MGIC Investment Corp (NYSE:MTG) Reports Strong Q4 2024 Performance with $185 Million Net Income

MGIC Investment Corp (NYSE:MTG) has delivered a solid financial performance for the fourth quarter and the full year of 2024. The company reported a net income of $185 million for Q4 2024, reflecting an annualized return on equity of 14%. This marks a strong year-end for the insurer, with a full-year net income of $763 million, a 4.5% increase compared to the previous year’s $730 million.

Key Financial Highlights

• Net income per diluted share for Q4 2024 was $0.72, an increase from $0.66 in the same period last year. For the full year, net income per diluted share increased to $2.89 from $2.49 in 2023.
• Insurance in force reached over $295 billion by the end of Q4 2024.
• The company wrote $16 billion in new insurance in Q4, contributing to a total of $56 billion for the full year, which is a 21% increase over 2023.

Shareholder Returns

MGIC Investment Corp has also been highly committed to returning value to its shareholders. In Q4 2024, the company repurchased 7.8 million shares for $193 million, bringing its remaining share repurchase authorization to $372 million as of January 31, 2025. Additionally, $33 million was paid out in common stock dividends during the fourth quarter.

The company’s dividend from MGIC to the holding company amounted to a substantial $400 million, further showcasing its robust financial position. The payout ratio for 2024 stood at 92% of the company’s net income, highlighting the strong return of capital to shareholders.

Operational Efficiency

MGIC has made strides in reducing its operating expenses, with Q4 expenses falling to $49 million, down from $55 million in the same period last year. For the full year of 2024, operating expenses were $218 million, representing a $19 million decrease from 2023. The company anticipates continued operational efficiencies in 2025.

Challenges and Risks

Despite the strong operational results, MGIC Investment Corp faced some headwinds:

• The delinquency rate in Q4 2024 rose by 16 basis points, reaching 2.4% due to seasonal trends and hurricane-related delinquencies. Specifically, Hurricanes Helene and Milton contributed to approximately 700 new delinquency notices.
• The company also saw unrealized losses on its investment portfolio, which increased by $129 million due to rising yields across the treasury curve.
• While MGIC’s insurance in force grew substantially, the company acknowledged that market size limitations have constrained further growth opportunities.

Reinsurance and Investment Portfolio Updates

MGIC’s reinsurance agreements were instrumental in reducing PMIERs required assets by $2.2 million or approximately 40% at the end of Q4, providing a more favorable capital position. However, the book yield on the investment portfolio remained flat quarter-over-quarter, with net investment income slightly declining by $1 million sequentially.

Despite some challenges, MGIC Investment Corp continues to make strong strides in the insurance and financial markets, underpinned by its commitment to operational efficiency and shareholder returns.