MGIC Investment (NYSE:MTG) Q4 2025 Earnings call February 03, 2026 10:00 AM ET Speaker6Good day, ladies and gentlemen, and thank you for standing by. Welcome to the MGIC Investment Corporation fourth quarter 2025 earnings call. At this time, all lines have been placed on mute to prevent any background noise. At the end of today's presentation, we'll have a question and answer session. If anyone should require to ask a question at this time, please press star one one on your telephone keypad. At this time, I ...

Core Viewpoint - Goldman Sachs has upgraded Standard Chartered Group (02888) rating from "Neutral" to "Buy" and raised the target price by 21% from HKD 168 to HKD 203, indicating further revaluation potential despite an 83% increase in the stock price this year [1] Group 1: Rating and Target Price - The rating for Standard Chartered Group has been upgraded to "Buy" from "Neutral" [1] - The target price has been increased by 21% from HKD 168 to HKD 203 [1] Group 2: Financial Performance Expectations - Goldman Sachs expects the return on tangible equity (ROTE) to reach 14.6% by the end of this year, exceeding the management's guidance of 13% [1] - ROTE is projected to further increase to 15% in 2027 and 15.7% in 2028 [1] Group 3: Shareholder Returns - The expected total return to shareholders (dividends + buybacks) is projected to reach 8.4% by 2026 [1] - The long-term total payout ratio is anticipated to remain at 80% due to strong capital generation capabilities [1] Group 4: Capital Management Strategy - Share buyback forecasts for 2028-2029 have been raised from USD 2.5 billion to USD 2.8 billion annually [1] - Dividend payout ratios for 2026-2028 have been revised from a fixed 21% to 25%/30%/35% respectively [1] - The average total payout ratio for 2026-2028 is now expected to be 75% [1]

Core Viewpoint - Goldman Sachs has upgraded Standard Chartered Group's rating from "Neutral" to "Buy" and raised the target price by 21% from HKD 168 to HKD 203, indicating further revaluation potential despite an 83% increase in the stock price this year [1] Group 1: Rating and Price Target - Goldman Sachs has raised Standard Chartered's rating to "Buy" and increased the target price to HKD 203, reflecting a 21% increase from the previous target [1] - The bank believes there is still room for further revaluation of Standard Chartered's stock [1] Group 2: Return on Equity Expectations - Goldman Sachs projects that Standard Chartered's underlying return on tangible equity (ROTE) will reach 14.6% by the end of this year, exceeding the management's guidance of 13% [1] - The ROTE is expected to further increase to 15% in 2027 and 15.7% in 2028 [1] - An upward revision of the mid-term ROTE guidance is anticipated during the 2025 financial report or the investor day in May 2026, which could act as a catalyst for the stock price [1] Group 3: Shareholder Returns - Standard Chartered is expected to provide attractive returns to shareholders, with a projected total return (dividends + buybacks) of 8.4% by 2026 [1] - The long-term total payout ratio is expected to be maintained at 80% due to strong capital generation capabilities [1] - Share buyback forecasts for 2028-2029 have been increased from USD 2.5 billion to USD 2.8 billion annually, and the dividend payout ratios for 2026-2028 have been revised from a fixed 21% to 25%/30%/35% respectively [1] - The revised forecasts indicate an average total payout ratio of 75% for 2026-2028, supporting ROTE improvement and valuation revaluation [1]

Financial Data and Key Metrics Changes - Adjusted operating earnings for the second quarter were $350 million, supported by strong performance from spread products and higher yields in the bond portfolio [17][19] - Total adjusted capital exceeded $5.3 billion, reflecting a 5% increase since year-end 2024 [12][34] - Adjusted operating earnings per share was $4.87, with an adjusted figure of $5.12, up 5% from the prior year's second quarter [19][20] Business Line Data and Key Metrics Changes - Retail annuity sales reached $4.4 billion, a 9% increase over the first quarter and a 4% increase year-over-year [7][10] - RILA account balances increased by nearly 80% from the second quarter last year, with sales approaching $1.4 billion, up 16% from the previous quarter [6][7] - Variable annuity net outflows improved for the second consecutive quarter, totaling $2.2 billion, down 27% from a year ago [10][22] Market Data and Key Metrics Changes - Average retail annuity AUM increased to $249 billion, up from year-end 2024 [24] - The company experienced a 9.4% return on separate account assets, contributing approximately $19 billion to AUM [45] Company Strategy and Development Direction - The company remains committed to a balanced capital management strategy, focusing on disciplined investments, maintaining a strong balance sheet, and consistent capital return to shareholders [15][14] - Jackson is exploring opportunities for strategic partnerships and risk transfer transactions to enhance shareholder value [50][53] - The company aims to leverage Brook Re for potential M&A opportunities, enhancing capital generation and free cash flow [72][80] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong and sustainable capital generation supporting future growth initiatives and ongoing capital return to shareholders [12][13] - The need for financial security in retirement is increasingly recognized, positioning annuities as essential tools for clients [15][16] Other Important Information - The company returned $216 million to common shareholders in the quarter, a 60% increase from the previous year [32] - A cash dividend of $0.80 per common share was approved for the third quarter [14] Q&A Session Summary Question: Excess capital position and potential uses - Management reiterated the philosophy of generating excess capital, paying it as free cash flow, and returning capital to shareholders [40][42] Question: AUM levels and equity market impact - Strong equity market performance contributed to AUM growth, with solid margins expected despite some variable expense offsets [44][46] Question: Strategic considerations for business remixing - Management is open to strategic partnerships and risk transfer opportunities that enhance shareholder value [50][53] Question: RILA product features and competition - RILA sales increased 16% sequentially, with a competitive product offering that includes income options [60] Question: Risk management of RILA and legacy VA - The company manages RILA and legacy VA products separately, leveraging natural offsets in equity risk [70] Question: Potential for inorganic growth using Brook Re - Management confirmed that Brook Re could be leveraged for M&A opportunities, particularly in acquiring complementary blocks of business [72][80]