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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________________

FORM 10-Q
_____________________________
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021
OR
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from              to             
Commission File Number 1-11356
_______________________________
https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-rdn-20210630_g1.jpg
Radian Group Inc.
(Exact name of registrant as specified in its charter)
_______________________________
Delaware23-2691170
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
1500 Market Street,Philadelphia,PA19102
(Address of principal executive offices)(Zip Code)
(215) 231-1000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareRDNNew York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer☒Accelerated filer☐Non-accelerated filer☐Smaller reporting company☐Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐   No  ☒
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 185,557,493 shares of common stock, $0.001 par value per share, outstanding on August 4, 2021.


Table of Contents
 Page
PART I—FINANCIAL INFORMATION
Item 1
Item 2
Item 3
Item 4
PART II—OTHER INFORMATION
Item 1
Item 1A
Item 2
Item 6




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Glossary of Abbreviations and Acronyms
The following list defines various abbreviations and acronyms used throughout this report, including the Condensed Consolidated Financial Statements, the Notes to Unaudited Condensed Consolidated Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations.
TermDefinition
2020 Form 10-KAnnual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on February 26, 2021
2014 Master PolicyRadian Guaranty’s master insurance policy, setting forth the terms and conditions of our mortgage insurance coverage, which became effective October 1, 2014
2020 Master PolicyRadian Guaranty’s master insurance policy, setting forth the terms and conditions of our mortgage insurance coverage, which became effective March 1, 2020
2016 Single Premium QSR AgreementQuota share reinsurance agreement entered into with a panel of third-party reinsurance providers in the first quarter of 2016 and subsequently amended in the fourth quarter of 2017
2018 Single Premium QSR AgreementQuota share reinsurance agreement entered into with a panel of third-party reinsurance providers in October 2017 to cede a portion of Single Premium NIW beginning January 1, 2018
2020 Single Premium QSR AgreementQuota share reinsurance agreement entered into with a panel of third-party reinsurance providers in January 2020 to cede a portion of Single Premium NIW beginning January 1, 2020
2017 Surplus Note
The $100 million 0.0% intercompany surplus note issued by Radian Guaranty to Radian Group, due December 31, 2027
2020 Surplus Note
The $200 million 3.0% intercompany surplus note issued by Radian Guaranty to Radian Group, which was initially due January 31, 2030 but was converted to contributed surplus effective April 1, 2021
ABSAsset-backed securities
All OtherRadian’s non-reportable operating segments and other business activities, including: (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 its sale in the first quarter of 2020, income and expenses related to Clayton; (iv) for all periods presented, the income and expenses related to our traditional appraisal services; and (v) certain other immaterial revenue and expense items
ASUAccounting Standards Update, issued by the FASB to communicate changes to GAAP
Available AssetsAs defined in the PMIERs, assets primarily including the most liquid assets of a mortgage insurer, and reduced by, among other items, premiums received but not yet earned and reinsurance funds withheld
CARES ActCoronavirus Aid, Relief, and Economic Security Act signed into law on March 27, 2020
Claim CurtailmentOur legal right, under certain conditions, to reduce the amount of a claim, including due to servicer negligence
Claim DenialOur legal right, under certain conditions, to deny a claim
Claim SeverityThe total claim amount paid divided by the original coverage amount
ClaytonClayton Services LLC, a former indirect subsidiary of Radian Group that was sold on January 21, 2020, through which we provided services related to loan acquisition, RMBS securitization and distressed asset reviews and servicer and loan surveillance
CLOCollateralized loan obligations
CMBSCommercial mortgage-backed securities
COVID-19The novel coronavirus disease declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention in March 2020
COVID-19 AmendmentAmendment to the PMIERs effective June 30, 2020, primarily to recognize the COVID-19 pandemic as a nationwide “FEMA Declared Major Disaster” and to set forth guidelines on the application of the Disaster Related Capital Charge to COVID-19 Defaulted Loans
COVID-19 Crisis PeriodTime period extending from March 1, 2020 to March 31, 2021



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TermDefinition
COVID-19 Defaulted LoansAll non-performing loans that either: (i) have an Initial Missed Payment occurring during the COVID-19 Crisis Period or (ii) are subject to a forbearance plan granted in response to a financial hardship related to COVID-19 (which is assumed under the COVID-19 Amendment to be the case for any loan that has an Initial Missed Payment occurring during the COVID-19 Crisis Period and is subject to a forbearance plan), the terms of which are materially consistent with the terms of forbearance plans offered by the GSEs
CuresLoans that were in default as of the beginning of a period and are no longer in default because payments were received such that the loan is no longer 60 or more days past due
Default to Claim RateThe percentage of defaulted loans that are assumed to result in a claim
DemotechDemotech, Inc.
Disaster Related Capital ChargeUnder the PMIERs, multiplier of 0.30 applied to the required asset amount factor for each non-performing loan: (i) backed by a property located in a FEMA Designated Area and (ii) either subject to a certain forbearance plan or with an initial default date occurring within a certain timeframe
Dodd-Frank ActDodd-Frank Wall Street Reform and Consumer Protection Act, as amended
Eagle Re Issuer(s)A group of unaffiliated special purpose insurers (VIEs) domiciled in Bermuda, comprising Eagle Re 2018-1 Ltd., Eagle Re 2019-1 Ltd., Eagle Re 2020-1 Ltd., Eagle Re 2020-2 Ltd., and/or Eagle Re 2021-1 Ltd., which provide reinsurance coverage under Radian Guaranty’s Excess-of-Loss Program.
Excess-of-Loss ProgramThe credit risk protection obtained by Radian Guaranty in the form of excess-of-loss reinsurance, which indemnifies the ceding company against loss in excess of a specific agreed limit, up to a specified sum. The program includes reinsurance agreements with the Eagle Re Issuers in connection with various issuances of mortgage insurance-linked notes. The program also includes a separate agreement with a third-party reinsurer, representing a pro rata share of the credit risk alongside the risk assumed by Eagle Re 2018-1 Ltd., an Eagle Re Issuer.
Exchange ActSecurities Exchange Act of 1934, as amended
Extraordinary DistributionA dividend or distribution of capital that is required to be approved by an insurance company’s primary regulator that is greater than would be permitted as an ordinary distribution (which does not require regulatory approval)
Fannie MaeFederal National Mortgage Association
FASBFinancial Accounting Standards Board
FEMAFederal Emergency Management Agency, an agency of the U.S. Department of Homeland Security
FEMA Designated AreaGenerally, an area that has been subject to a disaster, designated by FEMA as an individual assistance disaster area for the purpose of determining eligibility for various forms of federal assistance
FHAFederal Housing Administration
FHFAFederal Housing Finance Agency
FHLBFederal Home Loan Bank of Pittsburgh
FICOFair Isaac Corporation (“FICO”) credit scores, for Radian’s portfolio statistics, represent the borrower’s credit score at origination and, in circumstances where there are multiple borrowers, the lowest of the borrowers’ FICO scores is utilized
FitchFitch Ratings, Inc.
Foreclosure Stage DefaultThe Stage of Default of a loan in which a foreclosure sale has been scheduled or held
Freddie MacFederal Home Loan Mortgage Corporation
GAAPGenerally accepted accounting principles in the U.S., as amended from time to time
GSE(s)Government-Sponsored Enterprises (Fannie Mae and Freddie Mac)
HARPHome Affordable Refinance Program
homegeniusRadian’s business segment (formerly known as “Real Estate”) that offers a broad array of title, valuation, asset management, SaaS and other real estate services to mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents
IBNRLosses incurred but not reported
IIFInsurance in force, equal to the aggregate unpaid principal balances of the underlying loans



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TermDefinition
Initial Missed Payment
The first missed monthly payment, which would be reported to us as delinquent as of the last day of the month for which it was due. (For example, for a loan first reported to the approved insurer in May as having missed its payments due on April 1 and May 1, the Initial Missed Payment shall be deemed to have occurred on April 30. In this example, the loan would become a non-performing primary mortgage guaranty insurance loan in May and, if applicable, the Disaster Related Capital Charge would be applied for May, June, and July.)
LAELoss adjustment expenses, which include the cost of investigating and adjusting losses and paying claims
LIBORLondon Inter-bank Offered Rate
Loss Mitigation Activity/ActivitiesActivities such as Rescissions, Claim Denials, Claim Curtailments and cancellations
LTVLoan-to-value ratio, calculated as the ratio of the original loan amount to the original value of the property, expressed as a percentage
Master PoliciesThe Prior Master Policy, the 2014 Master Policy, and the 2020 Master Policy, together
Minimum Required Asset(s)A risk-based minimum required asset amount, as defined in the PMIERs, calculated based on net RIF (RIF, net of credits permitted for reinsurance) and a variety of measures related to expected credit performance and other factors, including the impact of the Disaster Related Capital Charge
Model ActMortgage Guaranty Insurance Model Act, as issued by the National Association of Insurance Commissioners to establish minimum capital and surplus requirements for mortgage insurers
Monthly and Other Recurring Premiums (or Recurring Premium Policies)Insurance premiums or policies, respectively, where premiums are paid on a monthly or other installment basis, in contrast to Single Premium Policies
Monthly Premium PoliciesInsurance policies where premiums are paid on a monthly installment basis
Moody’sMoody’s Investors Service
Mortgage Radian’s mortgage insurance and risk services business segment, which provides credit-related insurance coverage, principally through private mortgage insurance on residential first-lien mortgage loans, as well as other credit risk management, contract underwriting and fulfillment solutions, to mortgage lending institutions and mortgage credit investors
MPP RequirementCertain states’ statutory or regulatory risk-based capital requirement that the mortgage insurer must maintain a minimum policyholder position, which is calculated based on both risk and surplus levels
NIWNew insurance written, representing the aggregate original principal amount of the mortgages underlying the Primary Mortgage Insurance
NOLNet operating loss; for tax purposes, accumulated during years a company reported more tax deductions than taxable income. NOLs may be carried back or carried forward a certain number of years, depending on various factors which can reduce a company’s tax liability.
Persistency RateThe percentage of IIF that remains in force over a period of time
PMIERsPrivate Mortgage Insurer Eligibility Requirements issued by the GSEs under oversight of the FHFA to set forth requirements an approved insurer must meet and maintain to provide mortgage guaranty insurance on loans acquired by the GSEs. The current PMIERs requirements, sometimes referred to as PMIERs 2.0, incorporate the most recent revisions to the PMIERs that became effective on March 31, 2019.
PMIERs CushionUnder PMIERs, Radian Guaranty's excess of Available Assets over Minimum Required Assets
Pool Mortgage InsuranceInsurance that provides a lender or investor protection against default on a group or “pool” of mortgages, rather than on an individual mortgage loan basis, generally subject to an aggregate exposure limit, or “stop loss,” and/or deductible applied to the initial aggregate loan balance of the entire pool, pursuant to the terms of the applicable insurance agreement
Primary Mortgage InsuranceInsurance that provides a lender or investor protection against default on an individual mortgage loan basis, at a specified coverage percentage for each loan, pursuant to the terms of the applicable Master Policy
Prior Master PolicyRadian Guaranty’s master insurance policy, setting forth the terms and conditions of our mortgage insurance coverage, which was in effect prior to the effective date of the 2014 Master Policy
QMQualified mortgage; a mortgage that possesses certain low-risk characteristics that enable it to qualify for lender protection under the ability to repay rule instituted by the Dodd-Frank Act



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TermDefinition
QSR ProgramThe quota share reinsurance agreements entered into with a third-party reinsurance provider in the second and fourth quarters of 2012, collectively
RadianRadian Group Inc. together with its consolidated subsidiaries
Radian GroupRadian Group Inc., our insurance holding company
Radian GuarantyRadian Guaranty Inc., a Pennsylvania domiciled insurance subsidiary of Radian Group and our approved insurer under the PMIERs, through which we provide mortgage insurance products and services
Radian ReinsuranceRadian Reinsurance Inc., a Pennsylvania domiciled insurance subsidiary of Radian Group, through which we provide mortgage credit risk insurance and reinsurance, including through participation in credit risk transactions issued by the GSEs
Radian Title InsuranceRadian Title Insurance Inc., an Ohio domiciled insurance company and an indirect subsidiary of Radian Group, through which we offer title insurance
RBC StatesRisk-based capital states, which are those states that currently impose a statutory or regulatory risk-based capital requirement
RescissionOur legal right, under certain conditions, to unilaterally rescind coverage on our mortgage insurance policies if we determine that a loan did not qualify for insurance
RIFRisk in force; for Primary Mortgage Insurance, RIF is equal to the underlying loan unpaid principal balance multiplied by the insurance coverage percentage, whereas for Pool Mortgage Insurance, it represents the remaining exposure under the agreements
Risk-to-capitalUnder certain state regulations, a maximum ratio of net RIF calculated relative to the level of statutory capital
RMBSResidential mortgage-backed securities
S&PStandard & Poor’s Financial Services LLC
SaaSSoftware-as-a-Service
SAPStatutory accounting principles and practices, including those required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries
SECUnited States Securities and Exchange Commission
Securities ActSecurities Act of 1933, as amended
Senior Notes due 2024Our 4.500% unsecured senior notes due October 2024 ($450 million original principal amount)
Senior Notes due 2025Our 6.625% unsecured senior notes due March 2025 ($525 million original principal amount)
Senior Notes due 2027Our 4.875% unsecured senior notes due March 2027 ($450 million original principal amount)
Single Premium NIWNIW on Single Premium Policies
Single Premium Policy / PoliciesInsurance policies where premiums are paid in a single payment, which includes policies written on an individual basis (as each loan is originated) and on an aggregated basis (in which each individual loan in a group of loans is insured in a single transaction, typically shortly after the loans have been originated)
Single Premium QSR ProgramThe 2016 Single Premium QSR Agreement, the 2018 Single Premium QSR Agreement and the 2020 Single Premium QSR Agreement, collectively
SOFRSecured Overnight Financing Rate
Stage of DefaultThe stage a loan is in relative to the foreclosure process, based on whether a foreclosure sale has been scheduled or held
Statutory RBC RequirementRisk-based capital requirement imposed by the RBC States, requiring a minimum surplus level and, in certain states, a minimum ratio of statutory capital relative to the level of risk
Time in DefaultThe time period from the point a loan reaches default status (based on the month the default occurred) to the current reporting date
VIEVariable interest entity



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Glossary
Cautionary Note Regarding Forward-Looking Statements
—Safe Harbor Provisions
All statements in this report 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, Section 21E of the Exchange Act and the 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. 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 are not guarantees of future performance, and 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:
■the COVID-19 pandemic, which has caused significant economic disruption, high unemployment, periods of volatility and disruption in financial markets, and required adjustments in the housing finance system and real estate markets. The COVID-19 pandemic has adversely impacted our businesses, and we expect that the COVID-19 pandemic could further impact our business and subject us to certain risks, including those discussed in “Item 1A. Risk Factors—The COVID-19 pandemic has adversely impacted us, and its ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope, severity and duration of the pandemic and actions taken by governmental authorities in response to the pandemic” and the other risk factors in our 2020 Form 10-K;
■changes in economic and political conditions that impact the size of the insurable market, the credit performance of our insured portfolio, and our business prospects;
■changes in the way customers, investors, ratings agencies, regulators or legislators perceive our performance, financial strength and future prospects;
■Radian Guaranty’s ability to remain eligible under the PMIERs and other applicable requirements imposed by the FHFA and by the GSEs to insure loans purchased by the GSEs;
■our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy existing and future regulatory requirements, including the PMIERs and any changes thereto, such as the application of the COVID-19 Amendment, and potential changes to the Model Act currently under consideration;
■changes in the charters or business practices of, or rules or regulations imposed by or applicable to, the GSEs, which may include changes in response to the COVID-19 pandemic, changes in the requirements for Radian Guaranty to remain an approved insurer to the GSEs, changes in the GSEs’ interpretation and application of the PMIERs, or changes impacting loans purchased by the GSEs;
■the effects of the Enterprise Regulatory Capital Framework which was finalized by the FHFA in December 2020 and which, among other things, increases the capital requirements for the GSEs and reduces the credit they receive for risk transfer, which could impact their operations and pricing as well as the size of the insurable mortgage insurance market, and which may form the basis for future versions of the PMIERs;
■changes in the current housing finance system in the United States, including the roles of the FHA, the GSEs and private mortgage insurers in this system;
■our ability to successfully execute and implement our capital plans, including our risk distribution strategy through the capital markets and reinsurance markets, and to maintain sufficient holding company liquidity to meet our liquidity needs;
■our ability to successfully execute and implement our business plans and strategies, including plans and strategies that require GSE and/or regulatory approvals and licenses or are subject to complex compliance requirements that we may be unable to satisfy, or that may expose us to new risks including those that could impact our capital and liquidity positions;
■uncertainty from the upcoming discontinuance of LIBOR and transition to one or more alternative benchmarks that could cause interest rate volatility and, among other things, impact our investment portfolio, cost of debt and cost of reinsurance through mortgage insurance-linked notes transactions;
■any disruption in the servicing of mortgages covered by our insurance policies, as well as poor servicer performance, which could be impacted by the burdens placed on many servicers due to the COVID-19 pandemic;
■a decrease in the Persistency Rates of our mortgage insurance on Monthly Premium Policies;



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Glossary
■competition in the private mortgage insurance industry generally, and more specifically: price competition in our mortgage insurance business, including as a result of the increased use of loan-level pricing delivery methodologies that are less transparent than historical pricing practices; and competition from the FHA and the U.S. Department of Veterans Affairs as well as from other forms of credit enhancement, such as GSE-sponsored alternatives to traditional mortgage insurance;
■the effect of the Dodd-Frank Act on the financial services industry in general, and on our businesses in particular;
■legislative and regulatory activity (or inactivity), including the adoption of (or failure to adopt) new laws and regulations, or changes in existing laws and regulations, or the way they are interpreted or applied, including potential changes in tax law under the Biden Administration;
■legal and regulatory claims, assertions, actions, reviews, audits, inquiries and investigations that could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures, new or increased reserves or have other effects on our business;
■the amount and timing of potential payments or adjustments associated with federal or other tax examinations;
■the possibility that we may fail to estimate accurately, especially in the event of an extended economic downturn or a period of extreme market volatility and economic uncertainty, the likelihood, magnitude and timing of losses in establishing loss reserves for our mortgage insurance business or to accurately calculate and/or project our Available Assets and Minimum Required Assets under the PMIERs, which will be impacted by, among other things, the size and mix of our IIF, the level of defaults in our portfolio, the reported status of defaults in our portfolio, including whether they are subject to forbearance, a repayment plan or a loan modification trial period granted in response to a financial hardship related to COVID-19, the level of cash flow generated by our insurance operations and our risk distribution strategies;
■volatility in our financial results caused by changes in the fair value of our assets and liabilities, including with respect to our use of derivatives and within our investment portfolio;
■changes in GAAP or SAP rules and guidance, or their interpretation;
■our ability and related costs to develop, launch and implement new and innovative technologies and digital products and services, and whether we will have broad customer acceptance of these products and services;
■effectiveness and security of our information technology systems and digital products and services, including the risk that these systems, products or services fail to operate as expected or planned or expose us to cybersecurity or third party risks, including due to computer viruses, unauthorized access, cyber-attack, natural disasters or other similar events;
■our ability to attract and retain key employees; and
■legal and other limitations on amounts we may receive from our subsidiaries, including dividends or ordinary course distributions under our internal tax- and expense-sharing arrangements.
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 this report and “Item 1A. Risk Factors” in our 2020 Form 10-K, and to subsequent reports and registration statements filed from time to time with the SEC. 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 report. 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.



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Table of Contents
Glossary
PART I—FINANCIAL INFORMATION
Item 1.    Financial Statements (Unaudited)
Index to Condensed Consolidated Financial Statements
Page
Quarterly Financial Statements
Notes to Unaudited Condensed Consolidated Financial Statements



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Glossary
Radian Group Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
(In thousands, except per-share amounts)June 30,
2021		December 31,
2020
Assets
Investments (Notes 5 and 6)
Fixed-maturities available for sale—at fair value, net of allowance for credit losses of $0 and $948 (amortized cost of $5,349,405 and $5,393,623)
$5,572,813 $5,723,340 
Trading securities—at fair value (amortized cost of $241,657 and $260,773)
267,980 290,885 
Equity securities—at fair value (cost of $160,224 and $145,501)
175,147 151,240 
Short-term investments—at fair value (includes $32,435 and $15,587 of reinvested cash collateral held under securities lending agreements)
662,095 618,004 
Other invested assets—at fair value3,624 4,973 
Total investments 6,681,659 6,788,442 
Cash134,939 87,915 
Restricted cash2,968 6,231 
Accrued investment income32,223 34,047 
Accounts and notes receivable153,128 121,294 
Reinsurance recoverables (includes $7 and $32 for paid losses)
75,411 73,202 
Deferred policy acquisition costs17,873 18,305 
Property and equipment, net74,288 80,457 
Goodwill and other acquired intangible assets, net (Note 7)
21,318 23,043 
Other assets (Note 9)
815,261 715,085 
Total assets$8,009,068 $7,948,021 
Liabilities and Stockholders’ Equity
Liabilities
Unearned premiums$373,031 $448,791 
Reserve for losses and LAE (Note 11)
885,498 848,413 
Senior notes (Note 12)
1,407,545 1,405,674 
FHLB advances (Note 12)
153,983 176,483 
Reinsurance funds withheld285,406 278,555 
Net deferred tax liability (Note 10)
266,330 213,897 
Other liabilities303,442 291,855 
Total liabilities3,675,235 3,663,668 
Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock: par value $0.001 per share; 485,000 shares authorized at June 30, 2021 and December 31, 2020; 207,250 and 210,130 shares issued at June 30, 2021 and December 31, 2020, respectively; 188,290 and 191,606 shares outstanding at June 30, 2021 and December 31, 2020, respectively
207 210 
Treasury stock, at cost: 18,960 and 18,524 shares at June 30, 2021 and December 31, 2020, respectively
(920,225)(910,115)
Additional paid-in capital2,161,857 2,245,897 
Retained earnings2,913,138 2,684,636 
Accumulated other comprehensive income (loss) (Note 15)
178,856 263,725 
Total stockholders’ equity4,333,833 4,284,353 
Total liabilities and stockholders’ equity$8,009,068 $7,948,021 
See Notes to Unaudited Condensed Consolidated Financial Statements.

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Glossary
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands, except per-share amounts)2021202020212020
Revenues
Net premiums earned (Note 8)
$254,756 $249,295 $526,628 $526,710 
Services revenue (Note 4)
29,464 28,075 52,359 60,002 
Net investment income36,291 38,723 74,542 79,667 
Net gains (losses) on investments and other financial instruments15,661 47,276 10,480 25,249 
Other income822 1,072 1,798 1,894 
Total revenues336,994 364,441 665,807 693,522 
 
Expenses
Provision for losses3,648 304,418 49,791 340,369 
Policy acquisition costs4,838 6,015 13,834 13,428 
Cost of services24,615 17,972 44,861 40,113 
Other operating expenses86,469 60,582 156,731 129,692 
Interest expense21,065 16,699 42,180 28,893 
Amortization and impairment of other acquired intangible assets863 979 1,725 1,958 
Total expenses141,498 406,665 309,122 554,453 
Pretax income (loss)195,496 (42,224)356,685 139,069 
Income tax provision (benefit)40,290 (12,273)75,871 28,559 
Net income (loss)$155,206 $(29,951)$280,814 $110,510 
 
Net Income (Loss) Per Share
Basic$0.80 $(0.15)$1.45 $0.56 
Diluted$0.80 $(0.15)$1.44 $0.56 
Weighted-average number of common shares outstanding—basic193,436 193,299 193,692 197,545 
Weighted-average number of common and common equivalent shares outstanding—diluted194,638 193,299 194,986 198,746 
See Notes to Unaudited Condensed Consolidated Financial Statements.

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Glossary
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Net income (loss)$155,206 $(29,951)$280,814 $110,510 
Other comprehensive income (loss), net of tax (Note 15)
Unrealized holding gains (losses) on investments arising during the period for which an allowance for expected losses has not been recognized64,477 185,056 (82,892)112,763 
Less: Reclassification adjustment for net gains (losses) on investments included in net income (loss)
Net realized gains (losses) on disposals and non-credit related impairment losses1,876 4,894 1,252 13,288 
Net decrease (increase) in expected credit losses480 (2,198)725 (2,198)
Other comprehensive income (loss), net of tax62,121 182,360 (84,869)101,673 
Comprehensive income$217,327 $152,409 $195,945 $212,183 
See Notes to Unaudited Condensed Consolidated Financial Statements.

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Glossary
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Common Stockholders’ Equity (Unaudited)
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Common Stock
Balance, beginning of period$210 $208 $210 $219 
Issuance of common stock under incentive and benefit plans1 2 1 2 
Shares repurchased under share repurchase program (Note 14)
(4)— (4)(11)
Balance, end of period207 210 207 210 
 
Treasury Stock
Balance, beginning of period(910,347)(902,024)(910,115)(901,657)
Repurchases of common stock under incentive plans(9,878)(7,714)(10,110)(8,081)
Balance, end of period(920,225)(909,738)(920,225)(909,738)
 
Additional Paid-in Capital
Balance, beginning of period2,242,950 2,231,670 2,245,897 2,449,884 
Issuance of common stock under incentive and benefit plans770 36 1,937 2,271 
Share-based compensation8,191 1,243 12,714 7,088 
Shares repurchased under share repurchase program (Note 14)
(90,054)— (98,691)(226,294)
Balance, end of period2,161,857 2,232,949 2,161,857 2,232,949 
 
Retained Earnings
Balance, beginning of period2,785,744 2,504,853 2,684,636 2,389,789 
Net income (loss)155,206 (29,951)280,814 110,510 
Dividends and dividend equivalents declared(27,812)(24,479)(52,312)(49,876)
Balance, end of period2,913,138 2,450,423 2,913,138 2,450,423 
Accumulated Other Comprehensive Income (Loss)
Balance, beginning of period116,735 29,801 263,725 110,488 
Net unrealized gains (losses) on investments, net of tax62,121 182,360 (84,869)101,673 
Balance, end of period178,856 212,161 178,856 212,161 
Total Stockholders’ Equity $4,333,833 $3,986,005 $4,333,833 $3,986,005 
See Notes to Unaudited Condensed Consolidated Financial Statements.

13
Table of Contents
Glossary
Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
Six Months Ended
June 30,
(In thousands)20212020
Cash Flows from Operating Activities
Net cash provided by (used in) operating activities$275,896 $305,291 
Cash Flows from Investing Activities
Proceeds from sales of:
Fixed-maturities available for sale329,072 735,154 
Trading securities7,952 11,602 
Equity securities 4,440 75,793 
Proceeds from redemptions of:
Fixed-maturities available for sale619,265 271,477 
Trading securities10,606 17,810 
Purchases of:
Fixed-maturities available for sale(944,618)(1,216,333)
Equity securities (61,235)(65,427)
Sales, redemptions and (purchases) of:
Short-term investments, net(41,925)(418,744)
Other assets and other invested assets, net5,043 2,346 
Proceeds from sale of subsidiary, net of cash sold— 16,481 
Purchases of property and equipment(4,993)(10,594)
Net cash provided by (used in) investing activities(76,393)(580,435)
Cash Flows from Financing Activities
Dividends and dividend equivalents paid(52,036)(49,301)
Issuance of senior notes, net— 516,083 
Issuance of common stock1,112 1,480 
Repurchases of common shares(98,695)(226,305)
Credit facility commitment fees paid(471)(1,754)
Change in secured borrowings, net (with terms three months or less)4,348 (17,535)
Proceeds from secured borrowings (with terms greater than three months)32,000 106,960 
Repayments of secured borrowings (with terms greater than three months)(42,000)(66,013)
Repayments of other borrowings— (79)
Net cash provided by (used in) financing activities(155,742)263,536 
Increase (decrease) in cash and restricted cash43,761 (11,608)
Cash and restricted cash, beginning of period94,146 96,274 
Cash and restricted cash, end of period$137,907 $84,666 
See Notes to Unaudited Condensed Consolidated Financial Statements.

