— Fourth quarter net income of $143 million, or $0.91 per diluted share, and full year net income of $603 million, or $3.77 per diluted share —

— Full year return on equity of 14.5% —

— Book value per share growth of 15% year-over-year to $28.71 —

— Full year total revenue growth of 4% year-over-year to $1.2 billion —

— Primary mortgage insurance in force increased year-over-year to all-time high $270 billion —

— Returned $279 million of capital to shareholders during the year via dividends and share repurchases —

WAYNE, Pa.–(BUSINESS WIRE)–Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended December 31, 2023, of $143 million, or $0.91 per diluted share. This compares with net income for the quarter ended December 31, 2022, of $162 million, or $1.01 per diluted share.

Net income for the full year 2023 was $603 million, or $3.77 per diluted share. This compares with net income for the full year 2022 of $743 million, or $4.35 per diluted share.

Key Financial Highlights	Quarter ended			Year ended
($ in millions, except per-share amounts)	December 31, 2023	September 30, 2023	December 31, 2022	December 31, 2023	December 31, 2022
Total revenues	$329	$313	$315	$1,241	$1,191
Net income	$143	$157	$162	$603	$743
Diluted net income per share	$0.91	$0.98	$1.01	$3.77	$4.35
Consolidated pretax income	$180	$201	$203	$767	$953
Adjusted pretax operating income ⁽¹⁾	$192	$210	$213	$786	$1,053
Adjusted diluted net operating income per share ⁽¹⁾⁽²⁾	$0.96	$1.04	$1.05	$3.88	$4.87
Return on equity⁽³⁾	13.4%	15.0%	17.0%	14.5%	18.2%
Adjusted net operating return on equity ⁽¹⁾⁽²⁾	14.2%	16.0%	17.6%	14.9%	20.3%
New Insurance Written (NIW) – mortgage insurance	$10,629	$13,922	$12,859	$52,670	$67,954
Net premiums earned – mortgage insurance	$230	$237	$230	$909	$957
New defaults	12,452	11,156	10,735	44,007	37,738
Provision for losses – mortgage insurance	$5	($8)	($44)	($42)	($339)
	As of
($ in millions, except per-share amounts)	December 31, 2023	September 30, 2023	December 31, 2022
Book value per share	$28.71	$26.69	$24.95
Accumulated other comprehensive income (loss) value per share ⁽⁴⁾	($2.16)	($3.35)	($2.91)
PMIERs Available Assets ⁽⁵⁾	$5,890	$5,758	$5,553
PMIERs excess Available Assets ⁽⁶⁾	$2,260	$1,670	$1,727
Total Holding Company Liquidity ⁽⁷⁾	$1,267	$1,279	$1,178
Total investments	$6,086	$5,886	$5,693
Primary mortgage insurance in force	$269,979	$269,511	$260,994
Percentage of primary loans in default ⁽⁸⁾	2.2%	2.0%	2.2%
Mortgage insurance loss reserves	$365	$362	$421

(1)	Adjusted results, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity, are non-GAAP financial measures. For definitions and reconciliations of these measures to the comparable GAAP measures, see Exhibits F and G.
(2)	Calculated using the company’s statutory tax rate of 21%.
(3)	Calculated by dividing annualized net income by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.
(4)	Included in book value per share for each period presented.
(5)	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.
(6)	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.
(7)	Represents Radian Group’s total liquidity, including available capacity under its $275 million unsecured revolving credit facility.
(8)	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 December 31, 2023, was $192 million, or $0.96 per diluted share. This compares with adjusted pretax operating income for the quarter ended December 31, 2022, of $213 million, or $1.05 per diluted share.

Adjusted pretax operating income for the full year 2023 was $786 million, or $3.88 per diluted share. This compares with adjusted pretax operating income for the full year 2022, of $1.1 billion, or $4.87 per diluted share.

Book value per share at December 31, 2023, was $28.71, compared to $26.69 at September 30, 2023, and $24.95 at December 31, 2022. This represents a 15% growth in book value per share at December 31, 2023, as compared to December 31, 2022, and includes accumulated other comprehensive income (loss) of $(2.16) per share as of December 31, 2023, and $(2.91) per share as of December 31, 2022. Changes in accumulated other comprehensive income (loss) are primarily from net unrealized gains or losses on investments as a result of decreases or increases, respectively, in market interest rates.

