RADIAN GROUP INC

Consolidated Cash Flows

The following table summarizes our consolidated cash flows from operating, investing and financing activities.

(1)

Includes Inigo results for the eight-month period from the Closing Date through September 30, 2026.

(2)

Includes change in cash and restricted cash for discontinued operations, which are included in assets held for sale on our condensed consolidated balance sheets.

Operating Activities. Our most significant source of operating cash flows from continuing operations is from premiums received from our insurance and assumed reinsurance policies, reinsurance recoverables and net investment income, while our most significant uses of operating cash flows are typically our operating expenses, taxes, ceded reinsurance premiums and claims paid on our insurance and assumed reinsurance policies. The increase in cash provided by operating activities, continuing operations, in the nine months ended September 30, 2026, as compared to the same period in 2025, was primarily due to the addition of Inigo’s operations, including premiums received in excess of claims and other operating expenses. This increase was partially offset by acquisition-related costs paid in connection with the Inigo acquisition in the first quarter of 2026, as well as an increase in mortgage insurance claims paid and a reduction in net investment income in the nine-month period. Net cash flows provided by (used in) operating activities from discontinued operations primarily relate to cash used for net purchases of mortgage loans held for sale in 2025, compared to cash provided by net sales of mortgage loans held for sale in 2026.

Investing Activities. The change in net cash used in investing activities, continuing operations, for the nine months ended September 30, 2026, as compared to cash provided by investing activities, continuing operations, in the same period in 2025, was primarily driven by the funding of the Inigo acquisition in the first quarter of 2026, net of cash acquired, primarily offset by an increase in sales and redemptions of short-term investments to help fund the acquisition in the first quarter. Additionally, in 2026, cash used for purchases of fixed-maturity investments available for sale has exceeded cash provided by sales and redemptions of such investments. The decrease in net cash provided by investing activities, discontinued operations, for the nine months ended September 30, 2026, as compared to the same period in 2025, was primarily driven by a reduction in cash provided from Mortgage Conduit loan activities.

Financing Activities. For the nine months ended September 30, 2026, our net cash used in financing activities, continuing operations primarily reflected repurchases of our common stock and the payment of dividends. See Notes 12 and 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our borrowing and capital stock activities, respectively. Net cash used in financing activities, discontinued operations, for the nine months ended

September 30, 2026, was primarily driven by the net change in borrowings related to funding from mortgage loan financing facilities.

See “Item 1. Financial Statements (Unaudited)—Condensed Consolidated Statements of Cash Flows (Unaudited)” for additional information.

Liquidity Analysis—Holding Company

Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. At September 30, 2026, Radian Group had available, either directly or through unregulated subsidiaries, unrestricted cash and liquid investments of $376 million. Total liquidity was $876 million as of September 30, 2026, and included $500 million of remaining availability under our unsecured revolving credit facility.

During the nine months ended September 30, 2026, Radian Group’s available liquidity decreased by $1.5 billion, primarily due to $1.65 billion of cash consideration paid for the acquisition of Inigo, $261 million paid for share repurchases and $107 million paid for dividends. This decrease was partially offset by $515 million of ordinary dividends received from Radian Guaranty and $65 million of distributions from our businesses held for sale. See Notes 16 and 18 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on distributions from Radian Guaranty and our businesses held for sale, respectively.

In addition to available cash and marketable securities, including net investment income earned on such investments, Radian Group’s principal sources of cash to fund future liquidity needs include: (i) payments made to Radian Group by certain of its subsidiaries under expense- and tax-sharing arrangements; (ii) to the extent available, dividends or other distributions from its subsidiaries; and (iii) as further described below, our $500 million unsecured revolving credit facility with a syndicate of bank lenders that is undrawn and remains available.

Subject to certain limitations, borrowings under our $500 million unsecured revolving credit facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to our insurance and other subsidiaries as well as growth initiatives. During the nine months ended September 30, 2026, we drew $200 million on the facility in connection with the Inigo acquisition and fully repaid the borrowing. As of September 30, 2026, we were in compliance with our covenants under the unsecured revolving credit facility. See Note 12 of Notes to Consolidated Financial Statements in our 2025 Form 10-K for additional information on the unsecured revolving credit facility.