14
Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
1. Description of Business
We are a diversified mortgage and real estate business, providing both credit-related mortgage insurance coverage and a broad array of other mortgage, risk, title, valuation, asset management, SaaS and other real estate services. We have two reportable business segments—Mortgage and homegenius. Our homegenius segment was previously named “Real Estate” and during the second quarter of 2021 we renamed it “homegenius” to align with updates to our branding strategy for the segment’s products and services.
Mortgage
Our Mortgage segment provides credit-related insurance coverage, principally through private mortgage insurance on residential first-lien mortgage loans, as well as other credit risk management, contract underwriting and fulfillment solutions, to mortgage lending institutions and mortgage credit investors. We provide our mortgage insurance products and services mainly through our wholly-owned subsidiary, Radian Guaranty. Private mortgage insurance plays an important role in the U.S. housing finance system because it promotes affordable home ownership and helps protect mortgage lenders and investors, as well as other beneficiaries, by mitigating default-related losses on residential mortgage loans. Generally, these loans are made to homebuyers who make down payments of less than 20% of the purchase price for their home or, in the case of refinancings, have less than 20% equity in their home. Private mortgage insurance also facilitates the sale of these low down payment loans in the secondary mortgage market, most of which are currently sold to the GSEs. Our total direct primary mortgage IIF and RIF were $237.3 billion and $58.0 billion, respectively, as of June 30, 2021, compared to $246.1 billion and $60.7 billion, respectively, as of December 31, 2020. In addition to providing private mortgage insurance, we participate in credit risk transfer programs developed by the GSEs as part of their initiative to distribute mortgage credit risk and increase the role of private capital in the mortgage market. Our additional RIF under credit risk transfer transactions, resulting from our participation in these programs with the GSEs, totaled $434.7 million as of June 30, 2021 compared to $392.0 million as of December 31, 2020.
The GSEs and state insurance regulators impose various capital and financial requirements on our mortgage insurance subsidiaries. These include Risk-to-capital, other risk-based capital measures and surplus requirements, as well as the PMIERs financial requirements. Failure to comply with these capital and financial requirements may limit the amount of insurance that our mortgage insurance subsidiaries write or may prohibit them from writing insurance altogether. The GSEs and state insurance regulators possess significant discretion with respect to our mortgage insurance subsidiaries and all aspects of their business. See Note 16 for additional information on PMIERs and other regulatory information, and “—Recent Developments” below for a discussion of the elevated risks posed by the COVID-19 pandemic, which has led to an increase in mortgage defaults in our insured portfolio and a resulting increase in our Minimum Required Assets.
homegenius
Our homegenius segment is primarily a fee-for-service business that offers a broad array of products and services to market participants across the real estate value chain. Our homegenius products and services include title, valuation, asset management, SaaS and other real estate services offered primarily to mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents. These products and services help lenders, investors, consumers and real estate agents evaluate, manage, monitor, acquire and sell properties. These products and services include SaaS solutions and platforms, as well as managed services, such as real estate owned asset management, single family rental services and real estate valuation services. In addition, we provide title insurance and non-insurance title, closing and settlement services to mortgage lenders, GSEs and mortgage investors, as well as directly to consumers for residential mortgage loans.
See Note 4 for additional information about our reportable segments and All Other business activities.
Recent Developments
As a seller of mortgage credit protection, our results are subject to macroeconomic conditions and specific events that impact the housing finance and real estate markets, including events that impact mortgage originations and the credit performance of our RIF. Many of these conditions are beyond our control, including housing prices, unemployment, interest rate changes, the availability of credit and other factors that may be derived from national and regional economic conditions. In general, a deterioration in economic conditions increases the likelihood that borrowers will be unable to satisfy their mortgage obligations. A deteriorating economy can adversely affect housing values, which in turn can influence the willingness of borrowers to continue to make mortgage payments regardless of whether they have the financial resources to do so. Mortgage defaults can also occur due to a variety of specific events affecting borrowers, including death or illness, divorce or other family problems, unemployment, or other events. In addition, factors impacting regional economic conditions, acts of terrorism, war or other severe conflicts, event-specific economic depressions or other catastrophic events such as natural disasters and pandemics could result in increased defaults due to the impact of such events on the ability of borrowers to satisfy their mortgage obligations and on the value of affected homes.
15

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The unprecedented and continually evolving social and economic impacts associated with the COVID-19 pandemic on the U.S. and global economies generally, and in particular on the U.S. housing, real estate and housing finance markets, had a negative effect on our business and our financial results for the second quarter of 2020, and since then to a lesser extent. Specifically, and primarily as a result of an increase in the number of new defaults since the start of the pandemic, our financial results have included: (i) an increase in provision for losses and (ii) an increase in our Minimum Required Assets under the PMIERs. While the number of new defaults increased significantly during the second quarter of 2020, they have subsequently trended down. See Note 11 for additional information on our reserve for losses.
We expect that certain future developments, such as anticipated increases in our claims paid once current foreclosure moratoriums are lifted, will have an adverse impact on aspects of our business in future periods. The long-term impact of the COVID-19 pandemic on our businesses will depend on, among other things: the extent and duration of the pandemic, the severity of illness and number of people infected with the virus and the acceptance and long-term effectiveness of anti-viral treatments and vaccines, especially as new strains of COVID-19 have emerged; the wider economic effects of the pandemic and the scope and duration of governmental and other third-party measures restricting day-to-day life and business operations; the impact of economic stimulus efforts to support the economy through the pandemic; and governmental and GSE programs implemented to assist borrowers experiencing a COVID-19-related hardship, including forbearance programs and suspensions of foreclosures and evictions. Although we are uncertain of the potential magnitude or duration of the business and economic impacts of the COVID-19 pandemic, these and other factors, including those discussed in our 2020 Form 10-K, could continue to have a material negative effect on the Company’s business, liquidity, results of operations and financial condition.
2. Significant Accounting Policies
Basis of Presentation
Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of Radian Group Inc. and its subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC.
We refer to Radian Group Inc. together with its consolidated subsidiaries as “Radian,” the “Company,” “we,” “us” or “our,” unless the context requires otherwise. We generally refer to Radian Group Inc. alone, without its consolidated subsidiaries, as “Radian Group.” Unless otherwise defined in this report, certain terms and acronyms used throughout this report are defined in the Glossary of Abbreviations and Acronyms included as part of this report.
The financial information presented for interim periods is unaudited; however, such information reflects all adjustments that are, in the opinion of management, necessary for the fair statement of the financial position, results of operations, comprehensive income (loss) and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP.
To fully understand the basis of presentation, these interim financial statements and related notes contained herein should be read in conjunction with the audited financial statements and notes thereto included in our 2020 Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. See Note 1 for discussion of the elevated risks to our future business, liquidity, results of operations and financial condition due to the COVID-19 pandemic.
Certain prior period amounts have been reclassified to conform to current period presentation, including: (i) certain balance sheet line items now reported in other assets and (ii) certain segment reporting balances due to changes in the composition of our segments during 2020.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially.
Other Significant Accounting Policies
See Note 2 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for information regarding other significant accounting policies. There have been no significant changes in our significant accounting policies from those
16

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
discussed in our 2020 Form 10-K, other than described below in “—Recent Accounting Pronouncements—Accounting Standards Adopted During 2021.”
Recent Accounting Pronouncements
Accounting Standards Adopted During 2021
In December 2019, the FASB issued ASU 2019-12, Income Taxes—Simplifying the Accounting for Income Taxes. This update simplifies the accounting for income taxes by removing certain exceptions to the general principles of ASC Topic 740 in GAAP and clarifies certain aspects to promote consistency among reporting entities. We adopted this update effective January 1, 2021. The adoption of this update did not have an impact on our financial statements and disclosures.
In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables—Nonrefundable Fees and Other Costs. This update clarifies that, for each reporting period, to the extent the amortized cost basis of an individual callable debt security exceeds the amount repayable by the issuer at the next call date, the excess (i.e., the premium) should be amortized to the next call date. We adopted ASU 2020-08 on January 1, 2021 on a prospective basis. The adoption of this update did not have a material impact on our financial statements and disclosures.
Accounting Standards Not Yet Adopted
In August 2018, the FASB issued ASU 2018-12, Financial Services—Insurance. The new standard: (i) requires that assumptions used to measure the liability for future policy benefits be reviewed at least annually; (ii) defines and simplifies the measurement of market risk benefits; (iii) simplifies the amortization of deferred acquisition costs; and (iv) enhances the required disclosures about long-duration contracts. This update is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted. We are currently evaluating the impact on our financial statements and future disclosures as a result of this update.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform—Facilitation of the Effects of Reference Reform on Financial Reporting. This update provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform. The amendments in this update are optional and may be elected from the date of issuance through December 31, 2022, as reference rate reform activities occur. We are currently evaluating the impact of the guidance and our options related to the practical expedients.
17

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
3. Net Income (Loss) Per Share
Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common shares outstanding, while diluted net income (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of dilutive potential common shares. Dilutive potential common shares relate to our share-based compensation arrangements.
The calculation of basic and diluted net income (loss) per share is as follows.
Net income (loss) per share
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands, except per-share amounts)2021202020212020
Net income (loss)—basic and diluted$155,206 $(29,951)$280,814 $110,510 
Average common shares outstanding—basic 193,436 193,299 193,692 197,545 
Dilutive effect of share-based compensation arrangements (1)
1,202 — 1,294 1,201 
Adjusted average common shares outstanding—diluted194,638 193,299 194,986 198,746 
Net income (loss) per share:
Basic$0.80 $(0.15)$1.45 $0.56 
Diluted$0.80 $(0.15)$1.44 $0.56 
(1)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 are not included in the calculation of diluted net income (loss) per share because they are anti-dilutive.
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Shares of common stock equivalents— 2,295 — 1,213 
4. Segment Reporting
We have two strategic business units that we manage separately—Mortgage and homegenius. Our Mortgage segment derives its revenue from mortgage insurance and other mortgage and risk services, including contract underwriting and fulfillment solutions provided to mortgage lending institutions and mortgage credit investors. Our homegenius segment offers a broad array of title, valuation, asset management, SaaS and other real estate services to mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents. In addition, we report as All Other activities that 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 through its sale in January 2020, income and expenses related to Clayton; (iv) for all periods presented, the income and expenses related to our traditional appraisal services, which we wound down beginning in the fourth quarter of 2020; and (v) certain other immaterial revenue and expense items.
As described in Note 4 of Notes to Consolidated Financial Statements in our 2020 Form 10-K, we implemented several changes to our segment reporting in 2020, including related to the wind down of our traditional appraisal business announced in the fourth quarter of 2020. All changes to the composition of our segment reporting have been reflected in our segment operating results for all periods presented.
During the second quarter of 2021, our Real Estate segment was renamed “homegenius” to align with updates to our branding strategy for the segment’s products and services. The homegenius segment name change had no impact on the composition of our segments or on our previously reported historical financial position, results of operations, cash flow or segment level results.
We allocate corporate operating expenses to both reportable segments based on each segment’s forecasted annual percentage of total revenue, which approximates the estimated percentage of management time spent on each segment. In addition, we allocate all corporate interest expense to our Mortgage segment, due to the capital-intensive nature of our mortgage insurance business.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
With the exception of goodwill and other acquired intangible assets that relate to our homegenius segment, which are reviewed as part of our annual goodwill impairment assessment, we do not manage assets by segment.
See Note 1 for additional details about our Mortgage and homegenius businesses.
Adjusted Pretax Operating Income (Loss)
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 each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as 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 impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. See Note 4 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for detailed information regarding items excluded from adjusted pretax operating income (loss), including the reasons for their treatment.
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).
The reconciliation of adjusted pretax operating income (loss) for our reportable segments to consolidated pretax income (loss) is as follows.
Reconciliation of adjusted pretax operating income (loss) by segment
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Adjusted pretax operating income (loss)
Mortgage$191,462 $(85,821)$365,749 $119,846 
homegenius(9,198)(3,909)(19,651)(7,062)
Total adjusted pretax operating income (loss) for reportable segments (1)
182,264 (89,730)346,098 112,784 
All Other adjusted pretax operating income (loss)2,455 1,231 5,937 3,316 
Net gains (losses) on investments and other financial instruments15,661 47,276 10,480 25,249 
Amortization and impairment of other acquired intangible assets(863)(979)(1,725)(1,958)
Impairment of other long-lived assets and other non-operating items (4,021)(22)(4,105)(322)
Consolidated pretax income (loss)$195,496 $(42,224)$356,685 $139,069 
(1)Includes allocated corporate operating expenses and depreciation expense as follows.
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Mortgage
Allocated corporate operating expenses$33,000 $25,359 $60,884 $54,573 
Depreciation expense1,660 2,656 3,470 5,926 
homegenius
Allocated corporate operating expenses$4,721 $2,823 $8,717 $6,190 
Depreciation expense491 719 945 1,329 
19

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Revenue
The reconciliation of revenue for our reportable segments to consolidated revenues is as follows.
Reconciliation of revenues by segment
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Revenues
Mortgage (1)
$284,301 $286,943 $588,098 $602,027 
homegenius (2)
33,451 22,548 59,246 49,073 
Total revenues for reportable segments317,752 309,491 647,344 651,100 
All Other revenues (1)
3,643 7,537 8,104 17,228 
Net gains (losses) on investments and other financial instruments15,661 47,276 10,480 25,249 
Other non-operating revenue— 247 — 247 
Elimination of inter-segment revenues(62)(110)(121)(302)
Total revenues$336,994 $364,441 $665,807 $693,522 
(1)Includes immaterial inter-segment revenues for the three and six months ended June 30, 2020.
(2)Includes immaterial inter-segment revenues for the three and six months ended June 30, 2021 and 2020.
The table below, which represents total services revenue on our condensed consolidated statements of operations for the periods indicated, represents the disaggregation of services revenues from external customers, by type.
Services revenue
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
homegenius services
Title services$9,399 $6,021 $17,456 $12,586 
Asset management services6,824 6,036 11,438 14,896 
Valuation services 8,494 3,837 13,380 10,018 
SaaS909 1,099 1,829 1,981 
Other real estate services62 586 76 1,239 
Mortgage services 3,732 3,918 8,083 7,051 
All Other services (1)
44 6,578 97 12,231 
Total services revenue $29,464 $28,075 $52,359 $60,002 
(1)Includes services revenue from Clayton prior to its sale in January 2020 and amounts related to our traditional appraisal business, which we wound down beginning in the fourth quarter of 2020.
Revenue recognized related to services made available to customers and billed is reflected in accounts and notes receivable. Accounts and notes receivable includes $17.0 million and $18.8 million as of June 30, 2021 and December 31, 2020, respectively, related to services revenue contracts. Revenue recognized related to services performed and not yet billed is recorded in unbilled receivables and reflected in other assets. See Note 2 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for information regarding our accounting policies and the services we offer.
5. Fair Value of Financial Instruments
For discussion of our valuation methodologies for assets and liabilities measured at fair value and the fair value hierarchy, see Note 5 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.

20

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following tables include a list of assets that are measured at fair value by hierarchy level as of June 30, 2021 and December 31, 2020.
Assets carried at fair value by hierarchy level
June 30, 2021
(In thousands)Level ILevel IILevel IIITotal
Investments
Fixed-maturities available for sale
U.S. government and agency securities$178,709 $29,954 $— $208,663 
State and municipal obligations— 157,944 — 157,944 
Corporate bonds and notes— 2,970,142 — 2,970,142 
RMBS— 719,840 — 719,840 
CMBS— 714,671 — 714,671 
CLO— 521,153 — 521,153 
Other ABS— 226,968 — 226,968 
Foreign government and agency securities— 5,399 — 5,399 
Mortgage insurance-linked notes (1)
— 48,033 — 48,033 
Total fixed-maturities available for sale178,709 5,394,104 — 5,572,813 
Trading securities
State and municipal obligations— 101,454 — 101,454 
Corporate bonds and notes— 121,377 — 121,377 
RMBS— 11,134 — 11,134 
CMBS— 34,015 — 34,015 
Total trading securities— 267,980 — 267,980 
Equity securities167,610 7,537 — 175,147 
Short-term investments
U.S. government and agency securities21,997 — — 21,997 
State and municipal obligations— 15,940 — 15,940 
Money market instruments406,808 — — 406,808 
Corporate bonds and notes— 19,931 — 19,931 
CMBS— 4,780 — 4,780 
Other ABS— 431 — 431 
Other investments (2)
— 192,208 — 192,208 
Total short-term investments428,805 233,290 — 662,095 
Other invested assets (3)
— — 3,000 3,000 
Total investments at fair value (3)
775,124 5,902,911 3,000 6,681,035 
Other
Embedded derivatives (4)
— — 5,905 5,905 
Loaned securities (5)
U.S. government and agency securities5,550 — — 5,550 
Corporate bonds and notes— 95,318 — 95,318 
Equity securities29,982 — — 29,982 
Total assets at fair value (3)
$810,656 $5,998,229 $8,905 $6,817,790 
(1)Comprises the notes purchased by Radian Group in connection with the Excess-of-Loss Program. See Note 8 for more information about our reinsurance programs.
(2)Comprising short-term certificates of deposit and commercial paper.
(3)Does not include other invested assets of $0.6 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient.
(4)Embedded derivatives related to our Excess-of-Loss Program are classified as other assets in our consolidated balance sheets. See Note 8 for more information about our reinsurance programs.
21

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
(5)Securities loaned to third-party borrowers under securities lending agreements are classified as other assets in our condensed consolidated balance sheets. See Note 6 for more information.
Assets carried at fair value by hierarchy level
December 31, 2020
(In thousands)Level ILevel IILevel IIITotal
Investments
Fixed-maturities available for sale
U.S. government and agency securities$140,034 $29,189 $— $169,223 
State and municipal obligations— 165,271 — 165,271 
Corporate bonds and notes— 3,047,189 — 3,047,189 
RMBS— 833,939 — 833,939 
CMBS— 681,265 — 681,265 
CLO— 568,558 — 568,558 
Other ABS— 252,457 — 252,457 
Foreign government and agency securities— 5,438 — 5,438 
Total fixed-maturities available for sale140,034 5,583,306 — 5,723,340 
Trading securities
State and municipal obligations— 120,449 — 120,449 
Corporate bonds and notes— 123,142 — 123,142 
RMBS— 13,000 — 13,000 
CMBS— 34,294 — 34,294 
Total trading securities— 290,885 — 290,885 
Equity securities142,761 8,479 — 151,240 
Short-term investments
State and municipal obligations— 21,819 — 21,819 
Money market instruments268,900 — — 268,900 
Corporate bonds and notes— 30,495 — 30,495 
Other ABS— 219 — 219 
Other investments (1)
— 296,571 — 296,571 
Total short-term investments268,900 349,104 — 618,004 
Other invested assets (2)
— — 3,000 3,000 
Total investments at fair value (2)
551,695 6,231,774 3,000 6,786,469 
Other
Embedded derivatives (3)
— — 5,513 5,513 
Loaned securities (4)
U.S. government and agency securities4,876 — — 4,876 
Corporate bonds and notes— 31,324 — 31,324 
Equity securities21,299 — — 21,299 
Total assets at fair value (2)
$577,870 $6,263,098 $8,513 $6,849,481 
(1)Comprising short-term certificates of deposit and commercial paper.
(2)Does not include other invested assets of $2.0 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient.
(3)Embedded derivatives related to our Excess-of-Loss Program are classified as other assets in our consolidated balance sheets. See Note 8 for more information about our reinsurance programs.
(4)Securities loaned to third-party borrowers under securities lending agreements are classified as other assets in our condensed consolidated balance sheets. See Note 6 for more information.
22

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
There were no transfers to or from Level III for the three and six months ended June 30, 2021 or the year ended December 31, 2020. Activity related to Level III assets and liabilities (including realized and unrealized gains and losses, purchases, sales, issuances, settlements and transfers) was immaterial for the three and six months ended June 30, 2021 and the year ended December 31, 2020.
Other Fair Value Disclosure
The carrying value and estimated fair value of other selected liabilities not carried at fair value in our condensed consolidated balance sheets were as follows as of the dates indicated.
Financial liabilities not carried at fair value
June 30, 2021December 31, 2020
(In thousands)Carrying
Amount		Estimated
Fair Value		Carrying
Amount		Estimated
Fair Value
Senior notes$1,407,545 $1,563,796 $1,405,674 $1,563,503 
FHLB advances153,983 156,116 176,483 179,578 
The fair value of our senior notes is estimated based on quoted market prices. The fair value of our FHLB advances is estimated based on expected cash flows for similar borrowings. These liabilities are categorized in Level II of the fair value hierarchy. See Note 12 for further information about these borrowings.
6. Investments
Available for Sale Securities
Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated.
Available for sale securities
June 30, 2021
(In thousands)Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Fixed-maturities available for sale
U.S. government and agency securities$213,954 $— $1,161 $(902)$214,213 
State and municipal obligations141,431 — 16,635 (122)157,944 
Corporate bonds and notes2,909,453 — 175,493 (19,486)3,065,460 
RMBS701,664 — 21,478 (3,302)719,840 
CMBS685,595 — 31,437 (2,361)714,671 
CLO519,909 — 1,851 (607)521,153 
Other ABS225,012 — 2,190 (234)226,968 
Foreign government and agency securities5,105 — 294 — 5,399 
Mortgage insurance-linked notes (1)
45,384 — 2,649 — 48,033 
Total securities available for sale, including loaned securities5,447,507 $— $253,188 $(27,014)5,673,681 
Less: loaned securities (2)
98,102 100,868 
Total fixed-maturities available for sale$5,349,405 $5,572,813 
(1)Comprises the notes purchased by Radian Group in connection with the Excess-of-Loss Program. See Note 8 for more information about our reinsurance programs.
(2)Included in other assets in our consolidated balance sheet as further described below. See below for a discussion of our securities lending agreements.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Available for sale securities
December 31, 2020
(In thousands)Amortized
Cost		Allowance for Credit LossesGross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Fixed-maturities available for sale
U.S. government and agency securities$176,033 $— $1,677 $(3,611)$174,099 
State and municipal obligations149,258 — 16,113 (100)165,271 
Corporate bonds and notes2,832,350 (948)250,771 (3,758)3,078,415 
RMBS799,814 — 34,439 (314)833,939 
CMBS645,071 — 39,495 (3,301)681,265 
CLO569,173 — 2,026 (2,641)568,558 
Other ABS249,988 — 2,901 (432)252,457 
Foreign government and agency securities5,100 — 338 — 5,438 
Total securities available for sale, including loaned securities5,426,787 $(948)$347,760 $(14,157)5,759,442 
Less: loaned securities (1)
33,164 36,102 
Total fixed-maturities available for sale$5,393,623 $5,723,340 
(1)Included in other assets in our consolidated balance sheet as further described below. See below for a discussion of our securities lending agreements.
The following table provides a rollforward of the allowance for credit losses on fixed-maturities available for sale, which relates entirely to corporate bonds and notes for the periods indicated.
Rollforward of allowance for credit losses on fixed-maturities available for sale
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Beginning balance$638 $— $948 $— 
Current provision for securities without prior allowance— 2,782 — 2,782 
Net increases (decreases) in allowance on previously impaired securities(608)— (918)— 
Reduction for securities sold(30)(306)(30)(306)
Ending balance$— $2,476 $— $2,476 
Gross Unrealized Losses and Related Fair Value of Available for Sale Securities
For securities deemed “available for sale” that are in an unrealized loss position and for which an allowance for credit loss has not been established, the following tables show the gross unrealized losses and fair value, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of June 30, 2021 and December 31, 2020 are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Unrealized losses on fixed-maturities available for sale by category and length of time
June 30, 2021
($ in thousands)Less Than 12 Months12 Months or GreaterTotal
Description of Securities# of
securities		Fair ValueUnrealized
Losses		# of
securities		Fair ValueUnrealized
Losses		# of
securities		Fair ValueUnrealized
Losses
U.S. government and agency securities6 $59,708 $(902)— $— $— 6 $59,708 $(902)
State and municipal obligations8 10,034 (122)— — — 8 10,034 (122)
Corporate bonds and notes174 684,401 (19,380)1 2,626 (106)175 687,027 (19,486)
RMBS35 260,712 (3,292)2 803 (10)37 261,515 (3,302)
CMBS49 106,289 (1,280)16 35,577 (1,081)65 141,866 (2,361)
CLO
43 151,791 (242)16 76,845 (365)59 228,636 (607)
Other ABS45 93,360 (210)1 677 (24)46 94,037 (234)
Total360 $1,366,295 $(25,428)36 $116,528 $(1,586)396 $1,482,823 $(27,014)
December 31, 2020
($ in thousands)Less Than 12 Months12 Months or GreaterTotal
Description of Securities# of
securities		Fair ValueUnrealized
Losses		# of
securities		Fair ValueUnrealized
Losses		# of
securities		Fair ValueUnrealized
Losses
U.S. government and agency securities4 $90,591 $(3,611)— $— $— 4 $90,591 $(3,611)
State and municipal obligations4 9,626 (100)— — — 4 9,626 (100)
Corporate bonds and notes60 174,848 (3,758)— — — 60 174,848 (3,758)
RMBS5 42,003 (305)2 915 (9)7 42,918 (314)
CMBS43 118,345 (3,035)6 8,312 (266)49 126,657 (3,301)
CLO52 173,459 (970)25 137,506 (1,671)77 310,965 (2,641)
Other ABS26 70,759 (322)3 12,119 (110)29 82,878 (432)
Total194 $679,631 $(12,101)36 $158,852 $(2,056)230 $838,483 $(14,157)
See “Net Gains (Losses) on Investments” below for additional details on our net gains (losses) on investments, including the changes in the allowance for credit losses on fixed maturities available for sale and other impairments due to our intent to sell securities in an unrealized loss position. See Note 2 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for information regarding our accounting policy for impairments.
Securities Lending Agreements
We participate in a securities lending program whereby we loan certain securities in our investment portfolio to third-party borrowers for short periods of time. Although we report such securities at fair value within other assets in our condensed consolidated balance sheets, rather than within investments, the detailed information we provide in this Note 6 includes these securities. See Note 5 for additional detail on the loaned securities, and see Note 6 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information about our accounting policies with respect to our securities lending agreements and the collateral requirements thereunder.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $102.0 million and $43.3 million as of June 30, 2021 and December 31, 2020, respectively, may not be transferred or re-pledged unless the third-party borrower is in default, and is therefore not reflected in our condensed consolidated financial statements.
Net Gains (Losses) on Investments
Net gains (losses) on investments consisted of the following.
Net gains (losses) on investments
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Net realized gains (losses)   
Fixed-maturities available for sale (1)
$2,376 $6,974 $1,586 $18,221 
Trading securities(112)(45)391 4 
Equity securities(227)51 (227)361 
Other investments2,229 44 2,334 77 
Net realized gains (losses) on investments4,266 7,024 4,084 18,663 
Impairment losses due to intent to sell— (779)— (1,401)
Net decrease (increase) in expected credit losses608 (2,782)918 (2,782)
Net unrealized gains (losses) on investments8,036 24,948 5,517 (1,897)
Total net gains (losses) on investments$12,910 $28,411 $10,519 $12,583 
(1)Components of net realized gains (losses) on fixed-maturities available for sale include the following.
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Gross investment gains from sales and redemptions$9,597 $8,304 $13,714 $20,203 
Gross investment losses from sales and redemptions(7,221)(1,330)(12,128)(1,982)
The net changes in unrealized gains (losses) recognized in earnings on investments that were still held at each period-end were as follows.
Net changes in unrealized gains (losses) on investments still held
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Net unrealized gains (losses) on investments still held   
Trading securities$4,601 $13,790 $(3,448)$11,131 
Equity securities5,140 10,443 9,983 (12,612)
Other investments178 (201)1,062 471 
Net unrealized gains (losses) on investments still held$9,919 $24,032 $7,597 $(1,010)
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
Contractual Maturities
The contractual maturities of fixed-maturities available for sale were as follows.
Contractual maturities of fixed-maturities available for sale
June 30, 2021
Available for Sale
(In thousands)Amortized
Cost		Fair
Value
Due in one year or less$187,546 $189,292 
Due after one year through five years (1)
1,130,214 1,182,709 
Due after five years through 10 years (1)
1,242,012 1,308,582 
Due after 10 years (1)
710,171 762,433 
Asset-backed and mortgage-backed securities (2)
2,177,564 2,230,665 
Total 5,447,507 5,673,681 
Less: loaned securities98,102 100,868 
Total fixed-maturities available for sale$5,349,405 $5,572,813 
(1)Actual maturities may differ as a result of calls before scheduled maturity.
(2)Includes RMBS, CMBS, CLO, Other ABS and mortgage insurance-linked notes, which are not due at a single maturity date.
Other
For the three and six months ended June 30, 2021, we did not transfer any securities to or from the available for sale or trading categories.
Our fixed-maturities available for sale include securities totaling $18.1 million and $16.9 million at June 30, 2021 and December 31, 2020, respectively, on deposit and serving as collateral with various state regulatory authorities. Our fixed-maturities available for sale also include securities serving as collateral for our FHLB advances. See Note 12 for additional information about our FHLB advances.
7. Goodwill and Other Acquired Intangible Assets, Net
All of our goodwill and other acquired intangible assets relate to our homegenius segment. There was no change to our goodwill balance of $9.8 million during the three and six months ended June 30, 2021.
The following is a summary of the gross and net carrying amounts and accumulated amortization (including impairment) of our other acquired intangible assets as of the periods indicated.
Other acquired intangible assets
June 30, 2021December 31, 2020
(In thousands)Gross Carrying AmountAccumulated AmortizationNet Carrying AmountGross Carrying AmountAccumulated AmortizationNet Carrying Amount
Client relationships$43,550 $(33,090)$10,460 $43,550 $(31,559)$11,991 
Technology8,285 (7,523)762 8,285 (7,370)915 
Licenses463 (169)294 463 (128)335 
Total$52,298 $(40,782)$11,516 $52,298 $(39,057)$13,241 
For additional information on our accounting policies for goodwill and other acquired intangible assets, see Notes 2 and 7 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
8. Reinsurance
In our mortgage insurance and title insurance businesses, we use reinsurance as part of our risk distribution strategy, including to manage our capital position and risk profile. The reinsurance arrangements for our mortgage insurance business include premiums ceded under the QSR Program, the Single Premium QSR Program and the Excess-of-Loss Program. The amount of credit that we receive under the PMIERs financial requirements for our third-party reinsurance transactions is subject to ongoing review and approval by the GSEs.
The effect of all of our reinsurance programs on our net income (loss) is as follows.
Reinsurance impacts
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Net premiums written
Direct$248,849 $271,545 $509,468 $551,027 
Assumed (1)
1,615 3,192 3,913 6,643 
Ceded (2)
(11,766)(43,580)(20,601)(63,123)
Net premiums written$238,698 $231,157 $492,780 $494,547 
Net premiums earned
Direct$282,507 $315,305 $585,228 $616,559 
Assumed (1)
1,615 3,197 3,913 6,653 
Ceded (2)
(29,366)(69,207)(62,513)(96,502)
Net premiums earned$254,756 $249,295 $526,628 $526,710 
Ceding commissions earned (3)
$7,919 $13,453 $18,326 $23,419 
Ceded losses(1,078)39,635 2,668 41,597 
(1)Primarily includes premiums from our participation in certain credit risk transfer programs.
(2)Net of profit commission, which is impacted by the level of ceded losses recoverable, if any, on reinsurance transactions. See Note 11 for additional information on our reserve for losses and reinsurance recoverables.
(3)Deferred ceding commissions of $43.6 million and $52.5 million are included in other liabilities on our condensed consolidated balance sheets at June 30, 2021 and December 31, 2020, respectively.
Single Premium QSR Program
Radian Guaranty entered into each of the 2016 Single Premium QSR Agreement, 2018 Single Premium QSR Agreement and 2020 Single Premium QSR Agreement with panels of third-party reinsurers to cede a contractual quota share percent of our Single Premium NIW as of the effective date of each agreement (as set forth in the table below), subject to certain conditions. Radian Guaranty receives a ceding commission for ceded premiums written pursuant to these transactions. Radian Guaranty also receives a profit commission annually, provided that the loss ratio on the loans covered under the agreement generally remains below the applicable prescribed thresholds. Losses on the ceded risk up to this level reduce Radian Guaranty’s profit commission on a dollar-for-dollar basis.
Each of the agreements is subject to a scheduled termination date as set forth in the table below; however, Radian Guaranty has the option, based on certain conditions and subject to a termination fee, to terminate any of the agreements at the end of any calendar quarter on or after the applicable optional termination date. If Radian Guaranty exercises this option in the future, it would result in Radian Guaranty reassuming the related RIF in exchange for a net payment to the reinsurer calculated in accordance with the terms of the applicable agreement. Radian Guaranty also may terminate any of the agreements prior to the applicable scheduled termination date under certain circumstances, including if one or both of the GSEs no longer grant full PMIERs capital relief for the reinsurance.
The 2020 Single Premium QSR Agreement is the only QSR agreement under which Radian Guaranty is currently ceding NIW. Under the 2020 Single Premium QSR Agreement, NIW for Single Premium Policies issued between January 1, 2020 and December 31, 2021 is being ceded, subject to certain conditions and a limitation on ceded premiums written of $250 million. The parties may mutually agree to increase the amount of ceded risk above this level.
28

