MGIC Lifts Earnings as New Insurance Written Climbs
New insurance written reached a five-quarter high of $17.8 billion.
MGIC Investment Corporation (MTG) lifted second-quarter earnings from the prior quarter as lower insurance losses offset weaker revenue. The mortgage insurer earned $182.1 million, up from $165.3 million sequentially but down from $192.5 million a year earlier.
Diluted earnings rose to $0.86 a share from $0.76 in the first quarter and $0.81 a year earlier. Adjusted earnings followed the same trajectory, increasing sequentially to $0.87 a share while exceeding the year-earlier $0.82 despite a decline in adjusted net operating income.
Revenue fell 2.9% from a year earlier to $295.4 million as net premiums earned and investment income both declined. Net premiums earned edged up from the first quarter to $238.1 million, interrupting four consecutive quarterly declines, though the measure remained below $244.3 million a year earlier.
The company wrote more new business and expanded its insured portfolio despite lower customer retention. Primary insurance in force rose to $304.8 billion, helped by larger average loan balances, while annual persistency declined to 83.3% from 84.0% sequentially and 84.7% a year earlier.
Credit costs eased sharply from the first quarter. Net losses incurred fell to $11.0 million from $33.2 million, cutting the loss ratio to 4.6% from 14.1%. The year-earlier quarter included a $2.8 million benefit, while paid claims and the average claim payment increased from both comparison periods.
Delinquencies also improved sequentially but remained elevated from a year earlier. Primary delinquency inventory declined to 26,152 loans and the delinquency rate fell to 2.37%, compared with 24,444 loans and a 2.21% rate in the prior-year quarter.
MGIC returned additional capital to shareholders, repurchasing 6.6 million shares for $176.6 million during the quarter and another 1.5 million shares for $42.4 million through July 24. The company also raised its quarterly dividend to $0.17 a share and added as much as $168 million of excess-of-loss reinsurance coverage for eligible 2027 business.