Ladies and gentlemen, thank you for standing by, and welcome to the Radian's Second Quarter 2018 Earnings Call. [Operator Instructions]. And as a reminder, today's conference is being recorded. At this time, I would like to turn the conference over to Senior Vice President of Investor Relations and Corporate Communications, Emily Riley. Please go ahead.

Thank you, and welcome to Radian's Second Quarter 2018 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued earlier this morning and is posted to the Investor Section of our website at www.radian.biz. This press release includes certain non-GAAP measures, which will be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share, adjusted net operating return on equity, tangible book value per share, as well as services adjusted EBITDA, and a new related non-GAAP measure, services adjusted EBITDA margin. A complete description of these measures and a reconciliation to GAAP may be found in press release exhibits F and G, and on the Investor Section of our website. This morning you will hear from Rick Thornberry, Radian's Chief Executive Officer; and Frank Hall, Chief Financial Officer. Also on hand for the Q&A portion of the call is Derek Brummer, Senior Executive Vice President of Mortgage Insurance and Risk Services. Before we begin, I would like to remind you that comments made during this call will include forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For a discussion of these risks, please review the cautionary statements regarding forward-looking statements included in our earnings release and the risk factors included in our 2017 Form 10-K and subsequent reports filed with the SEC. These are also available on our website. Now I would like to turn the call over to Rick.

Thank you, Emily, and good morning. I'd like to thank each of you for joining us today and for your interest in Radian. This morning, we reported outstanding financial results for the second quarter. While I have the pleasure of delivering this news you today, I want to emphasize on our performance, reflects the success of our business strategy as one Radian, our strong customer relationships, the strength of flexibility of our financial position, the value of our $211 billion insurance portfolio, and a hard work of our outstanding team and the support and guidance of our Board of Directors. Before I turn the call over to Frank, to cover the financial results, I'd like to share a few thoughts of observations related to our strong operating performance. In terms of our financial performance, net income for the second quarter was $209 million or $0.96 per diluted share, which includes the positive impact from the previously announced resolution of our long-standing tax matter. Adjusted diluted net operating input income per share increased 44% year-over-year to $0.69. And our return on equity was 27% for the second quarter, and adjusted net operating return on equity was 19%. In terms of our market performance, we set a company record for the highest volume of mortgage insurance business written on a full basis in the quarter, writing $16.4 billion in NIW driving strong economic value to our portfolio. We are now projecting approximately $55 billion of NIW for the year, which will be another record breaking level of flow for NIW, versus our original 2018 guidance of approximately $50 billion. We're achieving these market leading level of performance based on the breadth and depth of our customer relationships and the excellent customer service delivered by our entire team, while maintaining attractive returns. Also…

Thank you, Rick, and good morning, everyone. Rick has highlighted our headline financial performance for the quarter, so I'll spend some time discussing the drivers of our $0.69 per share adjusted diluted net operating income for the second quarter of 2018, which was an increase of 17% over the first quarter of 2018 and 44% over the same quarter last year. I'll start with the key drivers of our revenue. Our new insurance written was $16.4 billion during the quarter compared to $11.7 billion last quarter and $14.3 billion in the second quarter of 2017. Our second quarter 2018 volume marks our highest quarterly new insurance written on a flow basis. Monthly premium NIW was up 14% year-over-year to its highest quarterly level in over a decade. Single premium NIW represented 24% of our total production on a gross basis. And on a net basis, after our 65% session to reinsurers, our retained single premium percentage was only 8% in the second quarter of 2018. It is also noteworthy that our single premium NIW volume had more borrower paid policies then lender paid policies. Borrower paid singles, which have higher returns than lender paid policies, represented 14% of our total NIW compared to only 2% in the second quarter of 2017. In contrast, lender paid single premium NIW declined to just 10%, down from 21% of total NIW in the prior year. This shift in business mix is both expected and deliberate and designed to improve the return profile of our single premium business overall. The new business we are writing today continues to consists of loans that are expected to produce excellent risk-adjusted returns. Primary insurance in force increased to $210.7 billion at the end of the quarter, a 10% increase over the same period last year. As Rick…

Thank you, Frank. Before we open the call to your questions, let me remind you that, we achieved outstanding financial results for the second quarter with significant growth in net income, of 44% increase in adjusted diluted net operating income per share, and 11% increase in book value per share and adjusted net operating return on equity of 19%. We broke a company record for quarterly flow at NIW, continue to make progress on repositioning our services segment for sustained growth and profitability, and we grew our mortgage insurance and portfolio of 10% year-over-year, which is the primary driver of future earnings. Now, operator, we would like to open the call to questions.

