Radian announces second quarter 2022 financial results
Wayne, pa.--(business wire)--radian group inc. (nyse: rdn) today reported net income for the quarter ended june 30, 2022, of $201.2 million, or $1.15 per diluted share. this compares with net income for the quarter ended june 30, 2021, of $155.2 million, or $0.80 per diluted share. key financial highlights quarter ended ($ in millions, except per-share amounts) june 30, 2022 march 31, 2022 june 30, 2021 net income (1) $201.2 $181.1 $155.2 diluted net income per share $1.15 $1.01 $0.80 consolidated pretax income $259.9 $234.1 $195.5 adjusted pretax operating income (2) $302.0 $264.9 $184.7 adjusted diluted net operating income per share (2)(3) $1.36 $1.17 $0.75 return on equity (1)(4) 19.9 % 17.2 % 14.5 % adjusted net operating return on equity (2)(3) 23.6 % 19.9 % 13.6 % new insurance written (niw) - mortgage insurance $18,935 $18,655 $21,662 net premiums earned - mortgage insurance $246.9 $245.2 $247.1 new defaults (5) 8,009 9,393 8,145 provision for losses - mortgage insurance ($114.2) ($84.2) $3.3 homegenius revenues $32.3 $33.9 $33.5 book value per share $23.63 $23.75 $23.02 accumulated other comprehensive income (loss) value per share (6) ($1.98) ($0.74) $0.95 pmiers available assets (7) $5,175 $5,102 $5,042 pmiers excess available assets (8) $1,424 $1,560 $1,857 total holding company liquidity (9) $1,048 $1,282 $1,191 total investments $5,906 $6,335 $6,682 primary mortgage insurance in force $254,226 $248,951 $237,302 percentage of primary loans in default (10) 2.2 % 2.6 % 4.0 % mortgage insurance loss reserves $589 $722 $881 (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) adjusted pretax operating income for the quarter ended june 30, 2022, was $302.0 million, or $1.36 per diluted share. this compares with adjusted pretax operating income for the quarter ended june 30, 2021, of $184.7 million, or $0.75 per diluted share. book value per share at june 30, 2022, was $23.63, compared to $23.75 at march 31, 2022, and $23.02 at june 30, 2021. this represents a 2.6 percent growth in book value per share at june 30, 2022, as compared to june 30, 2021, and includes accumulated other comprehensive income (loss) of $(1.98) per share as of june 30, 2022 and $0.95 per share as of june 30, 2021, which, if excluded as of both dates, would represent 16.0 percent growth for the period. changes in accumulated other comprehensive income (loss) for the period are primarily from net unrealized losses on investments as a result of an increase in market interest rates during the period. we do not expect to realize these losses given that we have the ability and the expectation to hold these securities until recovery. “we are pleased with our excellent results in the second quarter with net income of $201 million, return on equity of 19.9 percent and total holding company liquidity of $1 billion. our primary mortgage insurance in force, which is the main driver of future earnings for our company, grew 7 percent year-over-year, and the number of new defaults in the quarter was the lowest we’ve seen in more than 20 years,” said radian’s chief executive officer rick thornberry. “moody’s recently upgraded our company, reflecting our improved capital adequacy through risk distribution, our improving profitability metrics, our strong market position and our financial flexibility with strong liquidity. we continue to strategically manage capital, repurchase shares opportunistically and pay regular dividends to stockholders and believe we are well positioned to continue our mission of ensuring affordable, sustainable and equitable homeownership for many years ahead.” second quarter highlights niw was $18.9 billion in the second quarter of 2022, compared to $18.7 billion in the first quarter of 2022, and $21.7 billion in the second quarter of 2021. purchase niw increased 7.8 percent in the second quarter of 2022 compared to the first quarter of 2022 and increased 10.0 percent compared to the second quarter of 2021. refinances accounted for 2.9 percent of total niw in the second quarter of 2022, compared to 8.6 percent in the first quarter of 2022, and 22.9 percent in the second quarter of 2021. of the $18.9 billion in niw in the second quarter of 2022, 95.4 percent was written with monthly and other recurring premiums, compared to 94.5 percent in the first quarter of 2022, and 93.1 percent in the second quarter of 2021. purchase niw increased 7.8 percent in the second quarter of 2022 compared to the first quarter of 2022 and increased 10.0 percent compared to the second quarter of 2021. refinances accounted for 2.9 percent of total niw in the second quarter of 2022, compared to 8.6 percent in the first quarter of 2022, and 22.9 percent in the second quarter of 2021. of the $18.9 billion in niw in the second quarter of 2022, 95.4 percent was written with monthly and other recurring premiums, compared to 94.5 percent in the first quarter of 2022, and 93.1 percent in the second quarter of 2021. total primary mortgage insurance in force as of june 30, 2022, increased to $254.2 billion, an increase of 2.1 percent compared to $249.0 billion as of march 31, 2022, and an increase of 7.1 percent compared to $237.3 billion as of june 30, 2021. the year-over-year change reflects a 12.6 percent increase in monthly premium policy insurance in force and a 15.1 percent decline in single premium policy insurance in force. persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 71.7 percent for the twelve months ended june 30, 2022, compared to 68.0 percent for the twelve months ended march 31, 2022, and 57.7 percent for the twelve months ended june 30, 2021. annualized persistency for the three months ended june 30, 2022, was 79.8 percent, compared to 76.9 percent for the three months ended march 31, 2022, and 66.3 percent for the three months ended june 30, 2021. persistency, which is the percentage of mortgage insurance that remains in force after a twelve-month period, was 71.7 percent for the twelve months ended june 30, 2022, compared to 68.0 percent for the twelve months ended march 31, 2022, and 57.7 percent for the twelve months ended june 30, 2021. annualized persistency for the three months ended june 30, 2022, was 79.8 percent, compared to 76.9 percent for the three months ended march 31, 2022, and 66.3 percent for the three months ended june 30, 2021. net mortgage insurance premiums earned were $246.9 million for the quarter ended june 30, 2022, compared to $245.2 million for the quarter ended march 31, 2022, and $247.1 million for the quarter ended june 