MGIC Investment Q2 Earnings Call Highlights

MGIC Investment Q2 Earnings Call Highlights

Strong quarterly results: MGIC reported $182 million in second-quarter net income, or $0.86 per share, aided by $43 million in favorable reserve development and lower expenses. Book value per share increased 10% year over year to $24.27, while annualized ROE reached 14.5%. Business growth with stable credit performance: New insurance written rose 8.5% year over year to $18 billion, and insurance in force increased 2.6% to $305 billion. Although delinquencies were higher than a year ago, management said credit trends remain consistent with normalization and broad-based rather than concentrated deterioration. Higher shareholder returns: The board raised the quarterly dividend 13% to $0.17 per share, marking the sixth consecutive year of increases. MGIC also repurchased $177 million of stock during the quarter and plans to continue returning capital at approximately the level of net income.

MGIC Investment NYSE: MTG reported second-quarter 2026 net income of $182 million, or $0.86 per diluted share, as favorable reserve development and lower operating expenses supported results. The mortgage insurer recorded an annualized return on equity of 14.5% and said book value per share rose 10% from a year earlier to $24.27. Chief Executive Officer Tim Mattke said the company wrote $18 billion in new insurance written during the quarter, up 8.5% from the second quarter of 2025 and its highest quarterly level since the third quarter of 2022. He attributed the increase to a slightly larger mortgage-origination market, supported by seasonal growth in purchase activity.

Insurance in force ended the quarter at $305 billion, rising slightly sequentially and 2.6% year over year. Annual persistency was 83%, compared with 84% in the first quarter, in line with management's previous expectations.

Credit Trends and Reserve Development

Chief Financial Officer Nathan Colson said the company recognized $43 million in favorable loss reserve development during the quarter, primarily reflecting better-than-expected cure activity among delinquency notices received in 2025. MGIC maintained its initial claim-rate assumption of 7.5% for new delinquency notices received in the second quarter. Its count-based delinquency rate declined seven basis points from the prior quarter, which Colson said was expected to reflect seasonal trends. The delinquency rate was nevertheless 16 basis points higher than a year earlier at 2.37%. Management expects seasonal patterns to contribute to higher delinquencies in the second half of 2026, but said credit performance remains consistent with the “credit normalization” the company has experienced over the past three years. The delinquency rate remained 43 basis points below the level reported in the second quarter of 2019. In response to questions about the composition of new delinquencies, Colson said the company has not seen meaningful changes by geography, key credit variables or home-price performance. He said the trends appeared broad-based rather than indicative of deterioration in a particular segment. Colson said fully developed claim rates for delinquency notices from two or three years ago have generally been in the 2% to 3% range, while more recent notices may trend modestly higher. Management currently sees fully developed notice quarters at roughly 3% to 4% ultimate claim rates, still below the 7.5% assumption used for newly reported notices. If current credit conditions continue, the company expects it could have further reserve redundancy available for release through favorable development.

Premiums, Expenses and Housing Market Outlook

MGIC’s in-force premium yield was 38 basis points in the quarter, dow...