Radian Group Reports Q2 2026 Results: Full Earnings Call Transcript

Radian Group (NYSE: RDN ) released second-quarter financial results and hosted an earnings call on Thursday. Read the complete transcript below. This content is powered APIs. For comprehensive financial data and transcripts, visit Access the full call at Summary Radian Group reported a 93% increase in total revenues year-over-year to $575 million, driven by the integration of Inigo, with net earned premiums up 116%.

The company has successfully transformed into a global multi-line specialty insurer, divesting non-core businesses like real estate services and focusing on insurance. Future guidance indicates a focus on profitability despite a softening market, with a projected 20% increase in specialty earned premiums in the second half of 2026. The mortgage insurance business remains strong, with new insurance written increasing 14% year-over-year and persistency reaching 82%.

Radian Group returned $76 million in share repurchases and $37 million in dividends to stockholders during the quarter, with expectations to reach the upper end of a $200-$250 million share repurchase range for 2026. Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the second quarter 2026 Radian Group earnings conference call. At this time all participants are in a listen-only mode.

After the speakers' presentation, there will be a question-and-answer session. To ask a question during the session you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bob Lalley, VP of Finance. Please go ahead. Bob Lalley, VP of Finance Thank you and welcome to Radian Group's second quarter 2026 conference call.

Our press release, which contains Radian Group's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website. This press release includes certain non-GAAP measures that may be discussed during today's call, including adjusted pre-tax operating income, adjusted diluted net operating income per share, and adjusted net operating return on equity. A complete description of all our non-GAAP measures may be found in Press Release Exhibit F, and reconciliations of these measures to the most comparable GAAP measures may be found in Press Release Exhibit G. These exhibits are on the Investors section of our website.

Today you will hear from Rick Thornberry, Radian Group's Chief Executive Officer, Mike Weinbach, Radian Group CEO Elect, and Dan Cabell, Senior Executive Vice President and Interim Chief Financial Officer. Before we begin, I'd like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially.

For more information regarding these risks and uncertainties, as well as certain additional risks that Radian Group faces, you should refer to the risk factors included in our 2025 Form 10-K as well as to subsequent reports filed with the SEC. These are also available on our website. Now I would like to turn the call over to Rick. Rick Thornberry, Chief Executive Officer Thank you all for joining us today.

Before discussing our second quarter results, I'd like to highlight another important milestone in Radian Group's strategic transformation. S. mortgage insurer into a global multi-line specialty insurer while divesting non-core businesses and becoming a more focused insurance organization. Since then, we have successfully closed the Inigo acquisition and integrated the business into our organization, and we have taken definitive action to complete the divestitures including completing the sale of our real estate services business this week, entering into an agreement to sell our title business, and earlier this year exiting the mortgage conduit business.

Together, these actions have sharpened our focus on insurance, expanded our product set, simplified our portfolio, reduced organizational complexity, and delivered on the key strategic actions we outlined less than a year ago. The Radian Group we are today is meaningfully different from the company that announced that strategy last year. Our mortgage insurance business, which has been the foundation of our company and a significant driver of value creation for stockholders for nearly 50 years, continues to generate strong earnings and capital.

Combined with Inigo, we are now a stronger, more diversified, and more focused organization with two complementary and uncorrelated insurance businesses, greater capital allocation flexibility, and access to broader growth opportunities across global insurance markets. Most importantly, our team has executed on the commitments we made and positioned Radian Group for its next chapter of growth. The second quarter marked our first full quarter with Inigo and another important step for Radian Group as a global multi-line specialty insurer. The financial benefits of this combination are already evident in our results.

Total revenues increased 93% year over year to $575 million, while net earned premiums increased 116% to $504 million. Our mortgage insurance business once again produced strong underlying performance and remains a powerful source of earnings, capital generation, and embedded economic value for our company. New insurance written increased year over year, reflecting continued strength in purchase activity combined with the value of our proprietary data and analytics capabilities and our deep customer relationships.

