RADIAN GROUP INC
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
RDN$35.97-3.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-02.
0000890926-24-000035
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewKey Factors Affecting Our ResultsMortgage Insurance PortfolioResults of Operations—ConsolidatedResults of Operations—Mortgage InsuranceResults of Operations—All OtherLiquidity and Capital ResourcesCritical Accounting EstimatesCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000950170-24-122809
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsOverviewKey Factors Affecting Our ResultsMortgage Insurance PortfolioResults of Operations—ConsolidatedResults of Operations—Mortgage InsuranceResults of Operations—All OtherLiquidity and Capital ResourcesCritical Accounting EstimatesThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 199 previous paragraphs and 176 current paragraphs.
77 unchanged; 83 reworded; 13 added; 34 removed; 5 previous and 3 current paragraphs rearranged.
Tables are not compared: 23 previous and 23 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
m 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
On August 21, 2024, the GSEs issued updates to the PMIERs (“PMIERs Updates”) that refine the standards for Available Assets under the PMIERs, which include the most liquid assets of a mortgage insurer available to pay claims. While the PMIERs do not prohibit a mortgage insurer from holding any type of assets, the PMIERs Updates further limit the Available Asset credit that mortgage insurers receive under the PMIERs for certain asset types based on several factors, including, among others, asset class and credit rating. Under the PMIERs Updates, the impact of reductions in Available Asset credit resulting from the changes is being phased-in over a two-year period, with 25% of the calculated adjustment to be implemented as of March 31, 2025, 50% as of September 30, 2025, 75% as of March 31, 2026, and 100% as of September 30, 2026. We do not expect the PMIERs Updates to have a material impact on Radian Guaranty’s capital position, its PMIERs cushion or its investment portfolio asset allocation strategy.
Current report
As part of the PMIERs Updates, the GSEs also announced that because the COVID-19 national emergency has ended, it would be eliminating the allowance for a reduction of the Minimum Required Asset factor under the PMIERs for COVID-19 Defaulted Loans. Effective March 31, 2025, COVID-19 Defaulted Loans will no longer qualify for the Disaster Related Capital Charge and will instead revert to the standard non-performing loan requirements of PMIERs. Although the Disaster Related Capital Charge is being eliminated for COVID-19 Defaulted Loans, it will continue to be available and apply to non-performing loans backed by a property located in a FEMA Designated Area, subject to certain conditions, including FEMA Designated Areas associated with the recent hurricanes Beryl, Helene and Milton. As of the effective date of March 31, 2025, we expect the elimination of the Disaster Related Capital Charge for COVID-19 Defaulted Loans to increase Radian Guaranty’s Minimum Required Assets by an immaterial amount.
Current report
See “Management’s Discussion and Analysis—Liquidity and Capital Resources—Mortgage Insurance” for more information.
Current report
Net of reinsurance recoveries.
Current report
Before reinsurance recoveries.
Current report
Hurricanes Helene and Milton made landfall in September and October 2024, respectively, causing extensive property damage in Florida and certain other states, as well as other general disruptions including power outages and flooding. Although the Primary Mortgage Insurance we write protects lenders from a portion of losses resulting from mortgage defaults, it generally does not provide protection against property loss or physical damage, including damage caused by hurricanes or other severe weather events or natural disasters. As a result, while we expect new defaults from the affected areas to increase in the fourth quarter of 2024, absent a prolonged negative impact on the local economies in these areas, as of September 30, 2024, we do not expect to incur any material losses due to current or future defaults in FEMA Designated Areas related to these hurricanes.
Removed paragraphs (34)
Previous report
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
On July 31, 2024, Radian Mortgage Capital closed its inaugural private label prime jumbo securitization transaction. The securitization involved the private offering and issuance of $348.9 million of unregistered mortgage pass-through certificates (the “Certificates”) collateralized by residential mortgage loans. At closing, Radian Mortgage Capital retained an interest in certain of the Certificates, and Radian Mortgage Capital and its affiliates (excluding its mortgage insurance affiliates) may hold an interest in the Certificates from time to time. Subject to market and other conditions, Radian Mortgage Capital expects to continue to distribute loans it acquires through private label securitizations on a regular programmatic basis in the future.
Previous report
On July 30, 2024, Radian Group notified holders of its outstanding 4.500% Senior Notes due 2024 (the “Notes”) that all of the outstanding Notes would be redeemed on September 27, 2024 (the “Redemption Date”), prior to the October 1, 2024 scheduled maturity date. The redemption price will be 100% of the principal amount of the Notes and will be payable together with accrued and unpaid interest on the Notes up to, but excluding, the Redemption Date.