“We reported another successful year for Radian in 2023, increasing book value per share by 15% year-over-year, generating net income of $603 million and delivering a return on equity of approximately 15%. Despite a challenging macroeconomic environment, total revenues grew to $1.2 billion and our primary mortgage insurance in force, which is the main driver of future earnings for our company, reached an all-time high of $270 billion,” said Radian’s Chief Executive Officer Rick Thornberry. “We continue to strategically manage capital, and in 2023 paid $400 million of ordinary dividends from Radian Guaranty to Radian Group and returned $279 million of capital to stockholders through dividends and share repurchases. We accomplished all of this working together as a “One Radian” team and look forward to the opportunities ahead in 2024.”

FOURTH QUARTER AND FULL YEAR HIGHLIGHTS

NIW was $10.6 billion in the fourth quarter of 2023, compared to $13.9 billion in the third quarter of 2023, and $12.9 billion in the fourth quarter of 2022. NIW was $52.7 billion for the full year 2023, compared to $68.0 billion for the prior year.
- Purchase NIW decreased 24% in the fourth quarter of 2023 compared to the third quarter of 2023 and decreased 17% compared to the fourth quarter of 2022.
- Refinances accounted for 1% of total NIW in the fourth quarter of 2023, compared to 1% in the third quarter of 2023, and 2% in the fourth quarter of 2022.
Total primary mortgage insurance in force of $270.0 billion as of December 31, 2023, increased slightly as compared to $269.5 billion as of September 30, 2023, and increased 3% compared to $261.0 billion as of December 31, 2022.
- The year-over-year change reflects a 6% increase in monthly premium policy insurance in force and a 10% decline in single premium policy insurance in force.
- Persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 84% for the twelve months ended December 31, 2023, compared to 84% for the twelve months ended September 30, 2023, and 80% for the twelve months ended December 31, 2022.
- Annualized persistency for the three months ended December 31, 2023, was 86%, compared to 84% for the three months ended September 30, 2023, and 84% for the three months ended December 31, 2022.
Net mortgage insurance premiums earned were $230 million for the fourth quarter of 2023, compared to $237 million for the third quarter of 2023, and $230 million for the fourth quarter of 2022.
- Mortgage insurance in force portfolio premium yield was 38.1 basis points in the fourth quarter of 2023. This compares to 38.0 basis points in the third quarter of 2023, and 38.1 basis points in the fourth quarter of 2022.
- The impact of single premium policy cancellations before consideration of reinsurance represented 0.3 basis points of direct premium yield in the fourth quarter of 2023, 0.5 basis points in the third quarter of 2023, and 0.9 basis points in the fourth quarter of 2022.
- Total net mortgage insurance premium yield, which includes the impact of ceded premiums earned and accrued profit commission, was 34.2 basis points in the fourth quarter of 2023. This compares to 35.3 basis points in the third quarter of 2023, and 35.4 basis points in the fourth quarter of 2022.
- Details regarding premiums earned may be found in Exhibit D.
The mortgage insurance provision for losses was $5 million in the fourth quarter of 2023, compared to benefits of $8 million and $44 million in the third quarter of 2023 and fourth quarter of 2022, respectively.
- Favorable reserve development on prior period defaults was $49 million in the fourth quarter of 2023, compared to $55 million in the third quarter of 2023 and $90 million in the fourth quarter of 2022.
- The number of primary delinquent loans was 22,021 as of December 31, 2023, compared to 20,406 as of September 30, 2023, and 21,913 as of December 31, 2022.
- The loss ratio in the fourth quarter of 2023 was 2.0%, compared to (3.5)% in the third quarter of 2023, and (18.9)% in the fourth quarter of 2022.
- Total mortgage insurance claims paid were $3 million in the fourth quarter of 2023, compared to $5 million in the third quarter of 2023, and $8 million in the fourth quarter of 2022. For the full year 2023, total net claims paid, which includes the impact of settlements and commutations, were $14 million, compared to $21 million for the full year 2022.
Radian’s homegenius segment offers an array of title, real estate and real estate technology products and services to consumers, mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents and corporations for their employees.
- Total homegenius segment revenues for the fourth quarter of 2023 were $15 million, compared to $15 million for the third quarter of 2023, and $19 million for the fourth quarter of 2022. Total homegenius segment revenues for the full year of 2023 were $58 million, compared to $110 million for the full year of 2022.
- Adjusted pretax operating loss, our primary segment measure of profitability for the homegenius segment, was $18 million for the fourth quarter of 2023, compared to $21 million for the third quarter of 2023, and $31 million for the fourth quarter of 2022. Adjusted pretax operating loss for the full year 2023 was $86 million, compared to $88 million for the full year 2022.
Other operating expenses were $95 million in the fourth quarter of 2023, compared to $79 million in the third quarter of 2023, and $110 million in the fourth quarter of 2022. Other operating expenses were $348 million for the full year 2023, compared to $381 million for the full year 2022.
- Other operating expenses increased in the fourth quarter of 2023 as compared to the third quarter of 2023, primarily due to $14 million of impairments of long-lived assets and other non-operating items recognized in the fourth quarter of 2023, related to our lease-related assets and internal-use software.
- Additional details regarding other operating expenses may be found in Exhibit D.

