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Radian 4Q earnings hit $36.4 million

Return to profit soars past analyst expectations

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Radian (RDN) recorded a fourth-quarter net income of $36.4 million, or 19 cents per share, compared to a net loss of $177.3 million, or $1.34 per diluted share, a year ago.

This beat Capital IQ Consensus Estimate by 19 cents.

The net loss for 2013 came in at $197 million, or $1.18 per share, a significant improvement from the net loss of $451.5 million, or $3.41 per share, for the full year 2012.

“Radian’s performance in 2013 reflects the solid progress we have made against our top priorities. I am pleased to report that we achieved operating profitability in our mortgage insurance business, and we expect that the size and credit quality of our MI portfolio will fuel improved levels of operating profitability this year,” said CEO S.A. Ibrahim.

New mortgage insurance written (NIW) slightly fell, falling to $9.3 billion during the quarter, compared to $13.7 billion in the third quarter of 2013 and $11.7 billion in the fourth quarter of 2012.

As a whole, NIW for of all 2013 was $47.3 billion, up from $37.1 in 2012, with Radian writing an additional $2.4 billion in NIW in January 2014, compared to $4 billion in January 2013.

The mortgage insurance provision for losses dropped to $144.3 million in the fourth quarter of 2013, from $152 million in the third quarter of 2013, and is also down from $306.9 million a year ago.

In addition, the total number of primary delinquent loans fell by 7% in the fourth quarter from the third quarter of 2013, and by 35% from the fourth quarter of 2012.

“We were successful in writing 27% more new MI business in 2013 than 2012, earning the position as the largest MI company with $161 billion in insurance in force,” Ibrahim said.

“We also made consistent strides in managing our legacy mortgage insurance and financial guaranty exposure, including a 35% decline in the total number of MI delinquencies and a 29% reduction in our total financial guaranty portfolio from 2012,” Ibrahim explained. “As we look ahead to 2014, we are encouraged by the improved housing and economic environment that promise new opportunities for Radian.” 

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