[Operator Instructions]. First question today comes from the line of Mark DeVries with Barclays.

I believe your comments round PMIERs were revised from last statement, adding the comment that you expect to have same cushion and implementation as you have today. Does that reflect a revision in what the communicated? After comments, there's a little bit more favorable to you? Or is it another way of just kind of castigate or join of factoring retained earnings in a kind of a build available assets over the period between now and implementation?

Yes, Mark, this is Frank. Thanks for the question dissecting the elements of attribution for the PMIERs cushion, the additional guidance that we gave us a little bit difficult. I think what you can expect though is we're aligned with the guidance that Rick gave of our new NIW guidance for the year. We're factoring in growth. But because of the limitations that we have, the specifics around PMIERs details, it's difficult to ascertain that, difficult to speak to it. So we thought it would be helpful to provide just the general guidance that are cushion will remain substantially the same, and hope that's helpful to you.

Okay. Fair enough. Separate question. Now you filled the latest buyback authorizations -- so anything you can share with us or our thoughts are any kind of future buybacks?

Sure. So the buyback, as you would imagine, are of one-off many elements that go into our capital plan, overall. And just as a reminder, our recently completed authorization of $50 million ahead of schedule expiration for the end of July. And that's why wanted to give some historical context over the way we handle repurchase programs in the past. And since 2015, we had three authorizations. And so since 2015, we have had repurchase authorization in place for more of that time horizon than we have not. So -- I think, as we think about going forward at the company has demonstrated a willingness to buy packet shares, opportunistically, when the value supports that but it is an element of a broader capital plan. And it is something that we're in an continue conversation with our Board of Directors.

Okay. And if the board schedule to meet anytime soon in the meeting which it might make sense to take that up?

Yes. We have, as you would imagine, regularly scheduled meetings, the next one is scheduled for mid-August.

Our next question is from the line of Randolph Binner with B. Riley.

I would like to follow-up on comment around introducing a black box model and kind of when that would make sense? You mentioned, you had that ability. Can you kind of little bit more on -- how the market is maybe stabilized or run rate card pricing in July? And then what we're changing the environment and that would make you move more towards the black box model?

Sure. Randy, thanks for the question. I think the -- certainly we see our continually move towards greater risk-based pricing. And we think the black boxes really nothing more than a delivery mechanism. If you go -- I can't speak for all the other MIs, but I can that the analytics that we have from a risk and pricing granularity, from a return point of view are all quite sophisticated. It so it's just that really matter of delivery mechanism. And so we look at the move towards greater risk-based pricing and greater granularity that we achieved. And I think you saw us go even a few steps further the industry kind of lineup, generally, even with that. But we believe this factors we put out there really address -- really important risk, that we manage around our business. So increased granularity, I think, is certainly a positive thing. We have the capabilities. We certainly have ready to position to offer and implement black box pricing, but we do think as a delivery mechanism as opposed to some further greater expansion towards risk-based pricing, which we think -- we're able to really manage and control well today. So I think for us, what drives and just to kind of wrap up to answer your question, ultimately, we've driven by our customers. And I myself and Derek and a many of others of our team, obviously, our sales team spend a lot of time with our customers talking to them about a variety of topics, one-off which is this concept of black box from a pricing delivery point of view. And I think as we see customers expressed the need the desire for it or in a position to accommodate that requirement. So -- at this point, we're going to be customer driven and because we believe from a risk point of view, we are very comfortable with how we can manage our risk return profile through the different pricing mechanisms we have in place today.

Great. The one follow-up I had, and I think I heard this in your comments is that, can you confirm that the pricing environment, at least, for the four MIs you use rate cards has stabilized after some price changes that came through earlier this month? And as opposed to where the pricing environment was in June?

