Thank you, and welcome to Radian's First Quarter 2022 Conference Call. Our press release, which contains Radian's financial results for the quarter, was issued yesterday evening and is posted to the Investors section of our website at www.radian.com. This press release includes certain non-GAAP measures that will be discussed during today's call, including adjusted pretax operating income, adjusted diluted net operating income per share and adjusted net operating return on equity. In addition, specifically for our Homegenius segment, other non-GAAP measures that will be discussed today include adjusted gross profit, adjusted pretax operating income or loss before allocated corporate operating expenses and the related Homegenius profit margins. A complete description of all of our non-GAAP measures may be found in press release Exhibit F and reconciliations of these measures to the most comparable GAAP measures may be found in press release Exhibit G. These exhibits are on the Investors 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, President of Radian Mortgage. 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 2021 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, John, and good morning. Thank you all for joining us today and for your interest in Radian. This morning, I'm pleased to report a strong start to the year. Our team remains focused across our 3 areas of strategic value creation, growing the economic value and the future earnings of our mortgage insurance portfolio, growing our Homegenius business and managing our capital resources. Before we start, I want to highlight that 2022 marks our 45th year in business and our 30th year as a publicly traded company. We are proud of our history of ensuring affordable, sustainable and equitable homeownership for so many years and are even more excited about the promise of our future. Frank will discuss the details of our financial position shortly, but let me share a few highlights from the quarter. We reported net income of $181 million or $1.01 per share. Adjusted diluted net operating income was $1.17 per diluted share. Return on equity was 17.2%, an increase from 11.8% reported a year ago. Frank will discuss the favorable prior period reserve development, which was largely driven by better-than-expected cure activity. We grew our book value per share by more than 7% year-over-year or 14% after adjusting for the impact of accumulated other comprehensive income which Frank will discuss in more detail shortly. We also returned $116 million of dividends to stockholders over the past year. In our mortgage segment, we wrote $18.7 billion of NIW in the first quarter. We are continuing to see a higher mix of purchase business with a 43% increase in purchase volume year-over-year. And as I mentioned last quarter, we typically deploy more capital in a purchase-driven market and expect the environment in 2022 to continue to provide strong opportunities to put our capital to work at…

Thank you, Rick, and good morning, everyone. To recap our financial results issued last evening, we reported GAAP net income of $181.1 million or $1.01 per diluted share for the first quarter of 2022 as compared to $1.07 per diluted share in the fourth quarter of 2021. And $0.64 per diluted share in the first quarter of 2021. Adjusted diluted net operating income was $1.17 per share in the first quarter of 2022 compared to $1.07 in the fourth quarter of 2021 and $0.68 in the first quarter of 2021. I'll now turn to the key drivers of our revenue. Our new insurance written was $18.7 billion during the quarter compared to $23.7 billion in the fourth quarter of 2021 and $20.2 billion in the first quarter of 2021. New insurance written for purchase transactions was $17 billion, an increase of 43% year-over-year. Purchase volume accounted for 91% of our total new insurance written for the first quarter of 2022 compared to 59% in the first quarter of 2021. Our reported quarterly annualized persistency rate increased to 76.9% this quarter compared to 62.5% a year ago. Rising interest rates in 2022 are expected to result in continued declines in refinance activity, which we would expect to drive further increases in our portfolio persistency and support insurance in-force growth. Primary insurance in force increased $3 billion during the quarter to $249 billion. Our outlook for 2022 insurance in force growth remains at approximately 10% given the expected higher persistency and strong NIW volume. Total net premiums earned were $254.2 million in the first quarter of 2022, down compared to $261.4 million in the fourth quarter of 2021 and $271.9 million in the first quarter of 2021. As noted last quarter, premiums earned in the fourth quarter were elevated by approximately $5.5…

Thank you, Frank. Before we open the call to your questions, I want to highlight that we are pleased with our start for 2022 and remain focused across our 3 areas of strategic value creation, growing the economic value and the future earnings of our mortgage insurance portfolio, growing our Homegenius business and managing our capital resources. Overall, we believe that macroeconomic conditions and strong home purchase market provide significant tailwinds for long-term growth and the economic value of projected future earnings of our mortgage insurance portfolio. We are pleased with how the credit performance of our portfolio continues to improve as we emerge from the pandemic environment. In our Homegenius business, we remain excited about the future for this business based on the market response to our innovative products and services and look forward to reporting on our progress in the coming quarters. And we continue to strategically manage capital by maintaining strong holding company liquidity and PMIERs cushion opportunistically repurchasing shares and paying the highest yielding dividend in the industry to stockholders. Finally, we will continue to leverage the strength of our team and utilize data analytics and technology to differentiate ourselves from the competition and help our customers succeed in this fast-moving digital market. Now operator, we would be happy to take questions.