Previous report
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
(1)Policy years represent the original policy years and have not been adjusted to reflect subsequent refinancing activity under the Home Affordable Refinance Program (“HARP”).
Previous report
(2)Includes loans that were subsequently refinanced under HARP.
Previous report
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report
(1)Net of reinsurance recoveries.
Previous report
(4)Before reinsurance recoveries.
Previous report
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Reworded paragraphs (83)
Previous wording
The following analysis of our financial condition and results of operations for the three and six months ended June 30, 2024, provides information that evaluates our financial condition as of June 30, 2024, compared with December 31, 2023, and our results of operations for the three and six months ended June 30, 2024, compared to the same periods last year.
Current wording
The following analysis of our financial condition and results of operations for the three and nine months ended September 30, 2024, provides information that evaluates our financial condition as of September 30, 2024, compared with December 31, 2023, and our results of operations for the three and nine months ended September 30, 2024, compared to the same periods last year.
Previous wording
Consistent with the trends observed in recent periods, the economic and market conditions impacting our results for the first six months of 2024 remained generally favorable. Interest rates remain elevated, which has benefited our Persistency Rates and net investment income yields, however, this has also contributed to reduced refinance volumes and NIW in our Mortgage Insurance business and lower transaction volumes for certain of our other businesses. Private mortgage insurance industry volumes are impacted by total mortgage origination volumes and the mix between mortgage originations that are for home purchases versus refinancings of existing mortgages. Although it is difficult to project future volumes, recent industry
Current wording
Consistent with the trends observed in recent periods, the economic and market conditions impacting our results for the first nine months of 2024 remained generally favorable. The current interest rate environment has benefited our Persistency Rates and net investment income yields, however, it has also contributed to reduced refinance volumes and NIW in our Mortgage Insurance business and lower transaction volumes for certain of our other businesses.
Previous wording
forecasts project a total mortgage origination market for 2024 of approximately $1.7 trillion, which would represent an increase of approximately 12% compared to 2023, but a reduction compared to projections at the beginning of 2024. This decrease in projections for 2024 primarily relates to the change in expectations for the timing for future interest rate decreases. Future interest rate decreases in 2024 are now expected to be less and to occur later, if at all, which would similarly delay any expected decline in mortgage interest rates, and as a result, reduce the overall size of the mortgage market. In light of updated projections, we now estimate that the private mortgage insurance market will be approximately $300 billion in 2024, which is the lower end of our expectations at the beginning of the year. In “Item 1A. Risk Factors” in our 2023 Form 10-K, see “A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our homegenius businesses” for more information.
Current wording
Private mortgage insurance industry volumes are impacted by total mortgage origination volumes and the mix between mortgage originations that are for home purchases versus refinancings of existing mortgages. Although it is difficult to project future volumes, recent industry forecasts project a total mortgage origination market for 2024 of approximately $1.7 trillion, which would represent an increase of approximately 17% compared to 2023, but a reduction compared to projections at the beginning of 2024. This decrease in projections for 2024 primarily relates to a change in the timing of interest rate decreases compared to expectations at the beginning of the year. The U.S. Federal Reserve reduced benchmark interest rates for the first time in approximately three years in September 2024, which was later than originally anticipated. The timing and magnitude of changes in the benchmark interest rate can affect mortgage interest rates and the overall size of the mortgage market. In light of updated projections, we now estimate that the private mortgage insurance market will be approximately $300 billion in 2024, which is the lower end of our expectations at the beginning of the year. In “Item 1A. Risk Factors” in our 2023 Form 10-K, see “A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our homegenius businesses” for more information.
Previous wording
While these recent developments in macroeconomic conditions are expected to negatively impact the overall volume of mortgage transactions taking place, the higher interest rate environment is expected to continue to benefit our financial performance through higher Persistency Rates, which is expected to increase our IIF despite lower NIW, as well as through the recognition of higher net investment income. Further, the housing supply continues to be constrained, which we believe will continue to support home values and the high level of home price appreciation currently embedded in our insured portfolio of mortgages. We expect this will continue to benefit our IIF as a result of the increased level of embedded equity borrowers have in their homes, which has positively impacted our default and cure trends. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Current Operating Environment” in our 2023 Form 10-K for additional discussion of the primary factors affecting the current operating environment for our businesses.