CAPITAL AND LIQUIDITY UPDATE

Radian Group

As of December 31, 2023, Radian Group maintained $992 million of available liquidity. Total holding company liquidity, including the company’s $275 million unsecured revolving credit facility, was $1.3 billion as of December 31, 2023.
Radian Group paid a dividend on its common stock in the amount of $0.225 per share, totaling $34 million on December 12, 2023. For the full year 2023, the company paid total dividends of $146 million.
During the fourth quarter of 2023, the company repurchased 2.4 million shares of Radian Group common stock at a total cost of $63 million, including commissions. For the full year 2023, the company repurchased 5.3 million shares of Radian Group common stock at a total cost of $133 million, including commissions. As of December 31, 2023, purchase authority of up to $167 million remained available under the existing program.

Radian Guaranty

In the fourth quarter of 2023, Radian Guaranty paid an ordinary dividend to Radian Group of $100 million, bringing the total ordinary dividends paid from Radian Guaranty to Radian Group during the year to $400 million.
At December 31, 2023, Radian Guaranty’s Available Assets under PMIERs totaled approximately $5.9 billion, resulting in PMIERs excess Available Assets of $2.3 billion, compared to $1.7 billion as of September 30, 2023.
As previously announced, in October 2023, Radian Guaranty improved its capital position and enhanced its risk distribution program with the closing of two risk distribution transactions.
- A fully collateralized mortgage insurance-linked-note reinsurance transaction, in which the company obtained $353 million of aggregate excess-of-loss reinsurance coverage from Eagle Re 2023-1 Ltd. on mortgage insurance losses on an existing portfolio of eligible policies with RIF of $8.8 billion that were issued between April 1, 2022, and December 31, 2022.
- A traditional excess-of-loss reinsurance agreement, in which the company obtained $246 million of aggregate excess-of-loss reinsurance coverage from a panel of third-party reinsurers on mortgage insurance losses on an existing portfolio of eligible policies with RIF of $8.0 billion that were issued between October 1, 2021, and March 31, 2022.

RECENT EVENTS

On January 8, 2024, S&P Global Ratings (“S&P”) upgraded the insurance financial strength (IFS) rating of Radian Guaranty to A- from BBB+. In the same rating action, S&P also upgraded the senior unsecured debt rating of Radian Group Inc. to BBB- from BB+. The outlook for the ratings is stable.

CONFERENCE CALL

Radian will discuss fourth quarter 2023 financial results in a conference call tomorrow, Thursday, February 8, 2024, at 12:00 p.m. Eastern time. The conference call will be webcast live on the company’s website at https://radian.com/who-we-are/for-investors/webcasts or at www.radian.com. The webcast is listen-only. Those interested in participating in the question-and-answer session should follow the conference call dial-in instructions below.

The call may be accessed via telephone by registering for the call here to receive the dial-in numbers and unique PIN. It is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call).

A digital replay of the webcast will be available on Radian’s website approximately two hours after the live broadcast ends for a period of one year at https://radian.com/who-we-are/for-investors/webcasts.

In addition to the information provided in the company’s earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian’s website at www.radian.com, under Investors.

NON-GAAP FINANCIAL MEASURES

Radian believes that adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity (non-GAAP measures) facilitate evaluation of the company’s fundamental financial performance and provide relevant and meaningful information to investors about the ongoing operating results of the company. On a consolidated basis, these measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be considered in isolation or viewed as substitutes for GAAP measures of performance. The measures described below have been established in order to increase transparency for the purpose of evaluating the company’s operating trends and enabling more meaningful comparisons with Radian’s competitors.