30, 2021. mortgage insurance in force portfolio premium yield was 40.0 basis points in the second quarter of 2022. this compares to 39.6 basis points in the first quarter of 2022, and 41.1 basis points in the second quarter of 2021. the impact of single premium policy cancellations before consideration of reinsurance represented 1.1 basis points of direct premium yield in the second quarter of 2022, 2.4 basis points in the first quarter of 2022, and 5.3 basis points in the second quarter of 2021. total net mortgage insurance premium yield, which includes the impact of ceded premiums and accrued profit commission, was 39.3 basis points in the second quarter of 2022. this compares to 39.6 basis points in the first quarter of 2022, and 41.5 basis points in the second quarter of 2021. additional details regarding premiums earned may be found in exhibit d. mortgage insurance in force portfolio premium yield was 40.0 basis points in the second quarter of 2022. this compares to 39.6 basis points in the first quarter of 2022, and 41.1 basis points in the second quarter of 2021. the impact of single premium policy cancellations before consideration of reinsurance represented 1.1 basis points of direct premium yield in the second quarter of 2022, 2.4 basis points in the first quarter of 2022, and 5.3 basis points in the second quarter of 2021. total net mortgage insurance premium yield, which includes the impact of ceded premiums and accrued profit commission, was 39.3 basis points in the second quarter of 2022. this compares to 39.6 basis points in the first quarter of 2022, and 41.5 basis points in the second quarter of 2021. additional details regarding premiums earned may be found in exhibit d. the mortgage insurance provision for losses was a benefit of $114.2 million in the second quarter of 2022, compared to a benefit of $84.2 million in the first quarter of 2022, and a provision of $3.3 million in the second quarter of 2021. the decrease in the second quarter of 2022 compared to both the first quarter of 2022 and the second quarter of 2021 was primarily related to more favorable development on prior period reserves, as compared to the first quarter of 2022 and second quarter of 2021. all periods were impacted by more favorable trends in cures than originally estimated. the number of primary delinquent loans was 21,861 as of june 30, 2022, compared to 25,510 as of march 31, 2022, and 40,464 as of june 30, 2021. the loss ratio in the second quarter of 2022 was (46.2) percent, compared to (34.3) percent in the first quarter of 2022, and 1.3 percent in the second quarter of 2021. total mortgage insurance claims paid were $3.3 million in the second quarter of 2022, compared to $4.7 million in the first quarter of 2022, and $4.2 million in the second quarter of 2021. the decrease in the second quarter of 2022 compared to both the first quarter of 2022 and the second quarter of 2021 was primarily related to more favorable development on prior period reserves, as compared to the first quarter of 2022 and second quarter of 2021. all periods were impacted by more favorable trends in cures than originally estimated. the number of primary delinquent loans was 21,861 as of june 30, 2022, compared to 25,510 as of march 31, 2022, and 40,464 as of june 30, 2021. the loss ratio in the second quarter of 2022 was (46.2) percent, compared to (34.3) percent in the first quarter of 2022, and 1.3 percent in the second quarter of 2021. total mortgage insurance claims paid were $3.3 million in the second quarter of 2022, compared to $4.7 million in the first quarter of 2022, and $4.2 million in the second quarter of 2021. radian's homegenius segment offers an array of title, real estate and technology products and services to consumers, mortgage lenders, mortgage and real estate investors, gses, real estate brokers and agents. total homegenius segment revenues for the second quarter of 2022 were $32.3 million, compared to $33.9 million for the first quarter of 2022, and $33.5 million for the second quarter of 2021. adjusted pretax operating loss, our primary segment measure of profitability for the homegenius segment, for the quarter ended june 30, 2022 was $17.7 million, compared to $13.5 million for the quarter ended march 31, 2022, and $9.2 million for the quarter ended june 30, 2021. homegenius non-gaap performance measures: adjusted pretax operating loss before allocated corporate operating expenses for the homegenius segment for the quarter ended june 30, 2022 was $12.0 million, compared to $8.2 million for the quarter ended march 31, 2022, and $4.5 million for the quarter ended june 30, 2021. adjusted gross profit for the homegenius segment for the quarter ended june 30, 2022 was $11.2 million, compared to $12.1 million for the quarter ended march 31, 2022, and $11.7 million for the quarter ended june 30, 2021. additional details regarding these and other related non-gaap measures may be found in exhibits f and g. total homegenius segment revenues for the second quarter of 2022 were $32.3 million, compared to $33.9 million for the first quarter of 2022, and $33.5 million for the second quarter of 2021. adjusted pretax operating loss, our primary segment measure of profitability for the homegenius segment, for the quarter ended june 30, 2022 was $17.7 million, compared to $13.5 million for the quarter ended march 31, 2022, and $9.2 million for the quarter ended june 30, 2021. homegenius non-gaap performance measures: adjusted pretax operating loss before allocated corporate operating expenses for the homegenius segment for the quarter ended june 30, 2022 was $12.0 million, compared to $8.2 million for the quarter ended march 31, 2022, and $4.5 million for the quarter ended june 30, 2021. adjusted gross profit for the homegenius segment for the quarter ended june 30, 2022 was $11.2 million, compared to $12.1 million for the quarter ended march 31, 2022, and $11.7 million for the quarter ended june 30, 2021. additional details regarding these and other related non-gaap measures may be found in exhibits f and g. adjusted pretax operating loss before allocated corporate operating expenses for the homegenius segment for the quarter ended june 30, 2022 was $12.0 million, compared to $8.2 million for the quarter ended march 31, 2022, and $4.5 million for the quarter ended june 30, 2021. adjusted gross profit for the homegenius segment for the quarter ended june 30, 2022 was $11.2 million, compared to $12.1 million for the quarter ended march 31, 2022, and $11.7 million for the quarter ended june 30, 2021. additional