Current wording
While these macroeconomic conditions are expected to negatively impact the overall volume of mortgage transactions taking place, the higher interest rate environment is expected to continue to benefit our financial performance through elevated Persistency Rates, which is expected to benefit our level of IIF despite lower NIW, as well as through the recognition of higher net investment income. Further, the housing supply continues to be constrained, which we believe will continue to support home values and the high level of home price appreciation currently embedded in our insured portfolio of mortgages. We expect this will continue to benefit the credit performance of our mortgage insurance portfolio as a result of the increased level of embedded equity borrowers have in their homes, which has positively impacted our default and cure trends. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Current Operating Environment” in our 2023 Form 10-K for additional discussion of the primary factors affecting the current operating environment for our businesses.
Previous wording
We are subject to comprehensive regulation by both federal and state regulatory authorities. For a description of significant state and federal regulations and other requirements of the GSEs that are applicable to our businesses, as well as legislative and regulatory developments affecting the housing finance industry, see “Item 1. Business—Regulation” in our 2023 Form 10-K.
Current wording
We are subject to comprehensive regulation by both federal and state regulatory authorities. For a description of significant state and federal regulations and other requirements of the GSEs that are applicable to our businesses, as well as legislative and regulatory developments affecting the housing finance industry, see “Item 1. Business—Regulation” in our 2023 Form 10-K. Except as discussed below, there were no significant regulatory developments impacting our businesses from those discussed in our 2023 Form 10-K.
Previous wording
We wrote $13.9 billion and $25.4 billion of primary new mortgage insurance in the three and six months ended June 30, 2024, respectively, compared to $16.9 billion and $28.2 billion of NIW in the three and six months ended June 30, 2023, respectively.
Current wording
We wrote $13.5 billion and $38.9 billion of primary new mortgage insurance in the three and nine months ended September 30, 2024, respectively, compared to $13.9 billion and $42.1 billion of NIW in the three and nine months ended September 30, 2023, respectively.
Previous wording
Our NIW decreased by 18% and 10% for the three and six months ended June 30, 2024, respectively, compared to the same periods in 2023, due to a decline in private mortgage insurance penetration as a percentage of the overall mortgage origination market. According to industry estimates, total mortgage origination volume was relatively flat for the three months ended June 30, 2024 and was slightly higher for the six months ended June 30, 2024, both as compared to the comparable periods in 2023, due primarily to a small increase in mortgage refinance activity.
Current wording
Our NIW decreased by 3% and 8% for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023, due to a decline in private mortgage insurance penetration as a percentage of the overall mortgage origination market. According to industry estimates, total mortgage origination volume was higher for the three and nine months ended September 30, 2024, as compared to the comparable periods in 2023, due primarily to a small increase in mortgage refinance activity.
Previous wording
(1)For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores at origination.
Current wording
For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores at origination.
Previous wording
Our IIF is the primary driver of the future premiums that we expect to earn over time. IIF increased to $272.8 billion at June 30, 2024, from $270.0 billion at December 31, 2023, reflecting the impact of our NIW offset by policy cancellations and amortization for the first six months of 2024. Our IIF at June 30, 2024, increased 2% as compared to the same period last year.
Current wording
Our IIF is the primary driver of the future premiums that we expect to earn over time. IIF increased to $274.7 billion at September 30, 2024, from $270.0 billion at December 31, 2023, reflecting the impact of our NIW offset by policy cancellations and amortization for the first nine months of 2024. Our IIF at September 30, 2024, increased 2% as compared to the same period last year.
Previous wording
Historically, there is a close correlation between interest rates and Persistency Rates. Higher interest rate environments generally decrease refinancings, which decrease the cancellation rate of our insurance and positively affect our Persistency Rates. As shown in the table below, our 12-month Persistency Rate at June 30, 2024, increased as compared to June 30, 2023. The increase in our Persistency Rate at June 30, 2024, was primarily attributable to decreased refinance activity due to increases in mortgage interest rates, as compared to the same period in the prior year. As of June 30, 2024, 74% of our IIF had a mortgage note interest rate of 6.0% or less. Given the higher prevailing market mortgage interest rates, which, based on reported industry averages, now exceed these levels, we would expect a continued positive impact on our Persistency Rates. If refinance volume increases, we would expect the Persistency Rate for our portfolio to decrease, reducing the size of our IIF portfolio. See “If the length of time that our mortgage insurance policies remain in force declines, it could result in a decrease in our future revenues” under “Item 1A. Risk Factors” in our 2023 Form 10-K for more information.
