Radian (RDN) 8 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to the Fourth Quarter 2023 Radian Group Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would like now to turn the conference over to John Damian, Senior Vice President, Investor Relations and Corporate Development. Please go ahead.

to Quarter welcome Conference Year-End and Call. you, Radian's and Fourth XXXX Thank

adjusted which per results that pretax is diluted Radian's and press includes including website contains Our release, adjusted press This financial share discussed Investors of on was equity. operating net release net during yesterday at call, www.radian.com. the non-GAAP operating full issued adjusted for be evening return operating to and measures and income, posted certain section income our may year, quarter the today's

available A may GAAP complete our of these release and non-GAAP found These description of on comparable all website. are release of may measures of Exhibit the be our measures press Investors measures reconciliations most G. in press section found the be to in Exhibit F, exhibits

you Radian call Rick hear Pandit, portion Financial Radian's Officer. Officer; the Executive Derek on is from Brummer, of Chief Chief Mortgage. Q&A and hand of for Sumita Also the will Today, Thornberry, President

would I expectations, estimates, you forward-looking are are to may current on begin, cause call uncertainties, that based and statements. and materially. These actual we assumptions include risks this during like differ subject projections that will Before which made statements comments remind to results to

reports website. regarding on risks, with review available these subsequent of release discussion a the For included also the forward-looking cautionary SEC. are our in the factors filed please Form included and XXXX XX-K statements risk statements These and earnings our in our

Now over I'd Rick. like turn to the call to

for to for us Good quarter report successful up afternoon, today. wrap pleased Radian. another to I and excellent thank am year and joining you all a

and XX%. a income share challenging grew book environment, Despite of GAAP $X.X XXXX. return by on For $XXX XX% year-over-year, value of increased in generating billion per XXXX, to revenues macroeconomic a equity net delivering million we

an in to through dividends total in Guaranty Group force, to $XXX main million during and the $XXX high our earnings future share for returned insurance driver ordinary $XXX company, of Our Radian stockholders paid capital repurchases the is a of of year. all-time We which reached of mortgage primary billion. Radian million dividends.

to yield continues dividend in regular the Our the be industry. highest

received liquidity remain company liquidity was of A- an the and financial cushion and holding Our to our for performance X position, BBB- Group was at upgrade investment and $XXX very all by our positions Radian strong. agencies. billion, Radian January as capital Group. $X.X ratings prior S&P we PMIERs capital Radian billion, from $X million primary Guaranty in strong increase now overall rating and Reflecting approximately year. for rated grade is a from year-end Available

of higher to our which end as mortgage of was strength managing I XXXX, would results environment, continued the also during for insurance range focus expenses. on reduced or on our high-quality growing position ongoing million challenging and operating and like to other costs business our focus we team's highlight compared XXXX as that, in of by consolidated cost our a of as target reductions. portfolio the $XX services strategic combined as a operating our expenses well capital These our managing XX% result disciplined at demonstrate and

business, economic capture we identify successfully value our in of market. platform Rates our continue Insurance RADAR In to leverage terms and analytics and Mortgage the proprietary to

for of result, written high-quality fourth the wrote billion and a quarter the we $XX.X billion year. As $XX.X new insurance in

their of frequency equity our here our and portfolio see note to claims. to remains insurance paid mortgage It have year, decreasing is We during rate by helps risk both continue borrowers in which to in in persistency and portfolio mitigate loss strong. positive the significant the our severity credit the homes, performance that insured important of

