MGIC Investment Corporation, a key player in the mortgage insurance sector through its subsidiary Mortgage Guaranty Insurance Corporation (MGIC), has reported significant developments as of September 30, 2024. The company provides mortgage insurance to lenders and government-sponsored entities, safeguarding against losses from defaults on low down payment residential mortgage loans.
As of the latest reporting period, MGIC remains compliant with the private mortgage insurer eligibility requirements (PMIERs) of government-sponsored enterprises (GSEs), with available assets exceeding the minimum required assets. The company is also in compliance with its debt covenants, having made interest payments of $34.1 million for the nine months ended September 30, 2024, a slight decrease from $35.1 million in the same period of 2023.
In terms of reinsurance, MGIC reported a reinsurance recoverable on loss reserves related to QSR Transactions of $45.3 million, up from $33.3 million at the end of 2023. The company has decided to terminate its 2021 QSR transaction effective December 31, 2024, anticipating an early termination fee of approximately $8 million in the fourth quarter of 2024. Additionally, MGIC has entered into a new 40% QSR transaction with unaffiliated reinsurers for most of its new insurance written in 2025 and 2026.
The company has also seen changes in its investment portfolio, with investments at fair value required for insurance and reinsurance activities increasing to $198.4 million from $156.9 million since the end of 2023. However, the number of securities in an unrealized loss position decreased from 1,021 to 851, attributed primarily to rising interest rates.
MGIC's operational strategies include a focus on share repurchases, having repurchased 17.5 million shares for $373.2 million in the nine months ended September 30, 2024, compared to 21.7 million shares for $340.6 million in 2023. The company has $651 million remaining under its share repurchase program, which extends through December 31, 2026. Dividends paid in 2024 totaled $400 million in October and $350 million in April, with a quarterly cash dividend of $0.13 per share declared on October 24, 2024.
The company has frozen its non-contributory defined benefit pension plan and supplemental executive retirement plan effective January 1, 2023, with all participants fully vested as of December 31, 2022. A contribution of $23.0 million was made to the qualified pension plan in Q1 2024.
Overall, MGIC Investment Corporation continues to navigate the mortgage insurance landscape with strategic reinsurance agreements, share repurchase initiatives, and compliance with regulatory requirements, positioning itself for future growth.
About MGIC INVESTMENT CORP
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