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, 2025
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
_______________________________
Radian Group Inc.
(Exact name of registrant as specified in its charter)
Delaware
23-2691170
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)
550 East Swedesford Road, Suite 350, Wayne, PA 19087
(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 class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, $0.001 par value per share
RDN
New 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: 135,450,446 shares of common stock, $0.001 par value per share, outstanding on July 30, 2025.
Table of Contents
Page
Glossary of Abbreviations and Acronyms for Selected References
3
Cautionary Note Regarding Forward-Looking Statements—Safe Harbor Provisions
7
PART I—FINANCIAL INFORMATION
Item 1
Financial Statements (Unaudited)
9
Item 2
Management’s Discussion and Analysis of Financial Condition and Results of Operations
46
Item 3
Quantitative and Qualitative Disclosures About Market Risk
67
Item 4
Controls and Procedures
68
PART II—OTHER INFORMATION
Legal Proceedings
Item 1A
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
69
Item 5
Other Information
Item 6
Exhibits
70
Signatures
71
2
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.
A number of cross-references to additional information included throughout this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”) are also utilized throughout this report, to assist readers seeking additional information related to a particular subject.
Term
Definition
2012 QSR Agreements
Collectively, the quota share reinsurance agreements entered into with a third-party reinsurance provider in the second and fourth quarters of 2012 to cede on a combined basis a portion of NIW originated between the fourth quarter of 2011 and the fourth quarter of 2014
2016 Single Premium QSR Agreement
Quota 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 to cede a portion of Single Premium NIW originated between January 1, 2012, and December 31, 2017
2018 Single Premium QSR Agreement
Quota share reinsurance agreement entered into with a panel of third-party reinsurance providers in October 2017 to cede a portion of Single Premium NIW originated between January 1, 2018, and December 31, 2019
2020 Single Premium QSR Agreement
Quota share reinsurance agreement entered into with a panel of third-party reinsurance providers in January 2020 to cede a portion of Single Premium NIW originated between January 1, 2020, and December 31, 2021
2022 QSR Agreement
Quota share reinsurance arrangement entered into with a panel of third-party reinsurance providers to cede, starting July 1, 2022, a portion of NIW, which includes both Recurring Premium Policies and Single Premium Policies, originated between January 1, 2022, and June 30, 2023
2023 QSR Agreement
Quota share reinsurance arrangement entered into with a panel of third-party reinsurance providers to cede, starting July 1, 2023, a portion of NIW, which includes both Recurring Premium Policies and Single Premium Policies, originated between July 1, 2023, and June 30, 2024
2023 XOL Agreement
Excess-of-loss reinsurance arrangement entered into with a panel of third-party reinsurance providers to provide reinsurance on a portion of NIW, which includes both Recurring Premium Policies and Single Premium Policies, originated between October 1, 2021, and March 31, 2022
2024 QSR Agreement
Quota share reinsurance arrangement entered into with a panel of third-party reinsurance providers to cede, starting July 1, 2024, a portion of NIW, which includes both Recurring Premium Policies and Single Premium Policies, originated between July 1, 2024, and June 30, 2025
ABS
Asset-backed securities
All Other
Radian’s non-reportable operating segments and other business activities, which consist of: (i) income (losses) from assets held by Radian Group; (ii) related general corporate operating expenses not attributable or allocated to our reportable segment; and (iii) the operating results from certain other immaterial activities and operating segments, including our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses
ASU
Accounting Standards Update, issued by the FASB to communicate changes to GAAP
Available Assets
As 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
BMO Master Repurchase Agreement
Uncommitted Master Repurchase Agreement, dated September 28, 2022, and as amended to date, between Bank of Montreal, a Canadian Chartered bank acting through its Chicago Branch, and Radian Mortgage Capital LLC to finance Radian Mortgage Capital’s acquisition of mortgage loans and related mortgage loan assets
Claim Denial
Our legal right, under certain conditions, to deny a claim
Claim Severity
The total claim amount paid divided by the original coverage amount
CLO
Collateralized loan obligations
CMBS
Commercial mortgage-backed securities
Cures
Loans that were in default as of the beginning of a period and are no longer in default primarily because payments were received such that the loan is no longer 60 or more days past due
Default to Claim Rate
The percentage of defaulted loans that are assumed to result in a claim submission
Dodd-Frank Act
Dodd-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 a series of Eagle Re entities related to reinsurance coverage issued starting in 2018
Everbank Master Repurchase Agreement
Uncommitted Master Repurchase Agreement, dated April 30, 2025, between Everbank Bank N.A., a national association, and Radian Mortgage Capital LLC to finance Radian Mortgage Capital’s acquisition of mortgage loans and related mortgage loan assets
Exchange Act
Securities Exchange Act of 1934, as amended
Fannie Mae
Federal National Mortgage Association
FASB
Financial Accounting Standards Board
FHA
Federal Housing Administration
FHFA
Federal Housing Finance Agency
FHLB
Federal Home Loan Bank of Pittsburgh
FICO
Fair 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
Freddie Mac
Federal Home Loan Mortgage Corporation
GAAP
Generally accepted accounting principles in the U.S., as amended from time to time
Goldman Sachs Master Repurchase Agreement
Uncommitted Master Repurchase Agreement, effective July 15, 2022, and as amended to date, among Goldman Sachs Bank USA, a national banking institution, Radian Liberty Funding LLC, a Delaware limited liability company, and Radian Mortgage Capital to finance the acquisition of mortgage loans and related mortgage loan assets
GSE(s)
Government-Sponsored Enterprises (Fannie Mae and Freddie Mac)
IBNR
Losses incurred but not reported
IIF
Insurance in force is the aggregate unpaid principal balances of the underlying loans, as reported by mortgage servicers or estimated by us
JP Morgan Master Repurchase Agreement
Uncommitted Master Repurchase Agreement, effective January 29, 2024, assigned by Flagstar Bank N.A. to JPMorgan Chase Bank, National Association, as administrative agent, to finance the acquisition of mortgage loans and related mortgage loan assets
LAE
Loss adjustment expenses, which include the cost of investigating and adjusting losses and paying claims
LTV
Loan-to-value ratio, calculated as the ratio of the original loan amount to the original value of the property, expressed as a percentage
Master Repurchase Agreements
The Goldman Sachs Master Repurchase Agreement, the BMO Master Repurchase Agreement, the JP Morgan Master Repurchase Agreement and the Everbank Master Repurchase Agreement, collectively
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
4
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 Policies
Insurance policies where premiums are paid on a monthly installment basis
Mortgage Conduit
Radian’s mortgage conduit business, operated primarily through Radian Mortgage Capital, which purchases eligible mortgage loans on the secondary market from residential mortgage lenders with the intent to either sell directly to mortgage investors or distribute into the capital markets through private label securitizations, with the option to hold servicing rights for the loans sold
Mortgage Insurance
Radian’s mortgage insurance business, operated primarily through Radian Guaranty, which provides credit-related insurance coverage for the benefit of mortgage lending institutions and mortgage credit investors, principally through private mortgage insurance on residential first-lien mortgage loans
MPP Requirement
Certain 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
NIW
New insurance written, representing the aggregate original principal amount of the mortgages underlying the Primary Mortgage Insurance
Parent Guarantees
Three separate parent guaranty agreements, entered into by Radian Group in connection with its mortgage conduit business, to guaranty the obligations of certain of its subsidiaries in connection with the Master Repurchase Agreements
Persistency Rate
The percentage of IIF that remains in force over a period of time
PMIERs
Private Mortgage Insurer Eligibility Requirements issued by the GSEs under oversight of the FHFA and updated by them from time to time to set forth requirements an approved insurer must meet and maintain to provide mortgage guaranty insurance on loans acquired by the GSEs
PMIERs Cushion
Under PMIERs, Radian Guaranty’s excess of Available Assets over Minimum Required Assets
Pool Mortgage Insurance
Insurance 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” (usually between 1% and 10%), 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 Insurance
Insurance 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, which are updated periodically and filed in each of the jurisdictions in which we conduct business
QSR Program
The Single Premium QSR Program, the 2012 QSR Agreements, the 2022 QSR Agreement, the 2023 QSR Agreement and the 2024 QSR Agreement, collectively
Radian
Radian Group Inc. together with its consolidated subsidiaries
Radian Group
Radian Group Inc., our insurance holding company
Radian Guaranty
Radian 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 Mortgage Capital
Radian Mortgage Capital LLC, a Delaware limited liability company and an indirect subsidiary of Radian Group, through which we acquire and sell residential mortgage loans
Radian Title Insurance
Radian Title Insurance Inc., an Ohio domiciled insurance company and an indirect subsidiary of Radian Group, through which we offer title insurance and settlement services
5
RBC States
Risk-based capital states, which are those states that currently impose a statutory or regulatory risk-based capital requirement
Real Estate Services
Radian’s real estate services business, operated primarily through Radian Real Estate Management LLC, which provides residential real estate management, valuation and due diligence services to single family rental investors, the GSEs and mortgage lenders, servicers and investors
Real Estate Technology
Radian’s real estate technology services business, operated primarily through homegenius Real Estate LLC
Rescission(s)
Our 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
RIF
Risk in force; for Primary Mortgage Insurance, RIF is equal to IIF multiplied by the insurance coverage percentage, whereas for Pool Mortgage Insurance, it represents the remaining exposure under the agreements
Risk-to-capital
Under certain state regulations, a maximum ratio of net RIF calculated relative to the level of statutory capital
RMBS
Residential mortgage-backed securities
RSU(s)
Restricted stock unit
SAP
Statutory 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
SEC
United States Securities and Exchange Commission
Securities Act
Securities Act of 1933, as amended
Senior Notes due 2027
Our 4.875% unsecured senior notes due March 2027 ($450 million original principal amount)
Senior Notes due 2029
Our 6.200% unsecured senior notes due May 2029 ($625 million original principal amount)
Single Premium NIW
NIW on Single Premium Policies
Single Premium Policy / Policies
Insurance 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 Program
The 2016 Single Premium QSR Agreement, the 2018 Single Premium QSR Agreement and the 2020 Single Premium QSR Agreement, collectively
SOFR
Secured Overnight Financing Rate
Statutory RBC Requirement
Risk-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
Title
Radian’s title insurance and settlement services business, operated primarily through Radian Title Insurance and Radian Settlement Services Inc., which serves as a national title insurance underwriter and agency delivering closing and settlement services for purchase, refinance, home equity and default real estate transactions to mortgage lenders and investors, real estate agents, the GSEs and consumers
VIE
Variable interest entity
XOL Program
The 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 level, up to a specified limit. The program includes reinsurance agreements with the Eagle Re Issuers in connection with various issuances of mortgage insurance-linked notes, as well as more traditional XOL reinsurance agreements with third-party reinsurers.
6
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. 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. 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:
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” included in our 2024 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.
8
Item 1. Financial Statements (Unaudited)
INDEX TO ITEM 1. FINANCIAL STATEMENTS
Quarterly Financial Statements
Condensed Consolidated Balance Sheets (Unaudited)
10
Condensed Consolidated Statements of Operations (Unaudited)
11
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)
12
Condensed Consolidated Statements of Changes in Common Stockholders’ Equity (Unaudited)
13
Condensed Consolidated Statements of Cash Flows (Unaudited)
14
Notes to Unaudited Condensed Consolidated Financial Statements
Note 1 - Description of Business
16
Note 2 - Significant Accounting Policies
Note 3 - Net Income Per Share
17
Note 4 - Segment Reporting
18
Note 5 - Fair Value of Financial Instruments
20
Note 6 - Investments
24
Note 7 - Residential Mortgage Loans
28
Note 8 - Reinsurance
31
Note 9 - Other Assets and Liabilities
36
Note 10 - Income Taxes
37
Note 11 - Losses and LAE
Note 12 - Borrowings and Financing Activities
39
Note 13 - Commitments and Contingencies
40
Note 14 - Capital Stock
41
Note 15 - Accumulated Other Comprehensive Income (Loss)
43
Note 16 - Statutory Information
44
Radian Group Inc. and Subsidiaries
(In thousands, except per-share amounts)
June 30,2025
December 31,2024
Assets
Investments (Notes 5 and 6)
Fixed maturities
Available for sale—at fair value (amortized cost of $5,449,992 and $5,511,501)
$
5,108,278
5,074,920
Trading—at fair value (amortized cost of $78,791 and $89,479)
74,317
82,652
Equity securities—at fair value (cost of $97,231 and $144,579)
92,991
138,189
Residential mortgage loans held for sale—at fair value (Note 7)
698,367
519,885
Other long-term invested assets—at fair value
8,238
7,942
Short-term investments—at fair value (includes $164,529 and $125,723 of reinvested cash collateral held under securities lending agreements)
502,501
521,648
Total investments
6,484,692
6,345,236
Cash
22,090
38,823
Restricted cash
105
2,649
Accrued investment income
50,542
49,053
Accounts and notes receivable
130,020
128,093
Reinsurance recoverables (includes $831 and $444 for paid losses)
43,652
36,433
Deferred policy acquisition costs
17,248
17,746
Property and equipment, net
23,516
27,637
Prepaid federal income taxes (Note 10)
997,805
921,080
Other assets (Note 9)
408,675
375,931
Consolidated VIE assets (Note 7)
Securitized residential mortgage loans held for investment—at fair value
1,394,700
717,227
Other VIE assets
7,612
4,080
Total assets
9,580,657
8,663,988
Liabilities and stockholders’ equity
Liabilities
Reserve for losses and LAE (Note 11)
383,103
360,326
Unearned premiums
171,901
188,337
Senior notes (Note 12)
1,066,603
1,065,337
Secured borrowings (Note 12)
762,933
538,294
Net deferred tax liability
841,376
746,685
Other liabilities (Note 9)
490,165
431,556
Consolidated VIE liabilities (Note 7)
Securitized nonrecourse debt—at fair value
1,360,195
703,526
Other VIE liabilities
11,700
6,069
Total liabilities
5,087,976
4,040,130
Commitments and contingencies (Note 13)
Stockholders’ equity
Common stock ($0.001 par value; 485,000 shares authorized; 2025: 156,781 and 135,395 shares issued and outstanding, respectively; 2024: 168,350 and 147,569 shares issued and outstanding, respectively)
157
168
Treasury stock, at cost (2025: 21,387 shares; 2024: 20,782 shares)
(988,764
)
(968,246
Additional paid-in capital
847,399
1,246,826
Retained earnings
4,906,830
4,695,348
Accumulated other comprehensive income (loss) (Note 15)
(272,941
(350,238
Total stockholders’ equity
4,492,681
4,623,858
Total liabilities and stockholders’ equity
See Notes to Unaudited Condensed Consolidated Financial Statements.
