MGIC Investment Corp. (MTG) reported that net income for the quarter ended June 30, 2015 was $113.7 million, compared with a net income of $45.5 million for the same quarter a year ago.
Total revenues for the second quarter were $243.1 million, compared with $231.2 million for the same quarter last year. Net premiums written for the quarter were $226.8 million, compared with $213.4 million for the same quarter last year.
New insurance written in the second quarter was $11.8 billion, compared to $8.3 billion for the same quarter last year. Persistency, or the percentage of insurance remaining in force from one year prior, was 80.4% at June 30, 2015, compared with 82.8% at Dec. 31, 2014, and 82.4% at June 30, 2014.
“I am pleased to report that in the second quarter of 2015 the company continued to grow our insurance in force by adding another $11.8 billion of high-quality new insurance,” said Patrick Sinks, CEO of MTG and Mortgage Guaranty Insurance Corporation. “At the same time, I am encouraged by the positive trends we continue to experience on pre-2009 business relative to new delinquent notices, paid claims, and the declining delinquent inventory.
“The combination of profitable new business, the continued runoff of the older books, and a strengthened housing market, positions us well to provide credit enhancement solutions to our customers now and in the future," he said.
As of June 30, 2015, MGIC's primary insurance in force was $168.8 billion, compared with $164.9 billion at Dec. 31, 2014, and $159.3 billion at June 30, 2014. The fair value of the investment portfolio, cash and cash equivalents was $4.8 billion at June 30, 2015, compared with $4.8 billion at Dec. 31, 2014, and $5.0 billion at June 30, 2014.
At June 30, 2015, the percentage of loans that were delinquent, excluding bulk loans, was 5.48%, compared with 6.65% at December 31, 2014, and 7.30% at June 30, 2014. Including bulk loans, the percentage of loans that were delinquent at June 30, 2015 was 6.78%, compared to 8.25% at December 31, 2014, and 8.98% at June 30, 2014.
Losses incurred in the second quarter were $90.2 million, compared to $141.1 million in the second quarter of 2014.
The decrease in losses incurred is primarily a result of fewer new delinquency notices received and a lower claim rate on new notices. Net underwriting and other expenses were $37.9 million in the second quarter, compared to $33.9 million reported for the same period last year; the increase was primarily a result of employee costs.
For the full year of 2015 MGIC expects that new insurance written will exceed the level written in 2014, however, the year over year percentage increase, as measured on a quarterly basis, is expected to be lower in the second half of 2015 when compared to the first half of 2015. For the full year annual persistency is forecasted to be 80-85%.
The number of loans in the delinquent inventory is expected to continue to decline modestly and the claim rate applied to new delinquent notices is expected to gradually decrease throughout the balance of the year.
The underwriting expense ratio is expected to stay relatively stable for the second half of 2015. MGIC expects that it will be in compliance with PMIERS when they become effective at December 31, 2015.