Primary insurance in force reached a record $284 billion, with persistency remaining strong, supporting the embedded value of our portfolio and future earnings generation. Credit performance continues to reflect the quality of our insured portfolio and our team's unwavering commitment to disciplined underwriting. We are proud of the important role private mortgage insurance plays in the home finance marketplace by helping borrowers responsibly and sustainably achieve homeownership. Turning to our specialty insurance business, as I mentioned, this quarter marks our first full reporting period.

Reflecting Inigo's contribution, the specialty insurance business is already contributing meaningfully to the diversification of our revenue and earnings profile. During the quarter, our specialty segment represented approximately 50% of total revenues and 53% of total net premiums earned, highlighting the scale and earnings contribution of our new business mix. The strategic value that the combination with Inigo brings to Radian Group is clear, reinforcing both the benefits and the opportunity ahead.

While the underlying specialty insurance portfolio continues to perform well, it is important to acknowledge that market conditions have become more competitive and rates continue to soften. The current rate environment is consistent with the cyclical dynamics we anticipated when underwriting the acquisition. The Inigo team is maintaining their focus on underwriting discipline and rate adequacy while also allocating capital to the most attractive opportunities. Our priority is profitability, not any particular revenue growth target.

We believe Inigo's diversified portfolio, strong analytics capabilities, unwavering commitment to strong underwriting, and experienced leadership team position the business well to navigate market cycles and selectively deploy capital to the highest-value opportunities. At the enterprise level, our capital position remains a significant and core strength. The earnings power and capital generation capabilities of our businesses provide us with meaningful financial flexibility.

During the quarter, we continued to return capital to stockholders through both dividends and share repurchases while maintaining the financial strength needed to support growth opportunities across the enterprise. As always, we remain focused on prudent capital management and creating long-term value for stockholders. Before I turn the call over to Dan to review our financial results, I would like to invite Mike Weinbach to share a few thoughts. As many of you know, Mike recently joined Radian Group as CEO Elect and has already spent considerable time engaging with our employees, customers, investors, and business leaders across both the mortgage and specialty segments.

He and I are working closely together to execute a seamless transition of leadership. Mike brings significant industry experience, a strong leadership track record, and a deep appreciation for the strengths that make Radian Group and Inigo unique, including the value of our talented and experienced teams. I'm excited about the future of this company under his leadership. Mike Weinbach, CEO Elect Thanks, Rick.

First off, I want to share how excited I am to be a part of Radian Group, and I want to offer two things to Rick. One is my congratulations on all you and the team have accomplished under your leadership. Radian Group is a transformed company due to your vision, leadership, and execution. The second is my thanks.

Having the opportunity to come in as CEO Elect on June 1st, where I could observe and learn before having to make decisions, was a true gift. So thank you, thank you, thank you to you and your family, who's had to wait a little bit longer for Pawpaw to be your primary job. And for my fellow investors, I'll expand a little more on why I'm so excited to be here. Radian Group—and I fully include Inigo when I say this—has great people, a great culture, and great platforms.

We have a leading mortgage insurance business led by a team with decades of experience combined with an excitement about asking how we can make the business even better. We have a leading specialty insurance business which is stocked with experienced insurance experts who came together to build something new and better than what they had experienced at their prior organizations. We're still early in that journey, and the progress the team has made gives me great confidence in what lies ahead. I'm still learning and plan to take advantage of every minute I have with Rick while in this role and when he continues as a strategic advisor to me and the board into the future.

But I'll go back to where I started. I'm excited, and you should be too, about all the possibilities ahead for Radian Group and Inigo and the talent we have to realize them. Rick, back to you. Rick Thornberry, Chief Executive Officer Thank you, Mike.

The team and I are thrilled to have you on board, and as my tenure comes to an end, I look forward to what is ahead and I'm confident in the future of Radian Group in your hands. With that, I will turn the call over to Dan to review our financial results in more detail. Dan Cabell, Senior Executive Vice President and Interim Chief Financial Officer Thank you, Rick. I'm pleased to provide additional details about our second quarter results on a GAAP basis, which includes the impact of certain one-time costs related to the Inigo transaction, as well as non-cash amortization and purchase accounting adjustments.

87 per share with a return on equity of 10%. 14, and adjusted net operating return on equity was 13% this quarter. Our operating results reflect continued strong underwriting performance across both our mortgage and specialty segments, continued growth in investment income, and disciplined capital management. The results also include the expected seasonal expense associated with our annual share-based incentive compensation plans, as well as the establishment of reserves in our specialty segment to reflect ongoing developments in the Middle East.