Three Months EndedJune 30,
Six Months EndedJune 30,
2025
2024
Revenues
Net premiums earned (Note 8)
237,520
237,731
474,199
473,588
Services revenue (Note 4)
10,924
13,265
23,040
25,853
Net investment income (Note 6)
72,769
73,766
141,343
142,987
Net gains (losses) on investments and other financial instruments (includes net realized gains (losses) on investments of $(2,053), $(3,019), $(3,487) and $(6,701)) (Note 6)
(4,852
(4,487
(5,575
(3,997
Income (loss) on consolidated VIEs (Note 7)
185
—
613
Other income
1,458
872
2,498
2,134
Total revenues
318,004
321,147
636,118
640,565
Expenses
Provision for losses (Note 11)
12,097
(1,745
27,264
(8,779
Policy acquisition costs
7,205
6,522
13,593
13,316
Cost of services
8,418
9,535
17,189
18,862
Other operating expenses
89,397
91,648
166,246
174,284
Interest expense (Note 12)
25,874
27,064
48,373
56,110
Total expenses
142,991
133,024
272,665
253,793
Pretax income
175,013
188,123
363,453
386,772
Income tax provision
33,217
36,220
77,099
82,515
Net income
141,796
151,903
286,354
304,257
Net income per share
Basic
1.03
0.99
2.02
1.98
Diluted
1.02
0.98
2.00
1.96
Weighted average number of common shares outstanding—basic
137,376
153,110
141,910
153,879
Weighted average number of common and common equivalent shares outstanding—diluted
138,360
154,399
143,012
155,271
(In thousands)
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 recognized
20,151
(17,242
73,772
(51,729
Less: Reclassification adjustment for net gains (losses) on investments included in net income
Net realized gains (losses) on disposals and non-credit related impairment losses
(1,624
(2,427
(3,480
(5,337
Net unrealized gains (losses) on investments
21,775
(14,815
77,252
(46,392
Other adjustments to comprehensive income (loss), net
45
(68
Other comprehensive income (loss), net of tax
77,297
(46,460
Comprehensive income (loss)
163,571
137,088
363,651
257,797
Common stock
Balance, beginning of period
162
171
173
Issuance of common stock under incentive and benefit plans
Shares repurchased under share repurchase program (Note 14)
(7
(1
(13
(3
Balance, end of period
172
Treasury stock
(969,396
(946,202
(945,870
Repurchases of common stock under incentive plans
(19,368
(21,016
(20,518
(21,348
(967,218
1,048,738
1,390,436
1,430,594
668
856
1,838
2,387
Share-based compensation
22,816
15,228
32,702
24,040
(224,823
(50,179
(433,967
(100,680
1,356,341
4,802,038
4,357,823
4,243,759
Dividends and dividend equivalents declared
(37,004
(39,391
(74,872
(77,681
4,470,335
Accumulated other comprehensive income (loss)
(294,716
(362,496
(330,851
Net unrealized gains (losses) on investments, net of tax
Other adjustments to other comprehensive income (loss)
(377,311
4,482,319
430
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Purchases of residential mortgage loans held for sale
(1,155,133
(613,469
Proceeds from sales of residential mortgage loans held for sale
185,589
178,853
Principal payments from residential mortgage loans held for sale
20,797
6,879
Net (gains) losses on investments and other financial instruments
5,575
3,997
Net (gains) losses on consolidated VIE assets and liabilities
651
Loss on extinguishment of debt
4,275
Depreciation, other amortization, and other impairments, net
41,100
34,272
Deferred income tax provision
74,144
78,899
Change in:
(5,021
(1,824
(1,719
(13,845
Reinsurance recoverable
(7,219
(5,155
498
152
Prepaid federal income tax
(76,725
(87,416
Other assets
9,375
12,445
(16,436
(19,302
Reserve for losses and LAE
22,777
(12,678
Reinsurance funds withheld
6,183
5,285
Other liabilities
(36,319
(31,863
Net cash provided by (used in) operating activities
(645,529
(156,238
Cash flows from investing activities
Proceeds from sales of:
Available for sale securities
233,741
300,023
Equity securities
17,908
14,507
Proceeds from redemptions of:
413,744
429,889
Trading securities
10,403
10,553
Purchases of:
(560,977
(752,250
(10,184
(9,101
Sales, redemptions and (purchases) of:
Short-term investments, net
23,185
(66,661
Other assets and other invested assets, net
(325
1,231
Principal payments from securitized residential mortgage loans held for investment
106,308
Additions to property and equipment
(2,493
(2,624
Net cash provided by (used in) investing activities
231,310
(74,433
Radian Group Inc. and SubsidiariesCondensed Consolidated Statements of Cash Flows (Unaudited) (continued)
Cash flows from financing activities
Dividends and dividend equivalents paid
(75,915
(78,070
Issuance of common stock
779
887
Repurchases of common stock, including excise taxes paid
(431,909
(100,033
Issuance of senior notes
616,745
Redemption of senior notes
(527,079
Issuance of securitized nonrecourse debt
745,117
Repayments of securitized nonrecourse debt
(106,308
Proceeds (repayments) related to cash collateral for loaned securities, net
38,806
(50,967
Proceeds from secured borrowings
1,934,981
830,123
Repayments of secured borrowings
(1,710,341
(464,934
Proceeds from credit facility borrowings
50,000
Repayments of credit facility borrowings
(50,000
Credit facility commitment fees paid
(268
(282
Net cash provided by (used in) financing activities
394,942
226,390
Increase (decrease) in cash and restricted cash
(19,277
(4,281
Cash and restricted cash, beginning of period
41,472
20,065
Cash and restricted cash, end of period
22,195
15,784
Supplemental noncash information
Transfer from residential mortgage loans held for sale to securitized residential mortgage loans held for investment
767,948
Retention of mortgage servicing and other related rights from residential mortgage loan sales
3,219
1,484
15
1. Description of Business
We are a mortgage and real estate company, providing both credit-related mortgage insurance coverage and an array of products and services across the residential real estate and mortgage finance industries. We have one reportable business segment—Mortgage Insurance.
Our Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance on residential first-lien mortgage loans to mortgage lending institutions and mortgage credit investors. We provide our mortgage insurance products and services 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 mortgage investors, as well as other beneficiaries such as the GSEs, by mitigating default-related losses on residential mortgage loans. Generally, these loans are made to home buyers 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, almost all of which are currently sold to the GSEs.
Our total direct primary mortgage IIF and RIF were $276.7 billion and $72.8 billion, respectively, as of June 30, 2025, compared to $275.1 billion and $72.1 billion, respectively, as of December 31, 2024.
As our primary mortgage insurance subsidiary, Radian Guaranty is subject to various capital and financial requirements imposed by the GSEs and state insurance regulators. These include the PMIERs financial requirements, as well as Risk-to-capital and other risk-based capital measures and surplus requirements. Failure to comply with these capital and financial requirements may limit the amount of insurance that Radian Guaranty writes or may prohibit it from writing insurance altogether. The GSEs and state insurance regulators possess significant discretion regarding all aspects of Radian Guaranty’s business. See Note 16 for additional information on PMIERs and other regulatory information.
We report on our other operating segments and business activities within an All Other category, which includes the results of our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses.
See Note 4 for additional information about our Mortgage Insurance reportable segment and All Other business activities.
Risks and Uncertainties
In assessing the Company’s current financial condition and developing forecasts of future operations, management has made significant judgments and estimates with respect to potential factors impacting our financial and liquidity position. These judgments and estimates are subject to risks and uncertainties that could affect amounts reported in our financial statements in future periods and that could cause actual results to be materially different from our estimates.
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 and its subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. Certain prior period amounts have been reclassified to conform to the current period presentation. 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 generally refer to our holding company alone, without its consolidated subsidiaries, as “Radian Group.” We refer to Radian Group together with its consolidated subsidiaries as “Radian,” the “Company,” “we,” “us” or “our,” unless the context
requires otherwise. 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 consolidated 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 2024 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.
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 2024 Form 10-K for information regarding other significant accounting policies. There have been no significant changes in our significant accounting policies from those discussed in our 2024 Form 10-K.
Recent Accounting Pronouncements
Accounting Standards Not Yet Adopted
In December 2023, the FASB issued ASU 2023-09, Income Taxes—Improvements to Income Tax Disclosures, an update which enhances income tax disclosures. This guidance requires disaggregated information about an entity’s effective tax rate reconciliation as well as information on income taxes paid. This update is applicable to all public entities and is effective for fiscal years starting after December 15, 2024. Early adoption is permitted. The amendments in this update should be applied prospectively; however, retrospective application is permitted. We are currently evaluating the impact the new accounting guidance will have on our annual disclosures.
In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. This update requires enhanced disclosures of certain costs and expenses in the notes to the financial statements. This update is applicable to all public entities and is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The amendments in this update should be applied prospectively; however, retrospective application is permitted. We are currently evaluating the impact the new accounting guidance will have on our disclosures.
3. Net Income Per Share
Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding, while diluted net income per share is computed by dividing net income 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 per share is as follows.
Net income—basic and diluted
Average common shares outstanding—basic
Dilutive effect of share-based compensation arrangements (1)
984
1,289
1,102
1,392
Adjusted average common shares outstanding—diluted
Shares of common stock equivalents
64
1
4. Segment Reporting
We have one reportable segment, Mortgage Insurance, which derives its revenue primarily from mortgage insurance. In addition to this reportable segment, in All Other we report activities for our non-reportable operating segments and other business activities that consist of: (i) income (losses) from assets held by Radian Group, our holding company; (ii) general corporate operating expenses not attributable or allocated to our reportable segment; and (iii) the operating results from certain other immaterial activities and operating segments, including our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses.
We allocate corporate operating expenses to our Mortgage Insurance business and our immaterial operating businesses included in All Other based primarily on their respective forecasted annual percentage of total revenue, which approximates the estimated percentage of management time spent on each business. In addition, we allocate all corporate interest expense to our Mortgage Insurance segment, due to the capital-intensive nature of our Mortgage Insurance business. We do not manage assets by operating segments.
See Note 1 for additional details about our Mortgage Insurance business.
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 businesses and to allocate resources to them.
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, except for those investments and other financial instruments attributable to our Mortgage Conduit business and (ii) impairment of other long-lived assets and other non-operating items, if any, such as gains (losses) from the sale of lines of business, acquisition-related income (expenses) and gains (losses) on extinguishment of debt, among others. See Note 4 of Notes to Consolidated Financial Statements in our 2024 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 segment to consolidated pretax income is as follows.
Reconciliation of adjusted pretax operating income (loss) to consolidated pretax income
Mortgage Insurance adjusted pretax operating income
189,522
198,763
383,815
408,613
Reconciling items
All Other adjusted pretax operating income (loss)
(16,361
(6,080
(19,820
(13,113
Net gains (losses) on investments and other financial instruments (1)
1,852
(4,438
(158
(4,331
Impairment of other long-lived assets and other non-operating items (2)
(122
(384
(4,397
Consolidated pretax income
Segment and Revenue Information
The following table summarizes information for our Mortgage Insurance reportable segment as follows.
Reportable segment revenue, significant segment expenses and other segment information
($ in thousands)
Total Mortgage Insurance revenues
288,316
285,983
572,614
571,006
Less:
Provision for losses
11,954
(1,769
27,294
(8,655
Direct other operating expenses
19,874
17,157
36,441
34,427
Allocated corporate operating expenses (1)
42,328
43,197
77,451
77,706
Interest expense
17,428
21,957
33,917
45,290
Other segment items
156
103
309
Adjusted pretax operating income
Other Mortgage Insurance segment information:
Direct depreciation expense
1,916
2,069
3,856
3,992
Loss Ratio (2)
5.1
%
(0.8
)%
5.8
(1.8
Expense Ratio (3)
29.7
28.5
27.3
26.8
19
The following table, which represents total services revenue in our condensed consolidated statements of operations for the periods indicated, provides the disaggregation of services revenue by revenue type.
Services revenue
Contract underwriting services
42
215
519
Valuation
2,447
4,086
6,226
8,561
Single family rental
1,245
2,368
3,095
4,728
Asset management technology platform
1,250
1,223
2,527
2,423
Real estate owned asset management
1,213
1,100
2,356
2,249
Other real estate services
32
4,013
3,540
7,274
6,113
682
639
1,310
1,251
Total services revenue
See Note 2 of Notes to Consolidated Financial Statements in our 2024 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 2024 Form 10-K.
The following tables include a list of assets and liabilities that are measured at fair value by hierarchy level as of the dates indicated.
Assets and liabilities carried at fair value by hierarchy level
June 30, 2025
Level I
Level II
Level III
Total
Investments
Fixed maturities available for sale
U.S. government and agency securities
130,575
1,815
132,390
State and municipal obligations
143,487
Corporate bonds and notes
2,427,824
991,509
325,384
480,443
Other ABS
560,421
Mortgage insurance-linked notes (1)
46,820
Total fixed maturities available for sale
4,977,703
Fixed maturities trading securities
41,969
24,357
2,765
5,226
Total fixed maturities trading securities
80,146
6,299
6,546
Residential mortgage loans held for sale (2)
Other invested assets (3) (4)
6,088
Short-term investments
895
Money market instruments
335,979
23,296
Other investments (5)
142,331
Total short-term investments
166,522
Total investments at fair value (4)
546,700
5,923,208
12,634
6,482,542
Other
Derivative assets
2,826
Mortgage servicing and other related rights
4,600
Loaned securities (6)
2,979
130,765
45,948
Securitized residential mortgage loans held for investment (2)
Total assets at fair value (4)
595,627
7,451,499
17,234
8,064,360
Derivative liabilities
667
868
1,535
Securitized nonrecourse debt (2)
Total liabilities at fair value
1,360,862
1,361,730
21
December 31, 2024
119,630
8,702
128,332
148,891
2,476,639
1,011,630
411,999
411,462
438,811
47,156
4,955,290
50,845
23,940
3,029
4,838
128,368
3,275
5,908
1,750
384,934
49,905
16,054
69,005
136,714
632,932
5,697,816
12,454
6,343,202
4,274
Mortgage servicing rights
2,702
130,256
60
8,805
717,228
641,737
6,549,634
15,156
7,206,527
1,249
703,566
704,815
22
Other Fair Value Disclosure
The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our condensed consolidated balance sheets are as follows as of the dates indicated.