XX% generates also our XX% of interest force embedded had that yield supports investment embedded at portfolio. returns resulted worth yields and The our flows in and at billion is higher in least directly XX% $X.X equity. as higher increased that of investment repeating of income that our least line. It incremental bottom estimate we higher rates equity on to our XX% loans insurance fact, year-end In XXXX, total had defaulted

to total recent XXXX In which market, increase terms $X industry an of forecast compared XXXX. housing mortgage for the of XXXX in interest originations mortgage a projects outlook to rates This project represent would approximately trillion, in home decline to by these originations an in purchase the And with demand, strong drive refinance fourth coupled a quarter. continued expected as originations purchase approximately in and lower increase XX% rates, mortgage XX% to is well. X% increase

to little refinance increased on volume we've business, said XXx currently And mortgage consist to of given persistency X%, remain increase for we strong interest is penetration purchase loans refinance While XX our before, volume, approximately positive projected in a would to no declining have therefore, refinances. that of borrowers rates with those rates given for expect MI as XX% purchase than is interest are to portfolio force below incentive. our insurance the transactions higher the

worth the for on which between the mitigate and create It we origination risk low insured forecast, is challenges first-time help for will demand be portfolio. mortgage that is these insurance while billion that and to downside a XXXX. continue inventory dynamics Based in homebuyers, mentioning also in home market private market to values, our positive $XXX billion $XXX estimate strong

remains volume, benefits and our purchase that home the outlook from our insurance increases business business for in prices positive. Given mortgage overall demand,

regard and team real With business, constrained our to and activity. of which navigated throughout mortgage the limited higher inventory, estate rates homegenius interest our impact XXXX,

technology. data, deepening investments on expenses to analytics customer making focused team managing and Our improve relationships, our across expanding our efficiency strategic operational and and in businesses

from home We and benefit rebounds. activity declining believe refinance purchase as positioned environment to interest this rate is a business well

investments cost to manage and align our environment. our the and We strategy continue structure will to market

managing capital And track we strong continue our to build on record for resources. our

strategic the enhances several forward. on past capital of believe now capital We focus flexibility and We have our demonstrated our over position optimization consistently going a years. strength the significantly financial

dynamic And me say into during reinsurance the capital actions company is details risk-based our our cycles, by capital framework, and to built markets. our and strengthened significantly the as the pricing quarter current heard the including of discuss and the distribution risk year, will withstand economic the capital you've Sumita before, during position. PMIERs of

will of Sumita financial cover our position. now the details

Rick, fourth of or you, results afternoon good all. of diluted produced earnings XXXX, earning quarter share. $X.XX quarter million the to in you income operating $XXX strong We and another Thank net per of

share the year. earned Adjusted the higher For the year, share. for of $X.XX GAAP slightly income or than for and diluted metrics was per the at we full full net net $XXX million income diluted per $X.XX operating $X.XX earnings quarter

book This book value of XXXX year-over-year share XX% $XX.XX. of value to return a generated in during growth to XX% million to share on paid We equity our per XXXX. in per dividends stockholders addition grew was and our $XXX

million shares were in during $XXX repurchased XX%. proud We an industry-leading deliver of our the And also XXXX, return year. to total of we shareholder

reduced and in over estate resulting XXXX. Our inventory, the during and we XXXX. limited total and interest Despite mortgage fourth quarter X% volumes both full transaction a $X.X the during billion XXXX of in revenues generated to our housing year total compared revenues strong revenues were real from higher rates increase year,

impacting in portfolio on our as through our force XX our factors as in insurance XX key other net well details mortgage premiums earned. includes presentation Slides

premiums an high for in X% the $XXX year-over-year in earned $XXX the grew year. of to generating $XXX million as and billion primary of in year-end, full Our mortgage all-time net force quarter insurance million

and excess in of X our capital with Guaranty agreements that to reinsurance previously manage volatility to quarter protection strategy effectively agreements provide mitigate overall entered profile As the into are potential insurance consistent Radian loss loss scenarios. fourth announced, the new our to risk These of and business. expected in mortgage additional stress are help

resulting presentation. during growth our in quarter billion including force our our in industry-wide originations. of insurance Contributing transactions written to the $XX.X in of the mortgage fourth premiums the volumes The for of The insurance reflected results in is decline quarterly ceded fourth quarter. Slide $XX.X reflects 'XX, from on XX our increase was our written billion reduction these new in

increased of remained We in business, on a provide benefited also While force, XX% trailing high due on new fourth it to persistency ago. insurance persistency XX more our in which to detail decline Slide for provided on trends the headwinds the the compared our based XX% rates at our rate months, XX. has industry-wide quarter significantly year the primarily

our strong pullback even recent remain mortgage the consideration to rate in expect of after persistency rates. We