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following table sets forth additional details regarding the Single Premium QSR Program.
Single Premium QSR Program
2020 Singles QSR2018 Singles QSR2016 Singles QSR
NIW Policy DatesJan 1, 2020-Dec 31, 2021Jan 1, 2018-Dec 31, 2019Jan 1, 2012-Dec 31, 2017
Effective DateJanuary 1, 2020January 1, 2018January 1, 2016
Scheduled Termination DateDecember 31, 2031December 31, 2029December 31, 2027
Optional Termination DateJanuary 1, 2024January 1, 2022January 1, 2020
Quota Share %65%65%
20% - 65% (1)
Ceding Commission %25%25%25%
Profit Commission %
Up to 56%
Up to 56%
Up to 55%
(In millions)As of June 30, 2021
RIF Ceded$1,897 $1,465 $2,366 
(In millions)As of December 31, 2020
RIF Ceded$1,597 $1,979 $3,071 
(1)Effective December 31, 2017, we amended the 2016 Single Premium QSR Agreement to increase the amount of ceded risk on performing loans under the agreement from 35% to 65% for the 2015 through 2017 vintages. Loans included in the 2012 through 2014 vintages, and any other loans subject to the agreement that were delinquent at the time of the amendment, were unaffected by the change and therefore the amount of ceded risk for those loans continues to range from 20% to 35%.
Excess-of-Loss Program
As of June 30, 2021, Radian Guaranty had entered into five fully collateralized reinsurance arrangements with the Eagle Re Issuers. For the respective coverage periods, Radian Guaranty retains the first-loss layer of aggregate losses, as well as any losses in excess of the outstanding reinsurance coverage amounts. The Eagle Re Issuers provide second layer coverage up to the outstanding coverage amounts. For each of these five reinsurance arrangements, the Eagle Re Issuers financed their coverage by issuing mortgage insurance-linked notes to eligible capital markets investors in unregistered private offerings. The aggregate excess-of-loss reinsurance coverage for these arrangements decreases over a 10-year period as the principal balances of the underlying covered mortgages decrease and as any claims are paid by the applicable Eagle Re Issuer or the mortgage insurance is canceled. Radian Guaranty has rights to terminate the reinsurance agreements upon the occurrence of certain events.
Under each of the reinsurance agreements, the outstanding reinsurance coverage amount will begin amortizing after an initial period in which a target level of credit enhancement is obtained and will stop amortizing if certain thresholds, or triggers, are reached, including a delinquency trigger event based on an elevated level of delinquencies as defined in the related insurance-linked notes transaction agreements. With the exception of insurance-linked notes issued by Eagle Re 2020-2 Ltd and Eagle Re 2021-1 Ltd., the insurance-linked notes issued by the Eagle Re Issuers in connection with our Excess-of-Loss Program are currently subject to a delinquency trigger event, which was first reported to the insurance-linked note investors on June 25, 2020. For the insurance-linked notes that are subject to a delinquency trigger event, both the amortization of the outstanding reinsurance coverage amount pursuant to our reinsurance arrangements with the Eagle Re Issuers and the amortization of the principal amount of the related insurance-linked notes issued by the Eagle Re Issuers have been suspended and will continue to be suspended during the pendency of the trigger event.
29

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The following table sets forth additional details regarding the Excess-of-Loss Program as of June 30, 2021.
Excess-of-Loss Program
(In millions)Eagle Re
2021-1 Ltd.		Eagle Re
2020-2 Ltd.		Eagle Re
2020-1 Ltd.		Eagle Re
2019-1 Ltd.		Eagle Re
2018-1 Ltd.
IssuedApril 2021October 2020February 2020April 2019November 2018
NIW Policy DatesAug 1, 2020-
Dec 31, 2020		Oct 1, 2019-
Jul 31, 2020		Jan 1, 2019-
Sep 30, 2019		Jan 1, 2018-
Dec 31, 2018		Jan 1, 2017-
Dec 31, 2017
Initial RIF$11,061 $13,011 $9,866 $10,705 $9,109 
Initial Coverage498 
(1)
390 488 562 434 
(2)
Initial First Layer Retention221 423 202 268 205 
(In millions)As of June 30, 2021
RIF$10,546 $9,516 $4,397 $3,289 $2,818 
Remaining Coverage498 285 488 385 276 
(2)
First Layer Retention221 423 202 264 201 
(In millions)As of December 31, 2020
RIF$— $11,748 $6,121 $4,657 $3,986 
Remaining Coverage— 390 488 385 276 
(2)
First Layer Retention— 423 202 265 201 
(1)Radian Group purchased $45.4 million original principal amount of these mortgage insurance-linked notes, which are included in fixed-maturities available for sale on our condensed consolidated balance sheet at June 30, 2021. See Notes 5 and 6 for additional information.
(2)Excludes a separate excess-of-loss reinsurance agreement entered into by Radian Guaranty with both initial and remaining coverage of $21.4 million.
The Eagle Re Issuers are not subsidiaries or affiliates of Radian Guaranty. Based on the accounting guidance that addresses VIEs, we have not consolidated any of the assets and liabilities of the Eagle Re Issuers in our financial statements, because Radian does not have: (i) the power to direct the activities that most significantly affect the Eagle Re Issuers’ economic performances or (ii) the obligation to absorb losses or the right to receive benefits from the Eagle Re Issuers that potentially could be significant to the Eagle Re Issuers. See Note 2 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for more information on our accounting treatment of VIEs.
The reinsurance premium due to the Eagle Re Issuers is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of a period by a coupon rate, which is the sum of one-month LIBOR (or an acceptable alternative to LIBOR) or SOFR, as applicable, plus a contractual risk margin, and then subtracting actual investment income collected on the assets in the reinsurance trust during the preceding month. As a result, the premiums we pay will vary based on: (i) the spread between LIBOR (or an acceptable alternative to LIBOR) or SOFR, as provided in each applicable reinsurance agreement, and the rates on the investments held by the reinsurance trust and (ii) the outstanding amount of reinsurance coverage. As the reinsurance premium will vary based on changes in these rates, we concluded that the reinsurance agreements contain embedded derivatives, which we have accounted for separately as freestanding derivatives and recorded in other assets or other liabilities on our condensed consolidated balance sheets. Changes in the fair value of these embedded derivatives are recorded in net gains (losses) on investments and other financial instruments in our condensed consolidated statements of operations. See Note 5 herein and Note 5 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for more information on our fair value measurements of financial instruments, including our embedded derivatives.
In the event an Eagle Re Issuer is unable to meet its future obligations to us, if any, our insurance subsidiaries would be liable to make claims payments to our policyholders. In the event that all of the assets in the reinsurance trust (consisting of U.S. government money market funds, cash or U.S. Treasury securities) have become worthless and the Eagle Re Issuer is unable to make its payments to us, our maximum potential loss would be the amount of mortgage insurance claim payments for losses on the insured policies, net of the aggregate reinsurance payments already received, up to the full aggregate excess-of-loss reinsurance coverage amount. In the same scenario, the related embedded derivative would no longer have value.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
The Eagle Re Issuers represent our only VIEs as of June 30, 2021 and December 31, 2020. The following table presents the total assets and liabilities of the Eagle Re Issuers as of the dates indicated.
Total assets and liabilities of Eagle Re Issuers (1)
(In thousands)June 30,
2021		December 31,
2020
Eagle Re 2021-1 Ltd.$497,735 $— 
Eagle Re 2020-2 Ltd.284,730 390,324 
Eagle Re 2020-1 Ltd.488,385 488,385 
Eagle Re 2019-1 Ltd.384,602  384,602 
Eagle Re 2018-1 Ltd.275,718  275,718 
Total$1,931,170  $1,539,029 
(1)Assets held by the Eagle Re Issuers are required to be invested in U.S. government money market funds, cash or U.S. Treasury securities. Liabilities of the Eagle Re Issuers consist of their mortgage insurance-linked notes, described above. Assets and liabilities are equal to each other for each of the Eagle Re Issuers.
Other Collateral
Although we use reinsurance as one of our risk management tools, reinsurance does not relieve us of our obligations to our policyholders. In the event the reinsurers are unable to meet their obligations to us, our insurance subsidiaries would be liable for any defaulted amounts. However, consistent with the PMIERs reinsurer counterparty collateral requirements, Radian Guaranty’s reinsurers have established trusts to help secure our potential cash recoveries. In addition to the total VIE assets of the Eagle Re Issuers discussed above, the amount held in reinsurance trusts was $197.8 million as of June 30, 2021, compared to $228.6 million as of December 31, 2020. In addition, for the Single Premium QSR Program, Radian Guaranty holds amounts related to ceded premiums written to collateralize the reinsurers’ obligations, which is reported in reinsurance funds withheld on our condensed consolidated balance sheets. Any loss recoveries and profit commissions paid to Radian Guaranty related to the Single Premium QSR Program are expected to be realized from this account.
See Note 8 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for more information about our reinsurance transactions.
9. Other Assets
The following table shows the components of other assets as of the dates indicated.
Other assets
(In thousands) June 30,
2021		December 31,
2020
Prepaid federal income taxes (Note 10)
$275,623 $210,889 
Prepaid reinsurance premiums (1)
225,727 267,638 
Loaned securities (Note 5)
130,850 57,499 
Company-owned life insurance (2)
112,638 115,586 
Right-of-use assets (Note 13)
34,662 32,985 
Other35,761 30,488 
Total other assets$815,261 $715,085 
(1)Relates to our Single Premium QSR Program.
(2)We are the beneficiary of insurance policies on the lives of certain of our current and past officers and employees. The balances reported in other assets reflect the amounts that could be realized upon surrender of the insurance policies as of each respective date.
Right-of-Use Assets
We assess our various asset groups, which include right-of-use assets, for changes in grouping and for potential impairment when certain events occur or when there are changes in circumstances, including potential alternative uses. If circumstances require a change in asset groupings or a right-of-use asset to be tested for possible impairment, and the carrying value of the right-of-use asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value.
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Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
During the second quarter of 2021, in response to the COVID-19 pandemic and Radian’s successful transition to a virtual work environment, we made the decision to exit, and to actively market for sublease, all office space in our current corporate headquarters. As part of this change, we also entered into a new lease with reduced square footage at another Philadelphia area location, which upon opening we intend to designate as our new corporate headquarters location. Accordingly, during the three months ended June 30, 2021, we recognized an impairment of $3.5 million related to our current corporate headquarter leases, reducing the carrying value of certain lease assets and the related property and equipment to its estimated fair value. The right-of-use asset fair value was estimated using an income approach based on forecasted future cash flows expected to be derived from the property based on current sublease market rent, which could differ from actual results and require us to revise our initial estimates. Following this impairment, which was recorded within other operating expenses in our condensed consolidated statement of operations, the aggregate carrying value of the right-of-use assets and leasehold improvements related to the two corporate headquarter leases that we plan to sublease was $28.4 million as of June 30, 2021.
10. Income Taxes
As of June 30, 2021 and December 31, 2020, our current income tax liability was $18.1 million and $17.5 million, respectively, and is included as a component of other liabilities in our condensed consolidated balance sheets.
Certain entities within our consolidated group have generated deferred tax assets relating primarily to state and local NOL carryforwards, which, if unutilized, will expire during various future tax periods. We are required to establish a valuation allowance against our deferred tax assets when it is more likely than not that all or some portion of our deferred tax assets will not be realized. At each balance sheet date, we assess our need for a valuation allowance and this assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our deferred tax assets will be realized in future periods. We have determined that certain entities within Radian Group may continue to generate taxable losses on a separate company basis in the near term and may not be able to fully utilize certain of their state and local NOLs on their state and local tax returns. Therefore, with respect to deferred tax assets relating to these state and local NOLs and other state timing adjustments, we retained a valuation allowance of $80.7 million at June 30, 2021.
As a mortgage guaranty insurer, we are eligible for a tax deduction, subject to certain limitations, under Internal Revenue Code Section 832(e) for amounts required by state law or regulation to be set aside in statutory contingency reserves. The deduction is allowed only to the extent that, in conjunction with quarterly federal tax payment due dates, we purchase non-interest bearing U.S. Mortgage Guaranty Tax and Loss Bonds issued by the U.S. Department of the Treasury in an amount equal to the tax benefit derived from deducting any portion of our statutory contingency reserves. As of June 30, 2021 and December 31, 2020, we held $275.6 million and $210.9 million of these bonds, respectively, which are included as prepaid federal income taxes within other assets in our condensed consolidated balance sheets. The corresponding deduction of our statutory contingency reserves resulted in the recognition of a net deferred tax liability. See Note 16 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information about our U.S. Mortgage Guaranty Tax and Loss Bonds.
For additional information on our income taxes, including our accounting policies, see Notes 2 and 10 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.
32

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
11. Losses and LAE
Our reserve for losses and LAE, at the end of each period indicated, consisted of the following.
Reserve for losses and LAE
(In thousands)June 30,
2021		December 31,
2020
Mortgage insurance loss reserves (1)
$880,763 $844,107 
Title insurance loss reserves4,735 4,306 
Total reserve for losses and LAE$885,498 $848,413 
(1)Primarily comprises first lien primary case reserves of $840.8 million and $799.5 million at June 30, 2021 and December 31, 2020, respectively.
For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE, but excluding our second-lien mortgage loan premium deficiency reserve.
Rollforward of mortgage insurance reserve for losses
Six Months Ended
June 30,
(In thousands)20212020
Balance at beginning of period$844,107 $401,273 
Less: Reinsurance recoverables (1)
71,769 14,594 
Balance at beginning of period, net of reinsurance recoverables772,338 386,679 
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)
85,807 356,555 
Prior years (36,695)(17,223)
Total incurred49,112 339,332 
Deduct: Paid claims and LAE related to:
Current year (2)
246 1,594 
Prior years14,447 44,580 
Total paid14,693 46,174 
Balance at end of period, net of reinsurance recoverables806,757 679,837 
Add: Reinsurance recoverables (1)
74,006 55,154 
Balance at end of period$880,763 $734,991 
(1)Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information.
(2)Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.
Reserve Activity
Incurred Losses
Case reserves established for new default notices were the primary driver of our total incurred losses for the six months ended June 30, 2021 and 2020, and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults.
For the six months ended June 30, 2021, we experienced a significant decrease in the number of new primary default notices, compared to the six months ended June 30, 2020, substantially all of which related to defaults subject to forbearance programs implemented in response to the COVID-19 pandemic. Our gross Default to Claim Rate assumption applied to new defaults was 8.0% as of June 30, 2021. Our provision for losses during the first six months of 2021 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated, resulting in a reduction from 8.5% to 8.0% in the Default to Claim Rate assumption for default notices reported
33

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
between April and December 2020. See Note 1 for additional information on the elevated risks and uncertainties resulting from the COVID-19 pandemic to our business.
Our gross Default to Claim Rate assumption applied to new defaults was 8.5% as of June 30, 2020. Our provision for losses during the first six months of 2020 was positively impacted by favorable reserve development on prior year defaults. This favorable development was primarily driven by a reduction in certain Default to Claim Rate assumptions for these prior year defaults based on observed trends, primarily due to higher Cures than previously estimated.
Claims Paid
Total claims paid decreased for the six months ended June 30, 2021 compared to the same period in 2020. Claims paid in 2021 include payments made to settle certain previously disclosed legal proceedings. See Note 13 for additional information about these legal proceedings. The decrease in claims paid is primarily attributable to COVID-19-related hardship forbearance plans and suspensions of foreclosure and evictions.
For additional information about our Reserve for Losses and LAE, including our accounting policies, see Notes 2 and 11 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.
12. Borrowings and Financing Activities
The carrying value of our debt at June 30, 2021 and December 31, 2020 was as follows.
Borrowings
(In thousands) June 30,
2021		December 31,
2020
Senior notes
Senior Notes due 2024$446,065 $445,512 
Senior Notes due 2025517,503 516,634 
Senior Notes due 2027443,977 443,528 
Total senior notes$1,407,545 $1,405,674 
FHLB advances
FHLB advances due 2021$13,000 $67,500 
FHLB advances due 202261,050 61,050 
FHLB advances due 202352,995 27,995 
FHLB advances due 202413,954 9,954 
FHLB advances due 20259,984 9,984 
FHLB advances due 20273,000 — 
Total FHLB advances$153,983 $176,483 
FHLB Advances
As of June 30, 2021, we had $154.0 million of fixed-rate advances outstanding with a weighted average interest rate of 1.03%. Interest on the FHLB advances is payable quarterly, or at maturity if the term of the advance is less than 90 days. Principal is due at maturity. For obligations with maturities greater than or equal to 90 days, we may prepay the debt at any time, subject to a prepayment fee calculation.
The principal balance of the FHLB advances are required to be collateralized by eligible assets with a market value that must be maintained generally within a minimum range of 103% to 111% of the amount borrowed, depending on the type of assets pledged. Our fixed-maturities available for sale and trading securities include securities totaling $175.5 million and $188.0 million at June 30, 2021 and December 31, 2020, respectively, which serve as collateral for our FHLB advances to satisfy this requirement. See Note 12 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information about our FHLB advances.
Revolving Credit Facility
Radian Group has in place a $267.5 million unsecured revolving credit facility with a syndicate of bank lenders, which has a maturity date of January 18, 2022. At June 30, 2021, Radian Group was in compliance with all of the credit facility covenants, and there were no amounts outstanding. For more information regarding our revolving credit facility, including certain of its terms and covenants, see Note 12 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.
34

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
13. Commitments and Contingencies
Legal Proceedings
We are routinely involved in a number of legal actions and proceedings, including litigation and other disputes arising in the ordinary course of our business. Legal and regulatory matters such as discussed below and in our 2020 Form 10-K could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures or have other effects on our business. Management believes, based on current knowledge and after consultation with counsel, that the outcome of any currently pending or threatened actions will not have a material adverse effect on our consolidated financial condition. The outcome of litigation and other legal and regulatory matters and proceedings is inherently uncertain, and it is possible that one or more of the matters currently pending or threatened could have an adverse effect on our liquidity, financial condition or results of operations for any particular period.
On August 31, 2018, Nationstar Mortgage LLC d/b/a Mr. Cooper (“Nationstar”) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania against Radian Guaranty related to certain insurance coverage and premium refund decisions made by Radian Guaranty. Effective June 26, 2020, Radian Guaranty and Nationstar entered into a Confidential Settlement Agreement and Release (the “Nationstar Settlement”) to fully resolve, among other things, all claims and counterclaims in this litigation. Implementation of the Nationstar Settlement, which was subject to the condition precedent that the GSEs consent to the Nationstar Settlement, became effective on March 1, 2021, and the litigation was subsequently dismissed with prejudice. Pursuant to the Nationstar Settlement, among other things: (i) Radian made a cash settlement payment to Nationstar on March 5, 2021 and (ii) each party agreed to release the other with respect to all known or unknown claims with respect to the certificates subject to this litigation as well as with respect to all other certificates issued under certain policies on loans serviced by Nationstar for which Radian decided claims prior to January 1, 2019. See Note 13 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional background on this matter. The implementation of the Nationstar Settlement did not have a material impact on our mortgage insurance reserves for this proceeding.
We also are periodically subject to reviews and audits, as well as inquiries, information-gathering requests and investigations, by regulatory entities. In connection with these matters, from time to time we receive requests and subpoenas seeking information and documents related to aspects of our business.
Our Master Policies establish the timeline within which any suit or action arising from any right of an insured under the policy generally must be commenced. In general, any suit or action arising from any right of an insured under the policy must be commenced within two years after such right first arose for primary insurance and within three years for certain other policies, including certain Pool Mortgage Insurance policies. Although we believe that our Loss Mitigation Activities are justified under our policies, from time to time we face challenges from certain lender and servicer customers regarding our Loss Mitigation Activities. These challenges could result in additional arbitration or judicial proceedings and we may need to reassume the risk on, and increase loss reserves for, the associated policies or pay additional claims.
The legal and regulatory matters discussed above could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures or have other effects on our business in excess of amounts we have established as reserves for such matters.
Lease Liability
Our lease liability represents the present value of future lease payments over the lease term. Our operating lease liability was $56.0 million and $53.4 million as of June 30, 2021 and December 31, 2020, respectively, and is classified in other liabilities in our condensed consolidated balance sheets. See Note 9 for additional information on our operating lease right-of-use assets, including an impairment recognized in the second quarter of 2021 related to a decision to sublease the office space in our current corporate headquarters.
See Note 13 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for further information regarding our commitments and contingencies and our accounting policies for contingencies.
14. Capital Stock
Share Repurchase Activity
On August 14, 2019, Radian Group’s board of directors approved a share repurchase program that authorizes the Company to spend up to $200 million, excluding commissions, to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. Radian operated this program pursuant to a trading plan under Rule 10b5-1 of the Exchange Act, which permits the Company to purchase shares, at pre-determined price targets, when it may otherwise be precluded from doing so. On February 13, 2020, Radian Group’s board of directors authorized a $275 million increase in this program, bringing the total authorization to
35

