株探米国株
英語
エドガーで原本を確認する
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________

 

FORM 10-Q

_____________________________

(Mark One)

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 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

_______________________________

img193021333_0.jpg

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

 

 

Item 1

Legal Proceedings

 

68

Item 1A

Risk Factors

 

68

Item 2

Unregistered Sales of Equity Securities and Use of Proceeds

 

69

Item 5

Other Information

 

69

Item 6

Exhibits

 

70

 

 

 

 

Signatures

 

71

 

2

 

Glossary of Abbreviations and Acronyms for Selected References

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

3

 

Term

Definition

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

 

Term

Definition

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

 

Term

Definition

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

 

Cautionary Note Regarding Forward-Looking Statements
—Safe Harbor Provisions

All statements in this report that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “strategy,” “future,” “likely” or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. 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:

■
the health of the U.S. housing market generally and changes in economic conditions that impact the size of the insurable mortgage market, the credit performance of our insured mortgage portfolio, the returns on our investments in residential mortgage loans and other mortgage assets acquired through our Mortgage Conduit business and other investments held in our investment portfolio, as well as our business prospects, including: changes resulting from inflationary pressures, the interest rate environment and the risk of recession and higher unemployment rates; other macroeconomic stresses and uncertainties, including potential impacts related to the recent regulatory and legislative actions and responses thereto, as well as other political and geopolitical events, civil disturbances and endemics/pandemics or extreme weather events and other natural disasters that may adversely affect regional economic conditions and housing markets;
■
the primary and secondary impacts of recent government actions and executive orders, including regulatory and legislative actions, tariffs, trade policies and reductions in the federal workforce, as well as challenges and other responses to those actions, and related uncertainty and volatility in the U.S. and global financial markets;
■
changes in the way customers, investors, ratings agencies, regulators or legislators perceive our performance, financial strength and future prospects;
■
Radian Guaranty’s ability to remain eligible under the PMIERs to insure loans purchased by the GSEs;
■
our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy current and future regulatory requirements;
■
changes in the charters or business practices of, or rules or regulations imposed by or applicable to, the GSEs or loans purchased by the GSEs, or changes in the requirements for Radian Guaranty to remain an approved insurer to the GSEs, such as changes in the PMIERs or the GSEs’ interpretation and application of the PMIERs or other applicable requirements;
■
changes in the current housing finance system in the United States, including the roles and areas of primary focus of the FHA, the U.S. Department of Veterans Affairs (“VA”), the GSEs and private mortgage insurers in this system;
■
our ability to successfully execute and implement our capital plans, including our risk distribution strategy through the capital markets, traditional reinsurance markets or other strategies, and to maintain sufficient holding company liquidity to meet our liquidity needs;
■
our ability to successfully execute and implement our business plans and strategies, including plans and strategies that may require GSE and/or regulatory approvals and licenses, that are subject to complex compliance requirements that we may be unable to satisfy, or that may expose us to new risks, including those that could impact our capital and liquidity positions;
■
risks related to the quality of third-party mortgage underwriting and mortgage loan servicing, including the timeliness and accuracy of servicer reporting;
■

7

 

■
a decrease in the Persistency Rates of our mortgage insurance on Monthly Premium Policies; competition in the private mortgage insurance industry generally, including competition from current and potential new mortgage insurers, the FHA and the VA as well as from other forms of credit enhancement, such as any potential GSE-sponsored alternatives to traditional mortgage insurance;
■
U.S. political conditions and legislative and regulatory activity (or inactivity), including adoption of (or failure to adopt) new laws, regulations and executive orders, changes in existing laws, regulations and executive orders, or the way they are interpreted or applied, and adoption of laws, regulations or executive orders that conflict among jurisdictions in which we operate;
■
legal and regulatory claims, assertions, actions, reviews, audits, inquiries and investigations that could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures, new or increased reserves or have other effects on our business;
■
the possibility that we may fail to estimate accurately, especially in the event of an extended economic downturn or a period of extreme market volatility and economic uncertainty, the likelihood, magnitude and timing of losses in establishing loss reserves for our Mortgage Insurance business or to accurately calculate and/or project our Available Assets and Minimum Required Assets under the PMIERs, which could be impacted by, among other things, the size and mix of our IIF, changes to the PMIERs, the level of defaults in our portfolio, the reported status of defaults in our portfolio (including whether they are subject to mortgage forbearance, a repayment plan or a loan modification trial period), the level of cash flow generated by our insurance operations and our risk distribution strategies;
■
risks associated with investments to diversify and grow, including to grow our existing businesses, or to pursue new lines of business or develop new products and services, including our ability and related costs to acquire, develop, launch and implement new and innovative technologies and digital products and services, whether these products and services receive broad customer acceptance or disrupt existing customer relationships, and additional financial risks related to these and other potential investments, including required changes in our investment, financing and hedging strategies, risks associated with our increased use of financial leverage, which could expose us to liquidity risks resulting from changes in the fair values of assets, and the risk that we may fail to achieve forecasted results, which could result in lower or negative earnings contribution;
■
the effectiveness and security of our information technology systems and digital products and services, including the risk that these systems, products or services fail to operate as expected or planned or expose us to cybersecurity or third-party risks, including due to malware, unauthorized access, cyberattack, ransomware or other similar events;
■
the amount of dividends, if any, that our insurance subsidiaries may distribute to us, which under applicable regulatory requirements is based primarily on the financial performance of our insurance subsidiaries, and therefore, may be impacted by general economic, competitive and other factors, many of which are beyond our control;
■
the ability of our operating subsidiaries to distribute amounts to us under our internal tax- and expense-sharing arrangements, which for our insurance subsidiaries are subject to regulatory review and could be terminated at the discretion of such regulators;
■
volatility in our financial results caused by changes in the fair value of our assets and liabilities carried at fair value;
■
changes in GAAP or SAP rules and guidance, or their interpretation;
■
the amount and timing of potential payments or adjustments associated with federal or other tax examinations; and
■
our ability to attract, develop and retain key employees.

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

 

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

 

INDEX TO ITEM 1. FINANCIAL STATEMENTS

Page

 

 

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

16

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

37

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

 

9

Radian Group Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

(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

 

$

9,580,657

 

 

$

8,663,988

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

10

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per-share amounts)

 

2025

 

 

2024

 

 

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

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

11

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Net income

 

$

141,796

 

 

$

151,903

 

 

$

286,354

 

 

$

304,257

 

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

 

 

21,775

 

 

 

(14,815

)

 

 

77,297

 

 

 

(46,460

)

Comprehensive income (loss)

 

$

163,571

 

 

$

137,088

 

 

$

363,651

 

 

$

257,797

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

12

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Common Stockholders’ Equity (Unaudited)

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

162

 

 

$

171

 

 

$

168

 

 

$

173

 

Issuance of common stock under incentive and benefit plans

 

 

2

 

 

 

2

 

 

 

2

 

 

 

2

 

Shares repurchased under share repurchase program (Note 14)

 

 

(7

)

 

 

(1

)

 

 

(13

)

 

 

(3

)

Balance, end of period

 

 

157

 

 

 

172

 

 

 

157

 

 

 

172

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Treasury stock

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(969,396

)

 

 

(946,202

)

 

 

(968,246

)

 

 

(945,870

)

Repurchases of common stock under incentive plans

 

 

(19,368

)

 

 

(21,016

)

 

 

(20,518

)

 

 

(21,348

)

Balance, end of period

 

 

(988,764

)

 

 

(967,218

)

 

 

(988,764

)

 

 

(967,218

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional paid-in capital

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

1,048,738

 

 

 

1,390,436

 

 

 

1,246,826

 

 

 

1,430,594

 

Issuance of common stock under incentive and benefit plans

 

 

668

 

 

 

856

 

 

 

1,838

 

 

 

2,387

 

Share-based compensation

 

 

22,816

 

 

 

15,228

 

 

 

32,702

 

 

 

24,040

 

Shares repurchased under share repurchase program (Note 14)

 

 

(224,823

)

 

 

(50,179

)

 

 

(433,967

)

 

 

(100,680

)

Balance, end of period

 

 

847,399

 

 

 

1,356,341

 

 

 

847,399

 

 

 

1,356,341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retained earnings

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

4,802,038

 

 

 

4,357,823

 

 

 

4,695,348

 

 

 

4,243,759

 

Net income

 

 

141,796

 

 

 

151,903

 

 

 

286,354

 

 

 

304,257

 

Dividends and dividend equivalents declared

 

 

(37,004

)

 

 

(39,391

)

 

 

(74,872

)

 

 

(77,681

)

Balance, end of period

 

 

4,906,830

 

 

 

4,470,335

 

 

 

4,906,830

 

 

 

4,470,335

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated other comprehensive income (loss)

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

 

(294,716

)

 

 

(362,496

)

 

 

(350,238

)

 

 

(330,851

)

Net unrealized gains (losses) on investments, net of tax

 

 

21,775

 

 

 

(14,815

)

 

 

77,252

 

 

 

(46,392

)

Other adjustments to other comprehensive income (loss)

 

 

—

 

 

 

—

 

 

 

45

 

 

 

(68

)

Balance, end of period

 

 

(272,941

)

 

 

(377,311

)

 

 

(272,941

)

 

 

(377,311

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$

4,492,681

 

 

$

4,482,319

 

 

$

4,492,681

 

 

$

4,482,319

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

13

Radian Group Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

430

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

Cash flows from operating activities

 

 

 

 

 

 

Net income

 

$

286,354

 

 

$

304,257

 

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:

 

 

 

 

 

 

Accrued investment income

 

 

(5,021

)

 

 

(1,824

)

Accounts and notes receivable

 

 

(1,719

)

 

 

(13,845

)

Reinsurance recoverable

 

 

(7,219

)

 

 

(5,155

)

Deferred policy acquisition costs

 

 

498

 

 

 

152

 

Prepaid federal income tax

 

 

(76,725

)

 

 

(87,416

)

Other assets

 

 

9,375

 

 

 

12,445

 

Unearned premiums

 

 

(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:

 

 

 

 

 

 

Available for sale securities

 

 

413,744

 

 

 

429,889

 

Trading securities

 

 

10,403

 

 

 

10,553

 

Purchases of:

 

 

 

 

 

 

Available for sale securities

 

 

(560,977

)

 

 

(752,250

)

Equity securities

 

 

(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

)

 

 

 

 

 

 

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

14

Radian Group Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited) (continued)

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

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

 

See Notes to Unaudited Condensed Consolidated Financial Statements.

 

15

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

 

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.

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.

All Other

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.

16

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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.

17

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per-share amounts)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income—basic and diluted

 

$

141,796

 

 

$

151,903

 

 

$

286,354

 

 

$

304,257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average common shares outstanding—basic

 

 

137,376

 

 

 

153,110

 

 

 

141,910

 

 

 

153,879

 

Dilutive effect of share-based compensation arrangements (1)

 

 

984

 

 

 

1,289

 

 

 

1,102

 

 

 

1,392

 

Adjusted average common shares outstanding—diluted

 

 

138,360

 

 

 

154,399

 

 

 

143,012

 

 

 

155,271

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.03

 

 

$

0.99

 

 

$

2.02

 

 

$

1.98

 

Diluted

 

$

1.02

 

 

$

0.98

 

 

$

2.00

 

 

$

1.96

 

 

(1)
The following number of shares of our common stock equivalents issued under our share-based compensation arrangements are not included in the calculation of diluted net income per share because their effect would be anti-dilutive.

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares of common stock equivalents

 

 

2

 

 

 

64

 

 

 

1

 

 

 

39

 

 

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).

18

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$

175,013

 

 

$

188,123

 

 

$

363,453

 

 

$

386,772

 

 

(1)
Does not include net gains (losses) on investments and other financial instruments that are attributable to our Mortgage Conduit business, which are included in All Other adjusted pretax operating income (loss).
(2)
The non-operating item for the six months ended June 30, 2024, primarily relates to a loss on extinguishment of debt.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

($ in thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Mortgage Insurance revenues

 

$

288,316

 

 

$

285,983

 

 

$

572,614

 

 

$

571,006

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses

 

 

11,954

 

 

 

(1,769

)

 

 

27,294

 

 

 

(8,655

)

Policy acquisition costs

 

 

7,205

 

 

 

6,522

 

 

 

13,593

 

 

 

13,316

 

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

 

 

5

 

 

 

156

 

 

 

103

 

 

 

309

 

Adjusted pretax operating income

 

$

189,522

 

 

$

198,763

 

 

$

383,815

 

 

$

408,613

 

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

 %

 

 

(1)
Includes immaterial allocated depreciation expense.
(2)
Calculated as provision for losses expressed as a percentage of net premiums earned.
(3)
Calculated as operating expenses (which consist of policy acquisition costs, direct other operating expenses and allocated corporate operating expenses) expressed as a percentage of net premiums earned.

19

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Mortgage Insurance

 

 

 

 

 

 

 

 

 

 

 

 

Contract underwriting services

 

$

42

 

 

$

309

 

 

$

215

 

 

$

519

 

All Other

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Services

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

—

 

 

 

37

 

 

 

9

 

Title

 

 

4,013

 

 

 

3,540

 

 

 

7,274

 

 

 

6,113

 

Real Estate Technology

 

 

682

 

 

 

639

 

 

 

1,310

 

 

 

1,251

 

Total services revenue

 

$

10,924

 

 

$

13,265

 

 

$

23,040

 

 

$

25,853

 

 

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

 

(In thousands)

 

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

 

 

 

—

 

 

 

143,487

 

Corporate bonds and notes

 

 

—

 

 

 

2,427,824

 

 

 

—

 

 

 

2,427,824

 

RMBS

 

 

—

 

 

 

991,509

 

 

 

—

 

 

 

991,509

 

CMBS

 

 

—

 

 

 

325,384

 

 

 

—

 

 

 

325,384

 

CLO

 

 

—

 

 

 

480,443

 

 

 

—

 

 

 

480,443

 

Other ABS

 

 

—

 

 

 

560,421

 

 

 

—

 

 

 

560,421

 

Mortgage insurance-linked notes (1)

 

 

—

 

 

 

46,820

 

 

 

—

 

 

 

46,820

 

Total fixed maturities available for sale

 

 

130,575

 

 

 

4,977,703

 

 

 

—

 

 

 

5,108,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

Assets and liabilities carried at fair value by hierarchy level

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

(In thousands)

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities trading securities

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

 

—

 

 

 

41,969

 

 

 

—

 

 

 

41,969

 

Corporate bonds and notes

 

 

—

 

 

 

24,357

 

 

 

—

 

 

 

24,357

 

RMBS

 

 

—

 

 

 

2,765

 

 

 

—

 

 

 

2,765

 

CMBS

 

 

—

 

 

 

5,226

 

 

 

—

 

 

 

5,226

 

Total fixed maturities trading securities

 

 

—

 

 

 

74,317

 

 

 

—

 

 

 

74,317

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

80,146

 

 

 

6,299

 

 

 

6,546

 

 

 

92,991

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage loans held for sale (2)

 

 

—

 

 

 

698,367

 

 

 

—

 

 

 

698,367

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other invested assets (3) (4)

 

 

—

 

 

 

—

 

 

 

6,088

 

 

 

6,088

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

 

—

 

 

 

895

 

 

 

—

 

 

 

895

 

Money market instruments

 

 

335,979

 

 

 

—

 

 

 

—

 

 

 

335,979

 

Corporate bonds and notes

 

 

—

 

 

 

23,296

 

 

 

—

 

 

 

23,296

 

Other investments (5)

 

 

—

 

 

 

142,331

 

 

 

—

 

 

 

142,331

 

Total short-term investments

 

 

335,979

 

 

 

166,522

 

 

 

—

 

 

 

502,501

 

Total investments at fair value (4)

 

 

546,700

 

 

 

5,923,208

 

 

 

12,634

 

 

 

6,482,542

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

—

 

 

 

2,826

 

 

 

—

 

 

 

2,826

 

Mortgage servicing and other related rights

 

 

—

 

 

 

—

 

 

 

4,600

 

 

 

4,600

 

Loaned securities (6)

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

 

2,979

 

 

 

—

 

 

 

—

 

 

 

2,979

 

Corporate bonds and notes

 

 

—

 

 

 

130,765

 

 

 

—

 

 

 

130,765

 

Equity securities

 

 

45,948

 

 

 

—

 

 

 

—

 

 

 

45,948

 

Securitized residential mortgage loans held for investment (2)

 

 

—

 

 

 

1,394,700

 

 

 

—

 

 

 

1,394,700

 

Total assets at fair value (4)

 

$

595,627

 

 

$

7,451,499

 

 

$

17,234

 

 

$

8,064,360

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

667

 

 

$

868

 

 

$

1,535

 

Securitized nonrecourse debt (2)

 

 

—

 

 

 

1,360,195

 

 

 

—

 

 

 

1,360,195

 

Total liabilities at fair value

 

$

—

 

 

$

1,360,862

 

 

$

868

 

 

$

1,361,730

 

 

(1)
Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information.
(2)
See Note 7 for more information about our residential mortgage loan activities, including our private label securitization program.
(3)
Consists primarily of interests in private debt and equity investments.
(4)
Does not include other invested assets of $2 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient.
(5)
Comprises short-term certificates of deposit and commercial paper.
(6)
Securities loaned to third-party borrowers under securities lending agreements are classified as other assets on our condensed consolidated balance sheets. See Note 6 for more information on our securities lending agreements.

21

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

Assets and liabilities carried at fair value by hierarchy level

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

(In thousands)

 

Level I

 

 

Level II

 

 

Level III

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investments

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

$

119,630

 

 

$

8,702

 

 

$

—

 

 

$

128,332

 

State and municipal obligations

 

 

—

 

 

 

148,891

 

 

 

—

 

 

 

148,891

 

Corporate bonds and notes

 

 

—

 

 

 

2,476,639

 

 

 

—

 

 

 

2,476,639

 

RMBS

 

 

—

 

 

 

1,011,630

 

 

 

—

 

 

 

1,011,630

 

CMBS

 

 

—

 

 

 

411,999

 

 

 

—

 

 

 

411,999

 

CLO

 

 

—

 

 

 

411,462

 

 

 

—

 

 

 

411,462

 

Other ABS

 

 

—

 

 

 

438,811

 

 

 

—

 

 

 

438,811

 

Mortgage insurance-linked notes (1)

 

 

—

 

 

 

47,156

 

 

 

—

 

 

 

47,156

 

Total fixed maturities available for sale

 

 

119,630

 

 

 

4,955,290

 

 

 

—

 

 

 

5,074,920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities trading securities

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

 

—

 

 

 

50,845

 

 

 

—

 

 

 

50,845

 

Corporate bonds and notes

 

 

—

 

 

 

23,940

 

 

 

—

 

 

 

23,940

 

RMBS

 

 

—

 

 

 

3,029

 

 

 

—

 

 

 

3,029

 

CMBS

 

 

—

 

 

 

4,838

 

 

 

—

 

 

 

4,838

 

Total fixed maturities trading securities

 

 

—

 

 

 

82,652

 

 

 

—

 

 

 

82,652

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity securities

 

 

128,368

 

 

 

3,275

 

 

 

6,546

 

 

 

138,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential mortgage loans held for sale (2)

 

 

—

 

 

 

519,885

 

 

 

—

 

 

 

519,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other invested assets (3) (4)

 

 

—

 

 

 

—

 

 

 

5,908

 

 

 

5,908

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term investments

 

 

 

 

 

 

 

 

 

 

 

 

State and municipal obligations

 

 

—

 

 

 

1,750

 

 

 

—

 

 

 

1,750

 

Money market instruments

 

 

384,934

 

 

 

—

 

 

 

—

 

 

 

384,934

 

Corporate bonds and notes

 

 

—

 

 

 

49,905

 

 

 

—

 

 

 

49,905

 

Other ABS

 

 

—

 

 

 

16,054

 

 

 

—

 

 

 

16,054

 

Other investments (5)

 

 

—

 

 

 

69,005

 

 

 

—

 

 

 

69,005

 

Total short-term investments

 

 

384,934

 

 

 

136,714

 

 

 

—

 

 

 

521,648

 

Total investments at fair value (4)

 

 

632,932

 

 

 

5,697,816

 

 

 

12,454

 

 

 

6,343,202

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

—

 

 

 

4,274

 

 

 

—

 

 

 

4,274

 

Mortgage servicing rights

 

 

—

 

 

 

—

 

 

 

2,702

 

 

 

2,702

 

Loaned securities (6)

 

 

 

 

 

 

 

 

 

 

 

 

Corporate bonds and notes

 

 

—

 

 

 

130,256

 

 

 

—

 

 

 

130,256

 

Other ABS

 

 

—

 

 

 

60

 

 

 

—

 

 

 

60

 

Equity securities

 

 

8,805

 

 

 

—

 

 

 

—

 

 

 

8,805

 

Securitized residential mortgage loans held for investment (2)

 

 

—

 

 

 

717,228

 

 

 

—

 

 

 

717,228

 

Total assets at fair value (4)

 

$

641,737

 

 

$

6,549,634

 

 

$

15,156

 

 

$

7,206,527

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities

 

$

—

 

 

$

40

 

 

$

1,249

 

 

$

1,289

 

Securitized nonrecourse debt (2)

 

 

—

 

 

 

703,526

 

 

 

—

 

 

 

703,526

 

Total liabilities at fair value

 

$

—

 

 

$

703,566

 

 

$

1,249

 

 

$

704,815

 

 

(1)
Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information.
(2)
See Note 7 for more information about our residential mortgage loan activities, including our private label securitization program.

