August 2nd PR Interesting if they get their delinquent loans under control furthur they will become a cash king. I have e-mailed IR to get the historical deliquency numbers and will post when and if I receive them. * Q2 EPS $1.03 vs loss/shr $4.31, last yr
* Books gains of $193.8 mln from investments in Q2
* Q2 primary delinquent loans fall by 5 percent sequentially
* Shares jump 27 pct (Adds conference call details, analyst comment, update stock movement)
BANGALORE, Aug 2 (Reuters) - Mortgage insurer Radian Group Inc swung to a second-quarter profit from a year-ago loss and said it expects claims to trail down after it reached its peak this quarter, sending its shares up 27 percent.
The no.2 U.S. mortgage insurer also saw a decline in mortgage insurance delinquencies for the sixth straight quarter.
For the second quarter, mortgage insurance claims paid were $512.6 million, compared with $337.3 million a year ago.
"Though the new business they have been writing is sound, they are still seeing the effects of some of their legacy loans from the crisis. It'll take them a while to turn around the corner," Standard & Poor's analyst Dick Smith said.
In the face of a housing market slump and high unemployment rates, Radian posted better capital ratios than its peers.
Mortgage insurers like MGIC Investment , Genworth and Old Republic International have been struggling to meet capital adequacy benchmarks and have time and again sought waivers to continue writing business in many states in the United States.
PMI Group Inc has had to get a waiver to continue writing insurance in a majority of the 16 states where it failed to meet the minimum risk-to-capital ratios.
However, Radian's risk-to-capital ratio -- a measure of its statutory capital relative to its insured risk in force -- came in comfortably at 19.8:1, compared with the benchmark of 25:1.
Genworth's U.S. MI segment risk-to-capital ratio as of June 30 was an estimated 25:1.
"Our risk-to-capital ratio and financial flexibility gives us a competitive edge," Radian Chief Executive S A Ibrahim said in a statement.
NEW MORTGAGES DIP
Sequentially, the company wrote only $2.3 billion in new mortgages, compared with $2.6 billion in the first quarter; which it attributed to a "record low origination market."
S&P analyst Dick Smith said, "mortgage origination is a problem. I don't think there's much of that type of business out there."
The company, which turned to profit in the first quarter after a string of losses, posted a second-quarter profit of $137.1 million or $1.03 a share, compared with a loss of $475.1 million or $4.31 a share, a year ago.
Radian booked gains of $193.8 million from its investments versus losses of $587.8 million in the year-ago.
The company's primary delinquent loans fell by 5 percent from the first quarter.
Shares of the Philadelphia-based company were trading up 82 cents at $3.90 in morning trade Tuesday, making them the top percentage gainer on the New York Stock Exchange. (Reporting by Rachel Chitra in Bangalore; Editing by Viraj Nair and Gopakumar Warrier)
