Despite rising quarterly business, a growing book of business and falling delinquency, a one-time charge pushed earnings at Radian Group Inc. into the red.
During the three months that concluded on June 30, 2017, pre-tax income was a $35 million loss, according to Radian’s second-quarter earnings report.
Earnings at the Philadelphia-based mortgage insurance company swung from a $115 million profit in the prior three-month period and a $157 million profit a year prior.
The severe deterioration in earnings was the result of a $184 million charge for goodwill impairment in its services segment. The charge followed a strategic review of the segment’s business lines that were performing below expectations.
“The company has determined to restructure this business and currently expects to incur charges relating to the changes necessary to reposition this business for sustained profitability,” the report stated.
There was $14.342 billion in primary insurance written in the first-three months of this year. Business strengthened from $10.055 billion in the first quarter and $12.921 billion in the second-quarter 2016.
For the entire first-half 2017, insurance written amounted to $24.397 billion.
Refinance share during the most-recent three-month period was 9 percent,
sinking from 16 percent the previous quarter and 18 percent the same-three months last year..
Second-quarter 2017 activity left primary insurance in force at 928,879 loans for $191.637 billion as of mid-2017.
Radian’s book of business was bolstered from 909,716 loans for $185.859 billion three months earlier and 885,406 loans for $177.672 billion one year earlier.
At the end of June 2017, Radian’s default rate was 2.56 percent, falling from 2.84 percent as of March 31, 2017, and plunging from 3.37 percent as of mid-2016.
