Radian Group Inc. · NYSE:RDN
Radian — Q4 2024 Earnings Presentation
30 slides from Radian's earnings presentation, Feb 6, 2025
Slide 1: Financial Results Q4 2024
Financial Results Q4 2024 NYSE: RDN www.radian.com
Slide 2: Safe Harbor Statements
Safe Harbor Statements All statements in this presentation that address events, developments or results • changes in the current housing finance system in the United States, including the • changes in GAAP or SAP rules and guidance, or their interpretation; that we expect or anticipate may occur in
Slide 3: About Us
About Us Radian Group Inc. is a mortgage and real estate company, providing mortgage insurance and other products and services: • Mortgage Insurance is our one reportable segment. This business provides credit-related insurance coverage for the benefit of mortgage lending institutions and mortgage c
Slide 4: Full Year 2024 Summary Financial Metrics
Full Year 2024 Summary Financial Metrics Compared to $603 million in 2023 $604 million 13.4% Compared to 14.5% in 2023 Net Income Return on Average Equity $3.92 14.1% Compared to 14.9% in 2023 Compared to $3.77 in 2023 Adjusted Net Operating Return Diluted Net Income Per Share on Average Equity (1)
Slide 5: Q4 2024 Summary Financial Metrics
Q4 2024 Summary Financial Metrics Compared to $152 million in Q3 2024 and $148 million $143 million in Q4 2023 12.7% Compared to 13.2% in Q3 2024 and 13.4% Net Income Return on Average Equity in Q4 2023 14.2% Compared to 13.7% in Q3 2024 and 14.2% Adjusted Net Operating in Q4 2023 (1) Return on Aver
Slide 6: Q4 2024 Summary Financial Metrics
Q4 2024 Summary Financial Metrics Compared to $274.7 billion as of $275.1 billion September 30, 2024 and $270.0 billion as of $316 million Compared to $334 million in Q3 2024 and Primary Insurance In Force December 31, 2023 Total Revenues $329 million in Q4 2023 $235 million Compared to $235 million
Slide 7: Financial Highlights
Financial Highlights Radian Group Inc. Consolidated December 31, March 31, June 30, September 30, December 31, (In millions, except per-share amounts) 2023 2024 2024 2024 2024 Primary IIF . $269,979 $270,986 $272,827 $274,721 $275,126 Total assets $7,594 $7,760 $8,130 $8,420 $8,664 Total investments
Slide 8: GAAP Diluted Net Income Per Share
GAAP Diluted Net Income Per Share 2023 to 2024 (1) Q3 2024 to Q4 2024 (2) (1) All diluted net income (loss) per share items are calculated based on 160.1 million weighted-average diluted shares outstanding for the year ended December 31, 2023, except for the December 31, 2024 diluted net income (los
Slide 9: AOCI Impact to Book Value Per Share
AOCI Impact to Book Value Per Share GAAP Book Value Per Share Contractual Maturities of Fixed-Maturities Available for Sale As of December 31, 2024 Unrealized gain (loss) GAAP book Amortized recorded in value per $ in millions Cost Fair Value AOCI share Due in one year or less $134 $133 ($1) Due aft
Slide 10: Revenue and Related Drivers
Revenue and Related Drivers 10
Slide 11: Primary Insurance In Force Rollforward and Persistency Rates
Primary Insurance In Force Rollforward and Persistency Rates Persistency Rates Primary IIF Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 ● Quarterly, Annualized (1) (In billions) ● 12 Months Ended Beginning primary IIF $269.5 $270.0 $271.0 $272.8 $274.7 NIW 10.6 11.5 13.9 13.5 13.2 Cancellations and (10.1
Slide 12: Primary Insurance In Force
Primary Insurance In Force IIF as of: Vintage written in: December 31, September 30, December 31, ($ in billions) 2023 2024 2024 2024 $— —% $37.6 13.7% $49.3 17.9% 2023 50.6 18.7% 47.2 17.2% 45.3 16.5% 2022 60.5 22.4% 56.0 20.4% 54.2 19.7% 2021 65.7 24.3% 56.6 20.6% 53.5 19.4% 2020 45.1 16.7% 36.4 1
Slide 13: Net Premiums Earned
Net Premiums Earned Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Average primary IIF ($ in billions) $269.7 $270.5 $271.9 $273.8 $274.9 (In basis points) In force portfolio premium yield (1) 38.1 38.2 38.2 38.2 38.0 Single premium cancellations (1) 0.3 0.3 0.3 0.3 0.3 Total direct yield 38.4 38.5 38.5 38
Slide 14: Investment Portfolio
Investment Portfolio Investment Portfolio Scheduled Maturity Investment Diversification Investment Portfolio by Rating As of December 31, 2024 As of December 31, 2024 As of December 31, 2024 $ in millions Fair Value Percent $ in millions Fair Value Percent $ in millions Fair Value Percent Short-term
Slide 15: Net Investment Income
