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Introduction & Market Context
Radian Group Inc (NYSE:RDN), a leading mortgage insurance and real estate services provider, released its first quarter 2025 financial results presentation on May 1, 2025. The company reported stable performance with modest challenges in some areas, while highlighting strong book value growth and capital position improvements.
The results come as the mortgage insurance market continues to navigate a complex interest rate environment, with the company maintaining its focus on operational efficiency and disciplined underwriting. Radian’s performance reflects broader industry trends of stabilizing insurance volumes amid shifting housing market dynamics.
Quarterly Performance Highlights
Radian reported net income of $145 million for Q1 2025, representing a slight decrease from both the previous quarter ($148 million) and the same quarter last year ($152 million). Diluted net income per share remained steady at $0.98, unchanged from both Q4 2024 and Q1 2024, while adjusted diluted net operating income per share was $0.99, down from $1.08 in Q4 2024 and $1.00 in Q1 2024.
As shown in the following summary of key financial metrics, the company maintained relatively stable performance across most indicators:
Total (EPA:TTEF) revenues remained relatively flat at $318 million compared to $316 million in Q4 2024 and $319 million in Q1 2024. Net mortgage insurance premiums earned were $234 million, virtually unchanged from both the previous quarter and the same period last year.
The company’s provision for losses increased to $15 million, compared to negative provisions of $1 million in Q4 2024 and $7 million in Q1 2024, indicating a more conservative approach to potential future claims. However, operating expenses decreased to $77 million from $88 million in the previous quarter and $83 million in Q1 2024, demonstrating the company’s focus on operational efficiency.
Book Value Growth and Capital Position
A significant bright spot in Radian’s Q1 2025 results was the continued growth in book value per share, which reached $32.48, representing an 11% increase from $29.30 as of March 31, 2024. This growth in book value provides a solid foundation for shareholder returns and reflects the company’s effective capital management.
The following chart illustrates the consistent growth in book value per share over time, including the impact of accumulated other comprehensive income (AOCI):
Radian’s capital position remained strong, with a holding company debt-to-capital ratio of 18.9%, significantly improved from 25.4% as of March 31, 2024. Available holding company liquidity stood at $834 million, down from $885 million at the end of 2024 and $1.1 billion a year earlier, reflecting the company’s ongoing capital deployment activities.
The company maintained robust PMIERs excess available assets of $2.1 billion, representing 53% above requirements, though this was slightly down from $2.2 billion (56%) at the end of 2024 and $2.3 billion (62%) a year earlier.
Mortgage Insurance Portfolio Performance
Radian’s primary insurance in force was $274.2 billion at the end of Q1 2025, relatively stable compared to $275.1 billion at the end of 2024 and up slightly from $271.0 billion a year earlier. New insurance written was $9.5 billion, down from $13.2 billion in Q4 2024 and $11.5 billion in Q1 2024, reflecting broader market conditions.
The following chart shows the rollforward of primary insurance in force and persistency rates:
The company’s quarterly annualized persistency rate improved to 85.7% in Q1 2025 from 83.5% in Q4 2024, while the 12-month persistency rate increased to 83.7% from 82.7% in the previous quarter. These improvements suggest a stabilizing portfolio with fewer policy cancellations.
Radian’s default inventory and management showed continued strength. The primary default rate was 2.33% in Q1 2025, and the company reported strong cure trends, with approximately 90% of defaults curing within one year of the initial default.
The following chart illustrates these impressive cure trends:
Investment Portfolio and Income
Radian’s investment portfolio remained well-diversified and conservatively positioned. Total investments stood at $6.1 billion as of March 31, 2025, compared to $6.3 billion at both year-end 2024 and March 31, 2024.
The investment portfolio composition is detailed in the following breakdown:
Net investment income was $69 million in Q1 2025, consistent with Q1 2024 and slightly down from $71 million in Q4 2024. The following chart shows the trend in net investment income:
Forward-Looking Statements and Outlook
While Radian’s Q1 2025 presentation did not include specific forward guidance, the company’s results suggest a stable outlook with some potential challenges. The increase in provision for losses indicates a more cautious approach to potential future claims, while the decrease in new insurance written may reflect broader market conditions affecting mortgage originations.
The company’s strong capital position, with $2.1 billion in PMIERs excess available assets and scheduled contingency reserve releases, provides flexibility for future capital deployment, including potential dividends and share repurchases. Radian’s debt-to-capital ratio improvement also enhances its financial flexibility.
Based on the previous quarter’s earnings call information, Radian had anticipated a significant reduction in operating expenses for the full year 2025, with an estimated run rate reduction of $20-25 million. The Q1 2025 results show progress in this direction, with operating expenses down to $77 million from $88 million in the previous quarter.
Radian’s strong cure rates and stable insurance portfolio, combined with its improved capital position and book value growth, position the company to navigate the evolving mortgage market environment, despite the modest challenges in revenue and new insurance written observed in the first quarter of 2025.
Full presentation:
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