details regarding these and other related non-gaap measures may be found in exhibits f and g. other operating expenses were $90.5 million in the second quarter of 2022, compared to $89.5 million in the first quarter of 2022, and $86.5 million in the second quarter of 2021. the increase in the second quarter of 2022 compared to the second quarter of 2021 was driven primarily by a decrease in ceding commissions and an increase in compensation expense. additional details regarding other operating expenses by segment may be found in exhibit e. the increase in the second quarter of 2022 compared to the second quarter of 2021 was driven primarily by a decrease in ceding commissions and an increase in compensation expense. additional details regarding other operating expenses by segment may be found in exhibit e. capital and liquidity update radian group as of june 30, 2022, radian group maintained $772.5 million of available liquidity. total holding company liquidity, which includes the company’s $275.0 million unsecured revolving credit facility, was $1.0 billion as of june 30, 2022. during the second quarter of 2022, the company repurchased 9.1 million shares of radian group common stock at a total cost of $183.8 million, including commissions. in addition, in july 2022 the company purchased an additional 4.8 million shares of radian group common stock at a total cost of approximately $97.5 million, including commissions. after the repurchases in july, purchase authority of up to approximately $97.6 million remained available under the existing program. the company purchased $281.3 million of radian group common stock, including commissions, during the period april 1, 2022 to july 31, 2022. this represented 7.9 percent in the aggregate of total shares outstanding as of the end of the first quarter. on may 11, 2022, radian group’s board of directors authorized a regular quarterly dividend on its common stock in the amount of $0.20 per share and the dividend was paid on june 3, 2022. radian guaranty at june 30, 2022, radian guaranty’s available assets under pmiers totaled approximately $5.2 billion, resulting in excess available resources or a “cushion” of $1.4 billion, or 38 percent, over its minimum required assets. as of june 30, 2022, 62 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. recent events consistent with our use of risk distribution strategies to effectively manage capital and proactively mitigate risk, radian guaranty agreed to principal terms in july 2022 on a quota share reinsurance arrangement ("2022 qsr agreement") with a panel of third-party reinsurance providers. under the 2022 qsr agreement, which remains subject to final documentation, starting july 1, 2022, we expect to cede 20 percent of policies issued between january 1, 2022, and june 30, 2023, subject to certain conditions. as of june 30, 2022, assuming the 2022 qsr agreement had been in place: radian guaranty's minimum required assets would have decreased by approximately $132 million, which would have resulted in an increase in pmiers excess available assets or "cushion" to $1.5 billion, or 43 percent. radian guaranty's primary mortgage insurance risk in force that is subject to some form of risk distribution would have increased to 76 percent, providing a $1.2 billion reduction of minimum required assets under pmiers. radian guaranty's minimum required assets would have decreased by approximately $132 million, which would have resulted in an increase in pmiers excess available assets or "cushion" to $1.5 billion, or 43 percent. radian guaranty's primary mortgage insurance risk in force that is subject to some form of risk distribution would have increased to 76 percent, providing a $1.2 billion reduction of minimum required assets under pmiers. on july 21, 2022, moody's investors service ("moody's") upgraded the insurance financial strength (ifs) rating of radian guaranty to a3 from baa1. in the same rating action, moody's also upgraded the senior unsecured debt rating of radian group inc. to baa3 from ba1. the outlook for the ratings is stable. conference call radian will discuss second quarter 2022 financial results in a conference call tomorrow, tuesday, august 2, 2022, at 10:00 a.m. eastern time. the conference call will be webcast live on the company’s website at https://radian.com/who-we-are/for-investors/webcasts or at www.radian.com. the webcast is listen-only. those interested in participating in the question-and-answer session should follow the conference call dial-in instructions below. please note that there is a new process to access the call via telephone. the call may be accessed via telephone by registering for the call here to receive the dial-in numbers and unique pin. it is recommended that you join 10 minutes prior to the event start (although you may register and dial in at any time during the call). a digital replay of the webcast will be available on radian’s website approximately two hours after the live broadcast ends for a period of one year at https://radian.com/who-we-are/for-investors/webcasts. 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 (loss), adjusted diluted net operating income (loss) 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, except for certain investments attributable to our reportable segments; (ii) gains (losses) 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 impairment of internal-use software, 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 non-gaap measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's asc 280 gaap measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. adjusted gross profit is further adjusted to remove other operating expenses. in addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit, respectively, by gaap total revenue for the homegenius segment. for the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related profit margins 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 homegenius 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, real estate and technology products and 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) condensed consolidated statements of operations trend schedule exhibit a 2022 2021 (in thousands, except per-share amounts) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 revenues net premiums earned $ 253,892 $ 254,190 $ 261,437 $ 249,118 $ 254,756 services revenue 27,281 29,348 35,693 37,773 29,464 net investment income 46,957 38,196 37,407 35,960 36,291 net gains (losses) on investments and other financial instruments (41,869 ) (29,457 ) 3,025 2,098 15,661 