Adjusted pretax operating income (loss) is defined as GAAP consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for certain investments and other financial instruments attributable to our reportable segments and 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 (losses) from the sale of lines of business, acquisition-related income and expenses and gains (losses) on extinguishment of debt. Adjusted diluted net operating income (loss) per share is calculated by dividing adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. Adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the company’s statutory tax rate, by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.

See Exhibit F or Radian’s website for a description of these items, as well as Exhibit G for reconciliations to the most comparable consolidated GAAP measures.

ABOUT RADIAN

Radian Group Inc. (NYSE: RDN) is 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, valuation, asset management and other real estate 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 and homegenius.com to learn more about how Radian and its pioneering homegenius platform are building a smarter future for mortgage and real estate services.

FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS (Unaudited)

Exhibit A:	Condensed Consolidated Statements of Operations
Exhibit B:	Net Income Per Share
Exhibit C:	Condensed Consolidated Balance Sheets
Exhibit D:	Net Premiums Earned and Other Operating Expenses
Exhibit E:	Segment Information
Exhibit F:	Definition of Consolidated Non-GAAP Financial Measures
Exhibit G:	Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit H:	Mortgage Insurance Supplemental Information – New Insurance Written
Exhibit I:	Mortgage Insurance Supplemental Information – Primary Insurance in Force and Risk in Force

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

Exhibit A (page 1 of 2)

	2023												2022
(In thousands, except per-share amounts)	Qtr 4		Qtr 3			Qtr 2			Qtr 1			Qtr 4
Revenues
Net premiums earned	$	232,649	$	240,262		$	213,429		$	233,238		$	232,827
Services revenue		12,419		10,892			11,797			10,984			15,441
Net investment income ⁽¹⁾		68,824		67,805			63,348			58,453			59,091
Net gains (losses) on investments and other financial instruments		13,447		(8,555	)		(236	)		5,585			6,845
Other income		1,305		2,109			1,241			1,592			520
Total revenues		328,644		312,513			289,579			309,852			314,724
Expenses
Provision for losses		4,170		(8,135	)		(21,632	)		(16,929	)		(43,599	)
Policy acquisition costs		6,147		6,920			5,218			6,293			5,931
Cost of services		8,950		8,886			10,257			10,398			16,128
Other operating expenses		95,218		79,206			89,885			83,269			109,785
Interest expense ⁽¹⁾		23,169		23,282			21,805			21,439			21,594
Impairment of goodwill		9,802		—			—			—			—
Amortization of other acquired intangible assets		1,371		1,371			1,370			1,371			1,587
Total expenses		148,827		111,530			106,903			105,841			111,426
Pretax income		179,817		200,983			182,676			204,011			203,298
Income tax provision		37,124		44,401			36,589			46,254			40,968
Net income	$	142,693	$	156,582		$	146,087		$	157,757		$	162,330
Diluted net income per share	$	0.91	$	0.98		$	0.91		$	0.98		$	1.01

(1)

Effective in the fourth quarter of 2023, expenses associated with securities lending transactions that had previously been reported as a component of interest expense are now included in net investment income, along with the applicable income. Net investment income and interest expense, including allocated interest expense, for prior periods in 2023 have been restated to reflect this reclassification, which totaled $2.6 million for the first three quarters of 2023.

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

Exhibit A (page 2 of 2)

	Years Ended December 31,
(In thousands, except per-share amounts)		2023			2022
Revenues:
Net premiums earned	$	919,578		$	981,131
Services revenue		46,092			92,216
Net investment income		258,430			195,658
Net gains (losses) on investments and other financial instruments		10,241			(80,733	)
Other income		6,247			2,454
Total revenues		1,240,588			1,190,726
Expenses:
Provision for losses		(42,526	)		(338,239	)
Policy acquisition costs		24,578			23,918
Cost of services		38,491			82,358
Other operating expenses		347,578			381,148
Interest expense		89,695			84,454
Impairment of goodwill		9,802			—
Amortization of other acquired intangible assets		5,483			4,308
Total expenses		473,101			237,947
Pretax income		767,487			952,779
Income tax provision		164,368			209,845
Net income	$	603,119		$	742,934
Diluted net income per share	$	3.77		$	4.35

Radian Group Inc. and Subsidiaries

Net Income Per Share

Exhibit B

The calculation of basic and diluted net income per share is as follows.

