2023 due to further headcount reductions in response to the challenging macroeconomic environment[297](index=297&type=chunk) [Liquidity and Capital Resources](index=61&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's strong liquidity, capital resources, debt-to-capital ratio, and book value per share - The holding company, Radian Group, had **$1.0 billion** in available liquidity as of June 30, 2023, and total liquidity of **$1.3 billion** including its undrawn credit facility[309](index=309&type=chunk) - Radian Guaranty paid two ordinary dividends of **$100 million** each to Radian Group in March and May 2023[310](index=310&type=chunk)[335](index=335&type=chunk) Capitalization and Key Ratios | Metric | June 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Total Debt (in thousands) | $1,415,610 | $1,413,504 | | Stockholders' Equity (in thousands) | $4,170,836 | $3,919,327 | | Debt-to-Capital Ratio | 25.3% | 26.5% | | Book Value Per Share | $26.51 | $24.95 | - Radian Guaranty's PMIERs cushion was **$1.7 billion** (**41%** over minimum required) as of June 30, 2023[332](index=332&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures, primarily interest rate and credit spread risk, remain materially unchanged from 2022 - The company's primary market risks are changes in **interest rates** and **credit spreads**, which affect the fair value of its **investment portfolio**[344](index=344&type=chunk) - There were **no material changes** to the company's market risk exposures at June 30, 2023, compared to those identified in the 2022 Form 10-K[345](index=345&type=chunk) [Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2023, with no material changes to internal controls - The CEO and CFO concluded that as of June 30, 2023, the company's disclosure controls and procedures were **effective**[347](index=347&type=chunk) - **No changes** occurred during Q2 2023 that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[348](index=348&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine legal and regulatory matters, with no expected material adverse effect on financial condition - The company is **routinely involved** in legal actions and regulatory matters arising in the ordinary course of business[349](index=349&type=chunk) - Management believes the outcome of currently pending legal proceedings will **not have a material adverse effect** on the company's financial condition[158](index=158&type=chunk) [Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the filing of the 2022 Form 10-K - **No material changes** to risk factors have occurred since the filing of the 2022 Form 10-K[350](index=350&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=67&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased shares in Q2 2023, with $280 million remaining available under the repurchase program Share Repurchase Activity (Q2 2023) | Month | Total Shares Purchased | Avg. Price Paid | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | April 2023 | 239,496 | $21.93 | 228,586 | | May 2023 | 525,773 | $24.95 | — | | June 2023 | 2,216 | $25.96 | — | | **Total** | **767,485** | | **228,586** | - The total number of shares purchased includes **538,899 shares** tendered by employees for tax withholding on vested restricted stock awards[354](index=354&type=chunk) - As of June 30, 2023, **$280 million** remained available under the share repurchase program authorized in January 2023, which expires in January 2025[355](index=355&type=chunk) [Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter - **No directors or officers** adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the reporting period[357](index=357&type=chunk) [Exhibits](index=68&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including compensation agreements, credit amendments, and certifications - Exhibits filed include **executive officer restricted stock unit grant agreements**, **amendments to credit and master repurchase agreements**, and **CEO/CFO certifications**[360](index=360&type=chunk)

Radian Group Inc. (NYSE:RDN) Q2 2023 Earnings Call Transcript August 3, 2023 12:00 PM ET Company Participants John Damian - Senior Vice President of Corporate Development and Investor Relations Rick Thornberry - CEO and Director Sumita Pandit - CFO and Senior EVP Derek Brummer - President of Mortgage Conference Call Participants Bose George - KBW Doug Harter - Credit Suisse Mihir Bhatia - Bank of America Operator Good day, and thank you for standing by. Welcome to Radian Group's Second Quarter 2023 Earnings ...