Current wording
As of September 30, 2024, 70% of our IIF had a mortgage note interest rate of 6.0% or less. Given the higher prevailing market mortgage interest rates, which, based on reported industry averages, now exceed these levels, we would expect a continued positive impact on our Persistency Rates. If refinance volume increases, we would expect the Persistency Rate for our portfolio to decrease, reducing the size of our IIF portfolio. See “If the length of time that our mortgage insurance policies remain in force declines, it could result in a decrease in our future revenues” under “Item 1A. Risk Factors” in our 2023 Form 10-K for more information.
Previous wording
(1)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.
Current wording
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.
Previous wording
(2)For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores at origination.
Current wording
For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores at origination.
Previous wording
(1)Consists primarily of 2022 and 2023 QSR Agreements, which include both single and monthly premium policies.
Current wording
Consists primarily of the 2022, 2023 and 2024 QSR Agreements, which include both single and monthly premium policies.
Previous wording
Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. Our consolidated operating results for the three and six months ended June 30, 2024, and June 30, 2023, primarily reflect the financial results and performance of our Mortgage Insurance business. See “Results of Operations—Mortgage Insurance” for the operating results of this business segment for the three and six months ended June 30, 2024, compared to the same periods in 2023.
Current wording
Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. Our consolidated operating results for the three and nine months ended September 30, 2024 and 2023, primarily reflect the financial results and performance of our Mortgage Insurance business. See “Results of Operations—Mortgage Insurance” for the operating results of this business segment for the three and nine months ended September 30, 2024, compared to the same periods in 2023.
Previous wording
(1)See “Use of Non-GAAP Financial Measures” below.
Current wording
See “Use of Non-GAAP Financial Measures” below.
Previous wording
Net Premiums Earned. Net premiums earned increased for the three and six months ended June 30, 2024, as compared to the same periods in 2023 primarily due to increased ceded premiums earned associated with the tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. in the second quarter of 2023 to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. See “Results of Operations—Mortgage Insurance—Revenues—Net Premiums Earned” for more information.
Current wording
Net Premiums Earned. Net premiums earned increased for the nine months ended September 30, 2024, as compared to the same period in 2023 primarily due to: (i) an increase in direct premiums earned in 2024 and (ii) increased ceded premiums earned associated with the tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. in the second quarter of 2023 to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. See “Results of Operations—Mortgage Insurance—Revenues—Net Premiums Earned” for more information.
Previous wording
Mortgage Capital and short-term investments. See Note 6 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net investment income. See “Results of Operations—Mortgage Insurance—Revenues—Net Investment Income” and “Results of Operations—All Other” for more information.
Current wording
Net Investment Income. The increase in net investment income for the three and nine months ended September 30, 2024, as compared to the same periods in 2023, is primarily attributable to higher balances of residential mortgage loans held for sale and short-term investments. See Note 6 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net investment income. See “Results of Operations—Mortgage Insurance—Revenues—Net Investment Income” and “Results of Operations—All Other” for more information.
Previous wording
Provision for Losses. The reduced benefit of the provision for losses for the three and six months ended June 30, 2024, as compared to the same periods in 2023, is primarily driven by a reduction in favorable development on prior period defaults, which impacted our mortgage insurance reserves. See “Results of Operations—Mortgage Insurance—Expenses—Provision for Losses” for more information.
Current wording
Provision for Losses. The change in the provision for losses for the three and nine months ended September 30, 2024, as compared to the same periods in 2023, is primarily driven by a reduction in favorable development on prior period defaults, which impacted our mortgage insurance reserves. See “Results of Operations—Mortgage Insurance—Expenses—Provision for Losses” for more information.
Previous wording
Other Operating Expenses. Other operating expenses increased for the three and six months ended June 30, 2024, as compared to the same periods in 2023. See “Results of Operations—Mortgage Insurance—Expenses—Other Operating Expenses” for more information.
Current wording
Other Operating Expenses. Other operating expenses increased for the three and nine months ended September 30, 2024, as compared to the same periods in 2023, primarily driven by a $10 million impairment of internal-use software, partially offset by decreases in other operating expense for the businesses that comprise All Other activities. For additional information, see “Expenses—Other Operating Expenses” under both “Results of Operations—Mortgage Insurance” and “Results of Operations—All Other.”
