Document and Entity Information
Document and Entity Information Document - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 02, 2016 | |
Document Information [Line Items] | ||
Entity Registrant Name | Radian Group Inc. | |
Entity Central Index Key | 890,926 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 214,427,037 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) Statement - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
ASSETS | ||
Fixed-maturities available for sale—at fair value (amortized cost $2,655,791 and $1,893,356) | $ 2,757,508 | $ 1,865,461 |
Equity securities available for sale—at fair value (cost $1,330 and $75,538) | 1,330 | 75,430 |
Trading securities—at fair value | 969,657 | 1,279,137 |
Short-term investments—at fair value | 835,960 | 1,076,944 |
Other invested assets | 1,293 | 1,714 |
Total investments | 4,565,748 | 4,298,686 |
Cash | 46,356 | 46,898 |
Restricted cash | 10,312 | 13,000 |
Accounts and notes receivable | 94,692 | 61,734 |
Deferred income taxes, net (Note 9) | 401,442 | 577,945 |
Goodwill and other intangible assets, net (Note 6) | 279,400 | 289,417 |
Prepaid reinsurance premium | 229,754 | 40,491 |
Other assets (Note 8) | 422,123 | 313,929 |
Total assets | 6,049,827 | 5,642,100 |
Liabilities and Stockholders’ Equity | ||
Unearned premiums | 680,973 | 680,300 |
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 821,934 | 976,399 |
Long-term debt (Note 11) | 1,067,666 | 1,219,454 |
Reinsurance funds withheld (Note 1) | 177,147 | 0 |
Other liabilities | 413,401 | 269,016 |
Total liabilities | 3,161,121 | 3,145,169 |
Commitments and contingencies (Note 12) | ||
Stockholders’ equity | ||
Common stock: par value $.001 per share; 485,000,000 shares authorized at September 30, 2016 and December 31, 2015; 231,967,395 and 224,432,465 shares issued at September 30, 2016 and December 31, 2015, respectively; 214,405,103 and 206,871,768 shares outstanding at September 30, 2016 and December 31, 2015, respectively | 232 | 224 |
Treasury stock, at cost: 17,562,292 and 17,560,697 shares at September 30, 2016 and December 31, 2015, respectively | (893,197) | (893,176) |
Additional paid-in capital | 2,778,860 | 2,716,618 |
Retained earnings | 937,338 | 691,742 |
Accumulated other comprehensive income (loss) (“AOCI”) (Note 14) | 65,473 | (18,477) |
Total stockholders’ equity | 2,888,706 | 2,496,931 |
Total liabilities and stockholders’ equity | $ 6,049,827 | $ 5,642,100 |
Balance Sheet Parenthetical (Pa
Balance Sheet Parenthetical (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Available-for-sale Debt Securities, Amortized Cost Basis | $ 2,655,791 | $ 1,893,356 |
Available-for-sale Equity Securities, Amortized Cost Basis | $ 1,330 | $ 75,538 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 485,000,000 | 485,000,000 |
Common Stock, Shares, Issued | 231,967,395 | 224,432,465 |
Common Stock, Shares, Outstanding | 214,405,103 | 206,871,768 |
Treasury Stock, Shares | 17,562,292 | 17,560,697 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Net premiums earned—insurance | $ 238,149 | $ 227,433 | $ 688,184 | $ 689,465 |
Services revenue | 43,096 | 42,189 | 112,990 | 116,322 |
Net investment income | 28,430 | 22,091 | 84,470 | 58,704 |
Net gains (losses) on investments and other financial instruments | 7,711 | 3,868 | 69,524 | 49,095 |
Other income | 3,497 | 1,711 | 8,835 | 4,785 |
Total revenues | 320,883 | 297,292 | 964,003 | 918,371 |
Expenses: | ||||
Provision for losses | 55,785 | 64,192 | 148,501 | 141,780 |
Policy acquisition costs | 6,119 | 2,880 | 17,901 | 17,593 |
Direct cost of services | 26,704 | 24,949 | 73,311 | 67,722 |
Other operating expenses | 64,862 | 65,082 | 189,531 | 186,587 |
Interest expense | 19,783 | 21,220 | 63,863 | 70,106 |
Loss on induced conversion and debt extinguishment (Note 11) | 17,397 | 11 | 75,075 | 91,887 |
Amortization and impairment of intangible assets | 3,292 | 3,273 | 9,931 | 9,577 |
Total expenses | 193,942 | 181,607 | 578,113 | 585,252 |
Pretax income from continuing operations | 126,941 | 115,685 | 385,890 | 333,119 |
Income tax provision | 44,138 | 45,594 | 138,726 | 126,108 |
Net income from continuing operations | 82,803 | 70,091 | 247,164 | 207,011 |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 5,385 |
Net income | $ 82,803 | $ 70,091 | $ 247,164 | $ 212,396 |
Earnings Per Share, Basic [Abstract] | ||||
Net income from continuing operations, per basic share | $ 0.39 | $ 0.34 | $ 1.17 | $ 1.05 |
Income from discontinued operations and disposal of discontinued operations, net of tax, per basic share | 0 | 0 | 0 | 0.03 |
Basic net income per share | 0.39 | 0.34 | 1.17 | 1.08 |
Earnings Per Share, Diluted [Abstract] | ||||
Net income from continuing operations, per diluted share | 0.37 | 0.29 | 1.09 | 0.88 |
Income from discontinued operations and disposal of discontinued operations, net of tax, per diluted share | 0 | 0 | 0 | 0.02 |
Diluted net income per share | $ 0.37 | $ 0.29 | $ 1.09 | $ 0.90 |
Weighted-average number of common shares outstanding—basic | 214,387 | 207,938 | 210,858 | 197,562 |
Weighted-average number of common and common equivalent shares outstanding—diluted | 225,968 | 250,795 | 230,672 | 246,993 |
Dividends per share | $ 0.0025 | $ 0.0025 | $ 0.0075 | $ 0.0075 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net income | $ 82,803 | $ 70,091 | $ 247,164 | $ 212,396 |
Unrealized gains (losses) on investments: | ||||
Unrealized holding gains (losses) arising during the period | 6,943 | 4,012 | 86,614 | (11,154) |
Less: Reclassification adjustment for net gains (losses) included in net income | 3,695 | (223) | 2,296 | 44,408 |
Net unrealized gains (losses) on investments | 3,248 | 4,235 | 84,318 | (55,562) |
Net foreign currency translation adjustments | (36) | (120) | (346) | (88) |
Activity related to investments recorded as assets held for sale | 0 | 0 | 0 | (3,254) |
Net actuarial gains (losses) | 156 | 0 | (22) | 0 |
Other comprehensive income (loss), net of tax | 3,368 | 4,115 | 83,950 | (58,904) |
Comprehensive income | $ 86,171 | $ 74,206 | $ 331,114 | $ 153,492 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Common Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Parent | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income |
Balance, beginning of period at Dec. 31, 2014 | $ 209 | $ (892,961) | $ 2,531,513 | $ 406,814 | $ 51,485 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under incentive and benefit plans | 1 | 2,394 | |||||
Stock-based compensation | 13,214 | ||||||
Impact of extinguishment of Convertible Senior Notes due 2017 and 2019 (Note 11) | 28 | 349,191 | |||||
Termination of capped calls (Note 11) | (3) | 11,976 | |||||
Change in equity component of currently redeemable convertible senior notes | 11,911 | ||||||
Shares repurchased under share repurchase program (Note 13) | (11) | (201,989) | |||||
Repurchases of common stock under incentive plans | (215) | ||||||
Net income | $ 212,396 | 212,396 | |||||
Dividends declared | (1,479) | ||||||
Net foreign currency translation adjustment, net of tax | (88) | (88) | |||||
Net unrealized gains (losses) on investments, net of tax | (58,816) | ||||||
Net actuarial gains (losses) | 0 | 0 | |||||
Balance, end of period at Sep. 30, 2015 | $ 2,435,570 | 224 | (893,176) | 2,718,210 | 617,731 | (7,419) | |
Balance, beginning of period at Dec. 31, 2015 | 2,496,931 | 224 | (893,176) | 2,716,618 | 691,742 | (18,477) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock under incentive and benefit plans | 0 | 1,711 | |||||
Stock-based compensation | 17,632 | ||||||
Impact of extinguishment of Convertible Senior Notes due 2017 and 2019 (Note 11) | 17 | 143,078 | |||||
Termination of capped calls (Note 11) | 0 | 0 | |||||
Change in equity component of currently redeemable convertible senior notes | 0 | ||||||
Shares repurchased under share repurchase program (Note 13) | (9) | (100,179) | |||||
Repurchases of common stock under incentive plans | (21) | ||||||
Net income | 247,164 | 247,164 | |||||
Dividends declared | (1,568) | ||||||
Net foreign currency translation adjustment, net of tax | (346) | (346) | |||||
Net unrealized gains (losses) on investments, net of tax | 84,318 | ||||||
Net actuarial gains (losses) | (22) | (22) | |||||
Balance, end of period at Sep. 30, 2016 | $ 2,888,706 | $ 2,888,706 | $ 232 | $ (893,197) | $ 2,778,860 | $ 937,338 | $ 65,473 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net cash provided by (used in) operating activities, continuing operations | $ 290,137 | $ (5,993) |
Net cash provided by (used in) operating activities, discontinued operations | 0 | (1,759) |
Net cash provided by (used in) operating activities | 290,137 | (7,752) |
Cash flows from investing activities: | ||
Proceeds from Sale and Maturity of Fixed-Maturity Investments Available-for-sale | 537,679 | 16,208 |
Proceeds from Sale of Available-for-sale Securities, Equity | 74,868 | 145,550 |
Proceeds from Sale of Trading Securities Held-for-investment | 178,227 | 13,566 |
Proceeds from Redemption of Fixed-Maturity Investments Available-for-sale | 220,126 | 64,747 |
Proceeds from Redemption of Trading Securities Held-for-investment | 106,589 | 169,991 |
Purchases of Fixed-Maturity Investments Available-for-sale | (1,419,431) | (1,006,985) |
Purchases of Equity Securities Available-for-sale | (830) | (500) |
Sales, Redemptions and (Purchases) of Short-term Investments | 241,579 | (160,874) |
Sales, Redemptions and (Purchases) of Other assets and other invested assets, net | 2,390 | 13,596 |
Proceeds from the sale of investment in affiliate, net of cash transferred | 0 | 784,866 |
Purchases of property and equipment, net | (28,252) | (19,264) |
Acquisitions, net of cash acquired | 0 | (6,449) |
Net cash provided by (used in) investing activities, continuing operations | (87,055) | 14,452 |
Net cash provided by (used in) investing activities, discontinued operations | 0 | 4,999 |
Net cash provided by (used in) investing activities | (87,055) | 19,451 |
Cash flows from financing activities: | ||
Dividends paid | (1,568) | (1,479) |
Issuance of long-term debt, net | 343,417 | 343,479 |
Purchases and redemptions of long-term debt | (445,069) | (128,486) |
Proceeds from termination of capped calls | 0 | 11,973 |
Issuance of common stock | 343 | 0 |
Purchase of common shares | (100,188) | (202,000) |
Excess tax benefits from stock-based awards | 115 | 3,000 |
Repayment of other borrowings | (292) | 0 |
Net cash provided by (used in) financing activities, continuing operations | (203,242) | 26,487 |
Net cash provided by (used in) financing activities, discontinued operations | 0 | 0 |
Net cash provided by (used in) financing activities | (203,242) | 26,487 |
Effect of exchange rate changes on cash | (382) | (42) |
Increase (decrease) in cash | (542) | 38,144 |
Cash, beginning of period | 46,898 | 30,465 |
Less: Increase (decrease) in cash of business held for sale | 0 | (421) |
Cash, end of period | $ 46,356 | $ 69,030 |
Note 1 - Condensed Consolidated
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed Consolidated Financial Statements - Significant Accounting Policies and Business Overview | Condensed Consolidated Financial Statements—Business Overview and Significant Accounting Policies Business Overview We provide mortgage insurance and products and services to the real estate and mortgage finance industries through our two business segments—Mortgage Insurance and Services. Mortgage Insurance Our Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance, to mortgage lending institutions nationwide. Private mortgage insurance helps protect mortgage lenders by mitigating default-related losses on residential mortgage loans made to home buyers who generally make downpayments of less than 20% of the purchase price for their homes. Private mortgage insurance also facilitates the sale of these low-downpayment mortgage loans in the secondary mortgage market, most of which are sold to the GSEs. Our Mortgage Insurance segment currently offers primary mortgage insurance coverage on residential first-lien mortgage loans, which comprised 97.8% of our $47.3 billion total direct RIF at September 30, 2016 . At September 30, 2016 , pool insurance represented 2.1% of our total direct RIF. We provide our mortgage insurance products mainly through our wholly-owned subsidiary, Radian Guaranty. The GSEs and state insurance regulators impose capital and financial requirements on our insurance subsidiaries. These include Risk-to-capital, other risk-based capital measures and surplus requirements, as well as the PMIERs Financial Requirements discussed below. Failure to comply with these capital and financial requirements may limit the amount of insurance that our insurance subsidiaries may write. The GSEs and our state insurance regulators also possess significant discretion with respect to our insurance subsidiaries. See Note 16 for additional regulatory information. Private mortgage insurers, including Radian Guaranty, are required to comply with the PMIERs to remain eligible insurers of loans purchased by the GSEs. At September 30, 2016 , Radian Guaranty was in compliance with the PMIERs. The PMIERs Financial Requirements, among other things, require that a mortgage insurer’s Available Assets meet or exceed its Minimum Required Assets. The GSEs may amend the PMIERs at any time, and they have broad discretion to interpret the requirements, which could impact the calculation of our Available Assets and/or Minimum Required Assets. The PMIERs specifically provide that the factors that are applied to calculate and determine a mortgage insurer’s Minimum Required Assets will be updated every two years following a minimum of 180 days’ notice (with the next review scheduled to take place in 2017), or more frequently, as determined by the GSEs, to reflect changes in macroeconomic conditions or loan performance. We have entered into reinsurance transactions as part of our capital and risk management activities, including to manage Radian Guaranty’s position under the PMIERs Financial Requirements, and the credit that we receive under the PMIERs Financial Requirements for these transactions is subject to the periodic review of the GSEs. In addition, it is our understanding that while a more comprehensive review of the PMIERs Financial Requirements is expected to take place in 2017, the GSEs currently are considering interim guidance for the industry that would negatively impact the amount of credit that we receive for our Single Premium QSR Transaction but also would give credit to certain liquid investments that are readily available to pay claims that previously were not permitted to be included in our Available Assets. As a result, we do not expect that this potential interim guidance, if and when issued, will impact Radian Guaranty’s compliance with the PMIERs. Under the PMIERs, Radian Guaranty’s Available Assets and Minimum Required Assets are determined on an aggregate basis, taking into account the assets and insured risk of Radian Guaranty and its affiliated reinsurers. Therefore, developments that impact the assets and insured risk of Radian Guaranty’s affiliated reinsurers individually also will impact the aggregate Available Assets and Minimum Required Assets, and importantly, Radian Guaranty’s compliance with the PMIERs Financial Requirements. As a result, references to Radian Guaranty’s Available Assets and Minimum Required Assets take into consideration both Radian Guaranty and its affiliated reinsurers. Services Our Services segment provides outsourced services, information-based analytics and specialty consulting for buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities as well as other ABS. These services and solutions are provided primarily through Clayton and its subsidiaries, including Green River Capital, Red Bell and ValuAmerica. The primary lines of business in our Services segment include: • loan review and due diligence; • surveillance, including RMBS surveillance, loan servicer oversight, loan-level servicing compliance reviews and operational reviews of mortgage servicers and originators; • real estate valuation and component services that provide outsourcing and technology solutions for the SFR and residential real estate markets; as well as outsourced solutions for appraisal, title and closing services; • REO management services; and • services for the United Kingdom and European mortgage markets through our EuroRisk operations. 2016 Developments Capital Management During the first nine months of 2016 , we completed a series of transactions to strengthen our financial position. The combination of these actions had the impact of decreasing diluted shares, improving Radian Group’s debt maturity profile and improving Radian Guaranty’s position under the PMIERs Financial Requirements. This series of capital management transactions consists of: • the issuance of $350 million aggregate principal amount of Senior Notes due 2021; • the purchases of aggregate principal amounts of $30.1 million and $322.0 million , respectively, of our outstanding Convertible Senior Notes due 2017 and 2019; • the termination of the portion of the capped call transactions related to the purchased Convertible Senior Notes due 2017; • the completion of the share repurchase program announced in January 2016, by purchasing an aggregate of 9.4 million shares of Radian Group common stock for $100.2 million , including commissions; • the execution of the Single Premium QSR Transaction, which had the effect of increasing the amount by which Radian Guaranty’s Available Assets exceed its Minimum Required Assets under the PMIERs Financial Requirements; and • the early redemption of the remaining $195.5 million aggregate principal amount of our Senior Notes due 2017. The purchases of Convertible Senior Notes due 2017 and 2019 and the early redemption of the Senior Notes due 2017 resulted in a pretax charge of $75.1 million during the first nine months of 2016, recorded as a loss on induced conversion and debt extinguishment. On June 29, 2016, Radian Group’s board of directors authorized a new share repurchase program of up to $125 million of Radian Group common stock. As of September 30, 2016, the full purchase authority remained available under this share repurchase program, which expires on June 30, 2017. See Notes 7, 11 and 13 for additional information. Significant Accounting Policies Basis of Presentation Our condensed consolidated financial statements include the accounts of Radian Group Inc. and its subsidiaries. We refer to Radian Group Inc. together with its consolidated subsidiaries as “Radian,” the “Company,” “we,” “us” or “our,” unless the context requires otherwise. We generally refer to Radian Group Inc. alone, without its consolidated subsidiaries, as “Radian Group.” Unless otherwise defined in this report, certain terms and acronyms used throughout this report are defined in the Glossary of Abbreviations and Acronyms included as part of this report. Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of all wholly-owned subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. The financial information presented for interim periods is unaudited; however, such information reflects all adjustments that are, in the opinion of management, necessary for the fair statement of the financial position, results of operations, comprehensive income and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2015 Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. Certain prior period amounts have been reclassified to conform to current period presentation. As previously disclosed in our 2015 Form 10-K, for the nine months ended September 30, 2015 , certain cash flows were incorrectly classified in the Company’s Condensed Consolidated Statements of Cash Flows. The Company has determined that these misclassifications are not material to the financial statements of any period. These amounts (shown below in thousands) have been corrected herein. These adjustments affected certain line items within cash flows from investing activities, but had no net impact to net cash provided by (used in) investing activities. For the nine months ended September 30, 2015 , these adjustments to the affected line items within the Consolidated Statements of Cash Flows consist of the following: (i) proceeds from sales of fixed-maturity investments available for sale reported as $96,684 has been adjusted to $16,208 ; and (ii) purchases of fixed-maturity investments available for sale reported as $1,087,461 has been adjusted to $1,006,985 . Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. Other Significant Accounting Policies 2016 Purchases of Convertible Debt Prior to Maturity. We accounted for the 2016 purchases of a portion of our outstanding convertible debt in exchange for cash and shares of Radian Group common stock as induced conversions of convertible debt in accordance with the accounting standard regarding derecognition of debt with conversion and other options, and the accounting standard regarding debt modifications and extinguishments. The accounting standards require the recognition through earnings of an inducement charge equal to the fair value of the consideration delivered in excess of the consideration issuable under the original conversion terms. The remaining consideration delivered and transaction costs incurred are required to be allocated between the extinguishment of the liability component and the reacquisition of the equity component. As a result, we recognized a loss on induced conversion and debt extinguishment equal to: (i) the inducement charges; (ii) the differences between the fair value and the carrying value of the liability component of the purchased debt; (iii) transaction costs allocated to the debt components; and (iv) unamortized debt issuance costs related to the purchased debt. Reinsurance. In accordance with the terms of the Single Premium QSR Transaction, rather than making a cash payment or transferring investments for ceded premiums written, Radian Guaranty holds the related amounts to collateralize the reinsurers’ obligations and has established a corresponding funds withheld liability. Any loss recoveries and any potential profit commission to Radian Guaranty will be realized from this account. This liability also includes an interest credit on funds withheld, which is recorded as ceded premiums at a rate specified in the agreement and, depending on experience under the contract, may be paid to either Radian Guaranty or the reinsurers. As described in Note 2 of our 2015 Form 10-K, ceded premiums written are recorded on the balance sheet as prepaid reinsurance premiums and amortized to ceded premiums earned in a manner consistent with the recognition of income on direct premiums. See Note 7 for further discussion of our reinsurance transactions. See Note 2 in our 2015 Form 10-K for information regarding other significant accounting policies. Recent Accounting Pronouncements Accounting Standards Adopted During 2016. In April 2015, the FASB issued an update to the accounting standard for the accounting of internal-use software. The update provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with its treatment of the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The provisions of this update are effective for interim and annual periods beginning after December 15, 2015. The implementation of this update did not have a material impact to our financial position, results of operations or cash flows. Accounting Standards Not Yet Adopted. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This update is not expected to change revenue recognition principles related to investments and our insurance products, which represents a significant portion of total revenues. This update is primarily applicable to revenues from our Services segment. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and in March, April and May 2016, issued clarifying updates. We are currently evaluating the impact to our financial statements and future disclosures as a result of these updates, if any. In May 2015, the FASB issued an update to the accounting standard for the accounting of short-duration insurance contracts by insurance entities. The amendments in this update require insurance entities to disclose certain information about the liability for unpaid claims and claim adjustment expenses. The additional information required is focused on improving disclosures regarding insurance liabilities, including the timing, nature and uncertainty of future cash flows related to insurance liabilities and the effect of those cash flows on the statement of comprehensive income. The disclosures required by this update are effective for public companies for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016; early adoption is permitted. We are currently evaluating the additional disclosures required in our financial statements as a result of this update. In January 2016, the FASB issued an update to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) the use of an exit price (i.e., the price that would be received to sell the asset) when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with the exception of the “own credit” provision. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all such leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In March 2016, the FASB issued an update seeking to reduce complexity in the accounting standards for share-based payment transactions, including: (i) accounting for income taxes; (ii) classification of excess tax benefits on the statement of cash flows; (iii) forfeitures; (iv) minimum statutory tax withholding requirements; (v) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes; (vi) the practical expedient for estimating the expected term; and (vii) intrinsic value. Among other things, the update requires: (i) all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement as they occur; (ii) recognition of excess tax benefits, regardless of whether the benefits reduce taxes payable in the current period; and (iii) excess tax benefits to be classified along with other cash flows as an operating activity, rather than separated from other income tax cash flows as a financing activity. For companies with significant share-based compensation, these changes may result in more volatile effective tax rates and net earnings, and result in additional dilution in earnings per share calculations. This update is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period; however, an entity electing early adoption must adopt all amendments in the same period. We are currently evaluating the impact to our financial statements, earnings per share and future disclosures as a result of this update. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at amortized cost basis be presented at the net (of allowance for credit losses) amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In August 2016, the FASB issued an update to the accounting standard regarding the statement of cash flows. This update reduces differences in practice over the presentation and classification of certain cash receipts and cash payments. The revision provides guidance related to eight specific identified cash flow issues. The guidance will be applied on a retrospective basis beginning with the earliest period presented. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact to our financial statements as a result of this update. In October 2016, the FASB issued an update to the accounting standard regarding the accounting for income taxes. This update is intended to reduce complexity in accounting for the income tax consequences from intra-entity transfers of assets other than inventory. This update requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This update will be applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted, including adoption in the first interim period of the adoption year. We are currently evaluating the impact to our financial statements as a result of this update. |
