Prepared remarks
Good day, and thank you for standing by. Welcome to the Second Quarter 2026 Radian Group Earnings Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Robert Lally, Vice President of Finance. Please go ahead.
Thank you, and welcome to Radian's Second Quarter 2026 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 radian.com. This press release includes certain non-GAAP measures that may 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. A complete description of all 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 the press release exhibits. These exhibits are on the Investors section of our website. Today, you will hear from Rick Thornberry, Radian's Chief Executive Officer; Mike Weinbach, Radian's CEO-elect; and Dan Kobell, Senior Executive Vice President and Interim Chief Financial Officer.
Before we begin, I'd 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 more information regarding these risks and uncertainties as well as certain additional risks that Radian faces, you should refer to the risk factors included in our 2025 Form 10-K as well as 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 all for joining us today. Before discussing our second quarter results, I'd like to highlight another important milestone in Radian's strategic transformation. When we announced our agreement to acquire Intego in September last year, we also outlined a clear strategic path forward: transforming Radian from a leading U.S. mortgage insurer into a global multiline specialty insurer, while divesting non-core businesses and becoming a more focused insurance organization. Since then, we have successfully closed the Intego acquisition and integrated the business into our organization, and we have taken definitive action to complete the divestitures, including completing the sale of our real estate services business this week, entering into an agreement to sell our title business, and earlier this year, exiting the mortgage conduit business. Together, these actions have sharpened our focus on insurance, expanded our product set, simplified our portfolio, reduced organizational complexity, and delivered on the key strategic actions we outlined less than a year ago.
The Radian we are today is meaningfully different from the company that announced that strategy last year. Our mortgage insurance business, which has been the foundation of our company and a significant driver of value creation for stockholders for nearly 50 years, continues to generate strong earnings and capital. Combined with Intego, we are now a stronger, more diversified and more focused organization with two complementary, correlated insurance businesses, greater capital allocation flexibility, and access to broader growth opportunities across global insurance markets. Most importantly, our team has executed on the commitments we made and positioned Radian for its next chapter of growth. The second quarter marked our first full quarter with Intego and another important step for Radian as a global multiline specialty insurer. The financial benefits of this combination are already evident in our results.
Total revenues increased 93% year-over-year to $575 million, while net earned premiums increased 116% to $504 million. Our Mortgage Insurance business once again produced strong underlying performance and remains a powerful source of earnings, capital generation and embedded economic value for our company. New insurance written increased year-over-year, reflecting continued strength in purchase activity, combined with the value of our proprietary data and analytics capabilities and our deep customer relationships. Primary insurance in force reached a record $284 billion with persistency remaining strong, supporting the embedded value of our portfolio and future earnings generation. Credit performance continued to reflect the quality of our insured portfolio and our team's unwavering commitment to disciplined underwriting. We are proud of the important role private mortgage insurance plays in the home finance marketplace by helping borrowers responsibly and sustainably achieve homeownership.
Turning to our Specialty Insurance business. As I mentioned, this quarter marks our first full reporting period reflecting Intego's contribution. The specialty insurance business is already contributing meaningfully to the diversification of our revenue and earnings profile. During the quarter, our Specialty segment represented approximately 50% of total revenues and 53% of total net premiums earned during the quarter, highlighting the scale and earnings contribution of our new business mix. The strategic value that the combination with Intego brings to Radian is clear, reinforcing both the benefits and the opportunity ahead. While the underlying specialty insurance portfolio continues to perform well, it is important to acknowledge that market conditions have become more competitive and rates continue to soften. The current rate environment is consistent with the cyclical dynamics we anticipated when underwriting the acquisition.
