Milwaukee-based MGIC Investment Corp. continues to strengthen its balance sheet in the wake of the troubles it faced during the recession.
The mortgage insurance company today reported first quarter profit of $89.8 million, or 24 cents per share, up from $69.2 million, or 17 cents per share, in the first quarter of 2016. Its first quarter net income included an extra $27.2 million tax provision for the expected settlement of previously disclosed IRS litigation. In 2016’s first quarter, MGIC recorded a $13.4 million pre-tax loss on debt extinguishment.
Excluding those items, net operating income was $117.1 million, up from $76.1 million in the first quarter of 2016.
Revenues totaled $260.9 million in the first quarter, up from $258.6 million in the prior year quarter.
Net premiums written totaled $236.7 million in the first quarter, up from $231.3 million in the first quarter of 2016. New insurance written was $9.3 billion, up 12 percent from $8.3 billion in the prior year quarter.
MGIC reduced its primary delinquent inventory by 18.4 percent year-over-year. About 3.6 percent of MGIC’s loans were delinquent at the end of the first quarter, down from 4.5 percent at the end of 2016’s first quarter.
“I am pleased to report that our insurance in force continued to grow, persistency has started to rise, and the new delinquent notices declined as the newer books of business continue to generate low levels of new delinquent notices and the legacy portfolio continues to run off,” said Patrick Sinks, chief executive officer of MGIC. “Additionally, the anticipated claim rate on existing delinquencies declined and we maintained our traditionally low expense ratio. During the quarter we notified holders of our 2 percent convertible senior notes due in 2020 that we would redeem all of the notes on April 21, which accelerates their decision to convert their notes to shares of our common stock. Finally, in the quarter the holding company received a $20 million dividend from MGIC.”