MGIC posts large 4Q recovery

Milwaukee-based MGIC Investment Corp. today reported fourth quarter net income of $74.4 million, or 19 cents per share, a significant recovery from a loss of $1.4 million, or 0 cents per share, in the fourth quarter of 2013.

Total revenues were $240.4 million, down from $251.9 million in the same quarter last year. MGIC wrote $227.7 million in net premiums in the fourth quarter, up from $204.1 million in the fourth quarter of 2013.

For the full year, MGIC reported net income of $251.9 million, or 64 cents per share, a recovery from a loss of $49.8 million, or 16 cents lost per share, in 2013.

The company reported 2014 revenue of $941.8 million, down from $1 billion in 2013. Net premiums written for the full year were $882 million, down from $923.5 million in 2013.

As of December 31, 2014, MGIC recorded 6.7 percent delinquent loans, excluding bulk loans, an improvement from 8.9 percent delinquency as of December 31, 2013.

The company reported full year losses incurred of $496.1 million, down drastically from $838.7 million in 2013, which it attributed to fewer new delinquency notices received, favorable reserve development and a lower claim rate on new notices.

“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,” said Curt Culver, chief executive officer and chairman of MGIC. “Notably, we have returned to annual profitability while maintaining a solid statutory capital position and low expense ratio.  For the year, new insurance written and risk in force increased while new delinquent notices, paid claims, and the delinquent inventory decreased. 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.”   

Culver, who is retiring March 1, said he expects more refinancing activity in 2015 compared to 2014 as homeowners take advantage of attractive interest rates.

“I’m stepping out here, but I’m more optimistic relative to volume than what I’ve stated here and as far as the company,” Culver said in a call with analysts this morning.

Management thanked Culver during the call for helping to turn the company around during the Great Recession, and position it for future success.

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