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(State or Other Jurisdiction
of Incorporation)
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(Commission
File Number)
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(IRS Employer
Identification No.)
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(Address of Principal Executive Offices, and Zip Code)
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Title of each class |
Trading Symbol(s)
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Name of each exchange on which registered
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∗
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Furnished herewith.
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RADIAN GROUP INC. | |||
(Registrant) | |||
Date: February 25, 2021 | |||
By:
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/s/ J. Franklin Hall | ||
J. Franklin Hall | |||
Senior Executive Vice President and Chief |
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Financial Officer |
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Exhibit 99.1
|
-- Fourth quarter GAAP net income of $148 million, or $0.76 per diluted share, and full year GAAP net income of $394 million, or $2.00 per diluted share --
-- New Insurance Written of $105 billion in new MI business for 2020; setting company record for annual flow mortgage insurance --
-- PMIERs excess Available Assets grows 38% to $1.3 billion (or 40% over the Minimum Required Assets) during the fourth quarter of 2020 --
-- Total Holding Company Liquidity of $1.4 billion --
-- Book value per share grows 11% year-over-year to $22.36 --
PHILADELPHIA--(BUSINESS WIRE)--February 24, 2021--Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended December 31, 2020, of $148.0 million, or $0.76 per diluted share. This compares with net income for the quarter ended December 31, 2019, of $161.2 million, or $0.79 per diluted share.
Net income for the full year 2020 was $393.6 million, or $2.00 per diluted share. This compares to net income for the full year 2019 of $672.3 million, or $3.20 per diluted share.
Key Financial Highlights (dollars in millions, except per-share amounts)
Quarter ended |
Year ended |
|||||
December 31, |
September 30, |
December 31, |
December 31, |
December 31, |
||
Net income (1) |
$148.0 |
$135.1 | $161.2 |
|
$393.6 | $672.3 |
Diluted net income per share |
$0.76 | $0.70 | $0.79 |
|
$2.00 | $3.20 |
Consolidated pretax income |
$179.2 | $161.2 | $205.6 |
|
$479.4 | $849.0 |
Adjusted pretax operating income (2) |
$171.0 | $145.0 | $224.0 |
|
$432.1 | $854.6 |
Adjusted diluted net operating |
$0.69 | $0.59 | $0.86 |
|
$1.74 | $3.21 |
Return on equity(1)(4) |
14.1% | 13.3% | 16.2% |
|
9.4% | 17.8% |
Adjusted net operating return |
12.9% | 11.3% | 17.8% |
|
8.2% | 17.9% |
New Insurance Written (NIW) - |
$29,781 | $33,320 | $19,953 |
|
$105,024 | $71,327 |
Net premiums earned - mortgage |
$286.8 | $283.4 | $298.5 |
|
$1,092.8 | $1,134.2 |
New defaults (6) |
14,552 | 20,508 | 10,869 |
|
108,025 | 40,985 |
Provision for losses - mortgage |
$56.3 | $87.8 | $34.4 |
|
$483.3 | $131.5 |
|
Quarter ended |
||
December 31, |
September 30, |
December 31, |
|
Book value per share (7) |
$22.36 |
$21.52 |
$20.13 |
PMIERs Available Assets (8) |
$4,700 |
$4,469 |
$3,630 |
PMIERs excess Available Assets (9) |
$1,338 |
$970 |
$804 |
Total Holding Company Liquidity (10) |
$1,371 |
$1,376 |
$921 |
Excess Available Resources to Support PMIERs (11) |
$2,674 |
$2,311 |
$1,690 |
Total investments |
$6,788 |
$6,585 |
$5,659 |
Primary mortgage insurance in force |
$246,144 |
$245,467 |
$240,558 |
Percentage of primary loans in default (12) |
5.2 % |
5.9 % |
2.0 % |
Mortgage insurance loss reserves |
$844 |
$822 |
$401 |
(1) |
Net income for the fourth quarter and full year 2020 includes a pretax net gain on investments and other financial instruments of $17.4 million and $60.3 million, respectively, compared to net gain on investments and other financial instruments for the fourth quarter and full year 2019 of $4.3 million and $51.7 million, respectively. Net income for the fourth quarter and full year 2019 also includes a pre-tax, non-cash impairment of goodwill and other acquired intangible assets of $18.5 million related to the company's sale of Clayton Services in January 2020. | |
(2) |
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. | |
(3) |
Calculated using the company’s statutory tax rate of 21 percent. | |
(4) |
Calculated by dividing annualized net income by average stockholders' equity, based on the average of the beginning and ending balances for each period presented. | |
(5) |
The fourth quarters of 2020 and 2019 include increases to premiums earned of $11.3 million and $17.4 million, respectively, related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. The impact of changes in this estimate in other periods is not material. | |
(6) |
Represents new defaults in the number of loans reported during the period on loans related to primary mortgage insurance policies. | |
(7) |
Accumulated other comprehensive income (loss) impacted book value per share by $1.38 per share as of December 31, 2020, and $0.55 per share as of December 31, 2019. | |
(8) |
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. | |
(9) |
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. | |
(10) |
Represents Radian Group's total liquidity, including the $35 million minimum liquidity requirement and available capacity under its unsecured revolving credit facility. | |
(11) |
Represents the sum of: (1) PMIERs excess Available Assets and (2) Total Holding Company Liquidity, net of the $35 million minimum liquidity requirement under the unsecured revolving credit facility. | |
(12) |
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, 2020, was $171.0 million, or $0.69 per diluted share. This compares with adjusted pretax operating income for the quarter ended December 31, 2019 of $224.0 million, or $0.86 per diluted share.
Adjusted pretax operating income for the full year 2020, was $432.1 million, or $1.74 per diluted share. This compares to adjusted pretax operating income for the full year 2019 of $854.6 million, or $3.21 per diluted share.
Book value as of December 31, 2020 was $4.3 billion, an increase of 6 percent compared to $4.0 billion as of December 31, 2019. Book value per share at December 31, 2020, was $22.36, an increase of 11 percent compared to $20.13 at December 31, 2019.
“While our quarterly and full-year results for 2020 were impacted by the pandemic environment, during the year we successfully increased book value per share by 11%, wrote record-breaking levels of new mortgage insurance business and grew revenues in our real estate segment,” said Radian’s Chief Executive Officer Rick Thornberry. “I’m proud to say that our business model weathered the storm as designed, demonstrating the strength and resilience we and the mortgage industry have been building since the last financial crisis in 2009. In 2020, we also took steps to fortify our capital position and increase our financial flexibility, with a focus on lowering the risk profile and through-the-cycle volatility of the business.”
Thornberry added, “Our solid results reflect the dedication of our outstanding team, who continue to support our customers and each other in a demanding, high-volume market. I’m pleased with our ability to operate well with strong momentum throughout a challenging year.”
FOURTH QUARTER AND FULL YEAR HIGHLIGHTS
CAPITAL AND LIQUIDITY UPDATE
Radian Group
Radian Guaranty
CONFERENCE CALL
Radian will discuss fourth quarter and year-end 2020 financial results in a conference call tomorrow, Thursday, February 25, 2021, at 10:00 a.m. Eastern standard time. The conference call will be broadcast live over the Internet at https://radian.com/who-we-are/for-investors/webcasts or at www.radian.com. The call may also be accessed by dialing 888.771.4371 inside the U.S., or 847.585.4405 for international callers, using passcode 50081023 by referencing Radian.
A digital replay of the webcast will be available on the Radian website approximately two hours after the live broadcast ends for a period of two weeks at https://radian.com/who-we-are/for-investors/webcasts using passcode 50081023.
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, adjusted diluted net operating income 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; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the Company’s statutory tax rate, by (ii) 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.
In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information a non-GAAP measure for our Real Estate segment, representing a measure of earnings before interest, income tax provision (benefit), depreciation and amortization ("EBITDA"). We calculate Real Estate adjusted EBITDA by using adjusted pretax operating income as described above, further adjusted to remove the impact of depreciation and corporate allocations for interest and operating expenses. In addition, Real Estate adjusted EBITDA margin is calculated by dividing Real Estate adjusted EBITDA by GAAP total revenue for the Real Estate segment. Real Estate adjusted EBITDA and Real Estate adjusted EBITDA margin are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our Real Estate segment.
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 to learn more about how Radian is shaping the future of mortgage and real estate services.
FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS (Unaudited)
Exhibit A: | Condensed Consolidated Statements of Operations Trend Schedule | |
Exhibit B: | Net Income Per Share Trend Schedule | |
Exhibit C: | Condensed Consolidated Balance Sheets | |
Exhibit D: | Net Premiums Earned | |
Exhibit E: | Segment Information | |
Exhibit F: | Definition of Consolidated Non-GAAP Financial Measures | |
Exhibit G: | Consolidated Non-GAAP Financial Measure Reconciliations | |
Exhibit H: | Mortgage Supplemental Information | |
New Insurance Written | ||
Exhibit I: | Mortgage Supplemental Information | |
Primary Insurance in Force and Risk in Force | ||
Exhibit J: | Mortgage Supplemental Information | |
Claims and Reserves | ||
Exhibit K: | Mortgage Supplemental Information | |
Default Statistics | ||
Exhibit L: | Mortgage Supplemental Information | |
Reinsurance Programs |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Condensed Consolidated Statements of Operations Trend Schedule |
||||||||||||||||||||
Exhibit A (page 1 of 2) |
||||||||||||||||||||
|
|
|
||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands, except per-share amounts) |
Qtr 4 |
|
|
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|||||||||||
Net premiums earned |
$ |
302,140 |
(1 |
) |
$ |
286,471 |
|
$ |
249,295 |
|
|
$ |
277,415 |
|
|
$ |
301,486 |
|||
Services revenue |
|
11,440 |
(1 |
) |
|
33,943 |
|
|
28,075 |
|
|
|
31,927 |
|
|
|
40,031 |
|||
Net investment income |
|
38,115 |
|
|
36,255 |
|
|
38,723 |
|
|
|
40,944 |
|
|
|
41,432 |
||||
Net gains (losses) on investments and other financial instruments |
|
17,376 |
|
|
17,652 |
|
|
47,276 |
|
|
|
(22,027 |
) |
|
|
4,257 |
||||
Other income |
|
790 |
|
|
913 |
|
|
1,072 |
|
|
|
822 |
|
|
|
818 |
||||
Total revenues |
|
369,861 |
|
|
375,234 |
|
|
364,441 |
|
|
|
329,081 |
|
|
|
388,024 |
||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Expenses: |
|
|
|
|
|
|
|
|
|
|||||||||||
Provision for losses |
|
56,664 |
|
|
88,084 |
|
|
304,418 |
|
|
|
35,951 |
|
|
|
34,619 |
||||
Policy acquisition costs |
|
7,395 |
|
|
10,166 |
|
|
6,015 |
|
|
|
7,413 |
|
|
|
6,783 |
||||
Cost of services |
|
21,600 |
|
|
24,353 |
|
|
17,972 |
|
|
|
22,141 |
|
|
|
27,278 |
||||
Other operating expenses |
|
81,641 |
|
|
69,377 |
|
|
60,582 |
|
|
|
69,110 |
|
|
|
80,894 |
||||
Interest expense |
|
21,169 |
|
|
21,088 |
|
|
16,699 |
|
|
|
12,194 |
|
|
|
12,160 |
||||
Impairment of goodwill |
|
— |
|
|
— |
|
|
— |
|
|
|
— |
|
|
|
4,828 |
||||
Amortization and impairment of other acquired intangible assets |
|
2,225 |
|
|
961 |
|
|
979 |
|
|
|
979 |
|
|
|
15,823 |
||||
Total expenses |
|
190,694 |
|
|
214,029 |
|
|
406,665 |
|
|
|
147,788 |
|
|
|
182,385 |
||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Pretax income (loss) |
|
179,167 |
|
|
161,205 |
|
|
(42,224 |
) |
|
|
181,293 |
|
|
|
205,639 |
||||
Income tax provision (benefit) |
|
31,154 |
|
|
26,102 |
|
|
(12,273 |
) |
|
|
40,832 |
|
|
|
44,455 |
||||
Net income (loss) |
$ |
148,013 |
|
$ |
135,103 |
|
$ |
(29,951 |
) |
|
$ |
140,461 |
|
|
$ |
161,184 |
||||
Diluted net income (loss) per share |
$ |
0.76 |
|
$ |
0.70 |
|
$ |
(0.15 |
) |
|
$ |
0.70 |
|
|
$ |
0.79 |
(1) |
Includes the impact of a line item reclassification recorded in the fourth quarter to correct earlier periods in 2020, which increased net premiums earned and decreased services revenue by $7.8 million each. See Exhibit E for additional detail by period related to this out-of-period adjustment reflected in our All Other results. |
Radian Group Inc. and Subsidiaries |
||||||
Condensed Consolidated Statements of Operations |
||||||
Exhibit A (page 2 of 2) |
||||||
|
Year Ended |
|||||
(In thousands, except per-share amounts) |
2020 |
|
2019 |
|||
|
|
|
|
|||
Revenues: |
|
|
|
|||
Net premiums earned - insurance |
$ |
1,115,321 |
|
$ |
1,145,349 |
|
Services revenue |
|
105,385 |
|
|
154,596 |
|
Net investment income |
|
154,037 |
|
|
171,796 |
|
Net gains (losses) on investments and other financial instruments |
|
60,277 |
|
|
51,719 |
|
Other income |
|
3,597 |
|
|
3,495 |
|
Total revenues |
|
1,438,617 |
|
|
1,526,955 |
|
|
|
|
|
|||
Expenses: |
|
|
|
|||
Provision for losses |
|
485,117 |
|
|
132,031 |
|
Policy acquisition costs |
|
30,989 |
|
|
25,314 |
|
Cost of services |
|
86,066 |
|
|
108,324 |
|
Other operating expenses |
|
280,710 |
|
|
306,129 |
|
Interest expense |
|
71,150 |
|
|
56,310 |
|
Loss on extinguishment of debt |
|
— |
|
|
22,738 |
|
Impairment of goodwill |
|
— |
|
|
4,828 |
|
Amortization and impairment of other intangible assets |
|
5,144 |
|
|
22,288 |
|
Total expenses |
|
959,176 |
|
|
677,962 |
|
|
|
|
|
|||
Pretax income |
|
479,441 |
|
|
848,993 |
|
Income tax provision |
|
85,815 |
|
|
176,684 |
|
Net income |
$ |
393,626 |
|
$ |
672,309 |
|
Diluted net income per share |
$ |
2.00 |
|
$ |
3.20 |
Radian Group Inc. and Subsidiaries |
||||||||||||||||
Net Income Per Share Trend Schedule |
||||||||||||||||
Exhibit B |
||||||||||||||||
|
||||||||||||||||
The calculation of basic and diluted net income (loss) per share was as follows: |
||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||
(In thousands, except per-share amounts) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||
Net income (loss) —basic and diluted |
$ |
148,013 |
|
$ |
135,103 |
|
$ |
(29,951 |
) |
|
$ |
140,461 |
|
$ |
161,184 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Average common shares outstanding—basic (1) |
|
193,248 |
|
|
193,176 |
|
|
193,299 |
|
|
|
200,161 |
|
|
203,431 |
|
Dilutive effect of stock-based compensation arrangements (2) |
|
1,415 |
|
|
980 |
|
|
— |
|
|
|
1,658 |
|
|
1,734 |
|
Adjusted average common shares outstanding—diluted |
|
194,663 |
|
|
194,156 |
|
|
193,299 |
|
|
|
201,819 |
|
|
205,165 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Basic net income (loss) per share |
$ |
0.77 |
|
$ |
0.70 |
|
$ |
(0.15 |
) |
|
$ |
0.70 |
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted net income (loss) per share |
$ |
0.76 |
|
$ |
0.70 |
|
$ |
(0.15 |
) |
|
$ |
0.70 |
|
$ |
0.79 |
(1) |
Includes the impact of fully vested shares under our share-based compensation arrangements. |
(2) |
There were no dilutive shares for the three months ended June 30, 2020, as a result of our net loss for the period. 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 (loss) per share because they were anti-dilutive: |
|
2020 |
|
2019 |
||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
||||||
Shares of common stock equivalents |
324 |
|
710 |
|
2,295 |
|
132 |
|
— |
|
Year Ended December 31, |
|||||||
(In thousands, except per-share amounts) |
2020 |
|
2019 |
|||||
Net income - basic and diluted |
$ |
393,626 |
|
|
$ |
672,309 |
|
|
|
|
|
|
|||||
Average common shares outstanding—basic (1) |
195,443 |
|
|
208,773 |
|
|||
Dilutive effect of stock-based compensation arrangements (2) |
1,199 |
|
|
1,567 |
|
|||
Adjusted average common shares outstanding—diluted |
196,642 |
|
|
210,340 |
|
|||
|
|
|
|
|||||
Basic net income per share |
$ |
2.01 |
|
|
$ |
3.22 |
|
|
|
|
|
|
|||||
Diluted net income per share |
$ |
2.00 |
|
|
$ |
3.20 |
|
(1) |
Includes the impact of fully vested shares under our share-based compensation arrangements. |
(2) |
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 were anti-dilutive: |
|
Year Ended December 31, |
|||||
(In thousands) |
2020 |
|
2019 |
|||
Shares of common stock equivalents |
865 |
|
221 |
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) |
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Assets: |
|
|
|
|
|
|
|
|
|
|||||||||||
Investments |
$ |
6,788,442 |
|
|
$ |
6,584,577 |
|
|
$ |
6,431,350 |
|
|
$ |
5,608,627 |
|
|
$ |
5,658,747 |
|
|
Cash |
87,915 |
|
|
82,020 |
|
|
68,387 |
|
|
54,108 |
|
|
92,729 |
|
||||||
Restricted cash |
6,231 |
|
|
4,424 |
|
|
16,279 |
|
|
7,817 |
|
|
3,545 |
|
||||||
Accrued investment income |
34,047 |
|
|
36,093 |
|
|
34,179 |
|
|
32,559 |
|
|
32,333 |
|
||||||
Accounts and notes receivable |
121,294 |
|
|
145,164 |
|
|
110,722 |
|
|
123,381 |
|
|
93,630 |
|
||||||
Reinsurance recoverables |
73,202 |
|
|
66,515 |
|
|
56,852 |
|
|
17,722 |
|
|
16,976 |
|
||||||
Deferred policy acquisition costs |
18,305 |
|
|
17,926 |
|
|
21,774 |
|
|
20,855 |
|
|
20,759 |
|
||||||
Property and equipment, net |
80,457 |
|
|
88,717 |
|
|
89,143 |
|
|
87,915 |
|
|
87,879 |
|
||||||
Prepaid reinsurance premium |
267,638 |
|
|
295,062 |
|
|
330,476 |
|
|
356,104 |
|
|
363,856 |
|
||||||
Goodwill and other acquired intangible assets, net |
23,043 |
|
|
25,268 |
|
|
26,229 |
|
|
27,208 |
|
|
28,187 |
|
||||||
Other assets |
447,447 |
|
|
431,579 |
|
|
383,918 |
|
|
354,136 |
|
|
409,672 |
|
||||||
Total assets |
$ |
7,948,021 |
|
|
$ |
7,777,345 |
|
|
$ |
7,569,309 |
|
|
$ |
6,690,432 |
|
|
$ |
6,808,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Liabilities and stockholders’ equity: |
|
|
|
|
|
|
|
|
|
|||||||||||
Unearned premiums |
$ |
448,791 |
|
|
$ |
501,787 |
|
|
$ |
561,280 |
|
|
$ |
605,045 |
|
|
$ |
626,822 |
|
|
Reserve for losses and loss adjustment expense |
