Radian suffers 'difficult' fourth quarter
January 22, 2004
Net income plummets to $55.5 million on shutdown of RadianExpress.com
Radian Group Inc. reported net income of $55.5 million for the fourth quarter of 2003, compared to $107.8 million in the fourth quarter of 2002.
Net income per share was $0.58 in the fourth quarter of 2003, compared to $1.14 in the fourth quarter of 2002.
For the year, net income and net income per share were $385.9 million and $4.08 respectively, compared to $427.2 million and $4.41 in 2002.
As previously announced, Radian's fourth quarter results reflect a $0.09 per share charge for the cessation of operations of its RadianExpress.com Inc. subsidiary and a $0.66 per share charge for an increase in loss reserves in anticipation of claims from a manufactured housing transaction originated and serviced by Conseco Finance Corp. The quarter also contained net after tax gains of $0.13 per share.
Premiums written in the fourth quarter were $298.7 million, up 16 percent compared to $258.1 million in the fourth quarter of 2002. Mortgage insurance accounted for 64 percent of the premiums written in the quarter, while financial guaranty business represented 36 percent. Premiums earned in the fourth quarter were $266.0 million, an increase of 22 percent compared to $217.4 million in 2002. Net investment income for the quarter was $46.1 million, the same as it was a year ago. For the year, premiums written increased 16 percent to $1.1 billion, premiums earned increased 19 percent to $1.0 billion and net investment income grew 4 percent from the prior year, to $186.2 million.
"With the closing of our RadianExpress subsidiary and the extraordinary Conseco loss provision, the fourth quarter was a difficult one for Radian," stated Chairman and Chief Executive Officer Frank P. Filipps. "Nonetheless 2003 was not without its accomplishments. Our mortgage insurance business continued to generate attractive returns despite the challenging environment and our financial guaranty business had very strong growth in both the direct public finance and direct structured finance products."
Financial guaranty net premiums written for the quarter were $107.2 million, compared to $78.3 million a year ago, which was led by significant new writings in direct public finance insurance and direct structured finance areas. Net premiums earned were $63.9 million, compared to $56 million last year. Insured net debt service outstanding at Dec. 31, 2003, was $117.9 billion, compared to $104.8 billion a year ago.
New primary mortgage insurance written in the quarter was $12.7 billion, consisting of $1.4 billion of structured and $11.3 billion of flow mortgage insurance. Primary mortgage insurance-in-force was $119.9 billion at Dec. 31, 2003, compared to $110.3 billion a year ago. The delinquency rate on primary loans was 4.72 percent, compared to 4.06 percent a year ago.
Net income per share from Radian's financial services businesses for the fourth quarter, which included a $0.09 per share charge for RadianExpress, was $0.13 per share compared to $0.10 per share for the same period last year.
Philadelphia, Pa.-based Radian Group Inc. (NYSE: RDN) is a credit enhancement provider to the global financial and capital markets, with subsidiaries providing products and services through financial guaranty, mortgage insurance and mortgage services.
Copyright: Inman News Features