	2023								2022
(In thousands, except per-share amounts)	Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4
Net income—basic and diluted	$	142,693	$	156,582	$	146,087	$	157,757	$	162,330
Average common shares outstanding—basic		155,318		158,461		159,010		158,304		158,357
Dilutive effect of share-based compensation arrangements ⁽¹⁾		1,909		1,686		1,734		3,045		2,450
Adjusted average common shares outstanding—diluted		157,227		160,147		160,744		161,349		160,807
Basic net income per share	$	0.92	$	0.99	$	0.92	$	1.00	$	1.03
Diluted net income per share	$	0.91	$	0.98	$	0.91	$	0.98	$	1.01

(1)

The following number of shares of our common stock equivalents issued under our share-based compensation arrangements are not included in the calculation of diluted net income per share because their effect would be anti-dilutive.

2023

2022

(In thousands)

Qtr 4

Qtr 3

Qtr 2

Qtr 1

Qtr 4

Shares of common stock equivalents

—

112

—

	Years Ended December 31,
(In thousands, except per-share amounts)	2023		2022
Net income – basic and diluted	$	603,119	$	742,934
Average common shares outstanding—basic		158,140		167,930
Dilutive effect of stock-based compensation arrangements⁽¹⁾		1,993		2,734
Adjusted average common shares outstanding—diluted		160,133		170,664
Basic net income per share	$	3.81	$	4.42
Diluted net income per share	$	3.77	$	4.35

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

Exhibit C

	December 31,			September 30,			June 30,			March 31,			December 31,
(In thousands, except per-share amounts)		2023			2023			2023			2023			2022
Assets
Investments	$	6,085,654		$	5,885,652		$	5,895,871		$	5,837,892		$	5,693,491
Cash		18,999			55,489			61,142			50,167			56,183
Restricted cash		1,066			1,305			1,317			577			377
Accrued investment income		45,783			45,623			42,650			42,567			40,093
Accounts and notes receivable		123,857			144,614			138,432			129,565			119,834
Reinsurance recoverable		25,909			24,148			22,979			24,396			25,633
Deferred policy acquisition costs		18,718			18,817			19,272			18,236			18,460
Property and equipment, net		63,822			74,558			73,885			72,111			70,981
Goodwill and other acquired intangible assets, net		—			11,173			12,543			13,914			15,285
Prepaid federal income taxes		750,320			696,820			663,320			596,368			596,368
Other assets		459,805			420,483			375,132			418,609			427,024
Total assets	$	7,593,933		$	7,378,682		$	7,306,543		$	7,204,402		$	7,063,729
Liabilities and stockholders’ equity
Unearned premiums	$	225,396		$	236,400		$	246,666		$	257,735		$	271,479
Reserve for losses and loss adjustment expense		370,148			367,568			379,434			405,651			426,843
Senior notes		1,417,781			1,416,687			1,415,610			1,414,549			1,413,504
Secured borrowings		119,476			241,753			178,762			121,642			155,822
Reinsurance funds withheld		130,564			156,114			154,354			153,099			152,067
Net deferred tax liability		589,564			497,560			479,754			455,517			391,083
Other liabilities		343,199			309,701			281,127			289,731			333,604
Total liabilities		3,196,128			3,225,783			3,135,707			3,097,924			3,144,402
Common stock		173			175			177			176			176
Treasury stock		(945,870	)		(945,504	)		(945,032	)		(931,313	)		(930,643	)
Additional paid-in capital		1,430,594			1,482,712			1,522,895			1,515,852			1,519,641
Retained earnings		4,243,759			4,136,598			4,016,482			3,908,396			3,786,952
Accumulated other comprehensive income (loss)		(330,851	)		(521,082	)		(423,686	)		(386,633	)		(456,799	)
Total stockholders’ equity		4,397,805			4,152,899			4,170,836			4,106,478			3,919,327
Total liabilities and stockholders’ equity	$	7,593,933		$	7,378,682		$	7,306,543		$	7,204,402		$	7,063,729
Shares outstanding		153,179			155,582			157,350			156,547			157,056
Book value per share	$	28.71		$	26.69		$	26.51		$	26.23		$	24.95

Holding company debt-to-capital ratio ⁽¹⁾		24.4	%		25.4	%		25.3	%		25.6	%		26.5	%

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 per share because they would be anti-dilutive:

Years Ended December 31,

(In thousands)

Shares of common stock equivalents