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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Radian Group Inc | NYSE:RDN | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.50 | 1.43% | 35.41 | 35.42 | 34.695 | 35.08 | 702,248 | 21:03:31 |
— GAAP net income of $201 million, or $1.15 per diluted share —
— Adjusted diluted net operating income of $1.36 per diluted share —
— Provision for losses of $(114) million in the second quarter of 2022 favorably impacted by positive development on prior period defaults —
— Primary mortgage insurance in force increases 7.1% year-over-year to $254 billion —
— Return on equity of 19.9% and adjusted net operating return on equity of 23.6% —
— Purchased $183.8 million in the second quarter, or 5.2% of total shares outstanding of Radian Group common stock —
— PMIERs excess Available Assets of $1.4 billion (or 38% over the Minimum Required Assets) —
Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended June 30, 2022, of $201.2 million, or $1.15 per diluted share. This compares with net income for the quarter ended June 30, 2021, of $155.2 million, or $0.80 per diluted share.
Key Financial Highlights
Quarter ended
($ in millions, except per-share amounts)
June 30, 2022
March 31, 2022
June 30, 2021
Net income (1)
$201.2
$181.1
$155.2
Diluted net income per share
$1.15
$1.01
$0.80
Consolidated pretax income
$259.9
$234.1
$195.5
Adjusted pretax operating income (2)
$302.0
$264.9
$184.7
Adjusted diluted net operating income per share (2)(3)
$1.36
$1.17
$0.75
Return on equity (1)(4)
19.9 %
17.2 %
14.5 %
Adjusted net operating return on equity (2)(3)
23.6 %
19.9 %
13.6 %
New Insurance Written (NIW) - mortgage insurance
$18,935
$18,655
$21,662
Net premiums earned - mortgage insurance
$246.9
$245.2
$247.1
New defaults (5)
8,009
9,393
8,145
Provision for losses - mortgage insurance
($114.2)
($84.2)
$3.3
homegenius revenues
$32.3
$33.9
$33.5
Book value per share
$23.63
$23.75
$23.02
Accumulated other comprehensive income
(loss) value per share (6)
($1.98)
($0.74)
$0.95
PMIERs Available Assets (7)
$5,175
$5,102
$5,042
PMIERs excess Available Assets (8)
$1,424
$1,560
$1,857
Total Holding Company Liquidity (9)
$1,048
$1,282
$1,191
Total investments
$5,906
$6,335
$6,682
Primary mortgage insurance in force
$254,226
$248,951
$237,302
Percentage of primary loans in default (10)
2.2 %
2.6 %
4.0 %
Mortgage insurance loss reserves
$589
$722
$881
(1)
Net income for the second quarter of 2022 includes a pretax net loss on investments and other financial instruments of $41.9 million, compared with a $29.5 million pretax net loss on investments and other financial instruments in the first quarter of 2022 and a pretax net gain on investments and other financial instruments of $15.7 million for the second quarter of 2021.(2)
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.(3)
Calculated using the company’s statutory tax rate of 21 percent.(4)
Calculated by dividing annualized net income by average stockholders' equity, based on the average of the beginning and ending balances for each period presented.(5)
Represents the number of new defaults reported during the period on loans related to primary mortgage insurance policies.(6)
Included in book value per share for each period presented.(7)
Represents Radian Guaranty’s Available Assets, calculated in accordance with the Private Mortgage Insurer Eligibility Requirements (PMIERs) financial requirements in effect for each date shown.(8)
Represents Radian Guaranty’s excess or "cushion" of Available Assets over its Minimum Required Assets, calculated in accordance with the PMIERs financial requirements in effect for each date shown.(9)
Represents Radian Group's total liquidity, including available capacity under its unsecured revolving credit facility.(10)
Represents the number of primary loans in default as a percentage of the total number of insured primary loans.Adjusted pretax operating income for the quarter ended June 30, 2022, was $302.0 million, or $1.36 per diluted share. This compares with adjusted pretax operating income for the quarter ended June 30, 2021, of $184.7 million, or $0.75 per diluted share.
Book value per share at June 30, 2022, was $23.63, compared to $23.75 at March 31, 2022, and $23.02 at June 30, 2021. This represents a 2.6 percent growth in book value per share at June 30, 2022, as compared to June 30, 2021, and includes accumulated other comprehensive income (loss) of $(1.98) per share as of June 30, 2022 and $0.95 per share as of June 30, 2021, which, if excluded as of both dates, would represent 16.0 percent growth for the period. Changes in accumulated other comprehensive income (loss) for the period are primarily from net unrealized losses on investments as a result of an increase in market interest rates during the period. We do not expect to realize these losses given that we have the ability and the expectation to hold these securities until recovery.