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
repurchase shares up to $475 million, excluding commissions, and extended the expiration of this program from July 31, 2020 to August 31, 2021. In March 2021, the Company entered into a new 10b5-1 plan and resumed purchases under this program which had been temporarily suspended in March 2020 in response to the COVID-19 pandemic. During the three and six months ended June 30, 2021, the Company purchased 3,892,456 and 4,305,597 shares at an average price of $23.14 and $22.92 per share, respectively, including commissions. As of June 30, 2021, purchase authority of up to $100.2 million remained available under this program.
During July, the Company purchased 2,808,658 shares of its common stock under its share repurchase program at an average price of $21.86 per share, including commissions. After giving consideration to these repurchases, purchase authority of up to $38.9 million remained available under this program.
Other Purchases
We may purchase shares on the open market to settle stock options exercised by employees and purchases under the Amended and Restated Radian Group Inc. Employee Stock Purchase Plan. In addition, upon the vesting of certain restricted stock awards under our equity compensation plans, we may withhold from such vested awards shares of our common stock to satisfy the tax liability of the award recipients.
Dividends and Dividend Equivalents
During the first quarter of 2021 and each quarter of 2020, we declared quarterly cash dividends on our common stock equal to $0.125 per share. On May 4, 2021, Radian Group’s board of directors authorized an increase to the Company’s quarterly dividend from $0.125 to $0.14 per share, beginning with the dividend declared in the second quarter of 2021.
Share-Based and Other Compensation Programs
During the second quarter of 2021, executive and non-executive officers were granted time-vested and performance-based RSUs to be settled in common stock. The maximum payout of performance-based RSUs at the end of the three-year performance period is 200% of a grantee’s target number of RSUs granted. The vesting of the performance-based RSUs granted to executive and non-executive officers is based upon the cumulative growth in Radian’s book value per share, adjusted for certain defined items, over a three-year performance period. Performance-based RSUs granted to executive officers are subject to a one-year post vesting holding period.
The time-vested RSU awards granted to executive and non-executive officers in 2021 generally vest in pro rata installments on each of the first three anniversaries of the grant date. In addition, time-vested RSU awards were also granted to non-employee directors and generally are subject to one-year cliff vesting. See Note 17 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information regarding the Company’s share-based and other compensation programs.
Information with regard to RSUs to be settled in stock for periods indicated is as follows.
Rollforward of RSUs
Performance-Based Time-Vested
Number of SharesWeighted-Average Grant Date Fair ValueNumber of SharesWeighted-Average Grant Date Fair Value
Outstanding, December 31, 2020 (1)
2,186,244 $15.71 2,118,885 $13.16 
Granted (2)
580,180 $20.40 461,339 $21.56 
Performance adjustment (3)
421,357 $— — $— 
Vested (4)
(811,578)$15.98 (438,825)$15.82 
Forfeited(14,371)$16.80 (13,829)$16.13 
Outstanding, June 30, 2021 (1)
2,361,832 $16.78 2,127,570 $14.41 
(1)Outstanding RSUs represent shares that have not yet been issued because not all conditions necessary to earn the right to benefit from the instruments have been satisfied. The final number of RSUs distributed depends on the cumulative growth in Radian's book value over the respective three-year performance period and, with the exception of certain retirement-eligible employees, continued service through the vesting date, which could result in changes in vested RSUs.
(2)For performance-based RSUs, number represents the number of target shares at grant date.
(3)For performance-based RSUs, represents the difference between the number of target shares at grant date and the number of shares vested at settlement, which can range from 0 to 200% of target depending on results over the applicable performance periods.
(4)Represents amounts vested during the year, including the impact of performance adjustments for performance-based awards.
36

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
15. Accumulated Other Comprehensive Income (Loss)
The following table shows the rollforward of accumulated other comprehensive income (loss) as of the periods indicated.
Rollforward of accumulated other comprehensive income
Three Months Ended
June 30, 2021		Six Months Ended
June 30, 2021
(In thousands)Before TaxTax EffectNet of TaxBefore TaxTax EffectNet of Tax
Balance at beginning of period$147,766 $31,031 $116,735 $333,829 $70,104 $263,725 
Other comprehensive income (loss)
Unrealized holding gains (losses) on investments arising during the period for which an allowance for expected credit losses has not been recognized81,617 17,140 64,477 (104,926)(22,034)(82,892)
Less: Reclassification adjustment for net gains (losses) on investments included in net income (loss) (1)
Net realized gains (losses) on disposals and non-credit related impairment losses2,375 499 1,876 1,585 333 1,252 
Net decrease (increase) in expected credit losses608 128 480 918 193 725 
Other comprehensive income (loss)78,634 16,513 62,121 (107,429)(22,560)(84,869)
Balance at end of period$226,400 $47,544 $178,856 $226,400 $47,544 $178,856 
 
 Three Months Ended
June 30, 2020		Six Months Ended
June 30, 2020
(In thousands)Before TaxTax EffectNet of TaxBefore TaxTax EffectNet of Tax
Balance at beginning of period$37,722 $7,921 $29,801 $139,858 $29,370 $110,488 
Other comprehensive income (loss)
Unrealized holding gains (losses) on investments arising during the period for which an allowance for expected credit losses has not been recognized234,249 49,193 185,056 142,738 29,975 112,763 
Less: Reclassification adjustment for net gains (losses) on investments included in net income (loss) (1)
Net realized gains (losses) on disposals and non-credit related impairment losses6,195 1,301 4,894 16,820 3,532 13,288 
Net decrease (increase) in expected credit losses(2,782)(584)(2,198)(2,782)(584)(2,198)
Other comprehensive income (loss)230,836 48,476 182,360 128,700 27,027 101,673 
Balance at end of period$268,558 $56,397 $212,161 $268,558 $56,397 $212,161 
(1)Included in net gains (losses) on investments and other financial instruments on our condensed consolidated statements of operations.
37

Radian Group Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
16. Statutory Information
Our insurance subsidiaries’ statutory net income for the year-to-date periods ended June 30, 2021 and 2020 and statutory policyholders’ surplus as of June 30, 2021 and December 31, 2020 were as follows.
Statutory net income
Six Months Ended June 30,
(In thousands)20212020
Radian Guaranty$348,307 $103,153 
Radian Reinsurance7,418 27,039 
Other Mortgage Subsidiaries629 378 
Radian Title Insurance2,623 843 
Statutory policyholders’ surplus
(In thousands)June 30,
2021		December 31,
2020
Radian Guaranty$595,981 $481,484 
Radian Reinsurance364,783 360,704 
Other Mortgage Subsidiaries42,331 41,327 
Radian Title Insurance31,627 28,849 
State insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations, as described below. As of June 30, 2021, the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $4.6 billion of our consolidated net assets.
In light of Radian Guaranty’s negative unassigned surplus related to operating losses in prior periods and the ongoing need to set aside contingency reserves, which totaled $3.6 billion as of June 30, 2021, we do not anticipate that Radian Guaranty will be permitted under applicable insurance laws to pay ordinary dividends or other distributions to Radian Group for the foreseeable future without the prior approval from the Pennsylvania Insurance Department.
Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in certain states, a maximum ratio of net RIF relative to statutory capital, or Risk-to-capital. There are 16 RBC States that currently impose a Statutory RBC Requirement. The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1. In certain of the RBC States, a mortgage insurer must satisfy a MPP Requirement. Radian Guaranty was in compliance with all applicable Statutory RBC Requirements and MPP Requirements in each of the RBC States as of June 30, 2021. Radian Guaranty’s Risk-to-capital was 11.4:1 and 12.7:1 as of June 30, 2021 and December 31, 2020, respectively. For purposes of the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus plus statutory contingency reserves. Our other mortgage insurance and title insurance subsidiaries were also in compliance with all statutory and counterparty capital requirements as of June 30, 2021.
In addition, in order to be eligible to insure loans purchased by the GSEs, mortgage insurers such as Radian Guaranty must meet the GSEs’ eligibility requirements, or PMIERs. At June 30, 2021, Radian Guaranty is an approved mortgage insurer under the PMIERs and is in compliance with the current PMIERs financial requirements. Under the PMIERs there are increased financial requirements for loans in default, including as a result of natural disasters and pandemics. As a result, increases in defaults related to the COVID-19 pandemic have subjected Radian Guaranty to an increase in Minimum Required Assets under the PMIERs, and if these continue or increase, would continue to negatively impact our results of operations and could impact our compliance with the PMIERs. See Note 1 for discussion about the elevated risks and uncertainties associated with the COVID-19 pandemic and Note 16 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information regarding the PMIERs, including the benefit provided by the Disaster Related Capital Charge.
Effective April 1, 2021, the Pennsylvania Insurance Department approved the termination of the 2020 Surplus Note via a conversion to Radian Guaranty’s gross paid-in and contributed surplus account. This conversion had no effect on Radian Guaranty’s total statutory policyholders’ surplus, Risk-to-capital or PMIERs Cushion.
For a description of our compliance with statutory and other regulations for our mortgage insurance and title insurance businesses, including statutory capital requirements and divided restrictions, see Note 16 of Notes to Consolidated Financial Statements in our 2020 Form 10-K.
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Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
The disclosures in this quarterly report are complementary to those made in our 2020 Form 10-K and should be read in conjunction with our unaudited condensed consolidated financial statements and the notes thereto included in this report, as well as our audited financial statements, notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2020 Form 10-K.
The following analysis of our financial condition and results of operations for the three and six months ended June 30, 2021 provides information that evaluates our financial condition as of June 30, 2021 compared with December 31, 2020 and our results of operations for the three and six months ended June 30, 2021, compared to the same period last year. Certain terms and acronyms used throughout this report are defined in the Glossary of Abbreviations and Acronyms included as part of this report. In addition, investors should review the “Cautionary Note Regarding Forward-Looking Statements—Safe Harbor Provisions” above, and “Item 1A. Risk Factors” in our 2020 Form 10-K for a discussion of those risks and uncertainties that have the potential to adversely affect our business, financial condition, results of operations, cash flows or prospects. Our results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. See “Overview” and Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Index to Item 2
ItemPage
Overview
We are a diversified mortgage and real estate business with two reportable business segments—Mortgage and homegenius. Our Mortgage segment provides credit-related insurance coverage, principally through private mortgage insurance on residential first-lien mortgage loans, as well as other credit risk management, contract underwriting and fulfillment solutions, to mortgage lending institutions and mortgage credit investors. Our homegenius segment offers a broad array of title, valuation, asset management, SaaS and other real estate services to mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents. Our homegenius segment was previously named “Real Estate” and during the second quarter of 2021 we renamed it “homegenius” to align with updates to our branding strategy for the segment’s products and services. As further discussed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements, the homegenius segment name change had no impact on the composition of our segments or on our previously reported historical financial position, results of operations, cash flow or segment level results.
Current Operating Environment
As a seller of mortgage credit protection and other mortgage and credit risk management solutions, our Mortgage business results are subject to macroeconomic conditions and other events that impact the housing, real estate and housing finance markets, the credit performance of our underlying insured assets and our future business opportunities, including the current global pandemic as well as seasonal fluctuations that specifically affect the mortgage origination environment. The macroeconomic conditions, seasonality and other events that impact the housing, mortgage finance and related real estate markets also affect the demand for our products and services offered through our homegenius segment.
The unprecedented and continually evolving social and economic impacts associated with the COVID-19 pandemic on the U.S. and global economies generally, and in particular on the U.S. housing, real estate and housing finance markets, had a
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

negative effect on our business and our financial results for the second quarter of 2020, and since then to a lesser extent. See “—COVID-19 Impacts” below for further discussion of the impacts on our business associated with the COVID-19 pandemic, including an increase in our new defaults and in our Minimum Required Assets under the PMIERs financial requirements.
Despite the effects of the COVID-19 pandemic, we wrote record levels of NIW in 2020, totaling $105.0 billion. In the first half of 2021 we wrote NIW of $41.8 billion, a decrease of 1% compared to our NIW in the first half of 2020. We continue to believe that the long-term housing market fundamentals and outlook remain positive, including low interest rates, demographics supporting growth in the population of first-time homebuyers and a relatively constrained supply of homes available for sale. However, the low interest rate environment in recent periods has also resulted in an increase in policy cancellations associated with the high level of refinance activity, which has reduced our Persistency Rate, and in turn contributed to a reduction in our IIF, particularly as a result of a decline in our Single Premium Policies. This refinance activity has moderated in the three months ended June 30, 2021, and if this trend continues in the second half of 2021 we would expect the Persistency Rate for our portfolio to increase. See “Mortgage Insurance Portfolio” for additional details on our NIW and IIF.
In recent years, Radian and other participants in the private mortgage insurance industry have engaged in a range of risk distribution transactions and strategies and implemented enhanced risk-based pricing frameworks, which we believe have helped increase the financial strength and flexibility of the mortgage insurance industry by mitigating credit risk and financial volatility through varying economic cycles. As of June 30, 2021, 71% of our primary RIF is subject to a form of risk distribution and our estimated reinsurance recoverables related to our mortgage insurance portfolio were $74.0 million. Our use of risk distribution structures has reduced our required capital and enhanced our projected return on capital, and we expect these structures to provide a level of protection in periods of economic stress.
COVID-19 Impacts
The COVID-19 pandemic has created periods of significant economic disruption, high unemployment, volatility and disruption in financial markets, and required adjustments in the housing finance system and real estate markets. In addition, the pandemic has resulted in travel restrictions, temporary business shutdowns, and stay-at-home, quarantine, and similar orders, all of which contributed to a rapid and significant rise in unemployment that peaked in the second quarter of 2020. Since then, businesses have been reopened, and unemployment levels have declined from their peak, but numerous operating limitations such as social distancing and extensive health and safety measures continue to limit operations. As a result, unemployment levels remain elevated compared to pre-pandemic levels, and may remain elevated or may rise if the current economic disruption is prolonged, especially in light of the recent spread of COVID-19 variants.
As a result of the COVID-19 pandemic and its impact on the economy, including the significant increase in unemployment, we experienced a material increase in new defaults in 2020, substantially all of which related to defaults of loans subject to forbearance programs implemented in response to the COVID-19 pandemic. The increase in the number of new mortgage defaults resulting from the COVID-19 pandemic has had a negative effect on our results of operations and our reserve for losses beginning in the second quarter of 2020. See Note 11 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our reserve for losses.
Our primary default rate was 4.0% at June 30, 2021, down from a peak of 6.5% at June 30, 2020, which was elevated by the material increase in new defaults in the three months ended June 30, 2020. Favorable trends in the number of new defaults and Cures were the primary drivers of the decline in our default inventory and default rate, compared to their peaks at June 30, 2020. The number, timing and duration of new defaults and, in turn, the number of defaults that ultimately result in claims will depend on a variety of factors, including the scope, severity and duration of the COVID-19 pandemic, the resulting impact on the economy, including with respect to unemployment and housing prices, and the effectiveness of forbearance and other government efforts such as financial stimulus programs, to provide long-term economic and individual relief to assist homeowners. Consequently, the number and rate of total defaults is difficult to predict and will depend on the foregoing and other factors, including the number and timing of Cures and claims paid and the net impact on IIF from our Persistency Rate and future NIW. See “Item 1A. Risk Factors” in our 2020 Form 10-K for additional discussion of these factors and other risks and uncertainties.
The increase in new defaults resulting from the COVID-19 pandemic may affect our ability to remain compliant with the PMIERs financial requirements. Once two missed payments have occurred on an insured loan, the PMIERs characterize the loan as “non-performing” and require us to establish an increased Minimum Required Asset factor for that loan regardless of the reason for the missed payments. During the COVID-19 Crisis Period, pursuant to the COVID-19 Amendment that amends the PMIERs, a Disaster Related Capital Charge that effectively reduces the Minimum Required Asset factor by 70% has been applied nationwide to all COVID-19 Defaulted Loans for no longer than three calendar months beginning with the month the loan becomes non-performing (i.e., missed two monthly payments), or if greater, the period of time that the loan is subject to a forbearance plan, repayment plan or loan modification trial period granted in response to a financial hardship related to COVID-19. Under the terms of the COVID-19 Amendment, the COVID-19 Crisis Period ended March 31, 2021. As a result, after March 31, 2021 the Disaster Related Capital Charge will no longer be applied to all new defaults, and instead will be applied only to new defaults if they are subject to a COVID-19 forbearance plan, regardless of whether the forbearance plan
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

was entered into before or after the expiration of the COVID-19 Crisis Period. See “—COVID-19 Amendment to PMIERs” below for more information.
The application of the Disaster Related Capital Charge has significantly reduced the total amount of assets that Radian Guaranty otherwise would be required to hold against COVID-19 Defaulted Loans under the PMIERs. Nonetheless, even after giving effect to the Disaster Related Capital Charge, since March 31, 2020, the overall volume of new defaults resulting from the pandemic has resulted in an increase in Radian Guaranty’s Minimum Required Assets and negatively impacted Radian Guaranty’s PMIERs Cushion as of June 30, 2021. While we expect Radian Guaranty to continue to maintain its eligibility status with the GSEs, there are possible scenarios in which the number of new defaults could impact Radian Guaranty’s ability to comply with the PMIERs financial requirements. See “Item 1A. Risk Factors—Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” in our 2020 Form 10-K.
As further described in this report, as a result of the COVID-19 pandemic, we have experienced increased financial requirements under the PMIERs, lower Persistency Rates due to a low interest rate environment and increased reserves for losses due to higher new defaults. Although we are uncertain of the ultimate magnitude or duration of the business and economic impacts of the COVID-19 pandemic, we expect that certain future developments, such as anticipated increases in our claims paid once current foreclosure moratoriums are lifted, will have an adverse impact on aspects of our business in future periods. See Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements in this report and “Item 1A. Risk Factors—The COVID-19 pandemic has adversely impacted us, and its ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope, severity and duration of the pandemic and actions taken by governmental authorities in response to the pandemic” in our 2020 Form 10-K for additional information.
Legislative and Regulatory Developments
We are subject to comprehensive regulation by both federal and state regulatory authorities. For a description of significant state and federal regulations and other requirements of the GSEs that are applicable to our businesses, as well as legislative and regulatory developments affecting the housing finance industry, see “Item 1. Business—Regulation” in our 2020 Form 10-K. Except as discussed below, there were no significant regulatory developments impacting our businesses from those discussed in our 2020 Form 10-K.
COVID-19 Amendment to PMIERs
In 2020, in response to the COVID-19 pandemic, the GSEs issued guidelines (“National Emergency Guidelines”) that became effective June 30, 2020 and, among other things, adopted the COVID-19 Amendment to the PMIERs to apply a Disaster Related Capital Charge nationwide to certain non-performing loans that we refer to as COVID-19 Defaulted Loans, which comprise non-performing loans that either: (i) have an Initial Missed Payment (discussed below) occurring during the COVID-19 Crisis Period or (ii) are subject to a forbearance plan granted in response to a financial hardship related to COVID-19 (which is assumed under the COVID-19 Amendment to be the case for any loan that has an Initial Missed Payment occurring during the COVID-19 Crisis Period and is subject to a forbearance plan), the terms of which are materially consistent with the terms of forbearance plans offered by the GSEs. The Disaster Related Capital Charge effectively reduces the Minimum Required Asset factor that applies to COVID-19 Defaulted Loans in recognition of the fact that these loans generally have a higher likelihood of curing. Under the COVID-19 Amendment, the Disaster Related Capital Charge applies for three calendar months beginning with the month the loan becomes non-performing (i.e., missed two monthly payments), or if greater, the period of time that the loan is subject to a forbearance plan, repayment plan or loan modification trial period granted in response to a financial hardship related to COVID-19.
Under the terms of the COVID-19 Amendment, the COVID-19 Crisis Period ended March 31, 2021. As a result, as of April 1, 2021 the Disaster Related Capital Charge is no longer applied to all new defaults, and instead is applied only to new defaults if they are subject to a COVID-19 forbearance plan, regardless of whether the forbearance plan was entered into before or after the expiration of the COVID-19 Crisis Period. The Disaster Related Capital Charge will continue to be applied to these COVID-19 Defaulted Loans for as long as they remain in the COVID-19 forbearance plan. With respect to defaults that occurred during the COVID-19 Crisis Period, the Disaster Related Capital Charge will continue to apply until: (i) they fail to enter a COVID-19 forbearance program within three calendar months beginning with the month the loan becomes non-performing (i.e., missed two monthly payments) or (ii) for defaults subject to a COVID-19 forbearance plan, repayment plan or loan modification trial period, they exit the program, plan or trial period without curing the default status. Given the ongoing improvement in new default trends, we do not expect the expiration of the COVID-19 Crisis Period to have a material impact on our business, results of operations or financial condition.
Further, pursuant to the National Emergency Guidelines, through June 30, 2021, certain capital preservation measures were instituted that required the consent of the GSEs for private mortgage insurers, including Radian Guaranty, to: (i) pay dividends or make payments of principal or increase payments of interest beyond those commitments made prior to June 30, 2020 associated with the Surplus Notes; (ii) make any other payments, unless related to expenses incurred in the normal course of business or to commitments made prior to June 30, 2020; (iii) pledge or transfer asset(s) to any affiliate or investor;
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

or (iv) enter into any new arrangements or alter any existing arrangements under tax-sharing and intercompany expense-sharing agreements other than renewals and extensions of agreements in effect prior to June 30, 2020 (collectively, the “Capital Preservation Actions”). Effective July 1, 2021, the National Emergency Guidelines were modified to extend the capital preservation measures through December 31, 2021 and to provide an exception that would permit Radian Guaranty and the other private mortgage insurers to pay dividends and take the other Capital Preservation Actions without the GSEs’ prior consent as long as the private mortgage insurer’s PMIERs Cushion remains above an applicable threshold, as further described below. From July 1, 2021 through September 30, 2021, a private mortgage insurer may pay dividends or take the other Capital Preservation Actions without the prior consent of the GSEs as long as its PMIERs Cushion is 50% or greater than its Minimum Required Assets and taking such actions would not cause its PMIERs cushion to fall below 50% of its Minimum Required Assets as of the end of the quarter ending September 30, 2021. From October 1, 2021 through December 30, 2021, a private mortgage insurer may pay dividends or take the other Capital Preservation Actions without the prior consent of the GSEs as long as its PMIERs Cushion is 15% or greater than its Minimum Required Assets and taking such actions would not cause its PMIERs Cushion to fall below 15% of its Minimum Required Assets as of the end of the quarter ending December 31, 2021.
For additional information on the risks associated with the expiration of the COVID-19 Crisis Period and the capital preservation measures, see “Item 1A. Risk Factors—Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” and “Radian Group’s sources of liquidity may be insufficient to fund its obligations” in our 2020 Form 10-K.
Change in FHFA Leadership
On June 23, 2021, following a U.S. Supreme Court decision that determined that the FHFA director may be removed by the President other than for cause, President Biden removed FHFA director Dr. Mark Calabria, who was appointed under the Trump Administration, and appointed Sandra Thompson as acting director of the FHFA. As discussed under “Item 1A. Risk Factors—Changes in the charters, business practices, or role of the GSEs in the U.S. housing market generally, could significantly impact our businesses” in our 2020 Form 10-K, a change in leadership at the FHFA could alter the policy priorities at the FHFA and modify the GSEs’ business practices in ways that have a significant impact on our businesses.
Qualified Mortgage (QM) Requirements - Ability to Repay Requirements
Under the Dodd-Frank Act, mortgage lenders must make a reasonable and good faith determination that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan (the “Ability to Repay Rule”). The Dodd-Frank Act provides that a creditor may presume that a borrower will be able to repay a loan if the loan has certain low-risk characteristics that meet the definition of a qualified mortgage, or QM (the “QM Rule”). This QM presumption is generally rebuttable; however, loans that are deemed to have the lowest risk profiles are granted a safe harbor from liability (“QM Safe Harbor”) related to the borrower’s ability to repay the loan. In implementing the QM Rule, the Consumer Financial Protection Bureau (“CFPB”) established rigorous underwriting and product feature requirements for loans to be deemed QMs (“Original QM Definition”), including that the borrower does not exceed a 43% debt-to-income ratio after giving effect to the loan. As part of the Original QM Definition, the CFPB also created a special exemption for the GSEs, which is generally referred to as the “QM Patch,” that allows any loan that meets the GSE underwriting and product feature requirements to be deemed to be a QM, regardless of whether the loan exceeds the 43% debt-to-income ratio. The QM Patch expired on July 1, 2021.
In December 2020, the CFPB finalized two new definitions of QM. One of these new QM definitions (the “New General QM Definition”) is intended to replace the underwriting focused approach of the Original QM Definition, including the 43% debt-to-income ratio limitation, with a new pricing-based approach to QM. Under the New General QM Definition, certain underwriting considerations are retained, but QM status generally is achieved if the loan is priced at no greater than 2.25% above the Average Prime Offer Rate (“APOR”). Loans priced at or less than 1.5% above APOR are subject to the QM Safe Harbor, while all other QM loans would receive the general rebuttable presumption that the loans met the ability to repay standard. Separately, the CFPB created another new QM definition (“Seasoned QM”) for first-lien, fixed-rate loans that meet certain performance requirements over a 36-month seasoning period and are held in the lender’s portfolio until the end of the seasoning period. Both new QM definitions became effective on March 1, 2021. The New General QM Definition originally had a mandatory compliance date of July 1, 2021, after which the Original QM Definition and QM Patch would no longer apply. The CFPB recently issued a rule delaying the mandatory compliance deadline for the New General QM Definition until October 1, 2022, thereby preserving the Original QM Definition and QM Patch until such date.
On April 8, 2021, the GSEs announced that for loan applications received on or after July 1, 2021 they will only purchase loans satisfying the New General QM Definition. As a result, even though the CFPB has delayed the mandatory compliance date for the New General QM Definition until October 1, 2022, for GSE-acquired loans with applications received on or after July 1, 2021, the QM Patch effectively will be limited to loans that satisfy the New General QM Definition. We expect that this decision by the GSEs will reduce the number of loans that otherwise would be designated QM compared to those receiving QM designation under the QM Patch, although not materially. For more information regarding the CFPB’s proposed New General QM Definition and the risks it may present for us, see “Item 1A. Risk Factors—A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our Real Estate business” in our 2020 Form 10-K.
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Recent Company Developments
During the second quarter of 2021, we introduced “homegenius” as the new name for our former Real Estate segment. We renamed the segment “homegenius” to align with updates to our branding strategy for the segment’s products and services. Our homegenius business segment encompasses a suite of existing and emerging digital products and services that leverage big data and analytics and are powered by advanced technology to serve real estate agents, lenders, investors and consumers across the real estate ecosystem. We expect the homegenius segment to contribute to the future growth and results of operations of the Company.
During the second quarter of 2021, in response to the COVID-19 pandemic and Radian’s successful transition to a virtual work environment, we made the decision to exit, and to actively market for sublease, all office space in our current corporate headquarters. As part of this change, we also entered into a new lease with reduced square footage at another Philadelphia area location, which will offer flexible, virtual and hybrid work arrangements to our employees and upon opening we intend to designate as our new corporate headquarters location. See Note 9 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information, including details on related impairments.
Key Factors Affecting Our Results
The key factors affecting our results are discussed in our 2020 Form 10-K. There have been no material changes to these key factors.
Mortgage Insurance Portfolio
IIF by origination vintage (1)
https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-rdn-20210630_g2.jpg
Insurance in Force as of:
Vintage written in:
($ in billions)		June 30,
2021		December 31, 2020June 30,
2020
¢
2021$41.017.3 %$—— %$—— %
¢
202086.936.6 98.840.2 41.517.2 
¢
201932.313.6 44.618.1 58.424.2 
¢
201816.77.1 23.59.5 33.113.7 
¢
201715.26.4 21.28.6 30.412.6 
¢
201613.05.5 17.57.1 24.610.2 
¢
2009 - 201519.18.0 25.710.5 36.115.0 
¢
2008 & Prior (2)
13.15.5 14.86.0 17.27.1 
Total$237.3100.0 %$246.1100.0 %$241.3100.0 %
(1)Policy years represent the original policy years, and have not been adjusted to reflect subsequent refinancing activity under HARP.
(2)Adjusted to reflect subsequent refinancing activity under HARP, these percentages would decrease to 3.5%, 3.7% and 4.2% as of June 30, 2021, December 31, 2020 and June 30, 2020, respectively.
New Insurance Written
A key component of our current business strategy is to write profitable NIW. We wrote $21.7 billion and $41.8 billion of primary new mortgage insurance in the three and six months ended June 30, 2021, respectively, compared to $25.5 billion and $42.1 billion of NIW in the three and six months ended June 30, 2020, respectively. As shown in the chart above, IIF decreased to $237.3 billion at June 30, 2021, from $246.1 billion at December 31, 2020, driven by a lower Persistency Rate, partially offset by our NIW for the first six months of 2021.
Our NIW decreased by 14.9% and 0.9% for the three and six months ended June 30, 2021, respectively, compared to the same periods in 2020, due to our lower market share partially offset by increases in purchase mortgage originations. According to industry forecasts, total mortgage origination volume was higher for the three and six months ended June 30, 2021, as compared to the comparable period in 2020, due to a strong purchase market and, for the six months ended June 30, 2021, an increase in refinance originations resulting from the low interest rate environment.
Although it is difficult to project future volumes, recent market projections for 2021 estimate total mortgage originations of approximately $3.9 trillion, which would represent a decline in the total annual mortgage origination market of 5-10% as
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compared to 2020, with a private mortgage insurance market of $550 to $600 billion. This outlook anticipates a decrease in refinance originations in the second half of 2021. While expectations for refinance volume vary, there is consensus around a large purchase market driven by increased home sales, which is a positive for mortgage insurers given the higher likelihood that purchase loans will utilize private mortgage insurance as compared to refinance loans. If refinance volume declines, we would expect the Persistency Rate for our portfolio to increase, benefiting the size of our IIF portfolio. See "Overview—COVID-19 Impacts” above and “Item 1A. Risk Factors” in our 2020 Form 10-K for more information.
NIW for direct Single Premiums include policies written on an individual basis (as each loan is originated) and on an aggregated basis (in which each individual loan in a group of loans is insured in a single transaction, typically after the loans have been originated). The following table provides selected information as of and for the periods indicated related to our mortgage insurance NIW.
NIW
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions)2021202020212020
NIW $21,662 $25,459 $41,761 $42,143 
Primary risk written $5,236 $5,864 $9,747 $9,758 
Average coverage percentage24.2 %23.0 %23.3 %23.2 %
NIW by loan purpose
Purchases77.1 %56.4 %68.5 %60.3 %
Refinances22.9 %43.6 %31.5 %39.7 %
Total borrower-paid NIW99.1 %97.8 %99.2 %97.4 %
NIW by premium type
Direct Monthly and Other Recurring Premiums93.1 %84.7 %91.7 %83.3 %
Direct single premiums (1)
6.9 %15.3 %8.3 %16.7 %
NIW by FICO Score (2)
>=74061.4 %67.3 %62.9 %66.6 %
680-73933.1 %30.1 %32.3 %30.5 %
620-6795.5 %2.6 %4.8 %2.9 %
NIW by LTV
95.01% and above10.9 %8.3 %9.5 %8.9 %
90.01% to 95.00%40.4 %36.4 %36.2 %36.9 %
85.01% to 90.00%27.6 %29.8 %29.4 %30.0 %
85.00% and below21.1 %25.5 %24.9 %24.2 %
(1)Borrower-paid Single Premium Policies were 6.6% and 8.0% of NIW for the three and six months ended June 30, 2021, respectively, compared to 13.6% and 14.8% for the same periods in 2020, respectively. See “Item 1. Business—Regulation—Federal Regulation—GSE Requirements” in our 2020 Form 10-K for additional information.
(2)For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores.
Insurance and Risk in Force
IIF at June 30, 2021 decreased 1.7% as compared to the same period last year, reflecting a 28.2% decline in Single Premium Policies in force, partially offset by an 8.1% increase in Monthly Premium Policies in force. Historically, there is a close correlation between interest rates and Persistency Rates. Lower interest rate environments generally increase refinancings, which increase the cancellation rate of our insurance and negatively affect our Persistency Rates. As shown in the table below, our Persistency Rate for the 12 months ended June 30, 2021 declined as compared to the same period in 2020. The decline in our Persistency Rate and the related decline in our Single Premium Policies in force at June 30, 2021, were attributable to increased refinance activity resulting from historically low interest rates, which led to an increase in Single
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Premium Policy cancellations. This increase in Single Premium Policy cancellations was the primary driver of the decrease in unearned premiums on our condensed consolidated balance sheet at June 30, 2021 as compared to December 31, 2020.
Our IIF is the primary driver of the future premiums that we expect to earn over time. Although not reflected in the current period financial statements, nor in our reported book value, we expect our IIF to generate substantial premiums in future periods, due to the high credit quality of our current mortgage insurance portfolio and its expected persistency over multiple years. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage—IIF and Related Drivers” in our 2020 Form 10-K for more information.
Our earnings in future periods are subject to elevated risks and uncertainties due to the potential impact of the unprecedented and continually evolving social and economic impacts associated with the COVID-19 pandemic on the U.S. and global economies generally, and in particular on the U.S. housing, real estate and housing finance markets. See Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information about the COVID-19 pandemic, which could have a material negative effect on the Company’s business, liquidity, results of operations and financial condition. See “Overview—COVID-19 Impacts” and, in our 2020 Form 10-K, “Item 1A. Risk Factors” for additional information.
Historical loan performance data indicates that credit scores and underwriting quality are key predictors of credit performance. As of June 30, 2021, substantially all of our total primary RIF is comprised of our portfolio of business written subsequent to 2008 and has consisted primarily of high credit quality loans with significantly better credit performance than loans originated during 2008 and prior periods. Although our actual and expected future losses on our portfolio written after 2008, together with refinancings under HARP, are significantly lower than those experienced on our NIW prior to and including 2008, the impact to our future losses from the COVID-19 pandemic, including from elevated levels of unemployment, which may be prolonged, is highly uncertain.
Throughout this report, unless otherwise noted, RIF is presented on a gross basis and includes the amount ceded under reinsurance. RIF and IIF for direct Single Premiums include policies written on an individual basis (as each loan is originated) and on an aggregated basis (in which each individual loan in a group of loans is insured in a single transaction, typically after the loans have been originated).
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table provides selected information as of and for the periods indicated related to mortgage insurance IIF and RIF.
IIF and RIF
($ in millions)June 30, 2021December 31, 2020June 30, 2020
Primary IIF $237,302 $246,144 $241,306 
Primary RIF $58,040 $60,656 $60,311 
Average coverage percentage24.5 %24.6 %25.0 %
Total primary RIF on defaulted loans $2,345 $3,250 $4,263 
Persistency Rate (12 months ended) 57.7 %61.2 %70.2 %
Persistency Rate (quarterly, annualized) (1)
66.3 %60.4 %63.8 %
Total borrower-paid RIF88.4 %86.3 %81.2 %
Primary RIF by Premium Type
Direct Monthly and Other Recurring Premiums81.2 %79.1 %73.8 %
Direct single premiums (2)
18.8 %20.9 %26.2 %
Primary RIF by FICO Score (3)
>=74057.5 %57.5 %57.4 %
680-73934.8 %34.6 %34.3 %
620-6797.2 %7.3 %7.7 %
<=6190.5 %0.6 %0.6 %
Primary RIF by LTV
95.01% and above14.5 %14.4 %14.2 %
90.01% to 95.00% 48.5 %49.3 %50.4 %
85.01% to 90.00% 28.1 %28.0 %28.1 %
85.00% and below8.9 %8.3 %7.3 %
(1)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.
(2)Borrower-paid Single Premium Policies were 9.2%, 9.4% and 9.9% of primary RIF for the periods indicated, respectively.
(3)For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores.
Risk Distribution
We use third-party reinsurance in our mortgage insurance business as part of our risk distribution strategy, including to manage our capital position and risk profile. When we enter into a reinsurance agreement, the reinsurer receives a premium and, in exchange, insures an agreed-upon portion of incurred losses. While these arrangements have the impact of reducing our earned premiums, they reduce our required capital and are expected to increase our return on required capital for the related policies. The impact of these programs on our financial results will vary depending on the level of ceded RIF, as well as the levels of prepayments and incurred losses on the reinsured portfolios, among other factors. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage—Risk Distribution” and Note 8 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for more information about our reinsurance transactions.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below provides information about the amounts by which Radian Guaranty’s reinsurance programs reduced its Minimum Required Assets as of the dates indicated.
PMIERs benefit from risk distribution
($ in thousands)June 30, 2021December 31, 2020June 30, 2020
PMIERs impact - reduction in Minimum Required Assets
Excess-of-Loss Program$907,112 $912,734 $970,294 
Single Premium QSR Program355,115 423,712 517,028 
QSR Program16,545 22,712 30,837 
Total PMIERs impact$1,278,772 $1,359,158 $1,518,159 
Percentage of gross Minimum Required Assets 28.7 %28.8 %32.0 %

