Radian swings to 1Q profit on derivatives
Mortgage insurer Radian Group Inc. (RDN) swung to a first-quarter profit of $103 million, or 77 cents per share, as the firm benefited from gains tied to a change in fair-value derivatives and other financial instruments. For the year-earlier first quarter, Radian reported a loss of $310 million, or $3.77 a share. The rise in profit comes as the mortgage insurer highlights fewer mortgage insurance delinquencies in its quarterly report. "We are pleased with the continued decline in mortgage insurance delinquencies through April and our ability to maintain a strong share of today’s high-quality mortgage insurance business," said Chief Executive Officer S.A. Ibrahim. "However, our first-quarter results clearly reflect the continued impact of a stagnant housing market and the uncertain outcome of our late-stage delinquent loans." First-quarter revenue rose to $603 million from $127 million last year. During the quarter, Radian recorded lower provisions for mortgage insurance losses, setting aside $414 million, down from $529.1 million. Meanwhile, mortgage insurance loss reserves stayed flat with the fourth quarter at $3.5 billion. So far this year, Radian has paid $365.2 million in insurance claims, up from $357.3 million in the first quarter of 2010. The company expects to pay $1.7 billion in insurance claims this year. Write to Kerri Panchuk.