RDN - Earnings call transcript Q3 2021

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Operator

Welcome to the Radian’s Third Quarter 2021 Earnings Call. My name is Jenny and I will be your operator for today’s call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Senior Vice President, Investor Relations and Corporate Development, John Damian. Mr. begin. may you Damian,

John Damian

welcome third and call. XXXX to you quarter Radian’s conference Thank

return the our income press financial release discussed evening today’s diluted issued to Radian’s which includes adjusted and operating income, call, share, section for posted Our and on that contains adjusted during was certain results non-GAAP release equity. will This at net website www.radian.com. the per measures quarter operating is including operating Investors press pre-tax of be net yesterday adjusted

release In gross our segment, from maybe are profit will maybe found website. will for Homegenius GAAP release expenses, addition, hear in on on found Hall, non-GAAP measures loss Derek and other non-GAAP Exhibit hand, be discussed Radian’s operating for our of call Brummer, Mortgage. of Chief of these related specifically Homegenius Financial Investors the pre-tax margins. Frank is or measures A today profit, income corporate to This press section the of reconciliations the exhibits that include Officer. in President and operating the measures G complete our allocated Also, Rick adjusted Executive description before and F all adjusted Chief of Radian press portion and Officer Q&A both you Thornberry, morning, Exhibit of

current to this Before cause to we on may begin, projections that will estimates, differ include call that during and statements. I materially. remind forward-looking statements actual risks made to which are would based expectations, like and comments uncertainties, These are results you subject assumptions

risk included XX-K forward-looking statements please review release in risks, our website. reports cautionary also our included and with and on discussion SEC. filed subsequent regarding earnings Form of the These available statements a these For XXXX in our factors are the the

the like would over turn I to to Rick. call Now,

Rick Thornberry

see $X.XX. we strong John that us the I growth Radian. and to you, to we markets will million real closely discuss the share your am low a over environment, X% we estate say portfolio of Frank we after first net are to diluted highlights value while the pleased insured Thank per income And position within reflect me and joining you more but dividends demand. for grew income more quarter. robust achieved past share driven from housing operating a continue share and for increasingly than today this year. and third the our of $X.XX good third the details share pandemic all or the our interest environment. continue financial for book and certain of that adjusted and million a and also few We morning. per historically let credit return reported monitor rates insights our to Thank by the for per trends in returned to in by encouraged We that quarter the even shortly, was operating year-over-year. favorable net by $XXX $XXX We interest accounting growth stockholders economic

attractive returns at we long-term earnings segment, future value focused that economic business its and and on mortgage Radian writing will our For believe remain stockholders. new we generate for

billion the XX. new and September in-force at During second high-quality business our we billion of from wrote $XXX.X primary by insurance billion to quarter, mortgage grew third insurance quarter $X.X $XX.X the

quarter-to-quarter transitioned a market shifts competitive maintain to the we over environment, last a would some the share expected long-term across noted to pro more the believe where expect stable, the quarter, market rata industry. with of share we As we has industry

in XX% We defaulted total of in received of our continued quarter. the new loans. have credit XX% in the a year-over-year saw year-over-year of notices improvement We with the performance seen in number portfolio, default our decline decline number of

third quarters outpacing XXX%. or The XXXX new month and new of June default number cure below has the with levels. cure-to-new Strong pre-COVID fact, each In were in of of since for activity ratio cures was quarter the at second defaults third notices XXXX. during continued default the

onset by in the the forbearance since the stakeholders, expire to to September began pandemic, the beyond. mentioned and have to and these forbearance XX homeowners outstanding beneficial industry meet mortgage at GSEs, support payments of government, the form for very programs I be has as their proven programs As struggling to of all

these borrowers with payment deferral including the are they current the and status, to or successfully servicers closely working as programs the workout through solution. use to We seek of GSEs a migrate appropriate

next quarters will greater of forbearance over resolution ultimate the have the visibility loans few exiting We we into expect the that programs.

overall In continuing increase our Based we housing positive Index from prices country. and in Price relatively supply on terms limited own market Home XX.X% the annualized Radian September the market, housing quarter. data the led strong saw in in home trends the to continued of third an across demand

over to home low believe price improving aligned housing healthy a of home economy, an well in well time interest continue and and and the relatively of the demand, as we rates underwriting, strong for dynamics terms market. as are moderate mortgage of We growth mortgage expect combination appreciation sustainable to strong housing supply, rate values income

projections which only market on business the we originations, Our market be in second new mortgage the in year our approximately billion, XX% million highest MI volume lower to XX% would updated still $XXX record private mortgage to a the $XXX insurance insurance mortgage Based third represent history. purchase year for XXXX, in volume versus volume than be expect XXXX was now quarter but ago. slightly the