22

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

(3)
Consists primarily of interests in private debt and equity investments.
(4)
Does not include other invested assets of $2 million that are primarily invested in limited partnership investments valued using the net asset value as a practical expedient.
(5)
Comprises short-term certificates of deposit and commercial paper.
(6)
Securities loaned to third-party borrowers under securities lending agreements are classified as other assets in our condensed consolidated balance sheets. See Note 6 for more information on our securities lending agreements.

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Carrying
Amount

 

 

Estimated
Fair Value

 

 

Carrying
Amount

 

 

Estimated
Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company-owned life insurance

 

$

113,529

 

 

$

113,529

 

 

$

110,968

 

 

$

110,968

 

Senior notes

 

 

1,066,603

 

 

 

1,099,765

 

 

 

1,065,337

 

 

 

1,088,306

 

Secured borrowings

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage loan financing facilities

 

$

664,248

 

 

$

664,248

 

 

$

492,429

 

 

$

492,429

 

FHLB advances

 

 

98,685

 

 

 

98,720

 

 

 

45,865

 

 

 

45,888

 

Total secured borrowings

 

$

762,933

 

 

$

762,968

 

 

$

538,294

 

 

$

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

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

6. Investments

Available for Sale Securities

Our available for sale securities within our investment portfolio consist of the following as of the dates indicated.

 

Available for sale securities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

$

164,513

 

 

$

126

 

 

$

(29,270

)

 

 

$

135,369

 

State and municipal obligations

 

 

159,695

 

 

 

167

 

 

 

(16,375

)

 

 

 

143,487

 

Corporate bonds and notes

 

 

2,767,925

 

 

 

17,288

 

 

 

(230,241

)

 

 

 

2,554,972

 

RMBS

 

 

1,063,500

 

 

 

8,628

 

 

 

(80,619

)

 

 

 

991,509

 

CMBS

 

 

343,420

 

 

 

37

 

 

 

(18,073

)

 

 

 

325,384

 

CLO

 

 

480,161

 

 

 

862

 

 

 

(580

)

 

 

 

480,443

 

Other ABS

 

 

559,833

 

 

 

4,055

 

 

 

(3,467

)

 

 

 

560,421

 

Mortgage insurance-linked notes (1)

 

 

45,384

 

 

 

1,436

 

 

 

—

 

 

 

 

46,820

 

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

 

Total fixed maturities available for sale

 

$

5,449,992

 

 

 

 

 

 

 

 

 

$

5,108,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Amortized
Cost

 

 

Gross
Unrealized
Gains

 

 

Gross
Unrealized
Losses

 

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

$

160,509

 

 

$

—

 

 

$

(32,177

)

 

 

$

128,332

 

State and municipal obligations

 

 

167,114

 

 

 

40

 

 

 

(18,263

)

 

 

 

148,891

 

Corporate bonds and notes

 

 

2,878,705

 

 

 

5,261

 

 

 

(277,535

)

 

 

 

2,606,431

 

RMBS

 

 

1,104,721

 

 

 

6,965

 

 

 

(100,056

)

 

 

 

1,011,630

 

CMBS

 

 

438,139

 

 

 

51

 

 

 

(26,191

)

 

 

 

411,999

 

CLO

 

 

411,328

 

 

 

983

 

 

 

(849

)

 

 

 

411,462

 

Other ABS

 

 

442,620

 

 

 

1,556

 

 

 

(5,305

)

 

 

 

438,871

 

Mortgage insurance-linked notes (1)

 

 

45,447

 

 

 

1,709

 

 

 

—

 

 

 

 

47,156

 

Total securities available for sale, including loaned securities

 

 

5,648,583

 

 

$

16,565

 

 

$

(460,376

)

(2)

 

 

5,204,772

 

Less: loaned securities (3)

 

 

137,082

 

 

 

 

 

 

 

 

 

 

129,852

 

Total fixed maturities available for sale

 

$

5,511,501

 

 

 

 

 

 

 

 

 

$

5,074,920

 

 

 

(1)
Includes mortgage insurance-linked notes purchased by Radian Group in connection with the XOL Program. See Note 8 for more information.
(2)
See “Gross Unrealized Losses and Related Fair Value of Available for Sale Securities” below for additional details.
(3)
Included in other assets on our condensed consolidated balance sheets. See “Loaned Securities” below for a discussion of our securities lending agreements.

24

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

 

Less Than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)
Description of Securities

 

Fair Value

 

 

Unrealized
Losses

 

 

Fair Value

 

 

Unrealized
Losses

 

 

Fair Value

 

 

Unrealized
Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

$

4,696

 

 

$

(532

)

 

$

112,687

 

 

$

(28,738

)

 

$

117,383

 

 

$

(29,270

)

State and municipal obligations

 

 

40,568

 

 

 

(1,724

)

 

 

84,611

 

 

 

(14,651

)

 

 

125,179

 

 

 

(16,375

)

Corporate bonds and notes

 

 

312,136

 

 

 

(7,899

)

 

 

1,362,178

 

 

 

(222,342

)

 

 

1,674,314

 

 

 

(230,241

)

RMBS

 

 

124,531

 

 

 

(2,878

)

 

 

543,954

 

 

 

(77,741

)

 

 

668,485

 

 

 

(80,619

)

CMBS

 

 

8,280

 

 

 

(75

)

 

 

304,678

 

 

 

(17,998

)

 

 

312,958

 

 

 

(18,073

)

CLO

 

 

99,329

 

 

 

(228

)

 

 

35,728

 

 

 

(352

)

 

 

135,057

 

 

 

(580

)

Other ABS

 

 

91,004

 

 

 

(1,928

)

 

 

33,629

 

 

 

(1,539

)

 

 

124,633

 

 

 

(3,467

)

Total

 

$

680,544

 

 

$

(15,264

)

 

$

2,477,465

 

 

$

(363,361

)

 

$

3,158,009

 

 

$

(378,625

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

Less Than 12 Months

 

 

12 Months or Greater

 

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)
Description of Securities

 

Fair Value

 

 

Unrealized
Losses

 

 

Fair Value

 

 

Unrealized
Losses

 

 

Fair Value

 

 

Unrealized
Losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. government and agency securities

 

$

5,807

 

 

$

(574

)

 

$

113,783

 

 

$

(31,603

)

 

$

119,590

 

 

$

(32,177

)

State and municipal obligations

 

 

45,539

 

 

 

(2,399

)

 

 

78,523

 

 

 

(15,864

)

 

 

124,062

 

 

 

(18,263

)

Corporate bonds and notes

 

 

749,427

 

 

 

(18,113

)

 

 

1,552,535

 

 

 

(259,422

)

 

 

2,301,962

 

 

 

(277,535

)

RMBS

 

 

296,899

 

 

 

(6,467

)

 

 

559,525

 

 

 

(93,589

)

 

 

856,424

 

 

 

(100,056

)

CMBS

 

 

15,179

 

 

 

(139

)

 

 

388,282

 

 

 

(26,052

)

 

 

403,461

 

 

 

(26,191

)

CLO

 

 

44,350

 

 

 

(65

)

 

 

43,542

 

 

 

(784

)

 

 

87,892

 

 

 

(849

)

Other ABS

 

 

180,824

 

 

 

(3,081

)

 

 

45,192

 

 

 

(2,224

)

 

 

226,016

 

 

 

(5,305

)

Total

 

$

1,338,025

 

 

$

(30,838

)

 

$

2,781,382

 

 

$

(429,538

)

 

$

4,119,407

 

 

$

(460,376

)

 

 

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

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

Contractual Maturities

The contractual maturities of fixed-maturities available for sale are as follows.

 

Contractual maturities of fixed maturities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

(In thousands)

 

Amortized Cost

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Total

 

 

5,584,431

 

 

 

5,238,405

 

Less: loaned securities

 

 

134,439

 

 

 

130,127

 

Total fixed maturities available for sale

 

$

5,449,992

 

 

$

5,108,278

 

 

(1)
Actual maturities may differ as a result of calls before scheduled maturity.
(2)
Includes RMBS, CMBS, CLO, Other ABS and mortgage insurance-linked notes, which are not due at a single maturity date.

Net Investment Income

Net investment income consists of the following.

 

Net investment income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities

 

$

57,835

 

 

$

57,924

 

 

$

114,549

 

 

$

115,183

 

Equity securities

 

 

2,634

 

 

 

3,067

 

 

 

4,779

 

 

 

5,606

 

Residential mortgage loans held for sale (1)

 

 

10,064

 

 

 

5,411

 

 

 

16,337

 

 

 

7,204

 

Short-term investments

 

 

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

)

Net investment income

 

$

72,769

 

 

$

73,766

 

 

$

141,343

 

 

$

142,987

 

 

(1)
See Note 7 for additional information on our residential mortgage loans held for sale.
(2)
Includes the impact from our securities lending activities. Investment expenses also include other investment management expenses.

26

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains (losses) on investments sold or redeemed (1)

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities available for sale

 

 

 

 

 

 

 

 

 

 

 

 

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

)

Fixed maturities trading securities

 

 

—

 

 

 

(191

)

 

 

—

 

 

 

(191

)

Equity securities

 

 

—

 

 

 

6

 

 

 

898

 

 

 

6

 

Other investments

 

 

2

 

 

 

—

 

 

 

20

 

 

 

1

 

Net realized gains (losses) on investments sold or redeemed (1)

 

 

(2,053

)

 

 

(3,019

)

 

 

(3,487

)

 

 

(6,701

)

Change in unrealized gains (losses) on investments sold or redeemed (1)

 

 

4

 

 

 

367

 

 

 

(937

)

 

 

130

 

Impairment losses due to intent to sell

 

 

—

 

 

 

(237

)

 

 

—

 

 

 

(237

)

Net unrealized gains (losses) on investments still held (1)

 

 

 

 

 

 

 

 

 

 

 

 

Fixed maturities trading securities

 

 

30

 

 

 

(1,371

)

 

 

2,249

 

 

 

(3,131

)

Equity securities

 

 

1,304

 

 

 

(416

)

 

 

(243

)

 

 

3,605

 

Other investments

 

 

(24

)

 

 

(42

)

 

 

(28

)

 

 

(55

)

Net unrealized gains (losses) on investments still held (1)

 

 

1,310

 

 

 

(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

 

Net gains (losses) on investments and other financial instruments

 

$

(4,852

)

 

$

(4,487

)

 

$

(5,575

)

 

$

(3,997

)

 

(1)
Does not include activities related to our residential mortgage loans held for sale. See Note 7 for additional information.
(2)
Includes realized and unrealized net gains (losses) on residential mortgage loans held for sale and related activities, including interest rate hedges. See Note 7 for additional details.
(3)
Includes changes in the fair value of embedded derivatives associated with our XOL Program. See Note 8 for additional information.

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

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

Other

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.

28

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

The following table reflects the outstanding derivative instruments related to our mortgage loan activity as of the dates indicated.

 

Derivative instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

 

December 31, 2024

 

 

 

 

 

 

Fair Value

 

 

 

 

 

Fair Value

 

(In thousands)

 

Notional (1)

 

 

Derivative
Assets

 

 

Derivative
Liabilities

 

 

Notional (1)

 

 

Derivative
Assets

 

 

Derivative
Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward mortgage loan purchase commitments

 

$

230,106

 

 

$

563

 

 

$

—

 

 

$

51,732

 

 

$

65

 

 

$

—

 

Hedging instruments (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Forward RMBS purchase contracts

 

$

465,000

 

 

$

746

 

 

$

667

 

 

$

394,000

 

 

$

2,492

 

 

$

40

 

Interest rate swap futures contracts

 

 

69,500

 

 

 

1,517

 

 

 

—

 

 

 

58,500

 

 

 

1,717

 

 

 

—

 

 

(1)
Notional amounts provide an indication of the volume of the Company’s derivative capacity. For our hedging instruments, the notional amount is the face amount of our contracts and does not represent our exposure to credit loss and therefore is not reflected on our condensed consolidated balance sheets.
(2)
All of the derivatives used for hedging purposes are interest rate derivatives subject to master netting agreements and are considered economic hedges.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

309

 

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

 

Net gains (losses) on residential mortgage loans held for sale, net of hedging activities

 

$

(6,704

)

 

$

(50

)

 

$

(5,417

)

 

$

334

 

 

(1)
Includes net gains (losses) on residential mortgage loans held for sale through the date of transfer to a securitization trust, if applicable. See “Securitized Residential Mortgage Loans Held for Investment” below for information on subsequent gains (losses) for those securitized loans.
(2)
Includes net gains (losses) on mortgage loan commitments accounted for as derivatives prior to settlement.

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

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

 

Net interest on residential mortgage loans held for sale

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

$

10,064

 

 

$

5,411

 

 

$

16,337

 

 

$

7,204

 

Interest expense

 

 

(8,446

)

 

 

(5,108

)

 

 

(14,456

)

 

 

(6,546

)

Net interest on residential mortgage loans held for sale

 

$

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.

30

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30, 2025

 

 

December 31, 2024

 

VIE

 

Closing Date

 

Consolidated
VIE Assets

 

 

Consolidated
VIE Liabilities

 

 

Net Retained
Interest

 

 

Consolidated
VIE Assets

 

 

Consolidated
VIE Liabilities

 

 

Net Retained
Interest

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

 

 

$

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(In thousands)

 

2025

 

 

2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net change in fair value of VIE assets and liabilities reported under the fair value option

 

$

(385

)

 

$

(698

)

Interest income

 

 

17,505

 

 

 

32,364

 

Interest expense

 

 

(16,245

)

 

 

(29,814

)

Other expenses

 

 

(690

)

 

 

(1,239

)

Total income (loss) on consolidated VIEs

 

$

185

 

 

$

613

 

 

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.

31

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

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

)

Title insurance

 

 

(108

)

 

 

(90

)

 

 

(201

)

 

 

(180

)

 

 

(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

 

 

$

237,520

 

 

$

237,731

 

 

$

474,199

 

 

$

473,588

 

 

(1)
Net of profit commission, which is impacted by the level of ceded losses recoverable, if any, on reinsurance transactions. See Note 11 for additional information on our reserve for losses and reinsurance recoverable.

 

Other reinsurance impacts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ceding commissions earned (1)

 

$

7,371

 

 

$

6,345

 

 

$

14,406

 

 

$

12,458

 

Ceded losses (2)

 

 

3,968

 

 

 

3,004

 

 

 

8,227

 

 

 

5,199

 

 

(1)
Ceding commissions earned are related to mortgage insurance and are included as an offset to expenses primarily in other operating expenses in our condensed consolidated statements of operations. Deferred ceding commissions are included in other liabilities on our condensed consolidated balance sheets. See Note 9 for additional detail.
(2)
Ceded losses are primarily related to mortgage insurance.

QSR Program

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.

Single Premium QSR Program

Radian Guaranty entered into each of the 2016 Single Premium QSR Agreement, 2018 Single Premium QSR Agreement and 2020 Single Premium QSR Agreement with panels of third-party reinsurers to cede a contractual quota share 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.

32

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2024 QSR Agreement

 

 

2023 QSR Agreement

 

 

2022 QSR Agreement

 

 

2020 Single Premium QSR Agreement

 

 

2018 Single Premium QSR Agreement

 

 

2016 Single Premium QSR Agreement

 

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

 

 

Jan 1, 2020

 

Quota share %

 

25%

 

 

22.5%

 

 

20%

 

 

65%

 

 

65%

 

 

18% - 57%

 

Ceding commission %

 

20%

 

 

20%

 

 

20%

 

 

25%

 

 

25%

 

 

25%

 

Profit commission %

 

Up to 59%

 

 

Up to 55%

 

 

Up to 59%

 

 

Up to 56%

 

 

Up to 56%

 

 

Up to 55%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

June 30, 2025

 

RIF ceded

 

$

3,043

 

 

$

2,362

 

 

$

3,823

 

 

$

1,436

 

 

$

629

 

 

$

833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

December 31, 2024

 

RIF ceded

 

$

1,621

 

 

$

2,518

 

 

$

4,059

 

 

$

1,525

 

 

$

661

 

 

$

873

 

 

(1)
Excludes the 2012 QSR Agreements, for which RIF ceded is no longer material.
(2)
Radian Guaranty has the option, based on certain conditions and subject to a termination fee, to terminate any of the agreements at the end of any calendar quarter on or after the applicable optional termination date. If Radian Guaranty exercises this option in the future, it would result in Radian Guaranty reassuming the related RIF in exchange for a net payment to the reinsurers calculated in accordance with the terms of the applicable agreement. Radian Guaranty also may terminate any of the agreements prior to the scheduled termination date under certain circumstances, including if one or both of the GSEs no longer grant full PMIERs credit for the reinsurance.

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.

33

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

XOL Program

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.

34

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30,
2025

 

 

December 31,
2024

 

 

 

 

 

 

 

 

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

 

Total

 

$

609,272

 

 

$

729,181

 
(1)
Assets held by the Eagle Re Issuers are required to be invested in U.S. government money market funds, cash or U.S. Treasury securities. Liabilities of the Eagle Re Issuers consist of their mortgage insurance-linked notes, as described above. Assets and liabilities are equal to each other for each of the Eagle Re Issuers.

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.

 

XOL Program

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Insurance-linked Notes

 

 

Traditional Reinsurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

Eagle Re
2023-1 Ltd.

 

 

Eagle Re
2021-2 Ltd.

 

 

Eagle Re
2021-1 Ltd. (1)

 

 

2023 XOL
Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Issued

 

October
2023

 

 

November
2021

 

 

April
2021

 

 

October
2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW policy dates

 

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

 

 

 

498

 

 

 

246

 

Initial first layer retention

 

 

287

 

 

 

242

 

 

 

221

 

 

 

240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RIF

 

$

7,461

 

 

$

5,643

 

 

$

4,465

 

 

$

6,333

 

Remaining coverage

 

 

294

 

 

 

199

 

 

 

117

 

 

 

137

 

First layer retention

 

 

285

 

 

 

241

 

 

 

221

 

 

 

240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RIF

 

$

7,906

 

 

$

6,271

 

 

$

4,966

 

 

$

6,815

 

Remaining coverage

 

 

327

 

 

 

247

 

 

 

155

 

 

 

167

 

First layer retention

 

 

286

 

 

 

241

 

 

 

221

 

 

 

240

 

 

(1)
Radian Group purchased $45 million of Eagle Re 2021-1 Ltd. outstanding principal amounts of the respective mortgage insurance-linked notes issued in connection with that reinsurance transaction. On our condensed consolidated balance sheets at June 30, 2025, and December 31, 2024, these notes are included either in fixed-maturities available for sale or, if included in our securities lending program, in other assets. See Notes 5 and 6 for additional information.

35

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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.

 

Other assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30,
2025

 

 

December 31,
2024

 

Loaned securities (Notes 5 and 6)

 

$

179,692

 

 

$

139,121

 

Company-owned life insurance (1)

 

 

113,529

 

 

 

110,968

 

Prepaid reinsurance premiums (2)

 

 

61,760

 

 

 

72,472

 

Other

 

 

53,694

 

 

 

53,370

 

Total other assets

 

$

408,675

 

 

$

375,931

 

 

(1)
We are the beneficiary of insurance policies on the lives of certain of our current and past officers and employees. The balances reported in other assets reflect the amounts that could be realized upon surrender of the insurance policies as of each respective date.
(2)
Relates primarily to our Single Premium QSR Program.

The following table shows the components of other liabilities as of the dates indicated.