As X% or of Rick mortgage mentioned, as therefore more less less than in XX% a of refinancing. our of the rate insurance force the likely cancel in due the end and to of had is near term to quarter fourth

our of in a rate or less XX% insurance mortgage In year-end. of had at force addition, X%

model originations and in While supported rate earnings, persistency in durability reduced of environment. in NIW, varied in our demonstrating the far mortgage interest on have rates business force insurance have increases growth high rates

at as persistency and year-end premium portfolio premium force stable shown XX, consistent well. stable mortgage year basis force XX.X on portfolio with environment, points to in the for XXXX, the rate as current for Slide yield upcoming in pricing ending remained strong With remain during portfolio insurance the industry we As expect yields positive our generally expected, the XXXX.

which rate quarter. in interest benefited XX% environment higher million our The $XXX including in year-over-year million fourth has also the grew income, investment to XXXX, $XX

the was the both yield XX, of and investment shown increases size investment portfolio. driven As during in income our net in Slide the our rise year on average by

book $XXX on in Our equity by stockholders' quarter reflected in improving year-end, investments value loss share. our improved unrealized per fourth net the at million

flow cash will provide these We with losses. and expect remaining securities liquidity our and ability unrealized us hold position maturity to the recover that strong the to

in services segment, in 'XX, earned million from primarily which the is including million $XX derived $XX quarter. fourth Our totaled revenue, homegenius our

to rebound, interest and strategy to environment cost market business our is environment. Rick we and this investments manage will continue well as refinance benefit mentioned, positioned activity declining purchase home believe our As align from and we structure a the and to rate

continue in at now greater previous continue our will losses. move to results new prior-period of cure offset Credit that on for established positive. significantly than for trends provision defaults releases defaults. expectations, our resulting to to Throughout have reserves our I XXXX, be rates

down continued These $XXX if of results releases declined as XX, potential X, are over reinsurance, releases as amount warranted. December trend as resulting past XXXX, future million of to $XXX quarters conditions million of January available balance, have for the from the our net reserve of less several of prior-period reserves has to in total XXXX,

resulting experienced from As loss price Rick strong by continues experience mentioned, recent the home homeowner primarily appreciation embedded equity to years. in the our driven significant be favorable

On trends primary Slide our we for default inventory. provide XX,

of prior at by portfolio approximately primary and loans, The a the default flat for seasonal inventory was us defaults quarter ending year-end rate periods. of consistent the to in expected was Our services seasoning representing new trends. portfolio approximately insured XX,XXX XXXX to our of 'XX, reported fourth both with default X.X% at XX,XXX of number

million trends of maintain defaults for We provision new new partially services. defaults our due continue reserve at to on Positive for offset resulting this roll $XX new loss quarter. claim the assumption just the provision development favorable claim rate million, default cure withdrawals higher in during to by for and defaults $XX discussed X%, reported prior-period defaults of to

loss for losses provision As of a benefits. result, in our in the consecutive provision following recognized we million X net insurance net quarters of a quarter, mortgage $X fourth

Turning to other our expenses.

As at expenses a operating beginning range other $XX combined to the savings million significant for This the our $XX of in end 'XX. and million cost savings our efforts, expense the we expense to XX% million had of result at of consolidated $XX compared of a aimed was million XXXX. to $XXX were decrease result or of reduced higher XXXX, of services

quarter fourth certain the the for results impact Our includes impairments. of

in expenses footprint fourth to maximize primarily as included million operating assets related rightsize continue lease-related long-lived efficiency assets to impairments the in and Our of our other to quarter, $XX savings. office cost we

remaining homegenius a our wrote expense we to related the as off in In $XX addition, nonoperating goodwill million segment.

