Financial Performance - First Quarter 2025 net income was $185.5 million, or $0.75 per diluted share, compared to $174.1 million, or $0.64 per diluted share in Q1 2024, representing a 6.9% increase in net income year-over-year [2][5]. - Adjusted net operating income for Q1 2025 was $185.2 million, or $0.75 per diluted share, up from $178.4 million, or $0.65 per diluted share in Q1 2024, indicating a 3.9% increase [5][22]. - Net premiums earned in Q1 2025 were $243.7 million, slightly up from $242.6 million in Q1 2024 [5][18]. - Book value per share increased to $21.40 in Q1 2025, up from $20.82 in Q4 2024 [26]. - The net premium yield is 33.0% in Q1 2025, compared to 32.9% in Q4 2024 [28]. Insurance Activity - New insurance written (NIW) for Q1 2025 was $10.2 billion, a decrease from $15.9 billion in Q4 2024 and an increase from $9.1 billion in Q1 2024 [5][7]. - New primary insurance written (NIW) for Q1 2025 is $10.2 billion, down from $15.9 billion in Q4 2024 [27]. - New primary risk written for Q1 2025 is $2.6 billion, down from $4.1 billion in Q4 2024 [27]. - The company's NIW on mortgages with LTV ratios greater than 95% was 13% in Q1 2025, compared to 15% in Q1 2024 and 14% for the full year 2024 [103]. - The company's NIW on mortgages with DTI ratios greater than 45% was 31% in Q1 2025, up from 28% in Q1 2024 [103]. Delinquency and Losses - Losses incurred, net for Q1 2025 were $9.6 million, compared to $4.6 million in Q1 2024, resulting in a loss ratio of 3.9% [5][18]. - The beginning delinquent inventory for Q1 2025 was 26,791 loans, decreasing to 25,438 by the end of the quarter, resulting in a delinquency rate of 2.30% [32]. - The company reported a total of 13,981 cures in Q1 2025, an increase from 12,040 in Q4 2024 [32]. - Total gross loss reserves for Q1 2025 stood at $465 million, slightly up from $463 million in Q4 2024 [33]. - Ceded losses incurred in Q1 2025 were $6.4 million, up from $6.1 million in Q4 2024 [35]. Capital Management - The company repurchased 9.2 million shares of common stock for $224.3 million during the quarter and declared a dividend of $0.13 per common share [7]. - The board approved an additional share repurchase program, authorizing up to $750 million of common stock purchases prior to December 31, 2027 [7]. - As of March 31, 2025, the holding company had approximately $824 million in cash and investments, with long-term debt obligations totaling $650 million [128]. - Annual debt service on the long-term debt obligations is approximately $34 million [128]. - MGIC paid $750 million in dividends to the holding company in the twelve months ended March 31, 2025 [127]. Regulatory and Compliance Issues - The PMIERs require significantly more Minimum Required Assets for delinquent loans compared to performing loans, increasing the risk of non-compliance if loan delinquencies rise [60]. - MGIC's compliance with PMIERs is critical, as non-compliance could lead to suspension or termination of eligibility to insure loans purchased by the GSEs, significantly reducing new insurance written [51]. - The proposed regulatory capital rule by the Federal Reserve could impose higher capital standards on large U.S. banks, potentially negatively affecting the company's NIW [78]. - Changes in GSEs' business practices regarding mortgage insurance coverage and costs could negatively impact the mortgage insurance industry and MGIC's financial results [43]. - The GSEs may increase guaranty fees and loan level price adjustments, leading to higher costs for borrowers and potentially affecting MGIC's new insurance written [44]. Market Conditions and Risks - The company experienced a decline in home prices, with a 0.1% increase in the Purchase-Only U.S. Home Price Index in February 2025 compared to January 2025 [40]. - Economic downturns due to wars or pandemics could lead to increased unemployment, inflation, and home price declines, resulting in higher loan delinquencies [42]. - The mortgage insurance industry is highly competitive, with competitors including private mortgage insurers and governmental agencies, which may impact the company's market position [112]. - The widespread use of risk-based pricing systems complicates the comparison of