“We are pleased with our excellent results in the second quarter with net income of $201 million, return on equity of 19.9 percent and total holding company liquidity of $1 billion. Our primary mortgage insurance in force, which is the main driver of future earnings for our company, grew 7 percent year-over-year, and the number of new defaults in the quarter was the lowest we’ve seen in more than 20 years,” said Radian’s Chief Executive Officer Rick Thornberry. “Moody’s recently upgraded our company, reflecting our improved capital adequacy through risk distribution, our improving profitability metrics, our strong market position and our financial flexibility with strong liquidity. We continue to strategically manage capital, repurchase shares opportunistically and pay regular dividends to stockholders and believe we are well positioned to continue our mission of ensuring affordable, sustainable and equitable homeownership for many years ahead.”
SECOND QUARTER HIGHLIGHTS
CAPITAL AND LIQUIDITY UPDATE
Radian Group
Radian Guaranty
RECENT EVENTS
CONFERENCE CALL
Radian will discuss second quarter 2022 financial results in a conference call tomorrow, Tuesday, August 2, 2022, at 10:00 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.
Please note that there is a new process to access the call via telephone. 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 certain investments attributable to our reportable segments; (ii) gains (losses) on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by (ii) 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.
In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information non-GAAP measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. Adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's ASC 280 GAAP measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. Adjusted gross profit is further adjusted to remove other operating expenses. In addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit, respectively, by GAAP total revenue for the homegenius segment. For the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related profit margins are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our homegenius segment.
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 ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, real estate and technology products and services. We are powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk. Visit www.radian.com to learn more about how Radian is shaping the future of mortgage and real estate services.
FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS (Unaudited)
Exhibit A: Condensed Consolidated Statements of Operations Trend Schedule Exhibit B: Net Income Per Share Trend Schedule Exhibit C: Condensed Consolidated Balance Sheets Exhibit D: Net Premiums Earned Exhibit E: Segment Information Exhibit F: Definition of Consolidated Non-GAAP Financial Measures Exhibit G: Consolidated Non-GAAP Financial Measure Reconciliations Exhibit H: Mortgage Supplemental Information New Insurance Written Exhibit I: Mortgage Supplemental Information Primary Insurance in Force and Risk in Force Exhibit J: Mortgage Supplemental Information Claims and Reserves, Default Statistics Exhibit K: Mortgage Supplemental Information Reinsurance Programs Radian Group Inc. and SubsidiariesCondensed Consolidated Statements of Operations Trend Schedule
Exhibit A
2022
2021
(In thousands, except per-share amounts)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Revenues
Net premiums earned
$
253,892
$
254,190
$
261,437
$
249,118
$
254,756
Services revenue
27,281
29,348
35,693
37,773
29,464
Net investment income
46,957
38,196
37,407
35,960
36,291
Net gains (losses) on investments and other financial instruments
(41,869
)
(29,457
)
3,025
2,098
15,661
Other income
572
703
805
809
822
Total revenues
286,833
292,980
338,367
325,758
336,994
Expenses
Provision for losses
(113,922
)
(83,754
)
(46,219
)
17,305
3,648
Policy acquisition costs
5,940
6,605
7,271
7,924
4,838
Cost of services
22,760
24,753
28,333
30,520
24,615
Other operating expenses
90,495
89,541
80,476
86,479
86,469
Interest expense
20,831
20,846
21,137
21,027
21,065
Amortization of other acquired intangible assets
849
849
863
862
863
Total expenses
26,953
58,840
91,861
164,117
141,498
Pretax income
259,880
234,140
246,506
161,641
195,496
Income tax provision
58,687
53,009
53,061
35,229
40,290
Net income
$
201,193
$
181,131
$
193,445
$
126,412
$
155,206
Diluted net income per share
$
1.15
$
1.01
$
1.07
$
0.67
$
0.80
Selected Mortgage Key Ratios
2022
2021
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Loss ratio (1)
(46.2
)%
(34.3
)%
(18.6
)%
7.1
%
1.3
%
Expense ratio (2)
26.2
%
27.2
%
25.6
%
28.6
%
25.4
%
(1)
Calculated as provision for losses on a GAAP basis expressed as a percentage of net premiums earned.(2)
Calculated as operating expenses (which include policy acquisition costs and other operating expenses, as well as allocated corporate operating expenses) on a GAAP basis expressed as a percentage of net premiums earned.Radian Group Inc. and Subsidiaries
Net Income Per Share Trend Schedule
Exhibit B
The calculation of basic and diluted net income per share was as follows.
2022
2021
(In thousands, except per-share amounts)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net income—basic and diluted
$
201,193
$
181,131
$
193,445
$
126,412
$
155,206
Average common shares outstanding—basic
173,705
176,816
179,500
186,741
193,436
Dilutive effect of stock-based compensation arrangements (1)
1,714
2,263
1,628
1,301
1,202
Adjusted average common shares outstanding—diluted
175,419
179,079
181,128
188,042
194,638
Basic net income per share
$
1.16
$
1.02
$
1.08
$
0.68
$
0.80
Diluted net income per share
$
1.15
$
1.01
$
1.07
$
0.67
$
0.80
(1)
The following number of shares of our common stock equivalents issued under our share-based compensation arrangements were not included in the calculation of diluted net income (loss) per share because they would be anti-dilutive.