other income 572 703 805 809 822 total revenues 286,833 292,980 338,367 325,758 336,994 expenses provision for losses (113,922 ) (83,754 ) (46,219 ) 17,305 3,648 policy acquisition costs 5,940 6,605 7,271 7,924 4,838 cost of services 22,760 24,753 28,333 30,520 24,615 other operating expenses 90,495 89,541 80,476 86,479 86,469 interest expense 20,831 20,846 21,137 21,027 21,065 amortization of other acquired intangible assets 849 849 863 862 863 total expenses 26,953 58,840 91,861 164,117 141,498 pretax income 259,880 234,140 246,506 161,641 195,496 income tax provision 58,687 53,009 53,061 35,229 40,290 net income $ 201,193 $ 181,131 $ 193,445 $ 126,412 $ 155,206 diluted net income per share $ 1.15 $ 1.01 $ 1.07 $ 0.67 $ 0.80 selected mortgage key ratios 2022 2021 qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 loss ratio (1) (46.2 )% (34.3 )% (18.6 )% 7.1 % 1.3 % expense ratio (2) 26.2 % 27.2 % 25.6 % 28.6 % 25.4 % (1) (2) radian group inc. and subsidiaries net income per share trend schedule exhibit b the calculation of basic and diluted net income per share was as follows. 2022 2021 (in thousands, except per-share amounts) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 net income—basic and diluted $ 201,193 $ 181,131 $ 193,445 $ 126,412 $ 155,206 average common shares outstanding—basic 173,705 176,816 179,500 186,741 193,436 dilutive effect of stock-based compensation arrangements (1) 1,714 2,263 1,628 1,301 1,202 adjusted average common shares outstanding—diluted 175,419 179,079 181,128 188,042 194,638 basic net income per share $ 1.16 $ 1.02 $ 1.08 $ 0.68 $ 0.80 diluted net income per share $ 1.15 $ 1.01 $ 1.07 $ 0.67 $ 0.80 (1) 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 shares of common stock equivalents 189 — 35 — — radian group inc. and subsidiaries condensed consolidated balance sheets exhibit c june 30 march 31, december 31, september 30, june 30, (in thousands, except per-share amounts) 2022 2022 2021 2021 2021 assets investments $ 5,906,147 $ 6,334,950 $ 6,513,542 $ 6,658,487 $ 6,681,659 cash 135,262 131,853 151,145 154,709 134,939 restricted cash 561 1,651 1,475 1,866 2,968 accrued investment income 35,774 35,531 32,812 33,258 32,223 accounts and notes receivable 166,380 142,579 124,016 166,730 153,128 reinsurance recoverables 39,876 55,015 67,896 76,048 75,411 deferred policy acquisition costs 16,983 16,383 16,317 16,823 17,873 property and equipment, net 74,874 75,275 75,086 74,170 74,288 goodwill and other acquired intangible assets, net 17,895 18,744 19,593 20,456 21,318 prepaid federal income taxes 466,123 354,123 354,123 313,123 275,623 other assets 414,412 449,642 483,180 525,938 539,638 total assets $ 7,274,287 $ 7,615,746 $ 7,839,185 $ 8,041,608 $ 8,009,068 liabilities and stockholders’ equity unearned premiums $ 298,991 $ 312,013 $ 329,090 $ 348,322 $ 373,031 reserve for losses and loss adjustment expense 594,808 727,247 828,642 893,155 885,498 senior notes 1,411,458 1,410,458 1,409,473 1,408,502 1,407,545 fhlb advances 184,284 148,983 150,983 172,649 153,983 reinsurance funds withheld 223,649 225,363 228,078 290,502 285,406 net deferred tax liability 324,866 324,004 337,509 286,957 266,330 other liabilities 305,269 320,114 296,614 383,585 303,442 total liabilities 3,343,325 3,468,182 3,580,389 3,783,672 3,675,235 common stock 186 193 194 200 207 treasury stock (930,284 ) (920,958 ) (920,798 ) (920,355 ) (920,225 ) additional paid-in capital 1,698,490 1,871,763 1,878,372 2,012,870 2,161,857 retained earnings 3,491,675 3,326,119 3,180,935 3,012,997 2,913,138 accumulated other comprehensive income (loss) (329,105 ) (129,553 ) 120,093 152,224 178,856 total stockholders’ equity 3,930,962 4,147,564 4,258,796 4,257,936 4,333,833 total liabilities and stockholders’ equity $ 7,274,287 $ 7,615,746 $ 7,839,185 $ 8,041,608 $ 8,009,068 shares outstanding 166,388 174,648 175,421 181,336 188,290 book value per share $ 23.63 $ 23.75 $ 24.28 $ 23.48 $ 23.02 debt to capital ratio (1) 26.4 % 25.4 % 24.9 % 24.9 % 24.5 % risk to capital ratio-radian guaranty only 11.9:1 12.1:1 11.1:1 11.4:1 11.4:1 (1) radian group inc. and subsidiaries net premiums earned exhibit d 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 premiums earned direct - mortgage premiums earned, excluding revenue from cancellations $ 249,937 $ 243,599 $ 248,704 $ 239,786 $ 243,077 single premium policy cancellations 6,894 14,696 20,530 25,592 31,592 total direct - mortgage 256,831 258,295 269,234 265,378 274,669 assumed - mortgage (1) 1,538 1,332 1,470 1,683 1,615 ceded - mortgage premiums earned, excluding revenue from cancellations (28,565 ) (27,339 ) (28,333 ) (27,662 ) (27,324 ) single premium policy cancellations (2) (1,965 ) (4,192 ) (5,905 ) (7,338 ) (9,036 ) profit commission - other (3) 19,070 17,078 13,199 4,806 7,162 total ceded premiums - mortgage (4) (11,460 ) (14,453 ) (21,039 ) (30,194 ) (29,198 ) net premiums earned - mortgage 246,909 245,174 249,665 236,867 247,086 net premiums earned - homegenius 6,983 9,016 11,772 12,251 7,670 net premiums earned $ 253,892 $ 254,190 $ 261,437 $ 249,118 $ 254,756 (1) (2) (3) (4) radian group inc. and subsidiaries segment information exhibit e (page 1 of 6) 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 (loss), homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit, along with reconciliations to consolidated gaap measures, see exhibits f and g. three months ended june 30, 2022 (in thousands) mortgage homegenius all other (1) inter- segment (2) total net premiums written (3) $ 248,645 $ 6,983 $ — $ — $ 255,628 increase in unearned premiums (1,736 ) — — — (1,736 ) net premiums earned 246,909 6,983 — — 253,892 services revenue 2,105 25,261 — (85 ) 27,281 net investment income 40,197 99 6,661 — 46,957 other income 572 — — — 572 total 289,783 32,343 6,661 (85 ) 328,702 provision for losses (114,179 ) 309 — (52 ) (113,922 ) policy acquisition costs 5,940 — — — 5,940 cost of services 1,960 20,800 — — 22,760 other operating expenses before allocated corporate operating expenses (4) 25,474 23,205 3,077 (33 ) 51,723 interest expense (5) 20,831 — — — 20,831 total (59,974 ) 44,314 3,077 (85 ) (12,668 ) adjusted pretax operating income (loss) before allocated corporate operating expenses 349,757 (11,971 ) 3,584 — 341,370 allocation of corporate operating expenses 33,237 5,719 381 — 39,337 adjusted pretax operating income (loss) $ 316,520 $ (17,690 ) $ 3,203 $ — $ 302,033 three months ended june 30, 2021 (in thousands) mortgage homegenius all other (1) inter- segment (2) total net premiums written (3) $ 231,027 $ 7,670 $ — $ — $ 238,697 decrease