As goodwill balance acquired 'XX, sheet. on we or remaining year-end no have intangible assets other of our

efficiencies. seek additional We our expenses continue actively and to manage operating opportunities for

our strong. holding dividend guidance finally our of million actions. XXXX, Radian expected $XXX $XXX available that from related to The capital, we liquidity financial the we and company. subsidiary, our to Radian Guaranty strategic to Guaranty, provided primary operating At position Moving million remains to of beginning

Radian XXXX, total to bringing paid end high each of of Guaranty million, in previously $XXX are dividends the our quarter pleased $XXX provided We that ordinary million consistent dividends guidance. with

from million. to $XXX paid Group Radian ordinary will XXXX Radian $XXX of and to estimate be in range We in increase Guaranty million the dividends the

in quarter We to first to million year, by dividend Group pay quarterly this of later expect dividend followed Guaranty larger the Radian $XXX payments in year. ordinary Radian the

reinsurance the agreements excess required assets X Guaranty's $X.X excess billion loss new increased PMIERs assets by Radian billion, as of the capital executed of fourth during a the available from over to provided primarily quarter result minimum in relief $X.X October.

Our $X quarter. company approximately fourth the remained liquidity available the stable at of at holding billion end

credit facility, million have a flexibility. with significant financial $XXX also providing us We undrawn

at the repurchased a million we shares including cost of million X.X $XXX XXXX, $XX fourth during shares During quarter. total repurchased of million,

end the share and XXXX. $XXX of repurchase As current expires of in remaining million January had XXXX, authorization of our

in have million ahead, Looking $XXX due XXXX. we this in coming October senior March of of million debt $XXX comes of debt year of that and due senior

we our with liquidity current flexibility. S&P strong recent capital structure, As provides to and our upgrade our us seek optimize from position ratings

We are these debt outstanding address may to and evaluating options XXXX. seek maturities our to debt during reduce

I year over year for and Rick. will back market the results resiliency company, as highlights XXXX challenges Our the result strength the many faced now full of other in mortgage a of fourth contrast environment. call the the quarter the to overall and over past turn participants macroeconomic our to

Thank you, Sumita.

your Before and on to remain call plans. we to I with strategic we highlight our the executing results focused that want pleased questions, open our are

across businesses. $XX combined cost We are reduced And of XX% in consolidated million. we by driving operational operating excellence our expenses or successfully and XXXX, other our services

mortgage going valuable highly significant expected is and growing deliver high forward. earnings insurance $XXX portfolio, reached Our an billion, which all-time to

$XXX XXXX, Radian repurchases. to In $XXX $XXX from Radian dividends through by of increased strategically paid PMIERs dividends share cushion million continue capital. returned stockholders and we to of and Group, our manage ordinary million, to capital Guaranty We million

work Radian thank confidence. of and do Most the One at every investors outstanding together to our I'd their dedicated importantly, for thank a recognize to like Radian day, and you as we team. they and accomplished for team continued customers and all working support this experienced and the

And to now operator, take happy we would be questions.

first comes The KBW. Instructions] George question [Operator from Bose with

to just notices. wanted ask first new Actually, about I

your season, 'XX, to 'XX, 'XX continues books are grow? you your expectations just As what And think there? notices books, do number new the the

book, of playing Derek. in the development terms Bose, expected Thanks. kind Yes, it's Hi, as it's of of out the favorably. pretty and

QX. at saw, QX, look increase, look year-over-year the 'XX, you the cures XXXX new we actually QX what quarter-over-quarter very saw we in increase Also, at most notice development we if in and recent unlike So quarter. that similar saw to if in you which,

is to on just other -- thing would I new important The focus not defaults.

the Looking at to default was at the levels so rate at X.X%. continues around default flat rate, That be quarter. actually low last

increase. may have of a seen of some think competitors bit an I our

positive that's So been development. a

to is our with XX% embedded seeing of least thing And defaults significant to having see at other The we're continue new equity. at new notices alluded we equity. Rick XX% that defaults.

So in QX, a little less than XX%.

as was it equity defaults least new of I think XX% had at XX% well.

when look the kind developing So very of book, expected as and we at favorably.