a $X activity. XX% estimated originations and Looking ahead, decrease a for to total purchase approximately in are originations refinance reflecting mortgage in be XX% increase trillion, XXXX

markets important market loans in MI expected MI, market XXXX, be private is private than positive macroeconomic to the industry insurance expected in mortgage overall Overall, portfolio. is the decline private among expected highlight in the we for history. purchase persistency result conditions by is in and to of for the loans. utilize is XXXX insurance believe value originations growth refinance likelihood fueled improving given strong compared long-term future the insurance homebuyers, economic projected our in first-time to purchase strong portfolio. the growth is higher market be as home mortgage in-force that tailwinds earnings to provides also mortgage the strong XXXX to the likely purchase projected will in mortgage largest insurance It of to another that in It for market, in smaller While fuel the improved is refinance our and

driven Turning total title the This revenue, year-over-year. million, which to our Homegenius an increase in in quarter a and were increase quarter XXXX as primarily XXX% a segment, increase as grew well valuation of XX% revenues third for second representing from XX% the $XX.X year-over-year our our growth by was business.

we against believe projections. has we during and Homegenius significant our our the financial Day in Investor As discuss value for our going forward, contribution financial will Homegenius creation progress June, potential and discussed Frank

XX, terms strong at September Radian maintained strength, company position of capital Group billion capital In with $X of holding a liquidity. total

September a Radian assets, XX, will or on moment. excess XX%. billion Additionally, $X.X PMIERs position of actions Frank a available was provide and in cushion Guaranty’s at details our capital additional

credit. recent assuming layered to the caps of the June, acting Sandra meaningful and regulatory risk, the Turning to Director prioritize landscape, has steps the since lifting mortgage of Thompson in stock on taken direct of preferred Notably, actions in the shift point newly to of and purchase FHFA role access hospital legislative affordability GSE-required as XX the market expanding the represent reduce Enterprise a levels focus. market capital eligibility the capital refinance to programs and framework such amendment notable fee now eliminating loans adverse for refi the proposed for refi and various basis agreement and

expand access to home the We to to continue. efforts expect FHFA’s ownership

only homeownership GSEs pursue and good overall for we dedicated is to and first-time forward among to At this to and the of alignment identify moderate FHFA industry our and Radian, the perfectly mortgage and given values to aligns with home private thoughtful and the with ensure for income source meaningful American homebuyers our credit economy to well. mortgage opportunities mission strong the dream As look with sustainable borrowers. the as loss Ultimately, working capital ownership. and insurance it the of increase currently homeownership first low protection, for

Now financial of I would turn details to our for call like over Frank to the position.

Frank Hall

issued recap reported the share of third was XXXX compared the the the in per $X.XX $X.XX net share results XXXX in per third quarter third in our turn morning the GAAP $X.XX income third second for and share of compared To operating now I’ll per XXXX second $X.XX of to diluted quarter in XXXX of of quarter key revenue. quarter of share diluted Rick diluted of quarter Adjusted in evening, of XXXX. Thank to or per diluted financial net drivers quarter everyone. and we $X.XX you, the XXXX. income good $X.XX million to $XXX.X our the last as and

quarter billion insurance billion earlier, As during XXXX to billion the quarter the quarter $XX.X Rick new compared mentioned third second and in $XX.X of of the XXXX. our $XX.X was written in

New X% purchase persistency over as a the of was of low in realized the insurance second in-force new It recognized Purchase XXXX. during volume to Primary in It insurance from $XX.X of past shortened. a compared in-force, has billion, XX.X% has monthly approximately insurance in a earned of during primarily low and is of year-over-year resulting however, policy billion. our an insurance quarter interest the by in drives during for be should our in-force the $X.X prepayments rate, of written single-premium written $XXX.X to life in-force accounted premiums, which returns insurance quarter is majority the grown single noted year-over-year increase single-premium this quarter third total XXXX. sustained quarter refinance basis, X% to our also prior mix period. important declined volume the the shift XX% in-force enhances transactions year-over-year third insurance which primary is for the to note, increased premium from X%, increase insurance the of portfolio compared XX% decline cancellations driven in-force. for premium quarter, XX% high and On XX% billion our an year, that

increase quarterly quarterly year. quarter by increase in in third this third the is refinance the and the activity quarter lower Our of last annualized XXXX primarily XX% same driven quarter quarter, The second XXXX rate XX.X% in the compared persistency persistency year-over-year an of in XX.X% to as was of quarter XXXX. from annualized

during pace persistency levels improve expect to long-term of is foreseeable future of remain XXXX, given the also refinance expected we for to historic the remainder the below persistency our activity. While current

million of net as a third to linked mortgage well XXXX. $XX.X XXXX. in quarter million in-force continued the premiums The as quarter XX premium earned cancellations the in the second total Title million $XXX.X premiums the XXXX lower revenues, million earned decline in in yield. now a and million past to increased our $X.X five $XXX.X our by quarter insurance Slide accelerated compared to shows driven of were of $XXX.X and second in to both are primarily the and quarter XXXX quarter year-over-year to yields due on recognition Moving over third premium other compared XXXX premiums trend the single-premium policy of premium in decrease quarter the basis third quarters. of

