Document and Entity Information
Document and Entity Information Document - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 06, 2018 | |
Document Information [Line Items] | ||
Entity Registrant Name | Radian Group Inc. | |
Entity Central Index Key | 890,926 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 213,290,215 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) Statement - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
ASSETS | |||
Fixed-maturities available for sale—at fair value (amortized cost $3,659,311 and $3,426,217) | $ 3,586,055 | $ 3,458,719 | |
Trading Securities—at fair value | 535,634 | 606,401 | |
Equity Securities-at fair value | 122,977 | ||
Equity securities available for sale—at fair value (at December 31, 2017, classified as available for sale with related cost of $163,106) | 162,830 | ||
Short-term investments—at fair value (includes $39,224 and $19,357 of reinvested cash collateral held under securities lending agreements) | 626,060 | 415,658 | |
Other invested assets—at fair value (amortized cost at December 31, 2017) | 3,193 | 334 | |
Total investments | 4,873,919 | 4,643,942 | |
Cash | 95,573 | 80,569 | |
Restricted cash | 9,152 | 15,675 | |
Accounts and notes receivable | 94,848 | 72,558 | |
Property, Plant and Equipment, Net | [1] | 90,184 | 87,042 |
Deferred income taxes, net (Note 9) | 171,293 | 229,567 | |
Goodwill and other intangible assets, net (Note 6) | 59,179 | 64,212 | |
Prepaid reinsurance premium | 405,447 | 386,509 | |
Other assets (Note 8) | 430,077 | 407,849 | |
Total assets | 6,139,488 | 5,900,881 | |
Liabilities and Stockholders’ Equity | |||
Unearned premiums | 741,296 | 723,938 | |
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 451,542 | 507,588 | |
Senior notes (Note 11) | 1,028,687 | 1,027,074 | |
Reinsurance funds withheld | 331,776 | 288,398 | |
Other liabilities (Note 12) | 385,051 | 353,845 | |
Total liabilities | 2,938,352 | 2,900,843 | |
Commitments and contingencies (Note 13) | |||
Stockholders’ equity | |||
Common stock: par value $0.001 per share; 485,000,000 shares authorized at June 30, 2018 and December 31, 2017; 230,875,884 and 233,416,989 shares issued at June 30, 2018 and December 31, 2017, respectively; 213,232,370 and 215,814,188 shares outstanding at June 30, 2018 and December 31, 2017, respectively | 231 | 233 | |
Treasury stock, at cost: 17,643,514 and 17,602,801 shares at June 30, 2018 and December 31, 2017, respectively | (894,610) | (893,888) | |
Additional paid-in capital | 2,715,426 | 2,754,275 | |
Retained earnings | 1,438,032 | 1,116,333 | |
Accumulated other comprehensive income (loss) (Note 15) | (57,943) | 23,085 | |
Total stockholders’ equity | 3,201,136 | 3,000,038 | |
Total liabilities and stockholders’ equity | 6,139,488 | 5,900,881 | |
Deferred policy acquisition costs | 16,266 | 16,987 | |
Accrued Investment Income Receivable | $ 33,762 | $ 31,389 | |
[1] | Property and equipment at cost, less accumulated depreciation of $115.5 million and $106.0 million at June 30, 2018 and December 31, 2017, respectively. Depreciation expense was $4.8 million and $4.1 million for the three-month periods ended June 30, 2018 and 2017, respectively, and $9.5 million and $8.3 million for the six-month periods ended June 30, 2018 and 2017, respectively. |
Balance Sheet Parenthetical (Pa
Balance Sheet Parenthetical (Parentheticals) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Available-for-sale Debt Securities, Amortized Cost Basis | $ 3,659,311 | $ 3,426,217 |
Available-for-sale Equity Securities, Amortized Cost Basis | 163,106 | |
Securities Received as Collateral | $ 39,224 | $ 19,357 |
Common Stock, Number of Shares, Par Value and Other Disclosures [Abstract] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 485,000,000 | 485,000,000 |
Common Stock, Shares, Issued | 230,875,884 | 233,416,989 |
Common Stock, Shares, Outstanding | 213,232,370 | 215,814,188 |
Treasury Stock, Shares | 17,643,514 | 17,602,801 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Net premiums earned—insurance | $ 251,344 | $ 229,096 | $ 493,894 | $ 450,896 |
Services revenue | 36,828 | 37,802 | 69,992 | 75,829 |
Net investment income | 37,473 | 30,071 | 71,429 | 61,103 |
Net gains (losses) on investments and other financial instruments | (7,404) | 5,331 | (26,291) | 2,480 |
Other income | 1,016 | 612 | 1,823 | 1,358 |
Total revenues | 319,257 | 302,912 | 610,847 | 591,666 |
Expenses: | ||||
Provision for losses | 19,337 | 17,222 | 56,620 | 64,135 |
Policy acquisition costs | 5,996 | 6,123 | 13,113 | 12,852 |
Cost of services | 24,205 | 25,635 | 47,331 | 54,010 |
Other operating expenses | 70,184 | 68,750 | 133,427 | 137,127 |
Restructuring and other exit costs (Note 1) | 925 | 0 | 1,476 | 0 |
Interest expense | 15,291 | 16,179 | 30,371 | 32,117 |
Loss on induced conversion and debt extinguishment | 0 | 1,247 | 0 | 5,703 |
Impairment of goodwill (Note 6) | 0 | 184,374 | 0 | 184,374 |
Amortization and impairment of other intangible assets | 2,748 | 18,856 | 5,496 | 22,152 |
Total expenses | 138,686 | 338,386 | 287,834 | 512,470 |
Pretax income (loss) | 180,571 | (35,474) | 323,013 | 79,196 |
Income tax provision (benefit) | (28,378) | (8,132) | (422) | 30,066 |
Net income (loss) | $ 208,949 | $ (27,342) | $ 323,435 | $ 49,130 |
Earnings Per Share, Basic [Abstract] | ||||
Basic net income (loss) per share | $ 0.98 | $ (0.13) | $ 1.50 | $ 0.23 |
Earnings Per Share, Diluted [Abstract] | ||||
Diluted net income (loss) per share | $ 0.96 | $ (0.13) | $ 1.48 | $ 0.22 |
Weighted-average number of common shares outstanding—basic | 213,976 | 215,152 | 215,049 | 215,054 |
Weighted-average number of common and common equivalent shares outstanding—diluted | 217,830 | 215,152 | 218,741 | 220,474 |
Dividends per share | $ 0.0025 | $ 0.0025 | $ 0.0050 | $ 0.0050 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Net income | $ 208,949 | $ (27,342) | $ 323,435 | $ 49,130 |
Net income (loss)—basic | 208,949 | (27,342) | ||
Unrealized gains (losses) on investments: | ||||
Unrealized holding gains (losses) arising during the period | (27,804) | 20,239 | (88,447) | 27,606 |
Less: Reclassification adjustment for net gains (losses) included in net income | (1,336) | (1,167) | (4,468) | (2,798) |
Net unrealized gains (losses) on investments | (26,468) | 21,406 | (83,979) | 30,404 |
Unrealized foreign currency translation adjustments | 0 | 74 | 3 | 108 |
Other comprehensive income (loss), net of tax | (26,468) | 21,480 | (83,976) | 30,512 |
Comprehensive income | $ 182,481 | $ (5,862) | $ 239,459 | $ 79,642 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Common Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Parent | Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income | Accounting Standards Update 2016-01 [Member]Retained Earnings | Accounting Standards Update 2016-01 [Member]Accumulated Other Comprehensive Income | Accounting Standards Update 2018-02 [Member]Retained Earnings | Accounting Standards Update 2018-02 [Member]Accumulated Other Comprehensive Income | Accounting Standards Update 2016-09 [Member]Additional Paid-in Capital | Accounting Standards Update 2016-09 [Member]Retained Earnings |
Balance, beginning of period at Dec. 31, 2016 | $ 232 | $ (893,332) | $ 2,779,891 | $ 997,890 | $ (12,395) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Issuance of common stock under incentive and benefit plans | 1 | ||||||||||||
Repurchases of common stock under incentive plans | (199) | ||||||||||||
Issuance of common stock under incentive and benefit plans | 3,840 | ||||||||||||
Share-based compensation | 7,676 | ||||||||||||
Impact of extinguishment of convertible senior notes | (52,352) | ||||||||||||
Equity Impact of Termination of Capped Call Transaction | 4,083 | ||||||||||||
Change in equity component of currently redeemable convertible senior notes | (16) | ||||||||||||
Shares repurchased under share repurchase program (Note 14) | 0 | (6) | |||||||||||
Net income | $ 49,130 | 49,130 | |||||||||||
Dividends declared | (1,076) | ||||||||||||
Net foreign currency translation adjustment, net of tax | 108 | 108 | |||||||||||
Net unrealized gains (losses) on investments, net of tax | 30,404 | 30,404 | |||||||||||
Balance, end of period at Jun. 30, 2017 | $ 2,914,144 | 233 | (893,531) | 2,743,872 | 1,045,453 | 18,117 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 0 | $ 0 | $ 0 | $ 0 | $ 756 | $ (491) | |||||||
Balance, beginning of period at Dec. 31, 2017 | 3,000,038 | 233 | (893,888) | 2,754,275 | 1,116,333 | 23,085 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Issuance of common stock under incentive and benefit plans | 1 | ||||||||||||
Repurchases of common stock under incentive plans | (722) | ||||||||||||
Issuance of common stock under incentive and benefit plans | 1,579 | ||||||||||||
Share-based compensation | 9,622 | ||||||||||||
Impact of extinguishment of convertible senior notes | 0 | ||||||||||||
Equity Impact of Termination of Capped Call Transaction | 0 | ||||||||||||
Change in equity component of currently redeemable convertible senior notes | 0 | ||||||||||||
Shares repurchased under share repurchase program (Note 14) | (3) | (50,050) | |||||||||||
Net income | 323,435 | 323,435 | |||||||||||
Dividends declared | (1,073) | ||||||||||||
Net foreign currency translation adjustment, net of tax | 3 | 3 | |||||||||||
Net unrealized gains (losses) on investments, net of tax | (83,979) | (83,979) | |||||||||||
Balance, end of period at Jun. 30, 2018 | $ 3,201,136 | $ 3,201,136 | $ 231 | $ (894,610) | $ 2,715,426 | $ 1,438,032 | $ (57,943) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 2,061 | $ 224 | $ (2,724) | $ 2,724 | $ 0 | $ 0 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Net Cash Provided by (Used in) Operating Activities [Abstract] | ||
Net Cash Provided by (Used in) Operating Activities | $ 300,822 | $ 206,412 |
Cash flows from investing activities: | ||
Proceeds from Sale and Maturity of Fixed-Maturity Investments Available-for-sale | 348,082 | 649,687 |
Proceeds from Sale of Equity Securities | 82,701 | 18,103 |
Proceeds from Sale of Trading Securities Held-for-investment | 16,639 | 130,022 |
Proceeds from Redemption of Fixed-Maturity Investments Available-for-sale | 219,825 | 260,848 |
Proceeds from Redemption of Trading Securities Held-for-investment | 33,849 | 43,603 |
Purchases of Fixed-Maturity Investments Available-for-sale | (807,204) | (1,147,875) |
Purchases of Equity Securities | (52,357) | (193,409) |
Sales, Redemptions and (Purchases) of Short-term Investments, Net | (205,566) | 201,942 |
Sales, Redemptions and (Purchases) of Other assets and other invested assets, net | 293 | 412 |
Purchases of property and equipment, net | (12,328) | (13,444) |
Acquisitions, net of cash acquired | (634) | (86) |
Net cash provided by (used in) investing activities | (376,700) | (50,197) |
Cash flows from financing activities: | ||
Dividends paid | (1,073) | (1,076) |
Purchases and redemptions of senior notes | 0 | (141,686) |
Proceeds from termination of capped calls | 0 | 4,083 |
Issuance of common stock | 810 | 3,123 |
Purchase of common shares | (50,053) | (6) |
Credit facility commitment fees paid | (405) | 0 |
Change in secured borrowings (Note 12) | 119,631 | 0 |
Proceeds from secured borrowings (with terms greater than 3 months) | 15,544 | 0 |
Repayment of other borrowings | (94) | (140) |
Net cash provided by (used in) financing activities | 84,360 | (135,702) |
Effect of exchange rate changes on cash and restricted cash | (1) | 77 |
Increase (decrease) in cash and restricted cash | 8,481 | 20,590 |
Cash and restricted cash, beginning of period | 96,244 | 61,814 |
Cash and restricted cash, end of period | $ 104,725 | $ 82,404 |
Note 1 - Condensed Consolidated
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block] | Condensed Consolidated Financial Statements—Business Overview, Recent Developments and Significant Accounting Policies Business Overview We are a diversified mortgage and real estate services business, providing both credit-related insurance coverage and other credit risk management solutions, as well as a broad array of mortgage and real estate services. We have two reportable business segments—Mortgage Insurance and Services. Mortgage Insurance Our Mortgage Insurance segment provides credit-related insurance coverage, principally through private mortgage insurance, as well as other credit risk management solutions, to mortgage lending institutions and mortgage investors. We provide our mortgage insurance products and services mainly through our wholly-owned subsidiary, Radian Guaranty. Private mortgage insurance plays an important role in the U.S. housing finance system because it promotes affordable home ownership and helps protect mortgage lenders, investors and other beneficiaries by mitigating default-related losses on residential mortgage loans. Generally, these loans are made to home buyers who make down payments of less than 20% of the purchase price for their home or, in the case of refinancings, have less than 20% equity in their homes. Private mortgage insurance also facilitates the sale of these low down payment loans in the secondary mortgage market, most of which are currently sold to the GSEs. Our total direct primary mortgage insurance RIF was $53.9 billion as of June 30, 2018 . The GSEs and state insurance regulators impose various capital and financial requirements on our insurance subsidiaries. These include Risk-to-capital, other risk-based capital measures and surplus requirements, as well as the PMIERs financial requirements discussed below. Failure to comply with these capital and financial requirements may limit the amount of insurance that our insurance subsidiaries may write or prohibit our insurance subsidiaries from writing insurance altogether. The GSEs and state insurance regulators also possess significant discretion with respect to our insurance subsidiaries and all aspects of their businesses. See Note 16 for additional regulatory information. PMIERs. In order to be eligible to insure loans purchased by the GSEs, mortgage insurers such as Radian Guaranty must meet the GSEs’ eligibility requirements, or PMIERs. At June 30, 2018 , Radian Guaranty is an approved mortgage insurer under the PMIERs and is in compliance with the PMIERs financial requirements. The PMIERs are comprehensive, covering virtually all aspects of the business and operations of a private mortgage insurer, including internal risk management and quality controls, the relationship between the GSEs and the approved insurer as well as the approved insurer’s financial condition. In addition, the GSEs have a broad range of consent rights under the PMIERs, and require private mortgage insurers to obtain the prior consent of the GSEs before taking certain actions, which may include paying dividends, entering into various intercompany agreements, and commuting or reinsuring risk, among others. If Radian Guaranty is unable to satisfy the requirements set forth in the PMIERs, the GSEs could restrict it from conducting certain types of business with them or take actions that may include not purchasing loans insured by Radian Guaranty. The PMIERs financial requirements require that a mortgage insurer’s Available Assets meet or exceed its Minimum Required Assets. The GSEs may amend the PMIERs at any time, and they have broad discretion to interpret the requirements, which could impact the calculation of Radian Guaranty’s Available Assets and/or Minimum Required Assets. During the second quarter of 2018, Radian Guaranty received, on a confidential basis, a revised draft of the GSEs’ proposed changes to the PMIERs that takes into consideration, among other things, comments previously provided by private mortgage insurers to the GSEs and the FHFA. Based on this information, when the proposed PMIERs become effective, which we expect to be at the end of the first quarter of 2019, 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. From time to time, we enter into reinsurance transactions as part of our strategy to manage our capital position and risk profile, which includes managing Radian Guaranty’s position under the PMIERs financial requirements. The credit that we receive under the PMIERs financial requirements for these transactions is subject to periodic review by the GSEs. Services Our Services segment is primarily a fee-for-service business that offers a broad array of services to market participants across the mortgage and real estate value chain. These services comprise mortgage services, real estate services and title services, including technology-based and turn-key solutions, that provide information and other resources and services used to originate, evaluate, acquire, securitize, service and monitor residential real estate and loans secured by residential real estate. We provide these services to, among others, mortgage lenders, financial institutions, mortgage and real estate investors and government entities. Our mortgage services include transaction management services such as loan review, RMBS securitization and distressed asset reviews, servicer and loan surveillance and underwriting. We offer a comprehensive suite of real estate services that includes software solutions and platforms, as well as digitally delivered services, including: REO asset management; review and valuation services related to single family rental properties; real estate valuation services and real estate brokerage services. Our title services include title search, title insurance, settlement and closing services. 2018 Developments Capital and Liquidity Actions. On August 9, 2017, Radian Group’s board of directors renewed the Company’s share repurchase program, authorizing the Company to repurchase up to $50 million of its common stock. During the three and six months ended June 30, 2018 , the Company purchased 2,491,843 and 3,022,856 shares, respectively, at an average price of $16.07 and $16.56 per share, respectively, including commissions. At June 30, 2018 , there was no remaining purchase authority under this program. See Note 14 for additional information. Restructuring and Other Exit Costs. As a result of the Company’s continued implementation of its 2017 plan to restructure the Services business, in the three months ended June 30, 2018, pretax restructuring charges of $0.9 million were recognized, which include: (i) $1.0 million in cash expenses and (ii) an adjustment to the previously recognized loss related to the sale of our EuroRisk business. For the six months ended June 30, 2018, pretax restructuring charges of $1.5 million were recognized, all of which represented cash expenses. We expect to incur additional pretax charges of approximately $1.4 million under this restructuring plan, including approximately $1.1 million in cash payments. These remaining charges are expected to be recognized by December 31, 2018. The total estimated restructuring charges of approximately $2.9 million during 2018 are expected to consist of: (i) asset impairment charges of approximately $0.2 million ; (ii) employee severance and benefit costs of approximately $1.0 million ; (iii) facility and lease termination costs of approximately $1.5 million ; and (iv) contract termination and other restructuring costs of approximately $0.2 million . See Notes 1 and 7 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for additional information, including the events that led to the restructuring plan. IRS Matter. Radian has reached a settlement with the IRS which resolves the issues and concludes all disputes relating to the IRS Matter. In the three-month period ended June 30, 2018, we recorded tax benefits of $73.6 million , which includes both the impact of the settlement with the IRS as well as the reversal of certain previously accrued state and local tax liabilities. Under the terms of the settlement, Radian will submit to the IRS approximately $31 million of its $89 million “qualified deposits” with the U.S. Treasury, and the remaining balance will be returned to Radian. Therefore, the liquidity impact of the settlement is a decrease in available holding company liquidity of $31 million . See Note 9 for additional information. Significant Accounting Policies Basis of Presentation Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of Radian Group Inc. and its subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. We refer to Radian Group Inc. together with its consolidated subsidiaries as “Radian,” the “Company,” “we,” “us” or “our,” unless the context requires otherwise. We generally refer to Radian Group Inc. alone, without its consolidated subsidiaries, as “Radian Group.” Unless otherwise defined in this report, certain terms and acronyms used throughout this report are defined in the Glossary of Abbreviations and Acronyms included as part of this report. The financial information presented for interim periods is unaudited; however, such information reflects all adjustments that are, in the opinion of management, necessary for the fair statement of the financial position, results of operations, comprehensive income and cash flows for the interim periods presented. Such adjustments are of a normal recurring nature. The year-end condensed balance sheet data was derived from our audited financial statements, but does not include all disclosures required by GAAP. These interim financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2017 Form 10-K. The results of operations for interim periods are not necessarily indicative of results to be expected for the full year or for any other period. Certain prior period amounts have been reclassified to conform to current period presentation. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. Other Significant Accounting Policies See Note 2 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for information regarding other significant accounting policies. There have been no significant changes in our significant accounting policies from those discussed in our 2017 Form 10-K, other than described below, including in “ —Revenue Recognition—Services” and “—Recent Accounting Pronouncements—Accounting Standards Adopted During 2018.” Revenue Recognition—Services The FASB issued an update to the accounting standard regarding revenue recognition, Revenue from Contracts with Customers , which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from our contracts with customers to provide services. We adopted this update effective January 1, 2018, using the modified retrospective approach. The principle of this update requires an entity to recognize revenue representing the transfer of services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those services, recognized as the performance obligations are satisfied. The majority of our revenue-generating transactions are not subject to the new standard as this update did not change revenue recognition principles related to our investments and insurance products, which together represented the majority of our total revenue for the six months ending June 30, 2018 and are subject to other GAAP guidance discussed elsewhere within our disclosures. This update is primarily applicable to revenues from our Services segment. See “—Business Overview— Services ” for information about the services we offer. The table below represents the disaggregation of Services revenues by revenue type: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Services segment revenue Mortgage Services $ 16,346 $ 17,782 $ 30,335 $ 36,153 Real Estate Services 19,301 15,463 37,204 32,477 Title Services 2,461 6,730 4,735 11,434 Total (1) $ 38,108 $ 39,975 $ 72,274 $ 80,064 ______________________ (1) Includes inter-segment revenues of $0.9 million and $1.9 million for the three and six months ended June 30, 2018 and $2.2 million and $4.2 million for the three and six months ended June 30, 2017 , respectively. For both the three- and six-month periods ended June 30, 2018 , amounts exclude $2.4 million of Services segment net premiums earned—insurance and net investment income, as both are excluded from the scope of the revenue recognition standard. See Note 3 for segment information. Our Services segment revenues are recognized over time and measured each period based on the progress to date as services are performed and made available to customers. Our contracts with customers, including payment terms, are generally short-term in nature; therefore, any impact related to timing is immaterial. Revenue recognized related to services made available to customers and billed is reflected in accounts receivables. Revenue recognized related to services performed and not yet billed is recorded in unbilled receivables and reflected in other assets. We have no material bad-debt expense. The following represents balances related to Services contracts as of the dates indicated: (In thousands) June 30, 2018 December 31, 2017 Accounts Receivable - Services Contracts $ 11,705 $ 17,391 Unbilled Receivables - Services Contracts 16,478 22,257 Deferred Revenues - Services Contracts 3,814 3,235 Revenue expected to be recognized in any future period related to remaining performance obligations, such as contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material. Fee-for-Service Contracts Generally, our contracts with our clients do not include minimum volume commitments and can be terminated at any time by our clients. Although some of our contracts and assignments are recurring in nature, and include repetitive monthly assignments, a significant portion of our engagements are transactional in nature and may be performed in connection with securitizations, loan sales, loan purchases or other transactions. Due to the transactional nature of our business, our Services segment revenues may fluctuate from period to period as transactions are commenced or completed. We do not recognize revenue or expense related to amounts advanced by us and subsequently reimbursed by clients for maintenance or repairs because we do not take control of the service prior to the client taking control. We record an expense if an advance is made that is not in accordance with a client contract and the client is not obligated to reimburse us. Due to the nature of the services provided, our Services arrangements with customers may include any of the following three basic types of contracts: Fixed-Price Contracts. We use fixed-price contracts in our real estate valuation and component services, our loan review, underwriting and due diligence services as well as our title and closing services. We also use fixed-price contracts in our surveillance business for our servicer oversight services and RMBS surveillance services, and in our asset management business activities. Under fixed-price contracts we agree to perform the specified services and deliverables for a pre-determined per-unit or per-file price or day rate. Each service qualifies as a separate performance obligation and revenue is recognized as the service performed is made available to the client. Time-and-Expense Contracts. The Services segment also derives a portion of its revenue from professional service activities under time-and-expense contracts. In these types of contracts, we are paid a fixed hourly rate, and we are reimbursed for billable out-of-pocket expenses as work is performed. These contracts are used in our loan review, underwriting and due diligence services. Services revenue consisting of billed time fees and pass-through expenses is recorded over time and based on the progress to date as services are performed and made available to customers. Services revenue may also include expenses billed to clients, which includes travel and other out-of-pocket expenses, and other reimbursable expenses. Percentage-of-Sale Contracts. Under percentage-of-sale contracts, we are paid a contractual percentage of the sale proceeds upon the sale of each property. These contracts are only used for a portion of our REO management services and our real estate brokerage services. In addition, through the use of our proprietary technology, property leads are sent to select clients. Revenue attributable to services provided under a percentage-of-sale contract is recognized over time and measured based on the progress to date and typically coincides with the client’s successful closing on the property. The revenue recognized for these transactions is based on a percentage of the sale. In certain instances, fees are received at the time that an asset is assigned to Radian for management. These fees are recorded as deferred revenue and are recognized over time based on progress to date and the availability to customers. Recent Accounting Pronouncements Accounting Standards Adopted During 2018. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and subsequently issued various clarifying updates. Our adoption of this standard, effective January 1, 2018, had no impact on our financial statements. The disclosures required by this update are included above in “— Revenue Recognition—Services. ” In January 2016, the FASB issued an update that makes certain changes to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In February 2018, the FASB issued technical corrections related to this update, which addresses common questions regarding the application and adoption of the new guidance and the subsequent amendments. As a result of adopting these updates, equity securities are no longer classified as available for sale securities and changes in fair value are recognized through earnings. Consequently, we recorded a cumulative effect adjustment to retained earnings from accumulated other comprehensive income representing unrealized losses related to equity securities in the amount of $0.2 million , net of tax. In addition, we elected to utilize net asset value as a practical expedient to measure certain other investments, which resulted in an increase to other invested assets with an offset to retained earnings in the amount of $2.3 million , net of tax . Our adoption of both these updates effective January 1, 2018 resulted in a net increase to retained earnings of $2.1 million . See Notes 4 and 5 for additional information. In February 2018, the FASB issued an update to the accounting standard regarding income statement reporting of comprehensive income and reclassification of certain tax effects from accumulated other comprehensive income. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period, for reporting periods for which financial statements have not been available for issuance. We elected to early adopt this update effective January 1, 2018. As a result we recorded a reclassification adjustment from other comprehensive income to retained earnings in the amount of $2.7 million . See Note 9 for additional information regarding the TCJA. Accounting Standards Not Yet Adopted. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update, and the clarifying update issued in July 2018, is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently in the process of identifying our current leases that are subject to the scope of this standard and evaluating the impact on our financial statements and future disclosures as a result of this update. We expect to recognize right-of-use assets and related obligations upon adoption of this update. Most recently, in late July 2018 the FASB issued a further update containing certain targeted improvements to the accounting and disclosure requirements for leases, including an additional (and optional) transition method to recognize the cumulative-effect adjustment as of the beginning of the period of adoption, rather than recognizing the cumulative-effect adjustment as of the beginning of the earliest comparative period presented. We are currently evaluating the impact of the targeted improvements on our financial statements and future disclosures. See Note 13 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for additional information about our leases. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at their amortized cost basis be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This update is not applicable to credit losses associated with our mortgage insurance policies. We are currently evaluating the impact on our financial statements and future disclosures as a result of this update. In March 2017, the FASB issued an update to the accounting standard regarding receivables. The new standard requires certain premiums on purchased callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We do not expect the adoption of this update to have a material effect on our financial statements and disclosures. |
