RDN 8-K

Radian Group Inc (RDN)

8-K 2023-02-09 For: 2023-02-08

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Added on April 04, 2026

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Delaware		001-11356		23-2691170
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.001 par value per share		RDN		New York Stock Exchange

	RADIAN GROUP INC.
	(Registrant)


Date: February 9, 2023	By: /s/ Robert J. Quigley
	Robert J. Quigley
	Executive Vice President, Controller and Chief Accounting Officer

Key Financial Highlights	Quarter ended			Year ended
($ in millions, except per-share amounts)	December 31, 2022	September 30, 2022	December 31, 2021	December 31, 2022	December 31, 2021
Net income ⁽¹⁾	$162.3	$198.3	$193.4	$742.9	$600.7
Diluted net income per share	$1.01	$1.20	$1.07	$4.35	$3.16
Consolidated pretax income	$203.3	$255.5	$246.5	$952.8	$764.8
Adjusted pretax operating income ⁽²⁾	$213.0	$272.7	$245.1	$1,052.7	$757.7
Adjusted diluted net operating income per share ⁽²⁾⁽³⁾	$1.05	$1.31	$1.07	$4.87	$3.15
Return on equity ⁽¹⁾⁽⁴⁾	17.0%	20.7%	18.2%	18.2%	14.1%
Adjusted net operating return on equity ⁽²⁾⁽³⁾	17.6%	22.5%	18.2%	20.3%	14.0%
New Insurance Written (NIW) - mortgage insurance	$12,859	$17,616	$23,710	$67,954	$91,830
Net premiums earned - mortgage insurance	$229.9	$235.2	$249.7	$957.2	$998.3
New defaults ⁽⁵⁾	10,735	9,601	9,342	37,738	37,470
Provision for losses - mortgage insurance	($43.5)	($97.5)	($46.6)	($339.4)	$19.4
homegenius revenues	$18.6	$25.1	$44.7	$110.0	$149.1

	Quarter ended
($ in millions, except per-share amounts)	December 31, 2022	September 30, 2022	December 31, 2021
Book value per share	$24.95	$23.80	$24.28
Accumulated other comprehensive income (loss) value per share ⁽⁶⁾	($2.91)	($3.20)	$0.68
PMIERs Available Assets ⁽⁷⁾	$5,553	$5,358	$5,406
PMIERs excess Available Assets ⁽⁸⁾	$1,727	$1,628	$2,077
Total Holding Company Liquidity ⁽⁹⁾	$1,178	$848	$880
Total investments	$5,693	$5,592	$6,514
Primary mortgage insurance in force	$260,994	$259,121	$245,972
Percentage of primary loans in default ^(5)(10)	2.2%	2.1%	2.9%
Mortgage insurance loss reserves	$421	$478	$823

(1)		Net income for the fourth quarter of 2022 includes a pretax net gain of $6.8 million on investments and other financial instruments. Net income for the third quarter and full year of 2022 includes a pretax net loss on investments and other financial instruments of $16.3 million and $80.7 million, respectively. This compares with a pretax net gain on investments and other financial instruments of $3.0 million and $15.6 million for the fourth quarter and full year of 2021, respectively.
(2)		Adjusted results, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity, are non-GAAP financial measures. For definitions and reconciliations of these measures to the comparable GAAP measures, see Exhibits F and G.
(3)		Calculated using the company’s statutory tax rate of 21%.
(4)		Calculated by dividing annualized net income by average stockholders' equity, based on the average of the beginning and ending balances for each period presented.
(5)		Defaults for the fourth quarter of 2022 were impacted by two items: (i) approximately 300 incremental new defaults from areas impacted by Hurricane Ian and (ii) approximately 700 incremental total defaults (comprised of approximately 500 incremental new defaults and 200 fewer cures) due to a timing change in when Radian receives servicer default reporting. Since these incremental defaults are expected to be temporary in nature, there is no material impact expected to our provision for losses, loss reserves or claims paid from either of these items. See “Fourth Quarter Highlights” below for additional information.
(6)		Included in book value per share for each period presented.
(7)		Represents Radian Guaranty’s Available Assets, calculated in accordance with the Private Mortgage Insurer Eligibility Requirements (PMIERs) financial requirements in effect for each date shown.
(8)		Represents Radian Guaranty’s excess or “cushion” of Available Assets over its Minimum Required Assets, calculated in accordance with the PMIERs financial requirements in effect for each date shown.
(9)		Represents Radian Group's total liquidity, including available capacity under its $275 million unsecured revolving credit facility.
(10)		Represents the number of primary loans in default as a percentage of the total number of insured primary loans.

