Financial Data and Key Metrics Changes - Radian achieved net income from continuing operations of $153 million, or $1.11 per diluted share, consistent with the previous quarter [13] - Net income including discontinued operations was $141 million in the third quarter [13] - Return on equity (ROE) was 12.4% including discontinued operations, and 13.4% for continuing operations, reflecting a 100 basis points increase [13][14] - Book value per share grew 9% year over year to $34.34 [14] Business Line Data and Key Metrics Changes - Total revenues for the third quarter were $303 million [15] - Net premiums earned reached $237 million, the highest level in over three years [15] - The mortgage insurance in-force portfolio grew to an all-time high of $281 billion, with $15.5 billion of new insurance written, a 15% increase year-over-year [15][16] - Persistency rate remained strong at 84% [15] Market Data and Key Metrics Changes - The investment portfolio totaled $6 billion, generating net investment income of $63 million [17] - The number of new defaults was approximately 13,400, a decline of 2% from the same period last year [17] - Total defaults increased to approximately 24,000 loans, resulting in a portfolio default rate of 2.42% [17] Company Strategy and Development Direction - Radian is transitioning from a leading U.S. mortgage insurer to a global multi-line specialty insurer, with the acquisition of Inigo as a key strategic move [7][10] - The divestiture plan for mortgage conduit, title, and real estate services businesses is underway, with completion expected by the third quarter of next year [6][12] - The acquisition of Inigo is valued at $1.7 billion, funded through available liquidity and excess capital [8][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the mortgage insurance business, citing strong credit characteristics and favorable market conditions [4][18] - The outlook remains positive, with expectations for stable in-force premium yield and continued strong persistency rates [16][18] - Management emphasized the importance of maintaining a disciplined approach to underwriting and capital allocation [9][10] Other Important Information - Radian has returned nearly $3 billion of capital to stockholders through dividends and share repurchases since 2017 [5] - The company expects to maintain strong liquidity, with available holding company liquidity growing to $995 million by quarter-end [21] - The leverage ratio declined to 18.7%, with expectations to remain below 20% by year-end 2026 [22] Q&A Session Summary Question: Should the 200 basis points increase be added to the current run rate ROE? - Management confirmed that a 200 basis points increase on the current operating ROE of 13.9% is reasonable [26][27] Question: What potential capital benefits could arise from using unearned premiums at Radian as capital at Inigo? - Management indicated that future details on potential synergies and reinsurance opportunities will be provided post-acquisition [28][29] Question: How should capital freed up from divesting non-core businesses be viewed? - The carrying value of the three businesses is estimated at $170 million, with no significant gains or losses expected [33][34] Question: What are the key steps to return to the buyback program? - Management outlined that excess liquidity is expected to return within a few quarters post-Inigo acquisition, allowing for a revisit of the share repurchase strategy [36][37] Question: What is the timing of the divestitures? - Management confirmed that the divestiture process is on track to be completed by the third quarter of next year [41][42] Question: What would it take to move the claim rate below 7.5%? - Management stated that the current claim rate is a through-the-cycle assumption, and no changes are expected in the near future [44][46] Question: Has anything changed post-COVID affecting claim rate trends? - Management noted that home equity growth and improved borrower assistance processes have positively influenced cure rates since COVID [47][49]