Mortgage Insurer PMI Narrows Q210 Losses to $150.6m on Fewer Defaults
The PMI Group (PMI) posted a $150.6m Q210 loss, narrowed from $157m in the previous quarter and $222.6m in the year-ago quarter. The company attributed the decline to lower losses and loss adjustment expenses, as well as a capital boost to its primary mortgage insurance unit. US mortgage insurance operations posted a $115.6m net Q210 loss, narrowed from $175.8m in the year-ago period. Reserves for losses on primary insurance fell by $28.1m since the previous quarter to $2.9bn, due to fewer mortgages in default. Primary loans in default declined to 138,431 as of quarter-end, from 147,248 in the previous quarter but up from 126,431 in the year-ago quarter. New notices of default totaled 28,597 in the quarter, down from 34,268 in the previous quarter and 38,007 in the year-ago quarter. PMI Mortgage Insurance Co. (MIC) -- PMI's primary mortgage insurance subsidiary -- benefited from a capital raise in April 2010, ending Q210 with excess minimum policyholders' position of about $415.5m and a risk-to-capital ratio of about 15.8 to 1. PMI in April priced its public offering of nearly 77.77m shares of common stock at $6.15 per share. It also agreed to sell $261m — by principal amount — of its 4.5% senior notes due 2020, raising an estimated $706m of net proceeds. Write to Diana Golobay. Disclosure: the author holds no relevant investments.