RDN 8-K

Radian Announces Fourth Quarter and Full Year 2022 Financial Results

Contacts


550 East Swedesford Road, Suite 350 Wayne, Pennsylvania, 19087
(Address of Principal Executive Offices, and Zip Code)

FINANCIAL RESULTS AND SUPPLEMENTAL INFORMATION CONTENTS (Unaudited)

Exhibit A:			Condensed Consolidated Statements of Operations Trend Schedule
Exhibit B:			Net Income Per Share Trend Schedule
Exhibit C:			Condensed Consolidated Balance Sheets
Exhibit D:			Net Premiums Earned
Exhibit E:			Segment Information
Exhibit F:			Definition of Consolidated Non-GAAP Financial Measures
Exhibit G:			Consolidated Non-GAAP Financial Measure Reconciliations
Exhibit H:			Mortgage Supplemental Information
			New Insurance Written
Exhibit I:			Mortgage Supplemental Information
			Primary Insurance in Force and Risk in Force
Exhibit J:			Mortgage Supplemental Information
			Claims and Reserves, Default Statistics
Exhibit K:			Mortgage Supplemental Information
			Reinsurance Programs

Radian Group Inc. and Subsidiaries Condensed Consolidated Statements of Operations Trend Schedule Exhibit A (page 1 of 2)

	2022												2021
(In thousands, except per-share amounts)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Revenues
Net premiums earned	$	232,827		$	240,222		$	253,892		$	254,190		$	261,437
Services revenue		15,441			20,146			27,281			29,348			35,693
Net investment income		59,091			51,414			46,957			38,196			37,407
Net gains (losses) on investments and other financial instruments		6,845			(16,252	)		(41,869	)		(29,457	)		3,025
Other income		520			659			572			703			805
Total revenues		314,724			296,189			286,833			292,980			338,367
Expenses
Provision for losses		(43,599	)		(96,964	)		(113,922	)		(83,754	)		(46,219	)
Policy acquisition costs		5,931			5,442			5,940			6,605			7,271
Cost of services		16,128			18,717			22,760			24,753			28,333
Other operating expenses		109,785			91,327			90,495			89,541			80,476
Interest expense		21,594			21,183			20,831			20,846			21,137
Amortization of other acquired intangible assets		1,587			1,023			849			849			863
Total expenses		111,426			40,728			26,953			58,840			91,861
Pretax income		203,298			255,461			259,880			234,140			246,506
Income tax provision		40,968			57,181			58,687			53,009			53,061
Net income	$	162,330		$	198,280		$	201,193		$	181,131		$	193,445
Diluted net income per share	$	1.01		$	1.20		$	1.15		$	1.01		$	1.07

Selected Mortgage Key Ratios

	2022								2021
	Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4
Loss ratio ⁽¹⁾	(18.9	)%	(41.5	)%	(46.2	)%	(34.3	)%	(18.6	)%
Expense ratio⁽²⁾	27.3	%	26.1	%	26.2	%	27.2	%	25.6	%

(1)		For our Mortgage segment, calculated as provision for losses expressed as a percentage of net premiums earned. See Exhibit E for additional information.
(2)		For our Mortgage segment, calculated as operating expenses, (which include policy acquisition costs and other operating expenses, as well as allocated corporate operating expenses), expressed as a percentage of net premiums earned. See Exhibit E for additional information.