Our XX.X remain premium and quarter was in this a volume direct XX.X volume returns. And we quarter we XX.X with last to generating economic third quarter points basis compared new risk-adjusted in-force XXXX. economic projected to value the focused pricing business, the the generate yield basis With to on regard points of overall, basis points target we expect highest attractive on and maximizing rata value. pro while

representing were to XX% the third compared of Our revenues Homegenius quarter of to XX% and second for quarter a XXXX, the a segment of million increase third quarter the increase $XX.X compared XXXX. XXXX

loss of of allocated operating quarter $XXX,XXX was expenses operating a Our reported $X.X XXXX pretax million the before home XXXX. second third of loss for for corporate to the genius compared quarter

was third XXXX items reported Homegenius the million million $XX.X to can for compared $XX.X be for A of second on gross quarter the reconciliation Exhibit adjusted Our profit XXXX. quarter G. these of found of

of goal XXXX. targets to earlier as we our still this million towards year, revenues XX, continue communicated with Slide on progress make against $XXX noted tracking Homegenius for our As

target made adjustments quarter reflect incentive company-wide pretax Our expense updated recognize to to income of allocations primarily for operating was approvals. before the this impact

approximately compared partially which investment flat from At by prior Our quarter underwriting investment quarter unchanged was same and the quarter. were prior cash investment balances due X.X the to portfolio quarter income quarter this lower prior end, was relatively of $XX additional offset from the yields, years, million investment flow. year the duration to

$X.X $XX.X XXXX. Slide XXXX now and to compared our quarter million was provision in for credit Moving in quality, $XX.X million, third of loss provision noted the of quarter decrease mortgage million for to and quarter the the of as third XXXX XX, increase on to an losses a compared the second

the quarter We cures rate of than of the reduction in the in approximately the to third to on the in rate was quarter estimated, as million. resulted X,XXX assumptions As defaults prior by defaults more provision assumptions, development we had our third on reported XXXX. positive defaults quarter new the the originally in the second pandemic, trends which assumption maintained of Slide prior on defaults both quarter related XX, positive first in driven development a and at approximately third to XXXX. for COVID-XX compared of Also, shown XX,XXX prior certain Slide third XXXX of to XX, start favorable new pandemic. default-to-claim onset This of XXXX claim for a for default for reported defaults includes noted on quarters $XX.X the since losses the primarily X% including

We continue and trends closely resolution default including for the forbearance of related that of monitor claims to cures our the and programs. inventory, COVID-XX portion

forbearance As of expect XX, September expiration that shown to provided date reported maximum XX, XXXX. XX% substantially forbearance the reach information Based will defaults be of scheduled forbearance time. reported on borrowers and XXXX. was by that term end quarter this term the of a before as were XX, we loan that estimates that will all These as their the on program third population reach XXXX expiration entering the all servicers, in forbearance available September the defaults of approximately under currently XXXX, by half to forbearance a of are the year-end based as at on of plan each and Slide

forbearance the that defaults a is for It be our have are of what new of through XXXX XX% the noted XX% disruption. cured October. as their the intended temporary industry to defaults of third reminder, approximately people as in a to programs be are As for also and second keep quarter new from positive homeowners homes should expected and economic XXXX from of of end they quarter

and XXXX, were in the associated to primarily grow, as compared million Homegenius incentive prior expenses compensation of a share-based expenses. and million increase an turning in decrease other continue to the Now It premium year lower quarter XXXX. operating to single of incentive total as third XXXX noted increased second long-term well. also third to quarter in The with the expense, including in $X.X flat the revenues $XX.X million compensation as acceleration. commissions is to expenses related will to be Other operating compared increase of ceding in quarter as our $XX.X grow well should as that earnings expenses

Homegenius timing $XX we consolidated approximately year, our depend to expect next of from to growth which segment revenue million $XX million normalized the operating approximately on quarterly will largely the Over expenses the grow strategy. execution and

million. just quarterly $XX under Our flat mortgage at have relatively however, should segment, expenses

taxes. to now Moving

tax XXXX XX.X%. overall of for rate Our was quarter effective the third

generally Our discrete rate XX%. with and remains tax for rate the items consistent annualized of statutory effective before XXXX

liquidity. available end assets Now capital billion available excess as PMIERs of a which and represents third Radian required of over quarter, moving assets minimum was to XX% the Guaranty’s cushion. the $X.X

