MGIC Investment Corporation Reports First Quarter 2022 Results

First Quarter Summary

• New insurance written was $19.6 billion, compared to $27.1 billion in the fourth quarter of 2021 and $30.8 billion in the first quarter of 2021, primarily reflecting a decrease in the refinance market.
• Persistency, or the percentage of insurance remaining in force from one year prior, was 66.9% at March 31, 2022, compared with 62.6% at December 31, 2021, and 56.2% at March 31, 2021.
• Insurance in force of $277.3 billion at March 31, 2022 increased by 1.1% during the quarter and 10.2% compared to March 31, 2021.
• Primary delinquency inventory of 30,462 loans at March 31, 2022 decreased from 33,290 loans at December 31, 2021, and 52,775 loans at March 31, 2021.
• The percentage of loans insured with primary insurance that were delinquent at March 31, 2022 was 2.61%, compared to 2.84% at December 31, 2021, and 4.65% at March 31, 2021.
• The loss ratio for the first quarter of 2022 was (7.6)%, compared to (9.9)% for the fourth quarter of 2021 and 15.5% for the first quarter of 2021.
• The underwriting expense ratio associated with our insurance operations for the first quarter of 2022 was 23.0%, compared to 18.2% for the fourth quarter of 2021 and 19.8% for the first quarter of 2021.
• Net premium yield was 36.9 basis points in the first quarter of 2022, compared to 37.3 basis points for the fourth quarter of 2021 and 40.9 basis points for the first quarter of 2021.
• Book value per common share outstanding as of March 31, 2022 decreased to $14.75, or 3%, from $15.18 as of December 31, 2021 and increased by 6% from $13.95 as of March 31, 2021. (March 31, 2022 book value per common share outstanding includes $(0.39) in net unrealized gains (losses) on securities, compared to $0.47 at December 31, 2021 and $0.53 at March 31, 2021).
• The decrease in the fair value of our investment portfolio is primarily due to the increase in prevailing market rates. The decrease is reflected in Accumulated Other Comprehensive Income and resulted in a decrease in book value per share.
• We paid a dividend of $0.08 per common share to shareholders during the first quarter of 2022.
• We repurchased 8.5 million shares of common stock at an average cost of $14.99 per share.
• We reduced our debt outstanding by $212.0 million in the first quarter of 2022.
• We repurchased $57.0 million in aggregate principal amount of our 9% Convertible Junior Debentures due 2063, reducing potentially dilutive shares by 4.4 million.
• We prepaid MGIC's $155.0 million Federal Home Loan Bank Advance.
• We executed a quota share transaction with a group of unaffiliated reinsurers covering most of our new insurance written in 2022 (with an additional 15% quota share) and 2023 (with a 15% quota share).

_______________

Second Quarter 2022 Activities

• In April, we repurchased an additional 3.0 million shares of our common stock outstanding totaling $39.7 million under the authorization that expires at the end of 2023.
• In April, we repurchased $10.0 million in aggregate principal amount of our 9% Convertible Junior Debentures due 2063, reducing potentially dilutive shares by 0.8 million.
• We declared a dividend of $0.08 per common share to shareholders payable on May 26, 2022, to shareholders of record at the close of business on May 12, 2022.
• We entered into a $473.6 million excess of loss reinsurance agreement (executed through an insurance linked notes transaction) that covers the vast majority of policies issued May 29, 2021 through December 31, 2021
• In April, MGIC obtained approval to pay a $400 million dividend to our holding company.

Revenues

Total revenues for the first quarter of 2022 were $294.6 million, compared to $298.0 million in the first quarter last year. The decrease primarily reflects a change in net realized investment gains and losses related to the investment portfolio.  Premiums earned in the first quarter of 2021 were $255.2 million compared with $255.0 million for the same period last year. Net premiums written for the quarter were $242.7 million, compared with $241.5 million for the same period last year. The increase in net premiums written was due to an increase in insurance in force and a decrease in ceded premiums from our quota share reinsurance transactions, partially offset by lower new insurance written  and a decrease in our premium yield compared with the same period last year.