premium rates with competitors, affecting the company's ability to maintain its market share [114]. - Financial strength ratings are crucial for maintaining public confidence and competitive position, with potential downgrades adversely impacting business operations [119]. Operational Risks - The company faces risks related to legal proceedings and regulatory scrutiny, which could materially affect its financial condition and results of operations [120]. - The company relies on third-party reporting for mortgage loan information, which may be subject to inaccuracies that could affect claims [85]. - The company's risk management programs may not effectively identify or mitigate risks, potentially impacting financial results [86]. - The company has delegated authority to GSEs for loss mitigation options, which may not always align with its interests and could increase claims [84]. - The risk of cybersecurity incidents affecting the company may increase, posing a threat to operational stability [42]. Investment Portfolio - The investment portfolio is primarily composed of high-quality, investment-grade fixed income investments, but is subject to risks from economic conditions and interest rate volatility [123]. - The investment portfolio is structured to meet expected liabilities, including claim payments in the mortgage insurance business [126]. - The company invests primarily in investment grade fixed income securities, which are subject to regulatory limitations and may impact investment income [125]. - Concerns over the federal budget deficit and potential political conflicts may increase liquidity risks associated with investments in U.S. government securities [124]. Shareholder Considerations - The market price of the company's common stock may fluctuate significantly due to various economic and industry factors [131]. - The inability of insurance subsidiaries to pay sufficient dividends could adversely affect the holding company's cash requirements and operational capabilities [127]. - Any required capital contributions to subsidiaries would decrease the holding company's cash and investments [129].

Core Viewpoint - MGIC Investment Corporation reported strong financial results for the first quarter of 2025, demonstrating continued performance improvement and market leadership despite macroeconomic concerns [2][3]. Financial Performance - Net income for Q1 2025 was $185.5 million, or $0.75 per diluted share, compared to $184.7 million and $0.72 per diluted share in Q4 2024, and $174.1 million and $0.64 per diluted share in Q1 2024 [4]. - Adjusted net operating income for Q1 2025 was $185.2 million, or $0.75 per diluted share, reflecting a slight increase from $184.5 million and $0.72 per diluted share in Q4 2024, and $178.4 million and $0.65 per diluted share in Q1 2024 [4]. - New insurance written (NIW) was $10.2 billion in Q1 2025, down from $15.9 billion in Q4 2024 and up from $9.1 billion in Q1 2024 [4][20]. - Net premiums earned were $243.7 million, slightly up from $241.3 million in Q4 2024 and $242.6 million in Q1 2024 [4]. - The annual persistency rate was 84.7%, a slight decrease from 84.8% in Q4 2024 and 85.7% in Q1 2024 [4]. Capital and Liquidity - As of March 31, 2025, PMIERs available assets were $5.9 billion, with PMIERs excess at $2.6 billion [4]. - The holding company liquidity was reported at $824 million, down from $1,076 million at the end of Q4 2024 [4]. Shareholder Actions - The company repurchased 9.2 million shares for $224.3 million and an additional 2.8 million shares for $65.8 million through April 25, 2025 [7]. - A dividend of $0.13 per common share was declared, payable on May 21, 2025 [7]. Delinquency and Loss Metrics - Primary delinquency inventory stood at 25,438, down from 26,791 in Q4 2024 [4][24]. - The primary IIF delinquency rate was 2.30%, a decrease from 2.40% in Q4 2024 [4][24]. - Losses incurred, net, were $9.6 million, compared to $8.7 million in Q4 2024 and $4.6 million in Q1 2024 [4]. Market Position and Strategy - The company maintains a strong market position with robust capital and liquidity, allowing it to continue executing its business strategies and supporting customers with innovative solutions [2][3].

