Radian Group Inc, the biggest private U.S. mortgage insurer, posted a surprise quarterly adjusted profit, helped by a rise in premium income, and said new business it wrote after the housing bust accounted for more than half of its portfolio.
A recovery in the U.S. housing sector has helped mortgage insurers attract new and profitable business, giving them some respite from the string of losses they have been posting since the housing crisis in 2008.
“This improved composition has helped our mortgage insurance business achieve profitability, absent the impact of fair value gains and losses, for the quarter and six months,” Chief Executive S.A. Ibrahim said in a statement.
Rival MGIC Investment Corp on Tuesday posted its first quarterly profit in three years and reported a drop in delinquencies.
Also Read: Mortgage Insurer MGIC Back in Profit as Housing Recovers
Radian said its new mortgage insurance business grew 60 percent in the quarter while its inventory of primary delinquent loans fell 21 percent.
Radian's loss narrowed to $33.2 million, or 19 cents per share, in the second quarter from $119.3 million, or 90 cents per share, a year earlier.
The mortgage insurer's results were hurt by net losses on investments of $130.3 million.
On an adjusted basis, the company earned 5 cents per share. Analysts on average had expected a loss of 5 cents per share, according to Thomson Reuters I/B/E/S.
The mortgage insurer has just posted one net profit in seven quarters, highlighting the scale of losses the industry has booked following the housing market crash.
Net premiums earned rose 14 percent to $213.1 million.
Radian shares closed at $13.83 on Tuesday on the New York Stock Exchange. They have gained 19 percent this month, outperforming the S&P 500 Index, which is up more than 5 percent.
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