— Fourth quarter net income of $148 million, or
$0.98 per diluted share —
— Full year net income of $604 million, or
$3.92 per diluted share —
— Full year return on equity of 13.4% —
— Book value per share growth of 9%
year-over-year to $31.33 —
— Primary mortgage insurance in force increased
to an all-time high of $275.1 billion —
— $675 million in ordinary dividends paid from
Radian Guaranty to holding company during the year —
— Returned $376 million of capital to
stockholders through dividends and share repurchases during the
year, including $111 million in the fourth quarter —
Radian Group Inc. (NYSE: RDN) today reported net income for the
quarter ended December 31, 2024, of $148 million, or $0.98 per
diluted share. This compares with net income for the quarter ended
December 31, 2023, of $143 million, or $0.91 per diluted share.
Net income for the full year 2024 was $604 million, or $3.92 per
diluted share. This compares with net income for the full year 2023
of $603 million, or $3.77 per diluted share.
Adjusted pretax operating income for the quarter ended December
31, 2024, was $209 million, compared to $192 million for the
quarter ended December 31, 2023. Adjusted diluted net operating
income per share for the quarter ended December 31, 2024, was
$1.09, compared to $0.96 for the quarter ended December 31,
2023.
Adjusted pretax operating income for the full year 2024 was $803
million, compared to $786 million for the full year 2023. Adjusted
diluted net operating income per share for the full year 2024 was
$4.11, compared to $3.88 for the full year 2023.
Key Financial Highlights
Quarter Ended
Year Ended
($ in millions, except per-share
amounts)
December 31, 2024
September 30, 2024
December 31, 2023
December 31, 2024
December 31, 2023
Total revenues
$316
$334
$329
$1,290
$1,241
Net income
$148
$152
$143
$604
$603
Diluted net income per share
$0.98
$0.99
$0.91
$3.92
$3.77
Consolidated pretax income
$189
$195
$180
$771
$767
Adjusted pretax operating income
(1)
$209
$199
$192
$803
$786
Adjusted diluted net operating
income per share (1)
$1.09
$1.03
$0.96
$4.11
$3.88
Return on equity
12.7%
13.2%
13.4%
13.4%
14.5%
Adjusted net operating return on
equity (1)
14.2%
13.7%
14.2%
14.1%
14.9%
New Insurance Written (NIW) -
mortgage insurance
$13,186
$13,493
$10,629
$51,984
$52,670
Net premiums earned - mortgage
insurance
$235
$235
$230
$939
$909
New defaults
13,967
13,708
12,452
50,535
44,007
As of
($ in millions, except per-share
amounts)
December 31, 2024
September 30, 2024
December 31, 2023
Book value per share
$31.33
$31.37
$28.71
Accumulated other comprehensive
income (loss) value per share
$(2.37)
$(1.56)
$(2.16)
PMIERs Available Assets
$6,039
$5,984
$5,890
PMIERs excess Available
Assets
$2,158
$2,122
$2,260
Available holding company
liquidity (2)
$885
$844
$992
Total investments
$6,345
$6,497
$6,086
Residential mortgage loans held
for sale, at fair value (3)
$520
$530
$33
Primary mortgage insurance in
force
$275,126
$274,721
$269,979
Percentage of primary loans in
default
2.44%
2.25%
2.20%
Mortgage insurance loss
reserves
$354
$357
$365
(1)
Adjusted results, including adjusted pretax operating income,
adjusted diluted net operating income per share and adjusted net
operating return on equity, are non-GAAP financial measures. For
definitions and reconciliations of these measures to the comparable
GAAP measures, see Exhibits F and G.
(2)
Represents Radian Group’s available liquidity without considering
available capacity under its undrawn $275 million unsecured
revolving credit facility.
(3)
Included in total investments on our consolidated balance sheets.
Book value per share at December 31, 2024, was $31.33, compared
to $31.37 at September 30, 2024, and $28.71 at December 31, 2023.
This represents a 9% growth in book value per share at December 31,
2024, as compared to December 31, 2023, and includes accumulated
other comprehensive income (loss) of $(2.37) per share as of
December 31, 2024, and $(2.16) per share as of December 31, 2023.
Changes in accumulated other comprehensive income (loss) are
primarily from net unrealized gains or losses on investments as a
result of decreases or increases, respectively, in market interest
rates.
“We reported another successful year for Radian in 2024,
increasing book value per share by 9% year-over-year, generating
net income of $604 million, and delivering a return on equity of
13.4%. Our primary mortgage insurance in force, which is the main
driver of future earnings for our company, reached a record level
of $275 billion dollars,” said Radian’s Chief Executive Officer,
Rick Thornberry. “Our results continue to reflect the economic
value of our high-quality mortgage insurance portfolio, the
strength and quality of our investment portfolio, our strong
capital and liquidity positions, our ongoing strategic focus on
managing expenses, and our commitment to helping our customers
transform risk into opportunity – while also returning value to our
stockholders. We look forward to the opportunities ahead in
2025.”
FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
- NIW was $13.2 billion in the fourth quarter of 2024, compared
to $13.5 billion in the third quarter of 2024, and $10.6 billion in
the fourth quarter of 2023. NIW was $52.0 billion for the full year
2024, compared to $52.7 billion for the prior year.
- Purchase NIW decreased 5% in the fourth quarter of 2024
compared to the third quarter of 2024 and decreased 8% compared to
the fourth quarter of 2023.
- Refinances accounted for 10% of total NIW in the fourth quarter
of 2024, compared to 4% in the third quarter of 2024, and 1% in the
fourth quarter of 2023.
- Total primary mortgage insurance in force of $275.1 billion as
of December 31, 2024, compared to $274.7 billion as of September
30, 2024, and $270.0 billion as of December 31, 2023.
- Persistency, which is the percentage of mortgage insurance that
remains in force after a twelve-month period, was 84% for the
twelve months ended December 31, 2024, compared to 84% for the
twelve months ended September 30, 2024, and 84% for the twelve
months ended December 31, 2023.
- Annualized persistency for the three months ended December 31,
2024, was 83%, compared to 84% for the three months ended September
30, 2024, and 86% for the three months ended December 31,
2023.
- Net mortgage insurance premiums earned were $235 million for
the fourth quarter of 2024, compared to $235 million for the third
quarter of 2024, and $230 million for the fourth quarter of 2023.
- Mortgage insurance in force portfolio premium yield was 38.0
basis points in the fourth quarter of 2024. This compares to 38.2
basis points in the third quarter of 2024 and 38.1 basis points in
the fourth quarter of 2023.
- Total net mortgage insurance premium yield, which includes the
impact of ceded premiums earned and accrued profit commission, was
34.2 basis points in the fourth quarter of 2024. This compares to
34.4 basis points in the third quarter of 2024, and 34.2 basis
points in the fourth quarter of 2023.
- Details regarding premiums earned may be found in Exhibit
D.
- The mortgage insurance provision for losses was a de minimis
amount in the fourth quarter of 2024, compared to a provision of $6
million in the third quarter of 2024 and a provision of $5 million
in the fourth quarter of 2023.
- Favorable reserve development on prior period defaults was $56
million in the fourth quarter of 2024, compared to $51 million in
the third quarter of 2024 and $49 million in the fourth quarter of
2023.
- The number of primary delinquent loans was 24,055 as of
December 31, 2024, compared to 22,350 as of September 30, 2024, and
22,021 as of December 31, 2023. This increase in delinquent loans
is consistent with seasonal credit trends and the natural seasoning
of the insured portfolio and reflects the growth in the company’s
total primary mortgage insurance in force in recent years.
- The loss ratio in the fourth quarter of 2024 was 0%, compared
to 3% in the third quarter of 2024, and 2% in the fourth quarter of
2023.