Yes. I will comment specifically on other MIs -- because I'm not sure which board we can check the boxes to which ones are really using black box to any degree versus others. The factors from a pricing point of view, I think we feel very comfortable the market is stabilized there's a normal level of noise that we hear from a competitive point of view. But I think truly our results speak for themselves from a market presence point of view. We take care different approach. Again, we feel like we have a very strong risk granularity, we're very pleased, quite frankly, very pleased, with the changes that we were able to make in June from a risk distribution point of view, so we take that as a big positive. Our ability to manage the risk across our customers and our origination sources citing remains extremely high, very powerful. But different than, I think, it's important to think about this is as an industry. Remember, pricing is one element of risk management, okay. So when we talk about black box pricing, we talk about the risk granularity. I feel like we have all the capability to do that, and so stable yet competitive environment as I said earlier. But I think the other part where I believe we excellent really Derek and the team, sales team, the way that we focus on the customers we do business with, and the value that we derive from those relationships, is kind of a two-way street. So I think when you think about pricing it's also about how we think about not only the competitive environment, which I feel is in a good place today, it's also about how we distribute risk-based pricing, which is in a good place today. It's also how we manage our customers and who we do business with, who originates the loans and we ensure from a quality point of view. And just as important, will services there is that we have. Sorry for the in the background -- Philadelphia - [indiscernible] So it's appropriate for our pricing discussions that we would get normal noise in the background a little bit. But I think as I said, earlier, it's a stable environment, I believe, the most important point for I think, if emphasize anything from this call perspective is we're very good managing kind of market -- if you will, different factors, we're in a competitive regulated environment, and we do a very good job of managing the complexity and the changes of the current And I think that results demonstrate our team is really good job of maintaining the relationships, and we're growing the value for our shareholders.

We'll go next to Philip Steffen with Deutsche Bank.

I guess, continuing the granularity pricing conversation little bit, but taking a different direction. So one of the things are think about if you look at the results 95%-plus LTV has picked up a little bit, and the 620 to 679 picked up a little bit. Again, the incremental change is not trying to make a mountain out of a But to what extent should we start to or could we start to read through as granularity and pricing increases? Someone knows premium yields hold up better than maybe we expected? Or someone who's NIW growth is better than we expected? They're expanding their credit box they're starting to nibble into our maybe what's credit risk profile they had before?

This is Derek. So there's a lot happened there. So a few things. So when you look at the volume, and I think we've seen quarter-over-quarter a bit of pickup in greater than 95 LTV. The last couple of months at that starting to reverse. And some of that you're going to see as we move production from LT singles to singles -- Singles products tend to be higher credit quality, so we've seen that moment in terms of the 620 to 679 bucket, and that's been pretty stable how we may tend to 20 basis points really over the last year. So I credit perspective, I would say, we haven't seen in expansion important thing contract emphasize the failure is looking on the lender by lender level. So we spent a lot of time segment our customers and looking at their delivery, so we're really focused on our those particular customers that might be pushing the envelope from a credit perspective and taking action accordingly. When you actually see that translating in our portfolio would say from a credit quality perspective I would say that this very stable we haven't seen an overall high with expansion of the credit to drive volume.

But what it makes sense not accusing you guys of anything. Because as I say these are small changes I'm not trying to make more than it is part seeking couple of years down the line, as we see these things develop right, could it be indicative that the credit boxes expanding as we see premium yields hold up?

You're going to see, I think, our national important thing to keep in mind though is kind of where we are now versus kind of how many years ago. And so far as we have risk adjusted pricing at a much granular level. So that the extent we've seen credit box expand, we look at it from an expected return perspective, it's more neutral kind of talk across the credit spectrum. And that's grew dramatically. Now when you see a natural expansion in -- one more price when adequately priced. And also that's a natural in terms of expansion in the credit box. So when lenders try to expand the credit box, they have to pay more premium borrowers have to pay more premium, so that has a natural kind of impact. The other thing we're not seeing from a credit perspective is, we're not seeing the risk -- Again, lot of that's driven by back out now you price and many more dimension, so as you see this clearing the our pricing incrementally goes up. And as a result, returns go up as well.

Got it. And then second question, on other operating income, if it feels like the commentary around this is largely persistent where the expectation of that 2018 should not exceed 2017. But it feels like this quarter, there was a caveat excluding title. I guess, title in my mind would be included in this thought, because the acquisition closed in March and the last earnings call was in April. I guess, is this an inflection in some way and other operating? Or am I -- I just parsing words to finally?

