RDN Q4 Earnings Beat on Higher Premiums, Net Investment Income

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