Results of Operations—Consolidated
Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended June 30, 2020
Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. Our consolidated operating results for the three and six months ended June 30, 2021 and June 30, 2020 primarily reflect the financial results and performance of our two reportable business segments—Mortgage and homegenius. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for information regarding modifications to our segment reporting in 2020, including for the wind down of our traditional appraisal business announced in the fourth quarter of 2020. All changes in 2020 to the composition of our reportable segments have been reflected in our segment operating results for all periods presented. See “Results of Operations—Mortgage” and “Results of Operations—homegenius” for the operating results of these business segments for the three and six months ended June 30, 2021, compared to the same periods in 2020.
In addition to the results of our operating segments, pretax income (loss) is also affected by those factors described in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results” in our 2020 Form 10-K.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table highlights selected information related to our consolidated results of operations for the three and six months ended June 30, 2021 and 2020.
Summary results of operations - Consolidated
 Three Months Ended
June 30,
Change
Favorable (Unfavorable)
Six Months Ended
June 30,
Change
Favorable (Unfavorable)
(In millions, except per-share amounts)202120202021 vs. 2020202120202021 vs. 2020
Pretax income (loss)$195.5 $(42.2)$237.7 $356.7 $139.1 $217.6 
Net income (loss)155.2 (30.0)185.2 280.8 110.5 170.3 
Diluted net income (loss) per share0.80 (0.15)0.95 1.44 0.56 0.88 
Book value per share at June 3023.02 20.82 2.20 23.02 20.82 2.20 
Net premiums earned (1)
254.8 249.3 5.5 526.6 526.7 (0.1)
Services revenue (2)
29.5 28.1 1.4 52.4 60.0 (7.6)
Net investment income (1)
36.3 38.7 (2.4)74.5 79.7 (5.2)
Net gains (losses) on investments and other financial instruments15.7 47.3 (31.6)10.5 25.2 (14.7)
Provision for losses (1)
3.6 304.4 300.8 49.8 340.4 290.6 
Policy acquisition costs (1)
4.8 6.0 1.2 13.8 13.4 (0.4)
Cost of services (2)
24.6 18.0 (6.6)44.9 40.1 (4.8)
Other operating expenses (3)
86.5 60.6 (25.9)156.7 129.7 (27.0)
Interest expense (1)
21.1 16.7 (4.4)42.2 28.9 (13.3)
Income tax provision (benefit)40.3 (12.3)(52.6)75.9 28.6 (47.3)
Adjusted pretax operating income (loss) (4)
184.7 (88.5)273.2 352.0 116.1 235.9 
Adjusted diluted net operating income (loss) per share (4)
0.75 (0.36)1.11 1.43 0.46 0.97 
Return on equity14.5 %(3.1)%17.6 %13.0 %5.5 %7.5 %
Adjusted net operating return on equity (4)
13.6 %(7.1)%20.7 %12.9 %4.6 %8.3 %
(1)Relates primarily to the Mortgage segment. See “Results of Operations—Mortgage” for more information.
(2)Relates primarily to our homegenius segment. See “Results of Operations—homegenius” for more information.
(3)See “Results of Operations—Mortgage,” “Results of Operations—homegenius” and “Results of Operations—All Other” for more information on both direct and allocated operating expenses.
(4)See “—Use of Non-GAAP Financial Measures” below.
Net Income (Loss). As discussed in more detail below, our net income for the three and six months ended June 30, 2021, increased as compared to the same periods in 2020, primarily reflecting a decrease in provision for losses related to our Mortgage segment. Partially offsetting this item was: (i) a decrease in net gains on investments and other financial instruments; (ii) an increase in other operating expenses; and (iii) an increase in interest expense.
Diluted Net Income (Loss) Per Share. The increase in diluted net income per share for the three and six months ended June 30, 2021, compared to the same periods in 2020, is primarily due to the increase in net income, as discussed above.
Book Value Per Share. The increase in book value per share from $22.36 at December 31, 2020, to $23.02 at June 30, 2021, is primarily due to our net income for the six months ended June 30, 2021. Partially offsetting this item is: (i) a decrease of $0.44 per share due to unrealized losses in our available for sale securities, recorded in accumulated other comprehensive income and (ii) a $0.27 per share impact of dividends.
Net Gains (Losses) on Investments and Other Financial Instruments. The decrease in net gains on investments and other financial instruments for the three months ended June 30, 2021 as compared to the same period in 2020, is primarily due to: (i) a decrease in net unrealized gains on our trading securities; (ii) a decrease in net realized gains on our fixed-maturities available for sale; and (iii) a decrease in the fair value of our embedded derivatives. The decrease in net gains on investments and other financial instruments for the six months ended June 30, 2021, as compared to the same period in 2020, is primarily due to: (i) a decrease in net realized gains on our fixed-maturities available for sale; (ii) a decrease in the fair value of our embedded derivatives; and (iii) a decrease in gains on other financial instruments. These decreases were partially offset by an
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

increase in net unrealized gains on our trading securities. See Notes 5 and 6 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information about the embedded derivatives associated with our reinsurance obtained through mortgage linked-notes transactions and net gains (losses) on investments, respectively.
Income Tax Provision. Our income tax provision increased in 2021 primarily due to higher pretax income. Our effective tax rate was 20.6% and 21.3% for the three and six months ended June 30, 2021, respectively, as compared to 29.1% and 20.5% for the same respective periods in 2020. Our effective tax rate for the three and six months ended June 30, 2021 approximated the federal statutory rate of 21%. The increase in our effective tax rate for the three months ended June 30, 2020 was primarily due to the proportional effects of permanent book-to-tax adjustments to our pretax loss for that three-month period.
Return on Equity. The change in return on equity is primarily due to the increase in net income for the three and six months ended June 30, 2021, as described above.
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 our business performance is evaluated by both management and by our board of directors. These measures have been established in order to increase transparency for the purposes of evaluating our operating trends and enabling more meaningful comparisons with our peers. Although on a consolidated basis “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity” are non-GAAP financial measures, for the reasons discussed above we believe these measures aid in understanding the underlying performance of our operations.
Total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity are not measures of overall profitability, and therefore should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss), diluted net income (loss) per share or return on equity. Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity, as discussed and reconciled below to the most comparable respective GAAP measures, may not be comparable to similarly-named measures reported by other companies.
Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of the Company’s business segments and to allocate resources to the segments. See Note 4 of Notes to Consolidated Financial Statements and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Consolidated—Use of Non-GAAP Financial Measures” each in our 2020 Form 10-K for detailed information regarding items excluded from adjusted pretax operating income and the reasons for their treatment.
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 impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses.
The following table provides a reconciliation of consolidated pretax income (loss) to our non-GAAP financial measure for the consolidated company of adjusted pretax operating income (loss).
Reconciliation of consolidated pretax income (loss) to consolidated adjusted pretax operating income (loss)
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Consolidated pretax income (loss)$195,496 $(42,224)$356,685 $139,069 
Less reconciling income (expense) items
Net gains (losses) on investments and other financial instruments 15,661 47,276 10,480 25,249 
Amortization and impairment of other acquired intangible assets(863)(979)(1,725)(1,958)
Impairment of other long-lived assets and other non-operating items(4,021)(22)(4,105)(322)
Total adjusted pretax operating income (loss) (1)
$184,719 $(88,499)$352,035 $116,100 
(1)Total adjusted pretax operating income (loss) on a consolidated basis consists of adjusted pretax operating income (loss) for our Mortgage segment, our homegenius segment and All Other activities, as further detailed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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. The following table provides a reconciliation of diluted net income (loss) per share to our non-GAAP financial measure for the consolidated company of adjusted diluted net operating income (loss) per share.
Reconciliation of diluted net income (loss) per share to adjusted diluted net operating income (loss) per share
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Diluted net income (loss) per share$0.80 $(0.15)$1.44 $0.56 
Less per-share impact of reconciling income (expense) items
Net gains (losses) on investments and other financial instruments0.08 0.24 0.05 0.13 
Amortization and impairment of other acquired intangible assets— (0.01)(0.01)(0.01)
Impairment of other long-lived assets and other non-operating items(0.02)— (0.02)— 
Income tax (provision) benefit on reconciling income (expense) items (1)
(0.01)(0.05)(0.01)(0.02)
Difference between statutory and effective tax rates — 0.03 — — 
Per-share impact of reconciling income (expense) items0.05 0.21 0.01 0.10 
Adjusted diluted net operating income (loss) per share (1)
$0.75 $(0.36)$1.43 $0.46 
(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.
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. The following table provides a reconciliation of return on equity to our non-GAAP financial measure for the consolidated company of adjusted net operating return on equity.
Reconciliation of return on equity to adjusted net operating return on equity
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Return on equity (1)
14.5 %(3.1)%13.0 %5.5 %
Less impact of reconciling income (expense) items (2)
Net gains (losses) on investments and other financial instruments1.5 4.8 0.5 1.3 
Amortization and impairment of other acquired intangible assets(0.1)(0.1)(0.1)(0.1)
Impairment of other long-lived assets and other non-operating items(0.4)— (0.2)— 
Income tax (provision) benefit on reconciling income (expense) items (3)
(0.2)(1.0)— (0.2)
Difference between statutory and effective tax rates 0.1 0.3 (0.1)(0.1)
Impact of reconciling income (expense) items0.9 4.0 0.1 0.9 
Adjusted net operating return on equity13.6 %(7.1)%12.9 %4.6 %
(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.
50

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations—Mortgage
Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended June 30, 2020
The following table summarizes our Mortgage segment’s results of operations for the three and six months ended June 30, 2021 and 2020.
Summary results of operations - Mortgage
Three Months Ended
June 30,
Change
Favorable (Unfavorable)
Six Months Ended
June 30,
Change
Favorable (Unfavorable)
(In millions)202120202021 vs. 2020202120202021 vs. 2020
Adjusted pretax operating income (loss) (1) (2)
$191.5 $(85.8)$277.3 $365.7 $119.8 $245.9 
Net premiums written 231.0 229.5 1.5 477.9 490.4 (12.5)
(Increase) decrease in unearned premiums 16.1 18.1 (2.0)33.8 32.2 1.6 
Net premiums earned 247.1 247.6 (0.5)511.8 522.6 (10.8)
Services revenue3.7 3.9 (0.2)8.1 7.1 1.0 
Net investment income32.8 34.7 (1.9)66.9 70.9 (4.0)
Provision for losses3.3 304.0 300.7 49.2 339.3 290.1 
Policy acquisition costs4.8 6.0 1.2 13.8 13.4 (0.4)
Cost of services3.2 2.1 (1.1)6.4 3.9 (2.5)
Other operating expenses (2)
60.4 43.9 (16.5)110.8 96.7 (14.1)
Interest expense21.1 16.7 (4.4)42.2 28.9 (13.3)
(1)Our senior management uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of the Company’s business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
(2)Includes allocation of corporate operating expenses of $33.0 million and $60.9 million for the three and six months ended June 30, 2021, respectively, and $25.4 million and $54.6 million for the same periods in 2020. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for more information about our allocation of corporate operating expenses to segments.
Adjusted Pretax Operating Income (Loss). Our Mortgage segment’s adjusted pretax operating income for the three and six months ended June 30, 2021, compared to adjusted pretax operating loss for the same period in 2020, primarily reflects a decrease in provision for losses. Partially offsetting this item is: (i) an increase in other operating expenses and (ii) an increase in interest expense. Our Mortgage segment’s adjusted pretax operating income for the six months ended June 30, 2021 as compared to the same period in 2020, was also impacted by a decrease in net premiums earned. See “—Net Premiums Written and Earned” and “—Provision for Losses” below for more information about our net premiums earned and provision for losses, respectively.
Net Premiums Written and Earned. Net premiums written for the three months ended June 30, 2021 increased, while net premiums written for the six months ended June 30, 2021 decreased, compared to the same periods in 2020. Higher ceded losses recorded in both the three and six months ended June 30, 2020, resulted in elevated ceded premiums due to a reduction in accrued profit commissions, which lowered net premiums written in those periods. The subsequent improvement in accrued profit commissions in 2021 was partially offset for the three months ended June 30, 2021, and more than offset for the six months ended June 30, 2021, by lower direct premium rates on our IIF portfolio compared to the same periods in 2020, as well as a lower proportion of Single Premium Policies.
51

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The table below provides additional information about the components of mortgage insurance net premiums earned for the periods indicated, including the effects of our reinsurance programs.
Net premiums earned
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands, except as otherwise indicated)2021202020212020
Direct
Premiums earned, excluding revenue from cancellations$243,077 $263,468 $499,982 $538,115 
Single Premium Policy cancellations31,592 50,023 70,102 74,156 
Direct premiums274,669 313,491 570,084 612,271 
Assumed (1)
1,615 3,197 3,913 6,653 
Ceded
Premiums earned, excluding revenue from cancellations(27,324)(26,493)(52,697)(55,102)
Single Premium Policy cancellations (2)
(9,036)(14,424)(20,145)(21,607)
Profit commission—other (3)
7,162 (28,175)10,595 (19,620)
Ceded premiums(29,198)(69,092)(62,247)(96,329)
Total net premiums earned $247,086 $247,596 $511,750 $522,595 
Direct premium yield (in basis points) (4)
41.1 44.3 41.7 45.3 
Net premium yield (in basis points) (5)
41.5 41.0 42.3 43.4 
Average primary IIF (in billions)$238.1 $241.5 $241.7 $240.9 
(1)Primarily includes premiums earned from our participation in certain credit risk transfer programs.
(2)Includes the impact of related profit commissions.
(3)Represents the profit commission on the Single Premium QSR Program, excluding the impact of Single Premium Policy cancellations.
(4)Calculated by dividing annualized direct premiums earned, including assumed revenue and excluding revenue from cancellations, by average primary IIF.
(5)Calculated by dividing annualized net premiums earned by average primary IIF.
Net premiums earned decreased for the three and six months ended June 30, 2021 compared to the same periods in 2020, primarily due to: (i) a decrease in premiums earned on our in-force Single Premium Policies and Monthly Premium Policies and (ii) a decrease in the impact, net of reinsurance, from Single Premium Policy cancellations related to decreased refinance activity, as compared to the same period in 2020. These decreases were partially offset by a decrease in ceded premiums, which were elevated in 2020 due to reduced profit commissions as a result of higher ceded losses in 2020.
The level of mortgage prepayments affects the revenue ultimately produced by our mortgage insurance business and is influenced by the mix of business we write. We believe that writing a mix of Single Premium Policies and Monthly Premium Policies has the potential to moderate the overall impact on our results if actual prepayments are significantly different from expectations. However, the impact of this moderating effect is affected by the amount of reinsurance we obtain on portions of our portfolio, with the Single Premium QSR Program currently reducing the proportion of retained Single Premium Policies in our portfolio. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage—IIF and Related Drivers” in our 2020 Form 10-K for more information.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table provides information related to the premium impact of our reinsurance transactions. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for more information about our reinsurance programs.
Ceded premiums earned
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in thousands)2021202020212020
Single Premium QSR Program$12,473 $58,482 $31,942 $74,866 
Excess-of-Loss Program 15,601 8,321 27,755 16,726 
QSR Program1,018 2,170 2,337 4,498 
Other106 119 213 239 
Total ceded premiums earned (1)
$29,198 $69,092 $62,247 $96,329 
Percentage of total direct and assumed premiums earned 10.3 %21.8 %10.5 %15.5 %
(1)Does not include the benefit from ceding commissions on our Single Premium QSR Programs, which are included in other operating expenses on the consolidated statement of operations. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Net Investment Income. Lower investment yields, partially offset by higher average investment balances, resulted in decreases in net investment income for the three and six months ended June 30, 2021, compared to the same periods in 2020. Our higher average investment balances were a result of investing our positive cash flows from operations.
Provision for Losses. The following table details the financial impact of the significant components of our provision for losses for the periods indicated.
Provision for losses
Three Months Ended
June 30,		Six Months Ended
June 30,
($ in millions, except reserve per new default)2021202020212020
Current period defaults (1)
$34.3 $309.2 $85.8 $356.6 
Prior period defaults (2)
(31.0)(5.3)(36.7)(17.2)
Second-lien mortgage loan premium deficiency reserve and other— 0.1 0.1 (0.1)
Provision for losses$3.3 $304.0 $49.2 $339.3 
Loss ratio (3)
1.3 %122.8 %9.6 %64.9 %
Reserve per new default (4)
$4,211 $4,908 $4,291 $4,887 
(1)Related to defaulted loans with a most recent default notice dated in the period indicated. For example, if a loan had defaulted in a prior period, but then subsequently cured and later re-defaulted in the current period, the default would be considered a current period default.
(2)Related to defaulted loans with a default notice dated in a period earlier than the period indicated, which have been continuously in default since that time.
(3)Provision for losses as a percentage of net premiums earned. See below and “—Net Premiums Written and Earned” for further discussion of the components of this ratio.
(4)Calculated by dividing provision for losses for new defaults, net of reinsurance, by new primary defaults for each period.
Our mortgage insurance provision for losses for the three and six months ended June 30, 2021 decreased by $300.7 million and $290.1 million, respectively, as compared to the same periods in 2020. Reserves established for new default notices were the primary driver of our total incurred losses for the three and six months ended June 30, 2021 and 2020. Current period new primary defaults decreased significantly for the three and six months ended June 30, 2021, compared to the same periods in 2020, as shown below. The decreases primarily relate to a decrease in the number of new default notices related to the effects of the COVID-19 pandemic, as compared to the same periods last year. Our gross Default to Claim Rate assumption for new primary defaults was 8.0% at June 30, 2021, compared to 8.5% at June 30, 2020.
Our provision for losses during the three and six months ended June 30, 2021 benefited from favorable reserve development on prior period defaults, based on more favorable trends in Cures than originally estimated. As a result of these observed trends during the three and six months ended June 30, 2021, we made adjustments to the prior Default to Claim Rate assumptions for default notices reported between April 2020 and December 2020. See Notes 1 and 11 of Notes to Unaudited Condensed Consolidated Financial Statements and, in our 2020 Form 10-K, “Item 1A. Risk Factors” for additional information.
53

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our primary default rate as a percentage of total insured loans at June 30, 2021 was 4.0% compared to 5.2% at December 31, 2020. The following table shows a rollforward of our primary loans in default.
Rollforward of primary loans in default
Three Months Ended
June 30,		Six Months Ended
June 30,
2021202020212020
Beginning default inventory50,106 19,781 55,537 21,266 
New defaults8,145 63,005 19,996 72,965 
Cures(17,681)(12,588)(34,818)(23,554)
Claims paid (98)(443)(241)(914)
Rescissions and Claim Denials, net of Reinstatements (1)
(8)(13)(10)(21)
Ending default inventory40,464 69,742 40,464 69,742 
(1)Net of any previous Rescissions and Claim Denials that were reversed and reinstated during the period. Such reinstated Rescissions and Claim Denials may ultimately result in a paid claim.
The following tables show additional information about our primary loans in default as of the dates indicated.
Primary loans in default - additional information
June 30, 2021
TotalForeclosure Stage Defaulted LoansCure % During the 2nd QuarterReserve for Losses% of Reserve
($ in thousands)
#%#%$%
Missed payments
Three payments or less6,891 17.0 %52 42.8 %$63,159 7.5 %
Four to eleven payments14,101 34.9 135 30.1 221,462 26.3 
Twelve payments or more19,170 47.4 822 18.3 540,250 64.3 
Pending claims302 0.7 N/A12.6 15,893 1.9 
Total40,464 100.0 %1,009 840,764 100.0 %
IBNR and other5,464 
LAE21,180 
Total primary reserve$867,408 
December 31, 2020
TotalForeclosure Stage Defaulted LoansCure % During the 4th QuarterReserve for Losses% of Reserve
($ in thousands)#%#%$%
Missed payments
Three payments or less12,504 22.5 %64 36.5 %$99,491 12.4 %
Four to eleven payments37,691 67.9 190 26.3 512,248 64.1 
Twelve payments or more5,067 9.1 861 5.4 172,161 21.5 
Pending claims275 0.5 N/A8.2 15,614 2.0 
Total55,537 100.0 %1,115 799,514 100.0 %
IBNR and other9,966 
LAE20,172 
Total primary reserve$829,652 
N/A – Not applicable
We develop our Default to Claim Rate estimates based primarily on models that use a variety of loan characteristics to determine the likelihood that a default will reach claim status. Our gross Default to Claim Rate estimates are mainly developed
54