848,413 |
|
|
825,792 |
|
|
738,885 |
|
|
418,202 |
|
|
404,765 |
|
||||||
Senior notes |
1,405,674 |
|
|
1,404,759 |
|
|
1,403,857 |
|
|
887,584 |
|
|
887,110 |
|
||||||
FHLB advances |
176,483 |
|
|
141,058 |
|
|
175,122 |
|
|
173,760 |
|
|
134,875 |
|
||||||
Reinsurance funds withheld |
278,555 |
|
|
318,773 |
|
|
312,350 |
|
|
302,551 |
|
|
291,829 |
|
||||||
Net deferred tax liability |
213,897 |
|
|
166,136 |
|
|
126,883 |
|
|
90,500 |
|
|
71,084 |
|
||||||
Other liabilities |
291,855 |
|
|
296,661 |
|
|
264,927 |
|
|
348,282 |
|
|
343,105 |
|
||||||
Total liabilities |
3,663,668 |
|
|
3,654,966 |
|
|
3,583,304 |
|
|
2,825,924 |
|
|
2,759,590 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Common stock |
210 |
|
|
210 |
|
|
210 |
|
|
208 |
|
|
219 |
|
||||||
Treasury stock |
(910,115 |
) |
|
(909,745 |
) |
|
(909,738 |
) |
|
(902,024 |
) |
|
(901,657 |
) |
||||||
Additional paid-in capital |
2,245,897 |
|
|
2,238,869 |
|
|
2,232,949 |
|
|
2,231,670 |
|
|
2,449,884 |
|
||||||
Retained earnings |
2,684,636 |
|
|
2,561,076 |
|
|
2,450,423 |
|
|
2,504,853 |
|
|
2,389,789 |
|
||||||
Accumulated other comprehensive income |
263,725 |
|
|
231,969 |
|
|
212,161 |
|
|
29,801 |
|
|
110,488 |
|
||||||
Total stockholders’ equity |
4,284,353 |
|
|
4,122,379 |
|
|
3,986,005 |
|
|
3,864,508 |
|
|
4,048,723 |
|
||||||
Total liabilities and stockholders’ equity |
$ |
7,948,021 |
|
|
$ |
7,777,345 |
|
|
$ |
7,569,309 |
|
|
$ |
6,690,432 |
|
|
$ |
6,808,313 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Shares outstanding |
191,606 |
|
|
191,556 |
|
|
191,492 |
|
|
190,387 |
|
|
201,164 |
|
||||||
Book value per share |
$ |
22.36 |
|
|
$ |
21.52 |
|
|
$ |
20.82 |
|
|
$ |
20.30 |
|
|
$ |
20.13 |
|
|
Debt to capital ratio (1) |
24.7 |
% |
|
25.4 |
% |
|
26.0 |
% |
|
18.7 |
% |
|
18.0 |
% |
||||||
Risk to capital ratio-Radian Guaranty only |
12.7:1 |
|
13.2:1 |
|
13.3:1 |
|
13.8:1 |
|
13.6:1 |
(1) |
Calculated as senior notes divided by senior notes and stockholders' equity. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Net Premiums Earned |
||||||||||||||||||||
Exhibit D (page 1 of 2) |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums earned: |
|
|
|
|
|
|
|
|
|
|||||||||||
Direct - Mortgage: |
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums earned, excluding revenue from cancellations (1) |
$ |
272,331 |
|
|
$ |
259,889 |
|
|
$ |
263,468 |
|
|
$ |
274,647 |
|
|
$ |
295,845 |
|
|
Single Premium Policy cancellations |
53,526 |
|
|
65,667 |
|
|
50,023 |
|
|
24,133 |
|
|
26,479 |
|
||||||
Total direct - Mortgage (1) |
325,857 |
|
|
325,556 |
|
|
313,491 |
|
|
298,780 |
|
|
322,324 |
|
||||||
Assumed - Mortgage: (2) |
2,615 |
|
|
2,946 |
|
|
3,197 |
|
|
3,456 |
|
|
2,837 |
|
||||||
Ceded - Mortgage: |
|
|
|
|
|
|
|
|
|
|||||||||||
Premiums earned, excluding revenue from cancellations |
(27,229 |
) |
|
(25,120 |
) |
|
(26,493 |
) |
|
(28,609 |
) |
|
(28,055 |
) |
||||||
Single Premium Policy cancellations (3) |
(15,197 |
) |
|
(18,679 |
) |
|
(14,424 |
) |
|
(7,183 |
) |
|
(7,843 |
) |
||||||
Profit commission - other (4) |
770 |
|
|
(1,347 |
) |
|
(28,175 |
) |
|
8,555 |
|
|
9,241 |
|
||||||
Total ceded premiums, net of profit commission - Mortgage (5) |
(41,656 |
) |
|
(45,146 |
) |
|
(69,092 |
) |
|
(27,237 |
) |
|
(26,657 |
) |
||||||
Net premiums earned - Mortgage (1) |
286,816 |
|
|
283,356 |
|
|
247,596 |
|
|
274,999 |
|
|
298,504 |
|
||||||
Net premiums earned - Real Estate (6) |
7,572 |
|
|
7,099 |
|
|
4,734 |
|
|
3,149 |
|
|
3,343 |
|
||||||
Net premiums earned - All Other (6) |
7,752 |
|
|
(3,984 |
) |
|
(3,035 |
) |
|
(733 |
) |
|
(361 |
) |
||||||
Net premiums earned (1) |
$ |
302,140 |
|
|
$ |
286,471 |
|
|
$ |
249,295 |
|
|
$ |
277,415 |
|
|
$ |
301,486 |
(1) |
The fourth quarters of 2020 and 2019 include increases to premiums earned of $11.3 million and $17.4 million, respectively, related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. The impact of changes in this estimate in other periods is not material. |
(2) |
Relates primarily to premiums earned from our participation in certain credit risk transfer programs. |
(3) |
Includes the impact of related profit commissions. |
(4) |
The amounts represent the profit commission on the Single Premium QSR Program, excluding the impact of Single Premium Policy cancellations. |
(5) |
See Exhibit L for additional information on ceded premiums for our various reinsurance programs. |
(6) |
See Exhibit E for additional information on changes that impacted our reported segment results for all periods. |
Radian Group Inc. and Subsidiaries |
|||||||||||
Net Premiums Earned - Insurance |
|||||||||||
Exhibit D (page 2 of 2) |
|||||||||||
|
Year Ended |
|
|||||||||
(In thousands) |
2020 |
|
2019 |
|
|||||||
|
|
|
|
|
|||||||
Premiums earned: |
|
|
|
|
|||||||
Direct - Mortgage: |
|
|
|
|
|||||||
Premiums earned, excluding revenue from cancellations |
$ |
1,070,335 |
|
|
$ |
1,154,045 |
|
(1 |
) |
||
Single Premium Policy cancellations |
|
193,349 |
|
|
|
79,483 |
|
|
|||
Total direct - Mortgage |
|
1,263,684 |
|
|
|
1,233,528 |
|
|
|||
Assumed - Mortgage: (2) |
|
12,214 |
|
|
|
10,382 |
|
|
|||
Ceded - Mortgage: |
|
|
|
|
|||||||
Premiums earned, excluding revenue from cancellations |
|
(107,451 |
) |
|
|
(134,946 |
) |
(1 |
) |
||
Single Premium Policy cancellations (3) |
|
(55,483 |
) |
|
|
(23,766 |
) |
|
|||
Profit commission - other (4) |
|
(20,197 |
) |
|
|
49,016 |
|
(1 |
) |
||
Total ceded premiums, net of profit commission - Mortgage (5) |
|
(183,131 |
) |
|
|
(109,696 |
) |
|
|||
Net premiums earned - Mortgage |
|
1,092,767 |
|
|
|
1,134,214 |
|
|
|||
Net premiums earned - Real Estate (6) |
|
22,554 |
|
|
|
11,976 |
|
|
|||
Net premiums earned - All Other (6) |
|
— |
|
|
|
(841 |
) |
|
|||
Net premiums earned |
$ |
1,115,321 |
|
|
$ |
1,145,349 |
|
|
(1) |
Includes a cumulative adjustment to unearned premiums related to an update to the amortization rates used to recognize revenue for Single Premium Policies. |
(2) |
Relates primarily to premiums earned from our participation in certain credit risk transfer programs. |
(3) |
Includes the impact of related profit commissions. |
(4) |
The amounts represent the profit commission on the Single Premium QSR Program, excluding the impact of Single Premium Policy cancellations. |
(5) |
See Exhibit L for additional information on ceded premiums for our various reinsurance programs. |
(6) |
See Exhibit E for additional information on changes that impacted our reported segment results for all periods. |
Radian Group Inc. and Subsidiaries |
Segment Information |
Exhibit E (page 1 of 6) |
Summarized financial information concerning our operating segments as of and for the periods indicated is as follows. For a definition of adjusted pretax operating income and Services adjusted EBITDA, along with reconciliations to consolidated GAAP measures, see Exhibits F and G. |
|
Mortgage (1) |
|||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Net premiums written (2) (3) |
$ |
261,244 |
|
|
$ |
259,278 |
|
|
$ |
229,458 |
|
|
$ |
260,974 |
|
|
$ |
287,952 |
|
|
(Increase) decrease in unearned premiums |
25,572 |
|
|
24,078 |
|
|
18,138 |
|
|
14,025 |
|
|
10,552 |
|
||||||
Net premiums earned |
286,816 |
|
|
283,356 |
|
|
247,596 |
|
|
274,999 |
|
|
298,504 |
|
||||||
Services revenue |
3,717 |
|
|
3,914 |
|
|
3,918 |
|
|
3,216 |
|
|
2,936 |
|
||||||
Net investment income |
34,235 |
|
|
32,054 |
|
|
34,708 |
|
|
36,198 |
|
|
37,818 |
|
||||||
Other income |
735 |
|
|
689 |
|
|
721 |
|
|
671 |
|
|
719 |
|
||||||
Total |
325,503 |
|
|
320,013 |
|
|
286,943 |
|
|
315,084 |
|
|
339,977 |
|
||||||
Provision for losses |
56,312 |
|
|
87,753 |
|
|
304,021 |
|
|
35,246 |
|
|
34,411 |
|
||||||
Policy acquisition costs |
7,395 |
|
|
10,166 |
|
|
6,015 |
|
|
7,413 |
|
|
6,783 |
|
||||||
Cost of services |
3,245 |
|
|
2,908 |
|
|
2,133 |
|
|
1,757 |
|
|
1,713 |
|
||||||
Other operating expenses before allocated corporate operating expenses (4) |
21,974 |
|
|
21,635 |
|
|
18,537 |
|
|
23,593 |
|
|
32,604 |
|
||||||
Interest expense (5) (7) |
21,169 |
|
|
21,088 |
|
|
16,699 |
|
|
12,194 |
|
|
12,160 |
|
||||||
Total (6) |
110,095 |
|
|
143,550 |
|
|
347,405 |
|
|
80,203 |
|
|
87,671 |
|
||||||
Adjusted pretax operating income (loss) before allocated corporate operating expenses |
215,408 |
|
|
176,463 |
|
|
(60,462 |
) |
|
234,881 |
|
|
252,306 |
|
||||||
Allocation of corporate operating expenses |
31,102 |
|
|
29,127 |
|
|
25,359 |
|
|
29,214 |
|
|
27,394 |
|
||||||
Adjusted pretax operating income (loss) |
$ |
184,306 |
|
|
$ |
147,336 |
|
|
$ |
(85,821 |
) |
|
$ |
205,667 |
|
|
$ |
224,912 |
|
|
Real Estate (1) (7) |
|||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Net premiums earned (8) |
$ |
7,572 |
|
|
$ |
7,099 |
|
|
$ |
4,734 |
|
|
$ |
3,149 |
|
|
$ |
3,343 |
|
|
Services revenue (6) (8) |
15,958 |
|
|
22,627 |
|
|
17,688 |
|
|
23,251 |
|
|
18,511 |
|
||||||
Net investment income |
43 |
|
|
67 |
|
|
126 |
|
|
125 |
|
|
144 |
|
||||||
Total |
23,573 |
|
|
29,793 |
|
|
22,548 |
