Radian announces first quarter 2021 financial results
Philadelphia--(business wire)--radian group inc. (nyse: rdn) today reported net income for the quarter ended march 31, 2021, of $125.6 million, or $0.64 per diluted share. this compares with net income for the quarter ended march 31, 2020, of $140.5 million, or $0.70 per diluted share. key financial highlights (dollars in millions, except per-share amounts) quarter ended march 31, 2021 december 31, 2020 march 31, 2020 net income (1) $125.6 $148.0 $140.5 diluted net income per share $0.64 $0.76 $0.70 consolidated pretax income $161.2 $179.2 $181.3 adjusted pretax operating income (2) $167.3 $171.0 $204.6 adjusted diluted net operating income per share (2)(3) $0.68 $0.69 $0.80 return on equity(1)(4) 11.8% 14.1% 14.2% adjusted net operating return on equity (2)(3) 12.4% 12.9% 16.3% new insurance written (niw) - mortgage insurance $20,161 $29,781 $16,706 net premiums earned - mortgage insurance (5) $264.7 $286.8 $275.0 new defaults (6) 11,851 14,552 9,960 provision for losses - mortgage insurance $45.9 $56.3 $35.2 book value per share (7) $22.14 $22.36 $20.30 pmiers available assets (8) $4,909 $4,700 $4,061 pmiers excess available assets (9) $1,451 $1,338 $1,129 total holding company liquidity (10) $1,292 $1,371 $916 excess available resources to support pmiers (11) $2,708 $2,674 $2,010 total investments $6,672 $6,788 $5,609 primary mortgage insurance in force $238,921 $246,144 $241,586 percentage of primary loans in default (12) 4.9% 5.2% 1.8% mortgage insurance loss reserves $883 $844 $415 (1) net income for the first quarter of 2021 includes a pretax net loss on investments and other financial instruments of $5.2 million, compared to a net gain on investments and other financial instruments of $17.4 million in the fourth quarter of 2020 and a net loss on investments and other financial instruments for the first quarter of 2020 of $22.0 million. (2) adjusted results, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity, are non-gaap financial measures. for definitions and reconciliations of these measures to the comparable gaap measures, see exhibits f and g. (3) calculated using the company’s statutory tax rate of 21 percent. (4) calculated by dividing annualized net income by average stockholders' equity, based on the average of the beginning and ending balances for each period presented. (5) the fourth quarter of 2020 includes an increase to premiums earned of $11.3 million related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. the impact of changes in this estimate in other periods is not material. (6) represents the number of new defaults reported during the period on loans related to primary mortgage insurance policies. (7) book value per share includes accumulated other comprehensive income (loss) of $0.61 as of march 31, 2021, $1.38 as of december 31, 2020 and $0.16 as of march 31, 2020. (8) represents radian guaranty’s available assets, calculated in accordance with the private mortgage insurer eligibility requirements (pmiers) financial requirements in effect for each date shown. (9) represents radian guaranty’s excess or "cushion" of available assets over its minimum required assets, calculated in accordance with the pmiers financial requirements in effect for each date shown. (10) represents radian group's total liquidity, including the $35 million minimum liquidity requirement and available capacity under its unsecured revolving credit facility. (11) represents the sum of: (1) pmiers excess available assets and (2) total holding company liquidity, net of the $35 million minimum liquidity requirement under the unsecured revolving credit facility. (12) represents the number of primary loans in default as a percentage of the total number of insured primary loans. adjusted pretax operating income for the quarter ended march 31, 2021, was $167.3 million, or $0.68 per diluted share. this compares with adjusted pretax operating income for the quarter ended march 31, 2020 of $204.6 million, or $0.80 per diluted share. book value as of march 31, 2021 was $4.2 billion, an increase of 10 percent compared to $3.9 billion as of march 31, 2020. book value per share at march 31, 2021, was $22.14, an increase of 9 percent compared to $20.30 at march 31, 2020. "while the unprecedented pandemic environment continued in the first quarter of 2021, year-over-year we successfully increased book value per share by 9%, grew pmiers excess available assets to $1.5 billion, increased monthly premium mortgage insurance in force by 9% and increased our title revenues by 56%,” said radian’s chief executive officer rick thornberry. “we are encouraged by the continued signs of improvement in the overall economy, the positive momentum in the housing market and the favorable credit trends within our portfolio. our results are a testament to the strength of our business model and the dedication of our team, who has shown commitment to our customers, our company and to each other as we have worked together to successfully navigate this challenging environment." first quarter highlights niw was $20.2 billion in the first quarter of 2021, compared to $29.8 billion in the fourth quarter of 2020 and $16.7 billion in the first quarter of 2020. of the $20.2 billion in niw in the first quarter of 2021, 90.2 percent was written with monthly and other recurring premiums, compared to 91.4 percent in the fourth quarter of 2020, and 81.1 percent in the first quarter of 2020. refinances accounted for 41 percent of total niw in the first quarter of 2021, compared to 35 percent in the fourth quarter of 2020, and 34 percent in the first quarter of 2020. of the $20.2 billion in niw in the first quarter of 2021, 90.2 percent was written with monthly and other recurring premiums, compared to 91.4 percent in the fourth quarter of 2020, and 81.1 percent in the first quarter of 2020. refinances accounted for 41 percent of total niw in the first quarter of 2021, compared to 35 percent in the fourth quarter of 2020, and 34 percent in the first quarter of 2020. total primary mortgage insurance in force as of march 31, 2021, declined to $238.9 billion, a decrease of 2.9 percent compared to $246.1 billion as of december 31, 2020, and a decrease of 1.1 percent compared to $241.6 billion as of march 31, 2020. the year over year decrease included a 26.3 percent decline in single premium policy insurance in force, partially offset by a 8.7 percent increase in monthly premium policy insurance in force. persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 57.2 percent for the twelve months ended march 31, 2021, compared to 61.2 percent for the twelve months ended december 31, 2020 and 75.4 percent for the twelve months ended march 31, 2020. annualized persistency for the three months ended march 31, 2021, was 62.5 percent, compared to 60.4 percent for the three months ended december 31, 2020, and 76.5 percent for the three months ended march 31, 2020. persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 57.2 percent for the twelve months ended march 31, 2021, compared to 61.2 percent for the twelve months ended december 31, 2020 and 75.4 percent for the twelve months ended march 31, 2020. annualized persistency for the three months ended march 31, 2021, was 62.5 percent, compared to 60.4 percent for the three months ended december 31, 2020, and 76.5 percent for the three months ended march 31, 2020. net mortgage insurance premiums earned were $264.7 million for the quarter ended march 31, 2021, compared to $286.8 million for the quarter ended december 31, 2020, and $275.0 million for the quarter ended march 31, 2020. mortgage insurance in force portfolio premium yield was 42.7 basis points in the first