Re X, excess of at this cover of will as fully aggregate reinsurance Guaranty on through reinsurance of XX, the required insurance $XXX.X losses on Eagle with loss an of pricing The third of eligible XXXX-X by to billion September XX, were from other requirements third-party January notes with closing. aggregate press issued loss release Radian our collateralized of existing noted XXXX Guaranty’s PMIERs amount predominantly by risk reinsurance on we in Exhibit connection excess new million As issued coverage policies and that mortgage portfolio L. Limited. reduced Re million mortgage arrangements principal transaction, reinsurance XXXX. of of receive $XX.X July Radian will quarter XXXX, And end, have billion notes asset defaults Eagle risk insurance-linked subsequent $XXX.X force and insurance-linked announced by Radian $X both In distributing between minimum a

million provides liquidity of in discuss decline Group, share as of to that September we available $XXX.X XX, XXXX. moment. most reiterate XXXX, of includes million activity, subsidiary. XXXX. Reinsurance are the level company’s driver offset through by sharing of from parent Radian important and tax Total $XXX For with The was payment, in compared is this $XXX September parent This us and company the not by a as XX, partially June detail flows maintained its dividends of $X cash subsidiaries enhanced primary of XX, predictability as of million to certainty was will company Radian agreements shareholder with our ordinary funded facility, the flows. a with regulator-approved million I expense, subsidiaries. interest dividend our in which an Along by billion more dividend recurring cash liquidity, long-established, of which It and $XX credit paid repurchase

third the purchased XXXX, and price approximately an we of $XX.XX have share value. or at shares XX.X October approximate repurchased discount year-to-date shares XX, X% quarter to book current X.X During million our outstanding of shares through an million we of average or X% our

remaining on approximately October million have authorization which As expires August of next XX year. XX, of we $XX of repurchase

we pay shareholders We during throughout common $XX through dividend during the returned to a quarter the shareholders approximately continued third including have pandemic, XXXX, the also to million quarter. to dividends as of

of share capital per as this a after-tax the of and income year. XX% increased $X.XX year. share operating our As of this combination represent by a second our announced, reminder, return quarter dividend quarterly approximately and dividend The repurchase during for of of we previously XX% to payments

Guaranty, deliver now will to and are we our well Rick. at Radian available Group, positioned we financial liquidity the our businesses shareholders. I call to by at turn to Radian our value the that support strength over back and the Given provided believe capital flexibility

Rick Thornberry

Thank you, Frank.

that highlight mortgage share return our credit to in and continued book force seen X% $X billion, the year-over-year. we insurance per questions, maintain year-over-year environment. Before high-quality you helped in a billion certain holding increased open let a reflects of billion increased company call performance by our business, new Homegenius mortgage to revenues $XX.X improvement We’ve position of your capital $XXX.X liquidity. to primary portfolio a we grow XX% which more wrote for with me value of operating that the total by insurance We strong

Finally, proud customers, continued and our our communities of am to to I how other. each I our team’s dedication wanted mention

During a a mission the Board our Forum annual quarter, with protecting raised we which homeownership. total for treatment. of of who were recognized to by wanted to the remain foundation fundraiser a moment of $XXX,XXX an their take for as our you children and enabling children ill families their and our of a an with NBA know campaign organization are Store critically shares are familiar to that or champion I make Executive injured Diversity outstanding Open of Foundation, Women helps the thank many homes in success cause. in huge the while helped to all I for

happy operator, to questions. be Now take would we

Operator

Thank you. [Operator Instructions] And Suisse. Harter ahead. Credit Please, our first question comes from from Doug go

Doug Harter

just where during this hoping think a little talk just business areas Thanks. happened could were you MI the And winning particular any space particular the that about competitive at I the dynamics quarter? on effective you was more quarter. you bit

Derek Brummer

Derek. Yes. is This

of in saw stabilized to we stabilization half saw opportunity. of competitive the We what really the remarks, second of effective competitive that of say would decreasing first his the of we us in alluded the environment. terms kind and and allowed price I in this in kind increased but half, an second some kind the Rick quarter, So dynamics, opening that saw,

would expect phases market As pro price market of our we’ve seen kind that rata give of kind in be indicated, we share where you’ve range share in to to volatility. up long-term,

better with to that across spectrum. distribute credit the So opportunities stability, we capital found

into We certain also saw some lean opportunities this to segments. quarter credit

quarter. up, So more up was deployment NIW was capital our even this our

the what also strength our the good is that to referenced, market we’re saw value. highest economic for, Frank have of Really, looking and pretty we value, with plays that that stability. when So portion as we

our focused see and out I based relative of kind a where spectrum Most we most see up, the positions in the where that, on we where segment of so we see across radar of the would lot quarter in and I of different good would moving kind say, and picked analytics is value And pricing, value really of are really schemes. value. rates of Black the we pricing was market And our characterize our upon share under kind that pickup overall this Box and

Doug Harter

Great. Derek. you, Thank

Operator

from next And comes go Riley Please, Johnson our Securities. question Cullen B. from ahead.