The Intego team is maintaining their focus on underwriting discipline and rate adequacy while also allocating capital to the most attractive opportunities. Our priority is profitability, not any particular revenue growth target. We believe Intego's diversified portfolio, strong analytics capabilities, unwavering commitment to strong underwriting and experienced leadership team position the business well to navigate market cycles and selectively deploy capital to the highest value opportunities. At the enterprise level, our capital position remains a significant and core strength. The earnings power and capital generation capabilities of our businesses provide us with meaningful financial flexibility. During the quarter, we continued to return capital to stockholders through both dividends and share repurchases, while maintaining the financial strength needed to support growth opportunities across the enterprise.
As always, we remain focused on prudent capital management and creating long-term value for stockholders. Before I turn the call over to Dan to review our financial results, I would like to invite Mike Weinbach to share a few thoughts. As many of you know, Mike recently joined Radian as CEO-elect and has already spent considerable time engaging with our employees, customers, investors and business leaders across both the mortgage and specialty segments. Mike and I will work closely together to execute a seamless transition of leadership. Mike brings significant industry experience, a strong leadership track record and a deep appreciation for the strengths that make Radian and Intego unique, including the value of our talented and experienced teams. I'm excited about the future of this company under his leadership.
Thanks, Rick. First off, I want to share how excited I am to be a part of Radian, and I want to offer two things to Rick. One is my congratulations on all you and the team have accomplished under your leadership. Radian is a transformed company due to your vision, leadership, and execution. The second is my thanks. Having the opportunity to come in as CEO-elect on June 1, where I could observe and learn before having to make decisions was a true gift. So thank you to you and your family who have had to wait a little bit longer for Papa to be primarily working, and thank you to my fellow investors. I'll expand a little more on why I'm so excited to be here. Radian Group, and I fully include Intego when I say this, has great people, a great culture and great platforms. We have a leading mortgage insurance business led by a team with decades of experience combined with an excitement about asking how we can make the business even better.
We have a leading specialty insurance business, which is stocked with experienced insurance experts who came together to build something new and better than what they had experienced at their prior organizations. We're still early in that journey and the progress the team has made gives me great confidence in what lies ahead. I'm still learning and plan to take advantage of every minute I have with Rick while in this role, and when he continues as a strategic adviser to me and the Board. But I'll go back to where I started. I'm excited, and you should be too about all the possibilities ahead for Radian and the talent we have to realize them. Rick, back to you.
Thank you, Mike. The team and I are thrilled to have you on board and as my tenure comes to an end, I look forward to what is ahead, and I'm confident in the future of Radian in your hands. With that, I will turn the call over to Dan to review our financial results in more detail.
Thank you, Rick. I'm pleased to provide additional details about our second quarter results. On a GAAP basis, which includes the impact of certain one-time costs related to the Intego transaction as well as noncash amortization and purchase accounting adjustments, we generated net income from continuing operations of $0.87 per share with a return on equity of 10%. Adjusted net operating earnings per share grew year-over-year to $1.14 and adjusted net operating return on equity was 13% this quarter. Our operating results reflect continued strong underwriting performance across both our Mortgage and Specialty segments, continued growth in investment income and disciplined capital management. The results also include the expected seasonal expense associated with our annual share-based incentive compensation plans as well as the establishment of reserves in our Specialty segment to reflect ongoing developments in the Middle East.
On a year-to-date basis, our adjusted net operating earnings per share has increased 12% compared to the prior year as we continue to see immediate financial benefits from the Intego acquisition. We grew book value per share 8.5% year-over-year to $36. We also returned dividends to our stockholders over the past year that were equivalent to an additional 3% of book value. On a consolidated basis, our total revenues grew 93% year-over-year to $575 million, primarily driven by the revenue contribution from our Specialty segment. Our net premiums earned are not evenly balanced across our segments, with our Specialty segment accounting for 53% of second quarter net premiums earned. Our total investment portfolio of $7.1 billion consists of well diversified and highly rated securities. At an enterprise level, we generated $75 million of net investment income this quarter, an increase of 21% from a year ago, primarily driven by growth in balances.