Core Insights - MGIC Investment (MTG) has a strong history of beating earnings estimates and is well-positioned for continued success in upcoming reports [1][2] - The company has surpassed earnings estimates by an average of 12.85% over the last two quarters, with recent surprises of 10.77% and 14.93% [2] Earnings Performance - In the most recent quarter, MGIC reported earnings of $0.72 per share against an expectation of $0.65, resulting in a surprise of 10.77% [2] - For the previous quarter, the consensus estimate was $0.67 per share, while the actual earnings were $0.77, leading to a surprise of 14.93% [2] Earnings Estimates and Predictions - Recent estimates for MGIC have been increasing, with a positive Earnings ESP (Expected Surprise Prediction) indicating potential for another earnings beat [5][8] - The current Earnings ESP for MGIC is +7.04%, suggesting analysts are optimistic about the company's near-term earnings potential [8] Zacks Rank and Success Rate - MGIC holds a Zacks Rank of 2 (Buy), which, when combined with a positive Earnings ESP, indicates a high likelihood of beating earnings estimates [8] - Research indicates that stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% success rate in beating consensus estimates [6]

Company Announcement - MGIC Investment Corporation plans to release its first quarter 2025 financial results after the market closes on April 30, 2025 [1] - A conference call/webcast is scheduled for May 1, 2025, at 10:00 a.m. Eastern Time to discuss the quarterly results [1] Participation Details - Individuals interested in joining the conference call must register to receive the dial-in number and unique PIN [2] - It is recommended to join the call at least 10 minutes early, and the call will also be available via webcast on the Company's Investor website [2] - A replay of the webcast will be accessible on the Company's website until June 2, 2025 [2] Company Overview - Mortgage Guaranty Insurance Corporation (MGIC) is the principal subsidiary of MGIC Investment Corporation, providing private mortgage insurance to lenders across the United States [3] - MGIC helps families achieve homeownership by making affordable low-down-payment mortgages possible [3] Information Dissemination - MGIC Investment Corporation releases important information through its corporate website and encourages investors to enroll for automatic email alerts and RSS feeds regarding new postings [4]

Group 1 - The core concept of momentum investing is to follow a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1] - MGIC Investment (MTG) currently holds a Momentum Style Score of B, indicating a favorable position in the momentum investing framework [3] - The Zacks Rank for MGIC Investment is 2 (Buy), suggesting that stocks with this rating and a Style Score of A or B tend to outperform the market in the following month [4] Group 2 - Over the past week, MTG shares increased by 1.95%, outperforming the Zacks Insurance - Multi line industry, which rose by 0.58% [6] - In the last quarter, MTG shares rose by 4.34%, and over the past year, they increased by 11.79%, while the S&P 500 experienced declines of -5.11% and a modest gain of 11.13%, respectively [7] - The average 20-day trading volume for MTG is 3,407,273 shares, indicating a bullish sign when combined with rising stock prices [8] Group 3 - Recent earnings estimates for MTG have shown positive revisions, with two estimates moving higher for the full year, raising the consensus estimate from $2.71 to $2.74 [10] - For the next fiscal year, one estimate has increased, with no downward revisions noted, reflecting a positive earnings outlook for MTG [10] Group 4 - Given the favorable momentum indicators and earnings outlook, MGIC Investment is positioned as a strong candidate for near-term investment opportunities [12]

Core Viewpoint - MGIC Investment (MTG) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The upgrade for MGIC reflects an improvement in the company's underlying business, suggesting that investors may push the stock price higher in response to rising earnings estimates [5][10]. - Analysts have raised their earnings estimates for MGIC, with the Zacks Consensus Estimate for the fiscal year ending December 2025 projected at $2.74 per share, representing a year-over-year decline of 5.8% [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - The upgrade of MGIC to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10].

