WAYNE, PA — Radian Group Inc. (NYSE: RDN) reported robust financial performance for the second quarter ending June 30, 2024, showcasing significant gains in net income and operational efficiency.
The mortgage insurance provider posted a net income of $152 million, or $0.98 per diluted share, up from $146 million, or $0.91 per diluted share, in the same period last year. Adjusted pretax operating income reached $193 million, a rise from $184 million in the previous year.
“We reported another quarter with excellent results for Radian,” said Radian’s Chief Executive Officer Rick Thornberry. “We increased book value per share by 12% year-over-year, generated net income of $152 million and delivered a return on equity of 13.6% in the second quarter.”
Radian’s book value per share grew to $29.66, a 12% increase from $26.51 a year earlier. The company also enhanced its liquidity, raising available holding company liquidity to $1.2 billion after a $200 million ordinary dividend from Radian Guaranty.
Radian expanded its share repurchase authorization to $900 million, with $50 million of shares repurchased in the second quarter, leaving $667 million of purchase authority available. The program is extended through June 2026.
Quarterly Highlights
New insurance written (NIW) totaled $13.9 billion, a jump from $11.5 billion in Q1 2024 but a decrease from $16.9 billion in Q2 2023. Persistency remained stable at 84% over the past twelve months.
Net mortgage insurance premiums earned were $235 million, slightly up from $234 million in Q1 2024 and significantly higher than $211 million in Q2 2023. The mortgage insurance provision for losses showed a benefit of $2 million, down from $22 million in the previous year.
Operating expenses rose to $92 million from $83 million in Q1 2024, largely due to share-based incentive grants and severance costs.
Capital and Liquidity
Radian Group maintained $1.5 billion in total liquidity, including a $275 million unsecured revolving credit facility. The company announced a $450 million redemption of its 2024 senior notes, set to reduce holding company debt significantly.
Insights & Outlook
Radian’s strong Q2 performance and increased liquidity are encouraging signs for shareholders. The company’s ability to grow book value and maintain a high return on equity highlights its financial health.
However, the decrease in NIW compared to last year and rising operating expenses warrant caution. The expanded share repurchase program indicates management’s confidence in the company’s future prospects.
Given these factors, Radian Group appears to be a Hold. Investors should monitor Radian’s ability to sustain its growth and manage costs effectively.
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