|
|
26,525 |
|
|
21,998 |
|
||||||
Provision for losses |
392 |
|
|
370 |
|
|
426 |
|
|
743 |
|
|
238 |
|
||||||
Cost of services |
15,706 |
|
|
18,085 |
|
|
12,681 |
|
|
14,989 |
|
|
13,904 |
|
||||||
Other operating expenses before allocated corporate operating expenses (4) |
15,238 |
|
|
13,136 |
|
|
10,527 |
|
|
10,579 |
|
|
10,803 |
|
||||||
Total |
31,336 |
|
|
31,591 |
|
|
23,634 |
|
|
26,311 |
|
|
24,945 |
|
||||||
Adjusted pretax operating income before allocated corporate operating expenses (9) |
(7,763 |
) |
|
(1,798 |
) |
|
(1,086 |
) |
|
214 |
|
|
(2,947 |
) |
||||||
Allocation of corporate operating expenses |
3,369 |
|
|
3,248 |
|
|
2,823 |
|
|
3,367 |
|
|
2,675 |
|
||||||
Adjusted pretax operating income (loss) |
$ |
(11,132 |
) |
|
$ |
(5,046 |
) |
|
$ |
(3,909 |
) |
|
$ |
(3,153 |
) |
|
$ |
(5,622 |
) |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Segment Information |
||||||||||||||||||||
Exhibit E (page 2 of 6) |
||||||||||||||||||||
|
All Other (1) (7) (10) |
|||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Net premiums earned (8) |
$ |
7,752 |
|
|
$ |
(3,984 |
) |
|
$ |
(3,035 |
) |
|
$ |
(733 |
) |
|
$ |
(361 |
) |
|
Services revenue (6) (8) |
(7,963 |
) |
|
8,267 |
|
|
6,579 |
|
|
5,652 |
|
|
18,874 |
|
||||||
Net investment income |
3,837 |
|
|
4,134 |
|
|
3,889 |
|
|
4,621 |
|
|
3,470 |
|
||||||
Other income |
55 |
|
|
224 |
|
|
104 |
|
|
151 |
|
|
99 |
|
||||||
Total |
3,681 |
|
|
8,641 |
|
|
7,537 |
|
|
9,691 |
|
|
22,082 |
|
||||||
Cost of services |
2,835 |
|
|
4,127 |
|
|
3,177 |
|
|
5,500 |
|
|
11,871 |
|
||||||
Other operating expenses (4) |
3,033 |
|
|
1,824 |
|
|
3,129 |
|
|
2,106 |
|
|
5,518 |
|
||||||
Total |
5,868 |
|
|
5,951 |
|
|
6,306 |
|
|
7,606 |
|
|
17,389 |
|
||||||
Adjusted pretax operating income (loss) |
$ |
(2,187 |
) |
|
$ |
2,690 |
|
|
$ |
1,231 |
|
|
$ |
2,085 |
|
|
$ |
4,693 |
(1) |
Certain organizational changes implemented in the first quarter of 2020 following the sale of Clayton caused the composition of our reportable segments to change, including all activity related to Clayton prior to the sale and certain other impacts now being reflected in All Other activities. These changes to our reportable segments have been reflected in our segment operating results for all periods presented. |
(2) |
Net of ceded premiums written under the QSR Programs and the Excess-of-Loss Program. See Exhibit L for additional information. |
(3) |
The fourth quarters of 2020 and 2019 include increases to premiums earned of $11.3 million and $17.4 million, respectively, related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. The impact of changes in this estimate in other periods is not material. |
(4) |
Does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss). |
(5) |
Relates to interest on our borrowing and financing activities including our Senior Notes issued by our holding company and FHLB borrowings made by our mortgage insurance subsidiaries. |
(6) |
Inter-segment information: |
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Inter-segment revenue included in: |
|
|
|
|
|
|
|
|
|
|||||||||||
Mortgage |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
83 |
|
|
$ |
160 |
|
|
Real Estate |
86 |
|
|
98 |
|
|
91 |
|
|
87 |
|
|
87 |
|
||||||
All Other |
186 |
|
|
767 |
|
|
19 |
|
|
22 |
|
|
43 |
|
||||||
Total inter-segment revenue |
$ |
272 |
|
|
$ |
865 |
|
|
$ |
110 |
|
|
$ |
192 |
|
|
$ |
290 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Inter-segment expense included in: |
|
|
|
|
|
|
|
|
|
|||||||||||
Mortgage |
$ |
86 |
|
|
$ |
98 |
|
|
$ |
91 |
|
|
$ |
87 |
|
|
$ |
79 |
|
|
Real Estate |
186 |
|
|
767 |
|
|
19 |
|
|
22 |
|
|
16 |
|
||||||
All Other |
— |
|
|
— |
|
|
— |
|
|
83 |
|
|
195 |
|
||||||
Total inter-segment expense |
$ |
272 |
|
|
$ |
865 |
|
|
$ |
110 |
|
|
$ |
192 |
|
|
$ |
290 |
|
See notes continued on next page. |
Radian Group Inc. and Subsidiaries |
|
Segment Information |
|
Exhibit E (page 3 of 6) |
|
Notes continued from prior page. |
|
(7) |
The wind-down of our traditional appraisal business announced in the fourth quarter of 2020 caused the composition of our reportable segments to change, including all activity related to that business and certain other adjustments to services revenue now being reflected in All Other activities. In addition, there were certain other immaterial reclassifications to net investment income and interest expense. These changes to our reportable segments have been reflected in our segment operating results for all periods presented. |
(8) |
In the fourth quarter of 2020, we reclassified certain revenue previously reflected in the Real Estate segment results as services revenue to net premiums earned. As a result, for all periods presented, on the Real Estate segment, net premiums earned has been increased and services revenue has been decreased, with offsetting adjustments reflected in All Other activities. |
(9) |
Supplemental information for Real Estate adjusted EBITDA (see definition in Exhibit F): |
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Adjusted pretax operating income (loss) before corporate allocations |
$ |
(7,763 |
) |
|
$ |
(1,798 |
) |
|
$ |
(1,086 |
) |
|
$ |
214 |
|
|
$ |
(2,947 |
) |
|
Depreciation and amortization |
744 |
|
|
679 |
|
|
771 |
|
|
663 |
|
|
552 |
|
||||||
Real Estate adjusted EBITDA |
$ |
(7,019 |
) |
|
$ |
(1,119 |
) |
|
$ |
(315 |
) |
|
$ |
877 |
|
|
$ |
(2,395 |
) |
(10) |
All Other activities include: (i) income (losses) from assets held by our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; (iii) for all periods prior to it's sale in the first quarter of 2020, revenue and expenses related to Clayton; (iv) revenue and expenses from our traditional appraisal business; and (v) other immaterial revenue and expense items. |
Selected Mortgage Key Ratios |
|||||||||||||||
|
2020 |
|
2019 |
||||||||||||
|
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
||||||
Loss ratio (1) |
19.6 |
% |
|
31.0 |
% |
|
122.8 |
% |
|
12.8 |
% |
|
11.5 |
% |
|
Expense ratio (1) |
21.1 |
% |
|
21.5 |
% |
|
20.2 |
% |
|
21.9 |
% |
|
22.4 |
% |
(1) |
Calculated on a GAAP basis using net premiums earned. |
Radian Group Inc. and Subsidiaries |
|||||||||
Segment Information |
|||||||||
Exhibit E (page 4 of 6) |
|||||||||
|
Mortgage (1) |
|
|||||||
|
Year Ended |
|
|||||||
(In thousands) |
2020 |
|
2019 |
|
|
||||
Net premiums written (2) |
$ |
1,010,954 |
|
$ |
1,075,450 |
|
|
||
Decrease in unearned premiums |
81,813 |
|
58,764 |
|
(3 |
) |
|||
Net premiums earned |
1,092,767 |
|
1,134,214 |
|
|
||||
Services revenue |
14,765 |
|
8,134 |
|
|
||||
Net investment income |
137,195 |
|
151,491 |
|
|
||||
Other income |
2,816 |
|
2,798 |
|
|
||||
Total |
1,247,543 |
|
1,296,637 |
|
|
||||
Provision for losses |
483,332 |
|
131,473 |
|
|
||||
Policy acquisition costs |
30,989 |
|
25,314 |
|
|
||||
Cost of services |
10,043 |
|
4,961 |
|
|
||||
Other operating expenses before allocated corporate operating expenses (4) |
85,739 |
|
121,647 |
|
|
||||
Interest expense (5) |
71,150 |
|
56,310 |
|
|
||||
Total (6) |
681,253 |
|
339,705 |
|
|
||||
Adjusted pretax operating income before allocated corporate operating expenses |
566,290 |
|
956,932 |
|
|
||||
Allocation of corporate operating expenses |
114,802 |
|
104,078 |
|
|
||||
Adjusted pretax operating income |
$ |
451,488 |
|
$ |
852,854 |
|
|
|
Real Estate (1) (7) |
|||||||
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Net premiums earned (8) |
$ |
22,554 |
|
|
$ |
11,976 |
|
|
Services revenue (6) (8) |
79,524 |
|
|
76,941 |
|
|||
Net investment income |
361 |
|
|
680 |
|
|||
Total |
102,439 |
|
|
89,597 |
|
|||
Provision for losses |
1,931 |
|
|
749 |
|
|||
Cost of services |
61,461 |
|
|
56,638 |
|
|||
Other operating expenses before allocated corporate operating expenses (4) |
49,480 |
|
|
40,032 |
|
|||
Total |
112,872 |
|
|
97,419 |
|
|||
Adjusted pretax operating income (loss) before allocated corporate operating expenses (9) |
(10,433 |
) |
|
(7,822 |
) |
|||
Allocation of corporate operating expenses |
12,807 |
|
|
10,165 |
|
|||
Adjusted pretax operating income (loss) |
$ |
(23,240 |
) |
|
$ |
(17,987 |
) |
Radian Group Inc. and Subsidiaries |
|||||||
Segment Information |
|||||||
Exhibit E (page 5 of 6) |
|||||||
|
All Other (1) (7) (10) |
||||||
|
Year Ended |
||||||
(In thousands) |
2020 |
|
2019 |
||||
Net premiums earned (8) |
$ |
— |
|
$ |
(841 |
) |
|
Services revenue (6) (8) |
12,535 |
|
70,961 |
|
|||
Net investment income |
16,481 |
|
19,625 |
|
|||
Other income |
534 |
|
697 |
|
|||
Total |
29,550 |
|
90,442 |
|
|||
Cost of services |
15,639 |
|
47,625 |
|
|||
Other operating expenses (4) |
10,092 |
|
23,049 |
|
|||
Total |
25,731 |
|
70,674 |
|
|||
Adjusted pretax operating income |
$ |
3,819 |
|
$ |
19,768 |
(1) |
Certain organizational changes implemented in the first quarter of 2020 following the sale of Clayton caused the composition of our reportable segments to change, including all activity related to Clayton prior to the sale and certain other impacts now being reflected in All Other activities. These changes to our reportable segments have been reflected in our segment operating results for all periods presented. |
