On this page of StockholderLetter.com we present the latest annual shareholder letter from RADIAN GROUP INC — ticker symbol RDN. Reading current and past RDN letters to shareholders can bring important insights into the investment thesis.
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3/31/2025 Letter Continued (Full PDF)
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3/30/2023 RDN Stockholder Letter
• 4/4/2024 RDN Stockholder Letter
• More "Insurance Brokers" Category Stockholder Letters
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RDN Benford's Law Stock Score = 85
3/31/2025 Letter Continued (Full PDF)
•
3/30/2023 RDN Stockholder Letter•
4/4/2024 RDN Stockholder Letter•
More "Insurance Brokers" Category Stockholder Letters•
RDN Benford's Law Stock Score = 85RDN Shareholder/Stockholder Letter Transcript:
-100 OUR CORE VALUES Deliver the Brand Promise Our People are the Difference We are a customer-centric enterprise striving to be the market leading brand as defined by our customers. We recognize that our people make the difference in our franchise. Innovate for the Future Do What s Right We embrace innovative technologies to strategically differentiate the delivery of our products and services. We will always do the right thing, without compromise. Create Shareholder Value Partner to Win We build long-term shareholder value through sustainable growth and profitability. We recognize that we cannot reach our goals alone, so we will develop intelligent strategic alliances with best-inclass partners. Radian Group Inc. is a mortgage and real estate company. We provide mortgage insurance and a comprehensive suite of products and services across the residential real estate and mortgage finance industries. The company is listed on the New York Stock Exchange under the symbol RDN. Learn more about Radian at Cautionary Note Regarding Forward-Looking Statements Safe Harbor Provisions This Annual Report to Stockholders contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities and Exchange Act of 1934 and the United States Private Securities Litigation Reform Act of 1995. Forward- looking statements may be identified by the use of words such as anticipate, may, will, could, should, would, expect, intend, plan, goal, believe, estimate, predict, project, potential, continue, seek, strategy, future, likely or the negative or other variations on these words. These forward-looking 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, and are subject to certain risks, uncertainties, and other factors that could cause actual results to differ materially from those anticipated. For more information regarding the factors that could cause actual results and the timing of events to differ materially from our forward-looking statements and the risks and uncertainties that we face, you should refer to Cautionary Note Regarding Forward-Looking Statements Safe Harbor Provisions and the Risk Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2024 that is part of this Annual Report to Stockholders. Chief Executive Officer's LETTER TO OUR STOCKHOLDERS: At Radian, we have always been driven by a deep sense of purpose -- to make homeownership affordable, responsible and sustainable. As we look back on 2024, our results reflect the economic value of our high-quality mortgage insurance portfolio, the strength and quality of our investment portfolio, our strong capital and liquidity positions and our ongoing strategic focus on managing expenses. This is a testament to our unwavering commitment to delivering long-term value for our stockholders. According to U.S. Mortgage Insurers (USMI) 2024 National Homeownership Market Survey, nearly 8 in 10 Americans (78%) believe owning a home is very important not only for the stability it provides, but also as an investment to build generational wealth. Despite the increased importance of homeownership, a majority of adults believe it has become harder to buy a home in the last few years and cite the down payment as the number one challenge. We are proud of the role we play in the housing market in helping more mortgage-ready borrowers, including historically underserved households, obtain access to affordable mortgage credit, often for first-time homeowners and typically for homes that are below the median home price in the United States. This mission drives our team to succeed each day -- and 2024 was no exception. 