quarter of 2021, compared to 44.6 basis points in the fourth quarter of 2020 and 46.1 basis points in the first quarter of 2020. net mortgage insurance premiums earned in the fourth quarter of 2020 included an increase of $11.3 million for the cumulative recognition of deferred initial premiums on monthly premium policies. excluding the impact of this adjustment, in force premium yield was 42.8 basis points in the fourth quarter of 2020. the impact of single premium policy cancellations before consideration of reinsurance represented 6.4 basis points of direct premium yield in the first quarter of 2021, 8.7 basis points in the fourth quarter of 2020, and 4.0 basis points in the first quarter of 2020. total net mortgage insurance premium yield, which includes the impact of ceded premiums and accrued profit commission, was 43.7 basis points in the first quarter of 2021, 46.7 basis points in the fourth quarter of 2020, or 44.8 basis points excluding the impact of the fourth quarter 2020 premium adjustment, and 45.6 basis points in the first quarter of 2020. additional details regarding premiums earned may be found in exhibit d. mortgage insurance in force portfolio premium yield was 42.7 basis points in the first quarter of 2021, compared to 44.6 basis points in the fourth quarter of 2020 and 46.1 basis points in the first quarter of 2020. net mortgage insurance premiums earned in the fourth quarter of 2020 included an increase of $11.3 million for the cumulative recognition of deferred initial premiums on monthly premium policies. excluding the impact of this adjustment, in force premium yield was 42.8 basis points in the fourth quarter of 2020. the impact of single premium policy cancellations before consideration of reinsurance represented 6.4 basis points of direct premium yield in the first quarter of 2021, 8.7 basis points in the fourth quarter of 2020, and 4.0 basis points in the first quarter of 2020. total net mortgage insurance premium yield, which includes the impact of ceded premiums and accrued profit commission, was 43.7 basis points in the first quarter of 2021, 46.7 basis points in the fourth quarter of 2020, or 44.8 basis points excluding the impact of the fourth quarter 2020 premium adjustment, and 45.6 basis points in the first quarter of 2020. additional details regarding premiums earned may be found in exhibit d. the mortgage insurance provision for losses was $45.9 million in the first quarter of 2021, compared to $56.3 million in the fourth quarter of 2020, and $35.2 million in the first quarter of 2020. the number of primary delinquent loans was 50,106 as of march 31, 2021, compared to 55,537 as of december 31, 2020 and 19,781 as of march 31, 2020. the loss ratio in the first quarter of 2021 was 17.3 percent, compared to 19.6 percent in the fourth quarter of 2020 and 12.8 percent in the first quarter of 2020. total mortgage insurance claims paid were $10.5 million in the first quarter of 2021, compared to $40.6 million in the fourth quarter of 2020, and $23.4 million in the first quarter of 2020. excluding the impact of commutations and settlements, claims paid were $6.5 million in the first quarter of 2021, compared to $8.4 million in the fourth quarter of 2020 and $23.4 million in the first quarter of 2020. the number of primary delinquent loans was 50,106 as of march 31, 2021, compared to 55,537 as of december 31, 2020 and 19,781 as of march 31, 2020. the loss ratio in the first quarter of 2021 was 17.3 percent, compared to 19.6 percent in the fourth quarter of 2020 and 12.8 percent in the first quarter of 2020. total mortgage insurance claims paid were $10.5 million in the first quarter of 2021, compared to $40.6 million in the fourth quarter of 2020, and $23.4 million in the first quarter of 2020. excluding the impact of commutations and settlements, claims paid were $6.5 million in the first quarter of 2021, compared to $8.4 million in the fourth quarter of 2020 and $23.4 million in the first quarter of 2020. radian's real estate segment offers a broad array of title, valuation, asset management and other real estate services to market participants across the real estate value chain. total real estate segment revenues for the first quarter of 2021 were $25.8 million, compared to $23.6 million for the fourth quarter of 2020, and $26.5 million for the first quarter of 2020. adjusted earnings before interest, income taxes, depreciation and amortization (real estate adjusted ebitda) for the quarter ended march 31, 2021 was a loss of $5.9 million, compared to a loss of $7.0 million for the quarter ended december 31, 2020, and income of $0.9 million for the quarter ended march 31, 2020. additional details regarding the non-gaap measure real estate adjusted ebitda may be found in exhibits f and g. the decrease in real estate adjusted ebitda in the first quarter of 2021 compared to the first quarter of 2020 was primarily driven by declines in services revenue related to our asset management services and valuation services due to the continued negative impact of the covid-19 pandemic on the operating environment and continued strategic investments focused on our title and digital real estate businesses. such investments contributed to an increase in total expenses, which was partially offset by increases in net premiums earned and services revenue attributable to our title services business. total real estate segment revenues for the first quarter of 2021 were $25.8 million, compared to $23.6 million for the fourth quarter of 2020, and $26.5 million for the first quarter of 2020. adjusted earnings before interest, income taxes, depreciation and amortization (real estate adjusted ebitda) for the quarter ended march 31, 2021 was a loss of $5.9 million, compared to a loss of $7.0 million for the quarter ended december 31, 2020, and income of $0.9 million for the quarter ended march 31, 2020. additional details regarding the non-gaap measure real estate adjusted ebitda may be found in exhibits f and g. the decrease in real estate adjusted ebitda in the first quarter of 2021 compared to the first quarter of 2020 was primarily driven by declines in services revenue related to our asset management services and valuation services due to the continued negative impact of the covid-19 pandemic on the operating environment and continued strategic investments focused on our title and digital real estate businesses. such investments contributed to an increase in total expenses, which was partially offset by increases in net premiums earned and services revenue attributable to our title services business. other operating expenses were $70.3 million in the first quarter of 2021, compared to $81.6 million in the fourth quarter of 2020, and $69.1 million in the first quarter of 2020. the decrease in the first quarter of 2021 compared to the fourth quarter of 2020 was primarily related to a $6.9 million decrease in non-operating items as well as a decrease in share-based compensation expense, which was partially offset by a decrease in ceding commissions. the increase in the first quarter of 2021 compared to the first quarter of 2020 was driven primarily by an increase in compensation expense, which was partially offset by a decrease in travel and entertainment expense. the decrease in the first quarter of 2021 compared to the fourth quarter of 2020 was primarily related to a $6.9 million decrease in non-operating items as well as a decrease in share-based compensation expense, which was partially offset by a decrease in ceding commissions. the increase in the first quarter of 2021 compared to the first quarter of 2020 was driven primarily by an increase in compensation expense, which was partially offset by a decrease