Our investment portfolio has continued to be an important contributor to our earnings and the addition of Intego's investment portfolio further enhances this strength. Turning now to the key drivers of our segment results, beginning with our mortgage segment. New insurance written was $16.3 billion in the quarter, an increase of 14% year-over-year. Persistency also remained strong in the quarter, increasing to 82%. Our large, high-quality mortgage insurance in-force portfolio grew 3% year-over-year to an all-time high of $284 billion. As of the end of the second quarter, approximately half of our insurance in force portfolio is on mortgages with interest rates of 5.5% or lower. Given current mortgage interest rates, these policies are less likely to cancel due to refinancing in the near term. Our in-force premium yield was stable this quarter as we continue to generate consistent premiums from our valuable mortgage insurance portfolio.
Our mortgage provision for losses and related credit trends continue to be positive with strong cure activity and low claim levels. We reported approximately 12,400 new defaults in the quarter, a decline of 9% from the prior quarter. Cures once again exceeded new defaults this quarter, reducing our portfolio default rate to 2.47%. Our cure trends have also been consistently positive, meaningfully exceeding our initial default-to-claim expectations. This quarter, these favorable cure trends drove $20 million of favorable development from prior period defaults. Consistent with prior years, our second quarter operating expenses in both our mortgage segment and corporate area reflect the timing impact of our share-based compensation plans. This expected seasonal item is the primary driver of the increase in expense in these areas compared to the first quarter of 2026. Importantly, underlying expense performance remained strong, with mortgage segment operating expenses declining 7% year-over-year and the mortgage segment expense ratio improving to 23% from 25% a year ago.
Now turning to our Specialty segment. Net premiums earned were $267 million, an increase of 9% year-over-year. In our specialty business, we continue to target opportunities to write attractive business across a range of insurance and reinsurance lines. As the environment has become more competitive, particularly in property insurance and reinsurance, the team remains thoughtful and disciplined in its underwriting approach, focusing on maintaining sound underwriting margins to drive profitability. It is important to note that the Specialty segment tends to exhibit meaningful seasonality in how premium revenue is recognized during the year. Earned premiums in the second half of the year are typically higher than in the first half. As shown in the Intego quarterly results for 2025 included in press release Exhibit J, we therefore anticipate second half earned premiums in 2026 to be approximately 20% higher than in the first half of the year.
Operating expenses in our Specialty segment were $39 million this quarter, in line with the full prior quarter. As noted at our recent Investor Day, Intego's business was intentionally built with a simple and scalable operating model, supporting our ability to maintain an appropriate expense ratio through a softening market cycle. Total loss provision within the Specialty segment was $169 million, which included $24 million of favorable net development for prior period reserves primarily seen in property lines of business. We are pleased that the acquired reserve portfolio has developed more favorably than expected since the acquisition. Consistent with our thoughtful approach to establishing reserves, particularly for cases with significant uncertainty, we've set reserves this quarter to reflect the ongoing developments in the Middle East. These reserves reflect both the expected and potential claims related to the ongoing conflict as well as updated inflation assumptions across our full insured portfolio given the related macroeconomic uncertainty and potential inflationary pressures associated with the conflict.
Our Specialty segment net combined ratio, which includes the impact of these reserves, was 98% for the second quarter. As we noted previously, we expect variability in our Specialty segment combined ratio over time and the impact on second quarter ratios from the Middle East reserving is elevated given the seasonally lower premiums in the first half of the year, as I noted earlier. Over the first half of 2026, the specialty combined ratio was 93%, which is elevated due to the reserving for the Middle East developments as noted. Absent this item, the combined ratio in the first half of the year would be in the high 80s, which is consistent with our expectations heading into the year. As the market continues to soften, we expect to see generally lower underwriting margins in our Specialty business which will gradually earn through to our reported results over time. As a result, a combined ratio in the low 90s is more reflective of the current operating environment.
