Private mortgage insurer MGIC Investment Corp. recorded a strong fourth quarter, posting net income of $107.5 million, or $0.28 per diluted share, which beat estimates by $0.06. This is up from last quarter’s net income of $102.4 million, or $0.24 per diluted share.
Looking at the full year, net income reached $342.5 million or $0.86 per diluted share, down from net income for the full year 2015 of $1,172.0 million, or $2.60 per diluted share.
However, net income for the full year of 2015 included $847.8 million associated with the change in the company’s deferred tax asset valuation allowance.
Patrick Sinks, CEO of MTG and its primary subsidiary MGIC, said, “I am pleased to report that in 2016 we achieved strong financial results and continued to position our company for further success.”
“Specifically, our insurance in force continued to grow as we added $48 billion of high quality new insurance, the newer books of business continue to generate low levels of new delinquent notices, the legacy books continue to runoff, and we maintained our traditionally low expense ratio,” Sinks added.
New insurance written in the fourth quarter hit $12.8 billion, compared to $9.8 billion in the fourth quarter 2015. Also increasing, new insurance written for the full year 2016 reached $47.9 billion compared to $43 billion for the full year 2015.
In addition, total revenues for the fourth quarter were $266.5 million, compared with $258.4 million in the fourth quarter last year.
Sinks noted, however, that 2017 is not forecasted to go as well. “We expect to write slightly less new insurance in 2017 compared to 2016 reflecting the current market conditions and a smaller origination market.
Although, he said that when combined with an improvement in annual persistency, MGIC expects that its insurance in force portfolio will continue to grow.
Sinks concluded, “Further we anticipate that the number of new mortgage delinquency notices, claims paid and delinquency inventory will continue to decline and we are well positioned to provide credit enhancement and low down payment solutions to lenders, GSEs and borrowers, now, and in the future.”