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What changed in RADIAN GROUP INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of RADIAN GROUP INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+956 added−694 removedSource: 10-K (2025-02-14) vs 10-K (2024-02-23)

Top changes in RADIAN GROUP INC's 2024 10-K

956 paragraphs added · 694 removed · 475 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

258 edited+429 added−107 removed160 unchanged
Biggest changeKey Accomplishments for 2023 ■ Delivered strong financial results, driven by continued favorable credit performance in our Mortgage Insurance segment, while executing upon our long-term strategy ▪ Earned consolidated pretax income of $767 million and net income of $603 million, or $3.77 net income per diluted share, in 2023, compared to consolidated pretax income of $953 million and net income of $743 million, or $4.35 net income per diluted share, in 2022, impacted by a reduction in the benefit from our provision for losses from $338 million in 2022 to $43 million in 2023 ▪ Adjusted pretax operating income (1) was $786 million, or $3.88 per diluted share, in 2023, compared to $1.1 billion, or $4.87 per diluted share, in 2022 ▪ Wrote $52.7 billion of NIW, contributing to an increase in our IIF from $261.0 billion at December 31, 2022, to $270.0 billion at December 31, 2023 ■ Maintained a strong risk culture, as demonstrated by ongoing risk distribution strategies, disciplined and granular risk-based pricing and strategic use of data and analytics to inform decision making ▪ Continued to monitor and grow the economic value of our insured mortgage portfolio by leveraging granular, risk-adjusted pricing and new technologies to identify strategies to maximize the economic value of NIW ▪ Entered into the 2023 QSR Agreement with a panel of third-party reinsurance providers to cede a portion of our NIW from July 2023 through June 2024 ▪ Entered into two excess-of-loss reinsurance transactions, one with Eagle Re 2023-1 Ltd. and the other with a panel of third-party reinsurance providers, that collectively provide Radian Guaranty with approximately $600 million of additional credit-risk protection, enhancing our PMIERs Cushion and improving our risk profile ▪ Continued to enhance our risk analytics, including customer and servicer segmentation, loss mitigation reporting, servicer dashboards and underwriting surveillance ■ Further strengthened our capital and liquidity profile, while enhancing financial flexibility and returning value to stockholders ▪ Repurchased 5.3 million shares in 2023 at an average share price of $25.32, including commissions ▪ Increased our quarterly cash dividend by 13% from $0.20 to $0.225 per share, beginning with the dividend declared in the first quarter of 2023 ▪ Increased PMIERs Cushion from $1.7 billion at December 31, 2022, to $2.3 billion at December 31, 2023 ▪ Increased available holding company liquidity from $903 million at December 31, 2022, to $992 million at December 31, 2023 ▪ Radian Guaranty paid $400 million in ordinary dividends to Radian Group in 2023 ▪ In June 2023, Eagle Re 2019-1 Ltd. and Eagle Re 2020-1 Ltd. conducted tender offers to purchase the mortgage insurance-linked notes that supported their reinsurance agreements with Radian Guaranty, which is expected to provide Radian Guaranty with significant savings over time as a result of the tender offers and termination of the corresponding portion of the reinsurance agreements. ■ Continued to prioritize the well-being and development of our people by promoting initiatives to increase inclusiveness and diversity and fostering a workplace that ensures that our employees can work in an agile manner that attracts and retains top talent ▪ Evolved our hybrid working model to ensure both flexibility and meaningful connections for our workforce that is proving to be attractive to current and prospective employees, as reflected by a low voluntary turnover rate in 2023 as well as strong participation and scores in our employee engagement surveys ▪ Completed annual talent reviews and succession planning for leaders throughout the Company to ensure development of our people and resiliency in our bench talent (1) Adjusted pretax operating income is a non-GAAP measure.
Biggest changeBusiness Key Accomplishments for 2024 ▪ Delivered strong financial results, driven by continued favorable credit performance in our Mortgage Insurance segment, while executing upon our long-term strategy ▪ Earned consolidated pretax income of $771 million and net income of $604 million, or $3.92 net income per diluted share, in 2024, compared to consolidated pretax income of $767 million and net income of $603 million, or $3.77 net income per diluted share, in 2023 ▪ Adjusted pretax operating income (1) was $803 million, in 2024, compared to $786 million in 2023, resulting in adjusted diluted net operating income per share of $4.11 for 2024, compared to $3.88 for 2023 ▪ Wrote $52.0 billion of NIW, contributing to an increase in our IIF from $270.0 billion at December 31, 2023, to $275.1 billion at December 31, 2024 ▪ Continued to grow our Mortgage Conduit business, purchasing $1.6 billion of residential mortgage loans and successfully completing Radian Mortgage Capital’s first two private label prime jumbo securitization transactions ▪ Maintained a strong risk culture, as demonstrated by ongoing risk distribution strategies, disciplined and risk-based pricing and strategic use of data and analytics to inform decision making ▪ Continued to monitor and grow the economic value of our insured mortgage portfolio by leveraging risk-adjusted pricing and new analytical approaches to identify strategies to maximize the economic value of NIW ▪ Entered into the 2024 QSR Agreement with a panel of third-party reinsurance providers to cede a portion of our NIW from July 2024 through June 2025 ▪ Further strengthened our capital and liquidity profile, while enhancing financial flexibility and returning value to stockholders ▪ Reduced our holding company debt-to-capital ratio to 18.7% at December 31, 2024, compared to 24.4% at December 31, 2023, primarily through a series of transactions that included the issuance of $625 million aggregate principal amount of 6.200% investment-grade Senior Notes due May 2029 and the redemption of $975 million aggregate principal amount of notes maturing in 2024 and 2025 ▪ Repurchased 7.0 million shares in 2024 at an average share price of $31.81, including commissions, totaling $224 million ▪ Increased our quarterly cash dividend by 9% from $0.225 to $0.245 per share, beginning with the dividend declared in the first quarter of 2024 ▪ Continued to maintain significant available holding company liquidity of $885 million at December 31, 2024, compared to $992 million at December 31, 2023 ▪ Increased Radian Guaranty’s ordinary dividends paid to Radian Group to $675 million in 2024, compared to $400 million paid in 2023 ▪ Maintained a sizable PMIERs Cushion at Radian Guaranty of $2.2 billion at December 31, 2024, compared to $2.3 billion at December 31, 2023 ▪ Continued to prioritize the well-being and development of our people by fostering a workplace that allows our employees to work in an agile manner, while maintaining meaningful connections, allowing us to attract and retain top talent (1) Adjusted pretax operating income is a non-GAAP measure.
Although we may make a final determination internally with respect to a Rescission, it is possible that a legal challenge to our decision to rescind coverage may be brought after we have rescinded coverage during a period of time that is specified under the terms of our Master Policies.
Although we may make a final determination internally with respect to a Rescission, it is possible that a legal challenge to our decision to rescind coverage may be brought during a period of time after we have rescinded coverage that is specified under the terms of our Master Policies.
Privacy The State of California has adopted the California Consumer Privacy Act (“CCPA”) that applies to any company that does business in California and meets certain threshold requirements. We believe Radian Group and certain of its affiliates, including Radian Guaranty, may be deemed covered businesses under the CCPA.
Business Privacy The State of California has adopted the California Consumer Privacy Act (“CCPA”) that applies to any company that does business in California and meets certain threshold requirements. We believe Radian Group and certain of its affiliates, including Radian Guaranty, may be deemed covered businesses under the CCPA.
Similarly, the Equal Credit Opportunity Act (“ECOA”) and Regulation B under ECOA make it unlawful for a creditor to discriminate in any aspect of a credit transaction against an applicant on a prohibited basis during any aspect of a consumer or business credit transaction or make any oral or written statement to applicants or prospective applicants that would discourage on a prohibited basis a reasonable person from making or pursuing an application.
Similarly, the Equal Credit Opportunity Act (“ECOA”) and Regulation B under ECOA make it unlawful for a creditor to discriminate in any aspect of a credit transaction against an applicant on a prohibited basis during any aspect of a consumer or business credit transaction or make any oral or written statement to applicants or prospective applicants that would discourage on a prohibited basis a reasonable person from making or pursuing an application for credit.
Integrated ERM Framework We have adopted an integrated approach to risk management, which includes, among other things: (i) a centralized ERM function that is responsible for overseeing the process for risk identification, assessment, management and mitigation across the organization; (ii) an enterprise compliance function for overseeing regulatory compliance matters, policy governance and related risks; (iii) risk management functions embedded in our businesses; (iv) specialized risk committees with a focus on specific risks; and (v) an internal audit function that performs periodic, independent reviews and tests compliance with risk management policies, procedures and standards across the Company.
We have adopted an integrated approach to risk management, which includes, among other things: (i) a centralized ERM function that is responsible for overseeing the process for risk identification, assessment, management, and mitigation across the organization; (ii) an enterprise compliance function for overseeing regulatory compliance matters, policy governance and related risks; (iii) risk management functions embedded in our businesses; (iv) specialized risk committees with a focus on specific risks; and (v) an internal audit function that performs periodic, independent reviews and tests compliance with risk management policies, procedures and standards across the Company.
The regulations, which recently were amended in November 2023, require covered entities to, among other things: establish a cybersecurity program; adopt a written cybersecurity policy; designate a Chief Information Security Officer responsible for implementing, overseeing and enforcing the cybersecurity program and policy; and have policies and procedures designed to ensure the security of information systems and nonpublic information accessible to, or held by, third parties, along with a variety of other requirements to protect the confidentiality, integrity and availability of information systems.
The regulations, which were amended in November 2023, require covered entities to, among other things: establish a cybersecurity program; adopt a written cybersecurity policy; designate a Chief Information Security Officer responsible for implementing, overseeing and enforcing the cybersecurity program and policy; and have policies and procedures designed to ensure the security of information systems and nonpublic information accessible to, or held by, third parties, along with a variety of other requirements to protect the confidentiality, integrity and availability of information systems.
We also have the following alternative settlement options under our Master Policies: (i) Third-Party Sale/Approved Sale Option: Subject to any reduction provided for in our Master Policies, we may pay the claim amount (not to exceed the lender’s entire loss or our maximum liability under the Percentage Option) by taking into account the net proceeds received by the lender following an approved sale, including a “short sale” or “deed-in-lieu” transaction; (ii) Acquisition Option: Subject to any reduction provided for elsewhere in our Master Policies, we may pay the entire claim amount (as described above but without application of the coverage percentage) and acquire good and marketable title to the property; or (iii) Anticipated Loss Option: In certain circumstances, as outlined in our Master Policies, this claim settlement option is primarily based on the claim amount minus the net proceeds we reasonably anticipate would be generated if the property, in its original condition on the effective insurance commitment date, reasonable wear and tear excepted, were sold to a third party for fair market value.
We also have the following alternative settlement options under our Master Policies: (i) Third-Party Sale/Approved Sale Option: Subject to any reduction provided for in our Master Policies, we may pay the claim amount (not to exceed the lender’s entire loss or our maximum liability under the Percentage Option) by taking into account the net proceeds received by the lender following an approved sale, including a “short sale” or “deed-in-lieu” transaction; (ii) Acquisition Option: Subject to any reduction provided for elsewhere in our Master Policies, we may pay the entire claim amount (as described above but without application of the coverage percentage) and acquire good and marketable title to the property; or (iii) Anticipated Loss Option: In certain circumstances, as outlined in our Master Policies, we may pay an amount primarily based on the claim amount minus the net proceeds we reasonably anticipate would be generated if the property, in its original condition on the effective insurance commitment date, reasonable wear and tear excepted, were sold to a third party for fair market value.
See Note 16 of Notes to Consolidated Financial Statements for more information on statutory capital requirements, including the NAIC’s recent approval in August 2023 of an amended Model Act for mortgage insurers that could be adopted through legislation in one or more states, and regardless of adoption, also could serve as the basis for how the NAIC updates the SAPs applicable to mortgage insurers.
See Note 16 of Notes to Consolidated Financial Statements for more information on statutory capital requirements, including the NAIC’s approval in August 2023 of an amended Model Act for mortgage insurers that could be adopted through legislation in one or more states, and regardless of adoption, also could serve as the basis for how the NAIC updates the SAPs applicable to mortgage insurers.
Business Internal investment policy guidelines NAIC Designation Ratings Equivalent Internal Policy 1 “A-” and above At least 75% of the portfolio Fair Value 2 “BBB+” to “BBB-” Not more than 25% of portfolio Fair Value 3 to 6 “BB+” and below Not more than 10% of portfolio Fair Value Our portfolio has been constructed to maximize long-term expected returns while maintaining an acceptable risk level.
Internal investment policy guidelines NAIC Designation Ratings Equivalent Internal Policy 1 “A-” and above At least 75% of the portfolio Fair Value 2 “BBB+” to “BBB-” Not more than 25% of portfolio Fair Value 3 to 6 “BB+” and below Not more than 10% of portfolio Fair Value Our portfolio has been constructed to maximize long-term expected returns while maintaining an acceptable risk level.
We have a dedicated loss mitigation group that works with servicers to identify and pursue loss mitigation opportunities for loans in both our performing and non-performing (defaulted) portfolios. This includes regular surveillance and benchmarking of servicer performance with respect to default and loss mitigation workout reporting, borrower home retention efforts, foreclosure alternatives and foreclosure proceedings.
We have a dedicated loss mitigation group that works with servicers to identify and pursue loss mitigation opportunities for loans in both our performing and non-performing portfolios. This includes regular surveillance and benchmarking of servicer performance with respect to default and loss mitigation workout reporting, borrower home retention efforts, foreclosure alternatives and foreclosure proceedings.
For new home purchases, loans subject to mortgage insurance typically are provided to first-time homeowners, and therefore, private mortgage insurance plays an important role by providing prospective first-time home buyers the opportunity to purchase their first home (and to begin to accumulate equity) without having to put down 20% of the value of the home at closing.