Financial instruments not carried at fair value
CarryingAmount
EstimatedFair Value
Company-owned life insurance
113,529
110,968
Senior notes
1,099,765
1,088,306
Secured borrowings
Mortgage loan financing facilities
664,248
492,429
FHLB advances
98,685
98,720
45,865
45,888
Total secured borrowings
762,968
538,317
The fair value of our company-owned life insurance is estimated based on the cash surrender value less applicable surrender charges. These assets are categorized in Level II of the fair value hierarchy. See Note 9 for further information on our company-owned life insurance.
The fair value of our senior notes is estimated based on quoted market prices. The fair value of our secured borrowings is estimated based on current market rates and contractual cash flows including, for FHLB advances, any fees that may be required to be paid to the FHLB. The carrying amount of borrowings under our mortgage loan financing facilities approximates fair value due to the floating rate nature of that debt. These liabilities are all categorized in Level II of the fair value hierarchy. See Note 12 for further information about our senior notes and secured borrowings.
23
6. Investments
Available for Sale Securities
Our available for sale securities within our investment portfolio consist of the following as of the dates indicated.
AmortizedCost
GrossUnrealizedGains
GrossUnrealizedLosses
Fair Value
164,513
126
(29,270
135,369
159,695
167
(16,375
2,767,925
17,288
(230,241
2,554,972
1,063,500
8,628
(80,619
343,420
(18,073
480,161
862
(580
559,833
4,055
(3,467
45,384
1,436
Total securities available for sale, including loaned securities
5,584,431
32,599
(378,625
(2)
5,238,405
Less: loaned securities (3)
134,439
130,127
5,449,992
160,509
(32,177
167,114
(18,263
2,878,705
5,261
(277,535
2,606,431
1,104,721
6,965
(100,056
438,139
51
(26,191
411,328
983
(849
442,620
1,556
(5,305
438,871
45,447
1,709
5,648,583
16,565
(460,376
5,204,772
137,082
129,852
5,511,501
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, 2025, and December 31, 2024, are loaned securities that are classified as other assets on our condensed consolidated balance sheets, as further described below under “Loaned Securities.”
Unrealized losses on fixed maturities available for sale by category and length of time
Less Than 12 Months
12 Months or Greater
(In thousands)Description of Securities
UnrealizedLosses
4,696
(532
112,687
(28,738
117,383
40,568
(1,724
84,611
(14,651
125,179
312,136
(7,899
1,362,178
(222,342
1,674,314
124,531
(2,878
543,954
(77,741
668,485
8,280
(75
304,678
(17,998
312,958
99,329
(228
35,728
(352
135,057
91,004
(1,928
33,629
(1,539
124,633
680,544
(15,264
2,477,465
(363,361
3,158,009
5,807
(574
113,783
(31,603
119,590
45,539
(2,399
78,523
(15,864
124,062
749,427
(18,113
1,552,535
(259,422
2,301,962
296,899
(6,467
559,525
(93,589
856,424
15,179
(139
388,282
(26,052
403,461
44,350
(65
43,542
(784
87,892
180,824
(3,081
45,192
(2,224
226,016
1,338,025
(30,838
2,781,382
(429,538
4,119,407
There were 850 and 1,059 securities in an unrealized loss position at June 30, 2025, and December 31, 2024, respectively. We determined that these unrealized losses were due to non-credit factors and that, as of June 30, 2025, we did not expect to realize a loss for our investments in an unrealized loss position given our intent and ability to hold these investment securities until recovery of their amortized cost basis. See Note 2 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for information regarding our accounting policy for impairments of investments.
25
Contractual Maturities
The contractual maturities of fixed-maturities available for sale are as follows.
Contractual maturities of fixed maturities available for sale
Amortized Cost
Due in one year or less
148,535
146,434
Due after one year through five years (1)
1,019,664
995,687
Due after five years through 10 years (1)
1,021,904
986,687
Due after 10 years (1)
902,030
705,020
Asset-backed and mortgage-backed securities (2)
2,492,298
2,404,577
Less: loaned securities
Net Investment Income
Net investment income consists of the following.
Net investment income
Investment income
57,835
57,924
114,549
115,183
2,634
3,067
4,779
5,606
Residential mortgage loans held for sale (1)
10,064
5,411
16,337
7,204
3,409
8,614
8,160
17,572
Other (2)
1,860
1,504
3,433
3,101
Gross investment income
75,802
76,520
147,258
148,666
Investment expenses (2)
(3,033
(2,754
(5,915
(5,679
26
Net Gains (Losses) on Investments and Other Financial Instruments
Net gains (losses) on investments and other financial instruments consists of the following.
Net gains (losses) on investments and other financial instruments
Net realized gains (losses) on investments sold or redeemed (1)
Gross realized gains
371
579
463
631
Gross realized losses
(2,426
(3,413
(4,868
(7,148
Fixed maturities available for sale, net
(2,055
(2,834
(4,405
(6,517
(191
898
Other investments
(2,053
(3,019
(3,487
(6,701
Change in unrealized gains (losses) on investments sold or redeemed (1)
367
(937
130
Impairment losses due to intent to sell
(237
Net unrealized gains (losses) on investments still held (1)
30
(1,371
(3,131
1,304
(416
(243
3,605
(24
(42
(28
(55
(1,829
1,978
419
Total net gains (losses) on investments (1)
(739
(4,718
(2,446
(6,389
Net gains (losses) on residential mortgage loans held for sale (Note 7) (2)
(6,704
(50
(5,417
334
Net gains (losses) on other financial instruments (1) (3)
2,591
281
2,288
2,058
Loaned Securities
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. Under this program, we had loaned $180 million and $139 million of our investment securities to third parties as of June 30, 2025, and December 31, 2024, respectively, including fixed-maturities, equity securities and short-term investments. Although we report such securities at fair value within other assets on our condensed consolidated balance sheets, rather than within investments, the detailed information we provide in this Note 6 includes these securities.
All of our securities lending agreements are classified as overnight and revolving. Securities collateral on deposit with us from third-party borrowers totaling $20 million and $18 million as of June 30, 2025, and December 31, 2024, 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.
See Note 5 herein for additional detail on the loaned securities and see Note 6 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional information about our accounting policies with respect to our securities lending agreements and the collateral requirements thereunder.
27
Our investments include securities totaling $15 million and $14 million at June 30, 2025, and December 31, 2024, respectively, that are 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. Residential Mortgage Loans
Radian Mortgage Capital, our mortgage conduit subsidiary, acquires residential mortgage loans with the intention of then either selling the loans directly to mortgage investors, including the GSEs, or distributing them into the capital markets through private label securitizations, with the option to retain and manage certain components of the underlying credit risk.
During the aggregation period following loan acquisition, we carry these loans as residential mortgage loans held for sale until the loan is either sold or securitized. Net gains (losses) associated with these residential mortgage loans held for sale and any related hedges are included in net gains (losses) on investments and other financial instruments in our condensed consolidated statements of operations. Interest income on these residential mortgage loans held for sale is included in net investment income, while interest expense on mortgage loan financing facilities is reported in interest expense.
For those loans that are ultimately contributed to a securitization, we perform an analysis of our ongoing participation and rights in the securitization to determine if we need to consolidate the securitization trust. If we conclude that we are required to consolidate the securitization trust and continue to reflect those securitized mortgage loans on our condensed consolidated balance sheets, we then reclassify those loans as securitized residential mortgage loans held for investment and record the prospective change in fair value and interest income and expense as total income (loss) on VIEs, as described further below.
Residential Mortgage Loans Held for Sale
The carrying value of our residential mortgage loans held for sale owned by Radian Mortgage Capital totaled $698 million and $520 million at June 30, 2025, and December 31, 2024, respectively, and is based on fair value. The estimated fair value of our residential mortgage loans held for sale is subject to, among other things, changes in mortgage interest rates from the date we agree to purchase the mortgage loan through the date we agree to sell the mortgage loan. To mitigate this interest rate risk, we enter into certain derivative contracts with third parties during the period from the commitment to purchase the mortgage loans until the loans are either securitized or sold directly to mortgage investors. We elected the fair value option for our residential mortgage loans held for sale to allow for consistent treatment of both mortgage loans and any associated hedges or derivatives.
As of June 30, 2025, our residential mortgage loans held for sale consisted of 832 mortgage loans with a total unpaid principal balance, as reported to us by our sub-servicers, of $690 million, related to properties in 46 states and the District of Columbia. As measured by the unpaid principal balance as of June 30, 2025, 99% of these loans were originated in the past six months, including 76% that were originated in the second quarter of 2025. Loans on properties in California accounted for 24% of this balance, with no other state concentration exceeding 10% as of June 30, 2025. The majority of the loans we hold are non-agency loans, with balances in excess of the GSEs’ conforming loan limits and with credit risk characteristics commensurate with the prime jumbo private label securitization market. As of June 30, 2025, none of these mortgage loans were greater than ninety days delinquent or in nonaccrual status.
Further, as of June 30, 2025, the Company had commitments to purchase and fund additional recently originated mortgage loans with a total unpaid principal balance of $230 million. Prior to the settlement and funding of these loan purchases, any unrealized net gains (losses) related to these commitments are recorded as derivative assets or liabilities on our condensed consolidated balance sheets, with the corresponding gain or loss included in net gains (losses) on investments and other financial instruments in our condensed consolidated statements of operations.
The following table reflects the outstanding derivative instruments related to our mortgage loan activity as of the dates indicated.
Derivative instruments
Notional (1)
DerivativeAssets
DerivativeLiabilities
Forward mortgage loan purchase commitments
230,106
563
51,732
65
Hedging instruments (2)
Forward RMBS purchase contracts
465,000
746
394,000
2,492
Interest rate swap futures contracts
69,500
1,517
58,500
1,717
The impact to net gains (losses) on investments and other financial instruments from our residential mortgage loans held for sale and related hedging activities is as follows.
Net gains (losses) on residential mortgage loans held for sale, net of hedging activities
Net realized gains (losses) on residential mortgage loans held for sale
Mortgage loans held for sale (1)
(3,660
(1,252
(9,643
(1,189
Mortgage servicing and other related rights resulting from residential mortgage loan sales
1,803
1,188
3,347
1,498
Total realized gains (losses) on residential mortgage loans held for sale
(1,857
(64
(6,296
Change in unrealized gains (losses) on residential mortgage loans sold (2)
(3,778
(79
5,676
(1,097
Unrealized gains (losses) on residential mortgage loans held for sale still held (2)
1,423
(1,610
1,505
(611
Total net gains (losses) on residential mortgage loans held for sale
(4,212
(1,753
885
(1,399
Net gains (losses) on mortgage loans held for sale hedging activities
(2,492
1,703
(6,302
1,733
We primarily fund the purchases of our residential mortgage loans held for sale with amounts borrowed under our mortgage loan financing facilities. See Note 12 for additional information on these facilities and their related terms and covenants.
Net investment income earned on our residential mortgage loans held for sale and interest expense incurred on our mortgage loan financing facilities consists of the following.
29
Net interest on residential mortgage loans held for sale
Interest income
(8,446
(5,108
(14,456
(6,546
1,618
303
1,881
658
In addition to the debt covenants under its financing facilities, Radian Mortgage Capital is also subject to certain requirements established by state and other regulators and loan purchasers, including Freddie Mac and Fannie Mae, such as certain minimum net worth and capital requirements and ratios. As of June 30, 2025, the most restrictive of these financial conditions required Radian Mortgage Capital to maintain a ratio of tangible net worth to total assets of at least 6%. As of June 30, 2025, Radian Mortgage Capital’s tangible net worth was $74 million, compared to a required minimum tangible net worth of $45 million based on this ratio. Changes in the fair value of residential mortgage loans held for sale and related hedges could materially impact Radian Mortgage Capital’s net worth in future periods. To the extent any capital requirements are not met, regulators and loan purchasers may exercise certain remedies, which may include, as applicable, prohibiting Radian Mortgage Capital from purchasing, selling or servicing loans. As of June 30, 2025, Radian Mortgage Capital was in compliance with all such requirements.
Securitized Residential Mortgage Loans Held for Investment
During the first half of 2025, Radian Mortgage Capital closed two private label prime jumbo securitization transactions. The securitizations involved the transfer of portfolios of residential mortgage loans to newly created special purpose vehicles, Radian Mortgage Capital Trust (“RMCT”) 2025-J1 and RMCT 2025-J2, and the private offering and issuance of $368 million and $396 million, respectively, of unregistered mortgage pass-through certificates collateralized by the cash flows of the underlying residential mortgage loans. From time to time Radian Mortgage Capital and its affiliates (excluding its mortgage insurance affiliates) may retain and hold an interest in certain of the certificates, and at the closing of each of the two transactions in the first half of 2025 and the two transactions in 2024, we retained an interest in certain of the certificates. Because these securitizations consist entirely of qualified mortgages as defined in the Dodd-Frank Act, pursuant to applicable federal securities laws and regulations, Radian Mortgage Capital is not obligated to retain these certificates for a minimum length of time as part of any risk retention requirements.
We concluded that the special purpose vehicles created to facilitate these four securitization transactions are VIEs, primarily due to the minimal equity that the securitization trusts hold to be able to finance their activities without additional support. In addition to being the sponsor and depositor for the trusts, our involvement with these VIEs is ongoing and includes retaining the subordinate certificates that are in a first loss position and maintaining certain discretionary rights associated with those subordinate investments, including certain rights to direct the loss mitigation activities of the servicer. As a result of our having both: (i) the economic obligation to absorb losses and receive benefits that could be significant to each VIE and (ii) the power to direct the activities that most significantly impact the performance of the VIE, we concluded that we are the primary beneficiary of these VIEs. As a result, we consolidate the assets, liabilities, operations and cash flows of the securitization trusts on our condensed consolidated financial statements. Because we were already carrying the loans transferred to the trusts at fair value prior to the securitization, consistent with our policy election for all residential mortgage loans held for sale, we did not recognize any material gain or loss upon consolidation of these VIEs.