2024 Financial and Operational Performance 48 $275B 8.5M+ Years in Business Insurance in Force Homebuyers Radian Has Helped Become Homeowners (as of 12/31/24) Net income and return on equity (ROE) ($ in millions) The past year was one of continued financial strength and operational excellence for Radian. We wrote $52 billion of new mortgage insurance business and grew our primary insurance in force (IIF) to an all-time high of $275 billion. Our total revenues for 2024 reached $1.3 billion and net income was $604 million as we delivered a return on equity of 13.4%. We increased book value per share by 9% year over year, and this book value growth is after returning $152 million to our stockholders in the form of dividends throughout 2024. We also repurchased 7 million shares of Radian Group common stock at a cost of $224 million during the year. Our capital position remains strong with holding company available liquidity of $885 million and under PMIERs, Radian Guaranty's excess available assets over minimum required assets remained stable in 2024, ending the year at $2.2 billion. 1 Year 5 Year 9% 40% 3% 16% Book Value per Share Growth (1) Dividends Declared to Stockholders (2) In January 2024, we kicked off the year by receiving an upgrade from S&P Global Ratings reflecting our strong financial performance and capital position. The financial strength rating for Radian Guaranty was increased to A-, and the senior unsecured debt rating of Radian Group was increased to BBB-. With this upgrade, Radian Group is now rated investment grade by all three primary ratings agencies. And, in January 2025, our financial strength and competitive positioning in the market were recognized by Fitch Ratings with an upgrade to Radian Guaranty's rating to A (Strong) and an upgrade to Radian Group's senior debt rating to BBB. (1) Represents growth in book value per share for periods indicated (2) Represents the total amount of dividends declared during the period as a percentage of total stockholders' equity at the beginning of the period indicated A Year of Strength and Stability Throughout 2024, Radian remained steadfast in its mission to serve the housing finance industry with excellence. Our financial results underscore the resilience of our business model, as we continue to navigate a dynamic economic landscape while maintaining strong profitability. Financial Performance: During the past year, we delivered total shareholder return (TSR) of 14.5%(1) demonstrating our disciplined execution, strong performance and long-term value creation for our stockholders. Revenue Growth: Aided by an increase in investment income and strong mortgage insurance premiums, our revenues grew year over year. A Strong Track Record of Effectively Managing our Capital Resources At our core, we excel in managing capital resources, a strength that truly amplifies our financial flexibility both now and for the future. Here s how we've strategically optimized our capital position: Enhanced Financial Flexibility: In 2024, Radian Guaranty paid $675 million in ordinary dividends to Radian Group, compared to $400 million paid in 2023. Continued PMIERs Strength: As of December 31, 2024, Radian Guaranty s available assets under PMIERs totaled $6.0 billion, resulting in PMIERs excess available assets over minimum required assets of $2.2 billion. Ample Liquidity: At the end of 2024, we maintained available holding company liquidity of $885 million. Additionally, we have a $275 million undrawn credit facility, further enhancing our financial flexibility. Capital Returns to Stockholders: Throughout 2024, we returned $376 million to our stockholders through share repurchases and dividends. :H LQFUHDVHG RXU TXDUWHUO\ FDVK GLYLGHQG WR VWRFNKROGHUV E\ WR SHU VKDUH DQG RXU UHJXODU GLYLGHQG \LHOG UHPDLQV WKH KLJKHVW LQ WKH SULYDWH PRUWJDJH LQVXUDQFH LQGXVWU\ Successful Debt Management: We reduced our holding company debt-to-capital ratio to 18.7% at December 31, 2024, compared to 24.4% at December 31, 2023, primarily through a series of transactions that reduced our holding company debt outstanding by $350 million. Strong Risk Culture: We entered into a quota-share reinsurance arrangement with a group of third-party reinsurance providers to cede a portion of our new insurance written from July 2024 to June 2025, continuing our strategy of proactively managing the risk profile and capital position of Radian Guaranty. Radian returned $2 billion to stockholders Capital returned to stockholders (Aggregated as of dates shown since 2020) ($ in billions) 2024 Highlights (2) 18.7% 3.09% Holding Company Debt-toCapital Ratio Dividend Yield (highest regular dividend in the MI Industry) 14.5% Total Shareholder Return (TSR) $675M Ordinary Dividends to Radian Group(3) $885M Available Holding Company Liquidity $2.2B PMIERs Excess Available Assets(4) (1) Total Shareholder Return reflects Radian s stock price return between December 31, 2023, through December 31, 2024, adjusted for dividends paid during that time period and assuming dividend reinvestment (2) As of December 31, 2024 (3) Ordinary dividends from Radian Guaranty to Radian Group in 2024 (4) 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 as of December 31, 2024 Our strategic focus on capital optimization continues to drive us forward, helping to position us for future growth. With our risk distribution strategy; holding company liquidity supported by strong expected ordinary dividend flows from Radian Guaranty to Radian Group; a high-quality investment portfolio and significant excess PMIERs capital in Radian Guaranty, we believe we have financial flexibility to allow us to drive our strategic path forward. At the same time, given our focus on operational efficiency, we took actions to achieve an expected $20 to $25 million reduction in our annual operating expenses in 2025 as compared to 2023, including a structural reorganization to better position our title, real estate service and real estate technology businesses while also consolidating our enterprise-wide technology functions. Overall, I believe, we are better positioned today as a stronger and more agile competitor, while continuing to deliver exceptional service to our customers and financial results for our investors. Leveraging Our Expertise Giving Back to Our Communities Mortgage insurance remains at the core of our business, and we continue to be a trusted partner in the housing finance system. As I mentioned earlier, we wrote $52 billion in new mortgage insurance business in 2024, reflecting the ongoing demand for our products and the strength of our customer relationships. We ended the year with a total mortgage insurance in force portfolio of $275 billion, underscoring our scale and importance in the mortgage market. Driven by our core value of doing the right thing, we continue to strive to be a responsible corporate citizen and deliver on our mission of affordable, responsible and sustainable homeownership. As a cornerstone partner of the MBA s CONVERGENCE Philadelphia initiative, we are working together with the MBA and other local partners to help address homeownership barriers in Philadelphia. ($ in billions) Aligned with our commitment to leverage private capital to support homeownership and affordability, Radian issued a line of credit of up to $1 million to the Philadelphia Accelerator Fund, a Community Development Financial Institution that supports the production, development and preservation of affordable housing and community development projects to benefit low-income communities. Our credit performance remains strong, with a continued low default rate, supported by sound underwriting practices, proactive loss management efforts and the continued demand in the U.S. housing market. Our risk distribution strategy, including the use of reinsurance, is capital-efficient and continues to reduce potential volatility in our earnings and capital position. We collaborated with the nonprofit Nueva Esperanza to obtain $1.35 million in financing for the organization from the Federal Home Loan Bank of Pittsburgh s 2024 Affordable Housing Program (AHP) and Voluntary Housing Grant initiative, to help facilitate affordable housing units for homebuyers in Philadelphia. The AHP is a flexible source of gap funding for projects that create an affordable place for low-to moderateincome families and individuals to call home. We supported Rebuilding Together Philadelphia with a $100,000 grant to revitalize homes to prevent displacement, reduce violence and maintain generational wealth. Together with our employees, we continue to strengthen our presence in our communities by sponsoring national and local organizations with a focus on housing, education and children, including multiple-year commitments to support the Mortgage Bankers Association s Open Doors Foundation and the Children Scholarship Fund of Philadelphia. Our annual Opens Doors Opens Hearts Fundraiser continues to draw attention to the meaningful work of the Opens Doors Foundation and raised more than $475,000 for the organization in 2024. Radian achieved an all-time high IIF in 2024 In addition to continuing to execute our Mortgage Insurance business plan, we are simultaneously pursuing growth through diversification and leveraging data, analytics and technology as a strategic differentiator across our businesses. We continue to seek and develop new and innovative opportunities to build upon our core mortgage credit risk competencies by expanding our mortgage and real estate market presence and further diversifying our revenue streams, including through our mortgage conduit, title and real estate services businesses. In 2024, we continued to grow our Radian Mortgage Capital (RMC) business, purchasing $1.6 billion of residential mortgage loans and successfully completing two privatelabel prime jumbo securitization transactions. RMC was formed to provide residential mortgage lenders with an additional secondary-market option for high-quality loans and to provide mortgage investors with a trusted, highquality sponsor. It leverages our successful model for aggregating, managing, and distributing residential mortgage credit risk and creates the opportunity for us to expand and deepen our relationships with our mortgage lender customers, which has been demonstrated by the strong response we have experienced from originators large and small.