For new home purchases, loans subject to mortgage insurance typically are provided to first-time homeowners, and therefore, private mortgage insurance plays an important role by providing these prospective home buyers the opportunity to purchase their first home (and to begin to accumulate equity) without having to put down 20% of the value of the home at closing.
Higher interest rate environments generally decrease refinancings, which decrease the cancellation rate of our insurance and positively affect our Persistency Rates. See “Regulation—Federal Regulation—Mortgage Insurance Cancellation” for more information regarding cancellation and termination requirements for borrower-paid private mortgage insurance meeting certain criteria under the HPA.
Higher interest rate environments generally decrease mortgage loan refinancings, which decrease the cancellation rate of our insurance and positively affect our Persistency Rates. See “Regulation—Federal Regulation—Mortgage Insurance Cancellation” for more information regarding cancellation and termination requirements for borrower-paid private mortgage insurance meeting certain criteria under the HPA.
In “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” see “Overview—Current Operating Environment” and “Key Factors Affecting Our Results—Mortgage Insurance.” Our Mortgage Insurance business is subject to comprehensive regulation by state and federal regulatory authorities and the GSEs.
In “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations,” see “Overview of Business Operating Environment” and “Key Factors Affecting Our Results—Mortgage Insurance.” Our Mortgage Insurance business is subject to comprehensive regulation by state and federal regulatory authorities and the GSEs.
External managers are selected by management based primarily upon their ability to meet our investment goals and objectives, based upon factors such as historical returns and the stability of their management teams. Management’s selections of external managers are presented to, approved and monitored by the Finance and Investment Committee of our board of directors.
External managers are selected by management based primarily upon their ability to meet our investment goals and objectives, based upon factors such as historical returns and the quality and stability of their management teams. Management’s selections of external managers are presented to, approved and monitored by the Finance and Investment Committee of our board of directors.
Business Information Security The NYDFS has adopted cybersecurity regulations known as “Part 500” that apply to all financial institutions and insurance companies licensed under the New York Banking, Insurance, and Financial Services Laws, including Radian Guaranty and certain of our other subsidiaries.
Information Security The NYDFS has adopted cybersecurity regulations known as “Part 500” that apply to all financial institutions and insurance companies licensed under the New York Banking, Insurance, and Financial Services Laws, including Radian Guaranty and certain of our other subsidiaries.
Given the size and market influence of the GSEs, this new rule is generally viewed as important to ensure that the GSEs, as is specified in their charters, are not otherwise encroaching on areas that may be more appropriately served by private capital.
Given the size and market influence of the GSEs, this rule is generally viewed as important to ensure that, as specified in their charters, the GSEs are not otherwise encroaching on areas that may be more appropriately served by private capital.
For example, the FHA’s QM Safe Harbor definition currently applies to loans priced at or less than APOR plus the sum of 1.15% and the FHA’s annual mortgage insurance premium rate, which is effectively broader than the QM Safe Harbor adopted under the New General QM Definition.
For example, the FHA’s QM Safe Harbor definition currently applies to loans priced at or less than APOR plus the sum of 1.15% and the FHA’s annual mortgage insurance premium rate, which is effectively broader than the QM Safe Harbor adopted under the General QM Definition.
These alternate definitions of qualified mortgages are more favorable to lenders and mortgage holders than the CFPB’s New General QM Definition that apply to loans purchased by the GSEs, and could provide for more favorable execution for FHA insured loans compared to loans insured with private mortgage insurance.
These alternate definitions of qualified mortgages are more favorable to lenders and mortgage holders than the CFPB’s General QM Definition that apply to loans purchased by the GSEs, and could provide for more favorable execution for FHA insured loans compared to loans insured with private mortgage insurance.
Overall customer service competition in our mortgage insurance business is based on, among other things, effective and timely delivery of products, timeliness of claims payments, customer connectivity, timely and accurate administration of policies, training, loss mitigation efforts and management and field service expertise.
Overall customer service related competition in our Mortgage Insurance business is based on, among other things, effective and timely delivery of products, timeliness of claims payments, customer connectivity, timely and accurate administration of policies, training, loss mitigation efforts and management and field service expertise.
Risk Factors,” see “ If the estimates we use in establishing mortgage insurance loss reserves are incorrect, we may be required to take unexpected charges to income, which could adversely affect our results of operations . ” For Pool Mortgage Insurance, which represents less than 1% of our RIF at December 31, 2023, our policies typically require the insured to not only acquire title to the property, but also to actively market and ultimately liquidate the property before filing a claim, which generally lengthens the time between a default and a claim submission.
Risk Factors,” see “ If the estimates we use in establishing mortgage insurance loss reserves are incorrect, we may be required to take unexpected charges to income, which could adversely affect our results of operations . ” For Pool Mortgage Insurance, which represents less than 1% of our RIF at December 31, 2024, our policies typically require the insured to not only acquire title to the property, but also to actively market and ultimately liquidate the property before filing a claim, which generally lengthens the time between a default and a claim submission.
The Dodd-Frank Act also granted the FHA, VA and USDA flexibility to establish their own QM definitions for their insurance guaranty programs. Both the FHA and VA have created their own definitions of qualified mortgages that differ from both the CFPB’s original QM Definition and New General QM Definition.
The Dodd-Frank Act also granted the FHA, VA and USDA flexibility to establish their own QM definitions for their insurance guaranty programs. Both the FHA and VA have created their own definitions of qualified mortgages that differ from both the CFPB’s original QM Definition and General QM Definition.
Pursuant to the agreement, for the loans subject to the agreement, Radian Guaranty will determine the amount of covered expenses forming part of a loss (other than unpaid principal balance and delinquent interest) using agreed upon model-based expense factors.
For the loans subject to the agreement, Radian Guaranty will determine the amount of covered expenses forming part of a loss (other than unpaid principal balance and delinquent interest) using agreed upon model-based expense factors.
For securitizations that include mortgage loans which are not QRMs, securitizers are required to retain at least a 5% first-loss position, or a 5% pro rata share of all securities issued or a combination of a first-loss position and pro rata share for up to seven years.
For securitizations that include mortgage loans that are not QRMs, securitizers are required to retain at least a 5% first-loss position, or a 5% pro rata share of all securities issued or a combination of a first-loss position and pro rata share for up to seven years.
Our Pricing and Risk Committee, Capital and Liquidity Committee and Model Governance Committee (these committees collectively comprise our Asset Liability Committee) focus on identifying risks and decision making related to pricing, credit, capital, liquidity and model risk management, including risk/return analysis associated with different business opportunities.
Business Committee (these committees collectively comprise our Asset Liability Committee) focus on identifying risks and decision making related to pricing, credit, capital, liquidity and model risk management, including risk/return analysis associated with different business opportunities.
Mortgage insurance premiums can be funded through a number of methods, and while the coverage remains for the benefit of the insured lender or third-party beneficiary, the premiums may be paid by the borrower or by the lender.
Business Mortgage insurance premiums can be funded through a number of methods, and while the coverage remains for the benefit of the insured lender or third-party beneficiary, the premiums may be paid by the borrower or by the lender.
Through our delegated underwriting program, we approve lenders to underwrite mortgage loan insurance applications based on our mortgage insurance underwriting guidelines. Each lender participating in the delegated underwriting program must be approved by our risk management group.
Through our delegated underwriting program, we approve lenders to underwrite mortgage insurance applications based on our mortgage insurance underwriting guidelines. Each lender participating in the delegated underwriting program must be approved by our risk management group.
We also have the following mortgage insurance subsidiaries: Radian Insurance, a direct wholly owned subsidiary of Radian Group that is licensed in Pennsylvania and insures a small amount of second-lien mortgage loan risk written prior to the great financial crisis in 2008; and Radian Mortgage Assurance, a direct wholly owned subsidiary of Radian Group that has a license or its equivalent in all 50 states and the District of Columbia, but which had no RIF as of December 31, 2023.
We also have the following mortgage insurance subsidiaries: Radian Insurance, a direct wholly owned subsidiary of Radian Group that is licensed in Pennsylvania and insures a small amount of second-lien mortgage loan risk written prior to the great financial crisis in 2008; and Radian Mortgage Assurance, a direct wholly owned subsidiary of Radian Group that has a license or its equivalent in all 50 states and the District of Columbia, but which had no RIF as of December 31, 2024.
The performance of our Mortgage Insurance business is particularly influenced by macroeconomic conditions and specific events that impact the housing finance and real estate markets, including seasonal fluctuations and other events that impact mortgage originations and the credit performance of our mortgage insurance portfolio, most of which are beyond our control, such as housing prices, inflationary pressures, unemployment levels, interest rate changes, the availability of credit and other national and regional economic conditions.
The performance of our Mortgage Insurance business is particularly influenced by macroeconomic conditions and specific events that impact the housing finance and real estate markets, including seasonal fluctuations and other events that impact mortgage originations and the credit performance of our mortgage insurance portfolio, most of which are beyond our control, such as housing prices, inflationary pressures, unemployment levels, interest rate changes, the availability of credit, natural disasters and other national and regional economic conditions.
As part of this licensing and registration process, loan originators who are employees of institutions other than depository institutions or certain of their subsidiaries that, in each case, are regulated by a federal banking agency, must generally be licensed under the SAFE Act guidelines enacted by each state in which they engage in loan origination activities and registered with the Registry.
As part of the state licensing and registration process, mortgage loan originators who are employees of institutions other than depository institutions or certain of their subsidiaries that, in each case, are regulated by a federal banking agency, must generally be licensed under the SAFE Act guidelines enacted by each state in which they engage in loan origination activities and registered with the Registry.
The Ability to Repay Rule requires mortgage lenders to make a reasonable and good faith determination that, at the time a loan is consummated, the consumer has a reasonable ability to repay the loan.
Business The Ability to Repay Rule requires mortgage lenders to make a reasonable and good faith determination that, at the time a loan is consummated, the consumer has a reasonable ability to repay the loan.
Programs such as our talent development strategy, annual performance reviews that are focused in part on living our company values and succession planning are all important aspects of this investment. These processes help management identify and nurture top talent for leadership opportunities and support the growth and development of knowledge and skills of our employees, managers and leaders.
Programs such as our talent development strategy, annual performance reviews, which are focused in part on living our company values, and succession planning are all important aspects of this investment. These processes help management identify and nurture top talent for leadership opportunities and support the growth and development of knowledge and skills of our employees, managers and leaders.
In order to measure engagement and culture across the organization, we use employee experience surveys. In addition to our experience surveys, we typically use employee pulse surveys and focus groups to gather employee feedback.
To measure engagement and culture across the organization, we use employee experience surveys. In addition to our experience surveys, we typically use employee pulse surveys and focus groups to gather employee feedback.
In October 2022, the FHFA announced that the GSEs will 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.
Credit Score Models. In October 2022, the FHFA announced that the GSEs will 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.
Marketing and communications activities include direct marketing; print and digital advertising; digital marketing including email, web, content and social media; public relations and thought leadership; brand strategy and expression; event marketing including customer meetings, conferences and trade shows and other targeted initiatives designed to generate new sales opportunities, drive customer adoption of our services and retain our existing customers.
Marketing and communications activities include direct marketing; advertising; digital marketing including email, content, and social media; public relations and thought leadership; brand strategy and expression; event marketing including customer meetings, conferences and trade shows and other targeted initiatives designed to generate new sales opportunities, drive customer adoption of our services and retain our existing customers.
Business Mortgage Insurance Overview Private mortgage insurance plays an important role in the U.S. housing finance system because it promotes affordable homeownership, while helping to protect mortgage lenders, investors and the GSEs, who are the primary beneficiaries of our mortgage insurance, by mitigating default-related losses on residential mortgage loans.
Business Mortgage Insurance Overview Private mortgage insurance plays an important role in the U.S. housing finance system because it supports affordable homeownership, while helping to protect mortgage lenders, investors and the GSEs, who are the primary beneficiaries of our mortgage insurance, by mitigating default-related losses on residential mortgage loans.
Following the onset of the COVID-19 pandemic, the average time for us to receive a claim increased as a result of COVID-19-related relief programs discussed above, along with temporary foreclosure and eviction moratoriums for residential mortgagors with certain federally or GSE-backed mortgages that were required under the CARES Act.
Following the onset of the COVID-19 pandemic, the average time for us to receive a claim increased as a result of COVID-19-related relief programs, along with temporary foreclosure and eviction moratoriums for residential mortgagors with certain federally or GSE-backed mortgages that were required under the CARES Act.
While this pricing change did not have a material impact on our NIW volumes, the FHA could institute further pricing changes in the future, including additional changes to its annual premiums, a reduction in its upfront premiums and/or the elimination of the life-of-loan premium requirement for most FHA insured loans.
While this pricing change did not have a material impact on our NIW volumes in 2023 or 2024, the FHA could institute further pricing changes in the future, including additional changes to its annual premiums, a reduction in its upfront premiums and/or the elimination of the life-of-loan premium requirement for most FHA insured loans.
One of these new QM definitions (the “New General QM Definition”) adopts a pricing-based approach to QM. Under the New General QM Definition, certain underwriting considerations are retained, but QM status generally is achieved if the loan is priced at no greater than 2.25% above the Average Prime Offer Rate (“APOR”).
One of these new QM definitions (the “General QM Definition”) adopts a pricing-based approach to QM. Under the General QM Definition, certain underwriting considerations are retained, but QM status generally is achieved if the loan is priced at no greater than 2.25% above the Average Prime Offer Rate (“APOR”).
In practice, our ERM function represents a cross-functional and enterprise-wide effort, consisting of subject matter experts and experienced managers, that utilizes a systematic method to identify, evaluate and monitor both known and emerging risks. Risk assessments and mitigation plans are developed to address these risks.
In practice, our ERM function represents a cross-functional and enterprise-wide effort, consisting of subject matter experts and experienced managers, which utilizes a systematic method to identify, evaluate, and monitor both known and emerging risks. Risk assessments and mitigation plans are developed to address these risks.
