WAYNE, PA — Radian Group Inc. (NYSE: RDN), a provider of mortgage insurance and other real estate services, recently reported its financial results for the third quarter ended September 30, 2023. The results provide a detailed snapshot of the company’s financial health and operational performance, offering investors crucial insights into its current position.
The net income for Q3 2023 was $157 million, or $0.98 per diluted share, compared to the net income for the same period in 2022, which stood at $198 million, or $1.20 per diluted share. Despite this year-over-year decrease, the company’s performance remains robust in a challenging market environment.
The adjusted pretax operating income for the third quarter of 2023 was $210 million, or $1.04 per diluted share, compared to $273 million, or $1.31 per diluted share, for the same period in 2022. This decrease can be attributed to various factors impacting the broader real estate market, including fluctuating interest rates and changing consumer behavior.
Despite these challenges, Radian’s book value per share increased by 12% year-over-year to $26.69 as of September 30, 2023. This includes accumulated other comprehensive income (loss) of $(3.35) per share, primarily due to a net unrealized loss on investments caused by an increase in market interest rates since the first quarter of 2022.
Net Insurance Written (NIW) was $13.9 billion in Q3 2023, marking an 18% decrease from Q2 2023 and a 21% decrease from Q3 2022. Refinances accounted for just 1% of total NIW during the quarter, while Total Primary Mortgage Insurance in-force increased to $269.5 billion.
Persistency was strong, with a twelve-month rate of 84% as of September 30, 2023. Net Mortgage Insurance Premiums Earned were $237 million for the quarter, and the Mortgage Insurance In-force portfolio premium yield was 38.0 basis points. The mortgage insurance provision for losses was a benefit of $8 million in Q3 2023, with Favorable Reserve Development on Prior Period defaults at $55 million.
Homegenius, one of Radian’s business segments, reported revenues of $15 million for Q3 2023, with an Adjusted Pretax Operating Loss at $21 million. Despite this loss, Homegenius continues to be an integral part of Radian’s diversified business model.
Radian Group maintained $1.0 billion of available liquidity as of September 30, 2023, along with an additional $275 million unsecured revolving credit facility. During Q3 2023, the company repurchased 1.9 million shares of its common stock at a total cost of $50 million, demonstrating its commitment to delivering value to shareholders.
In October 2023, Radian Guaranty, a subsidiary of Radian Group, entered into a new insurance-linked notes (ILN) reinsurance transaction to obtain $353 million of credit-risk protection on eligible policies issued between April 1, 2022, and December 31, 2022. Alongside this, Radian Guaranty also entered into an excess-of-loss reinsurance agreement that provided up to $246 million of aggregate reinsurance coverage for mortgage insurance losses.
These strategic initiatives have bolstered Radian’s financial position and risk management capabilities, reflecting the company’s commitment to prudent capital management. As Radian Group navigates through a dynamic real estate market, its focus on maintaining a strong balance sheet and diversifying its revenue streams positions it well for future growth.
In addition to the information provided in the company’s earnings news release, other statistical and financial information is available on Radian’s website at www.radian.com, under Investors.
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