- Total mortgage insurance claims paid were $5 million in the
fourth quarter of 2024, compared to $3 million in the third quarter
of 2024 and $3 million in the fourth quarter of 2023. For the full
year 2024, total net claims paid, which includes the impact of
settlements and commutations, were $17 million, compared to $14
million for the full year 2023.
- Additional details regarding mortgage insurance provision for
losses may be found in Exhibit D.
- Other operating expenses were $88 million in the fourth quarter
of 2024, compared to $86 million in the third quarter of 2024, and
$95 million in the fourth quarter of 2023. Other operating expenses
were $348 million for the full year 2024, compared to $348 million
for the full year 2023.
- Other operating expenses in the fourth quarter of 2024 included
$13 million of impairment expenses related to internal-use software
and lease-related assets.
- Additional details regarding other operating expenses may be
found in Exhibit D.
CAPITAL AND LIQUIDITY UPDATE
Radian Group
- During the fourth quarter of 2024, the company repurchased 2.2
million shares of Radian Group common stock at a total cost of $75
million. For the full year 2024, the company repurchased 7.0
million shares of Radian Group common stock at a total cost of $224
million. As of December 31, 2024, purchase authority of up to $543
million remained available under the existing program.
- Radian Group paid a dividend on its common stock in the amount
of $0.245 per share, totaling $36 million, in the fourth quarter of
2024. For the full year 2024, the company paid total dividends of
$152 million.
- As of December 31, 2024, Radian Group maintained $885 million
of available liquidity. Total holding company liquidity, including
the company’s undrawn $275 million unsecured revolving credit
facility, was $1.2 billion as of December 31, 2024.
Radian Guaranty
- Radian Guaranty paid an ordinary dividend to Radian Group of
$190 million in the fourth quarter of 2024, bringing total
dividends paid during 2024 to $675 million.
- At December 31, 2024, Radian Guaranty’s Available Assets under
PMIERs totaled $6.0 billion, resulting in PMIERs excess Available
Assets of $2.2 billion.
RECENT EVENTS
- On January 16, 2025, Fitch Ratings (“Fitch”) upgraded the
insurance financial strength (IFS) rating of Radian Guaranty to A
from A-. In the same rating action, Fitch also upgraded the senior
unsecured debt rating of Radian Group Inc. to BBB from BBB-. The
outlook for the ratings is stable.
CONFERENCE CALL
Radian will discuss fourth quarter 2024 financial results in a
conference call tomorrow, Thursday, February 6, 2025, at 11:00 a.m.
Eastern time. The conference call will be webcast live on the
company’s website at
https://radian.com/who-we-are/for-investors/webcasts or at
www.radian.com. The webcast is listen-only. Those interested in
participating in the question-and-answer session should follow the
conference call dial-in instructions below.
The call may be accessed via telephone by registering for the
call here to receive the dial-in numbers and unique PIN. It is
recommended that you join 10 minutes prior to the event start
(although you may register and dial in at any time during the
call).
A digital replay of the webcast will be available on Radian’s
website approximately two hours after the live broadcast ends for a
period of one year at
https://radian.com/who-we-are/for-investors/webcasts.
In addition to the information provided in the company’s
earnings news release, other statistical and financial information,
which is expected to be referred to during the conference call,
will be available on Radian’s website at www.radian.com, under
Investors.
NON-GAAP FINANCIAL MEASURES
Radian believes that adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity (non-GAAP measures) facilitate
evaluation of the company’s fundamental financial performance and
provide relevant and meaningful information to investors about the
ongoing operating results of the company. On a consolidated basis,
these measures are not recognized in accordance with accounting
principles generally accepted in the United States of America
(GAAP) and should not be considered in isolation or viewed as
substitutes for GAAP measures of performance. The measures
described below have been established in order to increase
transparency for the purpose of evaluating the company’s operating
trends and enabling more meaningful comparisons with Radian’s
competitors.
Adjusted pretax operating income (loss) is defined as GAAP
consolidated pretax income (loss) excluding the effects of: (i) net
gains (losses) on investments and other financial instruments,
except for those investments and other financial instruments
attributable to our Mortgage Conduit business; (ii) amortization
and impairment of goodwill and other acquired intangible assets;
and (iii) impairment of other long-lived assets and other
non-operating items, if any, such as gains (losses) from the sale
of lines of business, acquisition-related income (expenses) and
gains (losses) on extinguishment of debt. Adjusted diluted net
operating income (loss) per share is calculated by dividing
adjusted pretax operating income (loss) attributable to common
stockholders, net of taxes computed using the company’s statutory
tax rate, by the sum of the weighted average number of common
shares outstanding and all dilutive potential common shares
outstanding. Adjusted net operating return on equity is calculated
by dividing annualized adjusted pretax operating income (loss), net
of taxes computed using the company’s statutory tax rate, by
average stockholders’ equity, based on the average of the beginning
and ending balances for each period presented.
See Exhibit F or Radian’s website for a description of these
items, as well as Exhibit G for reconciliations to the most
comparable consolidated GAAP measures.
ABOUT RADIAN
Radian Group Inc. (NYSE: RDN) is a catalyst for homeownership
that transforms risk into opportunity through services and
technologies that empower housing and capital market participants
to act with confidence. The Radian family of companies is shaping
the future of mortgage and real estate services through products
and services that include industry-leading mortgage insurance and a
comprehensive suite of mortgage, risk, real estate, and title
services. Visit www.radian.com to see how we’re creating
possibilities for a place to call home.
FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS
(Unaudited)
Exhibit A:
Condensed Consolidated Statements of
Operations
Exhibit B:
Net Income Per Share
Exhibit C:
Condensed Consolidated Balance Sheets
Exhibit D:
Condensed Consolidated Statements of
Operations Detail
Exhibit E:
Segment Information
Exhibit F:
Definition of Consolidated Non-GAAP
Financial Measures
Exhibit G:
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit H:
Mortgage Insurance Supplemental
Information - New Insurance Written
Exhibit I:
Mortgage Insurance Supplemental
Information - Primary Insurance in Force and Risk in Force
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (1)
Exhibit A (page 1 of 2)
2024
2023
(In thousands, except per-share
amounts)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Revenues
Net premiums earned
$
238,562
$
239,133
$
237,731
$
235,857
$
232,649
Services revenue
12,250
12,167
13,265
12,588
12,419
Net investment income
71,310
78,396
73,766
69,221
68,824
Net gains (losses) on investments and
other financial instruments
(8,291
)
2,174
(4,487
)
490
13,447
Income (loss) on consolidated VIEs
(467
)
465
—
—
—
Other income
2,497
1,522
872
1,262
1,305
Total revenues
315,861
333,857
321,147
319,418
328,644
Expenses
Provision for losses
(624
)
6,889
(1,745
)
(7,034
)
4,170
Policy acquisition costs
7,276
6,724
6,522
6,794
6,147
Cost of services
9,867
9,542
9,535
9,327
8,950
Other operating expenses
87,703
85,919
91,648
82,636
95,218
Interest expense
22,513
29,391
27,064
29,046
23,169
Impairment of goodwill
—
—
—
—
9,802
Amortization of other acquired intangible
assets
—
—
—
—
1,371
Total expenses
126,735
138,465
133,024
120,769
148,827
Pretax income
189,126
195,392
188,123
198,649
179,817
Income tax provision
40,835
43,500
36,220
46,295
37,124
Net income
$
148,291
$
151,892
$
151,903
$
152,354
$
142,693
Diluted net income per share
$
0.98
$
0.99
$
0.98
$
0.98
$
0.91
(1)
See Exhibit D for additional details.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (1)
Exhibit A (page 2 of 2)
Years Ended December
31,
(In thousands, except per-share
amounts)
2024
2023
Revenues
Net premiums earned
$
951,283
$
919,578
Services revenue
50,270
46,092
Net investment income
292,693
258,430
Net gains (losses) on investments and
other financial instruments
(10,114
)
10,241
Income (loss) on consolidated VIEs
(2
)
—
Other income
6,153
6,247
Total revenues
1,290,283
1,240,588
Expenses
Provision for losses
(2,514
)
(42,526
)
Policy acquisition costs
27,316
24,578
Cost of services
38,271
38,491
Other operating expenses
347,906
347,578
Interest expense
108,014
89,695
Impairment of goodwill
—
9,802
Amortization of other acquired intangible
assets
—
5,483
Total expenses
518,993
473,101
Pretax income
771,290
767,487
Income tax provision
166,850
164,368
Net income
$
604,440
$
603,119
Diluted net income per share
$
3.92
$
3.77
(1)
See Exhibit D for additional details.