Okay. wanted switch capital. over helpful. And I to Great. to That's just

debt? you to that you what How company dividends balancing noted You return in up the year. versus terms holding capital this are do your might coming of of

indication that Yes. like prepared of And breaking I my gave just both think some planning what little are I we bit. but down for maybe in a remarks,

pay to should So to able Group. be Radian Radian dividend our much guidance increasing how of we from from we Guaranty dividends are --

we million We're conservative we to that increasing in last are and year, $XXX million still guidance year, $XXX of to instead the $XXX the million. $XXX paid early so that there. So million being we're

I number. this probably think we in be the given guidance our that felt appropriate we upside would there's are at that But some to that year, stage. conservative early

remarks prepared at this I in options that balancing again, In debt, our terms about my our that I indicated think thinking opportunistically looking are so of with we year.

are reducing our given would ratings credit looking other our the We may to market, access this debt year. credit to environment, fact our the issuers constructive we upgrade, that look options. the consider year, Given market evaluate S&P this the overall there many

I the have table. don't a But make all of we think about really as that think I between choice to as well is return. debt capital thinking our thinking our on So about

excess We our capital that fortunate liquidity holding position in are where significant have we in and company.

think Rick than billion. less a mentioned it's little I $X

do we may want So I really a of this what think we are place year. terms to in in good

from The question comes UBS. with Doug next Harter

the we any heading as kind rate Were onetime premiums a Can Or in about about that costs run think increase is this ceded XXXX? quarter? in into you there reasonable talk there? of

Yes.

really onetime by result deals. expense I on bit risk just place distribution think deals really more quarter. of you would And is And a gives you no at to premiums look last XX, Slide in what by detail want if there. distribution little think -- X put is that say some our It I it's driven real the take it there of maybe ceded a a risk that those in we the quarters. I is

we up, in went premium given that the put reinsurance just ceded our place. So deals

to point the of would also positive I that.

PMIERs that attributed again to is that put up. saw in It go we the our You reinsurance buffer deals did place.

about distribution. at did million. up right distribution go ceded to about cost reinsurance. And with of want that and time, buffer the comes premiums we right have and our So this that's the risk prospect pros do when our more thinking always but said con the We've also $XXX it capital of up that by the go access at we

I deals holding increase the execution -- the up one guess, to to for that of of allows your on is that company the those dividends those lines, allowed the you year? along the guidance factors you

Not at all.

say think to own of of basis on are to from distinctly capital. even But we and about business, the we it really us. think day. pretty to not because our that underwrite pricing our We day-to-day we it us I new kind flexibility. day that do risk available it distribution We about strength on premise do the do is distribution would need distribution. that more manage how appropriate, don't this be fact, this When In gives our the doing would we we of business

perspective it the a do the We access try We've we always distribution said that when capital. risk we opportunistically. cost of from markets to like

at X.X%. of think really think underwriting. that about we distribution to on risk I we've of to risk. reinsurance cost cost So depend capital year day-to-day last indicated At that done we've our capital, distribution that of the typically we X.X% about not do But of like

annual And Radian and just also the driven statutory that, Yes. to largely the Radian to through so really Guaranty, our Group, earnings is add from dividend earnings.

the reserves point, to Radian surplus of outstanding positive risk But those release talked So ordinary is Group as look perspectives. providing really we've of at the Sumita's earnings contingency create the we Radian an by strength distribution driven period, Guaranty to overall, dividend from about, to from prior our dividend.

of started as one first now why so last time, kind we of our earnings XX ordinary here. what forward And when capital the dividend expect first we think, reasons something a develop of recurring year, pay to like that, I upon the structure based part go years, to we that's

in So opportunity it through from of capital something see we capital but pretty take and arbitrage powerful the risk is piece, trade. a and risk a value trade distribution the advantage really we when

comes Mihir America. question with of next Bhatia Bank from The

I wanted to start on Slide XX.