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Shares of common stock equivalents
189
—
35
—
—
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
Exhibit C
June 30
March 31,
December 31,
September 30,
June 30,
(In thousands, except per-share amounts)
2022
2022
2021
2021
2021
Assets
Investments
$
5,906,147
$
6,334,950
$
6,513,542
$
6,658,487
$
6,681,659
Cash
135,262
131,853
151,145
154,709
134,939
Restricted cash
561
1,651
1,475
1,866
2,968
Accrued investment income
35,774
35,531
32,812
33,258
32,223
Accounts and notes receivable
166,380
142,579
124,016
166,730
153,128
Reinsurance recoverables
39,876
55,015
67,896
76,048
75,411
Deferred policy acquisition costs
16,983
16,383
16,317
16,823
17,873
Property and equipment, net
74,874
75,275
75,086
74,170
74,288
Goodwill and other acquired intangible assets, net
17,895
18,744
19,593
20,456
21,318
Prepaid federal income taxes
466,123
354,123
354,123
313,123
275,623
Other assets
414,412
449,642
483,180
525,938
539,638
Total assets
$
7,274,287
$
7,615,746
$
7,839,185
$
8,041,608
$
8,009,068
Liabilities and stockholders’ equity
Unearned premiums
$
298,991
$
312,013
$
329,090
$
348,322
$
373,031
Reserve for losses and loss adjustment expense
594,808
727,247
828,642
893,155
885,498
Senior notes
1,411,458
1,410,458
1,409,473
1,408,502
1,407,545
FHLB advances
184,284
148,983
150,983
172,649
153,983
Reinsurance funds withheld
223,649
225,363
228,078
290,502
285,406
Net deferred tax liability
324,866
324,004
337,509
286,957
266,330
Other liabilities
305,269
320,114
296,614
383,585
303,442
Total liabilities
3,343,325
3,468,182
3,580,389
3,783,672
3,675,235
Common stock
186
193
194
200
207
Treasury stock
(930,284
)
(920,958
)
(920,798
)
(920,355
)
(920,225
)
Additional paid-in capital
1,698,490
1,871,763
1,878,372
2,012,870
2,161,857
Retained earnings
3,491,675
3,326,119
3,180,935
3,012,997
2,913,138
Accumulated other comprehensive income (loss)
(329,105
)
(129,553
)
120,093
152,224
178,856
Total stockholders’ equity
3,930,962
4,147,564
4,258,796
4,257,936
4,333,833
Total liabilities and stockholders’ equity
$
7,274,287
$
7,615,746
$
7,839,185
$
8,041,608
$
8,009,068
Shares outstanding
166,388
174,648
175,421
181,336
188,290
Book value per share
$
23.63
$
23.75
$
24.28
$
23.48
$
23.02
Debt to capital ratio (1)
26.4
%
25.4
%
24.9
%
24.9
%
24.5
%
Risk to capital ratio-Radian Guaranty only
11.9:1
12.1:1
11.1:1
11.4:1
11.4:1
(1)
Calculated as senior notes divided by senior notes and stockholders' equity.Radian Group Inc. and Subsidiaries
Net Premiums Earned
Exhibit D
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Premiums earned
Direct - Mortgage
Premiums earned, excluding revenue from cancellations
$
249,937
$
243,599
$
248,704
$
239,786
$
243,077
Single Premium Policy cancellations
6,894
14,696
20,530
25,592
31,592
Total direct - Mortgage
256,831
258,295
269,234
265,378
274,669
Assumed - Mortgage (1)
1,538
1,332
1,470
1,683
1,615
Ceded - Mortgage
Premiums earned, excluding revenue from cancellations
(28,565
)
(27,339
)
(28,333
)
(27,662
)
(27,324
)
Single Premium Policy cancellations (2)
(1,965
)
(4,192
)
(5,905
)
(7,338
)
(9,036
)
Profit commission - other (3)
19,070
17,078
13,199
4,806
7,162
Total ceded premiums - Mortgage (4)
(11,460
)
(14,453
)
(21,039
)
(30,194
)
(29,198
)
Net premiums earned - Mortgage
246,909
245,174
249,665
236,867
247,086
Net premiums earned - homegenius
6,983
9,016
11,772
12,251
7,670
Net premiums earned
$
253,892
$
254,190
$
261,437
$
249,118
$
254,756
(1)
Represents premiums from our participation in certain credit risk transfer programs.(2)
Includes the impact of related profit commissions.(3)
The amounts represent the profit commission on the Single Premium QSR Program, excluding the impact of Single Premium Policy cancellations.(4)
See Exhibit K for additional information on ceded premiums for our various reinsurance programs.Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 1 of 6)
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), homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit, along with reconciliations to consolidated GAAP measures, see Exhibits F and G.