Core Viewpoint - MGIC Investment Corporation (MTG) shares are trading at a discount compared to the Zacks Multi-line insurance industry, with a price-to-book ratio of 1.13X versus the industry average of 2.32X [1] Financial Performance - MGIC Investment has a market capitalization of $5.6 billion and benefits from strong credit performance in its mortgage insurance portfolio [1] - The return on invested capital for MTG in the trailing 12 months was 11.4%, significantly higher than the industry average of 2% [9] - The return on equity for MTG was 14.9%, also above the industry average of 14.4% [9] Stock Performance - MTG stock has decreased by 2.6% year-to-date, underperforming both the industry and sector returns, but outperforming the S&P 500 composite's decline of 4.5% [3] - MTG shares are currently trading below the 50-day moving average, indicating a bearish trend [6] - The Zacks average price target for MTG is $27.14 per share, suggesting a potential upside of 20.3% from the last closing price [6] Growth Projections - The Zacks Consensus Estimate for MTG's 2025 earnings per share is $2.73, reflecting a 6.2% year-over-year decrease, while revenues are expected to increase by 3% to $1.3 billion [7] - For 2026, the earnings per share estimate is $2.86, indicating a 4.8% year-over-year increase, with revenues projected to rise by 3.2% to $1.3 billion [7] - Recent analyst revisions show a positive outlook, with estimates for 2025 and 2026 earnings raised by 2 cents and 5 cents, respectively [10] Market Position and Strategy - MGIC Investment is the largest mortgage insurer in the U.S. and is improving its capital position through capital contributions and reinsurance transactions [12] - The company has $724 million remaining in its share repurchase authorization through December 2026, reflecting strong mortgage credit performance [12] - MGIC is experiencing a decline in claim filings, which is expected to strengthen its balance sheet and improve its financial profile [11] Dividend and Shareholder Returns - MTG recently increased its quarterly dividend by 13% to 13 cents per share, marking four consecutive years of dividend increases at a compound annual growth rate of 21% [14] - The company also engages in share buybacks, with $372 million remaining on its current share repurchase authorization as of January 31 [14] Competitive Landscape - The mortgage insurance market is highly competitive, with significant market share held by a few players, including competition from the Federal Housing Administration [15] - The U.S. housing market is expected to grow slowly in 2025, which may exert downward pressure on home prices and reduce the overall market opportunity for new private mortgage insurance [15]

Financial Performance - In 2024, total revenues were $1.2 billion, with primary new insurance written (NIW) at $55.7 billion[34]. - Net income for 2024 was $763 million ($2.89 per diluted share), up from $713 million ($2.49 per diluted share) in 2023, representing a 7% increase[37]. - Cash dividends paid from MGIC to the holding company increased by 25% to $750 million in 2024, compared to $600 million in 2023[37]. - Operating expenses decreased by 8% in 2024 compared to 2023, reflecting improved efficiency[37]. - The company ended 2024 with $1.1 billion in cash and investments, an increase of $0.2 billion during the year[37]. Insurance Market Trends - The private mortgage insurance industry insured $299 billion of mortgages in 2024, up from $284 billion in 2023[46]. - The FHA accounted for 33.5% of low down payment residential mortgages in 2024, slightly up from 33.2% in 2023[47]. - The VA's market share of low down payment residential mortgages increased to 24.5% in 2024, compared to 21.5% in 2023[48]. - The PMI industry is highly competitive, with government-backed programs accounting for approximately 58.9% of low down payment residential mortgages in 2024, up from 55.9% in 2023[82]. Insurance Operations - New primary insurance written was $55.7 billion in 2024, up from $46.1 billion in 2023, reflecting a 20% increase attributed to higher refinance volumes[56]. - Primary insurance in force (IIF) reached $295.4 billion in 2024, a slight increase from $293.5 billion in 2023[58]. - The risk in force (RIF) for primary insurance was $78.8 billion in 2024, compared to $77.2 billion in 2023, indicating a 2% growth[58]. - The percentage of new insurance written (NIW) on loans representing refinances was 4% in 2024, compared to 2% in 2023[64]. - The weighted average interest rate for primary insurance in force was 6.7% in 2024, with a delinquency rate of 0.4%[75]. Shareholder Actions - MGIC repurchased 8.8% of its shares outstanding at the beginning of 2024[37]. - The company maintains a financial strength rating of A (stable outlook) by A.M. Best, A3 (positive outlook) by Moody's, and A- (stable outlook) by S&P[86]. Risk Management - The company’s primary insurance portfolio is heavily weighted towards borrower-paid mortgage insurance (BPMI), which constitutes most of the primary IIF[66]. - The percentage of loans with a loan-to-value ratio of 95.01% and above rose