MGIC Investment Corporation Reports Fourth Quarter 2019 Results and Announces $300 Million Share Repurchase Authorization
Adjusted net operating income for the fourth quarter of 2019 was
Mattke stated, "Reflecting our strong capital position, the
Fourth Quarter Summary
- New insurance written of
$19.3 billion , compared to$12.2 billion in the fourth quarter of 2018. - Insurance in force of
$222.3 billion atDecember 31, 2019 increased by 2% during the quarter and 6% compared toDecember 31, 2018 . - Primary delinquency inventory of 30,028 loans at
December 31, 2019 decreased from 32,898 loans atDecember 31, 2018 . Our primary delinquency inventory declined 9% year-over-year. - Insurance written in 2008 and before accounted for approximately 12% of the
December 31, 2019 primary risk in force but accounted for 60% of the new primary delinquency notices received in the quarter. - The percentage of primary loans that were delinquent at
December 31, 2019 was 2.78%, compared to 3.11% atDecember 31, 2018 , and 4.55% atDecember 31, 2017 . The percentage of flow primary loans that were delinquent atDecember 31, 2019 was 2.23%, compared to 2.47% atDecember 31, 2018 , and 3.70% atDecember 31, 2017 . - Persistency, or the percentage of insurance remaining in force from one year prior, was 75.8% at
December 31, 2019 , compared with 81.7% atDecember 31, 2018 and 80.1% atDecember 31, 2017 . - The loss ratio for the fourth quarter of 2019 was 8.9%, compared to 12.7% for the third quarter of 2019 and 11.3% for the fourth quarter of 2018.
- The underwriting expense ratio associated with our insurance operations for the fourth quarter of 2019 was 19.6%, compared to 17.7% for the third quarter of 2019 and 19.1% for the fourth quarter of 2018.
- Net premium yield was 48.4 basis points in the fourth quarter of 2019, compared to 49.6 basis points for the third quarter of 2019 and 47.3 basis points for the fourth quarter of 2018.
- MGIC paid a dividend of
$70 million to our holding company during the fourth quarter of 2019. MGIC Investment Corporation paid a$0.06 dividend per common share to shareholders during the fourth quarter of 2019.- 1.4 million shares of common stock were repurchased at an average cost per share of
$14.26 . - Book value per common share outstanding increased by 4% during the quarter to
$12.41 .
First Quarter 2020 Activities
- Declared a
$0.06 dividend per common share - Received authorization to repurchase
$300 million of our common stock through the end of 2021 - Received appropriate approvals to pay a dividend of
$320 million ("special dividend") from MGIC to the holding company - Received appropriate approvals to pay a dividend of
$70 million ("quarterly dividend") from MGIC to the holding company
Revenues
Total revenues for the fourth quarter of 2019 were
Losses and expenses
Losses incurred
Losses incurred in the fourth quarter of 2019 were
Underwriting and other expenses
Net underwriting and other expenses were
Provision for income taxes
The effective income tax rate was 20.5% in the fourth quarter of 2019, compared to 19.0% in the fourth quarter of 2018. The lower rate in the fourth quarter of 2018 was primarily due to a benefit recorded for the settlement of our
Capital
- Total shareholders' equity was
$4.3 billion and outstanding principal on borrowings was$837 million as ofDecember 31, 2019 . - MGIC's PMIERs Available Assets totaled
$4.6 billion , or$1.2 billion above its Minimum Required Assets as ofDecember 31, 2019 .
Other Balance Sheet and Liquidity Metrics
- Total assets were
$6.2 billion as ofDecember 31, 2019 , compared to$5.7 billion as ofDecember 31, 2018 , and$5.6 billion as ofDecember 31, 2017 . - The fair value of our investment portfolio, cash and cash equivalents was
$5.9 billion as ofDecember 31, 2019 , compared to$5.3 billion as ofDecember 31, 2018 , and$5.1 billion as ofDecember 31, 2017 . - Investments, cash and cash equivalents at the holding company were
$325 million as ofDecember 31, 2019 , compared to$248 million as ofDecember 31, 2018 , and$216 million as ofDecember 31, 2017 .