in travel and entertainment expense. capital and liquidity update at march 31, 2021, excess available resources to support private mortgage insurer eligibility requirements (pmiers) were $2.7 billion, or 79 percent, above radian guaranty's minimum required assets. radian group as of march 31, 2021, radian group maintained $1.0 billion of available liquidity. total liquidity, which includes the company’s $267.5 million unsecured revolving credit facility, was $1.3 billion as of march 31, 2021. for the quarter ended march 31, 2021, the company repurchased 413 thousand shares of radian group common stock at a total cost of $8.6 million, including commissions. as of march 31, 2021, purchase authority of up to $190.2 million remained available under this program. the current share repurchase authorization expires on august 31, 2021. on february 10, 2021, radian group's board of directors authorized a regular quarterly dividend on its common stock in the amount of $0.125 per share and paid the dividend on march 4, 2021. on may 4, 2021, radian group’s board of directors authorized an increase to the company’s quarterly dividend from $0.125 to $0.14 per share. the dividend is payable on june 4, 2021, to stockholders of record as of may 24, 2021. radian guaranty at march 31, 2021, radian guaranty’s available assets under pmiers totaled approximately $4.9 billion, resulting in excess available resources or a “cushion” of $1.5 billion, or 42 percent, over its minimum required assets. as of march 31, 2021, 60 percent of radian guaranty's primary mortgage insurance risk in force is subject to some form of risk distribution, providing a $1.1 billion reduction of minimum required assets under pmiers. thornberry added, "we recently increased our quarterly dividend by 12% and resumed our share repurchase program based on continued signs of improvement in the overall economy, the positive momentum in the housing market and the favorable credit trends within our portfolio." recent events insurance-linked-note as previously announced, in april 2021, radian guaranty entered into its fifth fully collateralized mortgage insurance-linked-note (iln) reinsurance transaction, in which the company obtained $497.7 million of credit-risk protection from eagle re 2021-1 ltd. (eagle re) through the issuance by eagle re of ilns to capital markets investors and radian group in the amounts of $452.3 million and $45.4 million, respectively, in an unregistered private offering. eagle re is a special purpose insurer domiciled in bermuda and is not a subsidiary or affiliate of radian guaranty. radian guaranty's related pmiers credit under this iln transaction remains subject to gse approval. as of march 31, 2021, after consideration of the april iln transaction described above: radian guaranty's minimum required assets would have decreased by approximately $480 million, which would have resulted in an increase in pmiers excess available assets or "cushion" to $1.9 billion, or 64 percent. radian guaranty's primary mortgage insurance risk in force that is subject to some form of risk distribution would have increased to 78 percent, providing a $1.6 billion reduction of minimum required assets under pmiers. radian guaranty operating statistics for april 2021 the information below includes total new primary defaults, which include defaults under forbearance programs in response to the covid-19 pandemic, as well as cures, claims paid and rescissions/denials. the information regarding new defaults and cures is reported to radian guaranty from loan servicers. we consider a loan to be in default for financial statement and internal tracking purposes upon receipt of notification by servicers that a borrower has missed two monthly payments. default reporting, particularly on a monthly basis, may be affected by several factors, including the date on which the loan servicer’s report is generated and transmitted to radian guaranty, the impact of updated information submitted by servicers and the timing of servicing transfers. april 2021 march 2021 february 2021 january 2021 beginning primary default inventory (# of loans) 50,106 52,882 54,488 55,537 new defaults 2,751 3,314 3,873 4,664 cures (7,128 ) (6,043 ) (5,420 ) (5,674 ) claims paid (37 ) (45 ) (57 ) (41 ) rescissions and claim denials, net (1) (3 ) (2 ) (2 ) 2 ending primary default inventory 45,689 50,106 52,882 54,488 (1) net of any previous rescissions and claim denials that were reinstated during the period. such reinstated rescissions and claim denials may ultimately result in a paid claim. conference call radian will discuss first quarter 2021 financial results in a conference call tomorrow, wednesday, may 5, 2021, at 10:00 a.m. eastern daylight time. the conference call will be broadcast live over the internet at https://radian.com/who-we-are/for-investors/webcasts or at www.radian.com. the call may also be accessed by dialing 800.447.0521 inside the u.s., or 847.413.3238 for international callers, using passcode 50147770 by referencing radian. a digital replay of the webcast will be available on the radian website approximately two hours after the live broadcast ends for a period of two weeks at https://radian.com/who-we-are/for-investors/webcasts using passcode 50147770. in addition to the information provided in the company's earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on radian's website at www.radian.com, under investors. non-gaap financial measures radian believes that adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity (non-gaap measures) facilitate evaluation of the company’s fundamental financial performance and provide relevant and meaningful information to investors about the ongoing operating results of the company. on a consolidated basis, these measures are not recognized in accordance with accounting principles generally accepted in the united states of america (gaap) and should not be considered in isolation or viewed as substitutes for gaap measures of performance. the measures described below have been established in order to increase transparency for the purpose of evaluating the company’s operating trends and enabling more meaningful comparisons with radian’s competitors. adjusted pretax operating income (loss) is defined as gaap consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as gains (losses) from the sale of lines of business and acquisition-related income and expenses. adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by (ii) the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the company's statutory tax rate, by average stockholders' equity, based on the average of the beginning and ending balances for each period presented. in addition to the above non-gaap measures for the consolidated company, we also have presented as supplemental information a non-gaap measure for our real estate segment, representing a measure of earnings before interest, income tax provision (benefit), depreciation and amortization ("ebitda"). we calculate real estate adjusted ebitda by using adjusted pretax operating income as described above, further adjusted to remove the impact of depreciation and corporate allocations for interest and operating expenses. in addition, real estate adjusted ebitda margin is calculated by dividing real estate adjusted ebitda by gaap total revenue for the real estate segment. real estate adjusted ebitda and real estate adjusted ebitda margin are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our real estate segment. see exhibit f or radian’s website for a description of these items, as well as exhibit g for reconciliations to the most comparable consolidated gaap measures. about radian radian group inc. (nyse: rdn) is ensuring