Note 2 - Net Income Per Share
Note 2 - Net Income Per Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income Per Share | Net Income Per Share Basic net income per share is computed by dividing net income by the weighted-average number of common shares outstanding, while diluted net income per share is computed by dividing net income attributable to common shareholders by the sum of the weighted-average number of common shares outstanding and the weighted-average number of dilutive potential common shares. Dilutive potential common shares relate to our share-based compensation arrangements and our outstanding convertible senior notes, if any. The calculation of basic and diluted net income per share was as follows: Three Months Ended Six Months Ended (In thousands, except per-share amounts) 2018 2017 2018 2017 Net income (loss)—basic $ 208,949 $ (27,342 ) $ 323,435 $ 49,130 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) — — — (215 ) Net income (loss)—diluted $ 208,949 $ (27,342 ) $ 323,435 $ 48,915 Average common shares outstanding—basic 213,976 215,152 215,049 215,054 Dilutive effect of Convertible Senior Notes due 2017 — — — 602 Dilutive effect of Convertible Senior Notes due 2019 — — — 922 Dilutive effect of share-based compensation arrangements (2) 3,854 — 3,692 3,896 Adjusted average common shares outstanding—diluted 217,830 215,152 218,741 220,474 Net income (loss) per share: Basic $ 0.98 $ (0.13 ) $ 1.50 $ 0.23 Diluted $ 0.96 $ (0.13 ) $ 1.48 $ 0.22 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the six months ended June 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. (2) There were no dilutive shares for the three months ended June 30, 2017, as a result of our net loss for the period. The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and convertible debt, if any, were not included in the calculation of diluted net income (loss) per share because they were anti-dilutive: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Shares of common stock equivalents 484 5,975 351 442 Shares of Convertible Senior Notes due 2017 — 509 — — |
Note 3 - Segment Reporting
Note 3 - Segment Reporting | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on its forecasted annual percentage of total revenue, which approximates the estimated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense (except for interest expense related to an intercompany note with terms consistent with the original issued amount of $300 million from the Senior Notes due 2019 that were used to fund our purchase of Clayton, all of which is allocated to our Services segment); and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on its forecasted annual percentage of total revenue, which approximates the estimated percentage of time spent on the Services segment and (ii) the allocated interest expense related to the intercompany note as described above. No material corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. Contract underwriting activities are reported within our Services segment. We include underwriting-related expenses for mortgage insurance, based on a pro-rata volume of mortgage applications excluding third-party contract underwriting services, in our Mortgage Insurance segment’s other operating expenses before corporate allocations. We include underwriting-related expenses for third-party contract underwriting services, based on a pro-rata volume of mortgage applications, in our Services segment’s cost of services and other operating expenses before corporate allocations, as applicable. Adjusted Pretax Operating Income (Loss) Our senior management, including our Chief Executive Officer (Radian’s chief operating decision maker), uses adjusted pretax operating income (loss) as our primary measure to evaluate the fundamental financial performance of each of Radian’s business segments and to allocate resources to the segments. Adjusted pretax operating income (loss) is defined as pretax income (loss) from continuing operations excluding the effects of net gains (losses) on investments and other financial instruments, loss on induced conversion and debt extinguishment, acquisition-related expenses, amortization or impairment of goodwill and other intangible assets, and net impairment losses recognized in earnings and losses from the sale of lines of business. Although adjusted pretax operating income excludes certain items that have occurred in the past and are expected to occur in the future, the excluded items represent those that are: (i) not viewed as part of the operating performance of our primary activities or (ii) not expected to result in an economic impact equal to the amount reflected in pretax income. These adjustments, along with the reasons for their treatment, are described below. (1) Net gains (losses) on investments and other financial instruments. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities, our tax and capital profile and overall market cycles. Unrealized investment gains and losses arise primarily from changes in the market value of our investments that are classified as trading or equity securities. These valuation adjustments may not necessarily result in realized economic gains or losses. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized and unrealized gains or losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). (2) Loss on induced conversion and debt extinguishment. Gains or losses on early extinguishment of debt and losses incurred to purchase our convertible debt prior to maturity are discretionary activities that are undertaken in order to take advantage of market opportunities to strengthen our financial and capital positions; therefore, we do not view these activities as part of our operating performance. Such transactions do not reflect expected future operations and do not provide meaningful insight regarding our current or past operating trends. Therefore, these items are excluded from our calculation of adjusted pretax operating income (loss). (3) Acquisition-related expenses. Acquisition-related expenses represent the costs incurred to effect an acquisition of a business (i.e., a business combination). Because we pursue acquisitions on a strategic and selective basis and not in the ordinary course of our business, we do not view acquisition-related expenses as a consequence of a primary business activity. Therefore, we do not consider these expenses to be part of our operating performance and they are excluded from our calculation of adjusted pretax operating income (loss). (4) Amortization or impairment of goodwill and other intangible assets. Amortization of intangible assets represents the periodic expense required to amortize the cost of intangible assets over their estimated useful lives. Intangible assets with an indefinite useful life are also periodically reviewed for potential impairment, and impairment adjustments are made whenever appropriate. These charges are not viewed as part of the operating performance of our primary activities and therefore are excluded from our calculation of adjusted pretax operating income (loss). (5) Net impairment losses recognized in earnings and losses from the sale of lines of business . The recognition of net impairment losses on investments and the impairment of other long-lived assets does not result in a cash payment and can vary significantly in both amount and frequency, depending on market credit cycles and other factors. Losses from the sale of lines of business are highly discretionary as a result of strategic restructuring decisions, and generally do not occur in the normal course of our business. We do not view these losses to be indicative of our fundamental operating activities. Therefore, whenever these losses occur, we exclude them from our calculation of adjusted pretax operating income (loss). Summarized operating results for our segments for the periods indicated, are as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Mortgage Insurance Net premiums written—insurance (1) $ 251,958 $ 241,307 $ 489,938 $ 465,972 (Increase) decrease in unearned premiums (2,990 ) (12,211 ) 1,580 (15,076 ) Net premiums earned—insurance 248,968 229,096 491,518 450,896 Net investment income 37,447 30,071 71,403 61,103 Other income 621 612 1,428 1,358 Total (2) 287,036 259,779 564,349 513,357 Provision for losses 19,362 17,714 56,753 64,946 Policy acquisition costs 5,996 6,123 13,113 12,852 Other operating expenses before corporate allocations 33,262 37,939 65,150 77,228 Total (3) 58,620 61,776 135,016 155,026 Adjusted pretax operating income before corporate allocations 228,416 198,003 429,333 358,331 Allocation of corporate operating expenses 20,136 15,894 38,713 30,080 Allocation of interest expense 10,840 11,748 21,469 23,257 Adjusted pretax operating income $ 197,440 $ 170,361 $ 369,151 $ 304,994 ______________________ (1) Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. (2) Excludes net losses on investments and other financial instruments of $7.4 million and $26.3 million for the three and six months ended June 30, 2018 , and net gains on investments and other financial instruments of $5.3 million and $2.5 million for the three and six months ended June 30, 2017 , not included in adjusted pretax operating income. (3) Includes inter-segment expenses as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Inter-segment expenses $ 885 $ 2,173 $ 1,887 $ 4,235 Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Services Net premiums earned—insurance (1) $ 2,376 $ — $ 2,376 $ — Services revenue (2) 37,713 39,975 71,879 80,064 Net investment income (1) 26 — 26 — Other income (1) 395 — 395 — Total (2) 40,510 39,975 74,676 80,064 Provision for losses (1) 53 — 53 — Cost of services 24,357 25,962 47,627 54,652 Other operating expenses before corporate allocations 14,015 12,803 24,759 25,407 Restructuring and other exit costs (3) 1,055 — 1,580 — Total 39,480 38,765 74,019 80,059 Adjusted pretax operating income (loss) before corporate allocations 1,030 1,210 657 5 Allocation of corporate operating expenses 3,010 3,404 5,794 7,122 Allocation of interest expense 4,451 4,431 8,902 8,860 Adjusted pretax operating income (loss) $ (6,431 ) $ (6,625 ) $ (14,039 ) $ (15,977 ) ______________________ (1) Results from inclusion of the operations of EnTitle Direct, a national title insurance and settlement services company, acquired in March 2018. (2) Includes inter-segment revenues as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Inter-segment revenues $ 885 $ 2,173 $ 1,887 $ 4,235 (3) Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income. Selected balance sheet information for our segments, as of the periods indicated, is as follows: At June 30, 2018 (In thousands) Mortgage Insurance Services Total Total assets $ 5,949,845 $ 189,643 $ 6,139,488 At December 31, 2017 (In thousands) Mortgage Insurance Services Total Total assets $ 5,733,918 $ 166,963 $ 5,900,881 The reconciliation of adjusted pretax operating income to consolidated pretax income (loss) is as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 197,440 $ 170,361 $ 369,151 $ 304,994 Services (1) (6,431 ) (6,625 ) (14,039 ) (15,977 ) Total adjusted pretax operating income 191,009 163,736 355,112 289,017 Net gains (losses) on investments and other financial instruments (7,404 ) 5,331 (26,291 ) 2,480 Loss on induced conversion and debt extinguishment — (1,247 ) — (5,703 ) Acquisition-related expenses (2) (416 ) (64 ) (416 ) (72 ) Impairment of goodwill — (184,374 ) — (184,374 ) Amortization and impairment of other intangible assets (2,748 ) (18,856 ) (5,496 ) (22,152 ) Impairment of other long-lived assets and loss from the sale of a business line (3) 130 — 104 — Consolidated pretax income (loss) $ 180,571 $ (35,474 ) $ 323,013 $ 79,196 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. (3) Included within restructuring and other exit costs. See Note 1. On a consolidated basis, “adjusted pretax operating income” is a measure not determined in accordance with GAAP. Total adjusted pretax operating income is not a measure of total profitability, and therefore should not be considered in isolation or viewed as a substitute for GAAP pretax income. Our definition of adjusted pretax operating income may not be comparable to similarly-named measures reported by other companies. |
Note 4 - Fair Value of Financia
Note 4 - Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Available for sale securities, trading securities, equity securities and certain other assets are recorded at fair value. All changes in the fair value of trading securities, equity securities and certain other assets are included in our condensed consolidated statements of operations. All changes in the fair value of available for sale securities are recorded in accumulated other comprehensive income. As a result of our implementation of the update to the standard for the accounting of financial instruments, we elected to measure certain other investments using the net asset value as a practical expedient. See Note 1 “—Significant Accounting Policies— Recent Accounting Pronouncements — Accounting Standards Adopted During 2018 ” for additional information. There were no other changes to our fair value methodologies during the six months ended June 30, 2018 . In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. We provide a qualitative description of the valuation techniques and inputs used for recurring and non-recurring fair value measurements in our audited financial statements and notes thereto included in our 2017 Form 10-K. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2017 Form 10-K. The following is a list of assets that are measured at fair value by hierarchy level as of June 30, 2018 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 137,749 $ 19,457 $ 157,206 State and municipal obligations — 351,085 351,085 Money market instruments 211,348 — 211,348 Corporate bonds and notes — 2,331,887 2,331,887 RMBS — 268,449 268,449 CMBS — 527,098 527,098 Other ABS — 693,672 693,672 Foreign government and agency securities — 50,433 50,433 Equity securities 139,637 5,269 144,906 Other investments (1) — 172,993 172,993 Total Investments at Fair Value (2) 488,734 4,420,343 4,909,077 (3) Total Assets at Fair Value $ 488,734 $ 4,420,343 $ 4,909,077 (3) ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $3.2 million ), primarily invested in limited partnership investments valued using the net asset value as a practical expedient. Includes cash collateral held under securities lending agreements ( $39.2 million ) reinvested in money market instruments. (3) Includes $38.4 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2017 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 124,969 $ 8,023 $ 132,992 State and municipal obligations — 386,111 386,111 Money market instruments 213,357 — 213,357 Corporate bonds and notes — 2,304,017 2,304,017 RMBS — 216,749 216,749 CMBS — 503,955 503,955 Other ABS — 676,158 676,158 Foreign government and agency securities — 36,448 36,448 Equity securities 175,205 860 176,065 Other investments (1) — 25,720 25,720 Total Investments at Fair Value (2) 513,531 4,158,041 4,671,572 (3) Total Assets at Fair Value $ 513,531 $ 4,158,041 $ 4,671,572 (3) ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $0.3 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Includes cash collateral held under securities lending agreements ( $19.4 million ) reinvested in money market instruments. (3) Includes $28.0 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. There were no Level III assets measured at fair value at June 30, 2018 or December 31, 2017 , and no Level III liabilities. There were no investment transfers between Level I, Level II or Level III for the three and six months ended June 30, 2018 and 2017 . Other Fair Value Disclosure The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value in our condensed consolidated balance sheets were as follows as of the dates indicated: June 30, 2018 December 31, 2017 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets (1) $ — $ — $ 334 $ 3,226 Liabilities: Senior notes 1,028,687 1,040,249 1,027,074 1,093,934 ______________________ (1) As a result of implementing the update to the standard for the accounting of financial instruments effective January 1, 2018, other invested assets are no longer carried at amortized cost. |
Note 5 - Investments
Note 5 - Investments | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Investments | Investments Available for Sale Securities Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: June 30, 2018 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 72,811 $ 71,045 (1) $ 1 $ 1,767 State and municipal obligations 136,649 137,699 2,957 1,907 Corporate bonds and notes 1,987,444 1,933,044 4,617 59,017 RMBS 249,577 243,659 (2) 1 5,919 CMBS 487,805 477,751 228 10,282 Other ABS 694,613 692,564 1,132 3,181 Foreign government and agency securities 46,826 46,290 116 652 Total fixed-maturities available for sale $ 3,675,725 $ 3,602,052 (3) $ 9,052 $ 82,725 ______________________ (1) Includes securities with a fair value of $10.6 million serving as collateral for FHLB advances. (2) Includes securities with a fair value of $112.2 million serving as collateral for FHLB advances. (3) Includes $16.0 million of fixed maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. December 31, 2017 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 69,667 $ 69,396 $ 96 $ 367 State and municipal obligations 156,587 161,722 5,834 699 Corporate bonds and notes 1,869,318 1,894,886 33,620 8,052 RMBS 189,455 187,229 636 2,862 CMBS 451,595 453,394 3,409 1,610 Other ABS 672,715 674,548 2,655 822 Foreign government and agency securities 31,417 32,207 823 33 Total fixed-maturities available for sale 3,440,754 3,473,382 (1) 47,073 14,445 Equity securities available for sale (2) 176,349 176,065 (1) 1,705 1,989 Total debt and equity securities available for sale $ 3,617,103 $ 3,649,447 $ 48,778 $ 16,434 ______________________ (1) Includes $14.7 million of fixed maturity securities and $13.2 million of equity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. (2) Primarily consists of investments in fixed-income and equity exchange-traded funds and publicly-traded business development company equities. For the six months ended June 30, 2018 , we did not transfer any securities from the available for sale or trading categories. Gross Unrealized Losses and Fair Value of Available for Sale Securities For securities deemed “available for sale” and that are in an unrealized loss position, the following tables show the gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of June 30, 2018 and December 31, 2017 are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. June 30, 2018 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 8 $ 41,506 $ 1,253 3 $ 9,502 $ 514 11 $ 51,008 $ 1,767 State and municipal obligations 27 78,350 1,907 — — — 27 78,350 1,907 Corporate bonds and notes 406 1,548,096 50,572 29 119,977 8,445 435 1,668,073 59,017 RMBS 24 168,364 2,175 27 75,189 3,744 51 243,553 5,919 CMBS 76 436,659 9,898 8 8,222 384 84 444,881 10,282 Other ABS 124 423,815 3,063 10 15,436 118 134 439,251 3,181 Foreign government and agency securities 26 39,520 652 — — — 26 39,520 652 Total 691 $ 2,736,310 $ 69,520 77 $ 228,326 $ 13,205 768 $ 2,964,636 $ 82,725 December 31, 2017 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 6 $ 23,309 $ 129 3 $ 9,799 $ 238 9 $ 33,108 $ 367 State and municipal obligations 21 65,898 699 — — — 21 65,898 699 Corporate bonds and notes 152 672,318 4,601 32 139,105 3,451 184 811,423 8,052 RMBS 8 19,943 204 26 101,812 2,658 34 121,755 2,862 CMBS 35 139,353 1,395 4 3,518 215 39 142,871 1,610 Other ABS 92 260,864 777 7 8,297 45 99 269,161 822 Foreign government and agency securities 5 7,397 33 — — — 5 7,397 33 Equity securities 13 149,785 1,989 — — — 13 149,785 1,989 Total 332 $ 1,338,867 $ 9,827 72 $ 262,531 $ 6,607 404 $ 1,601,398 $ 16,434 Although we held securities in an unrealized loss position as of June 30, 2018 , we did not consider those securities to be other-than-temporarily impaired as of such date. For all investment categories, the unrealized losses of 12 months or greater duration as of June 30, 2018 were generally caused by interest rate or credit spread movements since the purchase date, and as such, we expect to recover the amortized cost basis of these securities. As of June 30, 2018 , we did not have the intent to sell any debt securities in an unrealized loss position, and we determined that it is more likely than not that we will not be required to sell the securities before recovery of their cost basis, which may be at maturity; therefore, we did not consider these investments to be other-than-temporarily impaired at June 30, 2018 . Other-than-temporary Impairment Activity. To the extent we determine that a security is deemed to have had an other-than-temporary impairment, an impairment loss is recognized. During the six months ended June 30, 2018 , we recorded other-than-temporary impairment losses in earnings of $0.8 million due to our intent to sell certain corporate and state and municipal bonds at a loss. While we recognized other-than-temporary impairment losses related to our intent to sell securities, there were no credit-related impairment losses recognized in earnings during the six months ended June 30, 2018. During the six months ended June 30, 2017 , we recorded other-than-temporary impairment losses in earnings of $1.0 million , including $0.5 million related to a convertible note of a non-public company issuer included in debt securities and $0.5 million related to a privately-placed equity security, because we concluded that we would not recover the amortized cost basis of these securities due to credit deterioration. There were no other-than-temporary impairment losses recognized in accumulated other comprehensive income (loss) during the six months ended June 30, 2018 or the year ended December 31, 2017 . Trading Securities The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) June 30, December 31, Trading securities: State and municipal obligations $ 200,702 $ 214,841 Corporate bonds and notes 256,652 307,271 RMBS 24,790 29,520 CMBS 49,347 50,561 Foreign government and agency securities 4,143 4,241 Total (1) $ 535,634 $ 606,434 ______________________ (1) At December 31, 2017, includes a de minimis amount of loaned securities under securities lending agreements that are classified as other assets in our consolidated balance sheets, as further described below. Securities Lending Agreements During the third quarter of 2017, we commenced participation in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. In all of our securities lending agreements, the securities we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. Although we report such securities at fair value within other assets in our condensed consolidated balance sheets, the detailed information regarding investments provided in this Note includes these securities. Under our securities lending agreements, the Borrower is required to provide to us collateral, consisting of cash or securities, in amounts generally equal to or exceeding (i) 102% of the value of the loaned securities ( 105% in the case of foreign securities) or (ii) another agreed-upon percentage not less than 100% of the market value of the loaned securities. Any cash collateral we receive may be invested in liquid assets. The Borrower generally may return the loaned securities to us at any time, which would require us to return the collateral within the standard settlement period for the loaned securities on the principal exchange or market in which the securities are traded. We manage this liquidity risk associated with cash collateral by maintaining the cash collateral in a short-term money-market fund with daily availability. The credit risk under these programs is reduced by the amounts of collateral received. On a daily basis, the value of the underlying securities that we have loaned to the Borrowers is compared to the value of cash and securities collateral we received from the Borrowers, and additional cash or securities are requested or returned, as applicable. In addition, we are indemnified against counterparty credit risk by the intermediary. Key balances related to our securities lending agreements consisted of the following as of the dates indicated: (In thousands) June 30, December 31, Loaned securities (1) : Corporate bonds and notes $ 16,199 $ 13,862 Foreign government and agency securities 222 867 Equity securities 21,929 13,235 Total loaned securities, at fair value $ 38,350 $ 27,964 Total loaned securities, at amortized cost $ 39,503 $ 27,846 Securities collateral on deposit from Borrowers (2) 92 9,342 Reinvested cash collateral, at estimated fair value (3) 39,224 19,357 ______________________ (1) Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. (2) Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. (3) All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets. Net Gains (Losses) on Investments and Other Financial Instruments Net gains (losses) on investments and other financial instruments consisted of: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net realized gains (losses): Fixed-maturities available for sale $ (1,691 ) $ (1,180 ) $ (4,811 ) $ (3,689 ) Equity securities 498 385 640 385 Trading securities (112 ) (349 ) (650 ) (6,043 ) Short-term investments (7 ) (38 ) (7 ) (32 ) Other invested assets 201 — 263 — Other gains (losses) 23 — 35 18 Net realized gains (losses) on investments (1,088 ) (1,182 ) (4,530 ) (9,361 ) Other-than-temporary impairment losses — (1,000 ) (844 ) (1,000 ) Net unrealized gains (losses) on investment securities (1) (5,733 ) 6,938 (18,537 ) 12,164 Total net gains (losses) on investments (6,821 ) 4,756 (23,911 ) 1,803 Net gains (losses) on other financial instruments (583 ) 575 (2,380 ) 677 Net gains (losses) on investments and other financial instruments $ (7,404 ) $ 5,331 $ (26,291 ) $ 2,480 ______________________ (1) These amounts include unrealized gains (losses) on investment securities other than securities available for sale. For the three and six months ended June 30, 2017 , the unrealized gains (losses) on investments exclude the net change in unrealized gains and losses on equity securities. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized gains (losses) associated with equity securities were classified in accumulated other comprehensive income. Net Unrealized Gains (Losses) on Investment Securities The net changes in unrealized gains (losses) from trading securities and equity securities still held at period end were as follows for the periods indicated: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net changes in unrealized gains (losses) (1) : Equity securities $ 224 $ — $ (702 ) $ — Trading securities (2) (5,801 ) 5,913 (16,801 ) 7,979 Net unrealized gains (losses) on investment securities $ (5,577 ) $ 5,913 $ (17,503 ) $ 7,979 ______________________ (1) Related only to securities still held at period end. All amounts shown are included in net gains (losses) on investments and other financial instruments. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized losses associated with equity securities were classified in accumulated other comprehensive income. (2) Includes a de minimis amount of net changes in unrealized gains (losses) related to short-term securities. Contractual Maturities The contractual maturities of fixed-maturity investments available for sale were as follows: June 30, 2018 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 45,836 $ 45,694 Due after one year through five years (1) 789,095 774,712 Due after five years through 10 years (1) 1,012,314 973,838 Due after 10 years (1) 396,485 393,834 RMBS (2) 249,577 243,659 CMBS (2) 487,805 477,751 Other ABS (2) 694,613 692,564 Total (3) $ 3,675,725 $ 3,602,052 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. (3) Includes securities loaned under securities lending agreements. Other At June 30, 2018 , Radian had an aggregate amount of $122.8 million of U.S. government and agency securities and RMBS, classified as fixed-maturities available for sale within our investment securities portfolio, serving as collateral for our FHLB advances. There were no FHLB advances outstanding at December 31, 2017 . See Note 12 for additional information. Securities on deposit with various state insurance commissioners amounted to $15.4 million and $11.8 million at June 30, 2018 and December 31, 2017 , respectively. |