Three Months Ended June 30, 2022
(In thousands)
Mortgage
homegenius
All Other (1)
Inter- segment (2)
Total
Net premiums written (3)
$
248,645
$
6,983
$
—
$
—
$
255,628
Increase in unearned premiums
(1,736
)
—
—
—
(1,736
)
Net premiums earned
246,909
6,983
—
—
253,892
Services revenue
2,105
25,261
—
(85
)
27,281
Net investment income
40,197
99
6,661
—
46,957
Other income
572
—
—
—
572
Total
289,783
32,343
6,661
(85
)
328,702
Provision for losses
(114,179
)
309
—
(52
)
(113,922
)
Policy acquisition costs
5,940
—
—
—
5,940
Cost of services
1,960
20,800
—
—
22,760
Other operating expenses before allocated corporate operating expenses (4)
25,474
23,205
3,077
(33
)
51,723
Interest expense (5)
20,831
—
—
—
20,831
Total
(59,974
)
44,314
3,077
(85
)
(12,668
)
Adjusted pretax operating income (loss) before allocated corporate operating expenses
349,757
(11,971
)
3,584
—
341,370
Allocation of corporate operating expenses
33,237
5,719
381
—
39,337
Adjusted pretax operating income (loss)
$
316,520
$
(17,690
)
$
3,203
$
—
$
302,033
Three Months Ended June 30, 2021
(In thousands)
Mortgage
homegenius
All Other (1)
Inter- segment (2)
Total
Net premiums written (3)
$
231,027
$
7,670
$
—
$
—
$
238,697
Decrease in unearned premiums
16,059
—
—
—
16,059
Net premiums earned
247,086
7,670
—
—
254,756
Services revenue
3,732
25,750
44
(62
)
29,464
Net investment income
32,842
31
3,418
—
36,291
Other income
641
—
181
—
822
Total
284,301
33,451
3,643
(62
)
321,333
Provision for losses
3,334
335
—
(21
)
3,648
Policy acquisition costs
4,838
—
—
—
4,838
Cost of services
3,161
21,433
19
2
24,615
Other operating expenses before allocated corporate operating expenses (4)
25,222
16,160
3,387
(43
)
44,726
Interest expense (5)
21,065
—
—
—
21,065
Total
57,620
37,928
3,406
(62
)
98,892
Adjusted pretax operating income (loss) before allocated corporate operating expenses
226,681
(4,477
)
237
—
222,441
Allocation of corporate operating expenses
32,638
4,721
363
—
37,722
Adjusted pretax operating income (loss)
$
194,043
$
(9,198
)
$
(126
)
$
—
$
184,719
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 2 of 6)
(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) certain investments in new business opportunities, including activities and investments associated with Radian Mortgage Capital LLC, and other immaterial activities.(2)
Includes immaterial inter-segment services revenue for our homegenius segment and immaterial inter-segment provision for losses, cost of services and other operating expenses for our Mortgage segment.(3)
Net of ceded premiums written under the QSR Programs and the Excess-of-Loss Program. See Exhibit K for additional information.(4)
Does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss).(5)
Relates to interest on our borrowing and financing activities including our Senior Notes issued by our holding company and FHLB borrowings made by our mortgage insurance subsidiaries.Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 3 of 6)
Mortgage
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net premiums written (1)
$
248,645
$
248,360
$
238,529
$
228,116
$
231,027
(Increase) decrease in unearned premiums
(1,736
)
(3,186
)
11,136
8,751
16,059
Net premiums earned
246,909
245,174
249,665
236,867
247,086
Services revenue
2,105
4,552
4,560
5,027
3,732
Net investment income
40,197
34,017
33,916
32,158
32,842
Other income
572
703
661
607
641
Total
289,783
284,446
288,802
274,659
284,301
Provision for losses (2)
(114,179
)
(84,193
)
(46,560
)
16,794
3,334
Policy acquisition costs
5,940
6,605
7,271
7,924
4,838
Cost of services (2)
1,960
3,383
3,710
3,865
3,161
Other operating expenses before allocated corporate operating expenses (2) (3)
25,474
23,755
23,365
25,866
25,222
Interest expense (4)
20,831
20,846
21,137
21,027
21,065
Total (2)
(59,974
)
(29,604
)
8,923
75,476
57,620
Adjusted pretax operating income before allocated corporate operating expenses
349,757
314,050
279,879
199,183
226,681
Allocation of corporate operating expenses
33,237
36,209
33,305
33,963
32,638
Adjusted pretax operating income
$
316,520
$
277,841
$
246,574
$
165,220
$
194,043
homegenius
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net premiums earned
$
6,983
$
9,016
$
11,772
$
12,251
$
7,670
Services revenue (2)
25,261
24,878
31,177
32,805
25,750
Net investment income
99
18
255
35
31
Net gains (losses) on investments
—
—
1,509
—
—
Total (2)
32,343
33,912
44,713
45,091
33,451
Provision for losses
309
481
369
540
335
Cost of services
20,800
21,370
24,615
26,646
21,433
Other operating expenses before allocated corporate operating expenses (3)
23,205
20,287
16,998
18,544
16,160
Total
44,314
42,138
41,982
45,730
37,928
Adjusted pretax operating income (loss) before allocated corporate operating expenses
(11,971
)
(8,226
)
2,731
(639
)
(4,477
)
Allocation of corporate operating expenses
5,719
5,280
4,847
4,918
4,721
Adjusted pretax operating income (loss)
$
(17,690
)
$
(13,506
)
$
(2,116
)
$
(5,557
)
$
(9,198
)
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 4 of 6)
All Other (5)
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Services revenue
$
—
$
—
$
30
$
27
$
44
Net investment income
