Radian Group Inc.

Good day and thank you for standing by. Welcome to the third quarter 2024 Radian Group Earnings 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 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised today's conference is being recorded. I would now like to hand the conference over to your speaker today. Dan Cobell head of Invest Relations and Capital Management. Please go ahead.

Thank you and welcome to Radian's third quarter 2024 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 radian.com. This press release includes certain non-GAP 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-GAP measures may be found in press release exhibit F and reconciliations of these measures to the 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 -a-Pandit Chief Financial Officer. Also on hand for the Q&A portion of the call is Derek Brummer, President of Radian Mortgage Insurance. 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 a discussion of these risks, please review the cautionary statements regarding forward-looking statements included in our earnings release and the risk factors included in our 2024 Form 10-K and subsequent reports filed with the SEC. These are also available on our website. Now I would like to turn the call over to Rick.

Thanks Dan and thank you all for joining us today. Last evening we reported another quarter of excellent financial results for Radian. Our results continue to reflect the economic value of our high quality mortgage insurance portfolio, the strength and quality of our investment portfolio, our strong capital and liquidity positions, and our ongoing strategic focus on managing expenses. For the quarter, we increased book value per share by 18% year over year to $31.37. We grew revenues to $334 million during the quarter, generating net income of $152 million. Our annualized return on equity in the third quarter was .2% and our adjusted net operating return on equity was 13.7%, which reflects our strong financial results, including positive credit performance. We continue to leverage our proprietary analytics and radar rates platform to identify and capture economic value in the mortgage insurance market, which resulted in $13.5 billion of high quality new insurance written in the third quarter. Our primary mortgage insurance of course, which is the main driver of future earnings for our company grew to $275 billion. We continue to focus on managing operational efficiency and expenses, which resulted in a decrease in other operating expenses in the third quarter. Our primary operating subsidiary rating guarantee paid a quarterly dividend rating group in the amount of $185 million in the third quarter for a total of $485 million paid year to date. At the end of the quarter, we paid off $450 million of our senior debt, reducing our leverage ratio to 18.5%. Our overall capital and liquidity positions remain strong with a P.Mirers cushion for rating guarantee of $2.1 billion and our available holding company liquidity was $844 million at the end of the third quarter after paying off the debt. We are pleased that our strong financial position and capital flexibility allow us to deliver excellent financial results, grow our business and help our customers transform risk and opportunity. While also returning value to our stockholders. In terms of the housing and mortgage market, the supply of existing homes remains constrained, which we expect will continue to provide support for home values from an HPA perspective. And based on the originations thus far in the forecast for the remainder of 2024, we continue to estimate that the private mortgage insurance market will be approximately $300 billion this year, consistent with 2023. Looking ahead, based on current market projections for 2025, we expect the MI market to be approximately 10% larger in 2025 than in 2024. I believe it's also worth noting the continuing positive impact that we are experiencing from the current interest rate environment in terms of increasing our investment portfolio returns and maintaining strong persistency benefiting our insurance and force. Overall, our outlook for the housing market and our mortgage insurance business remains positive. I also want to highlight that Radian continues to be a catalyst for homeownership in the market, leveraging decades of experience and relationships. Most recently, our mortgage condo business, Radian Mortgage Capital, is focused on providing secondary market liquidity to our lender customers and sponsoring mortgage credit to investors. We believe this business is a natural extension of our business model and have been encouraged by the customer interested in the business. Sumitra will now cover the details of our financial and capital positions.

