Radian (RDN) Q4 Earnings Top Estimates, Premiums Rise Y/Y
Zacks Investment Research | Feb 10, 2019 09:38PM ET
Radian Group Inc.’s (NYSE:RDN) fourth-quarter 2018 operating income of 70 cents per share beat the Zacks Consensus Estimate by 6.1%. The bottom line also improved 37% year over year. The company benefited from solid performance of its Mortgage Insurance segment along with higher premiums. It continued to grow its insurance in force portfolio, a major catalyst for future earnings.
The fourth quarter proved to be excellent for the company as it witnessed growth in net income, mortgage insurance in force, net operating return on equity as well as book value per share.
Behind the Headlines
Operating revenues grew 8.9% year over year to $305 million, courtesy of higher net premiums, investment income as well as other income. Total revenues (including services revenues and net loss on investments and other financial instruments) were $331.5 million, up nearly 4.3% year over year.
Total net premiums earned were $261.7 million, up 6.7% year over year.
New mortgage insurance written declined 11% year over year to $12.7 billion (on a flow basis) in the quarter under review. As of Dec 31, 2018, total primary mortgage insurance in force was $221.4 billion, up 10% from $200.7 billion as of Dec 31, 2017.
The company expects to write new MI business of about $50 billion in 2019.
Persistency — percentage of mortgage insurance in force that remains in the company’s books after a 12-month period — was 85.5% as of Dec 31, 2018, up 610 basis points year over year.
Primary delinquent loans were 21,093 as of Dec 31, 2018, down 24% year over year.
Total expenses increased 1.2% year over year to $155 million, primarily on the back of higher policy acquisition costs, cost of services and other operating expenses, interest expense and amortization and impairment of other acquired intangible assets.
Radian Group Inc. Price, Consensus and EPS Surprise
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