RDN - Radian Announces Fourth Quarter and Full Year 2021 Financial Results

-- Fourth quarter GAAP net income of $193 million, or $1.07 per diluted share, and full year GAAP net income of $601 million, or $3.16 per diluted share --
-- MI New Insurance Written of $92 billion for 2021; second highest annual volume in Company's history --
-- homegenius revenues increase 45% in 2021 to $149 million --
-- Provision for losses of $(46.2) million in the fourth quarter of 2021 favorably impacted by positive development on prior period defaults --
-- Book value per share grows 9% year-over-year to $24.28 --
-- Company purchases 17.8 million shares or $399.1 million of Radian Group common stock during 2021 --

Radian Group Inc. (NYSE: RDN) today reported net income for the quarter ended December 31, 2021, of $193.4 million, or $1.07 per diluted share. This compares with net income for the quarter ended December 31, 2020, of $148.0 million, or $0.76 per diluted share.

Net income for the full year 2021 was $600.7 million, or $3.16 per diluted share. This compares with net income for the full year 2020 of $393.6 million, or $2.00 per diluted share.

Key Financial Highlights (dollars in millions, except per-share amounts)

Adjusted pretax operating income for the quarter ended December 31, 2021, was $245.1 million, or $1.07 per diluted share. This compares with adjusted pretax operating income for the quarter ended December 31, 2020, of $171.0 million, or $0.69 per diluted share.

Adjusted pretax operating income for the full year 2021 was $757.7 million, or $3.15 per diluted share. This compares to adjusted pretax operating income for the full year 2020 of $432.1 million, or $1.74 per diluted share.

Book value as of December 31, 2021 was $4.3 billion, relatively flat compared to December 31, 2020. Book value per share at December 31, 2021, was $24.28, an increase of 9 percent compared to $22.36 at December 31, 2020. Partially offsetting the increase in book value per share in 2021 is: (i) a decrease of $0.75 per share due to unrealized losses in our available for sale securities, recorded in accumulated other comprehensive income and (ii) a $0.54 per share impact of dividends and dividend equivalents.

“Our excellent results for 2021 reflect strong growth in the housing and real estate markets; continued demand for our products and services; and the commitment of our talented team,” said Radian’s Chief Executive Officer Rick Thornberry. “For the full year, we reported net income of more than $600 million; grew book value per share by 9%; wrote the second-highest level of new mortgage insurance business in Radian’s history; and increased homegenius revenue by 45%. Also in 2021, we continued to prudently manage our capital and returned more than $500 million to stockholders through a combination of dividends and stock repurchases.”

Thornberry added, “We are pleased with our business momentum in 2022. We increased our quarterly dividend this month, which provides the highest dividend yield in the private MI industry, and we announced a new $400 million share repurchase authorization. Our team is focused on our mission of ensuring affordable, sustainable and equitable homeownership; and utilizing data, analytics and technology to help our customers succeed in a fast-moving, digital market.”

FOURTH QUARTER HIGHLIGHTS

• NIW was $23.7 billion in the fourth quarter of 2021, compared to $26.6 billion in the third quarter of 2021, and $29.8 billion in the fourth quarter of 2020. NIW was $91.8 billion for the full year 2021, compared to $105.0 billion for the prior year.
  • Of the $23.7 billion in NIW in the fourth quarter of 2021, 93.5 percent was written with monthly and other recurring premiums, compared to 93.8 percent in the third quarter of 2021, and 91.4 percent in the fourth quarter of 2020.
  • Refinances accounted for 8.9 percent of total NIW in the fourth quarter of 2021, compared to 10.2 percent in the third quarter of 2021, and 35.4 percent in the fourth quarter of 2020.
• Total primary mortgage insurance in force as of December 31, 2021, increased to $246.0 billion, an increase of 1.8 percent compared to $241.6 billion as of September 30, 2021, and a decrease of 0.1 percent compared to $246.1 billion as of December 31, 2020. The year-over-year change reflects a 5.8 percent increase in monthly premium policy insurance in force and a 21.1 percent decline in single premium policy insurance in force.
  • Persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 64.3 percent for the twelve months ended December 31, 2021, compared to 60.8 percent for the twelve months ended September 30, 2021, and 61.2 percent for the twelve months ended December 31, 2020.
  • Annualized persistency for the three months ended December 31, 2021, was 71.7 percent, compared to 67.5 percent for the three months ended September 30, 2021, and 60.4 percent for the three months ended December 31, 2020.
• Net mortgage insurance premiums earned were $249.7 million for the quarter ended December 31, 2021, compared to $236.9 million for the quarter ended September 30, 2021, and $286.8 million for the quarter ended December 31, 2020. Net mortgage insurance premiums earned were $998.3 million for the year ended December 31, 2021, compared to $1.1 billion for the year ended December 31, 2020.
  • Mortgage insurance in force portfolio premium yield was 41.0 basis points in the fourth quarter of 2021. This compares to 40.3 basis points in the third quarter of 2021, and 44.6 basis points in the fourth quarter of 2020, or 42.8 basis points excluding the impact of the fourth quarter 2020 premium adjustment described below
  • The impact of single premium policy cancellations before consideration of reinsurance represented 3.4 basis points of direct premium yield in the fourth quarter of 2021, 4.3 basis points in the third quarter of 2021, and 8.7 basis points in the fourth quarter of 2020.
  • Total net mortgage insurance premium yield, which includes the impact of ceded premiums and accrued profit commission, was 41.0 basis points in the fourth quarter of 2021. This compares to 39.6 basis points in the third quarter of 2021, and 46.7 basis points in the fourth quarter of 2020, or 44.8 basis points excluding the impact of the fourth quarter 2020 premium adjustment described below.
  • The fourth quarter of 2020 includes an increase to premiums earned of $11.3 million related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation.
  • Additional details regarding premiums earned may be found in Exhibit D.
• The mortgage insurance provision for losses was a benefit of $46.6 million in the fourth quarter of 2021, compared to provisions of $16.8 million in the third quarter of 2021, and $56.3 million in the fourth quarter of 2020. The mortgage insurance provision for losses was $19.4 million for the year ended December 31, 2021, compared to $483.3 million for the year ended December 31, 2020.
  • The decrease in the fourth quarter of 2021 compared to both the third quarter of 2021 and the fourth quarter of 2020 was primarily related to more favorable development on prior period reserves, as compared to the third quarter of 2021 and fourth quarter of 2020. All periods were impacted by more favorable trends in cures than originally estimated. The decrease for the full year 2021 compared to the full year 2020 was driven primarily by a significant decrease in primary new default notices related to the effects of the COVID-19 pandemic, as well as a decrease in the default to claim rate applied to those defaults.
  • The number of primary delinquent loans was 29,061 as of December 31, 2021, compared to 33,795 as of September 30, 2021, and 55,537 as of December 31, 2020.
  • The loss ratio in the fourth quarter of 2021 was (18.6) percent, compared to 7.1 percent in the third quarter of 2021, and 19.6 percent in the fourth quarter of 2020.
  • Total mortgage insurance claims paid were $10.4 million in the fourth quarter of 2021, compared to $10.2 million in the third quarter of 2021, and $40.6 million in the fourth quarter of 2020. Excluding the impact of commutations and settlements, claims paid were $3.8 million in the fourth quarter of 2021, compared to $6.3 million in the third quarter of 2021, and $8.4 million in the fourth quarter of 2020. For the full year 2021, total net claims paid were $35.3 million, compared to $97.6 million for the full year 2020.
• Radian's homegenius segment offers an array of title, real estate and technology products and services to consumers, mortgage lenders, mortgage and real estate investors, GSEs, real estate brokers and agents.
  • Total homegenius segment revenues for the fourth quarter of 2021 were $44.7 million, compared to $45.1 million for the third quarter of 2021, and $23.6 million for the fourth quarter of 2020. Total homegenius segment revenues for the full year of 2021 were $149.1 million, compared to $102.4 million for the full year of 2020.
  • The 45.5 percent increase in revenues in the year 2021 compared to the year 2020 was primarily driven by a 72.6 percent increase in our title business and a 26.1 percent increase in our real estate services businesses.
• homegenius Profitability Metrics
  • Adjusted pretax operating loss, our primary segment measure of profitability for the homegenius segment, for the quarter ended December 31, 2021 was $2.1 million, compared to $5.6 million for the quarter ended September 30, 2021, and $11.1 million for the quarter ended December 31, 2020. Adjusted pretax operating loss for the full year 2021 was $27.3 million, compared to $23.2 million for the full year 2020.
  • Adjusted pretax operating income before allocated corporate operating expenses for the homegenius segment for the quarter ended December 31, 2021 was $2.7 million, compared to a loss of $0.6 million for the quarter ended September 30, 2021, and a loss of $7.8 million for the quarter ended December 31, 2020. Adjusted pretax operating loss before allocated corporate operating expenses for the homegenius segment for the full year 2021 was $8.8 million, compared to $10.4 million for the full year 2020.
  • Adjusted gross profit for the homegenius segment for the quarter ended December 31, 2021 was $19.7 million, compared to $17.9 million for the quarter ended September 30, 2021, and $7.5 million for the quarter ended December 31, 2020. Adjusted gross profit for the homegenius segment for the full year 2021 was $57.8 million, compared to $39.0 million for the full year 2020. Additional details regarding the homegenius results and related non-GAAP measures may be found in Exhibits F and G.
• Other operating expenses were $80.5 million in the fourth quarter of 2021, compared to $86.5 million in the third quarter of 2021, and $81.6 million in the fourth quarter of 2020. Other operating expenses were $323.7 million for the full year 2021, compared to $280.7 million for the full year 2020.
  • The increase for the full year of 2021 compared to the full year of 2020 was driven primarily by an increase in incentive compensation expense and a decrease in ceding commissions. Additional details regarding other operating expenses by segment may be found in Exhibit E.

CAPITAL AND LIQUIDITY UPDATE

Radian Group

• As of December 31, 2021, Radian Group maintained $604.9 million of available liquidity. Total liquidity, which includes the company’s $275.0 million unsecured revolving credit facility, was $879.9 million as of December 31, 2021.
• During the fourth quarter of 2021, the company repurchased 6.4 million shares of Radian Group common stock at a total cost of $142.1 million, including commissions. For the full year 2021, the company repurchased 17.8 million shares of Radian Group common stock at a total cost of $399.1 million, including commissions.
• On November 10, 2021, Radian Group’s board of directors authorized a regular quarterly dividend on its common stock in the amount of $0.14 per share and the dividend was paid on December 3, 2021.

Radian Guaranty

• As previously announced, in November 2021, Radian Guaranty entered into its sixth fully collateralized mortgage insurance-linked note (ILN) reinsurance transaction in which the company obtained $484.1 million of credit-risk protection from Eagle Re 2021-2 Ltd. (Eagle Re), covering an existing portfolio of mortgage insurance policies written predominantly from January 1, 2021 through and including July 31, 2021. Eagle Re financed the coverage through the issuance of ILNs to eligible capital markets investors of $484.1 million aggregate principal amount of 12.5-year mortgage insurance-linked notes, in an unregistered private offering. Eagle Re is a special purpose insurer domiciled in Bermuda and is not a subsidiary or affiliate of Radian Guaranty. Radian Guaranty's related PMIERs credit under this ILN transaction is determined by the GSE's.
• At December 31, 2021, Radian Guaranty’s Available Assets under PMIERs totaled approximately $5.4 billion, resulting in excess available resources or a “cushion” of $2.1 billion, or 62 percent, over its Minimum Required Assets.
• As of December 31, 2021, 73 percent of Radian Guaranty's primary mortgage insurance risk in force is subject to some form of risk distribution, providing a $1.3 billion reduction of Minimum Required Assets under PMIERs.

RECENT EVENTS

• As previously announced on February 9, 2022, Radian Group’s Board of Directors authorized the following strategic capital actions based on the company's strong financial position and capital flexibility:
  • A quarterly dividend of $0.20 per share, representing an increase of 43 percent from the previous quarterly dividend of $0.14 per share paid on December 3, 2021. The dividend is payable on March 3, 2022, to stockholders of record as of February 21, 2022.
  • A new $400 million share repurchase authorization. The shares may be purchased in the open market or in privately negotiated transactions. Radian plans to utilize a value-based Rule 10b5-1 plan to execute the new authorization which, once implemented, would permit the company to purchase shares, at pre-determined price targets, when it may otherwise be precluded from doing so. The authorization will expire in February 2024.

CONFERENCE CALL

Radian will discuss fourth quarter and year-end 2021 financial results in a conference call tomorrow, Wednesday, February 23, 2022, at 10:00 a.m. Eastern standard time. The conference call will be broadcast live over the Internet at https://radian.com/who-we-are/for-investors/webcasts or at www.radian.com . The call may also be accessed by dialing 800.447.0521 inside the U.S., or 847.413.3238 for international callers, using passcode 50275325 by referencing Radian.

A digital replay of the webcast will be available on the Radian website approximately two hours after the live broadcast ends for a period of two weeks at https://radian.com/who-we-are/for-investors/webcasts using passcode 50275325.

In addition to the information provided in the company's earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian's website at www.radian.com , under Investors.

NON-GAAP FINANCIAL MEASURES

Radian believes that adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity (non-GAAP measures) facilitate evaluation of the company’s fundamental financial performance and provide relevant and meaningful information to investors about the ongoing operating results of the company. On a consolidated basis, these measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be considered in isolation or viewed as substitutes for GAAP measures of performance. The measures described below have been established in order to increase transparency for the purpose of evaluating the company’s operating trends and enabling more meaningful comparisons with Radian’s competitors.

Adjusted pretax operating income (loss) is defined as GAAP consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for certain investments attributable to our reportable segments; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by (ii) the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. Adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the company's statutory tax rate, by average stockholders' equity, based on the average of the beginning and ending balances for each period presented.

In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information non-GAAP measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. Adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's ASC 280 GAAP measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. Adjusted gross profit is further adjusted to remove other operating expenses. In addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and homegenius adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and homegenius adjusted gross profit, respectively, by GAAP total revenue for the homegenius segment. For the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related homegenius profit margins are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our homegenius segment.

See Exhibit F or Radian’s website for a description of these items, as well as Exhibit G for reconciliations to the most comparable consolidated GAAP measures.

ABOUT RADIAN

Radian Group Inc. (NYSE: RDN) is ensuring the American dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, real estate and technology products and services. We are powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk. Visit www.radian.com to learn more about how Radian is shaping the future of mortgage and real estate services.

FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS (Unaudited)

Radian Group Inc. and Subsidiaries
Segment Information
Exhibit E (page 1 of 8)

Summarized financial information concerning our operating segments as of and for the periods indicated is as follows. For a definition of adjusted pretax operating income (loss), homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit, along with reconciliations to consolidated GAAP measures, see Exhibits F and G.

Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measures
Exhibit F (page 1 of 2)

Use of Non-GAAP Financial Measures

In addition to the traditional GAAP financial measures, we have presented “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “ adjusted net operating return on equity, ” which are non-GAAP financial measures for the consolidated company, among our key performance indicators to evaluate our fundamental financial performance. These non-GAAP financial measures align with the way the Company’s business performance is evaluated by both management and the board of directors. These measures have been established in order to increase transparency for the purposes of evaluating our operating trends and enabling more meaningful comparisons with our peers. Although on a consolidated basis “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity” are non-GAAP financial measures, we believe these measures aid in understanding the underlying performance of our operations. Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of the Company’s business segments and to allocate resources to the segments.

Adjusted pretax operating income (loss) is defined as GAAP consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments, except for certain investments attributable to our reportable segments; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as impairment of internal-use software, gains (losses) from the sale of lines of business and acquisition-related income and expenses. Adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the Company’s statutory tax rate, by (ii) the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. Adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the Company’s statutory tax rate, by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.

Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). These adjustments, along with the reasons for their treatment, are described below.

Radian Group Inc. and Subsidiaries
Definition of Consolidated Non-GAAP Financial Measures
Exhibit F (page 2 of 2)

In addition to the above non-GAAP measures for the consolidated company, we also have presented as supplemental information non-GAAP measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. Adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's ASC 280 GAAP measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. Adjusted gross profit is further adjusted to remove other operating expenses. In addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit, respectively, by GAAP total revenue for the homegenius segment. For the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related profit margins are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our homegenius segment.

See Exhibit G for the reconciliation of the most comparable GAAP measures, consolidated pretax income (loss), diluted net income (loss) per share and return on equity to our non-GAAP financial measures for the consolidated company, adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity, respectively. Exhibit G also contains the reconciliation of adjusted pretax operating income (loss) to adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit for the homegenius segment.

Total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss), or in the case of the homegenius non-GAAP measures, for homegenius adjusted pretax operating income (loss). Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity and homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit margin may not be comparable to similarly-named measures reported by other companies.

On a consolidated basis, “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity” are measures not determined in accordance with GAAP. In addition, “homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses", "homegenius adjusted gross profit," “homegenius adjusted pretax operating margin before allocated corporate operating expenses” and “homegenius adjusted pretax operating margin" are also non-GAAP measures. These measures should not be considered in isolation or viewed as substitutes for GAAP pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss), or in the case of the homegenius non-GAAP measures, for homegenius adjusted pretax operating income (loss).

Our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit margin may not be comparable to similarly-named measures reported by other companies. See Exhibit F for additional information on our consolidated non-GAAP financial measures.

FORWARD-LOOKING STATEMENTS

All statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the U.S. Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “seek,” “strategy,” “future,” “likely” or the negative or other variations on these words and other similar expressions. These statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment where new risks emerge from time to time and it is not possible for us to predict all risks that may affect us. The forward-looking statements are not guarantees of future performance, and the forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks and uncertainties include, without limitation:

• the COVID-19 pandemic, which has created periods of significant economic disruption, high unemployment, volatility and disruption in financial markets, and required adjustments in the housing finance system and real estate markets. The COVID-19 pandemic has adversely impacted our businesses, and could further impact our business and subject us to certain risks, including those discussed in “Item 1A. Risk Factors— The COVID-19 pandemic has adversely impacted us, and its ultimate impact on our business and financial results will depend on future developments, which are highly uncertain and cannot be predicted, including the scope, severity and duration of the pandemic and actions taken by governmental authorities in response to the pandemic. ” and the other risk factors in our Annual Report on Form 10-K for the year ended December 31, 2020 and in our subsequent reports and registration statements filed from time to time with the U.S. Securities and Exchange Commission;
• changes in economic conditions that impact the size of the insurable mortgage market, the credit performance of our insured mortgage portfolio and our business prospects;
• changes in the way customers, investors, ratings agencies, regulators or legislators perceive our performance, financial strength and future prospects;
• Radian Guaranty Inc.’s (“Radian Guaranty”) ability to remain eligible under the Private Mortgage Insurer Eligibility Requirements (the “PMIERs”) and other applicable requirements imposed by the Federal Housing Finance Agency (the "FHFA") and by Fannie Mae and Freddie Mac (collectively, the “GSEs”) to insure loans purchased by the GSEs;
• our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy existing and future regulatory requirements, including the PMIERs and any changes thereto and potential changes to the National Association of Insurance Commissioners Model Act;
• changes in the charters or business practices of, or rules or regulations imposed by or applicable to, the GSEs or loans purchased by the GSEs, which may include further changes in response to the COVID-19 pandemic, changes in furtherance of housing policy objectives such as the current FHFA focus on increasing the accessibility and affordability of homeownership for low-and-moderate income borrowers and minority communities, or changes in the requirements for Radian Guaranty to remain an approved insurer to the GSEs such as changes in the PMIERs or the GSEs’ interpretation and application of the PMIERs;
• the effects of the Enterprise Regulatory Capital Framework which, in the form finalized in December 2020, increases the capital requirements for the GSEs and reduces the credit they receive for risk transfer, and among other things, could impact the GSEs' operations and pricing as well as the size of the insurable mortgage market, and which may form the basis for future changes to the PMIERs;
• changes in the current housing finance system in the United States, including the roles of the Federal Housing Administration (the "FHA"), the GSEs and private mortgage insurers in this system;
• our ability to successfully execute and implement our capital plans, including our risk distribution strategy through the capital markets and traditional reinsurance markets, and to maintain sufficient holding company liquidity to meet our liquidity needs;
• our ability to successfully execute and implement our business plans and strategies, including plans and strategies that require GSE and/or regulatory approvals and licenses are subject to complex compliance requirements that we may be unable to satisfy, or may expose us to new risks including those that could impact our capital and liquidity positions;
• uncertainty from the upcoming discontinuance of LIBOR and transition to one or more alternative benchmarks that could cause interest rate volatility and, among other things, impact our investment portfolio, cost of debt and cost of reinsurance through mortgage insurance-linked notes transactions;
• any disruption in the servicing of mortgages covered by our insurance policies, as well as poor servicer performance, which could be impacted by the burdens placed on many servicers due to the COVID-19 pandemic;
• a decrease in the “Persistency Rates” (the percentage of insurance in force that remains in force over a period of time) of our mortgage insurance on monthly premium products;
• competition in the private mortgage insurance industry generally, and more specifically: price competition in our mortgage insurance business, including as a result of formulaic, granular risk-based pricing methodologies that are less transparent than historical rate-card-based pricing practices; and competition from the FHA and the U.S. Department of Veterans Affairs as well as from other forms of credit enhancement, such as GSE-sponsored alternatives to traditional mortgage insurance;
• legislative and regulatory activity (or inactivity), including the adoption of (or failure to adopt) new laws and regulations, or changes in existing laws and regulations, or the way they are interpreted or applied, including potential changes in tax law and other matters currently under consideration in the U.S. Congress;
• legal and regulatory claims, assertions, actions, reviews, audits, inquiries and investigations that could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures, new or increased reserves or have other effects on our business;
• the amount and timing of potential payments or adjustments associated with federal or other tax examinations;
• the possibility that we may fail to estimate accurately, especially in the event of an extended economic downturn or a period of extreme market volatility and economic uncertainty, the likelihood, magnitude and timing of losses in establishing loss reserves for our mortgage insurance business or to accurately calculate and/or project our Available Assets and Minimum Required Assets under the PMIERs, which will be impacted by, among other things, the size and mix of our insurance in force, the level of defaults in our portfolio, the reported status of defaults in our portfolio, including whether they are subject to mortgage forbearance, a repayment plan or a loan modification trial period granted in response to a financial hardship related to COVID-19, the level of cash flow generated by our insurance operations and our risk distribution strategies;
• volatility in our financial results caused by changes in the fair value of our assets and liabilities, including with respect to our use of derivatives and within our investment portfolio;
• changes in “GAAP” (accounting principles generally accepted in the U.S.) or “SAPP” (statutory accounting principles and practices including those required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries) rules and guidance, or their interpretation;
• risks associated with investments to grow our existing businesses, or to pursue new lines of business or new products and services, including our ability and related costs to develop, launch and implement new and innovative technologies and digital products and services, and whether these products and services will receive broad customer acceptance;
• the effectiveness and security of our information technology systems and digital products and services, including the risk that these systems, products or services fail to operate as expected or planned or expose us to cybersecurity or third party risks, including due to malware, unauthorized access, cyber-attack, natural disasters or other similar events;
• our ability to attract and retain key employees; and
• legal and other limitations on amounts we may receive from our subsidiaries, including dividends or ordinary course distributions under our internal tax- and expense-sharing arrangements.

For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, and to subsequent reports and registration statements filed from time to time with the U.S. Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.

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For Investors:
John Damian - Phone: 215.231.1383
email: john.damian@radian.com

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