MGIC Investment Corporation

MGIC reported second-quarter net income of $182 million, or $0.86 per diluted share, compared with $0.81 per diluted share a year ago. Annualized ROE was 14.5%, and book value per share was $24.27, up 10% year over year. New insurance written was $18 billion, up 8.5% year over year, and insurance in force ended at $305 billion, up 2.6% year over year. The company recorded $43 million of favorable loss reserve development, delinquency rate was 2.37% versus a year ago up 16 basis points, and the in-force premium yield was 38 basis points. Investment income was $59 million, underwriting and other expenses were $46 million versus $52 million a year ago, and full-year operating expenses are expected toward the low end of the previously shared $190 million to $200 million range. For capital returns, MGIC repurchased 6.6 million shares for $177 million, paid a 15¢ quarterly dividend in the quarter, and increased the quarterly common dividend to $0.17 per share.

Timothy Mattke framed the quarter as evidence of disciplined execution, a strong balance sheet, and a long-term strategy that is still working. He emphasized solid credit quality, low early payment defaults, and what he called a broad-based credit normalization rather than deterioration in any region or segment. He also highlighted the company’s role in policy discussions through his new chairmanship of USMI and said MGIC is positioned to manage evolving market conditions while returning capital when growth opportunities are limited.

Nathaniel Colson said results were solid and tied the $43 million of favorable reserve development to better cure activity on 2025 delinquency notices. He noted the delinquency rate fell 7 basis points sequentially to 2.37% but was 16 basis points higher than a year ago, and said seasonality likely lifts delinquencies in the second half. He also pointed to $59 million of investment income, a roughly 4% book yield on the portfolio, $46 million of underwriting and other expenses, and said full-year operating expenses should be toward the low end of $190 million to $200 million. On capital, he said MGIC bought back 6.6 million shares for $177 million, paid $135 million of dividends over the last four quarters, and that the new $0.17 quarterly dividend reflects the strong financial position of both the holding and operating companies.

Analysts pressed management on credit trends, new delinquency notices, cure rates, competitive pricing, reinsurance strategy, housing fundamentals, underwriting standards, and buybacks. Management said it is not seeing geographic or home-price-linked deterioration in new delinquencies, and that current fully developed notice vintages look more like 3% to 4% ultimate claim rates versus the 7.5% initial assumption, which could create future reserve redundancy if conditions hold. On competition, management said the market remains active with six participants and that gross premium rates have been grinding down gradually, but without any sharp quarter-to-quarter change. On capital returns, management said buybacks are intended to roughly track net income in the current environment rather than signal acceleration.