On a year-to-date basis, our adjusted net operating earnings per share has increased 12% compared to the prior year as we continue to see immediate financial benefits from the Inigo acquisition. 5% year over year to $36. We also returned dividends to our stockholders over the past year that were equivalent to an additional 3% of book value. On a consolidated basis, our total revenues grew 93% year over year to $575 million, primarily driven by the revenue contribution from our specialty segment.

Our net premiums earned are now well balanced across our segments, with our specialty segment accounting for 53% of second quarter net premiums earned. 1 billion consists of well-diversified and highly rated securities. At an enterprise level, we generated $75 million of net investment income this quarter. An increase of 21% from a year ago, primarily driven by growth imbalances.

Our investment portfolio has continued to be an important contributor to our earnings and the addition of Inigo's investment portfolio further enhances this strength. 3 billion in the quarter, an increase of 14% year over year. Persistency also remained strong in the quarter, increasing to 82%. Our large, high-quality mortgage insurance in-force portfolio grew 3% year over year to an all-time high of $284 billion.

5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term. Our in-force premium yield was stable this quarter as we continue to generate consistent premiums from our valuable mortgage insurance portfolio. Our mortgage provision for losses and related credit trends continue to be positive, with strong cure activity and low claim levels.

We reported approximately 12,400 new defaults in the quarter, a decline of 9% from the prior quarter. 47%. Our cure trends have also been consistently positive, meaningfully exceeding our initial default-to-claim expectations this quarter. These favorable cure trends drove $20 million of favorable development from prior period defaults.

Consistent with prior years, our second quarter operating expenses in both our mortgage segment and corporate area reflect the timing impact of our share-based compensation plans. This expected seasonal item is the primary driver of the increase in expense in these areas compared to the first quarter of 2026. Importantly, underlying expense performance remains strong, with mortgage segment operating expenses declining 7% year over year and the mortgage segment expense ratio improving to 23% from 25% a year ago. Now turning to our specialty segment, net premiums earned were $267 million, an increase of 9% year over year.

In our specialty business, we continue to target opportunities to write attractive business across a range of insurance and reinsurance lines as the environment has become more competitive, particularly in property insurance and reinsurance. The team remains thoughtful and disciplined in its underwriting approach, focusing on maintaining sound underwriting margins to drive profitability. It is important to note that the specialty segment tends to exhibit meaningful seasonality in how premium revenue is recognized during the year.

Earned premiums in the second half of the year are typically higher than in the first half, as shown in the Inigo quarterly results for 2025 included in Press Release Exhibit J. As a result, we anticipate second-half earned premiums in 2026 to be approximately 20% higher than in the first half of the year. Operating expenses in our specialty segment were $39 million this quarter, in line with the full prior quarter. As noted at our recent investor day, Inigo's business was intentionally built with a simple and scalable operating model, supporting our ability to maintain an appropriate expense ratio through a softening market cycle.

Total loss provision within the specialty segment was $169 million, which included $24 million of favorable net development for prior period reserves, primarily seen in property lines. We are pleased that the acquired reserve portfolio has developed more favorably than expected since the acquisition. Consistent with our thoughtful approach to establishing reserves, particularly in cases with significant uncertainty, we've set reserves this quarter to reflect the ongoing developments in the Middle East. These reserves reflect both the expected and potential claims related to the ongoing conflict, as well as updated inflation assumptions across our full insured portfolio.

Given the related macroeconomic uncertainty and potential inflationary pressures associated with the conflict, our specialty segment net combined ratio, which includes the impact of these reserves, was 98% for the second quarter. As we noted previously, we expect variability in our specialty segment combined ratio over time, and the impact on second quarter ratios from the Middle East reserving is elevated given the seasonally lower premiums in the first half of the year. As I noted earlier, over the first half of 2026 the specialty combined ratio is 93%, which is elevated due to the reserving for the Middle East developments.

As noted, absent this item, the combined ratio in the first half of the year would be in the high 80s, which is consistent with our expectations heading into the year.