Note 2 - Net Income Per Share
Note 2 - Net Income Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding, while diluted net income per share is computed by dividing net income attributable to common shareholders by the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. Dilutive potential common shares relate to our stock-based compensation arrangements and our outstanding convertible senior notes. For all calculations, the determination of whether potential common shares are dilutive or anti-dilutive is based on net income from continuing operations. The calculation of the basic and diluted net income per share was as follows: Three Months Ended Nine Months Ended (In thousands, except per-share amounts) 2016 2015 2016 2015 Net income from continuing operations: Net income from continuing operations - basic $ 82,803 $ 70,091 $ 247,164 $ 207,011 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) 848 3,714 5,151 11,094 Net income from continuing operations - diluted $ 83,651 $ 73,805 $ 252,315 $ 218,105 Net income: Net income from continuing operations - basic $ 82,803 $ 70,091 $ 247,164 $ 207,011 Income (loss) from discontinued operations, net of tax — — — 5,385 Net income - basic 82,803 70,091 247,164 212,396 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) 848 3,714 5,151 11,094 Net income - diluted $ 83,651 $ 73,805 $ 252,315 $ 223,490 Average common shares outstanding - basic 214,387 207,938 210,858 197,562 Dilutive effect of Convertible Senior Notes due 2017 (2) 178 1,798 71 8,620 Dilutive effect of Convertible Senior Notes due 2019 8,274 37,736 16,897 37,736 Dilutive effect of stock-based compensation arrangements (2) 3,129 3,323 2,846 3,075 Adjusted average common shares outstanding - diluted 225,968 250,795 230,672 246,993 Net income per share: Basic: Net income from continuing operations $ 0.39 $ 0.34 $ 1.17 $ 1.05 Income (loss) from discontinued operations, net of tax — — — 0.03 Net income $ 0.39 $ 0.34 $ 1.17 $ 1.08 Diluted: Net income from continuing operations $ 0.37 $ 0.29 $ 1.09 $ 0.88 Income (loss) from discontinued operations, net of tax — — — 0.02 Net income $ 0.37 $ 0.29 $ 1.09 $ 0.90 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income or loss that would result from the assumed conversion. (2) The following number of shares of our common stock equivalents issued under our stock-based compensation arrangements and convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months Ended Nine Months Ended (in thousands) 2016 2015 2016 2015 Shares of common stock equivalents 1,045 469 1,045 730 Shares of Convertible Senior Notes due 2017 — — 1,902 — |
Note 3 - Segment Reporting
Note 3 - Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on an allocated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense except for interest expense related to the Senior Notes due 2019 that were issued to fund our purchase of Clayton; and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on an allocated percentage of time spent on the Services segment; and (ii) as noted above, all interest expense related to the Senior Notes due 2019. No corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. Adjusted Pretax Operating Income (Loss) Our senior management, including our Chief Executive Officer (our chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as pretax income (loss) from continuing operations excluding the effects of net gains (losses) on investments and other financial instruments, loss on induced conversion and debt extinguishment, acquisition-related expenses, amortization and impairment of intangible assets, and net impairment losses recognized in earnings. Although adjusted pretax operating income (loss) excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (1) not viewed as part of the operating performance of our primary activities; or (2) not expected to result in an economic impact equal to the amount reflected in pretax income (loss) from continuing operations. These adjustments, along with the reasons for their treatment, are described below. (1) Net gains (losses) on investments and other financial instruments. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized investment gains and losses arise primarily from changes in the market value of our investments that are classified as trading. These valuation adjustments may not necessarily result in economic gains or losses. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). However, we include the change in expected economic loss or recovery associated with our consolidated VIEs, if any, in the calculation of adjusted pretax operating income (loss). (2) Loss on induced conversion and debt extinguishment. Gains or losses on early extinguishment of debt and losses incurred to purchase our convertible debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). (3) Acquisition-related expenses. Acquisition-related expenses represent the costs incurred to effect an acquisition of a business (i.e., a business combination). Because we pursue acquisitions on a strategic and selective basis and not in the ordinary course of our business, we do not view acquisition-related expenses as a consequence of a primary business activity. Therefore, we do not consider these expenses to be part of our operating performance and they are excluded from our calculation of adjusted pretax operating income (loss). (4) Amortization and impairment of intangible assets. Amortization of intangible assets represents the periodic expense required to amortize the cost of intangible assets over their estimated useful lives. Intangible assets with an indefinite useful life are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. These charges are not viewed as part of the operating performance of our primary activities and therefore are excluded from our calculation of adjusted pretax operating income (loss). (5) Net impairment losses recognized in earnings. The recognition of net impairment losses on investments can vary significantly in both size and timing, depending on market credit cycles. We do not view these impairment losses to be indicative of our fundamental operating activities. Therefore, whenever these losses occur, we exclude them from our calculation of adjusted pretax operating income (loss). Summarized operating results for our segments as of and for the periods indicated, are as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Mortgage Insurance Net premiums written—insurance (1) $ 240,999 $ 242,168 $ 499,662 $ 735,158 Decrease (increase) in unearned premiums (2,850 ) (14,735 ) 188,522 (45,693 ) Net premiums earned—insurance 238,149 227,433 688,184 689,465 Net investment income 28,430 22,091 84,470 58,704 Other income 3,511 1,711 8,850 4,785 Total (2) 270,090 251,235 781,504 752,954 Provision for losses 56,151 64,128 149,500 141,616 Policy acquisition costs 6,119 2,880 17,901 17,593 Other operating expenses before corporate allocations 38,081 36,632 108,036 112,535 Total (3) 100,351 103,640 275,437 271,744 Adjusted pretax operating income before corporate allocations 169,739 147,595 506,067 481,210 Allocation of corporate operating expenses 11,911 14,893 35,526 37,167 Allocation of interest expense 15,360 16,797 50,596 56,820 Adjusted pretax operating income $ 142,468 $ 115,905 $ 419,945 $ 387,223 ______________________ (1) Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Excludes net gains on investments and other financial instruments of $7.7 million and $69.5 million , respectively, for the three and nine months ended September 30, 2016 , and $3.9 million and $49.1 million , respectively, for the three and nine months ended September 30, 2015 , not included in adjusted pretax operating income. (3) Includes inter-segment expenses as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Inter-segment expenses $ 718 $ 925 $ 2,023 $ 2,919 Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Services Services revenue (1) $ 43,800 $ 43,114 $ 114,998 $ 119,241 Direct cost of services 26,911 25,870 74,188 70,624 Other operating expenses before corporate allocations 12,740 11,533 39,160 31,912 Total 39,651 37,403 113,348 102,536 Adjusted pretax operating income before corporate allocations 4,149 5,711 1,650 16,705 Allocation of corporate operating expenses 2,265 1,567 6,795 3,855 Allocation of interest expense 4,423 4,423 13,267 13,286 Adjusted pretax operating income (loss) $ (2,539 ) $ (279 ) $ (18,412 ) $ (436 ) ______________________ (1) Includes inter-segment revenues as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Inter-segment revenues $ 718 $ 925 $ 2,023 $ 2,919 Selected balance sheet information for our segments as of the periods indicated, is as follows: At September 30, 2016 (In thousands) Mortgage Insurance Services Total Total assets $ 5,686,726 $ 363,101 $ 6,049,827 At December 31, 2015 (In thousands) Mortgage Insurance Services Total Total assets $ 5,281,597 $ 360,503 $ 5,642,100 The reconciliation of adjusted pretax operating income to consolidated pretax income from continuing operations is as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 142,468 $ 115,905 $ 419,945 $ 387,223 Services (1) (2,539 ) (279 ) (18,412 ) (436 ) Total adjusted pretax operating income 139,929 115,626 401,533 386,787 Net gains (losses) on investments and other financial instruments 7,711 3,868 69,524 49,095 Loss on induced conversion and debt extinguishment (17,397 ) (11 ) (75,075 ) (91,887 ) Acquisition-related (expenses) benefits (2) (10 ) (525 ) (161 ) (1,299 ) Amortization and impairment of intangible assets (3,292 ) (3,273 ) (9,931 ) (9,577 ) Consolidated pretax income from continuing operations $ 126,941 $ 115,685 $ 385,890 $ 333,119 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related (expenses) benefits represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. On a consolidated basis, “adjusted pretax operating income (loss)” is a measure not determined in accordance with GAAP. Total adjusted pretax operating income (loss) is not a measure of total profitability, and therefore should not be viewed as a substitute for GAAP pretax income (loss) from continuing operations. Our definition of adjusted pretax operating income (loss) may not be comparable to similarly-named measures reported by other companies. |
Note 4 - Fair Value of Financia
Note 4 - Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Available for sale securities, trading securities and certain other assets are recorded at fair value. All changes in the fair value of trading securities and certain other assets are included in our condensed consolidated statements of operations. All changes in the fair value of available for sale securities are recorded in AOCI. There were no significant changes to our fair value methodologies during the nine months ended September 30, 2016 . In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. We provide a qualitative description of the valuation techniques and inputs used for Level II recurring and non-recurring fair value measurements in our audited annual financial statements as of December 31, 2015 . For a complete understanding of the valuation techniques and inputs used as of September 30, 2016 , these unaudited condensed consolidated financial statements should be read in conjunction with the audited annual financial statements and notes thereto included in our 2015 Form 10-K. The following is a list of assets that are measured at fair value by hierarchy level as of September 30, 2016 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 152,805 $ — $ — $ 152,805 State and municipal obligations — 384,609 — 384,609 Money market instruments 587,628 — — 587,628 Corporate bonds and notes — 1,909,060 — 1,909,060 RMBS — 433,474 — 433,474 CMBS — 556,250 — 556,250 Other ABS — 450,853 — 450,853 Foreign government and agency securities — 41,627 — 41,627 Equity securities — 830 500 1,330 Other investments (1) — 46,319 500 46,819 Total Investments at Fair Value (2) 740,433 3,823,022 1,000 4,564,455 Total Assets at Fair Value $ 740,433 $ 3,823,022 $ 1,000 $ 4,564,455 ______________________ (1) Comprising short-term certificates of deposit and commercial paper, included within Level II, and private convertible notes, included within Level III. (2) Does not include certain other invested assets ( $1.3 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. At September 30, 2016 , total Level III assets of $1.0 million accounted for less than 0.1% of total assets measured at fair value. Within other investments is a Level III investment which was purchased during the three months ended June 30, 2016, and there were no related gains or losses recorded during the quarter. Within equity securities is a Level III investment which was purchased during the three months ended June 30, 2015, and there were no related gains or losses recorded during the quarter. There were no Level III liabilities at September 30, 2016 . The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2015 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 670,328 $ 8,000 $ — $ 678,328 State and municipal obligations — 341,845 — 341,845 Money market instruments 443,272 — — 443,272 Corporate bonds and notes — 1,383,186 — 1,383,186 RMBS — 297,097 — 297,097 CMBS — 544,588 — 544,588 Other ABS — 371,625 — 371,625 Foreign government and agency securities — 37,576 — 37,576 Equity securities 74,930 25,016 500 100,446 Other investments (1) — 99,009 — 99,009 Total Investments at Fair Value (2) 1,188,530 3,107,942 500 4,296,972 Total Assets at Fair Value $ 1,188,530 $ 3,107,942 $ 500 $ 4,296,972 ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $1.7 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. At December 31, 2015 , total Level III assets of $0.5 million accounted for less than 0.1% of total assets measured at fair value. This investment was purchased during the three months ended June 30, 2015, and there were no related gains or losses recorded during the year ended December 31, 2015 . There were no Level III liabilities at December 31, 2015 . There were no transfers between Level I and Level II for the three and nine months ended September 30, 2016 and 2015 . There were also no transfers involving Level III assets or liabilities for the three and nine months ended September 30, 2016 and 2015. Other Fair Value Disclosure The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our condensed consolidated balance sheets were as follows as of the dates indicated: September 30, 2016 December 31, 2015 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets $ 1,293 $ 3,692 $ 1,714 $ 4,901 Liabilities: Long-term debt 1,067,666 1,195,740 1,219,454 1,414,875 |
Note 5 - Investments
Note 5 - Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Investments | Investments Available for Sale Securities Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: September 30, 2016 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 42,213 $ 45,035 $ 2,846 $ 24 State and municipal obligations 68,520 75,320 6,800 — Corporate bonds and notes 1,249,233 1,315,525 66,683 391 RMBS 384,867 391,701 7,054 220 CMBS 446,102 462,750 17,090 442 Other ABS 435,695 437,026 2,335 1,004 Foreign government and agency securities 27,161 28,151 1,041 51 Other investments 2,000 2,000 — — Total fixed-maturities available for sale 2,655,791 2,757,508 103,849 2,132 Equity securities available for sale (1) 1,330 1,330 — — Total debt and equity securities $ 2,657,121 $ 2,758,838 $ 103,849 $ 2,132 ______________________ (1) Comprised primarily of investments in Federal Home Loan Bank stock required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the Federal Home Loan Bank of Pittsburgh. December 31, 2015 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 13,773 $ 13,752 $ — $ 21 State and municipal obligations 36,920 37,900 1,100 120 Corporate bonds and notes 815,024 802,193 4,460 17,291 RMBS 226,744 224,905 625 2,464 CMBS 415,780 406,910 69 8,939 Other ABS 359,452 355,494 16 3,974 Foreign government and agency securities 25,663 24,307 27 1,383 Total fixed-maturities available for sale 1,893,356 1,865,461 6,297 34,192 Equity securities available for sale (1) 75,538 75,430 — 108 Total debt and equity securities $ 1,968,894 $ 1,940,891 $ 6,297 $ 34,300 ______________________ (1) Comprised primarily of a multi-sector exchange-traded fund. Gross Unrealized Losses and Fair Value of Available for Sale Securities The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated: September 30, 2016: ($ in thousands) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 4 $ 3,536 $ 24 — $ — $ — 4 $ 3,536 $ 24 Corporate bonds and notes 14 29,166 115 6 18,271 276 20 47,437 391 RMBS 9 92,845 220 — — — 9 92,845 220 CMBS 19 54,676 442 — — — 19 54,676 442 Other ABS 28 60,953 147 30 79,609 857 58 140,562 1,004 Foreign government and agency securities 1 254 — 3 3,601 51 4 3,855 51 Total 75 $ 241,430 $ 948 39 $ 101,481 $ 1,184 114 $ 342,911 $ 2,132 December 31, 2015: ($ in thousands) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 1 $ 5,752 $ 21 — $ — $ — 1 $ 5,752 $ 21 State and municipal obligations 2 11,674 120 — — — 2 11,674 120 Corporate bonds and notes 117 510,807 16,773 6 8,700 518 123 519,507 17,291 RMBS 12 168,415 2,464 — — — 12 168,415 2,464 CMBS 58 387,268 8,939 — — — 58 387,268 8,939 Other ABS 96 284,998 2,559 14 43,225 1,415 110 328,223 3,974 Foreign government and agency securities 18 18,733 1,095 3 2,278 288 21 21,011 1,383 Equity securities 1 74,930 108 — — — 1 74,930 108 Total 305 $ 1,462,577 $ 32,079 23 $ 54,203 $ 2,221 328 $ 1,516,780 $ 34,300 During the first nine months of 2016 and 2015 , we did not recognize in earnings any impairment losses related to credit deterioration. Although we held securities in an unrealized loss position as of September 30, 2016 , we did not consider them to be other-than-temporarily impaired as of such date. For all investment categories, the unrealized losses of 12 months or greater duration as of September 30, 2016 , were generally caused by interest rate or credit spread movements since the purchase date. As of September 30, 2016 , we estimated that the present value of cash flows expected to be collected from these securities would be sufficient to recover the amortized cost basis of these securities. As of September 30, 2016 , we did not have the intent to sell any debt securities in an unrealized loss position, and we determined that it is more likely than not that we will not be required to sell the securities before recovery of their cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at September 30, 2016 . Trading Securities The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) September 30, December 31, Trading securities: U.S. government and agency securities $ 33,781 $ 129,913 State and municipal obligations 273,564 303,946 Corporate bonds and notes 504,335 580,993 RMBS 41,773 72,192 CMBS 91,981 137,678 Other ABS 10,747 16,131 Foreign government and agency securities 13,476 13,268 Equity securities — 25,016 Total $ 969,657 $ 1,279,137 For trading securities held at September 30, 2016 and December 31, 2015 , we had net unrealized gains of $53.7 million during the nine months ended September 30, 2016 and net unrealized losses of $25.2 million during the year ended December 31, 2015 associated with those securities. For the nine months ended September 30, 2016 , we did not transfer any securities from the available for sale or trading categories. Net Gains (Losses) on Investments and Other Financial Instruments Net realized and unrealized gains (losses) on investments and other financial instruments consisted of: Three Months Ended Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net realized gains (losses): Fixed-maturities available for sale $ 5,685 $ (343 ) $ 3,703 $ (402 ) Equity securities available for sale — — (170 ) 68,723 Trading securities 1,524 (1 ) (295 ) (12,860 ) Short-term investments 38 (27 ) (1 ) (23 ) Other invested assets 631 2,794 631 2,794 Other gains (losses) 15 — 33 106 Net realized gains (losses) on investments 7,893 2,423 3,901 58,338 (1) Unrealized gains (losses) on trading securities (47 ) 1,810 62,862 (9,127 ) Total net gains (losses) on investments 7,846 4,233 66,763 49,211 Net gains (losses) on other financial instruments (135 ) (365 ) 2,761 (116 ) Net gains (losses) on investments and other financial instruments $ 7,711 $ 3,868 $ 69,524 $ 49,095 ______________________ (1) During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million . Contractual Maturities The contractual maturities of fixed-maturity investments were as follows: September 30, 2016 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 32,821 $ 32,764 Due after one year through five years (1) 267,312 274,014 Due after five years through ten years (1) 701,735 732,458 Due after ten years (1) 387,259 426,795 RMBS (2) 384,867 391,701 CMBS (2) 446,102 462,750 Other ABS (2) 435,695 437,026 Total $ 2,655,791 $ 2,757,508 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. Other At September 30, 2016 and December 31, 2015 , Radian Guaranty had $75.8 million and $74.7 million , respectively, in a collateral account pursuant to the Freddie Mac Agreement. This collateral account, which contains investments primarily invested in and classified as part of our trading securities, is pledged to cover Loss Mitigation Activity on the loans subject to the Freddie Mac Agreement. Subject to certain conditions in the Freddie Mac Agreement, amounts in the collateral account may be released to Radian Guaranty over time to the extent that Loss Mitigation Activity becomes final in accordance with the terms of that agreement. See Note 10 for additional information. |
