Radian(RDN) - 2025 Q2 - Quarterly Results

Second Quarter 2025 Financial Highlights Radian Group reported robust financial performance in Q2 2025, driven by strong net income, diluted EPS, and record primary mortgage insurance in force Consolidated Financial Performance Radian Group reported solid financial results in Q2 2025, with net income of $142 million and diluted EPS of $1.02, achieving a 12.5% return on equity and 12% YoY growth in book value per share to $33.18 Consolidated Financial Performance | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :--------------------------------- | :--------------- | :--------------- | :---------- | | Net Income (Million USD) | $142 | $152 | -6.6% | | Diluted Net Income Per Share | $1.02 | $0.98 | +4.1% | | Consolidated Pre-Tax Income (Million USD) | $175 | $188 | -6.9% | | Adjusted Pre-Tax Operating Income (Million USD) | $173 | $193 | -10.4% | | Adjusted Diluted Net Operating Income Per Share | $1.01 | $1.01 | 0.0% | | Return on Equity | 12.5% | 13.6% | -1.1 pp | | Adjusted Net Operating Return on Equity | 12.4% | 13.9% | -1.5 pp | | Book Value Per Share | $33.18 | $29.66 | +12.0% | | Primary Mortgage Insurance In Force (Billion USD) | $276.7 | $272.8 | +1.4% | - CEO Rick Thornberry highlighted a record $277 billion in primary mortgage insurance in force, a key driver for future profitability[7] Mortgage Insurance Operational Highlights Q2 2025 saw significant growth in new mortgage insurance written and an increased share of refinancing, alongside a decrease in primary delinquent loans but higher loss provisions and paid claims Mortgage Insurance Operational Highlights | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Change (QoQ) | Change (YoY) | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------- | :--------- | | New Insurance Written (NIW) (Million USD) | $14,330 | $9,489 | $13,902 | +51.0% | +3.1% | | Refinance as % of NIW | 5% | 4% | 2% | +1 pp | +3 pp | | Primary Mortgage Insurance In Force (Billion USD) | $276.7 | $274.2 | $272.8 | +0.9% | +1.4% | | Persistency (Last 12 Months) | 84% | 84% | 84% | 0 pp | 0 pp | | Net Premiums Earned - Mortgage Insurance (Million USD) | $234 | $234 | $235 | 0.0% | -0.4% | | Mortgage Insurance Provision for Losses (Million USD) | $12 | $15 | $(2) | -20.0% | N/A | | Favorable Provision Development from Prior Period Defaults (Million USD) | $36 | $38 | $50 | -5.3% | -28.0% | | Primary Delinquent Loans (Number) | 22,258 | 22,758 | 20,276 | -2.2% | +9.8% | | Loss Ratio | 5% | 7% | (1)% | -2 pp | +6 pp | | Mortgage Insurance Claims Paid (Million USD) | $7 | $4 | $6 | +75.0% | +16.7% | | Other Operating Expenses (Million USD) | $89 | $77 | $92 | +15.6% | -3.3% | - Other operating expenses increased quarter-over-quarter, primarily due to the timing of annual equity incentive grants in Q2 2025[8] Capital and Liquidity Update Radian Group actively managed capital through share repurchases and dividends, while Radian Guaranty maintained strong liquidity and PMIERs surplus Radian Group Capital Actions Radian Group actively repurchased shares and paid common stock dividends in Q2 2025, securing an additional $750 million board authorization for continued capital return to shareholders - The company repurchased 7 million common shares at a total cost of $223 million in Q2 2025[13] - As of June 30, 2025, the company had two share repurchase authorizations: $113 million remaining from the first, and an additional $750 million authorized in May 2025[13] - Common stock dividends of $0.255 per share were paid in Q2 2025, totaling $35 million[13] Radian Guaranty Capital and Liquidity Radian Guaranty distributed $400 million to Radian Group in H1 2025, including a $200 million common dividend in Q2, while maintaining ample PMIERs available asset surplus - As of June 30, 2025, Radian Group held $784 million in available liquidity, including a $275 million unsecured revolving credit facility, totaling $1.1 