Risk Factors Update Summary

• FHFA finalized ERCF with increased capital requirements for GSEs, impacting business practices significantly.
• Added a risk factor related to inaccurate business models impacting operations and financial condition.
• Launched Radian Mortgage Capital to expand capabilities in the mortgage market, acquiring $221 million in mortgage loans in 2023.
• The GSEs have significant discretion under the PMIERs, with large-scale revisions effective March 31, 2019. Future updates are expected.
• Growing complexity in laws and regulations, along with increased contractual commitments, pose compliance risks.
• Increased reliance on open-source software may heighten vulnerability to cyberattacks and data breaches.
• Radian Mortgage Capital expects to distribute loans through private label securitizations, owning $33 million in mortgage loans as of December 31, 2023.
• Changes in the GSEs' business practices could impact Radian Guaranty's eligibility to insure loans.
• High levels of defaults and delays in foreclosures could increase Claim Severity, impacting financials.
• GSE pricing may increase, reducing use of credit risk transfer, impacting market position.
• Introduced the use of statistical models, including AI and machine learning, with potential material differences.
• Potential changes to PMIERs could increase required capital and decrease capital relief.
• Loss Mitigation Activities disputes could lead to legal proceedings, impacting customer relationships.
• Expanded risk factors to include the impact of actual or perceived instability in the financial services industry.
• The FHFA and GSEs may pursue new products and activities impacting Radian Guaranty's financial condition.
• Use of AI and machine learning introduces risks of inaccuracies, biases, and potential liability.
• Radian Guaranty paid $400 million in ordinary dividends in 2023, with positive unassigned surplus of $120 million as of December 31, 2023.
• Acceptance of automated processes and GSE appraisal waivers may impact pricing and risk assessment.
• Increased use of reinsurance and risk distribution transactions may affect ability to mitigate losses.
• Increased net income from $743 million in 2022 to $603 million in 2023.
• Adjusted pretax operating income decreased from $1.1 billion in 2022 to $786 million in 2023.
• Wrote $52.7 billion of NIW in 2023, down from $68 billion in 2022.
• Increased quarterly cash dividend by 13% from $0.20 to $0.225 per share in 2023.