the american dream of homeownership responsibly and sustainably through products and services that include industry-leading mortgage insurance and a comprehensive suite of mortgage, risk, title, valuation, asset management and other real estate services. we are powered by technology, informed by data and driven to deliver new and better ways to transact and manage risk. visit www.radian.com to learn more about how radian is shaping the future of mortgage and real estate services. financial results and supplemental information contents (unaudited) exhibit a: condensed consolidated statements of operations trend schedule exhibit b: net income (loss) per share trend schedule exhibit c: condensed consolidated balance sheets exhibit d: net premiums earned exhibit e: segment information exhibit f: definition of consolidated non-gaap financial measures exhibit g: consolidated non-gaap financial measure reconciliations exhibit h: mortgage supplemental information new insurance written exhibit i: mortgage supplemental information primary insurance in force and risk in force exhibit j: mortgage supplemental information claims and reserves exhibit k: mortgage supplemental information default statistics exhibit l: mortgage supplemental information reinsurance programs radian group inc. and subsidiaries condensed consolidated statements of operations trend schedule exhibit a 2021 2020 (in thousands, except per-share amounts) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 revenues: net premiums earned $ 271,872 $ 302,140 (1 ) $ 286,471 $ 249,295 $ 277,415 services revenue 22,895 11,440 (1 ) 33,943 28,075 31,927 net investment income 38,251 38,115 36,255 38,723 40,944 net gains (losses) on investments and other financial instruments (5,181 ) 17,376 17,652 47,276 (22,027 ) other income 976 790 913 1,072 822 total revenues 328,813 369,861 375,234 364,441 329,081 expenses: provision for losses 46,143 56,664 88,084 304,418 35,951 policy acquisition costs 8,996 7,395 10,166 6,015 7,413 cost of services 20,246 21,600 24,353 17,972 22,141 other operating expenses 70,262 81,641 69,377 60,582 69,110 interest expense 21,115 21,169 21,088 16,699 12,194 amortization and impairment of other acquired intangible assets 862 2,225 961 979 979 total expenses 167,624 190,694 214,029 406,665 147,788 pretax income (loss) 161,189 179,167 161,205 (42,224 ) 181,293 income tax provision (benefit) 35,581 31,154 26,102 (12,273 ) 40,832 net income (loss) $ 125,608 $ 148,013 $ 135,103 $ (29,951 ) $ 140,461 diluted net income (loss) per share $ 0.64 $ 0.76 $ 0.70 $ (0.15 ) $ 0.70 (1) includes the impact of a line item reclassification recorded in the fourth quarter to correct earlier periods in 2020, which increased net premiums earned and decreased services revenue by $7.8 million each. see exhibit e for additional detail by period related to this out-of-period adjustment reflected in our all other results. radian group inc. and subsidiaries net income (loss) per share trend schedule exhibit b the calculation of basic and diluted net income (loss) per share was as follows: 2021 2020 (in thousands, except per-share amounts) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net income (loss) —basic and diluted $ 125,608 $ 148,013 $ 135,103 $ (29,951) $ 140,461 average common shares outstanding—basic 193,439 193,248 193,176 193,299 200,161 dilutive effect of stock-based compensation arrangements (1) 1,764 1,415 980 — 1,658 adjusted average common shares outstanding—diluted 195,203 194,663 194,156 193,299 201,819 basic net income (loss) per share $ 0.65 $ 0.77 $ 0.70 $ (0.15) $ 0.70 diluted net income (loss) per share $ 0.64 $ 0.76 $ 0.70 $ (0.15) $ 0.70 (1) there were no dilutive shares for the three months ended june 30, 2020, as a result of our net loss for the period. the following number of shares of our common stock equivalents issued under our share-based compensation arrangements were not included in the calculation of diluted net income (loss) per share because they were anti-dilutive: 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 shares of common stock equivalents — 324 710 2,295 132 radian group inc. and subsidiaries condensed consolidated balance sheets exhibit c march 31, december 31, september 30, june 30, march 31, (in thousands, except per-share amounts) 2021 2020 2020 2020 2020 assets: investments $ 6,671,874 $ 6,788,442 $ 6,584,577 $ 6,431,350 $ 5,608,627 cash 102,776 87,915 82,020 68,387 54,108 restricted cash 20,987 6,231 4,424 16,279 7,817 accrued investment income 34,841 34,047 36,093 34,179 32,559 accounts and notes receivable 134,075 121,294 145,164 110,722 123,381 reinsurance recoverables 76,664 73,202 66,515 56,852 17,722 deferred policy acquisition costs 15,652 18,305 17,926 21,774 20,855 property and equipment, net 78,309 80,457 88,717 89,143 87,915 goodwill and other acquired intangible assets, net 22,181 23,043 25,268 26,229 27,208 other assets 763,502 715,085 726,641 714,394 710,240 total assets $ 7,920,861 $ 7,948,021 $ 7,777,345 $ 7,569,309 $ 6,690,432 liabilities and stockholders’ equity: unearned premiums $ 406,689 $ 448,791 $ 501,787 $ 561,280 $ 605,045 reserve for losses and loss adjustment expense 887,355 848,413 825,792 738,885 418,202 senior notes 1,406,603 1,405,674 1,404,759 1,403,857 887,584 fhlb advances 138,833 176,483 141,058 175,122 173,760 reinsurance funds withheld 282,345 278,555 318,773 312,350 302,551 net deferred tax liability 210,571 213,897 166,136 126,883 90,500 other liabilities 353,173 291,855 296,661 264,927 348,282 total liabilities 3,685,569 3,663,668 3,654,966 3,583,304 2,825,924 common stock 210 210 210 210 208 treasury stock (910,347 ) (910,115 ) (909,745 ) (909,738 ) (902,024 ) additional paid-in capital 2,242,950 2,245,897 2,238,869 2,232,949 2,231,670 retained earnings 2,785,744 2,684,636 2,561,076 2,450,423 2,504,853 accumulated other comprehensive income 116,735 263,725 231,969 212,161 29,801 total stockholders’ equity 4,235,292 4,284,353 4,122,379 3,986,005 3,864,508 total liabilities and stockholders’ equity $ 7,920,861 $ 7,948,021 $ 7,777,345 $ 7,569,309 $ 6,690,432 shares outstanding 191,311 191,606 191,556 191,492 190,387 book value per share $ 22.14 $ 22.36 $ 21.52 $ 20.82 $ 20.30 24.9 % 24.7 % 25.4 % 26.0 % 18.7 % risk to capital ratio-radian guaranty only 11.9:1 12.7:1 13.2:1 13.3:1 13.8:1 (1) calculated as senior notes divided by senior notes and stockholders' equity. radian group inc. and subsidiaries net premiums earned exhibit d 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 premiums earned: direct - mortgage: premiums earned, excluding revenue from cancellations (1) $ 256,905 $ 272,331 $ 259,889 $ 263,468 $ 274,647 single premium policy cancellations 38,510 53,526 65,667 50,023 24,133 total direct - mortgage (1) 295,415 325,857 325,556 313,491 298,780 assumed - mortgage: (2) 2,298 2,615 2,946 3,197 3,456 ceded - mortgage: premiums earned, excluding revenue from cancellations (25,373 ) (27,229 ) (25,120 ) (26,493 ) (28,609 ) single premium policy cancellations (3) (11,109 ) (15,197 ) (18,679 ) (14,424 ) (7,183 ) profit commission - other (4) 3,433 770 (1,347 ) (28,175 ) 8,555 total ceded premiums, net of profit commission - mortgage (5) (33,049 ) (41,656 ) (45,146 ) (69,092 ) (27,237 ) net premiums earned - mortgage (1) 264,664 286,816 283,356 247,596 274,999 net premiums earned - real estate (6) 7,208 7,572 7,099 4,734 3,149 net premiums earned - all other (6) — 7,752 (3,984 ) (3,035 ) (733 ) net premiums earned (1) $ 271,872 $ 302,140 $ 286,471 $ 249,295 $ 277,415 (1) the fourth quarter of 2020 includes an increase to premiums earned of $11.3 million related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. the impact of changes in this estimate in other