For information regarding the NYDFS’ cybersecurity regulations and the California Consumer Privacy Act, under “State Regulation” above, see “Information Security” and “Privacy.” Fair Lending and Fair Servicing The federal Fair Housing Act, part of the Civil Rights Act of 1968, makes it unlawful for any person whose business includes engaging in residential real estate-related transactions to: (i) discriminate in housing-related lending activities against any person on a prohibited basis or (ii) for any person to discriminate in the sale or rental of housing “or in the provision of services or facilities in connection therewith,” to any person because of a prohibited basis, such as race, national origin, familial status, sex, disability or religion.
For information regarding the NYDFS’ cybersecurity regulations and the CCPA, under “State Regulation” above, see “Information Security” and “Privacy.” Fair Lending and Fair Servicing The federal Fair Housing Act, part of the Civil Rights Act of 1968, makes it unlawful: (i) for any person whose business includes engaging in residential real estate-related transactions to discriminate in housing-related lending activities against any person on a prohibited basis, such as race, national origin, familial status, sex, disability or religion or (ii) for any person to discriminate in the sale or rental of housing “or in the provision of services or facilities in connection therewith,” to any person because of a prohibited basis.
The program consists of three pillars: charitable contributions, matching gifts and community connection. Charitable contributions include donations made by Radian to non-profit organizations, including direct corporate contributions and sponsorship of charitable events. In 2023, we provided financial support to community organizations through direct giving, sponsorships, and fundraisers.
The program consists of three pillars: charitable contributions, matching gifts and community connection. Charitable contributions include donations made by Radian to non-profit organizations, including direct corporate contributions and sponsorship of charitable events. In 2024, we provided financial support to community organizations through direct giving, sponsorships, and fundraisers.
Utilization of our delegated underwriting program enables us to meet lenders’ demands for immediate decisions on mortgage insurance coverage and increases the efficiency of their underwriting process. We use quality control sampling and performance monitoring to manage the risks associated with delegated underwriting.
Use of our delegated underwriting program enables us to meet lenders’ demands for immediate decisions on mortgage insurance coverage and increases the efficiency of their underwriting process. We employ quality control sampling and performance monitoring to manage the risks associated with delegated underwriting.
For more information regarding the New General QM Definition and the risks it may present for us, in “Item 1A.
For more information regarding the General QM Definition and the risks it may present for us, in “Item 1A.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage Insurance—NIW and Related Drivers . ” In February 2023, the FHA reduced its annual mortgage insurance premium by 0.30% for most new borrowers.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Factors Affecting Our Results—Mortgage Insurance—NIW . ” In February 2023, the FHA reduced its annual mortgage insurance premium by 0.30% for most new borrowers.
GSE Requirements for Mortgage Insurance Eligibility As the largest purchasers of conventional mortgage loans, and therefore the main beneficiaries of private mortgage insurance, the GSEs impose eligibility requirements that private mortgage insurers must satisfy in order to be approved to insure loans purchased by the GSEs.
Federal Regulation GSE Requirements for Mortgage Insurance Eligibility As the largest purchasers of conventional mortgage loans, and therefore the main beneficiaries of private mortgage insurance, the GSEs impose eligibility requirements that private mortgage insurers must satisfy in order to be approved to insure loans purchased by the GSEs.
As a mortgage insurer, credit scores are utilized in several areas of Radian Guaranty’s operations and adoption of the new credit scores will require planning and analysis to, among other things, understand how these scores calibrate to Radian Guaranty’s credit risk models.
As a mortgage insurer, credit scores are used in several areas of Radian Guaranty’s operations and adoption of the new credit scores will require planning and analysis to, among other things, understand how these scores calibrate to Radian Guaranty’s credit risk models.
We value our employees by supporting a healthy work-life balance and a team-oriented, “One Radian” environment. We strive to offer competitive compensation and benefits programs as well as career development opportunities, while fostering a community where everyone feels included and empowered to do their best work and is encouraged to give back to their communities to make a social impact.
We value our employees by supporting a healthy work-life balance and a team-oriented environment. We strive to offer competitive compensation and benefits programs as well as career development opportunities, while fostering a community where everyone feels included and empowered to do their best work and is encouraged to give back to their communities to make a positive social impact.
With the increased prevalence of granular, “black box” pricing and the greater uniformity of master policy terms throughout the industry, pricing has become the predominant competitive market factor for private mortgage insurance, and an increasing number of customers are making their choice of mortgage insurance providers primarily based on the lowest price available for any particular loan.
With the increased prevalence of granular, “black box” pricing and the greater uniformity of master policy terms throughout the industry, pricing has become the predominant competitive market factor for private mortgage insurance, and an increasing number of customers are making their choice of mortgage insurance providers primarily based on the lowest price available for any particular loan. In “Item 1A.
The CCPA imposes a privacy framework for covered businesses that collect, sell or disclose personal information of California residents. Companies subject to the CCPA are required to establish procedures to enable them to comply with a California resident’s data privacy rights, including by disclosing the privacy practices of the entity and responding to verified requests within prescribed timeframes.
The CCPA imposes a privacy framework for covered businesses that collect, sell or disclose personal information of California residents. Companies subject to the CCPA are required to establish procedures to enable them to comply with a California resident’s data privacy rights, including by disclosing the privacy practices of the entity and responding to verified requests within prescribed time frames.
In addition to the laws and regulations discussed elsewhere in this Regulation section, these laws may include: ■ The Truth in Lending Act and Regulation Z, requiring disclosures of mortgage loan costs and other notices to consumers, prohibiting certain compensation to loan originators, steering and other loan origination practices, establishing a number of requirements for mortgage servicers and imposing requirements on loan owners for loan ownership transfers; ■ The Fair Debt Collection Practices Act, regulating debt collection communications and other activities; ■ Prohibition on Unfair, Deceptive or Abusive Acts or Practices, prohibiting unfair, deceptive or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service; ■ CAN-SPAM Act, regulating commercial and marketing email, including the right of recipients to have the sender stop sending emails; ■ The Telephone Consumer Protection Act and Do Not Call regulations, regulating and restricts certain marketing-related phone calls, text messages and facsimiles; and ■ Electronic Signatures in Global and National Commerce Act (E-Sign Act), allowing the use of electronic records to satisfy requirements that must be provided in writing if the consumer has affirmatively consented. 42 Table of Contents Glossary Part I.
In addition to the laws and regulations discussed elsewhere in this Regulation section, these laws may include: ▪ The Truth in Lending Act and Regulation Z, requiring disclosures of mortgage loan costs and other notices to consumers, prohibiting certain compensation to loan originators, steering and other loan origination practices, establishing a number of requirements for mortgage servicers and imposing requirements on loan owners for loan ownership transfers; ▪ The Fair Debt Collection Practices Act, regulating debt collection communications and other activities; ▪ Prohibition on Unfair, Deceptive or Abusive Acts or Practices, prohibiting unfair, deceptive or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service; ▪ CAN-SPAM Act, regulating commercial and marketing email, including the right of recipients to have the sender stop sending emails; ▪ The Telephone Consumer Protection Act and Do Not Call regulations, regulating and restricting certain marketing-related phone calls, text messages and facsimiles; and ▪ Electronic Signatures in Global and National Commerce Act (E-Sign Act), allowing the use of electronic records to satisfy requirements that must be provided in writing if the consumer has affirmatively consented.
Although we could seek post-claim recoveries from the beneficiaries of our Master Policies if we later determine that a claim was not valid, because our loss mitigation process is designed to ensure compliance with our Master Policies prior to payment of a claim, historically, we have not sought recoveries from the beneficiaries of our Master Policies once a claim payment has been made.
Although we could seek post-claim recoveries from the beneficiaries of our Master Policies if we later determine that a claim was not valid, because our loss mitigation process is designed to ensure compliance with our Master Policies prior to payment of a claim, historically, we have not sought recoveries from the beneficiaries of our Master Policies once a claim payment has been made. 23 Part I.
After a claim is received, our loss management specialists may focus on: ■ a review to determine compliance with applicable loan origination programs and our Master Policy requirements, including: (i) whether the loan qualified for insurance at the time the certificate of coverage (i.e., policy) was issued; (ii) whether the insured has satisfied its obligation in meeting all necessary conditions in order for us to pay a claim, including submitting all necessary documentation in connection with the claim (commonly referred to as “claim perfection”); and (iii) whether the loan was appropriately serviced in accordance with the standards set forth in our Master Policies; ■ analysis and prompt processing to ensure that valid claims are paid in an accurate and timely manner; ■ responses to loss mitigation opportunities presented by the insured and/or servicer; and ■ management and disposal of acquired real estate. 20 Table of Contents Glossary Part I.
After a claim is received, our loss management specialists focus on: ▪ a review to determine compliance with applicable loan origination programs and our Master Policy requirements, including: (i) whether the loan qualified for insurance at the time the certificate of coverage (i.e., policy) was issued; (ii) whether the insured has satisfied its obligation in meeting all necessary conditions for us to pay a claim, including submitting all necessary documentation in connection with the claim (commonly referred to as “claim perfection”); and (iii) whether the loan was appropriately serviced in accordance with the standards set forth in our Master Policies; ▪ analysis and prompt processing to ensure that valid claims are paid in an accurate and timely manner; ▪ responses to loss mitigation opportunities presented by the insured and/or servicer; and ▪ management and disposal of acquired real estate.
Risk Factors,” see “ A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our homegenius businesses. ” Qualified Residential Mortgage Regulations—Securitization Risk Retention Requirements The Dodd-Frank Act requires securitizers to retain at least 5% of the credit risk associated with mortgage loans that they transfer, sell or convey, unless the mortgage loans are qualified residential mortgages (“QRMs”) or are insured by the FHA, another federal agency or are backed by the GSEs while in conservatorship (the “QRM Rule”).
Risk Factors,” see “ A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business. ” Qualified Residential Mortgage Regulations—Securitization Risk Retention Requirements The Dodd-Frank Act requires the securitizers of loans to retain at least 5% of the credit risk associated with mortgage loans that they transfer, sell or convey in the securitization, unless the mortgage loans are qualified residential mortgages (“QRMs”) or are insured by the FHA, another federal agency or are backed by the GSEs while in conservatorship (the “QRM Rule”).
As a provider of products and services that support residential real estate transactions and the mortgage production and financing process, fair lending and servicing laws may impact the way we deliver or conduct our products and services, including in response to customer requirements.
As a provider of products and services that support residential real estate transactions and the mortgage production and financing process, fair lending and servicing laws may impact the way we deliver or conduct our products and services, including in response to our lender customers’ requirements.
Most often, a Claim Denial is the result of a servicer’s failure to provide the loan origination file or other critical servicing documents for review. If, after multiple requests by us, the loan origination file or other servicing documents are not provided to us, we generally deny the claim.
Most often, a Claim Denial is the result of a servicer’s failure to provide the loan origination file or other servicing documents critical for our assessment of the claim. If, after multiple requests by us, the loan origination file or other servicing documents are not provided to us, we generally deny the claim.
It is uncertain if and when the FHA may pursue any additional pricing or other actions and what form they may take; however, any change that would improve FHA execution compared to execution through the GSEs with private mortgage insurance could negatively impact our NIW volume. 24 Table of Contents Glossary Part I. Item 1.
It is uncertain if and when the FHA may pursue any additional pricing or other actions and what form they may take; however, any change that would improve FHA execution compared to execution through the GSEs with private mortgage insurance could negatively impact our NIW volume. 24 Part I. Item 1.
In addition to mortgage insurance provided by Radian Guaranty, our homegenius businesses offer an array of services to our customers, including real estate brokerage, valuation, hybrid appraisal, title and closing services, many of which may be considered settlement services for purposes of RESPA, and therefore, may be subject to the anti-referral fee, anti-kickback and required use provisions of RESPA.
In addition to mortgage insurance provided by Radian Guaranty, our other affiliates offer an array of services to our customers, including real estate brokerage, valuation, hybrid appraisal, title and closing services, many of which may be considered settlement services for purposes of RESPA, and therefore, may be subject to the anti-referral fee, anti-kickback and required use provisions of RESPA.
We also offer products where premiums are paid as a combination of an up-front premium at origination, plus a monthly installment. In addition, premiums may include a refundable component to be paid upon insurance cancellation.
We also offer products where premiums are paid as a combination of an up-front premium at origination, plus a monthly installment. In addition, with respect to certain products, premiums may include a refundable component to be paid upon insurance cancellation.
The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1, while in certain other RBC States, Radian Guaranty must satisfy a MPP Requirement. As of December 31, 2023, Radian Guaranty’s Risk-to-capital was 10.4 to 1, and Radian Guaranty was in compliance with all applicable Statutory RBC Requirements.
The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1, while in certain other RBC States, Radian Guaranty must satisfy a MPP Requirement. As of December 31, 2024, Radian Guaranty’s Risk-to-capital was 10.2 to 1, and Radian Guaranty was in compliance with all applicable Statutory RBC Requirements.
In 2017, the NAIC issued an Insurance Data Security Model Law, which was modelled after Part 500, and which several states have adopted.
In 2017, the NAIC issued an Insurance Data Security Model Law, which was modeled after Part 500, and which several states have adopted.
Based on publicly available information, the VA’s share of the total insured mortgage market was 22% in 2023, compared to 25% in 2022.
Based on publicly available information, the VA’s share of the total insured mortgage market was 25% in 2024, compared to 22% in 2023.
As of December 31, 2023, we internally managed 10% of the investment portfolio (the portion of the portfolio largely consisting of U.S. Treasury securities, money market funds, equities, mortgage insurance-linked notes and other mortgage related assets, and certain exchange-traded funds), with the remainder primarily managed by three external managers.
As of December 31, 2024, we internally managed 11% of the investment portfolio (the portion of the portfolio largely consisting of U.S. Treasury securities, money market funds, equities, mortgage insurance-linked notes and other mortgage related assets, and certain exchange-traded funds), with the remainder primarily managed by three external managers.
Item 1. Business Risk Categories Our risk appetite, or the amount of risk we are willing to take on in pursuit of value, is driven by our business strategy, which is established by executive management and overseen by our board of directors.