Radian Group Inc. and Subsidiaries
Net Income Per Share
Exhibit B
The calculation of basic and diluted net income per share is as
follows.
2024
2023
(In thousands, except per-share
amounts)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Net income—basic and diluted
$
148,291
$
151,892
$
151,903
$
152,354
$
142,693
Average common shares
outstanding—basic
150,302
151,846
153,110
153,817
155,318
Dilutive effect of share-based
compensation arrangements (1)
1,610
1,227
1,289
2,154
1,909
Adjusted average common shares
outstanding—diluted
151,912
153,073
154,399
155,971
157,227
Basic net income per share
$
0.99
$
1.00
$
0.99
$
0.99
$
0.92
Diluted net income per share
$
0.98
$
0.99
$
0.98
$
0.98
$
0.91
(1)
The following number of shares of our common stock equivalents
issued under our share-based compensation arrangements are not
included in the calculation of diluted net income per share because
their effect would be anti-dilutive.
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Shares of common stock equivalents
9
—
64
—
—
Years Ended December
31,
(In thousands, except per-share
amounts)
2024
2023
Net income—basic and diluted
$
604,440
$
603,119
Average common shares
outstanding—basic
152,465
158,140
Dilutive effect of share-based
compensation arrangements (1)
1,726
1,993
Adjusted average common shares
outstanding—diluted
154,191
160,133
Basic net income per share
$
3.96
$
3.81
Diluted net income per share
$
3.92
$
3.77
(1)
The following number of shares of our common stock equivalents
issued under our share-based compensation arrangements are not
included in the calculation of diluted net income per share because
their effect would be anti-dilutive.
Years Ended December
31,
(In thousands)
2024
2023
Shares of common stock equivalents
11
14
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit C
Dec 31,
Sep 30,
Jun 30,
Mar 31,
Dec 31,
(In thousands, except per-share
amounts)
2024
2024
2024
2024
2023
Assets
Investments
$
6,345,236
$
6,497,180
$
6,588,149
$
6,327,114
$
6,085,654
Cash
38,823
28,061
13,791
26,993
18,999
Restricted cash
2,649
2,014
1,993
1,832
1,066
Accrued investment income
49,053
49,707
47,607
46,334
45,783
Accounts and notes receivable
128,093
138,439
137,777
130,095
123,857
Reinsurance recoverable
36,433
34,015
31,064
28,151
25,909
Deferred policy acquisition costs
17,746
18,430
18,566
18,561
18,718
Property and equipment, net
27,637
41,892
56,360
60,521
63,822
Prepaid federal income taxes
921,080
870,336
837,736
750,320
750,320
Other assets
375,931
384,666
396,600
369,944
459,805
Consolidated VIE assets (1)
721,307
355,031
—
—
—
Total assets
$
8,663,988
$
8,419,771
$
8,129,643
$
7,759,865
$
7,593,933
Liabilities and stockholders’ equity
Reserve for losses and loss adjustment
expense
$
360,326
$
363,225
$
357,470
$
361,833
$
370,148
Unearned premiums
188,337
198,007
206,094
215,124
225,396
Senior notes
1,065,337
1,064,718
1,513,782
1,512,860
1,417,781
Secured borrowings
538,294
551,916
484,665
207,601
119,476
Net deferred tax liability
746,685
737,605
656,113
626,353
589,564
Other liabilities
431,556
457,155
429,200
396,362
473,763
Consolidated VIE liabilities (1)
709,595
348,292
—
—
—
Total liabilities
4,040,130
3,720,918
3,647,324
3,320,133
3,196,128
Common stock
168
171
172
171
173
Treasury stock
(968,246
)
(967,717
)
(967,218
)
(946,202
)
(945,870
)
Additional paid-in capital
1,246,826
1,315,046
1,356,341
1,390,436
1,430,594
Retained earnings
4,695,348
4,584,453
4,470,335
4,357,823
4,243,759
Accumulated other comprehensive income
(loss)
(350,238
)
(233,100
)
(377,311
)
(362,496
)
(330,851
)
Total stockholders’ equity
4,623,858
4,698,853
4,482,319
4,439,732
4,397,805
Total liabilities and stockholders’
equity
$
8,663,988
$
8,419,771
$
8,129,643
$
7,759,865
$
7,593,933
Shares outstanding
147,569
149,776
151,148
151,509
153,179
Book value per share
$
31.33
$
31.37
$
29.66
$
29.30
$
28.71
Holding company debt-to-capital ratio
(2)
18.7
%
18.5
%
25.2
%
25.4
%
24.4
%
(1)
Reflects the consolidation of Radian Mortgage Capital’s private
label securitizations, net of our retained interest in these
transactions. We determined that we are the primary beneficiary of
these securitization trusts, which are each considered to be a
variable interest entity (“VIE”), thereby requiring us to
consolidate the VIE.
(2)
Calculated as carrying value of senior notes, which were issued and
are owed by our holding company, divided by carrying value of
senior notes and stockholders’ equity. This holding company ratio
does not include the effects of amounts owed by our subsidiaries
related to secured borrowings.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Detail
Exhibit D (page 1 of 4)
Net Premiums Earned
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Direct - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
$
261,017
$
261,726
$
259,342
$
258,593
$
256,632
Single Premium Policy cancellations
2,363
1,783
2,076
2,114
2,058
Total direct - Mortgage insurance
263,380
263,509
261,418
260,707
258,690
Ceded - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
(43,239
)
(41,894
)
(39,925
)
(38,997
)
(40,065
)
Single Premium Policy cancellations
(1)
952
818
732
(112
)
(444
)
Profit commission - other (2)
14,183
12,711
12,593
12,401
12,199
Total ceded premiums - Mortgage
insurance
(28,104
)
(28,365
)
(26,600
)
(26,708
)
(28,310
)
Net premiums earned - Mortgage
insurance
235,276
235,144
234,818
233,999
230,380
Net premiums earned - Title insurance
3,286
3,989
2,913
1,858
2,269
Net premiums earned
$
238,562
$
239,133
$
237,731
$
235,857
$
232,649
(1)
Includes the impact of related profit commissions.
(2)
The amounts represent the profit commission under our QSR Program,
excluding the impact of Single Premium Policy cancellations.
Services Revenue
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Mortgage Insurance
Contract underwriting services
$
261
$
244
$
309
$
210
$
202
All Other
Real estate services
7,733
7,876
8,777
9,193
8,888
Title
3,645
3,427
3,540
2,573
2,713
Real estate technology
611
620
639
612
616
Total services revenue
$
12,250
$
12,167
$
13,265
$
12,588
$
12,419
Net Investment Income
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Fixed maturities
$
57,238
$
59,348
$
57,924
$
57,259
$
58,669
Equity securities
3,350
3,047
3,067
2,539
3,753
Mortgage loans held for sale
7,537
7,828
5,411
1,793
1,725
Short-term investments
4,478
9,686
8,614
8,958
5,871
Other (1)
(1,293
)
(1,513
)
(1,250
)
(1,328
)
(1,194
)
Net investment income
$
71,310
$
78,396
$
73,766
$
69,221
$
68,824
(1)
Includes investment management expenses, as well as the net impact
from our securities lending activities.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Detail
Exhibit D (page 2 of 4)
Provision for Losses
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Mortgage insurance
Current period defaults (1)
$
55,795
$
57,032
$
47,918
$
53,688
$
53,981
Prior period defaults (2)
(55,734
)
(50,686
)
(49,687
)
(60,574
)
(49,373
)
Total Mortgage insurance
61
6,346
(1,769
)
(6,886
)
4,608
Title insurance
(685
)
543
24
(148
)
(438
)
Total provision for losses
$
(624
)
$
6,889
$
(1,745
)
$
(7,034
)
$
4,170
(1)
Related to defaulted loans with the most recent default notice
dated in the period indicated. For example, if a loan had defaulted
in a prior period, but then subsequently cured and later
re-defaulted in the current period, the default would be considered
a current period default.
