Radian Reports $392M Loss

Radian Group Inc., Philadelphia, has reported a net loss of $392.5 million ($4.91 per share) for the second quarter, compared with net earnings of $21.1 million ($0.26 per share) a year earlier. The loss is due to a pretax, first-lien, premium deficiency reserve of $421.8 million that was established after updating Radian's loss projections. The company said the reserve is its best estimate of the present value of future losses not already included in the June 30, 2008 reserves. Radian Group also announced that it plans to contribute its investment in Radian Asset Assurance to Radian Guaranty in the third quarter. Radian Asset has $960 million of statutory surplus, which is part of $3 billion in claims-paying resources. As of June 30 (on a pro forma basis following the contribution of Radian Asset), Radian Guaranty would have a 10.3-to-1 risk-to-capital ratio, but its actual risk-to-capital ratio is 14.9 to 1. S.A. Ibrahim, Radian chief executive, said the company "is in the unique position to fill its capital needs through internal resources." The company can be found online at http://www.radian.biz.