I wouldn't accuse you of doing so. But as you think, and that's what I wanted to call out some of the details associated with our expenses. Really thematically what I'm trying to convey is that our expense guidance, overall, that we gave last year is that they've only seen reality euros on a year-to-date basis, both with or without the acquisition, expenses are lower than they were last year. I'm simply calling out something that didn't exist when I first give that guidance, just a sort of our further emphasis of what we look like on a competitive basis. But, overall, the key message here is that are expense control is actually very good. Our operating expenses are lower across any fine period that you look at, and really with or without the results of the acquisition. We also wanted to call out just the seasonal blip we have in the second quarter related to the compensation related expenses that we call, but if that happens every quarter. That the points, Phil, is that the acquisition happened in March. So there wasn't any first quarter impact associated without. This is really the first quarter we've seen any type of impact related to the acquisition.

Our next question is from Mackenzie Aron with Zelman and Associates.

The first question, just being on NIW with volume up almost 15% year-to-date tracking very well, and the comps the back half gets easier. Can you just provide an updated thoughts on where we shakeout for the full year for volumes? I think for last quarter you've still expecting flattish for the full year?

This is Rick. We feel like we have a good quarter and appreciate the thanks. So we expect $55 billion of NIW versus our previous guidance of $50 billion. So another record breaking year. Over last year, I think we were $54.6 billion or something. So we expect to exceed 2017. And I think that reflects, just a momentum we have both year-to-date and the momentum we have been haven't seen going forward across our team. So we're expecting a relatively strong year in comparison to what our previous guidance was. And I'd like to just say, I think as you think, about all the changes and all the noise in the industry from whether it's GSE competition, talked about EPMI and imagine or you talk about pricing, and you talk about different strategies, ultimately, we as a company and our team, both our sales team and our service delivery teams are operating teams and our risk teams that work with our customers every day, doing an excellent job of continuing to manage and build our franchise, so I think that's what it is enabling us to have a very strong performance this year and continued to build momentum.

That's great to here. And then just one of the services business, is there when you look out over the next year, 1.5 years, is there further room for acquisitions similar to the entitle direct? And how would you think about kind of the what services business offers today and where you would like it to go?

This is great question. Thank you. I think -- look, we're very pleased with the progress we're making on the services side, and I think the team is doing a great job. We're executing our plan our enterprise sales team and the products and services that we've defined for those businesses, I think, are well positioned in the marketplace, and becoming increasingly relevant to our customers. We executed the title insurance underwriter acquisition -- what it was and in material transaction from a purchase point of view, with a tremendous amount strategic leverage that both expand our state footprint to be 46 states -- international across our two title businesses, create a platform where it give us the opportunity to not only from a geography point of view, but from product point of view, really the thoughtful about how we build that business going forward. So it was a unique opportunity that quite frankly, we saw a tremendous amount of accretive fit. So as we look forward to in our services business, our business plan is based upon organic growth. Certainly, if we saw other similar type of acquisition opportunities like we saw with title underwriter, we would certainly consider, and we see deals almost every day. There's somebody walking in with a pitch that telling us. So we have a very, very high standard, a very strong filter. We're kind of come from the will of quick to kill, so we don't spend a lot of time on deals. So I'd say it's not part of our thesis to acquire or way toward growth, it will be much more from an accretive thoughtful opportunity perspective, and how it fits with what we're doing. So today, our Services business is Frank went to our results, I think is tracking very well along our expectations. And Eric and Ryan and the team are doing a great job of across those businesses really building our pipeline and a platform to deliver products. So I'd like what we're at we see opportunities. They have to pass a very high standard and fit strategically. But I would say it's not our focus, focus is building organically.

Our next question comes from the line of Bose George with KBW.

Just wanted to follow-up on your comments on the borrower paid singles versus the lender. Can you remind us was that change in mixed towards borrower paid driven by pricing changes? And is that percentage -- do you think that will change further?