PART I—FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=9&type=section&id=Item%201%20Financial%20Statements%20(Unaudited)) Radian Group's unaudited condensed consolidated financial statements for Q1 2023 detail financial position, performance, and cash flows, supported by explanatory notes [Condensed Consolidated Financial Statements](index=10&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Radian Group's Q1 2023 net income was **$157.8 million**, with **total assets at $7.20 billion** and **stockholders' equity at $4.11 billion**, supported by operating cash flow Key Financial Highlights (Q1 2023 vs Q1 2022) | Metric | Q1 2023 (Millions) | Q1 2022 (Millions) | | :--- | :--- | :--- | | **Total Revenues** | $310.62 | $292.98 | | **Net Income** | $157.76 | $181.13 | | **Diluted EPS** | $0.98 | $1.01 | Condensed Balance Sheet Data (As of March 31, 2023) | Account | March 31, 2023 (Billions) | December 31, 2022 (Billions) | | :--- | :--- | :--- | | **Total Assets** | $7.20 | $7.06 | | **Total Liabilities** | $3.10 | $3.14 | | **Total Stockholders' Equity** | $4.11 | $3.92 | - **Net cash provided by operating activities** was **$116.8 million** for Q1 2023, nearly identical to **$116.7 million** in Q1 2022[26](index=26&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=15&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) These notes detail the company's business segments, accounting policies, segment performance, reinsurance, loss reserves, and statutory capital, emphasizing risk distribution and PMIERs compliance - The company operates two segments: **Mortgage**, providing private mortgage insurance, and **homegenius**, offering title, real estate, and technology services[27](index=27&type=chunk)[28](index=28&type=chunk)[32](index=32&type=chunk) Adjusted Pretax Operating Income by Segment (Q1 2023 vs Q1 2022) | Segment | Q1 2023 (Millions) | Q1 2022 (Millions) | | :--- | :--- | :--- | | **Mortgage** | $214.44 | $277.84 | | **homegenius** | ($23.04) | ($13.51) | | **All Other** | $8.47 | $0.61 | - Radian Guaranty uses reinsurance, including the **Quota Share Reinsurance (QSR) Program** and **Excess-of-Loss Program**, to manage capital and risk[94](index=94&type=chunk) - As of March 31, 2023, Radian Guaranty complied with **Statutory Risk-Based Capital (RBC) requirements**, maintaining a **Risk-to-capital ratio of 10.6:1**[170](index=170&type=chunk) - In March 2023, Radian Guaranty paid a **$100 million ordinary dividend** to Radian Group, supported by its positive unassigned surplus[173](index=173&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=38&type=section&id=Item%202%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition and results, focusing on macroeconomic impacts, **NIW** decline, **IIF** growth, segment performance, liquidity, and a strong capital position with a **PMIERs cushion** [Overview](index=38&type=section&id=Overview) Macroeconomic conditions led to a **40% decrease in NIW** but increased **IIF** persistency, impacting **homegenius** negatively, though the company maintains a strong capital position and risk distribution - High inflation and rising interest rates negatively impacted the U.S. housing market, reducing refinance and purchase activity[183](index=183&type=chunk) - **New Insurance Written (NIW)** was **$11.3 billion** in Q1 2023, a **40% decrease** from Q1 2022, due to reduced housing market activity[184](index=184&type=chunk) - Higher interest rates increased **Persistency Rates**, contributing to **Insurance in Force (IIF)** growth[184](index=184&type=chunk) - As of March 31, 2023, **71%** of primary **Risk in Force (RIF)** is subject to risk distribution, mitigating credit risk and financial volatility[188](index=188&type=chunk) [Mortgage Insurance Portfolio](index=40&type=section&id=Mortgage%20Insurance%20Portfolio) The mortgage insurance portfolio grew to **$261.5 billion IIF**, despite a **40% decrease in NIW** to **$11.3 billion**, driven by an **81.6% persistency rate** and **$1.11 billion PMIERs reduction** Insurance in Force (IIF) by Vintage | Vintage | March 31, 2023 (Billions) | % of Total | | :--- | :--- | :--- | | 2023 | $11.2 | 4.3% | | 2022 | $64.1 | 24.5% | | 2021 | $75.0 | 28.7% | | 2020 | $54.2 | 20.7% | | Prior | $48.4 | 18.5% | | **Total** | **$261.5** | **100.0%** | Key Portfolio Metrics | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **New Insurance Written (NIW)** | $11.3 billion | $18.7 billion | | **12-Month Persistency Rate** | 81.6% | 68.0% | | **Primary Insurance in Force (IIF)** | $261.5 billion | $249.0 billion | - Risk distribution programs reduced Radian Guaranty's **Minimum Required Assets under PMIERs** by **$1.11 billion** as of March 31, 2023[213](index=213&type=chunk) [Results of Operations—Consolidated](index=43&type=section&id=Results%20of%20Operations%E2%80%94Consolidated) Consolidated **net income for Q1 2023 was $157.8 million**, a decrease