(2)
Related to defaulted loans with a default notice dated in a period
earlier than the period indicated, which have been continuously in
default since that time.
Other Operating
Expenses
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Salaries and other base employee
expenses
$
32,561
$
32,851
$
41,431
$
39,723
$
34,182
Variable and share-based incentive
compensation
20,342
17,581
23,223
17,515
20,262
Other general operating expenses (1)
40,385
39,984
31,623
30,262
45,186
Ceding commissions
(6,620
)
(6,276
)
(5,957
)
(5,644
)
(5,327
)
Title agent commissions
1,035
1,779
1,328
780
915
Total
$
87,703
$
85,919
$
91,648
$
82,636
$
95,218
(1)
Includes $13 million, $10 million and $14 million in the fourth
quarter of 2024, the third quarter of 2024 and the fourth quarter
of 2023, respectively, of impairment of long-lived assets,
consisting of impairments to our internal-use software and
lease-related assets.
Interest Expense
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Senior notes
$
15,791
$
20,945
$
21,156
$
22,128
$
20,335
Mortgage loan financing facilities
5,963
7,500
5,107
1,438
1,421
Loss on extinguishment of debt
—
—
—
4,275
—
FHLB advances
403
538
544
945
1,059
Revolving credit facility
356
408
257
260
354
Total interest expense
$
22,513
$
29,391
$
27,064
$
29,046
$
23,169
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Detail
Exhibit D (page 3 of 4)
Net Premiums Earned
Years Ended December
31,
(In thousands)
2024
2023
Direct - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
$
1,040,678
$
1,015,238
Single Premium Policy cancellations
8,336
14,703
Total direct - Mortgage insurance
1,049,014
1,029,941
Ceded - Mortgage insurance
Premiums earned, excluding revenue from
cancellations
(164,055
)
(165,870
)
Single Premium Policy cancellations
(1)
2,390
(3,903
)
Profit commission - other (2)
51,888
49,195
Total ceded premiums - Mortgage
insurance
(109,777
)
(120,578
)
Net premiums earned - Mortgage
insurance
939,237
909,363
Net premiums earned - Title insurance
12,046
10,215
Net premiums earned
$
951,283
$
919,578
(1)
Includes the impact of related profit commissions.
(2)
The amounts represent the profit commission under our QSR Program,
excluding the impact of Single Premium Policy cancellations.
Services Revenue
Years Ended December
31,
(In thousands)
2024
2023
Mortgage Insurance
Contract underwriting services
$
1,024
$
1,088
All Other
Real estate services
33,579
30,927
Title
13,185
11,464
Real estate technology
2,482
2,613
Total services revenue
$
50,270
$
46,092
Net Investment Income
Years Ended December
31,
(In thousands)
2024
2023
Fixed maturities
$
231,769
$
226,654
Equity securities
12,003
13,420
Mortgage loans held for sale
22,569
4,212
Short-term investments
31,736
18,840
Other (1)
(5,384
)
(4,696
)
Net investment income
$
292,693
$
258,430
(1)
Includes investment management expenses, as well as the net impact
from our securities lending activities.
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
Detail
Exhibit D (page 4 of 4)
Provision for Losses
Years Ended December
31,
(In thousands)
2024
2023
Mortgage insurance
Current period defaults (1)
$
197,719
$
178,664
Prior period defaults (2)
(199,967
)
(220,800
)
Total Mortgage insurance
(2,248
)
(42,136
)
Title insurance
(266
)
(390
)
Total provision for losses
$
(2,514
)
$
(42,526
)
(1)
Related to defaulted loans with the most recent default notice
dated in the period indicated. For example, if a loan had defaulted
in a prior period, but then subsequently cured and later
re-defaulted in the current period, the default would be considered
a current period default.
(2)
Related to defaulted loans with a default notice dated in a period
earlier than the period indicated, which have been continuously in
default since that time.
Other Operating
Expenses
Years Ended December
31,
(In thousands)
2024
2023
Salaries and other base employee
expenses
$
146,565
$
141,550
Variable and share-based incentive
compensation
78,661
76,989
Other general operating expenses (1)
142,254
144,516
Ceding commissions
(24,497
)
(19,932
)
Title agent commissions
4,923
4,455
Total
$
347,906
$
347,578
(1)
Includes $23 million and $14 million in 2024 and 2023,
respectively, of impairment of long-lived assets, consisting of
impairments to our internal-use software and lease-related assets.
Interest Expense
Years Ended December
31,
(In thousands)
2024
2023
Senior notes
$
80,020
$
81,246
Mortgage loan financing facilities
20,008
3,507
Loss on extinguishment of debt
4,275
—
FHLB advances
2,430
3,454
Revolving credit facility
1,281
1,374
Other
—
114
Total interest expense
$
108,014
$
89,695
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 1 of 5)
Summarized financial information concerning our operating
segments as of and for the periods indicated is as follows. For a
definition of adjusted pretax operating income (loss), along with a
reconciliation to its consolidated GAAP measure, see Exhibits F and
G.