Cullen Johnson

taking Thanks questions. my morning. good Hi, for

there XQ more think Looking Homegenius there the Is I XXXX, case ‘XX? at seasonality top in point any make quarter. data the do that of quarter the the lowest revenue the line there? there to segment, was again think for sort was isolated might Or fourth in that you

Rick Thornberry

Yes, question. Cullen, that’s great is Rick. This a

committed guidance that I think we our – we remain today, total revenue. to we of terms provided in

kind I business think generally, being market of today estate and real space at in that we the you there would see where as look mortgage in right? business could seasonality. today seasonality So Homegenius is

progress different and that’s as think that that. I side And existing important, of play of really penetrating the from I our customer not given just adding when around you what kind pipelines on both say year. confident executing are we and we’re guidance new year being we’ve the I continue last see think our our we more continuing proud clients, remain And Homegenius and build. we’re couldn’t XXXX But terms team made. look would at of XXXX to we I the revenue, would only plan in see than clients. than factors this be to

that real the with the manage feel will, we guidance and those through in provided. So mortgage estate navigate you if the that doing. we’ve and But will and we’re we’re about cycles, happy we’re business comfortable

Cullen Johnson

target. lower the end And Got just presentation, has been then helpful. in Homegenius revenue the with the kind of it. than segment the the SaaS of sticking to That’s low contribution

ramp kind cause I target just closer the and term? So that curious in to intermediate to up of that here might was what get

Rick Thornberry

Yes.

you think for – thank went question. again, through as the I we

As in we SaaS, really XXXX. focused Investor really through the went of it at kind growth in starting our on Day, comes

see of year anything our we from happening of title I say would Homegenius SaaS is of forecast, the of along title and and early this business here, early a kind our a and that you way. kind our on providing kind kind our following business, valuable on other with estate would side as So the lead is to perspective, real steady services, growth contribution said very

we’ve in of early very So from in a platforms our we’re our point business, – and SaaS property smart the workflow rollout. been have I and system customer feedback our would on the say very intelligence positive view, encouraging.

think start to in develop contribution see XXXX, SaaS the business. so expect we would And as the from to I we to roll

I we the focused did over a period that is, think more users number Day we of of Investor what time. about we on grow

And start so into get to look XXXX. would provide to we discuss that as and we information

Cullen Johnson

you. I there. Thank it Okay, will helpful. great. leave That’s

Rick Thornberry

Cullen. you, thanks Yes,

Operator

Barclays. from our go question from comes DeVries And Mark ahead. next Please,

Mark DeVries

do tough Yes, to from given thanks. of the is there. portfolio in-force the think you’re writing yield, I bottom understand some for we that today? close risk net just how the model But that are premium seeing the you given yield drivers

Frank Hall

a Yes, answering for is think I and been that now. question quarters this good It’s Mark, we’ve Frank. one many

to – the what stays of those with risk really particular decline a is expect new in that several said the associated Generally runs I business bringing before, premium a there. guided to portfolio level, we have years for actually particular at all in attributes it speaking, we and off we’ve with what yield think and see relative time mix premium matter as mathematics looking over in now. of that

the just declined under previous In fact, has basis portfolio X yield quarters. in-force points our seven over about

basis difficult continue about see would to not expect is would think, a per run to quarter regard. isn’t our predict directionally, to bake I that seeing But rate it for in. do that longer. suggest we to that I that’s say, much that decline bit of you’re But in a point a out That’s different. and coming there, So here really

Mark DeVries

the in Okay. Understood. you the what underwriting this, And discuss kind if I sorry caused increase expenses? then missed of MI did year-over-year

Frank Hall

Yes.

expense. year-over-year, So comp incentive was it

Mark DeVries

in Okay. that to Got quarter? it. remain expect Would elevated you the fourth

Frank Hall

seasonal. No. It’s generally

and to things change is of quarter magnitude As accruals fourth the in that true-up we generally like look year-end, muted. for the

Mark DeVries

it. Thank you. Okay, got

Operator

Mihir And Bhatia Bank comes our next go from question ahead. from America. of Please,