Conference Call and Webcast Details
About MGIC
MGIC (www.mgic.com), the principal subsidiary of
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 both available on the Company's website at https://mtg.mgic.com/ under "Newsroom."
From time to time
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
In addition, the current period financial results included in this press release may be affected by additional information that arises prior to the filing of our Form 10-K for the year ended December 31, 2019.
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
Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain (loss) on debt extinguishment, net impairment losses recognized in income (loss) 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 (loss) on debt extinguishment, net impairment losses recognized in income (loss), 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.
- Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.
- Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, improve our debt profile, and/or reduce potential dilution from our outstanding convertible debt.
- Net impairment losses recognized in earnings. The recognition of net impairment losses on investments can vary significantly in both size and timing, depending on market credit cycles, individual issuer performance, and general economic conditions.
- Infrequent or unusual non-operating items. Our 2018 income tax expense includes amounts related to our
IRS dispute and is related to past transactions which are non-recurring in nature and are not part of our primary operating activities.
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) |
||||||||||||||||
Three months ended |
Twelve months ended |
|||||||||||||||
(In thousands, except per share data) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net premiums written |
$ |
254,015 |
$ |
248,037 |
$ |
1,001,308 |
$ |
992,262 |
||||||||
Revenues |
||||||||||||||||
Net premiums earned |
$ |
266,267 |
$ |
245,665 |
$ |
1,030,988 |
$ |
975,162 |
||||||||
Net investment income |
41,322 |
38,328 |
167,045 |
141,331 |
||||||||||||
Net realized investment gains (losses) |
1,320 |
(241) |
5,306 |
(1,353) |
||||||||||||
Other revenue |
2,717 |
1,881 |
10,638 |
8,708 |
||||||||||||
Total revenues |
311,626 |
285,633 |
1,213,977 |
1,123,848 |
||||||||||||
Losses and expenses |
||||||||||||||||
Losses incurred, net |
23,690 |
27,685 |
118,575 |
36,562 |
||||||||||||
Underwriting and other expenses, net |
52,293 |
49,983 |
194,769 |
190,143 |
||||||||||||
Interest expense |
12,934 |
13,256 |
52,656 |
52,993 |
||||||||||||
Total losses and expenses |
88,917 |
90,924 |
366,000 |
279,698 |
||||||||||||
Income before tax |
222,709 |
194,709 |
847,977 |
844,150 |
||||||||||||
Provision for income taxes |
45,599 |
36,963 |
174,214 |
174,053 |
||||||||||||
Net income |
$ |
177,110 |
$ |
157,746 |
$ |
673,763 |
$ |
670,097 |
||||||||
Net income per diluted share |
$ |
0.49 |
$ |
0.43 |
$ |
1.85 |
$ |
