Schedule II - Financial Information of Registrant

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Schedule II—Financial Information of Registrant

Condensed Balance Sheet
Parent Company Only

(In thousands, except per-share amounts)	December 31, 2023		December 31, 2022
Assets
Investments
Fixed-maturities available for sale—at fair value (amortized cost of $653,575 and $747,309)	$	623,957	$	675,948
Equity securities—at fair value (cost of $79,170 and $140,733)	83,620		140,804
Other invested assets—at fair value	6,222		3,958
Short-term investments—at fair value (includes $63,450 and $61,238 of reinvested cash collateral held under securities lending agreements)	316,991		108,232
Total investments	1,030,790		928,942
Cash	2,200		1,872
Investment in subsidiaries, at equity in net assets (Note C)	4,990,822		4,576,644
Other assets (Note D)	165,612		158,027
Total assets	$	6,189,424	$	5,665,485
Liabilities and stockholders’ equity
Liabilities
Senior notes	$	1,417,781	$	1,413,504
Net deferred tax liability (Note A)	226,141		196,829
Other liabilities (Note D)	147,697		135,825
Total liabilities	1,791,619		1,746,158
Common stockholders’ equity
Common stock ($0.001 par value; 485,000 shares authorized; 2023: 173,247 and 153,179 shares issued and outstanding, respectively; 2022: 176,509 and 157,056 shares issued and outstanding, respectively)	173		176
Treasury stock, at cost (2023: 20,068 shares; 2022: 19,453 shares)	(945,870)		(930,643)
Additional paid-in capital	1,430,594		1,519,641
Retained earnings	4,243,759		3,786,952
Accumulated other comprehensive income (loss)	(330,851)		(456,799)
Total common stockholders’ equity	4,397,805		3,919,327
Total liabilities and stockholders’ equity	$	6,189,424	$	5,665,485

Schedule II—Financial Information of Registrant
Condensed Statements of Operations
Parent Company Only

	Years Ended December 31,
(In thousands)	2023		2022		2021
Revenues
Net investment income	$	55,370	$	20,584	$	7,540
Net gains (losses) on investments and other financial instruments	(5,844)		(4,322)		980
Other income	—		78		11
Total revenues	49,526		16,340		8,531
Expenses
Other operating expenses	5,025		2,043		3,163
Total expenses (Note B)	5,025		2,043		3,163
Pretax income	44,501		14,297		5,368
Income tax provision	12,479		8,148		1,167
Equity in net income of affiliates	571,097		736,785		596,470
Net income	603,119		742,934		600,671
Other comprehensive income (loss), net of tax	125,949		(576,892)		(143,632)
Comprehensive income	$	729,068	$	166,042	$	457,039

Schedule II—Financial Information of Registrant
Condensed Statements of Cash Flows
Parent Company Only

	Years Ended December 31,
(In thousands)	2023		2022		2021
Cash flows from operating activities
Net cash provided by (used in) operating activities (1)	$	194,607	$	(71)	$	66,317
Cash flows from investing activities
Proceeds from sales of:
Fixed-maturities available for sale	129,650		56,934		195,452
Trading securities	—		8,868		—
Equity securities	60,755		—		—
Proceeds from redemptions of:
Fixed-maturities available for sale	168,639		194,859		301,788
Purchases of:
Fixed-maturities available for sale	(84,313)		(29,039)		(156,344)
Equity securities	(3,690)		(2,500)		—
Sales, redemptions and (purchases) of:
Short-term investments, net	(135,657)		188,149		113,939
Other assets, net	(10,664)		(3,851)		(864)
Capital distributions from subsidiaries	7,000		32,512		44,951
Capital contributions to subsidiaries	(49,750)		(8,000)		(43,250)
Net cash provided by (used in) investing activities	81,970		437,932		455,672
Cash flows from financing activities
Dividends and dividend equivalents paid	(145,908)		(135,437)		(103,298)
Issuance of common stock	1,755		1,341		1,382
Repurchases of common stock	(133,314)		(400,195)		(399,100)
Credit facility commitment fees paid	(904)		(814)		(3,325)
Change in secured borrowings, net (with terms three months or less)	2,122		60,270		1,057
Net cash provided by (used in) financing activities	(276,249)		(474,835)		(503,284)
Increase (decrease) in cash and restricted cash	328		(36,974)		18,705
Cash and restricted cash, beginning of period	1,872		38,846		20,141
Cash and restricted cash, end of period	$	2,200	$	1,872	$	38,846

(1)Includes cash distributions received from subsidiaries of $191 million, $50 million and $85 million in 2023, 2022 and 2021, respectively. Excludes non-cash distributions received from subsidiaries of $218 million, $888 million and $92 million in 2023, 2022 and 2021, respectively.