Three Months Ended December
31, 2024
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
231,979
$
3,286
$
—
$
235,265
(Increase) decrease in unearned
premiums
3,297
—
—
3,297
Net premiums earned
235,276
3,286
—
238,562
Services revenue
262
12,088
(100
)
12,250
Net investment income
51,541
19,769
—
71,310
Net gains (losses) on investments and
other financial instruments
—
(1,521
)
—
(1,521
)
Income (loss) on consolidated VIEs
—
(467
)
—
(467
)
Other income
1,707
826
(36
)
2,497
Total
288,786
33,981
(136
)
322,631
Provision for losses
61
(685
)
—
(624
)
Policy acquisition costs
7,276
—
—
7,276
Cost of services
99
9,768
—
9,867
Other operating expenses before allocated
corporate operating expenses
15,582
21,644
(136
)
37,090
Interest expense
16,550
5,963
—
22,513
Total
39,568
36,690
(136
)
76,122
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
249,218
(2,709
)
—
246,509
Allocation of corporate operating
expenses
34,011
3,661
—
37,672
Adjusted pretax operating income (loss)
(2)
$
215,207
$
(6,370
)
$
—
$
208,837
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 2 of 5)
Three Months Ended December
31, 2023
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
225,112
$
2,269
$
—
$
227,381
(Increase) decrease in unearned
premiums
5,268
—
—
5,268
Net premiums earned
230,380
2,269
—
232,649
Services revenue
202
12,311
(94
)
12,419
Net investment income
51,061
17,763
—
68,824
Net gains (losses) on investments and
other financial instruments
—
356
—
356
Other income
1,302
14
(11
)
1,305
Total
282,945
32,713
(105
)
315,553
Provision for losses
4,608
(438
)
—
4,170
Policy acquisition costs
6,147
—
—
6,147
Cost of services
157
8,793
—
8,950
Other operating expenses before allocated
corporate operating expenses
15,559
23,660
(105
)
39,114
Interest expense
21,748
1,421
—
23,169
Total
48,219
33,436
(105
)
81,550
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
234,726
(723
)
—
234,003
Allocation of corporate operating
expenses
36,929
5,340
—
42,269
Adjusted pretax operating income (loss)
(2)
$
197,797
$
(6,063
)
$
—
$
191,734
Year Ended December 31,
2024
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
930,149
$
12,046
$
—
$
942,195
(Increase) decrease in unearned
premiums
9,088
—
—
9,088
Net premiums earned
939,237
12,046
—
951,283
Services revenue
1,025
49,646
(401
)
50,270
Net investment income
201,453
91,240
—
292,693
Net gains (losses) on investments and
other financial instruments
—
(5,798
)
—
(5,798
)
Income (loss) on consolidated VIEs
—
(2
)
—
(2
)
Other income
5,649
582
(78
)
6,153
Total
1,147,364
147,714
(3)
(479
)
1,294,599
Provision for losses
(2,248
)
(266
)
—
(2,514
)
Policy acquisition costs
27,316
—
—
27,316
Cost of services
534
37,737
—
38,271
Other operating expenses before allocated
corporate operating expenses
66,417
99,106
(479
)
165,044
Interest expense
83,731
20,008
—
103,739
Total
175,750
156,585
(479
)
331,856
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
971,614
(8,871
)
—
962,743
Allocation of corporate operating
expenses
144,251
15,487
—
159,738
Adjusted pretax operating income (loss)
(2)
$
827,363
$
(24,358
)
$
—
$
803,005
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 3 of 5)
Year Ended December 31,
2023
(In thousands)
Mortgage Insurance
All Other (1)
Inter- segment
Total
Net premiums written
$
904,240
$
10,215
$
—
$
914,455
(Increase) decrease in unearned
premiums
5,123
—
—
5,123
Net premiums earned
909,363
10,215
—
919,578
Services revenue
1,088
45,394
(390
)
46,092
Net investment income
195,077
63,353
—
258,430
Net gains (losses) on investments and
other financial instruments
—
814
—
814
Income (loss) on consolidated VIEs
—
—
—
—
Other income
5,372
27
(20
)
5,379
Total
1,110,900
119,803
(3)
(410
)
1,230,293
Provision for losses
(42,136
)
(390
)
—
(42,526
)
Policy acquisition costs
24,578
—
—
24,578
Cost of services
713
37,778
—
38,491
Other operating expenses before allocated
corporate operating expenses
71,150
99,030
(410
)
169,770
Interest expense
86,188
3,507
—
89,695
Total
140,493
139,925
(410
)
280,008
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
970,407
(20,122
)
—
950,285
Allocation of corporate operating
expenses
140,583
23,275
—
163,858
Adjusted pretax operating income (loss)
(2)
$
829,824
$
(43,397
)
$
—
$
786,427
(1)
All Other activities include: (i) income
(losses) from assets held by our holding company; (ii) related
general corporate operating expenses not attributable or allocated
to our reportable segments; and (iii) the operating results from
certain other immaterial activities and operating segments,
including our mortgage conduit, title, real estate services and
real estate technology businesses.
(2)
See Exhibits F and G for additional
information on the use and definition of this term and a
reconciliation to consolidated net income.
(3)
Details of All Other revenue are as follows.
Years Ended December
31,
(In thousands)
2024
2023
Holding company (a)
$
63,361
$
57,017
Real estate services
34,868
31,300
Title
27,503
23,662
Mortgage conduit
19,291
5,144
Real estate technology
2,691
2,680
Total
$
147,714
$
119,803
(a) Consists of net investment income earned from assets held by
Radian Group, our holding company, that are not attributable or
allocated to our underlying businesses.
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 4 of 5)
Mortgage Insurance
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Net premiums written
$
231,979
$
233,648
$
232,645
$
231,877
$
225,112
(Increase) decrease in unearned
premiums
3,297
1,496
2,173
2,122
5,268
Net premiums earned
235,276
235,144
234,818
233,999
230,380
Services revenue
262
244
309
210
202
Net investment income
51,541
50,236
50,102
49,574
51,061
Other income
1,707
1,948
754
1,240
1,302
Total
288,786
287,572
285,983
285,023
282,945
Provision for losses
61
6,346
(1,769
)
(6,886
)
4,608
Policy acquisition costs
7,276
6,724
6,522
6,794
6,147
Cost of services
99
126
156
153
157
Other operating expenses before allocated
corporate operating expenses
15,582
16,408
17,157
17,270
15,559
Interest expense
16,550
21,891
21,957
23,333
21,748
Total
39,568
51,495
44,023
40,664
48,219
Adjusted pretax operating income before
allocated corporate operating expenses
249,218
236,077
241,960
244,359
234,726
Allocation of corporate operating
expenses
34,011
32,534
43,197
34,509
36,929
Adjusted pretax operating income (1)
$
215,207
$
203,543
$
198,763
$
209,850
$
197,797
All Other (2)
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Net premiums earned
$
3,286
$
3,989
$
2,913
$
1,858
$
2,269
Services revenue
12,088
12,001
13,064
12,493
12,311
Net investment income
19,769
28,160
23,664
19,647
17,763
Net gains (losses) on investments and
other financial instruments
(1,521
)
(4,611
)
(49
)
383
356
Income (loss) on consolidated VIEs
(467
)
465
—
—
—
Other income
826
(399
)
130
25
14
Total (3)
33,981
39,605
39,722
34,406
32,713
Provision for losses
(685
)
543
24
(148
)
(438
)
Cost of services
9,768
9,416
9,379
9,174
8,793
Other operating expenses before allocated
corporate operating expenses
21,644
23,583
26,615
27,264
23,660
Interest expense
5,963
7,500
5,107
1,438
1,421
Total
36,690
41,042
41,125
37,728
33,436
Adjusted pretax operating income (loss)
before allocated corporate operating expenses
(2,709
)
(1,437
)
(1,403
)
(3,322
)
(723
)
Allocation of corporate operating
expenses
3,661
3,438
4,677
3,711
5,340
Adjusted pretax operating income (loss)
(1)
$
(6,370
)
$
(4,875
)
$
(6,080
)
$
(7,033
)
$
(6,063
)
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 5 of 5)
(1)
See Exhibits F and G for additional information on the use and
definition of this term and a reconciliation to consolidated net
income.
(2)
All Other activities include: (i) income (losses) from assets held
by our holding company; (ii) related general corporate operating
expenses not attributable or allocated to our reportable segments;
and (iii) the operating results from certain other immaterial
activities and operating segments, including our mortgage conduit,
title, real estate services and real estate technology businesses.
(3)
Details of All Other revenue are as follows.
2024
2023
(In thousands)
2024
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Holding company (a)
$
10,670
$
19,113
$
17,042
$
16,536
$
15,374
Real estate services
8,056
8,185
9,110
9,517
9,014
Title
7,486
7,973
7,047
4,997
5,516
Mortgage conduit
7,128
3,658
5,815
2,690
2,171
Real estate technology
641
676
708
666
638
Total
$
33,981
$
39,605
$
39,722
$
34,406
$
32,713
(a) Consists of net investment income earned from assets held by
Radian Group, our holding company, that are not attributable or
allocated to our underlying businesses.
Selected Mortgage Insurance
Key Ratios
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Loss ratio (1)
0.0
%
2.7
%
(0.8
)%
(2.9
)%
2.0
%
Expense ratio (2)
24.2
%
23.7
%
28.5
%
25.0
%
25.5
%
Years Ended December
31,
(In thousands)
2024
2023
Loss ratio (1)
(0.2
)%
(4.6
)%
Expense ratio (2)
25.3
%
26.0
%
(1)
For our Mortgage Insurance segment, calculated as provision for
losses expressed as a percentage of net premiums earned.