billion in liquidity[13] - Radian Guaranty distributed $400 million to Radian Group in H1 2025, with $200 million as a common dividend in Q2 2025[13] - As of June 30, 2025, Radian Guaranty's total PMIERs available assets were $6 billion, with an excess of $2 billion[13] Conference Call Information Radian will host a conference call on July 31, 2025, to discuss Q2 2025 financial results, with webcast and Q&A details provided Conference Call Details Radian will host a conference call on Thursday, July 31, 2025, at 11:00 AM ET to discuss Q2 2025 financial results, with a webcast available on the company's website and dial-in options for Q&A - The conference call will be held on Thursday, July 31, 2025, at 11:00 AM ET[10] - The call will be webcast live via the company's website at https://radian.com/who-we-are/for-investors/webcasts[10](index=10&type=chunk) - Participants interested in the Q&A session must register to receive dial-in numbers and a unique PIN[11] Non-GAAP Financial Measures Radian uses non-GAAP metrics to assess core financial performance and provide comparable operational results, with recent adjustments to calculation methods Definition and Use Radian utilizes non-GAAP financial measures like adjusted pre-tax operating income, adjusted diluted net operating income per share, and adjusted net operating return on equity to assess core financial performance and provide comparable operational results for management and the board - Non-GAAP measures are used to assess the company's core financial performance and provide more comparable information to peers[14] - Adjusted pre-tax operating income (loss) is defined as GAAP consolidated pre-tax income (loss) excluding the net gains or losses from investments and other financial instruments, and other non-operating items[15] - The calculation methods for adjusted diluted net operating income (loss) per share and adjusted net operating return on equity were revised in Q1 2025, no longer adjusting for differences between the company's statutory and effective tax rates[53] About Radian Radian Group Inc. (NYSE: RDN) is a leading provider of mortgage insurance and comprehensive housing market services, facilitating homeownership through innovative solutions Company Overview Radian Group Inc. (NYSE: RDN) facilitates homeownership by providing services and technology that empower housing and capital market participants to act with confidence, offering industry-leading mortgage insurance and comprehensive mortgage, risk, real estate, and title services - Radian Group Inc. (NYSE: RDN) is dedicated to facilitating homeownership through services and technology[17] - The company's business includes industry-leading mortgage insurance and comprehensive mortgage, risk, real estate, and title services[17] Financial Results and Supplemental Information This section provides detailed condensed consolidated financial statements, including operations, net income per share, and balance sheets for Radian Group Inc Condensed Consolidated Statements of Operations This section presents Radian Group Inc.'s condensed consolidated statements of operations, detailing revenue and expense components for Q2 2025 and prior quarters Condensed Consolidated Statements of Operations | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Total Revenue | $318,004 | $318,114 | $315,861 | $333,857 | $321,147 | | Net Premiums Earned | $237,520 | $236,679 | $238,562 | $239,133 | $237,731 | | Service Revenue | $10,924 | $12,116 | $12,250 | $12,167 | $13,265 | | Net Investment Income | $72,769 | $68,574 | $71,310 | $78,396 | $73,766 | | Provision for Losses | $12,097 | $15,167 | $(624) | $6,889 | $(1,745) | | Other Operating Expenses | $89,397 | $76,849 | $87,703 | $85,919 | $91,648 | | Pre-Tax Income | $175,013 | $188,440 | $189,126 | $195,392 | $188,123 | | Net Income | $141,796 | $144,558 | $148,291 | $151,892 | $151,903 | | Diluted Net Income Per Share | $1.02 | $0.98 | $0.98 | $0.99 | $0.98 | Net Income Per Share This section provides details on the calculation of basic and diluted net income per share for Radian Group Inc., including the average number of common shares used in the computation Net Income Per Share | Metric (Thousand USD, except per share amounts) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Basic and Diluted Net Income | $141,796 | $144,558 | $148,291 | $151,892 | $151,903 | | Average Common Shares Outstanding—Basic | 137,376 | 145,618 | 150,302 | 151,846 | 153,110 | | Adjusted Average Common Shares Outstanding—Diluted | 138,360 | 147,727 | 151,912 | 153,073 | 154,399 | | Basic Net Income Per Share | $1.03 | $0.99 | $0.99 | $1.00 | $0.99 | | Diluted Net Income Per Share | $1.02 | $0.98 | $0.98 | $0.99 | $0.98 | Condensed Consolidated Balance Sheets This section presents Radian Group Inc.'s condensed consolidated balance sheets, outlining assets, liabilities, and shareholders' equity as of June 30, 2025, and prior periods Condensed Consolidated Balance Sheets | Metric (Thousand USD, except per share amounts) | June 30, 2025 | March 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | June 30, 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Total Assets | $9,580,657 | $8,765,386 | $8,663,988 | $8,419,771 | $8,129,643 | | Investments | $6,484,692 | $6,113,792 | $6,345,236 | $6,497,180 | $6,588,149 | | Total Liabilities | $5,087,976 | $4,178,560 | $4,040,130 | $3,720,918 | $3,647,324 | | Total Shareholders' Equity | $4,492,681 | $4,586,826 | $4,623,858 | $4,698,853 | $4,482,319 | | Book Value Per Share | $33.18 | $32.48 | $31.33 | $31.37 | $29.66 | | Holding Company Debt-to-Capital Ratio | 19.2% | 18.9% | 18.7% | 18.5% | 25.2% | Condensed Consolidated Statements of Operations Detail This section offers a detailed breakdown of Radian Group Inc.'s operating statement components, including net premiums earned, service revenue, and various expenses Net Premiums Earned This section detailed Radian Group Inc.'s net premiums earned, including direct mortgage insurance, ceded mortgage insurance, and title insurance premiums Net Premiums Earned | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Direct - Mortgage Insurance | $262,044 | $261,911 | $263,380 | $263,509 | $261,418 | | Ceded - Mortgage Insurance | $(28,518) | $(27,867) | $(28,104) | $(28,365) | $(26,600) | | Net Premiums Earned - Mortgage Insurance | $233,526 | $234,044 | $235,276 | $235,144 | $234,818 | | Net Premiums Earned - Title Insurance | $3,994 | $2,635 | $3,286 | $3,989 | $2,913 | | Total Net Premiums Earned | $237,520 | $236,679 | $238,562 | $239,133 | $237,731 | Services Revenue This section provides a breakdown of Radian Group Inc.'s services revenue, encompassing mortgage insurance contract underwriting services and other services like real estate, title, and real estate technology Services Revenue | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Mortgage Insurance - Contract Underwriting Services | $42 | $173 | $261 | $244 | $309 | | Real Estate Services | $6,187 | $8,055 | $7,733 | $7,876 | $8,777 | | Title | $4,013 | $3,261 | $3,645 | $3,427 | $3,540 | | Real Estate Technology | $682 | $627 | $611 | $620 | $639 | | Total Services Revenue | $10,924 | $12,116 | $12,250 | $12,167 | $13,265 | Net Investment Income This section detailed Radian Group Inc.'s net investment income sources, including fixed maturity securities, equity securities, residential mortgage loans held for sale, and short-term investments Net Investment Income | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Fixed Maturity Securities | $57,835 | $56,714 | $57,238 | $59,348 | $57,924 | | Equity Securities | $2,634 | $2,145 | $3,350 | $3,047 | $3,067 | | Residential Mortgage Loans Held for Sale | $10,064 | $6,273 | $7,537 | $7,828 | $5,411 | | Short-Term Investments | $3,409 | $4,751 | $4,478 | $9,686 | $8,614 | | Total Net Investment Income | $72,769 | $68,574 | $71,310 | $78,396 | $73,766 | Provision for Losses This section provides a breakdown of Radian Group Inc.'s provision for losses, covering current and prior period defaults related to mortgage insurance and title insurance Provision for Losses | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Mortgage Insurance - Current Period Defaults | $47,912 | $53,740 | $55,795 | $57,032 | $47,918 | | Mortgage Insurance - Prior Period Defaults | $(35,958) | $(38,400) | $(55,734) | $(50,686) | $(49,687) | | Total Mortgage Insurance | $11,954 | $15,340 | $61 | $6,346 | $(1,769) | | Title Insurance | $143 | $(173) | $(685) | $543 | $24 | | Total Provision for Losses | $12,097 | $15,167 | $(624) | $6,889 | $(1,745) | Other Operating Expenses This section detailed Radian Group Inc.'s other operating expenses, including salaries, variable and equity incentive compensation, other general operating expenses, and ceded and title agency commissions Other Operating Expenses | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Salaries and Other Base Employee Costs | $36,025 | $36,038 | $32,561 | $32,851 | $41,431 | | Variable and Equity Incentive Compensation | $30,779 | $18,174 | $20,342 | $17,581 | $23,223 | | Other General Operating Expenses | $28,352 | $28,475 | $40,385 | $39,984 | $31,623 | | Ceded Commissions | $(7,075) | $(6,723) | $(6,620) | $(6,276) | $(5,957) | | Title Agency Commissions | $1,317 | $885 | $1,035 | $1,779 | $1,328 | | Total | $89,398 | $76,849 | $87,703 | $85,919 | $91,648 | Interest Expense This section provides a breakdown of Radian Group Inc.'s interest expense, including interest on senior notes, mortgage financing vehicles, FHLB advances, and revolving credit facilities Interest Expense | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Senior Notes | $15,810 | $15,800 | $15,791 | $20,945 | $21,156 | | Mortgage Financing Vehicles | $8,446 | $6,010 | $5,963 | $7,500 | $5,107 | | FHLB Advances | $877 | $425 | $403 | $538 | $544 | | Revolving Credit Facility | $741 | $264 | $356 | $408 | $257 | | Total Interest Expense | $25,874 | $22,499 | $22,513 | $29,391 | $27,064 | Segment Information This section presents financial performance and key ratios for Radian's Mortgage Insurance segment and All Other Activities segment, highlighting their respective contributions Mortgage Insurance Segment The Mortgage Insurance segment achieved $190 million in adjusted pre-tax operating income in Q2 2025, with stable net premiums earned despite increased loss provisions Mortgage Insurance Segment | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Net Premiums Earned | $233,526 | $234,044 | $235,276 | $235,144 | $234,818 | | Net Investment Income | $53,288 | $48,451 | $51,541 | $50,236 | $50,102 | | Provision for Losses | $11,954 | $15,340 | $61 | $6,346 | $(1,769) | | Adjusted Pre-Tax Operating Income | $189,522 | $194,293 | $215,207 | $203,543 | $198,763 | All Other Activities Segment The All Other Activities segment reported an adjusted pre-tax operating loss of $16.36 million in Q2 2025, primarily due to net losses from investments and other financial instruments, alongside decreased service and net investment income All Other Activities Segment | Metric (Thousand USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Net Premiums Earned | $3,994 | $2,635 | $3,286 | $3,989 | $2,913 | | Service Revenue | $10,990 | $12,033 | $12,088 | $12,001 | $13,064 | | Net Investment Income | $19,481 | $20,123 | $19,769 | $28,160 | $23,664 | | Net Gains (Losses) on Investments and Other Financial Instruments | $(6,704) | $1,287 | $(1,521) | $(4,611) | $(49) | | Adjusted Pre-Tax Operating Income (Loss) | $(16,361) | $(3,459) | $(6,370) | $(4,875) | $(6,080) | - “All Other Activities” includes income (loss) from holding company assets, unallocated corporate operating expenses, and the operating results of the mortgage conduit, title, real estate services, and real estate technology businesses[42][51] Selected Mortgage