In connection with our Mortgage Conduit business, Radian Mortgage Capital entered into the Master Repurchase Agreements to finance the acquisition of residential mortgage loans and related mortgage loan assets. In addition, Radian Group entered into Parent Guarantees guaranteeing the obligations under the Master Repurchase Agreements. Following the decision to wind down our Mortgage Conduit business, the Master Repurchase Agreements and the related Parent Guarantees have been terminated. See Note 18 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

As of September 30, 2026, we expect Radian Group’s principal liquidity demands for the next 12 months to be: (i) the payment of $450 million principal amount of our outstanding Senior Notes due 2027; (ii) the payment of corporate expenses, including taxes; (iii) interest payments on our outstanding debt obligations, including interest payments to Radian Guaranty under the terms of the Intercompany Note, as well as potential amounts to repay borrowings under our credit facility, if any; (iv) investments to support our business strategy and to expand and diversify our revenue streams, including, if needed, capital contributions to our subsidiaries; and (v) the payment of quarterly dividends on our common stock, which currently are $0.255 per share, and which remain subject to approval by our board of directors and our ongoing assessment of our financial condition and potential needs related to the execution and implementation of our business plans and strategies.

In addition to our ongoing short-term liquidity needs discussed above, our most significant need for liquidity beyond the next 12 months is the repayment of $625 million aggregate principal amount of our senior debt due in 2029 and of the $600 million that we borrowed from Radian Guaranty pursuant to the Intercompany Note to fund a portion of the purchase price of the Inigo acquisition. See “Capitalization—Holding Company” below for additional information about our outstanding debt.

Radian Group’s liquidity demands for the next 12 months or in future periods could also include: (i) potential repurchases of shares of our common stock pursuant to share repurchase authorizations, as described below and (ii) early repurchases or redemptions of portions of our debt obligations, including principal due on the Intercompany Note.

For additional information about related risks and uncertainties, see “The use of the Intercompany Note to fund a portion of the Inigo acquisition reduced our liquidity and Radian Guaranty’s PMIERs Cushion, and subjects us to certain conditions and compliance obligations associated with the Intercompany Note which could adversely affect us and our financial condition;” “Our sources of liquidity may be insufficient to fund our obligations;” and “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” under “Item 1A. Risk Factors” in our 2025 Form 10-K.

In addition to Radian Group’s existing sources of liquidity to fund its obligations, we may decide to seek additional capital, including by incurring additional debt, issuing additional equity or selling assets, which we may not be able to do on favorable terms, if at all.

Inigo Acquisition. On February 2, 2026, the Company completed its strategic acquisition of Inigo, which reduced both available and total liquidity by $1.65 billion, representing the cash portion of the consideration paid for the acquisition. Radian funded the acquisition from Radian Group’s available liquidity sources (including proceeds of the Intercompany Note) combined with funds from a $200 million draw on our unsecured revolving credit facility, which was fully repaid as of September 30, 2026.

Discontinued Operations. During the nine months ended September 30, 2026, our businesses held for sale returned $65 million of capital to Radian Group, partially offset by $11 million in contributions from Radian Group to those businesses. In the fourth quarter of 2026, we anticipate that the disposition of our remaining assets and liabilities held for sale will further contribute to our holding company liquidity.

Share Repurchases. During the nine months ended September 30, 2026, the Company repurchased 7.4 million shares of Radian Group common stock under programs authorized by Radian Group’s board of directors, at a total cost of $261 million, including commissions. See Note 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details on our share repurchase programs.

Dividends and Dividend Equivalents. Our quarterly dividend is currently $0.255 per share. Based on our outstanding shares of common stock and our current dividend level, which our board of directors may change at any time, we would require approximately $133 million in the aggregate to pay dividends for the next 12 months, plus an incremental amount for dividend equivalents that will fluctuate based on final shares vested under our performance-based RSU programs. So long as no default or event of default exists under our revolving credit facility, Radian Group is not subject to any legal or contractual limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. See Note 16 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details. The declaration and payment of future quarterly dividends remains subject to the board of directors’ discretion and determination.