Although we are the primary beneficiary of the VIEs and consolidate the trusts’ activities, the holders of the securitized debt have no recourse to the general credit of Radian and we neither own nor are liable for the assets and liabilities of the VIEs. Our exposure to these trusts is primarily through the risk of loss on the interests we have retained, as well as the obligation, under certain circumstances, for Radian Mortgage Capital to repurchase assets from the VIEs upon the breach of certain representations and warranties made with respect to the residential mortgage loans transferred to the VIEs. Furthermore, liquidity available at the consolidated VIEs is not available for corporate liquidity needs, other than through distributions on the certificates we have retained.
We have elected the fair value option for the initial and subsequent recognition of the securitized residential mortgage loans and the related liabilities issued by the consolidated VIEs. Electing this option allows us to record changes in fair value in
the condensed consolidated statement of operations, which, in management’s view, appropriately reflects the results of operations for a particular reporting period as all activities will be recorded in a comparable manner.
As a result of this fair value election, we report both the assets and liabilities of each consolidated VIE at fair value, including reporting the VIE’s mortgage loans in securitized residential mortgage loans held for investment and the asset-backed securities issued by the VIE in securitized nonrecourse debt. We eliminate from this debt the value of the certificates that we retained. As of June 30, 2025, the net reported value of the consolidated VIE assets and liabilities was $30 million, which represents the aggregate fair value of our retained interests from the VIE, including accrued interest, as of that date.
The following table details the components of our consolidated VIE assets and liabilities by securitization as of the dates indicated.
Consolidated VIE assets and liabilities
Closing Date
ConsolidatedVIE Assets
ConsolidatedVIE Liabilities
Net RetainedInterest
RMCT 2024-J1
July 2024
296,362
290,207
6,155
317,782
311,751
6,031
RMCT 2024-J2
October 2024
339,464
333,977
5,487
403,525
397,844
5,681
RMCT 2025-J1
February 2025
364,202
352,332
11,870
RMCT 2025-J2
June 2025
402,284
395,379
6,905
1,402,312
1,371,895
30,417
721,307
709,595
11,712
We report the net financial results from consolidated VIEs in income (loss) on consolidated VIEs in our condensed consolidated statements of operations, which also equals the income (loss) from our retained interests in any given period, based on the interest income and change in fair value for those interests. As of June 30, 2025, none of the loans in the securitization trusts were greater than ninety days delinquent or in nonaccrual status.
The following table details the components of income (loss) on consolidated VIEs for the three and six months ended June 30, 2025. There was no activity for the three and six months ended June 30, 2024.
Income (loss) on consolidated VIEs
Net change in fair value of VIE assets and liabilities reported under the fair value option
(385
(698
17,505
32,364
(16,245
(29,814
Other expenses
(690
(1,239
Total income (loss) on consolidated VIEs
Use of securitizations is part of the overall business strategy for Radian Mortgage Capital. It is possible that we may consolidate additional VIEs in future periods, depending on the facts and circumstances regarding our involvement with each VIE. We continuously analyze entities in which we hold variable interests, including when there is a reconsideration event, to determine whether our consolidation conclusions regarding any VIE should change.
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 and the XOL Program. The initial and ongoing credit that we receive under the PMIERs financial requirements for these risk distribution transactions is subject to the periodic review of the GSEs.
The effect of all of our reinsurance programs on our net premiums written and earned is as follows.
Reinsurance impacts on net premiums written and earned
Net Premiums Written
Net Premiums Earned
Direct
Mortgage insurance
255,014
252,388
507,518
502,823
262,044
261,418
523,955
522,125
Title insurance
4,102
3,003
6,830
4,951
Total direct
259,116
255,391
514,348
507,774
266,146
264,421
530,785
527,076
Ceded
Mortgage insurance (1)
(23,419
(19,743
(45,673
(38,301
(28,518
(26,600
(56,385
(53,308
(108
(90
(201
(180
Total ceded (1)
(23,527
(19,833
(45,874
(38,481
(28,626
(26,690
(56,586
(53,488
Total net premiums
235,589
235,558
468,474
469,293
Other reinsurance impacts
Ceding commissions earned (1)
7,371
6,345
14,406
12,458
Ceded losses (2)
3,968
3,004
8,227
5,199
2024, 2023 and 2022 QSR Agreements
Radian Guaranty entered into each of the 2024, 2023 and 2022 QSR Agreements with panels of third-party reinsurance providers to cede a contractual quota share percentage of certain of our NIW, which includes both Recurring Premium Policies and Single Premium Policies (as set forth in the table below), subject to certain conditions, including a limitation for the 2024 QSR Agreement on ceded RIF equal to $4.3 billion over the term of the agreement.
Radian Guaranty receives a ceding commission for ceded premiums earned pursuant to these transactions. Radian Guaranty is also entitled to receive a profit commission quarterly, subject to a final annual re-calculation, provided that the loss ratio on the loans covered under the agreements generally remains below the applicable prescribed thresholds. Losses on the ceded risk up to these thresholds reduce Radian Guaranty’s profit commission on a dollar-for-dollar basis.
As of July 1, 2025, Radian Guaranty is no longer ceding NIW under the 2024 QSR agreement. As of July 1, 2024, Radian Guaranty is no longer ceding NIW under the 2023 QSR Agreement. As of July 1, 2023, Radian Guaranty is no longer ceding NIW under the 2022 QSR Agreement.
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 percentage 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 these thresholds reduce Radian Guaranty’s profit commission on a dollar-for-dollar basis.
As of January 1, 2022, Radian Guaranty is no longer ceding NIW under the Single Premium QSR Program.
The following table sets forth additional details regarding the QSR Program, with RIF ceded as of the dates indicated.
QSR Program (1)
NIW policy dates
Jul 1, 2024-Jun 30, 2025
Jul 1, 2023-Jun 30, 2024
Jan 1, 2022-Jun 30, 2023
Jan 1, 2020-Dec 31, 2021
Jan 1, 2018-Dec 31, 2019
Jan 1, 2012-Dec 31, 2017
Effective date
Jul 1, 2024
Jul 1, 2023
Jul 1, 2022
Jan 1, 2020
Jan 1, 2018
Jan 1, 2016
Scheduled termination date
Jun 30, 2035
Jun 30, 2034
Jun 30, 2033
Dec 31, 2031
Dec 31, 2029
Dec 31, 2027
Optional termination date (2)
Jul 1, 2028
Jul 1, 2027
Jul 1, 2026
Jan 1, 2024
Jan 1, 2022
Quota share %
25%
22.5%
20%
65%
18% - 57%
Ceding commission %
Profit commission %
Up to 59%
Up to 55%
Up to 56%
(In millions)
RIF ceded
3,043
2,362
3,823
629
833
1,621
2,518
4,059
1,525
661
873
2025, 2026 and 2027 QSR Agreements
During the second quarter of 2025, Radian Guaranty agreed to terms on three quota share reinsurance arrangements (collectively, the “New QSR Agreements”), each with its own panel of third-party reinsurance providers. Under the New QSR Agreements, starting July 1, 2025 (the “2025 QSR Agreement”), July 1, 2026 (the “2026 QSR Agreement”) and July 1, 2027 (the “2027 QSR Agreement”), we expect to cede 30%, 30% and 15%, respectively, of NIW over three sequential one-year periods. Subject to certain conditions, the 2025 QSR Agreement covers NIW between July 1, 2025, and June 30, 2026; the 2026 QSR Agreement covers NIW between July 1, 2026, and June 30, 2027; and the 2027 QSR Agreement covers NIW between July 1, 2027, and June 30, 2028 (each of these sequential one-year periods being referred to herein as the “Fill-Up Period”). Radian Guaranty has the option to discontinue ceding new policies under each of the New QSR Agreements at the end of any calendar quarter.
Radian Guaranty will receive a ceding commission for ceded premiums written pursuant to each of the New QSR Agreements. Additionally, for each of the New QSR Agreements, Radian Guaranty will receive a profit commission annually, provided that the loss ratio on the loans covered under the applicable agreement generally remains below the applicable prescribed thresholds. Losses on the ceded risk up to the applicable thresholds in each of the New QSR Agreements will reduce Radian Guaranty’s profit commission on a dollar-for-dollar basis.
Each New QSR Agreement will remain in effect for a period of 10 years from the end of the applicable Fill-Up Period, unless terminated earlier. Radian Guaranty has the option, based on certain conditions and subject to a termination fee, to terminate the 2025 QSR Agreement, the 2026 QSR Agreement and the 2027 QSR Agreement as of July 1, 2029, July 1, 2030, and July 1, 2031, respectively, or at the end of any calendar quarter thereafter, which would result in Radian Guaranty reassuming the related RIF in exchange for a net payment to the reinsurers calculated in accordance with the terms of the applicable agreement. Radian Guaranty also may terminate each of the New QSR Agreements prior to the scheduled termination date under certain other circumstances.
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Mortgage Insurance-linked Notes
Radian Guaranty has entered into fully collateralized reinsurance arrangements with the Eagle Re Issuers, as described below. 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 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 the maturity period of the mortgage insurance-linked notes (either a 10-year or 12.5-year period depending on the transaction) 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, including an optional call feature that provides Radian Guaranty the right to terminate the transaction on or after the optional call date (5 or 7 years after the issuance of the mortgage insurance-linked notes depending on the transaction) and a right to exercise an optional clean-up call if the outstanding principal amount of the related mortgage insurance-linked notes falls below 10% of the initial coverage level or principal balance, depending on the transaction, of the related mortgage insurance-linked notes.
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 mortgage insurance-linked notes transaction agreements.
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 2024 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 SOFR, 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 amount of monthly reinsurance premiums ceded to the Eagle Re Issuers will fluctuate due to changes in one-month SOFR and changes in money market rates that affect investment income collected on the assets in the reinsurance trusts. 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 2024 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, Radian Guaranty would nonetheless 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) 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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The following table presents the total VIE assets and liabilities of the Eagle Re Issuers as of the dates indicated.
Total VIE assets and liabilities of Eagle Re Issuers (1)
Eagle Re 2023-1 Ltd.
293,690
326,855
Eagle Re 2021-2 Ltd.
198,568
247,442
Eagle Re 2021-1 Ltd.
117,014
154,884
609,272
729,181
Traditional Reinsurance
For the coverage period under our traditional XOL reinsurance agreement, Radian Guaranty retains the first-loss layer of aggregate losses, as well as any losses in excess of the outstanding reinsurance coverage amounts. The reinsurers provide second layer coverage up to the outstanding coverage amounts. Radian Guaranty is then responsible for any losses in excess of the reinsurance coverage amount.
The 2023 XOL Agreement, which was executed in October 2023, is scheduled to terminate September 30, 2033. Radian Guaranty has the option to terminate the agreement under certain circumstances, including the option to terminate the agreement as of September 30, 2028, or at the end of any calendar quarter thereafter. Termination would result in Radian Guaranty reassuming the related RIF. In the event Radian Guaranty does not exercise its right to terminate the agreement on September 30, 2028, the monthly premium rate will increase from the original monthly premium.
The following tables set forth additional details regarding the XOL Program, with RIF, remaining coverage and first layer retention as of the dates indicated.
Eagle Re2023-1 Ltd.
Eagle Re2021-2 Ltd.
Eagle Re2021-1 Ltd. (1)
2023 XOLAgreement
Issued
October2023
November2021
April2021
Apr 1, 2022-Dec 31, 2022
Jan 1, 2021-Jul 31, 2021
Aug 1, 2020-Dec 31, 2020
Oct 1, 2021-Mar 31, 2022
Initial RIF
8,782
10,758
11,061
8,002
Initial coverage
353
484
246
Initial first layer retention
287
242
221
240
7,461
5,643
4,465
6,333
Remaining coverage
294
199
117
137
First layer retention
285
241
7,906
6,271
4,966
6,815
327
247
155
286
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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, the third-party reinsurers to Radian Guaranty 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 $295 million as of June 30, 2025, compared to $283 million as of December 31, 2024.
In addition, primarily for the Single Premium QSR Program, Radian Guaranty holds amounts related to ceded premiums written to collateralize the reinsurers’ obligations, in reinsurance funds withheld which are reported in other liabilities 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 9 for additional detail on our reinsurance funds withheld balances.
9. Other Assets and Liabilities
The following table shows the components of other assets as of the dates indicated.
Loaned securities (Notes 5 and 6)
179,692
139,121
Company-owned life insurance (1)
Prepaid reinsurance premiums (2)
61,760
72,472
53,694
53,370
Total other assets
The following table shows the components of other liabilities as of the dates indicated.
Amount payable under securities lending agreements (1)
164,529
125,723
Reinsurance funds withheld (2)
128,165
121,983
Payable for securities
34,218
Lease liability
33,784
37,442
Accrued compensation
31,321
55,971
Current federal income taxes
25,807
23,290
72,341
67,147
Total other liabilities
10. Income Taxes
We use the estimated effective tax rate method to calculate income taxes in interim periods. Certain items, including those deemed to be unusual, infrequent or that cannot be reliably estimated, are excluded from the estimated annual tax rate. In these cases, the actual tax expense or benefit is reported in the same period as the related item.
As of June 30, 2025, and December 31, 2024, our current federal income tax liability primarily relates to applying the accounting standard for uncertainty in income taxes and is included as a component of other liabilities on our condensed consolidated balance sheets. See Note 9 for detail on the components of our other liabilities.
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, 2025, and December 31, 2024, we held $998 million and $921 million, respectively, of these bonds, which are included as prepaid federal income taxes on our condensed consolidated balance sheets. The corresponding deduction of our statutory contingency reserves resulted in the recognition of a net deferred tax liability.
On July 4, 2025, the One Big Beautiful Bill Act (the “Act”) was enacted, which introduced permanent changes to the U.S. tax code. Among other items, and most relevant to Radian, the Act reinstates and makes permanent 100% bonus depreciation and restores the immediate expensing for domestic research and experimentation costs. The Company is currently evaluating the impact of the new legislation but does not expect it to have a material impact on our consolidated financial statements.
For additional information on our income taxes, including our accounting policies, see Notes 2 and 10 of Notes to Consolidated Financial Statements in our 2024 Form 10-K.
11. Losses and LAE
Our reserve for losses and LAE consists of the following as of the dates indicated.
Primary case
356,895
336,553
Primary IBNR and LAE
14,076
13,399
Pool and other
6,261
4,479
377,232
354,431
5,871
5,895
Total reserve for losses and LAE
Our provision for losses consists of the following for the periods indicated.
143
(30
(124
Total provision for losses
For the periods indicated, the following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE.