Note 6 - Goodwill and Other Int
Note 6 - Goodwill and Other Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | Goodwill and Other Intangible Assets, Net All of our goodwill and other intangible assets relate to our Services segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended June 30, 2018 and December 31, 2017 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2016 $ 197,265 $ (2,095 ) $ 195,170 Goodwill acquired 126 — 126 Impairment losses — (184,374 ) (184,374 ) Balance at December 31, 2017 197,391 (186,469 ) 10,922 Goodwill acquired — — — Impairment losses — — — Balance at June 30, 2018 $ 197,391 $ (186,469 ) $ 10,922 Accounting Policy Considerations Goodwill is an asset representing the estimated future economic benefits arising from the assets we have acquired that are not individually identified and separately recognized, and includes the value of the discounted expected future cash flows from these businesses, the workforce, expected synergies with our other affiliates and other unidentifiable intangible assets. Goodwill is deemed to have an indefinite useful life and is subject to review for impairment annually, or more frequently, whenever events and circumstances indicate potential impairment. For purposes of performing our goodwill impairment test, we have concluded that the Services segment constitutes one reporting unit to which all of our recorded goodwill is related. In the second quarter of 2018, we performed a qualitative assessment of goodwill and other intangible assets and considered factors such as: (i) the decline in and timing of revenues during the second quarter of 2018 for the Services segment (as compared to the forecasted amounts for the same period); (ii) the current carrying amount of reporting unit and asset groupings; and (iii) our recent goodwill impairment test and recognition of impairment charges. Based on our qualitative assessment in the second quarter of 2018, we concluded that it is not “more likely than not” that the fair value of the Services reporting unit is less than its carrying amount as of June 30, 2018. In addition, we concluded that the carrying amounts of other intangible assets are supported by projected earnings. We monitor the performance of the Services segment each quarter, including through our annual impairment assessment planned for the fourth quarter of 2018. For additional information on our accounting policies for goodwill and other intangible assets, see Note 2 of Notes to Consolidated Financial Statements in our 2017 Form 10-K. Other Intangible Assets The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: June 30, 2018 (In thousands) Original Amount Acquired Accumulated Amortization and Impairment Net Carrying Amount Client relationships (1) $ 82,530 $ (44,912 ) $ 37,618 Technology (2) 15,250 (9,992 ) 5,258 Trade name and trademarks 8,340 (3,434 ) 4,906 Client backlog 6,680 (6,680 ) — Non-competition agreements 185 (173 ) 12 Licenses 463 — 463 Total $ 113,448 $ (65,191 ) $ 48,257 December 31, 2017 (In thousands) Original Amount Acquired Accumulated Amortization Net Carrying Amount Client relationships (1) $ 82,530 $ (41,596 ) $ 40,934 Technology (2) 15,250 (8,922 ) 6,328 Trade name and trademarks 8,340 (3,003 ) 5,337 Client backlog 6,680 (6,006 ) 674 Non-competition agreements 185 (168 ) 17 Total $ 112,985 $ (59,695 ) $ 53,290 ______________________ (1) Includes an impairment charge of $14.9 million in the quarter ended June 30, 2017. (2) Includes an impairment charge of $0.9 million in the quarter ended June 30, 2017. The estimated aggregate amortization expense for the remainder of 2018 and thereafter is as follows (in thousands): 2018 $ 6,934 2019 8,146 2020 6,827 2021 5,413 2022 4,881 2023 4,430 Thereafter 11,626 Total $ 48,257 Generally, for tax purposes, substantially all of our goodwill and other intangible assets are deductible and will be amortized over a period of 15 years from acquisition. |
Note 7 - Reinsurance
Note 7 - Reinsurance | 6 Months Ended |
Jun. 30, 2018 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance | Reinsurance The effect of reinsurance on our mortgage insurance net premiums written and earned is as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net premiums written—insurance: Direct $ 283,783 $ 260,647 $ 541,694 $ 500,292 Ceded (1) (31,825 ) (19,340 ) (51,756 ) (34,320 ) Net premiums written—insurance $ 251,958 $ 241,307 $ 489,938 $ 465,972 Net premiums earned—insurance: Direct $ 265,581 $ 243,229 $ 524,324 $ 479,291 Assumed 7 7 13 14 Ceded (1) (16,620 ) (14,140 ) (32,819 ) (28,409 ) Net premiums earned—insurance $ 248,968 $ 229,096 $ 491,518 $ 450,896 ______________________ (1) Net of profit commission. Single Premium QSR Program In the first quarter of 2016, Radian Guaranty entered into the 2016 Single Premium QSR Agreement with a panel of third-party reinsurers. Effective December 31, 2017, we amended the 2016 Single Premium QSR Agreement to increase the amount of ceded risk on performing loans under the agreement from 35% to 65% for the 2015 through 2017 vintages. As of the effective date, the result of this amendment increased the amount of risk ceded on Single Premium Policies, including for the purposes of calculating any future ceding commissions and profit commissions that Radian Guaranty will earn. It will also increase the future amounts of our ceded premiums and ceded losses. As of January 1, 2018, Radian Guaranty is no longer ceding NIW under this arrangement. RIF ceded under the 2016 Single Premium QSR Agreement was $6.6 billion and $4.1 billion as of June 30, 2018 and 2017 , respectively. In October 2017, we entered into the 2018 Single Premium QSR Agreement with a panel of third-party reinsurers. Under the 2018 Single Premium QSR Agreement, we expect to cede 65% of our Single Premium NIW beginning with the business written in January 2018, subject to certain conditions that may affect the amount ceded, including a limitation on ceded premium written equal to $335 million for policies issued between January 1, 2018 and December 31, 2019. Notwithstanding this limitation, the parties may mutually agree to amend the agreement, including with respect to any limitations on the amounts of insurance that may be ceded. RIF ceded under the 2018 Single Premium QSR Agreement was $1.0 billion as of June 30, 2018 . QSR Program In 2012, Radian Guaranty entered into the QSR Program with a third-party reinsurance provider. Radian Guaranty has ceded the maximum amount permitted under the QSR Program and is no longer ceding NIW under these transactions. RIF ceded under the QSR Program was $1.0 billion and $1.4 billion as of June 30, 2018 and 2017 , respectively. See Note 8 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for more information about our reinsurance transactions. The following tables show the amounts related to the Single Premium QSR Program and the QSR Program for the periods indicated: Single Premium QSR Program Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Ceded premiums written (1) $ 28,107 $ 13,856 $ 43,898 $ 22,816 Ceded premiums earned (1) 11,160 6,311 21,537 12,170 Ceding commissions written 9,880 5,134 16,501 8,846 Ceding commissions earned (2) 5,643 3,248 10,911 6,185 Ceded losses 1,013 464 1,913 1,037 QSR Program Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Ceded premiums written (1) $ 3,516 $ 5,059 $ 7,447 $ 10,516 Ceded premiums earned (1) 5,258 7,404 10,870 15,238 Ceding commissions written 1,012 1,446 2,140 3,005 Ceding commissions earned (2) 2,896 3,379 6,444 7,273 Ceded losses 6 (310 ) 252 260 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. |
Note 8 - Other Assets
Note 8 - Other Assets | 6 Months Ended |
Jun. 30, 2018 | |
Other Assets [Abstract] | |
Other Assets | Other Assets The following table shows the components of other assets as of the dates indicated: (In thousands) June 30, December 31, Property and equipment (1) $ 90,184 87,042 Deposit with the IRS (Note 9) 88,557 88,557 Corporate-owned life insurance 84,560 85,862 Loaned securities 38,350 27,964 Accrued investment income 33,762 31,389 Unbilled receivables 16,478 22,257 Deferred policy acquisition costs 16,266 16,987 Reinsurance recoverables 12,841 8,492 Other 49,079 39,299 Total other assets $ 430,077 $ 407,849 ______________________ (1) Property and equipment at cost, less accumulated depreciation of $115.5 million and $106.0 million at June 30, 2018 and December 31, 2017 , respectively. Depreciation expense was $4.8 million and $4.1 million for the three-month periods ended June 30, 2018 and 2017 , respectively, and $9.5 million and $8.3 million for the six-month periods ended June 30, 2018 and 2017 , respectively. |
Note 9 - Income Taxes
Note 9 - Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For additional information on our income taxes, including our accounting policies and the TCJA, see Notes 1 and 10 of Notes to Consolidated Financial Statements in our 2017 Form 10-K. Because the TCJA was passed late in the fourth quarter of 2017 and ongoing guidance and accounting interpretation is expected throughout 2018, as of December 31, 2017, we made provisional estimates for the effects of the TCJA in accordance with SAB 118. These provisional estimates primarily related to NOLs, loss reserves, tax depreciation, share-based compensation and state taxes. We expect to complete our analysis of all deferred tax balances by December 2018. As of June 30, 2018 , we have not recorded any measurement period adjustments in accordance with SAB 118 to change our provisional amounts that were recorded as of December 31, 2017. As of June 30, 2018 , for federal income tax purposes, we have approximately $2.3 million of federal NOL carryforwards. These carryforwards were obtained as part of the acquisition of EnTitle Direct and, as such, their annual utilization amount is limited under IRC Section 382. However, we still expect to fully utilize these NOLs prior to their expiration in tax year 2037. We also have approximately $47.1 million of AMT credit carryforwards, which are expected to be utilized or refunded, because any AMT credits that are not fully utilized as a credit against our existing tax liabilities may be claimed as a refundable credit. Some portion of the refundable credit may be subject to sequestration under the provisions of the Balanced Budget and Emergency Deficit Reduction Act of 1985. However, we do not expect the amount potentially subject to sequestration to be material. We are required to establish a valuation allowance against our deferred tax assets when it is more likely than not that all or some portion of our deferred tax assets will not be realized. At each balance sheet date, we assess our need for a valuation allowance and our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our deferred tax assets will be realized in future periods. In making this assessment as of June 30, 2018 , we determined that certain of our subsidiaries within Radian may continue to generate taxable losses on a separate company basis in the near term and may not be able to fully utilize certain of their state and local NOLs on their state and local tax returns. As of June 30, 2018 , our valuation allowance is $57.1 million , which relates primarily to these separate company NOLs and other state tax timing adjustments. In July 2018, we finalized a settlement with the IRS related to adjustments we had been contesting that resulted from the examination by the IRS of our 2000 through 2007 consolidated federal income tax returns. The IRS was opposing the recognition of certain tax losses and deductions that were generated through our investment in a portfolio of non-economic REMIC residual interests and proposed denying the associated tax benefits of these items. We appealed these proposed adjustments to the Internal Revenue Service Office of Appeals and made “qualified deposits” with the U.S. Treasury of $85 million in June 2008 relating to the 2000 through 2004 tax years and $4 million in May 2010 relating to the 2005 through 2007 tax years, in order to avoid the accrual of incremental above-market-rate interest with respect to the proposed adjustments. We attempted to reach a compromised settlement with the Internal Revenue Service Office of Appeals, but in September 2014 we received Notices of Deficiency covering the 2000 through 2007 tax years that asserted unpaid taxes and penalties of $157 million . The Notices of Deficiency also reflected additional amounts due of $105 million, which were primarily associated with the disallowance of the previously filed carryback of our 2008 NOL to the 2006 and 2007 tax years. See Footnote 10 of Notes to Consolidated Financial Statements in our 2017 Form 10-K. In October 2017, the parties informed the U.S. Tax Court that they believed they had reached agreement in principle on all issues in the dispute. As required by law, this agreement was reported to the JCT for review, and in April 2018, we were notified that the JCT had no objection to the terms of the agreement and that the IRS was working towards finalizing the settlement decision documents. In July 2018, the parties submitted final decision documents covering all years at issue (2000-2007) and on July 26, 2018 the Tax Court approved the settlement. This settlement with the IRS resolves the issues and concludes all disputes relating to the IRS Matter. In the three-month period ended June 30, 2018, we recorded tax benefits of $73.6 million , which includes both the impact of the settlement with the IRS as well as the reversal of certain previously accrued state and local tax liabilities. Under the terms of the settlement, we will submit to the IRS approximately $31 million of our $89 million “qualified deposits” with the U.S. Treasury and the remaining balance will be returned to us. Due to the resolution of our long-standing IRS Matter, in the second quarter of 2018 we recognized a reduction in our gross unrecognized tax benefits. This reduction, which excludes deferred uncertain tax positions as well as interest and penalties, was approximately $88.6 million , and will be reflected in our annual reconciliation of uncertain tax positions. This amount includes the reversal of certain state and local unrecognized tax benefits relating to the IRS dispute. |
Note 10 - Losses and LAE
Note 10 - Losses and LAE | 6 Months Ended |
Jun. 30, 2018 | |
Insurance Loss Reserves [Abstract] | |
Losses and Loss Adjustment Expense | Losses and Loss Adjustment Expense Our reserve for losses and LAE, at the end of each period indicated, consisted of: (In thousands) June 30, December 31, Mortgage insurance loss reserves $ 448,094 $ 507,588 Services loss reserves (1) 3,448 — Total reserve for losses and LAE $ 451,542 $ 507,588 ______________________ (1) A majority of this amount is included in the reinsurance recoverables reported in other assets in our condensed consolidated balance sheet, and relates to the acquisition of EnTitle Direct, completed on March 27, 2018. The following table shows our mortgage insurance reserve for losses and LAE by category at the end of each period indicated: (In thousands) June 30, December 31, Reserves for losses by category: Prime $ 255,284 $ 285,022 Alt-A and A minus and below 144,379 170,873 IBNR and other 14,246 16,021 LAE 12,228 13,349 Reinsurance recoverable (1) 9,317 8,315 Total primary reserves 435,454 493,580 Total pool reserves (2) 12,197 13,463 Total First-lien reserves 447,651 507,043 Other (3) 443 545 Total reserve for losses $ 448,094 $ 507,588 ______________________ (1) Represents ceded losses on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. (2) Includes reinsurance recoverable of $24 thousand and $35 thousand as of June 30, 2018 and December 31, 2017 , respectively. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. The following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Six Months Ended (In thousands) 2018 2017 Balance at beginning of period $ 507,588 $ 760,269 Less: Reinsurance recoverables (1) 8,350 6,851 Balance at beginning of period, net of reinsurance recoverables 499,238 753,418 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 67,286 88,906 Prior years (11,311 ) (24,721 ) Total incurred 55,975 64,185 Deduct: Paid claims and LAE related to: Current year (2) 1,091 1,027 Prior years 115,369 172,356 Total paid 116,460 173,383 Balance at end of period, net of reinsurance recoverables 438,753 644,220 Add: Reinsurance recoverables (1) 9,341 7,371 Balance at end of period $ 448,094 $ 651,591 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. Reserve Activity 2018 Activity Our mortgage insurance loss reserves at June 30, 2018 declined as compared to December 31, 2017 , primarily as a result of the amount of paid claims continuing to outpace losses incurred related to new default notices reported in the current year. Reserves established for new default notices were the primary driver of our incurred losses for the six months ended June 30, 2018 , and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was 9% as of June 30, 2018 . The provision for losses during the first six months of 2018 was positively impacted by favorable reserve development on prior year defaults, which was primarily driven by a reduction during the period in certain Default to Claim Rate assumptions for these prior year defaults compared to the assumptions used at December 31, 2017. The reductions in Default to Claim Rate assumptions resulted from observed trends, primarily higher Cures than were previously estimated. Following Hurricanes Harvey and Irma, which occurred in the third quarter of 2017, we observed an increase in new primary defaults from FEMA designated areas associated with these hurricanes. We expect most of these hurricane-related defaults to cure by the end of 2018, and at higher cure rates than the rates of our general population of defaults. We therefore assigned a 3% Default to Claim Rate assumption to the new primary defaults from FEMA Designated Areas associated with Hurricanes Harvey and Irma that were reported subsequent to those two natural disasters and through February 2018. These incremental defaults did not have a material impact on our provision for losses as of June 30, 2018 or December 31, 2017 . However, the future reserve impact may be affected by various factors, including the pace of economic recovery in the FEMA Designated Areas. Total claims paid decreased for the six months ended June 30, 2018 , compared to the same period in 2017 , consistent with the ongoing decline in the outstanding default inventory. 2017 Activity Our loss reserves at June 30, 2017 declined as compared to December 31, 2016, primarily as a result of the amount of paid claims and Cures continuing to outpace losses incurred related to new default notices reported in the current year. Reserves established for new default notices were the primary driver of our total incurred loss for the six months ended June 30, 2017, and they were primarily impacted by the number of new primary default notices received in the period and our related gross Default to Claim Rate assumption applied to those new defaults, which was 11% as of June 30, 2017 . The provision for losses during the first six months of 2017 was positively impacted by favorable reserve development on prior year defaults, which was primarily driven by a reduction during the period in certain Default to Claim Rate assumptions for these prior year defaults compared to those used at December 31, 2016. The reductions in Default to Claim Rate assumptions resulted from observed trends, primarily higher Cures than were previously estimated. The positive development in prior year defaults was partially offset by a decrease in estimated rates of future Loss Mitigation Activities compared to those used at December 31, 2016. Reserve Assumptions Default to Claim Rate Our aggregate weighted-average net Default to Claim Rate assumption (net of Claim Denials and Rescissions) used in estimating our primary reserve for losses was 35% at June 30, 2018 , compared to 31% at December 31, 2017 . This increase in the default to claim rate was entirely driven by a reduction in the number of defaults in FEMA Designated Areas associated with Hurricanes Harvey and Irma. Excluding the impact of defaults associated with these FEMA Designated Areas (which had a lower Default to Claim Rate of 3% ), our aggregate weighted-average net Default to Claim Rate (net of Claim Denials and Rescissions) was 38% at both June 30, 2018 and December 31, 2018. As of June 30, 2018 our gross Default to Claim Rate assumptions on our primary portfolio ranged from 9% for new defaults, up to 68% for defaults not in foreclosure stage, and 75% for Foreclosure Stage Defaults. Our Default to Claim Rate estimates on defaulted loans are mainly developed based on the Stage of Default and Time in Default of the underlying defaulted loans grouped according to the period in which the default occurred, as measured by the progress toward foreclosure sale and the number of months in default. Our estimate of expected Rescissions and Claim Denials (net of expected Reinstatements) embedded in our estimated Default to Claim Rate is generally based on our recent experience. Consideration is also given to any differences in characteristics between those rescinded policies and denied claims and the loans remaining in our defaulted inventory. Loss Mitigation As our Legacy Portfolio has become a smaller percentage of our overall insured portfolio, a reduced amount of Loss Mitigation Activity has occurred with respect to the claims we receive, and we expect this general trend to continue. As a result, our future Loss Mitigation Activity is not expected to mitigate our paid losses significantly. The amount of estimated Loss Mitigation Activities incorporated into our reserve analysis at any point in time is affected by a number of factors, including not only our estimated rate of Rescissions, Claim Denials and Claim Curtailments on future claims, but also the volume and attributes of our defaulted insured loans, our estimated Default to Claim Rate and our estimated Claim Severity, among other assumptions. Our estimate of net future Loss Mitigation Activities has not materially impacted our loss reserves at June 30, 2018 or December 31, 2017. Our reported Rescission, Claim Denial and Claim Curtailment activity in any given period is subject to challenge by our lender and servicer customers. We expect that a portion of previous Rescissions will be reinstated and previous Claim Denials will be resubmitted with the required documentation and ultimately paid; therefore, we have incorporated this expectation into our IBNR reserve estimate. Our IBNR reserve estimate of $6.2 million and $10.4 million at June 30, 2018 and December 31, 2017 , respectively, includes reserves for this activity. We also accrue for the premiums that we expect to refund to our lender customers in connection with our estimated Rescissions. |
Note 11 - Senior Notes
Note 11 - Senior Notes | 6 Months Ended |
Jun. 30, 2018 | |
Senior Notes [Abstract] | |
Senior Notes | Senior Notes The carrying value of our senior notes at June 30, 2018 and December 31, 2017 was as follows: (In thousands) June 30, December 31, 5.500% Senior Notes due 2019 $ 157,975 $ 157,636 5.250% Senior Notes due 2020 232,275 231,834 7.000% Senior Notes due 2021 195,500 195,146 4.500% Senior Notes due 2024 442,937 442,458 Total Senior Notes $ 1,028,687 $ 1,027,074 |
Note 12 - Other Liabilities (No
Note 12 - Other Liabilities (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities Disclosure [Text Block] | Other Liabilities The following table shows the components of other liabilities as of the dates indicated: (In thousands) June 30, December 31, FHLB advances $ 115,308 $ — Deferred ceding commission 92,070 89,907 Accrued compensation 39,621 67,687 Amount payable on the return of cash collateral under securities lending agreements 39,224 19,357 Current federal income taxes 8,807 96,740 Other 90,021 80,154 Total other liabilities $ 385,051 $ 353,845 FHLB Advances In August 2016, Radian Guaranty and Radian Reinsurance became members of the FHLB. As members, they may borrow from the FHLB, subject to certain conditions, which include the need to post collateral and the requirement to maintain a minimum investment in FHLB stock, in part depending on the level of their outstanding FHLB advances. As of June 30, 2018 , we had $115.3 million of fixed-rate advances outstanding with a weighted average interest rate of 2.21% . Interest on the FHLB advances is payable quarterly, or at maturity if the term of the advance is less than 90 days. As of June 30, 2018 , $102.8 million of the FHLB advances mature in 2018, $6.5 million mature in 2019 and $6.0 million mature in 2023. Principal is due at maturity. For obligations with maturities greater than or equal to 90 days, we may prepay the debt at any time, subject to a prepayment fee calculation. The FHLB advances are required to be collateralized by eligible assets with a market value that must be maintained at a minimum of approximately 103% to 105% of the principal balance of the FHLB advances (based on the eligible collateral we have provided at June 30, 2018 , which consisted of an aggregate amount of $122.8 million in U.S. government and agency securities and RMBS from fixed-maturities available for sale within our investment securities portfolio). Amount Payable on the Return of Cash Collateral under Securities Lending Agreements We participate in a securities lending program through which we loan certain securities in our investment portfolio to Borrowers for short periods of time. These securities lending agreements, whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities, are considered collateralized financing arrangements. Amounts payable on the return of cash collateral under securities lending agreements are classified as other liabilities in our condensed consolidated balance sheets. See Note 5 for additional information. Revolving Credit Facility On October 16, 2017, Radian Group entered into a three-year, $225 million unsecured revolving credit facility with a syndicate of bank lenders. Terms of the credit facility include an option to increase the amount during the term of the agreement, subject to our obtaining the necessary increased commitments from the lenders, up to a total of $300 million . Borrowings under the credit facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Radian Group’s insurance and reinsurance subsidiaries as well as growth initiatives. The credit facility contains customary representations, warranties, covenants, terms and conditions. Our ability to borrow under the credit facility is conditioned on the satisfaction of certain financial and other covenants, including covenants related to minimum net worth and statutory surplus, a maximum debt-to-capitalization level, limits on certain types of indebtedness and liens, minimum liquidity levels and Radian Guaranty’s eligibility as a private mortgage insurer with the GSEs. See Note 12 of Notes to Consolidated Financial Statements in our 2017 Form 10-K. At June 30, 2018 , Radian Group was in compliance with all the covenants and there were no amounts outstanding under this revolving credit facility. |
