RADIAN GROUP INC

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 months ended March 31, 2026, primarily reflect the financial results and performance of our Mortgage and Specialty segments, while our consolidated operating results for the three months ended March 31, 2025, primarily reflect the financial results and performance of our Mortgage segment.

As further described in Note 18 of Notes to Unaudited Condensed Consolidated Financial Statements, in the quarter ended September 30, 2025, Radian Group’s board of directors approved a plan to divest our Mortgage Conduit, Title and Real Estate Services businesses. As a result, we have reclassified the results related to these businesses to discontinued operations for all periods presented in our condensed consolidated statements of operations.

All amounts included in this “Results of Operations–-Consolidated” section relate to continuing operations unless otherwise noted.

In addition to the results of our reportable segments, pretax income (loss) from continuing operations is also affected by those factors described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results” in our 2025 Form 10-K as well as “Key Factors Affecting Our Results” herein, above. See also “Use of Non-GAAP Financial Measures” below for more information regarding items that are excluded from the operating results of our operating segments.

The following table summarizes our consolidated results of operations for the periods indicated.

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See “Use of Non-GAAP Financial Measures” below.

Net Premiums Earned. The increase in net premiums earned for the three months ended March 31, 2026, as compared to the same period in 2025, is primarily due to the acquisition of Inigo. See “Results of Operations—Mortgage Segment—Revenues—Net Premiums Earned” and “Results of Operations—Specialty Segment—Revenues—Net Premiums Earned” for more information.

Net Investment Income. The increase in net investment income for the three months ended March 31, 2026, as compared to the same period in 2025, is primarily due to the acquisition of Inigo. See Note 7 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net investment income. See “Results of Operations—Mortgage Segment—Revenues—Net Investment Income” and “Results of Operations—Specialty Segment—Revenues—Net Investment Income” for more information.

Net Gains (Losses) on Financial Instruments and Foreign Exchange. See Note 7 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net gains (losses) on financial instruments and foreign exchange by investment category.

Provision for Losses. The increase in the provision for losses for the three months ended March 31, 2026, as compared to the same period in 2025, is primarily due to the acquisition of Inigo. See “Results of Operations—Mortgage Segment—Expenses—Provision for Losses” and “Results of Operations—Specialty Segment—Expenses—Provision for Losses” for more information.

Amortization of Deferred Policy Acquisition Costs and VOBA. The increase in the amortization of deferred policy acquisition costs and VOBA for the three months ended March 31, 2026, as compared to the same period in 2025, is primarily related to amortization of the VOBA intangible asset recognized in connection with the acquisition of Inigo. See Note 3 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail on the impact of the Inigo acquisition and see “Results of Operations—Specialty Segment—Expenses—Amortization of Deferred Policy Acquisition Costs” for more information on Specialty segment results, which exclude the impact of purchase accounting adjustments.

Other Operating Expenses. Other operating expenses increased for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to the acquisition of Inigo. For additional information, see “Results of Operations—Mortgage Segment—Expenses—Other Operating Expenses” and “Results of Operations—Specialty Segment—Expenses—Other Operating Expenses.”

Interest Expense. The increase in interest expense for the three months ended March 31, 2026, as compared to the same period in 2025, is primarily due to interest expense on credit facilities for Inigo and Radian Group. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail about our interest expense.

Income Tax Provision

Our provision for income taxes for interim periods is established based on our estimated annual effective tax rate for a given year. This rate is impacted by the mix of income and loss and associated statutory tax rates by jurisdiction, and reflects the impact of discrete tax effects in the period in which they occur.

Our effective tax rate for continuing operations for the three months ended March 31, 2026, was 25.4%, as compared to 23.5% for the three months ended March 31, 2025. In addition to the effects of non‑deductible executive compensation expense, the increase in the effective tax rate was primarily attributable to a higher statutory tax rate on foreign earnings from Inigo and higher state income taxes associated with a temporary period of elevated investment income generated from increased investments held at Radian Group in anticipation of funding the Inigo acquisition.

Our unrecognized tax benefits increased during the quarter primarily as a result of uncertain tax positions assumed in connection with the Inigo acquisition. See Note 10 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail.