Previous wording
Interest Expense. The increase in interest expense for the three and six months ended June 30, 2024, as compared to the same periods in 2023, is primarily due to: (i) an increase in secured borrowings under our mortgage loan financing facilities and (ii) the net impact of the March 2024 issuance and redemption of the Senior Notes due 2029 and Senior Notes due 2025, respectively. The six months ended June 30, 2024, was also impacted by a $4 million loss on extinguishment of debt related to the redemption of the Senior Notes due 2025 in March 2024. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail about our interest expense.
Current wording
Interest Expense. The increase in interest expense for the three and nine months ended September 30, 2024, as compared to the same periods in 2023, is primarily due to: (i) an increase in secured borrowings under our mortgage loan financing facilities and (ii) the net impact of the March 2024 issuance and redemption of the Senior Notes due 2029 and Senior Notes due 2025, respectively, including the impact of a $4 million loss on extinguishment of debt related to the redemption of the Senior Notes due 2025. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail about our interest expense.
Previous wording
Our effective tax rate for the three and six months ended June 30, 2024, was 19.3% and 21.3%, respectively, as compared to 20.0% and 21.4% for the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2024 and 2023, the effects of non-deductible executive compensation expense, state income taxes, and the vesting of RSUs were the primary drivers of the difference in our effective tax rate compared to the federal statutory rate.
Current wording
Our effective tax rate for the three and nine months ended September 30, 2024, was 22.3% and 21.6%, respectively, as compared to 22.1% and 21.7% for the three and nine months ended September 30, 2023, respectively. For the three and nine months ended September 30, 2024 and 2023, the effects of non-deductible executive compensation expense, state income taxes and the vesting of RSUs were the primary drivers of the difference in our effective tax rate compared to the federal statutory rate.
Previous wording
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. For detailed information regarding items excluded from adjusted pretax operating income (loss) and the reasons for their treatment, see Note 4 of Notes to Consolidated Financial Statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Consolidated—Use of Non-GAAP Financial Measures,” each in our 2023 Form 10-K.
Current wording
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. For detailed information regarding items excluded from adjusted pretax operating income (loss) and the reasons for their treatment, see Note 4 of Notes to Consolidated Financial
Previous wording
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 and other financial instruments attributable to our reportable segment or All Other activities; (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
Current wording
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.
Previous wording
(1)Excludes certain net gains (losses), if any, on investments and other financial instruments that are attributable to specific operating segments and therefore included in adjusted pretax operating income (loss).
Current wording
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).
Previous wording
(2)The non-operating loss for the six months ended June 30, 2024, primarily relates to a loss on extinguishment of debt. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.
Current wording
The non-operating loss for the three and nine months ended September 30, 2024, primarily relates to impairment of internal-use software.
Previous wording
(3)Total adjusted pretax operating income on a consolidated basis consists of adjusted pretax operating income (loss) for our Mortgage Insurance segment and All Other activities, as further detailed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
Current wording
Total adjusted pretax operating income on a consolidated basis consists of adjusted pretax operating income (loss) for our Mortgage Insurance segment and All Other activities, as further detailed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
Previous wording
(1)Calculated using the Company’s federal statutory tax rate of 21%.
Current wording
Calculated using the Company’s federal statutory tax rate of 21%.
Previous wording
(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.
Current wording
Calculated by dividing annualized net income by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.
Previous wording
(2)Annualized, as a percentage of average stockholders’ equity.
Current wording
Annualized, as a percentage of average stockholders’ equity.
Previous wording
(3)Calculated using the Company’s federal statutory tax rate of 21%.
Current wording
Calculated using the Company’s federal statutory tax rate of 21%.
Previous wording
(1)Our senior management uses adjusted pretax operating income as our primary measure to evaluate the fundamental financial performance of our business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.
Current wording
Our senior management uses adjusted pretax operating income as our primary measure to evaluate the fundamental financial performance of our business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.
Previous wording
Net Premiums Earned. Net premiums earned increased for the three and six months ended June 30, 2024, as compared to the same periods in 2023, primarily due to increased ceded premiums earned associated with the tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. in the second quarter of 2023 to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty and, to a lesser extent, an increase in direct premiums earned in 2024, due primarily to higher IIF.
Current wording
Net Premiums Earned. Net premiums earned increased for the nine months ended September 30, 2024, as compared to the same period in 2023, primarily due to: (i) an increase in direct premiums earned in 2024, due primarily to higher IIF, and (ii) increased ceded premiums earned associated with the tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. in the second quarter of 2023 to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty.