(2) |
Net of ceded premiums written under the QSR Programs and the Excess-of-Loss Program. See Exhibit L for additional information. |
(3) |
Includes a cumulative adjustment to unearned premiums related to an update to the amortization rates used to recognize revenue for Single Premium Policies. |
(4) |
Does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss). |
(5) |
Relates to interest on our borrowing and financing activities including our Senior Notes issued by our holding company and FHLB borrowings made by our mortgage insurance subsidiaries. |
(6) |
Inter-segment information: |
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Inter-segment revenue included in: |
|
|
|
|||||
Mortgage |
$ |
83 |
|
|
$ |
502 |
|
|
Real Estate |
362 |
|
|
87 |
|
|||
All Other |
994 |
|
|
851 |
|
|||
Total inter-segment revenue |
$ |
1,439 |
|
|
$ |
1,440 |
|
|
|
|
|
|
|||||
Inter-segment expense included in: |
|
|
|
|||||
Mortgage |
$ |
362 |
|
|
$ |
539 |
|
|
Real Estate |
994 |
|
|
16 |
|
|||
All Other |
83 |
|
|
885 |
|
|||
Total inter-segment expense |
$ |
1,439 |
|
|
$ |
1,440 |
|
See notes continued on next page. |
Radian Group Inc. and Subsidiaries | |
Segment Information | |
Exhibit E (page 6 of 6) | |
|
|
Notes continued from prior page. | |
|
|
(7) |
The wind-down of our traditional appraisal business announced in the fourth quarter of 2020 caused the composition of our reportable segments to change, including all activity related to that business and certain other adjustments to services revenue now being reflected in All Other activities. These changes to our reportable segments have been reflected in our segment operating results for all periods presented. |
(8) |
In the fourth quarter of 2020, we reclassified certain revenue previously reflected in the Real Estate segment results as services revenue to net premiums earned. As a result, for all periods presented, on the Real Estate segment, net premiums earned has been increased and services revenue has been decreased, with offsetting adjustments reflected in All Other activities. |
(9) |
Supplemental information for Real Estate adjusted EBITDA (see definition in Exhibit F): |
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Adjusted pretax operating income (loss) before corporate allocations |
$ |
(10,433 |
) |
|
$ |
(7,822 |
) |
|
Depreciation and amortization |
2,857 |
|
|
2,321 |
|
|||
Real Estate adjusted EBITDA |
$ |
(7,576 |
) |
|
$ |
(5,501 |
) |
(10) |
All Other activities include: (i) income (losses) from assets held by our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; (iii) for all periods prior to it's sale in the first quarter of 2020, revenue and expenses related to Clayton; (iv) revenue and expenses from our traditional appraisal business; and (v) other immaterial revenue and expense items. |
Selected Mortgage Key Ratios |
||||||
|
Year Ended |
|||||
|
2020 |
|
2019 |
|||
Loss ratio (1) |
44.2 |
% |
|
11.6 |
% |
|
Expense ratio (1) |
21.2 |
% |
|
22.1 |
% |
(1) |
Calculated on a GAAP basis using net premiums earned. |
Radian Group Inc. and Subsidiaries | |
Definition of Consolidated Non-GAAP Financial Measures | |
Exhibit F (page 1 of 2) | |
|
|
Use of Non-GAAP Financial Measures |
|
In addition to the 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 the Company’s business performance is evaluated by both management and the 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, we believe these measures aid in understanding the underlying performance of our operations. 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. |
|
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; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the Company’s statutory tax rate, by (ii) 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. |
|
Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). These adjustments, along with the reasons for their treatment, are described below. |
|
(1) |
Net gains (losses) on investments and other financial instruments. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized gains and losses arise primarily from changes in the market value of our investments that are classified as trading or equity securities. These valuation adjustments may not necessarily result in realized economic gains or losses. |
Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses and changes in fair value of other financial instruments. We do not view them to be indicative of our fundamental operating activities. |
|
(2) |
Loss on extinguishment of debt. Gains or losses on early extinguishment of debt and losses incurred to purchase our debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends. |
(3) |
Amortization and impairment of goodwill and other acquired intangible assets. Amortization of acquired intangible assets represents the periodic expense required to amortize the cost of acquired intangible assets over their estimated useful lives. Acquired intangible assets are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. We do not view these charges as part of the operating performance of our primary activities. |
(4) |
Impairment of other long-lived assets and other non-operating items. Includes activities that we do not view to be indicative of our fundamental operating activities, such as: (i) impairment of internal-use software and other long-lived assets; (ii) gains (losses) from the sale of lines of business; and (iii) acquisition-related expenses. |
|
Radian Group Inc. and Subsidiaries | |
Definition of Consolidated Non-GAAP Financial Measures | |
Exhibit F (page 2 of 2) | |
|
|
In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information a non-GAAP measure for our Real Estate segment, representing a measure of earnings before interest, income tax provision (benefit), depreciation and amortization (“EBITDA”). We calculate Real Estate adjusted EBITDA by using adjusted pretax operating income (loss) as described above, further adjusted to remove the impact of depreciation and corporate allocations for interest and operating expenses. In addition, Real Estate adjusted EBITDA margin is calculated by dividing Real Estate adjusted EBITDA by GAAP total revenue for the Real Estate segment. Real Estate adjusted EBITDA and Real Estate adjusted EBITDA margin are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our Real Estate segment. |
|
See Exhibit G for the reconciliation of the most comparable GAAP measures, consolidated pretax income (loss), diluted net income (loss) per share and return on equity to our non-GAAP financial measures for the consolidated company, adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity, respectively. Exhibit G also contains the reconciliation of the most comparable GAAP measure, net income (loss), to Real Estate adjusted EBITDA. |
|
Total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, Real Estate adjusted EBITDA and Real Estate adjusted EBITDA margin should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss). Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, Real Estate adjusted EBITDA or Real Estate adjusted EBITDA margin may not be comparable to similarly-named measures reported by other companies. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||||||||||||||||
Exhibit G (page 1 of 6) |
||||||||||||||||||||
Reconciliation of Consolidated Pretax Income to Adjusted Pretax Operating Income |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Consolidated pretax income (loss) |
$ |
179,167 |
|
|
$ |
161,205 |
|
|
$ |
(42,224 |
) |
|
$ |
181,293 |
|
|
$ |
205,639 |
|
|
Less reconciling income (expense) items: |
|
|
|
|
|
|
|
|
|
|||||||||||
Net gains (losses) on investments and other financial instruments |
17,376 |
|
|
17,652 |
|
|
47,276 |
|
|
(22,027 |
) |
|
4,257 |
|
||||||
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,828 |
) |
||||||
Amortization and impairment of other acquired intangible assets |
(2,225 |
) |
|
(961 |
) |
|
(979 |
) |
|
(979 |
) |
|
(15,823 |
) |
||||||
Impairment of other long-lived assets and other non-operating items (1) |
(6,971 |
) |
|
(466 |
) |
|
(22 |
) |
|
(300 |
) |
|
(1,950 |
) |
||||||
Total adjusted pretax operating income (loss) (2) |
$ |
170,987 |
|
|
$ |
144,980 |
|
|
$ |
(88,499 |
) |
|
$ |
204,599 |
|
|
$ |
223,983 |
|
(1) |
The amounts for all the periods presented are included in other operating expenses on the Condensed Consolidated Statement of Operations in Exhibit A and primarily relate to impairments of other long-lived assets. |
(2) |
Total adjusted pretax operating income (loss) consists of adjusted pretax operating income (loss) for each reportable segment and All Other activities as follows: |
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Adjusted pretax operating income (loss): |
|
|
|
|
|
|
|
|
|
|||||||||||
Mortgage segment |
$ |
184,306 |
|
|
$ |
147,336 |
|
|
$ |
(85,821 |
) |
|
$ |
205,667 |
|
|
$ |