(2)
For our Mortgage Insurance segment, calculated as operating
expenses, (which consist of policy acquisition costs and other
operating expenses, as well as allocated corporate operating
expenses), expressed as a percentage of net premiums earned.
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial
Measures
Exhibit F (page 1 of 2)
Use of Non-GAAP Financial Measures
In addition to the traditional GAAP financial measures, we have
presented “adjusted pretax operating income (loss),” “adjusted
diluted net operating income (loss) per share” and “adjusted net
operating return on equity,” which are non-GAAP financial measures
for the consolidated company, among our key performance indicators
to evaluate our fundamental financial performance. These non-GAAP
financial measures align with the way our business performance is
evaluated by both management and by our board of directors. These
measures have been established in order to increase transparency
for the purposes of evaluating our operating trends and enabling
more meaningful comparisons with our peers. Although on a
consolidated basis adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity are non-GAAP financial measures, we
believe these measures aid in understanding the underlying
performance of our operations. Our senior management, including our
Chief Executive Officer (Radian’s chief operating decision maker),
uses adjusted pretax operating income (loss) as our primary measure
to evaluate the fundamental financial performance of our businesses
and to allocate resources to them.
Adjusted pretax operating income (loss) is defined as GAAP
consolidated pretax income (loss) excluding the effects of: (i) net
gains (losses) on investments and other financial instruments,
except for those investments and other financial instruments
attributable to our Mortgage Conduit business; (ii) amortization
and impairment of goodwill and other acquired intangible assets;
and (iii) impairment of other long-lived assets and other
non-operating items, if any, such as gains (losses) from the sale
of lines of business, acquisition-related income (expenses) and
gains (losses) on extinguishment of debt. Adjusted diluted net
operating income (loss) per share is calculated by dividing
adjusted pretax operating income (loss) attributable to common
stockholders, net of taxes computed using the company’s statutory
tax rate, by the sum of the weighted average number of common
shares outstanding and all dilutive potential common shares
outstanding. Adjusted net operating return on equity is calculated
by dividing annualized adjusted pretax operating income (loss), net
of taxes computed using the company’s statutory tax rate, by
average stockholders’ equity, based on the average of the beginning
and ending balances for each period presented.
Although adjusted pretax operating income (loss) excludes
certain items that have occurred in the past and are expected to
occur in the future, the excluded items represent those that are:
(i) not viewed as part of the operating performance of our primary
activities or (ii) not expected to result in an economic impact
equal to the amount reflected in pretax income (loss). These
adjustments, along with the reasons for their treatment, are
described below.
(1)
Net gains (losses) on investments and other financial
instruments. The recognition of realized investment gains or
losses can vary significantly across periods as the activity is
highly discretionary based on the timing of individual securities
sales due to such factors as market opportunities, our tax and
capital profile and overall market cycles. Unrealized gains and
losses arise primarily from changes in the market value of our
investments that are classified as trading or equity securities.
These valuation adjustments may not necessarily result in realized
economic gains or losses. Trends in the profitability of our
fundamental operating activities can be more clearly identified
without the fluctuations of these realized and unrealized gains or
losses and changes in fair value of other financial instruments.
Except for certain investments and other financial instruments
attributable to specific operating segments, we do not view them to
be indicative of our fundamental operating activities.
(2)
Amortization and impairment of goodwill and other acquired
intangible assets. Amortization of acquired intangible assets
represents the periodic expense required to amortize the cost of
acquired intangible assets over their estimated useful lives.
Acquired intangible assets are also periodically reviewed for
potential impairment, and impairment adjustments are made whenever
appropriate. We do not view these charges as part of the operating
performance of our primary activities.
(3)
Impairment of other long-lived assets and other non-operating
items, if any. Impairment of other long-lived assets and other
non-operating items includes activities that we do not view to be
indicative of our fundamental operating activities, such as: (i)
impairment of internal-use software and other long-lived assets;
(ii) gains (losses) from the sale of lines of business; (iii)
acquisition-related income and expenses; and (iv) gains (losses) on
extinguishment of debt.
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial
Measures
Exhibit F (page 2 of 2)
See Exhibit G for the reconciliations of the most comparable
GAAP measures, consolidated pretax income (loss), diluted net
income (loss) per share and return on equity to our non-GAAP
financial measures for the consolidated company, adjusted pretax
operating income (loss), adjusted diluted net operating income
(loss) per share and adjusted net operating return on equity,
respectively.
Total adjusted pretax operating income (loss), adjusted diluted
net operating income (loss) per share and adjusted net operating
return on equity are not measures of overall profitability, and
therefore, should not be considered in isolation or viewed as
substitutes for GAAP pretax income (loss), diluted net income
(loss) per share or return on equity. Our definitions of adjusted
pretax operating income (loss), adjusted diluted net operating
income (loss) per share and adjusted net operating return on equity
may not be comparable to similarly-named measures reported by other
companies.
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit G (page 1 of 3)
Reconciliation of Consolidated
Pretax Income to Adjusted Pretax Operating Income
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Consolidated pretax income
$
189,126
$
195,392
$
188,123
$
198,649
$
179,817
Less reconciling income (expense)
items
Net gains (losses) on investments and
other financial instruments (1)
(6,770
)
6,785
(4,438
)
107
13,091
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
—
—
(11,173
)
Impairment of other long-lived assets and
other non-operating items
(12,941
)
(2)
(10,061
)
(2)
(122
)
(4,275
)
(3)
(13,835
)
(2)
Total adjusted pretax operating income
(4)
$
208,837
$
198,668
$
192,683
$
202,817
$
191,734
(1)
Excludes net gains (losses) on investments and other financial
instruments that are attributable to our Mortgage Conduit business,
which are included in adjusted pretax operating income (loss).
(2)
This amount is included in other operating expenses on the
Condensed Consolidated Statement of Operations in Exhibit A and
primarily relates to impairment of other long-lived assets.
(3)
This amount is included in interest expense on the Condensed
Consolidated Statement of Operations in Exhibit A and relates to
the loss on extinguishment of debt.
(4)
Total adjusted pretax operating income consists of adjusted pretax
operating income (loss) for our reportable segment and All Other
activities as follows.
2024
2023
(In thousands)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Adjusted pretax operating income
(loss)
Mortgage Insurance segment
$
215,207
$
203,543
$
198,763
$
209,850
$
197,797
All Other activities
(6,370
)
(4,875
)
(6,080
)
(7,033
)
(6,063
)
Total adjusted pretax operating income
$
208,837
$
198,668
$
192,683
$
202,817
$
191,734
Reconciliation of Diluted Net
Income Per Share to Adjusted Diluted Net Operating Income Per
Share
2024
2023
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Diluted net income per share
$
0.98
$
0.99
$
0.98
$
0.98
$
0.91
Less per-share impact of reconciling
income (expense) items
Net gains (losses) on investments and
other financial instruments
(0.04
)
0.04
(0.03
)
—
0.08
Amortization and impairment of goodwill
and other acquired intangible assets
—
—
—
—
(0.07
)
Impairment of other long-lived assets and
other non-operating items
(0.09
)
(0.06
)
—
(0.03
)
(0.09
)
Income tax (provision) benefit on
reconciling income (expense) items (1)
0.03
—
—
0.01
0.02
Difference between statutory and effective
tax rates
(0.01
)
(0.02
)
0.02
(0.03
)
0.01
Per-share impact of reconciling income
(expense) items
(0.11
)
(0.04
)
(0.01
)
(0.05
)
(0.05
)
Adjusted diluted net operating income per
share (1)
$
1.09
$
1.03
$
0.99
$
1.03
$
0.96
(1)
Calculated using the company’s federal statutory tax rate of 21%.