[Operator Instructions] Our first question comes from Mark DeVries with Barclays.

My first question is probably for Derek. We've obviously had a pretty significant deterioration in housing affordability with the big spike in mortgage rates and high HPA. Could you just discuss kind of what history has taught you what the implications are for default rates and also for your ability to grow risk?

Sure. So as we're kind of looking at it historically, I think you also have to this in different context where you've kind of seen this run-up in home prices, certainly very different from what you would have seen kind of going into the financial crisis. I think what's driving it here is not kind of I would say, excess demand that's being driven kind of on the credit side. Credit continues to be very tight underwriting continues to be very high quality. Also, there's a lot of favorable demographic tailwinds as well. So as a result, the way I'd see it in terms of an adjustment makes it more likely that you're probably going to have a decrease in the acceleration of home price appreciation. And you're starting to see some of that in first express in home sale measures, right? So existing home sales, new home sales, pending home sales are starting to come down a bit. And we actually think that's healthy. So in terms of having rates go up, a moderation in home price appreciation is a positive from our perspective. Having it go up at the rates have been going up with rates down was continuing, I would say, to create more markets where you become concerned that the values were out of line with fundamentals. But kind of seeing this adjustment now we see that probably kind of moderating out?

Okay. Got it. And then next question, could somebody just address the latest trends of what you're seeing in terms of pricing across the industry?

Sure. I'll take that as well. competitive environment and pricing environment, I would characterize is pretty stable and normal. I think what we're seeing now is different companies picking their spots and adjusting pricing. Our focus continues to be identifying and deploying capital in the highest value segments of the market. So we're constantly adjusting pricing up and down based upon credit characteristics that we see relative value. Same thing with respect to GOs. Also, this quarter, our pricing was probably overall flat. We did implement a kind of a moderate price increase in that 3% range. I think we've seen our estimate of clearing rates kind of from competitors, we probably saw that go down moderately, so maybe that 2% to 3% range. And I think some of that translated, we probably gave up a bit of market share, which we'd expect in that environment, where, again, we're not going to be a price leader going down and we looked at this as an opportunity to potentially increase rates a little bit.

Got it. And would you expect rates to be biased more higher than lower just given some of the increasing macro uncertainty and risk around recession?

Well, all I can do is kind of speak from our perspective. We certainly took that into account and that was expressed in an increase in rates this quarter.

Our next question comes from Doug Harter with Credit Suisse.

Hoping you could just talk about the impact of lower refinance activity and how that plays out in terms of the premium yields you expect? And just kind of when we might see the bottom in that?

Yes, this is Frank. The guidance that we gave on portfolio yield last quarter, which is about a 2 basis point decrease throughout the year, we still expect to hold. So -- and that's updated for our current expectations around what the mix of NIW looks like on a go-forward basis. So -- last quarter, we had an adjusted 40.1 basis point portfolio yield, and that was at 39.6 basis points this quarter, and we expect to see again that trend down to probably 38 basis points by the fourth quarter. But again, mindful of and inclusive of the mix of business that we would see.

And then Lastly, obviously, rates having risen a fair amount. How does that play out in kind of the -- your investment yield? And kind of how do you expect that to trend over the course of the year?

Sure. I mean, certainly, rising rates are helpful for persistency. So we saw a good uptick in persistency this quarter quarterly annualized at 76.9%. We think that could certainly trend into the low to mid-80s if these trends continue. So definitely positive in that regard. Persistency is a very powerful driver of revenue and earnings for the organization. So that's very good. Investment portfolio earnings as well. We expect to see the yield on the investment portfolio increase. We have just over a 4-year duration on the portfolio, and there's a tremendous amount of cash flow that we're reinvesting each and every year. So that will be invested at higher rates. So very, very positive on both of those attributes. And I think the important thing to remember, too, for both of those is that incremental revenue to the business without incremental cost. And that's, again, a very powerful driver for earnings for the company.

Our next question comes from Bose George with KBW.

I just wanted to go back to your guidance on the Homegenius operating income. What's the level of corporate allocation of OpEx that we should think about for the year? I'm just wondering if that changes as well with the lower revenue guidance.

Sure, Bose. The -- if you look at Exhibit E in the prepared materials we've outlined what the corporate allocation is for Homegenius. And it's trended around $5 million or so each quarter that may moderate -- or excuse me, may fluctuate carry-to period just based on things like what we saw this quarter with compensation accruals, things of that nature. But generally, that's the level where we're staying.

