MGIC lost $184.6 million in first quarter
The real estate meltdown is still causing problems for Milwaukee-based MGIC Investment Corp. The company reported a net loss of $184.6 million for the first quarter, or $1.49 diluted loss per share. The company’s net loss is up 435 percent compared with a net loss of $34.5 million for the 2008 first quarter, or 41 cents diluted loss per share.
Curt S. Culver, chairman and chief executive officer of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation (MGIC), said that the company’s quarterly financial results reflect the difficult challenges that the company faces primarily from increased delinquencies which are being driven by a weakening economy, increased unemployment and lower home prices.
"While we believe that we have more than adequate resources to pay all of our insured claim obligations, we are considering options to obtain capital to continue to write new business, which could occur through the use of claims-paying resources that are not needed to cover obligations on our existing insurance in force, from reinsurance and/or through the sale of equity or debt securities," Culver said. "While we have not pursued raising capital from private sources, we have been in discussions with both the U.S. Treasury and the Office of the Commissioner of Insurance of Wisconsin to explore capital options. We believe that one of these options will develop in a manner that, combined with any benefits achieved from the national loan modification and refinance efforts, will allow MGIC to continue to write new insurance on an uninterrupted basis."
The company’s total revenues were up in the first quarter, at $435.2 million, compared with $423.9 million in the first quarter of 2008. Net premiums written for the first quarter were $347.5 million, compared with $368.5 million in the first quarter last year.