Radian Group, Philadelphia lost $1.1 billion for the fourth quarter and $1.9 billion for 2010 as the company took a non-cash charge of $841.5 million to establish a valuation allowance against substantially the company's entire net deferred tax assets.
The results also include a pre-tax loss from the change in fair value of derivatives of $185.9 million for the quarter and $558.7 million for the year.
For the fourth quarter and full year 2009 Radian lost $92 million and $148 million respectively.
If the company returns to sustained profitability, a portion, if not all, of the valuation allowance will be reversed.
Radian's MI unit had $3.8 billion of new insurance written for the quarter, up from $3.2 billion for the third quarter and $2.4 billion for the fourth quarter 2009. For the full year, the company had NIW of $12 billion, down from $17 billion in 2009. Company executives said it was able to maintain its 21% market share during the quarter.
Radian Guaranty's risk-to-capital ratio improved from 17.2:1 at the end of the third quarter to 16.8:1 at the end of the fourth.
The company also was able to shrink its inventory of delinquent loans for the fourth consecutive quarter. It started the year with 151,998 delinquent loans and ended it with 125,470.
However, the share of delinquent loans that have missed 12 or more payments continues to grow, from 44.7% at the end of the second quarter to 46.8% at the end of the third and 48.2% at the end of the fourth.
The share of loans in inventory with three or fewer missed payments remained at 20% between the third and fourth quarters while the loans in the four to 11 missed payment bucket fell from 33.3% to 31.8%.
Radian Group added that on Tuesday, its Radian Asset Assurance subsidiary agreed to purchase Municipal and Infrastructure Assurance Corp. (MIAC), a New York-based financial guaranty insurance company shell that has not written any business, but has obtained licenses in 36 states and the District of Columbia. The expected purchase price is $82 million.
Radian Asset is considering using MIAC to pursue strategic alternatives in the public finance market, including possibly partnering with third-party investors to write new public finance insurance and/or reinsuring all or a portion of Radian Asset’s existing public finance business.
In late morning trading, Radian's stock price was off 2.6% or $0.19 from its previous close to $7.16 per share. At one point, it was down $0.77 per share.