Radian Group Inc. (NYSE:RDN) Q4 2018 Earnings Conference Call Transcript

Feb 08, 2019 • 09:00 am ET


Radian Group Inc. (NYSE:RDN) Q4 2018 Earnings Conference Call Transcript


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Ladies and gentlemen, thank you for standing by and welcome to the Radian 2018 Fourth Quarter Earnings Call. (Operator Instructions) As a reminder, today's conference is being recorded.

I'd now like to turn the conference over to our host, Mr. Emily Riley, Senior Vice President of Investor Relations and Corporate Communications. Please go ahead.

Emily Riley

Thank you and welcome to Radian's fourth quarter and year-end 2018 conference call. Our press release which contains Radian's financial results was issued earlier this morning and is posted to the Investors section of our website at www.radian.biz. This press release includes certain non-GAAP measures which will be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share, adjusted net operating return on equity and services adjusted EBITDA. A complete description of these measures and a reconciliation to GAAP maybe found in press release Exhibits F and G and on the Investors section of our website. In addition, we've also presented a related non-GAAP measure, services adjusted EBITDA margin, which we calculate by dividing services adjusted EBITDA by GAAP total revenue for the Services segment.

This morning you will hear from Rick Thornberry, Radian's Chief Executive Officer; and Frank Hall, Chief Financial Officer. Also on hand for the Q&A portion of the call is Derek Brummer, Senior Executive Vice President of Mortgage Insurance and Risk Services.

Before we begin, I would like to remind you that comments made to 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 defer 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 2017 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.

Richard Thornberry

Thank you Emily, and good morning. Thank you all for joining us today and for your interest in Radian. I'm delighted to report another outstanding quarter and year for our company. These results are a testament to the hard work of the entire Radian team across all of our businesses from Mortgage Insurance and Risk Services to Title, Mortgage and Real Estate Services.

I'd like to take a moment now to recognize the team and to thank our customers, investors and business partners for helping us deliver such exceptional results. 2018 was a year where we delivered on our strategy in a consistent manner, but also celebrated several first for the company. We wrote $56 billion of flow NIW, which set a company record for highest flow volume in our more than 40-year history. Net premiums earned exceeded $1 billion and we grew primary insurance in force 10% year-over-year to $221 billion. We executed the mortgage industry's first ever simultaneous ILN and XOL reinsurance placement which has enhanced our capital efficiency and strengthened our risk