Rollforward of mortgage insurance reserve for losses
Balance at beginning of period
364,923
Less: Reinsurance recoverables (1)
34,144
25,074
Balance at beginning of period, net of reinsurance recoverables
320,287
339,849
Add: Losses and LAE incurred in respect of default notices reported and unreported in:
Current year (2)
103,750
100,986
Prior years
(76,456
(109,642
Total incurred
(8,656
Deduct: Paid claims and LAE related to:
220
91
11,001
8,813
Total paid
11,221
8,904
Balance at end of period, net of reinsurance recoverables
336,360
322,289
Add: Reinsurance recoverables (1)
40,872
28,918
Balance at end of period
351,207
Reserve Activity
Incurred Losses
Total incurred losses are driven by: (i) case reserves established for new default notices, which are primarily impacted by both the number of new primary default notices received in the period and our related gross Default to Claim Rate and Claim Severity assumptions applied to those new defaults and (ii) reserve developments on prior period defaults, which are primarily impacted by changes to our prior Default to Claim Rate and Claim Severity assumptions applied to these loans.
New primary default notices totaled 23,972 for the six months ended June 30, 2025, compared to 22,860 for the six months ended June 30, 2024, representing an increase of 5%. We believe this increase in new primary defaults is mainly due to the natural seasoning of our insured portfolio given the increase in our IIF in recent years and not the result of deteriorating credit performance of the insured portfolio.
Our gross Default to Claim Rate assumption applied to new defaults was 7.5% and 8.0% as of June 30, 2025, and June 30, 2024, respectively, based on our review of trends in Cures and claims paid for our default inventory and taking into consideration the risks and uncertainties associated with the current economic environment.
Our provision for losses during both the first six months of 2025 and 2024 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated. These Cures have been due primarily to favorable outcomes resulting from positive trends in home price appreciation, which has also contributed to a higher rate of claims that result in no ultimate loss to us and that are withdrawn by servicers as a result. These favorable observed trends for prior year default notices resulted in reductions in our Default to Claim Rate and other reserve assumptions in both of the first six months of 2025 and 2024, including our Claim Severity assumptions in the 2024 period.
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Claims Paid
Total claims paid were slightly higher for the six months ended June 30, 2025, compared to the same period in 2024.
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 2024 Form 10-K.
12. Borrowings and Financing Activities
As of the dates indicated, the carrying value of our debt, other than our securitized nonrecourse debt related to consolidated VIEs as discussed in Note 7, is as follows.
Borrowings
Interest rate
4.875
448,011
447,461
6.200
618,592
617,876
Total senior notes
Average interest rate (1)
6.028
FHLB advances due 2025
4.663
87,528
36,143
FHLB advances due 2026
4.465
3,270
1,835
FHLB advances due 2027
2.562
7,887
Total FHLB advances
Interest expense consists of the following.
15,810
21,156
31,610
43,284
8,446
5,108
14,456
877
544
1,302
1,489
Revolving credit facility
741
256
1,005
516
Total interest expense
Mortgage Loan Financing Facilities
Radian Mortgage Capital has entered into the Master Repurchase Agreements, which are collateralized borrowing facilities used to finance the acquisition of residential mortgage loans and related mortgage loan assets. Pursuant to the Master Repurchase Agreements, Radian Mortgage Capital may from time to time sell, and later repurchase, certain residential mortgage loan assets, which effectively equates to a borrowing secured by the mortgage loans and, therefore, we report amounts funded by our mortgage loan financing facilities as secured borrowings on our condensed consolidated balance sheets. Currently, the maximum borrowing amounts under the Goldman Sachs Master Repurchase Agreement, the BMO
Master Repurchase Agreement, the JP Morgan Master Repurchase Agreement and the Everbank Master Repurchase Agreement are $200 million, $400 million, $400 million and $125 million, respectively. The Goldman Sachs Master Repurchase Agreement, the BMO Master Repurchase Agreement, the JP Morgan Master Repurchase Agreement and the Everbank Master Repurchase Agreement are currently scheduled to expire on August 31, 2025, September 24, 2025, December 12, 2025, and April 29, 2026, respectively.
The borrowings under the Master Repurchase Agreements bear variable interest rates based on one-month SOFR or compounded SOFR, depending on the agreement, plus an applicable margin, with interest payable monthly. Principal is due upon the earliest of the sale or disposition of the related mortgage loans, the occurrence of certain default or acceleration events or at the termination date of the applicable Master Repurchase Agreement.
Funds advanced under the Master Repurchase Agreements generally will be calculated as a percentage of the unpaid principal balance or fair value of the residential mortgage loan assets, depending on the credit characteristics of the loans being purchased. Of our residential mortgage loans held for sale, $691 million and $515 million served as collateral for the Master Repurchase Agreements to support the funds advanced at June 30, 2025, and December 31, 2024, respectively.
FHLB Advances
The principal balance of the FHLB advances is required to be collateralized by eligible assets with a fair value that must be maintained generally within a minimum range of 103% to 114% of the amount borrowed, depending on the type of assets pledged. Our investments include securities totaling $105 million and $49 million at June 30, 2025, and December 31, 2024, respectively, which serve as collateral for our FHLB advances to satisfy this requirement.
Revolving Credit Facility
Radian Group has in place a $275 million unsecured revolving credit facility with a syndicate of bank lenders. During the second quarter of 2025, we borrowed and repaid in full $50 million under this facility. As of June 30, 2025, there were no amounts outstanding under this facility.
Debt Covenants and Other Information
As of June 30, 2025, we are in compliance with all of our debt covenants, including for our senior notes. For more information regarding our borrowings and financing activities, including certain terms, covenants and Parent Guarantees provided by Radian Group in connection with particular borrowings, see Note 12 of Notes to Consolidated Financial Statements in our 2024 Form 10-K.
13. Commitments and Contingencies
We are routinely involved in a number of legal actions and proceedings, including reviews, audits, inquiries, information-gathering requests and investigations by various regulatory entities, as well as litigation and other disputes arising in the ordinary course of our business. Legal actions and proceedings 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 currently pending or threatened actions will not have a material adverse effect on our consolidated financial condition or results of operations. The outcome of legal actions and proceedings is inherently uncertain, and it is possible that any one or more matters could have an adverse effect on our liquidity, financial condition or results of operations for any particular period.
See Note 13 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for further information regarding our commitments and contingencies and our accounting policies for contingencies.
14. Capital Stock
Shares of Common Stock
The following table shows the changes in common stock outstanding for each of the periods indicated.
Common stock outstanding
Common stock outstanding at beginning of period
141,220
151,509
147,569
153,179
Shares repurchased under share repurchase programs
(6,957
(1,574
(13,417
(3,344
Issuance of common stock under incentive and benefit plans, net of shares withheld for employee taxes
1,132
1,243
1,313
Common stock outstanding at end of period
135,395
151,148
Share Repurchase Activity
From time to time, Radian Group’s board of directors approves and authorizes the Company 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 generally executes its share repurchases pursuant to trading plans under Rule 10b5-1 of the Exchange Act, which permits the Company to purchase shares when it may otherwise be precluded from doing so.
As of June 30, 2025, Radian had two outstanding share repurchase authorizations in effect. Under the first authorization, which commenced in January 2023 and is scheduled to expire in June 2026, the Company is authorized to repurchase shares up to $900 million, excluding commissions. During the three and six months ended June 30, 2025, the Company purchased 7.0 million and 13.4 million shares at an average price of $32.05 and $32.06 per share, including commissions, respectively, pursuant to this share repurchase authorization. As of June 30, 2025, purchase authority of up to $113 million remained available under this authorization.
In May 2025, Radian Group’s board of directors authorized the Company to purchase shares up to an additional $750 million, excluding commissions. Under this second authorization, the full amount remained available as of June 30, 2025. Use of this authorization will commence once the first authorization is exhausted or expires, whichever occurs earlier, and is scheduled to expire in December 2027.
The Inflation Reduction Act of 2022 imposed a nondeductible 1% excise tax on the net value of certain stock repurchases made after December 31, 2022. Unless otherwise noted, all dollar amounts presented in this report related to our share repurchases and our share repurchase authorizations exclude such excise taxes, to the extent applicable.
Dividends and Dividend Equivalents
In February 2025, Radian Group’s board of directors authorized an increase in the Company’s quarterly dividend from $0.245 to $0.255 per share, beginning with the dividend declared and paid in the first quarter of 2025.
The following table presents the amount of dividends declared and paid, on a per share basis, for each quarter and annual period as indicated.
Dividends declared and paid
Quarter ended
March 31
0.255
0.245
June 30
September 30
N/A
December 31
Total annual dividends per share declared and paid
0.510
0.980
N/A – Not applicable
Dividend equivalents are accrued on RSUs when dividends are declared on the Company’s common stock and are typically paid upon vesting of the shares. See Note 17 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for information about our dividend equivalents on RSU awards.
Share-Based and Other Compensation Programs
During the second quarter of 2025, certain executive and non-executive officers were granted time-vested and performance-based RSUs to be settled in shares of Radian 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 certain executive and non-executive officers is based upon: (i) the cumulative growth in Radian’s book value per share over a three-year performance period, adjusted for certain defined items, and as modified based on a comparison of our total shareholder return to the total shareholder return of certain of our peers and (ii) with the exception of certain retirement-eligible employees, continued service through the vesting date. Performance-based RSUs granted to executive officers are subject to a one-year post-vesting holding period.
The time-vested RSU awards granted to certain executive and non-executive officers in the second quarter of 2025 generally vest in pro rata installments on each of the first three anniversaries of the grant date. In addition, time-vested RSU awards, which are generally subject to one-year cliff vesting, were also granted to non-employee directors. See Note 17 of Notes to Consolidated Financial Statements in our 2024 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 the period indicated is as follows.
Rollforward of RSUs
Performance-Based
Time-Vested
Number of Shares
Weighted AverageGrant Date Fair Value
Outstanding, December 31, 2024 (1)
2,639,190
$22.57
1,589,396
$20.75
Granted (2)
492,170
30.96
387,072
33.17
Performance adjustment (3)
549,540
Vested (4)
(1,158,485)
20.19
(604,393)
21.95
Forfeited
(11,216)
29.34
(7,747)
26.88
Outstanding, June 30, 2025 (1)
2,511,199
$24.61
1,364,328
$23.71
15. Accumulated Other Comprehensive Income (Loss)
The following tables show the rollforward of accumulated other comprehensive income (loss) for the periods indicated.
Rollforward of accumulated other comprehensive income (loss)
Three Months EndedJune 30, 2025
Six Months EndedJune 30, 2025
BeforeTax
TaxEffect
Net ofTax
(373,058
(78,342
(443,340
(93,102
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 recognized
25,507
5,356
93,382
19,610
Less: Reclassification adjustment for net gains (losses) on investments included in net income (1)
(2,056
(432
(925
27,563
5,788
97,787
20,535
58
97,845
20,548
(345,495
(72,554
Three Months EndedJune 30, 2024
Six Months EndedJune 30, 2024
(458,856
(96,360
(418,799
(87,948
(21,825
(4,583
(65,480
(13,751
(3,071
(644
(6,755
(1,418
(18,754
(3,939
(58,725
(12,333
Other adjustments to comprehensive income, net
(86
(18
(58,811
(12,351
(477,610
(100,299
16. Statutory Information
Our insurance subsidiaries’ statutory net income (loss) for the periods indicated, and statutory policyholders’ surplus as of the dates indicated, are as follows.
Statutory net income (loss)
360,049
388,372
Other mortgage insurance subsidiaries
(882
1,192
1,015
Statutory policyholders’ surplus
681,204
722,861
16,518
16,515
44,591
43,540
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. 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 an 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, 2025, and December 31, 2024. Radian Guaranty’s Risk-to-capital was 10.3:1 and 10.2:1 as of June 30, 2025, and December 31, 2024, 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, 2025, and December 31, 2024.
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, 2025, Radian Guaranty, an approved mortgage insurer under the PMIERs, was in compliance with the current PMIERs financial requirements.
State insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations. As of June 30, 2025, the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $4.5 billion of our consolidated net assets.
While all proposed dividends and distributions to stockholders must be filed with the Pennsylvania Insurance Department before payment, if a Pennsylvania domiciled insurer has positive unassigned surplus, such insurer can pay dividends or other distributions out of unassigned surplus during any 12-month period in an aggregate amount less than or equal to the greater of: (i) 10% of the preceding year-end statutory policyholders’ surplus or (ii) the preceding year’s statutory net income, in each case without the prior approval of the Pennsylvania Insurance Department.
Radian Guaranty had positive unassigned surplus of $223 million as of December 31, 2024, providing it with the ability to pay ordinary dividends in the first quarter of 2025, subject to the above restrictions under Pennsylvania’s insurance laws. Additionally, statutory accounting principles permit insurance companies with positive unassigned funds, such as Radian Guaranty, to return capital through distributions from paid in surplus, not just distributions as dividends from unassigned surplus. Under Pennsylvania insurance laws, an insurer must receive approval from the Pennsylvania Insurance Department to account for a distribution as a return of capital. Radian Guaranty sought and received such approval to treat its $200 million distribution to Radian Group in the first quarter of 2025 as a return of capital from paid in surplus. As a result, during the first quarter of 2025, Radian Guaranty’s common stock and paid in surplus balance declined from $500 million to $300 million, while its positive unassigned surplus increased to $408 million.
Based on its positive unassigned surplus balance as of March 31, 2025, Radian Guaranty also paid an ordinary dividend to Radian Group of $200 million in the second quarter of 2025. Subsequent to the payment of this dividend, as of June 30, 2025, Radian Guaranty had positive unassigned surplus of $381 million. Radian Guaranty maintains the ability to pay additional ordinary dividends during the remainder of 2025.
For a full description of our compliance with statutory and other regulations for our mortgage insurance and title insurance businesses, including statutory capital requirements and dividend restrictions, see Note 16 of Notes to Consolidated Financial Statements in our 2024 Form 10-K.
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 2024 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 2024 Form 10-K.
The following analysis of our financial condition and results of operations for the three and six months ended June 30, 2025, provides information that evaluates our financial condition as of June 30, 2025, compared with December 31, 2024, and our results of operations for the three and six months ended June 30, 2025, compared to the same periods in 2024.
