MGIC Investment Corporation (MTG) reported fourth-quarter net income of $74.4 million, compared with a net loss of $1.4 million for the same quarter a year ago. Diluted net income per share was $0.19 for the, compared to diluted loss per share of $0.00 for the same quarter a year ago. 

For the full year, net income was $251.9 million, compared with a net loss of $49.8 million for the full year 2013. Diluted net income per share was $0.64 compared to a diluted loss per share of $0.16 for the full year 2013.

Total revenues for the fourth quarter dipped to $240.4 million, down from $251.9 million in the fourth quarter last year.

This beat earnings per share expectations by $0.04 cents, while revenue beat by $2.71 million.

Additionally, new insurance written in the fourth quarter jumped to $9.5 billion, compared to $6.7 billion in the fourth quarter 2013. 

For the full year, new insurance written increased to $33.4 billion compared to $29.8 billion for the full year 2013. 

At the end of 2014, the percentage of loans that were delinquent, excluding bulk loans, was 6.65%, compared with 8.92% a year ago.

Losses incurred in the fourth quarter were $117.1 million, compared to $196.1 million in the fourth quarter of 2013.  For the full year 2014, losses incurred were $496.1 million compared to $838.7 million in 2013. 

This is primarily a result of fewer new delinquency notices received, a lower claim rate on new notices and favorable reserve development. 

Net underwriting and other expenses fell to $35.8 million in the fourth quarter, compared to $47.0 million a year ago. 

For the full year 2014, net underwriting and other expenses were $146.1 million compared to $192.5 million in 2013.  Both drops were primarily reflecting a reduction in headcount and an increase in ceding commissions related to reinsurance agreements.

"I am pleased to report that in 2014 the company continued to build on the progress we have made regarding many of the challenges we have been facing.  Notably we have returned to annual profitability while maintaining a solid statutory capital position and low expense ratio,” said Curt Culver, CEO and chairman of the board.

“For the year, new insurance written and risk in force increased while new delinquent notices, paid claims, and the delinquent inventory decreased."  Culver added, "I am encouraged by the positive trends in home prices and employment and am enthusiastic about the opportunities for growth and success for MGIC, and the mortgage insurance industry in 2015 and beyond."  

Mortgage insurance companies have been at the forefront of housing recently due to changes in regulations, which includes mortgage guidelines from Fannie Mae and Freddie Mac that went into effect on Dec. 1. The change lowered the minimum down payment from 5% to 3%, impacting private insurers.

Mortgage insurance rates are down relative to 2013, having fallen by an average of 3.36% across all credit scores. The biggest drop (11.36%) has been for buyers with a credit score of at least 760 who are making a 90% LTV purchase.