Note 13 - Commitments and Conti
Note 13 - Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings See Note 13 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for information regarding our accounting policies for contingencies. We are routinely involved in a number of legal actions and proceedings, including litigation and other disputes arising in the ordinary course of our business. The legal and regulatory matters discussed below and in our 2017 Form 10-K could result in adverse judgments, settlements, fines, injunctions, restitutions or other relief that could require significant expenditures or have other effects on our business. Management believes, based on current knowledge and after consultation with counsel, that the outcome of such actions will not have a material adverse effect on our consolidated financial condition. However, the outcome of litigation and other legal and regulatory matters and proceedings is inherently uncertain, and it is possible that one or more of the matters currently pending or threatened could have an unanticipated adverse effect on our liquidity, financial condition or results of operations for any particular period. On December 22, 2016, Ocwen Loan Servicing, LLC and Homeward Residential, Inc. (collectively, “Ocwen”) filed a complaint in the U.S. District Court for the Eastern District of Pennsylvania against Radian Guaranty (the “Complaint”) alleging breach of contract and bad faith claims and seeking monetary damages and declaratory relief. Ocwen has also initiated similar legal proceedings against several other mortgage insurers. On December 17, 2016, Ocwen separately filed a parallel arbitration petition against Radian Guaranty before the American Arbitration Association (“AAA”) asserting substantially the same allegations (the “Arbitration”). Ocwen’s filings together listed 9,420 mortgage insurance certificates issued under multiple insurance policies, including Pool Insurance policies, as subject to the dispute. On June 5, 2017, Ocwen filed an amended complaint and an amended petition (collectively, the “Amended Filings”) with both the court and the AAA, respectively, together listing 8,870 certificates as subject to the dispute. On April 11, 2018, the parties entered into a confidential agreement with respect to all certificates subject to the dispute. The confidential agreement resolved certain categories of claims involved in the dispute and, on April 12, 2018, the parties filed a stipulation of voluntary dismissal of the federal court proceeding and the trial judge issued an Order dismissing all claims and counterclaims subject to the parties’ agreement. Radian Guaranty was not required to make any payment in connection with this confidential agreement. Pursuant to the confidential agreement, the parties: (1) dismissed the federal court proceeding; (2) narrowed the scope of the dispute to Ocwen’s breach of contract claims seeking payment of insurance benefits on approximately 2,500 certificates that Ocwen was previously pursuing through the Amended Filings; and (3) agreed to resolve the remaining dispute through the Arbitration. Radian Guaranty believes that Ocwen’s allegations and claims in the legal proceedings described above are without merit and legally deficient, and plans to defend these claims vigorously. We are not able to estimate a reasonably possible loss, if any, or range of loss in this matter because of the preliminary stage of the Arbitration. We also are periodically subject to reviews and audits, as well as inquiries, information-gathering requests and investigations. In connection with these matters, from time to time we receive requests and subpoenas seeking information and documents related to aspects of our business. In March 2017, Green River Capital, a subsidiary of Clayton, received a letter from the staff of the SEC stating that it is conducting an investigation captioned, “In the Matter of Certain Single Family Rental Securitizations,” and that it is requesting information from market participants. The letter requested that Green River Capital provide information regarding broker price opinions that Green River Capital provided on properties included in SFR securitization transactions. Green River Capital has been cooperating with the SEC in this matter. Our Master Policies establish the timeline within which any suit or action arising from any right of an insured under the policy generally must be commenced. In general, any suit or action arising from any right of an insured under the policy must be commenced within two years after such right first arose for primary insurance and within three years for certain other policies, including certain Pool Insurance policies. Although we believe that our Loss Mitigation Activities are justified under our policies, from time to time we face challenges from certain lender and servicer customers regarding our Loss Mitigation Activities, which have resulted in some reversals of our decisions regarding Rescissions, Claim Denials or Claim Curtailments. We are currently in discussions with these customers regarding our Loss Mitigation Activities and claim payment practices, which if not resolved, could result in arbitration or judicial proceedings and we may need to reassume the risk on, and increase loss reserves for, the associated policies or pay additional claims. See Note 10 for additional information. Other Securities regulations became effective in 2005 that impose enhanced disclosure requirements on issuers of ABS (including mortgage-backed securities). To allow our customers to comply with these regulations at that time, we typically were required, depending on the amount of credit enhancement we were providing, to provide: (i) audited financial statements for the insurance subsidiary participating in the transaction or (ii) a full and unconditional holding company-level guarantee for our insurance subsidiaries’ obligations in such transactions. Radian Group has guaranteed two structured transactions for Radian Guaranty involving $92.8 million of remaining credit exposure as of June 30, 2018 . |
Note 14 - Capital Stock (Notes)
Note 14 - Capital Stock (Notes) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity Note Disclosure [Text Block] | Capital Stock Share Repurchase Program On August 9, 2017, Radian Group’s board of directors renewed the Company’s share repurchase program, authorizing the Company to repurchase up to $50 million of its common stock. The program authorized the Company to repurchase Radian Group common stock in the open market or in privately negotiated transactions, based on market and business conditions, stock price and other factors. Pursuant to a trading plan under Rule 10b5-1 of the Exchange Act, during the three and six months ended June 30, 2018 , the Company purchased 2,491,843 and 3,022,856 shares, respectively, at an average price of $16.07 and $16.56 per share, respectively, including commissions. At June 30, 2018 , there was no remaining purchase authority under this program. Other Purchases We may purchase shares on the open market to settle stock options exercised by employees and purchases under our Employee Stock Purchase Plan. In addition, upon the vesting of certain restricted stock awards or the auto-exercise of certain expiring stock options under our equity compensation plans, we may withhold from such vested or auto-exercised awards shares of our common stock to satisfy the tax liability and the stock option cost of the award recipients, as applicable. |
Note 15 - Accumulated Other Com
Note 15 - Accumulated Other Comprehensive Income | 6 Months Ended |
Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income (Loss) The following table shows the rollforward of accumulated other comprehensive income (loss) as of the periods indicated: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (39,842 ) $ (8,367 ) $ (31,475 ) $ 32,669 $ 9,584 $ 23,085 Cumulative effect of adopting the accounting standard update for financial instruments — — — 284 60 224 Cumulative effect of adopting the accounting standard update for the reclassification of certain tax effects — — — — (2,724 ) 2,724 Balance adjusted for cumulative effect of adopting accounting standard updates (39,842 ) (8,367 ) (31,475 ) 32,953 6,920 26,033 OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period (35,194 ) (7,390 ) (27,804 ) (111,957 ) (23,510 ) (88,447 ) Less: Reclassification adjustment for net gains (losses) included in net income (1) (1,691 ) (355 ) (1,336 ) (5,655 ) (1,187 ) (4,468 ) Net unrealized gains (losses) on investments (33,503 ) (7,035 ) (26,468 ) (106,302 ) (22,323 ) (83,979 ) Unrealized foreign currency translation adjustments — — — 4 1 3 OCI (33,503 ) (7,035 ) (26,468 ) (106,298 ) (22,322 ) (83,976 ) Balance at end of period $ (73,345 ) $ (15,402 ) $ (57,943 ) $ (73,345 ) $ (15,402 ) $ (57,943 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (5,168 ) $ (1,805 ) $ (3,363 ) $ (19,063 ) $ (6,668 ) $ (12,395 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 31,137 10,898 20,239 42,471 14,865 27,606 Less: Reclassification adjustment for net gains (losses) included in net income (1) (1,795 ) (628 ) (1,167 ) (4,304 ) (1,506 ) (2,798 ) Net unrealized gains (losses) on investments 32,932 11,526 21,406 46,775 16,371 30,404 Unrealized foreign currency translation adjustments 114 40 74 166 58 108 OCI 33,046 11,566 21,480 46,941 16,429 30,512 Balance at end of period $ 27,878 $ 9,761 $ 18,117 $ 27,878 $ 9,761 $ 18,117 ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 16 - Statutory Information
Note 16 - Statutory Information | 6 Months Ended |
Jun. 30, 2018 | |
Supplementary Insurance Information [Abstract] | |
Statutory Information | Statutory Information We prepare our statutory financial statements in accordance with the accounting practices required or permitted, if applicable, by the insurance departments of the respective states of domicile of our insurance subsidiaries. Required SAPP are established by a variety of NAIC publications, as well as state laws, regulations and general administrative rules. In addition, insurance departments have the right to permit other specific practices that may deviate from prescribed practices. As of June 30, 2018 , we did not have any prescribed or permitted statutory accounting practices that resulted in reported statutory surplus or risk-based capital being different from what would have been reported had NAIC statutory accounting practices been followed. State insurance regulations include various capital requirements and dividend restrictions based on our insurance subsidiaries’ statutory financial position and results of operations, as described below. Failure to maintain adequate levels of capital could lead to intervention by the various insurance regulatory authorities, which could materially and adversely affect our business, business prospects and financial condition. As of June 30, 2018 , the amount of restricted net assets held by our consolidated insurance subsidiaries (which represents our equity investment in those insurance subsidiaries) totaled $3.8 billion of our consolidated net assets. Under state insurance regulations, Radian Guaranty is required to maintain minimum surplus levels and, in certain states, a minimum ratio of statutory capital relative to the level of net RIF, or Risk-to-capital. There are 16 RBC States that currently impose a Statutory RBC Requirement. The most common Statutory RBC Requirement is that a mortgage insurer’s Risk-to-capital may not exceed 25 to 1. In certain of the RBC States, a mortgage insurer must satisfy a MPP Requirement. The statutory capital requirements for the non-RBC States are de minimis (ranging from $1 million to $5 million ); however, the insurance laws of these states generally grant broad supervisory powers to state agencies or officials to enforce rules or exercise discretion affecting almost every significant aspect of the insurance business, including the power to revoke or restrict an insurance company’s ability to write new business. Unless an RBC State grants a waiver or other form of relief, if a mortgage insurer, such as Radian Guaranty, is not in compliance with the Statutory RBC Requirement of that state, the mortgage insurer may be prohibited from writing new mortgage insurance business in that state. Radian Guaranty’s domiciliary state, Pennsylvania, is not one of the RBC States. Radian Guaranty was in compliance with the Statutory RBC Requirements or MPP Requirements, as applicable, in each of the RBC States as of June 30, 2018 . The NAIC is in the process of developing a new Model Act for mortgage insurers, which is expected to include, among other items, new capital adequacy requirements for mortgage insurers. In May 2016, a working group of state regulators released an exposure draft of this Model Act. While the outcome and timing of this process are uncertain, the new Model Act, if and when finalized by the NAIC, has the potential to increase capital requirements in those states that adopt the Model Act. However, we continue to believe the changes to the Model Act will not result in financial requirements that require greater capital than the level currently required under the PMIERs financial requirements. See Note 1 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for information regarding the PMIERs, which set requirements for private mortgage insurers to remain approved insurers of loans purchased by the GSEs. Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus plus statutory contingency reserves. June 30, December 31, ($ in millions) RIF, net (1) $ 38,956.0 $ 36,793.5 Common stock and paid-in capital $ 1,866.0 $ 1,866.0 Surplus Note 100.0 100.0 Unassigned earnings (deficit) (737.4 ) (765.0 ) Statutory policyholders’ surplus 1,228.6 1,201.0 Contingency reserve 1,883.5 1,667.0 Statutory capital $ 3,112.1 $ 2,868.0 Risk-to-capital 12.5:1 12.8:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. Radian Guaranty’s statutory capital increased by $244.1 million in the first six months of 2018 , primarily due to Radian Guaranty’s statutory net income of $244.5 million during this period. The net decrease in Radian Guaranty’s Risk-to-capital in the first six months of 2018 was primarily due to the increase in overall statutory capital, partially offset by an increase in RIF. The Risk-to-capital ratio for our combined mortgage insurance operations was 11.8 to 1 as of June 30, 2018 , compared to 12.1 to 1 as of December 31, 2017 . Segregated Funds Held for Others T hrough EnTitle Insurance, we maintain escrow deposits as a service to our customers. Amounts held in escrow and excluded from assets and liabilities in our consolidated balance sheets totaled $7.4 million as of June 30, 2018. These amounts were held at third-party financial institutions. |
Note 1 - Condensed Consolidat24
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Accounting, Policy [Policy Text Block] | Our condensed consolidated financial statements are prepared in accordance with GAAP and include the accounts of Radian Group Inc. and its subsidiaries. All intercompany accounts and transactions, and intercompany profits and losses, have been eliminated. We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with GAAP pursuant to the instructions set forth in Article 10 of Regulation S-X of the SEC. |
Reclassification, Policy [Policy Text Block] | Certain prior period amounts have been reclassified to conform to current period presentation. |
Use of Estimates, Policy [Policy Text Block] | The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of our contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. While the amounts included in our condensed consolidated financial statements include our best estimates and assumptions, actual results may vary materially. |
Securities Borrowed and Loaned Policy [Policy Text Block] | During the third quarter of 2017, we commenced participation in a securities lending program whereby we loan certain securities in our investment portfolio to Borrowers for short periods of time. These securities lending agreements are collateralized financing arrangements whereby we transfer securities to third parties through an intermediary in exchange for cash or other securities. In all of our securities lending agreements, the securities we transfer to Borrowers (loaned securities) may be transferred or loaned by the Borrowers; however, we maintain effective control over all loaned securities, including: (i) retaining ownership of the securities; (ii) receiving the related investment or other income; and (iii) having the right to request the return of the loaned securities at any time. Although we report such securities at fair value within other assets in our condensed consolidated balance sheets, the detailed information regarding investments provided in this Note includes these securities. |
New Accounting Pronouncements and Changes in Accounting Principles [Text Block] | Accounting Standards Adopted During 2018. In May 2014, the FASB issued an update to the accounting standard regarding revenue recognition. In July 2015, the FASB delayed the effective date for this updated standard for public companies to interim and annual periods beginning after December 15, 2017, and subsequently issued various clarifying updates. Our adoption of this standard, effective January 1, 2018, had no impact on our financial statements. The disclosures required by this update are included above in “— Revenue Recognition—Services. ” In January 2016, the FASB issued an update that makes certain changes to the standard for the accounting of financial instruments. Among other things, the update requires: (i) equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) the use of the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (iii) separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and (iv) separate presentation in other comprehensive income of the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk (also referred to as “own credit”) when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The update also eliminates the requirement to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. This update is effective for public companies for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. In February 2018, the FASB issued technical corrections related to this update, which addresses common questions regarding the application and adoption of the new guidance and the subsequent amendments. As a result of adopting these updates, equity securities are no longer classified as available for sale securities and changes in fair value are recognized through earnings. Consequently, we recorded a cumulative effect adjustment to retained earnings from accumulated other comprehensive income representing unrealized losses related to equity securities in the amount of $0.2 million , net of tax. In addition, we elected to utilize net asset value as a practical expedient to measure certain other investments, which resulted in an increase to other invested assets with an offset to retained earnings in the amount of $2.3 million , net of tax . Our adoption of both these updates effective January 1, 2018 resulted in a net increase to retained earnings of $2.1 million . See Notes 4 and 5 for additional information. In February 2018, the FASB issued an update to the accounting standard regarding income statement reporting of comprehensive income and reclassification of certain tax effects from accumulated other comprehensive income. The amendments in this update allow a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the TCJA. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period, for reporting periods for which financial statements have not been available for issuance. We elected to early adopt this update effective January 1, 2018. As a result we recorded a reclassification adjustment from other comprehensive income to retained earnings in the amount of $2.7 million . See Note 9 for additional information regarding the TCJA. |
New Accounting Pronouncements, Policy [Policy Text Block] | Accounting Standards Not Yet Adopted. In February 2016, the FASB issued an update that replaces the existing accounting and disclosure requirements for leases of property, plant and equipment. The update requires lessees to recognize, as of the lease commencement date, assets and liabilities for all leases with lease terms of more than 12 months, which is a change from the current GAAP requirement to recognize only capital leases on the balance sheet. Pursuant to the new standard, the liability initially recognized for the lease obligation is equal to the present value of the lease payments not yet made, discounted over the lease term at the implicit interest rate of the lease, if available, or otherwise at the lessee’s incremental borrowing rate. The lessee is also required to recognize an asset for its right to use the underlying asset for the lease term, based on the liability subject to certain adjustments, such as for initial direct costs. Leases are required to be classified as either operating or finance, with expense on operating leases recorded as a single lease cost on a straight-line basis. For finance leases, interest expense on the lease liability is required to be recognized separately from the straight-line amortization of the right-of-use asset. Quantitative disclosures are required for certain items, including the cost of leases, the weighted-average remaining lease term, the weighted-average discount rate and a maturity analysis of lease liabilities. Additional qualitative disclosures are also required regarding the nature of the leases, such as basis, terms and conditions of: (i) variable interest payments; (ii) extension and termination options; and (iii) residual value guarantees. This update, and the clarifying update issued in July 2018, is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The new standard must be adopted by applying the new guidance as of the beginning of the earliest comparative period presented, using a modified retrospective transition approach with certain optional practical expedients. We are currently in the process of identifying our current leases that are subject to the scope of this standard and evaluating the impact on our financial statements and future disclosures as a result of this update. We expect to recognize right-of-use assets and related obligations upon adoption of this update. Most recently, in late July 2018 the FASB issued a further update containing certain targeted improvements to the accounting and disclosure requirements for leases, including an additional (and optional) transition method to recognize the cumulative-effect adjustment as of the beginning of the period of adoption, rather than recognizing the cumulative-effect adjustment as of the beginning of the earliest comparative period presented. We are currently evaluating the impact of the targeted improvements on our financial statements and future disclosures. See Note 13 of Notes to Consolidated Financial Statements in our 2017 Form 10-K for additional information about our leases. In June 2016, the FASB issued an update to the accounting standard regarding the measurement of credit losses on financial instruments. This update requires that financial assets measured at their amortized cost basis be presented at the net amount expected to be collected. Credit losses relating to available-for-sale debt securities are to be recorded through an allowance for credit losses, rather than a write-down of the asset, with the amount of the allowance limited to the amount by which fair value is less than amortized cost. This update is effective for public companies for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. This update is not applicable to credit losses associated with our mortgage insurance policies. We are currently evaluating the impact on our financial statements and future disclosures as a result of this update. In March 2017, the FASB issued an update to the accounting standard regarding receivables. The new standard requires certain premiums on purchased callable debt securities to be amortized to the earliest call date. The amortization period for callable debt securities purchased at a discount will not be impacted. The provisions of this update are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. |
Segment Reporting, Policy [Policy Text Block] | We have two strategic business units that we manage separately—Mortgage Insurance and Services. Adjusted pretax operating income (loss) for each segment represents segment results on a standalone basis; therefore, inter-segment eliminations and reclassifications required for consolidated GAAP presentation have not been reflected. We allocate to our Mortgage Insurance segment: (i) corporate expenses based on its forecasted annual percentage of total revenue, which approximates the estimated percentage of time spent on the Mortgage Insurance segment; (ii) all interest expense (except for interest expense related to an intercompany note with terms consistent with the original issued amount of $300 million from the Senior Notes due 2019 that were used to fund our purchase of Clayton, all of which is allocated to our Services segment); and (iii) all corporate cash and investments. We allocate to our Services segment: (i) corporate expenses based on its forecasted annual percentage of total revenue, which approximates the estimated percentage of time spent on the Services segment and (ii) the allocated interest expense related to the intercompany note as described above. No material corporate cash or investments are allocated to the Services segment. Inter-segment activities are recorded at market rates for segment reporting and eliminated in consolidation. |
Fair Value of Financial Instruments, Policy [Policy Text Block] | In accordance with GAAP, we established a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or liability as of the measurement date. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level I measurements) and the lowest priority to unobservable inputs (Level III measurements). The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the measurement in its entirety. The three levels of the fair value hierarchy are defined below: Level I — Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level II — Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities; and Level III — Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. Level III inputs are used to measure fair value only to the extent that observable inputs are not available. The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. As a result of our implementation of the update to the standard for the accounting of financial instruments, we elected to measure certain other investments using the net asset value as a practical expedient. |
Income Tax, Policy [Policy Text Block] | We are required to establish a valuation allowance against our deferred tax assets when it is more likely than not that all or some portion of our deferred tax assets will not be realized. At each balance sheet date, we assess our need for a valuation allowance and our assessment is based on all available evidence, both positive and negative. This requires management to exercise judgment and make assumptions regarding whether our deferred tax assets will be realized in future periods. |
