MTG — MGIC Investment Corporation

Summary of MGIC Investment Corporation Q1 2026 Earnings Call

1. Key Financial Results and Metrics:

• Net Income: $165 million, or $0.76 per diluted share, slightly up from $0.75 per diluted share in Q1 2025.
• Return on Equity: 13% annualized.
• Book Value per Share: Increased by 10% year-over-year to $23.63.
• New Insurance Written (NIW): $14 billion, a 41% increase year-over-year, marking the largest first quarter since 2022.
• Insurance in Force: Approximately $303 billion, flat quarter-over-quarter, up 3% year-over-year.
• Persistency Rate: 84%, down from 85% in the previous quarter.
• Investment Income: $62 million, flat year-over-year and sequentially.
• Share Repurchases: 7.2 million shares repurchased for $193 million in the quarter.

2. Strategic Updates and Business Highlights:

• The company emphasizes a disciplined market approach and strong underwriting standards, maintaining solid credit quality with low early payment defaults.
• A $750 million share repurchase program was authorized, reflecting a commitment to capital return while balancing financial strength.
• A $400 million dividend was paid to the holding company to enhance liquidity.
• MGIC supports credit score modernization initiatives by the FHFA, which could improve affordability for borrowers.

3. Forward Guidance and Outlook:

• The company expects insurance in force to remain relatively flat in 2026, with potential for increased refinance activity if mortgage rates decline more than anticipated.
• Operating expenses are projected to be between $190 million and $200 million for the year.
• The in-force premium yield is expected to remain stable, with continued strong persistency anticipated unless significant refinance activity occurs.

4. Bad News, Challenges, or Points of Concern:

• The persistency rate has declined, indicating potential challenges in maintaining insurance in force levels amidst rising refinance activity.
• The account-based delinquency rate increased slightly, with seasonal trends not providing the usual benefits seen in previous years.
• The macroeconomic environment remains uncertain, with potential headwinds from energy prices and inflation impacting borrowers, although no significant direct impacts have been observed yet.

5. Notable Q&A Insights:

• Management acknowledged that the increase in delinquency rates was partly due to reporting timing from servicers, which may have skewed results.
• There is a focus on monitoring the macroeconomic environment, particularly unemployment rates and wage growth, as these factors could influence borrower behavior.
• The increase in new notice severity is attributed to a shift in the vintage mix towards higher loan amounts, rather than regional pressures.
• Management remains optimistic about long-term credit trends, citing strong cure rates and favorable development in loss reserves.

Overall, MGIC reported strong financial performance in Q1 2026, with strategic initiatives focused on capital management and supporting housing affordability, while navigating potential challenges in the macroeconomic landscape.