Corporate Expenses and Interest Expense. Radian Group has expense-sharing arrangements in place with its U.S. principal operating subsidiaries that may require those subsidiaries to pay their allocated share of certain holding-company-level expenses, including interest payments on Radian Group’s outstanding third-party debt obligations. Operating expenses and interest expense on Radian Group’s third-party debt obligations allocated under these arrangements during the nine months ended September 30, 2026, of $91 million and $53 million, respectively, were substantially all reimbursed by Radian Group’s subsidiaries. We expect these expense-sharing arrangements to remain in effect for the remainder of 2026 and beyond. The expense-sharing arrangements, as amended, between Radian Group and its mortgage insurance subsidiaries have been approved by the Pennsylvania Insurance Department, but such approval may be modified or revoked at any time and the amounts allocated under the agreements may change.

Taxes. Pursuant to our tax-sharing agreements, our U.S.-based operating subsidiaries pay Radian Group an amount equal to any federal income tax the subsidiary would have paid on a standalone basis if it was not part of our consolidated tax return. As a result, from time to time, under the provisions of our tax-sharing agreements, Radian Group may pay to or receive from its U.S.-based operating subsidiaries amounts that differ from Radian Group’s consolidated federal tax payment obligation. There were $110 million tax-sharing agreement payments received by Radian Group from its U.S.-based operating subsidiaries during the nine months ended September 30, 2026.

Capitalization—Holding Company

The following table presents our holding company capital structure.

(1)

Calculated as the aggregate carrying value of our senior notes, which were issued and are owed by our holding company, and any outstanding borrowings under our revolving credit facility, divided by the carrying value of our senior notes, any outstanding borrowings under our revolving credit facility and stockholders’ equity. This holding company ratio does not include the effects of amounts owed by our subsidiaries related to other borrowings.

Stockholders’ equity decreased by $132 million from December 31, 2025, to September 30, 2026. The net decrease in stockholders’ equity for the nine months ended September 30, 2026, resulted primarily from: (i) a net increase in unrealized losses on investment securities of $209 million as a result of increases in market interest rates during the period; (ii) share repurchases of $261 million, excluding related excise taxes due; and (iii) declared dividend and dividend equivalents of $107 million. These were partially offset by our net income of $404 million as well as $24 million of equity awards and common stock issued in connection with the Inigo acquisition.

The increase in book value per share from $35.29 at December 31, 2025, to $35.78 at September 30, 2026, was primarily due to an increase of $2.98 per share attributable to our net income for the nine months ended September 30, 2026, partially offset by: (i) a decrease of $1.54 per share due to a net increase in unrealized losses in our available for sale securities, recorded in accumulated other comprehensive income for the nine months ended September 30, 2026, and (ii) a decrease of $0.79 per share attributable to declared dividends and dividend equivalents.

We regularly evaluate opportunities, based on market conditions, to finance our operations by accessing the capital markets or entering into other types of financing arrangements with institutional and other lenders. We also regularly consider various measures to improve our capital and liquidity positions, as well as to strengthen our balance sheet, improve Radian Group’s debt maturity profile and maintain adequate liquidity for our operations. Among other things, these measures may include borrowing agreements or arrangements, such as securities or other master repurchase agreements and revolving credit facilities. In the past, we have repurchased or exchanged, prior to maturity, some of our outstanding debt, and in the future, we may from time to time seek to redeem, repurchase or exchange for other securities, or otherwise restructure or refinance some or all of our outstanding debt prior to maturity in the open market through other public or private transactions, including pursuant to one or more tender offers or through any combination of the foregoing, as circumstances may allow. The timing or amount of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs. There can be no assurance that any such transactions will be completed on favorable terms, or at all.

Mortgage Segment

Historically, one of the primary demands for liquidity in our Mortgage segment is the payment of claims, net of reinsurance, including from commutations and settlements. See Note 11 of Notes to Unaudited Condensed Consolidated

Financial Statements for information on our mortgage insurance reserve for losses and LAE, which represents our best estimate of the costs of settling future claims on currently defaulted mortgage loans.