Note 6 - Goodwill and Other Int
Note 6 - Goodwill and Other Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net All of our goodwill and other intangible assets relate to our Services segment, as a result of our acquisition of Clayton in 2014 and its subsequent acquisitions of Red Bell and ValuAmerica in 2015. The following table shows the changes in the carrying amount of goodwill as of and for the year-to-date periods ended September 30, 2016 and December 31, 2015 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2014 $ 194,027 $ (2,095 ) $ 191,932 Goodwill acquired 3,238 — 3,238 Impairment losses — — — Balance at December 31, 2015 197,265 (2,095 ) 195,170 Goodwill acquired — — — Impairment losses — — — Balance at September 30, 2016 $ 197,265 $ (2,095 ) $ 195,170 During the first quarter of 2015, Clayton expanded its service offerings by acquiring Red Bell, a real estate brokerage company that provides products and services that include automated valuation models; broker price opinions used by investors, lenders and loan servicers; and advanced technology solutions for: (i) monitoring loan portfolio performance; (ii) tracking non-performing loans; (iii) managing REO assets; and (iv) valuing and selling residential real estate through a secure platform. The transaction was treated as a purchase for accounting purposes, with the excess of the acquisition price over the estimated fair value of the net assets acquired resulting in goodwill of $2.4 million . In addition, in October 2015, Clayton acquired ValuAmerica, a national title agency and appraisal management company with a technology platform that helps mortgage lenders and their vendors streamline and manage their supply chains and operational workflow. The transaction was treated as a purchase for accounting purposes, with the excess of the acquisition price over the estimated fair value of the net assets acquired resulting in goodwill of $0.8 million . Neither of these acquisitions met the criteria to be considered a material business combination. Goodwill is an asset representing the estimated future economic benefits arising from the assets we have acquired that were not individually identified and separately recognized, and includes the value of the discounted expected future cash flows, the workforce, expected synergies with our other affiliates and other unidentifiable intangible assets. Goodwill is deemed to have an indefinite useful life and is subject to review for impairment annually, or more frequently, whenever circumstances indicate potential impairment. Events that could result in an interim assessment of goodwill impairment and/or a potential impairment loss include, but are not limited to: (i) significant under-performance relative to historical or projected future operating results; (ii) significant changes in the strategy for the Services segment; (iii) significant negative industry or economic trends; and (iv) a decline in market capitalization below book value attributable to the Services segment. Management regularly updates certain assumptions related to our projections, including potential revenues from new initiatives and business strategies, and to the extent these items have a significant negative impact on the reporting unit’s projections we may perform additional analysis to determine whether an impairment charge is needed. The evaluation of the estimated fair value of our Services segment in comparison to the recorded value of goodwill and other intangibles is performed primarily using an income approach and requires the use of significant estimates and assumptions that are highly subjective in nature, such as attrition rates, discount rates, future expected cash flows and market conditions. The most significant assumptions relate to the valuation of goodwill and customer relationships. In particular, future expected cash flows for the Services segment include: estimated transaction volumes that are not currently contracted; volume projections associated with non-agency RMBS securitizations for which current market conditions are not favorable; and projected revenues from new business initiatives that do not have an established customer base. Our estimates are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. If the projected revenues are not as favorable as those currently being used in our annual goodwill impairment assessment, or if revenues related to new initiatives and business strategies are not realized, it could result in an impairment charge which could have a material adverse effect on our results of operations for the period in which the impairment occurs. We performed a qualitative assessment for the quarter ended September 30, 2016 , and considered factors such as: (i) the decline in revenues and gross margins during 2016 (as compared to the forecasted amounts for the same period); (ii) the improvement in revenue and gross margins during the second and third quarters of 2016 (as compared to the first quarter of 2016); (iii) new senior management of the segment; and (iv) new business initiatives. Our third quarter 2016 qualitative evaluation of impairment included future revenue projections that were lower than those included in our annual impairment analysis conducted in the fourth quarter of 2015. However, based on our third quarter 2016 analysis, we concluded that it is not “more likely than not” that the fair value of the Services reporting unit is less than its carrying amount as of September 30, 2016 . We monitor the performance of the Services segment each quarter, including through our annual impairment assessment planned for the fourth quarter of 2016. The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: As of September 30, 2016 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships $ 83,359 $ (17,543 ) $ 65,816 Technology 15,100 (4,856 ) 10,244 Trade name and trademarks 8,340 (1,905 ) 6,435 Client backlog 6,680 (4,972 ) 1,708 Non-competition agreements 185 (158 ) 27 Total $ 113,664 $ (29,434 ) $ 84,230 As of December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships $ 83,471 $ (11,038 ) $ 72,433 Technology 15,100 (2,949 ) 12,151 Trade name and trademarks 8,340 (1,243 ) 7,097 Client backlog 6,680 (4,184 ) 2,496 Non-competition agreements 185 (115 ) 70 Total $ 113,776 $ (19,529 ) $ 94,247 The estimated aggregate amortization expense for the remainder of 2016 and thereafter is as follows (in thousands): 2016 $ 3,287 2017 12,621 2018 12,027 2019 10,768 2020 9,159 2021 7,353 Thereafter 29,015 Generally, for tax purposes, substantially all of our goodwill and other intangible assets are deductible and will be amortized over a period of 15 years . |
Note 7 - Reinsurance
Note 7 - Reinsurance | 9 Months Ended |
Sep. 30, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Net premiums written-insurance: Direct $ 261,456 $ 253,262 $ 748,110 $ 766,708 Assumed — 7 — 62 Ceded (1) (20,457 ) (11,101 ) (248,448 ) (31,612 ) Net premiums written-insurance $ 240,999 $ 242,168 $ 499,662 $ 735,158 Net premiums earned-insurance: Direct $ 258,074 $ 242,260 $ 747,342 $ 734,221 Assumed 9 10 27 33 Ceded (1) (19,934 ) (14,837 ) (59,185 ) (44,789 ) Net premiums earned-insurance $ 238,149 $ 227,433 $ 688,184 $ 689,465 ______________________ (1) Net of profit commission. In 2012, Radian Guaranty entered into two separate QSR Transactions with a third-party reinsurance provider. Radian Guaranty has ceded the maximum amount permitted under the QSR Transactions; therefore, Radian Guaranty is no longer ceding NIW under these transactions. Effective January 1, 2016, the ceding commission was reduced from 35% to 30% for a portion of the remaining reinsurance ceded under the Second QSR Transaction. Ceded losses to date under the QSR Transactions have been immaterial. See Note 8 of Notes to Consolidated Financial Statements in our 2015 Form 10-K for more information. In the first quarter of 2016, in order to proactively manage the risk and return profile of Radian Guaranty’s insured portfolio and continue managing its position under the PMIERs Financial Requirements in a cost-effective manner, Radian Guaranty entered into the Single Premium QSR Transaction with a panel of third-party reinsurers. Under the Single Premium QSR Transaction, effective January 1, 2016, Radian Guaranty began ceding the following Single Premium IIF and NIW, subject to certain conditions: • 20% of its existing performing Single Premium Policies written between January 1, 2012 and March 31, 2013; • 35% of its existing performing Single Premium Policies written between April 1, 2013 and December 31, 2015; and • 35% of its Single Premium NIW from January 1, 2016 to December 31, 2017, subject to a limitation on ceded premiums written equal to $195 million for policies issued between January 1, 2016 and December 31, 2017. Radian Guaranty will receive a 25% ceding commission for premiums ceded pursuant to this transaction. Radian Guaranty will also receive a profit commission, provided that the loss ratio on the loans covered under the agreement generally remains below 55% . Losses on the ceded risk reduce Radian Guaranty’s profit commission on a dollar-for-dollar basis. Ceded losses to date under the Single Premium QSR Transaction have been immaterial. Notwithstanding the limitation on ceded premiums written on the Single Premium QSR Transaction, the parties may mutually agree to increase the amount of ceded risk on December 31, 2017. Radian Guaranty is entitled to discontinue ceding new policies under the agreement at the end of any calendar quarter. The agreement is scheduled to terminate on December 31, 2027; however, Radian Guaranty has the option, based on certain conditions and subject to a termination fee, to terminate the agreement as of January 1, 2020, or at the end of any calendar quarter thereafter, which would result in Radian Guaranty reassuming the related RIF in exchange for a net payment from the reinsurer calculated in accordance with the terms of the agreement. The following tables show the amounts related to the QSR Transactions and the Single Premium QSR Transaction for the periods indicated: QSR Transactions Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Ceded premiums written (1) $ 6,730 $ 8,466 $ 22,048 $ 23,279 Ceded premiums earned (1) 10,597 12,203 33,094 36,452 Ceding commissions written 1,922 2,743 6,291 8,890 Ceding commissions earned (2) 3,974 2,463 12,199 10,987 Single Premium QSR Transaction Three Months Ended Nine Months Ended (In thousands) 2016 2016 Ceded premiums written (1) $ 13,004 $ 222,085 Ceded premiums earned (1) 8,608 21,748 Ceding commissions written 5,482 61,258 Ceding commissions earned (2) 4,382 11,173 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. RIF ceded under the QSR Transactions was $1.7 billion and $2.3 billion as of September 30, 2016 and 2015 , respectively. RIF ceded under the Single Premium QSR Transaction was $3.6 billion as of September 30, 2016 . |
Note 8 - Other Assets
Note 8 - Other Assets | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Other Assets | Other Assets The following table shows the components of other assets as of the dates indicated: (In thousands) September 30, December 31, Deposit with the IRS (Note 9) $ 88,557 $ 88,557 Corporate-owned life insurance 85,645 82,543 Receivable for securities sold 78,914 — Property and equipment (1) 67,478 46,802 Accrued investment income 27,599 25,620 Deferred policy acquisition costs 13,064 14,267 Reinsurance recoverables 6,755 11,044 Other 54,111 45,096 Total other assets $ 422,123 $ 313,929 ______________________ (1) Property and equipment, at cost less accumulated depreciation of $114.4 million and $106.9 million at September 30, 2016 and December 31, 2015 , respectively. |
Note 9 - Income Taxes
Note 9 - Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes As required under the accounting standard regarding accounting for income taxes, our deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized under the balance sheet method, which recognizes the future tax effect of temporary differences between the amounts recorded in our condensed consolidated financial statements and the tax bases of these amounts. DTAs and DTLs are measured using the enacted tax rates expected to apply to taxable income in the periods in which the DTA or DTL is expected to be realized or settled. Our provision for income taxes for interim financial periods is based on an estimate of our annual effective tax rate for continuing operations for the full year. When estimating our full year 2016 and 2015 annual effective tax rates, we accounted for the tax effects of gains and losses on our investments, return-to-provision adjustments, prior year items relating to the accounting for uncertainty in income taxes and certain other adjustments, as discrete items at the federal applicable tax rate. For federal income tax purposes, as of September 30, 2016 , we had approximately $821.6 million of NOL carryforwards and no foreign tax credit carryforward. To the extent not utilized, the NOL carryforwards will expire during tax years 2030 through 2032. We are required to establish a valuation allowance against our DTAs when it is more likely than not that all or some portion of our DTAs will not be realized. At each balance sheet date, we assess our need for a valuation allowance. Our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our DTAs will be realized in future periods. In making this assessment as of September 30, 2016 , we determined that certain state and local NOLs, relating to non-insurance entities within our consolidated group, may not be realized during their applicable carryforward period. Therefore, we have recorded a valuation allowance of $41.0 million , primarily relating to the DTAs associated with these state and local NOLs as of September 30, 2016 . Our 2016 redemption of Senior Notes due 2017 and purchases of Convertible Senior Notes due 2017 and 2019 resulted in a pretax charge of $75.1 million . This included $41.8 million of market premium related to the Convertible Senior Note purchases, of which $28.5 million was non-deductible for tax purposes and impacted our annualized effective tax rate. Overall, for the nine months ended September 30, 2016 , we recorded an income tax benefit of $15.3 million related to the redemption and these purchases. We are contesting adjustments resulting from the examination by the IRS of our 2000 through 2007 consolidated federal income tax returns. The IRS opposes the recognition of certain tax losses and deductions that were generated through our investment in a portfolio of non-economic REMIC residual interests and has proposed denying the associated tax benefits of these items. We appealed these proposed adjustments to Appeals and made “qualified deposits” with the U.S. Treasury of $85 million in June 2008 relating to the 2000 through 2004 tax years and $4 million in May 2010 relating to the 2005 through 2007 tax years, in order to avoid the accrual of incremental above-market-rate interest with respect to the proposed adjustments. We attempted to reach a compromised settlement with Appeals, but in September 2014 we received Notices of Deficiency covering the 2000 through 2007 tax years that assert unpaid taxes and penalties of approximately $157 million . The Deficiency Amount has not been reduced to reflect our NOL carryback ability. As of September 30, 2016 , there also would be interest of approximately $133 million related to these matters. Depending on the outcome, additional state income taxes, penalties and interest (estimated in the aggregate to be approximately $34 million as of September 30, 2016 ) also may become due when a final resolution is reached. The Notices of Deficiency also reflected additional amounts due of approximately $105 million , which are primarily associated with the disallowance of the previously filed carryback of our 2008 NOL to the 2006 and 2007 tax years. We currently believe that the disallowance of our 2008 NOL carryback is a precautionary position by the IRS and that we will ultimately maintain the benefit of this NOL carryback claim. On December 3, 2014, we petitioned the U.S. Tax Court to litigate the Deficiency Amount. On September 1, 2015, we received a notice that the case had been scheduled for trial. However, the parties have jointly filed, and the U.S. Tax Court has approved, motions for continuance in this matter to postpone the trial date. Also, in February 2016, the U.S. Tax Court approved a joint motion to consolidate for trial, briefing and opinion our case with a similar case involving MGIC Investment Corporation. The litigation could take several years to resolve and may result in substantial legal expenses. We can provide no assurance regarding the outcome of any such litigation or whether a compromised settlement with the IRS will ultimately be reached. We believe that an adequate provision for income taxes has been made for the potential liabilities that may result from this matter. However, if the ultimate resolution of this matter produces a result that differs materially from our current expectations, there could be a material impact on our effective tax rate, results of operations and cash flows. |
Note 10 - Losses and LAE
Note 10 - Losses and LAE | 9 Months Ended |
Sep. 30, 2016 | |
Insurance Loss Reserves [Abstract] | |
Losses and Loss Adjustment Expense | Losses and Loss Adjustment Expense The following table shows our reserve for Mortgage Insurance losses and LAE by category at the end of each period indicated: (In thousands) September 30, December 31, Reserves for losses by category: Prime $ 409,438 $ 480,481 Alt-A 166,349 203,706 A minus and below 106,678 129,352 IBNR and other (1) 73,057 83,066 LAE 21,255 26,108 Reinsurance recoverable (2) 6,448 8,286 Total primary reserves 783,225 930,999 Pool 36,065 42,084 IBNR and other 823 1,118 LAE 1,112 1,335 Reinsurance recoverable (2) 36 — Total pool reserves 38,036 44,537 Total First-lien reserves 821,261 975,536 Second-lien and other (3) 673 863 Total reserve for losses $ 821,934 $ 976,399 ______________________ (1) Primarily related to expected payments under the Freddie Mac Agreement. (2) Represents ceded losses on captive transactions, the QSR Transactions and the Single Premium QSR Transaction. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. The following table presents information relating to our reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Nine Months Ended (In thousands) 2016 2015 Balance at beginning of period $ 976,399 $ 1,560,032 Less: Reinsurance recoverables (1) 8,286 26,665 Balance at beginning of period, net of reinsurance recoverables 968,113 1,533,367 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 152,320 184,490 Prior years (3,906 ) (42,158 ) Total incurred 148,414 142,332 Deduct: Paid claims and LAE related to: Current year (2) 2,725 3,417 Prior years 298,352 584,783 Total paid 301,077 588,200 Balance at end of period, net of reinsurance recoverables 815,450 1,087,499 Add: Reinsurance recoverables (1) 6,484 11,071 Balance at end of period $ 821,934 $ 1,098,570 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. 2016 Activity Our loss reserves at September 30, 2016 declined as compared to December 31, 2015 , primarily as a result of the amount of paid claims continuing to outpace losses incurred related to new default notices reported in the current year. Reserves established for new default notices were the primary driver of our total incurred loss for the nine months ended September 30, 2016 , and they were impacted primarily by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was approximately 12% as of September 30, 2016 . The impact to incurred losses from reserve development on default notices reported in prior years was not significant during the first nine months of 2016. Total claims paid decreased for the nine months ended September 30, 2016 , compared to the same period in 2015, primarily due to the elevated claim payments associated with the BofA Settlement Agreement (discussed below) in 2015. 2015 Activity During the first nine months of 2015 , reserves established for new default notices were the primary driver of our total incurred loss, and they were impacted primarily by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was approximately 14% as of September 30, 2015 . In addition, we experienced favorable reserve development on prior year defaults due primarily to a reduction in certain Default to Claim Rate assumptions based on observed trends. Claims paid for the nine months ended September 30, 2015 include $236.6 million related to the implementation of the BofA Settlement Agreement beginning in February 2015. Default to Claim Rate Our aggregate weighted average Default to Claim Rate assumption for our primary loans (net of Claim Denials and Rescissions) used in estimating our primary reserve for losses was 45% ( 41% excluding pending claims) at September 30, 2016 , and 46% ( 42% excluding pending claims) at December 31, 2015 . During the nine months ended September 30, 2016 , our gross Default to Claim Rate assumption for new primary defaults was modestly reduced from approximately 13% as of December 31, 2015, to approximately 12% . As of September 30, 2016 , our gross Default to Claim Rates on our primary portfolio ranged from approximately 12% for new defaults, up to approximately 65% for defaults not in foreclosure stage, and 81% for Foreclosure Stage Defaults. Our estimate of expected Rescissions and Claim Denials (net of expected Reinstatements) embedded in our Default to Claim Rate is generally based on our experience in the most recent nine months. Consideration is also given for differences in characteristics between those previously rescinded policies and denied claims and the loans remaining in our defaulted inventory, as well as the estimated impact of the BofA Settlement Agreement (discussed below) on the volume of future Rescissions and Claim Denials. Loss Mitigation Rescissions and Claim Denials continue to reduce our paid losses and have resulted in a reduction in our loss reserve, although our estimates of future Rescissions and Claim Denials have generally been declining. As our Legacy Portfolio has become a smaller percentage of our overall insured portfolio, we have undertaken a reduced amount of Loss Mitigation Activity with respect to the claims we receive, and we expect this trend to continue. Our estimate of net future Rescissions and Claim Denials reduced our loss reserve as of September 30, 2016 and December 31, 2015 by approximately $59 million and $69 million , respectively. The amount of estimated Rescissions and Claim Denials incorporated into our reserve analysis at any point in time is affected by a number of factors, including our estimated rate of Rescissions and Claim Denials on future claims, the volume and attributes of our defaulted insured loans, our estimated Default to Claim Rate and our estimated Claim Severity, among other assumptions. Our assumptions also reflect the estimated future impact of the BofA Settlement Agreement, as further discussed below. Our reported Rescission and Claim Denial activity in any given period is subject to challenge by our lender and servicer customers. We expect that a portion of previous Rescissions will be reinstated and previous Claim Denials will be resubmitted with the required documentation and ultimately paid; therefore, we have incorporated this expectation into our IBNR reserve estimate. Our IBNR reserve estimate of $16.8 million and $26.6 million at September 30, 2016 and December 31, 2015 , respectively, includes reserves for this expected activity. BofA Settlement Agreement On September 16, 2014, Radian Guaranty entered into the BofA Settlement Agreement in order to resolve various actual and potential claims or disputes related to the parties’ respective rights and duties as to mortgage insurance coverage on certain Subject Loans. Implementation of the BofA Settlement Agreement commenced on February 1, 2015 for Subject Loans held in portfolio by the Insureds or purchased by the GSEs as of that date and implementation was completed by December 31, 2015 . In addition, except for certain limited circumstances, Radian Guaranty also agreed that with respect to Future Legacy Loans it will not assert any origination error or servicing defect as a basis for a decision not to pay a claim, nor will it effect a Claim Curtailment of such claims. See Note 10 of Notes to Consolidated Financial Statements in our 2015 Form 10-K for additional information about the BofA Settlement Agreement. Freddie Mac Agreement At September 30, 2016 and December 31, 2015 , Radian Guaranty had $75.8 million and $74.7 million , respectively, in a collateral account pursuant to the Freddie Mac Agreement. Subject to certain conditions in the Freddie Mac Agreement, amounts in the collateral account may be released to Radian Guaranty over time to the extent that Loss Mitigation Activity becomes final in accordance with the terms of that agreement. In accordance with these provisions, Radian Guaranty withdrew $11.7 million from this account in October 2016 related to Loss Mitigation Activity that had become final as of August 31, 2016. Following this withdrawal, if, as of August 29, 2017, the amount of additional Loss Mitigation Activity that has become final in accordance with the Freddie Mac Agreement is less than $64 million , then any shortfall will be paid to Freddie Mac from the funds remaining in the collateral account, subject to certain adjustments designed to allow for any Loss Mitigation Activity that has not become final or any claims evaluation that has not been completed as of that date. As of September 30, 2016 , we have $57 million , recorded in reserve for losses, that we expect to be paid to Freddie Mac from the funds expected to be remaining in the collateral account as of the August 29, 2017 measurement date. |
