Net income for the first six months of 2007 was $169.1 million, compared with $313.3 million for the same period last year. For the first six months of 2007, diluted earnings per share were $2.05 compared with $3.61 for the same period last year.
Curt S. Culver, chairman and chief executive officer of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation (MGIC), said that the financial results in the short term are being negatively impacted by recent credit developments in California and Florida and continued weakness in the Midwest. However, key long-term business fundamentals continue to improve as evidenced by increasing mortgage insurance penetration and policy persistency.
Total revenues for the second quarter were $369.0 million, up 1.5 percent from $363.5 million in the second quarter of 2006. The increase in revenues resulted primarily from a 4.1 percent increase in net premiums earned to $306.5 million. Net premiums written for the quarter were $321.0 million, compared with $305.3 million in the second quarter last year, a increase of 5.1 percent.
New insurance written in the second quarter was $19.0 billion, compared to $16.1 billion in the second quarter of 2006. New insurance written for the quarter included $1.7 billion of bulk business compared with $6.0 billion in the same period last year. New insurance written for the first six months of 2007 was $31.7 billion compared to $26.1 billion in the first half of 2006 and includes $4.0 billion of bulk business compared to $8.1 billion in the first half of 2006.
Persistency, or the percentage of insurance remaining in force from one year prior, was 72.0 percent at June 30, 2007, compared with 69.6 percent at December 31, 2006, and 64.1 percent at June 30, 2006.
As of June 30, 2007, MGIC's primary insurance in force was $186.1 billion, compared with $176.5 billion at December 31, 2006, and $169.8 billion at June 30, 2006. The book value of MGIC Investment Corporation's investment portfolio was $5.4 billion at June 30, 2007, compared with $5.3 billion at December 31, 2006, and $5.3 billion at June 30, 2006.
At June 30, 2007, the percentage of loans that were delinquent, excluding bulk loans, was 3.95 percent, compared with 4.08 percent at December 31, 2006, and 3.82 percent at June 30, 2006. Including bulk loans, the percentage of loans that were delinquent at June 30, 2007 was 6.11 percent, compared to 6.13 percent at December 31, 2006, and 5.77 percent at June 30, 2006.
Losses incurred in the second quarter were $235.2 million, up from $146.5 million reported for the same period last year. Underwriting expenses were $76.4 million in the second quarter up from $72.4 million reported for the same period last year.
Income from joint ventures, net of tax, for the second quarter was $31.9 million down from $47.6 million for the same period last year. For the six months ending June 30, 2007 joint venture contributions, net of tax, were $46.0 million versus $86.7 million for the same period one year ago.
The book value at June 30, 2007 was $53.68.
About MGIC
MGIC (), the principal subsidiary of MGIC Investment Corporation, is the nation's leading provider of private mortgage insurance coverage with $186.1 billion primary insurance in force covering 1.3 million mortgages as of June 30, 2007. MGIC serves 5,000 lenders with locations across the country and in Puerto Rico and Australia, helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality.
Webcast Details
As previously announced, MGIC Investment Corporation will hold a webcast today at 10 a.m. ET to allow securities analysts and shareholders the opportunity to hear management discuss the company's quarterly results. The call is being webcast and can be accessed at the company's website at The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Investors can listen to the call through CCBN's individual investor center at or by visiting any of the investor sites in CCBN's Individual Investor Network. The webcast will be available for replay through August 19, 2007.
This press release, which includes certain additional statistical and other information, including non-GAAP financial information, is available on the Company's website at under "Investor - News and Financials - News Releases."
Safe Harbor Statement Forward-Looking Statements and Risk Factors: --------------------------------------------
Our revenues and losses could be affected by the risk factors discussed below that are applicable to us, and our income from joint ventures could be affected by the risk factors discussed below that are applicable to C-BASS and Sherman. These risk factors should be reviewed in connection with this press release and our periodic reports to the Securities and Exchange Commission. These factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact. Among others, statements that include words such as we "believe", "anticipate" or "expect", or words of similar import, are forward looking statements. We are not undertaking any obligation to update any forward looking statements we may make even though these statements may be affected by events or circumstances occurring after the forward looking statements were made.
Deterioration in home prices in the segment of the market we serve, a
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