periods is not material. (2) relates primarily to premiums earned from our participation in certain credit risk transfer programs. (3) includes the impact of related profit commissions. (4) the amounts represent the profit commission on the single premium qsr program, excluding the impact of single premium policy cancellations. (5) see exhibit l for additional information on ceded premiums for our various reinsurance programs. (6) see exhibit e for additional information on changes that impacted our reported segment results for all periods. radian group inc. and subsidiaries segment information exhibit e (page 1 of 4) summarized financial information concerning our operating segments as of and for the periods indicated is as follows. for a definition of adjusted pretax operating income and services adjusted ebitda, along with reconciliations to consolidated gaap measures, see exhibits f and g. three months ended march 31, 2021 (in thousands) mortgage real estate all other inter- segment consolidated net premiums written $ 246,874 $ 7,208 $ — $ — $ 254,082 (increase) decrease in unearned premiums 17,790 — — — 17,790 net premiums earned 264,664 7,208 — — 271,872 services revenue 4,351 18,550 53 (59 ) 22,895 net investment income 34,013 37 4,201 — 38,251 other income 769 — 207 — 976 total 303,797 25,795 4,461 (59 ) 333,994 provision for losses 45,869 296 — (22 ) 46,143 policy acquisition costs 8,996 — — — 8,996 cost of services 3,192 17,028 28 (2 ) 20,246 other operating expenses before allocated corporate operating expenses 22,454 14,928 951 (35 ) 38,298 interest expense 21,115 — — — 21,115 total 101,626 32,252 979 (59 ) 134,798 adjusted pretax operating income (loss) before allocated corporate operating expenses 202,171 (6,457 ) 3,482 — 199,196 allocation of corporate operating expenses 27,884 3,996 — — 31,880 adjusted pretax operating income (loss) $ 174,287 $ (10,453 ) $ 3,482 $ — $ 167,316 three months ended march 31, 2020 (in thousands) mortgage real estate all other inter- segment consolidated net premiums written $ 260,974 $ 3,149 $ (733 ) $ — $ 263,390 (increase) decrease in unearned premiums 14,025 — — — 14,025 net premiums earned 274,999 3,149 (733 ) — 277,415 services revenue 3,216 23,251 5,652 (192 ) 31,927 net investment income 36,198 125 4,621 — 40,944 other income 671 — 151 — 822 total 315,084 26,525 9,691 (192 ) 351,108 provision for losses 35,246 743 — (38 ) 35,951 policy acquisition costs 7,413 — — — 7,413 cost of services 1,757 14,989 5,500 (105 ) 22,141 other operating expenses before allocated corporate operating expenses 23,593 10,579 2,106 (49 ) 36,229 interest expense 12,194 — — — 12,194 total 80,203 26,311 7,606 (192 ) 113,928 adjusted pretax operating income (loss) before allocated corporate operating expenses 234,881 214 2,085 — 237,180 allocation of corporate operating expenses 29,214 3,367 — — 32,581 adjusted pretax operating income (loss) $ 205,667 $ (3,153 ) $ 2,085 $ — $ 204,599 radian group inc. and subsidiaries segment information exhibit e (page 2 of 4) mortgage 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net premiums written (1) (2) $ 246,874 $ 261,244 $ 259,278 $ 229,458 $ 260,974 (increase) decrease in unearned premiums 17,790 25,572 24,078 18,138 14,025 net premiums earned 264,664 286,816 283,356 247,596 274,999 services revenue 4,351 3,717 3,914 3,918 3,216 net investment income 34,013 34,235 32,054 34,708 36,198 other income 769 735 689 721 671 total 303,797 325,503 320,013 286,943 315,084 provision for losses 45,869 56,312 87,753 304,021 35,246 policy acquisition costs 8,996 7,395 10,166 6,015 7,413 cost of services 3,192 3,245 2,908 2,133 1,757 other operating expenses before allocated corporate operating expenses (3) 22,454 21,974 21,635 18,537 23,593 interest expense (4) (5) 21,115 21,169 21,088 16,699 12,194 total (6) 101,626 110,095 143,550 347,405 80,203 adjusted pretax operating income (loss) before allocated corporate operating expenses 202,171 215,408 176,463 (60,462) 234,881 allocation of corporate operating expenses 27,884 31,102 29,127 25,359 29,214 adjusted pretax operating income (loss) $ 174,287 $ 184,306 $ 147,336 $ (85,821) $ 205,667 real estate (5) 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net premiums earned (7) $ 7,208 $ 7,572 $ 7,099 $ 4,734 $ 3,149 services revenue (6) (7) 18,550 15,958 22,627 17,688 23,251 net investment income 37 43 67 126 125 total 25,795 23,573 29,793 22,548 26,525 provision for losses 296 392 370 426 743 cost of services 17,028 15,706 18,085 12,681 14,989 other operating expenses before allocated corporate operating expenses (3) 14,928 15,238 13,136 10,527 10,579 total 32,252 31,336 31,591 23,634 26,311 adjusted pretax operating income before allocated corporate operating expenses (8) (6,457) (7,763) (1,798) (1,086) 214 allocation of corporate operating expenses 3,996 3,369 3,248 2,823 3,367 adjusted pretax operating income (loss) $ (10,453) $ (11,132) $ (5,046) $ (3,909) $ (3,153) radian group inc. and subsidiaries segment information exhibit e (page 3 of 4) all other (5) (9) 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net premiums earned (7) $ — $ 7,752 $ (3,984) $ (3,035) $ (733) services revenue (6) (7) 53 (7,963) 8,267 6,579 5,652 net investment income 4,201 3,837 4,134 3,889 4,621 other income 207 55 224 104 151 total 4,461 3,681 8,641 7,537 9,691 cost of services 28 2,835 4,127 3,177 5,500 other operating expenses (3) 951 3,033 1,824 3,129 2,106 total 979 5,868 5,951 6,306 7,606 adjusted pretax operating income (loss) $ 3,482 $ (2,187) $ 2,690 $ 1,231 $ 2,085 (1) net of ceded premiums written under the qsr programs and the excess-of-loss program. see exhibit l for additional information. (2) the fourth quarter of 2020 includes an increase to premiums earned of $11.3 million, related to changes in present value estimates for initial premiums on monthly policies that are deferred and not collected until cancellation. the impact of changes in this estimate in other periods is not material. (3) does not include impairment of long-lived assets and other non-operating items, which are not considered components of adjusted pretax operating income (loss). (4) relates to interest on our borrowing and financing activities including our senior notes issued by our holding company and fhlb borrowings made by our mortgage insurance subsidiaries. (5) the wind-down of our traditional appraisal business announced in the fourth quarter of 2020 caused the composition of our reportable segments to change, including all activity related to that business and certain other adjustments to services revenue now being reflected in all other activities. in addition, there were certain other immaterial reclassifications to net investment income and interest expense. these changes to our reportable segments have been reflected in our segment operating results for all periods presented. (6) inter-segment information: 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 inter-segment revenue included in: mortgage $ — $ — $ — $ — $ 83 real estate 59 86 98 91 87 all other — 186 767 19 22 total inter-segment revenue $ 59 $ 272 $ 865 $ 110 $ 192 inter-segment expense included in: mortgage $ 59 $ 86 $ 98 $ 91 $ 87 real estate — 186 767 19 22 all other — — — — 83 total inter-segment expense $ 59 $ 272 $ 865 $ 110 $ 192 see notes continued on next page. radian group inc. and subsidiaries segment information exhibit e (page 4 of 4) notes continued from prior page. (7) in the fourth quarter of 2020, we reclassified certain revenue previously reflected in the real estate segment results as services revenue to net premiums earned. as a result, for all periods presented in 2020, on the real estate segment, net premiums earned has been increased