6,661
4,161
3,236
3,767
3,418
Other income
—
—
144
202
181
Total
6,661
4,161
3,410
3,996
3,643
Cost of services
—
—
8
9
19
Other operating expenses before allocated corporate operating expenses (3)
3,077
3,142
2,422
2,623
3,387
Total
3,077
3,142
2,430
2,632
3,406
Adjusted pretax operating income before allocated corporate operating expenses
3,584
1,019
980
1,364
237
Allocation of corporate operating expenses
381
406
373
378
363
Adjusted pretax operating income (loss)
$
3,203
$
613
$
607
$
986
$
(126
)
(1)
Net of ceded premiums written under the QSR Programs and the Excess-of-Loss Program. See Exhibit K for additional information.(2)
Includes immaterial inter-segment services revenue for our homegenius segment and immaterial inter-segment provision for losses, cost of services and other operating expenses for our Mortgage segment.(3)
Does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss).(4)
Relates to interest on our borrowing and financing activities including our Senior Notes issued by our holding company and FHLB borrowings made by our mortgage insurance subsidiaries.(5)
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) certain investments in new business opportunities, including activities and investments associated with Radian Mortgage Capital LLC, and other immaterial activities.Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 5 of 6)
Supplemental Other Operating Expense Information by Segment
Mortgage
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Other operating expenses by type
Salaries and other base employee expenses
$
24,420
$
22,189
$
23,610
$
22,685
$
22,542
Variable and share-based incentive compensation
11,524
16,697
12,649
17,143
15,236
Other general operating expenses
25,611
25,027
25,290
25,639
26,583
Ceding commissions
(2,844
)
(3,949
)
(4,879
)
(5,638
)
(6,501
)
Total
$
58,711
$
59,964
$
56,670
$
59,829
$
57,860
homegenius
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Other operating expenses by type
Salaries and other base employee expenses
$
12,187
$
10,375
$
7,993
$
6,975
$
6,701
Variable and share-based incentive compensation
4,776
5,522
4,678
6,238
5,896
Other general operating expenses
10,162
8,571
7,851
7,982
6,525
Title agent commissions
1,799
1,099
1,323
2,267
1,759
Total
$
28,924
$
25,567
$
21,845
$
23,462
$
20,881
All Other
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Other operating expenses by type
Salaries and other base employee expenses
$
1,726
$
1,613
$
1,001
$
1,158
$
1,187
Variable and share-based incentive compensation
709
953
874
1,144
958
Other general operating expenses
1,023
982
920
699
1,605
Total
$
3,458
$
3,548
$
2,795
$
3,001
$
3,750
Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 6 of 6)
Inter-segment
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Other operating expenses by type
Other general operating expenses
$
(33
)
$
(40
)
$
(46
)
$
(57
)
$
(43
)
Total
$
(33
)
$
(40
)
$
(46
)
$
(57
)
$
(43
)
Total
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Other operating expenses by type
Salaries and other base employee expenses
$
38,333
$
34,177
$
32,604
$
30,818
$
30,430
Variable and share-based incentive compensation
17,009
23,172
18,201
24,525
22,090
Other general operating expenses
36,763
34,540
34,015
34,263
34,670
Ceding commissions
(2,844
)
(3,949
)
(4,879
)
(5,638
)
(6,501
)
Title agent commissions
1,799
1,099
1,323
2,267
1,759
Total
$
91,060
$
89,039
$
81,264
$
86,235
$
82,448
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 the Company’s business performance is evaluated by both management and the 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 the Company’s business segments and to allocate resources to the segments. 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 certain investments attributable to our reportable segments; (ii) gains (losses) on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by (ii) 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 attributable to our reportable segments, we do not view them to be indicative of our fundamental operating activities.
(2)
Loss on extinguishment of debt. Gains or losses on early extinguishment of debt and losses incurred to purchase our debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends.
(3)
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.
(4)
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; and (iii) acquisition-related income and expenses.
Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measures
Exhibit F (page 2 of 2)
In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information non-GAAP measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. Adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's ASC 280 GAAP measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. Adjusted gross profit is further adjusted to remove other operating expenses. In addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit, respectively, by GAAP total revenue for the homegenius segment. For the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related profit margins are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our homegenius segment.