224,912 |
|
|
Real Estate segment |
(11,132 |
) |
|
(5,046 |
) |
|
(3,909 |
) |
|
(3,153 |
) |
|
(5,622 |
) |
||||||
All Other activities |
(2,187 |
) |
|
2,690 |
|
|
1,231 |
|
|
2,085 |
|
|
4,693 |
|
||||||
Total adjusted pretax operating income (loss) |
$ |
170,987 |
|
|
$ |
144,980 |
|
|
$ |
(88,499 |
) |
|
$ |
204,599 |
|
|
$ |
223,983 |
|
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||||||||||||||||
Exhibit G (page 2 of 6) |
||||||||||||||||||||
Reconciliation of Diluted Net Income (Loss) Per Share to Adjusted Diluted Net Operating Income (Loss) Per Share |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
|
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Diluted net income (loss) per share |
$ |
0.76 |
|
|
$ |
0.70 |
|
|
$ |
(0.15 |
) |
|
$ |
0.70 |
|
|
$ |
0.79 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Less per-share impact of reconciling income (expense) items: |
|
|
|
|
|
|
|
|
|
|||||||||||
Net gains (losses) on investments and other financial instruments |
0.09 |
|
|
0.09 |
|
|
0.24 |
|
|
(0.11 |
) |
|
0.02 |
|
||||||
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.02 |
) |
||||||
Amortization and impairment of other acquired intangible assets |
(0.01 |
) |
|
— |
|
|
(0.01 |
) |
|
— |
|
|
(0.08 |
) |
||||||
Impairment of other long-lived assets and other non-operating items |
(0.04 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.01 |
) |
||||||
Income tax (provision) benefit on reconciling income (expense) items (1) |
(0.01 |
) |
|
(0.02 |
) |
|
(0.05 |
) |
|
0.02 |
|
|
0.02 |
|
||||||
Difference between statutory and effective tax rate |
0.04 |
|
|
0.04 |
|
|
0.03 |
|
|
(0.01 |
) |
|
— |
|
||||||
Per-share impact of reconciling income (expense) items |
0.07 |
|
|
0.11 |
|
|
0.21 |
|
|
(0.10 |
) |
|
(0.07 |
) |
||||||
Adjusted diluted net operating income (loss) per share (1) |
$ |
0.69 |
|
|
$ |
0.59 |
|
|
$ |
(0.36 |
) |
|
$ |
0.80 |
|
|
$ |
0.86 |
|
(1) |
Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. |
Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity (1) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
2020 |
|
2019 |
||||||||||||
|
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
||||||
Return on equity (1) |
14.1 |
% |
|
13.3 |
% |
|
(3.1 |
)% |
|
14.2 |
% |
|
16.2 |
% |
|
Less impact of reconciling income (expense) items: (2) |
|
|
|
|
|
|
|
|
|
||||||
Net gains (losses) on investments and other financial instruments |
1.7 |
|
|
1.7 |
|
|
4.8 |
|
|
(2.2 |
) |
|
0.4 |
|
|
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(0.5 |
) |
|
Amortization and impairment of other acquired intangible assets |
(0.2 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(0.1 |
) |
|
(1.6 |
) |
|
Impairment of other long-lived assets and other non-operating items |
(0.7 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(0.2 |
) |
|
Income tax (provision) benefit on reconciling income (expense) items (3) |
(0.2 |
) |
|
(0.3 |
) |
|
(1.0 |
) |
|
0.5 |
|
|
0.4 |
|
|
Difference between statutory and effective tax rate |
0.6 |
|
|
0.7 |
|
|
0.3 |
|
|
(0.3 |
) |
|
(0.1 |
) |
|
Impact of reconciling income (expense) items |
1.2 |
|
|
2.0 |
|
|
4.0 |
|
|
(2.1 |
) |
|
(1.6 |
) |
|
Adjusted net operating return on equity |
12.9 |
% |
|
11.3 |
% |
|
(7.1 |
)% |
|
16.3 |
% |
|
17.8 |
% |
(1) |
Calculated by dividing annualized net income (loss) by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented. |
(2) |
Annualized, as a percentage of average stockholders’ equity. |
(3) |
Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||||||||||||||||
Exhibit G (page 3 of 6) |
||||||||||||||||||||
Reconciliation of Net Income (Loss) to Real Estate Adjusted EBITDA |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
(In thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Net income (loss) |
$ |
148,013 |
|
|
$ |
135,103 |
|
|
$ |
(29,951 |
) |
|
$ |
140,461 |
|
|
$ |
161,184 |
|
|
Less reconciling income (expense) items: |
|
|
|
|
|
|
|
|
|
|||||||||||
Net gains (losses) on investments and other financial instruments |
17,376 |
|
|
17,652 |
|
|
47,276 |
|
|
(22,027 |
) |
|
4,257 |
|
||||||
Impairment of goodwill |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(4,828 |
) |
||||||
Amortization and impairment of other acquired intangible assets |
(2,225 |
) |
|
(961 |
) |
|
(979 |
) |
|
(979 |
) |
|
(15,823 |
) |
||||||
Impairment of other long-lived assets and other non-operating items |
(6,971 |
) |
|
(466 |
) |
|
(22 |
) |
|
(300 |
) |
|
(1,950 |
) |
||||||
Income tax (provision) benefit |
(31,154 |
) |
|
(26,102 |
) |
|
12,273 |
|
|
(40,832 |
) |
|
(44,455 |
) |
||||||
Mortgage adjusted pretax operating income (loss) |
184,306 |
|
|
147,336 |
|
|
(85,821 |
) |
|
205,667 |
|
|
224,912 |
|
||||||
All Other adjusted pretax operating income |
(2,187 |
) |
|
2,690 |
|
|
1,231 |
|
|
2,085 |
|
|
4,693 |
|
||||||
Real Estate adjusted pretax operating income (loss) |
(11,132 |
) |
|
(5,046 |
) |
|
(3,909 |
) |
|
(3,153 |
) |
|
(5,622 |
) |
||||||
Less reconciling income (expense) items: |
|
|
|
|
|
|
|
|
|
|||||||||||
Allocation of corporate operating expenses to Real Estate |
(3,369 |
) |
|
(3,248 |
) |
|
(2,823 |
) |
|
(3,367 |
) |
|
(2,675 |
) |
||||||
Real Estate depreciation and amortization |
(744 |
) |
|
(679 |
) |
|
(771 |
) |
|
(663 |
) |
|
(552 |
) |
||||||
Real Estate adjusted EBITDA |
$ |
(7,019 |
) |
|
$ |
(1,119 |
) |
|
$ |
(315 |
) |
|
$ |
877 |
|
|
$ |
(2,395 |
) |
Radian Group Inc. and Subsidiaries |
||||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||||
Exhibit G (page 4 of 6) |
||||||||
Reconciliation of Consolidated Pretax Income to Adjusted Pretax Operating Income |
||||||||
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Consolidated pretax income |
$ |
479,441 |
|
|
$ |
848,993 |
|
|
Less reconciling income (expense) items: |
|
|
|
|||||
Net gains (losses) on investments and other financial instruments |
60,277 |
|
|
51,719 |
|
|||
Loss on extinguishment of debt |
— |
|
|
(22,738 |
) |
|||
Impairment of goodwill |
— |
|
|
(4,828 |
) |
|||
Amortization and impairment of other acquired intangible assets |
(5,144 |
) |
|
(22,288 |
) |
|||
Impairment of other long-lived assets and other non-operating items (1) |
(7,759 |
) |
|
(7,507 |
) |
|||
Total adjusted pretax operating income (2) |
$ |
432,067 |
|
|
$ |
854,635 |
|
(1) |
The amounts for both periods are included in other operating expenses on the Condensed Consolidated Statement of Operations in Exhibit A and primarily relate to impairments of other long-lived assets. |
(2) |
Total adjusted pretax operating income consists of adjusted pretax operating income (loss) for each reportable segment and All Other activities as follows: |
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Adjusted pretax operating income (loss): |
|
|
|
|||||
Mortgage segment |
$ |
451,488 |
|
|
$ |
852,854 |
|
|
Real Estate segment |
(23,240 |
) |
|
(17,987 |
) |
|||
All Other activities |
3,819 |
|
|
19,768 |
|
|||
Total adjusted pretax operating income |
$ |
432,067 |
|
|
$ |
854,635 |
|
Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Operating Income Per Share |
||||||||
|
Year Ended |
|||||||
|
2020 |
|
2019 |
|||||
Diluted net income per share |
$ |
2.00 |
|
|
$ |
3.20 |
|
|
|
|
|
|
|||||
Less per-share impact of reconciling income (expense) items: |
|
|
|
|||||
Net gains (losses) on investments and other financial instruments |
0.31 |
|
|
0.25 |
|
|||
Loss on extinguishment of debt |
— |
|
|
(0.11 |
) |
|||
Impairment of goodwill |
— |
|
|
(0.02 |
) |
|||
Amortization and impairment of other acquired intangible assets |
(0.03 |
) |
|
(0.11 |
) |
|||
Impairment of other long-lived assets and other non-operating items |
(0.04 |
) |
|
(0.04 |
) |
|||
Income tax (provision) benefit on other income (expense) items (1) |
(0.05 |
) |
|
0.01 |
|
|||
Difference between statutory and effective tax rate |
0.07 |
|
|
0.01 |
|
|||
Per-share impact of other income (expense) items |
0.26 |
|
|
(0.01 |
) |
|||
Adjusted diluted net operating income per share (1) |
$ |
1.74 |
|
|
$ |
3.21 |
|
(1) |
Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. |
Radian Group Inc. and Subsidiaries |
||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||
Exhibit G (page 5 of 6) |
||||||
Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity (1) |
||||||
|
Year Ended |
|||||
|
2020 |
|
2019 |
|||
Return on equity (1) |
9.4 |
% |
|
17.8 |
% |
|
Less impact of reconciling income (expense) items: (2) |
|
|
|
|||
Net gains (losses) on investments and other financial instruments |
1.4 |
|
|
1.4 |
|
|
Loss on extinguishment of debt |
— |
|
|
(0.6 |
) |
|
Impairment of goodwill |
— |
|
|
(0.1 |
) |
|
Amortization and impairment of other acquired intangible assets |
(0.1 |
) |
|
(0.6 |
) |
|
Impairment of other long-lived assets and other non-operating items |
(0.2 |
) |
|
(0.2 |
) |
|
Income tax (provision) benefit on reconciling income (expense) items (3) |
(0.2 |
) |
|
— |
|
|
Difference between statutory and effective tax rate (3) |
0.3 |
|
|
— |
|
|
Impact of reconciling income (expense) items |