Insurance Key Ratios This section provides key financial ratios for the Mortgage Insurance segment, including the loss ratio and expense ratio, reflecting its profitability and operational efficiency Selected Mortgage Insurance Key Ratios | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :----------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Loss Ratio | 5.1% | 6.6% | 0.0% | 2.7% | (0.8)% | | Expense Ratio | 29.7% | 24.8% | 24.2% | 23.7% | 28.5% | - The loss ratio is calculated as the provision for losses as a percentage of net premiums earned[50] - The expense ratio is calculated as operating expenses (including policy acquisition costs, other operating expenses, and allocated corporate operating expenses) as a percentage of net premiums earned[50] Mortgage Insurance Supplemental Information This section provides detailed supplemental data for mortgage insurance, including new insurance written (NIW) and primary insurance in force (IIF) metrics New Insurance Written (NIW) New Insurance Written (NIW) reached $14.33 billion in Q2 2025, predominantly comprising direct monthly and other recurring premiums, with 94.6% of NIW for purchase loans New Insurance Written (NIW) | Metric (Million USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | NIW | $14,330 | $9,489 | $13,186 | $13,493 | $13,902 | | NIW by Premium Type - Direct Monthly and Other Recurring Premiums | 96.4% | 96.4% | 96.4% | 95.9% | 96.5% | | NIW by Purpose - Purchase | 94.6% | 95.6% | 90.4% | 95.6% | 98.3% | | NIW by Purpose - Refinance | 5.4% | 4.4% | 9.6% | 4.4% | 1.7% | | NIW by FICO Score (>=740) | 68.2% | 68.1% | 71.7% | 69.5% | 69.4% | | NIW by LTV (90.01% to 95.00%) | 44.0% | 41.5% | 37.5% | 37.1% | 37.2% | Primary Insurance in Force (IIF) and Risk in Force (RIF) Primary Insurance in Force (IIF) and Risk in Force (RIF) continued to grow through Q2 2025, with most RIF attributed to loans with higher FICO scores and moderate LTVs Primary Insurance in Force (IIF) and Risk in Force (RIF) | Metric (Million USD) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :--------------------------------- | :--------------- | :--------------- | :--------------- | :--------------- | :--------------- | | Primary Insurance in Force (IIF) | $276,745 | $274,159 | $275,126 | $274,721 | $272,827 | | Primary Risk in Force (RIF) | $72,820 | $71,958 | $72,074 | $71,834 | $71,109 | | Primary RIF by Premium Type - Direct Monthly and Other Recurring Premiums | 90.3% | 90.1% | 90.0% | 89.8% | 89.5% | | Primary RIF by FICO Score (>=740) | 60.6% | 60.3% | 60.1% | 59.6% | 59.2% | | Primary RIF by LTV (90.01% to 95.00%) | 48.0% | 47.9% | 47.9% | 48.0% | 48.1% | | Persistency (Last 12 Months) | 83.8% | 83.7% | 83.6% | 84.4% | 84.3% | | Persistency (Quarterly, Annualized) | 83.8% | 85.7% | 82.7% | 84.1% | 83.5% | Forward-Looking Statements This report contains forward-looking statements subject to various risks and uncertainties, and the company disclaims any obligation to update or revise these projections Nature and Risks of Forward-Looking Statements This report contains forward-looking statements regarding future events, developments, or results, based on management's current views and assumptions, but subject to various risks and uncertainties that could cause actual results to differ materially, with no obligation to update or revise them - Forward-looking statements involve expected future events, developments, or results and are not guarantees of future performance[70] - Key risks and uncertainties include the health of the U.S. housing market, changes in economic conditions, regulatory and legislative actions, PMIERs compliance, ability to execute capital plans, competition, and information technology system security[70][72] - The company undertakes no obligation to update or revise any forward-looking statements and advises investors to refer to the “Risk Factors” section in its annual report on Form 10-K filed with the SEC[71]