in unearned premiums 16,059 — — — 16,059 net premiums earned 247,086 7,670 — — 254,756 services revenue 3,732 25,750 44 (62 ) 29,464 net investment income 32,842 31 3,418 — 36,291 other income 641 — 181 — 822 total 284,301 33,451 3,643 (62 ) 321,333 provision for losses 3,334 335 — (21 ) 3,648 policy acquisition costs 4,838 — — — 4,838 cost of services 3,161 21,433 19 2 24,615 other operating expenses before allocated corporate operating expenses (4) 25,222 16,160 3,387 (43 ) 44,726 interest expense (5) 21,065 — — — 21,065 total 57,620 37,928 3,406 (62 ) 98,892 adjusted pretax operating income (loss) before allocated corporate operating expenses 226,681 (4,477 ) 237 — 222,441 allocation of corporate operating expenses 32,638 4,721 363 — 37,722 adjusted pretax operating income (loss) $ 194,043 $ (9,198 ) $ (126 ) $ — $ 184,719 radian group inc. and subsidiaries segment information exhibit e (page 2 of 6) (1) (2) (3) (4) (5) radian group inc. and subsidiaries segment information exhibit e (page 3 of 6) mortgage 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 net premiums written (1) $ 248,645 $ 248,360 $ 238,529 $ 228,116 $ 231,027 (increase) decrease in unearned premiums (1,736 ) (3,186 ) 11,136 8,751 16,059 net premiums earned 246,909 245,174 249,665 236,867 247,086 services revenue 2,105 4,552 4,560 5,027 3,732 net investment income 40,197 34,017 33,916 32,158 32,842 other income 572 703 661 607 641 total 289,783 284,446 288,802 274,659 284,301 provision for losses (2) (114,179 ) (84,193 ) (46,560 ) 16,794 3,334 policy acquisition costs 5,940 6,605 7,271 7,924 4,838 cost of services (2) 1,960 3,383 3,710 3,865 3,161 other operating expenses before allocated corporate operating expenses (2) (3) 25,474 23,755 23,365 25,866 25,222 interest expense (4) 20,831 20,846 21,137 21,027 21,065 total (2) (59,974 ) (29,604 ) 8,923 75,476 57,620 adjusted pretax operating income before allocated corporate operating expenses 349,757 314,050 279,879 199,183 226,681 allocation of corporate operating expenses 33,237 36,209 33,305 33,963 32,638 adjusted pretax operating income $ 316,520 $ 277,841 $ 246,574 $ 165,220 $ 194,043 homegenius 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 net premiums earned $ 6,983 $ 9,016 $ 11,772 $ 12,251 $ 7,670 services revenue (2) 25,261 24,878 31,177 32,805 25,750 net investment income 99 18 255 35 31 net gains (losses) on investments — — 1,509 — — total (2) 32,343 33,912 44,713 45,091 33,451 provision for losses 309 481 369 540 335 cost of services 20,800 21,370 24,615 26,646 21,433 other operating expenses before allocated corporate operating expenses (3) 23,205 20,287 16,998 18,544 16,160 total 44,314 42,138 41,982 45,730 37,928 adjusted pretax operating income (loss) before allocated corporate operating expenses (11,971 ) (8,226 ) 2,731 (639 ) (4,477 ) allocation of corporate operating expenses 5,719 5,280 4,847 4,918 4,721 adjusted pretax operating income (loss) $ (17,690 ) $ (13,506 ) $ (2,116 ) $ (5,557 ) $ (9,198 ) radian group inc. and subsidiaries segment information exhibit e (page 4 of 6) all other (5) 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 services revenue $ — $ — $ 30 $ 27 $ 44 net investment income 6,661 4,161 3,236 3,767 3,418 other income — — 144 202 181 total 6,661 4,161 3,410 3,996 3,643 cost of services — — 8 9 19 other operating expenses before allocated corporate operating expenses (3) 3,077 3,142 2,422 2,623 3,387 total 3,077 3,142 2,430 2,632 3,406 adjusted pretax operating income before allocated corporate operating expenses 3,584 1,019 980 1,364 237 allocation of corporate operating expenses 381 406 373 378 363 adjusted pretax operating income (loss) $ 3,203 $ 613 $ 607 $ 986 $ (126 ) (1) (2) (3) (4) (5) radian group inc. and subsidiaries segment information exhibit e (page 5 of 6) supplemental other operating expense information by segment mortgage 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 other operating expenses by type salaries and other base employee expenses $ 24,420 $ 22,189 $ 23,610 $ 22,685 $ 22,542 variable and share-based incentive compensation 11,524 16,697 12,649 17,143 15,236 other general operating expenses 25,611 25,027 25,290 25,639 26,583 ceding commissions (2,844 ) (3,949 ) (4,879 ) (5,638 ) (6,501 ) total $ 58,711 $ 59,964 $ 56,670 $ 59,829 $ 57,860 homegenius 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 other operating expenses by type salaries and other base employee expenses $ 12,187 $ 10,375 $ 7,993 $ 6,975 $ 6,701 variable and share-based incentive compensation 4,776 5,522 4,678 6,238 5,896 other general operating expenses 10,162 8,571 7,851 7,982 6,525 title agent commissions 1,799 1,099 1,323 2,267 1,759 total $ 28,924 $ 25,567 $ 21,845 $ 23,462 $ 20,881 all other 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 other operating expenses by type salaries and other base employee expenses $ 1,726 $ 1,613 $ 1,001 $ 1,158 $ 1,187 variable and share-based incentive compensation 709 953 874 1,144 958 other general operating expenses 1,023 982 920 699 1,605 total $ 3,458 $ 3,548 $ 2,795 $ 3,001 $ 3,750 radian group inc. and subsidiaries segment information exhibit e (page 6 of 6) inter-segment 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 other operating expenses by type other general operating expenses $ (33 ) $ (40 ) $ (46 ) $ (57 ) $ (43 ) total $ (33 ) $ (40 ) $ (46 ) $ (57 ) $ (43 ) total 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 other operating expenses by type salaries and other base employee expenses $ 38,333 $ 34,177 $ 32,604 $ 30,818 $ 30,430 variable and share-based incentive compensation 17,009 23,172 18,201 24,525 22,090 other general operating expenses 36,763 34,540 34,015 34,263 34,670 ceding commissions (2,844 ) (3,949 ) (4,879 ) (5,638 ) (6,501 ) title agent commissions 1,799 1,099 1,323 2,267 1,759 total $ 91,060 $ 89,039 $ 81,264 $ 86,235 $ 82,448 definition of consolidated non-gaap financial measures exhibit f (page 1 of 2) (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. except for certain investments attributable to our reportable segments, 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 income and 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 non-gaap measures for our homegenius segment of adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit. adjusted pretax operating income (loss) before allocated corporate operating expenses is calculated as adjusted pretax operating income (loss) as described above (which is the segment's asc 280 gaap measure of operating performance), adjusted to remove the impact of