Radian Group Inc. and Subsidiaries Condensed Consolidated Statements of Operations Exhibit A (page 2 of 2)

	Year Ended December 31,
(In thousands, except per-share amounts)		2022			2021
Revenues:
Net premiums earned	$	981,131		$	1,037,183
Services revenue		92,216			125,825
Net investment income		195,658			147,909
Net gains (losses) on investments and other financial instruments		(80,733	)		15,603
Other income		2,454			3,412
Total revenues		1,190,726			1,329,932
Expenses:
Provision for losses		(338,239	)		20,877
Policy acquisition costs		23,918			29,029
Cost of services		82,358			103,714
Other operating expenses		381,148			323,686
Interest expense		84,454			84,344
Amortization of other acquired intangible assets		4,308			3,450
Total expenses		237,947			565,100
Pretax income		952,779			764,832
Income tax provision		209,845			164,161
Net income	$	742,934		$	600,671
Diluted net income per share	$	4.35		$	3.16

Radian Group Inc. and Subsidiaries Net Income Per Share Trend Schedule Exhibit B

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

	2022											2021
(In thousands, except per-share amounts)	Qtr 4		Qtr 3			Qtr 2			Qtr 1			Qtr 4
Net income—basic and diluted	$	162,330	$	198,280	.	$	201,193	.	$	181,131	.	$	193,445
Average common shares outstanding—basic		158,357		162,506	.		173,705	.		176,816	.		179,500
Dilutive effect of stock-based compensation arrangements ⁽¹⁾		2,450		2,232			1,714			2,263			1,628
Adjusted average common shares outstanding—diluted		160,807		164,738			175,419			179,079			181,128
Basic net income per share	$	1.03	$	1.22		$	1.16		$	1.02		$	1.08
Diluted net income per share	$	1.01	$	1.20	.	$	1.15	.	$	1.01	.	$	1.07

	Year Ended December 31,
(In thousands)	2022	2021
Shares of common stock equivalents	—	28

Radian Group Inc. and Subsidiaries Condensed Consolidated Balance Sheets Exhibit C

	December 31,			September 30,			June 30,			March 31,			December 31,
(In thousands, except per-share amounts)		2022			2022			2022			2022			2021
Assets
Investments	$	5,693,491		$	5,591,881		$	5,906,147		$	6,334,950		$	6,513,542
Cash		56,183			54,701			135,262			131,853			151,145
Restricted cash		377			1,107			561			1,651			1,475
Accrued investment income		40,093			38,596			35,774			35,531			32,812
Accounts and notes receivable		119,834			174,041			166,380			142,579			124,016
Reinsurance recoverable		25,633			30,569			39,876			55,015			67,896
Deferred policy acquisition costs		18,460			17,920			16,983			16,383			16,317
Property and equipment, net		70,981			75,740			74,874			75,275			75,086
Goodwill and other acquired intangible assets, net		15,285			16,873			17,895			18,744			19,593
Prepaid federal income taxes		596,368			526,123			466,123			354,123			354,123
Other assets		427,024			458,292			414,412			449,642			483,180
Total assets	$	7,063,729		$	6,985,843		$	7,274,287		$	7,615,746		$	7,839,185
Liabilities and stockholders’ equity
Unearned premiums	$	271,479		$	285,290		$	298,991		$	312,013		$	329,090
Reserve for losses and loss adjustment expense		426,843			483,664			594,808			727,247			828,642
Senior notes		1,413,504			1,412,473			1,411,458			1,410,458			1,409,473
Other borrowings		155,822			153,550			184,284			148,983			150,983
Reinsurance funds withheld		152,067			218,777			223,649			225,363			228,078
Net deferred tax liability		391,083			335,374			324,866			324,004			337,509
Other liabilities		333,604			358,665			305,269			320,114			296,614
Total liabilities		3,144,402			3,247,793			3,343,325			3,468,182			3,580,389
Common stock		176			176			186			193			194
Treasury stock		(930,643	)		(930,396	)		(930,284	)		(920,958	)		(920,798	)
Additional paid-in capital		1,519,641			1,513,615			1,698,490			1,871,763			1,878,372
Retained earnings		3,786,952			3,656,870			3,491,675			3,326,119			3,180,935
Accumulated other comprehensive income (loss)		(456,799	)		(502,215	)		(329,105	)		(129,553	)		120,093
Total stockholders’ equity		3,919,327			3,738,050			3,930,962			4,147,564			4,258,796
Total liabilities and stockholders’ equity	$	7,063,729		$	6,985,843		$	7,274,287		$	7,615,746		$	7,839,185
Shares outstanding		157,056			157,058			166,388			174,648			175,421
Book value per share	$	24.95		$	23.80		$	23.63		$	23.75		$	24.28

