Radian Group Inc.

Ladies and gentlemen, thank you for standing by. Welcome to Radian's third quarter 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker's 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 like now to turn the conference over to John Danion, Senior Vice President, Investor Relations and Corporate Development. Please go ahead.

Thank you, and welcome to Radian's third quarter 2023 conference call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the investor section of our website at www.radian.com. 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 of our non-GAAP measures may be found in press release exhibit F, and reconciliations of these measures to most comparable gap measures may be found in press release exhibit G. These exhibits are on the investor section of our website. Today, you will hear from Rick Thornberry, Radian's chief executive officer, and Sumit Dipandan, chief financial officer. Also on hand for the Q&A portion of the call is Derek Brummer, president of Radian Mortgage. Before we begin, I would 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 discussion of these risks, please review the cautionary statements regarding forward-looking statements included in our earnings release and the risk factors including in our 2022 Form 10-K and subsequent reports filed with the SEC. These are also available on our website. Now I'd like to turn the call over to Rick.

Good afternoon, and thank you all for joining us today. I am pleased to report another excellent quarter for Radian. Gap revenues grew year over year to $314 million. We generated net income of $157 million, or 98 cents per diluted share. Our annualized return on equity was 15%. and adjusted net operating ROE was 16% in the third quarter. Book value per share increased 12% year-over-year to $26.69. Radium Group paid a $35 million dividend to stockholders, reflecting the highest yielding dividend in the industry. We repurchased 1.9 million shares, or $50 million of common stock in a quarter. And our overall liquidity and capital positions remained very strong. These results reflect the quality and earnings power of our highly valuable mortgage insurance portfolio, combined with our successful track record of effectively managing our capital resources. We continue to monitor macroeconomic trends, including heightened geopolitical risks. While we continue to experience mortgage and real estate market headwinds in terms of higher interest rates, housing supply constraints, and affordability challenges, market conditions for our mortgage insurance business remain positive, including increasing home prices, employment stability, decreased inflation, and an improved reinsurance market for risk distribution. In terms of our mortgage insurance business, we continue to leverage our proprietary analytics and radar rates platform to successfully identify and capture economic value in the market. As a result, we wrote $13.9 billion of high-quality mortgage insurance business in the third quarter of 2023. This contributed to 4% growth year over year in our primary mortgage insurance force portfolio, which is the main driver of future earnings for our company. We continue to see positive credit performance in our mortgage insurance portfolio during the quarter, and our persistency rate remains strong. From a quality perspective, our $270 billion mortgage insurance portfolio has been well underwritten and has a strong overall credit profile. It's also worth repeating that higher interest rates result in higher yields on our $6 billion investment portfolio. This supports higher returns and generates incremental income that flows directly to our bottom line. In terms of the housing market, based on industry projections for the total mortgage originations of $1.6 trillion, we now expect the private mortgage insurance market in 2023 to be approximately $300 billion. And based on early industry projections, we expect a similarly sized MI market in 2024. While low inventory and strong market demand continue to create challenges for first-time homebuyers, These dynamics help to mitigate downside risk and home values, which is positive for our insured portfolio. And we believe the resulting pent-up demand also provides strong support for future purchase volume, which drives the growth in our large and valuable insurance-enforced portfolio. Given that our mortgage insurance business benefits from increases in demand, home prices, and purchase volume, our overall outlook for the business remains generally positive. With regards to our home genius business, we continue to navigate the market challenge of higher interest rates and limited inventory, which has constrained mortgage and real estate activity. We will continue to adjust our cost structure and align our strategy investments to the current market while positioning for an improved market in the opportunities ahead. And we continue to build on our strong track record for managing our capital resources. withholding company liquidity continuing to remain strong at $1.3 billion. Submitted, we'll discuss our capital position in more detail, including our two new reinsurance agreements. It's important to note that we continue to leverage our expertise in managing credit risk using an array of risk distribution strategies and structures in order to effectively manage capital and execute our aggregate, manage, and distribute mortgage insurance business model. We believe the strength of our capital position significantly enhances our financial flexibility now and going forward. Over the years, we've consistently demonstrated a strategic focus on capital optimization. As we noted previously, we carefully consider the balance between organic growth, the return of capital to stockholders, and other accretive capital allocation opportunities. Many of you have highlighted our differentiation from peers in terms of the capital return, as well as our effectiveness in unlocking trapped capital wherever feasible. As you've heard me say before, our company is built to withstand economic cycles, significantly strengthened by the P. Myers Capital Framework, dynamic risk-based pricing, and the distribution of risk into the capital reinsurance markets. Sumitta will now cover the details of our financial position.