Thank you, Rick, and good morning to you all. I'm pleased to provide additional details about our third quarter results, which reflect another strong quarter of performance, producing net income of $152 million or 99 cents per diluted share in line with the prior quarter. Adjusted diluted net operating income per share was slightly higher than the gap metric at $1.03 for the third quarter compared to 99 cents for the previous quarter. Analyzed return on equity in the third quarter was 13.2%, adjusted net operating return on equity was 13.7%, an increase from the second quarter. Book value per share grew to $31.37, an increase of 18% year over year. This book value per share growth is in addition to our regular stockholder dividends, which were $37 million during the quarter, reflecting our quarterly dividend of $24.5 per share. We also repurchase $49 million of shares during the third quarter. Turning now to the detailed drivers of our results. Our revenues continue to be strong in the third quarter. We generated $334 million of total revenues during the quarter, an increase compared to $321 million in the second quarter and $313 million in the third quarter of last year. Slides 10 through 12 in our presentation include details on our mortgage insurance in force portfolio, as well as other key factors impacting our net premiums earned. Our primary mortgage insurance in force continued to grow, reaching $275 billion as of the end of the third quarter and generating $235 million in net premiums earned in the quarter. Contributing to the growth of our insurance in force was $13.5 billion of new insurance written in the third quarter of 24 compared to $13.9 billion written in the prior quarter. The persistency rate of our existing insurance in force also remained high at .4% in the third quarter based on the trailing 12 months compared to .6% a year ago. As of the end of the third quarter, 70% of our insurance in force had a mortgage rate of 6% or less. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term, and we therefore continue to expect our persistency rate to remain strong. As shown on slide 12, the in force premium yield for our mortgage insurance portfolio remains stable in the quarter at 38.2 basis points. With strong persistency rates and the current industry pricing environment, we expect our in force portfolio premium yield to continue to remain stable. As shown on slide 13, our investment portfolio of $6.6 billion consists of well diversified, highly rated securities. Our portfolio has continued to increase over the past year in both size and average yield, generating a net investment income of $78 million in the third quarter. This includes $8 million of income in the third quarter related to mortgage loans held for sale within radiant mortgage capital. Excluding that impact, net investment income grew 7% year over year. We've continued to reinvest cash flows in the current trade environment, benefiting our investment portfolio yield, which was .3% in the third quarter. Our unrealized net loss on investments reflected in stockholders equity was $233 million at quarter end, an improvement of $144 million from the prior quarter driven primarily by a decline in market interest rates. We continue to expect that our strong liquidity and cash flow position will provide us with the ability to hold these securities to recovery of the remaining unrealized losses, which would equate to $1.56 that is expected to accrete back into our book value per share over time. I will now move on to our provision for losses and related credit trends, which continue to be positive with continued strong cure activity and very low claim levels. On slide 16, we provide trends for our primary default inventory. Total defaults increased to approximately 22,000 loans at quarter end, resulting in a portfolio default rate of .25% compared to .04% in the previous quarter. As expected, the number of new defaults reported to us by services increased in the third quarter to approximately 13,700 from 11,100 reported in the second quarter. This increase in new defaults, which impacts our mortgage insurance reserves, reflects normal seasonal trends and the expected continued seasoning of a large insurance in force portfolio. Our new defaults also continue to contain significant embedded home equity with approximately 76% of new defaults this quarter having at least 20% equity using an index based approach. This equity profile, which has been a key driver of recent favorable credit trends is largely unchanged from prior quarters. Looking ahead, we expect the impact of hurricanes Milton and Helene to impact the number of new defaults reported in the fourth quarter. Within the third quarter, we estimate that approximately 200 incremental new defaults were reported in FEMA designated areas impacted by hurricane barrels. Historically, defaults associated with storms and other natural disasters have cured at higher rates. This past performance is also recognized within PMIRES, which provides for a lower capital requirement for defaulted loans in FEMA designated areas. Our loss ratio remained low this quarter with a net expense of $6 million in our mortgage insurance provision for losses in the third quarter, compared to a net benefit of $2 million reported in the second quarter. We continue to maintain our default to claim role rate assumption for new defaults at 8%, which resulted in $57 million of loss provision for new defaults reported