As noted, the reported combined ratio in any specific period will be subject to some volatility due to market events. Additional details regarding our segments are available in press release Exhibit E. Moving to our capital, available liquidity and related strategic actions. Radian Guaranty’s financial position remains strong. In the second quarter, Radian Guaranty paid a $200 million dividend to Radian Group, and our PMIERs cushion was $1.5 billion, significantly above the required PMIERs capital level. This capital buffer, combined with our current reinsurance programs, positions Radian Guaranty well to withstand and remain well capitalized through a potential severe macroeconomic stress. Our Specialty segment also remains well capitalized and continues to maintain a strong position relative to its regulatory capital requirements. During the second quarter, our holding company received $19 million in distributions from our entities that were held for sale.
Since we announced our divestiture plan last year, we have returned $127 million of capital from our entities held for sale to our holding company providing immediate liquidity and reducing the carrying value of those entities to $35 million as of the end of the second quarter. As we announced this week, we have completed the sale of our real estate services business in the third quarter and entered into a definitive agreement to sell our title services business. While we have not disclosed terms of the transactions, we do not expect the total net asset value returned to our holding company as we complete the divestiture process to be materially different than the carrying value of these businesses as of the second quarter. As we approach the end of our divestiture plan, we are pleased with both the total value realized and the time to complete the process, both of which are in line with our initial expectations.
As we move forward and continue to execute on our multiline insurance strategy, our robust capital generation profile and balance sheet strength continue to provide us with significant financial flexibility. Our actions in the second quarter reflect our disciplined approach to capital management as we continue to return significant capital to stockholders while reducing our debt and growing our liquidity position. In the second quarter, we repurchased $76 million of our common stock, or 2.2 million shares. In the third quarter to date, we have purchased an additional $50 million of shares, bringing the total year-to-date purchase amount to $176 million, or 5 million shares. We continue to believe that share repurchase provides an efficient and accretive way to return excess capital to stockholders, particularly as the shares trade significantly below our view of their intrinsic value. During the second quarter, Radian Group also paid a quarterly dividend to stockholders totaling $37 million.
We also repaid $75 million of the draw on our revolving credit facility, reducing our holding company leverage ratio to 19%. As of quarter end, we had $75 million outstanding on our credit facility draw, which we expect to repay during 2026. Net of these actions, holding company liquidity at quarter end increased to $412 million. We have increased our previous guidance for expected dividends from Radian Guaranty to Radian Group and now expect at least $650 million of total dividends during 2026, including the $340 million paid through the first half of the year. I will now turn the call back over to Rick.
Thank you, Dan. Before we open the line for questions, let me summarize a few key takeaways from the quarter. First, our mortgage insurance business continues to be a source of strength across the enterprise, supported by high-quality risk selection, strong underwriting, favorable portfolio performance and meaningful capital generation. Second, Intego completed its first full quarter as part of Radian and continues to reinforce the strategic benefits of our transformation into a global multiline specialty insurer. Third, we remain focused on disciplined execution, managing capital thoughtfully by allocating resources to attractive opportunities. And finally, I would like to acknowledge our employees across the company; their dedication, expertise and commitment to our customers are at the heart of our success. While we are still early in the next chapter for Radian, we are encouraged by the momentum across the organization and excited about the opportunities ahead. With that, operator, we are ready to take questions.
Questions and answers
I wanted to quickly start on the Middle East loss. I think based on your high 80s combined ratio comment, it was about $20 million. Could you maybe help me understand if that was a few large claims or a higher volume of small to medium claims, and if we should expect ongoing pressures from that work?
