Lending

Radian 1Q earnings boosted by stronger mortgage credit trends

Beats earnings estimates

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Radian Group (RDN) reported a first-quarter net income of $91.7 million, or $0.39 per diluted share, which included net gains on investments and other financial instruments of $16.8 million. This is down compared last year’s net income from continuing operations of $146.0 million, or $0.68 per diluted share, which included net gains on investments and other financial instruments of $43.0 million.

This beat analyst earnings per share estimates by $0.04 and revenue by $67.91 million.

“We delivered strong results for Radian in the first quarter, driven primarily by outstanding credit trends in our mortgage insurance business,” said Radian’s CEO S.A. Ibrahim.

“The last twelve months have been a turning point for Radian, as we’ve eliminated a significant portion of our legacy risk and therefore simplified our company with a focus on our core strengths. Today, we are better positioned to drive long-term value, both from our large and growing mortgage insurance portfolio and by broadening our future sources of revenue through our new mortgage and real estate services businesses,” he continued.

New mortgage insurance written was $9.4 billion for the quarter, down from $10 billion in the fourth quarter of 2014, nut up from $6.8 billion in the prior-year quarter.

In addition, total primary mortgage insurance in force was $172.1 billion, compared to $171.8 billion as of Dec. 31, 2014, and $162.4 billion as of March 31, 2014..

The mortgage insurance provision for losses was $45.9 million in the first quarter of 2015, compared to $83.6 million in the fourth quarter of 2014, and $49.6 million in the prior-year period.

The total number of primary delinquent loans decreased 11% in the first quarter from the fourth quarter of 2014, and 24% from the first quarter of 2014. The primary mortgage insurance delinquency rate decreased to 4.6% in the first quarter of 2015, compared to 5.2% in the fourth quarter of 2014, and 6.3% in the first quarter of 2014.

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