Losses and expenses

Losses incurred   

Net losses incurred in the first quarter of 2022 were $(19.3) million, compared to $39.6 million in the same period last year. While new delinquency notices added approximately $36.3 million to losses incurred in the first quarter of 2022, our re-estimation of loss reserves resulted in favorable development of approximately $55.7 million primarily related to a decrease in the estimated claim rate on delinquencies received in the second and third quarters of 2020 ("Peak COVID").  In the first quarter of 2021, losses incurred were primarily related to reserves established on new notices with insignificant development on previously received delinquencies.

Underwriting and other expenses

Net underwriting and other expenses increased to $57.5 million in the first quarter of 2022 from $50.7 million in the same period last year primarily due to increases in expenses related to our investments in technology and data and analytics infrastructure.

Interest expense

Interest expense decreased to $14.9 million in the first quarter of 2022 from $18.0 million in the same period last year. The decrease is due to the repurchase of a portion of our 9% Convertible Junior Debentures.

Loss on debt extinguishment

The first quarter 2022 loss on debt extinguishment of $22.1 million primarily reflects the repurchase of $57.0 million in aggregate principal amount of our 9% Convertible Junior Debentures in excess of their carrying value.

Provision for income taxes

The effective income tax rate was 20.2% in the first quarters of 2022 and 20.9% in the first quarter of 2021.

Capital

• Total consolidated shareholders' equity was $4.6 billion as of March 31, 2022 and $4.7 billion as of March 31, 2021.
• MGIC's PMIERs Available Assets totaled $6.0 billion, or $2.4 billion above its Minimum Required Assets as of March 31, 2022, compared to PMIERs Available Assets of $5.5 billion, or $2.3 billion above its Minimum Required Assets as of March 31, 2021.

Other Balance Sheet and Liquidity Metrics

• Total consolidated assets were $6.8 billion as of March 31, 2022, compared to $7.3 billion as of December 31, 2021 and $7.4 billion as of March 31, 2021.
• The fair value of our consolidated investment portfolio, cash and cash equivalents was $6.4 billion as of March 31, 2022, compared to $6.9 billion as of December 31, 2021 and $7.0 billion as of March 31, 2021.
• The fair value of investments, cash and cash equivalents at the holding company was $409 million as of March 31, 2022, compared to $663 million as of December 31, 2021 and $802 million as of March 31, 2021.
• Consolidated debt was $935 million as of March 31, 2022, compared to $1.1 billion as of December 31, 2021and $1.2 billion as of March 31, 2021.

Conference Call and Webcast Details

MGIC Investment Corporation will hold a conference call May 5, 2022, at 10 a.m. ET to allow securities analysts and shareholders the opportunity to hear management discuss the company's quarterly results. The conference call number is 1-866-834-4126. The call is being webcast and can be accessed at the company's website at http://mtg.mgic.com/. A replay of the webcast will be available on the company's website through June 5, 2022 under "Newsroom."

About MGIC

Mortgage Guaranty Insurance Corporation (MGIC) (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, serves lenders throughout the United States, Puerto Rico, and other locations helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality through the use of private mortgage insurance. At March 31, 2022, MGIC had $277.3 billion of primary insurance in force covering more than 1.1 million mortgages.

This press release, which includes certain additional statistical and other information, including non-GAAP financial information and a supplement that contains various portfolio statistics, are all available on the Company's website at https://mtg.mgic.com/ under "Newsroom."

        From time to time MGIC Investment Corporation releases important information via postings on its corporate website, and via postings on MGIC's website for information related to underwriting and pricing, and intends to continue to do so in the future. Such postings include corrections of previous disclosures, and may be made without any other disclosure. Investors and other interested parties are encouraged to enroll to receive automatic email alerts and Really Simple Syndication (RSS) feeds regarding new postings. Enrollment information for MGIC Investment Corporation alerts can be found at https://mtg.mgic.com/shareholder-services/email-alerts. For information about our underwriting and rates, see https://www.mgic.com/underwriting.