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

based on the Stage of Default and Time in Default of the underlying defaulted loans, as measured by the progress toward foreclosure sale and the number of months in default. See Note 11 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional details about our Default to Claim Rate assumptions.
Our aggregate weighted average net Default to Claim Rate assumption for our primary loans used in estimating our reserve for losses, which is net of estimated Claim Denials and Rescissions, was approximately 34% and 24% at June 30, 2021 and December 31, 2020, respectively. This increase was primarily due to a shift in the mix of defaults during the three months ended June 30, 2021, given the smaller proportion of loans with fewer missed payments. Our net Default to Claim Rate and loss reserve estimate incorporates our expectations with respect to future Rescissions, Claim Denials and Claim Curtailments. Our estimate of such net future Loss Mitigation Activities, inclusive of claim withdrawals, reduced our loss reserve as of June 30, 2021 and December 31, 2020 by $29.8 million and $29.1 million, respectively. These expectations are based primarily on recent claim withdrawal activity and our recent experience with respect to the number of claims that have been denied due to the policyholder’s failure to submit sufficient documentation to perfect a claim within the time period permitted under our Master Policies and also our recent experience with respect to the number of insurance certificates that have been rescinded due to fraud, underwriter negligence or other factors.
Our mortgage insurance total loss reserve as a percentage of our mortgage insurance total RIF was 1.5% and 1.4% at June 30, 2021 and December 31, 2020, respectively. See Note 11 of Notes to Unaudited Condensed Consolidated Financial Statements for information regarding our reserves for losses and a reconciliation of our Mortgage segment’s beginning and ending reserves for losses and LAE.
We considered the sensitivity of our loss reserve estimates at June 30, 2021 by assessing the potential changes resulting from a parallel shift in Claim Severity and Default to Claim Rate for primary loans. For example, assuming all other factors remain constant, for every one percentage point absolute change in primary Claim Severity for our primary insurance risk exposure (which we estimated to be 98.3% of our risk exposure at June 30, 2021, compared to 97.5% at December 31, 2020), we estimated that our total loss reserve at June 30, 2021 would change by approximately $8.6 million. Assuming the portfolio mix and all other factors remain constant, for every one percentage point absolute change in our primary net Default to Claim Rate, we estimated a $24.4 million change in our primary loss reserve at June 30, 2021.
Total mortgage insurance claims paid of $4.2 million and $14.7 million for the three and six months ended June 30, 2021, respectively, decreased from claims paid of $22.8 million and $46.2 million for the same respective periods in 2020. The decrease in claims paid is primarily attributable to COVID-19-related forbearance plans and suspensions of foreclosure and evictions. Claims paid in both periods also include the impact of commutations and settlements. Although expected claims are included in our reserve for losses, the timing of claims paid is subject to fluctuation from quarter to quarter, based on the rate that defaults cure and other factors (as described in “Item 1. Business—Mortgage Insurance—Defaults and Claims” in our 2020 Form 10-K) that make the timing of paid claims difficult to predict.
The following table shows net claims paid and average primary claim paid for the periods indicated.
Claims paid
Three Months Ended
June 30,		Six Months Ended
June 30,
(In thousands)2021202020212020
Net claims paid (1)
Total primary claims paid$4,870 $22,144 $11,481 $46,502 
Total pool and other(649)639 (787)(272)
Subtotal4,221 22,783 10,694 46,230 
Impact of commutations and settlements (2)
— — 4,000 (56)
Total net claims paid$4,221 $22,783 $14,694 $46,174 
Total average net primary claim paid (1) (3)
$46.8 $47.9 $45.2 $49.2 
Average direct primary claim paid (3) (4)
$48.4 $49.0 $46.8 $50.2 
(1)Includes the impact of reinsurance recoveries and LAE.
(2)Includes payments to commute mortgage insurance coverage on certain performing and non-performing loans. For the six months ended June 30, 2021, primarily includes payments made to settle certain previously disclosed legal proceedings.
(3)Calculated without giving effect to the impact of other commutations and settlements.
(4)Before reinsurance recoveries.
Other Operating Expenses. Other operating expenses for the three and six months ended June 30, 2021 increased as compared to the same periods in 2020, primarily due to: (i) an increase in variable and share-based incentive compensation expense in 2021, including as part of allocated corporate operating expenses and (ii) a decrease in ceding commissions.
55

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Our expense ratio on a net premiums earned basis represents our Mortgage segment’s operating expenses (which include policy acquisition costs and other operating expenses, as well as allocated corporate operating expenses), expressed as a percentage of net premiums earned. Our expense ratio was 26.4% and 24.4% for the three and six months ended June 30, 2021, respectively, compared to 20.2% and 21.1% for the same periods in 2020, respectively. The increase in other operating expenses, as compared to the same periods in the prior year, was the primary driver of the increase in the expense ratio.
Interest Expense. The increase in interest expense for the three and six months ended June 30, 2021, as compared to the same periods in 2020, primarily reflects an increase in our senior notes outstanding in 2021 compared to 2020. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our senior notes.
Results of Operations—homegenius
Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended June 30, 2020
As noted above in Results of Operations—Consolidated and as further discussed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements, we made certain modifications to our segment reporting in 2020. These changes to our reportable segments have been reflected in our homegenius segment operating results for all periods presented. The following table summarizes our homegenius segment’s results of operations for the three and six months ended June 30, 2021 and 2020.
Summary results of operations - homegenius
Three Months Ended
June 30,
Change
Favorable (Unfavorable)
Six Months Ended
June 30,
Change
Favorable (Unfavorable)
(In millions)202120202021 vs. 2020202120202021 vs. 2020
Adjusted pretax operating income (loss) (1) (2)
$(9.2)$(3.9)$(5.3)$(19.7)$(7.1)$(12.6)
Net premiums earned7.7 4.7 3.0 14.9 7.9 7.0 
Services revenue25.8 17.7 8.1 44.3 40.9 3.4 
Cost of services21.4 12.7 (8.7)38.5 27.7 (10.8)
Other operating expenses (2)
20.9 13.4 (7.5)39.8 27.3 (12.5)
(1)Our senior management uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of the Company’s business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
(2)Includes allocation of corporate operating expenses of $4.7 million and $8.7 million for the three and six months ended June 30, 2021, respectively, and $2.8 million and $6.2 million for the same periods in 2020, respectively.
Adjusted Pretax Operating Income (Loss). Our homegenius segment’s adjusted pretax operating loss for the three and six months ended June 30, 2021 was $9.2 million and $19.7 million, respectively, compared to adjusted pretax operating loss of $3.9 million and $7.1 million for the same periods in 2020, respectively. The increase in our adjusted pretax operating loss for the three and six months ended June 30, 2021, as compared to the same periods in 2020, was primarily driven by: (i) an increase in variable and share-based incentive compensation expense in 2021, including as part of allocated corporate operating expenses and (ii) continued strategic investments focused on our title and digital real estate businesses. Such investments contributed to an increase in total expenses, which was partially offset by increases in net premiums earned and services revenue attributable to our title and valuation services businesses.
Results of Operations—All Other
Three and Six Months Ended June 30, 2021 Compared to Three and Six Months Ended June 30, 2020
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 its sale in the first quarter of 2020, income and expenses related to Clayton; (iv) for all periods presented, the income and expenses related to our traditional appraisal services; and (v) certain other immaterial revenue and expense items. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
56

Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following table summarizes our All Other results of operations for the three and six months ended June 30, 2021 and 2020.
Summary results of operations - All Other
Three Months Ended
June 30,
Change
Favorable (Unfavorable)
Six Months Ended
June 30,
Change
Favorable (Unfavorable)
(In millions)202120202021 vs. 2020202120202021 vs. 2020
Adjusted pretax operating income (loss) (1)
$2.5 $1.2 $1.3 $5.9 $3.3 $2.6 
Services revenue— 6.6 (6.6)0.1 12.2 (12.1)
Net investment income3.4 3.9 (0.5)7.6 8.5 (0.9)
Cost of services— 3.2 3.2 — 8.7 8.7 
Other operating expenses1.2 3.1 1.9 2.1 5.2 3.1 
(1)Our senior management uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of the Company’s business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.
Liquidity and Capital Resources
Consolidated Cash Flows
The following table summarizes our consolidated cash flows from operating, investing and financing activities.
Summary cash flows - Consolidated
Six Months Ended
June 30,
(In thousands)20212020
Net cash provided by (used in):
Operating activities$275,896 $305,291 
Investing activities(76,393)(580,435)
Financing activities(155,742)263,536 
Increase (decrease) in cash and restricted cash$43,761 $(11,608)
Operating Activities. Our most significant source of operating cash flows is from premiums received from our mortgage insurance policies, while our most significant uses of operating cash flows are for our operating expenses and claims paid on our mortgage insurance policies. Net cash provided by operating activities totaled $275.9 million for the six months ended June 30, 2021, a slight decrease compared to $305.3 million for the same period in 2020. This decrease was principally due to lower direct premiums written, partially offset by a reduction in claims paid for the six months ended June 30, 2021.
Investing Activities. Net cash used in investing activities was $76.4 million for the six months ended June 30, 2021, compared to $580.4 million used in investing activities for the same period in 2020. This change was primarily the result of an increase in proceeds from redemptions and decreases in purchases of both short-term investments, net, and fixed-maturity investments available for sale, partially offset by decreases in proceeds from sales of investments.
Financing Activities. Net cash used in financing activities was $155.7 million for the six months ended June 30, 2021, compared to net cash provided by financing activities of $263.5 million for the same period in 2020. For the six months ended June 30, 2021, our primary financing activities included: (i) repurchases of our common shares; (ii) payment of dividends; and (iii) net repayments of secured borrowings. For the six months ended June 30, 2020, cash provided by financing activities included the issuance of Senior Notes due 2025, partially offset by: (i) repurchases of our common shares and (ii) payments of dividends. See Notes 12 and 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding our borrowings and share repurchases, respectively.
See “Item 1. Financial Statements (Unaudited)—Condensed Consolidated Statements of Cash Flows (Unaudited)” for additional information.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Liquidity Analysis—Holding Company
Radian Group serves as the holding company for our operating subsidiaries and does not have any operations of its own. At June 30, 2021, Radian Group had available, either directly or through unregulated subsidiaries, unrestricted cash and liquid investments of $923.0 million. Available liquidity at June 30, 2021 excludes certain additional cash and liquid investments that have been advanced to Radian Group from its subsidiaries to pay for corporate expenses and interest payments. Total liquidity, which includes our undrawn $267.5 million unsecured revolving credit facility, as described below, was $1.2 billion as of June 30, 2021.
During the six months ended June 30, 2021, Radian Group’s available liquidity decreased by $179.7 million, primarily due to payments for share repurchases and dividends, as described below.
In addition to available cash and marketable securities, Radian Group’s principal sources of cash to fund future liquidity needs include: (i) payments made to Radian Group by its subsidiaries under expense- and tax-sharing arrangements; (ii) net investment income earned on its cash and marketable securities; (iii) to the extent available, dividends or other distributions from its subsidiaries; and (iv) amounts, if any, that Radian Guaranty is able to repay under the 2017 Surplus Note. Radian Group also has in place a $267.5 million unsecured revolving credit facility with a syndicate of bank lenders, which has a maturity date of January 18, 2022. Subject to certain limitations, borrowings under the credit facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to our insurance and reinsurance subsidiaries as well as growth initiatives. At June 30, 2021, the full $267.5 million remains undrawn and available under the facility. The credit facility has a minimum liquidity requirement of $35 million. See Note 12 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information on the unsecured revolving credit facility.
We expect Radian Group’s principal liquidity demands for the next 12 months to be: (i) the payment of corporate expenses, including taxes; (ii) interest payments on our outstanding debt obligations; (iii) subject to approval by our board of directors and our ongoing assessment of our financial condition, the payment of quarterly dividends on our common stock, which we increased in May 2021 from $0.125 to $0.14 per share; and (iv) the potential continued repurchases of shares of our common stock pursuant to our current and potential future share repurchase authorizations.
In addition to our ongoing short-term liquidity needs discussed above, our most significant need for liquidity beyond the next 12 months is the repayment of $1.4 billion aggregate principal amount of our senior debt due in future years. See “—Capitalization—Holding Company” below for details of our debt maturity profile. Radian Group’s liquidity demands for the next 12 months or in future periods could also include: (i) early repurchases or redemptions of portions of our debt obligations; (ii) potential additional investments to support our business strategy; and (iii) potential additional capital contributions to its subsidiaries, including due to the continuing impact that the COVID-19 pandemic could have on the liquidity, results of operations and financial condition of Radian Group and its subsidiaries. In our 2020 Form 10-K, see “Item 1A. Risk Factors,” including “—Radian Group’s sources of liquidity may be insufficient to fund its obligations” and “—Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” for additional discussion about the elevated risks and uncertainties associated with the COVID-19 pandemic and the potential impact to Radian Guaranty’s Minimum Required Assets. See also Notes 1 and 16 of Notes to Unaudited Condensed Consolidated Financial Statements and “Overview—COVID-19 Impacts” for further information.
If Radian Group’s current sources of liquidity are insufficient to fund its obligations, or if we otherwise decide to increase our liquidity position, Radian Group may seek additional capital, including by incurring additional debt, issuing additional equity, or selling assets, which we may not be able to do on favorable terms, if at all.
Share Repurchases. During the six months ended June 30, 2021, the Company repurchased 4.3 million shares of Radian Group common stock under programs authorized by Radian Group’s board of directors, at a total cost of $98.7 million, including commissions. See Note 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details on our share repurchase program.
Dividends and Dividend Equivalents. Throughout 2020, and for the first quarter of 2021, our quarterly common stock dividend was $0.125 per share. Effective May 4, 2021, Radian Group’s board of directors authorized an increase to the Company’s quarterly dividend to $0.14 per share. Based on our current outstanding shares of common stock and restricted stock units, we would require approximately $106 million in the aggregate to pay dividends and dividend equivalents for the next 12 months. Radian Group is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. The declaration and payment of future quarterly dividends remains subject to the board of directors’ determination.
Corporate Expenses and Interest Expense. Radian Group has expense-sharing arrangements in place with its principal operating subsidiaries that require those subsidiaries to pay their allocated share of certain holding-company-level expenses, including interest payments on Radian Group’s outstanding debt obligations. Corporate expenses and interest expense on Radian Group’s debt obligations allocated under these arrangements during the six months ended June 30, 2021 of $69.6 million and $41.3 million, respectively, were substantially all reimbursed by its subsidiaries. We expect substantially all of our holding company expenses to continue to be reimbursed by our subsidiaries under our expense-sharing arrangements.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The expense-sharing arrangements between Radian Group and its mortgage insurance subsidiaries, as amended, have been approved by the Pennsylvania Insurance Department, but such approval may be modified or revoked at any time.
Taxes. Pursuant to our tax-sharing agreements, our operating subsidiaries pay Radian Group an amount equal to any federal income tax the subsidiary would have paid on a standalone basis if they were not part of our consolidated tax return. As a result, from time to time, under the provisions of our tax-sharing agreements, Radian Group may pay to or receive from its operating subsidiaries amounts that differ from Radian Group’s consolidated federal tax payment obligation. During the six months ended June 30, 2021, Radian Group received $12.7 million of tax-sharing agreement payments from its operating subsidiaries.
Capitalization—Holding Company
The following table presents our holding company capital structure.
Capital structure
(In thousands) June 30,
2021		December 31,
2020
Debt
Senior Notes due 2024$450,000 $450,000 
Senior Notes due 2025525,000 525,000 
Senior Notes due 2027450,000 450,000 
Deferred debt costs on senior notes(17,455)(19,326)
Revolving credit facility— — 
Total1,407,545 1,405,674 
Stockholders’ equity4,333,833 4,284,353 
Total capitalization$5,741,378 $5,690,027 
Debt-to-capital ratio24.5 %24.7 %
Stockholders’ equity increased by $49.5 million from December 31, 2020 to June 30, 2021. The net increase in stockholders’ equity for the six months ended June 30, 2021 resulted primarily from our net income of $280.8 million, partially offset by share repurchases of $98.7 million, unrealized losses on investments of $84.9 million and dividends of $52.3 million.
We regularly evaluate opportunities, based on market conditions, to finance our operations by accessing the capital markets or entering into other types of financing arrangements with institutional and other lenders and financing sources, and consider various measures to improve our capital and liquidity positions, as well as to strengthen our balance sheet, improve Radian Group’s debt maturity profile and maintain adequate liquidity for our operations. In the past we have repurchased and exchanged, prior to maturity, some of our outstanding debt, and in the future, we may from time to time seek to redeem, repurchase or exchange for other securities, or otherwise restructure or refinance some or all of our outstanding debt prior to maturity in the open market through other public or private transactions, including pursuant to one or more tender offers or through any combination of the foregoing, as circumstances may allow. The timing or amount of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs, including as a result of the effects of the COVID-19 pandemic. There can be no assurance that any such transactions will be completed on favorable terms, or at all.
Mortgage
The principal demands for liquidity in our Mortgage business currently include: (i) the payment of claims and potential claim settlement transactions, net of reinsurance; (ii) expenses (including those allocated from Radian Group); (iii) repayments of FHLB advances; (iv) repayments, if any, associated with the 2017 Surplus Note; and (v) taxes, including potential additional purchases of U.S. Mortgage Guaranty Tax and Loss Bonds. See Notes 10 and 16 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information related to these non-interest bearing instruments.
The principal sources of liquidity in our mortgage insurance business currently include insurance premiums, net investment income and cash flows from: (i) investment sales and maturities; (ii) FHLB advances; and (iii) capital contributions from Radian Group. We believe that the operating cash flows generated by each of our mortgage insurance subsidiaries will provide these subsidiaries with a substantial portion of the funds necessary to satisfy their needs for the foreseeable future. However, see “Overview—COVID-19 Impacts” and Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements for discussion about the elevated risks and uncertainties associated with the COVID-19 pandemic, including the impact on our PMIERs Cushion.
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

As of June 30, 2021, our mortgage insurance subsidiaries maintained claims paying resources of $5.6 billion on a statutory basis, which consists of contingency reserves, statutory policyholders’ surplus, premiums received but not yet earned and loss reserves. In addition, our reinsurance programs are designed to provide additional claims-paying resources during times of economic stress and elevated losses. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Radian Guaranty’s Risk-to-capital as of June 30, 2021 was 11.4 to 1. Radian Guaranty is not expected to need additional capital to satisfy state insurance regulatory requirements in their current form. At June 30, 2021, Radian Guaranty had statutory policyholders’ surplus of $596.0 million. This balance includes a $275.6 million benefit from U.S. Mortgage Guaranty Tax and Loss Bonds issued by the U.S. Department of the Treasury, which mortgage guaranty insurers such as Radian Guaranty may purchase in order to be eligible for a tax deduction, subject to certain limitations, related to amounts required to be set aside in statutory contingency reserves. See Note 16 of Notes to Consolidated Financial Statements, “Overview—COVID-19 Impacts” and “Item 1A. Risk Factors” in our 2020 Form 10-K for more information about these bonds and the risks associated with potential corporate tax rate increases, our statutory and PMIERs requirements and the potential effects of increased defaults due to the COVID-19 pandemic.
Radian Guaranty currently is an approved mortgage insurer under the PMIERs. Private mortgage insurers, including Radian Guaranty, are required to comply with the PMIERs to remain approved insurers of loans purchased by the GSEs. At June 30, 2021, Radian Guaranty’s Available Assets under the PMIERs financial requirements totaled approximately $5.0 billion, resulting in a PMIERs Cushion of $1.9 billion, or 58%, over its Minimum Required Assets. Those amounts compare to Available Assets and a PMIERs cushion of $4.7 billion and $1.3 billion, respectively, at December 31, 2020.
The primary driver of the increase in Radian Guaranty’s PMIERs Cushion during the six months ended June 30, 2021 is the increase in Available Assets, reflecting positive cash flows from operating activities, combined with a decrease in Minimum Required Assets. During the six months ended June 30, 2021, Radian Guaranty’s Minimum Required Assets decreased primarily as a result of a decrease in the number of primary loans in default and an overall decline in IIF. Radian Guaranty’s Minimum Required Assets include a benefit as a result of reinsurance agreements, including the addition of the Eagle Re 2021-1 Ltd. reinsurance agreement in April 2021. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on our reinsurance agreements.
Our PMIERs Cushion at June 30, 2021, also includes a benefit from the application of the Disaster Related Capital Charge that has reduced the total amount of Minimum Required Assets that Radian Guaranty otherwise would have been required to hold against pandemic-related defaults by approximately $435 million as of June 30, 2021, taking into consideration our risk distribution structures in effect as of that date. We expect that application of the Disaster Related Capital Charge will continue to materially reduce Radian Guaranty’s PMIERs Minimum Required Assets, but will diminish over time.
Notwithstanding the continued application of the Disaster Related Capital Charge, the total amount of Minimum Required Assets we may be required to hold against defaulted loans will increase over time, because the 0.30 multiplier is applied to a higher base factor for the defaulting loans (including those in forbearance) as they age, with increases taking place upon four, six and 12 missed monthly payments. Additionally, given the lack of an expiration date under the CARES Act, it is difficult to estimate how long the GSEs may continue to offer COVID-19 forbearance programs for new defaults. It is also difficult to assess how long the GSEs may continue to apply the COVID-19 Amendment to loans in a COVID-19 related forbearance program. As described above, the COVID-19 Crisis Period expired March 31, 2021. See “Item 1. Business—Regulation—Federal Regulation—GSE Requirements” in our 2020 Form 10-K for more information about the Disaster Related Capital Charge, and for further information, including on the expiration of the COVID-19 Crisis Period, see “Overview—Legislative and Regulatory Developments—COVID-19 Amendment to PMIERs.”
Even though they hold assets in excess of the minimum statutory capital thresholds and PMIERs financial requirements, the ability of Radian’s mortgage insurance subsidiaries to pay dividends on their common stock is restricted by certain provisions of the insurance laws of Pennsylvania, their state of domicile. In light of Radian Guaranty’s negative unassigned surplus related to operating losses in prior periods, the ongoing need to set aside contingency reserves, and the current ongoing economic uncertainty related to the COVID-19 pandemic, which increased losses in 2020 and could cause losses in future periods, we do not anticipate that Radian Guaranty will be permitted under applicable insurance laws to pay dividends or other distributions for the foreseeable future without prior approval from the Pennsylvania Insurance Department. Under Pennsylvania’s insurance laws, an insurer must obtain the Pennsylvania Insurance Department’s approval to pay an Extraordinary Distribution. Radian Guaranty sought and received such approval to return capital by paying Extraordinary Distributions to Radian Group in 2019 and 2018. See Note 16 of Notes to Consolidated Financial Statements in our 2020 Form 10-K for additional information on our Extraordinary Distributions, statutory dividend restrictions and contingency reserve requirements.
Radian Guaranty and Radian Reinsurance are both members of the FHLB. As members, they may borrow from the FHLB, subject to certain conditions, which include requirements to post collateral and to maintain a minimum investment in FHLB stock. Advances from the FHLB may be used to provide low-cost, supplemental liquidity for various purposes, including to fund incremental investments. Radian’s current strategy includes using FHLB advances as financing for general cash management purposes and for purchases of additional investment securities that have similar durations, for the purpose of generating additional earnings from our investment securities portfolio with limited incremental risk. As of June 30, 2021, there
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Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

were $154.0 million of FHLB advances outstanding. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
homegenius
As of June 30, 2021, our homegenius segment maintained cash and liquid investments totaling $69.6 million, primarily held by Radian Title Insurance.
Title insurance companies, including Radian Title Insurance, are subject to comprehensive state regulations, including minimum net worth requirements. Radian Title Insurance was in compliance with all of its minimum net worth requirements at June 30, 2021. In the event the cash flows from operations of the homegenius segment are not adequate to fund all of its needs, including the regulatory capital needs of Radian Title Insurance, Radian Group may provide additional funds to the homegenius segment in the form of an intercompany note or other capital contribution, and if needed for Radian Title Insurance, subject to the approval of the Ohio Department of Insurance. Additional capital support may also be required for potential investments in new business initiatives to support our strategy of growing our businesses.
Liquidity levels may fluctuate depending on the levels and contractual timing of our invoicing and the payment practices of our homegenius clients, in combination with the timing of our homegenius segment’s payments for employee compensation and to external vendors. The amount, if any, and timing of the homegenius segment’s dividend paying capacity will depend primarily on the amount of excess cash flow generated by the segment.
Ratings
Radian Group, Radian Guaranty, Radian Reinsurance and Radian Title Insurance have been assigned the ratings set forth in the chart below. We believe that ratings often are considered by others in assessing our credit strength and the financial strength of our primary insurance subsidiaries. The following ratings have been independently assigned by third-party statistical rating organizations, are for informational purposes only and are subject to change. See “Item 1A. Risk Factors—The current financial strength ratings assigned to our mortgage insurance subsidiaries could weaken our competitive position and potential downgrades by rating agencies to these ratings and the ratings assigned to Radian Group could adversely affect the Company” in our 2020 Form 10-K.
Ratings
Subsidiary
Moody’s (1)
S&P (2)
Fitch (3)
Demotech (4)
Radian Group Ba1BB+BBB-N/A
Radian Guaranty Baa1BBB+A-N/A
Radian Reinsurance N/ABBB+N/AN/A
Radian Title InsuranceN/AN/AN/AA
(1)Based on the July 14, 2020 update, Moody’s outlook for Radian Group and Radian Guaranty currently is Stable.
(2)Based on the April 28, 2021 update, S&P’s outlook for Radian Group, Radian Guaranty and Radian Reinsurance is currently Stable.
(3)Based on the May 3, 2021 release, Fitch’s outlook for Radian Group and Radian Guaranty is currently Stable.
(4)Based on the May 20, 2021 release, Demotech’s outlook for Radian Title Insurance is currently Exceptional.
Critical Accounting Estimates
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 2020 Form 10-K. See Note 2 of Notes to Unaudited Condensed Consolidated Financial Statements for accounting pronouncements issued but not yet adopted that may impact the Company’s consolidated financial position, earnings, cash flows or disclosures.
Item 3.    Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the potential for loss due to adverse changes in the value of financial instruments as a result of changes in market conditions. Examples of market risk include changes in interest rates, credit spreads, foreign currency exchange rates and equity prices. We regularly analyze our exposure to interest-rate risk and credit-spread risk and have determined that the fair value of our investments is materially exposed to changes in both interest rates and credit spreads. See “Item 1A. Risk Factors—Our success depends, in part, on our ability to manage risks in our investment portfolio” in our 2020 Form 10-K.
Our market risk exposures at June 30, 2021 have not materially changed from those identified in our 2020
Form 10-K.
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Table of Contents
Glossary
Item 4.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of June 30, 2021, pursuant to Rule 15d-15(b) under the Exchange Act. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of June 30, 2021, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Changes in Internal Control Over Financial Reporting
During the three-month period ended June 30, 2021, there has been no change in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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Table of Contents
Glossary
PART II—OTHER INFORMATION
Item 1.    Legal Proceedings
We are routinely involved in a number of legal actions and proceedings, including reviews, audits and inquiries by various regulatory entities, as well as litigation and other disputes arising in the ordinary course of our business. See Note 13 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information regarding legal and regulatory matters and proceedings.
Item 1A.    Risk Factors
There have been no material changes to our risk factors from those previously disclosed in our 2020 Form 10-K.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuance of Unregistered Securities
During the three months ended June 30, 2021, no equity securities of Radian Group were sold that were not registered under the Securities Act.
Issuer Purchases of Equity Securities
The following table provides information about purchases of Radian Group common stock by us (and our affiliated purchasers) during the three months ended June 30, 2021.
Share repurchase program
($ in thousands, except per-share amounts)
Total Number of Shares Purchased (1)
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs (2)
Period:
4/1/2021 to 4/30/2021— $— — $190,229 
5/1/2021 to 5/31/2021422,920 23.21 — 190,229 
6/1/2021 to 6/30/20213,895,099 23.14 3,892,456 100,229 
Total 4,318,019 3,892,456 
(1)Includes 425,563 shares tendered by employees as payment of taxes withheld on the vesting of certain restricted stock awards granted under the Company’s equity compensation plans.
(2)On August 14, 2019, Radian Group’s board of directors approved a share repurchase program that authorizes the Company to spend up to $200 million to repurchase Radian Group common stock. On February 13, 2020, Radian Group’s board of directors authorized a $275 million increase in this program, bringing the total authorization to repurchase shares up to $475 million, excluding commissions. In March 2021, the Company entered into a new 10b5-1 plan and resumed purchases under this program which had been temporarily suspended in March 2020 in response to the COVID-19 pandemic. During the three months ended June 30, 2021, the Company purchased 3,892,456 shares at an average price of $23.14, including commissions, under this share repurchase program which expires on August 31, 2021. See Note 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details on our share repurchase program.
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Table of Contents
Glossary
Item 6. Exhibits
Exhibit Number
Exhibit
+*10.1
+*10.2
+*10.3
+*10.4
+10.5
*31
**32
*101.INSInline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*101.SCHInline XBRL Taxonomy Extension Schema Document
*101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
*101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
*101.LABInline XBRL Taxonomy Extension Label Linkbase Document
*101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
*104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS)
*    Filed herewith.
**    Furnished herewith.
+ Management contract, compensatory plan or arrangement.
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Glossary
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Radian Group Inc.
Date:August 6, 2021
/s/    J. FRANKLIN HALL
J. Franklin Hall
Senior Executive Vice President, Chief Financial Officer
/s/    ROBERT J. QUIGLEY
Robert J. Quigley
Executive Vice President, Controller and Chief Accounting Officer

