United Guaranty Corp., the mortgage insurance subsidiary of American International Group Inc., reported first-quarter earnings of $73 million — its first quarterly profit in three years.

United Guaranty cited improving levels of delinquencies and defaults. In the first quarter of 2009 it posted a loss of $483 million.

AIG's residential lending division, American General Finance, posted a first-quarter operating loss of $132 million, compared with a $203 million loss a year earlier.

AIG attributed the improvement to lower loan-loss provisions resulting from improved delinquency rates, lower interest expense because of lower average debt balances, and lower operating expenses.

AIG, which the government took over near the height of the financial crisis in 2008, reported the results Friday.

This story has been republished with permission from American Banker.

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