Yes. This is Derek. A couple of things on that. So some of that is driven by pricing changes, so relatively the execution between borrower paid and lender paid we improved. We've selectively been increasing pricing on with respect to lender paid product as well. And the reason we're trying to drive that shift is it's important to note that borrower paid project is subject to automatic cancellation, under the Homeowners Product Protection Act. What that means compared to lender paid product as a significantly, shorter duration. In addition, because it subject to over cancellation it's not subject to the capital multipliers under PMIERs. So what that effectively means is over the life of the policy you hope less capital and in addition to that because there is a shorter duration the claim rates are as the sole factor both of those what that results from materially higher expected on borrower product versus the lender product. So as a result that's what we're trying to make the shift. In terms of where that settles out I think we had to pick up since we made pricing changes the rest of the industry had matched. So you see some of that shift maybe, I'd say moderate out, but I would overall payment terms of having a much bigger percentage of single borrower paid, we think that's consistent with our strategy.

Okay. Great. That's helpful. And then switching to capital, can you remind us in terms of uses of excess capital, how your thinking about leverage?

Sure. This is Frank. So we've concisely stated that we have a long-term objective of investment grade. And so what that translate to from debt-to-total cap basis is roughly 20%. So that is what we would look to return to over time.

Okay. And let me just trying to sneak one in PMIERs. The language in your text where you noted without the need to take further action, is that safe to say it means your assumption on PMIERs available assets assumes that the reinsurance part of what you're doing remain stable?

Yes. So I think it's a safe assumption. As we are today, the comment that we're making would apply for that future state as well.

Our next question is from the line of Douglas Harter with Crédit Suisse.

Can you just remind us what your or how much holding company liquidity you would like to hold in light of upcoming debt maturities? And when we might I think you might or roll this over?

Sure. This is Frank. So, Douglas, we think about holding company liquidity as you stated in terms of sources and uses. And the $202 million level is lower than we have operated at historically, the part of our comfort level with that -- holding that level of liquidity has a lot to do with the credit facility that we have now. So when you look at available resources that we have, they are more today than they have been historically. But certainly, the upcoming debt maturities and things of that nature play into -- into the analysis and the forecasting of the planning that we do.

And as we're moving closer to PMIERs certainty, I guess, how can we think about the opportunity to get cash up to the holding company on a sort of a more recurring basis?

Sure. Another great question. So it's important to remember we're unique, we have an expense and tax sharing agreement in place with the subsidiary meaning that, we're meeting the operating needs of the parent company with prearranged cash flow that has been approved by the Pennsylvania Regulators on a regular basis. And so when you look at the need for cash to be upstream, if you will, from the subsidiaries to the holding company, we don't need to support our operations but on a go-forward basis any additional cash that we would upstream would really be in the context of the broader capital plan. That we're evaluating, and so it's in that broader context that we would make those arrangements.

Next we have a question from Jack Micenko with SIG.

Rick, I wanted to go back on the last quarter, I think you talked about $60 billion NIW number. I think it was in the context of we're not going to chase business we're not going to chase mispriced business in our here $55 billion. Obviously, good sign. But beneath the surface here we're trying to figure out what the demon picture is? Is rising rates impacting are not? Or what segments are healthy? And it is what point is you put up much NIW growth year-over-year than another large established competitors this quarter? And your numbers are now your outlook is bit better. Is it market list driving this? Is it Radian specific? Help us understand what the underlying demand drivers look like relative to vote at Radian may be doing on their own?

Thank you, Jack. This is great for because I think look, as I said, last quarter, I think, we're only one quarter and looking at pretty strong momentum in our business despite a lot of nice in the marketplace from a pricing competition point of view. And I think as we said last quarter, we feel like we have a lot of strength and momentum. And so I think we're left reflecting that in our guidance towards $55 billion. So I'd say from us, what's really important to understand about how we approach the business is purely from a portfolio management point of view. We're focused on generating economic value in our portfolio and are still talking about the value of the portfolio both from a tax rate adjustment, but also from a future earnings point of view. And I think so our model we haven't changed a model. Our model is basically -- focused on risk-adjusted returns through the cycle, being very thoughtful and analytical about how we approach each and every risk that we take, and of understanding that we're looking to build a portfolio that can endure through the cycle's and generate attractive returns through an economic value point of view. At this as part of that we're very, very focused on who we do business with, what customers are, how they perform, the quality they produce and not only from an origination point of view, but also from a servicing point of view so I think as over the past year, plus Derek and his team have been working very, very closely with the sales team to really refine and evolve our customers towards customers that are really producing value. And I think this is a large, 90 -- obviously, we had great good customers before,…

Okay. Thanks for that. And then in the opening comments, it sounded like there was a little more of a constructive view around the link structure. I think the recent transaction one to about 2.3% cost of capital. The question for you is or Frank, what do you do with the money? Is it something you're contemplating? Could it replace our reinsurance on the singles? Would it be an additional type order to do something from a capital management standpoint? How do we think about go forward as to your company?