Safe Harbor Statement

Forward Looking Statements and Risk Factors:

Our actual results could be affected by the risk factors below. These risk factors should be reviewed in connection with this press release and our periodic reports to the Securities and Exchange Commission ("SEC"). These risk factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact, including matters that inherently refer to future events. Among others, statements that include words such as "believe," "anticipate," "will" or "expect," or words of similar import, are forward looking statements. We are not undertaking any obligation to update any forward looking statements or other statements we may make even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. No investor should rely on the fact that such statements are current at any time other than the time at which this press release was delivered for dissemination to the public.

While we communicate with security analysts from time to time, it is against our policy to disclose to them any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report, and such reports are not our responsibility.

Use of Non-GAAP financial measures

We believe that use of the Non-GAAP measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors. These measures are not recognized in accordance with accounting principles generally accepted in the United States of America (GAAP) and should not be viewed as alternatives to GAAP measures of performance.

Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain and losses on debt extinguishment, net impairment losses recognized in earnings and infrequent or unusual non-operating items where applicable.

Adjusted net operating income (loss) is defined as GAAP net income (loss) excluding the after-tax effects of net realized investment gains (losses), gain and losses on debt extinguishment, net impairment losses recognized in earnings, and infrequent or unusual non-operating items where applicable. The amounts of adjustments to components of pre-tax operating income (loss) are tax effected using a federal statutory tax rate of 21%.

Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) after making adjustments for interest expense on convertible debt, whenever the impact is dilutive, by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units and from convertible debt when dilutive under the "if-converted" method.

Although adjusted pre-tax operating income (loss) and adjusted net operating income (loss) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items represent items that are: (1) not viewed as part of the operating performance of our primary activities; or (2) impacted by both discretionary and other economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, along with the reasons for their treatment, are described below. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these adjustments. Other companies may calculate these measures differently. Therefore, their measures may not be comparable to those used by us.

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
		Three Months Ended March 31
(In thousands, except per share data)		2022		2021
Net premiums written		$        242,665		$         241,499
Revenues
Net premiums earned		$        255,240		$         255,045
Net investment income		38,262		37,893
Net realized investment (losses) gains		(1,505)		2,215
Other revenue		2,619		2,804
Total revenues		294,616		297,957
Losses and expenses
Losses incurred, net		(19,314)		39,636
Underwriting and other expenses, net		57,472		50,719
Loss on debt extinguishment		22,107		—
Interest expense		14,912		17,985
Total losses and expenses		75,177		108,340
Income before tax		219,439		189,617
Provision for income taxes		44,426		39,596 Werbung Mehr Nachrichten zur Mgic Investment Aktie kostenlos abonnieren E-Mail-Adresse Bitte überprüfe deine die E-Mail-Adresse. Benachrichtigungen von ARIVA.DE (Mit der Bestellung akzeptierst du die Datenschutzhinweise) -1 Vielen Dank, dass du dich für unseren Newsletter angemeldet hast. Du erhältst in Kürze eine E-Mail mit einem Aktivierungslink. Hinweis: ARIVA.DE veröffentlicht in dieser Rubrik Analysen, Kolumnen und Nachrichten aus verschiedenen Quellen. Die ARIVA.DE AG ist nicht verantwortlich für Inhalte, die erkennbar von Dritten in den „News“-Bereich dieser Webseite eingestellt worden sind, und macht sich diese nicht zu Eigen. Diese Inhalte sind insbesondere durch eine entsprechende „von“-Kennzeichnung unterhalb der Artikelüberschrift und/oder durch den Link „Um den vollständigen Artikel zu lesen, klicken Sie bitte hier.“ erkennbar; verantwortlich für diese Inhalte ist allein der genannte Dritte. Andere Nutzer interessierten sich auch für folgende News 11:24 - ARIVA.DE Redaktion Aktienmarkt: Kurs der Infineon-Aktie im Plus (31,92 €) 11:22 - ARIVA.DE Redaktion Munich Re-Aktie verliert 0,95 Prozent (426,50 €) 02:00 - PR Newswire BlackRock Throgmorton Trust Plc - Total Voting Rights SolarBank    Wie die Revolution der sauberen Energie eine solide Investitionsmöglichkeit bieten könnte weiterlesen» Anzeige wo-site-teaser-box-16755_site-teaser-box_2024-04-25_09%253A00%253A00_2024-04-26_09%253A00%253A59