to 16.6% in 2024, compared to 15.7% in 2023[77]. - The debt-to-income ratio of 45.01% and above increased to 19.8% in 2024, up from 17.5% in 2023[77]. - The company’s exposure to catastrophic losses is influenced by economic conditions, including home prices and employment levels[102]. - The company has limited its ability to rescind insurance coverage under new master policy terms, potentially leading to higher losses[115]. Delinquency and Claims - As of December 31, 2024, the company had 1,118,308 insured loans in force, with a delinquency rate of 2.40%[105]. - The number of delinquent loans increased to 26,791 in 2024 from 25,650 in 2023, reflecting a rise in delinquency[105]. - The primary delinquency rate for Florida was 3.7% in 2024, up from 2.8% in 2023, indicating localized economic challenges[106]. - Claims received inventory included 319 delinquent loans as of December 31, 2024, compared to 302 in 2023[105]. - The average claim paid was reduced by approximately 4.7% in 2024 due to curtailments, compared to a 5.4% reduction in 2023[114]. Regulatory Environment - The company is subject to comprehensive regulation by state insurance departments, which includes maintaining minimum capital levels and adequacy ratios[138]. - MGIC is in compliance with PMIERs and is eligible to insure loans purchased by the GSEs, but any loss of eligibility would significantly reduce new business writings[152]. - The mortgage insurance premium rates are subject to state regulation, requiring justification for any increases based on loss experience and future trend analysis[146]. - Non-compliance with PMIERs could lead to suspension or termination of MGIC's eligibility to insure loans purchased by GSEs, significantly reducing the volume of new insurance written (NIW)[183]. Investment Portfolio - The fair value of the company's investment portfolio was approximately $5.9 billion as of December 31, 2024[130]. - The company's pre-tax yield on investments was 4.0% in 2024, compared to 3.7% in 2023 and 3.0% in 2022[135]. - The investment portfolio consisted of 47% corporate securities, 10% tax-exempt municipals, and 22% taxable municipals as of December 31, 2024[135]. - Approximately 94% of the investment portfolio was managed by two external investment managers as of December 31, 2024[131]. Community Involvement - The company is committed to community involvement, providing financial support for housing and youth programs in 2024[166]. Future Outlook - The proposed regulatory capital rule by U.S. regulators may negatively affect MGIC's NIW, although the extent of the impact is currently uncertain[210]. - Climate risk considerations are being incorporated into FHFA policy development, which may materially impact MGIC's NIW and borrower defaults in certain areas[193].

Financial Data and Key Metrics Changes - The company reported net income of $185 million for Q4 2024, resulting in an annualized return on equity of 14% [9] - For the full year, net income reached $763 million, an increase from $730 million in the previous year [9] - Insurance in force at the end of the quarter was over $295 billion, showing a slight increase from the prior quarter [10] - The annual persistency rate remained stable at 85% throughout the year [10] - The in-force premium yield was 38.6 basis points, remaining relatively flat during the year [21] - Book value per share grew to $20.82, up 12% year-over-year [22] Business Line Data and Key Metrics Changes - The company wrote $16 billion in new insurance during Q4 and $56 billion for the full year, marking a 21% increase from the prior year [11] - Operating expenses for Q4 were $49 million, down from $55 million in the same quarter last year [23] - The company repurchased 7.8 million shares for $193 million in Q4 and paid a quarterly dividend of $33 million [24] Market Data and Key Metrics Changes - The housing market remains resilient, supported by favorable supply-demand dynamics and a generally positive economic outlook [16] - The consensus forecast for the PMI market in 2025 is expected to be similar in size to 2024, with elevated mortgage rates leading to high persistency [16] Company Strategy and Development Direction - The company prioritizes prudent growth over capital return, with a focus on maintaining a strong and balanced insurance portfolio [13] - A well-established reinsurance program is a key component of the company's risk and capital management strategies [15] - The company aims to continue returning capital to shareholders primarily through share repurchases while maintaining quarterly dividends [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's leadership and market position, emphasizing capital strength and flexibility for future execution [30] - The company anticipates that if credit performance remains strong, capital levels will stay above target, and payout ratios will remain elevated [14] Other Important Information - The company experienced a favorable loss reserve development of $54 million in Q4 due to better-than-expected cure rates on delinquency notices [19] - The unrealized loss position on the investment portfolio