Well, first off, thanks for asking that question. Because I think as we go through my comments and I said this for over last several quarters, one of the great things about our business is the enormous financial flexibility that we have as a company. And as we passions I tried to briefly articulate today, is that we have this untyped capital resource capacity, if you will. So we -- we're quite familiar with all the structures and to your point because of our capital strength and our ability to fund our ongoing growth of our business without the need to kind of lever up each quarter from insurance lake point of view, we really are in the best of our work-study from a capital perspective. So your point is exactly the right one. It's not a question of availability of sources, it's all about the uses. From the first day I got here, Frank and I and Derek spent a lot of time was talk about sourcing and uses when we think about capital. And so for us, as we continue to execute and evolve our capital plan, we continually think about -- we're quite knowledgeable about the sources. And I think the reinsurance transaction is a perfect indication of highly competitive capital way. I think it is for us, it's all about taking through the access capital and also ultimately, the use. So that's something we're here, we kind of describe in detail. But to your point, for us, having the sources of capital provides us significant amount of financial flexibility to think about uses. And I think, we're -- I'd like to position and I say that because something we think about talk, about focus on everyday terms of how we manage our business. And I would rather be in a situation where have strong proprietary capital to drive through the cycle, and I can leverage other capital where it makes sense from a source point of view to think about how we manage any kind of volatility or tail risk associated with any future credit cycle downturn. So we're very thoughtful about it, very strategic about it. But I think we're in a very great position given our flexibility.

Our next question comes from line of Geoffrey Dunn with Dowling & Partners.

Just two quick ones. With respect to the shift in mix in singles, is that shift and the projected shift over the next three quarters? Any kind of meaningful part of your improved commentary around PMIERs?

No.

So the shifting capital charges is not part of expecting the same kind of --

No. I mean, look, we do our projects in that kind of full mix of business our volume and other factors so obviously that place in part we're not shifted mix and impact on kind of the PMIERs projections from that perspective.

And then, Frank, with the holdco, obviously, you bought the stock this quarter. The balance remain pretty flat sequentially. Is that the impact of tax sharing arrangement -- some of that money, from guaranty to holdco would that help balance out?

Yes. Jeff, it is. You see holding cash flow we've excluded the IRS expected payment of $31 million, we did have $40 million the repurchase. We did have a contribution to our new title insurers. So all of those cash flows in combination with just about equally offset by tax statements from the subsidiaries. That is not the permanent dynamic. It is a temporary dynamic, as the NOLs have been fully utilized of the subsidiaries, and so they're making tax payments up to the parent company, parent company still has some NOLs available for utilization, which should taper off to what the end of this year.

Okay. And when is that IRS payment going to go through?

I think the expectation is over the next couple of months, but we don't have great clarity on to that, just yet.

Our next question comes from the line of Mihir Bhatia with Bank of America.

I just really two quick ones. The first one just on the NIW, obviously, very strong NIW this quarter, and guidance is increasing. So I think just your suggesting momentum might continue. And I was curious, what is driving that? Is it just general market right? At that particular pockets, may be little bit of great expansion? Any comments on what's driving this strong NIW?

Yes. This is Rick. Thank you for the question. I think, look, we are kind of a block we have very specific plan of how we're approaching the market about how we manage the risk and pricing and who we do business with from a customer point of view, and I think it's -- we're fortunate to have a tremendous group of sales tremendous sales along with the folks from a risk and service delivered point of view doing a great job with our customers. But I think fundamentally we're just executing well in the marketplace, we've navigated through all the pricing competition and let's say, what some might think of firsts encroachment by the GSE's which we think as being having a minimal impact in the market today. And so I think from a business point of view, we're just executing well. We have a risk-based granular pricing structure and marketplace. We have a strong understanding of our customers and the business that they generate and the quality that the generate. And our team is very, very focused on economic value. And so as we think about our business, we never think about NIW. We never think about market share. We focus on the economic value internally it's a metric that drives everything we do from how we make business decisions, and which is highly reflective of risk-adjusted returns, against the cost of capital, as we talked about last quarter. So from our business, I think, that competence of how we're managing our business and who we're doing business with and how our customers see the value -- I would add just because I don't have a want to forget this. We also are becoming having increasing our relevance across our customers, as we with our services business even having broader discussions. And -- it's also interesting to note that despite what I mentioned, about customers, the ones that we've actually moved away from, I think, in year-to-date, we've had we parted, I think, over 90 new customers, I think, 99 new customers in our MI business, and we've had 74 new service -- services segment customers, and some of those overlap between MI, I think, 1/3 of 74 overlap with the MI customers. So our enterprise sales model is also pristine and how we're positioned in the marketplace with our customers and how much they are beginning to see this as a broader business partner.

