MGIC Investment Corp. reported second-quarter net income of $118.6 million, an improvement from the $109.2 million for the
Total revenue was flat on a year-over-year basis, $263.3 million compared with $263.5 million one year prior.
Its earnings per share of $0.31 was "well ahead" of the FBR Capital Market's estimate of $0.24 and the consensus estimate of $0.25, said FBR analyst Randy Binner in a research note. "The beat versus our model came from lower-than-forecast losses, as the company saw a reserve release for the second quarter in a row."
MGIC's losses incurred during the quarter were $27.3 million compared to $46.6 million last year. There were fewer new delinquency notices received plus a lower claim rate when compared with the second quarter last year.
There was $12.9 billion of new insurance written, up 2.4% from the $12.6 billion for the second quarter of 2016. But this was slightly below Binner's estimate of $13 billion.
Persistency, which is defined as the percentage of insurance that remains in force from one year prior, was 77.8% as of June 30, up from 76.9% at the end of last year but down from 79.9% on June 30, 2016.
The year-over-over increase in NIW, plus the improved persistency resulted in a 5.5% growth in insurance-in-force to $187.3 billion, MGIC CEO Patrick Sinks said in a press release.
Going forward, insurance-in-force should continue to grow across the MI sector "driven by a steady purchase market and a continued recovery in the percentage of first-time buyers," said an earnings preview report issued before the MGIC announcement by Keefe, Bruyette and Woods analyst Bose George. Furthermore,