Note 11 - Long-Term Debt
Note 11 - Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Long-term Debt | Long-Term Debt The carrying value of our long-term debt at September 30, 2016 and December 31, 2015 was as follows: (In thousands) September 30, December 31, 9.000% Senior Notes due 2017 $ — $ 192,261 3.000% Convertible Senior Notes due 2017 20,600 46,115 2.250% Convertible Senior Notes due 2019 61,374 341,214 5.500% Senior Notes due 2019 296,611 295,751 5.250% Senior Notes due 2020 345,003 344,113 7.000% Senior Notes due 2021 344,078 — Total long-term debt $ 1,067,666 $ 1,219,454 Senior Notes due 2017 On August 12, 2016, we redeemed the remaining $195.5 million aggregate principal amount of our Senior Notes due 2017 for the price established in accordance with the indenture governing the notes. We paid $211.3 million in cash (including accrued interest through the redemption date) to holders of the notes at redemption and recorded a loss on debt extinguishment of $15.0 million . Senior Notes due 2021 In March 2016, we issued $350 million aggregate principal amount of Senior Notes due 2021 and received net proceeds of $343.4 million . These notes mature on March 15, 2021 and bear interest at a rate of 7.000% per annum, payable semi-annually on March 15 and September 15 of each year, commencing on September 15, 2016. We have the option to redeem these notes, in whole or in part, at any time or from time to time prior to maturity at a redemption price equal to the greater of: (i) 100% of the aggregate principal amount of the notes to be redeemed; and (ii) the make-whole amount, which is the sum of the present value of the remaining scheduled payments of principal and interest in respect of the notes, discounted at the applicable treasury rate plus 50 basis points, plus, in each case, accrued and unpaid interest thereon to, but excluding, the redemption date. The Senior Notes due 2021 have covenants customary for securities of this nature, including covenants related to the payments of the notes, reports, compliance certificates and modification of the covenants. Additionally, the indenture governing the Senior Notes due 2021 includes covenants restricting us from encumbering the capital stock of a designated subsidiary (as defined in the indenture for the notes) or disposing of any capital stock of any designated subsidiary unless we either dispose of all of the stock or we retain more than 80% of the stock. Convertible Senior Notes due 2017 and 2019 During the first nine months of 2016 , we entered into privately negotiated agreements to purchase, for cash or a combination of cash and shares of Radian Group common stock, aggregate principal amounts of $30.1 million and $322.0 million , respectively, of our outstanding Convertible Senior Notes due 2017 and 2019. We funded the purchases with $235.0 million in cash (plus accrued and unpaid interest due on the purchased notes) and by issuing to certain of the sellers 17.0 million shares of Radian Group common stock. These purchases of Convertible Senior Notes due 2017 and 2019 resulted in a pretax charge in the first nine months of 2016 of $60.1 million . This charge represents: • the $41.8 million market premium representing the consideration paid to the sellers of the Convertible Senior Notes due 2017 and 2019 in excess of the conversion value of the purchased notes; • the $17.2 million difference between the fair value and the carrying value, net of unamortized issuance costs, of the liability component of the purchased notes; and • the $1.1 million impact of related transaction costs. In connection with our March 2016 purchases of Convertible Senior Notes due 2017, we terminated a corresponding portion of the capped call transactions we had entered into in 2010 related to the initial issuance of the Convertible Senior Notes due 2017. As a result of this termination, we received consideration of 0.2 million shares of Radian Group common stock, which was valued at $2.6 million based on a stock price on the closing date of $11.86 . In accordance with the accounting standards regarding equity and contracts in an entity’s own equity, the total consideration received was recorded as an increase to additional paid-in capital. The shares of Radian Group common stock received were retired, resulting in a decrease in shares issued and outstanding and a corresponding increase in unissued shares. Upon the original issuance of the Convertible Senior Notes due 2017 and 2019, in accordance with accounting standards related to convertible debt instruments that may be settled in cash upon conversion, the Company recorded a pretax equity component, net of the capped call transaction (with respect to the Convertible Senior Notes due 2017) and related issuance costs (with respect to the Convertible Senior Notes due 2017 and 2019). The pretax equity component is not subject to remeasurement, and therefore remains unchanged unless a reduction of outstanding principal occurs. As a result of our purchases during the first nine months of 2016, the remaining pretax equity component associated with the Convertible Senior Notes due 2017 and 2019 decreased from $11.3 million and $75.1 million , respectively, at December 31, 2015 to $5.0 million and $13.1 million , respectively, at September 30, 2016 . During the three-month period ended September 30, 2016 , our closing stock price did not exceed the thresholds required for the holders of our Convertible Senior Notes due 2017 or our Convertible Senior Notes due 2019 to be able to exercise their conversion rights during the three-month period ending December 31, 2016 . In any period when holders of the Convertible Senior Notes due 2017 are eligible to exercise their conversion option, the equity component related to these instruments would be classified as mezzanine (temporary) equity rather than permanent equity, because we are required to settle the aggregate principal amount of the notes in cash. This equity component is the difference between (1) the amount of cash deliverable upon conversion (i.e., par value of debt) and (2) the carrying value of the debt. Issuance and transaction costs incurred at the time of the original issuance of the convertible notes were allocated to the liability and equity components in proportion to the allocation of proceeds and are accounted for as debt issuance costs and equity issuance costs, respectively. The convertible notes are reflected on our condensed consolidated balance sheets as follows: Convertible Senior Notes due 2017 Convertible Senior Notes due 2019 (In thousands) September 30, December 31, September 30, December 31, Liability component: Principal $ 22,233 $ 52,370 $ 68,024 $ 389,992 Debt discount, net (1) (1,551 ) (5,941 ) (6,041 ) (44,313 ) Debt issuance costs (1) (82 ) (314 ) (609 ) (4,465 ) Net carrying amount $ 20,600 $ 46,115 $ 61,374 $ 341,214 ______________________ (1) Included within long-term debt and is being amortized over the life of the convertible notes. The following tables set forth total interest expense recognized related to the convertible notes for the periods indicated: Convertible Senior Notes due 2017 Three Months Ended Nine Months Ended ($ in thousands) 2016 2015 2016 2015 Contractual interest expense $ 166 $ 456 $ 705 $ 6,953 Amortization of debt issuance costs 17 43 71 659 Amortization of debt discount 322 808 1,344 11,910 Total interest expense $ 505 $ 1,307 $ 2,120 $ 19,522 Convertible Senior Notes due 2019 Three Months Ended Nine Months Ended ($ in thousands) 2016 2015 2016 2015 Contractual interest expense $ 493 $ 2,250 $ 3,043 $ 6,750 Amortization of debt issuance costs 74 317 447 975 Amortization of debt discount 737 3,146 4,434 9,342 Total interest expense $ 1,304 $ 5,713 $ 7,924 $ 17,067 |
Note 12 - Commitments and Conti
Note 12 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings See Note 17 of Notes to Consolidated Financial Statements in our 2015 Form 10-K for information regarding our accounting policies for contingencies. We are routinely involved in a number of legal actions, reviews and audits, as well as inquiries and investigations by various regulatory entities involving compliance with laws or other regulations, the outcome of which are uncertain. We are contesting the allegations in each matter and management believes, based on current knowledge and after consultation with counsel, that the outcome of such matters will not have a material adverse effect on our consolidated financial condition. However, the outcome of litigation and other legal and regulatory matters is inherently uncertain, and it is possible that one or more of the matters currently pending or threatened could have an unanticipated adverse effect on our liquidity, financial condition or results of operations for any particular period. As described in Note 9, on September 4, 2014, we received formal Notices of Deficiency from the IRS related to certain losses and deductions resulting from our investment in a portfolio of non-economic REMIC residual interests. We believe that an adequate provision for income taxes has been made for the potential liabilities that may result from this matter, which is now the subject of litigation as more fully described in Note 9. However, if the ultimate resolution of this matter produces a result that differs materially from our current expectations, there could be a material impact on our effective tax rate, results of operations and cash flows. Our Master Policies establish the timeline within which any suit or action arising from any right of an insured under the policy generally must be commenced. From time to time we face challenges from certain lender and servicer customers regarding these activities and practices. We are currently in discussions regarding our Loss Mitigation Activities and claim payment practices, which if not resolved, could result in arbitration or judicial proceedings. We are not able to estimate the reasonably possible loss or range of loss, if any, that could result from these discussions because they remain in preliminary stages. Although we believe that our Loss Mitigation Activities and claims paying practices are in compliance with our policies, if we are not successful in defending our actions we may need to reassume the risk on, and increase loss reserves for, those policies or pay additional claims. See Note 10 for further information. Further, there are loans in our total defaulted portfolio (in particular, our older defaulted portfolio) for which actions or proceedings (such as foreclosure) may not have been commenced within the outermost deadline in our Prior Master Policy. We are evaluating these loans regarding this potential violation and our corresponding rights under the Prior Master Policy. While we can provide no assurance regarding the ultimate resolution of these issues, it is possible that arbitration or legal proceedings could result. Other Securities regulations became effective in 2005 that impose enhanced disclosure requirements on issuers of ABS (including mortgage-backed securities). To allow our customers to comply with these regulations at that time, we typically were required, depending on the amount of credit enhancement we were providing, to provide: (1) audited financial statements for the insurance subsidiary participating in the transaction; or (2) a full and unconditional holding company-level guarantee for our insurance subsidiaries’ obligations in such transactions. Radian Group has guaranteed two structured transactions for Radian Guaranty involving approximately $114.5 million of remaining credit exposure as of September 30, 2016 . |
Note 13 - Capital Stock (Notes)
Note 13 - Capital Stock (Notes) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Capital Stock In the first quarter of 2016, we announced and completed a share repurchase program. Pursuant to this program, we purchased an aggregate of 9.4 million shares of Radian Group common stock for $100.2 million , at a weighted average price per share of $10.62 , including commissions. No further purchase authority remains under this share repurchase program. As partial consideration for our March 2016 purchases of a portion of our Convertible Senior Notes due 2017 and 2019, we issued to the sellers 17.0 million shares of Radian Group common stock. In addition, in connection with our termination of the related capped call transactions, we received consideration of 0.2 million shares of Radian Group common stock. See Note 11 for additional information regarding these transactions. All shares of Radian Group common stock that we received from the above transactions were retired, resulting in a decrease in shares issued and outstanding and a corresponding increase in unissued shares. On June 29, 2016, Radian Group’s board of directors authorized a new share repurchase program of up to $125 million of Radian Group common stock. In order to implement the program, we adopted a trading plan under Rule 10b5-1 of the Exchange Act during the third quarter of 2016. As of September 30, 2016, no shares had been purchased and therefore the full purchase authority of up to $125 million remained available under this program, which expires on June 30, 2017. We may also from time to time purchase shares on the open market to meet option exercise obligations and to fund 401(k) matches and purchases under our Employee Stock Purchase Plan. |
Note 14 - Accumulated Other Com
Note 14 - Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) The following table shows the rollforward of AOCI as of the periods indicated: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 95,548 $ 33,443 $ 62,105 $ (28,425 ) $ (9,948 ) $ (18,477 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 10,682 3,739 6,943 133,253 46,639 86,614 Less: Reclassification adjustment for net gains (losses) included in net income (1) 5,685 1,990 3,695 3,533 1,237 2,296 Net unrealized gains (losses) on investments 4,997 1,749 3,248 129,720 45,402 84,318 Net foreign currency translation adjustments (47 ) (11 ) (36 ) (523 ) (177 ) (346 ) Net actuarial gains (losses) 240 84 156 (34 ) (12 ) (22 ) OCI 5,190 1,822 3,368 129,163 45,213 83,950 Balance at end of period $ 100,738 $ 35,265 $ 65,473 $ 100,738 $ 35,265 $ 65,473 Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (17,744 ) $ (6,210 ) $ (11,534 ) $ 79,208 $ 27,723 $ 51,485 OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 6,172 2,160 4,012 (17,160 ) (6,006 ) (11,154 ) Less: Reclassification adjustment for net gains (losses) included in net income (1) (343 ) (120 ) (223 ) 68,320 23,912 44,408 Net unrealized gains (losses) on investments 6,515 2,280 4,235 (85,480 ) (29,918 ) (55,562 ) Net foreign currency translation adjustments (184 ) (64 ) (120 ) (135 ) (47 ) (88 ) Activity related to investments recorded as assets held for sale (2) — — — (5,006 ) (1,752 ) (3,254 ) OCI 6,331 2,216 4,115 (90,621 ) (31,717 ) (58,904 ) Balance at end of period $ (11,413 ) $ (3,994 ) $ (7,419 ) $ (11,413 ) $ (3,994 ) $ (7,419 ) ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our unaudited condensed consolidated statements of operations. During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million . (2) Represents the unrealized holding gains (losses) arising during the period on investments recorded as assets held for sale, net of reclassification adjustments for net gains (losses) included in income (loss) from discontinued operations, net of tax. |
Note 15 - Discontinued Operatio
Note 15 - Discontinued Operations | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations On April 1, 2015, Radian Guaranty completed the sale of 100% of the issued and outstanding shares of Radian Asset Assurance for a purchase price of approximately $810 million , pursuant to the Radian Asset Assurance Stock Purchase Agreement. Prior to this, we had determined that Radian Asset Assurance met the criteria for held for sale and discontinued operations accounting at December 31, 2014. As a result, we recognized a pretax impairment charge of $467.5 million for the year ended December 31, 2014 and an additional pretax impairment charge of $14.3 million for the six months ended June 30, 2015. We recorded net income on discontinued operations of $5.4 million related to this sale in the first six months of 2015, consisting primarily of the recognition of investment gains previously deferred and recorded in AOCI and recognized as a result of the completion of the sale of Radian Asset Assurance to Assured on April 1, 2015, and adjustments to estimated transaction costs and taxes. The operating results of Radian Asset Assurance have been classified as discontinued operations for all periods presented in our condensed consolidated statements of operations. No general corporate overhead or interest expense was allocated to discontinued operations. The table below summarizes the components of income from discontinued operations, net of tax, for the period indicated. There was no activity for discontinued operations in the three and nine months ended September 30, 2016 or in the three months ended September 30, 2015 . Nine Months Ended (In thousands) Net premiums earned $ 1,007 Net investment income 9,153 Net gains (losses) on investments and other financial instruments 21,486 Change in fair value of derivative instruments 2,625 Total revenues 34,271 Provision for losses 502 Policy acquisition costs (191 ) Other operating expenses 4,107 Total expenses 4,418 Equity in net income (loss) of affiliates (13 ) Income (loss) from operations of businesses held for sale 29,840 Income (loss) on sale (14,280 ) Income tax provision (benefit) 10,175 Income (loss) from discontinued operations, net of tax $ 5,385 |
Note 16 - Statutory Information
Note 16 - Statutory Information | 9 Months Ended |
Sep. 30, 2016 | |
Supplementary Insurance Information [Abstract] | |
Statutory Information | Statutory Information We prepare our statutory financial statements in accordance with the accounting practices required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries. Required SAPP are established by a variety of publications of the NAIC as well as state laws, regulations and general administrative rules. In addition, insurance departments have the right to permit other specific practices that may deviate from prescribed practices. As of September 30, 2016 , we did not have any prescribed or permitted statutory accounting practices that resulted in reported statutory surplus or risk-based capital being significantly different from what would have been reported if NAIC SAPP had been followed. The state insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations, as described below. Failure to maintain adequate levels of capital could lead to intervention by the various insurance regulatory authorities, which could materially and adversely affect our business, business prospects and financial condition. As of September 30, 2016 , the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $3.0 billion of our consolidated net assets. Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in certain states, a minimum Risk-to-capital ratio. The sixteen RBC States currently impose a Statutory RBC Requirement. The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1. In certain of the RBC States, a mortgage insurer must satisfy an MPP Requirement. The statutory capital requirements for the non-RBC States are de minimis (ranging from $1 million to $5 million ); however, the insurance laws of these states generally grant broad supervisory powers to state agencies or officials to enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including the power to revoke or restrict an insurance company’s ability to write new business. Unless an RBC State grants a waiver or other form of relief, if a mortgage insurer is not in compliance with the Statutory RBC Requirement of that state, the mortgage insurer may be prohibited from writing new mortgage insurance business in that state. Radian Guaranty’s domiciliary state, Pennsylvania, is not one of the RBC States. Radian Guaranty was in compliance with the Statutory RBC Requirements or MPP Requirements, as applicable, in each of the RBC States as of September 30, 2016 . The NAIC is in the process of developing a new Model Act for mortgage insurers, which is expected to include among other items, new capital adequacy requirements for mortgage insurers. In May 2016, a working group of State regulators released an exposure draft of a risk-based capital framework to establish capital requirements for mortgage insurers. While the outcome and timing of this process are uncertain, the new Model Act, if and when finalized by the NAIC, has the potential to increase capital requirements in those states that adopt the Model Act. However, we continue to believe the changes to the Model Act will not result in financial requirements that require greater capital than the level currently required under the PMIERs Financial Requirements. See also Note 1 for information regarding the PMIERs, which set requirements for private mortgage insurers to remain eligible insurers of loans purchased by the GSEs. Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus (i.e., statutory capital and surplus) plus statutory contingency reserves. September 30, December 31, ($ in millions) RIF, net (1) $ 34,849.2 $ 36,396.1 Common stock and paid-in capital $ 2,041.5 $ 2,041.4 Surplus Note — 325.0 Unassigned earnings (deficit) (656.3 ) (679.9 ) Statutory policyholders’ surplus 1,385.2 1,686.5 Contingency reserve 1,156.9 860.9 Statutory capital $ 2,542.1 $ 2,547.4 Risk-to-capital 13.7:1 14.3:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. The net decrease in Radian Guaranty’s Risk-to-capital in the first nine months of 2016 was primarily due to a decrease in net RIF at Radian Guaranty, resulting from insurance ceded pursuant to the Single Premium QSR Transaction during 2016, combined with statutory net income, which had the effect of increasing statutory policyholders’ surplus. The effect of both of these items was mainly offset by the repayment of the $325 million Surplus Note on June 30, 2016. We have actively managed Radian Guaranty’s capital position in various ways, including: (1) through internal and external reinsurance arrangements; (2) by seeking opportunities to reduce our risk exposure through negotiated transactions; and (3) by contributing additional capital from Radian Group, including through the use of the Surplus Note. |
Note 1 - Condensed Consolidat24
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of all wholly-owned subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. |
Use of Estimates, Policy [Policy Text Block] | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. |