1.78 |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
||||||||||||||||
EARNINGS PER SHARE (UNAUDITED) |
||||||||||||||||
Three months ended December 31, |
Year ended December 31, |
|||||||||||||||
(In thousands, except per share data) |
2019 |
2018 |
2019 |
2018 |
||||||||||||
Net income |
$ |
177,110 |
$ |
157,746 |
$ |
673,763 |
$ |
670,097 |
||||||||
Interest expense, net of tax: |
||||||||||||||||
9% Convertible Junior Subordinated Debentures due 2063 |
4,566 |
4,566 |
18,264 |
18,264 |
||||||||||||
Diluted net income available to common shareholders |
$ |
181,676 |
$ |
162,312 |
$ |
692,027 |
$ |
688,361 |
||||||||
Weighted average shares - basic |
348,538 |
360,111 |
352,827 |
365,406 |
||||||||||||
Effect of dilutive securities: |
||||||||||||||||
Unvested restricted stock units |
2,377 |
1,937 |
2,069 |
1,644 |
||||||||||||
9% Convertible Junior Subordinated Debentures due 2063 |
19,028 |
19,028 |
19,028 |
19,028 |
||||||||||||
Weighted average shares - diluted |
369,943 |
381,076 |
373,924 |
386,078 |
||||||||||||
Net income per diluted share |
$ |
0.49 |
$ |
0.43 |
$ |
1.85 |
$ |
1.78 |
NON-GAAP RECONCILIATIONS |
||||||||||||||||||||||||||
Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income |
||||||||||||||||||||||||||
Three months ended December 31, |
||||||||||||||||||||||||||
2019 |
2018 |
|||||||||||||||||||||||||
(In thousands, except per share amounts) |
Pre-tax |
Tax Effect |
Net |
Pre-tax |
Tax Effect |
Net |
||||||||||||||||||||
Income before tax / Net income |
$ |
222,709 |
$ |
45,599 |
$ |
177,110 |
$ |
194,709 |
$ |
36,963 |
$ |
157,746 |
||||||||||||||
Adjustments: |
||||||||||||||||||||||||||
Additional income tax benefit related to IRS litigation |
— |
— |
— |
— |
3,939 |
(3,939) |
||||||||||||||||||||
Net realized investment (gains) losses |
(1,336) |
(281) |
(1,055) |
241 |
51 |
190 |
||||||||||||||||||||
Adjusted pre-tax operating income / Adjusted net operating income |
$ |
221,373 |
$ |
45,318 |
$ |
176,055 |
$ |
194,950 |
$ |
40,953 |
$ |
153,997 |
||||||||||||||
Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share |
||||||||||||||||||||||||||
Weighted average shares - diluted |
369,943 |
381,076 |
||||||||||||||||||||||||
Net income per diluted share |
$ |
0.49 |
$ |
0.43 |
||||||||||||||||||||||
Additional income tax benefit related to IRS litigation |
— |
(0.01) |
||||||||||||||||||||||||
Net realized investment (gains) losses |
— |
— |
||||||||||||||||||||||||
Adjusted net operating income per diluted share |
$ |
0.49 |
$ |
0.42 |
||||||||||||||||||||||
Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income |
||||||||||||||||||||||||||
Twelve months ended December 31, |
||||||||||||||||||||||||||
2019 |
2018 |
|||||||||||||||||||||||||
(In thousands, except per share amounts) |
Pre-tax |
Tax Effect |
Net |
Pre-tax |
Tax Effect |
Net |
||||||||||||||||||||
Income before tax / Net income |
$ |
847,977 |
$ |
174,214 |
$ |
673,763 |
$ |
844,150 |
$ |
174,053 |
$ |
670,097 |
||||||||||||||
Adjustments: |
