Long-time mortgage industry executive Rick Thornberry is retiring as the CEO of the Radian Group just months after overseeing a major business shift into a multi-line insurer.
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The company
Mike Weinbach,
“The Inigo acquisition represents a defining moment in Radian’s history, and it happened because of Rick’s vision, discipline and entrepreneurial leadership,” said Howard Culang, Radian’s chairman, in a press release.
The hiring of Weinbach involved Russell Reynolds Associates, a global executive search and leadership advisory.
“In Mike, we found someone who distinguished himself throughout the process — not only for his track record of leading large, diversified and complex businesses, but for the thoughtfulness and discipline with which he thinks about the road ahead,” Culang said.
Thornberry himself was a lending executive
Thornberry on why he’s retiring
“The most important decision a board makes is succession planning for the CEO,” Thornberry said when asked about the timing of the change, adding it was his decision to retire.
“I couldn’t be more excited about where Radian sits today, completing the Inigo acquisition, getting the divestitures in place, having the MI business performing at a very high level, with a very clear strategy, really kind of simple strategy, the opportunity for Radian going forward, I’m really excited about,” Thornberry said. “I feel like I’m leaving it in a good place.”
At the same time, he took a step back and asked what’s next in his life. The most excited people about this is his family; his 6-year-old grandson told him it means the two will have more time to spend together
Thornberry pointed to Weinbach’s background as a broader financial services executive, including heading up bank mortgage lending operations at JPMorgan Chase and Wells Fargo.
He noted he has known Weinbach for 10 years, adding “it’s a nice opportunity for he and I to have this transition period together, where he can immerse himself into the business, before taking the full responsibility as CEO.”
How Radian is doing today
Radian ended the first quarter doing $4 billion more in new insurance written year-over-year and moved to second in market share from fourth during the time frame.
Its
Radian has been pursuing diversification for some time. Having Inigo “alongside our MI business is really transformative and I think puts the company in a position, a very different position, than it was prior to the acquisition,” Thornberry said.
He reflected on the culture created, the way Radian does business and how he helped to set it up for the future.
He noted delinquency rates are 13 basis points higher for April than the same month last year (although flat versus March), according to ICE Mortgage Technology. They remain below pre-pandemic levels.
Cure rates also rebounded for the second month in a row, following three months of declines. In its first quarter results, Radian said its cure rates exceeded expectations, Thornberry said.
Helping the situation is the ongoing housing shortage, which is supporting higher home values, he said. This is allowing borrowers to navigate distress situations.
‘We’re not really seeing trends that are concerning at this point,” he said. It’s always been a cyclical business, but Radian, as a mortgage insurer, is as strong as we’ve ever been.”
The mortgage insurance competitive landscape
The company differentiates itself from its competitors through its proprietary data and analytics. Since the industry started using what has become
“One thing that we’re very thoughtful about is our view of economic trends around the country at a very localized geographic level,” Thornberry said. “We express our views every day through our pricing, and it’s a through the cycle view, so we’re watching local economics, local home values, local employment trends, rental rates, all things that give us indication of how markets we would expect to perform over time versus a headline we read today.”
He is less concerned about those shifts in market share and more about finding and underwriting high quality business.
If mortgage rates were to move lower, the opportunity to create more new insurance written would improve, not just in purchases, but for refinancing of recent borrowers who have yet to build 20% equity in their properties.
The note of caution: “lower rates actually may cause home prices to go up if we don’t increase supply,” he said.
He does not see consolidation in the mortgage insurance business in the near future; Radian itself was