Investors should review the “Cautionary Note Regarding Forward-Looking Statements—Safe Harbor Provisions” and “Item 1A. Risk Factors” herein and in our 2024 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 of Business Operating Environment” below and Note 1 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
INDEX TO ITEM 2
Overview of Business Operating Environment
Key Factors Affecting Our Results
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Mortgage Insurance Portfolio Metrics
Results of Operations—Consolidated
Results of Operations—Mortgage Insurance
56
Results of Operations—All Other
62
Liquidity and Capital Resources
Critical Accounting Estimates
We are a mortgage and real estate company with one reportable business segment—Mortgage Insurance.
Our Mortgage Insurance segment aggregates, manages and distributes U.S. mortgage credit risk for the benefit of mortgage lending institutions and mortgage credit investors, principally through private mortgage insurance on residential first-lien mortgage loans.
Our other immaterial businesses are reported collectively as All Other and consist of our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses, which provide our existing and new customers with an array of products and services across the residential real estate and mortgage finance industries.
As a mortgage and real estate company, our business results are subject to seasonal fluctuations impacting mortgage and real estate markets as well as macroeconomic conditions and specific events that impact the housing, housing finance and residential real estate markets and the credit performance of our mortgage insurance portfolio. Among others, these factors may include home prices and housing supply, inflationary pressures, the interest rate environment and the risk of recession, unemployment levels, the volume of mortgage originations and the availability of credit, national and regional economic conditions, legislative and regulatory developments and responses thereto, as well as other events, including macroeconomic stresses and uncertainties and other political and geopolitical events and global conflicts.
In addition, as discussed in “Item 1A. Risk Factors” herein, the impact of the recent actions of the current presidential administration on, among other things, the macroeconomic environment and regulatory policies could exacerbate the risks and uncertainties set forth in “Item 1A. Risk Factors” in our 2024 Form 10-K and could negatively impact our businesses and financial results. See also “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our 2024 Form 10-K for additional discussion of the primary factors affecting the current operating environment for our businesses.
Part I. Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Despite risks and uncertainties, we believe that mortgage industry fundamentals remain strong, including as a result of the improvements to the mortgage and real estate ecosystem since the great financial crisis in 2008, such as more stringent underwriting and product standards, higher-quality borrowers with strong credit profiles and strengthened mortgage loan servicing and government support to help borrowers stay in their homes. Consistent with the trends observed in recent periods, the economic and market conditions impacting our results for the three and six months ended June 30, 2025, remained generally favorable.
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 2024 Form 10-K. There were no significant regulatory developments impacting our businesses from those discussed in our 2024 Form 10-K, other than the following.
Credit Score Models. In October 2022, the FHFA announced that as part of a multi-year effort, the GSEs intended to replace their use of Classic FICO credit scores with FICO 10T and VantageScore 4.0 credit scores, which are intended to improve accuracy by capturing additional payment histories for borrowers when available, such as rent, utilities, and telecom payments. On July 8, 2025, FHFA announced that the GSEs will allow lenders to use a credit score generated by either the Classic FICO model or the VantageScore 4.0 model. As a mortgage insurer, Radian Guaranty uses credit scores in several areas of its operations and adoption of the new credit scores requires planning and analysis to, among other things, understand how these scores calibrate to Radian Guaranty’s credit risk models. The Company is evaluating the impact of this most recent announcement, and while we expect the operational impacts could be significant, we do not expect it to have a material impact on our results of operations or financial condition.
Mortgage Insurance Income Tax Deduction for Borrowers. The One Big Beautiful Bill Act (the “Act”), which became effective July 4, 2025, makes permanent an income tax deduction for mortgage insurance premiums paid by borrowers, including private mortgage insurance premiums, and makes that deduction effective beginning in 2026. The mortgage insurance tax deduction in the Act reinstates a deduction for taxpayers that had previously been in effect from 2007 through 2021, and which is expected to help support affordable homeownership by reducing costs for eligible low down payment borrowers.
The key factors affecting our results are discussed in our 2024 Form 10-K. There have been no material changes to these key factors.
New Insurance Written
We wrote $14.3 billion and $23.8 billion of primary new mortgage insurance in the three and six months ended June 30, 2025, respectively, compared to $13.9 billion and $25.4 billion of NIW in the three and six months ended June 30, 2024, respectively, representing an increase of 3% for the three months ended June 30, 2025, and a decrease of 6% for the six months ended June 30, 2025, each as compared to the same period in 2024.
According to industry estimates, mortgage origination volume for home purchases, for which private mortgage insurance has a significantly higher penetration rate than for mortgage refinances and therefore typically drives our NIW, increased slightly for the three months ended June 30, 2025, as compared to the same period in 2024, contributing to the increase in NIW in the second quarter of 2025. However, a flat purchase origination market in the first quarter of 2025, combined with our lower market share of the total private mortgage insurance volume in that quarter, as compared to an elevated market share level in the first quarter of 2024, contributed to a lower NIW for the six months ended June 30, 2025, as compared to the same period in 2024.
The following table provides selected information for the periods indicated related to our mortgage insurance NIW. For direct Single Premium Policies, NIW includes policies written on an individual basis (as each loan is originated) and on an aggregated basis (in which each individual loan in a group of loans is insured in a single transaction, typically after the loans have been originated).
($ in millions)
14,330
13,902
23,819
25,404
Primary risk written
3,771
3,541
6,507
Average coverage percentage
26.3
25.5
26.1
25.6
NIW by loan purpose
Purchases
94.6
98.3
95.0
97.7
Refinances
5.4
1.7
5.0
2.3
NIW by premium type
Direct Monthly and Other Recurring Premiums
96.4
96.5
96.6
Direct single premiums
3.6
3.5
3.4
NIW by FICO score (1)
>=740
68.2
69.4
68.5
680-739
27.0
26.2
620-679
4.8
5.3
<=619
0.0
NIW by LTV (2)
95.01% and above
16.7
16.5
16.3
16.0
90.01% to 95.00%
44.0
37.2
43.0
38.8
85.01% to 90.00%
30.1
32.4
30.9
31.9
85.00% and below
9.2
13.9
9.8
13.3
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Insurance and Risk in Force
Year of origination - IIF
($ in billions)
IIF as of:
By vintage:
June 30, 2024
23.4
8.5
46.6
16.8
49.3
17.9
24.9
9.1
2023
42.3
15.3
45.3
48.4
17.8
2022
50.7
18.3
54.2
19.7
57.6
21.1
2021
48.1
17.4
53.5
19.4
59.5
21.8
2020
30.6
11.1
34.1
12.4
39.2
14.4
2009 - 2019
28.8
10.4
32.2
11.7
36.0
13.2
2008 & Prior
6.2
2.2
6.5
2.4
7.2
2.6
276.7
100.0
275.1
272.8
The primary driver of the future premiums that we expect to earn over time is our IIF, which increases as a result of our NIW and decreases as a result of policy cancellations and amortization.
Historically, there is a close correlation between interest rates and Persistency Rates. Higher interest rate environments generally decrease refinancings, which decreases the cancellation rate of our insurance and positively affects our Persistency Rates. As shown in the table below, our 12-month Persistency Rate at June 30, 2025, was relatively flat as compared to June 30, 2024.
As of June 30, 2025, 63% of our IIF had a mortgage note interest rate of 6.0% or less, which remains below the current prevailing mortgage interest rates based on reported industry averages. If mortgage rates were to decrease, however, refinance volumes could increase, which could have a negative impact on our Persistency Rate and the size of our IIF portfolio. See “If the length of time that our mortgage insurance policies remain in force declines, it could result in a decrease in our future revenues” under “Item 1A. Risk Factors” in our 2024 Form 10-K for more information.
The following table provides selected information as of and for the periods indicated related to mortgage insurance IIF and RIF. 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 Premium Policies 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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IIF and RIF
June 30,2024
Primary IIF
276,745
275,126
272,827
Primary RIF
72,820
72,074
71,109
Persistency Rate (12 months ended)
83.8
83.6
84.3
Persistency Rate (quarterly, annualized) (1)
82.7
83.5
Primary RIF by premium type
90.3
90.0
89.5
9.7
10.0
10.5
Primary RIF by FICO score (2)
60.6
60.1
59.2
32.6
33.3
6.9
7.0
0.3
Primary RIF by LTV (3)
20.2
19.8
19.2
48.0
47.9
27.1
4.7
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.
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 Insurance—Risk Distribution” in our 2024 Form 10-K and Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements in this report for more information about our reinsurance transactions.
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The following table provides information about the amounts by which Radian Guaranty’s reinsurance programs reduce its Minimum Required Assets.
PMIERs benefit from risk distribution
PMIERs impact - reduction in Minimum Required Assets
Mortgage insurance-linked notes program
460,257
558,939
Traditional reinsurance agreement
132,485
160,742
Total XOL Program
592,742
719,681
Other QSR Agreements (1)
634,464
572,229
163,744
172,968
Total PMIERs impact
1,390,950
1,464,878
Percentage of gross Minimum Required Assets
25.9
27.4
See “Results of Operations—Mortgage Insurance—Revenues—Net Premiums Earned” for information about the impact on premiums earned from each of Radian Guaranty’s reinsurance programs.
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, 2025 and 2024, primarily reflect the financial results and performance of our Mortgage Insurance business. See “Results of Operations—Mortgage Insurance” for the operating results of this business segment for the three and six months ended June 30, 2025, compared to the same periods in 2024.
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 2024 Form 10-K.
The following table summarizes our consolidated results of operations for the periods indicated.
Summary results of operations - Consolidated
ChangeFavorable(Unfavorable)
($ in thousands, except per-share amounts)
2025 vs. 2024
Net premiums earned
(211
611
(2,341
(2,813
(997
(1,644
(365
(1,578
586
364
(3,143
(4,447
(13,842
(36,043
(683
(277
1,117
1,673
2,251
8,038
1,190
7,737
(9,967
(18,872
(13,110
(23,319
5,416
(10,107
(17,903
Diluted net income per share
0.04
Weighted average common shares outstanding—diluted
16,039
12,259
Return on equity
12.5
13.6
(1.1
12.6
13.7
Non-GAAP Financial Measures (1)
173,161
192,683
(19,522
363,995
395,500
(31,505
Adjusted diluted net operating income per share
1.01
2.01
0.01
Adjusted net operating return on equity
(1.5
14.0
(1.4
Net Premiums Earned. See “Results of Operations—Mortgage Insurance—Revenues—Net Premiums Earned” for more information.
Services Revenue. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for a disaggregation of services revenue by revenue type.
Net Investment Income. See Note 6 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net investment income. See “Results of Operations—Mortgage Insurance—Revenues—Net Investment Income” and “Results of Operations—All Other” for more information.
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Net Gains (Losses) on Investments and Other Financial Instruments. See Note 6 of Notes to Unaudited Condensed Consolidated Financial Statements for comparative detail about net gains (losses) on investments and other financial instruments by investment category.
Provision for Losses. The change in the provision for losses for the three and six months ended June 30, 2025, as compared to the same periods in 2024, is primarily driven by a reduction in favorable development on prior period defaults, which impacted our mortgage insurance reserves. See “Results of Operations—Mortgage Insurance—Expenses—Provision for Losses” for more information.
Other Operating Expenses. Other operating expenses decreased for the three and six months ended June 30, 2025, as compared to the same periods in 2024, primarily driven by the impact of expense reduction initiatives for certain of the businesses that comprise All Other activities. For additional information, see “Results of Operations—Mortgage Insurance—Expenses—Other Operating Expenses” and “Results of Operations—All Other.”
Interest Expense. The decrease in interest expense for the three and six months ended June 30, 2025, as compared to the same periods in 2024, is primarily due to a decline in senior notes outstanding. This decrease in both periods was partially offset by an increase in secured borrowings under our mortgage loan financing facilities. The six months ended June 30, 2024, also included a $4 million loss on extinguishment of debt related to the redemption of senior notes in March of 2024. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional detail about our interest expense.
Income Tax Provision
Our provision for income taxes for interim periods is established based on our estimated annual effective tax rate for a given year and reflects the impact of discrete tax effects in the period in which they occur.
Our effective tax rate for the three and six months ended June 30, 2025, was 19.0% and 21.2%, respectively, as compared to 19.3% and 21.3% for the three and six months ended June 30, 2024, respectively. For the three and six months ended June 30, 2025 and 2024, the effects of non-deductible executive compensation expense, state income taxes and the vesting of RSUs were the primary drivers of the difference in our effective tax rate compared to the federal statutory rate.
Use of Non-GAAP Financial Measures
In addition to 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.
Beginning with the first quarter of 2025, when calculating adjusted diluted net operating income per share and adjusted net operating return on equity, the Company no longer adjusts for the difference between the Company’s statutory and effective tax rates to calculate those non-GAAP financial measures using the Company’s federal statutory tax rate of 21%. The impact of this incremental adjustment for the difference between the Company’s statutory and effective tax rates has been immaterial in recent periods because the number and magnitude of non-recurring fluctuations in the Company’s effective tax rate have declined in recent years. As such, the Company believes that this incremental adjustment for the difference between the two rates is no longer meaningful to users of our financial statements. We have reflected this change in our calculations of
53
adjusted diluted net operating income per share and adjusted net operating return on equity for all periods presented herein. As it relates to the impact of reconciling income (expense) items included in these non-GAAP financial measures, the Company continues to reflect these items on a gross basis and calculates the income tax provision (benefit) on these items using the Company’s federal statutory tax rate of 21%.
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. For detailed information regarding items excluded from adjusted pretax operating income (loss) and the reasons for their treatment, 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 2024 Form 10-K.
Adjusted pretax operating income (loss) is defined as GAAP consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for those investments and other financial instruments attributable to our Mortgage Conduit business and (ii) impairment of other long-lived assets and other non-operating items, if any, such as gains (losses) from the sale of lines of business, acquisition-related income (expenses) and gains (losses) on extinguishment of debt, among others.
The following table provides a reconciliation of pretax income to our non-GAAP financial measure of adjusted pretax operating income, both calculated on a consolidated Company basis.
Reconciliation of consolidated pretax income to adjusted pretax operating income
Less: income (expense) items
Total adjusted pretax operating income (3)
Adjusted diluted net operating income (loss) per share is calculated by dividing adjusted pretax operating income (loss), net of taxes computed using the Company’s effective tax rate, by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. As discussed above, for purposes of this non-GAAP financial measure, the income tax provision (benefit) on the reconciling income (expense) items is calculated using the Company’s federal statutory tax rate. The following table provides a reconciliation of diluted net income (loss) per share to our non-GAAP financial measure of adjusted diluted net operating income (loss) per share, both calculated on a consolidated Company basis.