Yes. Thanks, Rowland, for the question. So as I noted earlier, the combined ratio was 98% in the second quarter. That included the reserving related to the Middle East, and that's both for the expected and potential claims related to the conflict itself as well as our updated inflation estimates given the potential for some additional inflationary pressure resulting from the conflict. So I'd say the total of all those items in the second quarter was around $30 million, a bit higher than the number you provided. And again, that's inclusive of all of that for the Middle East. Excluding that, the combined ratio would have been generally in the mid- to high 80s, consistent with where it was in the first quarter and generally consistent with what we would have expected heading into the year. As far as the balance of the year, we feel like we're very well reserved as we sit here today, we continue to actively monitor the situation, but feel pretty good about where we sit relative to the reserves and what we know about the conflict at this point.
Okay. That's helpful. And then several property and casualty insurers are seeing a spreading of competition beyond property lines. I was wondering if you could help me with the specialty growth in the quarter and whether you're seeing softening in casualty?
I think Rowland, this is Rick. Thank you for the question. We're clearly seeing the market continue to soften across the specialty and reinsurance business. This is part of what we anticipated as part of the acquisition, so these changing market cycles are expected. For us, the team will respond to specific opportunities we see, and the teams remain very disciplined in how they define those opportunities. I think the team is well positioned to go through it. We've been impressed by the experience and the approach and discipline that the teams apply across the process. We're here to write profitable business and to be selective where we can across the wide range of products that we focus on. Our strategy remains unchanged: we won't sacrifice pricing, terms, or expected returns to maintain premium volume. Year-over-year, the team has seen opportunities to grow, continues to see attractive rate adequacy across a variety of products, and continues to work closely with our customers to find those opportunities and write risk where we see value.
The market has moved and will continue to move to where underwriting discipline matters more than ever. The hard market rewarded participation, but the next stage of the cycle will reward those who remain disciplined and allocate capital selectively and consistently prioritize margin over volume, which is what we plan to do and what the team has done as the market evolves. So the team is continuing to find opportunities across a variety of different classes of products, and we're going to continue to look for those opportunities as we go forward.
Rick, that was super helpful. And just one more quick numbers one out of me, and I'll jump back in the queue. But you gave a guide on the specialty earned premium for the second half of the year. Does that 20% increase include the January growth that was not part of your consolidated results?
Good question, Rowland. And the answer is yes, it does. If you take the full six months of the first half of the year, which we provided in two different places in our press release, use that full six months as a baseline and the second half of the year would be approximately 20% higher than that baseline.
Thank you, Dan, for that helpful clarification. I appreciate that.
Maybe just starting out with specialty. I think I heard you say a combined ratio in the low 90s is more reflective of the current environment. Could you expand on that, and then longer term, should we expect the combined ratio to migrate back to the high 80s?
Yes. Thanks, Terry, for the question. In terms of the combined ratio, I mentioned in my prepared remarks we'd expect to see the business we're writing in today's market produce combined ratios in the low 90s. That is coming after several really strong years of performance, so the impact is the expected softening we've seen across the market. If you look back at the results we provided for Intego's business over their history, it's been more mid-80s to high-80s historically, and now you're seeing that move into the low 90s. That's part of the normal cycle we expected when we made the acquisition. Also keep in mind the seasonality from a revenue perspective: second half premiums are typically around 20% higher than the first half, so please take both factors into consideration when thinking about near-term underwriting projections for that business. And again, combined ratio will be subject to quarter-to-quarter volatility based on market events.
Yes. As you think about this business over a variety of cycles, underwriting discipline and focusing on rate adequacy through those cycles is important. Over the long term, you can look at this business's long-term combined ratios with some volatility through cycles. The one thing we feel very confident in is our team's ability to navigate those cycles effectively. We're trying to provide a view of where we are in the cycle at this point and how the team is navigating it.
Got it. That's helpful. And then maybe just switching gears, talking about credit for mortgage insurance: do you have any color on the cure rate trends that you're seeing? Slide 16 in your deck still shows pretty favorable trends overall across vintages. Do you expect that to continue as more recent vintages mature?