65
Document
2021 BV Performance Section 16 Officers
EXHIBIT 10.1
RADIAN GROUP INC.
2021 EQUITY COMPENSATION PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT
(LTI BOOK VALUE)

TERMS AND CONDITIONS


These Terms and Conditions (“Terms and Conditions”) are part of the Performance-Based Restricted Stock Unit Grant made as of May 12, 2021 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to #ParticipantName#, an employee of the Company (the “Grantee”).
RECITALS
WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;
WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan;
WHEREAS, the Restricted Stock Units granted pursuant to these Terms and Conditions shall vest based on the attainment of performance goals related to LTI Book Value per Share (as defined below) and continued employment; and
WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1.Grant of Performance-Based Restricted Stock Units. The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Target Award”), subject to the vesting and other conditions of these Terms and Conditions. Payment of the Restricted Stock Units will be based on performance against the metric forth in Schedule A (the “LTI BV Performance”) and, except as otherwise provided herein, continued employment.
2.Vesting.
(a)General Vesting Terms. Except as set forth in Sections 2(d) and 2(e) below, the Grantee shall vest in a number of Restricted Stock Units with respect to the Target Award based
    


on the LTI BV Performance as of the end of the performance period, provided that, except as set forth in Sections 2(b) and 2(c) below, the Grantee remains employed by the Company or a Subsidiary through May 15, 2024 (the “Vesting Date”). The performance period is the period beginning on March 31, 2021 and ending on March 31, 2024 (the “BV Performance Period”). Except as specifically provided below in this Section 2, no Restricted Stock Units will vest for any reason prior to the Vesting Date, and in the event of a termination of the Grantee’s employment prior to the Vesting Date, the Grantee will forfeit to the Company all Restricted Stock Units that have not yet vested as of the termination date. Except as provided in Sections 2(d) and 2(e) below, any Restricted Stock Units that have not vested at the end of the BV Performance Period will be immediately forfeited.
(b)Retirement.
(i)If the Grantee terminates employment prior to the Vesting Date on account of the Grantee’s Retirement, the Grantee will not forfeit the Restricted Stock Units upon Retirement, and the Restricted Stock Units will vest on the Vesting Date based on the LTI BV Performance through the end of the BV Performance Period, except as provided in Sections 2(d) and 2(e) below.
(ii)For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service from the Company and its Subsidiaries, other than on account of Cause (as defined below), death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or a Subsidiary, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or a Subsidiary.
(iii)For purposes of these Terms and Conditions, “Cause” shall mean the Grantee’s (A) indictment for, conviction of, or pleading nolo contendere to, a felony or a crime involving fraud, misrepresentation, or moral turpitude (excluding traffic offenses other than traffic offenses involving the use of alcohol or illegal substances), (B) fraud, dishonesty, theft, or misappropriation of funds in connection with the Grantee’s duties with the Company and its Subsidiaries, (C) material violation of the Company’s Code of Conduct or employment policies, as in effect from time to time, (D) gross negligence or willful misconduct in the performance of the Grantee’s duties with the Company and its Subsidiaries, or (E) a breach of any written confidentiality, nonsolicitation, or noncompetition covenant with the Company or an Affiliate, in each case as determined in the sole discretion of the Committee. In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)Involuntary Termination.
(i)Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, then on the Vesting Date the Grantee will vest in a number of Restricted Stock Units with respect to the Pro-Rata Target Award (as defined below),
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based on the LTI BV Performance through the end of the BV Performance Period. For purposes of these Terms and Conditions, “Pro-Rata Target Award” shall mean a pro-rated portion of the Restricted Stock Units, which shall be determined by multiplying the number of Restricted Stock Units in the Target Award by a fraction, the numerator of which is the number of months that elapsed during the period beginning on the Grant Date and ending on the Grantee’s termination date (with a partial month counting as a whole month for this purpose), and the denominator of which is 36. Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period following the Grant Date, the Grantee’s Restricted Stock Units will be forfeited.
(ii)Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period immediately prior to the Vesting Date, the Grantee’s Restricted Stock Units will vest on the Vesting Date without proration, based on the LTI BV Performance through the end of the BV Performance Period.
(iii)For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Subsidiaries on account of a termination by the Company or a Subsidiary without Cause, other than on account of Retirement, death or Disability, provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or Subsidiary, as applicable. A termination by the Grantee for Good Reason under the Grantee’s executive severance agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Grantee’s executive severance agreement.
(d)Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or a Subsidiary prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level (as described in Section 4 of Schedule A)) on the date of the Grantee’s death or Disability, as applicable. If, following the Grantee’s termination of employment due to Retirement, or due to Involuntary Termination after the six month period following the Grant Date, the Grantee dies prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level) on the date of the Grantee’s death; provided that if the termination of employment was due to Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, the Grantee will automatically vest at the Pro-Rata Target Award level (or, if a Change of Control has occurred, the Pro-Rata Target Award will vest at the CoC Performance Level) on the date of the Grantee’s death. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or a Subsidiary, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term
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disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the Vesting Date, the award will be forfeited.
(e)Change of Control.
(i)If a Change of Control occurs prior to the Vesting Date, the Restricted Stock Units will vest at the CoC Performance Level on the Vesting Date, provided that, except as set forth in subsections (ii) and (iii) below, the Grantee remains employed by the Company or a Subsidiary through the Vesting Date.
(ii)If, prior to the Vesting Date, a Change of Control occurs and the Grantee’s employment is terminated by the Company or a Subsidiary without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest at the CoC Performance Level as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control). If the Grantee’s employment terminates on account of an Involuntary Termination as described in Section 2(c) (other than an Involuntary Termination within six months following the Grant Date) more than 90 days before the Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, then on the date of the Change of Control, the Grantee will vest in a Pro-Rata Target Award based on performance at the CoC Performance Level on the date of the Change of Control; provided that if Section 2(c)(ii) applies, the Grantee will vest in the Restricted Stock Units at the CoC Performance Level and no pro-ration will apply.
(iii)If the Grantee’s employment terminates on account of Retirement before a Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, the outstanding Restricted Stock Units will vest on the date of the Change of Control at the CoC Performance Level. If the Grantee’s employment terminates on account of Retirement on or after a Change of Control, the Restricted Stock Units will vest at the CoC Performance Level on the Grantee’s Retirement date.
(f)Cause. Notwithstanding anything in these Terms and Conditions to the contrary, in the event the Grantee’s employment is terminated by the Company or a Subsidiary for Cause, all outstanding Restricted Stock Units held by the Grantee shall immediately terminate and be of no further force or effect.
(g)Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all unvested Restricted Stock Units. Except as provided in Section 2(b), 2(c) or 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or a Subsidiary has terminated for any reason.
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3.Restricted Stock Units Account.
The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.
4.Dividend Equivalents.
    Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable after vesting of the underlying Restricted Stock Units, as described below. Dividend equivalents shall be credited on the Restricted Stock Units when dividends are declared on shares of Common Stock from the Grant Date until the payment date for the Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Accrued dividend equivalents on vested Restricted Stock Units shall be paid in cash within 90 days after the Vesting Date or, if earlier, on the payment date for the Restricted Stock Units under Section 5(b). Any dividend equivalents that accrue with respect to vested Restricted Stock Units during the period after the Vesting Date and before the date on which the Restricted Stock Units are paid as described in Section 5 shall be paid in cash upon the payment date for the applicable dividend on shares of Common Stock. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.
5.Conversion of Restricted Stock Units.
(a)Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with these Terms and Conditions, the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the one-year anniversary of the Vesting Date (the one-year anniversary of the Vesting Date is referred to as the “Distribution Date”).
(b)The vested Restricted Stock Units shall be paid earlier than the Distribution Date in the following circumstances:
(i)If (A) the Restricted Stock Units vest in accordance with Section 2(d) (the Grantee’s death or Disability), or (B) the Grantee dies or incurs a Disability after the Vesting Date but before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Grantee’s death or Disability, as applicable.
(ii)If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) and a Change of Control subsequently occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Change of Control.
(iii)If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) upon or after a Change of Control that occurs before the Distribution Date, the
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vested Restricted Stock Units shall be paid within 90 days after the Grantee’s separation from service with the Company and its Subsidiaries.
(iv)Notwithstanding subsections (ii) and (iii), if the Change of Control is not a “change in control event” under section 409A of the Code, and if required by section 409A of the Code, payment will not be made on the dates described in subsections (ii) and (iii) and, instead, will be made within 90 days after the Distribution Date. In addition, if required by section 409A of the Code, if the separation from service described in subsection (iii) does not occur within two years after a Change of Control that is a “change in control event” under section 409A of the Code, payment will instead be made within 90 days after the Distribution Date.
(c)On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to (i) the limitation of subsection (d) below, (ii) compliance with the six-month delay described in Section 17 below, if applicable, and (iii) the payment of any federal, state, local or foreign withholding taxes as described in Section 13 below, and subject to compliance with the restrictive covenants in Section 7 below. The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 15 below.
(d)For the avoidance of doubt, the Grantee will forfeit all Restricted Stock Units if the Grantee’s employment is terminated for Cause prior to the Distribution Date or other applicable payment date under this Section 5.
(e)Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.Certain Corporate Changes.
If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee, the maximum number of shares for which the Restricted Stock Units may vest, the share price or class of Common Stock for purposes of the BV Performance Goals, in each case, as appropriate to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.
7.Restrictive Covenants.
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(a)The Grantee acknowledges and agrees that, during and after the Grantee’s employment with the Company or any of its Affiliates, the Grantee will be subject to, and will comply with, the applicable confidentiality and other terms specified in the Company’s Code of Conduct and Ethics, including terms applicable to former employees. A copy of the Code of Conduct and Ethics has been provided to the Grantee and can be accessed on the Company’s intranet. The Code of Conduct and Ethics, including any future revisions to the Code of Conduct and Ethics, are incorporated into and made a part of these Terms and Conditions as if fully set forth herein.
(b)The Grantee acknowledges that the Grantee’s relationship with the Company and its Affiliates is one of confidence and trust such that the Grantee is, and may in the future be, privy to and/or the Grantee will develop Confidential Information and Trade Secrets of the Company or any of its Affiliates. Subject to the provisions of subsection (j), the Grantee agrees that, at all times during the Grantee’s employment and after the Grantee’s employment with the Company or any of its Affiliates terminates for any reason, whether by the Grantee or by the Company or any of its Affiliates, the Grantee will hold in strictest confidence and will not disclose, use, or publish any Confidential Information and Trade Secrets, except as and only to the extent such disclosure, use, or publication is required during the Grantee’s employment with the Company or any of its Affiliates for the Grantee to fulfill the Grantee’s job duties and responsibilities to the Company or any of its Affiliates. At all times during the Grantee’s employment and after the Grantee’s termination of employment, the Grantee agrees that the Grantee shall take all reasonable precautions to prevent the inadvertent or accidental disclosure of Confidential Information and Trade Secrets. The Grantee hereby assigns to the Company any rights the Grantee may have or acquire in Confidential Information and Trade Secrets, whether developed by the Grantee or others, and the Grantee acknowledges and agrees that all Confidential Information and Trade Secrets shall be the sole property of the Company and its assigns. For purposes of these Terms and Conditions, “Confidential Information and Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or any of its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or any of its Affiliates, that the Company or any of its Affiliates treat as proprietary, private, or confidential, and that is not generally known to the public.
(c)The Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, and for the 12 month period immediately following the Grantee’s termination of employment for any reason, and subject to subsection (l) below (the “Restricted Period”), the Grantee will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity within the United States whose primary business involves or is related to providing any mortgage- or real estate-related service or product that, during the Grantee’s employment, the Company or any of its Affiliates provides or is actively engaged in developing through the use of Confidential Information and Trade Secrets; provided however, the foregoing restriction shall only apply to such service or product for which the Grantee has had access to Confidential Information and Trade Secrets or otherwise has had active involvement. The Grantee further agrees that, given the nature of the
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business of the Company and its Affiliates and the Grantee’s position with the Company, a nationwide geographic scope is appropriate and reasonable.
(d)The Grantee acknowledges and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or any of its Affiliates to become an employee, consultant, or independent contractor to, for, or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate his or her relationship with the Company or any of its Affiliates, unless in each case more than six months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire. If any employee, consultant, or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Grantee, such hiring or solicitation shall be conclusively presumed to be a violation of these Terms and Conditions; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Grantee, or by a headhunter employed by such entity, which does not involve the Grantee, shall not be a violation of this subsection (d).
(e)The Grantee covenants and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, either directly or indirectly through others:
(i)solicit, divert, appropriate, or do business with, or attempt to solicit, divert, appropriate, or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination or any actively sought prospective customer of the Company or any of its Affiliates for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Grantee’s employment with the Company or any of its Affiliates; or
(ii)encourage any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.
(f)The Grantee acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company or any of its Affiliates at significant expense and effort, and that the restrictions contained in this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company or any of its Affiliates.
(g)The parties to these Terms and Conditions acknowledge and agree that any breach by the Grantee of any of the covenants or agreements contained in this Section 7 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money
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damages could not adequately compensate such entity. Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity and in addition to the forfeiture requirements set forth in subsection (h) below) to seek to enforce this Section 7 and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in this Section 7. The Grantee agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance, or other equitable relief, the Grantee will not assert or contend that any of the provisions of this Section 7 are unreasonable or otherwise unenforceable. The Grantee irrevocably and unconditionally (i) agrees that any legal proceeding arising out of these Terms and Conditions shall be brought only in the United States District Court for the District of Delaware, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New Castle County, Delaware, (ii) consents to the sole and exclusive jurisdiction and venue of such court in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any such court. The Grantee also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers.
(h)The Grantee acknowledges and agrees that in the event the Grantee breaches any of the covenants or agreements contained in this Section 7 or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:
    (i)    The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and
    (ii)    The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (h)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the covenants or agreements contained in this Section 7 or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.
(i)If any portion of the covenants or agreements contained in this Section 7, the specific forfeiture provisions related to vested shares, or the application thereof, is construed to
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be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 7 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. The covenants and agreements contained in this Section 7 shall survive the termination of the Grantee’s employment with the Company or any of its Affiliates and shall survive the termination of these Terms and Conditions.
(j)Nothing in these Terms and Conditions, including any restrictions on the use of Confidential Information and Trade Secrets, shall prohibit or restrict the Grantee from initiating communications directly with, responding to any inquiry from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or filing a claim or assisting with an investigation directly with a self-regulatory organization or a government agency or entity, including the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, any agency Inspector General or any other federal, state or local regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Nor do these Terms and Conditions require the Grantee to obtain prior authorization from the Company before engaging in any conduct described in this subsection (j), or to notify the Company that the Grantee has engaged in any such conduct. To the extent permitted by law and except as provided above in this subsection (j), upon receipt of any subpoena, court order, or other legal process compelling the disclosure of Confidential Information and Trade Secrets, the Grantee agrees to give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the fullest extent possible. Please take notice that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.
(k)Nothing in these Terms and Conditions shall be deemed to constitute the grant of any license or other right to the Grantee in respect of any Confidential Information and Trade Secrets or other data, tangible property, or intellectual property of the Company or any of its Affiliates.
(l)Notwithstanding the foregoing, should the Grantee violate any of the restrictive covenants of these Terms and Conditions, then the period of the Grantee’s breach of such covenant (“Violation Period”) shall stop the running of the corresponding Restricted Period. Once the Grantee resumes compliance with the restrictive covenant, the Restricted Period applicable to such covenant shall be extended for a period equal to the Violation Period so that the Company enjoys the full benefit of the Grantee’s compliance with the restrictive covenant for the duration of the corresponding Restricted Period.
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(m)In the event of a conflict between the terms of the confidentiality, non-competition or non-solicitation covenants in this Section 7 and a confidentiality, non-competition or non-solicitation covenant in a prior stock option, restricted stock unit or other equity grant agreement between the Grantee and the Company, the confidentiality, non-competition and non-solicitation covenants in this Section 7 shall control as of the Grant Date.
8.No Stockholder Rights.
The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.  
9.Retention Rights.
Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or a Subsidiary or shall interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment or service at any time.
10.Cancellation or Amendment.
This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.
11.Notice.
Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, Pennsylvania 19102, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or a Subsidiary thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.
12.Incorporation of Plan by Reference.
These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and
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Conditions constitutes the Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, his or her beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, Pennsylvania 19102.
13.Income Taxes; Withholding Taxes.
The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.
14.Governing Law.
The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.
15.Grant Subject to Applicable Laws and Company Policies.
These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.
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16.Assignment.
These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.
17.Section 409A.
This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee) and if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.

RADIAN GROUP INC.

By: https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-image_0a.jpg
Name: Mary Dickerson
Title: Executive Vice President, Chief People Officer
By electronically acknowledging and accepting this award of Restricted Stock Units following the date of the Company’s electronic notification to the Grantee, the Grantee (a) acknowledges receipt of the Plan incorporated herein, (b) acknowledges that he or she has read the Award Summary delivered in connection with this grant of Restricted Stock Units and these Terms and Conditions and understands the terms and conditions of them, (c) accepts the award of the Restricted Stock Units described in these Terms and Conditions, (d) agrees to be bound by the terms of the Plan and these Terms and Conditions, and (e) agrees that all decisions and determinations of the Committee with respect to the Restricted Stock Units shall be final and binding.

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Schedule A
BV Performance Goals
1.Calculation of LTI Book Value per Share. Except as set forth in Section 4 below, vesting of the Restricted Stock Units will be based on the Company’s cumulative growth in LTI Book Value per Share (as defined below) over the BV Performance Period beginning on March 31, 2021 and ending on March 31, 2024 as compared to the following reference points:
Cumulative Growth in LTI Book Value per Share (1)
  
 Payout Percentage(1)
(Percentage of Target Award)
0%
  200%
30%
  100%
<10%(2)
  0%
 
(1) If the Company’s cumulative growth in LTI Book Value per Share falls between two referenced percentages, the payout percentage will be interpolated. Cumulative growth in LTI Book Value per Share will be calculated by dividing the LTI Book Value per Share on the last day of the BV Performance Period (or the projected LTI Book Value per Share in the case of a Change of Control, as described below), by the LTI Book Value per Share on the first day of the BV Performance Period, expressed as a percentage, minus 100%.

(2) The LTI Book Value per Share on the first day of the BV Performance Period (March 31, 2021) was $21.53. If the Company’s cumulative growth in LTI Book Value per Share is less than 10%, the payout percentage will be zero.

The Company’s “LTI Book Value per Share” is defined as: (i) Book Value adjusted to exclude (A) Accumulated Other Comprehensive Income and (B) the impact, if any, during the BV Performance Period (or through the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs, if applicable) from declared dividends on common shares and dividend equivalents on outstanding equity awards, divided by (ii) basic shares of Common Stock of the Company outstanding as of the applicable measurement date. The LTI Book Value per Share shall be derived from the Company’s financial statements, prepared in accordance with GAAP, and the adjustments described above.

2.General Vesting Terms. Any fractional Restricted Stock Unit resulting from the vesting of the Restricted Stock Units in accordance with these Terms and Conditions shall be rounded down to the nearest whole number. Any portion of the Restricted Stock Units that does not vest as of the end of the BV Performance Period shall be forfeited as of the end of the BV Performance Period.

3.Maximum Vesting and Payment. In no event shall the maximum number of Restricted Stock Units that may be payable pursuant to these Terms and Conditions exceed 200% of the Target Award.

4.Change of Control Vesting. If a Change of Control occurs prior to the end of the BV Performance Period, the Committee will calculate the “CoC Performance Level,” based on the Company’s projected LTI Book Value per Share through the end of the BV Performance Period, projected as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs, as determined in the sole discretion of the Committee. If a Change of Control occurs after the end of the BV Performance Period and before the Vesting Date, the CoC Performance Level will be calculated based on attainment of the BV Performance Goals through the end of the BV Performance Period. Any Restricted Stock Units that do not vest at the CoC Performance Level shall be forfeited as of the date of the Change of Control.
    

Document
2021 BV Performance Thornberry
EXHIBIT 10.2
RADIAN GROUP INC.
2021 EQUITY COMPENSATION PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT
(LTI BOOK VALUE)

TERMS AND CONDITIONS


These Terms and Conditions (“Terms and Conditions”) are part of the Performance-Based Restricted Stock Unit Grant made as of May 12, 2021 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to Richard G. Thornberry, an employee of the Company (the “Grantee”).
RECITALS
WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;
WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan;
WHEREAS, the Restricted Stock Units granted pursuant to these Terms and Conditions shall vest based on the attainment of performance goals related to LTI Book Value per Share (as defined below) and continued employment; and
WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1.Grant of Performance-Based Restricted Stock Units. The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Target Award”), subject to the vesting and other conditions of these Terms and Conditions. Payment of the Restricted Stock Units will be based on performance against the metric forth in Schedule A (the “LTI BV Performance”) and, except as otherwise provided herein, continued employment.
2.Vesting.
(a)General Vesting Terms. Except as set forth in Sections 2(d) and 2(e) below, the Grantee shall vest in a number of Restricted Stock Units with respect to the Target Award based
    


on the LTI BV Performance as of the end of the performance period, provided that, except as set forth in Sections 2(b) and 2(c) below, the Grantee remains employed by the Company or an Affiliate through May 15, 2024 (the “Vesting Date”). The performance period is the period beginning on March 31, 2021 and ending on March 31, 2024 (the “BV Performance Period”). Except as specifically provided below in this Section 2, no Restricted Stock Units will vest for any reason prior to the Vesting Date, and in the event of a termination of the Grantee’s employment prior to the Vesting Date, the Grantee will forfeit to the Company all Restricted Stock Units that have not yet vested as of the termination date. Except as provided in Sections 2(d) and 2(e) below, any Restricted Stock Units that have not vested at the end of the BV Performance Period will be immediately forfeited.
(b)Retirement.
(i)If the Grantee terminates employment prior to the Vesting Date on account of the Grantee’s Retirement, the Grantee will not forfeit the Restricted Stock Units upon Retirement, and the Restricted Stock Units will vest on the Vesting Date based on the LTI BV Performance through the end of the BV Performance Period, except as provided in Sections 2(d) and 2(e) below.
(ii)For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service from the Company and its Affiliates, other than on account of Cause (as defined below), death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or an Affiliate, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or an Affiliate.
(iii)For purposes of these Terms and Conditions, “Cause” shall have the meaning ascribed to the term in the Employment Agreement between the Grantee and the Company dated November 19, 2019, as amended effective March 26, 2021 (the “Employment Agreement”).
(c)Involuntary Termination.
(i)Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, then on the Vesting Date the Grantee will vest in a number of Restricted Stock Units with respect to the Pro-Rata Target Award (as defined below), based on the LTI BV Performance through the end of the BV Performance Period. For purposes of these Terms and Conditions, “Pro-Rata Target Award” shall mean a pro-rated portion of the Restricted Stock Units, which shall be determined by multiplying the number of Restricted Stock Units in the Target Award by a fraction, the numerator of which is the number of months that elapsed during the period beginning on the Grant Date and ending on the Grantee’s termination date (with a partial month counting as a whole month for this purpose), and the denominator of which is 36. Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period following the Grant Date, the Grantee’s Restricted Stock Units will be forfeited.
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(ii)Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period immediately prior to the Vesting Date, the Grantee’s Restricted Stock Units will vest on the Vesting Date without proration, based on the LTI BV Performance through the end of the BV Performance Period.
(iii)For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Affiliates on account of a termination by the Company or an Affiliate without Cause, other than on account of Retirement, death or Disability, provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or an Affiliate, as applicable. A termination by the Grantee for Good Reason under the Employment Agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Employment Agreement.
(d)Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or an Affiliate prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level (as described in Section 4 of Schedule A)) on the date of the Grantee’s death or Disability, as applicable. If, following the Grantee’s termination of employment due to Retirement, or due to Involuntary Termination after the six month period following the Grant Date, the Grantee dies prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level) on the date of the Grantee’s death; provided that if the termination of employment was due to Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, the Grantee will automatically vest at the Pro-Rata Target Award level (or, if a Change of Control has occurred, the Pro-Rata Target Award will vest at the CoC Performance Level) on the date of the Grantee’s death. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or an Affiliate, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the Vesting Date, the award will be forfeited.
(e)Change of Control.
(i)If a Change of Control occurs prior to the Vesting Date, the Restricted Stock Units will vest at the CoC Performance Level on the Vesting Date, provided that, except as
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set forth in subsections (ii) and (iii) below, the Grantee remains employed by the Company or an Affiliate through the Vesting Date.
(ii)If, prior to the Vesting Date, a Change of Control occurs and the Grantee’s employment is terminated by the Company or an Affiliate without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest at the CoC Performance Level as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control). If the Grantee’s employment terminates on account of an Involuntary Termination as described in Section 2(c) (other than an Involuntary Termination within six months following the Grant Date) more than 90 days before the Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, then on the date of the Change of Control, the Grantee will vest in a Pro-Rata Target Award based on performance at the CoC Performance Level on the date of the Change of Control; provided that if Section 2(c)(ii) applies, the Grantee will vest in the Restricted Stock Units at the CoC Performance Level and no pro-ration will apply.
(iii)If the Grantee’s employment terminates on account of Retirement before a Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, the outstanding Restricted Stock Units will vest on the date of the Change of Control at the CoC Performance Level. If the Grantee’s employment terminates on account of Retirement on or after a Change of Control, the Restricted Stock Units will vest at the CoC Performance Level on the Grantee’s Retirement date.
(f)Cause. Notwithstanding anything in these Terms and Conditions to the contrary, in the event the Grantee’s employment is terminated by the Company or an Affiliate for Cause, all outstanding Restricted Stock Units held by the Grantee shall immediately terminate and be of no further force or effect.
(g)Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all unvested Restricted Stock Units. Except as provided in Section 2(b), 2(c) or 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or an Affiliate has terminated for any reason.
3.Restricted Stock Units Account.
The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.
4.Dividend Equivalents.
    Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable after vesting of the underlying Restricted Stock Units, as described below. Dividend equivalents shall be credited on the Restricted Stock Units when dividends are declared
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on shares of Common Stock from the Grant Date until the payment date for the Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Accrued dividend equivalents on vested Restricted Stock Units shall be paid in cash within 90 days after the Vesting Date or, if earlier, on the payment date for the Restricted Stock Units under Section 5(b). Any dividend equivalents that accrue with respect to vested Restricted Stock Units during the period after the Vesting Date and before the date on which the Restricted Stock Units are paid as described in Section 5 shall be paid in cash upon the payment date for the applicable dividend on shares of Common Stock. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.
5.Conversion of Restricted Stock Units.
(a)Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with these Terms and Conditions, the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the one-year anniversary of the Vesting Date (the one-year anniversary of the Vesting Date is referred to as the “Distribution Date”).
(b)The vested Restricted Stock Units shall be paid earlier than the Distribution Date in the following circumstances:
(i)If (A) the Restricted Stock Units vest in accordance with Section 2(d) (the Grantee’s death or Disability), or (B) the Grantee dies or incurs a Disability after the Vesting Date but before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Grantee’s death or Disability, as applicable.
(ii)If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) and a Change of Control subsequently occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Change of Control.
(iii)If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) upon or after a Change of Control that occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the Grantee’s separation from service with the Company and its Affiliates.
(iv)Notwithstanding subsections (ii) and (iii), if the Change of Control is not a “change in control event” under section 409A of the Code, and if required by section 409A of the Code, payment will not be made on the dates described in subsections (ii) and (iii) and, instead, will be made within 90 days after the Distribution Date. In addition, if required by section 409A of the Code, if the separation from service described in subsection (iii) does not occur within two years after a Change of Control that is a “change in control event” under section 409A of the Code, payment will instead be made within 90 days after the Distribution Date.
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(c)On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to (i) the limitation of subsection (d) below, (ii) compliance with the six-month delay described in Section 17 below, if applicable, and (iii) the payment of any federal, state, local or foreign withholding taxes as described in Section 13 below, and subject to compliance with the Restrictive Covenants (as defined in Section 7(a) below). The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 15 below.
(d)For the avoidance of doubt, the Grantee will forfeit all Restricted Stock Units if the Grantee’s employment is terminated for Cause prior to the Distribution Date or other applicable payment date under this Section 5.
(e)Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.Certain Corporate Changes.
If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee, the maximum number of shares for which the Restricted Stock Units may vest, the share price or class of Common Stock for purposes of the BV Performance Goals, in each case, as appropriate to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.
7.Restrictive Covenants.
(a)The Grantee acknowledges and agrees that in consideration for the grant of the Restricted Stock Units, the Grantee remains subject to the non-competition, non-solicitation, confidentiality, inventions assignment, and non-disparagement provisions to the extent described in (including incorporated by reference into) Section 14 of the Employment Agreement, the Restrictive Covenants Agreement dated February 8, 2017 between the Grantee and the Company, the Company’s Code of Conduct (as defined in the Employment Agreement), and any other written agreements between the Company and the Grantee (collectively, the “Restrictive Covenants”).
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(b)The Grantee acknowledges and agrees that in the event the Grantee breaches any of the Restrictive Covenants or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:
(i)The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and
(ii)The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (b)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the Restrictive Covenants or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.
8.No Stockholder Rights.
The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.  
9.Retention Rights.
Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or an Affiliate or shall interfere in any way with the right of the Company or an Affiliate to terminate Grantee’s employment or service at any time.
10.Cancellation or Amendment.
This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.
11.Notice.
Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 1500 Market Street,
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Philadelphia, Pennsylvania 19102, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or an Affiliate thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.
12.Incorporation of Plan by Reference.
These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes the Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, his or her beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to the Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, Pennsylvania 19102.
13.Income Taxes; Withholding Taxes.
The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.
14.Governing Law.
The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.
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15.Grant Subject to Applicable Laws and Company Policies.
These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.
16.Assignment.
These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.
17.Section 409A.
This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee) and if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the
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Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.