Debt to capital ratio ⁽¹⁾		26.5	%		27.4	%		26.4	%		25.4	%		24.9	%
Risk to capital ratio-Radian Guaranty only		10.7:1			11.1:1			11.9:1			12.1:1			11.1:1

Radian Group Inc. and Subsidiaries Net Premiums Earned Exhibit D (page 1 of 2)

	2022													2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Premiums earned
Direct - Mortgage
Premiums earned, excluding revenue from cancellations	$	247,880		$	250,140		$	249,936		$	243,600		$	248,704
Single Premium Policy cancellations		5,756			6,705			6,894			14,696			20,530
Total direct - Mortgage		253,636			256,845			256,830			258,296			269,234
Assumed - Mortgage ⁽¹⁾		(56	)		1,211			1,539			1,331			1,470
Ceded - Mortgage
Premiums earned, excluding revenue from cancellations		(35,773	)		(38,879	)		(28,565	)		(27,339	)		(28,333	)
Single Premium Policy cancellations ⁽²⁾		(1,676	)		(1,844	)		(1,965	)		(4,192	)		(5,905	)
Profit commission - other ⁽³⁾		13,802			17,864			19,070			17,078			13,199
Total ceded premiums - Mortgage ⁽⁴⁾		(23,647	)		(22,859	)		(11,460	)		(14,453	)		(21,039	)
Net premiums earned - Mortgage		229,933			235,197			246,909			245,174			249,665
Net premiums earned - homegenius		2,894			5,025			6,983			9,016			11,772
Net premiums earned	$	232,827		$	240,222		$	253,892		$	254,190		$	261,437

(1)		Represents premiums from our participation in certain credit risk transfer programs. In the fourth quarter of 2022, we novated this insured risk to an unrelated third-party reinsurer, which assumed all rights, interests, liabilities and obligations related to our participation in these programs on a prospective basis.
(2)		Includes the impact of related profit commissions.
(3)		The amounts represent the profit commission on the Single Premium QSR Program and 2022 QSR Agreement, excluding the impact of Single Premium Policy cancellations.
(4)		See Exhibit K for additional information on ceded premiums for our various reinsurance programs.

(1)		Represents premiums from our participation in certain credit risk transfer programs. In the fourth quarter of 2022, we novated this insured risk to an unrelated third-party reinsurer, which assumed all rights, interests, liabilities and obligations related to our participation in these programs on a prospective basis.
(2)		Includes the impact of related profit commissions.
(3)		The amounts represent the profit commission on the Single Premium QSR Program and 2022 QSR Agreement, excluding the impact of Single Premium Policy cancellations.
(4)		See Exhibit K for additional information on ceded premiums for our various reinsurance programs.

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 4 of 8)

	Mortgage
	2022												2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Net premiums written⁽¹⁾	$	227,791		$	235,076		$	248,645		$	248,360		$	238,529
(Increase) decrease in unearned premiums		2,142			121			(1,736	)		(3,186	)		11,136
Net premiums earned		229,933			235,197			246,909			245,174			249,665
Services revenue		328			405			2,105			4,552			4,560
Net investment income		52,165			44,842			40,197			34,017			33,916
Other income		512			589			572			703			661
Total		282,938			281,033			289,783			284,446			288,802

Provision for losses⁽²⁾		(43,509	)		(97,493	)		(114,179	)		(84,193	)		(46,560	)
Policy acquisition costs		5,931			5,442			5,940			6,605			7,271
Cost of services		235			373			1,960			3,383			3,710
Other operating expenses before allocated corporate operating expenses^{(2) (3)}		20,131			23,396			25,474			23,755			23,365
Interest expense		21,580			21,183			20,831			20,846			21,137
Total ⁽²⁾		4,368			(47,099	)		(59,974	)		(29,604	)		8,923
Adjusted pretax operating income before allocated corporate operating expenses		278,570			328,132			349,757			314,050			279,879
Allocation of corporate operating expenses		36,663			32,457			33,237			36,209			33,305
Adjusted pretax operating income	$	241,907		$	295,675		$	316,520		$	277,841		$	246,574

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.

