Radian Group, the nation's third largest mortgage insurer, posted a net loss of $122 million for the fourth quarter, an improvement from the $1.1 billion hit it took in the year ago period.
During the quarter it wrote $6.5 billion of new residential MI policies, a handsome 71% gain from 4Q 2010.
Its 4Q results include net gains from a change in the fair market value of derivatives and other financial instruments to the tune of $102 million, and an income tax provision of $65 million.
But for the full year, the company earned $302 million, compared with a net loss of $1.8 billion for 2010.
S.A. Ibrahim, Radian's CEO, said the results "were impacted by the challenges of our legacy portfolio as well as the macroeconomic environment. That said, we believe the credit environment is stabilizing and we remain encouraged by the steady improvement in our number of primary delinquent loans, which declined by 12% from 2010, and by our ability to capture the leading market share of outstanding credit quality business.”
Its private mortgage insurance subsidiary, Radian Guaranty, has a risk-to-capital ratio of 21.5:1, a slight change from the 21.4:1 ratio at the end of the third quarter.
The holding company has $480 million of capital available to downstream to the MI unit if needed. A transaction involving its asset guaranty business, announced earlier this year, will provide another $100 million of statutory capital.
Radian Thursday said it will launch a “modified Dutch auction” tender offer to repurchase a portion of its $250 million of debt maturing in February 2013 at a discount to face value.
During the quarter the MI paid out $292 million of claims, an improvement from the $393 million of a year ago. For the full-year, Radian paid claims of $1.5 billion, compared to $1.3 billion for 2010.
The company anticipates mortgage insurance claims paid of $1.3 billion for full-year 2012.