Debt, Policy [Policy Text Block] | We accounted for the 2016 purchases of a portion of our outstanding convertible debt in exchange for cash and shares of Radian Group common stock as induced conversions of convertible debt in accordance with the accounting standard regarding derecognition of debt with conversion and other options, and the accounting standard regarding debt modifications and extinguishments. The accounting standards require the recognition through earnings of an inducement charge equal to the fair value of the consideration delivered in excess of the consideration issuable under the original conversion terms. The remaining consideration delivered and transaction costs incurred are required to be allocated between the extinguishment of the liability component and the reacquisition of the equity component. As a result, we recognized a loss on induced conversion and debt extinguishment equal to: (i) the inducement charges; (ii) the differences between the fair value and the carrying value of the liability component of the purchased debt; (iii) transaction costs allocated to the debt components; and (iv) unamortized debt issuance costs related to the purchased debt. |
Reinsurance Accounting Policy [Policy Text Block] | In accordance with the terms of the Single Premium QSR Transaction, rather than making a cash payment or transferring investments for ceded premiums written, Radian Guaranty holds the related amounts to collateralize the reinsurers’ obligations and has established a corresponding funds withheld liability. Any loss recoveries and any potential profit commission to Radian Guaranty will be realized from this account. This liability also includes an interest credit on funds withheld, which is recorded as ceded premiums at a rate specified in the agreement and, depending on experience under the contract, may be paid to either Radian Guaranty or the reinsurers. As described in Note 2 of our 2015 Form 10-K, ceded premiums written are recorded on the balance sheet as prepaid reinsurance premiums and amortized to ceded premiums earned in a manner consistent with the recognition of income on direct premiums. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Accounting Standards Adopted During 2016. In April 2015, the FASB issued an update to the accounting standard for the accounting of internal-use software. The update provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with its treatment of the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The provisions of this update are effective for interim and annual periods beginning after December 15, 2015. The implementation of this update did not have a material impact to our financial position, results of operations or cash flows. |
New Accounting Pronouncements, Policy [Policy Text Block] | Accounting Standards Not Yet Adopted. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. This update is not expected to change revenue recognition principles related to investments and our insurance products, which represents a significant portion of total revenues. This update is primarily applicable to revenues from our Services segment. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and in March, April and May 2016, issued clarifying updates. We are currently evaluating the impact to our financial statements and future disclosures as a result of these updates, if any. In May 2015, the FASB issued an update to the accounting standard for the accounting of short-duration insurance contracts by insurance entities. The amendments in this update require insurance entities to disclose certain information about the liability for unpaid claims and claim adjustment expenses. The additional information required is focused on improving disclosures regarding insurance liabilities, including the timing, nature and uncertainty of future cash flows related to insurance liabilities and the effect of those cash flows on the statement of comprehensive income. The disclosures required by this update are effective for public companies for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016; early adoption is permitted. We are currently evaluating the additional disclosures required in our financial statements as a result of this update. In January 2016, the FASB issued an update to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) the use of an exit price (i.e., the price that would be received to sell the asset) when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is not permitted, with the exception of the “own credit” provision. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all such leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. In March 2016, the FASB issued an update seeking to reduce complexity in the accounting standards for share-based payment transactions, including: (i) accounting for income taxes; (ii) classification of excess tax benefits on the statement of cash flows; (iii) forfeitures; (iv) minimum statutory tax withholding requirements; (v) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax withholding purposes; (vi) the practical expedient for estimating the expected term; and (vii) intrinsic value. Among other things, the update requires: (i) all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement as they occur; (ii) recognition of excess tax benefits, regardless of whether the benefits reduce taxes payable in the current period; and (iii) excess tax benefits to be classified along with other cash flows as an operating activity, rather than separated from other income tax cash flows as a financing activity. For companies with significant share-based compensation, these changes may result in more volatile effective tax rates and net earnings, and result in additional dilution in earnings per share calculations. This update is effective for public companies for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted in any annual or interim period; however, an entity electing early adoption must adopt all amendments in the same period. We are currently evaluating the impact to our financial statements, earnings per share and future disclosures as a result of this update. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at amortized cost basis be presented at the net (of allowance for credit losses) amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted as of the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently evaluating the impact to our financial statements and future disclosures as a result of this update. |
Segment Reporting, Policy [Policy Text Block] | We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on an allocated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense except for interest expense related to the Senior Notes due 2019 that were issued to fund our purchase of Clayton; and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on an allocated percentage of time spent on the Services segment; and (ii) as noted above, all interest expense related to the Senior Notes due 2019. No corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. |
Income Tax, Policy [Policy Text Block] | We are required to establish a valuation allowance against our DTAs when it is more likely than not that all or some portion of our DTAs will not be realized. At each balance sheet date, we assess our need for a valuation allowance. Our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our DTAs will be realized in future periods. As required under the accounting standard regarding accounting for income taxes, our deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized under the balance sheet method, which recognizes the future tax effect of temporary differences between the amounts recorded in our condensed consolidated financial statements and the tax bases of these amounts. DTAs and DTLs are measured using the enacted tax rates expected to apply to taxable income in the periods in which the DTA or DTL is expected to be realized or settled. Our provision for income taxes for interim financial periods is based on an estimate of our annual effective tax rate for continuing operations for the full year. When estimating our full year 2016 and 2015 annual effective tax rates, we accounted for the tax effects of gains and losses on our investments, return-to-provision adjustments, prior year items relating to the accounting for uncertainty in income taxes and certain other adjustments, as discrete items at the federal applicable tax rate. |
Note 2 - Net Income Per Share (
Note 2 - Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The calculation of the basic and diluted net income per share was as follows: Three Months Ended Nine Months Ended (In thousands, except per-share amounts) 2016 2015 2016 2015 Net income from continuing operations: Net income from continuing operations - basic $ 82,803 $ 70,091 $ 247,164 $ 207,011 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) 848 3,714 5,151 11,094 Net income from continuing operations - diluted $ 83,651 $ 73,805 $ 252,315 $ 218,105 Net income: Net income from continuing operations - basic $ 82,803 $ 70,091 $ 247,164 $ 207,011 Income (loss) from discontinued operations, net of tax — — — 5,385 Net income - basic 82,803 70,091 247,164 212,396 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) 848 3,714 5,151 11,094 Net income - diluted $ 83,651 $ 73,805 $ 252,315 $ 223,490 Average common shares outstanding - basic 214,387 207,938 210,858 197,562 Dilutive effect of Convertible Senior Notes due 2017 (2) 178 1,798 71 8,620 Dilutive effect of Convertible Senior Notes due 2019 8,274 37,736 16,897 37,736 Dilutive effect of stock-based compensation arrangements (2) 3,129 3,323 2,846 3,075 Adjusted average common shares outstanding - diluted 225,968 250,795 230,672 246,993 Net income per share: Basic: Net income from continuing operations $ 0.39 $ 0.34 $ 1.17 $ 1.05 Income (loss) from discontinued operations, net of tax — — — 0.03 Net income $ 0.39 $ 0.34 $ 1.17 $ 1.08 Diluted: Net income from continuing operations $ 0.37 $ 0.29 $ 1.09 $ 0.88 Income (loss) from discontinued operations, net of tax — — — 0.02 Net income $ 0.37 $ 0.29 $ 1.09 $ 0.90 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income or loss that would result from the assumed conversion. (2) The following number of shares of our common stock equivalents issued under our stock-based compensation arrangements and convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months Ended Nine Months Ended (in thousands) 2016 2015 2016 2015 Shares of common stock equivalents 1,045 469 1,045 730 Shares of Convertible Senior Notes due 2017 — — 1,902 — |
Note 3 - Segment Reporting (Tab
Note 3 - Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Summarized operating results for our segments as of and for the periods indicated, are as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Mortgage Insurance Net premiums written—insurance (1) $ 240,999 $ 242,168 $ 499,662 $ 735,158 Decrease (increase) in unearned premiums (2,850 ) (14,735 ) 188,522 (45,693 ) Net premiums earned—insurance 238,149 227,433 688,184 689,465 Net investment income 28,430 22,091 84,470 58,704 Other income 3,511 1,711 8,850 4,785 Total (2) 270,090 251,235 781,504 752,954 Provision for losses 56,151 64,128 149,500 141,616 Policy acquisition costs 6,119 2,880 17,901 17,593 Other operating expenses before corporate allocations 38,081 36,632 108,036 112,535 Total (3) 100,351 103,640 275,437 271,744 Adjusted pretax operating income before corporate allocations 169,739 147,595 506,067 481,210 Allocation of corporate operating expenses 11,911 14,893 35,526 37,167 Allocation of interest expense 15,360 16,797 50,596 56,820 Adjusted pretax operating income $ 142,468 $ 115,905 $ 419,945 $ 387,223 ______________________ (1) Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Excludes net gains on investments and other financial instruments of $7.7 million and $69.5 million , respectively, for the three and nine months ended September 30, 2016 , and $3.9 million and $49.1 million , respectively, for the three and nine months ended September 30, 2015 , not included in adjusted pretax operating income. (3) Includes inter-segment expenses as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Inter-segment expenses $ 718 $ 925 $ 2,023 $ 2,919 Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Services Services revenue (1) $ 43,800 $ 43,114 $ 114,998 $ 119,241 Direct cost of services 26,911 25,870 74,188 70,624 Other operating expenses before corporate allocations 12,740 11,533 39,160 31,912 Total 39,651 37,403 113,348 102,536 Adjusted pretax operating income before corporate allocations 4,149 5,711 1,650 16,705 Allocation of corporate operating expenses 2,265 1,567 6,795 3,855 Allocation of interest expense 4,423 4,423 13,267 13,286 Adjusted pretax operating income (loss) $ (2,539 ) $ (279 ) $ (18,412 ) $ (436 ) ______________________ (1) Includes inter-segment revenues as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Inter-segment revenues $ 718 $ 925 $ 2,023 $ 2,919 Selected balance sheet information for our segments as of the periods indicated, is as follows: At September 30, 2016 (In thousands) Mortgage Insurance Services Total Total assets $ 5,686,726 $ 363,101 $ 6,049,827 At December 31, 2015 (In thousands) Mortgage Insurance Services Total Total assets $ 5,281,597 $ 360,503 $ 5,642,100 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The reconciliation of adjusted pretax operating income to consolidated pretax income from continuing operations is as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 142,468 $ 115,905 $ 419,945 $ 387,223 Services (1) (2,539 ) (279 ) (18,412 ) (436 ) Total adjusted pretax operating income 139,929 115,626 401,533 386,787 Net gains (losses) on investments and other financial instruments 7,711 3,868 69,524 49,095 Loss on induced conversion and debt extinguishment (17,397 ) (11 ) (75,075 ) (91,887 ) Acquisition-related (expenses) benefits (2) (10 ) (525 ) (161 ) (1,299 ) Amortization and impairment of intangible assets (3,292 ) (3,273 ) (9,931 ) (9,577 ) Consolidated pretax income from continuing operations $ 126,941 $ 115,685 $ 385,890 $ 333,119 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related (expenses) benefits represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. |
Note 4 - Fair Value of Financ27
Note 4 - Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following is a list of assets that are measured at fair value by hierarchy level as of September 30, 2016 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 152,805 $ — $ — $ 152,805 State and municipal obligations — 384,609 — 384,609 Money market instruments 587,628 — — 587,628 Corporate bonds and notes — 1,909,060 — 1,909,060 RMBS — 433,474 — 433,474 CMBS — 556,250 — 556,250 Other ABS — 450,853 — 450,853 Foreign government and agency securities — 41,627 — 41,627 Equity securities — 830 500 1,330 Other investments (1) — 46,319 500 46,819 Total Investments at Fair Value (2) 740,433 3,823,022 1,000 4,564,455 Total Assets at Fair Value $ 740,433 $ 3,823,022 $ 1,000 $ 4,564,455 ______________________ (1) Comprising short-term certificates of deposit and commercial paper, included within Level II, and private convertible notes, included within Level III. (2) Does not include certain other invested assets ( $1.3 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2015 : (In thousands) Level I Level II Level III Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 670,328 $ 8,000 $ — $ 678,328 State and municipal obligations — 341,845 — 341,845 Money market instruments 443,272 — — 443,272 Corporate bonds and notes — 1,383,186 — 1,383,186 RMBS — 297,097 — 297,097 CMBS — 544,588 — 544,588 Other ABS — 371,625 — 371,625 Foreign government and agency securities — 37,576 — 37,576 Equity securities 74,930 25,016 500 100,446 Other investments (1) — 99,009 — 99,009 Total Investments at Fair Value (2) 1,188,530 3,107,942 500 4,296,972 Total Assets at Fair Value $ 1,188,530 $ 3,107,942 $ 500 $ 4,296,972 ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $1.7 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value on our condensed consolidated balance sheets were as follows as of the dates indicated: September 30, 2016 December 31, 2015 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets $ 1,293 $ 3,692 $ 1,714 $ 4,901 Liabilities: Long-term debt 1,067,666 1,195,740 1,219,454 1,414,875 |
Note 5 - Investments (Tables)
Note 5 - Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Unrealized Gain (Loss) on Investments [Table Text Block] | Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: September 30, 2016 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 42,213 $ 45,035 $ 2,846 $ 24 State and municipal obligations 68,520 75,320 6,800 — Corporate bonds and notes 1,249,233 1,315,525 66,683 391 RMBS 384,867 391,701 7,054 220 CMBS 446,102 462,750 17,090 442 Other ABS 435,695 437,026 2,335 1,004 Foreign government and agency securities 27,161 28,151 1,041 51 Other investments 2,000 2,000 — — Total fixed-maturities available for sale 2,655,791 2,757,508 103,849 2,132 Equity securities available for sale (1) 1,330 1,330 — — Total debt and equity securities $ 2,657,121 $ 2,758,838 $ 103,849 $ 2,132 ______________________ (1) Comprised primarily of investments in Federal Home Loan Bank stock required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the Federal Home Loan Bank of Pittsburgh. December 31, 2015 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 13,773 $ 13,752 $ — $ 21 State and municipal obligations 36,920 37,900 1,100 120 Corporate bonds and notes 815,024 802,193 4,460 17,291 RMBS 226,744 224,905 625 2,464 CMBS 415,780 406,910 69 8,939 Other ABS 359,452 355,494 16 3,974 Foreign government and agency securities 25,663 24,307 27 1,383 Total fixed-maturities available for sale 1,893,356 1,865,461 6,297 34,192 Equity securities available for sale (1) 75,538 75,430 — 108 Total debt and equity securities $ 1,968,894 $ 1,940,891 $ 6,297 $ 34,300 ______________________ (1) Comprised primarily of a multi-sector exchange-traded fund. |
Schedule Of Unrealized Losses [Table Text Block] | The following tables show the gross unrealized losses and fair value of our securities deemed “available for sale” aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated: September 30, 2016: ($ in thousands) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 4 $ 3,536 $ 24 — $ — $ — 4 $ 3,536 $ 24 Corporate bonds and notes 14 29,166 115 6 18,271 276 20 47,437 391 RMBS 9 92,845 220 — — — 9 92,845 220 CMBS 19 54,676 442 — — — 19 54,676 442 Other ABS 28 60,953 147 30 79,609 857 58 140,562 1,004 Foreign government and agency securities 1 254 — 3 3,601 51 4 3,855 51 Total 75 $ 241,430 $ 948 39 $ 101,481 $ 1,184 114 $ 342,911 $ 2,132 December 31, 2015: ($ in thousands) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 1 $ 5,752 $ 21 — $ — $ — 1 $ 5,752 $ 21 State and municipal obligations 2 11,674 120 — — — 2 11,674 120 Corporate bonds and notes 117 510,807 16,773 6 8,700 518 123 519,507 17,291 RMBS 12 168,415 2,464 — — — 12 168,415 2,464 CMBS 58 387,268 8,939 — — — 58 387,268 8,939 Other ABS 96 284,998 2,559 14 43,225 1,415 110 328,223 3,974 Foreign government and agency securities 18 18,733 1,095 3 2,278 288 21 21,011 1,383 Equity securities 1 74,930 108 — — — 1 74,930 108 Total 305 $ 1,462,577 $ 32,079 23 $ 54,203 $ 2,221 328 $ 1,516,780 $ 34,300 |
Trading Securities (and Certain Trading Assets) [Table Text Block] | The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) September 30, December 31, Trading securities: U.S. government and agency securities $ 33,781 $ 129,913 State and municipal obligations 273,564 303,946 Corporate bonds and notes 504,335 580,993 RMBS 41,773 72,192 CMBS 91,981 137,678 Other ABS 10,747 16,131 Foreign government and agency securities 13,476 13,268 Equity securities — 25,016 Total $ 969,657 $ 1,279,137 |
Gain (Loss) on Investments [Table Text Block] | Net realized and unrealized gains (losses) on investments and other financial instruments consisted of: Three Months Ended Nine Months Ended September 30, (In thousands) 2016 2015 2016 2015 Net realized gains (losses): Fixed-maturities available for sale $ 5,685 $ (343 ) $ 3,703 $ (402 ) Equity securities available for sale — — (170 ) 68,723 Trading securities 1,524 (1 ) (295 ) (12,860 ) Short-term investments 38 (27 ) (1 ) (23 ) Other invested assets 631 2,794 631 2,794 Other gains (losses) 15 — 33 106 Net realized gains (losses) on investments 7,893 2,423 3,901 58,338 (1) Unrealized gains (losses) on trading securities (47 ) 1,810 62,862 (9,127 ) Total net gains (losses) on investments 7,846 4,233 66,763 49,211 Net gains (losses) on other financial instruments (135 ) (365 ) 2,761 (116 ) Net gains (losses) on investments and other financial instruments $ 7,711 $ 3,868 $ 69,524 $ 49,095 ______________________ (1) During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million . |
Investments Classified by Contractual Maturity Date [Table Text Block] | The contractual maturities of fixed-maturity investments were as follows: September 30, 2016 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 32,821 $ 32,764 Due after one year through five years (1) 267,312 274,014 Due after five years through ten years (1) 701,735 732,458 Due after ten years (1) 387,259 426,795 RMBS (2) 384,867 391,701 CMBS (2) 446,102 462,750 Other ABS (2) 435,695 437,026 Total $ 2,655,791 $ 2,757,508 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. |
Note 6 - Goodwill and Other I29
Note 6 - Goodwill and Other Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | All of our goodwill and other intangible assets relate to our Services segment, as a result of our acquisition of Clayton in 2014 and its subsequent acquisitions of Red Bell and ValuAmerica in 2015. The following table shows the changes in the carrying amount of goodwill as of and for the year-to-date periods ended September 30, 2016 and December 31, 2015 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2014 $ 194,027 $ (2,095 ) $ 191,932 Goodwill acquired 3,238 — 3,238 Impairment losses — — — Balance at December 31, 2015 197,265 (2,095 ) 195,170 Goodwill acquired — — — Impairment losses — — — Balance at September 30, 2016 $ 197,265 $ (2,095 ) $ 195,170 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: As of September 30, 2016 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships $ 83,359 $ (17,543 ) $ 65,816 Technology 15,100 (4,856 ) 10,244 Trade name and trademarks 8,340 (1,905 ) 6,435 Client backlog 6,680 (4,972 ) 1,708 Non-competition agreements 185 (158 ) 27 Total $ 113,664 $ (29,434 ) $ 84,230 As of December 31, 2015 (In thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Client relationships $ 83,471 $ (11,038 ) $ 72,433 Technology 15,100 (2,949 ) 12,151 Trade name and trademarks 8,340 (1,243 ) 7,097 Client backlog 6,680 (4,184 ) 2,496 Non-competition agreements 185 (115 ) 70 Total $ 113,776 $ (19,529 ) $ 94,247 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated aggregate amortization expense for the remainder of 2016 and thereafter is as follows (in thousands): 2016 $ 3,287 2017 12,621 2018 12,027 2019 10,768 2020 9,159 2021 7,353 Thereafter 29,015 |
Note 7 - Reinsurance (Tables)
Note 7 - Reinsurance (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance, Premiums Written And Earned [Table Text Block] | The effect of reinsurance on net premiums written and earned is as follows: Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Net premiums written-insurance: Direct $ 261,456 $ 253,262 $ 748,110 $ 766,708 Assumed — 7 — 62 Ceded (1) (20,457 ) (11,101 ) (248,448 ) (31,612 ) Net premiums written-insurance $ 240,999 $ 242,168 $ 499,662 $ 735,158 Net premiums earned-insurance: Direct $ 258,074 $ 242,260 $ 747,342 $ 734,221 Assumed 9 10 27 33 Ceded (1) (19,934 ) (14,837 ) (59,185 ) (44,789 ) Net premiums earned-insurance $ 238,149 $ 227,433 $ 688,184 $ 689,465 ______________________ (1) Net of profit commission. |
Reinsurance Transaction Details [Table Text Block] | The following tables show the amounts related to the QSR Transactions and the Single Premium QSR Transaction for the periods indicated: QSR Transactions Three Months Ended Nine Months Ended (In thousands) 2016 2015 2016 2015 Ceded premiums written (1) $ 6,730 $ 8,466 $ 22,048 $ 23,279 Ceded premiums earned (1) 10,597 12,203 33,094 36,452 Ceding commissions written 1,922 2,743 6,291 8,890 Ceding commissions earned (2) 3,974 2,463 12,199 10,987 Single Premium QSR Transaction Three Months Ended Nine Months Ended (In thousands) 2016 2016 Ceded premiums written (1) $ 13,004 $ 222,085 Ceded premiums earned (1) 8,608 21,748 Ceding commissions written 5,482 61,258 Ceding commissions earned (2) 4,382 11,173 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. |