See Exhibit G for the reconciliation 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. Exhibit G also contains the reconciliation of adjusted pretax operating income (loss) to adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit for the homegenius segment.
Total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit 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), or in the case of the homegenius non-GAAP measures, for homegenius adjusted pretax operating income (loss). Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity and homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit margin 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
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Consolidated pretax income
$
259,880
$
234,140
$
246,506
$
161,641
$
195,496
Less reconciling income (expense) items
Net gains (losses) on investments and other financial instruments (1)
(41,869
)
(29,457
)
1,516
2,098
15,661
Amortization of other acquired intangible assets
(849
)
(849
)
(863
)
(862
)
(863
)
Impairment of other long-lived assets and other non-operating items (2)
565
(502
)
788
(244
)
(4,021
)
Total adjusted pretax operating income (3)
$
302,033
$
264,948
$
245,065
$
160,649
$
184,719
(1)
For the fourth quarter of 2021, excludes $1.5 million in net gains on investments attributable to our homegenius segment and included in adjusted pretax operating income (loss) for that reportable segment.(2)
The amounts for all the periods presented are included in other operating expenses on the Condensed Consolidated Statement of Operations in Exhibit A and primarily relate to impairments of other long-lived assets.(3)
Total adjusted pretax operating income consists of adjusted pretax operating income (loss) for each reportable segment and All Other activities as follows.
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Adjusted pretax operating income (loss)
Mortgage segment
$
316,520
$
277,841
$
246,574
$
165,220
$
194,043
homegenius segment
(17,690
)
(13,506
)
(2,116
)
(5,557
)
(9,198
)
All Other activities
3,203
613
607
986
(126
)
Total adjusted pretax operating income
$
302,033
$
264,948
$
245,065
$
160,649
$
184,719
Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 2 of 3)
Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Operating Income Per Share
2022
2021
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Diluted net income per share
$
1.15
$
1.01
$
1.07
$
0.67
$
0.80
Less per-share impact of reconciling income (expense) items
Net gains (losses) on investments and other financial instruments
(0.24
)
(0.16
)
0.01
0.01
0.08
Amortization of other acquired intangible assets
—
(0.01
)
—
—
—
Impairment of other long-lived assets and other non-operating items
—
—
—
—
(0.02
)
Income tax (provision) benefit on reconciling income (expense) items (1)
0.05
0.03
—
—
(0.01
)
Difference between statutory and effective tax rate
(0.02
)
(0.02
)
(0.01
)
(0.01
)
—
Per-share impact of reconciling income (expense) items
(0.21
)
(0.16
)
—
—
0.05
Adjusted diluted net operating income per share (1)
$
1.36
$
1.17
$
1.07
$
0.67
$
0.75
(1)
Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included.Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity (1)
2022
2021
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Return on equity (1)
19.9
%
17.2
%
18.2
%
11.8
%
14.5
%
Less impact of reconciling income (expense) items (2)
Net gains (losses) on investments and other financial instruments
(4.1
)
(2.8
)
0.1
0.2
1.5
Amortization of other acquired intangible assets
(0.1
)
(0.1
)
(0.1
)
(0.1
)
(0.1
)
Impairment of other long-lived assets and other non-operating items
0.1
—
0.1
—
(0.4
)
Income tax (provision) benefit on reconciling income (expense) items (3)
0.9
0.6
—
—
(0.2
)
Difference between statutory and effective tax rate
(0.5
)
(0.4
)
(0.1
)
(0.1
)
0.1
Impact of reconciling income (expense) items
(3.7
)
(2.7
)
—
—
0.9
Adjusted net operating return on equity (3)
23.6
%
19.9
%
18.2
%
11.8
%
13.6
%
(1)
Calculated by dividing annualized net income (loss) 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%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included.Radian Group Inc. and Subsidiaries
Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit G (page 3 of 3)
Reconciliation of homegenius Adjusted Pretax Operating Income (Loss) to homegenius Adjusted Gross Profit
2022
2021
(In thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
homegenius adjusted pretax operating income (loss)
$
(17,690
)
$
(13,506
)
$
(2,116
)
$
(5,557
)
$
(9,198
)
Less reconciling income (expense) items
Allocation of corporate operating expenses
(5,719
)
(5,280
)
(4,847
)
(4,918
)
(4,721
)
Adjusted pretax operating income (loss) before allocated corporate operating expenses
(11,971
)
(8,226
)
2,731
(639
)
(4,477
)
Less reconciling income (expense) items
Other operating expenses before allocated corporate operating expenses
(23,205
)
(20,287
)
(16,998
)
(18,544
)
(16,160
)
homegenius adjusted gross profit
$
11,234
$
12,061
$
19,729
$
17,905
$
11,683
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. In addition, “homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses", "homegenius adjusted gross profit," “homegenius adjusted pretax operating margin before allocated corporate operating expenses” and “homegenius adjusted pretax operating margin" are also non-GAAP measures. 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), or in the case of the homegenius non-GAAP measures, for homegenius adjusted pretax operating income (loss).
Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit margin 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 Supplemental Information - New Insurance Written
Exhibit H
2022
2021
($ in millions)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
New insurance written ("NIW")
$
18,935
$
18,655
$
23,710
$
26,558
$
21,662
Total borrower-paid NIW
99.2
%
99.2
%
99.4
%
99.2
%
99.1
%
NIW by premium type
Direct monthly and other recurring premiums
95.4
%
94.5
%
93.5
%
93.8
%
93.1
%
Borrower-paid
4.4
5.3
6.3
6.0
6.6
Lender-paid
0.2
0.2
0.2
0.2
0.3
Direct single premiums
4.6
5.5
6.5
6.2
6.9
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
NIW for purchases
97.1
%
91.4
%
91.1
%
89.8
%
77.1
%
NIW for refinances
2.9
%
8.6
%
8.9
%
10.2
%
22.9
%
NIW by FICO score (1)
>=740
59.6
%
57.1
%
53.8
%
56.0
%
61.4
%
680-739
32.3
35.7
36.9
34.9
33.1
620-679
8.1
7.2
9.3
9.1
5.5
Total NIW
100.0
%
100.0
%
100.0
%
100.0
%
100.0
%
NIW by LTV
95.01% and above
17.7
%
14.6
%
16.3
%
12.1
%
10.9
%
90.01% to 95.00%
39.9
42.0
41.9
46.7
40.4
85.01% to 90.00%
26.7
29.4
28.4
26.5
27.6
85.00% and below
15.7
14.0
13.4
14.7
21.1
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.Radian Group Inc. and Subsidiaries
Mortgage Supplemental Information - Primary Insurance in Force and Risk in Force
Exhibit I
June 30
March 31,
December 31,
September 30,
June 30,
($ in millions)
2022
2022
2021
2021
2021
Primary insurance in force
$
254,226
$
248,951
$
245,972
$
241,575
$
237,302
Primary risk in force ("RIF")
$
63,770
$
62,036
$
60,913
$
59,421
$
58,040
Primary RIF by premium type
Direct monthly and other recurring premiums
85.6
%
84.9
%
83.9
%
82.7
%
81.2%
Direct single premiums (1)
14.4
%
15.1
%
16.1
%
17.3
%
18.8%
Primary RIF by FICO score (2)
>=740
57.2
%
56.9
%
56.9
%
57.3
%
57.5%
680-739
34.9
35.1
35.0
34.8
34.8
620-679
7.5
7.5
7.6
7.4
7.2
<=619
0.4
0.5
0.5
0.5
0.5
Total Primary
100.0
%
100.0
%
100.0
%
100.0
%
100.0%
Primary RIF by LTV
95.01% and above
16.1
%
15.5
%
15.1
%
14.6
%
14.5%
90.01% to 95.00%
48.7
48.9
48.9
48.9
48.5
85.01% to 90.00%
27.4
27.6
27.7
27.8
28.1
85.00% and below
7.8
8.0
8.3
8.7
8.9
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0%
Primary RIF by policy year
2008 and prior
4.0
%
4.3
%
4.7
%
5.2
%
5.7%
2009 - 2016
8.3
9.3
10.8
12.5
14.7
2017
3.9
4.3
4.9
5.7
6.8
2018
4.1
4.6
5.2
6.1
7.3
2019
7.7
8.6
9.7
11.4
13.6
2020
25.0
27.2
29.2
32.1
35.4
2021
32.1
34.0
35.5
27.0
16.5
2022
14.9
7.7
—
—
—
Total
100.0
%
100.0
%
100.0
%
100.0
%
100.0%
Persistency Rate (12 months ended)
71.7
%
68.0
%
64.3
%
60.8
%
57.7%(3)
Persistency Rate (quarterly, annualized) (4)
79.8
%
76.9
%
(3)
71.7
%
67.5
%
66.3%
(1)
Borrower-paid Single Premium Policies were 8.1%, 8.4%, 8.5%, 8.8% and 9.2% of primary RIF for the periods indicated, respectively.(2)
For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores.(3)
The Persistency Rate was reduced by an increase in cancellations of Single Premium Policies due to increased cancellations identified by our ongoing servicer monitoring process for Single Premium Policies.(4)
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.Radian Group Inc. and Subsidiaries
Mortgage Supplemental Information - Claims and Reserves, Default Statistics
Exhibit J
2022
2021
($ in thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Net claims paid (1)
Total primary claims paid
$
3,658
$
5,153
$
4,300
$
5,330
$
4,870
Total pool and other
(396
)
(415
)
(462
)
991
(649
)
Subtotal
3,262
4,738
3,838
6,321
4,221
Impact of commutations and settlements (2)
—
—
6,549
3,915
—
Total net claims paid
$
3,262
$
4,738
$
10,387
$
10,236
$
4,221
Total average net primary claims paid (1) (3)
$
41.6
$
41.6
$
47.8
$
42.0
$
46.8
Average direct primary claims paid (3) (4)
$
41.9
$
42.1
$
49.1
$
43.2
$
48.4
(1)
Includes the impact of reinsurance recoveries and LAE.(2)
Includes payments to commute mortgage insurance coverage on certain performing and non-performing loans.(3)
Calculated without giving effect to the impact of commutations and settlements.(4)
Before reinsurance recoveries.
