MGIC Investment (US:MTG)2024-05-01 20:07Forward Looking and Other Statements This section clarifies that the report contains forward-looking statements, which are not historical facts and are subject to risks, advising readers not to rely on these statements being current beyond the filing date and disclaiming any obligation to update them - Forward-looking statements are identified by words such as "believe," "anticipate," or "expect" and relate to future events, not historical facts4 - Actual results may differ materially from forward-looking statements due to various risk factors4 - The company does not undertake any obligation to update forward-looking statements or other statements after the filing date4 Glossary of terms and acronyms This section provides definitions for key terms and acronyms used throughout the report, essential for understanding the company's financial condition and operations, particularly in the mortgage insurance industry - Defines industry-specific terms such as "Annual Persistency," "Delinquency Rate," "Insurance in force (IIF)," "Risk in force (RIF)," and "PMIERs"8142320 - Explains financial metrics like "EPS" (Earnings per share), "Loss ratio," and "Underwriting profit"111526 - Clarifies acronyms for regulatory bodies and financial instruments, including "GSEs" (Fannie Mae and Freddie Mac), "NAIC," "QSR Transaction" (Quota share reinsurance), and "XOL Transactions" (Excess-of-loss reinsurance)12172227 PART I — FINANCIAL INFORMATION Item 1 Financial Statements This section presents the unaudited consolidated financial statements for MGIC Investment Corporation and its subsidiaries for the quarter ended March 31, 2024, including balance sheets, statements of operations, comprehensive income, shareholders' equity, and cash flows, along with detailed notes Consolidated Balance Sheets The consolidated balance sheets show the company's financial position at March 31, 2024, compared to December 31, 2023, indicating a slight decrease in total assets and liabilities, while shareholders' equity increased | Metric | March 31, 2024 (in thousands) | December 31, 2023 (in thousands) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | | Total assets | $6,535,246 | $6,538,380 | (0.05%) | | Total liabilities | $1,432,903 | $1,466,363 | (2.28%) | | Total shareholders' equity | $5,102,343 | $5,072,017 | 0.60% | | Cash and cash equivalents | $431,347 | $363,666 | 18.62% | | Loss reserves | $504,447 | $505,379 | (0.18%) | | Senior notes | $643,563 | $643,196 | 0.06% | Consolidated Statements of Operations The consolidated statements of operations show an increase in net income for the three months ended March 31, 2024, compared to the same period in 2023, driven by higher investment income and lower losses and expenses | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (%) | | :--------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net premiums earned | $242,644 | $242,015 | 0.26% | | Investment income, net of expenses | $59,744 | $49,223 | 21.37% | | Net gains (losses) on investments | $(8,509) | $(7,698) | 10.53% | | Total revenues | $294,361 | $283,965 | 3.66% | | Losses incurred, net | $4,555 | $6,446 | (29.34%) | | Other underwriting and operating expenses, net | $59,018 | $70,063 | (15.80%) | | Total losses and expenses | $74,481 | $88,361 | (15.71%) | | Income before tax | $219,880 | $195,604 | 12.41% | | Net income | $174,097 | $154,547 | 12.65% | | Basic EPS | $0.64 | $0.53 | 20.75% | | Diluted EPS | $0.64 | $0.53 | 20.75% | Consolidated Statements of Comprehensive Income The consolidated statements of comprehensive income show a decrease in comprehensive income for the three months ended March 31, 2024, primarily due to a change from unrealized investment gains to losses, despite an increase in net income | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (%) | | :----------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net income | $174,097 | $154,547 | 12.65% | | Change in unrealized investment gains and losses | $(10,392) | $80,659 | (112.88%) | | Benefit plan adjustments | $539 | $5,353 | (89.92%) | | Other comprehensive income (loss), net of tax | $(9,853) | $86,012 | (111.45%) | | Comprehensive income (loss) | $164,244 | $240,559 | (31.73%) | Consolidated Statements of Shareholders' Equity The consolidated statements of shareholders' equity show an increase in total shareholders' equity for the three months ended March 31, 2024, primarily driven by net income, partially offset by treasury stock repurchases and cash dividends | Metric | March 31, 2024 (in thousands) | March 31, 2023 (in thousands) | Change (%) | | :----------------------------------- | :---------------------------- | :---------------------------- | :--------- | | Common stock | $371,353 | $371,353 | 0.00% | | Paid-in capital | $1,788,050 | $1,791,609 | (0.20%) | | Treasury stock | $(1,466,224) | $(1,119,048) | 31.02% | | Accumulated other comprehensive income (loss) | $(326,134) | $(395,499) | (17.54%) | | Retained earnings | $4,735,298 | $4,129,229 | 14.68% | | Total shareholders' equity | $5,102,343 | $4,777,644 | 6.79% | - Repurchase of common stock amounted to $(94,053) thousand in Q1 2024, compared to $(78,523) thousand in Q1 202334 - Cash dividends paid were $(31,924) thousand in Q1 2024, compared to $(29,612) thousand in Q1 202334 Consolidated Statements of Cash Flows The consolidated statements of cash flows show a net increase in cash and cash equivalents for the three months ended March 31, 2024, primarily due to positive cash flow from operating and investing activities, partially offset by financing activities | Metric | Three Months Ended March 31, 2024 (in thousands) | Three Months Ended March 31, 2023 (in thousands) | Change (%) | | :------------------------------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :--------- | | Net cash provided by (used in) operating activities | $190,537 | $212,286 | (10.25%) | | Net cash provided by (used in)