Note 8 - Other Assets (Tables)
Note 8 - Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets [Abstract] | |
Schedule of Other Assets [Table Text Block] | The following table shows the components of other assets as of the dates indicated: (In thousands) September 30, December 31, Deposit with the IRS (Note 9) $ 88,557 $ 88,557 Corporate-owned life insurance 85,645 82,543 Receivable for securities sold 78,914 — Property and equipment (1) 67,478 46,802 Accrued investment income 27,599 25,620 Deferred policy acquisition costs 13,064 14,267 Reinsurance recoverables 6,755 11,044 Other 54,111 45,096 Total other assets $ 422,123 $ 313,929 ______________________ (1) Property and equipment, at cost less accumulated depreciation of $114.4 million and $106.9 million at September 30, 2016 and December 31, 2015 , respectively. |
Note 10 - Losses and LAE (Table
Note 10 - Losses and LAE (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Future Policy Benefits, by Product Segment [Table Text Block] | The following table shows our reserve for Mortgage Insurance losses and LAE by category at the end of each period indicated: (In thousands) September 30, December 31, Reserves for losses by category: Prime $ 409,438 $ 480,481 Alt-A 166,349 203,706 A minus and below 106,678 129,352 IBNR and other (1) 73,057 83,066 LAE 21,255 26,108 Reinsurance recoverable (2) 6,448 8,286 Total primary reserves 783,225 930,999 Pool 36,065 42,084 IBNR and other 823 1,118 LAE 1,112 1,335 Reinsurance recoverable (2) 36 — Total pool reserves 38,036 44,537 Total First-lien reserves 821,261 975,536 Second-lien and other (3) 673 863 Total reserve for losses $ 821,934 $ 976,399 ______________________ (1) Primarily related to expected payments under the Freddie Mac Agreement. (2) Represents ceded losses on captive transactions, the QSR Transactions and the Single Premium QSR Transaction. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | The following table presents information relating to our reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Nine Months Ended (In thousands) 2016 2015 Balance at beginning of period $ 976,399 $ 1,560,032 Less: Reinsurance recoverables (1) 8,286 26,665 Balance at beginning of period, net of reinsurance recoverables 968,113 1,533,367 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 152,320 184,490 Prior years (3,906 ) (42,158 ) Total incurred 148,414 142,332 Deduct: Paid claims and LAE related to: Current year (2) 2,725 3,417 Prior years 298,352 584,783 Total paid 301,077 588,200 Balance at end of period, net of reinsurance recoverables 815,450 1,087,499 Add: Reinsurance recoverables (1) 6,484 11,071 Balance at end of period $ 821,934 $ 1,098,570 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. |
Note 11 - Long-Term Debt (Table
Note 11 - Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Long-term Debt, Unclassified [Abstract] | |
Schedule of Long-term Debt Instruments [Table Text Block] | The carrying value of our long-term debt at September 30, 2016 and December 31, 2015 was as follows: (In thousands) September 30, December 31, 9.000% Senior Notes due 2017 $ — $ 192,261 3.000% Convertible Senior Notes due 2017 20,600 46,115 2.250% Convertible Senior Notes due 2019 61,374 341,214 5.500% Senior Notes due 2019 296,611 295,751 5.250% Senior Notes due 2020 345,003 344,113 7.000% Senior Notes due 2021 344,078 — Total long-term debt $ 1,067,666 $ 1,219,454 |
Convertible Debt | The convertible notes are reflected on our condensed consolidated balance sheets as follows: Convertible Senior Notes due 2017 Convertible Senior Notes due 2019 (In thousands) September 30, December 31, September 30, December 31, Liability component: Principal $ 22,233 $ 52,370 $ 68,024 $ 389,992 Debt discount, net (1) (1,551 ) (5,941 ) (6,041 ) (44,313 ) Debt issuance costs (1) (82 ) (314 ) (609 ) (4,465 ) Net carrying amount $ 20,600 $ 46,115 $ 61,374 $ 341,214 ______________________ (1) Included within long-term debt and is being amortized over the life of the convertible notes. The following tables set forth total interest expense recognized related to the convertible notes for the periods indicated: Convertible Senior Notes due 2017 Three Months Ended Nine Months Ended ($ in thousands) 2016 2015 2016 2015 Contractual interest expense $ 166 $ 456 $ 705 $ 6,953 Amortization of debt issuance costs 17 43 71 659 Amortization of debt discount 322 808 1,344 11,910 Total interest expense $ 505 $ 1,307 $ 2,120 $ 19,522 Convertible Senior Notes due 2019 Three Months Ended Nine Months Ended ($ in thousands) 2016 2015 2016 2015 Contractual interest expense $ 493 $ 2,250 $ 3,043 $ 6,750 Amortization of debt issuance costs 74 317 447 975 Amortization of debt discount 737 3,146 4,434 9,342 Total interest expense $ 1,304 $ 5,713 $ 7,924 $ 17,067 |
Note 14 - Accumulated Other C34
Note 14 - Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table shows the rollforward of AOCI as of the periods indicated: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ 95,548 $ 33,443 $ 62,105 $ (28,425 ) $ (9,948 ) $ (18,477 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 10,682 3,739 6,943 133,253 46,639 86,614 Less: Reclassification adjustment for net gains (losses) included in net income (1) 5,685 1,990 3,695 3,533 1,237 2,296 Net unrealized gains (losses) on investments 4,997 1,749 3,248 129,720 45,402 84,318 Net foreign currency translation adjustments (47 ) (11 ) (36 ) (523 ) (177 ) (346 ) Net actuarial gains (losses) 240 84 156 (34 ) (12 ) (22 ) OCI 5,190 1,822 3,368 129,163 45,213 83,950 Balance at end of period $ 100,738 $ 35,265 $ 65,473 $ 100,738 $ 35,265 $ 65,473 Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (17,744 ) $ (6,210 ) $ (11,534 ) $ 79,208 $ 27,723 $ 51,485 OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 6,172 2,160 4,012 (17,160 ) (6,006 ) (11,154 ) Less: Reclassification adjustment for net gains (losses) included in net income (1) (343 ) (120 ) (223 ) 68,320 23,912 44,408 Net unrealized gains (losses) on investments 6,515 2,280 4,235 (85,480 ) (29,918 ) (55,562 ) Net foreign currency translation adjustments (184 ) (64 ) (120 ) (135 ) (47 ) (88 ) Activity related to investments recorded as assets held for sale (2) — — — (5,006 ) (1,752 ) (3,254 ) OCI 6,331 2,216 4,115 (90,621 ) (31,717 ) (58,904 ) Balance at end of period $ (11,413 ) $ (3,994 ) $ (7,419 ) $ (11,413 ) $ (3,994 ) $ (7,419 ) ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our unaudited condensed consolidated statements of operations. During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million . (2) Represents the unrealized holding gains (losses) arising during the period on investments recorded as assets held for sale, net of reclassification adjustments for net gains (losses) included in income (loss) from discontinued operations, net of tax. |
Note 15 - Discontinued Operat35
Note 15 - Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations [Table Text Block] | The table below summarizes the components of income from discontinued operations, net of tax, for the period indicated. There was no activity for discontinued operations in the three and nine months ended September 30, 2016 or in the three months ended September 30, 2015 . Nine Months Ended (In thousands) Net premiums earned $ 1,007 Net investment income 9,153 Net gains (losses) on investments and other financial instruments 21,486 Change in fair value of derivative instruments 2,625 Total revenues 34,271 Provision for losses 502 Policy acquisition costs (191 ) Other operating expenses 4,107 Total expenses 4,418 Equity in net income (loss) of affiliates (13 ) Income (loss) from operations of businesses held for sale 29,840 Income (loss) on sale (14,280 ) Income tax provision (benefit) 10,175 Income (loss) from discontinued operations, net of tax $ 5,385 |
Note 16 - Statutory Informati36
Note 16 - Statutory Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Supplementary Insurance Information [Abstract] | |
Risk To Capital Calculation [Table Text Block] | Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus (i.e., statutory capital and surplus) plus statutory contingency reserves. September 30, December 31, ($ in millions) RIF, net (1) $ 34,849.2 $ 36,396.1 Common stock and paid-in capital $ 2,041.5 $ 2,041.4 Surplus Note — 325.0 Unassigned earnings (deficit) (656.3 ) (679.9 ) Statutory policyholders’ surplus 1,385.2 1,686.5 Contingency reserve 1,156.9 860.9 Statutory capital $ 2,542.1 $ 2,547.4 Risk-to-capital 13.7:1 14.3:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |
Note 1 - Condensed Consolidat37
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies Business Overview and Significant Accounting Policies(Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Aug. 12, 2016USD ($) | Jun. 29, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Basis of Presentation and Business Overview [Line Items] | ||||||||||
Net Cash Provided by (Used in) Investing Activities | $ (87,055,000) | $ 19,451,000 | ||||||||
Proceeds from Sale and Maturity of Fixed-Maturity Investments Available-for-sale | 537,679,000 | 16,208,000 | ||||||||
Payments to Acquire Available-for-sale Securities | 1,419,431,000 | 1,006,985,000 | ||||||||
Net cash provided by (used in) operating activities, continuing operations | 290,137,000 | (5,993,000) | ||||||||
Net cash provided by (used in) operating activities, discontinued operations | 0 | (1,759,000) | ||||||||
Net cash provided by (used in) investing activities, discontinued operations | 0 | 4,999,000 | ||||||||
Net Cash Provided by (Used in) Discontinued Operations | $ 0 | (421,000) | ||||||||
Business Overview [Abstract] | ||||||||||
Number of Operating Segments | segment | 2 | |||||||||
Mortgage Insurance [Abstract] | ||||||||||
Payments for Repurchase of Common Stock | $ 100,188,000 | 202,000,000 | ||||||||
Loss on induced conversion and debt extinguishment (Note 11) | $ 17,397,000 | $ 11,000 | $ 75,075,000 | 91,887,000 | ||||||
Stock Repurchase Program, Authorized Amount | $ 125,000,000 | |||||||||
Mortgage Insurance Segment | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Private Mortgage Insurance Protects Lenders For Loans Made With Less Than This Maximum Down Payment Percentage | 20.00% | 20.00% | 20.00% | |||||||
Percentage Of Primary Insurance On Domestic First-Lien Mortgages To Total Risk In Force | 97.80% | 97.80% | 97.80% | |||||||
Risk In Force | $ 47,300,000,000 | $ 47,300,000,000 | $ 47,300,000,000 | |||||||
Senior Notes Due 2017 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Debt Instrument, Repurchase Amount | $ 195,500,000 | |||||||||
Loss on induced conversion and debt extinguishment (Note 11) | $ 15,000,000 | |||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | 9.00% | |||||||
Senior Notes Due 2021 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Long-term debt, Gross | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | ||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% | |||||||
Convertible Senior Notes Due 2017 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 3.00% | 3.00% | |||||||
Convertible Senior Notes Due 2019 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | 2.25% | 2.25% | |||||||
Scenario, Previously Reported [Member] | ||||||||||
Basis of Presentation and Business Overview [Line Items] | ||||||||||
Proceeds from Sale and Maturity of Fixed-Maturity Investments Available-for-sale | 96,684,000 | |||||||||
Payments to Acquire Available-for-sale Securities | 1,087,461,000 | |||||||||
Convertible Debt | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Loss on induced conversion and debt extinguishment (Note 11) | $ 60,100,000 | |||||||||
Repayments of Convertible Debt | 235,000,000 | |||||||||
Convertible Debt | Convertible Senior Notes Due 2017 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Long-term debt, Gross | $ 22,233,000 | $ 22,233,000 | 22,233,000 | $ 52,370,000 | ||||||
Debt Instrument, Repurchase Amount | 30,100,000 | 30,100,000 | 30,100,000 | |||||||
Convertible Debt | Convertible Senior Notes Due 2019 | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Long-term debt, Gross | 68,024,000 | 68,024,000 | 68,024,000 | $ 389,992,000 | ||||||
Debt Instrument, Repurchase Amount | $ 322,000,000 | $ 322,000,000 | $ 322,000,000 | |||||||
Reportable Legal Entities [Member] | Radian Guaranty | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Repayments of Notes Payable | $ 325,000,000 | |||||||||
Pool Insurance Mortgage Insurance Product [Member] | Mortgage Insurance Segment | ||||||||||
Mortgage Insurance [Abstract] | ||||||||||
Concentration Risk, Percentage | 2.10% | |||||||||
Classification Error [Member] | ||||||||||
Basis of Presentation and Business Overview [Line Items] | ||||||||||
Net Cash Provided by (Used in) Investing Activities | $ 0 |
Note 2 - Net Income Per Share N
Note 2 - Net Income Per Share Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Net income From continuing operations - diluted | $ 83,651 | $ 73,805 | $ 252,315 | $ 218,105 | |
Net income - diluted | $ 83,651 | $ 73,805 | $ 252,315 | $ 223,490 | |
Dilutive effect of stock-based compensation arrangements (2) | [1] | 3,129 | 3,323 | 2,846 | 3,075 |
Adjusted average common shares outstanding - diluted | 225,968 | 250,795 | 230,672 | 246,993 | |
Net income from continuing operations, per diluted share | $ 0.37 | $ 0.29 | $ 1.09 | $ 0.88 | |
Income from discontinued operations and disposal of discontinued operations, net of tax, per diluted share | 0 | 0 | 0 | 0.02 | |
Net income per share - diluted | $ 0.37 | $ 0.29 | $ 1.09 | $ 0.90 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income from continuing operations - basic | $ 82,803 | $ 70,091 | $ 247,164 | $ 207,011 | |
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 5,385 | |
Net income - basic | $ 82,803 | $ 70,091 | $ 247,164 | $ 212,396 | |
Average common shares outstanding - basic | 214,387 | 207,938 | 210,858 | 197,562 | |
Net income from continuing operations, per basic share | $ 0.39 | $ 0.34 | $ 1.17 | $ 1.05 | |
Income from discontinued operations and disposal of discontinued operations, net of tax, per basic share | 0 | 0 | 0 | 0.03 | |
Net income per share - basic | $ 0.39 | $ 0.34 | $ 1.17 | $ 1.08 | |
Convertible Debt | Convertible Senior Notes Due 2019 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) | [2] | $ 848 | $ 3,714 | $ 5,151 | $ 11,094 |
Dilutive effect of Convertible Senior Notes | 8,274 | 37,736 | 16,897 | 37,736 | |
Convertible Debt | Convertible Senior Notes Due 2017 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Dilutive effect of Convertible Senior Notes | [1] | 178 | 1,798 | 71 | 8,620 |
Stock Compensation Plan [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,045 | 469 | 1,045 | 730 | |
Convertible Debt Securities [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 0 | 1,902 | 0 | |
[1] | The following number of shares of our common stock equivalents issued under our stock-based compensation arrangements and convertible debt were not included in the calculation of diluted net income per share because they were anti-dilutive: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(in thousands)2016 2015 2016 2015Shares of common stock equivalents1,045 469 1,045 730Shares of Convertible Senior Notes due 2017— — 1,902 — | ||||
[2] | As applicable, includes coupon interest, amortization of discount and fees, and other changes in income or loss that would result from the assumed conversion. |
Note 3 - Segment Reporting Sche
Note 3 - Segment Reporting Schedule of Segment Reporting Information by Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)segment | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | ||
Segment Reporting Information [Line Items] | ||||||
Number of Operating Segments | segment | 2 | |||||
Net premiums earned-insurance | $ 238,149 | $ 227,433 | $ 688,184 | $ 689,465 | ||
Services revenue | 43,096 | 42,189 | 112,990 | 116,322 | ||
Net investment income | 28,430 | 22,091 | 84,470 | 58,704 | ||
Other income | 3,497 | 1,711 | 8,835 | 4,785 | ||
Provision for losses | 55,785 | 64,192 | 148,501 | 141,780 | ||
Policy acquisition costs | 6,119 | 2,880 | 17,901 | 17,593 | ||
Direct cost of services | 26,704 | 24,949 | 73,311 | 67,722 | ||
Other operating expenses before corporate allocations | 64,862 | 65,082 | 189,531 | 186,587 | ||
Net gains (losses) on investments and other financial instruments | 7,711 | 3,868 | 69,524 | 49,095 | ||
Total assets | 6,049,827 | 6,049,827 | $ 5,642,100 | |||
Mortgage Insurance Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums written—insurance | [1] | 240,999 | 242,168 | 499,662 | 735,158 | |
Decrease (increase) in unearned premiums | (2,850) | (14,735) | 188,522 | (45,693) | ||
Net premiums earned-insurance | 238,149 | 227,433 | 688,184 | 689,465 | ||
Net investment income | 28,430 | 22,091 | 84,470 | 58,704 | ||
Other income | 3,511 | 1,711 | 8,850 | 4,785 | ||
Total | [2] | 270,090 | 251,235 | 781,504 | 752,954 | |
Provision for losses | 56,151 | 64,128 | 149,500 | 141,616 | ||
Policy acquisition costs | 6,119 | 2,880 | 17,901 | 17,593 | ||
Other operating expenses before corporate allocations | 38,081 | 36,632 | 108,036 | 112,535 | ||
Total | [3] | 100,351 | 103,640 | 275,437 | 271,744 | |
Adjusted pretax operating income (loss) before corporate allocations | 169,739 | 147,595 | 506,067 | 481,210 | ||
Allocation of corporate operating expenses | 11,911 | 14,893 | 35,526 | 37,167 | ||
Allocation of interest expense | 15,360 | 16,797 | 50,596 | 56,820 | ||
Adjusted pretax operating income (loss) | [4] | 142,468 | 115,905 | 419,945 | 387,223 | |
Net gains (losses) on investments and other financial instruments | 7,700 | 3,900 | 69,500 | 49,100 | ||
Inter-segment expenses | 718 | 925 | 2,023 | 2,919 | ||
Total assets | 5,686,726 | 5,686,726 | 5,281,597 | |||
Mortgage and Real Estate Services Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Services revenue | [5] | 43,800 | 43,114 | 114,998 | 119,241 | |
Direct cost of services | 26,911 | 25,870 | 74,188 | 70,624 | ||
Other operating expenses before corporate allocations | 12,740 | 11,533 | 39,160 | 31,912 | ||
Total | 39,651 | 37,403 | 113,348 | 102,536 | ||
Adjusted pretax operating income (loss) before corporate allocations | 4,149 | 5,711 | 1,650 | 16,705 | ||
Allocation of corporate operating expenses | 2,265 | 1,567 | 6,795 | 3,855 | ||
Allocation of interest expense | 4,423 | 4,423 | 13,267 | 13,286 | ||
Adjusted pretax operating income (loss) | [4] | (2,539) | (279) | (18,412) | (436) | |
Inter-segment revenues | 718 | $ 925 | 2,023 | $ 2,919 | ||
Total assets | $ 363,101 | $ 363,101 | $ 360,503 | |||
[1] | Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | |||||
[2] | Excludes net gains on investments and other financial instruments of $7.7 million and $69.5 million, respectively, for the three and nine months ended September 30, 2016, and $3.9 million and $49.1 million, respectively, for the three and nine months ended September 30, 2015, not included in adjusted pretax operating income. | |||||
[3] | Includes inter-segment expenses as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(In thousands)2016 2015 2016 2015Inter-segment expenses$718 $925 $2,023 $2,919 | |||||
[4] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. | |||||
[5] | Includes inter-segment revenues as follows: Three Months EndedSeptember 30, Nine Months EndedSeptember 30,(In thousands)2016 2015 2016 2015Inter-segment revenues$718 $925 $2,023 $2,919 |
Note 3 - Segment Reporting Reco
Note 3 - Segment Reporting Reconciliation of Segment to Consolidated Results Pretax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Net gains (losses) on investments and other financial instruments | $ 7,711 | $ 3,868 | $ 69,524 | $ 49,095 | |
Loss on induced conversion and debt extinguishment | (17,397) | (11) | (75,075) | (91,887) | |
Acquisition-related (expenses) benefits | [1] | (10) | (525) | (161) | (1,299) |
Amortization and impairment of intangible assets | (3,292) | (3,273) | (9,931) | (9,577) | |
Consolidated pretax income from continuing operations | 126,941 | 115,685 | 385,890 | 333,119 | |
Mortgage Insurance Segment | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted pretax operating income (loss) | [2] | 142,468 | 115,905 | 419,945 | 387,223 |
Net gains (losses) on investments and other financial instruments | 7,700 | 3,900 | 69,500 | 49,100 | |
Mortgage and Real Estate Services Segment [Member] | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted pretax operating income (loss) | [2] | (2,539) | (279) | (18,412) | (436) |
Mortgage Insurance and Mortgage and Real Estate Services Segments [Member] | |||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | |||||
Adjusted pretax operating income (loss) | $ 139,929 | $ 115,626 | $ 401,533 | $ 386,787 | |
[1] | Acquisition-related (expenses) benefits represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. | ||||
[2] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. |
Note 4 - Fair Value of Financ41
Note 4 - Fair Value of Financial Instruments Fair Value Assets Liabilities by Hierarchy Level (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Cost Method Investments | $ 1,293,000 | $ 1,293,000 | $ 1,714,000 | |||||
Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 4,564,455,000 | [1] | 4,564,455,000 | [1] | 4,296,972,000 | [2] | ||
Total Assets at Fair Value | 4,564,455,000 | 4,564,455,000 | 4,296,972,000 | |||||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | $ 0 | 0 | $ 0 | ||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 | 0 | 0 | ||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | 0 | $ 0 | 0 | $ 0 | ||||
US government and agency securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 152,805,000 | 152,805,000 | 678,328,000 | |||||
State and municipal obligations | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 384,609,000 | 384,609,000 | 341,845,000 | |||||
Money market instruments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 587,628,000 | 587,628,000 | 443,272,000 | |||||
Corporate bonds and notes | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 1,909,060,000 | 1,909,060,000 | 1,383,186,000 | |||||
RMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 433,474,000 | 433,474,000 | 297,097,000 | |||||
CMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 556,250,000 | 556,250,000 | 544,588,000 | |||||
Other ABS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 450,853,000 | 450,853,000 | 371,625,000 | |||||
Foreign government securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 41,627,000 | 41,627,000 | 37,576,000 | |||||
Equity securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 1,330,000 | 1,330,000 | 100,446,000 | |||||
Other investments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 46,819,000 | [3] | 46,819,000 | [3] | 99,009,000 | [4] | ||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 740,433,000 | [1] | 740,433,000 | [1] | 1,188,530,000 | [2] | ||
Total Assets at Fair Value | 740,433,000 | 740,433,000 | 1,188,530,000 | |||||
Fair Value, Inputs, Level 1 | US government and agency securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 152,805,000 | 152,805,000 | 670,328,000 | |||||
Fair Value, Inputs, Level 1 | State and municipal obligations | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | Money market instruments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 587,628,000 | 587,628,000 | 443,272,000 | |||||
Fair Value, Inputs, Level 1 | Corporate bonds and notes | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | RMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | CMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | Other ABS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | Foreign government securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 1 | Equity securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 74,930,000 | |||||
Fair Value, Inputs, Level 1 | Other investments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | [3] | 0 | [3] | 0 | [4] | ||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 3,823,022,000 | [1] | 3,823,022,000 | [1] | 3,107,942,000 | [2] | ||
Total Assets at Fair Value | 3,823,022,000 | 3,823,022,000 | 3,107,942,000 | |||||
Fair Value, Inputs, Level 2 | US government and agency securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 8,000,000 | |||||
Fair Value, Inputs, Level 2 | State and municipal obligations | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 384,609,000 | 384,609,000 | 341,845,000 | |||||