||||||||||||||||||||||||||
Additional income tax benefit related to IRS litigation |
— |
— |
— |
— |
2,462 |
(2,462) |
||||||||||||||||||||
Net realized investment (gains) losses |
(5,108) |
(1,073) |
(4,035) |
1,353 |
284 |
1,069 |
||||||||||||||||||||
Adjusted pre-tax operating income / Adjusted net operating income |
$ |
842,869 |
$ |
173,141 |
$ |
669,728 |
$ |
845,503 |
$ |
176,799 |
$ |
668,704 |
||||||||||||||
Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share |
||||||||||||||||||||||||||
Weighted average shares - diluted |
373,924 |
386,078 |
||||||||||||||||||||||||
Net income per diluted share |
$ |
1.85 |
$ |
1.78 |
||||||||||||||||||||||
Additional income tax benefit related to IRS litigation |
— |
(0.01) |
||||||||||||||||||||||||
Net realized investment (gains) losses |
(0.01) |
— |
||||||||||||||||||||||||
Adjusted net operating income per diluted share |
$ |
1.84 |
$ |
1.78 |
(1) |
|||||||||||||||||||||
(1) For the twelve months ended December 31, 2018, the Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share does not foot due to rounding of the adjustments. |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
||||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||||||
December 31, |
December 31, |
December 31, |
||||||||||
(In thousands, except per share data) |
2019 |
2018 |
2017 |
|||||||||
ASSETS |
||||||||||||
Investments (1) |
$ |
5,758,320 |
$ |
5,159,019 |
$ |
4,990,561 |
||||||
Cash and cash equivalents |
161,847 |
151,892 |
99,851 |
|||||||||
Restricted cash and cash equivalents |
7,209 |
3,146 |
— |
|||||||||
Reinsurance recoverable on loss reserves (2) |
21,641 |
33,328 |
48,474 |
|||||||||
Home office and equipment, net |
50,121 |
51,734 |
44,936 |
|||||||||
Deferred insurance policy acquisition costs |
18,531 |
17,888 |
18,841 |
|||||||||
Deferred income taxes, net |
5,742 |
69,184 |
234,381 |
|||||||||
Other assets |
206,160 |
191,611 |
182,455 |
|||||||||
Total assets |
$ |
6,229,571 |
$ |
5,677,802 |
$ |
5,619,499 |
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||
Liabilities: |
||||||||||||
Loss reserves (2) |
$ |
555,334 |
$ |
674,019 |
$ |
985,635 |
||||||
Unearned premiums |
380,302 |
409,985 |
392,934 |
|||||||||
Federal home loan bank advance |
155,000 |
155,000 |
155,000 |
|||||||||
Senior notes |
420,867 |
419,713 |
418,560 |
|||||||||
Convertible junior debentures |
256,872 |
256,872 |
256,872 |
|||||||||
Other liabilities |
151,962 |
180,322 |
255,972 |
|||||||||
Total liabilities |
1,920,337 |
2,095,911 |
2,464,973 |
|||||||||
Shareholders' equity |
4,309,234 |
3,581,891 |
3,154,526 |
|||||||||
Total liabilities and shareholders' equity |
$ |
6,229,571 |
$ |
5,677,802 |
$ |
5,619,499 |
||||||
Book value per share (3) |
$ |
12.41 |
$ |
10.08 |
$ |
8.51 |
||||||
(1) Investments include net unrealized gains (losses) on securities |
$ |
138,285 |
$ |
(44,795) |
$ |
37,058 |
||||||
(2) Loss reserves, net of reinsurance recoverable on loss reserves |
$ |
533,693 |
$ |
640,691 |
$ |
937,161 |
||||||