June 30,
March 31,
December 31,
September 30,
June 30,
($ in thousands, except per default amounts)
2022
2022
2021
2021
2021
Reserve for losses by category (1)
Mortgage reserves
Primary case reserves
$
562,436
$
691,090
$
790,380
$
851,151
$
840,764
LAE
14,147
17,367
19,859
21,400
21,180
IBNR
2,424
2,539
2,886
3,788
5,464
Total primary reserves
579,007
710,996
813,125
876,339
867,408
Total pool reserves
9,756
10,330
9,826
11,413
13,085
Total 1st lien reserves
588,763
721,326
822,951
887,752
880,493
Other
184
184
185
269
270
Total Mortgage reserves
588,947
721,510
823,136
888,021
880,763
homegenius reserves
5,861
5,737
5,506
5,134
4,735
Total reserves
$
594,808
$
727,247
$
828,642
$
893,155
$
885,498
Primary reserve per primary default excluding IBNR and other
$
26,380
$
27,776
$
27,884
$
25,822
$
21,304
(1)
Includes ceded losses on reinsurance transactions, which are expected to be recovered and are included in the reinsurance recoverables reported in our condensed consolidated balance sheets.
June 30,
March 31,
December 31,
September 30,
June 30,
2022
2022
2021
2021
2021
Default Statistics
Primary Insurance
Number of insured loans
998,520
994,721
999,203
998,408
1,000,549
Number of loans in default
21,861
25,510
29,061
33,795
40,464
Percentage of loans in default
2.19
%
2.56
%
2.91
%
3.38
%
4.04
%
Radian Group Inc. and Subsidiaries
Mortgage Supplemental Information - Reinsurance Programs
Exhibit K
2022
2021
($ in thousands)
Qtr 2
Qtr 1
Qtr 4
Qtr 3
Qtr 2
Quota Share Reinsurance (“QSR”) and Single Premium QSR Programs
Ceded premiums written (1)
$ (21,554)
$ (22,079)
$ (7,670)
$ (1,304)
$ (7,032)
% of premiums written
(8.5) %
(8.8) %
(2.9) %
(0.5) %
(2.8) %
Ceded premiums earned
$ (7,937)
$ (3,240)
$ 3,116
$ 13,506
$ 13,491
% of premiums earned
(3.0) %
(1.2) %
1.1 %
4.8 %
4.8 %
Ceding commissions written
$ (6,584)
$ (9,153)
$ (8,232)
$ (7,861)
$ (2,362)
Ceding commissions earned (2)
$ 3,414
$ 5,123
$ 6,288
$ 7,087
$ 7,920
Profit commission
$ 21,447
$ 22,075
$ 20,290
$ 13,630
$ 17,935
Ceded losses
$ (15,037)
$ (12,588)
$ (7,940)
$ 883
$ (1,007)
Excess-of-Loss Program
Ceded premiums written
$ 18,151
$ 16,164
$ 20,508
$ 15,434
$ 18,524
% of premiums written
7.2 %
6.4 %
7.9 %
6.1 %
7.4 %
Ceded premiums earned
$ 19,292
$ 17,588
$ 17,817
$ 16,581
$ 15,601
% of premiums earned
7.3 %
6.5 %
6.3 %
5.9 %
5.5 %
Ceded RIF (3)
Single Premium QSR Program
$ 4,665,020
$ 4,855,228
$ 5,228,037
$ 5,439,056
$ 5,728,142
Excess-of-Loss Program
2,076,121
2,199,919
2,295,954
1,873,426
1,952,900
QSR Program
175,046
186,930
207,106
232,539
268,337
Total Ceded RIF
$ 6,916,187
$ 7,242,077
$ 7,731,097
$ 7,545,021
$ 7,949,379
PMIERs impact - reduction in Minimum Required Assets
Excess-of-Loss Program
$ 785,705
$ 881,917
$ 995,171
$ 659,151
$ 907,112
Single Premium QSR Program
268,847
286,706
314,183
328,339
355,115
QSR Program
10,226
11,214
12,541
14,116
16,545
Total PMIERs impact
$ 1,064,778
$ 1,179,837
$ 1,321,895
$ 1,001,606
$ 1,278,772
(1)
Net of profit commission.(2)
Includes amounts reported in policy acquisition costs and other operating expenses. See Exhibit E for details.(3)
Included in primary RIF.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:
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, 2021, 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/20220727005926/en/
For Investors John Damian - Phone: 215.231.1383 email: john.damian@radian.com For Media Rashi Iyer - Phone 215.231.1167 email: rashi.iyer@radian.com
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