during the quarter. Positive reserve development on prior period defaults of $51 million mostly offset this provision for new defaults. Our defaults continue to cure at rates greater than our previous expectations, resulting in releases of prior period reserves that in recent years have significantly offset reserves established for new defaults. As shown on slide 17, our cure trends have been very consistent and positive in recent periods, with approximately 90% of defaults curing within four quarters and 96% curing within eight quarters, meaningfully exceeding our initial expectations. Cure rates in the third quarter exhibited typical seasonal trends and compared favorably to similar periods from past years. As noted above, our favorable loss experience continues to be driven primarily by the significant embedded homeowner equity, resulting from the strong home price appreciation experienced in recent years. Using an index based approach, approximately 78% of our total default inventory has estimated embedded home equity of 20% or more. Moving to our other business lines, total revenues in our all other category, which include investments held at region group, as well as revenues from other lines of business, where $40 million in the third quarter in line with the second quarter. The adjusted pre-tax operating loss for all other was $5 million in the third quarter compared to a $6 million operating loss in the second quarter. Within our all other category, radiant mortgage capital closed its inaugural private label Prime Jumbo Securitization transaction during the third quarter. This securitization involved the issuance of $349 million of certificates collateralized by residential mortgage loans, of which we retain certificates valued at $6 million. These certificates were issued by a newly created securitization trust, which is considered to be a variable interest entity or VIE. As a result of the economic exposure that we retained and the corresponding rights that our retained interests have, we are considered the primary beneficiary of the VIE. And in accordance with accounting guidance, radiant will consolidate the VIE in our financial statements. Therefore, you will see new line items this quarter reflecting the VIE's assets liabilities and results on our financial statements. It is important to note that radiant's economic exposure is limited to our retained certificates with a net impact from this exposure, including changes in fair value reflected in the line item, income loss on consolidated VIE's in our income statement each period. Now turning to our other expenses. For the third quarter, our other operating expenses totaled $86 million, a decrease compared to $92 million recognized in the second quarter. The lower expenses in this quarter were consistent with our expectations and reflect the benefit from our expense savings actions to date. This decrease was partially offset by a $10 million non-operating impairment on internal use software recognized in the quarter. As noted previously, we expect a significant reduction in our other operating expenses on a full year basis in comparison to 2023 with an estimated run rate reduction of $20 to $25 million beginning in 2025. Moving to our capital available liquidity and related strategic action. Radiant Guarantee's financial position remains strong. We paid $185 million ordinary dividend to Radiant Group in the third quarter while maintaining a stable PMIRES cushion of $2.1 billion. As highlighted on slide 21, Radiant Guarantee held $191 million of unassigned funds at the end of the third quarter, providing the capacity to distribute approximately $190 million of additional funds to Radiant Group in the fourth quarter. As a reminder, we had provided guidance at the beginning of the year that we expect Radiant Guarantee to pay $400 to $500 million of dividends for the full year 2025. We are pleased that we are in a position to meaningfully exceed this guidance with $485 million of dividends already paid year to date and other $190 million expected to be paid in the fourth quarter. Moving to our holding company Radiant Group. In September, we executed on the planned redemption of our 2024 senior notes in the amount of $450 million, which reduced our holding company debt to capital ratio to 18.5%. This action is expected to reduce our ongoing interest expense by approximately $20 million annually and Radiant has no senior debt maturities due until 2027. Within the quarter, we repurchased 1.5 million shares of our common stock at a total cost of $49 million for an average price of $33.61 per share and return $37 million in shareholder dividends for a total of $86 million of capital returned in the quarter. We have $618 million remaining on our current share repurchase authorization, which expires on June 30, 2026. Over the past four quarters, we've returned approximately $360 million in the form of share repurchases and dividends to shareholders. As demonstrated by this past quarter's repurchase activity and our track record in recent years, we believe that share repurchase provides an attractive option to deploy our excess capital. Following the redemption of our 2024 senior notes, our available holding company liquidity was $844 million at the end of the third quarter. We also have an undrawn credit facility with borrowing capacity of $275 million, providing us with significant financial flexibility. I will now turn the call back over to Rick.

Thank you, Samantha. Before we open the call to your questions, I want to highlight that our results for the third quarter continue to reflect the balance and resiliency of our company, as well as the strength and flexibility of our capital and liquidity positions. We expect the earnings and cash flows generated from our large enforced mortgage insurance and investment portfolios to allow us to continue operating from a position of strength and delivering value to our customers, policyholders, and stockholders. We increased book value per share by 18% year over year. We returned $86 million of capital to stockholders during the third quarter and approximately $360 million over the past 12 months in the form of share repurchases and dividends. As you've heard me say before, our business model is well established and proven, significantly strengthened by the P. Myers capital framework, dynamic risk-based pricing, and the distribution of risk into the capital and reinsurance markets. We believe this is recognized on Capitol Hill and we are well positioned to fulfill our important role in the housing finance system. And finally, I want to recognize and thank our dedicated and experienced team at Radian for the outstanding work they do every day. And now, operator, we would be happy to take questions.

Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. And our first question comes from Boze George of KBW. Your line is open.

Hey, good morning, everyone. This is actually Alex Bond on for Boze. Maybe just starting with Radian Mortgage Capital, would you be able to give a little more color there relating to maybe what you expect the cadence of issuance will be there moving forward?

Yeah, thanks for the question. This is Rick. I don't think we will give any kind of forward guidance on that, but I think as we did our first deal in the third quarter, we actually did our second deal in the fourth quarter just recently. We expect to be a regular issuer in the market as the business scales, and so we would expect next year to be a continuing issuer, you know, but haven't really given forward guidance, but I think you'll continue to see that the frequency and regularity of issuance into the market to be driven by as we scale the business going forward.

Okay, great. Thanks. Thanks for that. And then maybe just one more relating to the $10 million software impact. The $10 million impairment in the quarter, was that related to the mortgage services or the other segment? And then maybe just to go a little bit deeper there, would you be able to give any color relating to some of the strategic actions you're taking in that segment in terms of the footprint there?

Yeah, thanks for the question. I think, yeah, the $10 million impairment that we took was on some software that we felt we needed to impair given the current use of the software, and it was related to businesses that sit in our all other category, and we think that it's a one time item. I think in terms of like, you know, for our all other business, we've given some more disclosure on what our expected revenues are going to be. I think for the last two quarters, we've been at about $40 million. We do expect that, you know, some of our investment income and all other may come down. As we've repaid our debt and therefore $450 million of liquidity has gone out from our holding company. So we expect that all other number to come down a little bit by about $5 million. But $35 to $40 million of revenues is still a good estimate for all other. And that captures all of our businesses in the all other business segment.

Yeah, and I think this is Rick also, I think in the context of like a strategic update on those businesses, I think you also asked about. We, you know, that particular category includes our condo business, our title business, our real estate services business, and then our HG Tech platform as well as the interest income, kind of the investment portfolio rating group. So it's got a number of things in there. The condo business, as I said, you know, we continue to kind of focus on scaling that business. The results are not really material today to the overall business. The title business is, you know, we've navigated a difficult cycle over the last few years. I think the title business is well positioned with kind of a growing customer list. And, you know, look forward to kind of continuing to see the prospects for that as we go forward and momentum. Our real estate services business, which is our SFR, REO, and valuation business, been profitable, a little bit less profitable through the cycle, but continues to be a market leader. Across the different categories of products and services, and we continue to expect to see a profitable contribution from that business. And then the last one, which is our home genius, kind of our real estate tech platform, as I've mentioned in previous quarters, we're We're having an active dialogue with partners across a variety of different interested parties. And, you know, as we have more to update, we'll update on that. But that's really kind of the update across a particular all other category.

Great. Thanks. Thanks for the color there and appreciate you taking the questions.

Yeah, my pleasure.

Thank you. Our next question comes from Mahira Bhatia of Bank of America. Your line is open.

Hi, thank you for taking my questions. I wanted to ask just first about the pricing backdrop. Obviously, appreciate that the enforced yield was steady and your comments about that's your expectation from here. Should we take from that that the pricing environment remains quite stable or is that more a function of your individual pricing? Like I'm trying to understand what's going on in the market just from a competitive dynamics perspective, maybe even away from you all. But just any comments on that just competitive environment and pricing in the market.

I'm here. This is Derek. In terms of the pricing environment overall, I think it's been pretty consistent really for Probably the last year and a half to two years. And so, as I would characterize the pricing environment continues to be rational and disciplined. You do see Some movements here and there kind of around the edges in terms of pricing from quarter to quarter. And you see that reflected and kind of in market share movements when you look at kind of the top line. But overall, I would say the price environment continues to be stable. And environment that we like because it allows us to leverage our analytics to really pick our spot and find value in the market. So we really find value kind of across the risk spectrum. And that's been pretty consistent for quite some time.

Thank you. And then turning to defaults and really cures more than defaults for many quarters. Now you'll have had very elevated cure rates and been releasing significant number of reserves. And I guess the question I have is, when does that become like part of your history where you start actually lowering the claim rate and taking less reserves up front or is is the thought process that it's better to be conservative take the reserves up front and then just release and make your

Yeah, I think it's a good question. And I would say that, you know, when we think about our reserve assumptions. We always try to be prudent and we always try to look at it through the cycle. So clearly, like, you know, the claim rates we see today. They're very low and we are obviously focused on making sure that the accounting assumptions to make our longer term and through the cycle. So I think, you know, that's the reason why we've kept our 8% default to claim rate unchanged, even though, you know, as you rightly pointed out, you know, our actual claim experience is very, very benign. So we don't see that environment to necessarily change our accounting assumptions and we would like to continue to be prudent.

Can I ask when was the last time you all hit a 8% claim rate? Like any vintage that has hit that?

No, none of the none of our current vintages and I would say it's been a while.

Yeah, I think, you know, probably the answer that would be sometime prior to COVID. I don't remember the exact timeline, but you know, if you remember back, I got here in 2017 we were actually coming down off the great financial crisis from a default to claim assumption. And so I think, you know, to your point here, it's one of those things where we were, as Sumitha said, we're really looking forward versus like at a point in time. And then we monitor that default portfolio performance. And as you look at our schedule and the materials that we provide, we call it the triangle schedule. You can see how consistent that cure rate has been for a period of time. But I would say pre-COVID we were coming down off the great financial crisis. And so as we look at kind of the modeled losses going forward, you know, we try to anticipate that in the reserve because remember we reserve when loans go two times delinquent in default. But the other thing I would just highlight, which is, you know, just more good news is when we price, when Derek and the team price, we price through an anticipated kind of loss assumption, you know, kind of going forward. And so all the business that we've been writing that is going through that default cycle is far outperforming our pricing, which is, you know, resulting in, you know, greater than expected returns on the business we wrote in previous periods, you know. And so when that turns, you know, going back to Sumitha's comment, you know, we try to have a through the cycle view and we'll continue to try to think through, you know, sustainable trends that could influence that. We do, however, you know, believe that the housing cycle today remains generally positive with the supply demand imbalance. And that's giving consumers more opportunities to solve their own default and retain their equity. So we're going to continue to monitor it closely, but it's been an extremely favorable trend that, you know, all we can do is continue to evaluate, monitor as we go forward from the county point of view.

Got it. No, and I appreciate that. And particularly the slide 17 disclosure. And really, that's what we were looking at. And just, you know, as you mentioned, you just see really consistent activity and that kind of

almost

begs. I hear what you're saying. Thank you.

Yeah, I mean, here, if you look out four quarters, I mean, it's 90 percent. Yeah, it's very consistent and then, you know, continues to improve. So we, we, we appreciate the question because it's something we internally are highly focused on and have pretty robust discussions each quarter as we go through and think through it. So thank you for the question.

Thank you. Our next question comes from Scott Hellenia of RBC Capital Markets. Your line is open.

Yeah, thanks. Morning. Just just wonder if you could expand on the comment, Rick, you may expect the private insurance mortgage insurance market to grow 10 percent. Can you talk about some of the drivers you expect there? It sounds like you're pretty positive on that for 2025 and how you expect radiant to participate in that in terms of an adobe growth as that happens.

Yeah, again, thank you for the question, but I think we are when you look at the current industry forecast and we look across the, you know, the GSEs and the MBA and other sources that we kind of look to. You can see there's an implied growth in the purchase market, a little bit of refinances, which may or may not materialize depending upon interest rates, but we continue to see growth in the purchase market. MI is going to have a strong participation in that growth. And so that really is what drives the comments I made and in my prepared comments is really just looking at industry forecast. Now those. Those can have some degree of volatility as we go through the year, either plus or minus, depending upon where interest rates, but I think we're largely fueled by a purchase market growth and we know historically that market has been. You know, kind of slowed by the lack of inventory and the lack of churn in the existing homes and kind of a, you know. From a new home, new home sales perspective, even, you know, we'd like to see faster growth there, but I think, as we look to next year. That purchase market continues to expand would be our view and mortgage insurance is going to participate in that growth as well. But the other part of your question about how we participate in it. I think, you know, our mortgage insurance team, Derek and the team. You know, in that market, you know, as Derek explained them one of the earlier questions. We have the opportunity to leverage our data and analytics, our proprietary tools, our radar rates. To really select the risk profile and the risk return and they and they driving economic value across that selection to really pick and choose across that universe of purchase volume. So I think we're well positioned to kind of. You know, target the economic value alongside that growth and you know, I think, as we've said before. We're not really focused on market share. We tend to kind of range in and out. We're focused on really optimizing the selection of economic value across our tools across the broader market. So I think we're well positioned for that and you know, like to see that that growth materialize.

Okay, that's that's helpful detail and just on the persistency that that ticked up a little bit sequentially you know others that kind of seen flattish Persistence or even down a little bit and just want to take a comment and as to whether you think you can see further improvement there. It's obviously closer to peak levels, but you have a lot of customers have a lot of embedded home equity in there. So just just curious what what your thoughts are on that persistency.

Yeah, I think on a 12 month basis, I would say our post-mortem see has been in and around that 84% level. So I do think that you know what you're seeing as a small uptake is more fluctuations in the quarterly measure. We don't expect for system see to go up as such. We think that we are pretty much at at stable levels. Now it is possible that we see some pockets of refinance activity as as rates decline and in which case we will see an impact in our Persistency, but I would just remind you that 70% of our in force book is still has been written at less than 6% note rate. So we expect persistency to more or less remain high in the in the low 80s and feel pretty good about it.

Okay, great. And then just the last question was just on on use of excess capital. Now it sounds like buybacks is number one use but You talk about dividends either just increases in regular driven special dividends. reinvestments in the business M&A or anything else like that. It sounds like your, your dad is is this the debt to cap spend at the lowest level. It's been probably probably ever at least a long time, but just any thoughts on the excess capital and uses over the next 12 Yeah,

yeah, I'll start and big jump in with other thoughts on some of the strategic users, I would say, you know, as you pointed out, like we've, we've been pretty consistent about our capital return this quarter we returned about 87 million Last one year 360 million last three years 1.2 billion last five years 1.9 billion. So I think you see that we have been consistently returning capital back to shareholders. And we are also the highest yielding dividend stock in the industry. I would say, you know, from a forward view. I think in our prepared remarks, we mentioned that we use some of our excess hold call liquidity to pay down our debt and brought down our leverage ratio to 18 and a half percent. We build that 844 million liquidity backup to about a billion dollars pretty quickly by year end just given our expectation of dividends from radiant guarantee to group. So I think that we will continue to buy back shares. We believe that, you know, we are still reasonably undervalued. I think one and a half dollars is just in our OCI. And if you just think about In our last investor day we'd given some estimates of our expectation of future discounted earnings from our existing book that was about 13 and a half dollars a share. So we still think that we are trading reasonably below our intrinsic value and we'll continue to buy back shares and we have the liquidity to do that. Do you want to comment on some of our M&A initiatives?

Well, I think, you know, for us, obviously, we're going to invest in our businesses that are kind of an organic growth phase is continue to invest in our mortgage insurance business where we see opportunity. So those are, you know, kind of one form of strategic capital. You know, you mentioned M&A, we obviously get a lot of looks at a lot of different M&A opportunities. We haven't done one for a while because we haven't really seen the value. But I would say like a normal capital allocation waterfall, Samantha and I and our team, we go through, you know, we prioritize return of capital to shareholders and being very disciplined and focused on that. And then, you know, thinking about how we invest either organically or inorganically to improve returns and long term value for shareholders. So I think we have a pretty disciplined track record of how we manage capital. The good news is today we're in a situation where we have significant hold co liquidity, as Samantha said, we just paid off our debt and we're going to still have near, you know, somewhere in that billion dollar category at year end. Tremendous P. Myers excess capital, I think 2.1 billion at the end of the third quarter. So we've got a lot of flexibility around our franchise to think about allocating capital effectively to improve returns for shareholders. So we always talk in hindsight. So not much forward to talk about there, but the best forward view is what we've done in the past. I think sometimes it's trying to remain very disciplined and thoughtful on behalf of our shareholders. Great. Thanks for all the detail.

Thank you. I've shown no further questions. I'd like to turn it back to Rick Thornberry for closing remarks.

Yeah, well, I appreciate everybody joining us today. It's been an eventful week. I know we're probably all exhausted from watching all the political activities over the last several months and it coming to a conclusion. But I appreciate your interest in radian and look forward to crossing paths in the near future and continuing to answer your questions and and share our insights about our business. So thank you very much and have a very happy holiday season. Should we not cross paths before that. Take care.

This concludes today's conference call. Thank you for participating in you may now disconnect.