and services revenue has been decreased, with offsetting adjustments reflected in all other activities. (8) supplemental information for real estate adjusted ebitda (see definition in exhibit f): 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 adjusted pretax operating income (loss) before corporate allocations $ (6,457) $ (7,763) $ (1,798) $ (1,086) $ 214 depreciation and amortization 578 744 679 771 663 real estate adjusted ebitda $ (5,879) $ (7,019) $ (1,119) $ (315) $ 877 (9) all other activities include: (i) income (losses) from assets held by our holding company; (ii) related general corporate operating expenses not attributable or allocated to our reportable segments; (iii) for all periods prior to its sale in the first quarter of 2020, income and expenses related to clayton; (iv) for all periods presented, the income and expenses related to our traditional appraisal services; and (v) certain other immaterial revenue and expense items. selected mortgage key ratios 2021 2020 qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 loss ratio (1) 17.3 % 19.6 % 31.0 % 122.8 % 12.8 % expense ratio (1) 22.4 % 21.1 % 21.5 % 20.2 % 21.9 % (1) calculated on a gaap basis using net premiums earned. radian group inc. and subsidiaries definition of consolidated non-gaap financial measures exhibit f (page 1 of 2) use of non-gaap financial measures in addition to the traditional gaap financial measures, we have presented “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity,” which are non-gaap financial measures for the consolidated company, among our key performance indicators to evaluate our fundamental financial performance. these non-gaap financial measures align with the way the company’s business performance is evaluated by both management and the board of directors. these measures have been established in order to increase transparency for the purposes of evaluating our operating trends and enabling more meaningful comparisons with our peers. although on a consolidated basis “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity” are non-gaap financial measures, we believe these measures aid in understanding the underlying performance of our operations. our senior management, including our chief executive officer (radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of the company’s business segments and to allocate resources to the segments. adjusted pretax operating income (loss) is defined as gaap consolidated pretax income (loss) excluding the effects of: (i) net gains (losses) on investments and other financial instruments; (ii) loss on extinguishment of debt; (iii) amortization and impairment of goodwill and other acquired intangible assets; and (iv) impairment of other long-lived assets and other non-operating items, such as gains (losses) from the sale of lines of business and acquisition-related income and expenses. adjusted diluted net operating income (loss) per share is calculated by dividing (i) adjusted pretax operating income (loss) attributable to common stockholders, net of taxes computed using the company’s statutory tax rate, by (ii) the sum of the weighted average number of common shares outstanding and all dilutive potential common shares outstanding. adjusted net operating return on equity is calculated by dividing annualized adjusted pretax operating income (loss), net of taxes computed using the company’s statutory tax rate, by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented. 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: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income (loss). 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 gains and losses arise primarily from changes in the market value of our investments that are classified as trading or equity securities. these valuation adjustments may not necessarily result in realized 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 and changes in fair value of other financial instruments. we do not view them to be indicative of our fundamental operating activities. (2) loss on extinguishment of debt. gains or losses on early extinguishment of debt and losses incurred to purchase our 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. (3) amortization and impairment of goodwill and other acquired intangible assets. amortization of acquired intangible assets represents the periodic expense required to amortize the cost of acquired intangible assets over their estimated useful lives. acquired intangible assets are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. we do not view these charges as part of the operating performance of our primary activities. (4) impairment of other long-lived assets and other non-operating items. includes activities that we do not view to be indicative of our fundamental operating activities, such as: (i) impairment of internal-use software and other long-lived assets; (ii) gains (losses) from the sale of lines of business; and (iii) acquisition-related expenses. radian group inc. and subsidiaries definition of consolidated non-gaap financial measures exhibit f (page 2 of 2) in addition to the above non-gaap measures for the consolidated company, we also have presented as supplemental information a non-gaap measure for our real estate segment, representing a measure of earnings before interest, income tax provision (benefit), depreciation and amortization (“ebitda”). we calculate real estate adjusted ebitda by using adjusted pretax operating income (loss) as described above, further adjusted to remove the impact of depreciation and corporate allocations for interest and operating expenses. in addition, real estate adjusted ebitda margin is calculated by dividing real estate adjusted ebitda by gaap total revenue for the real estate segment. real estate adjusted ebitda and real estate adjusted ebitda margin are used to facilitate comparisons with other services companies, since they are widely accepted measures of performance in the services industry and are used internally as supplemental measures to evaluate the performance of our real estate segment. see exhibit g for the reconciliation of the most comparable gaap measures, consolidated pretax income (loss), diluted net income (loss) per share and return on equity to our non-gaap financial measures for the consolidated company, adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share and adjusted net operating return on equity, respectively. exhibit g also contains the reconciliation of the most comparable gaap measure, net income (loss), to real estate adjusted ebitda. total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, real estate adjusted ebitda and real estate adjusted ebitda margin should not be considered in isolation or viewed as substitutes for gaap pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss). our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, real estate adjusted ebitda or real estate adjusted ebitda margin may not be comparable to similarly-named measures reported by other companies. radian group inc. and subsidiaries consolidated non-gaap financial measure reconciliations exhibit g (page 1 of 3) reconciliation of consolidated pretax income (loss) to adjusted pretax operating income (loss) 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 consolidated pretax income (loss) $ 161,189 $ 179,167 $ 161,205 $ (42,224) $ 181,293 less reconciling income (expense) items: net gains (losses) on investments and other financial instruments (5,181) 17,376 17,652 47,276 (22,027) amortization and impairment of other acquired intangible assets (862) (2,225) (961) (979) (979) impairment of other long-lived assets and other non-operating items (1) (84) (6,971) (466) (22) (300) total