corporate allocations of other operating expenses for the homegenius segment. adjusted gross profit is further adjusted to remove other operating expenses. in addition, homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit margin are calculated by dividing homegenius adjusted pretax operating margin before allocated corporate operating expenses and adjusted gross profit, respectively, by gaap total revenue for the homegenius segment. for the homegenius segment, adjusted pretax operating income (loss) before allocated corporate operating expenses, adjusted gross profit, and the related profit margins 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 homegenius 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 adjusted pretax operating income (loss) to adjusted pretax operating income (loss) before allocated corporate operating expenses and adjusted gross profit for the homegenius segment. total adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses and homegenius adjusted gross profit 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), or in the case of the homegenius non-gaap measures, for homegenius adjusted pretax operating income (loss). our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity and homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit 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 to adjusted pretax operating income 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 consolidated pretax income $ 259,880 $ 234,140 $ 246,506 $ 161,641 $ 195,496 less reconciling income (expense) items net gains (losses) on investments and other financial instruments (1) (41,869 ) (29,457 ) 1,516 2,098 15,661 amortization of other acquired intangible assets (849 ) (849 ) (863 ) (862 ) (863 ) impairment of other long-lived assets and other non-operating items (2) 565 (502 ) 788 (244 ) (4,021 ) total adjusted pretax operating income (3) $ 302,033 $ 264,948 $ 245,065 $ 160,649 $ 184,719 (1) (2) (3) 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 adjusted pretax operating income (loss) mortgage segment $ 316,520 $ 277,841 $ 246,574 $ 165,220 $ 194,043 homegenius segment (17,690 ) (13,506 ) (2,116 ) (5,557 ) (9,198 ) all other activities 3,203 613 607 986 (126 ) total adjusted pretax operating income $ 302,033 $ 264,948 $ 245,065 $ 160,649 $ 184,719 radian group inc. and subsidiaries consolidated non-gaap financial measure reconciliations exhibit g (page 2 of 3) reconciliation of diluted net income per share to adjusted diluted net operating income per share 2022 2021 qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 diluted net income per share $ 1.15 $ 1.01 $ 1.07 $ 0.67 $ 0.80 less per-share impact of reconciling income (expense) items net gains (losses) on investments and other financial instruments (0.24 ) (0.16 ) 0.01 0.01 0.08 amortization of other acquired intangible assets — (0.01 ) — — — impairment of other long-lived assets and other non-operating items — — — — (0.02 ) income tax (provision) benefit on reconciling income (expense) items (1) 0.05 0.03 — — (0.01 ) difference between statutory and effective tax rate (0.02 ) (0.02 ) (0.01 ) (0.01 ) — per-share impact of reconciling income (expense) items (0.21 ) (0.16 ) — — 0.05 adjusted diluted net operating income per share (1) $ 1.36 $ 1.17 $ 1.07 $ 0.67 $ 0.75 (1) reconciliation of return on equity to adjusted net operating return on equity (1) 2022 2021 qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 return on equity (1) 19.9 % 17.2 % 18.2 % 11.8 % 14.5 % less impact of reconciling income (expense) items (2) net gains (losses) on investments and other financial instruments (4.1 ) (2.8 ) 0.1 0.2 1.5 amortization of other acquired intangible assets (0.1 ) (0.1 ) (0.1 ) (0.1 ) (0.1 ) impairment of other long-lived assets and other non-operating items 0.1 — 0.1 — (0.4 ) income tax (provision) benefit on reconciling income (expense) items (3) 0.9 0.6 — — (0.2 ) difference between statutory and effective tax rate (0.5 ) (0.4 ) (0.1 ) (0.1 ) 0.1 impact of reconciling income (expense) items (3.7 ) (2.7 ) — — 0.9 adjusted net operating return on equity (3) 23.6 % 19.9 % 18.2 % 11.8 % 13.6 % (1) (2) (3) radian group inc. and subsidiaries consolidated non-gaap financial measure reconciliations exhibit g (page 3 of 3) reconciliation of homegenius adjusted pretax operating income (loss) to homegenius adjusted gross profit 2022 2021 (in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 homegenius adjusted pretax operating income (loss) $ (17,690 ) $ (13,506 ) $ (2,116 ) $ (5,557 ) $ (9,198 ) less reconciling income (expense) items allocation of corporate operating expenses (5,719 ) (5,280 ) (4,847 ) (4,918 ) (4,721 ) adjusted pretax operating income (loss) before allocated corporate operating expenses (11,971 ) (8,226 ) 2,731 (639 ) (4,477 ) less reconciling income (expense) items other operating expenses before allocated corporate operating expenses (23,205 ) (20,287 ) (16,998 ) (18,544 ) (16,160 ) homegenius adjusted gross profit $ 11,234 $ 12,061 $ 19,729 $ 17,905 $ 11,683 our definitions of adjusted pretax operating income (loss), adjusted diluted net operating income (loss) per share, adjusted net operating return on equity, homegenius adjusted pretax operating income (loss) before allocated corporate operating expenses, homegenius adjusted gross profit, homegenius adjusted pretax operating margin before allocated corporate operating expenses or homegenius adjusted gross profit 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 2022 2021 ($ in millions) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 new insurance written ("niw") $ 18,935 $ 18,655 $ 23,710 $ 26,558 $ 21,662 total borrower-paid niw 99.2 % 99.2 % 99.4 % 99.2 % 99.1 % niw by premium type direct monthly and other recurring premiums 95.4 % 94.5 % 93.5 % 93.8 % 93.1 % borrower-paid 4.4 5.3 6.3 6.0 6.6 lender-paid 0.2 0.2 0.2 0.2 0.3 direct single premiums 4.6 5.5 6.5 6.2 6.9 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % niw for purchases 97.1 % 91.4 % 91.1 % 89.8 % 77.1 % niw for refinances 2.9 % 8.6 % 8.9 % 10.2 % 22.9 % niw by fico score (1) >=740 59.6 % 57.1 % 53.8 % 56.0 % 61.4 % 680-739 32.3 35.7 36.9 34.9 33.1 620-679 8.1 7.2 9.3 9.1 5.5 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % niw by ltv 95.01% and above 17.7 % 14.6 % 16.3 % 12.1 % 10.9 % 90.01% to 95.00% 39.9 42.0 41.9 46.7 40.4 85.01% to 90.00% 26.7 29.4 28.4 26.5 27.6 85.00% and below 15.7 14.0 13.4 14.7 21.1 total niw 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % (1) radian group inc. and subsidiaries mortgage supplemental