Our risk appetite, or the amount of risk we are willing to take on in pursuit of value, is driven by our business strategy, which is established by executive management and overseen by our board of directors.
For a discussion of these limited Rescission rights, see “Defaults and Claims—Claims Management— Rescissions. ” As of December 31, 2023 and 2022, 71% and 70%, respectively, of our total first-lien IIF had been underwritten on a delegated basis. Non-Delegated Underwriting. Approved lenders may submit mortgage loan applications to us so that we may perform the mortgage insurance underwriting.
For a discussion of these limited Rescission rights, see “Defaults and Claims—Claims Management— Rescissions. ” As of December 31, 2024 and 2023, 72% and 71%, respectively, of our total first-lien IIF had been underwritten on a delegated basis. Non-Delegated Underwriting. Approved lenders may submit mortgage insurance applications to us so that we may perform the mortgage insurance underwriting.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Mortgage Insurance Portfolio—Insurance and Risk in Force—Geographic Dispersion” for additional information about the geographic dispersion of our direct Primary Mortgage Insurance. In “Item 1A.
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Mortgage Insurance Portfolio Metrics—Insurance and Risk in Force—Geographic Dispersion” for additional information about the geographic dispersion of our direct Primary Mortgage Insurance. In “Item 1A.
Through our risk management function, we seek to hold servicers accountable for their performance and communicate to servicers identified best practices for servicer performance. See “Mortgage Insurance—Defaults and Claims—Claims Management” for more information. Risk Modeling.
Through our risk management function, we seek to hold servicers accountable for their performance and communicate to servicers identified best practices for servicer performance. See “Mortgage Insurance—Defaults and Claims—Claims Management” for more information. Quantitative Analytics.
Risk Factors” see “ Our mortgage insurance business faces intense competition. ” Underwriting Mortgage loan applications are underwritten to determine whether they are eligible for our mortgage insurance. We perform this function directly or, alternatively, we delegate to our approved lenders the ability to underwrite the mortgage loans on our behalf. Delegated Underwriting.
Risk Factors,” see “ Our Mortgage Insurance business faces intense competition. ” Underwriting Mortgage loan applications are underwritten to determine whether they are eligible for our mortgage insurance. We either perform this function directly or we delegate to approved lenders the ability to underwrite the mortgage loans on our behalf. Delegated Underwriting.
Radian Title Insurance had negative unassigned surplus of $9 million and $11 million at December 31, 2023 and 2022, respectively, and therefore was unable to pay ordinary dividends in 2023 and is currently unable to pay dividends or other ordinary distributions in 2024 without prior approval from the Ohio Department of Insurance.
Radian Title Insurance had negative unassigned surplus of $7 million and $9 million at December 31, 2024 and 2023, respectively, and therefore was unable to pay ordinary dividends in 2024 and is currently unable to pay dividends or other ordinary distributions in 2025 without prior approval from the Ohio Department of Insurance.
The following goals guide our strategy and actions as a risk management organization: ■ Embed and continually reinforce a disciplined, corporate-wide risk culture that utilizes an understanding of risk/return trade-offs to drive quality decisions and achieve long-term, through-the-cycle profitability; ■ Maintain credit, underwriting, pricing and risk/return disciplines based on sound data and analytics and continuous feedback throughout the organization; ■ Proactively monitor business, counterparty, economic, housing and regulatory trends to identify and mitigate emerging risks; ■ Continually refine analytical and technological capabilities, processes and systems to effectively identify, assess and manage risks; and ■ Develop and leverage tools and capabilities to inform and optimize capital allocation within our risk appetite in support of our corporate strategy. 27 Table of Contents Glossary Part I.
The following goals guide our strategy and actions as a risk management organization: ▪ Embed and continually reinforce a disciplined, corporate-wide risk culture that utilizes an understanding of risk/return trade-offs to drive quality decisions and achieve long-term, through-the-cycle profitability; ▪ Maintain credit, underwriting, pricing, and risk/return disciplines based on sound data and analytics and continuous feedback throughout the organization; ▪ Proactively monitor business, counterparty, economic, housing and compliance-related trends to identify and mitigate emerging risks; ▪ Continually refine analytical and technological capabilities, processes and systems to effectively identify, assess and manage risks; and ▪ Develop and leverage tools and capabilities to inform and optimize capital allocation within our risk appetite in support of our corporate strategy.
The stated intention of that model law is that if a covered insurance company is compliant with Part 500, it also would be in compliance with the NAIC Insurance Data Security Model Law, although states that adopt the Data Security Model Law can impose their own unique requirements.
The stated intention of that model law is that if a covered insurance company is compliant with Part 500, it also would be in compliance with the NAIC Insurance Data Security Model Law, although states that adopt the Data Security Model Law can impose their own unique requirements. 36 Part I. Item 1.
Primary Mortgage Insurance provides protection against mortgage defaults at a specified coverage percentage. When there is a valid claim under Primary Mortgage Insurance, our maximum liability typically is determined by multiplying the claim amount, which consists of the unpaid loan principal, plus past due interest and certain expenses associated with the default, by the coverage percentage.
Primary Mortgage Insurance provides protection against mortgage defaults at a specified coverage percentage. When there is a valid claim under Primary Mortgage Insurance, our maximum liability typically is determined by multiplying the claim amount, which consists of the unpaid loan principal, plus past due interest and certain expenses associated with the default, 16 Part I. Item 1.
There are many factors that influence the types of premiums we receive, including, among others: (i) the preference of customers with whom we do business and (ii) the relative premium levels we and our competitors set for the various forms of premiums offered.
There are many factors that influence the types of premiums we receive, including, among others: (i) the preference of customers with whom we do business and (ii) the relative premium levels we and our competitors set for the various forms of premiums offered. 17 Part I. Item 1.
Business and Analysis of Financial Condition and Results of Operations—Mortgage Insurance Portfolio—Insurance and Risk in Force” for additional information about the composition of our Primary RIF. We analyze our mortgage insurance portfolio in a number of ways to identify potential concentrations or imbalances in risk dispersion.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Mortgage Insurance Portfolio Metrics—Insurance and Risk in Force” for additional information about the composition of our Primary RIF. We analyze our mortgage insurance portfolio in a number of ways to identify potential concentrations or imbalances in risk dispersion.
The PMIERs contain extensive requirements related to the conduct and operations of our mortgage insurance business, including operational requirements in areas such as claim processing, loss mitigation, document retention, underwriting, quality control, reporting and monitoring, among others. Radian Guaranty currently is an approved mortgage insurer under the PMIERs.
The PMIERs contain extensive requirements related to the conduct and operations of our Mortgage Insurance business, including operational requirements in areas such as claim processing, loss mitigation, document retention, underwriting, quality control, reporting and monitoring, among others. Radian Guaranty currently is an 37 Part I. Item 1. Business approved mortgage insurer under the PMIERs.
As master servicer, Radian Mortgage Capital is subject to the mortgage loan servicing requirements under RESPA, including those relating to servicing transfers, responding to consumer information requests, resolution of notices of error, force-placed insurance, early intervention and continuity of contact with delinquent borrowers, loss mitigation, general servicing policies and procedures, escrow account maintenance and service provider oversight. 40 Table of Contents Glossary Part I.
As master servicer, Radian Mortgage Capital is subject to the mortgage loan servicing requirements under RESPA, including those relating to servicing transfers, responding to consumer information requests, resolution of notices of error, force-placed insurance, early intervention and continuity of contact with delinquent borrowers, loss mitigation, general servicing policies and procedures, escrow account maintenance and service provider oversight.
Further, in addition to the growing proliferation of “black box” pricing, industry pricing practices in recent years have also included an increased use of customized rate plans for certain customers, pursuant to which rates may be awarded to certain customers based on a number of factors for only a limited period of time.
Further, in addition to the widespread use of “black box” pricing, in recent years, mortgage insurance industry pricing practices have also included an increased use of customized rate plans for certain customers, pursuant to which rates may be awarded to certain customers based on a number of factors for only a limited period of time.
Radian currently has five active ERGs: TrueColors, which brings together our LGBTQIA+ employees and allies; Women Heard, as our women and women’s advocate group; Vibrant Crossroads, which highlights intersectionality and multiculturalism; Without Limits, which represents our commitment to Neurodiversity inclusion; and Radian Salutes, supporting veterans, military service members, and military dependents.
Radian currently has five active ERGs: TrueColors, which brings together our LGBTQIA+ employees and allies; Women Heard, as our women and women’s advocate group; Vibrant Crossroads, which highlights intersectionality and multiculturalism; Without Limits, which represents our commitment to Neurodiversity inclusion; and Radian Salutes, supporting veterans, military service members, and military dependents. 31 Part I. Item 1.
In 2020, we created a framework for and launched Radian’s Employee Resource Group (“ERG”) program, which is an important aspect of Radian’s DEI efforts because it not only creates inclusive communities where employees feel support, but it enriches our overall company culture.
In 2020, we created a framework for and launched Radian’s Employee Resource Group (“ERG”) program, which is an important aspect of Radian’s employee development and engagement efforts because it not only creates inclusive communities where employees feel supported, but it enriches our overall company culture.
We actively monitor our customer concentration and regularly engage in efforts to diversify our customer base; however, the increasing use of custom rate cards for individual lenders in the mortgage insurance marketplace has increased the likelihood that a significant portion of NIW volume generated in any given period may be attributable to one or more customers.
We actively monitor our customer concentration and regularly engage in efforts to diversify our customer base; however, the increasing use of custom rate cards for individual lenders in the mortgage insurance marketplace has increased the likelihood that a significant portion of NIW volume generated in any given period may be attributable to a relatively small number of customers.
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, and also offers other credit risk management solutions, including contract underwriting, to our customers.
We have 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, and also offers other credit risk management solutions, including contract underwriting, to our customers.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeDuring the reporting period, we were not impacted by any cybersecurity incidents that we believe are reasonably likely to materially affect our business strategy, results of operations, or financial condition. While the Information Security Program is reasonably designed to mitigate the risk of cybersecurity events, we cannot provide assurance that we will not be subject to a cybersecurity event.
Biggest changeWhile the Information Security Program is reasonably designed to mitigate the risk of cybersecurity events, we cannot provide assurance that we will not be subject to a cybersecurity event. In “Item 1A.
Our board of directors has ultimate oversight of cybersecurity risk, which it manages in coordination with our Risk Committee as part of our enterprise risk management program. The Risk Committee regularly reviews the Company’s enterprise risk management program and Information Security Program with management and reports to the board of directors.
Our board of directors has ultimate oversight of cybersecurity risk, which it manages in coordination with the Risk Committee of our board of directors as part of our enterprise risk management program. The Risk Committee regularly reviews the Company’s enterprise risk management program and Information Security Program with management and reports to the board of directors.
To maintain governance and oversight over the Information Security Program, we have established an Information Security Council and Executive Information Security Committee composed of our Chief Information Security Officer and colleagues with experience, education and ongoing training in information security, cybersecurity risk and information governance.
To further maintain governance and oversight over the Information Security Program, we have established an Information Security Council and Executive Information Security Committee composed of our Chief Information Security Officer and colleagues with experience, education and ongoing training in information security, cybersecurity risk and information governance.
The Information Security Program is built on a risk-based approach that identifies and prioritizes cyber threats based on their potential impact on our strategy, operations, and assets. This program extends across all business lines and encompasses written policies on cybersecurity.
The Information Security Program is built on a risk-based approach that identifies and prioritizes cyber threats based on their potential impact on our strategy, operations, and assets. This program is aligned with our enterprise risk management program, extends across business lines and encompasses written policies on cybersecurity.
In “Item 1A. Risk Factors,” see “ We could incur significant liability or reputational harm if the security of our information technology systems, or of our third-party vendors or service providers, is breached, including as result of a cyberattack, or we otherwise fail to protect confidential information, including personally identifiable information that we maintain .” 62 Table of Contents Glossary
Risk Factors,” see “ We could incur significant liability or reputational harm if the security of our information technology systems, or of our third-party vendors or service providers, is breached, including as result of a cyberattack, or we otherwise fail to protect confidential information, including personally identifiable information that we maintain .”
The Chief Information Security Officer reports directly to our General Counsel and presents at least annually to the Company’s full board of directors about the overall effectiveness of the Information Security Program, as well as quarterly to the Risk Committee of the Company’s board of directors.
The Chief Information Security Officer reports directly to our Chief Digital Officer and presents at least annually to the Company’s full board of directors about the overall effectiveness of the Information Security Program, as well as quarterly to the Risk Committee. Radian’s board of directors approves the written Information Security Policy and Information Security Program documents annually.
Radian’s board of directors approves the written Information Security Policy and Information Security Program documents annually. Collectively, these documents describe the structure, scope, organization and requirements of the Information Security Program, as well as the responsibility and authority of the Chief Information Security Officer.
Collectively, these documents describe the structure, scope, organization and requirements of the Information Security Program, as well as the responsibility and authority of the Chief Information Security Officer.
We also utilize both internal and external auditors to provide independent assessments of our Information Security Program. Cybersecurity incidents are reviewed at least quarterly by management, the appropriate executive committees and the board of directors or its committees.
We also utilize both internal and external auditors to provide independent assessments of our Information Security Program .
Added
In addition, our Chief Executive Officer receives regular updates from the Chief Information Security Officer, reviews reports of key developments involving our Information Security Program and meets with our Information Security team at least quarterly to review the readiness and effectiveness of our program.
Added
Cybersecurity incidents are reviewed at least quarterly by management, the appropriate executive committees and the board of directors or its committees. 69 During the reporting period, we were not impacted by any cybersecurity incidents that we believe are reasonably likely to materially affect our business strategy, results of operations, or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeSee Note 13 of Notes to Consolidated Financial Statements for additional information regarding our lease commitments.
Biggest changeWe believe our existing properties are suitable and adequate for their intended use. See Note 13 of Notes to Consolidated Financial Statements for additional information regarding our lease commitments.
