Radian Group (RDN) reported net income for the quarter ended Sept. 30, 2014, of $153.6 million, or $0.67 per diluted share.

This compares to a net loss for the quarter ended Sept. 30, 2013, of $12.7 million, or $0.07 per diluted share.

In addition, this beat earnings per share expectations by $0.34 and revenue by $11.38 million.

Results for both periods included modest levels of combined net gains from the change in fair value of derivatives and other financial instruments and minimal net losses on investments. Book value per share at Sept. 30, 2014, was $9.08.

Adjusted pretax operating income for the quarter ended Sept. 30, 2014, was $147.2 million, consisting of $132.6 million of income from the Mortgage Insurance segment, $9.3 million of income from the Financial Guaranty segment and $5.3 million of income from the Mortgage and Real Estate Services segment.

This compares to an adjusted pretax operating loss for the quarter ended September 30, 2013, of $12.4 million, consisting of a loss of $3.2 million from the Mortgage Insurance segment and a loss of $9.2 million from the Financial Guaranty segment. The Mortgage and Real Estate Services segment comprises the results of operations for Clayton Holdings, which was acquired by Radian on June 30, 2014.

“Radian delivered excellent results in the third quarter, increasing profits with net income of $154 million,” said CEO S.A. Ibrahim. “Our results were driven by the strong credit performance of our businesses combined with the positive top-line impact of our growing mortgage insurance book. Our results also included solid performance from Clayton, which begins to illustrate the benefit of our diversification strategy.”

Third quarter highlights include:

  • New mortgage insurance written was $11.2 billion during the quarter, compared to $9.3 billion in the second quarter of 2014, and $13.7 billion in the prior-year quarter.
  • Of the $11.2 billion in new business written in the third quarter of 2014, 72 percent was written with monthly premiums and 28 percent with single premiums. This compares to a mix of 71 percent monthly premiums and 29 percent single premiums in the third quarter of 2013.
  • Total primary mortgage insurance in force was $169.2 billion as of September 30, 2014, compared to $165.0 billion as of June 30, 2014, and $158.6 billion as of September 30, 2013.
  • Mortgage insurance loss reserves were $1.6 billion as of September 30, 2014, compared to $1.7 billion as of June 30, 2014, and $2.3 billion as of September 30, 2013.
  • The total number of primary delinquent loans decreased by 4 percent in the third quarter from the second quarter of 2014, and by 28 percent from the third quarter of 2013. The primary mortgage insurance delinquency rate decreased to 5.4 percent in the third quarter of 2014, compared to 5.8 percent in the second quarter of 2014, and 7.8 percent in the third quarter of 2013.
  • Total mortgage insurance claims paid were $173.9 million in the third quarter of 2014, compared to $240.3 million in the second quarter of 2014, and $519.3 million in the third quarter of 2013 (consisting of $254.6 million related to the August 2013 Freddie Mac Agreement and $264.7 million of other claims paid). Claims paid in the third quarter of 2014 exclude approximately $22 million of claims processed in the quarter in accordance with the terms of the Freddie Mac Agreement, for which no cash payment was necessary. The company continues to expect mortgage insurance net claims paid in the $900 million to $1.0 billion range for the full-year 2014. Claims paid for the full-year 2015 are expected to decrease materially from 2014 levels.