Revenue Recognition, Deferred Revenue [Policy Text Block] | Our Services segment revenues are recognized over time and measured each period based on the progress to date as services are performed and made available to customers. Our contracts with customers, including payment terms, are generally short-term in nature; therefore, any impact related to timing is immaterial. Revenue recognized related to services made available to customers and billed is reflected in accounts receivables. Revenue recognized related to services performed and not yet billed is recorded in unbilled receivables and reflected in other assets. We have no material bad-debt expense. The following represents balances related to Services contracts as of the dates indicated: (In thousands) June 30, 2018 December 31, 2017 Accounts Receivable - Services Contracts $ 11,705 $ 17,391 Unbilled Receivables - Services Contracts 16,478 22,257 Deferred Revenues - Services Contracts 3,814 3,235 Revenue expected to be recognized in any future period related to remaining performance obligations, such as contracts where revenue is recognized as invoiced and contracts with variable consideration related to undelivered performance obligations, is not material. Fee-for-Service Contracts Generally, our contracts with our clients do not include minimum volume commitments and can be terminated at any time by our clients. Although some of our contracts and assignments are recurring in nature, and include repetitive monthly assignments, a significant portion of our engagements are transactional in nature and may be performed in connection with securitizations, loan sales, loan purchases or other transactions. Due to the transactional nature of our business, our Services segment revenues may fluctuate from period to period as transactions are commenced or completed. We do not recognize revenue or expense related to amounts advanced by us and subsequently reimbursed by clients for maintenance or repairs because we do not take control of the service prior to the client taking control. We record an expense if an advance is made that is not in accordance with a client contract and the client is not obligated to reimburse us. Due to the nature of the services provided, our Services arrangements with customers may include any of the following three basic types of contracts: Fixed-Price Contracts. We use fixed-price contracts in our real estate valuation and component services, our loan review, underwriting and due diligence services as well as our title and closing services. We also use fixed-price contracts in our surveillance business for our servicer oversight services and RMBS surveillance services, and in our asset management business activities. Under fixed-price contracts we agree to perform the specified services and deliverables for a pre-determined per-unit or per-file price or day rate. Each service qualifies as a separate performance obligation and revenue is recognized as the service performed is made available to the client. Time-and-Expense Contracts. The Services segment also derives a portion of its revenue from professional service activities under time-and-expense contracts. In these types of contracts, we are paid a fixed hourly rate, and we are reimbursed for billable out-of-pocket expenses as work is performed. These contracts are used in our loan review, underwriting and due diligence services. Services revenue consisting of billed time fees and pass-through expenses is recorded over time and based on the progress to date as services are performed and made available to customers. Services revenue may also include expenses billed to clients, which includes travel and other out-of-pocket expenses, and other reimbursable expenses. Percentage-of-Sale Contracts. Under percentage-of-sale contracts, we are paid a contractual percentage of the sale proceeds upon the sale of each property. These contracts are only used for a portion of our REO management services and our real estate brokerage services. In addition, through the use of our proprietary technology, property leads are sent to select clients. Revenue attributable to services provided under a percentage-of-sale contract is recognized over time and measured based on the progress to date and typically coincides with the client’s successful closing on the property. The revenue recognized for these transactions is based on a percentage of the sale. In certain instances, fees are received at the time that an asset is assigned to Radian for management. These fees are recorded as deferred revenue and are recognized over time based on progress to date and the availability to customers. |
Note 1 - Condensed Consolidat25
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies Revenue Recognition-Services (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Services Revenue [Table Text Block] | The table below represents the disaggregation of Services revenues by revenue type: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Services segment revenue Mortgage Services $ 16,346 $ 17,782 $ 30,335 $ 36,153 Real Estate Services 19,301 15,463 37,204 32,477 Title Services 2,461 6,730 4,735 11,434 Total (1) $ 38,108 $ 39,975 $ 72,274 $ 80,064 ______________________ (1) Includes inter-segment revenues of $0.9 million and $1.9 million for the three and six months ended June 30, 2018 and $2.2 million and $4.2 million for the three and six months ended June 30, 2017 , respectively. For both the three- and six-month periods ended June 30, 2018 , amounts exclude $2.4 million of Services segment net premiums earned—insurance and net investment income, as both are excluded from the scope of the revenue recognition standard. See Note 3 for segment information. |
Contract Assets & Liabilities [Table Text Block] | The following represents balances related to Services contracts as of the dates indicated: (In thousands) June 30, 2018 December 31, 2017 Accounts Receivable - Services Contracts $ 11,705 $ 17,391 Unbilled Receivables - Services Contracts 16,478 22,257 Deferred Revenues - Services Contracts 3,814 3,235 |
Note 2 - Net Income Per Share (
Note 2 - Net Income Per Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The calculation of basic and diluted net income per share was as follows: Three Months Ended Six Months Ended (In thousands, except per-share amounts) 2018 2017 2018 2017 Net income (loss)—basic $ 208,949 $ (27,342 ) $ 323,435 $ 49,130 Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) — — — (215 ) Net income (loss)—diluted $ 208,949 $ (27,342 ) $ 323,435 $ 48,915 Average common shares outstanding—basic 213,976 215,152 215,049 215,054 Dilutive effect of Convertible Senior Notes due 2017 — — — 602 Dilutive effect of Convertible Senior Notes due 2019 — — — 922 Dilutive effect of share-based compensation arrangements (2) 3,854 — 3,692 3,896 Adjusted average common shares outstanding—diluted 217,830 215,152 218,741 220,474 Net income (loss) per share: Basic $ 0.98 $ (0.13 ) $ 1.50 $ 0.23 Diluted $ 0.96 $ (0.13 ) $ 1.48 $ 0.22 ______________________ (1) As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the six months ended June 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. (2) There were no dilutive shares for the three months ended June 30, 2017, as a result of our net loss for the period. The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and convertible debt, if any, were not included in the calculation of diluted net income (loss) per share because they were anti-dilutive: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Shares of common stock equivalents 484 5,975 351 442 Shares of Convertible Senior Notes due 2017 — 509 — — |
Note 3 - Segment Reporting (Tab
Note 3 - Segment Reporting (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Summarized operating results for our segments for the periods indicated, are as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Mortgage Insurance Net premiums written—insurance (1) $ 251,958 $ 241,307 $ 489,938 $ 465,972 (Increase) decrease in unearned premiums (2,990 ) (12,211 ) 1,580 (15,076 ) Net premiums earned—insurance 248,968 229,096 491,518 450,896 Net investment income 37,447 30,071 71,403 61,103 Other income 621 612 1,428 1,358 Total (2) 287,036 259,779 564,349 513,357 Provision for losses 19,362 17,714 56,753 64,946 Policy acquisition costs 5,996 6,123 13,113 12,852 Other operating expenses before corporate allocations 33,262 37,939 65,150 77,228 Total (3) 58,620 61,776 135,016 155,026 Adjusted pretax operating income before corporate allocations 228,416 198,003 429,333 358,331 Allocation of corporate operating expenses 20,136 15,894 38,713 30,080 Allocation of interest expense 10,840 11,748 21,469 23,257 Adjusted pretax operating income $ 197,440 $ 170,361 $ 369,151 $ 304,994 ______________________ (1) Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. (2) Excludes net losses on investments and other financial instruments of $7.4 million and $26.3 million for the three and six months ended June 30, 2018 , and net gains on investments and other financial instruments of $5.3 million and $2.5 million for the three and six months ended June 30, 2017 , not included in adjusted pretax operating income. (3) Includes inter-segment expenses as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Inter-segment expenses $ 885 $ 2,173 $ 1,887 $ 4,235 Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Services Net premiums earned—insurance (1) $ 2,376 $ — $ 2,376 $ — Services revenue (2) 37,713 39,975 71,879 80,064 Net investment income (1) 26 — 26 — Other income (1) 395 — 395 — Total (2) 40,510 39,975 74,676 80,064 Provision for losses (1) 53 — 53 — Cost of services 24,357 25,962 47,627 54,652 Other operating expenses before corporate allocations 14,015 12,803 24,759 25,407 Restructuring and other exit costs (3) 1,055 — 1,580 — Total 39,480 38,765 74,019 80,059 Adjusted pretax operating income (loss) before corporate allocations 1,030 1,210 657 5 Allocation of corporate operating expenses 3,010 3,404 5,794 7,122 Allocation of interest expense 4,451 4,431 8,902 8,860 Adjusted pretax operating income (loss) $ (6,431 ) $ (6,625 ) $ (14,039 ) $ (15,977 ) ______________________ (1) Results from inclusion of the operations of EnTitle Direct, a national title insurance and settlement services company, acquired in March 2018. (2) Includes inter-segment revenues as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Inter-segment revenues $ 885 $ 2,173 $ 1,887 $ 4,235 (3) Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income. Selected balance sheet information for our segments, as of the periods indicated, is as follows: At June 30, 2018 (In thousands) Mortgage Insurance Services Total Total assets $ 5,949,845 $ 189,643 $ 6,139,488 At December 31, 2017 (In thousands) Mortgage Insurance Services Total Total assets $ 5,733,918 $ 166,963 $ 5,900,881 |
Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block] | The reconciliation of adjusted pretax operating income to consolidated pretax income (loss) is as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Adjusted pretax operating income (loss): Mortgage Insurance (1) $ 197,440 $ 170,361 $ 369,151 $ 304,994 Services (1) (6,431 ) (6,625 ) (14,039 ) (15,977 ) Total adjusted pretax operating income 191,009 163,736 355,112 289,017 Net gains (losses) on investments and other financial instruments (7,404 ) 5,331 (26,291 ) 2,480 Loss on induced conversion and debt extinguishment — (1,247 ) — (5,703 ) Acquisition-related expenses (2) (416 ) (64 ) (416 ) (72 ) Impairment of goodwill — (184,374 ) — (184,374 ) Amortization and impairment of other intangible assets (2,748 ) (18,856 ) (5,496 ) (22,152 ) Impairment of other long-lived assets and loss from the sale of a business line (3) 130 — 104 — Consolidated pretax income (loss) $ 180,571 $ (35,474 ) $ 323,013 $ 79,196 ______________________ (1) Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. (2) Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. (3) Included within restructuring and other exit costs. See Note 1. |
Note 4 - Fair Value of Financ28
Note 4 - Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block] | The following is a list of assets that are measured at fair value by hierarchy level as of June 30, 2018 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 137,749 $ 19,457 $ 157,206 State and municipal obligations — 351,085 351,085 Money market instruments 211,348 — 211,348 Corporate bonds and notes — 2,331,887 2,331,887 RMBS — 268,449 268,449 CMBS — 527,098 527,098 Other ABS — 693,672 693,672 Foreign government and agency securities — 50,433 50,433 Equity securities 139,637 5,269 144,906 Other investments (1) — 172,993 172,993 Total Investments at Fair Value (2) 488,734 4,420,343 4,909,077 (3) Total Assets at Fair Value $ 488,734 $ 4,420,343 $ 4,909,077 (3) ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $3.2 million ), primarily invested in limited partnership investments valued using the net asset value as a practical expedient. Includes cash collateral held under securities lending agreements ( $39.2 million ) reinvested in money market instruments. (3) Includes $38.4 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. The following is a list of assets that are measured at fair value by hierarchy level as of December 31, 2017 : (In thousands) Level I Level II Total Assets at Fair Value Investment Portfolio: U.S. government and agency securities $ 124,969 $ 8,023 $ 132,992 State and municipal obligations — 386,111 386,111 Money market instruments 213,357 — 213,357 Corporate bonds and notes — 2,304,017 2,304,017 RMBS — 216,749 216,749 CMBS — 503,955 503,955 Other ABS — 676,158 676,158 Foreign government and agency securities — 36,448 36,448 Equity securities 175,205 860 176,065 Other investments (1) — 25,720 25,720 Total Investments at Fair Value (2) 513,531 4,158,041 4,671,572 (3) Total Assets at Fair Value $ 513,531 $ 4,158,041 $ 4,671,572 (3) ______________________ (1) Comprising short-term certificates of deposit and commercial paper. (2) Does not include certain other invested assets ( $0.3 million ), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Includes cash collateral held under securities lending agreements ( $19.4 million ) reinvested in money market instruments. (3) Includes $28.0 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. |
Fair Value, by Balance Sheet Grouping [Table Text Block] | The carrying value and estimated fair value of other selected assets and liabilities not carried at fair value in our condensed consolidated balance sheets were as follows as of the dates indicated: June 30, 2018 December 31, 2017 (In thousands) Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Assets: Other invested assets (1) $ — $ — $ 334 $ 3,226 Liabilities: Senior notes 1,028,687 1,040,249 1,027,074 1,093,934 ______________________ (1) As a result of implementing the update to the standard for the accounting of financial instruments effective January 1, 2018, other invested assets are no longer carried at amortized cost. |
Note 5 - Investments (Tables)
Note 5 - Investments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments [Abstract] | |
Schedule of Securities Financing Transactions [Table Text Block] | Key balances related to our securities lending agreements consisted of the following as of the dates indicated: (In thousands) June 30, December 31, Loaned securities (1) : Corporate bonds and notes $ 16,199 $ 13,862 Foreign government and agency securities 222 867 Equity securities 21,929 13,235 Total loaned securities, at fair value $ 38,350 $ 27,964 Total loaned securities, at amortized cost $ 39,503 $ 27,846 Securities collateral on deposit from Borrowers (2) 92 9,342 Reinvested cash collateral, at estimated fair value (3) 39,224 19,357 ______________________ (1) Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. (2) Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. (3) All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets. |
Unrealized Gain (Loss) on Investments [Table Text Block] | The net changes in unrealized gains (losses) from trading securities and equity securities still held at period end were as follows for the periods indicated: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net changes in unrealized gains (losses) (1) : Equity securities $ 224 $ — $ (702 ) $ — Trading securities (2) (5,801 ) 5,913 (16,801 ) 7,979 Net unrealized gains (losses) on investment securities $ (5,577 ) $ 5,913 $ (17,503 ) $ 7,979 ______________________ (1) Related only to securities still held at period end. All amounts shown are included in net gains (losses) on investments and other financial instruments. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized losses associated with equity securities were classified in accumulated other comprehensive income. (2) Includes a de minimis amount of net changes in unrealized gains (losses) related to short-term securities. Our available for sale securities within our investment portfolio consisted of the following as of the dates indicated: June 30, 2018 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 72,811 $ 71,045 (1) $ 1 $ 1,767 State and municipal obligations 136,649 137,699 2,957 1,907 Corporate bonds and notes 1,987,444 1,933,044 4,617 59,017 RMBS 249,577 243,659 (2) 1 5,919 CMBS 487,805 477,751 228 10,282 Other ABS 694,613 692,564 1,132 3,181 Foreign government and agency securities 46,826 46,290 116 652 Total fixed-maturities available for sale $ 3,675,725 $ 3,602,052 (3) $ 9,052 $ 82,725 ______________________ (1) Includes securities with a fair value of $10.6 million serving as collateral for FHLB advances. (2) Includes securities with a fair value of $112.2 million serving as collateral for FHLB advances. (3) Includes $16.0 million of fixed maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. December 31, 2017 (In thousands) Amortized Cost Fair Value Gross Unrealized Gains Gross Unrealized Losses Fixed-maturities available for sale: U.S. government and agency securities $ 69,667 $ 69,396 $ 96 $ 367 State and municipal obligations 156,587 161,722 5,834 699 Corporate bonds and notes 1,869,318 1,894,886 33,620 8,052 RMBS 189,455 187,229 636 2,862 CMBS 451,595 453,394 3,409 1,610 Other ABS 672,715 674,548 2,655 822 Foreign government and agency securities 31,417 32,207 823 33 Total fixed-maturities available for sale 3,440,754 3,473,382 (1) 47,073 14,445 Equity securities available for sale (2) 176,349 176,065 (1) 1,705 1,989 Total debt and equity securities available for sale $ 3,617,103 $ 3,649,447 $ 48,778 $ 16,434 ______________________ (1) Includes $14.7 million of fixed maturity securities and $13.2 million of equity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. (2) Primarily consists of investments in fixed-income and equity exchange-traded funds and publicly-traded business development company equities. For the six months ended June 30, 2018 , we did not transfer any securities from the available for sale or trading categories. |
Schedule Of Unrealized Losses [Table Text Block] | the following tables show the gross unrealized losses and fair values, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of the dates indicated. Included in the amounts as of June 30, 2018 and December 31, 2017 are loaned securities under securities lending agreements that are classified as other assets in our condensed consolidated balance sheets, as further described below. June 30, 2018 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 8 $ 41,506 $ 1,253 3 $ 9,502 $ 514 11 $ 51,008 $ 1,767 State and municipal obligations 27 78,350 1,907 — — — 27 78,350 1,907 Corporate bonds and notes 406 1,548,096 50,572 29 119,977 8,445 435 1,668,073 59,017 RMBS 24 168,364 2,175 27 75,189 3,744 51 243,553 5,919 CMBS 76 436,659 9,898 8 8,222 384 84 444,881 10,282 Other ABS 124 423,815 3,063 10 15,436 118 134 439,251 3,181 Foreign government and agency securities 26 39,520 652 — — — 26 39,520 652 Total 691 $ 2,736,310 $ 69,520 77 $ 228,326 $ 13,205 768 $ 2,964,636 $ 82,725 December 31, 2017 ( $ in thousands ) Description of Securities Less Than 12 Months 12 Months or Greater Total # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses # of securities Fair Value Unrealized Losses U.S. government and agency securities 6 $ 23,309 $ 129 3 $ 9,799 $ 238 9 $ 33,108 $ 367 State and municipal obligations 21 65,898 699 — — — 21 65,898 699 Corporate bonds and notes 152 672,318 4,601 32 139,105 3,451 184 811,423 8,052 RMBS 8 19,943 204 26 101,812 2,658 34 121,755 2,862 CMBS 35 139,353 1,395 4 3,518 215 39 142,871 1,610 Other ABS 92 260,864 777 7 8,297 45 99 269,161 822 Foreign government and agency securities 5 7,397 33 — — — 5 7,397 33 Equity securities 13 149,785 1,989 — — — 13 149,785 1,989 Total 332 $ 1,338,867 $ 9,827 72 $ 262,531 $ 6,607 404 $ 1,601,398 $ 16,434 |
Trading Securities (and Certain Trading Assets) [Table Text Block] | The trading securities within our investment portfolio, which are recorded at fair value, consisted of the following as of the dates indicated: (In thousands) June 30, December 31, Trading securities: State and municipal obligations $ 200,702 $ 214,841 Corporate bonds and notes 256,652 307,271 RMBS 24,790 29,520 CMBS 49,347 50,561 Foreign government and agency securities 4,143 4,241 Total (1) $ 535,634 $ 606,434 ______________________ (1) At December 31, 2017, includes a de minimis amount of loaned securities under securities lending agreements that are classified as other assets in our consolidated balance sheets, as further described below. |
Gain (Loss) on Investments [Table Text Block] | Net gains (losses) on investments and other financial instruments consisted of: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net realized gains (losses): Fixed-maturities available for sale $ (1,691 ) $ (1,180 ) $ (4,811 ) $ (3,689 ) Equity securities 498 385 640 385 Trading securities (112 ) (349 ) (650 ) (6,043 ) Short-term investments (7 ) (38 ) (7 ) (32 ) Other invested assets 201 — 263 — Other gains (losses) 23 — 35 18 Net realized gains (losses) on investments (1,088 ) (1,182 ) (4,530 ) (9,361 ) Other-than-temporary impairment losses — (1,000 ) (844 ) (1,000 ) Net unrealized gains (losses) on investment securities (1) (5,733 ) 6,938 (18,537 ) 12,164 Total net gains (losses) on investments (6,821 ) 4,756 (23,911 ) 1,803 Net gains (losses) on other financial instruments (583 ) 575 (2,380 ) 677 Net gains (losses) on investments and other financial instruments $ (7,404 ) $ 5,331 $ (26,291 ) $ 2,480 ______________________ (1) These amounts include unrealized gains (losses) on investment securities other than securities available for sale. For the three and six months ended June 30, 2017 , the unrealized gains (losses) on investments exclude the net change in unrealized gains and losses on equity securities. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized gains (losses) associated with equity securities were classified in accumulated other comprehensive income. |
Investments Classified by Contractual Maturity Date [Table Text Block] | The contractual maturities of fixed-maturity investments available for sale were as follows: June 30, 2018 Available for Sale (In thousands) Amortized Cost Fair Value Due in one year or less (1) $ 45,836 $ 45,694 Due after one year through five years (1) 789,095 774,712 Due after five years through 10 years (1) 1,012,314 973,838 Due after 10 years (1) 396,485 393,834 RMBS (2) 249,577 243,659 CMBS (2) 487,805 477,751 Other ABS (2) 694,613 692,564 Total (3) $ 3,675,725 $ 3,602,052 ______________________ (1) Actual maturities may differ as a result of calls before scheduled maturity. (2) RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. (3) Includes securities loaned under securities lending agreements. |
Note 6 - Goodwill and Other I30
Note 6 - Goodwill and Other Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill [Table Text Block] | All of our goodwill and other intangible assets relate to our Services segment. The following table shows the changes in the carrying amount of goodwill for the year-to-date periods ended June 30, 2018 and December 31, 2017 : (In thousands) Goodwill Accumulated Impairment Losses Net Balance at December 31, 2016 $ 197,265 $ (2,095 ) $ 195,170 Goodwill acquired 126 — 126 Impairment losses — (184,374 ) (184,374 ) Balance at December 31, 2017 197,391 (186,469 ) 10,922 Goodwill acquired — — — Impairment losses — — — Balance at June 30, 2018 $ 197,391 $ (186,469 ) $ 10,922 |
Schedule of Finite-Lived Intangible Assets [Table Text Block] | The following is a summary of the gross and net carrying amounts and accumulated amortization of our other intangible assets as of the periods indicated: June 30, 2018 (In thousands) Original Amount Acquired Accumulated Amortization and Impairment Net Carrying Amount Client relationships (1) $ 82,530 $ (44,912 ) $ 37,618 Technology (2) 15,250 (9,992 ) 5,258 Trade name and trademarks 8,340 (3,434 ) 4,906 Client backlog 6,680 (6,680 ) — Non-competition agreements 185 (173 ) 12 Licenses 463 — 463 Total $ 113,448 $ (65,191 ) $ 48,257 December 31, 2017 (In thousands) Original Amount Acquired Accumulated Amortization Net Carrying Amount Client relationships (1) $ 82,530 $ (41,596 ) $ 40,934 Technology (2) 15,250 (8,922 ) 6,328 Trade name and trademarks 8,340 (3,003 ) 5,337 Client backlog 6,680 (6,006 ) 674 Non-competition agreements 185 (168 ) 17 Total $ 112,985 $ (59,695 ) $ 53,290 ______________________ (1) Includes an impairment charge of $14.9 million in the quarter ended June 30, 2017. (2) Includes an impairment charge of $0.9 million in the quarter ended June 30, 2017. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block] | The estimated aggregate amortization expense for the remainder of 2018 and thereafter is as follows (in thousands): 2018 $ 6,934 2019 8,146 2020 6,827 2021 5,413 2022 4,881 2023 4,430 Thereafter 11,626 Total $ 48,257 |
Note 7 - Reinsurance (Tables)
Note 7 - Reinsurance (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Reinsurance Disclosures [Abstract] | |
Reinsurance, Premiums Written And Earned [Table Text Block] | The effect of reinsurance on our mortgage insurance net premiums written and earned is as follows: Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Net premiums written—insurance: Direct $ 283,783 $ 260,647 $ 541,694 $ 500,292 Ceded (1) (31,825 ) (19,340 ) (51,756 ) (34,320 ) Net premiums written—insurance $ 251,958 $ 241,307 $ 489,938 $ 465,972 Net premiums earned—insurance: Direct $ 265,581 $ 243,229 $ 524,324 $ 479,291 Assumed 7 7 13 14 Ceded (1) (16,620 ) (14,140 ) (32,819 ) (28,409 ) Net premiums earned—insurance $ 248,968 $ 229,096 $ 491,518 $ 450,896 ______________________ (1) Net of profit commission. |
Reinsurance Transaction Details [Table Text Block] | The following tables show the amounts related to the Single Premium QSR Program and the QSR Program for the periods indicated: Single Premium QSR Program Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Ceded premiums written (1) $ 28,107 $ 13,856 $ 43,898 $ 22,816 Ceded premiums earned (1) 11,160 6,311 21,537 12,170 Ceding commissions written 9,880 5,134 16,501 8,846 Ceding commissions earned (2) 5,643 3,248 10,911 6,185 Ceded losses 1,013 464 1,913 1,037 QSR Program Three Months Ended Six Months Ended (In thousands) 2018 2017 2018 2017 Ceded premiums written (1) $ 3,516 $ 5,059 $ 7,447 $ 10,516 Ceded premiums earned (1) 5,258 7,404 10,870 15,238 Ceding commissions written 1,012 1,446 2,140 3,005 Ceding commissions earned (2) 2,896 3,379 6,444 7,273 Ceded losses 6 (310 ) 252 260 ______________________ (1) Net of profit commission. (2) Includes amounts reported in policy acquisition costs and other operating expenses. |
Note 8 - Other Assets (Tables)
Note 8 - Other Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Assets [Abstract] | |
Schedule of Other Assets [Table Text Block] | The following table shows the components of other assets as of the dates indicated: (In thousands) June 30, December 31, Property and equipment (1) $ 90,184 87,042 Deposit with the IRS (Note 9) 88,557 88,557 Corporate-owned life insurance 84,560 85,862 Loaned securities 38,350 27,964 Accrued investment income 33,762 31,389 Unbilled receivables 16,478 22,257 Deferred policy acquisition costs 16,266 16,987 Reinsurance recoverables 12,841 8,492 Other 49,079 39,299 Total other assets $ 430,077 $ 407,849 ______________________ (1) Property and equipment at cost, less accumulated depreciation of $115.5 million and $106.0 million at June 30, 2018 and December 31, 2017 , respectively. Depreciation expense was $4.8 million and $4.1 million for the three-month periods ended June 30, 2018 and 2017 , respectively, and $9.5 million and $8.3 million for the six-month periods ended June 30, 2018 and 2017 , respectively. |
Note 10 - Losses and LAE (Table