from **$181.1 million** in Q1 2022, primarily due to a smaller provision for losses benefit and lower services revenue Consolidated Results of Operations Summary | Metric (Millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Total Revenues** | $310.62 | $292.98 | | **Provision for Losses** | ($16.93) | ($83.75) | | **Total Expenses** | $106.61 | $58.84 | | **Pretax Income** | $204.01 | $234.14 | | **Net Income** | $157.76 | $181.13 | - The effective tax rate was **22.7%** for Q1 2023, slightly up from **22.6%** in Q1 2022, due to state income taxes and deduction limitations[227](index=227&type=chunk) Reconciliation to Adjusted Pretax Operating Income (Non-GAAP) | Metric (Millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Consolidated Pretax Income** | $204.01 | $234.14 | | Less: Net gains on investments | $5.51 | ($29.46) | | Less: Amortization of intangibles | ($1.37) | ($0.85) | | **Adjusted Pretax Operating Income** | **$199.86** | **$264.95** | [Results of Operations—Mortgage](index=48&type=section&id=Results%20of%20Operations%E2%80%94Mortgage) The Mortgage segment's adjusted pretax operating income decreased to **$214.4 million** in Q1 2023 from **$277.8 million** in Q1 2022, driven by lower net premiums and a smaller provision for losses benefit Mortgage Segment Results Summary | Metric (Millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Net Premiums Earned** | $231.45 | $245.17 | | **Total Revenues** | $279.87 | $284.45 | | **Provision for Losses** | ($16.86) | ($84.19) | | **Adjusted Pretax Operating Income** | $214.44 | $277.84 | - The provision for losses included a **$67.4 million benefit** from favorable development on prior period defaults, down from **$124.9 million** in Q1 2022[261](index=261&type=chunk) - The number of primary loans in default decreased to **20,748** at the end of Q1 2023 from **25,510** a year earlier[266](index=266&type=chunk) [Results of Operations—homegenius](index=54&type=section&id=Results%20of%20Operations%E2%80%94homegenius) The **homegenius** segment reported an adjusted pretax operating loss of **$23.0 million** in Q1 2023, an increase from **$13.5 million** in Q1 2022, driven by a sharp decline in total revenues to **$13.0 million** homegenius Segment Results Summary | Metric (Millions) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | **Net Premiums Earned** | $1.79 | $9.02 | | **Services Revenue** | $10.74 | $24.88 | | **Total Revenues** | $12.96 | $33.91 | | **Adjusted Pretax Operating Loss** | ($23.04) | ($13.51) | - Revenue decrease was primarily due to declining new title policies and lower real estate and title services, reflecting the mortgage market slowdown[281](index=281&type=chunk)[282](index=282&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) Radian Group maintained strong liquidity with **$956 million** cash and **$1.2 billion** total liquidity, while Radian Guaranty reported a **$1.7 billion PMIERs cushion** and paid a **$100 million dividend** - At March 31, 2023, Radian Group held **$956 million** in available unrestricted cash and liquid investments[294](index=294&type=chunk) - Radian Guaranty's **PMIERs Cushion** was **$1.7 billion**, or **44%** over its Minimum Required Assets, with Available Assets totaling approximately **$5.7 billion**[316](index=316&type=chunk) - In March 2023, Radian Guaranty paid a **$100 million ordinary dividend** to Radian Group, with capacity for additional dividends in 2023[319](index=319&type=chunk) Holding Company Capital Structure | Metric | March 31, 2023 (Billions) | December 31, 2022 (Billions) | | :--- | :--- | :--- | | **Total Debt** | $1.41 | $1.41 | | **Total Stockholders' Equity** | $4.11 | $3.92 | | **Debt-to-capital ratio** | 25.6% | 26.5% | | **Book value per share** | $26.23 | $24.95 | [Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risk exposures, primarily interest rate and credit spread risk, remain materially unchanged from its 2022 Form 10-K disclosures - Market risk exposures as of March 31, 2023, remain materially unchanged from the 2022 Form 10-K disclosures[330](index=330&type=chunk) [Controls and Procedures](index=61&type=section&id=Item%204%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting during the quarter - Disclosure controls and procedures were deemed effective by the CEO and Principal Financial Officer as of March 31, 2023[332](index=332&type=chunk) - No material changes in internal control over financial reporting occurred during Q1 2023[333](index=333&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=62&type=section&id=Item%201%20Legal%20Proceedings) The company is involved in routine legal actions and regulatory inquiries, with management not expecting a material adverse effect on financial condition - The company is routinely involved in legal actions, but management does not expect a material adverse effect on its financial condition[151](index=151&type=chunk)[335](index=335&type=chunk) [Risk