 

Other liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30,
2025

 

 

December 31,
2024

 

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

 

Other

 

 

72,341

 

 

 

67,147

 

Total other liabilities

 

$

490,165

 

 

$

431,556

 
(1)
Represents the obligation to return cash collateral under our securities lending agreements. See Note 6 for additional information.
(2)
Represents ceded premiums written held by Radian Guaranty to collateralize our reinsurers’ obligations primarily related to our Single Premium QSR Program. See Note 8 for additional information.

36

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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.

 

Reserve for losses and LAE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30,
2025

 

 

December 31,
2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Primary case

 

$

356,895

 

 

$

336,553

 

Primary IBNR and LAE

 

 

14,076

 

 

 

13,399

 

Pool and other

 

 

6,261

 

 

 

4,479

 

Mortgage insurance

 

 

377,232

 

 

 

354,431

 

Title insurance

 

 

5,871

 

 

 

5,895

 

Total reserve for losses and LAE

 

$

383,103

 

 

$

360,326

 

 

Our provision for losses consists of the following for the periods indicated.

 

Provision for losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage insurance

 

$

11,954

 

 

$

(1,769

)

 

$

27,294

 

 

$

(8,655

)

Title insurance

 

 

143

 

 

 

24

 

 

 

(30

)

 

 

(124

)

Total provision for losses

 

$

12,097

 

 

$

(1,745

)

 

$

27,264

 

 

$

(8,779

)

 

37

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

354,431

 

 

$

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

 

 

27,294

 

 

 

(8,656

)

Deduct: Paid claims and LAE related to:

 

 

 

 

 

 

Current year (2)

 

 

220

 

 

 

91

 

Prior years

 

 

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

 

$

377,232

 

 

$

351,207

 

 

(1)
Related to ceded losses recoverable, if any, on reinsurance transactions. See Note 8 for additional information.
(2)
Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default.

Reserve Activity

Incurred Losses

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.

38

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

Interest rate

 

 

June 30,
2025

 

 

December 31,
2024

 

Senior notes

 

 

 

 

 

 

 

 

 

Senior Notes due 2027

 

 

4.875

%

 

$

448,011

 

 

$

447,461

 

Senior Notes due 2029

 

 

6.200

%

 

 

618,592

 

 

 

617,876

 

Total senior notes

 

 

 

 

$

1,066,603

 

 

$

1,065,337

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

Average
interest rate (1)

 

 

June 30,
2025

 

 

December 31,
2024

 

Secured borrowings

 

 

 

 

 

 

 

 

 

Mortgage loan financing facilities

 

 

6.028

%

 

$

664,248

 

 

$

492,429

 

FHLB advances

 

 

 

 

 

 

 

 

 

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

 

 

 

7,887

 

Total FHLB advances

 

 

 

 

 

98,685

 

 

 

45,865

 

Total secured borrowings

 

 

 

 

$

762,933

 

 

$

538,294

 

 

 

(1)
As of June 30, 2025. See “Mortgage Loan Financing Facilities” and “FHLB Advances” below for more information.

Interest expense consists of the following.

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Senior notes

 

$

15,810

 

 

$

21,156

 

 

$

31,610

 

 

$

43,284

 

Mortgage loan financing facilities

 

 

8,446

 

 

 

5,108

 

 

 

14,456

 

 

 

6,546

 

FHLB advances

 

 

877

 

 

 

544

 

 

 

1,302

 

 

 

1,489

 

Revolving credit facility

 

 

741

 

 

 

256

 

 

 

1,005

 

 

 

516

 

Loss on extinguishment of debt

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4,275

 

Total interest expense

 

$

25,874

 

 

$

27,064

 

 

$

48,373

 

 

$

56,110

 

 

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.

39

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

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. 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.

40

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

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

 

 

 

1,213

 

 

 

1,243

 

 

 

1,313

 

Common stock outstanding at end of period

 

 

135,395

 

 

 

151,148

 

 

 

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.

41

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

Quarter ended

 

 

 

 

 

 

March 31

 

$

0.255

 

 

$

0.245

 

June 30

 

 

0.255

 

 

 

0.245

 

September 30

 

N/A

 

 

 

0.245

 

December 31

 

N/A

 

 

 

0.245

 

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 Average
Grant Date Fair Value

 

Number of
Shares

 

Weighted Average
Grant 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

 

(1)
Outstanding RSUs represent shares that have not yet been issued because not all conditions necessary to earn the right to benefit from the instruments have been satisfied. For performance-based awards, the final number of RSUs distributed depends on: (i) the cumulative growth in Radian’s book value per share adjusted for certain defined items over the respective three-year performance period and, for the performance-based RSUs granted starting in 2023, a modifier 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, which could result in changes to the number of vested RSUs.
(2)
For performance-based RSUs, amount represents the number of target shares at grant date.

42

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

(3)
For performance-based RSUs, amount represents the difference between the number of shares vested at settlement, which can range from 0 to 200% of target depending on results over the applicable performance periods, and the number of target shares at the grant date.
(4)
For both performance-based and time-based RSUs, amount represents the number of shares vested during the period, including the impact of performance adjustments for performance-based awards.

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 Ended
June 30, 2025

 

 

Six Months Ended
June 30, 2025

 

(In thousands)

 

Before
Tax

 

 

Tax
Effect

 

 

Net of
Tax

 

 

Before
Tax

 

 

Tax
Effect

 

 

Net of
Tax

 

Balance at beginning of period

 

$

(373,058

)

 

$

(78,342

)

 

$

(294,716

)

 

$

(443,340

)

 

$

(93,102

)

 

$

(350,238

)

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

 

 

 

20,151

 

 

 

93,382

 

 

 

19,610

 

 

 

73,772

 

Less: Reclassification adjustment for net gains (losses) on investments included in net income (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains (losses) on disposals and non-credit related impairment losses

 

 

(2,056

)

 

 

(432

)

 

 

(1,624

)

 

 

(4,405

)

 

 

(925

)

 

 

(3,480

)

Net unrealized gains (losses) on investments

 

 

27,563

 

 

 

5,788

 

 

 

21,775

 

 

 

97,787

 

 

 

20,535

 

 

 

77,252

 

Other adjustments to comprehensive income (loss), net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

58

 

 

 

13

 

 

 

45

 

Other comprehensive income (loss)

 

 

27,563

 

 

 

5,788

 

 

 

21,775

 

 

 

97,845

 

 

 

20,548

 

 

 

77,297

 

Balance at end of period

 

$

(345,495

)

 

$

(72,554

)

 

$

(272,941

)

 

$

(345,495

)

 

$

(72,554

)

 

$

(272,941

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30, 2024

 

 

Six Months Ended
June 30, 2024

 

(In thousands)

 

Before
Tax

 

 

Tax
Effect

 

 

Net of
Tax

 

 

Before
Tax

 

 

Tax
Effect

 

 

Net of
Tax

 

Balance at beginning of period

 

$

(458,856

)

 

$

(96,360

)

 

$

(362,496

)

 

$

(418,799

)

 

$

(87,948

)

 

$

(330,851

)

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

 

 

(21,825

)

 

 

(4,583

)

 

 

(17,242

)

 

 

(65,480

)

 

 

(13,751

)

 

 

(51,729

)

Less: Reclassification adjustment for net gains (losses) on investments included in net income (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net realized gains (losses) on disposals and non-credit related impairment losses

 

 

(3,071

)

 

 

(644

)

 

 

(2,427

)

 

 

(6,755

)

 

 

(1,418

)

 

 

(5,337

)

Net unrealized gains (losses) on investments

 

 

(18,754

)

 

 

(3,939

)

 

 

(14,815

)

 

 

(58,725

)

 

 

(12,333

)

 

 

(46,392

)

Other adjustments to comprehensive income, net

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(86

)

 

 

(18

)

 

 

(68

)

Other comprehensive income (loss)

 

 

(18,754

)

 

 

(3,939

)

 

 

(14,815

)

 

 

(58,811

)

 

 

(12,351

)

 

 

(46,460

)

Balance at end of period

 

$

(477,610

)

 

$

(100,299

)

 

$

(377,311

)

 

$

(477,610

)

 

$

(100,299

)

 

$

(377,311

)

 

(1)
Included in net gains (losses) on investments and other financial instruments in our condensed consolidated statements of operations.

43

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Radian Guaranty

 

$

360,049

 

 

$

388,372

 

Other mortgage insurance subsidiaries

 

 

629

 

 

 

(882

)

Radian Title Insurance

 

 

1,192

 

 

 

1,015

 

 

Statutory policyholders’ surplus

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

June 30,
2025

 

 

December 31,
2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Radian Guaranty

 

$

681,204

 

 

$

722,861

 

Other mortgage insurance subsidiaries

 

 

16,518

 

 

 

16,515

 

Radian Title Insurance

 

 

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.

44

Radian Group Inc. and Subsidiaries

Notes to Unaudited Condensed Consolidated Financial Statements

 

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.

45

 

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

Page

Overview of Business Operating Environment

46

Key Factors Affecting Our Results

47

Mortgage Insurance Portfolio Metrics

47

Results of Operations—Consolidated

51

Results of Operations—Mortgage Insurance

56

Results of Operations—All Other

62

Liquidity and Capital Resources

62

Critical Accounting Estimates

67

 

Overview of Business Operating Environment

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.

46

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.

Key Factors Affecting Our Results

The key factors affecting our results are discussed in our 2024 Form 10-K. There have been no material changes to these key factors.

Mortgage Insurance Portfolio Metrics

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.

47

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

 

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).

NIW

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW

 

$

14,330

 

 

$

13,902

 

 

$

23,819

 

 

$

25,404

 

Primary risk written

 

$

3,771

 

 

$

3,541

 

 

$

6,226

 

 

$

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

%

 

 

96.4

%

 

 

96.6

%

Direct single premiums

 

 

3.6

%

 

 

3.5

%

 

 

3.6

%

 

 

3.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NIW by FICO score (1)

 

 

 

 

 

 

 

 

 

 

 

 

>=740

 

 

68.2

%

 

 

69.4

%

 

 

68.2

%

 

 

68.5

%

680-739

 

 

27.0

%

 

 

25.5

%

 

 

27.0

%

 

 

26.2

%

620-679

 

 

4.8

%

 

 

5.1

%

 

 

4.8

%

 

 

5.3

%

<=619

 

 

0.0

%

 

 

0.0

%

 

 

0.0

%

 

 

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

%

 

(1)
For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores at origination.
(2)
LTV at origination.

48

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

 

Insurance and Risk in Force

 

Year of origination - IIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in billions)

 

IIF as of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By vintage:

 

June 30, 2025

 

 

December 31, 2024

 

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

$

23.4

 

 

 

8.5

%

 

$

—

 

 

 

—

%

 

$

—

 

 

 

—

%

2024

 

 

46.6

 

 

 

16.8

%

 

 

49.3

 

 

 

17.9

%

 

 

24.9

 

 

 

9.1

%

2023

 

 

42.3

 

 

 

15.3

%

 

 

45.3

 

 

 

16.5

%

 

 

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

%

Total

 

$

276.7

 

 

 

100.0

%

 

$

275.1

 

 

 

100.0

%

 

$

272.8

 

 

 

100.0

%

 

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).

49

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

 

 

IIF and RIF

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions)

 

June 30,
2025

 

 

December 31,
2024

 

 

June 30,
2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Primary IIF

 

$

276,745

 

 

$

275,126

 

 

$

272,827

 

Primary RIF

 

$

72,820

 

 

$

72,074

 

 

$

71,109

 

Average coverage percentage

 

 

26.3

%

 

 

26.2

%

 

 

26.1

%

 

 

 

 

 

 

 

 

 

 

Persistency Rate (12 months ended)

 

 

83.8

%

 

 

83.6

%

 

 

84.3

%

Persistency Rate (quarterly, annualized) (1)

 

 

83.8

%

 

 

82.7

%

 

 

83.5

%

 

 

 

 

 

 

 

 

 

 

Primary RIF by premium type

 

 

 

 

 

 

 

 

 

Direct Monthly and Other Recurring Premiums

 

 

90.3

%

 

 

90.0

%

 

 

89.5

%

Direct single premiums

 

 

9.7

%

 

 

10.0

%

 

 

10.5

%

 

 

 

 

 

 

 

 

 

 

Primary RIF by FICO score (2)

 

 

 

 

 

 

 

 

 

>=740

 

 

60.6

%

 

 

60.1

%

 

 

59.2

%

680-739

 

 

32.2

%

 

 

32.6

%

 

 

33.3

%

620-679

 

 

6.9

%

 

 

7.0

%

 

 

7.2

%

<=619

 

 

0.3

%

 

 

0.3

%

 

 

0.3

%

 

 

 

 

 

 

 

 

 

 

Primary RIF by LTV (3)

 

 

 

 

 

 

 

 

 

95.01% and above

 

 

20.2

%

 

 

19.8

%

 

 

19.2

%

90.01% to 95.00%

 

 

48.0

%

 

 

47.9

%

 

 

48.1

%

85.01% to 90.00%

 

 

27.1

%

 

 

27.3

%

 

 

27.3

%

85.00% and below

 

 

4.7

%

 

 

5.0

%

 

 

5.4

%

 

(1)
The Persistency Rate on a quarterly, annualized basis is calculated based on loan-level detail for the quarter ending as of the date shown. It may be impacted by seasonality or other factors, including the level of refinance activity during the applicable periods, and may not be indicative of full-year trends.
(2)
For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores at origination.
(3)
LTV at origination.

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.

50

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

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

June 30,
2025

 

 

December 31,
2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PMIERs impact - reduction in Minimum Required Assets

 

 

 

 

 

 

XOL Program

 

 

 

 

 

 

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

 

Single Premium QSR Program

 

 

163,744

 

 

 

172,968

 

Total PMIERs impact

 

$

1,390,950

 

 

$

1,464,878

 

Percentage of gross Minimum Required Assets

 

 

25.9

%

 

 

27.4

%

 

(1)
Consists primarily of the 2022, 2023 and 2024 QSR Agreements, which include both single and monthly premium policies.

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.

Results of Operations—Consolidated

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.

51

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

 

The following table summarizes our consolidated results of operations for the periods indicated.

 

Summary results of operations - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

Six Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per-share amounts)

 

2025

 

 

2024

 

 

2025 vs. 2024

 

 

2025

 

 

2024

 

 

2025 vs. 2024

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

237,520

 

 

$

237,731

 

 

$

(211

)

 

$

474,199

 

 

$

473,588

 

 

$

611

 

Services revenue

 

 

10,924

 

 

 

13,265

 

 

 

(2,341

)

 

 

23,040

 

 

 

25,853

 

 

 

(2,813

)

Net investment income

 

 

72,769

 

 

 

73,766

 

 

 

(997

)

 

 

141,343

 

 

 

142,987

 

 

 

(1,644

)

Net gains (losses) on investments and other financial instruments

 

 

(4,852

)

 

 

(4,487

)

 

 

(365

)

 

 

(5,575

)

 

 

(3,997

)

 

 

(1,578

)

Income (loss) on consolidated VIEs

 

 

185

 

 

 

—

 

 

 

185

 

 

 

613

 

 

 

—

 

 

 

613

 

Other income

 

 

1,458

 

 

 

872

 

 

 

586

 

 

 

2,498

 

 

 

2,134

 

 

 

364

 

Total revenues

 

 

318,004

 

 

 

321,147

 

 

 

(3,143

)

 

 

636,118

 

 

 

640,565

 

 

 

(4,447

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses

 

 

12,097

 

 

 

(1,745

)

 

 

(13,842

)

 

 

27,264

 

 

 

(8,779

)

 

 

(36,043

)

Policy acquisition costs

 

 

7,205

 

 

 

6,522

 

 

 

(683

)

 

 

13,593

 

 

 

13,316

 

 

 

(277

)

Cost of services

 

 

8,418

 

 

 

9,535

 

 

 

1,117

 

 

 

17,189

 

 

 

18,862

 

 

 

1,673

 

Other operating expenses

 

 

89,397

 

 

 

91,648

 

 

 

2,251

 

 

 

166,246

 

 

 

174,284

 

 

 

8,038

 

Interest expense

 

 

25,874

 

 

 

27,064

 

 

 

1,190

 

 

 

48,373

 

 

 

56,110

 

 

 

7,737

 

Total expenses

 

 

142,991

 

 

 

133,024

 

 

 

(9,967

)

 

 

272,665

 

 

 

253,793

 

 

 

(18,872

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pretax income

 

 

175,013

 

 

 

188,123

 

 

 

(13,110

)

 

 

363,453

 

 

 

386,772

 

 

 

(23,319

)

Income tax provision

 

 

33,217

 

 

 

36,220

 

 

 

3,003

 

 

 

77,099

 

 

 

82,515

 

 

 

5,416

 

Net income

 

$

141,796

 

 

$

151,903

 

 

$

(10,107

)

 

$

286,354

 

 

$

304,257

 

 

$

(17,903

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted net income per share

 

$

1.02

 

 

$

0.98

 

 

$

0.04

 

 

$

2.00

 

 

$

1.96

 

 

$

0.04

 

Weighted average common shares outstanding—diluted

 

 

138,360

 

 

 

154,399

 

 

 

16,039

 

 

 

143,012

 

 

 

155,271

 

 

 

12,259

 

Return on equity

 

 

12.5

%

 

 

13.6

%

 

 

(1.1

)%

 

 

12.6

%

 

 

13.7

%

 

 

(1.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-GAAP Financial Measures (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pretax operating income

 

$

173,161

 

 

$

192,683

 

 

$

(19,522

)

 

$

363,995

 

 

$

395,500

 

 

$

(31,505

)

Adjusted diluted net operating income per share

 

$

1.01

 

 

$

1.01

 

 

$

—

 

 

$

2.01

 

 

$

2.00

 

 

$

0.01

 

Adjusted net operating return on equity

 

 

12.4

%

 

 

13.9

%

 

 

(1.5

)%

 

 

12.6

%

 

 

14.0

%

 

 

(1.4

)%

 

(1)
See “Use of Non-GAAP Financial Measures” below.

Revenues

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.

52

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

 

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.

Expenses

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 adjusted diluted net operating income per share and adjusted net operating return on equity for all periods presented herein.

53

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

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated pretax income

 

$

175,013

 

 

$

188,123

 

 

$

363,453

 

 

$

386,772

 

Less: income (expense) items

 

 

 

 

 

 

 

 

 

 

 

 

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

)

Total adjusted pretax operating income (3)

 

$

173,161

 

 

$

192,683

 

 

$

363,995

 

 

$

395,500

 

 

(1)
Excludes net gains (losses) on investments and other financial instruments that are attributable to our Mortgage Conduit business, which are included in adjusted pretax operating income (loss).
(2)
The non-operating item for the six months ended June 30, 2024, primarily relates to a loss on extinguishment of debt.
(3)
Total adjusted pretax operating income on a consolidated basis consists of adjusted pretax operating income (loss) for our Mortgage Insurance segment and All Other activities, as further detailed in Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.

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

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

 

Reconciliation of diluted net income per share to adjusted diluted net operating income per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Diluted net income per share

 

$

1.02

 

 

$

0.98

 

 

$

2.00

 

 

$

1.96

 

Less: per-share impact of reconciling income (expense) items

 

 

 

 

 

 

 

 

 

 

 

 

Net gains (losses) on investments and other financial instruments

 

 

0.01

 

 

 

(0.03

)

 

 

—

 

 

 

(0.03

)

Impairment of other long-lived assets and other non-operating items

 

 

—

 

 

 

—

 

 

 

(0.01

)

 

 

(0.03

)

Income tax (provision) benefit on reconciling income (expense) items (1)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

0.02

 

Per-share impact of reconciling income (expense) items

 

 

0.01

 

 

 

(0.03

)

 

 

(0.01

)

 

 

(0.04

)

Adjusted diluted net operating income per share

 

$

1.01

 

 

$

1.01

 

 

$

2.01

 

 

$

2.00

 

 

(1)
Calculated using the Company’s federal statutory tax rate of 21%.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

Return on equity (1)

 

 

12.5

 %

 

 

13.6

 %

 

 

12.6

 %

 

 

13.7

 %

Less: impact of reconciling income (expense) items (2)

 

 

 

 

 

 

 

 

 

 

 

 

Net gains (losses) on investments and other financial instruments

 

 

0.1

 %

 

 

(0.4

)%

 

 

—

 %

 

 

(0.2

)%

Impairment of other long-lived assets and other non-operating items

 

 

—

 %

 

 

—

 %

 

 

—

 %

 

 

(0.2

)%

Income tax (provision) benefit on reconciling income (expense) items (3)

 

 

—

 %

 

 

0.1

 %

 

 

—

 %

 

 

0.1

 %

Impact of reconciling income (expense) items

 

 

0.1

 %

 

 

(0.3

)%

 

 

—

 %

 

 

(0.3

)%

Adjusted net operating return on equity

 

 

12.4

 %

 

 

13.9

 %

 

 

12.6

 %

 

 

14.0

 %

 

(1)
Calculated by dividing annualized net income by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.
(2)
Annualized, as a percentage of average stockholders’ equity.
(3)
Calculated using the Company’s federal statutory tax rate of 21%.