Fair Value, Inputs, Level 2 | Money market instruments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 2 | Corporate bonds and notes | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 1,909,060,000 | 1,909,060,000 | 1,383,186,000 | |||||
Fair Value, Inputs, Level 2 | RMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 433,474,000 | 433,474,000 | 297,097,000 | |||||
Fair Value, Inputs, Level 2 | CMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 556,250,000 | 556,250,000 | 544,588,000 | |||||
Fair Value, Inputs, Level 2 | Other ABS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 450,853,000 | 450,853,000 | 371,625,000 | |||||
Fair Value, Inputs, Level 2 | Foreign government securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 41,627,000 | 41,627,000 | 37,576,000 | |||||
Fair Value, Inputs, Level 2 | Equity securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 830,000 | 830,000 | 25,016,000 | |||||
Fair Value, Inputs, Level 2 | Other investments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 46,319,000 | [3] | 46,319,000 | [3] | 99,009,000 | [4] | ||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 1,000,000 | [1] | 1,000,000 | [1] | 500,000 | [2] | ||
Total Assets at Fair Value | $ 1,000,000 | $ 1,000,000 | 500,000 | |||||
Total Level III Assets as a Percentage of Total Assets Measured at Fair Value (less than 0.1%) | 0.10% | 0.10% | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | $ 0 | $ 0 | 0 | |||||
Fair Value, Inputs, Level 3 | US government and agency securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | State and municipal obligations | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | Money market instruments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | Corporate bonds and notes | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | RMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | CMBS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | Other ABS | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | Foreign government securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 0 | 0 | 0 | |||||
Fair Value, Inputs, Level 3 | Equity securities | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 500,000 | 500,000 | 500,000 | |||||
Gain (Loss) on Investments | 0 | 0 | ||||||
Fair Value, Inputs, Level 3 | Other investments | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Investments at Fair Value | 500,000 | [3] | $ 500,000 | [3] | $ 0 | [4] | ||
Gain (Loss) on Investments | $ 0 | |||||||
Maximum [Member] | Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | ||||||||
Fair Value by Hierarchy Level [Line Items] | ||||||||
Total Level III Assets as a Percentage of Total Assets Measured at Fair Value (less than 0.1%) | 0.10% | |||||||
[1] | Does not include certain other invested assets ($1.3 million), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. | |||||||
[2] | Does not include certain other invested assets ($1.7 million), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. | |||||||
[3] | Comprising short-term certificates of deposit and commercial paper, included within Level II, and private convertible notes, included within Level III. | |||||||
[4] | Comprising short-term certificates of deposit and commercial paper. |
Note 4 - Fair Value of Financ42
Note 4 - Fair Value of Financial Instruments Other Fair Value Disclosure (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Long-term debt | $ 1,067,666 | $ 1,219,454 |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost Method Investments | 1,293 | 1,714 |
Long-term debt | 1,067,666 | 1,219,454 |
Estimate of Fair Value, Fair Value Disclosure [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Cost Method Investments, Fair Value Disclosure | 3,692 | 4,901 |
Long-term Debt, Fair Value | $ 1,195,740 | $ 1,414,875 |
Note 5 - Investments Unrealized
Note 5 - Investments Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | $ 2,655,791 | $ 1,893,356 | ||
Available-for-sale Securities | 2,758,838 | 1,940,891 | ||
Available-for-sale Equity Securities, Amortized Cost Basis | 1,330 | 75,538 | ||
Available-for-sale Securities, Equity Securities | 1,330 | 75,430 | ||
Amortized Cost Debt and Equity Securities | 2,657,121 | 1,968,894 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 103,849 | 6,297 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 2,132 | 34,300 | ||
US government and agency securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 42,213 | 13,773 | ||
Available-for-sale Securities | 45,035 | 13,752 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 2,846 | 0 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 24 | 21 | ||
US States and Political Subdivisions Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 68,520 | 36,920 | ||
Available-for-sale Securities | 75,320 | 37,900 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 6,800 | 1,100 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | 120 | ||
Corporate bonds and notes | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 1,249,233 | 815,024 | ||
Available-for-sale Securities | 1,315,525 | 802,193 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 66,683 | 4,460 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 391 | 17,291 | ||
RMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 384,867 | 226,744 | ||
Available-for-sale Securities | 391,701 | 224,905 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 7,054 | 625 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 220 | 2,464 | ||
CMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 446,102 | 415,780 | ||
Available-for-sale Securities | 462,750 | 406,910 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 17,090 | 69 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 442 | 8,939 | ||
Other ABS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 435,695 | 359,452 | ||
Available-for-sale Securities | 437,026 | 355,494 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 2,335 | 16 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 1,004 | 3,974 | ||
Foreign government securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 27,161 | 25,663 | ||
Available-for-sale Securities | 28,151 | 24,307 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 1,041 | 27 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 51 | 1,383 | ||
Other than Securities Investment [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 2,000 | |||
Available-for-sale Securities | 2,000 | |||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | |||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 0 | |||
Debt Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Debt Securities, Amortized Cost Basis | 2,655,791 | 1,893,356 | ||
Available-for-sale Securities | 2,757,508 | 1,865,461 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax | 103,849 | 6,297 | ||
Available-for-sale Debt Securities, Accumulated Gross Unrealized Loss, before Tax | 2,132 | 34,192 | ||
Equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Equity Securities, Amortized Cost Basis | 1,330 | [1] | 75,538 | [2] |
Available-for-sale Securities, Equity Securities | 1,330 | [1] | 75,430 | [2] |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Gain, before Tax | 0 | [1] | 0 | [2] |
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | $ 0 | [1] | $ 108 | [2] |
[1] | Comprised primarily of investments in Federal Home Loan Bank stock required in connection with the memberships of Radian Guaranty and Radian Reinsurance in the Federal Home Loan Bank of Pittsburgh. | |||
[2] | Comprised primarily of a multi-sector exchange-traded fund. |
Note 5 - Investments Schedule o
Note 5 - Investments Schedule of Unrealized Losses (Details) $ in Thousands | Sep. 30, 2016USD ($)security | Dec. 31, 2015USD ($)security |
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 75 | 305 |
Fair value available-for-sale securities | $ 241,430 | $ 1,462,577 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 948 | $ 32,079 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 39 | 23 |
Fair value available-for-sale securities | $ 101,481 | $ 54,203 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 1,184 | $ 2,221 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 114 | 328 |
Fair value available-for-sale securities | $ 342,911 | $ 1,516,780 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 2,132 | $ 34,300 |
US government and agency securities | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 4 | 1 |
Fair value available-for-sale securities | $ 3,536 | $ 5,752 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 24 | $ 21 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 |
Fair value available-for-sale securities | $ 0 | $ 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 4 | 1 |
Fair value available-for-sale securities | $ 3,536 | $ 5,752 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 24 | $ 21 |
US States and Political Subdivisions Debt Securities [Member] | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 2 | |
Fair value available-for-sale securities | $ 11,674 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 120 | |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | |
Fair value available-for-sale securities | $ 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 2 | |
Fair value available-for-sale securities | $ 11,674 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 120 | |
Corporate bonds and notes | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 14 | 117 |
Fair value available-for-sale securities | $ 29,166 | $ 510,807 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 115 | $ 16,773 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 6 | 6 |
Fair value available-for-sale securities | $ 18,271 | $ 8,700 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 276 | $ 518 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 20 | 123 |
Fair value available-for-sale securities | $ 47,437 | $ 519,507 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 391 | $ 17,291 |
RMBS | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 9 | 12 |
Fair value available-for-sale securities | $ 92,845 | $ 168,415 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 220 | $ 2,464 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 |
Fair value available-for-sale securities | $ 0 | $ 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 9 | 12 |
Fair value available-for-sale securities | $ 92,845 | $ 168,415 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 220 | $ 2,464 |
CMBS | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 19 | 58 |
Fair value available-for-sale securities | $ 54,676 | $ 387,268 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 442 | $ 8,939 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 |
Fair value available-for-sale securities | $ 0 | $ 0 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 19 | 58 |
Fair value available-for-sale securities | $ 54,676 | $ 387,268 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 442 | $ 8,939 |
Other ABS | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 28 | 96 |
Fair value available-for-sale securities | $ 60,953 | $ 284,998 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 147 | $ 2,559 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 30 | 14 |
Fair value available-for-sale securities | $ 79,609 | $ 43,225 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 857 | $ 1,415 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 58 | 110 |
Fair value available-for-sale securities | $ 140,562 | $ 328,223 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,004 | $ 3,974 |
Foreign government securities | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 1 | 18 |
Fair value available-for-sale securities | $ 254 | $ 18,733 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 0 | $ 1,095 |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 3 | 3 |
Fair value available-for-sale securities | $ 3,601 | $ 2,278 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 51 | $ 288 |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 4 | 21 |
Fair value available-for-sale securities | $ 3,855 | $ 21,011 |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 51 | $ 1,383 |
Equity securities | ||
Continuous Loss Position Less Than Twelve Months [Abstract] | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 1 | |
Fair value available-for-sale securities | $ 74,930 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Aggregate Loss | $ 108 | |
Continuous Unrealized Loss Position, Twelve Months Or Greater | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | |
Fair value available-for-sale securities | $ 0 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | |
Continuous Loss Position, Total | ||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 1 | |
Fair value available-for-sale securities | $ 74,930 | |
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 108 |
Note 5 - Investments Investment
Note 5 - Investments Investments Trading Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | $ 969,657 | $ 1,279,137 |
Marketable Securities, Unrealized Gain (Loss) | 53,700 | (25,200) |
US government and agency securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 33,781 | 129,913 |
State and municipal obligations | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 273,564 | 303,946 |
Corporate bonds and notes | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 504,335 | 580,993 |
RMBS | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 41,773 | 72,192 |
CMBS | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 91,981 | 137,678 |
Other ABS | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 10,747 | 16,131 |
Foreign government securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | 13,476 | 13,268 |
Equity securities | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Trading Securities | $ 0 | $ 25,016 |
Note 5 - Investments Gain (Loss
Note 5 - Investments Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |||
Gain (Loss) on Investments [Line Items] | |||||||
Other gains | $ 15 | $ 0 | $ 33 | $ 106 | |||
Net realized losses on investments | 7,893 | 2,423 | 3,901 | 58,338 | [1] | ||
Unrealized gains on trading securities | (47) | 1,810 | 62,862 | (9,127) | |||
Total net gains on investments | 7,846 | 4,233 | 66,763 | 49,211 | |||
Net gains on other financial instruments | (135) | (365) | 2,761 | (116) | |||
Net gains on investments and other financial instruments | 7,711 | 3,868 | 69,524 | 49,095 | |||
Fixed Maturities [Member] | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Available-for-sale Securities, Gross Realized (Loss) Gain, Excluding Other than Temporary Impairments | 5,685 | (343) | 3,703 | (402) | |||
Equity securities | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Available-for-sale Securities, Gross Realized (Loss) Gain, Excluding Other than Temporary Impairments | 0 | 0 | (170) | 68,723 | |||
Trading Securities [Member] | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Trading securities | 1,524 | (1) | (295) | (12,860) | |||
Short-term Investments [Member] | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Short-term investments | 38 | (27) | (1) | (23) | |||
Other investments | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Cost-method Investments, Realized Gain (Loss), Excluding Other than Temporary Impairments | $ 631 | 2,794 | $ 631 | 2,794 | |||
Other Comprehensive Income | |||||||
Gain (Loss) on Investments [Line Items] | |||||||
Less: Reclassification Adjustment from AOCI for Sale of Securities Continuing Operations, before Tax | [2] | $ (343) | $ 68,700 | $ 68,320 | |||
[1] | During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million. | ||||||
[2] | Included in net gains (losses) on investments and other financial instruments on our unaudited condensed consolidated statements of operations. During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million. |
Note 5 - Investments Schedule47
Note 5 - Investments Schedule of Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | $ 2,655,791 | $ 1,893,356 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | 2,757,508 | 1,865,461 | |
Debt Securities | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | 2,655,791 | ||
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | 2,757,508 | ||
Non Asset Backed Security Investments, Contractual Maturities | |||
Available-for-sale Securities, Amortized Cost | |||
Due in one year or less | [1] | 32,821 | |
Due after one year through five years | [1] | 267,312 | |
Due after five years through ten years | [1] | 701,735 | |
Due after ten years | [1] | 387,259 | |
Available-for-sale Securities, Fair Value | |||
Due in one year or less | [1] | 32,764 | |
Due after one year through five years | [1] | 274,014 | |
Due after five years through ten years | [1] | 732,458 | |
Due after ten years | [1] | 426,795 | |
RMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [2] | 384,867 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [2] | 391,701 | |
CMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [2] | 446,102 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [2] | 462,750 | |
Other ABS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [2] | 435,695 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [2] | 437,026 | |
2013 Freddie Mac Agreement [Member] | Radian Guaranty Inc [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Marketable Securities, Restricted | $ 75,800 | $ 74,700 | |
[1] | Actual maturities may differ as a result of calls before scheduled maturity. | ||
[2] | RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. |
Note 6 - Goodwill and Other I48
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Mar. 31, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Mortgage and Real Estate Services Segment [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, Gross, Beginning of Period | $ 194,027 | $ 197,265 | $ 194,027 | ||
Goodwill, Acquired During Period | 0 | 3,238 | |||
Goodwill, Gross, End of Period | 197,265 | 197,265 | |||
Goodwill, Impaired, Accumulated Impairment Loss, Beginning of Period | (2,095) | (2,095) | (2,095) | ||
Goodwill, Impairment Loss | 0 | 0 | |||
Goodwill, Impaired, Accumulated Impairment Loss, End of Period | (2,095) | (2,095) | |||
Goodwill, Net | $ 195,170 | $ 195,170 | $ 191,932 | ||
Clayton Holdings, LLC [Member] | Series of Individually Immaterial Business Acquisitions [Member] | |||||
Goodwill [Line Items] | |||||
Goodwill, Acquired During Period | $ 800 | $ 2,400 |
Note 6 - Goodwill and Other I49
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Finite-Lived Intangible Assets (Details) - Mortgage and Real Estate Services Segment [Member] - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | $ 113,664 | $ 113,776 |
Accumulated amortization | (29,434) | (19,529) |
Net carrying amount | 84,230 | 94,247 |
Client Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 83,359 | 83,471 |
Accumulated amortization | (17,543) | (11,038) |
Net carrying amount | 65,816 | 72,433 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 15,100 | 15,100 |
Accumulated amortization | (4,856) | (2,949) |
Net carrying amount | 10,244 | 12,151 |
Trade name and trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 8,340 | 8,340 |
Accumulated amortization | (1,905) | (1,243) |
Net carrying amount | 6,435 | 7,097 |
Client backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 6,680 | 6,680 |
Accumulated amortization | (4,972) | (4,184) |
Net carrying amount | 1,708 | 2,496 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying amount | 185 | 185 |
Accumulated amortization | (158) | (115) |
Net carrying amount | $ 27 | $ 70 |
Note 6 - Goodwill and Other I50
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Future Amortization Expense for Finite Lived Assets (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 3,287 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 12,621 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 12,027 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 10,768 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 9,159 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 7,353 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | $ 29,015 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years |
Note 7 - Reinsurance Reinsuranc
Note 7 - Reinsurance Reinsurance Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Premiums Earned, Net [Abstract] | |||||
Net premiums earned-insurance | $ 238,149 | $ 227,433 | $ 688,184 | $ 689,465 | |
Mortgage Insurance Segment | |||||
Premiums Written, Net [Abstract] | |||||
Direct Premiums Written | 261,456 | 253,262 | 748,110 | 766,708 | |
Assumed Premiums Written | 0 | 7 | 0 | 62 | |
Ceded Premiums Written | [1] | (20,457) | (11,101) | (248,448) | (31,612) |
Net premiums written | [2] | 240,999 | 242,168 | 499,662 | 735,158 |
Premiums Earned, Net [Abstract] | |||||
Direct Premiums Earned | 258,074 | 242,260 | 747,342 | 734,221 | |
Assumed Premiums Earned | 9 | 10 | 27 | 33 | |
Ceded Premiums Earned | [1] | (19,934) | (14,837) | (59,185) | (44,789) |
Net premiums earned-insurance | $ 238,149 | $ 227,433 | $ 688,184 | $ 689,465 | |
[1] | Net of profit commission. | ||||
[2] | Net of ceded premiums written under the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. |
Note 7 - Reinsurance Reinsura52
Note 7 - Reinsurance Reinsurance Transactions (Details) - Reinsurer Concentration Risk [Member] - Radian Guaranty $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 15 Months Ended | 24 Months Ended | 33 Months Ended | ||||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015 | Mar. 31, 2013 | Dec. 31, 2017USD ($) | Dec. 31, 2015 | Dec. 31, 2012transaction | ||
Quota Share Reinsurance Transactions [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Number of Quota Share Reinsurance Agreements | transaction | 2 | |||||||||
Ceded Insurance Commission Percentage | 30.00% | 35.00% | ||||||||
Ceded Premiums Written | [1] | $ 6,730 | $ 8,466 | $ 22,048 | $ 23,279 | |||||
Ceded Premiums Earned | [1] | 10,597 | 12,203 | 33,094 | 36,452 | |||||
Accrued Liabilities for Commissions, Expense and Taxes | 1,922 | 2,743 | 6,291 | 8,890 | ||||||
Fees and Commissions | [2] | $ 3,974 | 2,463 | 12,199 | 10,987 | |||||
Single Premium QSR Transaction [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Ceded Insurance Commission Percentage | 25.00% | |||||||||
Concentration Risk, Percentage | 20.00% | 35.00% | ||||||||
Ceded Premiums Written | [1] | $ 13,004 | 222,085 | |||||||
Ceded Premiums Earned | [1] | 8,608 | 21,748 | |||||||
Accrued Liabilities for Commissions, Expense and Taxes | 5,482 | 61,258 | ||||||||
Fees and Commissions | [2] | $ 4,382 | 11,173 | |||||||
Scenario, Forecast [Member] | Single Premium QSR Transaction [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Concentration Risk, Percentage | 35.00% | |||||||||
Maximum [Member] | Single Premium QSR Transaction [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Loss Ratio | 55.00% | |||||||||
Maximum [Member] | Scenario, Forecast [Member] | Single Premium QSR Transaction [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Ceded Premiums Written | $ 195,000 | |||||||||
First Lien Mortgage Insurance Products [Member] | Quota Share Reinsurance Transactions [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Risk In Force | $ 1,700,000 | $ 2,300,000 | 1,700,000 | $ 2,300,000 | ||||||
First Lien Mortgage Insurance Products [Member] | Single Premium QSR Transaction [Member] | ||||||||||
Ceded Credit Risk [Line Items] | ||||||||||
Risk In Force | $ 3,600,000 | $ 3,600,000 | ||||||||
[1] | Net of profit commission. | |||||||||
[2] | Includes amounts reported in policy acquisition costs and other operating expenses. |
Note 8 - Other Assets (Details)
Note 8 - Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Receivable for Securities Sold | $ 78,914 | $ 0 | |
Deposit with the IRS (Note 9) | 88,557 | 88,557 | |
Corporate-owned life insurance | 85,645 | 82,543 | |
Property and equipment | [1] | 67,478 | 46,802 |
Accrued investment income | 27,599 | 25,620 | |
Deferred policy acquisition costs | 13,064 | 14,267 | |
Reinsurance recoverables | 6,755 | 11,044 | |
Other | 54,111 | 45,096 | |
Total other assets | 422,123 | 313,929 | |
Property and Equipment, Owned, Accumulated Depreciation | $ 114,400 | $ 106,900 | |
[1] | Property and equipment, at cost less accumulated depreciation of $114.4 million and $106.9 million at September 30, 2016 and December 31, 2015, respectively. |