Note 10 - Losses and LAE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Insurance Loss Reserves [Abstract] | |
Schedule of Liability for Unpaid Claims and Claim Adjustment Expenses, by Segment [Table Text Block] | Our reserve for losses and LAE, at the end of each period indicated, consisted of: (In thousands) June 30, December 31, Mortgage insurance loss reserves $ 448,094 $ 507,588 Services loss reserves (1) 3,448 — Total reserve for losses and LAE $ 451,542 $ 507,588 ______________________ (1) A majority of this amount is included in the reinsurance recoverables reported in other assets in our condensed consolidated balance sheet, and relates to the acquisition of EnTitle Direct, completed on March 27, 2018. |
Schedule of Liability for Future Policy Benefits, by Product Segment [Table Text Block] | The following table shows our mortgage insurance reserve for losses and LAE by category at the end of each period indicated: (In thousands) June 30, December 31, Reserves for losses by category: Prime $ 255,284 $ 285,022 Alt-A and A minus and below 144,379 170,873 IBNR and other 14,246 16,021 LAE 12,228 13,349 Reinsurance recoverable (1) 9,317 8,315 Total primary reserves 435,454 493,580 Total pool reserves (2) 12,197 13,463 Total First-lien reserves 447,651 507,043 Other (3) 443 545 Total reserve for losses $ 448,094 $ 507,588 ______________________ (1) Represents ceded losses on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. (2) Includes reinsurance recoverable of $24 thousand and $35 thousand as of June 30, 2018 and December 31, 2017 , respectively. (3) Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Schedule of Liability for Unpaid Claims and Claims Adjustment Expense [Table Text Block] | The following table presents information relating to our mortgage insurance reserve for losses, including our IBNR reserve and LAE but excluding our Second-lien premium deficiency reserve, for the periods indicated: Six Months Ended (In thousands) 2018 2017 Balance at beginning of period $ 507,588 $ 760,269 Less: Reinsurance recoverables (1) 8,350 6,851 Balance at beginning of period, net of reinsurance recoverables 499,238 753,418 Add: Losses and LAE incurred in respect of default notices reported and unreported in: Current year (2) 67,286 88,906 Prior years (11,311 ) (24,721 ) Total incurred 55,975 64,185 Deduct: Paid claims and LAE related to: Current year (2) 1,091 1,027 Prior years 115,369 172,356 Total paid 116,460 173,383 Balance at end of period, net of reinsurance recoverables 438,753 644,220 Add: Reinsurance recoverables (1) 9,341 7,371 Balance at end of period $ 448,094 $ 651,591 ______________________ (1) Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. (2) Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. |
Note 11 - Senior Notes (Tables)
Note 11 - Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Senior Notes [Abstract] | |
Schedule of Senior Notes [Table Text Block] | The carrying value of our senior notes at June 30, 2018 and December 31, 2017 was as follows: (In thousands) June 30, December 31, 5.500% Senior Notes due 2019 $ 157,975 $ 157,636 5.250% Senior Notes due 2020 232,275 231,834 7.000% Senior Notes due 2021 195,500 195,146 4.500% Senior Notes due 2024 442,937 442,458 Total Senior Notes $ 1,028,687 $ 1,027,074 |
Note 12 - Other Liabilities (Ta
Note 12 - Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Other Liabilities [Abstract] | |
Other Liabilities [Table Text Block] | The following table shows the components of other liabilities as of the dates indicated: (In thousands) June 30, December 31, FHLB advances $ 115,308 $ — Deferred ceding commission 92,070 89,907 Accrued compensation 39,621 67,687 Amount payable on the return of cash collateral under securities lending agreements 39,224 19,357 Current federal income taxes 8,807 96,740 Other 90,021 80,154 Total other liabilities $ 385,051 $ 353,845 |
Note 15 - Accumulated Other C36
Note 15 - Accumulated Other Comprehensive Income (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | The following table shows the rollforward of accumulated other comprehensive income (loss) as of the periods indicated: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (39,842 ) $ (8,367 ) $ (31,475 ) $ 32,669 $ 9,584 $ 23,085 Cumulative effect of adopting the accounting standard update for financial instruments — — — 284 60 224 Cumulative effect of adopting the accounting standard update for the reclassification of certain tax effects — — — — (2,724 ) 2,724 Balance adjusted for cumulative effect of adopting accounting standard updates (39,842 ) (8,367 ) (31,475 ) 32,953 6,920 26,033 OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period (35,194 ) (7,390 ) (27,804 ) (111,957 ) (23,510 ) (88,447 ) Less: Reclassification adjustment for net gains (losses) included in net income (1) (1,691 ) (355 ) (1,336 ) (5,655 ) (1,187 ) (4,468 ) Net unrealized gains (losses) on investments (33,503 ) (7,035 ) (26,468 ) (106,302 ) (22,323 ) (83,979 ) Unrealized foreign currency translation adjustments — — — 4 1 3 OCI (33,503 ) (7,035 ) (26,468 ) (106,298 ) (22,322 ) (83,976 ) Balance at end of period $ (73,345 ) $ (15,402 ) $ (57,943 ) $ (73,345 ) $ (15,402 ) $ (57,943 ) Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 (In thousands) Before Tax Tax Effect Net of Tax Before Tax Tax Effect Net of Tax Balance at beginning of period $ (5,168 ) $ (1,805 ) $ (3,363 ) $ (19,063 ) $ (6,668 ) $ (12,395 ) OCI: Unrealized gains (losses) on investments: Unrealized holding gains (losses) arising during the period 31,137 10,898 20,239 42,471 14,865 27,606 Less: Reclassification adjustment for net gains (losses) included in net income (1) (1,795 ) (628 ) (1,167 ) (4,304 ) (1,506 ) (2,798 ) Net unrealized gains (losses) on investments 32,932 11,526 21,406 46,775 16,371 30,404 Unrealized foreign currency translation adjustments 114 40 74 166 58 108 OCI 33,046 11,566 21,480 46,941 16,429 30,512 Balance at end of period $ 27,878 $ 9,761 $ 18,117 $ 27,878 $ 9,761 $ 18,117 ______________________ (1) Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 16 - Statutory Informati37
Note 16 - Statutory Information (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Supplementary Insurance Information [Abstract] | |
Risk To Capital Calculation [Table Text Block] | Radian Guaranty’s Risk-to-capital calculation appears in the table below. For purposes of the Risk-to-capital calculation, as well as the Risk-to-capital requirements imposed by certain states, statutory capital is defined as the sum of statutory policyholders’ surplus plus statutory contingency reserves. June 30, December 31, ($ in millions) RIF, net (1) $ 38,956.0 $ 36,793.5 Common stock and paid-in capital $ 1,866.0 $ 1,866.0 Surplus Note 100.0 100.0 Unassigned earnings (deficit) (737.4 ) (765.0 ) Statutory policyholders’ surplus 1,228.6 1,201.0 Contingency reserve 1,883.5 1,667.0 Statutory capital $ 3,112.1 $ 2,868.0 Risk-to-capital 12.5:1 12.8:1 ______________________ (1) Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |
Note 1 - Condensed Consolidat38
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies Business Overview and Significant Accounting Policies(Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Jun. 30, 2018USD ($)segment$ / sharesshares | Jun. 30, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Aug. 09, 2017USD ($) | ||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Deposit Assets | $ 88,557,000 | $ 88,557,000 | $ 88,557,000 | ||||||
Business Overview [Abstract] | |||||||||
Number of Operating Segments | segment | 2 | ||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | 925,000 | $ 0 | $ 1,476,000 | $ 0 | |||||
Income Tax Expense (Benefit) Recorded as a Result of Finalized IRS Settlement | 73,600,000 | ||||||||
Qualified Deposit Assets With The U.S. Department Of Treasury Expected to be Submitted | 31,000,000 | 31,000,000 | |||||||
Restructuring and other exit costs - cash payments | 1,000,000 | ||||||||
Reduction to Available Holding Company Liquidity | $ (31,000,000) | $ (31,000,000) | |||||||
Mortgage Insurance Segment | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Private Mortgage Insurance Protects Lenders For Loans Made With Less Than This Maximum Down Payment Percentage | 20.00% | 20.00% | |||||||
Private Mortgage Insurance Protects Lenders For Refinancings Made to Home Buyers With Less Than This Maximum Equity-Ownership Percentage | 20.00% | 20.00% | |||||||
Mortgage and Real Estate Services Segment [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | [1] | $ 1,055,000 | 0 | $ 1,580,000 | 0 | ||||
Net Premiums Earned and Net Investment Income | 2,400,000 | 2,402,000 | |||||||
Provision for Doubtful Accounts | 0 | 0 | 0 | 0 | |||||
Total Primary Insurance Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Risk In Force | $ 53,900,000,000 | $ 53,900,000,000 | |||||||
Third Quarter 2017 Repurchase Program [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Stock Repurchase Program, Authorized Amount | $ 50,000,000 | ||||||||
Stock Repurchased During Period, Shares | shares | 2,491,843 | 3,022,856 | |||||||
Accelerated Share Repurchases, Final Price Paid Per Share | $ / shares | $ 16.07 | $ 16.56 | |||||||
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 0 | $ 0 | |||||||
Scenario, Forecast [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | $ 1,400,000 | $ 2,900,000 | |||||||
Restructuring and other exit costs - cash payments | $ 1,100,000 | ||||||||
Scenario, Forecast [Member] | Asset Impairment Charges [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | 200,000 | ||||||||
Scenario, Forecast [Member] | Employee Severance and Benefit Costs [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | 1,000,000 | ||||||||
Scenario, Forecast [Member] | Facility and Lease Termination Costs [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | 1,500,000 | ||||||||
Scenario, Forecast [Member] | Contract Termination and Other Restructuring Costs [Member] | |||||||||
Mortgage Insurance [Abstract] | |||||||||
Restructuring and other exit costs | $ 200,000 | ||||||||
Accounting Standards Update 2016-01 [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Increase in Invested Assets | 2,300,000 | ||||||||
Accounting Standards Update 2016-01 [Member] | AOCI Attributable to Parent [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 224,000 | 0 | 224,000 | 0 | |||||
Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 2,061,000 | 0 | 2,061,000 | 0 | |||||
Accounting Standards Update 2018-02 [Member] | AOCI Attributable to Parent [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | 2,724,000 | 0 | 2,724,000 | 0 | |||||
Accounting Standards Update 2018-02 [Member] | Retained Earnings [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (2,724,000) | $ 0 | (2,724,000) | $ 0 | |||||
Unrealized Loss Related to Equity Securities [Member] | Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | (200,000) | (200,000) | |||||||
Practical Expedient to Measure Certain Other Investments Using the NAV [Member] | Accounting Standards Update 2016-01 [Member] | Retained Earnings [Member] | |||||||||
Basis of Presentation and Business Overview [Line Items] | |||||||||
Cumulative Effect of New Accounting Principle in Period of Adoption | $ 2,300,000 | $ 2,300,000 | |||||||
[1] | Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income. |
Note 1 - Condensed Consolidat39
Note 1 - Condensed Consolidated Financial Statements - Business Overview and Significant Accounting Policies Revenue Recognition-Services (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Revenue from External Customer [Line Items] | ||||||
Restructuring and other exit costs | $ 925,000 | $ 0 | $ 1,476,000 | $ 0 | ||
Unbilled Contracts Receivable | 16,478,000 | 16,478,000 | $ 22,257,000 | |||
Mortgage and Real Estate Services Segment [Member] | ||||||
Revenue from External Customer [Line Items] | ||||||
Restructuring and other exit costs | [1] | 1,055,000 | 0 | 1,580,000 | 0 | |
Sales Revenue, Services and Other, Net | [2] | 38,108,000 | 39,975,000 | 72,274,000 | 80,064,000 | |
Revenue from Related Parties | 885,000 | 2,173,000 | 1,887,000 | 4,235,000 | ||
Provision for Doubtful Accounts | 0 | 0 | 0 | 0 | ||
Accounts Receivable, Net | 11,705,000 | 11,705,000 | 17,391,000 | |||
Unbilled Contracts Receivable | 22,257,000 | |||||
Deferred Revenue | 3,814,000 | 3,814,000 | $ 3,235,000 | |||
Net Premiums Earned and Net Investment Income | 2,400,000 | 2,402,000 | ||||
Mortgage and Real Estate Services Segment [Member] | Mortgage Services [Member] | ||||||
Revenue from External Customer [Line Items] | ||||||
Sales Revenue, Services and Other, Net | 16,346,000 | 17,782,000 | 30,335,000 | 36,153,000 | ||
Mortgage and Real Estate Services Segment [Member] | Real Estate Services [Member] | ||||||
Revenue from External Customer [Line Items] | ||||||
Sales Revenue, Services and Other, Net | 19,301,000 | 15,463,000 | 37,204,000 | 32,477,000 | ||
Mortgage and Real Estate Services Segment [Member] | Title Services [Member] | ||||||
Revenue from External Customer [Line Items] | ||||||
Sales Revenue, Services and Other, Net | 2,461,000 | 6,730,000 | $ 4,735,000 | $ 11,434,000 | ||
Mortgage Insurance Segment [Member] | ||||||
Revenue from External Customer [Line Items] | ||||||
Revenue from Related Parties | $ 885,000 | $ 2,173,000 | ||||
[1] | Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income. | |||||
[2] | Includes inter-segment revenues of $0.9 million and $1.9 million for the three and six months ended June 30, 2018 and $2.2 million and $4.2 million for the three and six months ended June 30, 2017, respectively. For both the three- and six-month periods ended June 30, 2018, amounts exclude $2.4 million of Services segment net premiums earned—insurance and net investment income, as both are excluded from the scope of the revenue recognition standard. See Note 3 for segment information. |
Note 2 - Net Income Per Share N
Note 2 - Net Income Per Share Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Shares | 0 | ||||
Net income (loss)—diluted | $ 208,949 | $ (27,342) | $ 323,435 | $ 48,915 | |
Dilutive effect of share-based compensation arrangements (2) | [1] | 3,854 | 0 | 3,692 | 3,896 |
Adjusted average common shares outstanding—diluted | 217,830 | 215,152 | 218,741 | 220,474 | |
Net income (loss)—diluted | $ 0.96 | $ (0.13) | $ 1.48 | $ 0.22 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Net income (loss)—basic | $ 208,949 | $ (27,342) | |||
Net income | $ 208,949 | $ (27,342) | $ 323,435 | $ 49,130 | |
Average common shares outstanding - basic | 213,976 | 215,152 | 215,049 | 215,054 | |
Net income per share - basic | $ 0.98 | $ (0.13) | $ 1.50 | $ 0.23 | |
Convertible Debt | Convertible Senior Notes Due 2019 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Adjustment for dilutive Convertible Senior Notes due 2019, net of tax (1) | [2] | $ 0 | $ 0 | $ 0 | $ (215) |
Dilutive effect of Convertible Senior Notes | 0 | 0 | 0 | 922 | |
Convertible Debt | Convertible Senior Notes Due 2017 | |||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||||
Dilutive effect of Convertible Senior Notes | 0 | 0 | 0 | 602 | |
Stock Compensation Plan [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Shares of common stock equivalents | 484 | 5,975 | 351 | 442 | |
Convertible Debt Securities [Member] | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Shares of common stock equivalents | 0 | 509 | 0 | 0 | |
[1] | There were no dilutive shares for the three months ended June 30, 2017, as a result of our net loss for the period. The following number of shares of our common stock equivalents issued under our share-based compensation arrangements and convertible debt, if any, were not included in the calculation of diluted net income (loss) per share because they were anti-dilutive: Three Months EndedJune 30, Six Months EndedJune 30,(In thousands)2018 2017 2018 2017Shares of common stock equivalents484 5,975 351 442Shares of Convertible Senior Notes due 2017— 509 — — | ||||
[2] | As applicable, includes coupon interest, amortization of discount and fees, and other changes in income that would result from the assumed conversion. Included in the six months ended June 30, 2017 is a benefit related to our adjustment of estimated accrued expense to actual amounts, resulting from the January 2017 settlement of our obligations on the remaining Convertible Senior Notes due 2019. |
Note 3 - Segment Reporting Sche
Note 3 - Segment Reporting Schedule of Segment Reporting Information by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Segment Reporting Information [Line Items] | ||||||
Goodwill, Impairment Loss | $ 0 | $ (184,374) | $ 0 | $ (184,374) | ||
Net premiums earned-insurance | 251,344 | 229,096 | 493,894 | 450,896 | ||
Services revenue | 36,828 | 37,802 | 69,992 | 75,829 | ||
Net investment income | 37,473 | 30,071 | 71,429 | 61,103 | ||
Other income | 1,016 | 612 | 1,823 | 1,358 | ||
Policy acquisition costs | 5,996 | 6,123 | 13,113 | 12,852 | ||
Cost of services | 24,205 | 25,635 | 47,331 | 54,010 | ||
Other operating expenses before corporate allocations | 70,184 | 68,750 | 133,427 | 137,127 | ||
Restructuring and other exit costs | 925 | 0 | 1,476 | 0 | ||
Adjusted pretax operating income (loss) | 191,009 | 163,736 | 355,112 | 289,017 | ||
Net gains (losses) on investments and other financial instruments | (7,404) | 5,331 | (26,291) | 2,480 | ||
Total assets | 6,139,488 | 6,139,488 | $ 5,900,881 | |||
Mortgage Insurance Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net premiums written—insurance | [1] | 251,958 | 241,307 | 489,938 | 465,972 | |
(Increase) decrease in unearned premiums | (2,990) | (12,211) | 1,580 | (15,076) | ||
Net premiums earned-insurance | 248,968 | 229,096 | 491,518 | 450,896 | ||
Net investment income | 37,447 | 30,071 | 71,403 | 61,103 | ||
Other income | 621 | 612 | 1,428 | 1,358 | ||
Total | [2] | 287,036 | 259,779 | 564,349 | 513,357 | |
Provision for losses | 19,362 | 17,714 | 56,753 | 64,946 | ||
Policy acquisition costs | 5,996 | 6,123 | 13,113 | 12,852 | ||
Other operating expenses before corporate allocations | 33,262 | 37,939 | 65,150 | 77,228 | ||
Total | [3] | 58,620 | 61,776 | 135,016 | 155,026 | |
Adjusted pretax operating income (loss) before corporate allocations | 228,416 | 198,003 | 429,333 | 358,331 | ||
Allocation of corporate operating expenses | 20,136 | 15,894 | 38,713 | 30,080 | ||
Allocation of interest expense | 10,840 | 11,748 | 21,469 | 23,257 | ||
Adjusted pretax operating income (loss) | [4] | 197,440 | 170,361 | 369,151 | 304,994 | |
Inter-segment expenses | 1,887 | 4,235 | ||||
Inter-segment revenues | 885 | 2,173 | ||||
Total assets | 5,949,845 | 5,949,845 | 5,733,918 | |||
Mortgage and Real Estate Services Segment [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Goodwill, Impairment Loss | 0 | (184,374) | ||||
Net premiums earned-insurance | [5] | 2,376 | 0 | 2,376 | 0 | |
Services revenue | [6] | 37,713 | 39,975 | 71,879 | 80,064 | |
Net investment income | [5] | 26 | 0 | 26 | 0 | |
Other income | [5] | 395 | 0 | 395 | 0 | |
Total | [6] | 40,510 | 39,975 | 74,676 | 80,064 | |
Provision for losses | [5] | 53 | 0 | 53 | 0 | |
Cost of services | 24,357 | 25,962 | 47,627 | 54,652 | ||
Other operating expenses before corporate allocations | 14,015 | 12,803 | 24,759 | 25,407 | ||
Restructuring and other exit costs | [7] | 1,055 | 0 | 1,580 | 0 | |
Total | 39,480 | 38,765 | 74,019 | 80,059 | ||
Adjusted pretax operating income (loss) before corporate allocations | 1,030 | 1,210 | 657 | 5 | ||
Allocation of corporate operating expenses | 3,010 | 3,404 | 5,794 | 7,122 | ||
Allocation of interest expense | 4,451 | 4,431 | 8,902 | 8,860 | ||
Adjusted pretax operating income (loss) | [4] | (6,431) | (6,625) | (14,039) | (15,977) | |
Inter-segment revenues | 885 | $ 2,173 | 1,887 | $ 4,235 | ||
Total assets | 189,643 | 189,643 | $ 166,963 | |||
Investments and Cash | 0 | 0 | ||||
Senior Notes [Member] | Senior Notes Due 2019 [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Debt Instrument, Face Amount | $ 300,000 | $ 300,000 | ||||
[1] | Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. | |||||
[2] | Excludes net losses on investments and other financial instruments of $7.4 million and $26.3 million for the three and six months ended June 30, 2018, and net gains on investments and other financial instruments of $5.3 million and $2.5 million for the three and six months ended June 30, 2017, not included in adjusted pretax operating income. | |||||
[3] | Includes inter-segment expenses as follows: Three Months EndedJune 30, Six Months EndedJune 30,(In thousands)2018 2017 2018 2017Inter-segment expenses$885 $2,173 $1,887 $4,235 | |||||
[4] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. | |||||
[5] | Results from inclusion of the operations of EnTitle Direct, a national title insurance and settlement services company, acquired in March 2018. | |||||
[6] | Includes inter-segment revenues as follows: Three Months EndedJune 30, Six Months EndedJune 30,(In thousands)2018 2017 2018 2017Inter-segment revenues$885 $2,173 $1,887 $4,235 | |||||
[7] | Does not include impairment of long-lived assets and loss from the sale of a business line, which is not a component of adjusted pretax operating income. |
Note 3 - Segment Reporting Reco
Note 3 - Segment Reporting Reconciliation of Segment to Consolidated Results Pretax (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Assets | $ 6,139,488 | $ 6,139,488 | $ 5,900,881 | |||
Adjusted pretax operating income (loss) | 191,009 | $ 163,736 | 355,112 | $ 289,017 | ||
Net gains (losses) on investments and other financial instruments | (7,404) | 5,331 | (26,291) | 2,480 | ||
Loss on induced conversion and debt extinguishment | 0 | (1,247) | 0 | (5,703) | ||
Acquisition-related (expenses) benefits | [1] | (416) | (64) | (416) | (72) | |
Goodwill, Impairment Loss | 0 | (184,374) | 0 | (184,374) | ||
Increase (Decrease) in Goodwill and Intangible Assets | (2,748) | (18,856) | (5,496) | (22,152) | ||
Impairment of Long-Lived Assets Held-for-use | [2] | 130 | 0 | 104 | 0 | |
Pretax income (loss) | 180,571 | (35,474) | 323,013 | 79,196 | ||
Mortgage Insurance Segment | ||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Revenue from Related Parties | 885 | 2,173 | ||||
Assets | 5,949,845 | 5,949,845 | 5,733,918 | |||
Adjusted pretax operating income (loss) | [3] | 197,440 | 170,361 | 369,151 | 304,994 | |
Costs and Expenses, Related Party | 1,887 | 4,235 | ||||
Mortgage and Real Estate Services Segment [Member] | ||||||
Segment Reporting, Reconciling Item for Operating Profit (Loss) from Segment to Consolidated [Line Items] | ||||||
Revenue from Related Parties | 885 | 2,173 | 1,887 | 4,235 | ||
Assets | 189,643 | 189,643 | 166,963 | |||
Adjusted pretax operating income (loss) | [3] | $ (6,431) | $ (6,625) | (14,039) | $ (15,977) | |
Goodwill, Impairment Loss | $ 0 | $ (184,374) | ||||
[1] | Acquisition-related expenses represent expenses incurred to effect the acquisition of a business, net of adjustments to accruals previously recorded for acquisition expenses. | |||||
[2] | Included within restructuring and other exit costs. See Note 1. | |||||
[3] | Includes inter-segment expenses and revenues as listed in the notes to the preceding tables. |
Note 4 - Fair Value of Financ43
Note 4 - Fair Value of Financial Instruments Fair Value Assets Liabilities by Hierarchy Level (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Other Investments | $ 3,193,000 | $ 3,193,000 | $ 334,000 | ||||||
Securities Received as Collateral | 39,224,000 | 39,224,000 | 19,357,000 | ||||||
Loaned securities | 38,350,000 | 38,350,000 | 27,964,000 | ||||||
Gain (Loss) on Investments | (6,821,000) | $ 4,756,000 | (23,911,000) | $ 1,803,000 | |||||
Other than Temporary Impairment Losses, Investments | 0 | 1,000,000 | 844,000 | 1,000,000 | |||||
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Other Investments | 3,200,000 | 3,200,000 | |||||||
Cost Method Investments | [1] | 0 | 0 | 334,000 | |||||
Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 4,909,077,000 | [2],[3] | 4,909,077,000 | [2],[3] | 4,671,572,000 | [4],[5] | |||
Total Assets at Fair Value | 4,909,077,000 | [3] | 4,909,077,000 | [3] | 4,671,572,000 | [5] | |||
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 | 0 | 0 | |||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers, Net | 0 | 0 | 0 | 0 | |||||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Liability, Transfers, Net | 0 | $ 0 | 0 | $ 0 | |||||
US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 157,206,000 | 157,206,000 | 132,992,000 | ||||||
State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 351,085,000 | 351,085,000 | 386,111,000 | ||||||
Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 211,348,000 | 211,348,000 | 213,357,000 | ||||||
Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 2,331,887,000 | 2,331,887,000 | 2,304,017,000 | ||||||
RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 268,449,000 | 268,449,000 | 216,749,000 | ||||||
CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 527,098,000 | 527,098,000 | 503,955,000 | ||||||
Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 693,672,000 | 693,672,000 | 676,158,000 | ||||||
Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 50,433,000 | 50,433,000 | 36,448,000 | ||||||
Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 144,906,000 | 144,906,000 | 176,065,000 | ||||||
Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 172,993,000 | [6] | 172,993,000 | [6] | 25,720,000 | [7] | |||
Fair Value, Inputs, Level 1 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 488,734,000 | [2] | 488,734,000 | [2] | 513,531,000 | [4] | |||
Total Assets at Fair Value | 488,734,000 | 488,734,000 | 513,531,000 | ||||||
Fair Value, Inputs, Level 1 | US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 137,749,000 | 137,749,000 | 124,969,000 | ||||||
Fair Value, Inputs, Level 1 | State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 211,348,000 | 211,348,000 | 213,357,000 | ||||||
Fair Value, Inputs, Level 1 | Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 1 | Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 139,637,000 | 139,637,000 | 175,205,000 | ||||||
Fair Value, Inputs, Level 1 | Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | [6] | 0 | [6] | 0 | [7] | |||
Fair Value, Inputs, Level 2 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 4,420,343,000 | [2] | 4,420,343,000 | [2] | 4,158,041,000 | [4] | |||
Total Assets at Fair Value | 4,420,343,000 | 4,420,343,000 | 4,158,041,000 | ||||||
Fair Value, Inputs, Level 2 | US government and agency securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 19,457,000 | 19,457,000 | 8,023,000 | ||||||
Fair Value, Inputs, Level 2 | State and municipal obligations | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 351,085,000 | 351,085,000 | 386,111,000 | ||||||
Fair Value, Inputs, Level 2 | Money market instruments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Inputs, Level 2 | Corporate bonds and notes | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 2,331,887,000 | 2,331,887,000 | 2,304,017,000 | ||||||
Fair Value, Inputs, Level 2 | RMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 268,449,000 | 268,449,000 | 216,749,000 | ||||||
Fair Value, Inputs, Level 2 | CMBS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 527,098,000 | 527,098,000 | 503,955,000 | ||||||
Fair Value, Inputs, Level 2 | Other ABS | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 693,672,000 | 693,672,000 | 676,158,000 | ||||||
Fair Value, Inputs, Level 2 | Foreign government securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 50,433,000 | 50,433,000 | 36,448,000 | ||||||
Fair Value, Inputs, Level 2 | Equity securities | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 5,269,000 | 5,269,000 | 860,000 | ||||||
Fair Value, Inputs, Level 2 | Other investments | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Investments at Fair Value | 172,993,000 | [6] | 172,993,000 | [6] | 25,720,000 | [7] | |||
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Recurring | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Total Assets at Fair Value | 0 | 0 | 0 | ||||||
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value | 0 | 0 | 0 | ||||||
Securities Financing Transaction, Fair Value [Member] | |||||||||
Fair Value by Hierarchy Level [Line Items] | |||||||||
Securities Received as Collateral | [8],[9] | 39,224,000 | 39,224,000 | 19,357,000 | |||||
Loaned securities | [9] | $ 38,350,000 | $ 38,350,000 | $ 27,964,000 | |||||
[1] | As a result of implementing the update to the standard for the accounting of financial instruments effective January 1, 2018, other invested assets are no longer carried at amortized cost. | ||||||||