55

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

 

Results of Operations—Mortgage Insurance

The following table summarizes our Mortgage Insurance segment’s results of operations for the periods indicated.

 

Summary results of operations - Mortgage Insurance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

Six Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025 vs. 2024

 

 

2025

 

 

2024

 

 

2025 vs. 2024

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

 

$

231,596

 

 

$

232,645

 

 

$

(1,049

)

 

$

461,846

 

 

$

464,522

 

 

$

(2,676

)

(Increase) decrease in unearned premiums

 

 

1,930

 

 

 

2,173

 

 

 

(243

)

 

 

5,724

 

 

 

4,295

 

 

 

1,429

 

Net premiums earned

 

 

233,526

 

 

 

234,818

 

 

 

(1,292

)

 

 

467,570

 

 

 

468,817

 

 

 

(1,247

)

Services revenue

 

 

41

 

 

 

309

 

 

 

(268

)

 

 

215

 

 

 

519

 

 

 

(304

)

Net investment income

 

 

53,288

 

 

 

50,102

 

 

 

3,186

 

 

 

101,739

 

 

 

99,676

 

 

 

2,063

 

Other income

 

 

1,461

 

 

 

754

 

 

 

707

 

 

 

3,090

 

 

 

1,994

 

 

 

1,096

 

Total revenues

 

 

288,316

 

 

 

285,983

 

 

 

2,333

 

 

 

572,614

 

 

 

571,006

 

 

 

1,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses

 

 

11,954

 

 

 

(1,769

)

 

 

(13,723

)

 

 

27,294

 

 

 

(8,655

)

 

 

(35,949

)

Policy acquisition costs

 

 

7,205

 

 

 

6,522

 

 

 

(683

)

 

 

13,593

 

 

 

13,316

 

 

 

(277

)

Cost of services

 

 

5

 

 

 

156

 

 

 

151

 

 

 

103

 

 

 

309

 

 

 

206

 

Other operating expenses

 

 

62,202

 

 

 

60,354

 

 

 

(1,848

)

 

 

113,892

 

 

 

112,133

 

 

 

(1,759

)

Interest expense

 

 

17,428

 

 

 

21,957

 

 

 

4,529

 

 

 

33,917

 

 

 

45,290

 

 

 

11,373

 

Total expenses

 

 

98,794

 

 

 

87,220

 

 

 

(11,574

)

 

 

188,799

 

 

 

162,393

 

 

 

(26,406

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pretax operating income (1)

 

$

189,522

 

 

$

198,763

 

 

$

(9,241

)

 

$

383,815

 

 

$

408,613

 

 

$

(24,798

)

 

(1)
Our senior management uses adjusted pretax operating income as our primary measure to evaluate the fundamental financial performance of our business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for more information.

Revenues

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.

56

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

 

 

Net premiums earned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

Six Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except as otherwise indicated)

 

2025

 

 

2024

 

 

2025 vs. 2024

 

 

2025

 

 

2024

 

 

2025 vs. 2024

 

Direct

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

Direct

 

 

262,044

 

 

 

261,418

 

 

 

626

 

 

 

523,955

 

 

 

522,125

 

 

 

1,830

 

Ceded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Premiums earned, excluding revenue from cancellations

 

 

(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

 

 

(28,518

)

 

 

(26,600

)

 

 

(1,918

)

 

 

(56,385

)

 

 

(53,308

)

 

 

(3,077

)

Total net premiums earned

 

$

233,526

 

 

$

234,818

 

 

$

(1,292

)

 

$

467,570

 

 

$

468,817

 

 

$

(1,247

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In force portfolio premium yield (in basis points) (3)

 

 

37.8

 

 

 

38.2

 

 

 

(0.4

)

 

 

37.8

 

 

 

38.2

 

 

 

(0.4

)

Direct premium yield (in basis points) (4)

 

 

38.1

 

 

 

38.5

 

 

 

(0.4

)

 

 

38.0

 

 

 

38.5

 

 

 

(0.5

)

Net premium yield (in basis points) (5)

 

 

33.9

 

 

 

34.5

 

 

 

(0.6

)

 

 

33.9

 

 

 

34.5

 

 

 

(0.6

)

Average primary IIF (in billions) (6)

 

$

275.5

 

 

$

271.9

 

 

$

3.6

 

 

$

275.9

 

 

$

271.4

 

 

$

4.5

 

 

(1)
Includes the impact of related profit commissions.
(2)
Represents the profit commission on the Single Premium QSR Program and 2022, 2023 and 2024 QSR Agreements, excluding the impact of Single Premium Policy cancellations.
(3)
Calculated by dividing annualized direct premiums earned, excluding revenue from cancellations, by average primary IIF.
(4)
Calculated by dividing annualized direct premiums earned, by average primary IIF.
(5)
Calculated by dividing annualized net premiums earned by average primary IIF. The calculation for all periods presented incorporates the impact of profit commission adjustments related to our reinsurance programs.
(6)
The average of beginning and ending balances of primary IIF, for each period presented.

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.

57

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

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

XOL Program

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage insurance-linked notes program

 

$

7,911

 

 

$

9,470

 

 

$

15,646

 

 

$

19,528

 

Traditional reinsurance agreement

 

 

1,655

 

 

 

2,169

 

 

 

3,467

 

 

 

4,533

 

Total XOL Program

 

 

9,566

 

 

 

11,639

 

 

 

19,113

 

 

 

24,061

 

Other QSR Agreements (1)

 

 

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

%

 

 

10.2

%

 

(1)
Consists primarily of the 2022, 2023 and 2024 QSR Agreements.
(2)
Includes the impact of changes in the profit commission retained by the Company due to changes in loss reserves.
(3)
Does not include the benefit from ceding commissions from the reinsurance agreements in our QSR Program, which is primarily included in other operating expenses in our condensed consolidated statements of operations. See Note 8 of Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

Change
Favorable
(Unfavorable)

Six Months Ended
June 30,

Change
Favorable
(Unfavorable)

($ in thousands)

 

2025

 

 

2024

 

 

2025 vs. 2024

2025

 

 

2024

 

 

2025 vs. 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment income

 

$

55,953

 

 

$

52,528

 

 

$

3,425

 

 

$

107,020

 

 

$

104,338

 

 

$

2,682

 

 

Investment expenses

 

 

(2,665

)

 

 

(2,426

)

 

 

(239

)

 

 

(5,281

)

 

 

(4,662

)

 

 

(619

)

 

Net investment income

 

$

53,288

 

 

$

50,102

 

 

$

3,186

 

 

$

101,739

 

 

$

99,676

 

 

$

2,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

%

 

 

0.3

%

 

 

3.8

%

 

 

3.7

%

 

 

0.1

%

 

 

(1)
For each period presented, reflects the average of the beginning and ending amortized cost for each month of the quarter, based on the investments held by our Mortgage Insurance subsidiaries.
(2)
Calculated by dividing annualized net investment income by average investments balance.

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.

58

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

 

Expenses

Provision for Losses. The following table details the financial impact of the significant components of our provision for losses for the periods indicated.

 

Provision for losses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

Six Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except reserve per new default)

 

2025

 

 

2024

 

 

2025 vs. 2024

2025

 

 

2024

 

 

2025 vs. 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current period defaults (1)

 

$

47,912

 

 

$

47,918

 

 

$

6

 

 

$

103,750

 

 

$

100,986

 

 

$

(2,764

)

 

Prior period defaults (2)

 

 

(35,958

)

 

 

(49,687

)

 

 

(13,729

)

 

 

(76,456

)

 

 

(109,641

)

 

 

(33,185

)

 

Total provision for losses

 

$

11,954

 

 

$

(1,769

)

 

$

(13,723

)

 

$

27,294

 

 

$

(8,655

)

 

$

(35,949

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio (3)

 

 

5.1

%

 

 

(0.8

)%

 

 

(5.9

)%

 

 

11.7

%

 

 

(1.8

)%

 

 

(13.5

)%

 

Reserve per new default (4)

 

$

4,178

 

 

$

4,315

 

 

$

137

 

 

$

4,328

 

 

$

4,418

 

 

$

90

 

 

 

(1)
Related to defaulted loans with the most recent default notice dated in the period indicated. For example, if a loan had defaulted in a prior period, but then subsequently cured and later re-defaulted in the current period, the default would be considered a current period default.
(2)
Related to defaulted loans with a default notice dated in a period earlier than the period indicated, which have been continuously in default since that time.
(3)
Provision for losses as a percentage of net premiums earned.
(4)
Calculated by dividing provision for losses for new defaults, net of reinsurance, by new primary defaults for each period.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

 

(277

)

Rescissions and Claim Denials (2)

 

 

(38

)

 

 

(21

)

 

 

(81

)

 

 

(48

)

Ending default inventory

 

 

22,258

 

 

 

20,276

 

 

 

22,258

 

 

 

20,276

 

 

(1)
Includes submitted claims that resolved without a claim payment.

59

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

 

(2)
Net of any previous Rescissions and Claim Denials that were reinstated during the period. Such reinstated Rescissions and Claim Denials may ultimately result in a paid claim.

The following table shows additional information about our primary loans in default as of the dates indicated.

Primary loans in default - additional information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2025

 

December 31, 2024

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

#

 

%

 

#

 

%

 

#

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

327

 

1.5%

 

293

 

1.2%

 

402

 

2.0%

Total default inventory

 

22,258

 

100.0%

 

24,055

 

100.0%

 

20,276

 

100.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

Policies in force

 

978,862

 

 

 

985,089

 

 

 

994,235

 

 

Primary default rate

 

 

 

2.3%

 

 

 

2.4%

 

 

 

2.0%

 

(1)
Loans in the stage of default in which a foreclosure sale has been scheduled or held.

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.

 

Claims paid

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net claims paid (1)

 

 

 

 

 

 

 

 

 

 

 

 

Primary

 

$

5,122

 

 

$

2,896

 

 

$

9,325

 

 

$

5,150

 

Pool and other

 

 

(2

)

 

 

21

 

 

 

(921

)

 

 

6

 

Subtotal

 

 

5,120

 

 

 

2,917

 

 

 

8,404

 

 

 

5,156

 

LAE

 

 

945

 

 

 

1,048

 

 

 

1,894

 

 

 

2,196

 

Commutations and settlements (2)

 

 

924

 

 

 

1,552

 

 

 

924

 

 

 

1,552

 

Total net claims paid

 

$

6,989

 

 

$

5,517

 

 

$

11,222

 

 

$

8,904

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average net primary claim paid (1) (3)

 

$

40.6

 

 

$

36.5

 

 

$

34.0

 

 

$

29.0

 

Average direct primary claim paid (3) (4)

 

$

47.8

 

 

$

38.0

 

 

$

44.0

 

 

$

29.8

 

 

(1)
Net of reinsurance recoveries.
(2)
Includes payments to commute mortgage insurance coverage on certain performing and non-performing loans.
(3)
Calculated excluding the impact of: (i) LAE; (ii) commutations and settlements; and (iii) claims resolved without payment, including claims subsequently withdrawn by the servicer.
(4)
Before reinsurance recoveries.

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.

60

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

 

Other Operating Expenses. The following table shows additional information about other operating expenses for our Mortgage Insurance segment, for the periods indicated.

 

Other operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

Six Months Ended
June 30,

 

 

Change
Favorable
(Unfavorable)

($ in thousands)

 

2025

 

 

2024

 

 

2025 vs. 2024

2025

 

 

2024

 

 

2025 vs. 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and other base employee expenses

 

$

11,337

 

 

$

11,336

 

 

$

(1

)

 

$

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

)

 

 

1,117

 

 

 

(13,797

)

 

 

(11,601

)

 

 

2,196

 

 

Total direct

 

 

19,874

 

 

 

17,157

 

 

 

(2,717

)

 

 

36,441

 

 

 

34,427

 

 

 

(2,014

)

 

Allocated (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and other base employee expenses

 

 

13,386

 

 

 

15,713

 

 

 

2,327

 

 

 

26,353

 

 

 

28,541

 

 

 

2,188

 

 

Variable and share-based incentive compensation

 

 

16,580

 

 

 

12,684

 

 

 

(3,896

)

 

 

25,061

 

 

 

20,645

 

 

 

(4,416

)

 

Other general operating expenses

 

 

12,362

 

 

 

14,800

 

 

 

2,438

 

 

 

26,037

 

 

 

28,520

 

 

 

2,483

 

 

Total allocated

 

 

42,328

 

 

 

43,197

 

 

 

869

 

 

 

77,451

 

 

 

77,706

 

 

 

255

 

 

Total other operating expenses

 

$

62,202

 

 

$

60,354

 

 

$

(1,848

)

 

$

113,892

 

 

$

112,133

 

 

$

(1,759

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expense ratio (2)

 

 

29.7

%

 

 

28.5

%

 

 

(1.2

)%

 

 

27.3

%

 

 

26.8

%

 

 

(0.5

)%

 

 

(1)
See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements for more information about our allocation of corporate operating expenses.
(2)
Operating expenses (which consist of policy acquisition costs and other operating expenses, as well as allocated corporate operating expenses), expressed as a percentage of net premiums earned.

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.

61

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

 

Results of Operations—All Other

The following table summarizes our All Other results of operations for the periods indicated.

 

Summary results of operations - All Other

 

 

Three Months Ended
June 30,

Change
Favorable
(Unfavorable)

Six Months Ended
June 30,

Change
Favorable
(Unfavorable)

(In thousands)

 

2025

 

 

2024

 

 

2025 vs. 2024

2025

 

 

2024

 

 

2025 vs. 2024

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned

 

$

3,994

 

 

$

2,913

 

 

$

1,081

 

 

$

6,629

 

 

$

4,771

 

 

$

1,858

 

 

Services revenue

 

 

10,990

 

 

 

13,064

 

 

 

(2,074

)

 

 

23,023

 

 

 

25,557

 

 

 

(2,534

)

 

Net investment income

 

 

19,481

 

 

 

23,664

 

 

 

(4,183

)

 

 

39,604

 

 

 

43,311

 

 

 

(3,707

)

 

Net gains (losses) on investments and other financial instruments

 

 

(6,704

)

 

 

(49

)

 

 

(6,655

)

 

 

(5,417

)

 

 

334

 

 

 

(5,751

)

 

Income (loss) on consolidated VIEs

 

 

185

 

 

 

—

 

 

 

185

 

 

 

613

 

 

 

—

 

 

 

613

 

 

Other income

 

 

(3

)

 

 

130

 

 

 

(133

)

 

 

(571

)

 

 

155

 

 

 

(726

)

 

Total revenues

 

 

27,943

 

 

 

39,722

 

 

 

(11,779

)

 

 

63,881

 

 

 

74,128

 

 

 

(10,247

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for losses

 

 

143

 

 

 

24

 

 

 

(119

)

 

 

(30

)

 

 

(124

)

 

 

(94

)

 

Cost of services

 

 

8,413

 

 

 

9,379

 

 

 

966

 

 

 

17,086

 

 

 

18,553

 

 

 

1,467

 

 

Other operating expenses

 

 

27,302

 

 

 

31,292

 

 

 

3,990

 

 

 

52,189

 

 

 

62,267

 

 

 

10,078

 

 

Interest expense

 

 

8,446

 

 

 

5,107

 

 

 

(3,339

)

 

 

14,456

 

 

 

6,545

 

 

 

(7,911

)

 

Total expenses

 

 

44,304

 

 

 

45,802

 

 

 

1,498

 

 

 

83,701

 

 

 

87,241

 

 

 

3,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted pretax operating income (loss) (1)

 

$

(16,361

)

 

$

(6,080

)

 

$

(10,281

)

 

$

(19,820

)

 

$

(13,113

)

 

$

(6,707

)

 

 

(1)
Our senior management uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of our business segments. See Note 4 of Notes to Unaudited Condensed Consolidated Financial Statements.

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.

Liquidity and Capital Resources

Consolidated Cash Flows

The following table summarizes our consolidated cash flows from operating, investing and financing activities.

 

Summary cash flows - Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended
June 30,

 

 

 

 

 

 

 

 

(In thousands)

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in):

 

 

 

 

 

 

Operating activities

 

$

(645,529

)

 

$

(156,238

)

Investing activities

 

 

231,310

 

 

 

(74,433

)

Financing activities

 

 

394,942

 

 

 

226,390

 

Increase (decrease) in cash and restricted cash

 

$

(19,277

)

 

$

(4,281

)

 

62

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

 

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

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

 

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.

64

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

 

Capitalization—Holding Company

The following table presents our holding company capital structure.

 

Capital structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands, except per-share amounts and ratios)

 

June 30,
2025

 

 

December 31,
2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt

 

 

 

 

 

 

Senior Notes due 2027

 

$

450,000

 

 

$

450,000

 

Senior Notes due 2029

 

 

625,000

 

 

 

625,000

 

Unamortized discount and debt issuance costs

 

 

(8,397

)

 

 

(9,663

)

Revolving credit facility

 

 

—

 

 

 

—

 

Total

 

 

1,066,603

 

 

 

1,065,337

 

Stockholders’ equity

 

 

4,492,681

 

 

 

4,623,858

 

Total capitalization

 

$

5,559,284

 

 

$

5,689,195

 

Holding company debt-to-capital ratio (1)

 

 

19.2

%

 

 

18.7

%

 

 

 

 

 

 

 

Shares outstanding

 

 

135,395

 

 

 

147,569

 

Book value per share

 

$

33.18

 

 

$

31.33

 

 

(1)
Calculated as carrying value of senior notes, which were issued and are owed by our holding company, divided by carrying value of senior notes and stockholders’ equity. This holding company ratio does not include the effects of amounts owed by our subsidiaries related to secured borrowings.

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.

Mortgage Insurance

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.

65

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

 

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

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

 

All Other

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.

 

Ratings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Subsidiary

 

Demotech, Inc.

 

Fitch (1)

 

Moody’s (1)

 

S&P (1)

Radian Group (2)

 

N/A

 

BBB

 

Baa3

 

BBB-

Radian Guaranty

 

N/A

 

A

 

A3

 

A-

Radian Title Insurance

 

A

 

N/A

 

N/A

 

N/A

 

(1)
Fitch Ratings (“Fitch”), Moody’s Investors Service (“Moody’s”) and S&P Global Ratings (“S&P”) each currently rate the outlook for both Radian Group and Radian Guaranty as Stable.
(2)
Senior debt ratings.

Critical Accounting Estimates

As of the filing date of this report, there were no significant changes in our critical accounting estimates from those discussed in our 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.

67

 

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.

PART II—OTHER INFORMATION

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.

68

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in thousands, except per-share amounts)

 

Total Number
of Shares
Purchased (1)

 

 

Average
Price
Paid per
Share

 

 

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs (2)

 

 

Approximate Dollar
Value of Shares That
May Yet Be Purchased
Under the Plans or
Programs (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Period

 

 

 

 

 

 

 

 

 

 

 

 

4/1/2025 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

 

 

 

—

 

 

 

862,763

 

Total

 

 

7,526,757

 

 

 

 

 

 

6,957,942

 

 

 

 

 

(1)
Includes 568,815 shares tendered by employees as payment of taxes withheld on the vesting of certain restricted stock awards granted under the Company’s equity compensation plans.
(2)
As of June 30, 2025, Radian had two outstanding share repurchase authorizations in effect. In January 2023, Radian Group’s board of directors authorized the Company to spend up to $300 million, excluding commissions, to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. In May 2024, Radian Group’s board of directors approved an extension of the duration of this authorization to June 2026, as well as an increase of $600 million in the authorization, bringing the total authorization to repurchase shares up to $900 million, excluding commissions. In May 2025, Radian Group’s board of directors authorized the Company to spend up to an additional $750 million, excluding commissions, to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. Under this May 2025 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.

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.

69

 

Item 6. Exhibits

 

Exhibit

Number

 

Exhibit

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)

10.8

 

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)

10.9

 

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.

70

 

Signatures

 

 

 

Radian Group Inc.