RADIAN GROUP INC.

By: https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-image_01.jpg
Name: Mary Dickerson
Title: Executive Vice President, Chief People Officer
By electronically acknowledging and accepting this award of Restricted Stock Units following the date of the Company’s electronic notification to the Grantee, the Grantee (a) acknowledges receipt of the Plan incorporated herein, (b) acknowledges that he or she has read the Award Summary delivered in connection with this grant of Restricted Stock Units and these Terms and Conditions and understands the terms and conditions of them, (c) accepts the award of the Restricted Stock Units described in these Terms and Conditions, (d) agrees to be bound by the terms of the Plan and these Terms and Conditions, and (e) agrees that all decisions and determinations of the Committee with respect to the Restricted Stock Units shall be final and binding.

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Schedule A
BV Performance Goals
1.Calculation of LTI Book Value per Share. Except as set forth in Section 4 below, vesting of the Restricted Stock Units will be based on the Company’s cumulative growth in LTI Book Value per Share (as defined below) over the BV Performance Period beginning on March 31, 2021 and ending on March 31, 2024 as compared to the following reference points:
Cumulative Growth in LTI Book Value per Share (1)
  
 Payout Percentage(1)
(Percentage of Target Award)
0%
  200%
30%
  100%
<10%(2)
  0%
 
(1) If the Company’s cumulative growth in LTI Book Value per Share falls between two referenced percentages, the payout percentage will be interpolated. Cumulative growth in LTI Book Value per Share will be calculated by dividing the LTI Book Value per Share on the last day of the BV Performance Period (or the projected LTI Book Value per Share in the case of a Change of Control, as described below), by the LTI Book Value per Share on the first day of the BV Performance Period, expressed as a percentage, minus 100%.

(2) The LTI Book Value per Share on the first day of the BV Performance Period (March 31, 2021) was $21.53. If the Company’s cumulative growth in LTI Book Value per Share is less than 10%, the payout percentage will be zero.

The Company’s “LTI Book Value per Share” is defined as: (i) Book Value adjusted to exclude (A) Accumulated Other Comprehensive Income and (B) the impact, if any, during the BV Performance Period (or through the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs, if applicable) from declared dividends on common shares and dividend equivalents on outstanding equity awards, divided by (ii) basic shares of Common Stock of the Company outstanding as of the applicable measurement date. The LTI Book Value per Share shall be derived from the Company’s financial statements, prepared in accordance with GAAP, and the adjustments described above.

2.General Vesting Terms. Any fractional Restricted Stock Unit resulting from the vesting of the Restricted Stock Units in accordance with these Terms and Conditions shall be rounded down to the nearest whole number. Any portion of the Restricted Stock Units that does not vest as of the end of the BV Performance Period shall be forfeited as of the end of the BV Performance Period.

3.Maximum Vesting and Payment. In no event shall the maximum number of Restricted Stock Units that may be payable pursuant to these Terms and Conditions exceed 200% of the Target Award.

4.Change of Control Vesting. If a Change of Control occurs prior to the end of the BV Performance Period, the Committee will calculate the “CoC Performance Level,” based on the Company’s projected LTI Book Value per Share through the end of the BV Performance Period, projected as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs, as determined in the sole discretion of the Committee. If a Change of Control occurs after the end of the BV Performance Period and before the Vesting Date, the CoC Performance Level will be calculated based on attainment of the BV Performance Goals through the end of the BV Performance Period. Any Restricted Stock Units that do not vest at the CoC Performance Level shall be forfeited as of the date of the Change of Control.
    

Document
        2021 Time-Based RSU Thornberry

EXHIBIT 10.3
RADIAN GROUP INC.
2021 EQUITY COMPENSATION PLAN
RESTRICTED STOCK UNIT GRANT
TERMS AND CONDITIONS
These Terms and Conditions (“Terms and Conditions”) are part of the Restricted Stock Unit Grant made as of May 12, 2021 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to Richard G. Thornberry, an employee of the Company (the “Grantee”).
RECITALS
WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;
WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan; and
WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1.Grant of Restricted Stock Units.
The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Restricted Stock Units”), subject to the vesting and other conditions of these Terms and Conditions.
2.Vesting.
(a)General Vesting Terms. Provided the Grantee remains employed by the Company or an Affiliate through the applicable vesting date set forth in this Section 2 (the “Vesting Date”) and meets all applicable requirements set forth in these Terms and Conditions, the Restricted Stock Units awarded under these Terms and Conditions shall vest in three substantially equal installments on each of May 15, 2022, May 15, 2023, and May 15, 2024, except as set forth in Sections 2(b), 2(c), 2(d) and 2(e) below (the period over which the Restricted Stock Units vest is referred to as the “Restriction Period”).


(b)Retirement.
(i)If the Grantee terminates employment during the Restriction Period because of the Grantee’s Retirement, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service without Cause, other than on account of death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or an Affiliate, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or an Affiliate.
(iii)For purposes of these Terms and Conditions, “Cause” shall have the meaning ascribed to the term in the Employment Agreement between the Grantee and the Company dated November 19, 2019, as amended effective March 26, 2021 (the “Employment Agreement”). In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)Involuntary Termination.
(i)Except as set forth in Section 2(e) below, if the Grantee terminates employment on or before the first Vesting Date because of an Involuntary Termination, one-third of the Grantee’s Restricted Stock Units will automatically vest on the date of such termination of employment and the remaining unvested Restricted Stock Units shall be immediately forfeited. If the Grantee terminates employment during the Restriction Period and after the first Vesting Date because of an Involuntary Termination, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Affiliates on account of a termination by the Company or an Affiliate without Cause, other than on account of Retirement, death or Disability; provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or an Affiliate, as applicable. A termination by the Grantee for Good Reason under the Employment Agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning ascribed to the term in the Employment Agreement.
(d)Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or an Affiliate during the Restriction Period, the Grantee’s Restricted Stock Units will automatically vest in full on the date of the Grantee’s death or Disability, as applicable. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or an
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Affiliate, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the first Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the first Vesting Date, the award will be forfeited.
(e)Change of Control. Notwithstanding the foregoing, if, during the Restriction Period, a Change of Control occurs and the Grantee’s employment with the Company and its Affiliates is terminated by the Company or an Affiliate without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control).
(f)Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all Restricted Stock Units that do not vest either before the termination date or on the termination date associated with such termination. Except as provided in Section 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or an Affiliate has terminated for any reason. For clarification purposes, in the event the Grantee’s employment is terminated by the Company or an Affiliate for Cause, the outstanding Restricted Stock Units held by such Grantee shall immediately terminate and be of no further force or effect.
3.Restricted Stock Units Account.
The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.
4.Dividend Equivalents.
    Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable subject to the same vesting terms and other conditions as the Restricted Stock Units to which they relate. Dividend equivalents shall be credited on the Restricted Stock Units when dividends are declared on shares of Common Stock from the Grant Date until the payment date for the vested Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Vested dividend equivalents shall be paid in cash at the same time and subject to the same terms as the underlying vested Restricted Stock Units. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for
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accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.
5.Conversion of Restricted Stock Units.
(a)Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with Section 2(a), the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the applicable Vesting Date.
(b)The vested Restricted Stock Units shall be paid earlier than the applicable Vesting Date in the following circumstances:
(i)If the Restricted Stock Units vest in accordance with Section 2(b) (Retirement), Section 2(c) (Involuntary Termination), or Section 2(d) (death or Disability), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment on account of Retirement, Involuntary Termination or death, or the date of Disability, as applicable.
(ii)If a Change of Control occurs and the Grantee’s employment terminates in accordance with Section 2(e), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment (or, if later, on the date of the Change of Control).
(c)On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to compliance with the six-month delay described in Section 17 below, if applicable, and the payment of any federal, state, local, or foreign withholding taxes as described in Section 13 below, and subject to compliance with the Restrictive Covenants (as defined in Section 7(a) below). The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 15 below.
(d)Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.Certain Corporate Changes.
If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve
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the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.
7.Restrictive Covenants.
(a)The Grantee acknowledges and agrees that, in consideration for the grant of the Restricted Stock Units, the Grantee remains subject to the non-competition, non-solicitation, confidentiality, inventions assignment, and non-disparagement provisions to the extent described in (including incorporated by reference into) Section 14 of the Employment Agreement, the Restrictive Covenants Agreement dated February 8, 2017 between the Grantee and the Company, the Company’s Code of Conduct (as defined in the Employment Agreement), and any other written agreements between the Company and the Grantee (collectively, the “Restrictive Covenants”).
(b)The Grantee acknowledges and agrees that in the event the Grantee breaches any of the Restrictive Covenants or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:
    (i)    The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and
    (ii)    The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (b)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the Restrictive Covenants, or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.
8.No Stockholder Rights.
The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.
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9.Retention Rights.
Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or an Affiliate or shall interfere in any way with the right of the Company or an Affiliate to terminate Grantee’s employment or service at any time.
10.Cancellation or Amendment.
This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.
11.Notice.
Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, PA 19102, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or an Affiliate thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.
12.Incorporation of Plan by Reference.
These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes such Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, his or her beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, PA 19102.
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13.Income Taxes; Withholding Taxes.
The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.
14.Governing Law.
The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.
15.Grant Subject to Applicable Laws and Company Policies.
These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.
16.Assignment.
These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.
17.Section 409A.
This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance
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with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee), if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.
RADIAN GROUP INC.
By: https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-image_0.jpg
Name:    Mary Dickerson
Title: Executive Vice President, Chief People Officer
By electronically acknowledging and accepting this award of Restricted Stock Units following the date of the Company’s electronic notification to the Grantee, the Grantee (a) acknowledges receipt of the Plan incorporated herein, (b) acknowledges that he or she has read the Award Summary delivered in connection with this grant of Restricted Stock Units and these Terms and Conditions and understands the terms and conditions of them, (c) accepts the award of the Restricted Stock Units described in these Terms and Conditions, (d) agrees to be bound by the terms of the Plan and these Terms and Conditions, and (e) agrees that all decisions and determinations of the Committee with respect to the Restricted Stock Units shall be final and binding.
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Document
        2021 Time-Based RSU Section 16 Officers

EXHIBIT 10.4
RADIAN GROUP INC.
2021 EQUITY COMPENSATION PLAN
RESTRICTED STOCK UNIT GRANT
TERMS AND CONDITIONS
These Terms and Conditions (“Terms and Conditions”) are part of the Restricted Stock Unit Grant made as of May 12, 2021 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to #ParticipantName#, an employee of the Company (the “Grantee”).
RECITALS
WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;
WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan; and
WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:
1.Grant of Restricted Stock Units.
The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Restricted Stock Units”), subject to the vesting and other conditions of these Terms and Conditions.
2.Vesting.
(a)General Vesting Terms. Provided the Grantee remains employed by the Company or a Subsidiary through the applicable vesting date set forth in this Section 2 (the “Vesting Date”) and meets all applicable requirements set forth in these Terms and Conditions, the Restricted Stock Units awarded under these Terms and Conditions shall vest in three substantially equal installments on each of May 15, 2022, May 15, 2023 and May 15, 2024, except as set forth in Sections 2(b), 2(c), 2(d) and 2(e) below (the period over which the Restricted Stock Units vest is referred to as the “Restriction Period”).


(b)Retirement.
(i)If the Grantee terminates employment during the Restriction Period because of the Grantee’s Retirement, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service without Cause, other than on account of death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or a Subsidiary, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or a Subsidiary.
(iii)For purposes of these Terms and Conditions, “Cause” shall mean the Grantee’s (A) indictment for, conviction of, or pleading nolo contendere to, a felony or a crime involving fraud, misrepresentation, or moral turpitude (excluding traffic offenses other than traffic offenses involving the use of alcohol or illegal substances), (B) fraud, dishonesty, theft, or misappropriation of funds in connection with the Grantee’s duties with the Company and its Subsidiaries, (C) material violation of the Company’s Code of Conduct or employment policies, as in effect from time to time, (D) gross negligence or willful misconduct in the performance of the Grantee’s duties with the Company and its Subsidiaries, or (E) a breach of any written confidentiality, nonsolicitation, or noncompetition covenant with the Company or an Affiliate, in each case as determined in the sole discretion of the Committee. In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)Involuntary Termination.
(i)Except as set forth in Section 2(e) below, if the Grantee terminates employment on or before the first Vesting Date because of an Involuntary Termination, one-third of the Grantee’s Restricted Stock Units will automatically vest on the date of such termination of employment and the remaining unvested Restricted Stock Units shall be immediately forfeited. If the Grantee terminates employment during the Restriction Period and after the first Vesting Date because of an Involuntary Termination, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Subsidiaries on account of a termination by the Company or a Subsidiary without Cause, other than on account of Retirement, death or Disability; provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or Subsidiary, as applicable. A termination by the Grantee for Good Reason under the Grantee’s executive severance agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Grantee’s executive severance agreement.
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(d)Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or a Subsidiary during the Restriction Period, the Grantee’s Restricted Stock Units will automatically vest in full on the date of the Grantee’s death or Disability, as applicable. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or a Subsidiary, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the first Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the first Vesting Date, the award will be forfeited.
(e)Change of Control. Notwithstanding the foregoing, if, during the Restriction Period, a Change of Control occurs and the Grantee’s employment with the Company and its Subsidiaries is terminated by the Company or a Subsidiary without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control).
(f)Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all Restricted Stock Units that do not vest either before the termination date or on the termination date associated with such termination. Except as provided in Section 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or a Subsidiary has terminated for any reason. For clarification purposes, in the event the Grantee’s employment is terminated by the Company or a Subsidiary for Cause, the outstanding Restricted Stock Units held by such Grantee shall immediately terminate and be of no further force or effect.
3.Restricted Stock Units Account.
The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.
4.Dividend Equivalents.
    Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable subject to the same vesting terms and other conditions as the Restricted Stock Units to which they relate. Dividend equivalents shall be credited on the Restricted Stock Units when dividends are declared on shares of Common Stock from the Grant Date until the
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payment date for the vested Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Vested dividend equivalents shall be paid in cash at the same time and subject to the same terms as the underlying vested Restricted Stock Units. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.
5.Conversion of Restricted Stock Units.
(a)Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with Section 2(a), the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the applicable Vesting Date.
(b)The vested Restricted Stock Units shall be paid earlier than the applicable Vesting Date in the following circumstances:
(i)If the Restricted Stock Units vest in accordance with Section 2(b) (Retirement), Section 2(c) (Involuntary Termination), or Section 2(d) (death or Disability), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment on account of Retirement, Involuntary Termination or death, or the date of Disability, as applicable.
(ii)If a Change of Control occurs and the Grantee’s employment terminates in accordance with Section 2(e), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment (or, if later, on the date of the Change of Control).
(c)On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to compliance with the six-month delay described in Section 17 below, if applicable, and the payment of any federal, state, local, or foreign withholding taxes as described in Section 13 below, and subject to compliance with the restrictive covenants in Section 7 below. The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 15 below.
(d)Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
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6.Certain Corporate Changes.
If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.
7.Restrictive Covenants.
(a)The Grantee acknowledges and agrees that, during and after the Grantee’s employment with the Company or any of its Affiliates, the Grantee will be subject to, and will comply with, the applicable confidentiality and other terms specified in the Company’s Code of Conduct and Ethics, including terms applicable to former employees. A copy of the Code of Conduct and Ethics has been provided to the Grantee and can be accessed on the Company’s intranet. The Code of Conduct and Ethics, including any future revisions to the Code of Conduct and Ethics, are incorporated into and made a part of these Terms and Conditions as if fully set forth herein.
(b)The Grantee acknowledges that the Grantee’s relationship with the Company and its Affiliates is one of confidence and trust such that the Grantee is, and may in the future be, privy to and/or the Grantee will develop Confidential Information and Trade Secrets of the Company or any of its Affiliates. Subject to the provisions of subsection (j), the Grantee agrees that, at all times during the Grantee’s employment and after the Grantee’s employment with the Company or any of its Affiliates terminates for any reason, whether by the Grantee or by the Company or any of its Affiliates, the Grantee will hold in strictest confidence and will not disclose, use, or publish any Confidential Information and Trade Secrets, except as and only to the extent such disclosure, use, or publication is required during the Grantee’s employment with the Company or any of its Affiliates for the Grantee to fulfill the Grantee’s job duties and responsibilities to the Company or any of its Affiliates. At all times during the Grantee’s employment and after the Grantee’s termination of employment, the Grantee agrees that the Grantee shall take all reasonable precautions to prevent the inadvertent or accidental disclosure of Confidential Information and Trade Secrets. The Grantee hereby assigns to the Company any rights the Grantee may have or acquire in Confidential Information and Trade Secrets, whether developed by the Grantee or others, and the Grantee acknowledges and agrees that all Confidential Information and Trade Secrets shall be the sole property of the Company and its assigns. For purposes of these Terms and Conditions, “Confidential Information and Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or any of its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or any of its Affiliates, that the
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Company or any of its Affiliates treat as proprietary, private, or confidential, and that is not generally known to the public.
(c)The Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, and for the 12 month period immediately following the Grantee’s termination of employment for any reason, and subject to subsection (l) below (the “Restricted Period”), the Grantee will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity within the United States whose primary business involves or is related to providing any mortgage- or real estate-related service or product that, during the Grantee’s employment, the Company or any of its Affiliates provides or is actively engaged in developing through the use of Confidential Information and Trade Secrets; provided however, the foregoing restriction shall only apply to such service or product for which the Grantee has had access to Confidential Information and Trade Secrets or otherwise has had active involvement. The Grantee further agrees that, given the nature of the business of the Company and its Affiliates and the Grantee’s position with the Company, a nationwide geographic scope is appropriate and reasonable.
(d)The Grantee acknowledges and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or any of its Affiliates to become an employee, consultant, or independent contractor to, for, or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate his or her relationship with the Company or any of its Affiliates, unless in each case more than six months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire. If any employee, consultant, or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Grantee, such hiring or solicitation shall be conclusively presumed to be a violation of these Terms and Conditions; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Grantee, or by a headhunter employed by such entity, which does not involve the Grantee, shall not be a violation of this subsection (d).
(e)The Grantee covenants and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, either directly or indirectly through others:
(i)solicit, divert, appropriate, or do business with, or attempt to solicit, divert, appropriate, or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination or any actively sought prospective customer of the Company or any of its Affiliates for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Grantee’s employment with the Company or any of its Affiliates; or
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(ii)encourage any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.
(f)The Grantee acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company or any of its Affiliates at significant expense and effort, and that the restrictions contained in this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company or any of its Affiliates.
(g)The parties to these Terms and Conditions acknowledge and agree that any breach by the Grantee of any of the covenants or agreements contained in this Section 7 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money damages could not adequately compensate such entity. Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity and in addition to the forfeiture requirements set forth in subsection (h) below) to seek to enforce this Section 7 and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in this Section 7. The Grantee agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance, or other equitable relief, the Grantee will not assert or contend that any of the provisions of this Section 7 are unreasonable or otherwise unenforceable. The Grantee irrevocably and unconditionally (i) agrees that any legal proceeding arising out of these Terms and Conditions shall be brought only in the United States District Court for the District of Delaware, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New Castle County, Delaware, (ii) consents to the sole and exclusive jurisdiction and venue of such court in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any such court. The Grantee also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers.
(h)The Grantee acknowledges and agrees that in the event the Grantee breaches any of the covenants or agreements contained in this Section 7 or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:
    (i)    The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and
    (ii)    The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units;
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provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (h)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the covenants or agreements contained in this Section 7, or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.
(i)If any portion of the covenants or agreements contained in this Section 7, the specific forfeiture provisions related to vested shares, or the application thereof, is construed to be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 7 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. The covenants and agreements contained in this Section 7 shall survive the termination of the Grantee’s employment with the Company or any of its Affiliates and shall survive the termination of these Terms and Conditions.
(j)Nothing in these Terms and Conditions, including any restrictions on the use of Confidential Information and Trade Secrets, shall prohibit or restrict the Grantee from initiating communications directly with, responding to any inquiry from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or filing a claim or assisting with an investigation directly with a self-regulatory organization or a government agency or entity, including the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, any agency Inspector General or any other federal, state or local regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Nor do these Terms and Conditions require the Grantee to obtain prior authorization from the Company before engaging in any conduct described in this subsection (j), or to notify the Company that the Grantee has engaged in any such conduct. To the extent permitted by law and except as provided above in this subsection (j), upon receipt of any subpoena, court order, or other legal process compelling the disclosure of Confidential Information and Trade Secrets, the Grantee agrees to give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the fullest extent possible. Please take notice that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to
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the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.
(k)Nothing in these Terms and Conditions shall be deemed to constitute the grant of any license or other right to the Grantee in respect of any Confidential Information and Trade Secrets or other data, tangible property, or intellectual property of the Company or any of its Affiliates.
(l)Notwithstanding the foregoing, should the Grantee violate any of the restrictive covenants of these Terms and Conditions, then the period of the Grantee’s breach of such covenant (“Violation Period”) shall stop the running of the corresponding Restricted Period. Once the Grantee resumes compliance with the restrictive covenant, the Restricted Period applicable to such covenant shall be extended for a period equal to the Violation Period so that the Company enjoys the full benefit of the Grantee’s compliance with the restrictive covenant for the duration of the corresponding Restricted Period.
(m)In the event of a conflict between the terms of the confidentiality, non-competition or non-solicitation covenants in this Section 7 and a confidentiality, non-competition or non-solicitation covenant in a prior stock option, restricted stock unit or other equity grant agreement between the Grantee and the Company, the confidentiality, non-competition and non-solicitation covenants in this Section 7 shall control as of the Grant Date.
8.No Stockholder Rights.
The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.
9.Retention Rights.
Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or a Subsidiary or shall interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment or service at any time.
10.Cancellation or Amendment.
This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.
11.Notice.
Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, PA 19102, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or a Subsidiary thereof, or to such
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other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.
12.Incorporation of Plan by Reference.
These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes such Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, his or her beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 1500 Market Street, Philadelphia, PA 19102.
13.Income Taxes; Withholding Taxes.
The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.
14.Governing Law.
The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.
15.Grant Subject to Applicable Laws and Company Policies.
These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject
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to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.
16.Assignment.
These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.
17.Section 409A.
This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee), if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the
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calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.
RADIAN GROUP INC.
By: https://cdn.kscope.io/ba3341b3a84ab6ff9c65df73a147fda5-image_03.jpg
Name:    Mary Dickerson
Title: Executive Vice President, Chief People Officer

By electronically acknowledging and accepting this award of Restricted Stock Units following the date of the Company’s electronic notification to the Grantee, the Grantee (a) acknowledges receipt of the Plan incorporated herein, (b) acknowledges that he or she has read the Award Summary delivered in connection with this grant of Restricted Stock Units and these Terms and Conditions and understands the terms and conditions of them, (c) accepts the award of the Restricted Stock Units described in these Terms and Conditions, (d) agrees to be bound by the terms of the Plan and these Terms and Conditions, and (e) agrees that all decisions and determinations of the Committee with respect to the Restricted Stock Units shall be final and binding.


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Document

EXHIBIT 31
CERTIFICATIONS
I, Richard G. Thornberry, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q of Radian Group Inc.;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date: August 6, 2021
/s/    RICHARD G. THORNBERRY
 
 Richard G. Thornberry
Chief Executive Officer




I, J. Franklin Hall, certify that:
1.    I have reviewed this Quarterly Report on Form 10-Q of Radian Group Inc.;
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.    The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.    The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
 
Date: August 6, 2021
/s/    J. Franklin Hall
 
 J. Franklin Hall
Chief Financial Officer

Document

EXHIBIT 32
Section 1350 Certifications
I, Richard G. Thornberry, Chief Executive Officer of Radian Group Inc., and I, J. Franklin Hall, Chief Financial Officer of Radian Group Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Quarterly Report on Form 10-Q for the quarter ended June 30, 2021 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Radian Group Inc.
 
Date: August 6, 2021/s/  Richard G. Thornberry
 Richard G. Thornberry
Chief Executive Officer
 
/s/   J. Franklin Hall
 
 J. Franklin Hall
Chief Financial Officer