Schedule II—Financial Information of Registrant
Supplemental Notes

Parent Company Only

Note A

The Radian Group Inc. (the “Parent Company,” “we” or “our”) financial statements represent the stand-alone financial statements of the Parent Company. These financial statements have been prepared on the same basis and using the same accounting policies as described in the consolidated financial statements included herein, except that the Parent Company uses the equity-method of accounting for its majority-owned subsidiaries. These financial statements should be read in conjunction with our consolidated financial statements and the accompanying notes thereto.

See Notes 12 and 14 of Notes to Consolidated Financial Statements for additional information on the Parent Company’s debt obligations and capital stock.

The Parent Company has entered into the following guarantees on behalf of our subsidiaries:

■Beginning in 2022, Radian Group entered into certain Parent Guarantees to support its mortgage conduit business. See Note 12 of Notes to Consolidated Financial Statements for additional information.

■To allow our mortgage insurance customers to comply with applicable securities regulations for issuers of ABS (including mortgage-backed securities), Radian Group has guaranteed two structured transactions for Radian Guaranty with $54 million of aggregate remaining credit exposure as of December 31, 2023.

■Radian Group and Radian Mortgage Assurance are parties to a guaranty agreement, which provides that Radian Group will make sufficient funds available to Radian Mortgage Assurance to ensure that Radian Mortgage Assurance has a minimum of $5 million of statutory policyholders’ surplus every calendar quarter. Radian Mortgage Assurance had $9 million of statutory policyholders’ surplus and no RIF exposure as of December 31, 2023.

As of December 31, 2023, Radian Group recorded a net deferred tax liability of $226 million. This balance includes liabilities related to certain of our subsidiaries, which have incurred federal NOLs that could not be carried-back and utilized on a separate company tax return basis. As a result, we are not currently obligated under our tax-sharing agreement to reimburse these subsidiaries for their separate company federal NOL carryforward. However, if in a future period one of these subsidiaries utilizes its share of federal NOL carryforwards on a separate entity basis, then Radian Group may be obligated to fund such subsidiary’s share of our consolidated tax liability to the Internal Revenue Service.

Note B

The Parent Company provides certain services to its subsidiaries. The Parent Company allocates to its subsidiaries expenses it incurs in the capacity of supporting those subsidiaries, including operating expenses, which are allocated based on the forecasted annual percentage of total revenue, which approximates the estimated percentage of time spent on certain subsidiaries, and interest expense, which is allocated based on relative capital. These expenses are presented net of allocations in the Condensed Statements of Operations. Substantially all operating expenses and interest expense have been allocated to the subsidiaries for 2023, 2022 and 2021.

Amounts allocated to the subsidiaries for expenses are based on actual cost, without any mark-up. The Parent Company considers these charges to be fair and reasonable. The subsidiaries generally reimburse the Parent Company for these costs in a timely manner, which has the impact of temporarily improving the cash flows of the Parent Company, if accrued expenses are reimbursed prior to actual payment.

The following table shows the components of our Parent Company expenses that have been allocated to our subsidiaries for the periods indicated.

Total allocated expenses
	Years Ended December 31,
(In thousands)	2023		2022		2021
Allocated operating expenses	$	163,858	$	163,000	$	147,386
Allocated interest expense	82,734		82,568		82,833
Total allocated expenses	$	246,592	$	245,568	$	230,219

Note C

During 2023 and 2022, certain non-insurance subsidiaries had not generated sufficient cash flow to reimburse the Parent Company for its share of its direct and allocated operating expenses, and therefore the Parent Company effectively contributed a total of $110 million and $82 million, respectively, to these subsidiaries to reflect the impairment of the intercompany receivables representing unreimbursed direct and allocated costs.

See Note 16 of Notes to Consolidated Financial Statements for additional information related to capital transactions between the Parent Company and its consolidated insurance subsidiaries, including $400 million in ordinary dividends paid during 2023 from Radian Guaranty to Radian Group.

Note D

As of December 31, 2023 and 2022, the Parent Company’s other assets related primarily to: (i) its participation in a securities lending program; (ii) intercompany receivables; and (iii) property and equipment. As of December 31, 2023 and 2022, the Parent Company’s other liabilities related primarily to: (i) accounts payable and accrued expenses and (ii) its participation in a securities lending program. See Note 6 of Notes to Consolidated Financial Statements for additional information on this program.