(3) Shares outstanding |
347,308 |
355,371 |
370,567 |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||||
ADDITIONAL INFORMATION - NEW INSURANCE WRITTEN |
|||||||||||||||||||||||||||
2019 |
2018 |
Year-to-date |
|||||||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
2019 |
2018 |
|||||||||||||||||||||
New primary insurance written (NIW) (billions) |
$ |
19.3 |
$ |
19.1 |
$ |
14.9 |
$ |
10.1 |
$ |
12.2 |
$ |
63.4 |
$ |
50.5 |
|||||||||||||
Monthly (including split premium plans) and annual premium plans |
16.3 |
16.2 |
12.6 |
8.5 |
10.2 |
53.6 |
42.0 |
||||||||||||||||||||
Single premium plans |
3.0 |
2.9 |
2.3 |
1.6 |
2.0 |
9.8 |
8.5 |
||||||||||||||||||||
Direct average premium rate (bps) on NIW |
|||||||||||||||||||||||||||
Monthly (1) |
39.0 |
42.3 |
45.6 |
49.1 |
50.2 |
43.1 |
52.8 |
||||||||||||||||||||
Singles |
102.7 |
112.8 |
129.6 |
141.5 |
147.0 |
118.6 |
158.3 |
||||||||||||||||||||
Product mix as a % of primary NIW |
|||||||||||||||||||||||||||
FICO < 680 |
3 |
% |
4 |
% |
6 |
% |
7 |
% |
8 |
% |
5 |
% |
7 |
% |
|||||||||||||
>95% LTVs |
9 |
% |
12 |
% |
16 |
% |
18 |
% |
17 |
% |
13 |
% |
16 |
% |
|||||||||||||
>45% DTI (2) |
11 |
% |
12 |
% |
15 |
% |
18 |
% |
19 |
% |
14 |
% |
19 |
% |
|||||||||||||
Singles |
15 |
% |
15 |
% |
16 |
% |
16 |
% |
16 |
% |
16 |
% |
17 |
% |
|||||||||||||
Refinances |
30 |
% |
20 |
% |
11 |
% |
8 |
% |
6 |
% |
19 |
% |
7 |
% |
|||||||||||||
New primary risk written (billions) |
$ |
4.8 |
$ |
4.7 |
$ |
3.8 |
$ |
2.5 |
$ |
3.1 |
$ |
15.8 |
$ |
12.7 |
(1) Excludes loans with split and annual payments. |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||
ADDITIONAL INFORMATION - INSURANCE IN FORCE and RISK IN FORCE |
|||||||||||||||||||||||||
2019 |
2018 |
Year-to-date |
|||||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
2019 |
2018 |
|||||||||||||||||||
Primary Insurance In Force (IIF) (billions) |
$ |
222.3 |
$ |
218.1 |
$ |
213.9 |
$ |
211.4 |
$ |
209.7 |
|||||||||||||||
Total # of loans |
1,079,578 |
1,075,285 |
1,065,893 |
1,059,720 |
1,058,292 |
||||||||||||||||||||
Flow # of loans |
1,040,667 |
1,032,936 |
1,022,157 |
1,013,291 |
1,010,944 |
||||||||||||||||||||
Premium Yield |
|||||||||||||||||||||||||
Inforce portfolio yield (1) |
50.3 |
51.7 |
52.2 |
52.5 |
52.7 |
51.4 |
53.1 |
||||||||||||||||||
Premium refunds |
(0.6) |
(0.6) |
(0.3) |
(0.5) |
(0.5) |
(0.5) |
(0.7) |
||||||||||||||||||
Accelerated earnings on single premium |
3.6 |
3.5 |
2.1 |
1.1 |
1.0 |
2.6 |
1.2 |
||||||||||||||||||
Total direct premium yield |
53.3 |
54.6 |
54.0 |
53.1 |
53.2 |
53.5 |
53.6 |
||||||||||||||||||
Ceded premiums earned, net of profit commission and assumed premiums (2) |
(4.9) |
(5.0) |
(7.5) |
(5.7) |
(5.9) |
(5.8) |
(5.4) |
||||||||||||||||||
Net premium yield |
48.4 |
49.6 |
46.5 |
47.4 |
47.3 |
47.7 |
48.2 |
||||||||||||||||||
Average Loan Size of IIF (thousands) |
$ |
205.9 |
$ |
202.9 |
$ |
200.7 |
$ |
199.5 |
$ |
198.2 |
|||||||||||||||
Flow only |
$ |
208.2 |
$ |
205.4 |
$ |
