Mortgage insurance firm MGIC Investment Corp. (MTG) reported Wednesday a profit for the third quarter that surged from last year, despite a revenues decline, reflecting lower losses and expenses. Earnings per share and quarterly revenues topped analysts' expectations.
"I am pleased to report we had another profitable quarter and that the amount of new insurance written increased 21% while the delinquency inventory declined more than 25% from the same period last year," Chairman and CEO Curt Culver said in a statement.
The Milwaukee, Wisconsin-based company reported net income of $72.02 million or $0.18 per share for the third quarter, sharply higher than $12.11 million or $0.04 per share in the prior-year quarter.
On average, 10 analysts polled by Thomson Reuters expected the company to report earnings of $0.10 per share for the quarter. Analysts' estimates typically exclude one-time items.
Revenues for the quarter declined to $235.12 million from $254.45 million in the same quarter last year, but topped eight Wall Street analysts' consensus estimate of $232.92 million.
Net premiums written declined to $222.91 million from $234.28 million, and net premiums earned slid to $209.04 million from $231.86 million a year ago. Net realized gains surged to $632 thousand from $189 thousand last year.
New insurance written during the quarter totaled $10.4 billion, higher than $8.6 billion in the year-ago quarter.
At the end of the third quarter, persistency, or the percentage of insurance remaining in force from one year prior, was 82.8 percent, compared to 78.3 percent at the end of the prior-year quarter.
MGIC's primary insurance in force stood at $162.4 billion at the end of the third quarter, compared to $159.2 billion at the end of the year-ago quarter.
Total losses and expenses for the quarter declined to $162.85 million from $242.0 million a year ago, with losses incurred narrowing to $115.25 million from $180.19 million reported last year, reflecting fewer new delinquency notices received and lower claim rates on new and previously reported delinquencies.
Net underwriting and other expenses declined to $37.0 million from $48.0 million last year, mainly due to ceding commissions related to reinsurance.
Relative to the recently proposed GSE mortgage insurance eligibility requirements Culver further added that "I fully expect that we will comply with the requirements, whether they are modified or not, and that MGIC will remain a vital part of the evolving U.S. housing finance system."
MTG closed Tuesday's regular trading session at $7.72, down $0.03 on a volume of 6.46 million shares.
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