Mihir Bhatia

I part in question upfront and thank for stabilize? apologize Maybe my Mark’s beating on questions. they more be – your on want about And even terms that help to at about back that but dead taking follow-up NIW, little you did talk premium on rates comes lower for come where outlook maybe how a a can struggling been horse, I little as Hi, for than let this me yield they is relative least or under pre-pandemic you, the are or on I guess, little question, policies I to year’s year, takes year, a rates from last a where puts trending pace a yield, has on NIW bit And great? yield? the declining bit, or year’s with at guess, this lower we’re is, raised us will anything rates a last premium levels, premium like rates some just guess, yield would the in-force and be of then at in-force that faster you to here and seeing and the premium you the we’re a here bit is, premium yields on decline.

Frank Hall

spectrum, what the would on Frank. to able always color Sure. that I’ll But business risk greatest sure we where and across is look nimbleness we to to where see But doesn’t market maintain Derek start. again for I are make over is want value. this. try the at That that mean some as it’s write we I’ll the same know dynamics. risk to it’s turn and Sure I frustrating the thing, This value start to suggest dimension. you we it and additional maybe then predict Mihir. to

of And the that so that, because it also can means vary. premium rates

the in And mind really that the probably Derek Directionally, can to this unusual can this is very bit COVID, do what before a that rate for was saw event and specific COVID, say more we COVID a particular on also then for I we difficult dynamic, one so metric keep during best touch you post just that’s makes there. predict. would and a – and volatility

that It So to to I trend is overall, best likely not that’s again, for you is do and just dynamic can continue. is a competitive the unusual. pricing the say directionally

years. basis produced actually for differences that saying create IW what’s finding value been on from again, have that what can on focused are a an some we We is and perspective. But risk in

had know else if Derek, you there. anything don’t So I

Derek Brummer

Yes.

think hit you terms upon mix very in the important, I risk of it, Frank, right. is

So, are what capital. doing is are we deploying we

economic are value the on to We looking the return and capital. that maximize

And and as I to this well. to respect so with alluded that,

out correspondingly, We will premium move credit move out. And in we of in will rates and kind and the shift as segments. of different

have of rate seen you you have stable, industry say where have in first relatively have So, situations the I decline rate would in but and we risk stayed would year stabilization. our as overall the have mix. half, that’s I a can that we argue premium premium kind seen has you this moved seen

on decision, of an premium Now looking which to important not we rate. that. value kind is are terms focus that’s economic maximize that and output in component, to maximizing of an our That’s but necessarily

very it’s say. hard So, to

in have thing the purchase between other you mix. The shift and is just refi

have So, increase, seen have move around as well. you volume you that seen that purchase

what policy. you to is duration have on in factor think the the also You

then seek in environment. a I do, finally, would competitive and live to a So, we whatever result, say as – we

dependent as trying of to we the upon portfolio well. environment So, like project what ultimately, when kind the it’s yield, looks competitive are

projection. it difficult I think a to it that’s why make does give

of where is be this period it will Here in time.

Frank Hall

of with close persistency. going one know increasing you but this it at in other just to are I change And likely faster overall. persistency there decrease lower and persistency a the would you that’s again. to out That modest the some see is starting rate I look the cause observation, Frank know in going turn is you is which as Mihir, yield we to to in upticks see are persistency actually portfolio portfolio,

that So, well I us. bodes think for

Mihir Bhatia

new maximizing you Is of little to pricing competitors? that. on not Day this a talk you be are returns, investment. it again, that Homegenius just it you. challenging within Are few appreciate are – maybe about outsource? in continues it’s process growth Like, area Okay. premiums. just that. people But early totally, at No, I those an just But months I just about gears from a business the title – are It’s to you the appreciate on little see Who think choosing a some Homegenius, coming outside the against ago. outside, Maybe the a bit bit straightforward. I And from you we dynamics little the Investor competing obviously, on a please? the winning talk of switching businesses, And Thank talked particularly your your it businesses non-title side, you some who kind the the to from? guess little competing that, of in in about where of title side, on from? is to

Derek Brummer

able a us first entrant, the some you gain have off, to think, title for new question. because our entrant leveraging titles right. and side what’s with And the those other with relationships. you been about and we a – consider our the business relationships we to business new I on on can is of relationships businesses, thank key MI business the I And lenders Yes, exclude want to interesting title I are don’t think Mihir,

delivery are new those side. service we and the shifts perspective, are of the important we the is by see our mortgage same relationships on we the just penetrating on title as So, market side, very, through time, kind clients, teams, a and very growing which service execution at from

