Radian Group Inc., Philadelphia, reported net income for the second quarter of $137 million, helped by widening spreads leading to a gain in fair value on its derivative portfolio of $194 million. One year prior, the company lost $475 million, due to a fair value charge of $588 million.
The provision for losses was $270 million in the second quarter, compared to $414 million in the first quarter and $427.6 million for the second quarter 2010. Chief financial officer Bob Quint said during a conference call the change reflects an improvement in the mix of its delinquent loan portfolio, as more loans from the 12-month plus bucket went to claim.
Another strong point for Radian, its chief executive S.A. Ibrahim said, is that its risk-to-capital ratio fell during the quarter to 19.8:1 from the first quarter's 20.3:1.
"Our capital and liquidity position provide a competitive advantage for Radian," he said, noting the company is looking to take advantage of possible realignments in the industry.
Teresa Bryce Bazemore, president of Radian Guaranty, said the MI's sales force is "aggressively" soliciting more business from existing customers. The company is also working to get new customers to sign up and use its products.
Radian Guaranty had $2.3 billion in new insurance written during the quarter, down from $2.6 billion for the first quarter. Ibrahim said NIW volume in the early part of the quarter was curtailed by loss mitigation activity but it picked up in the last two months of the period.
