Radian (RDN) Financial Report Summaries

Risks

• Radian Guaranty may fail to maintain its eligibility status with the GSEs, and the additional capital required to support Radian Guaranty’s eligibility could reduce our available liquidity.
• Our insurance subsidiaries are subject to comprehensive state insurance regulations and other requirements, which we may fail to satisfy.
• Changes in the charters, business practices or role of the GSEs in the U.S. housing finance market generally, could significantly impact our businesses.
• Legislation and administrative and regulatory changes and interpretations could impact our businesses.
• Our success depends on our ability to assess and manage our mortgage insurance underwriting risks; the mortgage insurance premiums we charge may not be adequate to compensate us for our liability for losses and the amount of capital we are required to hold against our insured mortgage risks. We expect to incur losses for future mortgage defaults beyond what we have reserved for in our financial statements.
• If the estimates we use in establishing mortgage insurance loss reserves are incorrect, we may be required to take unexpected charges to income, which could adversely affect our results of operations.
• Our Loss Mitigation Activity could negatively impact our customer relationships.
• Reinsurance may not be available, affordable or adequate to protect us against losses.
• If the length of time that our mortgage insurance policies remain in force declines, it could result in a decrease in our future revenues.
• Our delegated underwriting program may subject our mortgage insurance business to unanticipated claims.
• Our mortgage insurance business faces intense competition.
• Our NIW and franchise value could decline if we lose business from significant customers.
• The current financial strength ratings assigned to our mortgage insurance subsidiaries could weaken our competitive position and potential downgrades by rating agencies to these ratings and the ratings assigned to Radian Group could adversely affect the Company.
• Our business depends, in part, on effective and reliable loan servicing.
• We face risks associated with our contract underwriting business.
• A decrease in the volume of mortgage originations could result in fewer opportunities for us to write new mortgage insurance business and conduct our homegenius businesses.
• We are exposed to risks associated with our homegenius businesses that could negatively affect our results of operations and financial condition.
• We rely upon proprietary technology and information, and if we are unable to protect our intellectual property rights, it could have a material adverse effect on us.
• We face risks associated with our mortgage conduit business.
• If the models used in our businesses are inaccurate, it could have a material adverse impact on our business, results of operations and financial condition.
• Actual or perceived instability in the financial services industry or non-performance by financial institutions or transactional counterparties could materially impact our business.
• The credit performance of our mortgage insurance portfolio is impacted by macroeconomic conditions and specific events that affect the ability of borrowers to pay their mortgages.
• Our success depends, in part, on our ability to manage risks in our investment portfolio.
• Climate change and extreme weather events could adversely affect our businesses, results of operations and financial condition.
• Our reported earnings, stockholders’ equity and book value per share are subject to fluctuations based on changes in our investments that require us to adjust their fair market value.
• Our sources of liquidity may be insufficient to fund our obligations.
• Our revolving credit facility and the Parent Guarantees we provide for the Master Repurchase Agreements to finance loan purchases in our mortgage conduit business contain covenants that are restrictive and could limit our operating flexibility. A default under our credit facility or these Parent Guarantees could trigger an event of default under the terms of our senior notes. We may not have access to funding under our credit facility when we require it.
• Our information technology systems may fail or become outmoded, be temporarily interrupted or otherwise cause us to be unable to meet our customers’ demands.
• We could incur significant liability or reputational harm if the security of our information technology systems, or of our third-party vendors or service providers, is breached, including as result of a cyberattack, or we otherwise fail to protect confidential information, including personally identifiable information that we maintain.
• We use statistical models, including artificial intelligence and machine learning models, to assist our decision making in key areas, such as underwriting, claims and pricing, but actual results could differ materially from the model outputs and related analyses.
• We may not continue to pay dividends at the same rate we are currently paying them, or at all, and any decrease in or suspension of payment of a dividend could cause our stock price to decline.
• We are subject to litigation and regulatory proceedings.
• We rely on our management team and our business could be harmed if we are unable to retain qualified personnel or successfully develop and/or recruit their replacements.
• Investments to grow our existing businesses, pursue new lines of business or new products and services within existing lines of business subject us to additional risks and uncertainties.