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Radian Group (RDN) Q4 Earnings Top, Revenues Rise Y/Y
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Radian Group Inc. (RDN - Free Report) reported fourth-quarter 2023 adjusted operating income of 96 cents per share, which beat the Zacks Consensus Estimate by 15.6%. The bottom line decreased 8.5% year over year.
The results reflected higher monthly premium policy insurance in force and a decline in single premium policy insurance in force, offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Operating revenues increased 4.4% year over year to $329 million due to higher services revenues and net investment income.
Net premiums earned were $232.6 million, which decreased 0.07% year over year. Net investment income jumped 16.5% year over year to $68.8 million.
MI New Insurance Written declined 17.3% year over year to $10.6 billion.
Primary mortgage insurance in force totaled $270 billion as of Dec 31, 2023, up 3% year over year. The year-over-year rise reflects a 6% increase in monthly premium policy insurance in force and a 10% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of Dec 31, 2023, up 400 basis points (bps) year over year.
Primary delinquent loans were 22,021 as of Dec 31, 2023, up 0.5% year over year.
Total expenses increased 33.5% year over year to $148.8 million on account of higher policy acquisition costs and interest expenses.
The expense ratio was 25.5, which improved 180 bps from the year-ago quarter's level.
Segmental Update
The Mortgage segment’s total revenues of $282.9 million remained almost unchanged year over year. Net premiums earned by the segment were $230.3 million, up 0.2% year over year. Claims paid totaled $3 million, which plunged 62.5% year over year. The loss ratio was 2% compared with (18.9) % in the year-ago quarter.
The homegenius segment’s revenues of $15 million decreased 21% year over year. Net premiums earned by the segment were $2.3 million, which decreased 21.5% year over year. Adjusted pre-tax operating loss was $17.8 million, narrower than the prior-year quarter’s loss of $31.5 million.
Full-Year Highlights
Adjusted operating income of $3.88 per share beat the Zacks Consensus Estimate by 3.5%. The bottom line decreased 20.3% year over year.
Total revenues came in at $1.2 billion, up 4.2% year over year.
New insurance written of $52.7 billion declined 22.5% from the 2022 level.
The loss ratio was negative 4.6 compared with negative 35.5 in 2022, while the expense ratio was 26, which improved from 70 bps in 2022.
Financial Update
As of Dec 31, 2023, Radian Group had a solid cash balance of $18.9 million, which declined 66.2% from the 2022-end level.
The debt-to-capital ratio improved 210 bps to 24.4 from the 2022-end level. Book value per share, a measure of net worth, climbed 15.1% year over year to $28.71 as of Dec 31, 2023.
In the fourth quarter, adjusted net operating return on equity was 14.2%, which contracted 340 bps year over year.
As of Dec 31, 2023, Radian Guaranty’s Available Assets under PMIERs totaled approximately $5.9 billion, resulting in PMIERs excess Available Assets of $2.3 billion.
Share Repurchase and Dividend Update
Radian bought back 2.4 million shares worth $63 million, including commissions, in the fourth quarter of 2023. The board of directors paid a quarterly dividend of 22 cents per share.
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported fourth-quarter 2023 adjusted operating earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line climbed 32% year over year. Operating revenues of HIG amounted to $4.3 billion, which improved 7.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker.
Earned premiums of Hartford Financial rose 8.2% year over year to $5.43 billion in the fourth quarter, higher than the Zacks Consensus Estimate of $5.41 billion and our estimate of $5.35 billion. Pre-tax net investment income of $653 million grew 2% year over year and beat the consensus mark of $623 million but missed our estimate of $697.6 million.
MGIC Investment Corporation (MTG - Free Report) reported fourth-quarter 2023 operating net income per share of 67 cents, which beat the Zacks Consensus Estimate by 17.5%. The bottom line improved 4.7% year over year. MGIC Investment recorded total operating revenues of $285 million, which declined 2.1% year over year on lower net premiums written, partially offset by higher net investment income. The top line missed the consensus mark by 6%.
Insurance in force declined 0.6% from the prior-year quarter to $293.5 billion. The company missed our estimate of $300.7 billion. The insurer witnessed a 2.8% decrease in primary delinquency to 25,650 loans. Net premiums written declined 5.3% year over year to $219.1 million. The figure was lower than our estimate of $235 million. Net investment income increased 24.7% year over year to $57.8 million. The company beat our estimate of $56.1 million.
MetLife, Inc. (MET - Free Report) reported fourth-quarter 2023 adjusted operating earnings of $1.93 per share, which fell short of the Zacks Consensus Estimate by 1%. The bottom line improved 21% year over year. Adjusted operating revenues of MET climbed 21.5% year over year to $18.7 billion in the quarter under review. The top line outpaced the consensus mark by 3.6%. Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT), were $11.8 billion. The figure rose 8% year over year.
The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, improved 60 bps year over year to 20.6% in the quarter under review. Net income of $574 million dropped 63% year over year. Adjusted return on equity, excluding accumulated other comprehensive income (loss) other than foreign currency translation adjustments, improved 170 bps year over year to 13.8%.
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Radian Group (RDN) Q4 Earnings Top, Revenues Rise Y/Y
Radian Group Inc. (RDN - Free Report) reported fourth-quarter 2023 adjusted operating income of 96 cents per share, which beat the Zacks Consensus Estimate by 15.6%. The bottom line decreased 8.5% year over year.