Factors](index=62&type=section&id=Item%201A%20Risk%20Factors) No material changes to the company's risk factors have occurred since those disclosed in its 2022 Annual Report on Form 10-K - No material changes to the company's risk factors have occurred since the 2022 Form 10-K disclosures[336](index=336&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2023, the company repurchased **715,643 shares** at **$20.97 per share**, with **$285.0 million** remaining under the repurchase program expiring January 2025 Issuer Purchases of Equity Securities (Q1 2023) | Period | Total Shares Purchased | Average Price Paid per Share | Approx. Dollar Value Remaining in Program (Millions) | | :--- | :--- | :--- | :--- | | Jan 2023 | 9,542 | $19.07 | $300.0 | | Feb 2023 | 39,050 | $21.66 | $299.16 | | Mar 2023 | 699,516 | $20.94 | $285.0 | - A new **$300 million share repurchase program** was approved in January 2023, expiring in January 2025[340](index=340&type=chunk) [Exhibits](index=63&type=section&id=Item%206%20Exhibits) This section lists exhibits filed with the Form 10-Q, including amendments to agreements and required certifications

Radian Group Inc. (NYSE:RDN) Q1 2023 Earnings Conference Call May 4, 2023 ET Company Participants John Damian - SVP, Corporate Development and IR Rick Thornberry - CEO Rob Quigley - Controller and Chief Accounting Officer Derek Brummer - President of Radian Mortgage Conference Call Participants Bose George - KBW Mark DeVries - Barclays Douglas Harter - Credit Suisse Eric Hagen - BTIG Operator Good day, and thank you for standing by. Welcome to the First Quarter 2023 Radian Group Earnings Conference Call. At ...

Financial Performance - The company reported a total revenue of $1.2 billion for the last quarter, representing a 15% increase year-over-year[7]. - The company expects revenue guidance for the next quarter to be between $1.25 billion and $1.3 billion, indicating a potential growth of 4% to 8%[7]. - The company reported a net income of $250 million, reflecting a 12% increase compared to the same quarter last year[7]. - Consolidated pretax income for 2022 was $953 million, up from $765 million in 2021, with net income increasing to $743 million or $4.35 per diluted share[41]. - Adjusted pretax operating income was $1.1 billion, or $4.87 per diluted share, compared to $758 million, or $3.15 per diluted share, in 2021[41]. User Growth and Market Expansion - User data showed an increase in active users to 5 million, up from 4.5 million in the previous quarter, marking an 11% growth[7]. - The company is expanding its market presence in Europe, targeting a 30% increase in market share by the end of the fiscal year[7]. - New product launches contributed to a 20% increase in sales, with the latest product line accounting for $200 million in revenue[7]. Strategic Initiatives - A strategic acquisition was completed, adding $150 million in annual revenue and enhancing the company's service offerings[7]. - The company plans to invest $50 million in sustainability initiatives over the next two years to improve operational efficiency[7]. - The company launched Radian Mortgage Capital, providing an additional secondary-market option for residential mortgage lenders[41]. Risk Management and Compliance - Radian Group's capital plans include a risk distribution strategy through capital markets and traditional reinsurance markets to maintain liquidity[16]. - The company anticipates potential impacts from the new regulatory capital framework for GSEs, which may increase capital requirements and affect operations[16]. - Radian Guaranty must remain eligible under the PMIERs to insure loans purchased by GSEs, which is critical for business continuity[16]. Customer and Market Dynamics - The customer retention rate improved to 85%, up from 80% in the previous quarter, showcasing enhanced customer satisfaction[7]. - The company is facing competition in the private mortgage insurance industry, particularly from FHA and VA alternatives, which may affect market share[16]. - The company estimates its share of new insurance written (NIW) within the private mortgage insurance market was approximately 17% for 2022[115]. Investment and Financial Strategy - The investment portfolio had a cost basis of $6.4 billion and a carrying value of $5.8 billion as of December 31, 2022, with 95% rated investment grade[138]. - The investment strategy is designed to optimize after-tax returns while preserving capital, with oversight from management and the Finance and Investment Committee[137]. Employee Engagement and Diversity - The company has approximately 1,400 employees as of December 31, 2022[167]. - The employee engagement score was 84, exceeding the benchmark of 79[180]. - Women represent 56% of the workforce and 38% of senior management team[178]. - The company has established a Diversity, Equity and Inclusion Council to advance its DEI efforts[172]. Claims Management and Insurance Operations - The claims management process focuses on timely and accurate processing of claims to mitigate losses[75]. - The company has a dedicated loss mitigation group that works with servicers to identify loss mitigation opportunities[152]. - The company retains the right to deny claims if necessary documentation is not provided by the loan servicer within specified timeframes[83]. Community Engagement - Radian's matching gifts program doubled during 2021 and 2022 to support employee donations amid the COVID-19 pandemic[183]. - Radian's community-based program, Radian Connected, enhances employee engagement and community involvement[183].

