MGIC Investment Corporation
) reported second quarter 2013 operating profit of 4 cents per
share, in contrast to the Zacks Consensus Estimate of a loss of
16 cents per share. MGIC had reported an operating loss of $1.36
per share in the year-ago quarter.
Quarterly Operational Update
Total revenue for the quarter came in at $263.9 million, down
18% year over year.
Net premiums written were $236.6 million, down 0.8% year over
year. The company's new insurance written soared 36% year over
year to $8.0 billion in the quarter.
Losses incurred in the second quarter were $196 million, down
64% from last year and down 26% from last quarter. Paid claims in
the second quarter were $433 million, down 32% from last year and
down 8% from last quarter.
Total expenses in the quarter declined 58% year over year to
Investment income in the quarter declined 35% year over year
to $20.8 million.
As of Jun 30, 2013 persistency (the percentage of insurance
remaining in force from the previous year) was 79.8%, down 160
basis points year over year.
As of Jun 30, 2013, MGIC's investment portfolio, cash and cash
equivalents was $5.6 billion, down 1.7% year over year.
Total assets of MGIC were $6.0 billion, down 1.5% year over
At Jun 30, 2013 MGIC's risk-to-capital ratio was 20.2 to 1,
lower than the maximum allowed by the jurisdictions with capital
requirements, and its policyholder position was $175 million
above the required minimum of $1.2 billion.
Book value per share as of Jun 30, 2013 declined 53.0% year
over year to $2.02.
This second quarter 2013 earnings was the first
quarterly profit reported by MGIC, since the second quarter of
2010 and the lowest incurred loss ratio since the second quarter
of 2007. Results were helped by lower claim rate on early-stage
delinquencies, combined with a decreasing level of new notices.
An improving housing market, along with the outstanding credit
quality of the company's new business and its industry's growing
share of business from the FHA, offers an environment for gradual
growth at MGIC.
Radian Group Inc.
Genworth Financial Inc.
) are scheduled to report second quarter earnings
MGIC carries a Zacks Rank #3 (Hold). Another player
Assured Guaranty Ltd.
) with Zacks Rank #1 (Strong Buy) is worth considering.
ASSURED GUARNTY (AGO): Free Stock Analysis
GENWORTH FINL (GNW): Free Stock Analysis
MGIC INVSTMT CP (MTG): Free Stock Analysis
RADIAN GRP INC (RDN): Free Stock Analysis
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