Previous wording
(1)The three and six months ended June 30, 2023, include the impact of tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. As a result of these tender offers, Radian Guaranty incurred additional ceded premiums earned during the second quarter of 2023 of $21 million, consisting of $16 million related to the cost of tender premiums and associated expenses and $5 million related to the acceleration of deferred costs from the original executions of these transactions.
Current wording
The nine months ended September 30, 2023, include the impact of tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. As a result of these tender offers, Radian Guaranty incurred additional ceded premiums earned during the second quarter of 2023 of $21 million.
Previous wording
(2)Includes the impact of related profit commissions.
Current wording
Includes the impact of related profit commissions.
Previous wording
(3)Represents the profit commission from the Single Premium QSR Program, 2022 QSR Agreement and 2023 QSR Agreement, excluding the impact of Single Premium Policy cancellations.
Current wording
Represents the profit commission from the Single Premium QSR Program, 2022 QSR Agreement, 2023 QSR Agreement and 2024 QSR Agreement, excluding the impact of Single Premium Policy cancellations.
Previous wording
(4)Calculated by dividing annualized direct premiums earned, excluding revenue from cancellations, by average primary IIF.
Current wording
Calculated by dividing annualized direct premiums earned, excluding revenue from cancellations, by average primary IIF.
Previous wording
(5)Calculated by dividing annualized direct premiums earned, by average primary IIF.
Current wording
Calculated by dividing annualized direct premiums earned, by average primary IIF.
Previous wording
(6)Calculated by dividing annualized net premiums earned by average primary IIF. The calculation for all periods presented incorporates the impact of profit commission adjustments related to our reinsurance programs.
Current wording
Calculated by dividing annualized net premiums earned by average primary IIF. The calculation for all periods presented incorporates the impact of profit commission adjustments related to our reinsurance programs.
Previous wording
(7)The average of beginning and ending balances of primary IIF, for each period presented.
Current wording
The average of beginning and ending balances of primary IIF, for each period presented.
Previous wording
(1)The three and six months ended June 30, 2023, include the impact of tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. As a result of these tender offers, Radian Guaranty incurred additional ceded premiums earned during the second quarter of 2023 of $21 million, consisting of $16 million related to the cost of tender premiums and associated expenses and $5 million related to the acceleration of deferred costs from the original executions of these transactions.
Current wording
The nine months ended September 30, 2023, include the impact of tender offers by Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty. As a result of these tender offers, Radian Guaranty incurred additional ceded premiums earned during the second quarter of 2023 of $21 million, consisting of $16 million related to the cost of tender premiums and associated expenses and $5 million related to the acceleration of deferred costs from the original executions of these transactions.
Showing the first 40 of 83 pairs. Open the source sections for the rest.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Historically, there is a close correlation between interest rates and Persistency Rates. Higher interest rate environments generally decrease refinancings, which decrease the cancellation rate of our insurance and positively affect our Persistency Rates. As shown in the table below, our 12-month Persistency Rate at September 30, 2024, increased as compared to September 30, 2023. The increase in our Persistency Rate at September 30, 2024, was primarily attributable to decreased refinance activity due to increases in mortgage interest rates, as compared to the same period in the prior year.
Current report — wording carried from elsewhere
Statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Consolidated—Use of Non-GAAP Financial Measures,” each in our 2023 Form 10-K.
Current report — wording carried from elsewhere
Other Operating Expenses. The increase in other operating expenses for the three and nine months ended September 30, 2024, as compared to the same periods in 2023, is primarily due to an increase in variable and share-based compensation expense and severance related expense, partially offset by a reduction in general operating expenses related to expense savings actions implemented during the past year, as well as an increase in the benefit from ceding commissions under Radian Guaranty’s QSR Program.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Previous report — wording carried elsewhere
Net Investment Income. The increase in net investment income for the three and six months ended June 30, 2024, as compared to the same periods in 2023, is primarily attributable to higher balances of mortgage loans held for sale by Radian
Previous report — wording carried elsewhere
(losses) from the sale of lines of business, acquisition-related income (expenses) and gains (losses) on extinguishment of debt.
Previous report — wording carried elsewhere
Operating Activities. Our most significant source of operating cash flows is from premiums received from our mortgage insurance policies, while our most significant uses of operating cash flows are typically for our operating expenses and claims
Previous report — wording carried elsewhere
Financial Statements for information on our mortgage insurance reserve for losses and LAE, which represents our best estimate for the costs of settling future claims on currently defaulted mortgage loans.