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit G (page 2 of 3)
Reconciliation of Return on
Equity to Adjusted Net Operating Return on Equity (1)
2024
2023
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Return on equity (1)
12.7
%
13.2
%
13.6
%
13.8
%
13.4
%
Less impact of reconciling income
(expense) items (2)
Net gains (losses) on investments and
other financial instruments
(0.6
)%
0.6
%
(0.4
)%
—
%
1.2
%
Amortization and impairment of goodwill
and other acquired intangible assets
—
%
—
%
—
%
—
%
(1.0
)%
Impairment of other long-lived assets and
other non-operating items
(1.1
)%
(0.9
)%
—
%
(0.4
)%
(1.3
)%
Income tax (provision) benefit on
reconciling income (expense) items (3)
0.3
%
—
%
0.1
%
0.1
%
0.2
%
Difference between statutory and effective
tax rates
(0.1
)%
(0.2
)%
0.3
%
(0.4
)%
0.1
%
Impact of reconciling income (expense)
items
(1.5
)%
(0.5
)%
—
%
(0.7
)%
(0.8
)%
Adjusted net operating return on equity
(3)
14.2
%
13.7
%
13.6
%
14.5
%
14.2
%
(1)
Calculated by dividing annualized net income by average
stockholders’ equity, based on the average of the beginning and
ending balances for each period presented.
(2)
Annualized, as a percentage of average stockholders’ equity.
(3)
Calculated using the company’s federal statutory tax rate of 21%.
Reconciliation of Consolidated
Pretax Income to Adjusted Pretax Operating Income
Years Ended December
31,
(In thousands)
2024
2023
Consolidated pretax income
$
771,290
$
767,487
Less reconciling income (expense)
items
Net gains (losses) on investments and
other financial instruments (1)
(4,316
)
9,427
Amortization and impairment of goodwill
and other acquired intangible assets
—
(15,285
)
Impairment of other long-lived assets and
other non-operating items (2)
(27,399
)
(13,082
)
Total adjusted pretax operating income
(3)
$
803,005
$
786,427
(1)
Excludes net gains (losses) on investments and other financial
instruments that are attributable to our Mortgage Conduit business,
which are included in adjusted pretax operating income (loss).
(2)
Related primarily to impairments of internal-use software and
lease-related assets, which are included in other operating
expenses on the Condensed Consolidated Statement of Operations in
Exhibit A.
(3)
Total adjusted pretax operating income consists of adjusted pretax
operating income (loss) for our reportable segment and All Other
activities as follows.
Years Ended December
31,
(In thousands)
2024
2023
Adjusted pretax operating income
(loss)
Mortgage Insurance segment
$
827,363
$
829,824
All Other activities
(24,358
)
(43,397
)
Total adjusted pretax operating income
$
803,005
$
786,427
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure
Reconciliations
Exhibit G (page 3 of 3)
Reconciliation of Diluted Net
Income Per Share to Adjusted Diluted Net Operating Income Per
Share
Years Ended December
31,
2024
2023
Diluted net income per share
$
3.92
$
3.77
Less per-share impact of reconciling
income (expense) items
Net gains (losses) on investments and
other financial instruments
(0.03
)
0.06
Amortization and impairment of goodwill
and other acquired intangible assets
—
(0.09
)
Impairment of other long-lived assets and
other non-operating items
(0.17
)
(0.08
)
Income tax (provision) benefit on
reconciling income (expense) items (1)
0.04
0.02
Difference between statutory and effective
tax rates
(0.03
)
(0.02
)
Per-share impact of reconciling income
(expense) items
(0.19
)
(0.11
)
Adjusted diluted net operating income per
share (1)
$
4.11
$
3.88
(1)
Calculated using the company’s federal statutory tax rate of 21%.
Reconciliation of Return on
Equity to Adjusted Net Operating Return on Equity (1)
Years Ended December
31,
2024
2023
Return on equity (1)
13.4
%
14.5
%
Less impact of reconciling income
(expense) items (2)
Net gains (losses) on investments and
other financial instruments
(0.1
)%
0.2
%
Amortization and impairment of goodwill
and other acquired intangible assets
—
%
(0.3
)%
Impairment of other long-lived assets and
other non-operating items
(0.6
)%
(0.3
)%
Income tax (provision) benefit on
reconciling income (expense) items (3)
0.1
%
0.1
%
Difference between statutory and effective
tax rates
(0.1
)%
(0.1
)%
Impact of reconciling income (expense)
items
(0.7
)%
(0.4
)%
Adjusted net operating return on equity
(3)
14.1
%
14.9
%
(1)
Calculated by dividing net income by average stockholders’ equity.
(2)
As a percentage of average stockholders’ equity.
(3)
Calculated using the company’s federal statutory tax rate of 21%.
On a consolidated basis, “adjusted pretax operating income
(loss),” “adjusted diluted net operating income (loss) per share”
and “adjusted net operating return on equity” are measures not
determined in accordance with GAAP. These measures should not be
considered in isolation or viewed as substitutes for GAAP pretax
income (loss), diluted net income (loss) per share, return on
equity or net income (loss).
Our definitions of adjusted pretax operating income (loss),
adjusted diluted net operating income (loss) per share and adjusted
net operating return on equity may not be comparable to
similarly-named measures reported by other companies. See Exhibit F
for additional information on our consolidated non-GAAP financial
measures.
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - New Insurance
Written
Exhibit H
2024
2023
($ in millions)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
NIW
$
13,186
$
13,493
$
13,902
$
11,534
$
10,629
NIW by premium type
Direct monthly and other recurring
premiums
96.4
%
95.9
%
96.5
%
96.7
%
96.4
%
Direct single premiums
3.6
%
4.1
%
3.5
%
3.3
%
3.6
%
NIW for purchases
90.4
%
95.6
%
98.3
%
96.9
%
98.8
%
NIW for refinances
9.6
%
4.4
%
1.7
%
3.1
%
1.2
%
NIW by FICO score (1)
>=740
71.7
%
69.5
%
69.4
%
67.3
%
66.5
%
680-739
23.3
%
24.8
%
25.5
%
27.1
%
27.9
%
620-679
5.0
%
5.7
%
5.1
%
5.6
%
5.6
%
<=619
0.0
%
0.0
%
0.0
%
0.0
%
0.0
%
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
NIW by LTV (2)
95.01% and above
15.9
%
16.5
%
16.5
%
15.4
%
15.4
%
90.01% to 95.00%
37.5
%
37.1
%
37.2
%
40.8
%
40.0
%
85.01% to 90.00%
31.7
%
31.5
%
32.4
%
31.3
%
31.3
%
85.00% and below
14.9
%
14.9
%
13.9
%
12.5
%
13.3
%
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
(1)
For loans with multiple borrowers, the percentage of NIW by FICO
score represents the lowest of the borrowers’ FICO scores at
origination.
(2)
At origination.
Radian Group Inc. and Subsidiaries
Mortgage Insurance Supplemental Information - Primary
Insurance in Force and Risk in Force
Exhibit I
2024
2023
($ in millions)
Qtr 4
Qtr 3
Qtr 2
Qtr 1
Qtr 4
Primary insurance in force
$
275,126
$
274,721
$
272,827
$
270,986
$
269,979
Primary risk in force (“RIF”)
$
72,074
$
71,834
$
71,109
$
70,299
$
69,710
Primary RIF by premium type
Direct monthly and other recurring
premiums
90.0
%
89.8
%
89.5
%
89.2
%
88.9
%
Direct single premiums
10.0
%
10.2
%
10.5
%
10.8
%
11.1
%
Primary RIF by FICO score (1)
>=740
60.1
%
59.6
%
59.2
%
58.8
%
58.5
%
680-739
32.6
%
33.0
%
33.3
%
33.6
%
33.9
%
620-679
7.0
%
7.1
%
7.2
%
7.3
%
7.3
%
<=619
0.3
%
0.3
%
0.3
%
0.3
%
0.3
%
Total RIF
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Primary RIF by LTV (2)
95.01% and above
19.8
%
19.5
%
19.2
%
18.9
%
18.6
%
90.01% to 95.00%
47.9
%
48.0
%
48.1
%
48.2
%
48.2
%
85.01% to 90.00%
27.3
%
27.3
%
27.3
%
27.1
%
27.1
%
85.00% and below
5.0
%
5.2
%
5.4
%
5.8
%
6.1
%
Total RIF
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
Persistency Rate (12 months ended)
83.6
%
84.4
%
84.3
%
84.3
%
84.0
%
Persistency Rate (quarterly, annualized)
(3)
82.7
%
84.1
%
83.5
%
85.3
%
85.8
%
(1)
For loans with multiple borrowers, the percentage of primary RIF by
FICO score represents the lowest of the borrowers’ FICO scores at
origination.