1.2 |
|
|
(0.1 |
) |
|
Adjusted net operating return on equity |
8.2 |
% |
|
17.9 |
% |
(1) |
Calculated by dividing net income by average stockholders’ equity. |
(2) |
As a percentage of average stockholders’ equity. |
(3) |
Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. |
Radian Group Inc. and Subsidiaries |
||||||||
Consolidated Non-GAAP Financial Measure Reconciliations |
||||||||
Exhibit G (page 6 of 6) |
||||||||
Reconciliation of Net Income to Real Estate Adjusted EBITDA |
||||||||
|
Year Ended |
|||||||
(In thousands) |
2020 |
|
2019 |
|||||
Net income |
$ |
393,626 |
|
|
$ |
672,309 |
|
|
Less reconciling income (expense) items: |
|
|
|
|||||
Net gains (losses) on investments and other financial instruments |
60,277 |
|
|
51,719 |
|
|||
Loss on extinguishment of debt |
— |
|
|
(22,738 |
) |
|||
Impairment of goodwill |
— |
|
|
(4,828 |
) |
|||
Amortization and impairment of other acquired intangible assets |
(5,144 |
) |
|
(22,288 |
) |
|||
Impairment of other long-lived assets and other non-operating items |
(7,759 |
) |
|
(7,507 |
) |
|||
Income tax (provision) benefit |
(85,815 |
) |
|
(176,684 |
) |
|||
Mortgage adjusted pretax operating income |
451,488 |
|
|
852,854 |
|
|||
All Other adjusted pretax operating income |
3,819 |
|
|
19,768 |
|
|||
Real Estate adjusted pretax operating income (loss) |
(23,240 |
) |
|
(17,987 |
) |
|||
Less reconciling income (expense) items: |
|
|
|
|||||
Allocation of corporate operating expenses to Real Estate |
(12,807 |
) |
|
(10,165 |
) |
|||
Real Estate depreciation and amortization |
(2,857 |
) |
|
(2,321 |
) |
|||
Real Estate adjusted EBITDA |
$ |
(7,576 |
) |
|
$ |
(5,501 |
) |
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 measures not determined in accordance with GAAP. “Real Estate adjusted EBITDA” and “Real Estate adjusted EBITDA margin” are also non-GAAP measures. These measures should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss). Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, Real Estate adjusted EBITDA or Real Estate adjusted EBITDA margin may not be comparable to similarly-named measures reported by other companies. See Exhibit F for additional information on our consolidated non-GAAP financial measures. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Mortgage Supplemental Information - New Insurance Written |
||||||||||||||||||||
Exhibit H |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
($ in millions) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
New insurance written ("NIW") |
$ |
29,781 |
|
|
$ |
33,320 |
|
|
$ |
25,459 |
|
|
$ |
16,706 |
|
|
$ |
19,953 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of NIW by FICO score (1) |
|
|
|
|
|
|
|
|
|
|||||||||||
>=740 |
64.7 |
% |
|
66.2 |
% |
|
67.3 |
% |
|
65.7 |
% |
|
66.3 |
% |
||||||
680-739 |
31.5 |
|
|
30.7 |
|
|
30.1 |
|
|
31.1 |
|
|
30.5 |
|
||||||
620-679 |
3.8 |
|
|
3.1 |
|
|
2.6 |
|
|
3.2 |
|
|
3.2 |
|
||||||
Total NIW |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of NIW |
|
|
|
|
|
|
|
|
|
|||||||||||
Borrower-paid |
99.2 |
% |
|
98.5 |
% |
|
97.8 |
% |
|
96.7 |
% |
|
97.4 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage by premium type |
|
|
|
|
|
|
|
|
|
|||||||||||
Direct monthly and other recurring premiums |
91.4 |
% |
|
90.0 |
% |
|
84.7 |
% |
|
81.1 |
% |
|
82.1 |
% |
||||||
Borrower-paid (2) (3) |
8.3 |
|
|
9.0 |
|
|
13.6 |
|
|
16.5 |
|
|
16.0 |
|
||||||
Lender-paid (2) |
0.3 |
|
|
1.0 |
|
|
1.7 |
|
|
2.4 |
|
|
1.9 |
|
||||||
Direct single premiums (2) |
8.6 |
|
|
10.0 |
|
|
15.3 |
|
|
18.9 |
|
|
17.9 |
|
||||||
Total NIW |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
NIW for purchases |
64.6 |
% |
|
70.5 |
% |
|
56.4 |
% |
|
66.2 |
% |
|
67.5 |
% |
||||||
NIW for refinances |
35.4 |
% |
|
29.5 |
% |
|
43.6 |
% |
|
33.8 |
% |
|
32.5 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage by LTV |
|
|
|
|
|
|
|
|
|
|||||||||||
95.01% and above |
8.9 |
% |
|
9.7 |
% |
|
8.3 |
% |
|
9.9 |
% |
|
11.5 |
% |
||||||
90.01% to 95.00% |
34.7 |
|
|
39.6 |
|
|
36.4 |
|
|
37.6 |
|
|
35.8 |
|
||||||
85.01% to 90.00% |
29.8 |
|
|
28.3 |
|
|
29.8 |
|
|
30.3 |
|
|
30.0 |
|
||||||
85.00% and below |
26.6 |
|
|
22.4 |
|
|
25.5 |
|
|
22.2 |
|
|
22.7 |
|
||||||
Total NIW |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
(1) |
For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores. |
(2) |
Percentages exclude the impact of reinsurance. |
(3) |
Borrower-paid Single Premium Policies have lower Minimum Required Assets under PMIERs as compared to lender-paid Single Premium Policies. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Mortgage Supplemental Information - Primary Insurance in Force and Risk in Force |
||||||||||||||||||||
Exhibit I (page 1 of 2) |
||||||||||||||||||||
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|||||||||||
($ in millions) |
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|||||||||||
Primary insurance in force (1) |
|
|
|
|
|
|
|
|
|
|||||||||||
Prime |
$ |
242,044 |
|
|
$ |
241,166 |
|
|
$ |
236,835 |
|
|
$ |
236,958 |
|
|
$ |
235,742 |
|
|
Alt-A and A minus and below |
4,100 |
|
|
4,301 |
|
|
4,471 |
|
|
4,628 |
|
|
4,816 |
|
||||||
Primary |
$ |
246,144 |
|
|
$ |
245,467 |
|
|
$ |
241,306 |
|
|
$ |
241,586 |
|
|
$ |
240,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Primary risk in force (1) (2) |
|
|
|
|
|
|
|
|
|
|||||||||||
Prime |
$ |
59,689 |
|
|
$ |
59,972 |
|
|
$ |
59,253 |
|
|
$ |
59,827 |
|
|
$ |
59,780 |
|
|
Alt-A and A minus and below |
967 |
|
|
1,017 |
|
|
1,058 |
|
|
1,096 |
|
|
1,141 |
|
||||||
Primary |
$ |
60,656 |
|
|
$ |
60,989 |
|
|
$ |
60,311 |
|
|
$ |
60,923 |
|
|
$ |
60,921 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of primary risk in force |
|
|
|
|
|
|
|
|
|
|||||||||||
Direct monthly and other recurring premiums |
79.1 |
% |
|
76.8 |
% |
|
73.8 |
% |
|
72.6 |
% |
|
72.4 |
% |
||||||
Direct single premiums |
20.9 |
% |
|
23.2 |
% |
|
26.2 |
% |
|
27.4 |
% |
|
27.6 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of primary risk in force by FICO score (3) |
|
|
|
|
|
|
|
|
|
|||||||||||
>=740 |
57.5 |
% |
|
57.6 |
% |
|
57.4 |
% |
|
57.2 |
% |
|
56.9 |
% |
||||||
680-739 |
34.6 |
|
|
34.3 |
|
|
34.3 |
|
|
34.2 |
|
|
34.2 |
|
||||||
620-679 |
7.3 |
|
|
7.5 |
|
|
7.7 |
|
|
8.0 |
|
|
8.2 |
|
||||||
<=619 |
0.6 |
|
|
0.6 |
|
|
0.6 |
|
|
0.6 |
|
|
0.7 |
|
||||||
Total Primary |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of primary risk in force by LTV |
|
|
|
|
|
|
|
|
|
|||||||||||
95.01% and above |
14.4 |
% |
|
14.3 |
% |
|
14.2 |
% |
|
14.3 |
% |
|
14.2 |
% |
||||||
90.01% to 95.00% |
49.3 |
|
|
50.1 |
|
|
50.4 |
|
|
51.0 |
|
|
51.3 |
|
||||||
85.01% to 90.00% |
28.0 |
|
|
27.9 |
|
|
28.1 |
|
|
27.9 |
|
|
27.9 |
|
||||||
85.00% and below |
8.3 |
|
|
7.7 |
|
|
7.3 |
|
|
6.8 |
|
|
6.6 |
|
||||||
Total |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Percentage of primary risk in force by policy year |
|
|
|
|
|
|
|
|
|
|||||||||||
2008 and prior |
6.2 |
% |
|
6.6 |
% |
|
7.2 |
% |
|
7.5 |
% |
|
7.8 |
% |
||||||
2009 - 2013 |
4.4 |
|
|
5.2 |
|
|
6.3 |
|
|
6.9 |
|
|
7.5 |
|
||||||
2014 |
2.6 |
|
|
3.0 |
|
|
3.6 |
|
|
4.0 |
|
|
4.3 |
|
||||||
2015 |
4.3 |
|
|
5.1 |
|
|
6.1 |
|
|
6.9 |
|
|
7.4 |
|
||||||
2016 |
7.6 |
|
|
8.9 |
|
|
10.6 |
|
|
11.7 |
|
|
12.5 |
|
||||||
2017 |
9.1 |
|
|
10.7 |
|
|
13.0 |
|
|
14.8 |
|
|
16.0 |
|
||||||
2018 |
9.8 |
|
|
11.7 |
|
|
14.0 |
|
|
16.4 |
|
|
17.9 |
|
||||||
2019 |
17.8 |
|
|
20.6 |
|
|
23.3 |
|
|
25.4 |
|
|
26.6 |
|
||||||
2020 |
38.2 |
|
|
28.2 |
|
|
15.9 |
|
|
6.4 |
|
|
— |
|
||||||
Total |
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Primary risk in force on defaulted loans |
$ |
3,250 |
|
|
$ |
3,747 |
|
|
$ |
4,263 |
|
|
$ |
1,001 |
|
|
$ |
1,061 |
|
Table continued on next page. |
Radian Group Inc. and Subsidiaries |
|||||||||||||||
Mortgage Supplemental Information - Primary Insurance in Force and Risk in Force |
|||||||||||||||
Exhibit I (page 2 of 2) |
|||||||||||||||
Table continued from prior page. |
|||||||||||||||
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||
Persistency Rate (12 months ended) (4) |
61.2 |
% |
|
65.6 |
% |
|
70.2 |
% |
|
75.4 |
% |
|
78.2 |
% |
|
Persistency Rate (quarterly, annualized) (4) (5) |
60.4 |
% |
|
60.0 |
% |
|
63.8 |
% |
|
76.5 |
% |
|
75.0 |
% |
(1) |
Excludes the impact of premiums ceded under our reinsurance agreements. |
(2) |
Does not include pool risk in force or other risk in force, which combined represent less than 1.0% of our total risk in force for all periods presented. |
(3) |
For loans with multiple borrowers, the percentage of primary risk in force by FICO score represents the lowest of the borrowers’ FICO scores. |
(4) |
For the quarters ended December 31, 2020 and September 30, 2020, the Persistency Rate was reduced by an increase in cancellations of Single Premium Policies due to increased cancellations identified by our ongoing servicer monitoring process for Single Premium Policies. |
(5) |
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. |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Mortgage Supplemental Information - Claims and Reserves |