information - primary insurance in force and risk in force exhibit i june 30 march 31, december 31, september 30, june 30, ($ in millions) 2022 2022 2021 2021 2021 primary insurance in force $ 254,226 $ 248,951 $ 245,972 $ 241,575 $ 237,302 primary risk in force ("rif") $ 63,770 $ 62,036 $ 60,913 $ 59,421 $ 58,040 primary rif by premium type direct monthly and other recurring premiums 85.6 % 84.9 % 83.9 % 82.7 % 81.2% direct single premiums (1) 14.4 % 15.1 % 16.1 % 17.3 % 18.8% primary rif by fico score (2) >=740 57.2 % 56.9 % 56.9 % 57.3 % 57.5% 680-739 34.9 35.1 35.0 34.8 34.8 620-679 7.5 7.5 7.6 7.4 7.2 <=619 0.4 0.5 0.5 0.5 0.5 total primary 100.0 % 100.0 % 100.0 % 100.0 % 100.0% primary rif by ltv 95.01% and above 16.1 % 15.5 % 15.1 % 14.6 % 14.5% 90.01% to 95.00% 48.7 48.9 48.9 48.9 48.5 85.01% to 90.00% 27.4 27.6 27.7 27.8 28.1 85.00% and below 7.8 8.0 8.3 8.7 8.9 total 100.0 % 100.0 % 100.0 % 100.0 % 100.0% primary rif by policy year 2008 and prior 4.0 % 4.3 % 4.7 % 5.2 % 5.7% 2009 - 2016 8.3 9.3 10.8 12.5 14.7 2017 3.9 4.3 4.9 5.7 6.8 2018 4.1 4.6 5.2 6.1 7.3 2019 7.7 8.6 9.7 11.4 13.6 2020 25.0 27.2 29.2 32.1 35.4 2021 32.1 34.0 35.5 27.0 16.5 2022 14.9 7.7 — — — total 100.0 % 100.0 % 100.0 % 100.0 % 100.0% persistency rate (12 months ended) 71.7 % 68.0 % 64.3 % 60.8 % 57.7%(3) persistency rate (quarterly, annualized) (4) 79.8 % 76.9 % (3) 71.7 % 67.5 % 66.3% (1) (2) (3) (4) radian group inc. and subsidiaries mortgage supplemental information - claims and reserves, default statistics exhibit j 2022 2021 ($ in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 net claims paid (1) total primary claims paid $ 3,658 $ 5,153 $ 4,300 $ 5,330 $ 4,870 total pool and other (396 ) (415 ) (462 ) 991 (649 ) subtotal 3,262 4,738 3,838 6,321 4,221 impact of commutations and settlements (2) — — 6,549 3,915 — total net claims paid $ 3,262 $ 4,738 $ 10,387 $ 10,236 $ 4,221 total average net primary claims paid (1) (3) $ 41.6 $ 41.6 $ 47.8 $ 42.0 $ 46.8 average direct primary claims paid (3) (4) $ 41.9 $ 42.1 $ 49.1 $ 43.2 $ 48.4 (1) (2) (3) (4) june 30, march 31, december 31, september 30, june 30, ($ in thousands, except per default amounts) 2022 2022 2021 2021 2021 reserve for losses by category (1) mortgage reserves primary case reserves $ 562,436 $ 691,090 $ 790,380 $ 851,151 $ 840,764 lae 14,147 17,367 19,859 21,400 21,180 ibnr 2,424 2,539 2,886 3,788 5,464 total primary reserves 579,007 710,996 813,125 876,339 867,408 total pool reserves 9,756 10,330 9,826 11,413 13,085 total 1st lien reserves 588,763 721,326 822,951 887,752 880,493 other 184 184 185 269 270 total mortgage reserves 588,947 721,510 823,136 888,021 880,763 homegenius reserves 5,861 5,737 5,506 5,134 4,735 total reserves $ 594,808 $ 727,247 $ 828,642 $ 893,155 $ 885,498 primary reserve per primary default excluding ibnr and other $ 26,380 $ 27,776 $ 27,884 $ 25,822 $ 21,304 (1) june 30, march 31, december 31, september 30, june 30, 2022 2022 2021 2021 2021 default statistics primary insurance number of insured loans 998,520 994,721 999,203 998,408 1,000,549 number of loans in default 21,861 25,510 29,061 33,795 40,464 percentage of loans in default 2.19 % 2.56 % 2.91 % 3.38 % 4.04 % radian group inc. and subsidiaries mortgage supplemental information - reinsurance programs exhibit k 2022 2021 ($ in thousands) qtr 2 qtr 1 qtr 4 qtr 3 qtr 2 quota share reinsurance (“qsr”) and single premium qsr programs ceded premiums written (1) $ (21,554) $ (22,079) $ (7,670) $ (1,304) $ (7,032) % of premiums written (8.5) % (8.8) % (2.9) % (0.5) % (2.8) % ceded premiums earned $ (7,937) $ (3,240) $ 3,116 $ 13,506 $ 13,491 % of premiums earned (3.0) % (1.2) % 1.1 % 4.8 % 4.8 % ceding commissions written $ (6,584) $ (9,153) $ (8,232) $ (7,861) $ (2,362) ceding commissions earned (2) $ 3,414 $ 5,123 $ 6,288 $ 7,087 $ 7,920 profit commission $ 21,447 $ 22,075 $ 20,290 $ 13,630 $ 17,935 ceded losses $ (15,037) $ (12,588) $ (7,940) $ 883 $ (1,007) excess-of-loss program ceded premiums written $ 18,151 $ 16,164 $ 20,508 $ 15,434 $ 18,524 % of premiums written 7.2 % 6.4 % 7.9 % 6.1 % 7.4 % ceded premiums earned $ 19,292 $ 17,588 $ 17,817 $ 16,581 $ 15,601 % of premiums earned 7.3 % 6.5 % 6.3 % 5.9 % 5.5 % ceded rif (3) single premium qsr program $ 4,665,020 $ 4,855,228 $ 5,228,037 $ 5,439,056 $ 5,728,142 excess-of-loss program 2,076,121 2,199,919 2,295,954 1,873,426 1,952,900 qsr program 175,046 186,930 207,106 232,539 268,337 total ceded rif $ 6,916,187 $ 7,242,077 $ 7,731,097 $ 7,545,021 $ 7,949,379 pmiers impact - reduction in minimum required assets excess-of-loss program $ 785,705 $ 881,917 $ 995,171 $ 659,151 $ 907,112 single premium qsr program 268,847 286,706 314,183 328,339 355,115 qsr program 10,226 11,214 12,541 14,116 16,545 total pmiers impact $ 1,064,778 $ 1,179,837 $ 1,321,895 $ 1,001,606 $ 1,278,772 (1) (2) (3) 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,” “predict,” “project,” “potential,” “continue,” “seek,” “strategy,” “future,” “likely” or the negative or other variations on these words and other similar expressions. these statements, which may include, without limitation, projections regarding our future performance and financial condition, are made on the basis of management’s current views and assumptions with respect to future events. these statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. we operate in a changing environment where new risks emerge from time to time and it is not possible for us to predict all risks that may affect us. the forward-looking statements are not guarantees of future performance, and the forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. these risks and uncertainties include, without limitation: the health of the u.s. housing market generally and changes in economic conditions that impact the size of the insurable mortgage market, the credit performance of our insured mortgage portfolio and our business prospects, including as a result of inflationary pressures from a rising interest rate environment and the potential for a recession and higher unemployment rates, as well as other macroeconomic stresses such as those that may arise from the ongoing effects of the covid-19 pandemic and government control responses to the pandemic as well as the ongoing russia-ukraine conflict; changes in the way customers, investors, ratings agencies, regulators or legislators perceive our performance, financial strength and future prospects; radian guaranty inc.’s (“radian guaranty”) ability to remain eligible under the private mortgage insurer eligibility requirements (the “pmiers”) and other