adjusted pretax operating income (loss) (2) $ 167,316 $ 170,987 $ 144,980 $ (88,499) $ 204,599 (1) the amounts for all the periods presented are included in other operating expenses on the condensed consolidated statement of operations in exhibit a and primarily relate to impairments of other long-lived assets. (2) total adjusted pretax operating income (loss) consists of adjusted pretax operating income (loss) for each reportable segment and all other activities as follows: 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 adjusted pretax operating income (loss): mortgage segment $ 174,287 $ 184,306 $ 147,336 $ (85,821) $ 205,667 real estate segment (10,453) (11,132) (5,046) (3,909) (3,153) all other activities 3,482 (2,187) 2,690 1,231 2,085 total adjusted pretax operating income (loss) $ 167,316 $ 170,987 $ 144,980 $ (88,499) $ 204,599 radian group inc. and subsidiaries consolidated non-gaap financial measure reconciliations exhibit g (page 2 of 3) reconciliation of diluted net income (loss) per share to adjusted diluted net operating income (loss) per share 2021 2020 qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 diluted net income (loss) per share $ 0.64 $ 0.76 $ 0.70 $ (0.15) $ 0.70 less per-share impact of reconciling income (expense) items: net gains (losses) on investments and other financial instruments (0.03) 0.09 0.09 0.24 (0.11) amortization and impairment of other acquired intangible assets — (0.01) — (0.01) — impairment of other long-lived assets and other non-operating items — (0.04) — — — income tax (provision) benefit on reconciling income (expense) items (1) 0.01 (0.01) (0.02) (0.05) 0.02 difference between statutory and effective tax rate (0.02) 0.04 0.04 0.03 (0.01) per-share impact of reconciling income (expense) items (0.04) 0.07 0.11 0.21 (0.10) adjusted diluted net operating income (loss) per share (1) $ 0.68 $ 0.69 $ 0.59 $ (0.36) $ 0.80 (1) calculated using the company’s federal statutory tax rate of 21%. any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. reconciliation of return on equity to adjusted net operating return on equity (1) 2021 2020 qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 return on equity (1) 11.8 % 14.1 % 13.3 % (3.1) % 14.2 % less impact of reconciling income (expense) items: (2) net gains (losses) on investments and other financial instruments (0.5) 1.7 1.7 4.8 (2.2) amortization and impairment of other acquired intangible assets (0.1) (0.2) (0.1) (0.1) (0.1) impairment of other long-lived assets and other non-operating items — (0.7) — — — income tax (provision) benefit on reconciling income (expense) items (3) 0.1 (0.2) (0.3) (1.0) 0.5 difference between statutory and effective tax rate (0.1) 0.6 0.7 0.3 (0.3) impact of reconciling income (expense) items (0.6) 1.2 2.0 4.0 (2.1) adjusted net operating return on equity 12.4 % 12.9 % 11.3 % (7.1) % 16.3 % (1) calculated by dividing annualized net income (loss) by average stockholders’ equity, based on the average of the beginning and ending balances for each period presented. (2) annualized, as a percentage of average stockholders’ equity. (3) calculated using the company’s federal statutory tax rate of 21%. any permanent tax adjustments and state income taxes on these items have been deemed immaterial and are not included. radian group inc. and subsidiaries consolidated non-gaap financial measure reconciliations exhibit g (page 3 of 3) reconciliation of net income (loss) to real estate adjusted ebitda 2021 2020 (in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net income (loss) $ 125,608 $ 148,013 $ 135,103 $ (29,951) $ 140,461 less reconciling income (expense) items: net gains (losses) on investments and other financial instruments (5,181) 17,376 17,652 47,276 (22,027) amortization and impairment of other acquired intangible assets (862) (2,225) (961) (979) (979) impairment of other long-lived assets and other non-operating items (84) (6,971) (466) (22) (300) income tax (provision) benefit (35,581) (31,154) (26,102) 12,273 (40,832) mortgage adjusted pretax operating income (loss) 174,287 184,306 147,336 (85,821) 205,667 all other adjusted pretax operating income 3,482 (2,187) 2,690 1,231 2,085 real estate adjusted pretax operating income (loss) (10,453) (11,132) (5,046) (3,909) (3,153) less reconciling income (expense) items: allocation of corporate operating expenses to real estate (3,996) (3,369) (3,248) (2,823) (3,367) real estate depreciation and amortization (578) (744) (679) (771) (663) real estate adjusted ebitda $ (5,879) $ (7,019) $ (1,119) $ (315) $ 877 on a consolidated basis, “adjusted pretax operating income (loss),” “adjusted diluted net operating income (loss) per share” and “adjusted net operating return on equity” are measures not determined in accordance with gaap. “real estate adjusted ebitda” and “real estate adjusted ebitda margin” are also non-gaap measures. these measures should not be considered in isolation or viewed as substitutes for gaap pretax income (loss), diluted net income (loss) per share, return on equity or net income (loss). our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, real estate adjusted ebitda or real estate adjusted ebitda margin may not be comparable to similarly-named measures reported by other companies. see exhibit f for additional information on our consolidated non-gaap financial measures. radian group inc. and subsidiaries mortgage supplemental information - new insurance written exhibit h 2021 2020 ($ in millions) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 new insurance written ("niw") $ 20,161 $ 29,781 $ 33,320 $ 25,459 $ 16,706 percentage of niw borrower-paid 99.2 % 99.2 % 98.5 % 97.8 % 96.7 % percentage by premium type direct monthly and other recurring premiums 90.2 % 91.4 % 90.0 % 84.7 % 81.1 % borrower-paid (1) (2) 9.4 8.3 9.0 13.6 16.5 lender-paid (1) 0.4 0.3 1.0 1.7 2.4 direct single premiums (1) 9.8 8.6 10.0 15.3 18.9 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % niw for purchases 59.1 % 64.6 % 70.5 % 56.4 % 66.2 % niw for refinances 40.9 % 35.4 % 29.5 % 43.6 % 33.8 % percentage of niw by fico score (3) >=740 64.3 % 64.7 % 66.2 % 67.3 % 65.7 % 680-739 31.5 31.5 30.7 30.1 31.1 620-679 4.2 3.8 3.1 2.6 3.2 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % percentage by ltv 95.01% and above 8.0 % 8.9 % 9.7 % 8.3 % 9.9 % 90.01% to 95.00% 31.6 34.7 39.6 36.4 37.6 85.01% to 90.00% 31.3 29.8 28.3 29.8 30.3 85.00% and below 29.1 26.6 22.4 25.5 22.2 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % (1) percentages exclude the impact of reinsurance. (2) borrower-paid single premium policies have lower minimum required assets under pmiers as compared to lender-paid single premium policies. (3) for loans with multiple borrowers, the percentage of niw by fico score represents the lowest of the borrowers’ fico scores. radian group inc. and subsidiaries mortgage supplemental information - primary insurance in force and risk in force exhibit i (page 1 of 2) march 31, december 31, september 30, june 30, march 31, ($ in millions) 2021 2020 2020 2020 2020 primary insurance in force (1) prime $ 234,980 $ 242,044 $ 241,166 $ 236,835 $ 236,958 alt-a and a minus and below 3,941 4,100 4,301 4,471 4,628 primary $ 238,921 $ 246,144 $ 245,467 $ 241,306 $ 241,586 primary risk in force (1) (2) prime $ 57,579 $ 59,689 $ 59,972 $ 59,253 $ 59,827 alt-a and a minus and below 929 967 1,017 1,058 1,096 primary $ 58,508 $ 60,656 $ 60,989 $ 60,311 $ 60,923 percentage of primary risk in force direct monthly and other recurring premiums 80.0 % 79.1 % 76.8 % 73.8 % 72.6 % direct single premiums 20.0 % 20.9 % 23.2 % 26.2 % 27.4 % percentage of primary risk in force by fico score (3) >=740 57.2 % 57.5 % 57.6 % 57.4 % 57.2 % 680-739 