Radian plunges 10% after Q1 disappoints; drags down other MI players

|By:, SA News Editor

Q1 adjusted pretax income of $125.3M or $0.37 per share vs. $130.2M and $0.37 a year ago. Expectations had been for $0.43.

Net premiums earned of $221.8M flat from a year ago; new mortgage insurance written of $10B, up 25%.

MI in force of $185.9B up 6%; persistency of 77.1% down from 79.4% a year ago.

Provision for losses of $47.2M vs. $43.3M a year ago; loss ratio of 21.3% up from 19.6%. Total primary delinquent loans down 16.4% Y/Y.

At issue for the miss appears to be operating expenses - up to $68.4M from $57.2M a year ago. $3.6M of this has to do with the retirement of the CEO, and another $3.7M of this was an increase in variable and incentive-based compensation vs. a decrease a year ago.

Book value per share of $13.58 up 9% Y/Y.

Radian (RDN -10.2%)

Other players: MGIC Investment (MTG -3.3%), Essent Group (ESNT -3.1%), NMI Holdings (NMIH -3.6%), and Old Republic (ORI +2.5%), which topped estimates.

Previously: Radian Group misses by $0.06, misses on net premiums earned (April 27)