Radian Group Inc. Q4 FY2025 earnings call

• Strong financial performance in 2025 with net income from continuing operations of $618 million or $4.39 per share for the full year. - Grew mortgage insurance in force portfolio to all-time high. - Completed strategic acquisition of Inigo, a specialty insurer underwriting through Lloyd's of London, funded with available liquidity and excess capital. - Divestiture plan for Mortgage Conduit, Title and Real Estate Services businesses well underway, on track for completion by Q3 2025. - Organizational updates including promoting Steve Keleher and Meghan Bartholomew to co-head Mortgage Insurance business, and promoting Dan Kobell and Rob Quigley to key financial roles. - Radian Guaranty's financial position remains strong with $795 million distributed to Radian Group in 2025, and $1.6 billion PMIERs cushion at year-end.

Mortgage Insurance: In the fourth quarter, net premiums earned were $237 million, highest in over 3 years. Large, high-quality primary Mortgage Insurance portfolio grew 3% year-over-year to $283 billion. NIW grew 6% year-over-year, with $55 billion in 2025 including $15.9 billion in Q4. Persistency rate was 82% in Q4. In-force premium yield was 38 basis points. Investment portfolio was $6.1 billion, generating net investment income of $249 million in 2025. Provision for losses had positive credit trends with strong cure activity. Other operating expenses for Q4 were $56 million, and $246 million for the year, below annual guidance. Radian Guaranty distributed $795 million to Radian Group in 2025. Inigo acquisition: Expected to double annual revenues, be accretive to EPS and returns, expand expertise, capabilities, and geographic reach. Funded entirely with available liquidity and excess capital with no new equity raised.

• Expect Inigo acquisition to double annual revenues, be accretive to EPS and returns. - In 2026, expect dividends of at least $600 million from Radian Guaranty to Radian Group, including a $140 million dividend later in Q1. - Expect leverage ratio to remain below 20% by year-end 2026. - Expect to resume share repurchases under available authorization as part of disciplined capital allocation.

• Comments made during the call include forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially. - Risks and uncertainties include those in Radian's 2024 Form 10-K, third quarter 2025 Form 10-Q, and subsequent SEC filings.

Q: Terry Ma of Barclays asked about updated thoughts on Inigo acquisition financial metrics.

A: Dan Kobell said broadly no changes from initial layout, $1.7 billion acquisition with funds from investment portfolio earning 4%-5% yield now deployed into Inigo expected to earn mid-teens return through cycle, execution risk low with light integration needed.

Q: Terry Ma asked about credit cure trends for recent vintages.

A: Dan Kobell said will monitor, more recent vintages starting to play out but cure activity strong, reserving assumes 92.5% cumulative cure rate, no pockets of concern seen.

Q: Mihir Bhatia of Bank of America asked about pricing environment returns on new business.

A: Dan Kobell said in-force premium yield consistent at 38 basis points, Rick Thornberry added industry pricing stable, focus on economic value, over 80% of NIW sourced through proprietary RADAR Rates platform.

Q: Mihir Bhatia asked about Inigo combined ratio.

A: Dan Kobell said no forward guidance, will provide more detail in first quarter.

Q: Bose George of KBW asked about accretion pretax number, premium to book value intangibles.

A: Dan Kobell confirmed $170 million as pretax, in process of purchase accounting for intangibles, will provide details in first quarter.

Q: Bose George asked about buybacks.

A: Richard Thornberry said shares undervalued, expect to resume opportunistic share repurchases based on financial position and visibility of earnings and capital return