Yes. Thanks for the question. When you look at that slide, you can see that cure development has continued to be very strong and very positive over time. That schedule covers multiple years and already reflects some newer vintages working their way through the portfolio. You can probably see on the margins a little bit of change in the cure development path from quarter-to-quarter, but broadly we continue to see very strong cures, which are favorable to our reserving assumptions. We're effectively reserving to a 92.5% cure rate and we're getting to that level and beyond consistently across default cohorts. So we continue to see very strong activity even as newer business works into the portfolio. From a credit perspective, we don't see any pockets of concern at a metric level, whether by geography or across vintages; overall, things continue to play out in line with or better than our expectations when pricing the business.
I wanted to start on the specialty insurance piece. You continue to describe the rate conditions as softening. You also suggest the low 90s combined ratio. Can you help us understand where the pressure is greatest today and whether your expectation is that future earnings pressure will come from lower margins or just lower premium growth?
Thank you, Mihir. As we sit here today year-over-year, our net earned premiums were up 9% year-over-year, which indicates the team is continuing to find opportunities in a competitive market. As Dan noted, there's seasonality with more earned premiums in the third and fourth quarters. We are writing business at technically lower margins than previous years from a rate perspective, but still at attractive rate adequacy and returns on capital. We would expect the combined ratio to migrate up as a result. We anticipated this softening as part of our M&A transaction and analysis of the through-cycle view. One of the things we liked about Intego was the experience of the team and their ability to adjust and navigate through cycles and find value. Similar to our mortgage insurance business, we focus on finding economic value rather than market share or a particular growth target. Intego focuses on finding those opportunities across markets and across cycles where returns are most attractive. The team continues to demonstrate resilience navigating this environment, and we feel the business is in a good position.
Got it. And Rick, congratulations on your upcoming retirement, and Mike, congratulations again on the appointment as CEO. Mike, after spending the last two months at the company, can you talk a little bit about the biggest thing you've learned that was maybe a little different from your perception before being on the inside? What's been new, different, or some of the learnings you've had so far?
Thanks, Mihir, for the question. From the outside looking in I saw a company with really good people, good culture, and good platforms, and that observation completely holds true from the inside. It really is great people, great culture, great platforms. As I look to the future, Radian entering 2027 will look very different than Radian entering 2026. This has been a year of transformation: the leadership transition, the acquisition of Intego, and the sale of non-core businesses. We have a company where revenues have effectively doubled from where they were coming into the year, revenue generation capability with double-digit accretion to EPS, and a simpler, more focused company with two core insurance businesses — mortgage insurance and specialty insurance — that are not correlated but both use data and analytics to outperform the market. The company will continue to generate excess capital and we'll have many opportunities to deploy it.
In the mortgage insurance business, I see the strength in how we deploy data, analytics and risk management capabilities and I'm very positive about how we participate in the market. There are opportunities to be more efficient and to take advantage of emerging AI technologies to be faster and elevate our analytics. At Intego, I spent time with the team in London and spoke with brokers and customers; I see an experienced team that has managed through cycles and is focused on deploying capital for strong risk-adjusted returns across the lines it writes today. We don't have to grow at all costs; we'll pull back in a softening market where returns are not adequate, but we'll lean into areas where pricing remains adequate and our underwriting expertise provides an advantage. We still see opportunities for growth, new lines, and partnerships. I'm excited about the opportunity ahead.
Mihir, thank you for the well wishes. As a shareholder in this business, I'm excited about the future with Mike. We've had the chance to work together, and over the last two-plus months, the transition has been seamless and positive. I think this sets the company up for the future. Thank you for the question.
This is Graham Bundy on for Bose. You touched on earned premiums growing 20% in the second half. Could you help me understand how expenses trend there and why they appear to be staying relatively flat?
Yes. Thanks, Graham. Are you referring to expenses in the Specialty segment?
Yes.
In terms of expenses in the Specialty segment, there's a component related to acquisition costs that will fluctuate more directly with earned premium, so you'll see a change there. There's also a portion that's more fixed quarter-to-quarter and we'd expect that to be generally more stable. There will be some investments for growth, obviously, but the expense trend is reflected in the combined ratio guidance we provided of low 90s for the second half of the year.