Other principal demands for liquidity in our Mortgage segment are expected to include: (i) expenses (including those allocated from Radian Group); (ii) repayments of FHLB advances; (iii) distributions from Radian Guaranty to Radian Group, including returns of capital and recurring ordinary dividends; and (iv) taxes, including potential payments to Radian Group pursuant to the tax-sharing agreement.

The principal sources of liquidity in our Mortgage segment currently include insurance premiums, net investment income and cash flows from: (i) investment sales and maturities; (ii) FHLB advances; and (iii) interest payments received from Radian Group on the $600 million Intercompany Note. We believe that the operating cash flows generated by Radian Guaranty, as well as our other immaterial mortgage insurance subsidiaries, will provide them with the funds necessary to satisfy their respective needs for the foreseeable future. Sources of liquidity in future periods are scheduled to include the principal repayment of the Intercompany Note and, if necessary, may include capital contributions from Radian Group.

As of September 30, 2026, Radian Guaranty maintained claims paying resources of $6.1 billion on a statutory basis, which consist of contingency reserves, statutory policyholders’ surplus, premiums received but not yet earned and loss reserves. In addition, our reinsurance programs are designed to provide additional claims paying resources during times of economic stress and elevated losses. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Radian Guaranty’s Risk-to-capital as of September 30, 2026, was 10.4 to 1. Radian Guaranty is not expected to need additional capital to satisfy state insurance regulatory requirements in their current form. At September 30, 2026, Radian Guaranty had statutory policyholders’ surplus of $554 million. This balance includes a $1.1 billion benefit from U.S. Mortgage Guaranty Tax and Loss Bonds issued by the U.S. Department of the Treasury, which mortgage guaranty insurers such as Radian Guaranty may purchase in order to be eligible for a tax deduction, subject to certain limitations, related to amounts required to be set aside in statutory contingency reserves. For more information, in our 2025 Form 10-K, see Note 16 of Notes to Consolidated Financial Statements and, under “Item 1A. Risk Factors,” see “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity.”

Radian Guaranty currently is an approved mortgage insurer under the PMIERs. Private mortgage insurers, including Radian Guaranty, are required to comply with the PMIERs to remain approved insurers of loans purchased by the GSEs. At September 30, 2026, Radian Guaranty’s Available Assets under the PMIERs financial requirements totaled $5.3 billion, resulting in a PMIERs Cushion of $1.5 billion, or 38%, over its Minimum Required Assets. Those amounts compare to Available Assets of $5.4 billion and a PMIERs Cushion of $1.6 billion, or 41%, at December 31, 2025. Under “Item 1A. Risk Factors” in our 2025 Form 10-K, see “The use of the Intercompany Note to fund a portion of the Inigo acquisition reduced our liquidity and Radian Guaranty’s PMIERs Cushion, and subjects us to certain conditions and compliance obligations associated with the Intercompany Note which could adversely affect us and our financial condition.”

Despite holding assets above the minimum statutory capital thresholds and PMIERs financial requirements, the ability of Radian’s mortgage insurance subsidiaries to pay dividends on their common stock is restricted by certain provisions of the insurance laws of Pennsylvania, their state of domicile and, with respect to Radian Guaranty, by provisions of the Intercompany Note as described below. Under Pennsylvania’s insurance laws, ordinary dividends and other distributions may only be paid out of an insurer’s positive unassigned surplus unless the Pennsylvania Insurance Department approves the payment of dividends or other distributions from another source.

Radian Guaranty distributed $515 million to Radian Group in the first nine months of 2026, including a $175 million ordinary dividend in the third quarter of 2026. We expect Radian Guaranty to maintain the ability to pay dividends during the remainder of 2026 and for the foreseeable future. See Note 16 of Notes to Consolidated Financial Statements in our 2025 Form 10-K for additional information on our statutory dividend restrictions and contingency reserve requirements.

