MGIC Investment Q1 Earnings Call Highlights

Key Points

• MGIC reported Q1 net income of $165 million with an annualized return on equity of 13% and book value per share up to $23.63 (≈10% YoY), with EPS of $0.76 aided by $31 million of favorable loss reserve development.
• New insurance written rose 41% to $14 billion, driven by stronger refinance activity, though management expects refinancing to moderate if mortgage rates stay around 6.25–6.5%, keeping insurance-in-force roughly flat at about $303 billion.
• MGIC says its capital position is robust—about $6 billion of balance-sheet capital and reinsurance that reduced PMIERs required assets by $3.1 billion—while the board authorized an additional $750 million buyback; the company also paid a $400 million dividend to the holding company to boost liquidity.

MGIC Investment NYSE: MTG reported first-quarter 2026 results that management described as a “strong start” to the year, driven by higher new insurance written and continued favorable credit performance. On the earnings call, CEO Tim Mattke and CFO and Chief Risk Officer Nathan Colson also detailed capital return activity, including a new share repurchase authorization and an intercompany dividend intended to bolster holding-company liquidity.

First-quarter results and book value growth

Mattke said MGIC generated first-quarter net income of $165 million, producing an annualized return on equity of 13%. He added that book value per share rose to $23.63, up 10% year-over-year.

Colson reported earnings of $0.76 per diluted share, compared with $0.75 in the year-ago quarter. He said results included $31 million of favorable loss reserve development, which he attributed primarily to delinquency notices received in 2025 that have cured at better-than-expected rates. “Cure rates on those delinquency notices have exceeded our expectations,” Colson said, adding that MGIC adjusted ultimate loss expectations accordingly.

New insurance written increased 41% as refinances picked up

MGIC wrote $14 billion of new insurance written (NIW) in the first quarter, which Mattke said was up 41% from last year and represented the company’s largest first-quarter NIW since 2022. He attributed the increase to higher refinance activity and what MGIC expects was a modestly larger purchase market.

Insurance in force ended the quarter at approximately $303 billion, which management said was relatively flat sequentially and up 3% from a year ago. Annual persistency ended the quarter at 84%, down from 85% in the prior quarter. Mattke said both metrics were in line with expectations and reiterated that MGIC expects insurance in force to remain “relatively flat” in 2026.

Colson provided additional color on the refinance dynamic, noting that while refinances were a larger portion of NIW, management expects refinance activity to moderate if mortgage rates remain in the recent range. He said that with rates “more in that 6.25-6.5,” the company is seeing a falloff in refinance activity and expects moderation in the second quarter and the second half of the year. If rates decline and refinance volume increases, Colson said persistency would likely fall further and there could be “slight headwinds” to the in-force premium yield depending on the mix of loans refinancing.

Credit performance and delinquency trends

Management emphasized that overall credit quality remains favorable. Mattke said underwriting standards remain strong and MGIC has not seen a material change in credit performance. He also said early payment defaults remain low, which the company views as a positive near-term credit indicator.

Colson said MGIC’s count-based delinquency rate rose 14 basis points year-over-year and 1 basis point sequentially. He noted that seasonal improvements typically seen in the first quarter were “less pronounced” this year. However, he said cures on new notices remain strong and the delinquency rate and level of new notices remain low by historical standards.

In response to analyst questions about delinquency behavior, Colson pointed to timing effects from large servicers’ reporting schedules. He explained that earlier reporting in March by two servicers may have temporarily increased new notices and reduced observed cures in the quarter. “From what we’ve seen so far in April, those trends look pretty favorable and more in line with what we would have expected,” he said, while adding that time will tell.

Colson also discussed “normalization” in delinquency behavior and said MGIC has experienced several years in which the delinquency rate increased roughly 10 to 15 basis points year over year, which he described as consistent with normalizing credit conditions. He highlighted that a larger portion of today’s insured book is in the 3-to-6-year age range, which tends to carry higher delinquency levels, and said the path of delinquencies will also depend on interest rates and how much new business is written.

On severity assumptions, Colson said rising new-notice severity was largely a function of vintage and average loan size. As delinquencies have shifted away from older, smaller-balance vintages and toward more recent vintages with higher loan amounts, the average exposure per delinquency has increased, he said, rather than regional factors or changes in assumptions.

Premium yield, investment income, and expenses

Colson said MGIC’s in-force premium yield was 38 basis points in the quarter, flat sequentially and in line with expectations. With expectations for another year of high persistency and MI origination trends similar to last year, MGIC expects the in-force premium yield to remain relatively flat through the year.

Investment income totaled $62 million, flat both sequentially and year over year, as the investment portfolio book yield has been approximately 4% for the past year. Colson said reinvestment rates continued to exceed book yield, but capital return activity has limited investment portfolio growth.

Underwriting and other expenses were $48 million, down from $53 million in the year-ago quarter, which Colson attributed to disciplined expense management. He reiterated expected full-year operating expenses of $190 million to $200 million.

Capital position and shareholder returns

Mattke said MGIC’s capital structure remains “robust,” citing $6 billion of balance sheet capital and a reinsurance program that management views as a core element of risk and capital management. He said the reinsurance program reduced PMIERs required assets by $3.1 billion, or about 52%, at quarter end.

While reiterating that MGIC prioritizes prudent insurance-in-force growth over capital return, Mattke outlined the company’s continued shareholder return activity in light of constrained insurance-in-force growth in recent years and what management views as attractive share price levels. He said the board authorized an additional $750 million share repurchase program.

Colson said MGIC repurchased 7.2 million shares for $193 million during the first quarter and paid $35 million in quarterly common dividends. Over the prior four quarters, he said repurchases totaled $750 million and dividends totaled $138 million, which together represented a 123% payout of net income earned over that period.

In the second quarter through April 24, MGIC repurchased an additional 1.7 million shares for $47 million. Colson also noted the board approved a $0.15 per share common stock dividend payable May 21.

Mattke added that earlier in the week, MGIC paid a $400 million dividend to the holding company to enhance liquidity and financial flexibility. Addressing a question about accumulated other comprehensive income (AOCI) and capital return, Mattke said management does not view AOCI as a major input into capital return decisions, emphasizing statutory and PMIERs measures instead.

Industry and policy updates

Mattke said housing affordability remains challenging and reiterated that private mortgage insurance supports affordability by enabling low-down-payment borrowers to enter the market. He also referenced a recent FHFA announcement regarding credit score modernization, including movement toward VantageScore 4.0 and FICO Score 10 T. Mattke said MGIC supports the effort and is working with the GSEs, lenders, and technology partners to operationalize the changes.

MGIC said it will participate in the BTIG Housing and Real Estate Conference and the KBW Virtual Real Estate Finance and Technology Conference in May.

About MGIC Investment NYSE: MTG

MGIC Investment Corporation NYSE: MTG is a leading provider of private mortgage insurance in the United States. Established in 1957 as the nation's first private mortgage insurer, MGIC helps lenders manage credit risk and facilitates homeownership by protecting mortgage loans against default. Headquartered in Milwaukee, Wisconsin, the company operates through its principal subsidiary, Mortgage Guaranty Insurance Corporation, and maintains relationships with a broad network of originators and servicers nationwide.

The company's primary business activity involves issuing mortgage insurance policies that enable borrowers to purchase homes with down payments below traditional lending thresholds.

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