a have just I being trying about I cures. delinquency are much without of you disclosure payment that. One you a that curious, resolved Obviously, remarks, new was built question with lot guess, prepared And in notices receiving. in claims a you to on to how talked something that equity think this signal increase? included new you the is X-part expect a you there are Do this? your the I why? about as Are is, in

-- of used -- in not as us. happen this appreciation, et maybe numbers. at increasing, numbers a for that any context home to I given go price historical put -- -- the the we've are with meaningful just bit level cetera, ahead. So like little the all presume never This

to the atypical, probably the we've really, in of has a years Mihir, terms Yes, the years I state withdrawal. been been X it's claim in X.X mean for last bit Derek.

instance, cure it, the at look I most around pending think, rate recent this was you if XX%. our claim So inventory, for quarter,

environment, been for ever, in equity embedded it's withdrawals. some driven at claim resulting the strong part importantly, So employment, so with most right? that reemployment, the large of and portfolio, to And been but the by a the is in level is Rick that's so macroeconomic highest time So trend pretty seen at number consistent it's embedded equity, large continued now. we've in it referring that

do without keep increasing numbers But claims resolved you payment? think the like these

down, kind terms of it base of Well, of going the are of I kind in move -- the so that's defaults mean to that going depends. around.

to same don't coming it I just percentage, In new is in of in, we've on been defaults the equity the so level coming horizon down To portfolio. substantially. the had, date, terms moving depend upon and of close pretty the going see embedded in they've terms to

I new of at if see prices are now which good down growth, probably a existing driven But is price some it but to home puts on for you need the come double-digit home home embedded because business. little significantly. you'd appreciation, equity a some where really look price we think is pressure spot good in portfolio, was by the that

right where home good are we to Where now, price X% we're spot. pretty a seeing is appreciation X%

be continue vintages. that positive should in of So to terms new

into default As through they be maybe where coming where default to move home embedded price equity, unlike peak, X% seen years, years past you've ago, they X% appreciation. some should with -- seasoning

able little like a a or to Or wanted thinking reasonably be is expect that? how capital we should going expansion to opportunities the that returned about about homegenius, you impact be upsized Got expect what go thought is up a What good of like upsized bulk then shareholders dividends? Is in it's -- things get to capital plan get is to the these the mean, invest hear coming like for there insurance it's -- that's to that that it. the talk the that. what of I distribution of is subsidiaries. just from it out invest guess, M&A, And that shareholders? more whether bit about whether to can is to are I maybe -- -- use of that the I But

Yes.

some just context. maybe think I

dividends. $XXX that. we million think of million you of returned about If just pay $XXX We said had we'll to right, $XXX million XXXX,

that out as So and year. share million $XXX went dividends last of repurchases million $XXX

we share. the in fourth back $XX about In just million fact, quarter, bought of

of we opportunities. And yes, we So would maybe, debt. would could be disciplined Rick, shareholders. about I want to go few portion to And I strategic big a to be want say continue towards also add to of evaluate A that used part you would that back would a it. probably comments But say, that other here.

mean, along I we kind track of for say and would about record Yes. I with speak in shareholders, itself history of about disciplined general. just just our return terms how to are our thinking capital return in

our So and last I look have. good I buybacks. you the we sits look the of over a It's just dividends billion several kind And an at of within returned capital luxury $X.X years think capital Guaranty, the track at And from cushion have through When excess share Radian Radian of record Radian today. the Guaranty, look capital Group problem at have excess of there. PMIERs you we flow to capital.

capital shareholders. a be going of We're on focus opportunities to of in always your capital going question, capital. to always stewards good Mihir, thinking through to to continue to to We're aware allocation. and hindsight. it to We return alert strategic and waterfall we're other opportunities So about talk

capital But quick very and I Sumita those, and And our consideration. we've in situation great there they I to really we're see are consider disciplined very opportunities kill. arise, excess situation to dozens those that the them could of with should throughout about evaluating John and year, been opportunities. warrant we're think and really a

what say. I So would that's

that talking that a more to bit be to. things my coming pipeline has be touch a few base down that that investors that with the seems regulations just should regulatory probably then of? for discussion on regulatory last the maybe coming MI your impact I there investors but could the just big seeing the quiet question, something that's attention last little that larger paying just around know business, worth are quarters. can are have down been changing, aware I'm always like It like developments. you're And Okay. anything Is

see base we touch I where So on wanted to at just are to that.