As noted above, Radian Group paid a portion of the cash consideration for the Inigo acquisition with proceeds from the Intercompany Note that was approved by the Pennsylvania Insurance Department. Radian Guaranty is required to comply with certain conditions while the Intercompany Note is outstanding, including, most notably, obtaining prior approval from the Pennsylvania Insurance Department for all dividends paid by Radian Guaranty for a period of three years (which we may request to be reduced or the Pennsylvania Insurance Department may, in certain circumstances, extend for up to five years) and maintaining a minimum policyholders’ surplus of $500 million, among other conditions.

Radian Guaranty is a member of the FHLB. As a member, it may borrow from the FHLB, subject to certain conditions, which include requirements to post collateral and to maintain a minimum investment in FHLB stock. Advances from the FHLB may be used to provide low-cost, supplemental liquidity for various purposes, including to fund incremental investments. Radian’s current strategy includes using FHLB advances as financing for general cash management and liquidity purposes. As of September 30, 2026, there were $100 million of FHLB advances outstanding. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Specialty Segment

The principal demands for liquidity in our Specialty segment arise from the financial obligations associated with its insurance contracts and other financial liabilities. The Specialty segment is exposed to daily calls on its available cash resources, primarily from claims payments under insurance contracts.

Due to the potential timing mismatch between the payment of gross claims and the receipt of related reinsurance recoveries, gross claims payments are considered a principal demand in our liquidity planning. The occurrence of large loss events may require us to liquidate investments at times when market conditions are unfavorable, which could result in the realization of capital losses.

The principal sources of liquidity in our Specialty segment consist of premium receipts, collections of reinsurance recoverables, investment income and proceeds from the sale and redemption of investments.

We expect that the liquidity needs of the Specialty segment over the next 12 months will be met through cash flows generated from operating activities. However, due to a combination of market conditions, changes in investment yields and the nature of our business, which includes exposure to infrequent but potentially significant loss events, future cash flows from operating activities cannot be predicted with certainty and may fluctuate materially between individual quarters and years.

As of September 30, 2026, in our Specialty segment we held total cash, restricted cash and investments of approximately $2.7 billion. Our Specialty segment investment portfolio is primarily composed of cash, high‑grade fixed income securities and highly liquid money market funds, which we believe provide an appropriate level of liquidity to support our obligations as they come due.

Our Specialty business is written through the Lloyd’s market and each member of Lloyd’s is required to provide capital to Lloyd’s in the form of FAL, which is held in trust for the benefit of policyholders. FAL is intended primarily to provide additional resources if syndicate assets are insufficient to meet participating members’ underwriting liabilities. In addition, Lloyd’s central assets are available, at the discretion of the Council of Lloyd’s, to meet valid claims that cannot be met from the resources of any individual member.

As of September 30, 2026, Inigo had a $620 million letter of credit pledged as FAL and no amounts have been called upon to date. In October 2026, Inigo’s letter of credit facility was amended and restated, including an increase in aggregate lender commitments from $620 million to $880 million. Effective October 29, 2026, letters of credit for the full $880 million are issued and outstanding and no amounts have been called upon to date. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

For more information on Lloyd’s capital requirements, under “Item 1A. Risk Factors” in our 2025 Form 10-K, see “The amount of capital that we must hold to maintain our various capital requirements can vary significantly from time to time and the capital needed to maintain those requirements may not be available or may only be available on unfavorable terms.”

Ratings

Ratings independently assigned by third-party statistical rating organizations often are considered in assessing our credit strength and the financial strength of our primary insurance subsidiaries. Radian Group is currently assigned credit ratings, and Radian Guaranty and Syndicate 1301 are currently assigned financial strength ratings, each as set forth in the following table, which are provided for informational purposes only and are subject to change. Under “Item 1A. Risk Factors” in our 2025 Form 10-K, see “Potential downgrades by rating agencies to the current financial strength ratings assigned to Radian Guaranty and/or the credit ratings assigned to Radian Group could adversely affect the Company.”

(1)

Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”) each currently rate the outlook for both Radian Group and Radian Guaranty as Stable.

(2)

Senior debt ratings.

(3)

All Lloyd’s syndicates, including Syndicate 1301, benefit from the financial strength ratings assigned to the Lloyd’s market, as policies written by Lloyd’s syndicates are ultimately supported by the market’s common security arrangements.