||||||||||||||||||||
Exhibit J |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
($ in thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net claims paid: (1) |
|
|
|
|
|
|
|
|
|
|||||||||||
Total primary claims paid |
$ |
8,353 |
|
|
$ |
11,331 |
|
|
$ |
22,144 |
|
|
$ |
24,358 |
|
|
$ |
24,267 |
|
|
Total pool and other |
70 |
|
|
(230 |
) |
|
639 |
|
|
(911 |
) |
|
559 |
|
||||||
Subtotal |
8,423 |
|
|
11,101 |
|
|
22,783 |
|
|
23,447 |
|
|
24,826 |
|
||||||
Impact of commutations and settlements (2) |
32,170 |
|
|
(267 |
) |
|
— |
|
|
(56 |
) |
|
3,691 |
|
||||||
Total net claims paid |
$ |
40,593 |
|
|
$ |
10,834 |
|
|
$ |
22,783 |
|
|
$ |
23,391 |
|
|
$ |
28,517 |
|
|
Total average net primary claims paid (1) (3) |
$ |
46.9 |
|
|
$ |
46.4 |
|
|
$ |
47.9 |
|
|
$ |
50.3 |
|
|
$ |
50.9 |
|
|
Average direct primary claims paid (3) (4) |
$ |
48.5 |
|
|
$ |
47.8 |
|
|
$ |
49.0 |
|
|
$ |
51.4 |
|
|
$ |
52.1 |
|
(1) |
Net of reinsurance recoveries. |
(2) |
Includes payments to commute mortgage insurance coverage on certain performing and non-performing loans. For the fourth quarter of 2020, primarily includes payments made to settle certain previously disclosed legal proceedings. |
(3) |
Calculated without giving effect to the impact of commutations and settlements. |
(4) |
Before reinsurance recoveries. |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|||||||||||
($ in thousands, except per default amounts) |
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Reserve for losses by category (1) |
|
|
|
|
|
|
|
|
|
|||||||||||
Mortgage reserves |
|
|
|
|
|
|
|
|
|
|||||||||||
Prime |
$ |
711,245 |
|
|
$ |
655,754 |
|
|
$ |
573,463 |
|
|
$ |
264,694 |
|
|
$ |
248,727 |
|
|
Alt-A and A minus and below |
88,269 |
|
|
88,879 |
|
|
86,646 |
|
|
88,481 |
|
|
91,093 |
|
||||||
IBNR and other |
9,966 |
|
|
43,153 |
|
|
43,342 |
|
|
40,583 |
|
|
40,920 |
|
||||||
LAE |
20,172 |
|
|
18,745 |
|
|
16,807 |
|
|
9,216 |
|
|
8,918 |
|
||||||
Total primary reserves |
829,652 |
|
|
806,531 |
|
|
720,258 |
|
|
402,974 |
|
|
389,658 |
|
||||||
Total pool reserves |
14,163 |
|
|
14,779 |
|
|
14,398 |
|
|
11,297 |
|
|
11,322 |
|
||||||
Total 1st lien reserves |
843,815 |
|
|
821,310 |
|
|
734,656 |
|
|
414,271 |
|
|
400,980 |
|
||||||
Other |
292 |
|
|
398 |
|
|
335 |
|
|
407 |
|
|
293 |
|
||||||
Total Mortgage reserves |
844,107 |
|
|
821,708 |
|
|
734,991 |
|
|
414,678 |
|
|
401,273 |
|
||||||
Real Estate reserves |
4,306 |
|
|
4,084 |
|
|
3,894 |
|
|
3,524 |
|
|
3,492 |
|
||||||
Total reserves |
$ |
848,413 |
|
|
$ |
825,792 |
|
|
$ |
738,885 |
|
|
$ |
418,202 |
|
|
$ |
404,765 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
1st lien reserve per default |
|
|
|
|
|
|
|
|
|
|||||||||||
Primary reserve per primary default excluding IBNR and other |
$ |
14,759 |
|
|
$ |
12,168 |
|
|
$ |
9,706 |
|
|
$ |
18,320 |
|
|
$ |
16,399 |
|
(1) |
Includes ceded losses on reinsurance transactions, which are expected to be recovered and are included in the reinsurance recoverables reported in other assets in our condensed consolidated balance sheets. |
Radian Group Inc. and Subsidiaries |
|||||||||||||||
Mortgage Supplemental Information - Default Statistics |
|||||||||||||||
Exhibit K |
|||||||||||||||
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
||||||
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
2019 |
||||||
Default Statistics |
|
|
|
|
|
|
|
|
|
||||||
Primary Insurance: |
|
|
|
|
|
|
|
|
|
||||||
Prime |
|
|
|
|
|
|
|
|
|
||||||
Number of insured loans |
1,031,736 |
|
|
1,043,450 |
|
|
1,040,964 |
|
|
1,049,974 |
|
|
1,049,954 |
|
|
Number of loans in default |
51,032 |
|
|
58,057 |
|
|
64,648 |
|
|
15,497 |
|
|
16,532 |
|
|
Percentage of loans in default |
4.95 |
% |
|
5.56 |
% |
|
6.21 |
% |
|
1.48 |
% |
|
1.57 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||
Alt-A and A minus and below |
|
|
|
|
|
|
|
|
|
||||||
Number of insured loans |
26,208 |
|
|
27,310 |
|
|
28,357 |
|
|
29,375 |
|
|
30,439 |
|
|
Number of loans in default |
4,505 |
|
|
4,680 |
|
|
5,094 |
|
|
4,284 |
|
|
4,734 |
|
|
Percentage of loans in default |
17.19 |
% |
|
17.14 |
% |
|
17.96 |
% |
|
14.58 |
% |
|
15.55 |
% |
|
|
|
|
|
|
|
|
|
|
|
||||||
Total Primary |
|
|
|
|
|
|
|
|
|
||||||
Number of insured loans |
1,057,944 |
|
|
1,070,760 |
|
|
1,069,321 |
|
|
1,079,349 |
|
|
1,080,393 |
|
|
Number of loans in default |
55,537 |
|
|
62,737 |
|
|
69,742 |
|
|
19,781 |
|
|
21,266 |
|
|
Percentage of loans in default |
5.25 |
% |
|
5.86 |
% |
|
6.52 |
% |
|
1.83 |
% |
|
1.97 |
% |
Radian Group Inc. and Subsidiaries |
||||||||||||||||||||
Mortgage Supplemental Information - Reinsurance Programs |
||||||||||||||||||||
Exhibit L |
||||||||||||||||||||
|
2020 |
|
2019 |
|||||||||||||||||
($ in thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Quota Share Reinsurance (“QSR”) and Single Premium QSR Programs |
|
|
|
|
|
|
|
|
|
|||||||||||
Ceded premiums written (1) |
$ |
(1,117 |
) |
|
$ |
2,119 |
|
|
$ |
35,821 |
|
|
$ |
6,687 |
|
|
$ |
9,217 |
|
|
% of premiums written |
(0.4 |
)% |
|
0.8 |
% |
|
13.0 |
% |
|
2.4 |
% |
|
3.0 |
% |
||||||
Ceded premiums earned |
$ |
29,510 |
|
|
$ |
36,742 |
|
|
$ |
60,652 |
|
|
$ |
18,712 |
|
|
$ |
19,428 |
|
|
% of premiums earned |
8.6 |
% |
|
11.2 |
% |
|
19.2 |
% |
|
6.2 |
% |
|
6.1 |
% |
||||||
Ceding commissions written |
$ |
(3,847 |
) |
|
$ |
(4,984 |
) |
|
$ |
(5,304 |
) |
|
$ |
8,413 |
|
|
$ |
6,836 |
|
|
Ceding commissions earned (2) |
$ |
13,197 |
|
|
$ |
17,038 |
|
|
$ |
13,453 |
|
|
$ |
9,966 |
|
|
$ |
12,055 |
|
|
Profit commission |
$ |
18,406 |
|
|
$ |
20,425 |
|
|
$ |
(10,649 |
) |
|
$ |
16,405 |
|
|
$ |
17,792 |
|
|
Ceded losses |
$ |
7,106 |
|
|
$ |
10,189 |
|
|
$ |
39,635 |
|
|
$ |
1,962 |
|
|
$ |
1,533 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Excess-of-Loss Program |
|
|
|
|
|
|
|
|
|
|||||||||||
Ceded premiums written |
$ |
15,240 |
|
|
$ |
7,499 |
|
|
$ |
7,525 |
|
|
$ |
12,678 |
|
|
$ |
6,834 |
|
|
% of premiums written |
5.2 |
% |
|
2.8 |
% |
|
2.7 |
% |
|
4.5 |
% |
|
2.2 |
% |
||||||
Ceded premiums earned |
$ |
12,037 |
|
|
$ |
8,290 |
|
|
$ |
8,321 |
|
|
$ |
8,405 |
|
|
$ |
7,104 |
|
|
% of premiums earned |
3.7 |
% |
|
2.5 |
% |
|
2.6 |
% |
|
2.8 |
% |
|
2.2 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Ceded RIF (3) |
|
|
|
|
|
|
|
|
|
|||||||||||
QSR Program |
$ |
381,787 |
|
|
$ |
454,585 |
|
|
$ |
532,743 |
|
|
$ |
596,166 |
|
|
$ |
644,512 |
|
|
Single Premium QSR Program |
6,646,812 |
|
|
7,358,932 |
|
|
8,173,756 |
|
|
8,580,047 |
|
|
8,582,067 |
|
||||||
Excess-of-Loss Program |
1,560,600 |
|
|
1,170,200 |
|
|
1,170,200 |
|
|
1,230,000 |
|
|
850,800 |
|
||||||
Total Ceded RIF |
$ |
8,589,199 |
|
|
$ |
8,983,717 |
|
|
$ |
9,876,699 |
|
|
$ |
10,406,213 |
|
|
$ |
10,077,379 |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
PMIERs impact - reduction in Minimum Required Assets (4) |
|
|
|
|
|
|
|
|
|
|||||||||||
QSR Program |
$ |
22,712 |
|
|
$ |
26,213 |
|
|
$ |
30,837 |
|
|
$ |
31,638 |
|
|
$ |
35,382 |
|
|
Single Premium QSR Program |
423,712 |
|
|
469,625 |
|
|
517,028 |
|
|
501,668 |
|
|
511,695 |
|
||||||
Excess-of-Loss Program |
912,734 |
|
|
783,842 |
|
|
970,294 |
|
|
1,066,464 |
|
|
738,386 |
|
||||||
Total PMIERs impact |
$ |
1,359,158 |
|
|
$ |
1,279,680 |
|
|
$ |
1,518,159 |
|
|
$ |
1,599,770 |
|
|
$ |
1,285,463 |
|
(1) |
Net of profit commission. |
(2) |
Includes amounts reported in policy acquisition costs and other operating expenses. Operating expenses include the following ceding commissions, net of deferred policy acquisition costs, for the periods indicated: |
|
2020 |
|
2019 |
|||||||||||||||||
($ in thousands) |
Qtr 4 |
|
Qtr 3 |
|
Qtr 2 |
|
Qtr 1 |
|
Qtr 4 |
|||||||||||
Ceding commissions |
$ |
(10,436 |
) |
|
$ |
(12,337 |
) |
|
$ |
(10,406 |
) |
|
$ |
(7,967 |
) |
|
$ |
(7,973 |
) |
(3) |
Included in primary RIF. |
(4) |
Excludes the impact of intercompany reinsurance. |
FORWARD-LOOKING STATEMENTS
All statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “strategy,” “future,” “likely” or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events, including management’s current views regarding the likely impacts of the COVID-19 pandemic. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment where new risks emerge from time to time and it is not possible for us to predict all risks that may affect us, particularly those associated with the COVID-19 pandemic, which has had wide-ranging and continually evolving effects. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks and uncertainties include, without limitation:
For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 and “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, and to subsequent reports and registration statements filed from time to time with the U.S. Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.
For Investors:
John Damian - Phone: 215.231.1383 email:john.damian@radian.com
For Media:
Rashi Iyer - Phone 215.231.1167 email: rashi.iyer@radian.com