Radian Group Inc. said Thursday that its liquidity and claims-paying ability "remain strong" a day after the New York Stock Exchange halted trading on its stock.
Offering some preliminary second-quarter numbers as indications of its strength, Radian also said it believes the recent decline in its stock price is "disproportionate to the fundamentals of [its] business." Up $0.25 Thursday, shares of the stock closed at $1.02 compared to a 52-week high of $55.96.
"Radian is insuring mostly prime loans which we believe will generate profitability and long-term financial strength," the company said in a statement. "Our liquidity and claims-paying resources remain strong and we are focused on meeting the present challenges in the housing market and overall economy by working closely with the government-sponsored enterprises and managing our existing risk-in-force exposure."
For the second quarter, Radian expects to pay first- and second-lien claims of less than $230 million, down $10 million from its previous estimate. It has also grown its market share of mortgage insurance to 16% from 14% at the beginning of the year. In addition, Radian has tightened guidelines and increased prices in an effort to improve its risk-adjusted returns.
Radian also said there has been "no material credit deterioration" in its financial guaranty portfolio.
The NYSE stopped trading on both Radian and Ambac Financial Inc. stock under its "sub-penny" rule Wednesday, when shares of both companies fell below $1.05. The NYSE will not resume trading on the insurers' shares until their stocks trade above $1.10 for a full day on an automated trading platform.