Radian Group Inc. lost $169 million in the first quarter, as the company's mortgage insurance business had a pretax loss of $45 million for the period. Also contributing to the loss was $91 million in combined losses from the change in fair value of derivatives and other financial instruments.
In the same period in 2011, Radian had a profit of $103 million, driven by a $319 million improvement in the fair value of derivatives.
The company also took a GAAP pretax loss of $37 million on a transaction Radian Asset Assurance has with Assured Guaranty, although the reduction of risk to the company as a result of the deal did improve Radian's statutory capital levels by $94 million.
Radian Guaranty did $6.5 billion in new insurance written during the quarter, similar to the fourth quarter and well above the $2.6 billion written in 1Q11. For April, Radian is reporting it wrote $2.6 billion.
The company said Radian Guaranty's risk-to-capital ratio improved to 20.6-to-1, compared with 21.5-to-1 at the end of the fourth quarter. However, it added, that without additional capital support, the risk-to-capital ratio is expected to exceed the 25-to-1 regulatory barrier in the second half of this year.
Radian Group said it has $350 million of capital at the holding company level. Radian Asset Assurance is expected to pay a $50 million dividend to Radian Guaranty in July.
Furthermore, Radian received approval from Fannie Mae and Freddie Mac in the first quarter to write new business through Radian Mortgage Assurance in states where waivers have not been obtained at such time that Radian Guaranty goes above that 25-to-1 level.
As previously disclosed, in addition to the $17 million of existing capital in RMAI, Radian Group will contribute $50 million of additional capital to RMAI at that time.
