Radian Group Inc.

Radian reported GAAP net income from continuing operations of $0.87 per share and 10% ROE. Adjusted diluted net operating EPS was $1.14 and adjusted net operating ROE was 13%, both up year over year. Total revenues increased 93% year over year to $575 million, net earned premiums increased 116% to $504 million, book value per share rose 8.5% year over year to $36, and net investment income was $75 million, up 21%. Mortgage insurance new written business was $16.3 billion, up 14%, persistency was 82%, and in-force insurance reached $284 billion. Specialty net premiums earned were $267 million, up 9%, and the Specialty net combined ratio was 98% in the quarter. For the mortgage segment, the default rate fell to 2.47% and favorable development from prior period defaults was $20 million. Guidance: management said second-half 2026 specialty earned premiums should be approximately 20% higher than the first half of 2026; they also expect the specialty combined ratio to be in the low 90s in the current softening market. Full-year 2026 dividends from Radian Guaranty to Radian Group are now expected to be at least $650 million, including $340 million already paid in the first half. Share repurchases for 2026 are expected to land toward the upper end of the $200 million to $250 million range.

Rick Thornberry framed the quarter as evidence that Radian has completed a major transformation: closing Inigo, exiting non-core businesses, and becoming a more focused multiline specialty insurer. He emphasized that the mortgage business remains a strong earnings and capital engine while Specialty adds diversification and broader growth opportunities. His tone was confident and upbeat, but disciplined; he repeatedly stressed underwriting discipline, capital allocation flexibility, and that profitability matters more than hitting any specific growth target.

Dan Kobell highlighted the hard numbers: adjusted net operating EPS of $1.14, adjusted ROE of 13%, revenue of $575 million, and net investment income of $75 million. He said the specialty segment’s results included a reserve build tied to developments in the Middle East, with the total related provision around $30 million and a reported specialty combined ratio of 98%. On the balance sheet, he cited a $1.5 billion PMIERs cushion, $412 million of holding company liquidity, a $75 million revolver draw remaining at quarter-end, and $127 million of capital already returned from assets held for sale since the divestiture plan began. He also said Radian repurchased $76 million of stock in 2Q, had $176 million repurchased year to date, and lifted expected 2026 dividends from Radian Guaranty to at least $650 million.

Analysts focused on the Middle East reserve charge, asking whether it reflected a few large claims or a broader issue; management said the roughly $30 million provision was fully loaded for expected and potential claims plus inflation assumptions, and they feel well reserved. Questions also centered on specialty market softness and whether pressure would come from lower margins or lower premium growth; management said both the market is softening and they are seeing lower margins, but they are still finding opportunities and will not sacrifice pricing or terms for volume. Analysts asked about the 20% second-half specialty premium growth guide, and Dan confirmed it is measured against the full first-half premium base. On capital return, management said the remaining $75 million revolver draw should be repaid during 2026, the 2027 debt maturity is currently expected to be refinanced, and buybacks are tracking toward the upper end of the $200 million to $250 million range.