Financial Data and Key Metrics Changes - In Q4 2022, the company reported GAAP net income of $162 million or $1.01 per diluted share, compared to $1.07 per diluted share in the same quarter of the previous year [5] - For the full year 2022, net income was $743 million or $4.35 per diluted share, an increase from $3.16 per diluted share in 2021, resulting in an 18.2% return on equity compared to 14.1% in 2021 [5][6] - The company returned $135 million in dividends and repurchased $400 million of common stock, representing 11% of total shares outstanding [4] Business Line Data and Key Metrics Changes - Total net premiums earned in Q4 2022 were $233 million, reflecting a decline due to fewer single premium policy cancellations and lower title insurance volume [6] - The primary insurance in force grew 6% year-over-year to $261 billion as of December 31, 2022, with a 10% year-over-year growth in monthly premium in force [6][8] - Monthly and other recurring premiums accounted for 95% of new volume in both Q4 and full year 2022 [7] Market Data and Key Metrics Changes - The persistency rate increased to 84% on a quarterly annualized basis in Q4 2022, up from 72% a year ago, driven by a significant portion of the insurance in force having mortgage rates of 5% or less [8] - The investment income increased to $59 million in Q4 2022 compared to $37 million in Q4 2021, with the book yield on the investment portfolio rising to 3.5% [60] Company Strategy and Development Direction - The company remains focused on three strategic areas: enhancing the economic value of the Mortgage Insurance portfolio, growing the Homegenius business, and managing capital resources [14] - The company has increased pricing in 2022 and continues to do so in 2023, aiming to leverage dynamic risk-based pricing strategies [14] - The company is positioned to pay recurring ordinary dividends from Radian Guaranty, projected to be between $300 million and $400 million in 2023 [9][63] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the housing market, noting a strong labor market and a supply-demand imbalance that supports home price stability [28] - The company anticipates a decline in mortgage origination volumes in 2023, followed by a return to growth in 2024, driven by first-time homebuyers [50] - Management highlighted the importance of maintaining strong credit quality and underwriting standards, with new defaults expected to increase as the portfolio seasons [52] Other Important Information - The company completed a series of capital actions that resulted in a $382 million distribution from Radian Guaranty to Radian Group [4] - The company has made adjustments to its Homegenius cost structure in response to declining revenues, with a focus on operational efficiency [59] Q&A Session Summary Question: How to think about the loss provision on current period defaults going forward? - Management indicated that defaults will be concentrated in certain loan cohorts, with FICO and LTV being key variables in determining defaults [20][32] Question: How is the competitive environment viewed? - Management noted that there have been no significant market share shifts, but pricing dynamics have been increasing, with a focus on geographic pricing [24][64] Question: Can Homegenius reach breakeven in a sub $2 trillion mortgage market? - Management acknowledged the challenges but expressed optimism about positioning Homegenius for profitability despite market conditions [26][66] Question: What are the constraints around capital return? - Management highlighted the importance of regulatory requirements and PMIERs, indicating a strong capital position to support future distributions [67]

Radian Group Inc. (NYSE:RDN) Q3 2022 Earnings Conference Call November 3, 2022 12:00 PM ET Company Participants John Damian - SVP of Corporate Development and IR Rick Thornberry - CEO Frank Hall - CFO Derek Brummer - President, Radian Mortgage Conference Call Participants Mark DeVries - Barclays Doug Harter - Credit Suisse Bose George - KBW Mihir Bhatia - Bank of America Eric Hagen - BTIG Operator Good day, and welcome to the Q3 2022 Radian Group Earnings Conference Call. [Operator Instructions] I would now ...

