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Radian Provides Update on Capital Actions, Comments on Proposed Changes to PMIERs and Sets Fourth Quarter 2017 Conference Call for February 1, 2018Radian (News - Alert) Group Inc. today announced that it has taken the following actions in order to leverage its financial flexibility and cost-effectively strengthen the financial position of Radian Guaranty Inc., its principal mortgage insurance (MI) subsidiary, under the Private Mortgage Insurer Eligibility Requirements (PMIERs):
As a result of these capital actions, at December 31, 2017, Radian Guaranty's "Available Assets" under the PMIERs were approximately $3.7 billion and its "Minimum Required Assets" under the PMIERs were approximately $3.2 billion, resulting in an excess of approximately $450 million, or 14 percent. This compares to an excess of approximately $237 million, or 7 percent, at September 30, 2017. In addition, Radian Group maintained approximately $200 million of available liquidity as of December 31, 2017. Total available liquidity, which includes the company's $225 million unsecured revolving credit facility entered into in October 2017, was approximately $425 million as of December 31, 2017. As expected, Radian Guaranty experienced a recent increase in reported delinquencies in hurricane-affected areas. Given that the PMIERs require Radian to maintain significantly more Minimum Required Assets for delinquent loans than for performing loans, the company's Minimum Required Assets from FEMA-designated areas increased by approximately $100 million as of December 31, 2017, as compared to September 30, 2017. The company believes that these hurricane-related delinquencies have reached their peak and, based on past experience, continues to expect that these delinquencies will not result in a material number of new paid claims. Proposed Changes to PMIERs On December 18, 2017, Radian Guaranty received a summary of proposed changes to the PMIERs that are being recommended to the Federal Housing Finance Agency (FHFA) by the GSEs. Based on this initial summary, which remains subject to comment by the private mortgage insurance industry, Radian expects to be able to fully comply with the proposed PMIERs and to maintain an excess of Available Assets over Minimum Required Assets under the PMIERs as of the expected effective date in late 2018, without a need to take further actions to do so. The company's expectation is not dependent upon the existing surplus note and is based on its projections for positive operating results in 2018, its strong capital position, and the benefits of its reinsurance programs. In response to the GSEs' request, Radian expects to provide initial comments on the proposed PMIERs to the GSEs and the FHFA, which will include the company's suggested modifications. Once the proposed PMIERs are finalized, the company anticipates a six-month implementation period before they are effective, which is expected to be no earlier than the fourth quarter of 2018. Radian is subject to non-disclosure agreements with each of the GSEs covering the specific provisions of the GSE-recommended changes. "Our ongoing compliance with PMIERs allows us to continue to support our customers with the products and services they need, and helps create sustainable homeownership opportunities for more families," said Radian Chief Executive Officer Rick Thornberry. "I am pleased with our financial strength and flexibility, which allow us to effectively manage our capital position today and are expected to enable us to comply with the proposed changes to PMIERs." Fourth Quarter and Year-end 2017 Conference Call Radian will hold a conference call on Thursday, February 1, 2018, at 10:00 a.m. Eastern time to discuss the company's fourth quarter and year-end 2017 results, which will be announced prior to the market open on the same day. The conference call will be broadcast live over the Internet at http://www.radian.biz/page?name=Webcasts or at www.radian.biz. The call may also be accessed by dialing 800.230.1093 inside the U.S., or 612.332.0226 for international callers, using passcode 443361 or by referencing Radian. A replay of the webcast will be available on the Radian website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two and a half hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 800.475.6701 inside the U.S., or 320.365.3844 for international callers, passcode 443361. In addition to the information provided in the company's earnings news release, other statistical and financial information, which is expected to be referred to during the conference call, will be available on Radian's website under Investors >Quarterly Results, or by clicking on http://www.radian.biz/page?name=QuarterlyResults. About Radian Radian Group Inc. (NYSE: RDN), headquartered in Philadelphia, provides private mortgage insurance, risk management products and real estate services to financial institutions. Radian offers products and services through two business segments:
Additional information may be found at www.radian.biz. FORWARD-LOOKING STATEMENTS All statements in this press release that address events, developments or results that we expect or anticipate may occur in the future are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Exchange Act and the U.S. Private Securities Litigation Reform Act of 1995. In most cases, forward-looking statements may be identified by words such as "anticipate," "may," "will," "could," "should," "would," "expect," "intend," "plan," "goal," "contemplate," "believe," "estimate," "predict," "project," "potential," "continue," "seek," "strategy," "future," "likely" or the negative or other variations on these words and other similar expressions. These statements, which include, without limitation, projections regarding our future performance and financial condition and our expectations regarding our ability to comply with the proposed PMIERs, are made on the basis of management's current views and assumptions with respect to future performance and other events. Any forward-looking statement is not a guarantee of future performance and actual results could differ materially from those contained in the forward-looking statement. These statements speak only as of the date they were made, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. We operate in a changing environment where new risks emerge from time to time and it is not possible for us to predict all risks that may affect us. The forward-looking statements, as well as our prospects as a whole, are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. These risks and uncertainties include, without limitation:
For more information regarding these risks and uncertainties as well as certain additional risks that we face, you should refer to the Risk Factors detailed in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2016, and subsequent reports filed from time to time with the U.S. Securities and Exchange Commission. We caution you not to place undue reliance on these forward-looking statements, which are current only as of the date on which we issued this press release. We do not intend to, and we disclaim any duty or obligation to, update or revise any forward-looking statements to reflect new information or future events or for any other reason. View source version on businesswire.com: http://www.businesswire.com/news/home/20180117006439/en/ |