Note 9 - Income Taxes Income Ta
Note 9 - Income Taxes Income Tax (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Loss Carryforwards [Line Items] | ||||
Operating Loss Carryforwards | $ 821,600,000 | $ 821,600,000 | ||
Deferred Tax Assets, Tax Credit Carryforwards, Foreign | 0 | 0 | ||
Loss on induced conversion and debt extinguishment (Note 11) | 17,397,000 | $ 11,000 | 75,075,000 | $ 91,887,000 |
State and Local NOL Carryforwards [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Valuation Allowance, Amount | $ 41,000,000 | 41,000,000 | ||
Convertible Debt | ||||
Operating Loss Carryforwards [Line Items] | ||||
Loss on induced conversion and debt extinguishment (Note 11) | 60,100,000 | |||
Induced Conversion of Convertible Debt Expense | 41,800,000 | |||
Effective Income Tax Rate Reconciliation, Deduction, Other, Amount | 28,500,000 | |||
Extinguishment of Debt, Gain (Loss), Income Tax | $ 15,300,000 |
Note 9 - Income Taxes Summary o
Note 9 - Income Taxes Summary of Income Tax Examinations (Details) - Internal Revenue Service (IRS) [Member] - USD ($) $ in Millions | Sep. 30, 2016 | Sep. 04, 2014 | May 31, 2010 | Jun. 30, 2008 |
Income Tax Examination [Line Items] | ||||
Income Tax Examination, Amount of Claimed Income Tax Refund Being Disallowed for Tax Years 2006 and 2007 | $ 105 | |||
REMIC Residual [Member] | ||||
Income Tax Examination [Line Items] | ||||
Qualified Deposit With The U.S. Department Of Treasury Relating to Tax Years 2000 Through 2004 | $ 85 | |||
Qualified Deposit With The U.S. Department Of Treasury Relating To Tax Years 2005 Through 2007 | $ 4 | |||
Income Tax Examination, Notice of Deficiency, Amounts Related to Unpaid Taxes and Penalties | $ 157 | |||
Income Tax Examination, Estimated Interest on Notice of Deficiency Amounts | $ 133 | |||
Income Tax Examination, Proposed State Liabilities Resulting from IRS Examination of Tax Years 2000 Through 2007 | $ 34 |
Note 10 - Losses and LAE Mortga
Note 10 - Losses and LAE Mortgage Insurance Reserves by Product (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | $ 821,934 | $ 976,399 | |||
Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Reinsurance recoverables | [1] | 6,484 | 8,286 | $ 11,071 | $ 26,665 |
Liability for Claims and Claims Adjustment Expense | 821,934 | 976,399 | $ 1,098,570 | $ 1,560,032 | |
Prime Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 409,438 | 480,481 | |||
Alt A Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 166,349 | 203,706 | |||
A Minus and Below Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 106,678 | 129,352 | |||
Primary Mortgage Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Incurred but Not Reported Claims | [2] | 73,057 | 83,066 | ||
Liability for Claims Adjustment Expense | 21,255 | 26,108 | |||
Reinsurance recoverables | [3] | 6,448 | 8,286 | ||
Total Primary Insurance Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 783,225 | 930,999 | |||
Pool Insurance Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 36,065 | 42,084 | |||
Liability for Incurred but Not Reported Claims | 823 | 1,118 | |||
Liability for Claims Adjustment Expense | 1,112 | 1,335 | |||
Reinsurance recoverables | [3] | 36 | 0 | ||
Liability for Claims and Claims Adjustment Expense | 38,036 | 44,537 | |||
First Lien Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 821,261 | 975,536 | |||
Second Lien Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | [4] | $ 673 | $ 863 | ||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | ||||
[2] | Primarily related to expected payments under the Freddie Mac Agreement. | ||||
[3] | Represents ceded losses on captive transactions, the QSR Transactions and the Single Premium QSR Transaction. | ||||
[4] | Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Note 10 - Losses and LAE Mort57
Note 10 - Losses and LAE Mortgage Insurance Loss Reserves Rollforward (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Loss reserve [Roll Forward] | ||||
Balance at January 1 | $ 976,399 | |||
Deduct paid claims and LAE related to [Abstract] | ||||
Balance at September 30 | 821,934 | $ 976,399 | ||
Mortgage Insurance Segment | ||||
Loss reserve [Roll Forward] | ||||
Balance at January 1 | 976,399 | $ 1,560,032 | 1,560,032 | |
Less reinsurance recoverables | [1] | 8,286 | 26,665 | 26,665 |
Balance at beginning of period, net of reinsurance recoverables | 968,113 | 1,533,367 | 1,533,367 | |
Add losses and LAE incurred in respect of default notices reported and unreported in [Abstract] | ||||
Current year | [2] | 152,320 | 184,490 | |
Prior years | (3,906) | (42,158) | ||
Total incurred losses and LAE | 148,414 | 142,332 | ||
Deduct paid claims and LAE related to [Abstract] | ||||
Paid Losses and LAE Current year | [2] | 2,725 | 3,417 | |
Paid losses and LAE Prior years | 298,352 | 584,783 | ||
Total paid losses and LAE | 301,077 | 588,200 | ||
Balance at end of period, net of reinsurance recoverables | 815,450 | 1,087,499 | 968,113 | |
Add reinsurance recoverables | [1] | 6,484 | 11,071 | 8,286 |
Balance at September 30 | $ 821,934 | $ 1,098,570 | $ 976,399 | |
Default To Claim Rate Detail [Abstract] | ||||
Default To Claim Rate Estimate, Gross, For New Defaults | 12.00% | 14.00% | 13.00% | |
Mortgage Insurance Segment | Primary Mortgage Product [Member] | ||||
Loss reserve [Roll Forward] | ||||
Less reinsurance recoverables | [3] | $ 8,286 | ||
Deduct paid claims and LAE related to [Abstract] | ||||
Add reinsurance recoverables | [3] | $ 6,448 | $ 8,286 | |
Default To Claim Rate Detail [Abstract] | ||||
Weighted Average Default To Claim Rate Assumption Net Of Denials Rescissions and Reinstatements | 45.00% | 46.00% | ||
Weighted Average Default To Claim Rate Assumption Excluding Pending Claims Net Of Denials And Rescissions | 41.00% | 42.00% | ||
Default To Claim Rate Estimate, Gross, For Pre-Foreclosure Stage Defaults | 65.00% | |||
Gross Default To Claim Rate Estimate | 81.00% | |||
Bank of America Settlement Agreement [Member] | Mortgage Insurance Segment | ||||
Deduct paid claims and LAE related to [Abstract] | ||||
Total paid losses and LAE | $ 236,600 | |||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Transactions and the Single Premium QSR Transaction. See Note 7 for additional information. | |||
[2] | Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. | |||
[3] | Represents ceded losses on captive transactions, the QSR Transactions and the Single Premium QSR Transaction. |
Note 10 - Losses and LAE Rescis
Note 10 - Losses and LAE Rescissions And Denials (Details) - USD ($) $ in Thousands | Aug. 29, 2017 | Oct. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Rescissions And Denials [Line Items] | ||||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 821,934 | $ 976,399 | ||||
Mortgage Insurance Segment | ||||||
Rescissions And Denials [Line Items] | ||||||
Decrease To Our Loss Reserves Due To Estimated Rescissions And Denials | 59,000 | 69,000 | ||||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 16,800 | 26,600 | ||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 821,934 | 976,399 | $ 1,098,570 | $ 1,560,032 | ||
2013 Freddie Mac Agreement [Member] | ||||||
Rescissions And Denials [Line Items] | ||||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 57,000 | |||||
2013 Freddie Mac Agreement [Member] | Radian Guaranty Inc [Member] | ||||||
Rescissions And Denials [Line Items] | ||||||
Marketable Securities, Restricted | $ 75,800 | $ 74,700 | ||||
2013 Freddie Mac Agreement [Member] | Radian Guaranty Inc [Member] | Scenario, Forecast [Member] | ||||||
Rescissions And Denials [Line Items] | ||||||
Not Final Loss Mitigation Activity (less than) | $ 64,000 | |||||
Subsequent Event [Member] | 2013 Freddie Mac Agreement [Member] | ||||||
Rescissions And Denials [Line Items] | ||||||
Increase (Decrease) in Restricted Cash and Investments for Operating Activities | $ 11,700 |
Note 11 - Long-Term Debt Schedu
Note 11 - Long-Term Debt Schedule of Long Term Debt (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Aug. 12, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 1,067,666 | $ 1,067,666 | $ 1,067,666 | $ 1,219,454 | ||||
Loss on induced conversion and debt extinguishment | $ (17,397) | $ (11) | $ (75,075) | $ (91,887) | ||||
Senior Notes Due 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 9.00% | 9.00% | 9.00% | |||||
Long-term debt | $ 0 | $ 0 | $ 0 | 192,261 | ||||
Debt Instrument, Repurchase Amount | $ 195,500 | |||||||
Repayments of Senior Debt | 211,300 | |||||||
Loss on induced conversion and debt extinguishment | $ (15,000) | |||||||
Convertible Senior Notes Due 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 3.00% | 3.00% | 3.00% | |||||
Long-term debt | $ 20,600 | $ 20,600 | $ 20,600 | 46,115 | ||||
Convertible Debt, Termination of Capped Call Transaction, Number of Shares Received | 0.2 | |||||||
Convertible Debt, Termination of Capped Call Transaction, Total Consideration | $ 2,600 | |||||||
Convertible Debt, Termination of Capped Call Transaction, Closing Stock Price | $ 11.86 | |||||||
Convertible Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 2.25% | 2.25% | 2.25% | |||||
Long-term debt | $ 61,374 | $ 61,374 | $ 61,374 | 341,214 | ||||
Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% | 5.50% | |||||
Long-term debt | $ 296,611 | $ 296,611 | $ 296,611 | 295,751 | ||||
Senior Notes Due 2020 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | 5.25% | 5.25% | |||||
Long-term debt | $ 345,003 | $ 345,003 | $ 345,003 | 344,113 | ||||
Senior Notes Due 2021 | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% | 7.00% | |||||
Long-term debt | $ 344,078 | $ 344,078 | $ 344,078 | 0 | ||||
Long-term debt, Gross | $ 350,000 | $ 350,000 | $ 350,000 | $ 350,000 | ||||
Proceeds from Issuance of Long-term Debt | $ 343,400 | |||||||
Debt Instrument, Redemption Price, Percentage | 100.00% | |||||||
Debt Instrument, Basis Spread on Variable Rate | 0.50% | |||||||
Percent of Stock With Ordinary Voting Rights That Company Must Retain In Order To Make Any Capital Stock Transactions Under Debt Covenant Agreement (more than) | 80.00% | 80.00% | 80.00% | |||||
Convertible Debt | ||||||||
Debt Instrument [Line Items] | ||||||||
Repayments of Convertible Debt | $ 235,000 | |||||||
Debt Conversion, Converted Instrument, Shares Issued | 17 | |||||||
Loss on induced conversion and debt extinguishment | $ (60,100) | |||||||
Induced Conversion of Convertible Debt Expense | 41,800 | |||||||
Losses on Extinguishment of Debt | (17,200) | |||||||
Write off of Deferred Debt Issuance Cost | 1,100 | |||||||
Convertible Debt | Convertible Senior Notes Due 2017 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | $ 20,600 | $ 20,600 | 20,600 | 46,115 | ||||
Long-term debt, Gross | 22,233 | 22,233 | 22,233 | 52,370 | ||||
Debt Instrument, Repurchase Amount | 30,100 | 30,100 | 30,100 | |||||
Convertible Debt | Convertible Senior Notes Due 2019 | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt | 61,374 | 61,374 | 61,374 | 341,214 | ||||
Long-term debt, Gross | 68,024 | 68,024 | 68,024 | $ 389,992 | ||||
Debt Instrument, Repurchase Amount | $ 322,000 | $ 322,000 | $ 322,000 |
Note 11 - Long-Term Debt Sche60
Note 11 - Long-Term Debt Schedule of Convertible Debt (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Debt Instrument [Line Items] | ||||||
Long-term debt, net | $ 1,067,666 | $ 1,067,666 | $ 1,219,454 | |||
Convertible Senior Notes Due 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Equity component of currently redeemable convertible senior notes | 5,000 | 5,000 | 11,300 | |||
Long-term debt, net | 20,600 | 20,600 | 46,115 | |||
Convertible Senior Notes Due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Equity component of currently redeemable convertible senior notes | 13,100 | 13,100 | 75,100 | |||
Long-term debt, net | 61,374 | 61,374 | 341,214 | |||
Convertible Debt | Convertible Senior Notes Due 2017 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of convertible debt in liabilities | 22,233 | 22,233 | 52,370 | |||
Less: Debt discount, net (1) | [1] | (1,551) | (1,551) | (5,941) | ||
Less: Debt issuance costs (1) | [1] | (82) | (82) | (314) | ||
Long-term debt, net | 20,600 | 20,600 | 46,115 | |||
Contractual interest expense of convertible debt | 166 | $ 456 | 705 | $ 6,953 | ||
Amortization of debt issuance costs | 17 | 43 | 71 | 659 | ||
Amortization of debt discount | 322 | 808 | 1,344 | 11,910 | ||
Total interest expense for convertible debt | 505 | 1,307 | 2,120 | 19,522 | ||
Convertible Debt | Convertible Senior Notes Due 2019 | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of convertible debt in liabilities | 68,024 | 68,024 | 389,992 | |||
Less: Debt discount, net (1) | [1] | (6,041) | (6,041) | (44,313) | ||
Less: Debt issuance costs (1) | [1] | (609) | (609) | (4,465) | ||
Long-term debt, net | 61,374 | 61,374 | $ 341,214 | |||
Contractual interest expense of convertible debt | 493 | 2,250 | 3,043 | 6,750 | ||
Amortization of debt issuance costs | 74 | 317 | 447 | 975 | ||
Amortization of debt discount | 737 | 3,146 | 4,434 | 9,342 | ||
Total interest expense for convertible debt | $ 1,304 | $ 5,713 | $ 7,924 | $ 17,067 | ||
[1] | Included within long-term debt and is being amortized over the life of the convertible notes. |
Note 12 - Commitments and Con61
Note 12 - Commitments and Contingencies Legal Proceedings (Details) | Sep. 30, 2016matter |
Unasserted Claim [Member] | Minimum [Member] | |
Loss Contingencies [Line Items] | |
Minimum Number of Pending or Threatened Matters That Could Affect Our Results | 1 |
Note 12 - Commitments and Con62
Note 12 - Commitments and Contingencies Guarantor Obligations (Details) - Indirect Guarantee of Indebtedness [Member] $ in Millions | Sep. 30, 2016USD ($)transaction |
Guarantees [Abstract] | |
Number of Guaranteed Structured Transactions | transaction | 2 |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ | $ 114.5 |
Note 13 - Capital Stock (Detail
Note 13 - Capital Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Jun. 29, 2016 | |
Class of Stock [Line Items] | ||||||
Payments for Repurchase of Common Stock | $ 100,188,000 | $ 202,000,000 | ||||
Stock Repurchase Program, Authorized Amount | $ 125,000,000 | |||||
Convertible Senior Notes Due 2017 | ||||||
Class of Stock [Line Items] | ||||||
Convertible Debt, Termination of Capped Call Transaction, Number of Shares Received | 200,000 | |||||
Convertible Debt | ||||||
Class of Stock [Line Items] | ||||||
Debt Conversion, Converted Instrument, Shares Issued | 17,000,000 | |||||
First Quarter 2016 Repurchase Program [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock Repurchased During Period, Shares | 9,400,000 | |||||
Payments for Repurchase of Common Stock | $ 100,200,000 | |||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ 10.62 | |||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 0 | 0 | ||||
Second Quarter 2016 Repurchase Program [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock Repurchased During Period, Shares | 0 | |||||
Stock Repurchase Program, Authorized Amount | $ 125,000,000 | $ 125,000,000 | $ 125,000,000 |
Note 14 - Accumulated Other C64
Note 14 - Accumulated Other Comprehensive Income Rollforward of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2016 | Sep. 30, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Other Comprehensive Income, Net of Tax [Abstract] | ||||||
AOCI, Net of Tax, beginning balance | $ (18,477) | |||||
Unrealized holding gains (losses) arising during the period | $ 6,943 | $ 4,012 | 86,614 | $ (11,154) | ||
Less: Reclassification adjustment for net gains (losses) included in net income | 3,695 | (223) | 2,296 | 44,408 | ||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment Continuing Operations, Net of Tax | 3,248 | 4,235 | 84,318 | (55,562) | ||
Net foreign currency translation adjustments | (36) | (120) | (346) | (88) | ||
Activity related to investments recorded as assets held for sale | 0 | 0 | 0 | (3,254) | ||
Net actuarial gains (losses) | 156 | 0 | (22) | 0 | ||
Other comprehensive income | 3,368 | 4,115 | 83,950 | (58,904) | ||
AOCI, Net of Tax, ending balance | 65,473 | 65,473 | ||||
Other Comprehensive Income | ||||||
Other Comprehensive Income, before Tax [Abstract] | ||||||
AOCI before Tax, Attributable to Parent, beginning balance | 95,548 | (17,744) | (28,425) | 79,208 | ||
Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax | 10,682 | 133,253 | ||||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | [1] | 5,685 | 3,533 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax | 4,997 | 129,720 | ||||
Unrealized Holding Gain (Loss) on Securities Arising Durling Period Continuing Operations, before Tax | 6,172 | (17,160) | ||||
Less: Reclassification Adjustment from AOCI for Sale of Securities Continuing Operations, before Tax | [1] | (343) | $ 68,700 | 68,320 | ||
Other Comprehensive Income (Loss), Before Tax, Unrealized Gains Losses on Investments Continuing Operations | 6,515 | (85,480) | ||||
Net foreign currency translation adjustments, before tax | (47) | (184) | (523) | (135) | ||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, before Tax | 240 | (34) | ||||
Other Comprehensive Income (Loss), Before Tax, Unrealized Holding Gains (Losses) Arising During the Period on Investments Recorded as Assets Held for Sale, Net of Reclassification Adjustments | [2] | 0 | (5,006) | |||
Other comprehensive income, before tax | 5,190 | 6,331 | 129,163 | (90,621) | ||
AOCI before Tax, Attributable to Parent, ending balance | 100,738 | (11,413) | (17,744) | 100,738 | (11,413) | |
Other Comprehensive Income, Tax [Abstract] | ||||||
AOCI, Tax, beginning balance | 33,443 | (6,210) | (9,948) | 27,723 | ||
Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | 3,739 | 46,639 | ||||
Less: Reclassification adjustment for net (losses) gains included in net income, tax | [1] | 1,990 | 1,237 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | 1,749 | 45,402 | ||||
Unrealized Holding Gain (Loss) on Securities Arising During Period Continuing Operations, Tax | 2,160 | (6,006) | ||||
Less: Reclassification adjustment for net gains (losses) included in net income related to continuing operations, Tax | [1] | (120) | 23,912 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities Continuing Operations, Tax | 2,280 | (29,918) | ||||
Net foreign currency translation adjustments, tax | (11) | (64) | (177) | (47) | ||
Other Comprehensive Income (Loss), Tax Effect, Unrealized Gains (Losses) on Investments Recorded as Assets Held for Sale | [2] | 0 | (1,752) | |||
Other Comprehensive Income (Loss), Pension and Other Postretirement Benefit Plans, Net Unamortized Gain (Loss) Arising During Period, Tax | 84 | (12) | ||||
Other Comprehensive Income, Tax | 1,822 | 2,216 | 45,213 | (31,717) | ||
AOCI Tax, ending balance | 35,265 | (3,994) | (6,210) | 35,265 | (3,994) | |
Other Comprehensive Income, Net of Tax [Abstract] | ||||||
AOCI, Net of Tax, beginning balance | 62,105 | (11,534) | (18,477) | 51,485 | ||
Unrealized holding gains (losses) arising during the period | 6,943 | 86,614 | ||||
Less: Reclassification adjustment for net gains (losses) included in net income | [1] | 3,695 | 2,296 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent | 3,248 | 84,318 | ||||
Unrealized holding gains (losses) arising during period continuing operations | 4,012 | (11,154) | ||||
Less: Reclassification adjustment for net gains (losses) included in net income for continuing operations | [1] | (223) | 44,408 | |||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment Continuing Operations, Net of Tax | 4,235 | (55,562) | ||||
Net foreign currency translation adjustments | (36) | (120) | (346) | (88) | ||
Activity related to investments recorded as assets held for sale | [2] | 0 | (3,254) | |||
Net actuarial gains (losses) | 156 | (22) | ||||
Other comprehensive income | 3,368 | 4,115 | 83,950 | (58,904) | ||
AOCI, Net of Tax, ending balance | $ 65,473 | $ (7,419) | $ (11,534) | $ 65,473 | $ (7,419) | |
[1] | Included in net gains (losses) on investments and other financial instruments on our unaudited condensed consolidated statements of operations. During the second quarter of 2015, we sold equity securities in our portfolio and reinvested the proceeds in assets that qualify as PMIERs-compliant Available Assets, recognizing pretax gains of $68.7 million. | |||||
[2] | Represents the unrealized holding gains (losses) arising during the period on investments recorded as assets held for sale, net of reclassification adjustments for net gains (losses) included in income (loss) from discontinued operations, net of tax. |
Note 15 - Discontinued Operat65
Note 15 - Discontinued Operations Discontinued Operations (Details) - USD ($) | Apr. 01, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2014 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Net investment income | $ 28,430,000 | $ 22,091,000 | $ 84,470,000 | $ 58,704,000 | ||
Net gains (losses) on investments and other financial instruments | 7,711,000 | 3,868,000 | 69,524,000 | 49,095,000 | ||
Other income | 3,497,000 | 1,711,000 | 8,835,000 | 4,785,000 | ||
Total revenues | 320,883,000 | 297,292,000 | 964,003,000 | 918,371,000 | ||
Policy acquisition costs | 6,119,000 | 2,880,000 | 17,901,000 | 17,593,000 | ||
Other operating expenses | 64,862,000 | 65,082,000 | 189,531,000 | 186,587,000 | ||
Total expenses | 193,942,000 | 181,607,000 | 578,113,000 | 585,252,000 | ||
Income (loss) from discontinued operations, net of tax | 0 | 0 | 0 | 5,385,000 | ||
Discontinued Operations, Disposed of by Sale [Member] | Radian Asset Assurance [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Sale of Stock, Percentage of Ownership before Transaction | 100.00% | |||||
Disposal Group, Including Discontinued Operation, Consideration | $ 810,000,000 | |||||
Income (loss) from discontinued operations, net of tax | $ 0 | $ 0 | 0 | |||
Discontinued Operations, Held-for-sale [Member] | Radian Asset Assurance [Member] | ||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Total Operating Expenses Allocated to Subsidiaries From Parent Company | 0 | 0 | ||||
Total Interest Expense Allocated to Subsidiaries From Parent Company | $ 0 | 0 | ||||
Net premiums earned | 1,007,000 | |||||
Net investment income | 9,153,000 | |||||
Net gains (losses) on investments and other financial instruments | 21,486,000 | |||||
Change in fair value of derivative instruments | 2,625,000 | |||||
Total revenues | 34,271,000 | |||||
Provision for losses | 502,000 | |||||
Policy acquisition costs | (191,000) | |||||
Other operating expenses | 4,107,000 | |||||
Total expenses | 4,418,000 | |||||
Equity in net (loss) of affiliates | (13,000) | |||||
Income from operations of businesses held for sale | 29,840,000 | |||||
Loss on sale | (14,280,000) | $ (467,500,000) | ||||
Income tax provision | 10,175,000 | |||||
Income (loss) from discontinued operations, net of tax | $ 5,385,000 |
Note 16 - Statutory Informati66
Note 16 - Statutory Information Statutory Information (Details) $ in Billions | Sep. 30, 2016USD ($) |
Reportable Subsegments [Member] | |
Statutory Accounting Practices [Line Items] | |
Restricted Net Assets Held by Consolidated Subsidiaries | $ 3 |
Note 16 - Statutory Informati67
Note 16 - Statutory Information Risk To Capital Calculation (Details) $ in Millions | 1 Months Ended | |||
Jun. 30, 2016USD ($) | Sep. 30, 2016USD ($)state | Dec. 31, 2015USD ($) | ||
Risk to Capital Line Items [Line Items] | ||||
Risk To Capital Ratio, Regulatory Maximum | 25 | |||
Radian Guaranty | ||||
Risk to Capital Line Items [Line Items] | ||||
RIF, net (1) | [1] | $ 34,849.2 | $ 36,396.1 | |
Common stock and paid-in capital | 2,041.5 | 2,041.4 | ||
Surplus Notes | 0 | 325 | ||
Unassigned earnings (deficit) | (656.3) | (679.9) | ||
Statutory policyholders’ surplus | 1,385.2 | 1,686.5 | ||
Contingency reserve | 1,156.9 | 860.9 | ||
Statutory capital | $ 2,542.1 | $ 2,547.4 | ||
Risk-to-capital | 13.7 | 14.3 | ||
Reportable Legal Entities [Member] | Radian Guaranty | ||||
Risk to Capital Line Items [Line Items] | ||||
Repayments of Notes Payable | $ 325 | |||
State Insurance Regulations [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Number Of States That Have A Statutory Or Regulatory Risk Based Capital Requirement | state | 16 | |||
Non RBC States [Member] | Minimum [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Capital Required for Capital Adequacy | $ 1 | |||
Non RBC States [Member] | Maximum [Member] | ||||
Risk to Capital Line Items [Line Items] | ||||
Capital Required for Capital Adequacy | $ 5 | |||
[1] | Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |