On this page of StockholderLetter.com we present the 3/30/2023 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.

 •  3/30/2023 Letter Continued (Full PDF)
 •  4/4/2024 RDN Stockholder Letter
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 •  RDN Benford's Law Stock Score = 91

RDN 3/30/2023 Shareholder/Stockholder Letter Transcript:

OF ENSURING THE
AMERICAN DREAM
ANNUAL REPORT 2022

OUR CORE VALUES
We are a customer-centric enterprise striving to be the
market leading brand as defined by our customers.
We embrace innovative technologies to strategically
differentiate the delivery of our products and services.
We build long-term shareholder value
through sustainable growth and profitability.
We recognize that our people make the
difference in our franchise.
We will always do the right thing,
without compromise.
We recognize that we cannot reach our goals
alone, so we will develop intelligent strategic
alliances with best in class partners.
Radian Group Inc. is a diversified mortgage and real estate services business. We provide mortgage insurance and
products and services to the real estate and mortgage finance industries. The company is listed on the New York Stock
Exchange under the symbol RDN.
www.radian.com

Chief Executive Officer   s
LETTER TO OUR
STOCKHOLDERS
In 2022, Radian celebrated 45 years of
helping families achieve their dream of
homeownership in a responsible and
sustainable way. Since the beginning, we
have maintained an unwavering focus on
products and services that support our
customers, communities and mission.
And in 2022 alone, despite headwinds
in the macroeconomic environment and
continued cooling across the mortgage
and real estate markets, we helped more
than 220,000 families buy a home or lower
their monthly mortgage payments through
refinance. I am incredibly proud of our
team   s accomplishments and of our success
in serving such an important role in the
housing industry.
We provide mortgage insurance and other
products and services to the real estate
and mortgage finance industries through
our two business segments, mortgage and
homegenius. While the operating environment
is challenging today for the markets we serve,
our outlook for housing remains positive over
the long term. And our business is benefiting
from higher persistency rates, which is the
percentage of insurance that remains in
force over a period of time, across our $261
billion dollar insurance in force portfolio. This
portfolio is expected to continue delivering
significant future earnings for our company.
For 2023, recent industry mortgage
origination forecasts call for a continued
decline in the mortgage origination market
followed by a return to growth in 2024 with
increased mortgage purchase loans and
expected strong participation by first-time
homebuyers. And while the shortage of
affordable housing combined with the strong
market demand has created affordability
challenges for first-time home buyers today,
it continues to bolster home values, which
is a positive for our mortgage insurance
portfolio as it helps to mitigate downside risk.
The supply shortage is also creating pent up
demand, which is expected to drive purchase
market growth in 2024 and beyond.

From a strategic perspective, our team
remained focused throughout 2022 across
three areas of value creation:
1. Growing the economic value and the
future earnings of our mortgage insurance
portfolio
2. Growing our homegenius business
3. Managing our capital resources
Growing the economic value of our
mortgage insurance portfolio
By leveraging our proprietary analytics and
RADAR   Rates platform, along with our deep
customer relationships and dynamic pricing
strategies, we wrote $68 billion of highquality mortgage insurance business in 2022.
This contributed to more than 6% growth
year-over-year in our $261 billion insurance
in-force portfolio, which is the primary driver
of future earnings for our company. We
continue to calibrate our dynamic risk-based
pricing to address the risks and opportunities
that we see in the market, including through
price increases in 2022 that have continued
in 2023.
While we believe the volume of new
mortgage insurance business that we write
will slow over the next year, we also expect to
see continued opportunity to put our capital
to work at attractive risk-adjusted returns.
Importantly, as noted above, the higher
mortgage interest rates that are impacting
volume are also driving higher persistency
across our mortgage insurance portfolio. The
increase in interest rates has also resulted
in higher yields across our $5.8 billion
investment portfolio. These higher yields
support returns on our mortgage insurance
business and generate incremental income
that flows directly to our bottom line.
Growing our homegenius business
During 2022, we experienced a decline
in homegenius revenues due to the rapid
decrease in industry-wide mortgage and
real estate transaction volume. In response,
we made adjustments to our homegenius
cost structure over the second half of
2022 to better align with this challenging
market environment. We remain focused on
building awareness of our homegenius suite
of products and services and the growth
opportunities for this business.
Managing our capital resources
We continue to maintain a strong capital
position with significant excess resources
above our required capital levels. Our primary
mortgage insurance subsidiary, Radian
Guaranty, held $5.6 billion of Available
Assets under PMIERs as of December 31,
2022, which was $1.7 billion or 45% above
our required level. In addition, our holding
company, Radian Group, maintained nearly
$1.2 billion of total liquidity as of December
31, 2022. In 2022, we also entered into a
new quota share reinsurance agreement as
we continue to execute on our strategy to
aggregate, manage and distribute mortgage
credit risk. As of December 31, 2022, 70%
of Radian Guaranty   s primary mortgage
insurance risk in force is subject to some
form of risk distribution.
We have prudently and strategically
managed our capital resources, while
opportunistically repurchasing shares and
paying the highest yielding dividend in
the industry to stockholders. We returned
significant capital to our stockholders in
2022, paying dividends of $135 million and
purchasing $400 million of Radian Group
common stock, which represented 11% of
total shares outstanding. And in January
2023, our Board of Directors approved a
new share repurchase program of $300
million over two years. We also increased
our quarterly dividend for the fourth
consecutive year in 2023 to $0.225 per share,
representing a total increase of 80% over the
past three years.
We took several steps in 2022 to further
increase our financial flexibility and enhance
our capital position. In the fourth quarter we
completed a series of capital actions that
resulted in a $382 million distribution from
Radian Guaranty to Radian Group. And for the
first time since the beginning of the Global
Financial Crisis more than 15 years ago, Radian
Guaranty is positioned to resume paying
recurring ordinary dividends to Radian Group
this year, which we project to be between
$300 and $400 million in 2023. Ordinary
dividends in 2024 and beyond are expected
to approximate Radian Guaranty   s ongoing
statutory earnings.