Awesome. Very helpful. And then jumping to repurchases: could you help us from a modeling perspective what we should be expecting in the second half? I know with the Intego acquisition in the first half, originally you thought repurchases would pause, but you restarted them. What can we expect in the second half of the year?
Sure. We were pleased to restart the share repurchase program quickly after the Intego acquisition closed effectively in the first quarter of this year, and we're pleased with the repurchase we have done to date. As we sit here, we're at $176 million of share repurchases to date for 2026. I provided guidance last quarter that we'd expect a range for the full year of between $200 million to $250 million. We're tracking very well against that range, and based on activity to date, I would expect us to be towards the upper end of that $200 million to $250 million range. Of course, that is subject to market conditions and what happens between now and the end of the year, but that's a good feel for where we'd expect to finish 2026 in terms of share repurchase.
I'd add that our track record over the last several years shows discipline around allocating capital, whether it's dividends or share buybacks, not to mention a major acquisition. This quarter highlights revenue growth, earnings contribution, and the opportunity to accelerate share buybacks this year while reducing debt. We've been active capital managers, and under Mike's leadership going forward, capital allocation will remain a key focus. You'll continue to see us take advantage of capital resources in the most attractive ways.
One piece that gives us confidence to execute these capital initiatives is the visibility we have into dividends from Radian Guaranty. At the beginning of the year we noted expecting $600 million or more of dividends; we've updated that to $650 million or more for full year 2026. That increase reflects continued strong performance of the underlying mortgage business, and the earnings of the mortgage business drive that dividend capacity. We continue to see that trend working well for us.
I wanted to quickly go off that buyback question. Could you walk through the remaining liquidity draws with the revolver and debt? Once those are completed, should we assume there is a lot more free capital available for buybacks?
Yes. As of the end of the second quarter, we had a $75 million balance on the draw we took on the revolver. Our expectation has been, and remains, that we'd pay that down by the end of 2026. Regarding the debt maturity coming up in early 2027, our current expectation is that we would look to refinance that at a similar size to what exists today, though we'll evaluate options as we get closer. In the world where we're not carrying a revolver draw and we continue to have a similar level of dividends coming up from Radian Guaranty, that creates additional flexibility for capital management. That said, we follow a regular capital allocation waterfall we discussed at Investor Day: support organic growth of the businesses first, and then evaluate delevering, accretive M&A, or returning capital to stockholders through the dividend and opportunistic buybacks.
And just one more and then I'm done. I want to make sure I didn't mishear the Middle East commentary. That $30 million provision you took in 2Q includes IBNR for potential future events, or should we expect ongoing losses as the count continues?
I would say that's a fully loaded number that includes what we expect and potential claims related to the conflict based on what we knew as of the end of the second quarter. It also includes the related inflation adjustment based on potential pressures that the conflict might create.
Thank you. I appreciate that. And once again, thank you to everybody for joining us today. Before we conclude, I'd like to thank our employees across Radian and its businesses. Throughout my time as CEO, I have been continually impressed by the talent, dedication and professionalism of the teams. Their commitment to serving our customers and delivering for our stockholders is what has made our success possible. I'd also like to thank our customers, business partners, and stockholders for the trust and support they have placed in us over the years. As I reflect on my time leading this company, I'm incredibly proud of what we've accomplished together. We have built a stronger, more diversified organization, created a platform for future growth and positioned Radian for long-term success. Most importantly, with Mike's leadership and exceptional leadership team, outstanding employees and a clear strategy, I'm excited and confident in the future of this company. It's been a privilege to serve as CEO. Thank you for your support, and thank you for the opportunity to be part of this remarkable team and company. Thank you.
This concludes today's conference call. Thank you for participating, and you may now disconnect.