[2] | Does not include certain other invested assets ($3.2 million), primarily invested in limited partnership investments valued using the net asset value as a practical expedient. Includes cash collateral held under securities lending agreements ($39.2 million) reinvested in money market instruments. | ||||||||
[3] | Includes $38.4 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. | ||||||||
[4] | Does not include certain other invested assets ($0.3 million), primarily invested in limited partnerships, accounted for as cost-method investments and not measured at fair value. Includes cash collateral held under securities lending agreements ($19.4 million) reinvested in money market instruments. | ||||||||
[5] | Includes $28.0 million of securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our consolidated balance sheets. See Note 5 for more information. | ||||||||
[6] | Comprising short-term certificates of deposit and commercial paper. | ||||||||
[7] | Comprising short-term certificates of deposit and commercial paper. | ||||||||
[8] | All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets. | ||||||||
[9] | Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. |
Note 4 - Fair Value of Financ44
Note 4 - Fair Value of Financial Instruments Other Fair Value Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Senior Notes | $ 1,028,687 | $ 1,027,074 | |
Carrying (Reported) Amount, Fair Value Disclosure [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cost Method Investments | [1] | 0 | 334 |
Senior Notes | 1,028,687 | 1,027,074 | |
Estimate of Fair Value, Fair Value Disclosure [Member] | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Cost Method Investments, Fair Value Disclosure | [1] | 0 | 3,226 |
Senior Notes, Fair Value | $ 1,040,249 | $ 1,093,934 | |
[1] | As a result of implementing the update to the standard for the accounting of financial instruments effective January 1, 2018, other invested assets are no longer carried at amortized cost. |
Note 5 - Investments Unrealized
Note 5 - Investments Unrealized Gain (Loss) on Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | ||
Schedule of Available-for-sale Securities [Line Items] | ||||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | $ 122,800 | |||
Loaned securities | 38,350 | $ 27,964 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 48,778 | |||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 16,434 | |||
Available-for-sale Securities, including Loaned Securities, Amortized Cost Basis | 3,617,103 | |||
Available-for-sale Securities, including Loaned Securities | 3,649,447 | |||
Available-for-sale Debt Securities, Amortized Cost Basis | 3,659,311 | 3,426,217 | ||
Fixed-maturities available for sale—at fair value (amortized cost $3,659,311 and $3,426,217) | 3,586,055 | 3,458,719 | ||
US government and agency securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | 10,600 | |||
Amortized Cost Debt and Equity Securities | 72,811 | 69,667 | ||
Available-for-sale Securities | 71,045 | [1] | 69,396 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 96 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 1,767 | 367 | ||
US States and Political Subdivisions Debt Securities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 136,649 | 156,587 | ||
Available-for-sale Securities | 137,699 | 161,722 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 2,957 | 5,834 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 1,907 | 699 | ||
Corporate bonds and notes | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 1,987,444 | 1,869,318 | ||
Available-for-sale Securities | 1,933,044 | 1,894,886 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 4,617 | 33,620 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 59,017 | 8,052 | ||
RMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | 112,200 | |||
Amortized Cost Debt and Equity Securities | 249,577 | 189,455 | ||
Available-for-sale Securities | 243,659 | [2] | 187,229 | |
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1 | 636 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 5,919 | 2,862 | ||
CMBS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 487,805 | 451,595 | ||
Available-for-sale Securities | 477,751 | 453,394 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 228 | 3,409 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 10,282 | 1,610 | ||
Other ABS | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 694,613 | 672,715 | ||
Available-for-sale Securities | 692,564 | 674,548 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 1,132 | 2,655 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 3,181 | 822 | ||
Foreign government securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 46,826 | 31,417 | ||
Available-for-sale Securities | 46,290 | 32,207 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 116 | 823 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 652 | 33 | ||
Debt Securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Amortized Cost Debt and Equity Securities | 3,440,754 | |||
Available-for-sale Securities | [3] | 3,473,382 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax | 9,052 | 47,073 | ||
Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax | 82,725 | 14,445 | ||
Available-for-sale Securities, including Loaned Securities, Amortized Cost Basis | 3,675,725 | |||
Available-for-sale Securities, including Loaned Securities | [4] | 3,602,052 | ||
Equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Available-for-sale Equity Securities, including Loaned Securities, Amortized Cost Basis | [5] | 176,349 | ||
Available-for-sale Securities, including Loaned Securities, Equity Securities | [3],[5] | 176,065 | ||
Available-for-sale Equity Securities, Accumulated Gross Unrealized Gain, before Tax | [5] | 1,705 | ||
Available-for-sale Equity Securities, Accumulated Gross Unrealized Loss, before Tax | [5] | 1,989 | ||
Securities Financing Transaction, Fair Value [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Loaned securities | [6] | 38,350 | 27,964 | |
Securities Financing Transaction, Fair Value [Member] | Fixed Maturities [Member] | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Loaned securities | 16,000 | 14,700 | ||
Securities Financing Transaction, Fair Value [Member] | Corporate bonds and notes | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Loaned securities | [6] | 16,199 | 13,862 | |
Securities Financing Transaction, Fair Value [Member] | Foreign government securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Loaned securities | [6] | 222 | 867 | |
Securities Financing Transaction, Fair Value [Member] | Equity securities | ||||
Schedule of Available-for-sale Securities [Line Items] | ||||
Loaned securities | [6] | $ 21,929 | $ 13,235 | |
[1] | Includes securities with a fair value of $10.6 million serving as collateral for FHLB advances. | |||
[2] | Includes securities with a fair value of $112.2 million serving as collateral for FHLB advances. | |||
[3] | Includes $14.7 million of fixed maturity securities and $13.2 million of equity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. | |||
[4] | Includes $16.0 million of fixed maturity securities loaned to third-party Borrowers under securities lending agreements, classified as other assets in our condensed consolidated balance sheets, as further described below. | |||
[5] | Primarily consists of investments in fixed-income and equity exchange-traded funds and publicly-traded business development company equities. | |||
[6] | Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. |
Note 5 - Investments Schedule o
Note 5 - Investments Schedule of Unrealized Losses (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)security | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments | $ 0 | $ 1,000 | $ 844 | $ 1,000 | |
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 691 | 691 | 332 | ||
Fair value available-for-sale securities | $ 2,736,310 | $ 2,736,310 | $ 1,338,867 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 69,520 | $ 69,520 | $ 9,827 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 77 | 77 | 72 | ||
Fair value available-for-sale securities | $ 228,326 | $ 228,326 | $ 262,531 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 13,205 | $ 13,205 | $ 6,607 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 768 | 768 | 404 | ||
Fair value available-for-sale securities | $ 2,964,636 | $ 2,964,636 | $ 1,601,398 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 82,725 | 82,725 | 16,434 | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held | $ 0 | $ 0 | $ 0 | ||
US government and agency securities | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 8 | 8 | 6 | ||
Fair value available-for-sale securities | $ 41,506 | $ 41,506 | $ 23,309 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,253 | $ 1,253 | $ 129 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 3 | 3 | 3 | ||
Fair value available-for-sale securities | $ 9,502 | $ 9,502 | $ 9,799 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 514 | $ 514 | $ 238 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 11 | 11 | 9 | ||
Fair value available-for-sale securities | $ 51,008 | $ 51,008 | $ 33,108 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,767 | $ 1,767 | $ 367 | ||
US States and Political Subdivisions Debt Securities [Member] | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 27 | 27 | 21 | ||
Fair value available-for-sale securities | $ 78,350 | $ 78,350 | $ 65,898 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,907 | $ 1,907 | $ 699 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | ||
Fair value available-for-sale securities | $ 0 | $ 0 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 27 | 27 | 21 | ||
Fair value available-for-sale securities | $ 78,350 | $ 78,350 | $ 65,898 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,907 | $ 1,907 | $ 699 | ||
Corporate bonds and notes | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 406 | 406 | 152 | ||
Fair value available-for-sale securities | $ 1,548,096 | $ 1,548,096 | $ 672,318 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 50,572 | $ 50,572 | $ 4,601 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 29 | 29 | 32 | ||
Fair value available-for-sale securities | $ 119,977 | $ 119,977 | $ 139,105 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 8,445 | $ 8,445 | $ 3,451 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 435 | 435 | 184 | ||
Fair value available-for-sale securities | $ 1,668,073 | $ 1,668,073 | $ 811,423 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 59,017 | $ 59,017 | $ 8,052 | ||
RMBS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 24 | 24 | 8 | ||
Fair value available-for-sale securities | $ 168,364 | $ 168,364 | $ 19,943 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 2,175 | $ 2,175 | $ 204 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 27 | 27 | 26 | ||
Fair value available-for-sale securities | $ 75,189 | $ 75,189 | $ 101,812 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 3,744 | $ 3,744 | $ 2,658 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 51 | 51 | 34 | ||
Fair value available-for-sale securities | $ 243,553 | $ 243,553 | $ 121,755 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 5,919 | $ 5,919 | $ 2,862 | ||
CMBS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 76 | 76 | 35 | ||
Fair value available-for-sale securities | $ 436,659 | $ 436,659 | $ 139,353 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 9,898 | $ 9,898 | $ 1,395 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 8 | 8 | 4 | ||
Fair value available-for-sale securities | $ 8,222 | $ 8,222 | $ 3,518 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 384 | $ 384 | $ 215 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 84 | 84 | 39 | ||
Fair value available-for-sale securities | $ 444,881 | $ 444,881 | $ 142,871 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 10,282 | $ 10,282 | $ 1,610 | ||
Other ABS | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 124 | 124 | 92 | ||
Fair value available-for-sale securities | $ 423,815 | $ 423,815 | $ 260,864 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 3,063 | $ 3,063 | $ 777 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 10 | 10 | 7 | ||
Fair value available-for-sale securities | $ 15,436 | $ 15,436 | $ 8,297 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 118 | $ 118 | $ 45 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 134 | 134 | 99 | ||
Fair value available-for-sale securities | $ 439,251 | $ 439,251 | $ 269,161 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 3,181 | $ 3,181 | $ 822 | ||
Foreign government securities | |||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 26 | 26 | 5 | ||
Fair value available-for-sale securities | $ 39,520 | $ 39,520 | $ 7,397 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 652 | $ 652 | $ 33 | ||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | ||
Fair value available-for-sale securities | $ 0 | $ 0 | $ 0 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | ||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 26 | 26 | 5 | ||
Fair value available-for-sale securities | $ 39,520 | $ 39,520 | $ 7,397 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 652 | $ 652 | $ 33 | ||
Equity securities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net | (500) | ||||
Continuous Loss Position Less Than Twelve Months [Abstract] | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 13 | ||||
Fair value available-for-sale securities | $ 149,785 | ||||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,989 | ||||
Continuous Unrealized Loss Position, Twelve Months Or Greater | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | ||||
Fair value available-for-sale securities | $ 0 | ||||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | ||||
Continuous Loss Position, Total | |||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 13 | ||||
Fair value available-for-sale securities | $ 149,785 | ||||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,989 | ||||
Convertible Debt Securities [Member] | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net | $ 500 |
Note 5 - Investments Investment
Note 5 - Investments Investments Trading Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | [1] | $ 535,634 | $ 606,434 |
State and municipal obligations | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 200,702 | 214,841 | |
Corporate bonds and notes | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 256,652 | 307,271 | |
RMBS | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 24,790 | 29,520 | |
CMBS | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | 49,347 | 50,561 | |
Foreign government securities | |||
Schedule of Trading Securities and Other Trading Assets [Line Items] | |||
Trading Securities | $ 4,143 | $ 4,241 | |
[1] | At December 31, 2017, includes a de minimis amount of loaned securities under securities lending agreements that are classified as other assets in our consolidated balance sheets, as further described below. |
Note 5 - Investments Securities
Note 5 - Investments Securities Lending Activity (Details) | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | ||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1.02 | ||
Loaned securities | $ 38,350,000 | $ 27,964,000 | |
Securities Held as Collateral, at Fair Value | 0 | ||
Cash Collateral for Borrowed Securities | $ 39,224,000 | 19,357,000 | |
Repurchase Agreements, Securities Lending Transactions, and Repurchase-to-Maturity Transactions Accounted for as Secured Borrowings, Description of Potential Risks | The Borrower generally may return the loaned securities to us at any time, which would require us to return the collateral within the standard settlement period for the loaned securities on the principal exchange or market in which the securities are traded. We manage this liquidity risk associated with cash collateral by maintaining the cash collateral in a short-term money-market fund with daily availability. The credit risk under these programs is reduced by the amounts of collateral received. On a daily basis, the value of the underlying securities that we have loaned to the Borrowers is compared to the value of cash and securities collateral we received from the Borrowers, and additional cash or securities are requested or returned, as applicable. In addition, we are indemnified against counterparty credit risk by the intermediary. | ||
Securities Financing Transaction, Fair Value [Member] | |||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1 | ||
Loaned securities | [1] | $ 38,350,000 | 27,964,000 |
Securities Borrowed, Fair Value of Collateral | [1],[2] | 92,000 | 9,342,000 |
Cash Collateral for Borrowed Securities | [1],[3] | 39,224,000 | 19,357,000 |
Securities Financing Transaction, Fair Value [Member] | Corporate bonds and notes | |||
Securities Financing Transaction [Line Items] | |||
Loaned securities | [1] | 16,199,000 | 13,862,000 |
Securities Financing Transaction, Fair Value [Member] | Foreign government securities | |||
Securities Financing Transaction [Line Items] | |||
Loaned securities | [1] | 222,000 | 867,000 |
Securities Financing Transaction, Fair Value [Member] | Equity securities | |||
Securities Financing Transaction [Line Items] | |||
Loaned securities | [1] | 21,929,000 | 13,235,000 |
Securities Financing Transaction, Cost [Member] | |||
Securities Financing Transaction [Line Items] | |||
Loaned securities | [1] | $ 39,503,000 | $ 27,846,000 |
Foreign government securities | |||
Securities Financing Transaction [Line Items] | |||
Securities Lending Rate of Collateral Required | 1.05 | ||
[1] | Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. | ||
[2] | Securities collateral on deposit with us from Borrowers may not be transferred or re-pledged unless the Borrower is in default, and is therefore not reflected in our condensed consolidated financial statements. | ||
[3] | All cash collateral received has been reinvested in accordance with the securities lending agreements and is included in short-term investments in our condensed consolidated balance sheets. Amounts payable on the return of cash collateral under securities lending agreements are included within other liabilities in our condensed consolidated balance sheets. |
Note 5 - Investments Gain (Loss
Note 5 - Investments Gain (Loss) on Investments (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)security | ||
Gain (Loss) on Investments [Line Items] | ||||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 691 | 691 | 332 | |||
Other gains | $ 23 | $ 0 | $ 35 | $ 18 | ||
Net realized losses on investments | (1,088) | (1,182) | (4,530) | (9,361) | ||
Other than Temporary Impairment Losses, Investments | 0 | (1,000) | (844) | (1,000) | ||
Unrealized gains on trading securities | [1] | (5,733) | 6,938 | (18,537) | 12,164 | |
Total net gains on investments | (6,821) | 4,756 | (23,911) | 1,803 | ||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | 2,736,310 | 2,736,310 | $ 1,338,867 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 69,520 | $ 69,520 | $ 9,827 | |||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 77 | 77 | 72 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | $ 228,326 | $ 228,326 | $ 262,531 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 13,205 | $ 13,205 | $ 6,607 | |||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 768 | 768 | 404 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 2,964,636 | $ 2,964,636 | $ 1,601,398 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | 82,725 | 82,725 | $ 16,434 | |||
Net gains (losses) on other financial instruments | (583) | 575 | (2,380) | 677 | ||
Net Gains (Losses) on Investments and Other Financial Instruments | (7,404) | 5,331 | (26,291) | 2,480 | ||
Fixed Maturities [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Available-for-sale Securities, Gross Realized (Loss) Gain, Excluding Other than Temporary Impairments | (1,691) | (1,180) | (4,811) | (3,689) | ||
Equity securities | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Equity Securities, Realized Gain (Loss) | 498 | 385 | 640 | 385 | ||
Trading Securities [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Trading securities | (112) | (349) | (650) | (6,043) | ||
Unrealized gains on trading securities | [2],[3] | (5,801) | 5,913 | (16,801) | 7,979 | |
Short-term Investments [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Short-term investments | (7) | (38) | (7) | (32) | ||
Other investments | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Cost-method Investments, Realized Gain (Loss), Excluding Other than Temporary Impairments | $ 201 | $ 0 | $ 263 | $ 0 | ||
US States and Political Subdivisions Debt Securities [Member] | ||||||
Gain (Loss) on Investments [Line Items] | ||||||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Less than One Year | security | 27 | 27 | 21 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than Twelve Months, Fair Value | $ 78,350 | $ 78,350 | $ 65,898 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Less than 12 Months, Accumulated Loss | $ 1,907 | $ 1,907 | $ 699 | |||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions, Greater than or Equal to One Year | security | 0 | 0 | 0 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Twelve Months or Longer, Fair Value | $ 0 | $ 0 | $ 0 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ 0 | $ 0 | $ 0 | |||
Available-for-sale, Securities in Unrealized Loss Positions, Qualitative Disclosure, Number of Positions | security | 27 | 27 | 21 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Fair Value | $ 78,350 | $ 78,350 | $ 65,898 | |||
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss | $ 1,907 | $ 1,907 | $ 699 | |||
[1] | These amounts include unrealized gains (losses) on investment securities other than securities available for sale. For the three and six months ended June 30, 2017, the unrealized gains (losses) on investments exclude the net change in unrealized gains and losses on equity securities. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized gains (losses) associated with equity securities were classified in accumulated other comprehensive income. | |||||
[2] | Includes a de minimis amount of net changes in unrealized gains (losses) related to short-term securities. | |||||
[3] | Related only to securities still held at period end. All amounts shown are included in net gains (losses) on investments and other financial instruments. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized losses associated with equity securities were classified in accumulated other comprehensive income. |
Note 5 - Investments Schedule50
Note 5 - Investments Schedule of Contractual Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | $ 122,800 | ||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | 3,659,311 | $ 3,426,217 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | 3,586,055 | 3,458,719 | |
FHLB advances | 115,308 | 0 | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings, Credit Losses on Debt Securities Held | 0 | 0 | |
Debt Securities | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Debt Securities, Amortized Cost Basis | [1] | 3,675,725 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Securities | [1] | 3,602,052 | |
Assets Held by Insurance Regulators | 15,400 | $ 11,800 | |
Non Asset Backed Security Investments, Contractual Maturities | |||
Available-for-sale Securities, Amortized Cost | |||
Due in one year or less | [2] | 45,836 | |
Due after one year through five years | [2] | 789,095 | |
Due after five years through ten years | [2] | 1,012,314 | |
Due after ten years | [2] | 396,485 | |
Available-for-sale Securities, Fair Value | |||
Due in one year or less | [2] | 45,694 | |
Due after one year through five years | [2] | 774,712 | |
Due after five years through ten years | [2] | 973,838 | |
Due after ten years | [2] | 393,834 | |
RMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 249,577 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | 243,659 | |
CMBS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 487,805 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | 477,751 | |
Other ABS | |||
Available-for-sale Securities, Amortized Cost | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Amortized Cost Basis | [3] | 694,613 | |
Available-for-sale Securities, Fair Value | |||
Available-for-sale Securities, Debt Maturities, without Single Maturity Date, Fair Value | [3] | $ 692,564 | |
[1] | Includes securities loaned under securities lending agreements. | ||
[2] | Actual maturities may differ as a result of calls before scheduled maturity. | ||
[3] | RMBS, CMBS and Other ABS are shown separately, as they are not due at a single maturity date. |
Note 5 - Investments Net Unreal
Note 5 - Investments Net Unrealized Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Gain (Loss) on Investments [Line Items] | |||||
Unrealized Gain (Loss) on Securities | [1] | $ (5,577) | $ 5,913 | $ (17,503) | $ 7,979 |
Trading Securities, Change in Unrealized Holding Gain (Loss) | [2] | (5,733) | 6,938 | (18,537) | 12,164 |
Equity Securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Equity Securities, Change in Unrealized Holding Gain (Loss) | [1] | 224 | 0 | (702) | 0 |
Trading Securities [Member] | |||||
Gain (Loss) on Investments [Line Items] | |||||
Trading Securities, Change in Unrealized Holding Gain (Loss) | [1],[3] | $ (5,801) | $ 5,913 | $ (16,801) | $ 7,979 |
[1] | Related only to securities still held at period end. All amounts shown are included in net gains (losses) on investments and other financial instruments. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized losses associated with equity securities were classified in accumulated other comprehensive income. | ||||
[2] | These amounts include unrealized gains (losses) on investment securities other than securities available for sale. For the three and six months ended June 30, 2017, the unrealized gains (losses) on investments exclude the net change in unrealized gains and losses on equity securities. Prior to the implementation of the update to the standard for the accounting of financial instruments effective January 1, 2018, the unrealized gains (losses) associated with equity securities were classified in accumulated other comprehensive income. | ||||
[3] | Includes a de minimis amount of net changes in unrealized gains (losses) related to short-term securities. |
Note 6 - Goodwill and Other I52
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill [Roll Forward] | ||||||
Goodwill, Impairment Loss | $ 0 | $ (184,374) | $ 0 | $ (184,374) | ||
Mortgage and Real Estate Services Segment [Member] | ||||||
Goodwill [Roll Forward] | ||||||
Goodwill, Gross, Beginning of Period | 197,391 | 197,265 | $ 197,265 | |||
Goodwill, Acquired During Period | 0 | 126 | ||||
Goodwill, Gross, End of Period | 197,391 | 197,391 | 197,391 | |||
Goodwill, Impaired, Accumulated Impairment Loss, Beginning of Period | (186,469) | $ (2,095) | (2,095) | |||
Goodwill, Impairment Loss | 0 | (184,374) | ||||
Goodwill, Impaired, Accumulated Impairment Loss, End of Period | (186,469) | (186,469) | (186,469) | |||
Goodwill, Net | $ 10,922 | $ 10,922 | $ 10,922 | $ 195,170 |
Note 6 - Goodwill and Other I53
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Goodwill - Text (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)segment | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Goodwill [Line Items] | |||||
Goodwill, Impairment Loss | $ 0 | $ 184,374 | $ 0 | $ 184,374 | |
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years | ||||
Mortgage and Real Estate Services Segment [Member] | |||||
Goodwill [Line Items] | |||||
Number of Reporting Units | segment | 1 | ||||
Goodwill, Impairment Loss | $ 0 | $ 184,374 |
Note 6 - Goodwill and Other I54
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Finite-Lived Intangible Assets Including Impairment (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2018 | Dec. 31, 2017 | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Net | $ 48,257 | |||
Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [1] | $ 82,530 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [1] | (41,596) | ||
Finite-Lived Intangible Assets, Net | [1] | 40,934 | ||
Technology-Based Intangible Assets [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | [2] | 15,250 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [2] | (8,922) | ||
Finite-Lived Intangible Assets, Net | [2] | 6,328 | ||
Trademarks and Trade Names [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 8,340 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (3,003) | |||
Finite-Lived Intangible Assets, Net | 5,337 | |||
Order or Production Backlog [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 6,680 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (6,006) | |||
Finite-Lived Intangible Assets, Net | 674 | |||