Based on the macroeconomic and marketdriven headwinds I mentioned earlier, we
continue to make the necessary adjustments
to manage our expense structure across our
businesses, with a focus on driving greater
operational efficiency. While this effort has
involved very difficult decisions related to our
people, I am pleased with the team   s focus
on addressing the dramatic market shift and
I believe the adjustments we have made
will help position us as a stronger and more
agile competitor, while continuing to deliver
exceptional service to our customers.
Throughout the year we also made progress
in expanding and strengthening our programs
for Environmental, Social and Governance
(ESG) and for Diversity, Equity and Inclusion
(DEI). I am proud of our progress as well as the
external recognition of our efforts:
    In addition to our annual Corporate
Responsibility Report, we expanded our
disclosure on Radian   s environmental
impact, including publishing a Task Force
on Climate-Related Disclosures (TCFD)
Report and disclosing our Greenhouse Gas
emissions data.
    We made significant progress towards our
multi-year DEI roadmap, developed key
performance indicators measuring DEI and
published our inaugural DEI Report. We also
expanded our Employee Resource Groups
by launching our fourth, Radian Salutes,
which focuses on supporting veterans,
military spouses and their families.
    We were recognized by the Bloomberg
Gender Equality Index for the fifth
consecutive year; increased our score for
the fourth consecutive year for the Human
Rights Campaign focused on equality for the
LGBTQA+ community; were recognized for
the gender balance of our Board of Directors
by 50/50 Women on Boards and designated
as a Champion of Board Diversity by The
Forum of Executive Women for the second
consecutive year.
While we are extremely proud of our success
over the years in ensuring the American dream
of homeownership, we know we are in a unique
position to do even more. As a cornerstone
partner of the Mortgage Bankers Association
(MBA) CONVERGENCE Philadelphia initiative,
we look forward to the launch this year and
to working together with the MBA and other
local partners to help address homeownership
barriers for people and communities of color.
Finally, last month we announced the addition
of Fawad Ahmad to our Board of Directors,
the fifth director that we have added to our
Board since 2019. Fawad brings an important
perspective of the digital transformation
occurring across the financial markets, and
more broadly the consumer markets, that will
benefit our mortgage and homegenius teams.
We welcome the addition of his exceptional
experience leading innovative digital, data and
analytics organizations to Radian   s experienced
and talented Board.
I am pleased with our success in 2022.
While we continue to navigate through
the reality of lower industry volumes for
the near term, we will remain nimble in this
economic climate, leveraging our outstanding
customer relationships, our diversified set
of innovative products and services and our
financial strength and flexibility, as well as our
experienced and passionate team, to provide
the solutions our customers need and to drive
our future success. Our results in 2022 were
driven by the hard work of our talented team,
who continue to support our customers, launch
new products and create new technologies
to make doing business with us faster and
easier. I would like to also thank our customers,
business partners, investors and Board for their
support in helping us deliver such excellent
results in 2022.
Rick Thornberry
Chief Executive Officer
March 31, 2023



 3/30/2023 Letter Continued (Full PDF)