Item 2. Properties In addition to leases of other properties and facilities to support our business operations, we currently lease approximately 30,000 square feet of office and storage space for our corporate headquarters, located at 550 East Swedesford Road, Suite 350, in Wayne, Pennsylvania. This property is used by both our reportable segments and our corporate functions.
Item 2. Properties In addition to leases of other properties and facilities to support our business operations, we currently lease approximately 30,000 square feet of office and storage space for our corporate headquarters, located at 550 East Swedesford Road, Suite 350, in Wayne, Pennsylvania. This property is used for our corporate functions and by certain of our businesses.
Removed
During 2021, in connection with our shift to a more flexible hybrid work environment following the onset of the COVID-19 pandemic, we made the decision to exit, and actively market for sublease, our former corporate headquarters comprised of 150,000 square feet of leased office and storage space at 1500 Market Street, West Tower, in Philadelphia, Pennsylvania.
Removed
We have entered into agreements to sublease some of the vacated office space and continue to actively market the remaining space for sublease. In the future, we may choose to enter into additional sublease arrangements with regard to our other leased office locations. We believe our existing properties are suitable and adequate for their intended use.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Item 3. 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.
Added
Item 3. Legal Proceedings We are not currently subject to any material legal proceedings. See Note 13 of Notes to Consolidated Financial Statements for additional information regarding legal proceedings that may arise in the ordinary course of business and certain risks presented by such matters.
Removed
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.
Removed
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.
Removed
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 for additional information regarding legal proceedings and regulatory matters.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeShare 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 10/1/2023 to 10/31/2023 2,458,971 $ 25.86 2,447,222 $ 166,739 11/1/2023 to 11/30/2023 595 27.13 — 166,739 12/1/2023 to 12/31/2023 1,973 28.26 — 166,739 Total 2,461,539 2,447,222 (1) Includes 14,317 shares tendered by employees for payment of taxes withheld on the vesting of certain RSUs granted under the Company’s equity compensation plans.
Biggest changeShare 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 10/1/2024 to 10/31/2024 763,421 $ 34.55 760,782 $ 591,470 11/1/2024 to 11/30/2024 716,565 33.63 705,054 567,744 12/1/2024 to 12/31/2024 778,878 32.20 776,692 542,744 Total 2,258,864 2,242,528 (1) Includes 16,336 shares tendered by employees for payment of taxes withheld on the vesting of certain RSUs granted under the Company’s equity compensation plans.
Unregistered Sales of Equity Securities In the last three years, no equity securities of the Company 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 December 31, 2023.
Unregistered Sales of Equity Securities In the last three years, no equity securities of the Company were sold that were not registered under the Securities Act. 70 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 December 31, 2024.
During 2022 and 2023, we declared and paid a quarterly cash dividend of $0.20 and $0.225 per share, respectively. In February 2024, Radian Group’s board of directors authorized an increase in our quarterly cash dividend from $0.225 to $0.245 per share. We presently expect to continue to declare a regular quarterly dividend on our common stock.
During 2023 and 2024, we declared and paid a quarterly cash dividend of $0.225 and $0.245 per share, respectively. In February 2025, Radian Group’s board of directors authorized an increase to our quarterly dividend from $0.245 to $0.255 per share. We presently expect to continue to declare a regular quarterly dividend on our common stock.
During the three months ended December 31, 2023, the Company purchased 2.4 million shares at an average price of $25.86, including commissions. See Note 14 of Notes to Consolidated Financial Statements for additional details on our share repurchase plan.
During the three months ended December 31, 2024, the Company purchased 2.2 million shares at an average price of $33.45, including commissions. See Note 14 of Notes to Consolidated Financial Statements for additional details on our share repurchase plan.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “RDN.” At February 21, 2024, there were 151,498,098 shares of our common stock outstanding and 61 holders of record.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is listed on the New York Stock Exchange (“NYSE”) under the symbol “RDN.” At February 12, 2025, there were 145,063,145 shares of our common stock outstanding and 62 holders of record.
Added
In May 2024, Radian Group’s board of directors approved an extension of this program to June 2026, as well as a $600 million increase in authorization for this program, bringing the total authorization to repurchase shares up to $900 million, excluding commissions.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

191 edited+43 added−105 removed79 unchanged
Biggest changeSummary results of operations - Consolidated Change Years Ended December 31, Favorable (Unfavorable) ($ in thousands, except per-share amounts) 2023 2022 2021 2023 vs. 2022 2022 vs. 2021 Revenues Net premiums earned $ 919,578 $ 981,131 $ 1,037,183 $ (61,553) $ (56,052) Services revenue 46,092 92,216 125,825 (46,124) (33,609) Net investment income 258,430 195,658 147,909 62,772 47,749 Net gains (losses) on investments and other financial instruments 10,241 (80,733) 15,603 90,974 (96,336) Other income 6,247 2,454 3,412 3,793 (958) Total revenues 1,240,588 1,190,726 1,329,932 49,862 (139,206) Expenses Provision for losses (42,526) (338,239) 20,877 (295,713) 359,116 Policy acquisition costs 24,578 23,918 29,029 (660) 5,111 Cost of services 38,491 82,358 103,714 43,867 21,356 Other operating expenses 347,578 381,148 323,686 33,570 (57,462) Interest expense 89,695 84,454 84,344 (5,241) (110) Impairment of goodwill 9,802 — — (9,802) — Amortization of other acquired intangible assets 5,483 4,308 3,450 (1,175) (858) Total expenses 473,101 237,947 565,100 (235,154) 327,153 Pretax income 767,487 952,779 764,832 (185,292) 187,947 Income tax provision 164,368 209,845 164,161 45,477 (45,684) Net income $ 603,119 $ 742,934 $ 600,671 $ (139,815) $ 142,263 Diluted net income per share $ 3.77 $ 4.35 $ 3.16 $ (0.58) $ 1.19 Return on equity 14.5 % 18.2 % 14.1 % (3.7) % 4.1 % Non-GAAP Financial Measures (1) Adjusted pretax operating income $ 786,427 $ 1,052,717 $ 757,749 $ (266,290) $ 294,968 Adjusted diluted net operating income per share $ 3.88 $ 4.87 $ 3.15 $ (0.99) $ 1.72 Adjusted net operating return on equity 14.9 % 20.3 % 14.0 % (5.4) % 6.3 % (1) See “Use of Non-GAAP Financial Measures” below.
Biggest changeSummary results of operations - Consolidated Years Ended December 31, Change Favorable (Unfavorable) ($ in thousands, except per-share amounts) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Revenues Net premiums earned $ 951,283 $ 919,578 $ 981,131 $ 31,705 $ (61,553 ) Services revenue 50,270 46,092 92,216 4,178 (46,124 ) Net investment income 292,693 258,430 195,658 34,263 62,772 Net gains (losses) on investments and other financial instruments (10,114 ) 10,241 (80,733 ) (20,355 ) 90,974 Income (loss) on consolidated VIEs (2 ) — — (2 ) — Other income 6,153 6,247 2,454 (94 ) 3,793 Total revenues 1,290,283 1,240,588 1,190,726 49,695 49,862 Expenses Provision for losses (2,514 ) (42,526 ) (338,239 ) (40,012 ) (295,713 ) Policy acquisition costs 27,316 24,578 23,918 (2,738 ) (660 ) Cost of services 38,271 38,491 82,358 220 43,867 Other operating expenses 347,906 347,578 381,148 (328 ) 33,570 Interest expense 108,014 89,695 84,454 (18,319 ) (5,241 ) Impairment of goodwill — 9,802 — 9,802 (9,802 ) Amortization of other acquired intangible assets — 5,483 4,308 5,483 (1,175 ) Total expenses 518,993 473,101 237,947 (45,892 ) (235,154 ) Pretax income 771,290 767,487 952,779 3,803 (185,292 ) Income tax provision 166,850 164,368 209,845 (2,482 ) 45,477 Net income $ 604,440 $ 603,119 $ 742,934 $ 1,321 $ (139,815 ) Diluted net income per share $ 3.92 $ 3.77 $ 4.35 $ 0.15 $ (0.58 ) Return on equity 13.4 % 14.5 % 18.2 % (1.1 )% (3.7 )% Non-GAAP Financial Measures (1) Adjusted pretax operating income $ 803,005 $ 786,427 $ 1,052,717 $ 16,578 $ (266,290 ) Adjusted diluted net operating income per share $ 4.11 $ 3.88 $ 4.87 $ 0.23 $ (0.99 ) Adjusted net operating return on equity 14.1 % 14.9 % 20.3 % (0.8 )% (5.4 )% (1) See “Use of Non-GAAP Financial Measures” below.
See “Mortgage Insurance Portfolio—Insurance and Risk in Force;” ■ The average loan size (relatively higher priced properties with larger average loan amounts may result in higher incurred losses); ■ The percentage of coverage on insured loans (higher percentages of insurance coverage generally correlate with higher incurred losses) and the presence of structural mitigants such as deductibles or stop losses; ■ Changes in housing values (declines in housing values generally make it more difficult for borrowers to sell a home to avoid default or for the property to be sold to mitigate a claim, and also may negatively affect a borrower’s willingness to continue to make mortgage payments when the home value is less than the mortgage balance; conversely, increases in housing values tend to reduce the level of defaults as well as make it more likely that foreclosures will result in the loan being satisfied); ■ The distribution of claims over the life cycle of a portfolio (historically, claims are relatively low during the first two years after a loan is originated and then increase over a period of several years before declining; however, several factors can impact and change this cycle, including the economic environment, the quality of the underwriting of the loan, characteristics of the mortgage loan, the credit profile of the borrower, housing prices and unemployment rates); and ■ Our ability to mitigate potential losses through Rescissions, Claim Denials, cancellations and Claim Curtailments on claims submitted to us.
See “Mortgage Insurance Portfolio Metrics—Insurance and Risk in Force;” ▪ The average loan size (relatively higher priced properties with larger average loan amounts may result in higher incurred losses); ▪ The percentage of coverage on insured loans (higher percentages of insurance coverage generally correlate with higher incurred losses) and the presence of structural mitigants such as deductibles or stop losses; ▪ Changes in housing values (declines in housing values generally make it more difficult for borrowers to sell a home to avoid default or for the property to be sold to mitigate a claim, and also may negatively affect a borrower’s willingness to continue to make mortgage payments when the home value is less than the mortgage balance; conversely, increases in housing values tend to reduce the level of defaults as well as make it more likely that foreclosures will result in the loan being satisfied); ▪ The distribution of claims over the life cycle of a portfolio (historically, claims are relatively low during the first two years after a loan is originated and then increase over a period of several years before declining; however, several factors can impact and change this cycle, including the economic environment, the quality of the underwriting of the loan, characteristics of the mortgage loan, the credit profile of the borrower, housing prices and unemployment rates); and ▪ Our ability to mitigate potential losses through Rescissions, Claim Denials, cancellations and Claim Curtailments on claims submitted to us.
Other factors influencing incurred losses include: ■ The mix of credit characteristics in our total direct RIF (e.g., loans with higher risk characteristics, or loans with layered risk that combine multiple higher-risk attributes within the same loan, generally result in more delinquencies and claims).
Factors influencing incurred losses include: ▪ The mix of credit characteristics in our total direct RIF (e.g., loans with higher risk characteristics, or loans with layered risk that combine multiple higher-risk attributes within the same loan, generally result in more delinquencies and claims).
(2) Includes the impact of changes in the profit commission retained by the Company due to changes in loss reserves. See “Expenses— Provision for Losses ” below for additional information on the favorable reserve development, particularly in 2022.
(2) Includes the impact of changes in the profit commission retained by the Company due to changes in loss reserves. See “Expenses— Provision for Losses ” below for additional information on our favorable reserve development, particularly in 2022.
Our provision for losses during 2023 and 2022 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated.
Our provision for losses during 2024, 2023 and 2022 was positively impacted by favorable reserve development on prior year defaults, primarily as a result of more favorable trends in Cures than originally estimated.
This balance includes a $750 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.
This balance includes a $921 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.
Based on current NIW pricing and the impact of higher Persistency Rates we have been experiencing, we currently expect our in force portfolio premium yield in 2024 to remain stable; however, due to the potential impacts of Single Premium Policy cancellations and reinsurance, among other things, the net premium yield may continue to fluctuate from period to period.
Based on current NIW pricing and the impact of higher Persistency Rates we have been experiencing, we currently expect our in force portfolio premium yield in 2025 to remain stable; however, due to the potential impacts of Single Premium Policy cancellations and reinsurance, among other things, the net premium yield may continue to fluctuate from period to period.
Therefore, Claim Severity generally increases the longer that a loan is in default. We considered the sensitivity of first-lien loss reserve estimates at December 31, 2023, by assessing the potential changes resulting from a parallel shift in Claim Severity and Default to Claim Rate estimates for primary loans, excluding any potential benefits from reinsurance.
Therefore, Claim Severity generally increases the longer that a loan is in default. We considered the sensitivity of first-lien loss reserve estimates at December 31, 2024, by assessing the potential changes resulting from a parallel shift in Claim Severity and Default to Claim Rate estimates for primary loans, excluding any potential benefits from reinsurance.
(6) Calculated by dividing 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. See Note 8 of Notes to Consolidated Financial Statements for further information. (7) The average of beginning and ending balances of primary IIF, for each period presented.
(5) Calculated by dividing 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. See Note 8 of Notes to Consolidated Financial Statements for further information. (6) The average of beginning and ending balances of primary IIF, for each period presented.
Our actual portfolio returns will depend on a number of factors, including economic conditions, the mix of NIW that we are able to write, our pricing, the amount of reinsurance we use and the level of capital we hold, including amounts that may be in excess of minimum PMIERs financial and statutory capital requirements.
Our actual portfolio returns will depend on a number of factors, including the success of our pricing strategy, economic conditions, the mix of NIW that we are able to write, our pricing, the amount of reinsurance we use and the level of capital we hold, including amounts that may be in excess of minimum PMIERs financial and statutory capital requirements.