increased by $129 million due to rising yields across the treasury curve [23] Q&A Session Summary Question: Discussion on new notice claim rate and severity - Management explained that the increase in new notice severity is due to higher exposures from recent delinquencies, but they are targeting the same severity to exposure ratio as before [33] Question: Operating expense guidance - Management indicated that the lower operating expenses are a result of cumulative changes made over the past years, with expectations for continued reductions in 2025 [34][36] Question: GSE reform and privatization impacts - Management discussed the potential implications of GSE reform, emphasizing the importance of having the right guardrails in place for the market [40][42] Question: Claim rate expectations - Management noted that the current claim rate of 7.3% reflects adjustments due to hurricane-related delinquencies, with expectations to revert to 7.5% once those notices are resolved [76] Question: Debt-to-income trends - Management acknowledged that rising debt-to-income ratios are a reflection of affordability challenges due to increased home prices and interest rates [52][56] Question: Pricing environment for new insurance written (NIW) - Management stated that the risk-return profile for NIW remains favorable, with no significant changes in approach to pricing and risk factors [66] Question: Operating expense ratio and potential one-time benefits - Management clarified that the fourth quarter's expense ratio reflects natural variability and cumulative impacts of changes made, with no significant nonrecurring items [72][74]

Financial Data and Key Metrics Changes - The company reported a net income of $185 million for Q4 2024, with an annualized return on equity of 14% [7] - For the full year, net income increased to $763 million from $713 million in the prior year [8] - The insurance in force at the end of the quarter was over $295 billion, showing a slight increase from the previous quarter [8] - The annual persistency rate remained stable at 85% throughout the year [9] - The book value per share grew to $20.82, reflecting a 12% increase year-over-year [17] Business Line Data and Key Metrics Changes - The company wrote $16 billion of new insurance in Q4 and $56 billion for the full year, marking a 21% increase from the prior year [9] - The in-force premium yield was 38.6 basis points, remaining relatively flat during the year [16] Market Data and Key Metrics Changes - The housing market remains resilient, supported by favorable supply-demand dynamics and a generally positive economic outlook [11] - Consensus forecasts suggest that the mortgage insurance market in 2025 will be similar in size to 2024, with elevated mortgage rates expected to lead to high persistency [12] Company Strategy and Development Direction - The company emphasizes a dynamic approach to capital management, focusing on financial strength and flexibility [10] - The reinsurance program is a key component of risk and capital management, providing capital diversification and reducing required assets [11] - The company aims to continue returning capital to shareholders through share repurchases and dividends while maintaining a strong insurance portfolio [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's leadership and market position, highlighting the successful execution of business strategies [22] - The company anticipates continued favorable credit trends and a stable risk profile, which may lead to elevated payout ratios [10] - Management noted that while the economic environment has been favorable, future conditions remain uncertain [33] Other Important Information - The company returned approximately $700 million to shareholders through dividends and share repurchases, representing a 92% payout ratio of net income [10] - Operating expenses for Q4 were $49 million, down from $55 million in the previous year, with expectations for further reductions in 2025 [17][18] Q&A Session Summary Question: Can you discuss the new notice claim rate and its drivers? - Management explained that the increase in new delinquencies is due to higher exposures from recent vintages, but they are targeting the same severity to exposure ratio as before [24] Question: What are the drivers behind the lower operating expenses? - Management attributed the lower operating expenses to cumulative changes made over the past couple of years, aligning resources to add value [25][26] Question: How does GSE reform impact the company? - Management acknowledged the uncertainty surrounding GSE reform but emphasized the importance of having the right guardrails in place to protect taxpayers and ensure a stable market [29][30] Question: What is the normalized delinquency rate? - Management indicated that while the current environment is favorable, they expect more normalized delinquency rates to be in the range of 20% to 40% over time [36] Question: Can you elaborate on the pricing environment for new insurance written? - Management noted that the risk-return profile remains favorable, allowing for effective capital deployment [50]