203.2 |
$ |
202.0 |
$ |
200.7 |
|||||||||||||||
Annual Persistency |
75.8 |
% |
78.6 |
% |
80.8 |
% |
81.7 |
% |
81.7 |
% |
|||||||||||||||
Primary Risk In Force (RIF) (billions) |
$ |
57.2 |
$ |
56.2 |
$ |
55.2 |
$ |
54.5 |
$ |
54.1 |
|||||||||||||||
By FICO (%) (3) |
|||||||||||||||||||||||||
FICO 760 & > |
39 |
% |
39 |
% |
38 |
% |
38 |
% |
38 |
% |
|||||||||||||||
FICO 740-759 |
17 |
% |
16 |
% |
16 |
% |
16 |
% |
16 |
% |
|||||||||||||||
FICO 720-739 |
14 |
% |
14 |
% |
14 |
% |
14 |
% |
14 |
% |
|||||||||||||||
FICO 700-719 |
11 |
% |
11 |
% |
11 |
% |
11 |
% |
11 |
% |
|||||||||||||||
FICO 680-699 |
8 |
% |
8 |
% |
9 |
% |
9 |
% |
8 |
% |
|||||||||||||||
FICO 660-679 |
4 |
% |
5 |
% |
5 |
% |
5 |
% |
5 |
% |
|||||||||||||||
FICO 640-659 |
3 |
% |
3 |
% |
3 |
% |
3 |
% |
3 |
% |
|||||||||||||||
FICO 639 & < |
4 |
% |
4 |
% |
4 |
% |
4 |
% |
5 |
% |
|||||||||||||||
Average Coverage Ratio (RIF/IIF) |
25.7 |
% |
25.8 |
% |
25.8 |
% |
25.8 |
% |
25.8 |
% |
|||||||||||||||
Direct Pool RIF (millions) |
|||||||||||||||||||||||||
With aggregate loss limits |
$ |
213 |
$ |
214 |
$ |
215 |
$ |
216 |
$ |
228 |
|||||||||||||||
Without aggregate loss limits |
$ |
163 |
$ |
173 |
$ |
178 |
$ |
186 |
$ |
191 |
(1) |
Total direct premiums earned, excluding accelerated premiums from premium refunds and single premium policy cancellations divided by average primary insurance in force. |
(2) |
Ceded premiums earned, net of profit commissions and assumed premiums. Assumed premiums include our participation in GSE Credit Risk Transfer programs, of which the impact on the net premium yield was 0.2 bps in 2019 and 0.1 bps in 2018. |
(3) |
The FICO credit score for a loan with multiple borrowers is the lowest of the borrowers' "decision FICO scores." A borrower's "decision FICO score" is determined as follows: if there are three FICO scores available, the middle FICO score is used; if two FICO scores are available, the lower of the two is used; if only one FICO score is available, it is used. |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||
ADDITIONAL INFORMATION - DELINQUENCY STATISTICS |
|||||||||||||||||||||
2019 |
2018 |
||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
|||||||||||||||||
Primary IIF - Delinquent Roll Forward - # of Loans |
|||||||||||||||||||||
Beginning Delinquent Inventory |
29,940 |
29,795 |
30,921 |
32,898 |
33,398 |
||||||||||||||||
New Notices |
13,694 |
14,019 |
12,915 |
13,611 |
14,097 |
||||||||||||||||
Cures |
(12,213) |
(12,592) |
(12,882) |
(14,348) |
(12,891) |
||||||||||||||||
Paid claims |
(922) |
(1,045) |
(1,112) |
(1,188) |
(1,304) |
||||||||||||||||
Rescissions and denials |
(27) |
(42) |
(47) |
(52) |
(67) |
||||||||||||||||
Other items removed from inventory |
(444) |
(195) |
— |
— |
(335) |
||||||||||||||||
Ending Delinquent Inventory |
30,028 |
29,940 |
29,795 |
30,921 |
32,898 |
||||||||||||||||
Primary IIF Delinquency Rate |
2.78 |
% |
2.78 |
% |
2.80 |
% |
2.92 |
% |
3.11 |
% |
|||||||||||