 

 

 

Date:

August 1, 2025

/s/ SUMITA PANDIT

 

 

Sumita Pandit

 

 

President and Chief Financial Officer

 

 

 

Date:

August 1, 2025

/s/ ROBERT J. QUIGLEY

 

 

Robert J. Quigley

 

 

Executive Vice President, Controller and Chief Accounting Officer

 

71

EX-10.1 2 rdn-ex10_1.htm EX-10.1 EX-10.1

2025 Performance Thornberry

EXHIBIT 10.1

RADIAN GROUP INC.

2021 EQUITY COMPENSATION PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT

(LTI BOOK VALUE WITH RELATIVE TSR MODIFIER)

 

TERMS AND CONDITIONS

 

 

These Terms and Conditions (“Terms and Conditions”) are part of the Performance-Based Restricted Stock Unit Grant made as of May 21, 2025 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to Richard G. Thornberry, an employee of the Company (the “Grantee”).

RECITALS

WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;

WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan;

WHEREAS, the Restricted Stock Units granted pursuant to these Terms and Conditions shall vest based on the attainment of LTI Performance (as defined below) and continued employment; and

WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

1.
Grant of Performance-Based Restricted Stock Units. The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Target Award”), subject to the vesting and other conditions of these Terms and Conditions. Payment of the Restricted Stock Units will be based on performance against the metrics set forth in Schedule A (the “LTI Performance”) and, except as otherwise provided herein, continued employment.
2.
Vesting.
(a)
General Vesting Terms. Except as set forth in Sections 2(d) and 2(e) below, the Grantee shall vest in a number of Restricted Stock Units with respect to the Target Award based on the LTI Performance as of the end of the performance period, provided that, except as set forth in Sections 2(b) and 2(c) below, the Grantee remains employed by the Company or an Affiliate through May 15, 2028 (the “Vesting Date”). The performance period is the period beginning on April 1, 2025 and ending on March 31, 2028 (the “Performance Period”).

 

2025 Performance Thornberry

 

Except as specifically provided below in this Section 2, no Restricted Stock Units will vest for any reason prior to the Vesting Date, and in the event of a termination of the Grantee’s employment prior to the Vesting Date, the Grantee will forfeit to the Company all Restricted Stock Units that have not yet vested as of the termination date. Except as provided in Sections 2(d) and 2(e) below, any Restricted Stock Units that have not vested at the end of the Performance Period will be immediately forfeited.
(b)
Retirement.
(i)
If the Grantee terminates employment prior to the Vesting Date on account of the Grantee’s Retirement, the Grantee will not forfeit the Restricted Stock Units upon Retirement, and the Restricted Stock Units will vest on the Vesting Date based on the LTI Performance through the end of the Performance Period, except as provided in Sections 2(d) and 2(e) below.
(ii)
For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service from the Company and its Affiliates, other than on account of Cause (as defined below), death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or an Affiliate, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or an Affiliate.
(iii)
For purposes of these Terms and Conditions, “Cause” shall have the meaning ascribed to the term in the Amended and Restated Employment Agreement between the Grantee and the Company, effective July 1, 2023 (the “Employment Agreement”).
(c)
Involuntary Termination.
(i)
Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, then on the Vesting Date the Grantee will vest in a number of Restricted Stock Units with respect to the Pro-Rata Target Award (as defined below), based on the LTI Performance through the end of the Performance Period. For purposes of these Terms and Conditions, “Pro-Rata Target Award” shall mean a pro-rated portion of the Restricted Stock Units, which shall be determined by multiplying the number of Restricted Stock Units in the Target Award by a fraction, the numerator of which is the number of months that elapsed during the period beginning on the Grant Date and ending on the Grantee’s termination date (with a partial month counting as a whole month for this purpose), and the denominator of which is 36. Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period following the Grant Date, the Grantee’s Restricted Stock Units will be forfeited.
(ii)
Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period immediately prior to the Vesting Date, the Grantee’s Restricted Stock Units will vest on the Vesting Date without proration, based on the LTI Performance through the end of the Performance Period.

2

 

2025 Performance Thornberry

 

(iii)
For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Affiliates on account of a termination by the Company or an Affiliate without Cause, other than on account of Retirement, death or Disability, provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or an Affiliate, as applicable. A termination by the Grantee for Good Reason under the Employment Agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Employment Agreement.
(d)
Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or an Affiliate prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level (as described in Section 6 of Schedule A)) on the date of the Grantee’s death or Disability, as applicable. If, following the Grantee’s termination of employment due to Retirement, or due to Involuntary Termination after the six month period following the Grant Date, the Grantee dies prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level) on the date of the Grantee’s death; provided that if the termination of employment was due to Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Pro-Rata Target Award level (or, if a Change of Control has occurred, the Pro-Rata Target Award will vest at the CoC Performance Level) on the date of the Grantee’s death. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or an Affiliate, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the Vesting Date, the award will be forfeited.
(e)
Change of Control.
(i)
If a Change of Control occurs prior to the Vesting Date, the Restricted Stock Units will vest at the CoC Performance Level on the Vesting Date, provided that, except as set forth in subsections (ii) and (iii) below, the Grantee remains employed by the Company or an Affiliate through the Vesting Date.
(ii)
If, prior to the Vesting Date, a Change of Control occurs and the Grantee’s employment is terminated by the Company or an Affiliate without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest at the CoC Performance Level as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control).

3

 

2025 Performance Thornberry

 

If the Grantee’s employment terminates on account of an Involuntary Termination as described in Section 2(c) (other than an Involuntary Termination within six months following the Grant Date) more than 90 days before the Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, then on the date of the Change of Control, the Grantee will vest in a Pro-Rata Target Award based on performance at the CoC Performance Level on the date of the Change of Control; provided that if Section 2(c)(ii) applies, the Grantee will vest in the Restricted Stock Units at the CoC Performance Level and no pro-ration will apply.
(iii)
If the Grantee’s employment terminates on account of Retirement before a Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, the outstanding Restricted Stock Units will vest on the date of the Change of Control at the CoC Performance Level. If the Grantee’s employment terminates on account of Retirement on or after a Change of Control, the Restricted Stock Units will vest at the CoC Performance Level on the Grantee’s Retirement date.
(f)
Cause. Notwithstanding anything in these Terms and Conditions to the contrary, in the event the Grantee’s employment is terminated by the Company or an Affiliate for Cause, all outstanding Restricted Stock Units held by the Grantee shall immediately terminate and be of no further force or effect.
(g)
Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all unvested Restricted Stock Units. Except as provided in Section 2(b), 2(c) or 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or an Affiliate has terminated for any reason.
3.
Restricted Stock Units Account.

The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.

4.
Dividend Equivalents.

Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable after vesting of the underlying Restricted Stock Units, as described below. Dividend equivalents shall be credited on the Restricted Stock Units as of the dividend record date with respect to shares of Common Stock from the Grant Date until the payment date for the Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Accrued dividend equivalents on vested Restricted Stock Units shall be paid in cash within 90 days after the Vesting Date or, if earlier, on the payment date for the Restricted Stock Units under Section 5(b). Any dividend equivalents that accrue with respect to vested Restricted Stock Units during the period after the Vesting Date and before the date on which the Restricted Stock Units are paid as described in Section 5 shall be paid in cash upon the payment date for the applicable dividend on shares of Common Stock. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited.

4

 

2025 Performance Thornberry

 

For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.

5.
Conversion of Restricted Stock Units.
(a)
Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with these Terms and Conditions, the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the one-year anniversary of the Vesting Date (the one-year anniversary of the Vesting Date is referred to as the “Distribution Date”).
(b)
The vested Restricted Stock Units shall be paid earlier than the Distribution Date in the following circumstances:
(i)
If (A) the Restricted Stock Units vest in accordance with Section 2(d) (the Grantee’s death or Disability), or (B) the Grantee dies or incurs a Disability after the Vesting Date but before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Grantee’s death or Disability, as applicable.
(ii)
If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) and a Change of Control subsequently occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Change of Control.
(iii)
If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) upon or after a Change of Control that occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the Grantee’s separation from service with the Company and its Affiliates.
(iv)
Notwithstanding subsections (ii) and (iii), if the Change of Control is not a “change in control event” under section 409A of the Code, and if required by section 409A of the Code, payment will not be made on the dates described in subsections (ii) and (iii) and, instead, will be made within 90 days after the Distribution Date. In addition, if required by section 409A of the Code, if the separation from service described in subsection (iii) does not occur within two years after a Change of Control that is a “change in control event” under section 409A of the Code, payment will instead be made within 90 days after the Distribution Date.
(c)
On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to (i) the limitation of subsection (d) below, (ii) compliance with the six-month delay described in Section 18 below, if applicable, and (iii) the payment of any federal, state, local or foreign withholding taxes as described in Section 13 below, and subject to compliance with the Restrictive Covenants (as defined in Section 7(a) below). The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 16 below.

5

 

2025 Performance Thornberry

 

(d)
For the avoidance of doubt, the Grantee will forfeit all Restricted Stock Units if the Grantee’s employment is terminated for Cause prior to the Distribution Date or other applicable payment date under this Section 5.
(e)
Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.
Certain Corporate Changes.

If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee, the maximum number of shares for which the Restricted Stock Units may vest, the share price or class of Common Stock for purposes of the applicable performance goals, in each case, as appropriate to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.

7.
Restrictive Covenants.
(a)
The Grantee acknowledges and agrees that in consideration for the grant of the Restricted Stock Units, the Grantee remains subject to the non-competition, non-solicitation, confidentiality, inventions assignment, and non-disparagement provisions to the extent described in (including incorporated by reference into) Section 14 of the Employment Agreement, the Restrictive Covenants Agreement dated February 8, 2017 between the Grantee and the Company, the Company’s Code of Conduct (as defined in the Employment Agreement), and any other written agreements between the Company and the Grantee (collectively, the “Restrictive Covenants”).
(b)
The Grantee acknowledges and agrees that in the event the Grantee breaches any of the Restrictive Covenants or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:
(i)
The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and
(ii)
The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition.

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The Committee shall exercise the right of recoupment provided in this subsection (b)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the Restrictive Covenants or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.
8.
No Stockholder Rights.

The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.

9.
Retention Rights.

Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or an Affiliate or shall interfere in any way with the right of the Company or an Affiliate to terminate Grantee’s employment or service at any time.

10.
Cancellation or Amendment.

This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.

11.
Notice.

Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, Pennsylvania 19087, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or an Affiliate thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.

12.
Incorporation of Plan by Reference.

These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder.

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The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes the Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, the Grantee’s beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to the Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, Pennsylvania 19087.

13.
Income Taxes; Withholding Taxes.

The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.

14.
Governing Law.

The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.

15.
Advice to Consult Counsel.

The Company advises the Grantee to consult with an attorney before signing these Terms and Conditions. The Grantee represents and warrants that the Grantee has obtained independent legal advice from an attorney of the Grantee’s own choice with respect to these Terms and Conditions and the Restrictive Covenants or the Grantee has knowingly and voluntarily chosen not to do so.

 

16.
Grant Subject to Applicable Laws and Company Policies.

These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time.

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As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.

17.
Assignment.

These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.

18.
Section 409A.

This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee) and if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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

 

RADIAN GROUP INC.

 

By: /s/ Mary Dickerson

Name: Mary Dickerson

Title: Senior Executive Vice President, Chief People and Operating Officer

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

 

 

 

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Schedule A

LTI Performance

Vesting of the Restricted Stock Units will be based on the following performance results: (i) the Company’s cumulative growth in LTI Book Value per Share (as defined below) over the Performance Period and (ii) the Relative TSR Modifier (as defined below).

1.
LTI Book Value per Share.
(a)
Except as set forth in Section 6 below, vesting of the Restricted Stock Units will be based on the Company’s cumulative growth in LTI Book Value per Share and the Company Absolute TSR (as defined below) as compared to the Average Peer Group TSR, in each case over the Performance Period beginning on April 1, 2025 and ending on March 31, 2028 as compared to the following reference points:

 

 

 

Cumulative Growth in LTI Book Value per Share(1)

BV Payout Percentage(1)

(Percentage of Target Award)

Maximum (48%)

200%

Target (33%)

100%

Threshold (≤18%)(2)

0%

(1) If the Company’s cumulative growth in LTI Book Value per Share falls between two referenced percentages, the BV Payout Percentage will be interpolated. Cumulative growth in LTI Book Value per Share will be calculated by dividing the LTI Book Value per Share on the last day of the Performance Period (or the projected LTI Book Value per Share in the case of a Change of Control, as described below), by the LTI Book Value per Share on the first day of the Performance Period, expressed as a percentage, minus 100%.

 

(2) The LTI Book Value per Share at the beginning of the Performance Period (April 1, 2025) was $34.57. If the Company’s cumulative growth in LTI Book Value per Share is less than or equal to 15%, the BV Payout Percentage will be zero.

 

(b)
The Company’s “LTI Book Value per Share” is defined as: (i) Book Value adjusted to exclude (A) Accumulated Other Comprehensive Income and (B) the impact, if any, during the Performance Period (or through the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, if applicable) from declared dividends on common shares and dividend equivalents on outstanding equity awards, divided by (ii) the basic shares of Common Stock of the Company outstanding as of the applicable measurement date. The LTI Book Value per Share shall be derived from the Company’s financial statements, prepared in accordance with GAAP, and the adjustments described above.
2.
Calculation of TSR. At the end of the Performance Period, the TSR for the Company and for each company in the TSR Peer Group (as defined below) shall be calculated by dividing the Closing Average Share Value (as defined below) by the Opening Average Share Value (as defined below).

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The companies in the TSR Peer Group will be determined on the first day of the Performance Period for purposes of the TSR calculation and will be changed only in accordance with subsection (d) below. No company shall be added to the TSR Peer Group during the Performance Period for purposes of the TSR calculation.
(a)
The term “Closing Average Share Value” means the average value of the common stock, including Accumulated Shares, for the 20 trading days ending on the last day of the Performance Period (i.e., the 20 trading days ending on and including March 31, 2028), which shall be calculated as follows: (i) determine the closing price of the common stock on each trading date during the 20-day period, (ii) multiply each closing price by the Accumulated Shares as of that trading date, and (iii) average the amounts so determined for the 20-day period.
(b)
The term “Opening Average Share Value” means the average value of the common stock, including Accumulated Shares, for the 20 trading days ending on the day immediately prior to the first day of the Performance Period (i.e., the 20 trading days ending immediately prior to April 1, 2025), which shall be calculated as follows: (i) determine the closing price of the common stock on each trading day during the 20-day period, (ii) multiply each closing price by the Accumulated Shares as of that trading date, and (ii) average the amounts so determined for the 20-day period. The Opening Average Share Value is $32.02.
(c)
The term “Accumulated Shares” means, for a given trading day, the sum of (i) one share and (ii) a cumulative number of shares of the company’s common stock purchased with dividends declared on a company’s common stock, assuming same day reinvestment of the dividends in the common stock of a company at the closing price on the ex-dividend date. The calculations under this Schedule A shall include ex-dividend dates between and including March 1, 2025 and the trading day.
(d)
The term “TSR Peer Group” means the companies listed on Exhibit A and will be subject to change as follows:
(i)
In the event of a merger, acquisition or business combination transaction of a company in the TSR Peer Group in which the company in the TSR Peer Group is the surviving entity and remains publicly traded, the surviving entity shall remain a company in the TSR Peer Group. Any entity involved in the transaction that is not the surviving company shall no longer be a company in the TSR Peer Group.
(ii)
In the event of a merger, acquisition or business combination transaction of a company in the TSR Peer Group, a “going private” transaction or other event involving a company in the TSR Peer Group or the liquidation of a company in the TSR Peer Group, in each case where the company in the TSR Peer Group is not the surviving entity or is no longer publicly traded, the company shall no longer be a company in the TSR Peer Group.
(iii)
Notwithstanding the foregoing, in the event of a bankruptcy of a company in the TSR Peer Group where the company in the TSR Peer Group is not publicly traded at the end of the Performance Period, such company shall remain a company in the TSR Peer Group but shall be deemed to have a TSR of negative 100% (-100%).

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3.
Relative TSR Modifier. The results of the BV Payout Percentage, as described in Section 1 above, shall be modified by a Relative TSR Modifier (as defined below) to determine the actual number of Restricted Stock Units that vest. If the Relative TSR Modifier is zero, the Final Payout Percentage (as defined below) will be the BV Payout Percentage determined under Section 1 above.
(a)
A “Relative TSR Modifier” shall be calculated based on the Company’s cumulative three-year TSR for the Performance Period (“Company Absolute TSR”), as compared to a simple average TSR of the companies in the TSR Peer Group for the Performance Period (the “Average Peer Group TSR”), as follows:
(i)
If the Company Absolute TSR is higher than the Average Peer Group TSR by at least 0.5%, the applicable Relative TSR Modifier will be added to the BV Payout Percentage such that the BV Payout Percentage increases by 6.25% for every 2.5% by which the Company Absolute TSR exceeds the Average Peer Group TSR, as shown in the table below. Notwithstanding the forgoing, if the Company Absolute TSR is higher than the Average Peer Group TSR by at least 0.5%, but the Company Absolute TSR for the Performance Period is negative, the Relative TSR Modifier will be zero.
(ii)
If the Company Absolute TSR does not exceed the Average Peer Group TSR by at least 0.5%, the applicable Relative TSR Modifier will be deducted from the BV Payout Percentage such that the BV Payout Percentage will be reduced by 6.25% for every 2.5% by which the Company Absolute TSR is less than the Average Peer Group TSR, as shown in the table below.
(iii)
Straight-line interpolation will apply to performance levels between the performance levels illustrated in the table below:

Company Absolute TSR

vs.

Average Peer Group TSR

 

Relative TSR Modifier

10.5%

25.00%

8.0%

18.75%

5.5%

12.50%

3.0%

6.25%

0.5%

0.0%

-2.0%

-6.25%

-4.5%

-12.50%

-7.0%

-18.75%

≤-9.5%

-25.00%

 

4.
Final Payout Percentage. The actual number of Restricted Stock Units that vest with respect to the Performance Period (“Final Payout Percentage”) shall be determined by multiplying the Target Award by the BV Payout Percentage after adjustment by the Relative TSR Modifier. In no event shall the maximum number of Restricted Stock Units that may be payable pursuant to these Terms and Conditions exceed 200% of the Target Award.

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5.
General Vesting Terms. Any fractional Restricted Stock Unit resulting from the vesting of the Restricted Stock Units in accordance with these Terms and Conditions shall be rounded down to the nearest whole number. Any portion of the Restricted Stock Units that does not vest as of the end of the Performance Period shall be forfeited as of the end of the Performance Period.

 

6.
Change of Control Vesting. If a Change of Control occurs prior to the end of the Performance Period, the Committee will calculate the “CoC Performance Level,” based on (a) the Company’s projected LTI Book Value per Share through the end of the Performance Period, projected as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, and (b) the Relative TSR Modifier based on the Company Absolute TSR as compared to the Average Peer Group TSR as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, in each case as determined in the sole discretion of the Committee. If a Change of Control occurs after the end of the Performance Period and before the Vesting Date, the CoC Performance Level will be calculated based on LTI Performance through the end of the Performance Period. Any Restricted Stock Units that do not vest at the CoC Performance Level shall be forfeited as of the date of the Change of Control.

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EXHIBIT A

 

TSR PEER GROUP

 

Enact Holdings (ACT)

 

Essent Group (ESNT)

 

MGIC Investment Corporation (MTG)

 

NMI Holdings (NMIH)

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EX-10.2 3 rdn-ex10_2.htm EX-10.2 EX-10.2

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EXHIBIT 10.2

RADIAN GROUP INC.

2021 EQUITY COMPENSATION PLAN

RESTRICTED STOCK UNIT GRANT

TERMS AND CONDITIONS

These Terms and Conditions (“Terms and Conditions”) are part of the Restricted Stock Unit Grant made as of May 21, 2025 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to Richard G. Thornberry, an employee of the Company (the “Grantee”).

RECITALS

WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;

WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan; and

WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

1.
Grant of Restricted Stock Units.

The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Restricted Stock Units”), subject to the vesting and other conditions of these Terms and Conditions.

2.
Vesting.
(a)
General Vesting Terms. Provided the Grantee remains employed by the Company or an Affiliate through the applicable vesting date set forth in this Section 2 (the “Vesting Date”) and meets all applicable requirements set forth in these Terms and Conditions, the Restricted Stock Units awarded under these Terms and Conditions shall vest in three substantially equal installments on each of May 15, 2026, May 15, 2027, and May 15, 2028, except as set forth in Sections 2(b), 2(c), 2(d) and 2(e) below (the period over which the Restricted Stock Units vest is referred to as the “Restriction Period”).

