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MGIC earnings beat expectations in Q3

Net operating income increases from last year

MGIC Investment Corporation reported net income for the third quarter of $56.6 million, or $0.14 per diluted share. This is down significantly from last year’s net income of $822.9 million or $1.78 per diluted share.

However, net income last year included $739.3 million associated with the change in the company's deferred tax asset valuation allowance. Net operating income was $102.2 million, or $0.25 per diluted share. This is up from last year’s net operating income of $83.1 million, or $0.20 per diluted share.

Revenues rose 1.6% annually to $273.9 million, above the Capital IQ consensus of $259.57 million.

Partially driving the increase in revenues is the percentage of loans that were delinquent, excluding bulk loans, decreased to 4.1%, compared to 5.1% last year.

“I am pleased to report that our insurance in force continued to grow as we added $14.2 billion of high quality new insurance, the newer books of business continue to generate low levels of new delinquent notices, the legacy books continue to runoff, and we maintained our traditionally low expense ratio.” MGIC CEO Patrick Sinks said.

“In August we accessed the senior debt markets and continued our efforts to improve and simplify our capital profile, and reduce the number of potentially dilutive shares,” Sinks said. “Finally, the holding company received another $16 million dividend from MGIC, bringing the year to date total to $48 million.”

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