Primary claim received inventory included in ending delinquent inventory |
538 |
557 |
630 |
665 |
809 |
||||||||||||||||
Primary IIF - # of Delinquent Loans - Flow only |
23,240 |
22,688 |
22,227 |
23,483 |
24,919 |
||||||||||||||||
Primary IIF Delinquency Rate - Flow only |
2.23 |
% |
2.20 |
% |
2.17 |
% |
2.32 |
% |
2.47 |
% |
|||||||||||
Composition of Cures |
|||||||||||||||||||||
Reported delinquent and cured intraquarter |
4,122 |
4,397 |
3,735 |
4,884 |
4,081 |
||||||||||||||||
Number of payments delinquent prior to cure |
|||||||||||||||||||||
3 payments or less |
5,724 |
5,631 |
6,221 |
6,506 |
5,623 |
||||||||||||||||
4-11 payments |
2,001 |
2,075 |
2,401 |
2,419 |
2,616 |
||||||||||||||||
12 payments or more |
366 |
489 |
525 |
539 |
571 |
||||||||||||||||
Total Cures in Quarter |
12,213 |
12,592 |
12,882 |
14,348 |
12,891 |
||||||||||||||||
Composition of Paids |
|||||||||||||||||||||
Number of payments delinquent at time of claim payment |
|||||||||||||||||||||
3 payments or less |
2 |
— |
4 |
2 |
6 |
||||||||||||||||
4-11 payments |
83 |
104 |
121 |
149 |
125 |
||||||||||||||||
12 payments or more |
837 |
941 |
987 |
1,037 |
1,173 |
||||||||||||||||
Total Paids in Quarter |
922 |
1,045 |
1,112 |
1,188 |
1,304 |
||||||||||||||||
Aging of Primary Delinquent Inventory |
|||||||||||||||||||||
Consecutive months delinquent |
|||||||||||||||||||||
3 months or less |
9,447 |
32 |
% |
9,462 |
32 |
% |
8,970 |
30 |
% |
8,568 |
28 |
% |
9,829 |
30 |
% |
||||||
4-11 months |
9,664 |
32 |
% |
9,082 |
30 |
% |
8,951 |
30 |
% |
9,997 |
32 |
% |
9,655 |
29 |
% |
||||||
12 months or more |
10,917 |
36 |
% |
11,396 |
38 |
% |
11,874 |
40 |
% |
12,356 |
40 |
% |
13,414 |
41 |
% |
||||||
Number of payments delinquent |
|||||||||||||||||||||
3 payments or less |
14,895 |
50 |
% |
14,690 |
49 |
% |
14,071 |
47 |
% |
14,129 |
46 |
% |
15,519 |
47 |
% |
||||||
4-11 payments |
8,519 |
28 |
% |
8,225 |
27 |
% |
8,194 |
28 |
% |
8,833 |
28 |
% |
8,842 |
27 |
% |
||||||
12 payments or more |
6,614 |
22 |
% |
7,025 |
24 |
% |
7,530 |
25 |
% |
7,959 |
26 |
% |
8,537 |
26 |
% |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||||||
ADDITIONAL INFORMATION - RESERVES and CLAIMS PAID |
|||||||||||||||||||||||||||||
2019 |
2018 |
Year-to-date |
|||||||||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
2019 |
2018 |
|||||||||||||||||||||||
Reserves (millions) |
|||||||||||||||||||||||||||||
Primary Direct Loss Reserves |
$ |
546 |
$ |
591 |
$ |
610 |
$ |
642 |
$ |
660 |
|||||||||||||||||||
Pool Direct loss reserves |
9 |
11 |
11 |
12 |
13 |
||||||||||||||||||||||||
Other Gross Reserves |
— |
— |
1 |
1 |
1 |
||||||||||||||||||||||||
Total Gross Loss Reserves |
$ |
555 |
$ |
602 |
$ |
622 |
$ |
655 |
$ |
674 |
|||||||||||||||||||
Primary Average Direct Reserve Per Delinquency |
$ |
18,171 |
$ |
18,955 |
$ |
19,684 |
$ |
20,014 |
$ |
20,077 |
|||||||||||||||||||
Net Paid Claims (millions) (1) |
$ |
73 |
$ |
55 |
$ |
55 |
$ |
57 |
$ |
75 |
$ |
240 |
$ |
335 |
|||||||||||||||