been Yes, Basel But terms the kind broader say, quiet other of Mihir, a good for when independent the can all about -- us. and many it as as would directly rules matters of And mortgage a it in relates impact discussion you number on But news bit. it's look, don't been regulatory in tag and not I has this the banks. impact I as quiet, of team it say, think, there from is, Derek, like respects mortgage of there's different impacts banks one little to market mortgage you are the around I and that, participation capital the directly a III us. out that think kind things on just relatively that

we're in you the that. very chatter little we opportunity to right changes But There of fact, would it around a and where have that as III I relates agree, lot I Basel us activities and now, we to are directly In of was say, it. bit a quiet a a different FHA period perspective to from created an Derek? say Would just would kind around conduit in MI. close participate and continue actually for of evaluate appropriate. kind of watch

the Yes, the that's on think on just most well side industry, risk. in rating really add you've would how transformed beating recognized that's upgrade is strength the industry the kind just financial and just I and policy seen of from about industry of in and the I has strength, aggregating an terms recent the of which

it, mean, we a capital and look more the you affordable buyer So that private helps an are home when first-time at cycle. Also, through much resilient segment. I

sides that the aisle. of perspective, from we're on So in political a looking really kind spot of good both

industry I is you the leadership, in have if changes kind think of So placed. of regulatory terms well

from The Scott next Heleniak question with Capital Markets. comes RBC

Well. Yes.

had on just was ratio. I question expense the First

the progress You've down made on bringing that good year. for

took so you of And -- lot out. did you a costs

is you could -- further right it be Or or of where rate you kind the XXXX? expectation that improvement the are You see run rightsized. the now? Is to run expense from in rate going stable

for Scott, Thanks, question. that Yes.

million $XX reduction had operating saw services in guidance think, XXXX, cost cost of to of in about million as cost which I million other achieve is we of a savings and were XX% expenses. we So our to able 'XX, of initial given you savings, and $XX $XX in

heard the also -- including acquired us the of QX, writing that some of about talk You we intangibles. cleanup completed activity in

perspective, are from about from. So starting sheet where we year a I really think we feel good this balance

I forward, a some onetime items. is indicator think run good going quarter of the fourth those rate of the excluding

specific We giving expense this yet. are not guidance year

took expenses the I still it's about of last we our out early think XX% in year. and year,

dollar are that So make a looking I lines. guidance to we we always efficient, our would across expenses are we say our But yet. that looking continuing sure business we're and are specific not at to remain giving

think dollar look I like guidance initiative, are for this ongoing giving specific may we So of not an what that but that's year. a

Okay. that fair. all months, you you're And Can just gears how whether on seeing out fourth little seeing to third XXXX? you pricing. any bit playing you've switching year? and thoughts talk about few in in a see any what just And at kind been major versus the into of in last shifts That's the quarter quarter

a Yes, in terms positive. pricing, Hi, quiet, Scott, this pretty of is Derek. which is

has in we fairly last say, at the view really, pricing when I improved. think sense since as our flat, positive in outlook the call, that would the a I macroeconomic look So which we industry, significantly

You're prices seeing home go up.

probability a think there's landing. soft decreased I of a

price is flat positive. to stay very see So

XXXX. look that was is The it substantially it's in you above other where I'd thing when pricing, point at out

levels, go appropriate, is we is you our years through risk at X.X pricing looking X back which think when the cycle. to higher at years, the So

say, quiet would I in overall, terms pretty development. of quarter-over-quarter So

yield some do average was the investment kind opportunity coming yield? in to Great. where of than X.XX% that Okay. then QX. feel expect you higher one, Or now, there to quarters? of get like is it's get last is to it any just on similar it kind the Is And -- was the the yield right you -- stabilized