54
Reconciliation of diluted net income per share to adjusted diluted net operating income per share
Less: per-share impact of reconciling income (expense) items
(0.03
Impairment of other long-lived assets and other non-operating items
(0.01
Income tax (provision) benefit on reconciling income (expense) items (1)
0.02
Per-share impact of reconciling income (expense) items
(0.04
Adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the Company’s effective tax rate, by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented. As discussed above, for purposes of this non-GAAP financial measure, the income tax provision (benefit) on the reconciling income (expense) items is calculated using the Company’s federal statutory tax rate. The following table provides a reconciliation of return on equity to our non-GAAP financial measure of adjusted net operating return on equity, both calculated on a consolidated Company basis.
Reconciliation of return on equity to adjusted net operating return on equity
Return on equity (1)
Less: impact of reconciling income (expense) items (2)
0.1
(0.4
(0.2
Income tax (provision) benefit on reconciling income (expense) items (3)
Impact of reconciling income (expense) items
(0.3
55
The following table summarizes our Mortgage Insurance segment’s results of operations for the periods indicated.
Summary results of operations - Mortgage Insurance
Net premiums written
231,596
232,645
(1,049
461,846
464,522
(2,676
(Increase) decrease in unearned premiums
1,930
2,173
5,724
4,295
1,429
233,526
234,818
(1,292
467,570
468,817
(1,247
(304
53,288
50,102
3,186
101,739
99,676
2,063
1,461
754
707
3,090
1,994
1,096
2,333
1,608
(13,723
(35,949
151
206
62,202
60,354
(1,848
113,892
112,133
(1,759
4,529
11,373
98,794
87,220
(11,574
188,799
162,393
(26,406
Adjusted pretax operating income (1)
(9,241
(24,798
Net Premiums Earned. The following tables provide additional information about the components of mortgage insurance net premiums earned for the periods indicated, including the effects of our reinsurance programs.
(In thousands, except as otherwise indicated)
Premiums earned, excluding revenue from cancellations
260,336
259,342
994
521,041
517,935
3,106
Single Premium Policy cancellations
1,708
2,076
(368
2,914
4,190
(1,276
626
1,830
(43,849
(39,925
(3,924
(86,137
(78,922
(7,215
Single Premium Policy cancellations (1)
1,328
732
596
2,230
620
1,610
Profit commission—other (2)
14,003
12,593
1,410
27,522
24,994
2,528
Ceded premiums, net of profit commission
(1,918
(3,077
Total net premiums earned
In force portfolio premium yield (in basis points) (3)
37.8
38.2
Direct premium yield (in basis points) (4)
38.1
38.5
38.0
(0.5
Net premium yield (in basis points) (5)
33.9
34.5
(0.6
Average primary IIF (in billions) (6)
275.5
271.9
275.9
271.4
4.5
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. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage Insurance—IIF and Related Drivers” in our 2024 Form 10-K for more information.
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The following table provides information related to the impact of our reinsurance transactions on premiums earned. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for more information about our reinsurance programs.
Ceded premiums earned
7,911
9,470
15,646
19,528
1,655
2,169
3,467
4,533
9,566
11,639
19,113
24,061
16,594
12,686
32,637
24,780
Single Premium QSR Program (2)
2,358
2,275
4,635
4,467
Total ceded premiums earned (3)
28,518
26,600
56,385
53,308
Percentage of total direct and assumed premiums earned
10.9
10.2
10.8
Net Investment Income. The following table provides information related to our Mortgage Insurance subsidiaries’ investment balances and investment yields for the periods indicated.
Investment balances and yields
55,953
52,528
3,425
107,020
104,338
2,682
Investment expenses
(2,665
(239
(5,281
(4,662
(619
Average investments (1)
5,385,552
5,454,448
(68,896
5,391,016
5,448,372
(57,356
Average investment yield (2)
4.0
3.7
3.8
Net investment income increased for the three and six months ended June 30, 2025, as compared to the same periods in 2024, primarily driven by higher investment yields, which offset the declines in average investment balances.
Provision for Losses. The following table details the financial impact of the significant components of our provision for losses for the periods indicated.
($ in thousands, except reserve per new default)
Current period defaults (1)
47,912
47,918
(2,764
Prior period defaults (2)
(35,958
(49,687
(13,729
(109,641
(33,185
Loss ratio (3)
(5.9
(13.5
Reserve per new default (4)
4,178
4,315
4,328
4,418
90
As shown in the table below, current period new primary defaults increased by 3% and 5% for the three and six months ended June 30, 2025, respectively, compared to the same periods in 2024, which is consistent with the natural seasoning of the portfolio given the increase in our IIF in recent years. Our gross Default to Claim Rate assumption for new primary defaults was 7.5% and 8.0% at June 30, 2025 and 2024, respectively, as we continue to closely monitor the trends in Cures and claims paid for our default inventory, while also weighing the risks and uncertainties associated with the current economic environment.
Our provision for losses during the three and six months ended June 30, 2025, and the same periods in 2024, was positively impacted by favorable reserve development on prior period defaults, primarily as a result of more favorable trends in Cures than originally estimated. These Cures have been due primarily to favorable outcomes resulting from positive trends in home price appreciation, which has also contributed to a higher rate of claims that result in no ultimate loss and that are withdrawn by servicers as a result. These favorable observed trends have resulted in reductions in our Default to Claim Rate and other reserve adjustments for prior year default notices, including our Claim Severity assumptions in 2024.
See Note 11 of Notes to Unaudited Condensed Consolidated Financial Statements herein for additional information, as well as Notes 1 and 11 of Notes to Consolidated Financial Statements in our 2024 Form 10-K and “Item 1A. Risk Factors” herein and in our 2024 Form 10-K.
Our primary default rate as a percentage of total insured loans at June 30, 2025, was 2.3% compared to 2.4% at December 31, 2024. The following table shows a rollforward of our primary loans in default.
Rollforward of primary loans in default
Beginning default inventory
22,758
20,850
24,055
22,021
New defaults
11,467
11,104
23,972
22,860
Cures (1)
(11,754
(11,472
(25,394
(24,280
Claims paid
(175
(185
(294
Rescissions and Claim Denials (2)
(38
(21
(81
(48
Ending default inventory
22,258
20,276
59
The following table shows additional information about our primary loans in default as of the dates indicated.
Primary loans in default - additional information
#
Missed payments - pre-foreclosure stage
Three payments or less
10,918
49.1%
12,673
52.7%
10,225
50.4%
Four to eleven payments
7,282
32.7%
7,517
31.3%
6,179
30.5%
Twelve payments or more
2,593
11.6%
2,511
10.4%
2,493
12.3%
Foreclosure stage defaulted loans (1)
1,138
5.1%
1,061
4.4%
977
4.8%
Pending claims
1.5%
293
1.2%
402
2.0%
Total default inventory
100.0%
Policies in force
978,862
985,089
994,235
Primary default rate
2.3%
2.4%
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 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 25% and 23% as of June 30, 2025, and December 31, 2024, respectively. See Note 11 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional details about our Default to Claim Rate assumptions.
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 2024 Form 10-K) that make the timing of paid claims difficult to predict.
The following table shows net claims paid by product and the average claim paid by product for the periods indicated.
Net claims paid (1)
Primary
5,122
2,896
9,325
5,150
(2
(921
Subtotal
5,120
2,917
8,404
5,156
945
1,048
1,894
2,196
Commutations and settlements (2)
924
1,552
Total net claims paid
6,989
5,517
11,222
Average net primary claim paid (1) (3)
40.6
36.5
34.0
29.0
Average direct primary claim paid (3) (4)
47.8
29.8
For additional information about our reserve for losses, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” in our 2024 Form 10-K.
Other Operating Expenses. The following table shows additional information about other operating expenses for our Mortgage Insurance segment, for the periods indicated.
Salaries and other base employee expenses
11,337
11,336
22,270
22,193
(77
Variable and share-based incentive compensation
7,921
4,853
(3,068
13,282
9,810
(3,472
Other general operating expenses
7,690
6,925
(765
14,686
14,025
(661
Ceding commissions
(7,074
(5,957
(13,797
(11,601
(2,717
(2,014
Allocated (1)
13,386
15,713
2,327
26,353
28,541
2,188
16,580
12,684
(3,896
25,061
20,645
(4,416
12,362
14,800
2,438
26,037
28,520
2,483
Total allocated
869
255
Total other operating expenses
Expense ratio (2)
(1.2
Share-based incentive compensation expense increased for the three and six months ended June 30, 2025, as compared to the same periods in 2024, primarily due to increases in the projected payouts associated with outstanding performance-based RSUs. Share-based incentive compensation expense also included $10 million of costs recognized on RSUs granted to retirement eligible grantees during the second quarter of 2025, as compared to $8 million for the same period in 2024. Because these awards are no longer subject to forfeiture for time-based service, we recognize the full compensation costs as of the grant date for retirement eligible grantees. See Note 17 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional information about our share-based compensation programs.
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The following table summarizes our All Other results of operations for the periods indicated.
Summary results of operations - All Other
3,994
2,913
1,081
6,629
4,771
1,858
10,990
13,064
(2,074
23,023
25,557
(2,534
19,481
23,664
(4,183
39,604
43,311
(3,707
(49
(6,655
(5,751
(133
(571
(726
27,943
39,722
(11,779
63,881
74,128
(10,247
(119
(94
8,413
9,379
966
17,086
18,553
1,467
27,302
31,292
3,990
52,189
62,267
10,078
5,107
(3,339
6,545
(7,911
44,304
45,802
83,701
87,241
Adjusted pretax operating income (loss) (1)
(10,281
(6,707
Our All Other results include income (losses) from investments held at Radian Group and general corporate operating expenses not attributable or allocated to our reportable segment. All Other also includes the financial results of our immaterial operating segments, comprising our Mortgage Conduit, Title, Real Estate Services and Real Estate Technology businesses. Our All Other results may be subject to volatility from period to period as a result of mark-to-market changes in the value of mortgage assets held in our Mortgage Conduit business or seasonality and trends primarily impacting Title and Real Estate Services volumes, among other factors.
Consolidated Cash Flows
The following table summarizes our consolidated cash flows from operating, investing and financing activities.
Summary cash flows - Consolidated
Net cash provided by (used in):
Operating activities
Investing activities
Financing activities
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 have typically been for our operating expenses, taxes and claims paid on our mortgage insurance policies. In addition, our operating activities also include Radian Mortgage Capital’s purchases and sales of, as well as principal payments received from, residential mortgage loans held for sale, which can fluctuate from period to period. The increase in cash used in operating activities in the six months ended June 30, 2025, as compared to the same period in 2024, is primarily due to increases in net purchases of residential mortgage loans held for sale, which increased from $428 million in the first half of 2024 to $949 million for the same period in 2025.
Investing Activities. Net cash provided by investing activities increased for the six months ended June 30, 2025, as compared to cash used in investing activities in the same period in 2024. The increase was primarily from: (i) principal payments on securitized residential mortgage loans held for investment and (ii) a decrease in purchases, net of sales and redemptions, of fixed-maturities available for sale and short-term investments, which helped to fund certain of our financing activities described below.
Financing Activities. For the six months ended June 30, 2025, our primary use of cash for financing activities included: (i) repurchases of our common stock and (ii) payment of dividends. The net use of cash for those financing activities was more than offset by: (i) the net proceeds from the issuance of securitized nonrecourse debt and (ii) the net increase in our secured borrowings related to funding from mortgage loan financing facilities. 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.
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, 2025, Radian Group had available, either directly or through unregulated subsidiaries, unrestricted cash and liquid investments of $784 million. Total liquidity was $1.1 billion as of June 30, 2025, and includes our $275 million unsecured revolving credit facility.
During the six months ended June 30, 2025, Radian Group’s available liquidity decreased by $101 million, primarily due to $506 million paid for dividends and share repurchases, as described below, partially offset by $400 million received from Radian Guaranty, consisting of a $200 million return of capital and a $200 million ordinary dividend. See Note 16 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information on these distributions.
In addition to available cash and marketable securities, including net investment income earned on such investments, Radian Group’s principal sources of cash to fund future liquidity needs include: (i) payments made to Radian Group by its subsidiaries under expense- and tax-sharing arrangements and (ii) to the extent available, dividends or other distributions from its subsidiaries.
Radian Group has in place a $275 million unsecured revolving credit facility with a syndicate of bank lenders. The revolving credit facility matures in December 2026, although under certain conditions Radian Group may be required to offer to repay any outstanding amounts and terminate lender commitments earlier than the maturity date. 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 other subsidiaries as well as growth initiatives. The facility provides us with additional flexibility for short-term cash management and, during the second quarter of 2025, we borrowed and repaid in full $50 million under this facility in support of our capital return opportunities. At June 30, 2025, the full $275 million was available under the facility. See Note 12 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional information on the unsecured revolving credit facility.
In connection with our Mortgage Conduit business, Radian Mortgage Capital has entered into the Master Repurchase Agreements to finance the acquisition of residential mortgage loans and related mortgage loan assets. In the ordinary course of its business, Radian Mortgage Capital expects to renew the Master Repurchase Agreements on or prior to expiration and/or to enter into new agreements to finance the acquisition of residential mortgage loans and related mortgage loan assets. As of June 30, 2025, Radian Group has entered into four separate Parent Guarantees to guaranty the obligations under the Master Repurchase Agreements. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information. In addition to financing the acquisition of mortgage loan assets under the Master Repurchase Agreements, Radian Mortgage Capital may fund such purchases directly using capital contributed from Radian Group.
63
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) the payment of quarterly dividends on our common stock, which are currently $0.255 per share, and which remain subject to approval by our board of directors and our ongoing assessment of our financial condition and potential needs related to the execution and implementation of our business plans and strategies; (iv) potential repurchases of shares of our common stock pursuant to share repurchase authorizations, as described below; and (v) investments to support our business strategy, including investments to expand and diversify our business and revenue streams and capital contributions to our subsidiaries.
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 $1.1 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 and (ii) potential payments pursuant to the Parent Guarantees.
For additional information about related risks and uncertainties, see “Our sources of liquidity may be insufficient to fund our obligations” and “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” under “Item 1A. Risk Factors” in our 2024 Form 10-K.