Noncompete Agreements [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 185 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (168) | |||
Finite-Lived Intangible Assets, Net | 17 | |||
Mortgage and Real Estate Services Segment [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 113,448 | 112,985 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (65,191) | (59,695) | ||
Finite-Lived Intangible Assets, Net | 48,257 | $ 53,290 | ||
Mortgage and Real Estate Services Segment [Member] | Customer Relationships [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of Intangible Assets, Finite-lived | $ 14,900 | |||
Finite-Lived Intangible Assets, Gross | [1] | 82,530 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [1] | (44,912) | ||
Finite-Lived Intangible Assets, Net | [1] | 37,618 | ||
Mortgage and Real Estate Services Segment [Member] | Technology-Based Intangible Assets [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of Intangible Assets, Finite-lived | $ 900 | |||
Finite-Lived Intangible Assets, Gross | [2] | 15,250 | ||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | [2] | (9,992) | ||
Finite-Lived Intangible Assets, Net | [2] | 5,258 | ||
Mortgage and Real Estate Services Segment [Member] | Trademarks [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 8,340 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (3,434) | |||
Finite-Lived Intangible Assets, Net | 4,906 | |||
Mortgage and Real Estate Services Segment [Member] | Order or Production Backlog [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 6,680 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (6,680) | |||
Finite-Lived Intangible Assets, Net | 0 | |||
Mortgage and Real Estate Services Segment [Member] | Noncompete Agreements [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 185 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | (173) | |||
Finite-Lived Intangible Assets, Net | 12 | |||
Mortgage and Real Estate Services Segment [Member] | Licensing Agreements [Member] | ||||
Acquired Finite-Lived Intangible Assets [Line Items] | ||||
Finite-Lived Intangible Assets, Gross | 463 | |||
Finite-Lived Intangible Assets, Accumulated Amortization and Impairment | 0 | |||
Finite-Lived Intangible Assets, Net | $ 463 | |||
[1] | Includes an impairment charge of $14.9 million in the quarter ended June 30, 2017. | |||
[2] | Includes an impairment charge of $0.9 million in the quarter ended June 30, 2017. |
Note 6 - Goodwill and Other I55
Note 6 - Goodwill and Other Intangible Assets, Net Schedule of Future Amortization Expense for Finite Lived Assets (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Finite-Lived Intangible Assets, Amortization Expense, Remainder of Fiscal Year | $ 6,934 |
Finite-Lived Intangible Assets, Amortization Expense, Next Twelve Months | 8,146 |
Finite-Lived Intangible Assets, Amortization Expense, Year Two | 6,827 |
Finite-Lived Intangible Assets, Amortization Expense, Year Three | 5,413 |
Finite-Lived Intangible Assets, Amortization Expense, Year Four | 4,881 |
Finite-Lived Intangible Assets, Amortization Expense, Year Five | 4,430 |
Finite-Lived Intangible Assets, Amortization Expense, after Year Five | 11,626 |
Finite-Lived Intangible Assets, Net | $ 48,257 |
Finite-Lived Intangible Assets, Remaining Amortization Period | 15 years |
Note 7 - Reinsurance Reinsuranc
Note 7 - Reinsurance Reinsurance Premiums Written and Earned (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | ||
Premiums Earned, Net [Abstract] | |||||
Net premiums earned-insurance | $ 251,344 | $ 229,096 | $ 493,894 | $ 450,896 | |
Mortgage Insurance Segment | |||||
Premiums Written, Net [Abstract] | |||||
Direct Premiums Written | 283,783 | 260,647 | 541,694 | 500,292 | |
Ceded Premiums Written | [1] | (31,825) | (19,340) | (51,756) | (34,320) |
Net premiums written | [2] | 251,958 | 241,307 | 489,938 | 465,972 |
Premiums Earned, Net [Abstract] | |||||
Direct Premiums Earned | 265,581 | 243,229 | 524,324 | 479,291 | |
Assumed Premiums Earned | 7 | 7 | 13 | 14 | |
Ceded Premiums Earned | [1] | (16,620) | (14,140) | (32,819) | (28,409) |
Net premiums earned-insurance | $ 248,968 | $ 229,096 | $ 491,518 | $ 450,896 | |
[1] | Net of profit commission. | ||||
[2] | Net of ceded premiums written under the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. |
Note 7 - Reinsurance Reinsura57
Note 7 - Reinsurance Reinsurance Transactions (Details) - Reinsurer Concentration Risk [Member] - Radian Guaranty - USD ($) $ in Thousands | Dec. 31, 2017 | Oct. 31, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Single Premium QSR Transaction [Member] | ||||||||
Ceded Credit Risk [Line Items] | ||||||||
Ceded Premiums Written | [1] | $ 28,107 | $ 13,856 | $ 43,898 | $ 22,816 | |||
Ceded Premiums Earned | [1] | 11,160 | 6,311 | 21,537 | 12,170 | |||
Ceding commissions written | 9,880 | 5,134 | 16,501 | 8,846 | ||||
Ceding Commissions Earned | [2] | 5,643 | 3,248 | 10,911 | 6,185 | |||
Ceded losses, net | 1,013 | 464 | 1,913 | 1,037 | ||||
Quota Share Reinsurance Transactions [Member] | ||||||||
Ceded Credit Risk [Line Items] | ||||||||
Ceded Premiums Written | [1] | 3,516 | 5,059 | 7,447 | 10,516 | |||
Ceded Premiums Earned | [1] | 5,258 | 7,404 | 10,870 | 15,238 | |||
Ceding commissions written | 1,012 | 1,446 | 2,140 | 3,005 | ||||
Ceding Commissions Earned | [2] | 2,896 | 3,379 | 6,444 | 7,273 | |||
Ceded losses, net | 6 | (310) | 252 | 260 | ||||
2016 Single Premium QSR Transaction [Member] | ||||||||
Ceded Credit Risk [Line Items] | ||||||||
Concentration Risk, Percentage | 35.00% | |||||||
Risk In Force | 6,600,000 | 4,100,000 | 6,600,000 | 4,100,000 | ||||
2018 Single Premium QSR [Member] | ||||||||
Ceded Credit Risk [Line Items] | ||||||||
Concentration Risk, Percentage | 65.00% | |||||||
Ceded Premiums Written | $ 335,000 | |||||||
Risk In Force | 1,000,000 | 1,000,000 | ||||||
First Lien Mortgage Insurance Products [Member] | Quota Share Reinsurance Transactions [Member] | ||||||||
Ceded Credit Risk [Line Items] | ||||||||
Risk In Force | $ 1,000,000 | $ 1,400,000 | $ 1,000,000 | $ 1,400,000 | ||||
[1] | Net of profit commission. | |||||||
[2] | Includes amounts reported in policy acquisition costs and other operating expenses. |
Note 8 - Other Assets (Details)
Note 8 - Other Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | ||
Deposit with the IRS (Note 9) | $ 88,557 | $ 88,557 | $ 88,557 | |||
Property and equipment (1) | [1] | 90,184 | 90,184 | 87,042 | ||
Corporate-owned life insurance | 84,560 | 84,560 | 85,862 | |||
Loaned securities | 38,350 | 38,350 | 27,964 | |||
Accrued investment income | 33,762 | 33,762 | 31,389 | |||
Deferred policy acquisition costs | 16,266 | 16,266 | 16,987 | |||
Reinsurance recoverables | 12,841 | 12,841 | 8,492 | |||
Unbilled Contracts Receivable | 16,478 | 16,478 | 22,257 | |||
Other | 49,079 | 49,079 | 39,299 | |||
Total other assets | 430,077 | 430,077 | 407,849 | |||
Property and Equipment, Owned, Accumulated Depreciation | 115,500 | 115,500 | 106,000 | |||
Depreciation expense | 4,800 | $ 4,100 | 9,500 | $ 8,300 | ||
Prepaid reinsurance premium | 405,447 | 405,447 | 386,509 | |||
Securities Financing Transaction, Fair Value [Member] | ||||||
Loaned securities | [2] | $ 38,350 | $ 38,350 | 27,964 | ||
Mortgage and Real Estate Services Segment [Member] | ||||||
Unbilled Contracts Receivable | $ 22,257 | |||||
[1] | Property and equipment at cost, less accumulated depreciation of $115.5 million and $106.0 million at June 30, 2018 and December 31, 2017, respectively. Depreciation expense was $4.8 million and $4.1 million for the three-month periods ended June 30, 2018 and 2017, respectively, and $9.5 million and $8.3 million for the six-month periods ended June 30, 2018 and 2017, respectively. | |||||
[2] | Our securities loaned under securities lending agreements are reported at fair value within other assets in our condensed consolidated balance sheets. All of our securities lending agreements are classified as overnight and revolving. None of the amounts are subject to offsetting. |
Note 9 - Income Taxes Income Ta
Note 9 - Income Taxes Income Tax (Details) $ in Millions | Jun. 30, 2018USD ($) |
Operating Loss Carryforwards [Line Items] | |
Operating Loss Carryforwards Due to Acquisitions | $ 2.3 |
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax | 47.1 |
State and Local NOL Carryforwards [Member] | |
Operating Loss Carryforwards [Line Items] | |
Valuation Allowance, Amount | $ 57.1 |
Note 9 - Income Taxes Summary o
Note 9 - Income Taxes Summary of Income Tax Examinations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Sep. 04, 2014 | May 31, 2010 | Jun. 30, 2008 | |
Income Tax Examination [Line Items] | ||||||||
Income Tax Expense (Benefit) | $ (28,378) | $ (8,132) | $ (422) | $ 30,066 | ||||
Income Tax Expense (Benefit) Recorded as a Result of Finalized IRS Settlement | (73,600) | |||||||
Qualified Deposit Assets With The U.S. Department Of Treasury Expected to be Submitted | 31,000 | 31,000 | ||||||
Deposit Assets | $ 88,557 | 88,557 | $ 88,557 | |||||
Unrecognized Tax Benefits, Decrease Resulting from Settlements with Taxing Authorities | $ 88,600 | |||||||
Internal Revenue Service (IRS) [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Income Tax Examination, Amount of Claimed Income Tax Refund Being Disallowed for Tax Years 2006 and 2007 | $ 105,000 | |||||||
REMIC Residual [Member] | Internal Revenue Service (IRS) [Member] | ||||||||
Income Tax Examination [Line Items] | ||||||||
Qualified Deposit With The U.S. Department Of Treasury Relating to Tax Years 2000 Through 2004 | $ 85,000 | |||||||
Qualified Deposit With The U.S. Department Of Treasury Relating To Tax Years 2005 Through 2007 | $ 4,000 | |||||||
Income Tax Examination, Penalties Accrued | $ 157,000 |
Note 10 - Losses and LAE Mortga
Note 10 - Losses and LAE Mortgage Insurance Reserves by Product (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | $ 451,542 | $ 507,588 | |||
Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Reinsurance recoverables | [1] | 9,341 | 8,350 | $ 7,371 | $ 6,851 |
Liability for Claims and Claims Adjustment Expense | 448,094 | 507,588 | $ 651,591 | $ 760,269 | |
Prime Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 255,284 | 285,022 | |||
Alt-A and A minus and Below Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Unpaid Claims | 144,379 | 170,873 | |||
Primary Mortgage Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Incurred but Not Reported Claims | 14,246 | 16,021 | |||
Liability for Claims Adjustment Expense | 12,228 | 13,349 | |||
Reinsurance recoverables | [2] | 9,317 | 8,315 | ||
Total Primary Insurance Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 435,454 | 493,580 | |||
Pool Insurance Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Reinsurance recoverables | [2] | 24 | 35 | ||
Liability for Claims and Claims Adjustment Expense | [3] | 12,197 | 13,463 | ||
First Lien Mortgage Insurance Products [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | 447,651 | 507,043 | |||
Second Lien Mortgage Insurance Product [Member] | Mortgage Insurance Segment | |||||
Liability for Future Policy Benefit, by Product Segment [Line Items] | |||||
Liability for Claims and Claims Adjustment Expense | [4] | $ 443 | $ 545 | ||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. | ||||
[2] | Represents ceded losses on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. | ||||
[3] | Includes reinsurance recoverable of $24 thousand and $35 thousand as of June 30, 2018 and December 31, 2017, respectively. | ||||
[4] | Does not include our Second-lien premium deficiency reserve that is included in other liabilities. |
Note 10 - Losses and LAE Mort62
Note 10 - Losses and LAE Mortgage Insurance Loss Reserves Rollforward (Details) $ in Thousands | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018USD ($)incident | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Number of Natural Disasters | incident | 2 | |||||
Loss reserve [Roll Forward] | ||||||
Balance at January 1 | $ 507,588 | |||||
Deduct paid claims and LAE related to [Abstract] | ||||||
Balance at September 30 | $ 451,542 | $ 507,588 | ||||
Mortgage Insurance Segment | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Average Default To Claim Rate Estimate, Gross, For New Defaults | 9.00% | |||||
Loss reserve [Roll Forward] | ||||||
Balance at January 1 | $ 507,588 | $ 760,269 | 760,269 | |||
Less reinsurance recoverables | 8,350 | [1] | 6,851 | [1] | 6,851 | [1] |
Balance at beginning of period, net of reinsurance recoverables | 499,238 | 753,418 | 753,418 | |||
Add losses and LAE incurred in respect of default notices reported and unreported in [Abstract] | ||||||
Current year | 67,286 | [2] | 88,906 | [2] | ||
Prior years | (11,311) | (24,721) | ||||
Total incurred losses and LAE | 55,975 | 64,185 | ||||
Deduct paid claims and LAE related to [Abstract] | ||||||
Paid Losses and LAE Current year | 1,091 | [2] | 1,027 | [2] | ||
Paid losses and LAE Prior years | 115,369 | 172,356 | ||||
Total paid losses and LAE | 116,460 | 173,383 | ||||
Balance at end of period, net of reinsurance recoverables | 438,753 | 644,220 | 499,238 | |||
Add reinsurance recoverables | 9,341 | [1] | 7,371 | [1] | 8,350 | [1] |
Balance at September 30 | 448,094 | $ 651,591 | 507,588 | |||
Default To Claim Rate Detail [Abstract] | ||||||
Default To Claim Rate Estimate, Gross, For New Defaults | 11.00% | |||||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 6,200 | 10,400 | ||||
Mortgage Insurance Segment | Pool Insurance Mortgage Insurance Product [Member] | ||||||
Loss reserve [Roll Forward] | ||||||
Balance at January 1 | 13,463 | [3] | ||||
Less reinsurance recoverables | 35 | [4] | ||||
Deduct paid claims and LAE related to [Abstract] | ||||||
Add reinsurance recoverables | 24 | [4] | 35 | [4] | ||
Balance at September 30 | 12,197 | [3] | 13,463 | [3] | ||
Mortgage Insurance Segment | Primary Mortgage Product [Member] | ||||||
Loss reserve [Roll Forward] | ||||||
Less reinsurance recoverables | 8,315 | [4] | ||||
Deduct paid claims and LAE related to [Abstract] | ||||||
Add reinsurance recoverables | $ 9,317 | [4] | $ 8,315 | [4] | ||
Default To Claim Rate Detail [Abstract] | ||||||
Weighted Average Default To Claim Rate Assumption Net Of Denials Rescissions and Reinstatements | 35.00% | 31.00% | ||||
Weighted Average Default To Claim Rate Assumption Net Of Denials Rescissions and Reinstatements Excluding Defaults in FEMA Designated Areas | 38.00% | 38.00% | ||||
Default To Claim Rate Estimate, Gross, For Pre-Foreclosure Stage Defaults | 68.00% | |||||
Gross Default To Claim Rate Estimate | 75.00% | |||||
Hurricanes Harvey and Irma [Member] | Mortgage Insurance Segment | Primary Mortgage Product [Member] | ||||||
Default To Claim Rate Detail [Abstract] | ||||||
Default To Claim Rate Estimate, Gross, For New Defaults | 3.00% | |||||
[1] | Related to ceded losses recoverable, if any, on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. See Note 7 for additional information. | |||||
[2] | Related to underlying defaulted loans with a most recent default notice dated in the year indicated. For example, if a loan had defaulted in a prior year, but then subsequently cured and later re-defaulted in the current year, that default would be considered a current year default. | |||||
[3] | Includes reinsurance recoverable of $24 thousand and $35 thousand as of June 30, 2018 and December 31, 2017, respectively. | |||||
[4] | Represents ceded losses on captive reinsurance transactions, the QSR Program and the Single Premium QSR Program. |
Note 10 - Losses and LAE Rescis
Note 10 - Losses and LAE Rescissions And Denials (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Rescissions And Denials [Line Items] | ||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 451,542 | $ 507,588 | ||
Mortgage Insurance Segment | ||||
Rescissions And Denials [Line Items] | ||||
Default To Claim Rate Estimate, Gross, For New Defaults | 11.00% | |||
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred but Not Reported (IBNR) Claims, Amount | 6,200 | 10,400 | ||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 448,094 | $ 507,588 | $ 651,591 | $ 760,269 |
Primary Mortgage Product [Member] | Mortgage Insurance Segment | ||||
Rescissions And Denials [Line Items] | ||||
Weighted Average Default To Claim Rate Assumption Net Of Denials Rescissions and Reinstatements | 35.00% | 31.00% |
Note 10 - Losses and LAE Total
Note 10 - Losses and LAE Total Reserve for Losses and LAE (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | |
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 451,542 | $ 507,588 | |||
Mortgage Insurance Segment [Member] | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | 448,094 | 507,588 | $ 651,591 | $ 760,269 | |
Mortgage and Real Estate Services Segment [Member] | |||||
Liability for Claims and Claims Adjustment Expense [Line Items] | |||||
Reserve for losses and loss adjustment expense (“LAE”) (Note 10) | $ 3,448 | [1] | $ 0 | ||
[1] | A majority of this amount is included in the reinsurance recoverables reported in other assets in our condensed consolidated balance sheet, and relates to the acquisition of EnTitle Direct, completed on March 27, 2018. |
Note 11 - Senior Notes Schedule
Note 11 - Senior Notes Schedule of Long Term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Senior Notes | $ 1,028,687 | $ 1,027,074 |
Senior Notes Due 2019 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.50% | 5.50% |
Senior Notes | $ 157,975 | $ 157,636 |
Senior Notes Due 2020 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 5.25% | 5.25% |
Senior Notes | $ 232,275 | $ 231,834 |
Senior Notes Due 2021 | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 7.00% | 7.00% |
Senior Notes | $ 195,500 | $ 195,146 |
Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 4.50% | 4.50% |
Senior Notes | $ 442,937 | $ 442,458 |
Note 12 - Other Liabilities (De
Note 12 - Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Other Liabilities [Line Items] | ||
Current federal income taxes | $ 8,807 | $ 96,740 |
Deferred ceding commission | 92,070 | 89,907 |
Amount payable on the return of cash collateral under securities lending agreements | 39,224 | 19,357 |
Accrued compensation | 39,621 | 67,687 |
FHLB advances | 115,308 | 0 |
Other | 90,021 | 80,154 |
Total other liabilities | $ 385,051 | $ 353,845 |
Note 12 - Other Liabilities FHL
Note 12 - Other Liabilities FHLB Advances (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
FHLB Advances [Line Items] | ||
FHLB advances | $ 115,308 | $ 0 |
Federal Home Loan Bank, Advances, Weighted Average Interest Rate | 2.21% | |
Federal Home Loan Bank, Advances, Maturity Period, Fixed Rate | 90 days | |
Long-term Debt, Maturities, Repayments of Principal, Remainder of Fiscal Year | $ 102,800 | |
Long-term Debt, Maturities, Repayments of Principal in Rolling Year Two | 6,500 | |
Long-term Debt, Maturities, Repayments of Principal in Rolling after Year Five | 6,000 | |
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged | $ 122,800 | |
Minimum [Member] | ||
FHLB Advances [Line Items] | ||
Federal Home Loan Bank, Ratio of Market Value of Collateral to Advances | 1.03 | |
Maximum [Member] | ||
FHLB Advances [Line Items] | ||
Federal Home Loan Bank, Ratio of Market Value of Collateral to Advances | 1.05 |
Note 12 - Other Liabilities Rev
Note 12 - Other Liabilities Revolving Credit Facility (Details) - Revolving Credit Facility [Member] - USD ($) $ in Millions | Jun. 30, 2018 | Oct. 16, 2017 |
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Current Borrowing Capacity | $ 225 | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 300 | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 0 |
Note 13 - Commitments and Con69
Note 13 - Commitments and Contingencies Legal Proceedings (Details) | 6 Months Ended | |||
Jun. 30, 2018matter | Apr. 12, 2018Certificates | Jun. 05, 2017Certificates | Dec. 17, 2016Certificates | |
Unasserted Claim [Member] | Minimum [Member] | ||||
Loss Contingencies [Line Items] | ||||
Minimum Number of Pending or Threatened Matters That Could Affect Our Results | matter | 1 | |||
Total Primary Insurance Mortgage Insurance Products [Member] | Insurance Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Legal Actions Commencement, Period | 2 years | |||
Pool Insurance Mortgage Insurance Product [Member] | Insurance Claims [Member] | ||||
Loss Contingencies [Line Items] | ||||
Loss Contingency, Legal Actions Commencement, Period | 3 years | |||
Initial [Member] | ||||
Loss Contingencies [Line Items] | ||||
Insurance Certificates Issued Under Multiple Insurance Policies | 9,420 | |||
Ocwen Filings [Member] | ||||
Loss Contingencies [Line Items] | ||||
Insurance Certificates Issued Under Multiple Insurance Policies | 8,870 | |||
Subsequent Event [Member] | Ocwen Filings [Member] | ||||
Loss Contingencies [Line Items] | ||||
Insurance Certificates Whose Scopes Were Narrowed as a Result of the Confidential Agreement | 2,500 |
Note 13 - Commitments and Con70
Note 13 - Commitments and Contingencies Guarantor Obligations (Details) - Indirect Guarantee of Indebtedness [Member] $ in Millions | Jun. 30, 2018USD ($)transaction |
Guarantees [Abstract] | |
Number of Guaranteed Structured Transactions | transaction | 2 |
Guarantor Obligations, Maximum Exposure, Undiscounted | $ | $ 92.8 |
Note 14 - Capital Stock (Detail
Note 14 - Capital Stock (Details) - Third Quarter 2017 Repurchase Program [Member] - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2018 | Aug. 09, 2017 | |
Class of Stock [Line Items] | |||
Stock Repurchase Program, Authorized Amount | $ 50 | ||
Treasury Stock Acquired, Average Cost Per Share | $ 16.07 | $ 16.56 | |
Stock Repurchased During Period, Shares | 2,491,843 | 3,022,856 | |
Stock Repurchase Program, Remaining Authorized Repurchase Amount | $ 0 | $ 0 |
Note 15 - Accumulated Other C72
Note 15 - Accumulated Other Comprehensive Income Rollforward of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Mar. 31, 2018 | Dec. 31, 2017 | ||
Other Comprehensive Income, Net of Tax [Abstract] | |||||||
AOCI, Net of Tax, beginning balance | $ 23,085 | ||||||
Unrealized holding gains (losses) arising during the period | $ (27,804) | $ 20,239 | (88,447) | $ 27,606 | |||
Less: Reclassification adjustment for net gains (losses) included in net income (loss) | (1,336) | (1,167) | (4,468) | (2,798) | |||
Unrealized foreign currency translation adjustments | 0 | 74 | 3 | 108 | |||
Other comprehensive income (loss), net of tax | (26,468) | 21,480 | (83,976) | 30,512 | |||
AOCI, Net of Tax, ending balance | (57,943) | (57,943) | |||||
Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income [Line Items] | |||||||
AOCI before Tax, Attributable to Parent, Adjusted for Cumulative Effect of Adopting Accounting Standard Updates | $ (39,842) | $ 32,953 | |||||
Other Comprehensive Income, before Tax [Abstract] | |||||||
AOCI before Tax, Attributable to Parent, beginning balance | (39,842) | (5,168) | 32,669 | (19,063) | |||
Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax | (35,194) | 31,137 | (111,957) | 42,471 | |||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax | [1] | (1,691) | (1,795) | (5,655) | (4,304) | ||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, before Tax | (33,503) | 32,932 | (106,302) | 46,775 | |||
Net foreign currency translation adjustments, before tax | 0 | 114 | 4 | 166 | |||
Other comprehensive income, before tax | (33,503) | 33,046 | (106,298) | 46,941 | |||
AOCI before Tax, Attributable to Parent, ending balance | (73,345) | 27,878 | (73,345) | 27,878 | |||
Other Comprehensive Income, Tax [Abstract] | |||||||
AOCI, Tax, beginning balance | (8,367) | (1,805) | 9,584 | (6,668) | |||
Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax | (7,390) | 10,898 | (23,510) | 14,865 | |||
Less: Reclassification adjustment for net (losses) gains included in net income, tax | [1] | (355) | (628) | (1,187) | (1,506) | ||
Other Comprehensive Income (Loss), Available-for-sale Securities, Tax | (7,035) | 11,526 | (22,323) | 16,371 | |||
Net foreign currency translation adjustments, tax | 0 | 40 | 1 | 58 | |||
Other Comprehensive Income, Tax | (7,035) | 11,566 | (22,322) | 16,429 | |||
AOCI Tax, ending balance | (15,402) | 9,761 | (15,402) | 9,761 | |||
Other Comprehensive Income, Net of Tax [Abstract] | |||||||
AOCI, Net of Tax, beginning balance | (31,475) | (3,363) | 23,085 | (12,395) | |||
Unrealized holding gains (losses) arising during the period | (27,804) | 20,239 | (88,447) | 27,606 | |||
Less: Reclassification adjustment for net gains (losses) included in net income (loss) | [1] | (1,336) | (1,167) | (4,468) | (2,798) | ||
Other Comprehensive Income (Loss), Available-for-sale Securities Adjustment, Net of Tax, Portion Attributable to Parent | (26,468) | 21,406 | (83,979) | 30,404 | |||
Unrealized foreign currency translation adjustments | 0 | 74 | 3 | 108 | |||
Other comprehensive income (loss), net of tax | (26,468) | 21,480 | (83,976) | 30,512 | |||
AOCI, Net of Tax, ending balance | $ (57,943) | $ 18,117 | $ (57,943) | $ 18,117 | |||
AOCI Tax, Attributable to Parent, Adjusted for Cumulative Effect of Adopting Accounting Standard Updates | (8,367) | 6,920 | |||||
Accumulated Other Comprehensive Income (Loss), Net of Tax, Adjusted for Cumulative Effect of Adopting Accounting Standard Updates | (31,475) | 26,033 | |||||
Accounting Standards Update 2016-01 [Member] | Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income [Line Items] | |||||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update, Before Tax | 0 | 284 | |||||
Other Comprehensive Income, Net of Tax [Abstract] | |||||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update | 0 | 60 | |||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update, Net of Tax | 0 | 224 | |||||
ASU 2018-02 [Member] | Other Comprehensive Income | |||||||
Accumulated Other Comprehensive Income [Line Items] | |||||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update, Before Tax | 0 | 0 | |||||
Other Comprehensive Income, Net of Tax [Abstract] | |||||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update | 0 | (2,724) | |||||
Other Comprehensive Income (Loss), Cumulative Effect of Adopting an Accounting Standard Update, Net of Tax | $ 0 | $ 2,724 | |||||
[1] | Included in net gains (losses) on investments and other financial instruments on our consolidated statements of operations. |
Note 16 - Statutory Informati73
Note 16 - Statutory Information Statutory Information (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Dec. 31, 2017 | |
Reportable Subsegments [Member] | ||
Statutory Accounting Practices [Line Items] | ||
Restricted Net Assets Held by Consolidated Subsidiaries | $ 3,800 | |
Radian Guaranty | ||
Statutory Accounting Practices [Line Items] | ||
Statutory Accounting Practices, Statutory Capital and Surplus, Balance | 1,228.6 | $ 1,201 |
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | $ 244.1 |
Note 16 - Statutory Informati74
Note 16 - Statutory Information Risk To Capital Calculation (Details) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018USD ($)state | Dec. 31, 2017USD ($) | ||
Risk to Capital Line Items [Line Items] | |||
Number Of States That Have A Statutory Or Regulatory Risk Based Capital Requirement | state | 16 | ||
Risk To Capital Ratio, Regulatory Maximum | 25 | ||
Radian Guaranty | |||
Risk to Capital Line Items [Line Items] | |||
Statutory Accounting Practices, Statutory Capital and Surplus, Increase (Decrease) | $ 244.1 | ||
RIF, net (1) | [1] | 38,956 | $ 36,793.5 |
Common stock and paid-in capital | 1,866 | 1,866 | |
Surplus Notes | 100 | 100 | |
Unassigned earnings (deficit) | (737.4) | (765) | |
Statutory policyholders’ surplus | 1,228.6 | 1,201 | |
Contingency reserve | 1,883.5 | 1,667 | |
Statutory capital | $ 3,112.1 | $ 2,868 | |
Risk-to-capital | 12.5 | 12.8 | |
Statutory Accounting Practices, Statutory Net Income Amount | $ 244.5 | ||
Non RBC States [Member] | Minimum [Member] | |||
Risk to Capital Line Items [Line Items] | |||
Capital Required for Capital Adequacy | 1 | ||
Non RBC States [Member] | Maximum [Member] | |||
Risk to Capital Line Items [Line Items] | |||
Capital Required for Capital Adequacy | $ 5 | ||
Reportable Subsegments [Member] | |||
Risk to Capital Line Items [Line Items] | |||
Risk-to-capital | 11.8 | 12.1 | |
[1] | Excludes risk ceded through reinsurance contracts (to third parties and affiliates) and RIF on defaulted loans. |
Note 16 - Statutory Informati75
Note 16 - Statutory Information Segregated Funds Held for Others (Details) $ in Millions | Jun. 30, 2018USD ($) |
Segregated Funds Held for Others [Abstract] | |
Segregated Funds Held for Others | $ 7.4 |
Note 17 - Subsequent Events Tax
Note 17 - Subsequent Events Tax Matter (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Subsequent Event [Line Items] | ||||
Reduction to Available Holding Company Liquidity | $ (31,000) | $ (31,000) | ||
Income Tax Expense (Benefit) | $ (28,378) | $ (8,132) | $ (422) | $ 30,066 |