Okay. Great. And then actually, just going back to the pricing, just like spreads have widened on the ILNs that we're seeing in the market, rates obviously have increase, which is pushing up the effective pricing on that. I mean do you think that will translate into some impact on pricing potentially push pricing a little higher?

Was difficult to say. Like I said, we kind of expressed our view in terms of making a pricing adjustment. The other thing to keep in mind, we've never taken into account in terms of our pricing and our return calculation risk distribution. That is obviously an outlet to decrease tail risk to efficiently utilize our capital and to -- it does provide enhancement to returns. We just don't bake that in. But it's a little difficult to tell where [indiscernible] from a competitive environment perspective. I think the other thing to keep in mind, if you just look at the fundamentals, while there is some increased recession risk, if you look at the fundamentals in the housing market, again, I think that there's solid equity cushions. We still expect home price appreciation employment market, labor market remains extremely strong. So where our competitors and how they factor that all in and whether that's a price increase or decrease, I mean time will tell.

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

This is Mihir. One from me here. Just go back to homes real quickly. In your long-term targets, I tell you had a target of 14% margin in the long term. Does that still stand with this higher rate environment?

Yes. I'm sorry, could you repeat that? I didn't hear the first part of your question.

Sorry. So on Homegenius, I think you said your long-term targets that you're trying to get to a 14% operating margin. Is it deal standing in this higher rate environment?

Yes, absolutely. I mean the long term, I'll call it, the economics of the business at scale are unchanged. And what we had contemplated, as I said in my prepared remarks, was that refinance activity we expected to slow anyway, it just it occurred faster than we had originally anticipated in 2022. So yes, the economics at scale, margins at scale, all of those still hold, and we remain confident in our 2025 estimates.

Awesome. Okay. And then just curious, like the higher interest rate environment, I mean, obviously, there's going to be some reduction on the refi side, but curious if you saw any demand change for purchase volumes in April. Anything speaks to that.

I mean, I follow the rates, I mean, we've seen purchase volume increase as a percentage of production, and we've seen that increase in April as well. So that's really following the rates. Much more of a purchase market which is positive. Looking at NIW having that shift a good environment for us. And so far as that increased persistency, we have a growing and we expect a continuing growing purchase market. And that's really feeding into just an increase in the size of our insurance in force. And so we expect to see that. And I think, as Frank had mentioned, up to 10% in 2022. And we see the demographic tailwinds as being very strong over the next several years. So -- and that's really what's embedding our future and earnings. And so we continue to see that as a real positive.

[Operator Instructions] Our next question comes from Ryan Gilbert with BTIG.

First question is on purchase NIW up by, I think, 40-plus percent year-over-year a pretty sharp increase. Anything in particular you want to call out there? Or is it just within the normal range of fluctuations for the quarter?

I think -- Ryan, this is Rick. I think nothing new to call out. I think it's really just a function of the overall market environment. And I think we're -- this is evolving to a much stronger purchase-driven market where mortgage insurance is really, really 12x more likely to be used for a purchase transaction than a refinance transaction. So I think that's -- if I understood your question, I think that's what we're seeing, nothing other than that.

Okay. Got it. Yes, that's what I was asking. Second question is on capital return. Share repurchase volume was a bit lower than I expected in 1Q '22, is there -- although it's obviously has picked back up in April. Any changes to how you're thinking about share repurchases here? I mean the stock is trading well below book value at this point?

Sure, Ryan. This is Frank. Yes, I think you'll see historically, we've always had a very disciplined value-oriented approach to our share repurchase. And if you recall, we have a $400 million authorization that expires in 2 years from the time of issuance -- so we're comfortable with the amount of share repurchase activity that we've had will continue to be value oriented in that regard. And I think it's a very important part of our overall capital management by returning capital to shareholders, certainly at these value levels and we continue to pay our dividend, which increased last quarter by 43%. So I think net-net, our return of capital to shareholders is very strong over time and continues to be so.

I'm showing no further questions in queue at this time. I'd like to turn the call back to Rick Thornberry for closing remarks.

Thank you. I just want to thank everybody for their questions and participating in the call today. And as always, thank our team for the great work that they're doing on behalf of our customers and our shareholders. So I wish all of you all a wonderful Wednesday, and we look forward to seeing you soon. And -- take care. Thank you again for your interest in Radian.

This concludes today's conference call. Thank you for participating. You may now disconnect.