Radian Group, Inc. (NYSE: RDN) reported Q2 EPS of $0.78, which may not compare with the analyst estimate of $0.28. Revenue for the quarter came in at $222.37 million versus the consensus estimate of $210.7 million.

EPS includes net gains on investments of $47.2 million and combined gains from the change in fair value of derivatives and other financial instruments of $55.6 million.

Capital and Liquidity Update

Radian Guaranty’s risk-to-capital ratio was 18.7:1 as of June 30, 2014. Radian Group maintains approximately $770 million of currently available liquidity.

• The improvement in the risk-to-capital ratio from March 31, 2014, was primarily driven by the company’s net income, partially offset by an increase to net risk in force.
• Current holding company liquidity was approximately $770 million after an investment of $20 million in July 2014, to capitalize a newly formed, wholly owned insurance subsidiary of Radian Group. The strategic objective of this investment is to offer mortgage insurance-related products, which are currently in a developmental stage.
• As of June 30, 2014, Radian Guaranty’s statutory capital was $1.5 billion compared to $1.4 billion at March 31, 2014, and $1.2 billion a year ago.
• In 2012, Radian Guaranty entered into two quota share reinsurance agreements with the same third-party reinsurance provider, in order to proactively manage its risk-to-capital position. On April 1, 2013, Radian reduced the amount of new business ceded under these reinsurance agreements on a prospective basis from 20 percent to 5 percent. As of June 30, 2014, a total of $2.7 billion of risk in force had been ceded under those agreements. Radian has the option to recapture a portion of the ceded risk outstanding on each of December 31, 2014 and December 31, 2015.

For earnings history and earnings-related data on Radian Group, Inc. (RDN) click here.