Total primary (excluding settlements) |
42 |
47 |
52 |
52 |
62 |
193 |
282 |
||||||||||||||||||||||
Rescission and NPL settlements |
26 |
4 |
— |
— |
10 |
30 |
50 |
||||||||||||||||||||||
Pool |
2 |
1 |
— |
1 |
1 |
4 |
6 |
||||||||||||||||||||||
Reinsurance |
(1) |
(2) |
(2) |
(3) |
(2) |
(8) |
(19) |
||||||||||||||||||||||
Other |
4 |
5 |
5 |
7 |
4 |
21 |
16 |
||||||||||||||||||||||
Reinsurance terminations (1) |
— |
— |
(14) |
— |
— |
(14) |
(2) |
||||||||||||||||||||||
Primary Average Claim Payment (thousands) |
$ |
46.3 |
(2) |
$ |
44.4 |
(2) |
$ |
46.9 |
$ |
43.9 |
$ |
48.0 |
(2) |
$ |
45.3 |
(2) |
$ |
49.2 |
(2) |
||||||||||
Flow only |
$ |
41.2 |
(2) |
$ |
39.4 |
(2) |
$ |
40.0 |
$ |
37.6 |
$ |
41.6 |
(2) |
$ |
39.5 |
(2) |
$ |
43.6 |
(2) |
||||||||||
(1) |
Net paid claims, as presented, does not include amounts received in conjunction with terminations or commutations of reinsurance agreements. |
(2) |
Excludes amounts paid in settlement disputes for claims paying practices and/or commutations of policies. |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||||||||||||||||
ADDITIONAL INFORMATION - REINSURANCE |
|||||||||||||||||||||||||||
2019 |
2018 |
Year-to-date |
|||||||||||||||||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
2019 |
2018 |
|||||||||||||||||||||
Quota Share Reinsurance |
|||||||||||||||||||||||||||
% insurance inforce subject to reinsurance |
78.5 |
% |
78.4 |
% |
78.2 |
% |
77.8 |
% |
77.5 |
% |
|||||||||||||||||
% NIW subject to reinsurance |
79.4 |
% |
81.2 |
% |
83.0 |
% |
84.0 |
% |
75.5 |
% |
81.5 |
% |
75.1 |
% |
|||||||||||||
Ceded premiums written and earned (millions) |
$ |
23.8 |
$ |
23.0 |
$ |
36.5 |
(1) |
$ |
28.2 |
$ |
28.6 |
$ |
111.5 |
$ |
108.2 |
||||||||||||
Ceded losses incurred (millions) |
$ |
3.6 |
$ |
2.7 |
$ |
3.4 |
$ |
1.7 |
$ |
3.0 |
$ |
11.4 |
$ |
6.6 |
|||||||||||||
Ceding commissions (millions) (included in underwriting and other expenses) |
$ |
11.0 |
$ |
11.0 |
$ |
13.4 |
$ |
13.4 |
$ |
12.9 |
$ |
48.8 |
$ |
51.1 |
|||||||||||||
Profit commission (millions) (included in ceded premiums) |
$ |
31.1 |
$ |
32.2 |
$ |
37.0 |
$ |
38.9 |
$ |
36.0 |
$ |
139.2 |
$ |
147.7 |
|||||||||||||
Excess-of-Loss Reinsurance |
|||||||||||||||||||||||||||
Ceded premiums earned (millions) |
$ |
5.2 |
$ |
5.4 |
$ |
4.5 |
$ |
2.5 |
$ |
2.8 |
$ |
17.6 |
$ |
2.8 |
|||||||||||||
Ceded losses incurred (millions) |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
|||||||||||||
(1) |
Includes a $6.8 million termination fee paid to terminate a portion of our 2015 quota share reinsurance agreement. |
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES |
|||||||||||||
ADDITIONAL INFORMATION: BULK STATISTICS AND MI RATIOS |
|||||||||||||
2019 |
2018 |
Year-to-date |
|||||||||||
Q4 |
Q3 |
Q2 |
Q1 |
Q4 |
2019 |
2018 |
|||||||
Bulk Primary Insurance Statistics |
|||||||||||||
Insurance in force (billions) |
$5.6 |
$6.0 |
$6.2 |
$6.7 |
$6.8 |
||||||||
Risk in force (billions) |
$1.6 |
$1.7 |
$1.7 |
$1.9 |
$1.9 |