34.9 34.6 34.3 34.3 34.2 620-679 7.3 7.3 7.5 7.7 8.0 <=619 0.6 0.6 0.6 0.6 0.6 total primary 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % percentage of primary risk in force by ltv 95.01% and above 14.4 % 14.4 % 14.3 % 14.2 % 14.3 % 90.01% to 95.00% 48.6 49.3 50.1 50.4 51.0 85.01% to 90.00% 28.2 28.0 27.9 28.1 27.9 85.00% and below 8.8 8.3 7.7 7.3 6.8 total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % percentage of primary risk in force by policy year 2008 and prior 6.1 % 6.2 % 6.6 % 7.2 % 7.5 % 2009 - 2015 9.9 11.3 13.3 16.0 17.8 2016 6.8 7.6 8.9 10.6 11.7 2017 8.0 9.1 10.7 13.0 14.8 2018 8.7 9.8 11.7 14.0 16.4 2019 15.6 17.8 20.6 23.3 25.4 2020 37.2 38.2 28.2 15.9 6.4 2021 7.7 — — — total 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % primary risk in force on defaulted loans $ 2,910 $ 3,250 $ 3,747 $ 4,263 $ 1,001 table continued on next page. radian group inc. and subsidiaries mortgage supplemental information - primary insurance in force and risk in force exhibit i (page 2 of 2) table continued from prior page. march 31, december 31, september 30, june 30, march 31, 2021 2020 2020 2020 2020 persistency rate (12 months ended) 57.2 % (4) 61.2 % (4) 65.6 % (4) 70.2 % 75.4 % persistency rate (quarterly, annualized) (5) 62.5 % 60.4 % (4) 60.0 % (4) 63.8 % 76.5 % (1) excludes the impact of premiums ceded under our reinsurance agreements. (2) does not include pool risk in force or other risk in force, which combined represent approximately 1.0% of our total risk in force for all periods presented. (3) for loans with multiple borrowers, the percentage of primary risk in force by fico score represents the lowest of the borrowers’ fico scores. (4) the persistency rate was reduced by an increase in cancellations of single premium policies due to increased cancellations identified by our ongoing servicer monitoring process for single premium policies. (5) the persistency rate on a quarterly, annualized basis is calculated based on loan-level detail for the quarter ending as of the date shown. it may be impacted by seasonality or other factors, including the level of refinance activity during the applicable periods, and may not be indicative of full-year trends. radian group inc. and subsidiaries mortgage supplemental information - claims and reserves exhibit j 2021 2020 ($ in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 net claims paid: (1) total primary claims paid $ 6,611 $ 8,353 $ 11,331 $ 22,144 $ 24,358 total pool and other (138 ) 70 (230 ) 639 (911 ) subtotal 6,473 8,423 11,101 22,783 23,447 impact of commutations and settlements (2) 4,000 32,170 (267 ) — (56 ) total net claims paid $ 10,473 $ 40,593 $ 10,834 $ 22,783 $ 23,391 total average net primary claims paid (1) (3) $ 43.8 $ 46.9 $ 46.4 $ 47.9 $ 50.3 average direct primary claims paid (3) (4) $ 45.5 $ 48.5 $ 47.8 $ 49.0 $ 51.4 (1) includes the impact of reinsurance recoveries and lae. (2) includes payments to commute mortgage insurance coverage on certain performing and non-performing loans. for the first quarter of 2021 and the fourth quarter of 2020, primarily includes payments made to settle certain previously disclosed legal proceedings. (3) calculated without giving effect to the impact of commutations and settlements. (4) before reinsurance recoveries. march 31, december 31, september 30, june 30, march 31, ($ in thousands, except per default amounts) 2021 2020 2020 2020 2020 reserve for losses by category (1) mortgage reserves prime $ 751,100 $ 711,245 $ 655,754 $ 573,463 $ 264,694 alt-a and a minus and below 90,455 88,269 88,879 86,646 88,481 ibnr and other 6,626 9,966 43,153 43,342 40,583 lae 21,212 20,172 18,745 16,807 9,216 total primary reserves 869,393 829,652 806,531 720,258 402,974 total pool reserves 13,175 14,163 14,779 14,398 11,297 total 1st lien reserves 882,568 843,815 821,310 734,656 414,271 other 270 292 398 335 407 total mortgage reserves 882,838 844,107 821,708 734,991 414,678 real estate reserves 4,517 4,306 4,084 3,894 3,524 total reserves $ 887,355 $ 848,413 $ 825,792 $ 738,885 $ 418,202 primary reserve per primary default excluding ibnr and other $ 17,219 $ 14,759 $ 12,168 $ 9,706 $ 18,320 (1) includes ceded losses on reinsurance transactions, which are expected to be recovered and are included in the reinsurance recoverables reported in our condensed consolidated balance sheets. radian group inc. and subsidiaries mortgage supplemental information - default statistics exhibit k march 31, december 31, september 30, june 30, march 31, 2021 2020 2020 2020 2020 default statistics primary insurance: prime number of insured loans 996,082 1,031,736 1,043,450 1,040,964 1,049,974 number of loans in default 45,929 51,032 58,057 64,648 15,497 percentage of loans in default 4.61 % 4.95 % 5.56 % 6.21 % 1.48 % alt-a and a minus and below number of insured loans 25,282 26,208 27,310 28,357 29,375 number of loans in default 4,177 4,505 4,680 5,094 4,284 percentage of loans in default 16.52 % 17.19 % 17.14 % 17.96 % 14.58 % total primary number of insured loans 1,021,364 1,057,944 1,070,760 1,069,321 1,079,349 number of loans in default 50,106 55,537 62,737 69,742 19,781 percentage of loans in default 4.91 % 5.25 % 5.86 % 6.52 % 1.83 % radian group inc. and subsidiaries mortgage supplemental information - reinsurance programs exhibit l 2021 2020 ($ in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 quota share reinsurance (“qsr”) and single premium qsr programs ceded premiums written (1) $ (2,852) $ (1,117) $ 2,119 $ 35,821 $ 6,687 % of premiums written (1.1) % (0.4) % 0.8 % 13.0 % 2.4 % ceded premiums earned $ 20,788 $ 29,510 $ 36,742 $ 60,652 $ 18,712 % of premiums earned 6.8 % 8.6 % 11.2 % 19.2 % 6.2 % ceding commissions written $ (2,949) $ (3,847) $ (4,984) $ (5,304) $ 8,413 ceding commissions earned (2) $ 10,407 $ 13,197 $ 17,038 $ 13,453 $ 9,966 profit commission $ 16,350 $ 18,406 $ 20,425 $ (10,649) $ 16,405 ceded losses $ 3,661 $ 7,106 $ 10,189 $ 39,635 $ 1,962 excess-of-loss program ceded premiums written $ 11,482 $ 15,240 $ 7,499 $ 7,525 $ 12,678 % of premiums written 4.4 % 5.2 % 2.8 % 2.7 % 4.5 % ceded premiums earned $ 12,154 $ 12,037 $ 8,290 $ 8,321 $ 8,405 % of premiums earned 4.0 % 3.7 % 2.5 % 2.6 % 2.8 % ceded rif (3) single premium qsr program $ 6,147,808 $ 6,646,812 $ 7,358,932 $ 8,173,756 $ 8,580,047 excess-of-loss program 1,525,100 1,560,600 1,170,200 1,170,200 1,230,000 qsr program 317,827 381,787 454,585 532,743 596,166 total ceded rif $ 7,990,735 $ 8,589,199 $ 8,983,717 $ 9,876,699 $ 10,406,213 pmiers impact - reduction in minimum required assets excess-of-loss program $ 673,957 $ 912,734 $ 783,842 $ 970,294 $ 1,066,464 single premium qsr program 388,536 423,712 469,625 517,028 501,668 qsr program 19,378 22,712 26,213 30,837 31,638 total pmiers impact $ 1,081,871 $ 1,359,158 $ 1,279,680 $ 1,518,159 $ 1,599,770 (1) net of profit commission. (2) includes amounts reported in policy acquisition costs and other operating expenses. operating expenses include the following ceding commissions, net of deferred policy acquisition costs, for the periods indicated: 2021 2020 ($ in thousands) qtr 1 qtr 4 qtr 3 qtr 2 qtr 1 ceding commissions $ (7,689) $ (10,436) $ (12,337) $ (10,406) $ (7,967) (3) included in primary rif. forward-looking statements all statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are “forward-looking statements” within the meaning of section 27a of the securities act of 1933, section 21e of the securities exchange act of 1934 and the u.s. private securities litigation reform act of 1995. in most cases, forward-looking statements may be identified by words such as “anticipate,” “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “goal,” “contemplate,” “believe,” “estimate,