In addition to Radian Group’s existing sources of liquidity to fund its obligations, we may decide to seek additional capital, including by incurring additional debt, issuing additional equity, or selling assets, which we may not be able to do on favorable terms, if at all.
Share Repurchases. During the six months ended June 30, 2025, the Company repurchased 13.4 million shares of Radian Group common stock under programs authorized by Radian Group’s board of directors, at a total cost of $430 million, including commissions. See Note 14 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details on our share repurchase programs.
Dividends and Dividend Equivalents. In February 2025, Radian Group’s board of directors authorized an increase to the Company’s quarterly dividend from $0.245 to $0.255 per share. Based on our outstanding shares of common stock and our current dividend level, we would require approximately $138 million in aggregate to pay dividends for the next 12 months, plus an incremental amount for dividend equivalents that will fluctuate based on final shares vested under our performance-based RSU programs. So long as no default or event of default exists under our revolving credit facility or the Parent Guarantees, Radian Group is not subject to any legal or contractual limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional details. The declaration, level and payment of future quarterly dividends remains subject to the board of directors’ discretion and determination.
Corporate Expenses and Interest Expense. Radian Group has expense-sharing arrangements in place with its 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, 2025, of $86 million and $33 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. The expense-sharing arrangements, as amended, between Radian Group and its mortgage insurance subsidiaries have been approved by the Pennsylvania Insurance Department, but such approval may be modified or revoked at any time.
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. There were $10 million of tax-sharing agreement payments received by Radian Group from its subsidiaries during the six months ended June 30, 2025.
Capitalization—Holding Company
The following table presents our holding company capital structure.
Capital structure
(In thousands, except per-share amounts and ratios)
Debt
450,000
625,000
Unamortized discount and debt issuance costs
(8,397
(9,663
Total capitalization
5,559,284
5,689,195
Holding company debt-to-capital ratio (1)
18.7
Shares outstanding
Book value per share
33.18
31.33
Stockholders’ equity decreased by $131 million from December 31, 2024, to June 30, 2025. The net decrease in stockholders’ equity for the six months ended June 30, 2025, resulted primarily from: (i) share repurchases of $430 million, excluding related excise taxes due and (ii) dividend and dividend equivalents of $75 million. These were partially offset by our net income of $286 million and a net decrease in unrealized losses on investment securities of $77 million as a result of decreases in market interest rates during the period. As of June 30, 2025, we did not expect to realize a loss for our investments in an unrealized loss position given our intent and ability to hold these investment securities until recovery of their amortized cost basis.
The increase in book value per share from $31.33 at December 31, 2024, to $33.18 at June 30, 2025, is primarily due to: (i) an increase of $1.94 per share attributable to our net income for the six months ended June 30, 2025, and (ii) an increase of $0.52 per share due to a net decrease in unrealized losses in our available for sale securities, recorded in accumulated other comprehensive income for the six months ended June 30, 2025. These increases were partially offset primarily by a decrease of $0.51 per share attributable to dividends and dividend equivalents.
We regularly evaluate opportunities, based on market conditions, to finance our operations by accessing the capital markets or entering into other types of financing arrangements with institutional and other lenders. We also regularly consider various measures to improve our capital and liquidity positions, as well as to strengthen our balance sheet, improve Radian Group’s debt maturity profile and maintain adequate liquidity for our operations. Among other things, these measures may include borrowing agreements or arrangements, such as securities or other master repurchase agreements and revolving credit facilities. In the past we have repurchased or exchanged, prior to maturity, some of our outstanding debt, and in the future, we may from time to time seek to redeem, repurchase or exchange for other securities, or otherwise restructure or refinance some or all of our outstanding debt prior to maturity in the open market through other public or private transactions, including pursuant to one or more tender offers or through any combination of the foregoing, as circumstances may allow. The timing or amount of any potential transactions will depend on a number of factors, including market opportunities and our views regarding our capital and liquidity positions and potential future needs. There can be no assurance that any such transactions will be completed on favorable terms, or at all.
Historically, one of the primary demands for liquidity in our Mortgage Insurance business is the payment of claims, net of reinsurance, including from commutations and settlements. See Note 11 of Notes to Unaudited Condensed Consolidated
Financial Statements for information on our mortgage insurance reserve for losses and LAE, which represents our best estimate for the costs of settling future claims on currently defaulted mortgage loans.
Other principal demands for liquidity in our Mortgage Insurance business are expected to include: (i) expenses (including those allocated from Radian Group); (ii) repayments of FHLB advances; (iii) distributions from Radian Guaranty to Radian Group, including returns of capital or recurring ordinary dividends, as discussed below; and (iv) 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 2024 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) if necessary, capital contributions from Radian Group. We believe that the operating cash flows generated by Radian Guaranty, as well as our other immaterial mortgage insurance subsidiaries, will provide them with the funds necessary to satisfy their respective needs for the foreseeable future.
As of June 30, 2025, Radian Guaranty maintained claims paying resources of $6.1 billion on a statutory basis, which consist of contingency reserves, statutory policyholders’ surplus, premiums received but not yet earned and loss reserves. In addition, our reinsurance programs are designed to provide additional claims-paying resources during times of economic stress and elevated losses. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
Radian Guaranty’s Risk-to-capital as of June 30, 2025, was 10.3 to 1. Radian Guaranty is not expected to need additional capital to satisfy state insurance regulatory requirements in their current form. At June 30, 2025, Radian Guaranty had statutory policyholders’ surplus of $681 million. This balance includes a $998 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. In our 2024 Form 10-K, see Note 16 of Notes to Consolidated Financial Statements and “Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity” under “Item 1A. Risk Factors” for more information.
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, 2025, Radian Guaranty’s Available Assets under the PMIERs financial requirements totaled $6.0 billion, resulting in a PMIERs Cushion of $2.0 billion, or 51%, over its Minimum Required Assets. Those amounts compare to Available Assets of $6.0 billion and a PMIERs Cushion of $2.2 billion, or 56%, at December 31, 2024.
Despite holding assets above the minimum statutory capital thresholds and PMIERs financial requirements, the ability of Radian’s mortgage insurance subsidiaries to pay dividends on their common stock is restricted by certain provisions of the insurance laws of Pennsylvania, their state of domicile. Under Pennsylvania’s insurance laws, ordinary dividends and other distributions may only be paid out of an insurer’s positive unassigned surplus unless the Pennsylvania Insurance Department approves the payment of dividends or other distributions from another source.
Radian Guaranty received approval from the Pennsylvania Insurance Department to make a return of capital distribution to Radian Group of $200 million during the first three months of 2025 from its paid in surplus. In the second quarter of 2025, Radian Guaranty paid $200 million in ordinary dividends to Radian Group, and we expect Radian Guaranty to maintain the ability to pay ordinary dividends during the remainder of 2025 and for the foreseeable future. See Note 16 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional information on this return of capital distribution, as well as our statutory dividend restrictions and contingency reserve requirements.
Radian Guaranty is a member of the FHLB. As a member, it may borrow from the FHLB, subject to certain conditions, which include requirements to post collateral and to maintain a minimum investment in FHLB stock. Advances from the FHLB may be used to provide low-cost, supplemental liquidity for various purposes, including to fund incremental investments. Radian’s current strategy includes using FHLB advances as financing for general cash management and liquidity purposes. As of June 30, 2025, there were $99 million of FHLB advances outstanding. See Note 12 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.
66
Additional capital support may also be required for potential investments in our other business initiatives to support our strategy of growing our businesses. During the six months ended June 30, 2025 and 2024, Radian Group made $24 million and $47 million, respectively, of additional equity contributions to support our Title, Real Estate Services and Real Estate Technology businesses. During the six months ended June 30, 2024, Radian Group made a $15 million additional equity contribution to facilitate the growth of our Mortgage Conduit business.
In the event the cash flows from operations of our All Other businesses continue to be insufficient to fund all of their needs, Radian Group may continue to provide additional funds in the form of additional capital contributions or other support. See “Investments to grow our existing businesses, pursue new lines of business or develop new products and services within existing lines of business subject us to additional risks and uncertainties” under “Item 1A. Risk Factors” in our 2024 Form 10-K for additional information.
Ratings
Ratings independently assigned by third-party statistical rating organizations often are considered in assessing our credit strength and the financial strength of our primary insurance subsidiaries. Radian Group, Radian Guaranty and Radian Title Insurance are currently assigned the financial strength ratings set forth in the chart below, which are provided for informational purposes only and are subject to change. See “Potential downgrades by rating agencies to the current financial strength ratings assigned to Radian Guaranty and/or the credit ratings assigned to Radian Group could adversely affect the Company” under “Item 1A. Risk Factors” in our 2024 Form 10-K.
Subsidiary
Demotech, Inc.
Fitch (1)
Moody’s (1)
S&P (1)
Radian Group (2)
BBB
Baa3
BBB-
A
A3
A-
As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 2024 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 “Our success depends, in part, on our ability to manage risks in our investment portfolio” under “Item 1A. Risk Factors” in our 2024 Form 10-K.
Our market risk exposures at June 30, 2025, related to our investments, including our residential mortgage loans held for sale and retained VIE interests, primarily relate to interest rate and credit risk and have not materially changed from those identified in our 2024 Form 10-K.
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, 2025, 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, 2025, 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, 2025, there was 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.
Item 1. Legal Proceedings
We are routinely involved in a number of legal actions and proceedings, including reviews, audits, inquiries, information-gathering requests and investigations 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 actions and proceedings.
Item 1A. Risk Factors
There have been no material changes to our risk factors from those previously disclosed in our 2024 Form 10-K. However, the primary and secondary impacts of recent regulatory and legislative actions, tariffs and trade policies, and responses thereto, have impacted the global economy, disrupted global supply chains, created significant uncertainty and volatility in the U.S. and global financial markets, and increased the risks of recession and elevated unemployment levels. In addition, reductions in staffing as well as changes in leadership at several government agencies, including the FHFA and FHA, and the GSEs, are influencing changes in federal housing policies and the housing finance system and have resulted in changes to the business practices of the GSEs. Accordingly, the impact of recent regulatory and legislative actions and other actions of the current presidential administration on, among other things, the macroeconomic environment and regulatory and government policies could exacerbate the other risks and uncertainties set forth in “Item 1A. Risk Factors” in our 2024 10-K and could negatively impact our businesses and financial results.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Unregistered Sales of Equity Securities
During the three months ended June 30, 2025, 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, 2025.
Share repurchase program
Total Number of Shares Purchased (1)
AveragePrice Paid perShare
Total Number ofShares Purchasedas Part of PubliclyAnnounced Plansor Programs (2)
Approximate DollarValue of Shares ThatMay Yet Be PurchasedUnder the Plans orPrograms (2)
Period
4/1/2025 to 4/30/2025
6,924,703
32.05
6,924,486
113,823
5/1/2025 to 5/31/2025
590,329
33.90
33,456
862,763
6/1/2025 to 6/30/2025
11,725
34.83
7,526,757
6,957,942
Limitations on Payment of Dividends
Radian Group is not subject to any legal or contractual limitations on its ability to pay dividends except as described below. The Company is subject to dividend limitations generally applicable to corporations that are incorporated in Delaware. In addition, pursuant to Radian Group’s revolving credit facility and the Parent Guarantees, Radian Group is permitted to pay dividends so long as no event of default exists and the Company is in pro forma compliance with the applicable financial covenants in the agreements on the date a dividend is declared. See Note 12 of Notes to Consolidated Financial Statements in our 2024 Form 10-K for additional details.
Item 5. Other Information
None of the directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) of the Company adopted or terminated any Rule 10b5-1 trading arrangement or any non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K) during the three months ended June 30, 2025.
Item 6. Exhibits
Exhibit
Number
10.1*+
2025 Performance-Based Restricted Stock Unit Grant Agreement (book value) under the Radian Group Inc. Equity Compensation Plan between the Registrant and Richard G. Thornberry
10.2*+
2025 Time-Based Restricted Stock Unit Grant Agreement (book value) under the Radian Group Inc. Equity Compensation Plan between the Registrant and Richard G. Thornberry
10.3*+
Form of Executive Officer 2025 Performance-Based Restricted Stock Unit Grant Agreement (book value) under the Radian Group Inc. Equity Compensation Plan
10.4*+
Form of Executive Officer 2025 Time-Based Restricted Stock Unit Grant Agreement under the Radian Group Inc. Equity Compensation Plan
10.5+
Radian Group Inc. Severance Plan (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8-K (file no. 1-11356) dated May 21, 2025, and filed on May 28, 2025)
10.6
Master Repurchase Agreement, dated April 30, 2025, among Everbank Bank N.A., a national association (“Buyer”), Radian Group Inc., a Delaware corporation (“Guarantor”) and Radian Mortgage Capital LLC, a Delaware limited liability company (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8- K (file no. 1-11356) dated April 30, 2025, and filed on May 5, 2025)
10.7
Guaranty dated as of April 30, 2025, made by Guarantor, in favor of Buyer (incorporated by reference to Exhibit 10.2 of the Registrant’s Current Report on Form 8- K (file no. 1-11356) dated April 30, 2025, and filed on May 5, 2025)
Amendment No. 5 to Master Repurchase Agreement, dated as of May 30, 2025, by and among Goldman Sachs Bank USA, Radian Liberty Funding LLC and Radian Mortgage Capital LLC (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8- K (file no. 1-11356) dated May 30, 2025, and filed on June 2, 2025)
Amendment No. 2 to Master Repurchase Agreement, dated as of June 5, 2025, entered into by and among JPMorgan Chase Bank, N.A., as administrative agent on behalf of one or more buyers from time to time and as assignee of Flagstar Bank, N.A., Radian Mortgage Capital LLC, as seller and Radian Group Inc., as guarantor (incorporated by reference to Exhibit 10.1 of the Registrant’s Current Report on Form 8- K (file no. 1-11356) dated June 5, 2025, and filed on June 10, 2025)
31*
Rule 13a - 14(a) Certifications
32**
Section 1350 Certifications
101.INS*
Inline 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.SCH*
Inline XBRL Taxonomy Extension Schema Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101.INS)
* Filed herewith.
** Furnished herewith.
+ Management contract, compensatory plan or arrangement
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.
Date:
August 1, 2025
/s/ SUMITA PANDIT
Sumita Pandit
President and Chief Financial Officer
/s/ ROBERT J. QUIGLEY
Robert J. Quigley
Executive Vice President, Controller and Chief Accounting Officer