So, feel of the that, it’s done we growing and and at good look and about kind – business, Day, lead would I to we Investor growth, we said our title, start think would that. as forward

the of asset into far, has strength lifting And we have even we have going of XXXX, and On that services we market-leading say, a player kind the though very in shutdown – across business. foreclosure REO side. the been pretty estate SFR because the strong so valuation real seen great much and see moratorium, actually seen and we asset are side, management management

So, to And it early. we business. business, on but a player is then nice It’s the small, are a our contribution very SaaS leading that in business. it’s

of there of of of is bringing think for kind is, platforms other I – category generally kind kind would terms for realtors as say, narrow new solutions, the are solutions We have niche competing we are a with, technology are – doing described players in we and competition people systems I it workflow what property a smart intelligence realtor. and

of and for with define think estate of players – with so say away take from and competition kind because models. don’t to share I agents, doing as have business market better to better new we existing legacy way a real and we right, are competing not but we So, there them, different we do

been it’s feedback again, having the customers So, the we we and positive capabilities. been that of as have has to starting are kind from unveil different early. been discussions have the very But

us And in so that’s of the gives what gives confidence future. us kind

try look, all confident cases that helps is of a we our to opportunity – do everything I than and what’s in proposition Homegenius feel we to in an I able would be market, better offer competition, do But traditional hopefully, today, we to So the we disruptor about of than a we And say, you. to but we competitive a highly cheaper, propositions. it kind competitive, be next better kind are determine value more value legacy the of across think business player. and are

Mihir Bhatia

what the last you. question just have I Thank then one I applies will one and Understood. call. ask

regulatory. Just on the

adopting and talk coverage that? You life puts mentioned to just with from doing on just sliding or of premium takes changes in cuts, rate program, that? to for sliding Have offerings views rumblings away expand. the you like Can Thank of some whether MI heard your loan a looking rates, of of you about the terms of some any FHA you. scale scales even the or

Rick Thornberry

– look, a Well – of has very are FHA, he you would about can year I view into I add U.S. was great his But referring right, there to a when think in and premium is early of MI, this Derek visibility saw cuts. we Chairman and say, also terms considered discussions take this. because this to FHA

being an had heard our discussed have all certainly business. material would think Radian, felt a we on as not as like what I we impact industry

– still FHA terms there of think view we feel the way. too, also point low GSE be that from changes Obviously, any So, in changes I could an of could be adjustments. from perspective, also level pricing

actuarial has where So the still there think is. changes pricing. of the great And – I think, see fund on will is FHA there to the is of obviously, around considerations kind report we coming discipline out I today, FHA been there that soon and on strength about

I think it’s business maybe is practices. a if balance compared and will, between you what public some politics, policy with

I will anything we you have that? Recently, if I chatter. much have to know, So, add want heard see. to Derek, don’t to not

Derek Brummer

the hit you think I No, points. key

I XX credit going alluded overlap things it the GPs GSEs we other is, FHFA we significant I than we keep we think looked less mind I loan I was as But X% in think if basis back I And in topic, focused like as like the and just in on a well. point think historically, looking in of important think risk that price business. to for GSE’s writing what volume kind was a when reduction this had it Rick is premium, and because to, where level are the at of past, thought of terms way. just of of move probably when generally to the us is the think it’s FHA to thing also a at and been are think a estimated less than adjustments I hot there less about

where So, you is size. expanding can that have a market there also shift in

to it tough shapes all where it’s out. So, see

Rick Thornberry

consideration issue reduce nothing before, other I of that’s anything isolation. think about out you important to issue extends there, we is to right. And further think which price the that only in do talked the primary happens just supply-demand, a

increase more and you extremely of demand attractive by So, supply the providing is things pricing side limited.

against could supply, Economics affordability you XXX. right, just we issues So, thinking with actually cause increasing by borrowers, you demand are helping reducing that finite all learn in because price a

the we gone So, thoughtful been we will to was And through. work. good consideration as have I news there think has very continue yes,

And once to as together around kind continuing They there and of to do for some to and in the We affordability us as access work all trying solve GSEs. of be FHFA the low-to-moderate we is it’s work And very to income an think are closely those efforts some are financing I for working time issues. outcomes industry way. it. and that very I positive optimistic to m going those very opportunities constructive, sustainable really together with really a to to address to

Mihir Bhatia

Understood. Thank you.

Rick Thornberry

you. Thank Yes.

Operator

Bose ahead. George from go Our from Please Instructions] [Operator question comes next KBW.

Bose George

afternoon. number is to added million expenses. costs? you that back for operating discussion good guys – just Hi, the I on digits that mid-single just go should then for to to, acquisition the $XX policy wanted we The add and expense when whatever, the

Frank Hall

Yes, that is correct. for the other That’s operating expenses.