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. At December 31, 2023, the full $275 million remains undrawn and available under the facility.
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. At December 31, 2024, the full $275 million remains undrawn and available under the facility.
(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. Cost of Services.
(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.
Critical Accounting Estimates SEC guidance defines Critical Accounting Estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
Critical Ac counting Estimates SEC guidance defines Critical Accounting Estimates as those estimates made in accordance with GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the registrant.
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.
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.
Increasing yields from higher interest rates were the primary driver of the increases in net investment income for 2023 compared to 2022. The following table provides information related to our Mortgage Insurance subsidiaries’ investment balances and investment yields for the periods indicated.
Increasing yields from higher interest rates and higher investment balances were the primary driver of the increases in net investment income for 2024 compared to 2023. The following table provides information related to our Mortgage Insurance subsidiaries’ investment balances and investment yields for the periods indicated.
Risk Factors,” including “ 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 .” See also “Overview—Current Operating Environment” and Note 1 of Notes to Consolidated Financial Statements for further information.
Risk Factors,” including “ 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 .” See also “Overview of Business Operating Environment” above and Note 1 of Notes to Consolidated Financial Statements for further information.
Business—Mortgage Insurance—Pricing—Primary Mortgage Insurance Premiums.” As discussed above, the ultimate profitability of Single Premium Policies may be higher or lower than expected due to the impact of prepayment speeds. See “IIF and Related Drivers” above. Monthly Premium Policies typically provide a level monthly premium for the first 10 years of the policy, followed by a lower level monthly premium thereafter.
Business—Mortgage Insurance—Pricing—Primary Mortgage Insurance Premiums.” As discussed above, the ultimate profitability of Single Premium Policies may be higher or lower than expected due to the impact of prepayment speeds. See “IIF and Persistency” above. Monthly Premium Policies typically provide a level monthly premium for the first 10 years of the policy, followed by a lower level monthly premium thereafter.
This section of our Annual Report on Form 10-K generally discusses our consolidated results of operations for the years ended December 31, 2023 and 2022, and a year-over-year comparison between 2023 and 2022.
This section of our Annual Report on Form 10-K generally discusses our consolidated results of operations for the years ended December 31, 2024 and 2023, and a year-over-year comparison between 2024 and 2023.
Cumulative incurred loss ratio by vintage (1) Vintage Dec 2014 Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 (2) Dec 2021 (2) Dec 2022 Dec 2023 2014 2.7% 4.1% 4.9% 5.0% 5.1% 5.2% 6.9% 6.8% 4.5% 3.9% 2015 2.1% 4.8% 5.2% 5.0% 4.7% 7.4% 6.8% 3.8% 2.9% 2016 2.9% 5.0% 4.8% 4.7% 9.7% 8.0% 3.7% 2.7% 2017 4.7% 5.1% 6.1% 14.3% 11.9% 5.1% 3.7% 2018 3.0% 6.4% 22.8% 19.0% 7.2% 4.9% 2019 2.8% 35.6% 23.5% 6.8% 4.6% 2020 25.6% 14.9% 6.0% 3.8% 2021 7.9% 10.9% 9.1% 2022 9.4% 15.2% 2023 7.1% (1) Represents inception-to-date losses incurred as a percentage of net premiums earned.
Cumulative incurred loss ratio by vintage (1) Vintage Dec 2015 Dec 2016 Dec 2017 Dec 2018 Dec 2019 Dec 2020 (2) Dec 2021 (2) Dec 2022 Dec 2023 Dec 2024 2015 2.1% 4.8% 5.2% 5.0% 4.7% 7.4% 6.8% 3.8% 2.9% 2.4% 2016 2.9% 5.0% 4.8% 4.7% 9.7% 8.0% 3.7% 2.7% 2.1% 2017 4.7% 5.1% 6.1% 14.3% 11.9% 5.1% 3.7% 2.9% 2018 3.0% 6.4% 22.8% 19.0% 7.2% 4.9% 3.9% 2019 2.8% 35.6% 23.5% 6.8% 4.6% 3.5% 2020 25.6% 14.9% 6.0% 3.8% 3.1% 2021 7.9% 10.9% 9.1% 8.0% 2022 9.4% 15.2% 17.0% 2023 7.1% 12.6% 2024 6.9% (1) Represents inception-to-date losses incurred as a percentage of net premiums earned.
Therefore, with respect to deferred tax assets relating to these state and local NOLs and other state timing adjustments, we retained a valuation allowance of $63 million and $70 million at December 31, 2023 and 2022, respectively. Estimated factors in this assessment include, but are not limited to, forecasts of future income and actual and planned business and operational changes.
Therefore, with respect to deferred tax assets relating to these state and local NOLs and other state timing adjustments, we retained a valuation allowance of $67 million and $63 million at December 31, 2024 and 2023, respectively. Estimated factors in this assessment include, but are not limited to, forecasts of future income and actual and planned business and operational changes.
As of December 31, 2023, 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.
As of December 31, 2024, Radian Guaranty maintained claims paying resources of $6.2 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.
Losses Incurred losses represent the estimated future claim payments on newly defaulted insured loans as well as any change in our claim estimates for existing defaults, including changes in our estimates with respect to the frequency, magnitude and timing of anticipated losses on defaulted loans.
Losses Incurred losses reduce our pretax income and represent the estimated future claim payments on newly defaulted insured loans as well as any change in our claim estimates for existing defaults, including changes in our estimates with respect to the frequency, magnitude and timing of anticipated losses on defaulted loans.
Factors considered in our assessment for impairment include the extent to which the amortized cost basis is greater than fair value and the reasons for the decline in value. As of December 31, 2023, our gross unrealized losses on available for sale securities were $444 million, which can fluctuate materially over time based on changes in market conditions.
Factors considered in our assessment for impairment include the extent to which the amortized cost basis is greater than fair value and the reasons for the decline in value. As of December 31, 2024, our gross unrealized losses on available for sale securities were $460 million, which can fluctuate materially over time based on changes in market conditions.
Current Operating Environment As a mortgage and real estate company, our business results are subject to 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, as well as seasonal fluctuations impacting mortgage and real estate markets.
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.
(3) Represents the profit commission on the Single Premium QSR Program and 2022 and 2023 QSR Agreements, excluding the impact of Single Premium Policy cancellations. (4) Calculated by dividing direct premiums earned, including assumed revenue and excluding revenue from cancellations, by average primary IIF. (5) Calculated by dividing direct premiums earned, including assumed revenue, by average primary IIF.
(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 direct premiums earned, including assumed revenue and excluding revenue from cancellations, by average primary IIF. (4) Calculated by dividing direct premiums earned, including assumed revenue, by average primary IIF.
See Note 11 of Notes to Consolidated Financial Statements for additional details about our Default to Claim Rate assumptions. Our aggregate weighted-average net Default to Claim Rate assumption for our primary defaulted loans used in estimating our reserve for losses, which is net of estimated Claim Denials and Rescissions, was 25% and 30%, at December 31, 2023 and 2022, respectively.
See Note 11 of Notes to Consolidated Financial Statements for additional details about our Default to Claim Rate assumptions. Our aggregate weighted-average net Default to Claim Rate assumption for our primary defaulted loans used in estimating our reserve for losses, which is net of estimated Claim Denials and Rescissions, was 23% and 25%, at December 31, 2024 and 2023, respectively.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K.
Item 7. Management ’s Discussion and Analysis of Financial Condition and Results of Operations The following analysis of our financial condition and results of operations should be read in conjunction with our Consolidated Financial Statements and Notes thereto included in Item 8 of this Annual Report on Form 10-K.
As described above, premiums on our mortgage insurance products are generally paid either on an installment basis, pursuant to Monthly Premium Policies, or in a single payment at the time of loan origination, pursuant to Single Premium Policies. See “Item 1.
Premiums on our mortgage insurance products are generally paid either on an installment basis, pursuant to Monthly Premium Policies, or in a single payment at the time of loan origination, pursuant to Single Premium Policies. See “Item 1.
Our estimate for the single premium earnings pattern is updated periodically and subject to change given uncertainty as to the underlying loss development and duration of risk. There were no significant changes to our single premium earnings pattern estimate in 2023 and 2022.
Our estimate for the single premium earnings pattern is updated periodically and subject to change given uncertainty as to the underlying loss development and duration of risk. There were no changes to our single premium earnings pattern estimate in 2024 and 2023.
This decrease was primarily due to a shift in the mix of defaults as of December 31, 2023, given the larger proportion of loans with fewer missed payments, as well as reduced claim rate assumptions for prior period defaults due to more favorable trends in Cures than originally estimated.
This decrease was primarily due to a shift in the mix of defaults as of December 31, 2024, given the larger proportion of more recent defaults and loans with fewer missed payments, as well as reduced claim rate assumptions for prior period defaults due to more favorable trends in Cures than originally estimated.
For example, assuming all other factors remain constant, for every one percentage point change in primary Claim Severity (which we estimate to be 98% of defaulted risk exposure at December 31, 2023), we estimated that our loss reserves would change by approximately $4 million at December 31, 2023.
For example, assuming all other factors remain constant, for every one percentage point change in primary Claim Severity (which we estimate to be 89% of defaulted risk exposure at December 31, 2024), we estimated that our loss reserves would change by approximately $4 million at December 31, 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The table below provides additional information about the components of mortgage insurance net premiums earned for the periods indicat ed, including the effects of our reinsurance programs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The table below provides additional information about the components of mortgage insurance net premiums earned for the periods indicated, including the effects of our reinsurance programs.
Business—Mortgage Insurance—Defaults and Claims”), which make the timing of paid claims difficult to predict. 85 Table of Contents Glossary Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following table shows net claims paid by product and the average claim paid by product for the periods indicated.
Business—Mortgage Insurance—Defaults and Claims”), which make the timing of paid claims difficult to predict. 91 Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following table shows net claims paid by product and the average claim paid by product for the periods indicated.
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 December 31, 2023, Radian Group had available, either directly or through unregulated subsidiaries, unrestricted cash and liquid investments of $992 million.
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 December 31, 2024, Radian Group had available, either directly or through unregulated subsidiaries, unrestricted cash and liquid investments of $885 million.
We have distributed risk through traditional quota share and excess-of-loss reinsurance arrangements, as well as to investors through the capital markets using mortgage insurance-linked notes transactions. See “IIF and Related Drivers” above. When we enter into a quota share reinsurance agreement, the reinsurer receives a premium and, in exchange, agrees to insure an agreed upon portion of incurred losses.
We have distributed risk through traditional quota share and excess-of-loss reinsurance arrangements, as well as to investors through the capital markets using mortgage insurance-linked notes transactions. When we enter into a quota share reinsurance agreement, the reinsurer receives a premium and, in exchange, agrees to insure an agreed upon portion of incurred losses.
The primary risks in our investment portfolio are interest-rate risk and credit-spread risk, namely the fair value sensitivity of our fixed income securities to changes in interest rates and credit spreads, respectively.
The primary risks in our investment portfolio are interest-rate risk and credit-spread risk, namely the fair value sensitivity of our fixed income securities and residential mortgage loans to changes in interest rates and credit spreads, respectively.
Although it is difficult to project future volumes, recent industry projections for 2024 estimate total mortgage originations of approximately $2.0 trillion, which would represent an increase in the total annual mortgage origination market of approximately 27% as compared to 2023.
Although it is difficult to project future volumes, recent industry projections for 2025 estimate total mortgage originations of approximately $2.0 trillion, which would represent an increase in the total annual mortgage origination market of approximately 14% as compared to 2024.
Key assumptions supporting our estimate of this net premium receivable, which equaled $36 million and $32 million as of December 31, 2023 and 2022, respectively, include a collection rate and average life. During both 2023 and 2022, we made no changes to these assumptions.
Key assumptions supporting our estimate of this net premium receivable, which equaled $38 million and $36 million as of December 31, 2024 and 2023, respectively, include a collection rate and average life. During both 2024 and 2023, we made no changes to these assumptions.
Reconciliation of return on equity to adjusted net operating return on equity Years Ended December 31, 2023 2022 2021 Return on equity (1) 14.5 % 18.2 % 14.1 % Less: impact of reconciling income (expense) items (2) Net gains (losses) on investments and other financial instruments 0.2 (2.0) 0.4 Impairment of goodwill (0.2) — — Amortization of other acquired intangible assets (0.1) (0.1) (0.1) Impairment of other long-lived assets and other non-operating items (0.3) (0.4) (0.1) Income tax (provision) benefit on reconciling income (expense) items (3) 0.1 0.5 — Difference between statutory and effective tax rate (0.1) (0.1) (0.1) Impact of reconciling income (expense) items (0.4) (2.1) 0.1 Adjusted net operating return on equity (3) 14.9 % 20.3 % 14.0 % (1) Calculated by dividing net income by average stockholders’ equity.
Reconciliation of return on equity to adjusted net operating return on equity Years Ended December 31, 2024 2023 2022 Return on equity (1) 13.4 % 14.5 % 18.2 % Less: impact of reconciling income (expense) items (2) Net gains (losses) on investments and other financial instruments (0.1 )% 0.2 % (2.0 )% Amortization and impairment of goodwill and other acquired intangible assets — % (0.3 )% (0.1 )% Impairment of other long-lived assets and other non-operating items (0.6 )% (0.3 )% (0.4 )% Income tax (provision) benefit on reconciling income (expense) items (3) 0.1 % 0.1 % 0.5 % Difference between statutory and effective tax rates (0.1 )% (0.1 )% (0.1 )% Impact of reconciling income (expense) items (0.7 )% (0.4 )% (2.1 )% Adjusted net operating return on equity (3) 14.1 % 14.9 % 20.3 % (1) Calculated by dividing net income by average stockholders’ equity.
Paul-Bloomington, MN-WI 2.2 1.5 2.3 1.5 Seattle-Tacoma-Bellevue, WA 2.1 1.1 2.1 0.9 Total 32.0 % 34.3 % 31.0 % 35.4 % (1) CBSAs are metropolitan areas and may include a portion of adjoining states as noted above.
Paul-Bloomington, MN-WI 2.2 % 1.8 % 2.2 % 1.5 % Seattle-Tacoma-Bellevue, WA 2.2 % 1.0 % 2.1 % 1.1 % Total 32.3 % 35.0 % 32.0 % 34.3 % (1) CBSAs are metropolitan areas and may include a portion of adjoining states as noted above.
(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 on the consolidated statements of operations. See Note 8 of Notes to Consolidated Financial Statements for additional information. Services Revenue.
(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 on the consolidated statements of operations. See Note 8 of Notes to Consolidated Financial Statements for additional information. Net Investment Income.
Dividends and Dividend Equivalents. Throughout 2023 and 2022, our quarterly dividend was $0.225 and $0.20 per share, respectively. In February 2024, Radian Group’s board of directors authorized an increase to our quarterly dividend from $0.225 to $0.245 per share.
Dividends and Dividend Equivalents. Throughout 2024 and 2023, our quarterly dividend was $0.245 and $0.225 per share, respectively. In February 2025, Radian Group’s board of directors authorized an increase to our quarterly dividend from $0.245 to $0.255 per share.
See Note 8 of Notes to Consolidated Financial Statements for additional information. Radian Guaranty’s Risk-to-capital as of December 31, 2023, was 10.4 to 1. Radian Guaranty is not expected to need additional capital to satisfy state insurance regulatory requirements in their current form. At December 31, 2023, Radian Guaranty had statutory policyholders’ surplus of $620 million.
See Note 8 of Notes to Consolidated Financial Statements for additional information. Radian Guaranty’s Risk-to-capital as of December 31, 2024, was 10.2 to 1. Radian Guaranty is not expected to need additional capital to satisfy state insurance regulatory requirements in their current form. At December 31, 2024, Radian Guaranty had statutory policyholders’ surplus of $723 million.
See Note 16 of Notes to Consolidated Financial Statements and “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.
See Note 16 of Notes to Consolidated Financial Statements 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.
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 certain investments and other financial instruments attributable to our reportable segments and All Other activities; (ii) amortization and impairment of goodwill and other acquired intangible assets; and (iii) 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 and expenses and gains (losses) on extinguishment of debt.
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; (ii) amortization and impairment of goodwill and other acquired intangible assets; and (iii) 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 and expenses and gains (losses) on extinguishment of debt.
During 2023 and 2022, the Company repurchased 5.3 million shares and 19.5 million shares of Radian Group common stock, respectively, under programs authorized by Radian Group’s board of directors, at a total cost of $133 million and $400 million, respectively, including commissions. See Note 14 of Notes to Consolidated Financial Statements for additional details on our share repurchase programs.
During 2024 and 2023, the Company repurchased 7.0 million shares and 5.3 million shares of Radian Group common stock, respectively, under programs authorized by Radian Group’s board of directors, at a total cost of $224 million and $133 million, respectively, including commissions. See Note 14 of Notes to Consolidated Financial Statements for additional details on our share repurchase programs.
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).
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). 77 Part II. Item 7.
Mortgage originations are based upon the average of originations reported by the Mortgage Bankers Association, Freddie Mac and Fannie Mae in their most recent published industry reports. (2) Excluding originations under HARP.
Mortgage originations are based upon the average of originations reported by the Mortgage Bankers Association, Freddie Mac and Fannie Mae in their most recent published industry reports.
(as measured by our direct Primary Mortgage Insurance RIF as of December 31, 2023).
(as measured by our direct Primary Mortgage Insurance RIF as of December 31, 2024).
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.
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 98 Part II. Item 7.
Conversely, the higher interest rate environment also has benefited our financial performance through higher Persistency Rates, which has resulted in continued growth in our IIF despite lower NIW, as well as through the recognition of higher net investment income.
At the same time, the higher interest rate environment has benefited our financial performance through higher Persistency Rates, which has resulted in continued growth in our IIF despite lower NIW, as well as through the recognition of higher net investment income.
These favorable observed trends resulted in reductions in our Default to Claim Rate and other reserve adjustments for prior year default notices. See Notes 1 and 11 of Notes to Consolidated Financial Statements and “Item 1A. Risk Factors” for additional information. Our primary default rate at both December 31, 2023 and 2022, was 2.2%.
These favorable observed trends resulted in reductions in our Default to Claim Rate and other reserve adjustments for prior year default notices. See Note 11 of Notes to Consolidated Financial Statements and “Item 1A. Risk Factors” for additional information. Our primary default rate at December 31, 2024, was 2.4% compared to 2.2% at December 31, 2023.
Corporate expenses and interest expense on Radian Group’s debt obligations allocated under these arrangements during 2023 of $164 million and $83 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.
Corporate expenses and interest expense on Radian Group’s debt obligations allocated under these arrangements during 2024 of $169 million and $81 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.
(2) Net of any previous Rescission and Claim Denials that were reinstated during the period. Such reinstated Rescissions and Claim Denials may ultimately result in a paid claim. 84 Table of Contents Glossary Part II. Item 7.
(2) Net of any previous Rescission and Claim Denials that were reinstated during the period. Such reinstated Rescissions and Claim Denials may ultimately result in a paid claim. 90 Part II. Item 7.
In addition to available cash and marketable securities, Radian Group’s principal sources of cash to fund future liquidity needs include: (i) payments made to Radian Group by its subsidiaries under expense- and tax-sharing arrangements; (ii) net investment income earned on its cash and marketable securities; and (iii) to the extent available, dividends or other distributions from its subsidiaries.
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. 96 Part II. Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Top 10 Core Based Statistical Areas - RIF December 31, 2023 2022 Top 10 CBSAs (1) RIF Reserve for Losses RIF Reserve for Losses New York-Newark-Jersey City, NY-NJ-PA 5.3 % 10.7 % 5.5 % 12.2 % Chicago-Naperville-Elgin, IL-IN-WI 4.6 5.6 4.3 5.7 Washington-Arlington-Alexandria, DC-VA-MD-WV 4.3 3.1 4.0 3.4 Dallas-Fort Worth-Arlington, TX 3.4 3.0 3.1 2.7 Houston-The Woodlands-Sugar Land, TX 2.9 3.2 2.7 3.0 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 2.7 2.6 2.7 2.5 Los Angeles-Long Beach-Anaheim, CA 2.3 2.5 2.4 2.6 Denver-Aurora-Lakewood, CO 2.2 1.0 1.9 0.9 Minneapolis-St.
Top 10 Core Based Statistical Areas - RIF December 31, 2024 2023 Top 10 CBSAs (1) RIF Reserve for Losses RIF Reserve for Losses New York-Newark-Jersey City, NY-NJ-PA 5.0 % 8.9 % 5.3 % 10.7 % Chicago-Naperville-Elgin, IL-IN-WI 4.7 % 5.5 % 4.6 % 5.6 % Washington-Arlington-Alexandria, DC-VA-MD-WV 4.4 % 3.5 % 4.3 % 3.1 % Dallas-Fort Worth-Arlington, TX 3.4 % 3.9 % 3.4 % 3.0 % Houston-The Woodlands-Sugar Land, TX 3.0 % 4.3 % 2.9 % 3.2 % Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 2.7 % 2.4 % 2.7 % 2.6 % Denver-Aurora-Lakewood, CO 2.4 % 1.5 % 2.2 % 1.0 % Los Angeles-Long Beach-Anaheim, CA 2.3 % 2.2 % 2.3 % 2.5 % Minneapolis-St.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Adjusted diluted net operating income (loss) per share is calculated by dividing adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the Company’s statutory tax rate, by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding.
Adjusted diluted net operating income (loss) per share is calculated by dividing adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the Company’s statutory tax rate, by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding.
At December 31, 2023, Radian Guaranty’s Available Assets under the PMIERs financial requirements totaled $5.9 billion, resulting in a PMIERs Cushion of $2.3 billion, or 62%, over its Minimum Required Assets. Those amounts compare to Available Assets and a PMIERs cushion of $5.6 billion and $1.7 billion, respectively, at December 31, 2022.
At December 31, 2024, Radian Guaranty’s Available Assets under the PMIERs financial requirements totaled $6.0 billion, resulting in a PMIERs Cushion of $2.2 billion, or 56%, over its Minimum Required Assets. Those amounts compare to Available Assets and a PMIERs Cushion of $5.9 billion and $2.3 billion, respectively, at December 31, 2023.
(2) Amounts primarily relate to impairments of other long-lived assets that are included in other operating expenses on the consolidated statements of operations. See Note 9 of Notes to Consolidated Financial Statements.
(2) Related primarily to impairments of other long-lived assets that are included in other operating expenses on the consolidated statements of operations. See Note 4 of Notes to Consolidated Financial Statements.
The following table provides a reconciliation of diluted net income (loss) per share to our non-GAAP financial measure for the consolidated Company of adjusted diluted net operating income (loss) per share.
The following table provides a reconciliation of diluted net income (loss) per share to our non-GAAP financial measure for the consolidated Company of adjusted diluted net operating income (loss) per share. 85 Part II. Item 7.
See Note 4 of Notes to Consolidated Financial Statements. Our All Other results include income from investments held at Radian Group, which have benefited from rising interest rates over the past year as well as from rising balances resulting from distributions by Radian Guaranty. 88 Table of Contents Glossary Part II. Item 7.
See Note 4 of Notes to Consolidated Financial Statements. Our All Other results include income from investments held at Radian Group, which have benefited from rising interest rates over the past year as well as from rising balances resulting from distributions by Radian Guaranty.
Based on the current composition of our mortgage insurance portfolio, with Monthly Premium Policies comprising a larger proportion of our total portfolio than Single Premium Policies, an increase in IIF generally has a corresponding positive impact on premiums earned, while a decrease in IIF generally has a corresponding negative impact on premiums earned. 67 Table of Contents Glossary Part II.
Based on the current composition of our mortgage insurance portfolio, with Monthly Premium Policies comprising a larger proportion of our total portfolio than Single Premium Policies, an increase in IIF generally has a corresponding positive impact on premiums earned, while a decrease in IIF generally has a corresponding negative impact on premiums earned. Reductions 79 Part II. Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following tables show additional information about homegenius’s other operating expenses for the periods indicated.
Management’s Discussion and Analysis of Financial Condition and Results of Operations The following tables show additional information about other operating expenses for our Mortgage Insurance segment for the periods indicated.
Reconciliation of diluted net income per share to adjusted diluted net operating income per share Years Ended December 31, 2023 2022 2021 Diluted net income per share $ 3.77 $ 4.35 $ 3.16 Less: per-share impact of reconciling income (expense) items Net gains (losses) on investments and other financial instruments 0.06 (0.47) 0.08 Impairment of goodwill (0.06) — — Amortization of other acquired intangible assets (0.03) (0.03) (0.02) Impairment of other long-lived assets and other non-operating items (0.08) (0.09) (0.02) Income tax (provision) benefit on other income (expense) items (1) 0.02 0.12 (0.01) Difference between statutory and effective tax rate (0.02) (0.05) (0.02) Per-share impact of reconciling income (expense) items (0.11) (0.52) 0.01 Adjusted diluted net operating income per share (1) $ 3.88 $ 4.87 $ 3.15 (1) Calculated using the Company’s federal statutory tax rate of 21%.
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 Years Ended December 31, 2024 2023 2022 Diluted net income per share $ 3.92 $ 3.77 $ 4.35 Less: per-share impact of reconciling income (expense) items Net gains (losses) on investments and other financial instruments (0.03 ) 0.06 (0.47 ) Amortization and impairment of goodwill and other acquired intangible assets — (0.09 ) (0.03 ) Impairment of other long-lived assets and other non-operating items (0.17 ) (0.08 ) (0.09 ) Income tax (provision) benefit on reconciling income (expense) items (1) 0.04 0.02 0.12 Difference between statutory and effective tax rates (0.03 ) (0.02 ) (0.05 ) Per-share impact of reconciling income (expense) items (0.19 ) (0.11 ) (0.52 ) Adjusted diluted net operating income per share (1) $ 4.11 $ 3.88 $ 4.87 (1) Calculated using the Company’s federal statutory tax rate of 21%.
Our in force portfolio premium yield was relatively stable for 2023, as compared to 2022.
Our in force portfolio premium yield was stable for 2024, as compared to 2023.
IIF and RIF Years Ended December 31, ($ in millions) 2023 2022 2021 Primary IIF $ 269,979 $ 260,994 $ 245,972 Primary RIF $ 69,710 $ 66,094 $ 60,913 Average coverage percentage 25.8 % 25.3 % 24.8 % Persistency Rate (12 months ended) 84.0 % 79.6 % 64.3 % Persistency Rate (quarterly, annualized) (1) 85.8 % 84.1 % 71.7 % Primary RIF by premium type Direct Monthly and Other Recurring Premiums 88.9 % 87.1 % 83.9 % Direct single premiums 11.1 % 12.9 % 16.1 % Primary RIF by FICO score (2) >=740 58.5 % 57.4 % 56.9 % 680-739 33.9 % 34.6 % 35.0 % 620-679 7.3 % 7.6 % 7.6 % 0.3 % 0.4 % 0.5 % Primary RIF by LTV 95.01% and above 18.6 % 17.1 % 15.1 % 90.01% to 95.00% 48.2 % 48.4 % 48.9 % 85.01% to 90.00% 27.1 % 27.2 % 27.7 % 85.00% and below 6.1 % 7.3 % 8.3 % (1) The Persistency Rate on a quarterly, annualized basis is calculated based on loan-level detail for the quarter ending as of the date shown.