Yes.

quarter we I new money yield. reinvestment current we've quarterly are our call Scott, than see think mentioned, do in our last rates higher that

overall for I our come given it portfolio, think it our to takes while just size the little of actually a portfolio. into

backdrop that we current say, overall upside levels, not have the would I XXXX. So from for given maybe but one meaningful rate our a interest some

comes Hagen question next BTIG. from The Eric with

billion for say feel any above Within your $XXX take lower $XXX maybe interest billion you which other you the this that for level? year -- there's rates, heard I it than Do NIW think outlook market. catalyst of like could to I

Eric. So Thanks question, for your this Rick. is

list I origination based purchase think is the with expected up obviously, kind refinance little in think, home declining demand met that's and the a supply of supply. now, we is of picking is catalyst right because -- to saw people that upon start extent purchase retrade so -- homes. rates, increase an range I the with to And available being think become bit. But began that's their I market to kind by

first-time second-, could because purchase for That would part homebuyers, third-time that to MI be And the see transaction. that of MI, be other especially market homebuyers, more You expand. is likely catalyst.

rates interest we're a going little but provide limited. So are supply now, to bit, right

think so to things would be construction, And similarly. expand supply extent that factors, of expand the based enable catalysts, I of would market the on building, variety those kind could to MI a different

good Maybe the point, ahead as back, I can had who slightly but used they think years what a little to I some more getting a also few that I live interest were terms environment. add their change, lower are rate of a interest waiting for homebuyers bit I do people curve potential to consumer Maybe rate confluence just of it's need lives. and here lot behavior. to as think And for go higher not a a of think at people rates. in great interest

it I that current think there people is interest as behavior So to rates. the to consumer get used aspect do a

this LTV good perspective. on can were that. your got share here? loans perspective the out there what and drop the persistency -- Any a speeds appreciate rates week. That's GSE given high I if there, from rate you We like might from prepayment look mortgage Yes. to what

mean I -- yes, it's Well, Derek.

money of which is from the looking touched of the perspective. refinance the So portfolio in at earlier, for outlook upon kind persistency, of a terms significantly most Rick out of

situation Sumita of persistency a So to fact having you Rick down in given the of of terms interest a kind terms but positive of think situation have rates up you you of originations, portfolio rate because where bit the out versus refi elevated pick portfolio. go typical that stays the much could of where have a when we of kind a the then still out money you rate lot so might side. Also, in of origination interest were dip, at have movement, and your a it, of an I be look alluding your

in to of basis say, rates be of kind kind within down. if points spot within a XXX might let's corridor, certain kind XXX we So of a stay good

interest in which to And say of significant think to pickup lot stickiness would I there's I portfolio. would significant parties think third we're or are it prepayments. take in decreases see rates, don't most So I that a projecting projecting, a the

the more fair now, Yes. a some that it refi, to you feel assumption MI of they there require were again? flexibility MI most Or would folks, like? they with is if borrowers Is for

the more portfolio. depends Well, there's It just flexibility. on

in the that to less and going recent vintages, -- seen side. The penetration you've think there's be So been -- a bit of kind has I the embedded that refinance little on equity. rate more

So who those in going closer are look vintages have they're and equity. be the year, at less to to like if going recent are last money being to the embedded you

to money, a they so that perspective. higher to So kind there the are might versus some put have mortgage probability need But far portfolio, have older older of respect out the of the with -- overall they versus would that you so in vintages. insurance of the be vintages,

I to now this no Thornberry time. back Rick turn further would call I like for to remarks. questions closing at show the

that for are to We we this you the hope forward and Thank as with everybody Super for good you. luck those of investors, that appreciate also really you Chiefs you our received soon. their support from questions. excellent you And And good for participation weekend, we well. I want I all who as of fans and fans, meeting And XXer look our Bowl the for the to have weekend. thank a

it. Take road. on that's the all seeing you forward to That's I Look got. So all care.

Thank you for participating. This concludes today's conference call.

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