Right. That was asked exactly -- the last part what you talk was kind of what I was trying to get that. Do think this, I think, I will shifted to this enterprise sales approach, and that -- is there, I mean, the question you kind of refer to I think it is this a lot of cross selling that's going on? Like what I'm trying to understand is it sustainable effectively, is this new approach really what's driving it? Or is it just small granular pricing?

Yes. I would say it's really about execution of our business model. And our sales team and our operations teams are really working very, very well and integrated together. And so I'd say it is very strong execution of our plan. And I think we've done that through all the noise. I think we've been successfully than that very well. The point I added about our services team is I think around the services enterprise sales I do think it has become important to you, it becomes relevant to have a broader discussion with the CEO or the mortgage company our President kind of capital market so I sat through probably a dozen or so enterprise sales meetings where we talk about rest of services, we can offer and it does the relationship. I would say from a MI point of view, we're just self-executing extremely well in the marketplace. And we're very happy with the value. Rating for our sourcing the risk and we're managing through this through our portfolio.

Got it. And just one question on the Services segment. I think you'll love mentioned, 10% to 15% margin for the back half of the -- starting back half of this year is that run rate margin to see longer term? Or -- and also booted change once you start incorporating title fully in there?

Yes. This is Frank, great question. When you look at the services, EBITDA margin and also I would call it normalized revenue that we achieved for this quarter, excluding the may I mentioned, restructuring in the title. On an annualized basis, we're already at the run rate that we projected from the second half of the year. So we're already at $150 million annualized revenue, and a 10% EBITDA margin. Your point is right, as you start to fall in the impact of title, it's going to change the mix because our projections were given before we had acquired that particular company. So, as Rick said, as we evolve that over time, we'll certainly be sure to update the guidance, and Rick, if you want to add something there?

Yes. I think, look, we were just at the front end of having reposition this business, Eric joined this 3, 4 months ago, times flying for them. But -- we feel very good about kind of starting point that we're from are positioning point of view. I think, the broader title business that we see building is one that does not reflect the current state of the existing title industry, which is agent driven and brick-and-mortar, and I would say I combined ratio and low-margin business, that's not our interest. Our interest is working really being very thoughtful about how tightened and settlement services business should and could be built in the future leveraging technology, digital technology. And thinking about how we approach the marketplace from a customer point of view in a different way. So I think as we evolve our title businesses as we evolve our mortgage services business, as we evolve our real estate service business. I think we're going to -- our focus is to continue to grow revenues, and grow the contribution which we measure in the context of adjusted EBITDA margin. And grow that in the context of how it contributes to our business meaningfully, both in terms of profit and value. And so I think will continue to provide guidance, but I think we're going to hit our file first milestone, and kind of as we continue forward we'll provide kind of we'll look forward as we start to get our baseline position numbers.

Got it. Just -- not looking for guidance for do expect title to be margin accretive long-term or not? Does that make sense?

I understand the question. I think, at this point will probably not -- but I would say looking at the current industry is not reflective of the margins we target.

Thank you. With that, I'll turn the conference back over to Rick Thornberry.

Thank you. And thank you to each of you for participating in this call. I think -- and the excellent questions. I really appreciate that. And I know takes time out of your day. I want to thank our team for the excellent work they are doing to build a value for shareholders. I think the results of this quarter are reflective of tremendous team effort. And so thank you, and hope everyone now if you have a great day, and look forward to seeing many of you soon.

Thank you. And that does conclude our conference for today. We thank you for your participation and for using AT&T teleconference. You may now disconnect.