 

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(b)
Retirement.
(i)
If the Grantee terminates employment during the Restriction Period because of the Grantee’s Retirement, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)
For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service without Cause, other than on account of death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or an Affiliate, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or an Affiliate.
(iii)
For purposes of these Terms and Conditions, “Cause” shall have the meaning ascribed to the term in the Employment Agreement between the Grantee and the Company effective July 1, 2023 (the “Employment Agreement”). In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)
Involuntary Termination.
(i)
Except as set forth in Section 2(e) below, if the Grantee terminates employment on or before the first Vesting Date because of an Involuntary Termination, one-third of the Grantee’s Restricted Stock Units will automatically vest on the date of such termination of employment and the remaining unvested Restricted Stock Units shall be immediately forfeited. If the Grantee terminates employment during the Restriction Period and after the first Vesting Date because of an Involuntary Termination, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)
For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Affiliates on account of a termination by the Company or an Affiliate without Cause, other than on account of Retirement, death or Disability; provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or an Affiliate, as applicable. A termination by the Grantee for Good Reason under the Employment Agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning ascribed to the term in the Employment Agreement.
(d)
Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or an Affiliate during the Restriction Period, the Grantee’s Restricted Stock Units will automatically vest in full on the date of the Grantee’s death or Disability, as applicable. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or an Affiliate, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the first Vesting Date.

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The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the first Vesting Date, the award will be forfeited.
(e)
Change of Control. Notwithstanding the foregoing, if, during the Restriction Period, a Change of Control occurs and the Grantee’s employment with the Company and its Affiliates is terminated by the Company or an Affiliate without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control).
(f)
Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all Restricted Stock Units that do not vest either before the termination date or on the termination date associated with such termination. Except as provided in Section 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or an Affiliate has terminated for any reason. For clarification purposes, in the event the Grantee’s employment is terminated by the Company or an Affiliate for Cause, the outstanding Restricted Stock Units held by such Grantee shall immediately terminate and be of no further force or effect.
3.
Restricted Stock Units Account.

The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.

4.
Dividend Equivalents.

Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable subject to the same vesting terms and other conditions as the Restricted Stock Units to which they relate. Dividend equivalents shall be credited on the Restricted Stock Units as of the dividend record date with respect to shares of Common Stock from the Grant Date until the payment date for the vested Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Vested dividend equivalents shall be paid in cash at the same time and subject to the same terms as the underlying vested Restricted Stock Units. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.

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5.
Conversion of Restricted Stock Units.
(a)
Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with Section 2(a), the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the applicable Vesting Date.
(b)
The vested Restricted Stock Units shall be paid earlier than the applicable Vesting Date in the following circumstances:
(i)
If the Restricted Stock Units vest in accordance with Section 2(b) (Retirement), Section 2(c) (Involuntary Termination), or Section 2(d) (death or Disability), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment on account of Retirement, Involuntary Termination or death, or the date of Disability, as applicable.
(ii)
If a Change of Control occurs and the Grantee’s employment terminates in accordance with Section 2(e), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment (or, if later, on the date of the Change of Control).
(c)
On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to compliance with the six-month delay described in Section 18 below, if applicable, and the payment of any federal, state, local, or foreign withholding taxes as described in Section 13 below, and subject to compliance with the Restrictive Covenants (as defined in Section 7(a) below). The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 16 below.
(d)
Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.
Certain Corporate Changes.

If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.

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7.
Restrictive Covenants.
(a)
The Grantee acknowledges and agrees that, in consideration for the grant of the Restricted Stock Units, the Grantee remains subject to the non-competition, non-solicitation, confidentiality, inventions assignment, and non-disparagement provisions to the extent described in (including incorporated by reference into) Section 14 of the Employment Agreement, the Restrictive Covenants Agreement dated February 8, 2017 between the Grantee and the Company, the Company’s Code of Conduct (as defined in the Employment Agreement), and any other written agreements between the Company and the Grantee (collectively, the “Restrictive Covenants”).
(b)
The Grantee acknowledges and agrees that in the event the Grantee breaches any of the Restrictive Covenants or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:

(i) The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and

(ii) The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (b)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the Restrictive Covenants, or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.

8.
No Stockholder Rights.

The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.

9.
Retention Rights.

Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or an Affiliate or shall interfere in any way with the right of the Company or an Affiliate to terminate Grantee’s employment or service at any time.

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10.
Cancellation or Amendment.

This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.

11.
Notice.

Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, PA 19087, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or an Affiliate thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.

12.
Incorporation of Plan by Reference.

These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes such Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, the Grantee’s beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, PA 19087.

13.
Income Taxes; Withholding Taxes.

The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.

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14.
Governing Law.

The validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.

15.
Advice to Consult Counsel.

The Company advises the Grantee to consult with an attorney before signing these Terms and Conditions. The Grantee represents and warrants that the Grantee has obtained independent legal advice from an attorney of the Grantee’s own choice with respect to these Terms and Conditions and the Restrictive Covenants or the Grantee has knowingly and voluntarily chosen not to do so.

 

16.
Grant Subject to Applicable Laws and Company Policies.

These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.

17.
Assignment.

These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.

18.
Section 409A.

This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee), if required pursuant to section 409A of the Code.

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If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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

RADIAN GROUP INC.

By: /s/ Mary Dickerson

Name: Mary Dickerson

Title: Senior Executive Vice President, Chief People and Operating Officer

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

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EXHIBIT 10.3

RADIAN GROUP INC.

2021 EQUITY COMPENSATION PLAN

PERFORMANCE-BASED RESTRICTED STOCK UNIT GRANT

(LTI BOOK VALUE WITH RELATIVE TSR MODIFIER)

 

TERMS AND CONDITIONS

 

These Terms and Conditions (“Terms and Conditions”) are part of the Performance-Based Restricted Stock Unit Grant made as of May 21, 2025 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to #ParticipantName#, an employee of the Company (the “Grantee”).

RECITALS

WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;

WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan;

WHEREAS, the Restricted Stock Units granted pursuant to these Terms and Conditions shall vest based on the attainment of LTI Performance (as defined below) and continued employment; and

WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

1.
Grant of Performance-Based Restricted Stock Units. The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Target Award”), subject to the vesting and other conditions of these Terms and Conditions. Payment of the Restricted Stock Units will be based on performance against the metrics set forth in Schedule A (the “LTI Performance”) and, except as otherwise provided herein, continued employment.
2.
Vesting.
(a)
General Vesting Terms. Except as set forth in Sections 2(d) and 2(e) below, the Grantee shall vest in a number of Restricted Stock Units with respect to the Target Award based on the LTI Performance as of the end of the performance period, provided that, except as set forth in Sections 2(b) and 2(c) below, the Grantee remains employed by the Company or a Subsidiary through May 15, 2028 (the “Vesting Date”).

 

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The performance period is the period beginning on April 1, 2025 and ending on March 31, 2028 (the “Performance Period”). Except as specifically provided below in this Section 2, no Restricted Stock Units will vest for any reason prior to the Vesting Date, and in the event of a termination of the Grantee’s employment prior to the Vesting Date, the Grantee will forfeit to the Company all Restricted Stock Units that have not yet vested as of the termination date. Except as provided in Sections 2(d) and 2(e) below, any Restricted Stock Units that have not vested at the end of the Performance Period will be immediately forfeited.
(b)
Retirement.
(i)
If the Grantee terminates employment prior to the Vesting Date on account of the Grantee’s Retirement, the Grantee will not forfeit the Restricted Stock Units upon Retirement, and the Restricted Stock Units will vest on the Vesting Date based on the LTI Performance through the end of the Performance Period, except as provided in Sections 2(d) and 2(e) below.
(ii)
For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service from the Company and its Subsidiaries, other than on account of Cause (as defined below), death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or a Subsidiary, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or a Subsidiary.
(iii)
For purposes of these Terms and Conditions, “Cause” shall mean the Grantee’s (A) indictment for, conviction of, or pleading nolo contendere to, a felony or a crime involving fraud, misrepresentation, or moral turpitude (excluding traffic offenses other than traffic offenses involving the use of alcohol or illegal substances), (B) fraud, dishonesty, theft, or misappropriation of funds in connection with the Grantee’s duties with the Company and its Subsidiaries, (C) material violation of the Company’s Code of Conduct or employment policies, as in effect from time to time, (D) gross negligence or willful misconduct in the performance of the Grantee’s duties with the Company and its Subsidiaries, or (E) a breach of any written confidentiality, nonsolicitation, or noncompetition covenant with the Company or an Affiliate, in each case as determined in the sole discretion of the Committee. In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)
Involuntary Termination.
(i)
Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, then on the Vesting Date the Grantee will vest in a number of Restricted Stock Units with respect to the Pro-Rata Target Award (as defined below), based on the LTI Performance through the end of the Performance Period. For purposes of these Terms and Conditions, “Pro-Rata Target Award” shall mean a pro-rated portion of the Restricted Stock Units, which shall be determined by multiplying the number of Restricted Stock Units in the Target Award by a fraction, the numerator of which is the number of months that elapsed during the period beginning on the Grant Date and ending on the Grantee’s termination date (with a partial month counting as a whole month for this purpose), and the denominator of which is 36.

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Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period following the Grant Date, the Grantee’s Restricted Stock Units will be forfeited.
(ii)
Except as provided in Sections 2(d) and 2(e) below, if the Grantee incurs an Involuntary Termination during the six-month period immediately prior to the Vesting Date, the Grantee’s Restricted Stock Units will vest on the Vesting Date without proration, based on the LTI Performance through the end of the Performance Period.
(iii)
For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Subsidiaries on account of a termination by the Company or a Subsidiary without Cause, other than on account of Retirement, death or Disability, provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or Subsidiary, as applicable. A termination by the Grantee for Good Reason under the Grantee’s executive severance agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Grantee’s executive severance agreement.
(d)
Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or a Subsidiary prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level (as described in Section 6 of Schedule A)) on the date of the Grantee’s death or Disability, as applicable. If, following the Grantee’s termination of employment due to Retirement, or due to Involuntary Termination after the six month period following the Grant Date, the Grantee dies prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Target Award level (or, if a Change of Control has occurred, at the CoC Performance Level) on the date of the Grantee’s death; provided that if the termination of employment was due to Involuntary Termination during the period beginning six months after the Grant Date and ending six months prior to the Vesting Date, the Grantee’s Restricted Stock Units will automatically vest at the Pro-Rata Target Award level (or, if a Change of Control has occurred, the Pro-Rata Target Award will vest at the CoC Performance Level) on the date of the Grantee’s death. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or a Subsidiary, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the Vesting Date, the award will be forfeited.

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(e)
Change of Control.
(i)
If a Change of Control occurs prior to the Vesting Date, the Restricted Stock Units will vest at the CoC Performance Level on the Vesting Date, provided that, except as set forth in subsections (ii) and (iii) below, the Grantee remains employed by the Company or a Subsidiary through the Vesting Date.
(ii)
If, prior to the Vesting Date, a Change of Control occurs and the Grantee’s employment is terminated by the Company or a Subsidiary without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest at the CoC Performance Level as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control). If the Grantee’s employment terminates on account of an Involuntary Termination as described in Section 2(c) (other than an Involuntary Termination within six months following the Grant Date) more than 90 days before the Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, then on the date of the Change of Control, the Grantee will vest in a Pro-Rata Target Award based on performance at the CoC Performance Level on the date of the Change of Control; provided that if Section 2(c)(ii) applies, the Grantee will vest in the Restricted Stock Units at the CoC Performance Level and no pro-ration will apply.
(iii)
If the Grantee’s employment terminates on account of Retirement before a Change of Control, and a Change of Control subsequently occurs prior to the Vesting Date, the outstanding Restricted Stock Units will vest on the date of the Change of Control at the CoC Performance Level. If the Grantee’s employment terminates on account of Retirement on or after a Change of Control, the Restricted Stock Units will vest at the CoC Performance Level on the Grantee’s Retirement date.
(f)
Cause. Notwithstanding anything in these Terms and Conditions to the contrary, in the event the Grantee’s employment is terminated by the Company or a Subsidiary for Cause, all outstanding Restricted Stock Units held by the Grantee shall immediately terminate and be of no further force or effect.
(g)
Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all unvested Restricted Stock Units. Except as provided in Section 2(b), 2(c) or 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or a Subsidiary has terminated for any reason.
3.
Restricted Stock Units Account.

The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.

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4.
Dividend Equivalents.

Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable after vesting of the underlying Restricted Stock Units, as described below. Dividend equivalents shall be credited on the Restricted Stock Units as of the dividend record date with respect to shares of Common Stock from the Grant Date until the payment date for the Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee. No interest will be credited to any such account. Accrued dividend equivalents on vested Restricted Stock Units shall be paid in cash within 90 days after the Vesting Date or, if earlier, on the payment date for the Restricted Stock Units under Section 5(b). Any dividend equivalents that accrue with respect to vested Restricted Stock Units during the period after the Vesting Date and before the date on which the Restricted Stock Units are paid as described in Section 5 shall be paid in cash upon the payment date for the applicable dividend on shares of Common Stock. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.

5.
Conversion of Restricted Stock Units.
(a)
Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with these Terms and Conditions, the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the one-year anniversary of the Vesting Date (the one-year anniversary of the Vesting Date is referred to as the “Distribution Date”).
(b)
The vested Restricted Stock Units shall be paid earlier than the Distribution Date in the following circumstances:
(i)
If (A) the Restricted Stock Units vest in accordance with Section 2(d) (the Grantee’s death or Disability), or (B) the Grantee dies or incurs a Disability after the Vesting Date but before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Grantee’s death or Disability, as applicable.
(ii)
If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) and a Change of Control subsequently occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the date of the Change of Control.
(iii)
If the Grantee’s employment terminates in accordance with Section 2(e)(ii) or 2(e)(iii) upon or after a Change of Control that occurs before the Distribution Date, the vested Restricted Stock Units shall be paid within 90 days after the Grantee’s separation from service with the Company and its Subsidiaries.
(iv)
Notwithstanding subsections (ii) and (iii), if the Change of Control is not a “change in control event” under section 409A of the Code, and if required by section 409A of the Code, payment will not be made on the dates described in subsections (ii) and (iii) and, instead, will be made within 90 days after the Distribution Date.

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In addition, if required by section 409A of the Code, if the separation from service described in subsection (iii) does not occur within two years after a Change of Control that is a “change in control event” under section 409A of the Code, payment will instead be made within 90 days after the Distribution Date.
(c)
On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to (i) the limitation of subsection (d) below, (ii) compliance with the six-month delay described in Section 18 below, if applicable, and (iii) the payment of any federal, state, local or foreign withholding taxes as described in Section 13 below, and subject to compliance with the restrictive covenants in Section 7 below. The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 16 below.
(d)
For the avoidance of doubt, the Grantee will forfeit all Restricted Stock Units if the Grantee’s employment is terminated for Cause prior to the Distribution Date or other applicable payment date under this Section 5.
(e)
Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.
Certain Corporate Changes.

If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee, the maximum number of shares for which the Restricted Stock Units may vest, the share price or class of Common Stock for purposes of the applicable performance goals, in each case, as appropriate to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units. Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.

7.
Restrictive Covenants.
(a)
The Grantee acknowledges and agrees that, during and after the Grantee’s employment with the Company or any of its Affiliates, the Grantee will be subject to, and will comply with, the applicable confidentiality and other terms specified in the Company’s Code of Conduct and Ethics, including terms applicable to former employees. A copy of the Code of Conduct and Ethics has been provided to the Grantee and can be accessed on the Company’s intranet. The Code of Conduct and Ethics, including any future revisions to the Code of Conduct and Ethics, are incorporated into and made a part of these Terms and Conditions as if fully set forth herein.

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(b)
The Grantee acknowledges that the Grantee’s relationship with the Company and its Affiliates is one of confidence and trust such that the Grantee is, and may in the future be, privy to and/or the Grantee will develop Confidential Information and Trade Secrets of the Company or any of its Affiliates. Subject to the provisions of subsection (j), the Grantee agrees that, at all times during the Grantee’s employment and after the Grantee’s employment with the Company or any of its Affiliates terminates for any reason, whether by the Grantee or by the Company or any of its Affiliates, the Grantee will hold in strictest confidence and will not disclose, use, or publish any Confidential Information and Trade Secrets, except as and only to the extent such disclosure, use, or publication is required during the Grantee’s employment with the Company or any of its Affiliates for the Grantee to fulfill the Grantee’s job duties and responsibilities to the Company or any of its Affiliates. At all times during the Grantee’s employment and after the Grantee’s termination of employment, the Grantee agrees that the Grantee shall take all reasonable precautions to prevent the inadvertent or accidental disclosure of Confidential Information and Trade Secrets. The Grantee hereby assigns to the Company any rights the Grantee may have or acquire in Confidential Information and Trade Secrets, whether developed by the Grantee or others, and the Grantee acknowledges and agrees that all Confidential Information and Trade Secrets shall be the sole property of the Company and its assigns. For purposes of these Terms and Conditions, “Confidential Information and Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or any of its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or any of its Affiliates, that the Company or any of its Affiliates treat as proprietary, private, or confidential, and that is not generally known to the public.
(c)
The Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, and for the 12 month period immediately following the Grantee’s termination of employment for any reason, and subject to subsection (l) below (the “Restricted Period”), the Grantee will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity within the cities, states, or territories of the United States (the “Restricted Territory”) whose primary business involves or is related to providing any mortgage- or real estate-related service or product that, during the Grantee’s employment, the Company or any of its Affiliates provides or is actively engaged in developing through the use of Confidential Information and Trade Secrets; provided however, the foregoing restriction shall only apply to such service or product for which the Grantee has had access to Confidential Information and Trade Secrets or otherwise has had active involvement. The Grantee further agrees that, given the nature of the business of the Company and its Affiliates and the Grantee’s position with the Company, the Restricted Territory is appropriate and reasonable.
(d)
The Grantee acknowledges and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or any of its Affiliates to become an employee, consultant, or independent contractor to, for, or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate such person’s relationship with the Company or any of its Affiliates, unless in each case more than six months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire.

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If any employee, consultant, or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Grantee, such hiring or solicitation shall be conclusively presumed to be a violation of these Terms and Conditions; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Grantee, or by a headhunter employed by such entity, which does not involve the Grantee, shall not be a violation of this subsection (d).

Notwithstanding the foregoing, if the Grantee is employed in a jurisdiction where the foregoing restrictions in this subsection (d) may otherwise be prohibited by law, the foregoing restrictions in this subsection (d) shall not apply, and instead the Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, the Grantee shall not, directly or indirectly through others, solicit, encourage, or attempt to solicit or encourage any Service Provider to terminate or reduce the Service Provider’s relationship or business with the Company or any of its Affiliates. For the purpose of these Terms and Conditions, “Service Provider” means persons and entities who, during the Grantee’s employment with the Company or any of its Affiliates, were employees, consultants, vendors, or independent contractors of the Company or any of its Affiliates.

(e)
The Grantee covenants and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, either directly or indirectly through others:
(i)
solicit, divert, appropriate, or do business with, or attempt to solicit, divert, appropriate, or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination or any prospective customer of the Company or any of its Affiliates for whom the Company or any of its Affiliates actively sought to provide goods or services within 12 months prior to the Grantee’s date of termination for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Grantee’s employment with the Company or any of its Affiliates; or
(ii)
encourage any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.
(f)
The Grantee acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company or any of its Affiliates at significant expense and effort, and that the restrictions contained in this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company or any of its Affiliates, including Confidential Information and Trade Secrets.

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2025 BV Performance Section 16 Officers

 

(g)
The parties to these Terms and Conditions acknowledge and agree that any breach by the Grantee of any of the covenants or agreements contained in this Section 7 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money damages could not adequately compensate such entity. Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity and in addition to the forfeiture requirements set forth in subsection (h) below) to seek to enforce this Section 7 and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in this Section 7. The Grantee agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance, or other equitable relief, the Grantee will not assert or contend that any of the provisions of this Section 7 are unreasonable or otherwise unenforceable. Unless otherwise prohibited by applicable law, the Grantee irrevocably and unconditionally (i) agrees that any legal proceeding arising out of these Terms and Conditions shall be brought only in the United States District Court for the District of Delaware, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New Castle County, Delaware, (ii) consents to the sole and exclusive jurisdiction and venue of such court in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any such court. The Grantee also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers.
(h)
The Grantee acknowledges and agrees that in the event the Grantee breaches any of the covenants or agreements contained in this Section 7 or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:

(i) The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and

(ii) The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (h)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the covenants or agreements contained in this Section 7, or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.