applicable requirements imposed by the federal housing finance agency and by fannie mae and freddie mac (collectively, the “gses”) to insure loans purchased by the gses; our ability to maintain an adequate level of capital in our insurance subsidiaries to satisfy existing and future regulatory requirements; changes in the charters or business practices of, or rules or regulations imposed by or applicable to, the gses or loans purchased by the gses, which may include changes in furtherance of housing policy objectives such as the accessibility and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities, or changes in the requirements for radian guaranty to remain an approved insurer to the gses such as changes in the pmiers or the gses’ interpretation and application of the pmiers; the effects of the enterprise capital framework, which establishes a new regulatory capital framework for the gses, and which, as finalized, increases the capital requirements for the gses, and among other things, could impact the gses' operations and pricing as well as the size of the insurable mortgage market, and which may form the basis for future changes to the pmiers; changes in the current housing finance system in the united states, including the roles of the federal housing administration (the "fha"), the gses and private mortgage insurers in this system; our ability to successfully execute and implement our capital plans, including our risk distribution strategy through the capital markets and traditional reinsurance markets, and to maintain sufficient holding company liquidity to meet our liquidity needs; our ability to successfully execute and implement our business plans and strategies, including plans and strategies that may require gse and/or regulatory approvals and licenses, are subject to complex compliance requirements that we may be unable to satisfy, or may expose us to new risks including those that could impact our capital and liquidity positions; uncertainty from the discontinuance of libor and transition to one or more alternative benchmarks that could cause interest rate volatility and, among other things, impact our investment portfolio, cost of debt and cost of reinsurance through mortgage insurance-linked notes transactions; risks related to the quality of third-party mortgage underwriting and mortgage servicing; a decrease in the “persistency rates” (the percentage of insurance in force that remains in force over a period of time) of our mortgage insurance on monthly premium products; competition in the private mortgage insurance industry generally, and more specifically: price competition in our mortgage insurance business, including the increasing prevalence of formulaic, granular risk-based pricing methodologies that are less transparent than historical rate-card-based pricing practices; and competition from the fha and the u.s. department of veterans affairs as well as from other forms of credit enhancement, such as gse-sponsored alternatives to traditional mortgage insurance; legislative and regulatory activity (or inactivity), including the adoption of (or failure to adopt) new laws and regulations, or changes in existing laws and regulations, or the way they are interpreted or applied; legal and regulatory claims, assertions, actions, reviews, audits, inquiries and investigations that could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures, new or increased reserves or have other effects on our business; the amount and timing of potential payments or adjustments associated with federal or other tax examinations; the possibility that we may fail to estimate accurately, especially in the event of an extended economic downturn or a period of extreme market volatility and economic uncertainty, the likelihood, magnitude and timing of losses in establishing loss reserves for our mortgage insurance business or to accurately calculate and/or project our available assets and minimum required assets under the pmiers, which will be impacted by, among other things, the size and mix of our insurance in force, the level of defaults in our portfolio, the reported status of defaults in our portfolio, including whether they are subject to mortgage forbearance, a repayment plan or a loan modification trial period granted in response to a financial hardship related to covid-19, the level of cash flow generated by our insurance operations and our risk distribution strategies; volatility in our financial results caused by changes in the fair value of our assets and liabilities, including with respect to our use of derivatives and within our investment portfolio; changes in “gaap” (accounting principles generally accepted in the u.s.) or “sapp” (statutory accounting principles and practices including those required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries) rules and guidance, or their interpretation; risks associated with investments to grow our existing businesses, or to pursue new lines of business or new products and services, including our ability and related costs to develop, launch and implement new and innovative technologies and digital products and services, whether these products and services will receive broad customer acceptance or will disrupt existing customer relations, and additional financial risks related to these investments, including required changes in our investment, financing and hedging strategies, and risks associated with our increased use of financial leverage, which could expose us to liquidity risks resulting from changes in the fair values of assets; the effectiveness and security of our information technology systems and digital products and services, including the risk that these systems, products or services fail to operate as expected or planned or expose us to cybersecurity or third party risks, including due to malware, unauthorized access, cyber-attack, natural disasters or other similar events; our ability to attract and retain key employees; and legal and other limitations on amounts we may receive from our subsidiaries, including dividends or ordinary course distributions under our internal tax- and expense-sharing arrangements. for more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to “item 1a. risk factors” in our annual report on form 10-k for the year ended december 31, 2021, and to subsequent reports and registration statements filed from time to time with the u.s. securities and exchange commission. we caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. we do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason.