Income (Loss) from Discontinued Operations, Net of Tax

Income (loss) from discontinued operations, net of tax, includes the results of our Mortgage Conduit, Title and Real Estate Services businesses, which have been reclassified to discontinued operations for all periods presented. See Note 18 of Notes to Unaudited Condensed Financial Statements for additional details.

Use of Non-GAAP Financial Measures

In addition to traditional GAAP financial measures, we have presented “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity,” which are non-GAAP financial measures for the consolidated company, among our key performance indicators to evaluate our fundamental financial performance. These non-GAAP financial measures align with the way our business performance is evaluated by both management and by our board of directors. These measures have been established in order to increase transparency for the purposes of evaluating our operating trends and enabling more meaningful comparisons with our peers. Although on a consolidated basis adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity are non-GAAP financial measures, for the reasons discussed above we believe these measures aid in understanding the underlying performance of our operations.

Total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity are not measures of overall profitability, and therefore should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss) from continuing operations, diluted net income (loss) per share or return on equity. Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity, as discussed and reconciled below to the most comparable respective GAAP measures, may not be comparable to similarly named measures reported by other companies.

Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of our businesses. For detailed information regarding items excluded from adjusted pretax operating income (loss) and the reasons for their treatment, see Note 5 of Notes to Unaudited Condensed Consolidated Financial Statements.

The results of our Mortgage Conduit, Title and Real Estate Services businesses are included in income (loss) from discontinued operations, net of tax, for all periods presented herein. The calculation of adjusted pretax operating income, as detailed below, excludes income (loss) from discontinued operations, net of tax, for all periods presented herein. As a result, the calculations of adjusted diluted net operating income per share and adjusted net operating return on equity also exclude income (loss) from discontinued operations, net of tax, for all periods presented herein.

Adjusted pretax operating income (loss) is defined as GAAP pretax income (loss) from continuing operations excluding the effects of: (i) net gains (losses) on financial instruments and foreign exchange; (ii) amortization of other acquired intangible assets; (iii) other purchase accounting adjustments, net; and (iv) acquisition-related expenses and other non-operating items, such as impairment of internal-use software and other long-lived assets and gains (losses) on extinguishment of debt, among others.

The following table provides a reconciliation of pretax income from continuing operations to our non-GAAP financial measure of adjusted pretax operating income.

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Primarily includes $53 million of net VOBA asset and liability amortization, offset by a $30 million reversal of policy acquisition costs that is reflected in the Specialty segment results but eliminated under purchase accounting on a consolidated basis.

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For the three months ended March 31, 2026, primarily relates to acquisition-related expenses for investment banking fees, transfer taxes, legal costs and other transaction expenses.

Adjusted diluted net operating income (loss) per share is calculated by dividing adjusted pretax operating income (loss), net of taxes computed using the Company’s effective tax rate, by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. For purposes of this non-GAAP financial measure, the income tax provision (benefit) on the reconciling income (expense) items is calculated using statutory tax rates that correspond to the jurisdiction and nature of each item, principally the U.S. federal income tax statutory rate or the U.K. Corporation Tax statutory rate. The following table provides a reconciliation of diluted net income (loss) from continuing operations per share to our non-GAAP financial measure of adjusted diluted net operating income (loss) per share.

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Calculated using the Company’s statutory tax rate of 21% for U.S.-based adjustments and 25% for U.K.-based adjustments.

Adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the Company’s effective tax rate, by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented. For purposes of this non-GAAP financial measure, the income tax provision (benefit) on the reconciling income (expense) items is calculated using statutory tax rates that correspond to the jurisdiction and nature of each item, principally the U.S. federal income tax statutory rate or the U.K. corporation tax statutory rate. The following table provides a reconciliation of return on equity from continuing operations to our non-GAAP financial measure of adjusted net operating return on equity.

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Calculated by dividing annualized net income from continuing operations by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.

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Annualized, as a percentage of average stockholders’ equity.

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Calculated using the Company’s statutory tax rate of 21% for U.S.-based adjustments and 25% for U.K.-based adjustments.