(2)
At origination.
(3)
The Persistency Rate on a quarterly, annualized basis is calculated
based on loan-level detail for the quarter ending as of the date
shown. It may be impacted by seasonality or other factors,
including the level of refinance activity during the applicable
periods and may not be indicative of full-year trends.
FORWARD-LOOKING STATEMENTS
All statements in this press release that address events,
developments or results that we expect or anticipate may occur in
the future are “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the
Securities Exchange Act of 1934 and the U.S. Private Securities
Litigation Reform Act of 1995. In most cases, forward-looking
statements may be identified by words such as “anticipate,” “may,”
“will,” “could,” “should,” “would,” “expect,” “intend,” “plan,”
“goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,”
“potential,” “continue,” “seek,” “strategy,” “future,” “likely” or
the negative or other variations on these words and other similar
expressions. These statements, which may include, without
limitation, projections regarding our future performance and
financial condition, are made on the basis of management’s current
views and assumptions with respect to future events. These
statements speak only as of the date they were made, and we
undertake no obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. We operate in a changing environment where new risks
emerge from time to time and it is not possible for us to predict
all risks that may affect us. The forward-looking statements are
not guarantees of future performance, and the forward-looking
statements, as well as our prospects as a whole, are subject to
risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements.
These risks and uncertainties include, without limitation:
- the health of the U.S. housing market generally and changes in
economic conditions that impact the size of the insurable mortgage
market, the credit performance of our insured mortgage portfolio,
the returns on our investments in residential mortgage loans
acquired through our Mortgage Conduit business and other
investments held in our investment portfolio, as well as our
business prospects, including: changes resulting from inflationary
pressures, the interest rate environment and the risk of higher
unemployment rates; other macroeconomic stresses and uncertainties,
including potential impacts resulting from the recent change in
Presidential administrations and other political and geopolitical
events, civil disturbances and endemics/pandemics or extreme
weather events and other natural disasters that may adversely
affect regional economic conditions and housing markets;
- changes in the way customers, investors, ratings agencies,
regulators or legislators perceive our performance, financial
strength and future prospects;
- Radian Guaranty’s ability to remain eligible under the PMIERs
to insure loans purchased by the GSEs;
- our ability to maintain an adequate level of capital in our
insurance subsidiaries to satisfy current and future regulatory
requirements;
- changes in the charters or business practices of, or rules or
regulations imposed by or applicable to, the GSEs or loans
purchased by the GSEs, or changes in the requirements for Radian
Guaranty to remain an approved insurer to the GSEs, such as changes
in the PMIERs or the GSEs’ interpretation and application of the
PMIERs or other applicable requirements;
- changes in the current housing finance system in the United
States, including the roles and areas of primary focus of the FHA,
the VA, the GSEs and private mortgage insurers in this system;
- our ability to successfully execute and implement our capital
plans, including our risk distribution strategy through the capital
markets, traditional reinsurance markets or other strategies, and
to maintain sufficient holding company liquidity to meet our
liquidity needs;
- our ability to successfully execute and implement our business
plans and strategies, including plans and strategies that may
require GSE and/or regulatory approvals and licenses, that are
subject to complex compliance requirements that we may be unable to
satisfy, or that may expose us to new risks, including those that
could impact our capital and liquidity positions;
- risks related to the quality of third-party mortgage
underwriting and mortgage loan servicing;
- a decrease in the Persistency Rates of our mortgage insurance
on Monthly Premium Policies;
- competition in the private mortgage insurance industry
generally, and more specifically: price competition in our mortgage
insurance business and competition from the FHA and the VA as well
as from other forms of credit enhancement, such as any potential
GSE-sponsored alternatives to traditional mortgage insurance;
- U.S. political conditions and the impact of Presidential
Executive Orders and legislative and regulatory activity (or
inactivity), including adoption of (or failure to adopt) new laws
and regulations, or changes in existing laws and regulations, or
the way they are interpreted or applied;
- legal and regulatory claims, assertions, actions, reviews,
audits, inquiries and investigations that could result in adverse
judgments, settlements, fines, injunctions, restitutions or other
relief that could require significant expenditures, new or
increased reserves or have other effects on our business;
- the amount and timing of potential payments or adjustments
associated with federal or other tax examinations;
- the possibility that we may fail to estimate accurately,
especially in the event of an extended economic downturn or a
period of extreme market volatility and economic uncertainty, the
likelihood, magnitude and timing of losses in establishing loss
reserves for our mortgage insurance business or to accurately
calculate and/or project our Available Assets and Minimum Required
Assets under the PMIERs, which could be impacted by, among other
things, the size and mix of our IIF, changes to the PMIERs, the
level of defaults in our portfolio, the reported status of defaults
in our portfolio (including whether they are subject to mortgage
forbearance, a repayment plan or a loan modification trial period),
the level of cash flow generated by our insurance operations and
our risk distribution strategies;
- volatility in our financial results caused by changes in the
fair value of our assets and liabilities carried at fair
value;
- changes in GAAP or SAP rules and guidance, or their
interpretation;
- risks associated with investments to grow our existing
businesses, or to pursue new lines of business or new products and
services, including our ability and related costs to acquire,
develop, launch and implement new and innovative technologies and
digital products and services, whether these products and services
receive broad customer acceptance or disrupt existing customer
relationships, and additional financial risks related to these and
other potential investments, including required changes in our
investment, financing and hedging strategies, risks associated with
our increased use of financial leverage, which could expose us to
liquidity risks resulting from changes in the fair values of
assets, and the risk that we may fail to achieve forecasted
results, which could result in lower or negative earnings
contribution;
- the effectiveness and security of our information technology
systems and digital products and services, including the risk that
these systems, products or services fail to operate as expected or
planned or expose us to cybersecurity or third-party risks,
including due to malware, unauthorized access, cyberattack,
ransomware or other similar events;
- our ability to attract, develop and retain key employees;
- the amount of dividends, if any, that our insurance
subsidiaries may distribute to us, which under applicable
regulatory requirements is based primarily on the financial
performance of our insurance subsidiaries, and therefore, may be
impacted by general economic, competitive and other factors, many
of which are beyond our control; and
- the ability of our operating subsidiaries to distribute amounts
to us under our internal tax- and expense-sharing arrangements,
which for our insurance subsidiaries are subject to regulatory
review and could be terminated at the discretion of such
regulators.
For more information regarding these risks and uncertainties as
well as certain additional risks that we face, you should refer to
“Item 1A. Risk Factors” in our Annual Report on Form 10-K for the
year ended December 31, 2023, and to subsequent reports and
registration statements filed from time to time with the U.S.
Securities and Exchange Commission. We caution you not to place
undue reliance on these forward-looking statements, which are
current only as of the date on which we issued this press release.
We do not intend to, and we disclaim any duty or obligation to,
update or revise any forward-looking statements to reflect new
information or future events or for any other reason.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250131818987/en/
For Investors Dan Kobell - Phone: 215.231.1113 email:
daniel.kobell@radian.com
For Media Rashi Iyer - Phone: 215.231.1167 email:
rashi.iyer@radian.com
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