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2025 BV Performance Section 16 Officers

 

(i)
Each provision of this Section 7 shall be deemed to be a separate and independent provision. If any portion of the covenants or agreements contained in this Section 7, the specific forfeiture provisions related to vested shares, or the application thereof, is construed to be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 7 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. The covenants and agreements contained in this Section 7 shall survive the termination of the Grantee’s employment with the Company or any of its Affiliates and shall survive the termination of these Terms and Conditions.
(j)
Nothing in these Terms and Conditions, including any restrictions on the use of Confidential Information and Trade Secrets, shall prohibit or restrict the Grantee from initiating communications directly with, responding to any inquiry from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or filing a claim or assisting with an investigation directly with a self-regulatory organization or a government agency or entity, including the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, any agency Inspector General or any other federal, state or local regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Nor do these Terms and Conditions require the Grantee to obtain prior authorization from the Company before engaging in any conduct described in this subsection (j), or to notify the Company that the Grantee has engaged in any such conduct. To the extent permitted by law and except as provided above in this subsection (j), upon receipt of any subpoena, court order, or other legal process compelling the disclosure of Confidential Information and Trade Secrets, the Grantee agrees to give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the fullest extent possible. Please take notice that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law. Nothing in these Terms and Conditions prevents California or Washington employees from discussing or disclosing information about unlawful acts, such as harassment or discrimination or any other conduct that they have reason to believe is unlawful. Moreover, nothing in this Section 7 or these Terms and Conditions generally is intended to limit the exercise of Employee’s rights under Section 7 of the National Labor Relations Act (“NLRA”) including communicating with others regarding Employee’s terms and conditions of employment.
(k)
Nothing in these Terms and Conditions shall be deemed to constitute the grant of any license or other right to the Grantee in respect of any Confidential Information and Trade Secrets or other data, tangible property, or intellectual property of the Company or any of its Affiliates.

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(l)
Notwithstanding the foregoing, should the Grantee violate any of the restrictive covenants of these Terms and Conditions, then the period of the Grantee’s breach of such covenant (“Violation Period”) shall stop the running of the corresponding Restricted Period. Once the Grantee resumes compliance with the restrictive covenant, the Restricted Period applicable to such covenant shall be extended for a period equal to the Violation Period so that the Company enjoys the full benefit of the Grantee’s compliance with the restrictive covenant for the duration of the corresponding Restricted Period.
(m)
In the event of a conflict between the terms of the confidentiality, non-competition or non-solicitation covenants in this Section 7 and a confidentiality, non-competition or non-solicitation covenant in a prior stock option, restricted stock unit or other equity grant agreement between the Grantee and the Company, the confidentiality, non-competition and non-solicitation covenants in this Section 7 shall control as of the Grant Date.
8.
No Stockholder Rights.

The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.

9.
Retention Rights.

Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or a Subsidiary or shall interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment or service at any time.

10.
Cancellation or Amendment.

This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.

11.
Notice.

Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, Pennsylvania 19087, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or a Subsidiary thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.

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12.
Incorporation of Plan by Reference.

These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes the Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, the Grantee’s beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, Pennsylvania 19087.

13.
Income Taxes; Withholding Taxes.

The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.

14.
Governing Law.

Where permissible by applicable law, the validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.

15.
Advice to Consult Counsel.

The Company advises the Grantee to consult with an attorney before signing these Terms and Conditions. The Grantee represents and warrants that the Grantee has obtained independent legal advice from an attorney of the Grantee’s own choice with respect to these Terms and Conditions and their Section 7 (Restrictive Covenants) or the Grantee has knowingly and voluntarily chosen not to do so.

 

16.
Grant Subject to Applicable Laws and Company Policies.

These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law.

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2025 BV Performance Section 16 Officers

 

Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.

17.
Assignment.

These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.

18.
Section 409A.

This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee) and if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

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2025 BV Performance Section 16 Officers

 

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

 

RADIAN GROUP INC.

 

By: /s/ Mary Dickerson

Name: Mary Dickerson

Title: Senior Executive Vice President, Chief People and Operating Officer

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

 

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Schedule A

LTI Performance

Vesting of the Restricted Stock Units will be based on the following performance results: (i) the Company’s cumulative growth in LTI Book Value per Share (as defined below) over the Performance Period and (ii) the Relative TSR Modifier (as defined below).

1.
LTI Book Value per Share.
(a)
Except as set forth in Section 6 below, vesting of the Restricted Stock Units will be based on the Company’s cumulative growth in LTI Book Value per Share and the Company Absolute TSR (as defined below) as compared to the Average Peer Group TSR, in each case over the Performance Period beginning on April 1, 2025 and ending on March 31, 2028 as compared to the following reference points:

 

 

 

Cumulative Growth in LTI Book Value per Share(1)

BV Payout Percentage(1)

(Percentage of Target Award)

Maximum (48%)

200%

Target (33%)

100%

Threshold (≤18%)(2)

0%

(1) If the Company’s cumulative growth in LTI Book Value per Share falls between two referenced percentages, the BV Payout Percentage will be interpolated. Cumulative growth in LTI Book Value per Share will be calculated by dividing the LTI Book Value per Share on the last day of the Performance Period (or the projected LTI Book Value per Share in the case of a Change of Control, as described below), by the LTI Book Value per Share on the first day of the Performance Period, expressed as a percentage, minus 100%.

 

(2) The LTI Book Value per Share at the beginning of the Performance Period (April 1, 2025) was $34.57. If the Company’s cumulative growth in LTI Book Value per Share is less than or equal to 15%, the BV Payout Percentage will be zero.

 

(b)
The Company’s “LTI Book Value per Share” is defined as: (i) Book Value adjusted to exclude (A) Accumulated Other Comprehensive Income and (B) the impact, if any, during the Performance Period (or through the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, if applicable) from declared dividends on common shares and dividend equivalents on outstanding equity awards, divided by (ii) the basic shares of Common Stock of the Company outstanding as of the applicable measurement date. The LTI Book Value per Share shall be derived from the Company’s financial statements, prepared in accordance with GAAP, and the adjustments described above.
2.
Calculation of TSR. At the end of the Performance Period, the TSR for the Company and for each company in the TSR Peer Group (as defined below) shall be calculated by dividing the Closing Average Share Value (as defined below) by the Opening Average Share Value (as defined below).

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2025 BV Performance Section 16 Officers

 

The companies in the TSR Peer Group will be determined on the first day of the Performance Period for purposes of the TSR calculation and will be changed only in accordance with subsection (d) below. No company shall be added to the TSR Peer Group during the Performance Period for purposes of the TSR calculation.
(a)
The term “Closing Average Share Value” means the average value of the common stock, including Accumulated Shares, for the 20 trading days ending on the last day of the Performance Period (i.e., the 20 trading days ending on and including March 31, 2028), which shall be calculated as follows: (i) determine the closing price of the common stock on each trading date during the 20-day period, (ii) multiply each closing price by the Accumulated Shares as of that trading date, and (iii) average the amounts so determined for the 20-day period.
(b)
The term “Opening Average Share Value” means the average value of the common stock, including Accumulated Shares, for the 20 trading days ending on the day immediately prior to the first day of the Performance Period (i.e., the 20 trading days ending immediately prior to April 1, 2025), which shall be calculated as follows: (i) determine the closing price of the common stock on each trading day during the 20-day period, (ii) multiply each closing price by the Accumulated Shares as of that trading date, and (ii) average the amounts so determined for the 20-day period. The Opening Average Share Value is $32.02.
(c)
The term “Accumulated Shares” means, for a given trading day, the sum of (i) one share and (ii) a cumulative number of shares of the company’s common stock purchased with dividends declared on a company’s common stock, assuming same day reinvestment of the dividends in the common stock of a company at the closing price on the ex-dividend date. The calculations under this Schedule A shall include ex-dividend dates between and including March 1, 2025 and the trading day.
(d)
The term “TSR Peer Group” means the companies listed on Exhibit A and will be subject to change as follows:
(i)
In the event of a merger, acquisition or business combination transaction of a company in the TSR Peer Group in which the company in the TSR Peer Group is the surviving entity and remains publicly traded, the surviving entity shall remain a company in the TSR Peer Group. Any entity involved in the transaction that is not the surviving company shall no longer be a company in the TSR Peer Group.
(ii)
In the event of a merger, acquisition or business combination transaction of a company in the TSR Peer Group, a “going private” transaction or other event involving a company in the TSR Peer Group or the liquidation of a company in the TSR Peer Group, in each case where the company in the TSR Peer Group is not the surviving entity or is no longer publicly traded, the company shall no longer be a company in the TSR Peer Group.
(iii)
Notwithstanding the foregoing, in the event of a bankruptcy of a company in the TSR Peer Group where the company in the TSR Peer Group is not publicly traded at the end of the Performance Period, such company shall remain a company in the TSR Peer Group but shall be deemed to have a TSR of negative 100% (-100%).

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3.
Relative TSR Modifier. The results of the BV Payout Percentage, as described in Section 1 above, shall be modified by a Relative TSR Modifier (as defined below) to determine the actual number of Restricted Stock Units that vest. If the Relative TSR Modifier is zero, the Final Payout Percentage (as defined below) will be the BV Payout Percentage determined under Section 1 above.
(a)
A “Relative TSR Modifier” shall be calculated based on the Company’s cumulative three-year TSR for the Performance Period (“Company Absolute TSR”), as compared to a simple average TSR of the companies in the TSR Peer Group for the Performance Period (the “Average Peer Group TSR”), as follows:
(i)
If the Company Absolute TSR is higher than the Average Peer Group TSR by at least 0.5%, the applicable Relative TSR Modifier will be added to the BV Payout Percentage such that the BV Payout Percentage increases by 6.25% for every 2.5% by which the Company Absolute TSR exceeds the Average Peer Group TSR, as shown in the table below. Notwithstanding the forgoing, if the Company Absolute TSR is higher than the Average Peer Group TSR by at least 0.5%, but the Company Absolute TSR for the Performance Period is negative, the Relative TSR Modifier will be zero.
(ii)
If the Company Absolute TSR does not exceed the Average Peer Group TSR by at least 0.5%, the applicable Relative TSR Modifier will be deducted from the BV Payout Percentage such that the BV Payout Percentage will be reduced by 6.25% for every 2.5% by which the Company Absolute TSR is less than the Average Peer Group TSR, as shown in the table below.
(iii)
Straight-line interpolation will apply to performance levels between the performance levels illustrated in the table below:

Company Absolute TSR

vs.

Average Peer Group TSR

 

Relative TSR Modifier

10.5%

25.00%

8.0%

18.75%

5.5%

12.50%

3.0%

6.25%

0.5%

0.00%

-2.0%

-6.25%

-4.5%

-12.50%

-7.0%

-18.75%

≤-9.5%

-25.00%

 

4.
Final Payout Percentage. The actual number of Restricted Stock Units that vest with respect to the Performance Period (“Final Payout Percentage”) shall be determined by multiplying the Target Award by the BV Payout Percentage after adjustment by the Relative TSR Modifier. In no event shall the maximum number of Restricted Stock Units that may be payable pursuant to these Terms and Conditions exceed 200% of the Target Award.

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5.
General Vesting Terms. Any fractional Restricted Stock Unit resulting from the vesting of the Restricted Stock Units in accordance with these Terms and Conditions shall be rounded down to the nearest whole number. Any portion of the Restricted Stock Units that does not vest as of the end of the Performance Period shall be forfeited as of the end of the Performance Period.

 

6.
Change of Control Vesting. If a Change of Control occurs prior to the end of the Performance Period, the Committee will calculate the “CoC Performance Level,” based on (a) the Company’s projected LTI Book Value per Share through the end of the Performance Period, projected as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, and (b) the Relative TSR Modifier based on the Company Absolute TSR as compared to the Average Peer Group TSR as of the end of the fiscal quarter immediately preceding the fiscal quarter in which the Change of Control occurs or the date of the Change of Control if the Change of Control occurs on the last day of a fiscal quarter, in each case as determined in the sole discretion of the Committee. If a Change of Control occurs after the end of the Performance Period and before the Vesting Date, the CoC Performance Level will be calculated based on LTI Performance through the end of the Performance Period. Any Restricted Stock Units that do not vest at the CoC Performance Level shall be forfeited as of the date of the Change of Control.

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EXHIBIT A

 

TSR PEER GROUP

 

Enact Holdings (ACT)

 

Essent Group (ESNT)

 

MGIC Investment Corporation (MTG)

 

NMI Holdings (NMIH)

 

19

 
EX-10.4 5 rdn-ex10_4.htm EX-10.4 EX-10.4

2025 Time-Based RSU Section 16 Officers

 

EXHIBIT 10.4

RADIAN GROUP INC.

2021 EQUITY COMPENSATION PLAN

RESTRICTED STOCK UNIT GRANT

TERMS AND CONDITIONS

These Terms and Conditions (“Terms and Conditions”) are part of the Restricted Stock Unit Grant made as of May 21, 2025 (the “Grant Date”), by Radian Group Inc., a Delaware corporation (the “Company”), to #ParticipantName#, an employee of the Company (the “Grantee”).

RECITALS

WHEREAS, the Radian Group Inc. 2021 Equity Compensation Plan (the “Plan”) permits the grant of Restricted Stock Units in accordance with the terms and provisions of the Plan;

WHEREAS, the Company desires to grant Restricted Stock Units to the Grantee, and the Grantee desires to accept such Restricted Stock Units, on the terms and conditions set forth herein and in the Plan; and

WHEREAS, the applicable provisions of the Plan are incorporated into these Terms and Conditions by reference, including the definitions of terms contained in the Plan (unless such terms are otherwise defined herein).

NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

1.
Grant of Restricted Stock Units.

The Company hereby awards to the Grantee #QuantityGranted# Restricted Stock Units (hereinafter, the “Restricted Stock Units”), subject to the vesting and other conditions of these Terms and Conditions.

2.
Vesting.
(a)
General Vesting Terms. Provided the Grantee remains employed by the Company or a Subsidiary through the applicable vesting date set forth in this Section 2 (the “Vesting Date”) and meets all applicable requirements set forth in these Terms and Conditions, the Restricted Stock Units awarded under these Terms and Conditions shall vest in three substantially equal installments on each of May 15, 2026, May 15, 2027 and May 15, 2028, except as set forth in Sections 2(b), 2(c), 2(d) and 2(e) below (the period over which the Restricted Stock Units vest is referred to as the “Restriction Period”).

 

2025 Time-Based RSU Section 16 Officers

 

(b)
Retirement.
(i)
If the Grantee terminates employment during the Restriction Period because of the Grantee’s Retirement, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)
For purposes of these Terms and Conditions, “Retirement” shall mean the Grantee’s separation from service without Cause, other than on account of death or Disability (as defined below), (A) following the Grantee’s attainment of age 65 and completion of five years of service with the Company or a Subsidiary, or (B) following the Grantee’s attainment of age 55 and completion of 10 years of service with the Company or a Subsidiary.
(iii)
For purposes of these Terms and Conditions, “Cause” shall mean the Grantee’s (A) indictment for, conviction of, or pleading nolo contendere to, a felony or a crime involving fraud, misrepresentation, or moral turpitude (excluding traffic offenses other than traffic offenses involving the use of alcohol or illegal substances), (B) fraud, dishonesty, theft, or misappropriation of funds in connection with the Grantee’s duties with the Company and its Subsidiaries, (C) material violation of the Company’s Code of Conduct or employment policies, as in effect from time to time, (D) gross negligence or willful misconduct in the performance of the Grantee’s duties with the Company and its Subsidiaries, or (E) a breach of any written confidentiality, nonsolicitation, or noncompetition covenant with the Company or an Affiliate, in each case as determined in the sole discretion of the Committee. In the event that the Committee determines that the Grantee engaged in any of the foregoing activities that are grounds for termination for Cause at any time, the Committee may determine that the Grantee’s termination of employment was a termination for Cause, even if not so designated at the date of termination.
(c)
Involuntary Termination.
(i)
Except as set forth in Section 2(e) below, if the Grantee terminates employment on or before the first Vesting Date because of an Involuntary Termination, one-third of the Grantee’s Restricted Stock Units will automatically vest on the date of such termination of employment and the remaining unvested Restricted Stock Units shall be immediately forfeited. If the Grantee terminates employment during the Restriction Period and after the first Vesting Date because of an Involuntary Termination, the Grantee’s Restricted Stock Units will automatically vest in full on the date of such termination of employment.
(ii)
For purposes of these Terms and Conditions, the term “Involuntary Termination” shall mean the Grantee’s separation from service from the Company and its Subsidiaries on account of a termination by the Company or a Subsidiary without Cause, other than on account of Retirement, death or Disability; provided the Grantee signs and does not revoke a release and waiver of claims in favor of the Company and its Affiliates in a form provided by the Company or Subsidiary, as applicable. A termination by the Grantee for Good Reason under the Grantee’s executive severance agreement shall be deemed to be an Involuntary Termination. For purposes of these Terms and Conditions, “Good Reason” shall have the meaning assigned to it in the Grantee’s executive severance agreement.

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(d)
Death or Disability. In the event of the Grantee’s death or Disability while employed by the Company or a Subsidiary during the Restriction Period, the Grantee’s Restricted Stock Units will automatically vest in full on the date of the Grantee’s death or Disability, as applicable. For purposes of these Terms and Conditions, the term “Disability” shall mean a physical or mental impairment of sufficient severity that the Grantee is both eligible for and in receipt of benefits under the long-term disability program maintained by the Company or a Subsidiary, as applicable, and that meets the requirements of a disability under section 409A of the Code, provided that the Grantee completes 30 days of active service with the Company at any time after the Grant Date and prior to the first Vesting Date. The date of Disability for purposes of these Terms and Conditions is the date on which the Grantee commences to receive such long-term disability benefits. In the event that the Grantee is not in active service on the Grant Date (for example, on account of short-term disability) and the Grantee does not return to the Company and complete 30 days of active service with the Company prior to the first Vesting Date, the award will be forfeited.
(e)
Change of Control. Notwithstanding the foregoing, if, during the Restriction Period, a Change of Control occurs and the Grantee’s employment with the Company and its Subsidiaries is terminated by the Company or a Subsidiary without Cause, or the Grantee terminates employment for Good Reason, and the Grantee’s date of termination of employment (or in the event of the Grantee’s termination for Good Reason, the event giving rise to Good Reason) occurs during the period beginning on the date that is 90 days before the Change of Control and ending on the date that is one year following the Change of Control, the unvested Restricted Stock Units will automatically vest as of the Grantee’s date of termination of employment (or, if later, on the date of the Change of Control).
(f)
Other Termination. Except as provided in Sections 2(b), 2(c), 2(d) and 2(e), in the event of a termination of employment, the Grantee will forfeit all Restricted Stock Units that do not vest either before the termination date or on the termination date associated with such termination. Except as provided in Section 2(e), no Restricted Stock Units will vest after the Grantee’s employment with the Company or a Subsidiary has terminated for any reason. For clarification purposes, in the event the Grantee’s employment is terminated by the Company or a Subsidiary for Cause, the outstanding Restricted Stock Units held by such Grantee shall immediately terminate and be of no further force or effect.
3.
Restricted Stock Units Account.

The Company shall establish a bookkeeping account on its records for the Grantee and shall credit the Grantee’s Restricted Stock Units to the bookkeeping account.

4.
Dividend Equivalents.

Dividend equivalents shall accrue with respect to the Grantee’s Restricted Stock Units and shall be payable subject to the same vesting terms and other conditions as the Restricted Stock Units to which they relate. Dividend equivalents shall be credited on the Restricted Stock Units as of the dividend record date with respect to shares of Common Stock from the Grant Date until the payment date for the vested Restricted Stock Units. The Company will keep records of dividend equivalents in a non-interest bearing bookkeeping account for the Grantee.

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No interest will be credited to any such account. Vested dividend equivalents shall be paid in cash at the same time and subject to the same terms as the underlying vested Restricted Stock Units. If and to the extent that the underlying Restricted Stock Units are forfeited, all related dividend equivalents shall also be forfeited. For the avoidance of doubt, if the Grantee elects to defer payment of the Restricted Stock Units under a Company deferred compensation plan, the payment date for accrued dividend equivalents will be determined based on the terms of the applicable deferred compensation plan.