Net Investment Income Net Investment Income (in millions) Average Investments (2) (in millions) ■ Mortgage loans held for sale (1) ■ Mortgage loans held for sale ■ Total investments, excluding mortgage loans held for sale ■ Total investments, excluding mortgage loans held for sale (1) Purchases of m
Slide 16: Defaults and Other Loss Reserve-Related Details
Defaults and Other Loss Reserve- Related Details 16
Slide 17: Mortgage Insurance Default Rollforward
Mortgage Insurance Default Rollforward Primary Insurance In Force Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 (number of loans) Beginning default inventory 20,406 22,021 20,850 20,276 22,350 Total new defaults (1) 12,452 11,756 11,104 13,708 13,967 Cures (2) (10,683) (12,808) (11,472) (11,484) (12,066)
Slide 18: Strong Cure Trends Resulting In ~90% Of Defaults Cured Within One Year
Strong Cure Trends Resulting In ~90% Of Defaults Cured Within One Year Of Default Cumulative % of New Defaults That Have Cured Since Original Default Quarter Defaults Remaining as of Defaults Cured # of Quarters Since Original New Default Quarterly New December 31, as of December Defaults 2024 (1) 3
Slide 19: Reserve Related Activity
Reserve Related Activity ($ in millions, except otherwise indicated) Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Provision for losses (1) Current period defaults (2) $54 $54 $48 $57 $56 Prior period defaults (3) (49) (61) (50) (51) (56) Total provision for losses (1) $5 $(7) $(2) $6 $0 Reserve for losse
Slide 20: Capital and Risk Distribution
Capital and Risk Distribution 20
Slide 21: Capital & Ratings
Capital & Ratings Total Holding Company Capitalization as of December 31, 2024 Holding Company Debt-to-Capital Ratio (1) ($ in millions) Coupon Description Principal Carrying Value 4.875% Senior Notes due 2027 $ 450 $ 447 6.200% Senior Notes due 2029 $ 625 $ 618 Total $ 1,075 $ 1,065 Stockholders’ e
Slide 22: Statutory Capital - Radian Guaranty Inc.
Statutory Capital - Radian Guaranty Inc. December 31, March 31, June 30, September 30, December 31, ($ in millions) 2023 2024 2024 2024 2024 Risk-to-capital ratio 10.4:1 10.2:1 10.3:1 10.3:1 10.2:1 Common stock and paid-in surplus $500 $500 $500 $500 $500 Unassigned funds (1) (2) 120 203 186 191 223
Slide 23: Ordinary Dividend Capacity Driven By Material Contingency Reserve Releases
Ordinary Dividend Capacity Driven By Material Contingency Reserve Releases Radian Guaranty Ordinary Dividends to Holdco (1) Scheduled Contingeny (in millions) (In millions) Reserve Releases (2) 2025 $466 2026 478 2027 481 2028 523 2029 574 2030 554 2031 514 2032 497 2033 475 2034 470 Total $5,032 (1
Slide 24: Reinsurance Key Metrics
Reinsurance Key Metrics Current Current RIF Subject to Current PMIERs Radian’s Current Current Attachment Detachment Delinquency ($ in millions) Vintage Agreement MRA Reduction (1) Retention Layer %(2) %(2) %(2) Mortgage Insurance-linked Notes Eagle Re 2023-1 Apr 2022 - Dec 2022 $7,906 $276 $286 3.6
Slide 25: Consolidated Non-GAAP Financial Measures Reconciliations
Consolidated Non-GAAP Financial Measures Reconciliations 25
Slide 26: Use of Non-GAAP Financial Measures
Use of Non-GAAP Financial Measures In addition to the traditional GAAP financial measures, we have presented “adjusted pretax operating (1) Net gains (losses) on investments and other financial instruments. The recognition of realized income (loss),” “adjusted diluted net operating income (loss) per
Slide 27: Reconciliation of Consolidated Pretax Income to Adjusted Pretax Operating Income
Reconciliation of Consolidated Pretax Income to Adjusted Pretax Operating Income 2023 2024 Year Ended December 31, (In millions) Q4 Q1 Q2 Q3 Q4 2023 2024 Consolidated pretax income $180 $199 $188 $195 $189 $767 $771 Less reconciling income (expense) items Net gains (losses) on investments and other
Slide 28: Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Operating Income Per Share
Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Operating Income Per Share 2023 2024 Year Ended December 31, Q4 Q1 Q2 Q3 Q4 2023 2024 Diluted net income per share $0.91 $0.98 $0.98 $0.99 $0.98 $3.77 $3.92 Less per-share impact of reconciling income (expense) items Net gains (l
Slide 29: Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity
Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity 2023 2024 Year Ended December 31, Q4 Q1 Q2 Q3 Q4 2023 2024 Return on equity (1) 13.4% 13.8% 13.6% 13.2% 12.7% 14.5% 13.4% Less impact of reconciling income (expense) items (2) Net gains (losses) on investments and other fi
Slide 30: Radian
radian ensuring the American dream