| Schedule of Reconciliation of Revenue from Segment to Consolidated |
The tables below present details on the operating results for our Mortgage segment and our Specialty segment, including a disaggregation of significant segment expenses as monitored by Radian’s chief operating decision maker.
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Segment operating results and other information |
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Three Months Ended March 31, |
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2026 |
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($ in thousands) |
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Mortgage |
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Specialty (1) |
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Total |
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Net premiums earned |
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$ |
238,177 |
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$ |
164,351 |
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$ |
402,528 |
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Net investment income (2) |
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53,327 |
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16,899 |
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70,226 |
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Other income |
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1,663 |
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1,327 |
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2,990 |
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Total revenues |
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293,167 |
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182,577 |
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475,744 |
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Less: expenses |
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Provision for losses |
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24,276 |
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86,268 |
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110,544 |
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Amortization of deferred policy acquisition costs (3) |
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6,899 |
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29,065 |
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35,964 |
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Other operating expenses (4) |
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Salaries and share-based employee expenses |
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30,011 |
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10,037 |
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40,048 |
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Other non-employee operating expenses |
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17,129 |
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14,444 |
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31,573 |
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Depreciation expense |
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1,802 |
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|
404 |
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2,206 |
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Ceding commissions |
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(8,219 |
) |
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— |
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(8,219 |
) |
Total other operating expenses |
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40,723 |
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24,885 |
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65,608 |
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Interest expense |
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470 |
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2,290 |
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2,760 |
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Adjusted pretax operating income |
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$ |
220,799 |
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$ |
40,069 |
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260,868 |
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Reconciling items |
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Corporate adjusted pretax operating income (loss) |
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Corporate net investment income |
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9,222 |
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Corporate other operating expenses |
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(10,699 |
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Corporate interest expense (5) |
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(27,584 |
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Net gains (losses) on financial instruments and foreign exchange |
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(8,879 |
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Amortization and impairment of other acquired intangible assets |
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(3,909 |
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Other purchase accounting adjustments, net (6) |
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(23,330 |
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Acquisition-related expenses and other non-operating items (7) |
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(22,026 |
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Pretax income from continuing operations |
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$ |
173,663 |
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Key segment ratios |
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Loss Ratio |
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10.2 |
% |
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52.5 |
% |
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Expense Ratio |
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20.0 |
% |
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32.8 |
% |
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Combined Ratio |
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30.2 |
% |
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85.3 |
% |
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Segment assets as of period end |
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$ |
6,549,091 |
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$ |
3,690,037 |
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(1)Results are for the two-month period subsequent to the Closing Date. (2)Mortgage segment includes $10 million related to Intercompany Note that is reported as interest expense in Corporate category and eliminated in consolidation. (3)Ceding commissions represent fees paid by reinsurers to offset certain costs incurred by the primary insurer. We report such commissions based on the nature of the underlying costs. For the Specialty segment, ceding commissions primarily relate to reimbursement of acquisition costs and are reported in amortization of deferred policy acquisition costs. For the Mortgage segment, ceding commissions primarily relate to reimbursement of operating expenses and are reported primarily in other operating expenses. (4)Mortgage segment includes $20 million of allocated holding company operating expenses, representing estimated time spent directly supporting the Mortgage business. (5)Includes $10 million related to Intercompany Note that is reported as net investment income in the Mortgage segment and eliminated in consolidation. (6)Primarily includes $53 million of net VOBA asset and liability amortization, offset by $30 million reversal of policy acquisition costs that is reflected in segment results but eliminated under purchase accounting on a consolidated basis. (7)Relates to acquisition-related expenses, which are included in other operating expenses on the condensed consolidated statement of operations.
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Segment operating results and other information |
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Three Months Ended March 31, |
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2025 |
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($ in thousands) |
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Mortgage |
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Total |
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Net premiums earned |
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$ |
234,044 |
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$ |
234,044 |
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Net investment income |
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48,451 |
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48,451 |
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Other income |
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1,782 |
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1,782 |
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Total revenues |
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284,277 |
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284,277 |
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Less: expenses |
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Provision for losses |
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15,340 |
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15,340 |
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Amortization of deferred policy acquisition costs |
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6,388 |
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6,388 |
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Other operating expenses (1) |
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Salaries and share-based employee expenses |
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32,636 |
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32,636 |
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Other non-employee operating expenses |
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15,416 |
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15,416 |
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Depreciation expense |
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1,873 |
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1,873 |
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Ceding commissions |
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(6,722 |
) |
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(6,722 |
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Total other operating expenses |
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43,203 |
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43,203 |
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Interest expense |
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425 |
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425 |
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Adjusted pretax operating income |
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$ |
218,921 |
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218,921 |
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Reconciling items |
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Corporate adjusted pretax operating income (loss) |
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Corporate net investment income |
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12,559 |
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Corporate other operating expenses |
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(14,321 |
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Corporate interest expense |
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(16,064 |
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Net gains (losses) on financial instruments and foreign exchange |
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(2,001 |
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Acquisition-related expenses and other non-operating items |
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(384 |
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Pretax income from continuing operations |
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$ |
198,710 |
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Key segment ratios |
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Loss Ratio |
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6.6 |
% |
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Expense Ratio |
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21.2 |
% |
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Combined Ratio |
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27.8 |
% |
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Segment assets as of period end |
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$ |
6,558,761 |
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(1)Includes $27 million of allocated holding company operating expenses, representing estimated time spent directly supporting the Mortgage business.
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