The results reflected higher monthly premium policy insurance in force and a decline in single premium policy insurance in force, offset by higher expenses.
Radian Group Inc. Price, Consensus and EPS Surprise
Radian Group Inc. price-consensus-eps-surprise-chart | Radian Group Inc. Quote
Quarter in Details
Operating revenues increased 4.4% year over year to $329 million due to higher services revenues and net investment income.
Net premiums earned were $232.6 million, which decreased 0.07% year over year. Net investment income jumped 16.5% year over year to $68.8 million.
MI New Insurance Written declined 17.3% year over year to $10.6 billion.
Primary mortgage insurance in force totaled $270 billion as of Dec 31, 2023, up 3% year over year. The year-over-year rise reflects a 6% increase in monthly premium policy insurance in force and a 10% decline in single premium policy insurance in force.
Persistency — the percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 84% as of Dec 31, 2023, up 400 basis points (bps) year over year.
Primary delinquent loans were 22,021 as of Dec 31, 2023, up 0.5% year over year.
Total expenses increased 33.5% year over year to $148.8 million on account of higher policy acquisition costs and interest expenses.
The expense ratio was 25.5, which improved 180 bps from the year-ago quarter's level.
Segmental Update
The Mortgage segment’s total revenues of $282.9 million remained almost unchanged year over year. Net premiums earned by the segment were $230.3 million, up 0.2% year over year. Claims paid totaled $3 million, which plunged 62.5% year over year. The loss ratio was 2% compared with (18.9) % in the year-ago quarter.
The homegenius segment’s revenues of $15 million decreased 21% year over year. Net premiums earned by the segment were $2.3 million, which decreased 21.5% year over year. Adjusted pre-tax operating loss was $17.8 million, narrower than the prior-year quarter’s loss of $31.5 million.
Full-Year Highlights
Adjusted operating income of $3.88 per share beat the Zacks Consensus Estimate by 3.5%. The bottom line decreased 20.3% year over year.
Total revenues came in at $1.2 billion, up 4.2% year over year.
New insurance written of $52.7 billion declined 22.5% from the 2022 level.
The loss ratio was negative 4.6 compared with negative 35.5 in 2022, while the expense ratio was 26, which improved from 70 bps in 2022.
Financial Update
As of Dec 31, 2023, Radian Group had a solid cash balance of $18.9 million, which declined 66.2% from the 2022-end level.
The debt-to-capital ratio improved 210 bps to 24.4 from the 2022-end level. Book value per share, a measure of net worth, climbed 15.1% year over year to $28.71 as of Dec 31, 2023.
In the fourth quarter, adjusted net operating return on equity was 14.2%, which contracted 340 bps year over year.
As of Dec 31, 2023, Radian Guaranty’s Available Assets under PMIERs totaled approximately $5.9 billion, resulting in PMIERs excess Available Assets of $2.3 billion.
Share Repurchase and Dividend Update
Radian bought back 2.4 million shares worth $63 million, including commissions, in the fourth quarter of 2023. The board of directors paid a quarterly dividend of 22 cents per share.
Zacks Rank
Radian Group currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Multi-Line Insurers
The Hartford Financial Services Group, Inc. (HIG - Free Report) reported fourth-quarter 2023 adjusted operating earnings of $3.06 per share, which surpassed the Zacks Consensus Estimate by 28%. The bottom line climbed 32% year over year. Operating revenues of HIG amounted to $4.3 billion, which improved 7.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker.
Earned premiums of Hartford Financial rose 8.2% year over year to $5.43 billion in the fourth quarter, higher than the Zacks Consensus Estimate of $5.41 billion and our estimate of $5.35 billion. Pre-tax net investment income of $653 million grew 2% year over year and beat the consensus mark of $623 million but missed our estimate of $697.6 million.
MGIC Investment Corporation (MTG - Free Report) reported fourth-quarter 2023 operating net income per share of 67 cents, which beat the Zacks Consensus Estimate by 17.5%. The bottom line improved 4.7% year over year. MGIC Investment recorded total operating revenues of $285 million, which declined 2.1% year over year on lower net premiums written, partially offset by higher net investment income. The top line missed the consensus mark by 6%.
Insurance in force declined 0.6% from the prior-year quarter to $293.5 billion. The company missed our estimate of $300.7 billion. The insurer witnessed a 2.8% decrease in primary delinquency to 25,650 loans. Net premiums written declined 5.3% year over year to $219.1 million. The figure was lower than our estimate of $235 million. Net investment income increased 24.7% year over year to $57.8 million. The company beat our estimate of $56.1 million.
MetLife, Inc. (MET - Free Report) reported fourth-quarter 2023 adjusted operating earnings of $1.93 per share, which fell short of the Zacks Consensus Estimate by 1%. The bottom line improved 21% year over year. Adjusted operating revenues of MET climbed 21.5% year over year to $18.7 billion in the quarter under review. The top line outpaced the consensus mark by 3.6%. Adjusted premiums, fees and other revenues, excluding pension risk transfer (PRT), were $11.8 billion. The figure rose 8% year over year.
The adjusted expense ratio, excluding total notable items related to adjusted other expenses and PRT, improved 60 bps year over year to 20.6% in the quarter under review. Net income of $574 million dropped 63% year over year. Adjusted return on equity, excluding accumulated other comprehensive income (loss) other than foreign currency translation adjustments, improved 170 bps year over year to 13.8%.