IIF and RIF As of December 31, ($ in millions) 2024 2023 2022 Primary IIF $ 275,126 $ 269,979 $ 260,994 Primary RIF $ 72,074 $ 69,710 $ 66,094 Average coverage percentage 26.2 % 25.8 % 25.3 % Persistency Rate (12 months ended) 83.6 % 84.0 % 79.6 % Persistency Rate (quarterly, annualized) (1) 82.7 % 85.8 % 84.1 % Primary RIF by premium type Direct Monthly and Other Recurring Premiums 90.0 % 88.9 % 87.1 % Direct single premiums 10.0 % 11.1 % 12.9 % Primary RIF by FICO score (2) >=740 60.1 % 58.5 % 57.4 % 680-739 32.6 % 33.9 % 34.6 % 620-679 7.0 % 7.3 % 7.6 % 0.3 % 0.3 % 0.4 % Primary RIF by LTV (3) 95.01% and above 19.8 % 18.6 % 17.1 % 90.01% to 95.00% 47.9 % 48.2 % 48.4 % 85.01% to 90.00% 27.3 % 27.1 % 27.2 % 85.00% and below 5.0 % 6.1 % 7.3 % (1) The Persistency Rate on a quarterly, annualized basis is calculated based on loan-level detail for the quarter ending as of the date shown.
Top 10 U.S. states - RIF December 31, 2023 2022 Top 10 States RIF Reserve for Losses RIF Reserve for Losses Texas 10.0 % 9.5 % 9.4 % 8.4 % California 8.5 9.3 8.7 9.3 Florida 5.8 8.5 6.3 9.1 Illinois 5.0 6.0 4.7 6.0 New York 4.2 9.4 4.5 10.0 Virginia 4.2 2.2 3.9 2.3 Pennsylvania 3.8 3.5 3.8 3.3 New Jersey 3.7 4.7 3.8 5.3 Maryland 3.7 3.5 3.5 3.6 Washington 3.6 2.2 3.6 1.7 Total 52.5 % 58.8 % 52.2 % 59.0 % The following table shows, as of the dates indicated, the percentage of our direct Primary Mortgage Insurance RIF and the associated percentage of our mortgage insurance reserve for losses (by location of property) for the top 10 Core Based Statistical Areas, referred to as “CBSAs,” in the U.S.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Top 10 U.S. states - RIF December 31, 2024 2023 Top 10 States RIF Reserve for Losses RIF Reserve for Losses Texas 10.3 % 11.8 % 10.0 % 9.5 % California 8.3 % 8.9 % 8.5 % 9.3 % Florida 5.5 % 8.4 % 5.8 % 8.5 % Illinois 5.1 % 5.8 % 5.0 % 6.0 % Virginia 4.4 % 2.5 % 4.2 % 2.2 % Maryland 3.9 % 3.4 % 3.7 % 3.5 % New York 3.9 % 7.1 % 4.2 % 9.4 % Pennsylvania 3.7 % 3.2 % 3.8 % 3.5 % Colorado 3.7 % 2.2 % 3.4 % 1.6 % Washington 3.7 % 1.8 % 3.6 % 2.2 % Total 52.5 % 55.1 % 52.2 % 55.7 % The following table shows, as of the dates indicated, the percentage of our direct Primary Mortgage Insurance RIF and the associated percentage of our mortgage insurance reserve for losses (by location of property) for the top 10 Core Based Statistical Areas, referred to as “CBSAs,” in the U.S.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations Cancellations of our insurance policies as a result of prepayments and other reductions of IIF, such as Rescissions of coverage and claims paid, generally have a negative effect on premiums earned over time.
Management’s Discussion and Analysis of Financial Condition and Results of Operations in IIF through cancellations of our insurance policies as a result of prepayments, as well as other insurance policy terminations such as Rescissions of coverage and claims paid, generally have a negative effect on premiums earned over time.
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). 73 Table of Contents Glossary Part II. Item 7.
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).
(2) Operating expenses (which consist of policy acquisition costs and other operating expenses), expressed as a percentage of net premiums earned. See “Revenues— Net Premiums Earned ” above for additional information on the changes in net premiums earned. 86 Table of Contents Glossary Part II. Item 7.
(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. See “Revenues— Net Premiums Earned ” above for additional information on the changes in net premiums earned. 93 Part II. Item 7.
Assuming all other factors remain constant, for every one percentage point change in our overall primary net Default to Claim Rate (which we estimate to be 25% at December 31, 2023, including our assumptions related to Loss Mitigation Activities), we estimated a $14 million change in our loss reserves at December 31, 2023.
Assuming all other factors remain constant, for every one percentage point change in our overall primary net Default to Claim Rate (which we estimate to be 23% at December 31, 2024, including our assumptions related to Loss Mitigation Activities), we estimated an approximate $15 million change in our loss reserves at December 31, 2024.
Detailed discussions of our consolidated results of operations for the year ended December 31, 2022, including the year-over-year comparisons between 2022 and 2021, that are not included in this Annual Report on Form 10-K can be found in “Item 7.
Detailed discussions of our consolidated results of operations for the year ended December 31, 2023, as well as the results of operations for our one reportable segment, Mortgage Insurance, for the year ended December 31, 2023, including the year-over-year comparisons between 2023 and 2022, that are not included in this Annual Report on Form 10-K can be found in “Item 7.
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 “Key Factors Affecting Our Results — Mortgage Insurance—IIF and Related Drivers” for more information. 82 Table of Contents Glossary Part II. Item 7.
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 “Key Factors Affecting Our Results — Mortgage Insurance—IIF and Persistency” for more information. 88 Part II. Item 7.
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.
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 paid ordinary dividends to Radian Group of $675 million during 2024.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Risk Distribution We use third-party reinsurance in our mortgage insurance business to manage capital and risk in an effort to optimize the amounts and types of capital and risk distribution deployed against insured risk.
Risk Distribution We use third-party reinsurance in our Mortgage Insurance business to manage capital and risk in an effort to optimize the amounts and types of capital and risk distribution deployed against insured risk.
Current year new primary defaults increased by 17% for 2023, as compared to 2022, consistent with our expectations regarding 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 8.0% at both December 31, 2023 and 2022.
Current year new primary defaults increased by 15% for 2024, as compared to 2023, 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% at December 31, 2024, compared to 8.0% at December 31, 2023.
These Cures have been due primarily to favorable outcomes resulting from mortgage forbearance programs implemented in response to the COVID-19 pandemic as well as 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 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.
In addition, enhancements in the mortgage insurance industry since the great financial crisis in 2008, including the implementation of strong capital and operating standards under the PMIERs, the implementation of greater risk-based granularity into our pricing methodologies and the increased use of risk distribution strategies to lower the risk profile and financial volatility of our mortgage insurance portfolio, have increased returns on our NIW, provided capital relief under the PMIERs and have helped position our mortgage insurance business to better withstand the negative effects from macroeconomic stresses discussed above, including those resulting from the higher rates of inflation and higher interest rates, as well as the other risks described in “Item 1A.
In addition, enhancements in the mortgage insurance industry since the great financial crisis in 2008, including the implementation of strong capital and operating standards under the PMIERs, the implementation of greater risk-based granularity into our pricing methodologies and the increased use of risk distribution strategies to lower the risk profile and financial volatility of our mortgage insurance portfolio, have increased returns on our NIW, provided capital relief under the PMIERs and have helped position our Mortgage Insurance business to better withstand the negative effects from macroeconomic stresses.
(3) Total adjusted pretax operating income on a consolidated basis consists of adjusted pretax operating income (loss) for our Mortgage Insurance segment, homegenius segment and All Other activities, as further detailed in Note 4 of Notes to Consolidated Financial Statements. 79 Table of Contents Glossary Part II. Item 7.
(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 Consolidated Financial Statements.
Our mortgage insurance business generally benefits from increases in housing demand, home prices and the volume of home purchases, all of which are influenced by the current market imbalance between a constrained housing supply and strong market demand.
Management’s Discussion and Analysis of Financial Condition and Results of Operations ▪ Strong Credit Environment and Housing Market – Our Mortgage Insurance business generally benefits from increases in housing demand, home prices and the volume of home purchases, all of which are influenced by the current market imbalance between a constrained housing supply and strong market demand.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIf interest rates experienced an increase of 100 basis points, our fixed income portfolio would decrease by $244 million and $236 million of the market value of the related fixed income portfolio for 2023 and 2022, respectively.
Biggest changeThe carrying value of our fixed income securities has a balance of $5.8 billion and $6.1 billion as of December 31, 2024 and 2023, respectively. If interest rates experienced an increase of 100 basis points, our fixed income portfolio would decrease by $244 million of the market value of the related fixed income portfolio for both 2024 and 2023.
Accordingly, in presenting this discussion, we have not distinguished between trading and non-trading instruments. We calculate the duration of our fixed income securities, expressed in years, in order to estimate the interest-rate sensitivity of these securities. The average duration of our total fixed income portfolio was 4.1 years and 4.4 years at December 31, 2023 and 2022, respectively.
Accordingly, in presenting this discussion, we have not distinguished between trading and non-trading instruments. We calculate the duration of our fixed income securities, expressed in years, in order to estimate the interest-rate sensitivity of these securities. The average duration of our total fixed income portfolio was 4.3 years and 4.1 years at December 31, 2024 and 2023, respectively.
Item 7A. 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.
Item 7A. Quantitative and Qu alitative 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. As of December 31, 2023, we held $106 million of investment securities for trading purposes, representing less than 2% of our total investment portfolio.
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. As of December 31, 2024, we held $83 million of investment securities for trading purposes, representing less than 2% of our total investment portfolio.
Market factors, including changes in interest rates, credit spreads and equity prices, may impact the timing or magnitude of cash outflows for the return of cash collateral. As of December 31, 2023 and 2022, the carrying value of these securities included in the sensitivity analyses above was $195 million and $85 million, respectively.
Market factors, including changes in interest rates, credit spreads and equity prices, may impact the timing or magnitude of cash outflows for the return of cash collateral. As of December 31, 2024 and 2023, the carrying value of these securities included in the sensitivity analyses above was $130 million and $195 million, respectively.
Actual shifts in credit spreads generally vary by issuer and security, based on issuer-specific and security-specific factors such as credit quality, maturity, sector and asset class. Within a given asset class, investment grade securities generally exhibit less credit-spread volatility than securities with lower credit ratings. At December 31, 2023, 95% of our investment portfolio was rated investment grade.
Actual shifts in credit spreads generally vary by issuer and security, based on issuer-specific and security-specific factors such as credit quality, maturity, sector and asset class. Within a given asset class, investment grade securities generally 103 exhibit less credit-spread volatility than securities with lower credit ratings. At December 31, 2024, 97% of our investment portfolio was rated investment grade.
Quantitative and Qualitative Disclosures About Market Risk Interest-Rate Risk and Credit-Spread Risk The primary market risks in our investment portfolio are interest-rate risk and credit-spread risk, namely the fair value sensitivity of our fixed income securities to changes in interest rates and credit spreads, respectively.
Interest-Rate Risk and Credit-Spread Risk The primary market risks in our investment portfolio are interest rate risk and credit spread risk, namely the fair value sensitivity of our fixed income securities to changes in interest rates and credit spreads, respectively.
If credit spreads experienced an increase of 100 basis points, our fixed income portfolio would decrease by $205 million and $201 million of the market value of the related fixed income portfolio for 2023 and 2022, respectively.
If credit spreads experienced an increase of 100 basis points, our fixed income portfolio would decrease by $204 million and $205 million of the market value of the related fixed income portfolio for 2024 and 2023, respectively.
We also have the right to request the return of the loaned securities at any time. For additional information on our securities lending agreements, see Note 6 of Notes to Consolidated Financial Statements. 98 Table of Contents Glossary
We also have the right to request the return of the loaned securities at any time. For additional information on our securities lending agreements, see Note 6 of Notes to Consolidated Financial Statements. 104
We perform sensitivity analyses to determine the effects of market risk exposures on our investment securities by determining the potential loss in future earnings, fair values or cash flows of market-risk-sensitive instruments resulting from one or more selected hypothetical changes in the above-mentioned market risks. 97 Table of Contents Glossary Part II. Item 7A.
We perform sensitivity analyses to determine the effects of market risk exposures on our investment securities by determining the potential loss in future earnings, fair values or cash flows of market-risk-sensitive instruments resulting from one or more selected hypothetical changes in the above-mentioned market risks.
Through our mortgage conduit, we also have exposure to market risks associated with our mortgage loan activities. For additional information on our mortgage loans held for sale, see Note 7 of Notes to Consolidated Financial Statements. See “Item 1. Business—Investment Policy and Portfolio” for a discussion of portfolio strategy and risk exposure. Securities Lending Agreements.
In addition, as of December 31, 2024, none of these mortgage loans were greater than ninety days delinquent. For additional information on our residential mortgage loans held for sale and related hedges, see Note 7 of Notes to Consolidated Financial Statements. See “Item 1. Business—Investment Policy and Portfolio” for a discussion of portfolio strategy and risk exposure. Securities Lending Agreements.
Removed
The carrying value of our fixed income securities has a balance of $6.1 billion and $5.6 billion as of December 31, 2023 and 2022, respectively.
Added
We also have exposure to market risks through our Mortgage Conduit business, including interest rate and credit risk associated with our mortgage loan activities. The fair value of our residential mortgage loans held for sale is subject to volatility resulting from changes in interest rates and credit performance.
Added
As part of our risk management strategies, we enter into derivatives that are intended to mitigate fluctuations in the fair value of our residential mortgage loans held for sale due to interest rate risk. The carrying value of our residential mortgage loans held for sale was $520 million and $33 million as of December 31, 2024 and 2023, respectively.
Added
If interest rates experienced an increase of 100 basis points, the net change in fair value of our residential mortgage loans held for sale and our interest rate derivatives would be immaterial for both 2024 and 2023.
Added
Our mortgage loan portfolio is also subject to credit risk, which is the risk of default that results from a borrower’s inability or unwillingness to make contractually required mortgage payments.
Added
Our residential mortgage loans held for sale are typically recently originated and held for less than six months before resale or securitization; as a result, we do not currently expect the impact from deteriorating credit on our residential mortgage loans held for sale portfolio to be material.

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