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 June 30, 2022 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 ...

Financial Data and Key Metrics Changes - The company reported net income of $201 million or $1.15 per diluted share for Q2 2022, compared to $1.01 per diluted share in Q1 2022 and $0.80 per diluted share in Q2 2021 [27] - Adjusted diluted net operating income was $1.36 per share in Q2 2022, up from $1.17 in Q1 2022 and $0.75 in Q2 2021 [27] - Return on equity was 19.9% [9] - The primary insurance in force grew 7% year-over-year to over $254 billion as of June 30, 2022 [10][29] - Monthly premium insurance in force increased by more than 12% year-over-year [10] Business Line Data and Key Metrics Changes - The Mortgage segment wrote $18.9 billion of new insurance written (NIW) in Q2 2022, a slight increase from $18.7 billion in Q1 2022 but down from $21.7 billion in Q2 2021 [28] - Purchase transactions accounted for 97% of total NIW in Q2 2022, compared to 77% in Q2 2021 [28] - Homegenius segment revenues were $32.3 million in Q2 2022, down from $33.9 million in Q1 2022 but up 12% year-to-date compared to the same period last year [13][34] Market Data and Key Metrics Changes - The company noted a favorable prior period reserve development driven by better-than-expected cure activity, with new notices of default at their lowest in over 20 years [12] - The overall housing market is experiencing challenges with affordability due to rising home prices and mortgage rates, but the company believes this is a healthy shift [22][55] Company Strategy and Development Direction - The company is focused on three areas of strategic value creation: growing the mortgage insurance portfolio, expanding the Homegenius business, and managing capital resources [8][46] - The launch of Radian Mortgage Capital aims to provide additional secondary market options for high-quality loans and broaden market reach [12][47] - The company is committed to addressing the homeownership gap for underserved communities through an affordable homeownership initiative [24][25] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the macroeconomic environment's rapid changes, including increased mortgage rates and inflation, but expressed confidence in the company's ability to navigate these challenges [19][21] - The company expects the private mortgage insurance market to be approximately $400 billion to $450 billion in 2022, representing a smaller market than originally expected but still significant [23] - Management emphasized the importance of dynamic risk-based pricing to address current economic conditions [21][59] Other Important Information - The company maintained a strong capital position with $1 billion in total holding company liquidity and a PMIERs cushion of $1.4 billion or 38% [18][40] - Moody's upgraded the ratings of Radian Group and Radian Guaranty, reflecting improved capital adequacy and profitability metrics [44] Q&A Session Summary Question: How is the company managing the risks associated with the current environment? - Management highlighted the strength of the business model and the ability to navigate economic cycles, emphasizing disciplined underwriting and risk distribution strategies [52][54] Question: What are the plans for additional capital return? - Management indicated a willingness to return capital to shareholders while ensuring sufficient capital to support organic growth and potential acquisitions [66][68] Question: Can you discuss the demand and pricing backdrop for reinsurance? - Management noted solid demand and favorable pricing in the reinsurance market, driven by strong fundamentals and demographic tailwinds [72] Question: What is the strategic plan behind Radian Mortgage Capital? - Management described Radian Mortgage Capital as a long-term strategic extension aimed at aggregating and managing mortgage credit risk, providing additional liquidity options for customers [74][76]