Bose George

you into $XX ratio expense of then to out build target kind expense mean, you ROE, like that? like to it quarter, kind And do a a that I seems millionish of kind I work Okay. when to what at if of close ratio. say, number, look your XX% mid-teens ish

Frank Hall

Yes.

the periodic we a at our we look for we just return give calculation. really our and expense do So, update on historic that assignment

allocations associated historical some at There costs And there. we that so look with we are in put our that.

So, estimating and but of an it’s it’s we some direct indirect combination that. put in that a costs, estimate forward

Bose George

mean I I am just of the in – peers force low-XXs. Okay. curious, kind similar are guess, insurance I Yes, in your with

think So, expense of there a do you little down kind to lower? ratio get room is the

Frank Hall

create to do to the big I operating gaps say there to will more business efficient technology, that I we refinements I just over where always is we Yes. are that and we suggest know the you leverage Bose, this followed in this, that for wouldn’t ways managing mean looking point more – want are are but we be time. would leverage it we to, are see think positive to to to enough always long

Bose George

Thanks a great. Okay, lot.

Operator

Gilbert next Ryan our BTIG. from question go comes ahead. And Please from

Ryan Gilbert

Thanks. Hi. morning guys. Good

or going in decline that think you continue enough around the that nice think really is smaller it expect to being that you through can sequential First third on be grow insurance do the question XXXX to to the in And do see than ‘XX, offset or believe and thinking your just to we do persistency in you in persistency pickup total in we market quarter. force, insurance then prepared in improvement the force, NIW? remarks is

Frank Hall

Yes. This question. is Frank. And I appreciate the

think our in-force in among our of share expectations. the market which the industry, the I especially is portfolio, that is, size given and one largest

I persistencies. think the things market, overall factors the just to and are that size would relative the higher influence etcetera, like growth

might certainly is factors to there of some there. it bit are years, NIW challenging suggest be landscape want our wouldn’t there. variables I But what refinance the might growth activity growth and the in just modest could mentioned. suggest think significant I you to it’s But to be that some given similar would a So, predict the the coming I just possible be what be yield, like would for given But portfolio like. that certainly that growth the

Rick Thornberry

the when talk as XX% in I have about you persistency. I next that projected market a shared And on you when we positive – mean, by also add the tailwinds. Yes. my year, might comments, out, look in to strong Ryan, macro factors, prepared of context Frank’s to I remarks, refinance too, think purchase the continues to at impact about And have the should plays a would market has assuming that that decline

is MI So, likely we participate. where market see growth purchase the in to

XXXX So, of MI the and albeit XXXX one for we see do than maybe business. smaller the markets, larger still

of you all kind the mortgage But insurance – common increase to strong markets. that purchase factors right are of So, of macro kind persistency participation continue at to potentially and mortgage the look the it’s because also see look and in And again, when in the with comments hard trends across at pointed direction of factors. it. sometimes and of macro some the of we I these that agree terms full predict to go of Frank’s forecasts, would force timing more at forward participate

Ryan Gilbert

is on Zillow’s exit if wondering am second total My I question business Homegenius. Okay, Really got changed the has iBuyer market? it. view from Homegenius’ your on helpful. addressable

Rick Thornberry

the the for bold. size and Thank markets in remains very scale, read will that the on them. And want large get real estate decision to they and Homegenius comment – And think trying of on the the them investors’ don’t – Homegenius not so it SFR think all. focus investors. But the do and needs. the And focus you. it. to leave to I But business. for our on give out, for we addressable opportunities last business are us, credit I they Zillow. of made something addressing get years mortgage part was and really no impact with year I at us, market focused we to really iBuyer or and the stories But X for No, SFR doesn’t why much I conviction we around I I related the of across actually continue in exit their and so of of seen we see same space iBuyers in our and to have some the why and kind

Ryan Gilbert

Okay, I great. much. Thanks appreciate very it.

Rick Thornberry

you. Thank

Operator

have We to CEO, turn Rick questions time. it this I now Thornberry. no over will at further

Rick Thornberry

always, day to to And you, safe, and safe. months. you forward. every be our as I everybody, is in Again, holiday that our business hopefully, goes helps to And and you our this stay your drive person appreciate some we really businesses, look participation a they and for dedication couldn’t days today, in weeks. for seeing on you. many season more and thank the today. over participating job, who hope Homegenius proud coming how at the forward we us you And demonstrate will call across thank an to and for And be well fantastic commitment point. the talk we questions. mortgage have coming your thank opportunity I But the Thank you everybody doing also team of

So, great a day. thank you. Have

Operator

you Thank concludes Thank gentlemen. conference. and you, This today’s ladies for participating.

disconnect. now You may

Radian (RDN) 3 Nov 212021 Q3 Earnings call transcript