	Three Months Ended December 31, 2022
(In thousands)	Mortgage			homegenius			All Other ⁽¹⁾		Inter-segment ⁽²⁾			Total
Net premiums written ⁽³⁾	$	227,791		$	2,894		$	—	$	—		$	230,685
Decrease in unearned premiums		2,142			—			—		—			2,142
Net premiums earned		229,933			2,894			—		—			232,827
Services revenue		328			15,207			—		(94	)		15,441
Net investment income		52,165			366			6,560		—			59,091
Net gains (losses) on investments and other financial instruments		—			—			47		—			47
Other income		512			170			8		(170	)		520
Total		282,938			18,637			6,615		(264	)		307,926
Provision for losses		(43,509	)		(90	)		—		—			(43,599	)
Policy acquisition costs		5,931			—			—		—			5,931
Cost of services		235			15,893			—		—			16,128
Other operating expenses before allocated corporate operating expenses ⁽⁴⁾		20,131			27,998			3,606		(264	)		51,471
Interest expense		21,580			—			14		—			21,594
Total		4,368			43,801			3,620		(264	)		51,525
Adjusted pretax operating income (loss) before allocated corporate operating expenses		278,570			(25,164	)		2,995		—			256,401
Allocation of corporate operating expenses		36,663			6,302			420		—			43,385
Adjusted pretax operating income (loss)	$	241,907		$	(31,466	)	$	2,575	$	—		$	213,016

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 2 of 8)

	Three Months Ended December 31, 2021
(In thousands)	Mortgage			homegenius			All Other ⁽¹⁾		Inter-segment ⁽²⁾			Total
Net premiums written ⁽³⁾	$	238,529		$	11,772		$	—	$	—		$	250,301
Decrease in unearned premiums		11,136			—			—		—			11,136
Net premiums earned		249,665			11,772			—		—			261,437
Services revenue		4,560			31,177			30		(74	)		35,693
Net investment income		33,916			255			3,236		—			37,407
Net gains (losses) on investments and other financial instruments		—			1,509			—		—			1,509
Other income		661			—			144		—			805
Total		288,802			44,713			3,410		(74	)		336,851
Provision for losses		(46,560	)		369			—		(28	)		(46,219	)
Policy acquisition costs		7,271			—			—		—			7,271
Cost of services		3,710			24,615			8		—			28,333
Other operating expenses before allocated corporate operating expenses ⁽⁴⁾		23,365			16,998			2,422		(46	)		42,739
Interest expense		21,137			—			—		—			21,137
Total		8,923			41,982			2,430		(74	)		53,261
Adjusted pretax operating income (loss) before allocated corporate operating expenses		279,879			2,731			980		—			283,590
Allocation of corporate operating expenses		33,305			4,847			373		—			38,525
Adjusted pretax operating income (loss)	$	246,574		$	(2,116	)	$	607	$	—		$	245,065


	Year Ended December 31, 2022
(In thousands)	Mortgage			homegenius			All Other ⁽¹⁾		Inter-segment ⁽²⁾			Total
Net premiums written ⁽³⁾	$	959,872		$	23,918		$	—	$	—		$	983,790
Decrease in unearned premiums		(2,659	)		—			—		—			(2,659	)
Net premiums earned		957,213			23,918			—		—			981,131
Services revenue		7,390			85,158			—		(332	)		92,216
Net investment income		171,221			729			23,708		—			195,658
Net gains (losses) on investments and other financial instruments		—			—			47		—			47
Other income		2,376			170			78		(170	)		2,454
Total		1,138,200			109,975			23,833		(502	)		1,271,506
Provision for losses		(339,374	)		1,135			—		—			(338,239	)
Policy acquisition costs		23,918			—			—		—			23,918
Cost of services		5,951			76,407			—		—			82,358
Other operating expenses before allocated corporate operating expenses⁽⁴⁾		92,756			97,775			13,269		(502	)		203,298
Interest expense		84,440			—			14		—			84,454
Total		(132,309	)		175,317			13,283		(502	)		55,789
Adjusted pretax operating income (loss) before allocated corporate operating expenses		1,270,509			(65,342	)		10,550		—			1,215,717
Allocation of corporate operating expenses		138,566			22,856			1,578		—			163,000
Adjusted pretax operating income (loss)	$	1,131,943		$	(88,198	)	$	8,972	$	—		$	1,052,717

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 3 of 8)

	Year Ended December 31, 2021
(In thousands)	Mortgage		homegenius			All Other ⁽¹⁾		Inter-segment ⁽²⁾			Total
Net premiums written ⁽³⁾	$	944,546	$	38,901		$	—	$	—		$	983,447
Decrease in unearned premiums		53,736		—			—		—			53,736
Net premiums earned		998,282		38,901			—		—			1,037,183
Services revenue		17,670		108,282			154		(281	)		125,825
Net investment income		132,929		358			14,622		—			147,909
Net gains (losses) on investments and other financial instruments		—		1,509			—		—			1,509
Other income		2,678		—			734		—			3,412
Total		1,151,559		149,050			15,510		(281	)		1,315,838
Provision for losses		19,437		1,540			—		(100	)		20,877
Policy acquisition costs		29,029		—			—		—			29,029
Cost of services		13,928		89,722			64		—			103,714
Other operating expenses before allocated corporate operating expenses ⁽⁴⁾		95,793		66,630			10,497		(181	)		172,739
Interest expense		84,344		—			—		—			84,344
Total		242,531		157,892			10,561		(281	)		410,703
Adjusted pretax operating income (loss) before allocated corporate operating expenses		909,028		(8,842	)		4,949		—			905,135
Allocation of corporate operating expenses		127,482		18,482			1,422		—			147,386
Adjusted pretax operating income (loss)	$	781,546	$	(27,324	)	$	3,527	$	—		$	757,749


(1)		All Other activities include: (i) income (losses) from assets held by our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; and (iii) certain investments in new business opportunities, including activities and investments associated with Radian Mortgage Capital, and other immaterial activities.
(2)		Includes immaterial inter-segment revenue for our homegenius segment and immaterial inter-segment expenses for our Mortgage segment and All Other activities.
(3)		Net of ceded premiums written under our quota share and excess-of-loss reinsurance agreements. See Exhibit K for additional information.
(4)		Does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss).

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 5 of 8)

	All Other⁽⁴⁾
	2022								2021
(In thousands)	Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4
Services revenue	$	—	$	—	$	—	$	—	$	30
Net investment income		6,560		6,326		6,661		4,161		3,236
Net gains (losses) on investments and other financial instruments		47		—		—		—		—
Other income		8		70		—		—		144
Total		6,615		6,396		6,661		4,161		3,410

Cost of services		—		—		—		—		8
Other operating expenses before allocated corporate operating expenses ⁽²⁾ ⁽³⁾		3,606		3,444		3,077		3,142		2,422
Interest expense		14		—		—		—		—
Total ⁽²⁾		3,620		3,444		3,077		3,142		2,430
Adjusted pretax operating income before allocated corporate operating expenses		2,995		2,952		3,584		1,019		980
Allocation of corporate operating expenses		420		371		381		406		373
Adjusted pretax operating income (loss)	$	2,575	$	2,581	$	3,203	$	613	$	607

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 6 of 8)

Supplemental Other Operating Expense Information by Segment

	Mortgage
	2022												2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Other operating expenses by type
Salaries and other base employee expenses	$	28,059		$	23,824		$	24,420		$	22,189		$	23,610
Variable and share-based incentive compensation		10,419			10,186			11,524			16,697			12,649
Other general operating expenses		23,414			26,116			25,611			25,027			25,290
Ceding commissions		(5,098	)		(4,273	)		(2,844	)		(3,949	)		(4,879	)
Total	$	56,794		$	55,853		$	58,711		$	59,964		$	56,670

	All Other
	2022								2021
(In thousands)	Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4
Other operating expenses by type
Salaries and other base employee expenses	$	1,529	$	1,429	$	1,726	$	1,613	$	1,001
Variable and share-based incentive compensation		755		751		709		953		874
Other general operating expenses		1,742		1,635		1,023		982		920
Total	$	4,026	$	3,815	$	3,458	$	3,548	$	2,795

Radian Group Inc. and Subsidiaries Segment Information Exhibit E (page 7 of 8)

	Inter-segment
	2022												2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Other operating expenses by type
Other general operating expenses	$	(264	)	$	(165	)	$	(33	)	$	(40	)	$	(46	)
Total	$	(264	)	$	(165	)	$	(33	)	$	(40	)	$	(46	)

	(1)		*Net gains (losses) on investments and other financial instruments.* The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized gains and losses arise primarily from changes in the market value of our investments that are classified as trading or equity securities. These valuation adjustments may not necessarily result in realized economic gains or losses.

			Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses and changes in fair value of other financial instruments. Except for certain investments attributable to our segments, we do not view them to be indicative of our fundamental operating activities.

	(2)		*Loss on extinguishment of debt.* Gains or losses on early extinguishment of debt and losses incurred to purchase our debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends.

	(3)		*Amortization and impairment of goodwill and other acquired intangible assets.* Amortization of acquired intangible assets represents the periodic expense required to amortize the cost of acquired intangible assets over their estimated useful lives. Acquired intangible assets are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. We do not view these charges as part of the operating performance of our primary activities.

	(4)		*Impairment of other long-lived assets and other non-operating items.* Includes activities that we do not view to be indicative of our fundamental operating activities, such as: (i) impairment of internal-use software and other long-lived assets; (ii) gains (losses) from the sale of lines of business; and (iii) acquisition-related income and expenses.

Radian Group Inc. and Subsidiaries Consolidated Non-GAAP Financial Measure Reconciliations Exhibit G (page 1 of 5)

Reconciliation of Consolidated Pretax Income to Adjusted Pretax Operating Income

	2022													2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Consolidated pretax income	$	203,298		$	255,461		$	259,880		$	234,140		$	246,506
Less reconciling income (expense) items
Net gains (losses) on investments and other financial instruments ⁽¹⁾		6,798			(16,252	)		(41,869	)		(29,457	)		1,516
Amortization of other acquired intangible assets		(1,587	)		(1,023	)		(849	)		(849	)		(863	)
Impairment of other long-lived assets and other non-operating items ⁽²⁾		(14,929	)		16			565			(502	)		788
Total adjusted pretax operating income ⁽³⁾	$	213,016		$	272,720		$	302,033		$	264,948		$	245,065

(1)		Excludes certain net gains (losses) on investments that are attributable to specific operating segments and therefore included in adjusted pretax operating income (loss).
(2)		The amounts for all the periods presented are included in other operating expenses on the Condensed Consolidated Statement of Operations in Exhibit A and primarily relate to impairments of other long-lived assets.
(3)		Total adjusted pretax operating income consists of adjusted pretax operating income (loss) for each reportable segment and All Other activities as follows.

Radian Group Inc. and Subsidiaries Consolidated Non-GAAP Financial Measure Reconciliations Exhibit G (page 2 of 5)

Reconciliation of Diluted Net Income Per Share to Adjusted Diluted Net Operating Income Per Share

	2022													2021
	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
Diluted net income per share	$	1.01		$	1.20		$	1.15		$	1.01		$	1.07
Less per-share impact of reconciling income (expense) items
Net gains (losses) on investments and other financial instruments		0.04			(0.10	)		(0.24	)		(0.16	)		0.01
Amortization of other acquired intangible assets		(0.01	)		(0.01	)		—			(0.01	)		—
Impairment of other long-lived assets and other non-operating items		(0.09	)		—			—			—			—
Income tax (provision) benefit on reconciling income (expense) items⁽¹⁾		0.01			0.02			0.05			0.03			—
Difference between statutory and effective tax rates		0.01			(0.02	)		(0.02	)		(0.02	)		(0.01	)
Per-share impact of reconciling income (expense) items		(0.04	)		(0.11	)		(0.21	)		(0.16	)		—
Adjusted diluted net operating income per share ⁽¹⁾	$	1.05		$	1.31		$	1.36		$	1.17		$	1.07

Reconciliation of Return on Equity to Adjusted Net Operating Return on Equity ⁽¹⁾

	2022								2021
	Qtr 4		Qtr 3		Qtr 2		Qtr 1		Qtr 4
Return on equity⁽¹⁾	17.0	%	20.7	%	19.9	%	17.2	%	18.2	%
Less impact of reconciling income (expense) items ⁽²⁾
Net gains (losses) on investments and other financial instruments	0.7		(1.7	)	(4.1	)	(2.8	)	0.1
Amortization of other acquired intangible assets	(0.2	)	(0.1	)	(0.1	)	(0.1	)	(0.1	)
Impairment of other long-lived assets and other non-operating items	(1.6	)	—		0.1		—		0.1
Income tax (provision) benefit on reconciling income (expense) items⁽³⁾	0.2		0.4		0.9		0.6		—
Difference between statutory and effective tax rates	0.3		(0.4	)	(0.5	)	(0.4	)	(0.1	)
Impact of reconciling income (expense) items	(0.6	)	(1.8	)	(3.7	)	(2.7	)	—
Adjusted net operating return on equity ⁽³⁾	17.6	%	22.5	%	23.6	%	19.9	%	18.2	%

(1)		Calculated by dividing annualized net income (loss) by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented.
(2)		Annualized, as a percentage of average stockholders’ equity.
(3)		Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included.

Radian Group Inc. and Subsidiaries Consolidated Non-GAAP Financial Measure Reconciliations Exhibit G (page 3 of 5)

Reconciliation of homegenius Adjusted Pretax Operating Income (Loss) to homegenius Adjusted Gross Profit

	2022													2021
(In thousands)	Qtr 4			Qtr 3			Qtr 2			Qtr 1			Qtr 4
homegenius adjusted pretax operating income (loss)	$	(31,466	)	$	(25,536	)	$	(17,690	)	$	(13,506	)	$	(2,116	)
Less reconciling income (expense) items
Allocation of corporate operating expenses		(6,302	)		(5,555	)		(5,719	)		(5,280	)		(4,847	)
Adjusted pretax operating income (loss) before allocated corporate operating expenses		(25,164	)		(19,981	)		(11,971	)		(8,226	)		2,731
Less reconciling income (expense) items
Other operating expenses before allocated corporate operating expenses		(27,998	)		(26,285	)		(23,205	)		(20,287	)		(16,998	)
homegenius adjusted gross profit	$	2,834		$	6,304		$	11,234		$	12,061		$	19,729

(1)		Excludes certain net gains (losses) on investments that are attributable to specific operating segments and therefore included in adjusted pretax operating income (loss).
(2)		The amounts for both periods are included in other operating expenses on the Condensed Consolidated Statement of Operations in Exhibit A and primarily relate to impairments of other long-lived assets.
(3)		Total adjusted pretax operating income consists of adjusted pretax operating income (loss) for each reportable segment and All Other activities as follows:

(1)		Calculated by dividing net income by average stockholders’ equity.
(2)		As a percentage of average stockholders’ equity.
(3)		Calculated using the company’s federal statutory tax rate of 21%. Any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included.

(1)		Borrower-paid Single Premium Policies were 4.9%, 4.3%, 4.4%, 5.3% and 6.3% of NIW for the periods indicated, respectively.
(2)		For loans with multiple borrowers, the percentage of NIW by FICO score represents the lowest of the borrowers’ FICO scores.

(1)		Borrower-paid Single Premium Policies were 7.7%, 7.9%, 8.1%, 8.4% and 8.5% of primary RIF for the periods indicated, respectively.
(2)		For loans with multiple borrowers, the percentage of primary RIF by FICO score represents the lowest of the borrowers’ FICO scores.
(3)		The Persistency Rate on a quarterly, annualized basis is calculated based on loan-level detail for the quarter ending as of the date shown. It may be impacted by seasonality or other factors, including the level of refinance activity during the applicable periods and may not be indicative of full-year trends.
(4)		The Persistency Rate was reduced by an increase in cancellations of Single Premium Policies due to increased cancellations identified by our ongoing servicer monitoring process for Single Premium Policies.