5.
Conversion of Restricted Stock Units.
(a)
Except as otherwise provided in this Section 5, if the Restricted Stock Units vest in accordance with Section 2(a), the Grantee shall be entitled to receive payment of the vested Restricted Stock Units within 90 days after the applicable Vesting Date.
(b)
The vested Restricted Stock Units shall be paid earlier than the applicable Vesting Date in the following circumstances:
(i)
If the Restricted Stock Units vest in accordance with Section 2(b) (Retirement), Section 2(c) (Involuntary Termination), or Section 2(d) (death or Disability), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment on account of Retirement, Involuntary Termination or death, or the date of Disability, as applicable.
(ii)
If a Change of Control occurs and the Grantee’s employment terminates in accordance with Section 2(e), the Grantee shall receive payment of the vested Restricted Stock Units within 90 days after the date of the Grantee’s termination of employment (or, if later, on the date of the Change of Control).
(c)
On the applicable payment date, each vested Restricted Stock Unit credited to the Grantee’s account shall be settled in whole shares of Common Stock of the Company equal to the number of vested Restricted Stock Units, subject to compliance with the six-month delay described in Section 18 below, if applicable, and the payment of any federal, state, local, or foreign withholding taxes as described in Section 13 below, and subject to compliance with the restrictive covenants in Section 7 below. The obligation of the Company to distribute shares shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 16 below.
(d)
Notwithstanding the foregoing, if the Grantee elects to defer payment of the Restricted Stock Units under the Company’s applicable deferred compensation plan, payment shall be made in the form and at the time specified under such plan.
6.
Certain Corporate Changes.

If any change is made to the Common Stock (whether by reason of merger, consolidation, reorganization, recapitalization, stock dividend, stock split, combination of shares, or exchange of shares or any other change in capital structure made without receipt of consideration), then unless such event or change results in the termination of all the Restricted Stock Units granted under these Terms and Conditions, the Committee shall adjust, as provided in the Plan, the number and class of shares underlying the Restricted Stock Units held by the Grantee to reflect the effect of such event or change in the Company’s capital structure in such a way as to preserve the value of the Restricted Stock Units.

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Any adjustment that occurs under the terms of this Section 6 or the Plan will not change the timing or form of payment with respect to any Restricted Stock Units except in accordance with section 409A of the Code.

7.
Restrictive Covenants.
(a)
The Grantee acknowledges and agrees that, during and after the Grantee’s employment with the Company or any of its Affiliates, the Grantee will be subject to, and will comply with, the applicable confidentiality and other terms specified in the Company’s Code of Conduct and Ethics, including terms applicable to former employees. A copy of the Code of Conduct and Ethics has been provided to the Grantee and can be accessed on the Company’s intranet. The Code of Conduct and Ethics, including any future revisions to the Code of Conduct and Ethics, are incorporated into and made a part of these Terms and Conditions as if fully set forth herein.
(b)
The Grantee acknowledges that the Grantee’s relationship with the Company and its Affiliates is one of confidence and trust such that the Grantee is, and may in the future be, privy to and/or the Grantee will develop Confidential Information and Trade Secrets of the Company or any of its Affiliates. Subject to the provisions of subsection (j), the Grantee agrees that, at all times during the Grantee’s employment and after the Grantee’s employment with the Company or any of its Affiliates terminates for any reason, whether by the Grantee or by the Company or any of its Affiliates, the Grantee will hold in strictest confidence and will not disclose, use, or publish any Confidential Information and Trade Secrets, except as and only to the extent such disclosure, use, or publication is required during the Grantee’s employment with the Company or any of its Affiliates for the Grantee to fulfill the Grantee’s job duties and responsibilities to the Company or any of its Affiliates. At all times during the Grantee’s employment and after the Grantee’s termination of employment, the Grantee agrees that the Grantee shall take all reasonable precautions to prevent the inadvertent or accidental disclosure of Confidential Information and Trade Secrets. The Grantee hereby assigns to the Company any rights the Grantee may have or acquire in Confidential Information and Trade Secrets, whether developed by the Grantee or others, and the Grantee acknowledges and agrees that all Confidential Information and Trade Secrets shall be the sole property of the Company and its assigns. For purposes of these Terms and Conditions, “Confidential Information and Trade Secrets” shall mean information that the Company or any of its Affiliates owns or possesses, that the Company or any of its Affiliates have developed at significant expense and effort, that they use or that is potentially useful in the business of the Company or any of its Affiliates, that the Company or any of its Affiliates treat as proprietary, private, or confidential, and that is not generally known to the public.
(c)
The Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, and for the 12 month period immediately following the Grantee’s termination of employment for any reason, and subject to subsection (l) below (the “Restricted Period”), the Grantee will not, without the Company’s express written consent, engage (directly or indirectly) in any employment or business activity within the cities, states, or territories of the United States (the “Restricted Territory”) whose primary business involves or is related to providing any mortgage- or real estate-related service or product that, during the Grantee’s employment, the Company or any of its Affiliates provides or is actively engaged in developing through the use of Confidential Information and Trade Secrets; provided however, the foregoing restriction shall only apply to such service or product for which the Grantee has had access to Confidential Information and Trade Secrets or otherwise has had active involvement.

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The Grantee further agrees that, given the nature of the business of the Company and its Affiliates and the Grantee’s position with the Company, the Restricted Territory is appropriate and reasonable.
(d)
The Grantee acknowledges and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, directly or indirectly through others, (i) hire or attempt to hire any employee of the Company or any of its Affiliates, (ii) solicit or attempt to solicit any employee of the Company or any of its Affiliates to become an employee, consultant, or independent contractor to, for, or of any other person or business entity, or (iii) solicit or attempt to solicit any employee, or any consultant or independent contractor of the Company or any of its Affiliates to change or terminate such person’s relationship with the Company or any of its Affiliates, unless in each case more than six months shall have elapsed between the last day of such person’s employment or service with the Company or any of its Affiliates and the first date of such solicitation or hiring or attempt to solicit or hire. If any employee, consultant, or independent contractor is hired or solicited by any entity that has hired or agreed to hire the Grantee, such hiring or solicitation shall be conclusively presumed to be a violation of these Terms and Conditions; provided, however, that any hiring or solicitation pursuant to a general solicitation conducted by an entity that has hired or agreed to hire the Grantee, or by a headhunter employed by such entity, which does not involve the Grantee, shall not be a violation of this subsection (d).

Notwithstanding the foregoing, if the Grantee is employed in a jurisdiction where the foregoing restrictions in this subsection (d) may otherwise be prohibited by law, the foregoing restrictions in this subsection (d) shall not apply, and instead the Grantee acknowledges and agrees that, during the Grantee’s employment with the Company or any of its Affiliates, the Grantee shall not, directly or indirectly through others, solicit, encourage, or attempt to solicit or encourage any Service Provider to terminate or reduce the Service Provider’s relationship or business with the Company or any of its Affiliates. For the purpose of these Terms and Conditions, “Service Provider” means persons and entities who, during the Grantee’s employment with the Company or any of its Affiliates, were employees, consultants, vendors, or independent contractors of the Company or any of its Affiliates.

(e)
The Grantee covenants and agrees that, during the term of the Grantee’s employment by the Company or any of its Affiliates and during the Restricted Period, the Grantee shall not, either directly or indirectly through others:
(i)
solicit, divert, appropriate, or do business with, or attempt to solicit, divert, appropriate, or do business with, any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination or any prospective customer of the Company or any of its Affiliates for whom the Company or any of its Affiliates actively sought to provide goods or services within 12 months prior to the Grantee’s date of termination for the purpose of providing such customer or actively sought prospective customer with services or products competitive with those offered by the Company or any of its Affiliates during the Grantee’s employment with the Company or any of its Affiliates; or

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(ii)
encourage any customer for whom the Company or any of its Affiliates provided goods or services within 12 months prior to the Grantee’s date of termination to reduce the level or amount of business such customer conducts with the Company or any of its Affiliates.
(f)
The Grantee acknowledges and agrees that the business of the Company and its Affiliates is highly competitive, that the Confidential Information and Trade Secrets have been developed by the Company or any of its Affiliates at significant expense and effort, and that the restrictions contained in this Section 7 are reasonable and necessary to protect the legitimate business interests of the Company or any of its Affiliates, including Confidential Information and Trade Secrets.
(g)
The parties to these Terms and Conditions acknowledge and agree that any breach by the Grantee of any of the covenants or agreements contained in this Section 7 will result in irreparable injury to the Company or any of its Affiliates, as the case may be, for which money damages could not adequately compensate such entity. Therefore, the Company or any of its Affiliates shall have the right (in addition to any other rights and remedies which it may have at law or in equity and in addition to the forfeiture requirements set forth in subsection (h) below) to seek to enforce this Section 7 and any of its provisions by injunction, specific performance, or other equitable relief, without bond and without prejudice to any other rights and remedies that the Company or any of its Affiliates may have for a breach, or threatened breach, of the restrictive covenants set forth in this Section 7. The Grantee agrees that in any action in which the Company or any of its Affiliates seeks injunction, specific performance, or other equitable relief, the Grantee will not assert or contend that any of the provisions of this Section 7 are unreasonable or otherwise unenforceable. Unless otherwise prohibited by applicable law, the Grantee irrevocably and unconditionally (i) agrees that any legal proceeding arising out of these Terms and Conditions shall be brought only in the United States District Court for the District of Delaware, or if such court does not have jurisdiction or will not accept jurisdiction, in any court of general jurisdiction in New Castle County, Delaware, (ii) consents to the sole and exclusive jurisdiction and venue of such court in any such proceeding, and (iii) waives any objection to the laying of venue of any such proceeding in any such court. The Grantee also irrevocably and unconditionally consents to the service of any process, pleadings, notices, or other papers.
(h)
The Grantee acknowledges and agrees that in the event the Grantee breaches any of the covenants or agreements contained in this Section 7 or the Grantee’s employment is terminated by the Company or an Affiliate for Cause, including a determination by the Committee that the Grantee has engaged in any activity, at any time, that would be grounds for termination of the Grantee’s employment for Cause:

(i) The Committee may in its discretion determine that the Grantee shall forfeit the outstanding Restricted Stock Units (without regard to whether the Restricted Stock Units have vested, except as to the vested shares where forfeiture of vested shares is expressly prohibited by law), and the outstanding Restricted Stock Units shall immediately terminate, and

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(ii) The Committee may in its discretion require the Grantee to return to the Company any shares of Common Stock received in settlement of the Restricted Stock Units; provided, that if the Grantee has disposed of any shares of Common Stock received upon settlement of the Restricted Stock Units, then the Committee may require the Grantee to pay to the Company, in cash, the Fair Market Value of such shares of Common Stock as of the date of disposition. The Committee shall exercise the right of recoupment provided in this subsection (h)(ii) within (x) 180 days after the Committee’s discovery of the Grantee’s breach of any of the covenants or agreements contained in this Section 7, or (y) within 180 days after the later of (A) the Grantee’s termination of employment by the Company or an Affiliate for Cause, or (B) the Committee’s discovery of circumstances that, if known to the Committee, would have been grounds for termination for Cause; provided, however, that this right of recoupment shall not limit the Board’s recoupment authority under any applicable clawback or recoupment policy of the Board.

(i)
Each provision of this Section 7 shall be deemed to be a separate and independent provision. If any portion of the covenants or agreements contained in this Section 7, the specific forfeiture provisions related to vested shares, or the application thereof, is construed to be invalid or unenforceable, the other portions of such covenants or agreements or the application thereof shall not be affected and shall be given full force and effect without regard to the invalid or unenforceable portions to the fullest extent possible. If any covenant or agreement in this Section 7 is held to be unenforceable because of the duration thereof or the scope thereof, then the court making such determination shall have the power to reduce the duration and limit the scope thereof, and the covenant or agreement shall then be enforceable in its reduced form. The covenants and agreements contained in this Section 7 shall survive the termination of the Grantee’s employment with the Company or any of its Affiliates and shall survive the termination of these Terms and Conditions.
(j)
Nothing in these Terms and Conditions, including any restrictions on the use of Confidential Information and Trade Secrets, shall prohibit or restrict the Grantee from initiating communications directly with, responding to any inquiry from, providing testimony before, providing confidential information to, reporting possible violations of law or regulation to, or filing a claim or assisting with an investigation directly with a self-regulatory organization or a government agency or entity, including the Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, Congress, any agency Inspector General or any other federal, state or local regulatory authority, or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation. Nor do these Terms and Conditions require the Grantee to obtain prior authorization from the Company before engaging in any conduct described in this subsection (j), or to notify the Company that the Grantee has engaged in any such conduct. To the extent permitted by law and except as provided above in this subsection (j), upon receipt of any subpoena, court order, or other legal process compelling the disclosure of Confidential Information and Trade Secrets, the Grantee agrees to give prompt written notice to the Company so as to permit the Company to protect its interests in confidentiality to the fullest extent possible. Please take notice that federal law provides criminal and civil immunity to federal and state claims for trade secret misappropriation to individuals who disclose a trade secret to their attorney, a court, or a government official in certain, confidential circumstances that are set forth at 18 U.S.C. §§ 1833(b)(1) and 1833(b)(2), related to the reporting or investigation of a suspected violation of the law, or in connection with a lawsuit for retaliation for reporting a suspected violation of the law.

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Nothing in these Terms and Conditions prevents California or Washington employees from discussing or disclosing information about unlawful acts, such as harassment or discrimination or any other conduct that they have reason to believe is unlawful. Moreover, nothing in this Section 7 or these Terms and Conditions generally is intended to limit the exercise of Employee’s rights under Section 7 of the National Labor Relations Act (“NLRA”) including communicating with others regarding Employee’s terms and conditions of employment.
(k)
Nothing in these Terms and Conditions shall be deemed to constitute the grant of any license or other right to the Grantee in respect of any Confidential Information and Trade Secrets or other data, tangible property, or intellectual property of the Company or any of its Affiliates.
(l)
Notwithstanding the foregoing, should the Grantee violate any of the restrictive covenants of these Terms and Conditions, then the period of the Grantee’s breach of such covenant (“Violation Period”) shall stop the running of the corresponding Restricted Period. Once the Grantee resumes compliance with the restrictive covenant, the Restricted Period applicable to such covenant shall be extended for a period equal to the Violation Period so that the Company enjoys the full benefit of the Grantee’s compliance with the restrictive covenant for the duration of the corresponding Restricted Period.
(m)
In the event of a conflict between the terms of the confidentiality, non-competition or non-solicitation covenants in this Section 7 and a confidentiality, non-competition or non-solicitation covenant in a prior stock option, restricted stock unit or other equity grant agreement between the Grantee and the Company, the confidentiality, non-competition and non-solicitation covenants in this Section 7 shall control as of the Grant Date.
8.
No Stockholder Rights.

The Grantee has no voting rights and no other ownership rights and privileges of a stockholder with respect to the shares of Common Stock subject to the Restricted Stock Units, except as otherwise provided in Section 4.

9.
Retention Rights.

Neither the award of Restricted Stock Units, nor any other action taken with respect to the Restricted Stock Units, shall confer upon the Grantee any right to continue in the employ or service of the Company or a Subsidiary or shall interfere in any way with the right of the Company or a Subsidiary to terminate Grantee’s employment or service at any time.

10.
Cancellation or Amendment.

This award may be canceled or amended by the Committee, in whole or in part, in accordance with the applicable terms of the Plan.

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11.
Notice.

Any notice to the Company provided for in these Terms and Conditions shall be addressed to it in care of the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, PA 19087, and any notice to the Grantee shall be addressed to such Grantee at the current address shown on the payroll system of the Company or a Subsidiary thereof, or to such other address as the Grantee may designate to the Company in writing. Any notice provided for hereunder shall be delivered by hand, sent by telecopy or electronic mail, or enclosed in a properly sealed envelope addressed as stated above, registered and deposited, postage and registry fee prepaid in the United States mail, or other mail delivery service. Notice to the Company shall be deemed effective upon receipt. By receipt of these Terms and Conditions, the Grantee hereby consents to the delivery of information (including without limitation, information required to be delivered to the Grantee pursuant to the applicable securities laws) regarding the Company, the Plan, and the Restricted Stock Units via the Company’s electronic mail system or other electronic delivery system.

12.
Incorporation of Plan by Reference.

These Terms and Conditions are made pursuant to the terms of the Plan, the terms of which are incorporated herein by reference, and shall in all respects be interpreted in accordance therewith. The decisions of the Committee shall be conclusive upon any question arising hereunder. The Grantee’s receipt of the Restricted Stock Units awarded under these Terms and Conditions constitutes such Grantee’s acknowledgment that all decisions and determinations of the Committee with respect to the Plan, these Terms and Conditions, and/or the Restricted Stock Units shall be final and binding on the Grantee, the Grantee’s beneficiaries, and any other person having or claiming an interest in such Restricted Stock Units. The settlement of any award with respect to Restricted Stock Units is subject to the provisions of the Plan and to interpretations, regulations, and determinations concerning the Plan as established from time to time by the Committee in accordance with the provisions of the Plan. A copy of the Plan will be furnished to each Grantee upon request. Additional copies may be obtained from the Corporate Secretary of the Company, 550 East Swedesford Road, Suite 350, Wayne, PA 19087.

13.
Income Taxes; Withholding Taxes.

The Grantee is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the Restricted Stock Units pursuant to these Terms and Conditions. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Restricted Stock Units, including by withholding shares of the Company’s Common Stock to satisfy the federal (including FICA), state, local and foreign income and payroll tax withholding obligation on amounts payable in shares, in accordance with procedures authorized by the Committee and established by the Company.

14.
Governing Law.

Where permissible by applicable law, the validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of Delaware, excluding any conflicts or choice of law rule or principle.

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15.
Advice to Consult Counsel.

The Company advises the Grantee to consult with an attorney before signing these Terms and Conditions. The Grantee represents and warrants that the Grantee has obtained independent legal advice from an attorney of the Grantee’s own choice with respect to these Terms and Conditions and their Section 7 (Restrictive Covenants) or the Grantee has knowingly and voluntarily chosen not to do so.

 

16.
Grant Subject to Applicable Laws and Company Policies.

These Terms and Conditions shall be subject to any required approvals by any governmental or regulatory agencies. This award of Restricted Stock Units shall also be subject to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding anything in these Terms and Conditions to the contrary, the Plan, these Terms and Conditions, and the Restricted Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify these Terms and Conditions and the Restricted Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Restricted Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.

17.
Assignment.

These Terms and Conditions shall bind and inure to the benefit of the successors and assignees of the Company. The Grantee may not sell, assign, transfer, pledge, or otherwise dispose of the Restricted Stock Units, except to a Successor Grantee in the event of the Grantee’s death.

18.
Section 409A.

This award of Restricted Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in these Terms and Conditions to the contrary, if the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and the Restricted Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Restricted Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a “specified employee” as defined under section 409A of the Code (as determined by the Committee), if required pursuant to section 409A of the Code.

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If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this award of Restricted Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of these Terms and Conditions would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Restricted Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall the Grantee, directly or indirectly, designate the calendar year of payment. If the Restricted Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Restricted Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

 

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

RADIAN GROUP INC.

By: /s/ Mary Dickerson

Name: Mary Dickerson

Title: Senior Executive Vice President, Chief People and Operating Officer

 

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

 

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EX-31 6 rdn-ex31.htm EX-31 EX-31

EXHIBIT 31

CERTIFICATIONS

I, Richard G. Thornberry, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Radian Group Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 1, 2025

/s/ RICHARD G. THORNBERRY

 

Richard G. Thornberry
Chief Executive Officer

 

I, Sumita Pandit, certify that:

1.
I have reviewed this Quarterly Report on Form 10-Q of Radian Group Inc.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

 

Date: August 1, 2025

/s/ SUMITA PANDIT

 

Sumita Pandit
President and Chief Financial Officer

 
EX-32 7 rdn-ex32.htm EX-32 EX-32

EXHIBIT 32

Section 1350 Certifications

I, Richard G. Thornberry, Chief Executive Officer of Radian Group Inc., and I, Sumita Pandit, President and Chief Financial Officer of Radian Group Inc., certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) the Quarterly Report on Form 10-Q for the quarter ended June 30, 2025 (the “Periodic Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

(2) the information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of Radian Group Inc.

 

 

 

Date: August 1, 2025

/s/ RICHARD G. THORNBERRY

 

Richard G. Thornberry
Chief Executive Officer

 

 

Date: August 1, 2025

/s/ SUMITA PANDIT

 

Sumita Pandit
President and Chief Financial Officer