.
.
.
Exhibit 99
[MGIC LOGO]
<Table>
INVESTOR CONTACT: Michael J. Zimmerman, Investor Relations, (414) 347-6596, mike_zimmerman@mgic.com
MEDIA CONTACT: Katie Monfre, Corporate Communications, (414) 347-2650, katie_monfre@mgic.com
</Table>
MGIC INVESTMENT CORPORATION
FIRST QUARTER NET INCOME OF $163.5 MILLION
MILWAUKEE (APRIL 13, 2006) -- MGIC Investment Corporation (NYSE:MTG) today
reported net income for the quarter ended March 31, 2006 of $163.5 million,
compared with the $182.0 million for the same quarter a year ago. Diluted
earnings per share were $1.87 for the quarter ending March 31, 2006, compared to
$1.90 for the same quarter a year ago.
Curt S. Culver, chairman and chief executive officer of MGIC Investment
Corporation and Mortgage Guaranty Insurance Corporation (MGIC), said that the
quarterly results benefited from positive joint venture results and the expected
seasonal decline in the delinquencies which somewhat offset the decline of
insurance in force and associated revenues.
Total revenues for the first quarter were $369.0 million, down 4.1 percent from
$384.9 million in the first quarter of 2005. The decline in revenues resulted
from a 5.2 percent decrease in net premiums earned to $299.7 million. Net
premiums written for the quarter were $300.5 million, compared with $312.2
million in the first quarter last year, a decrease of 3.8 percent.
New insurance written in the first quarter was $10.0 billion, compared to $11.4
billion in the first quarter of 2005. New insurance written for the quarter
included $2.1 billion of bulk business compared with $2.5 billion in the same
period last year.
Persistency, or the percentage of insurance remaining in force from one year
prior, was 62.0 percent at March 31, 2006, compared with 61.3 percent at
December 31, 2005, and 59.7 percent at March 31, 2005. As of March 31, 2006,
MGIC's primary insurance in force was $166.9 billion, compared with $170.0
billion at December 31, 2005, and $172.1 billion at March 31, 2005. The book
value of MGIC Investment Corporation's investment portfolio and cash was $5.4
billion at March 31, 2006, compared with $5.5 billion at December 31, 2005, and
$5.7 billion at March 31, 2005.
The delinquency inventory is 76,362 as of March 31, 2006, of which the company
estimates 3,100 delinquencies are the result of Hurricanes Katrina, Rita and
Wilma. At March 31, 2006, the percentage of loans that were delinquent,
excluding bulk loans, was 4.00 percent, compared with 4.52 percent at December
31, 2005, and 3.77 percent at March 31, 2005. Including bulk loans, the
percentage of loans that were delinquent at March 31, 2006 was 6.00 percent,
compared to 6.58 percent at December 31, 2005, and 5.71 percent at March 31,
2005.
Losses incurred in the first quarter were $114.9 million, up from $98.9 million
reported for the same period last year. Underwriting expenses were $75.4 million
in the first quarter up from $68.8 million reported for the same period last
year.
Income from joint ventures, net of tax in the quarter, was $39.1 million, up
from $34.2 million for the same period last year.
ABOUT MGIC
MGIC (www.mgic.com), the principal subsidiary of MGIC Investment Corporation, is
the nation's leading provider of private mortgage insurance coverage with $166.9
billion primary insurance in force covering 1.3 million mortgages as of March
31, 2006. MGIC serves 5,000 lenders with locations across the country and in
Puerto Rico, 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 www.mgic.com. 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 www.companyboardroom.com or by
visiting any of the investor sites in CCBN's Individual Investor Network. The
webcast will be available for replay through May 14, 2006.
This press release, which includes certain additional statistical and other
information, including non-GAAP financial information, is available on the
Company's website at www.mgic.com under "Investor - News and Financials - News
Releases."
SAFE HARBOR STATEMENT
Forward-Looking Statements and Risk Factors
The Company's revenues and losses could be affected by the risk factors
discussed below, which should be read in conjunction with the company's periodic
reports to the SEC. These factors may also cause actual results to differ
materially from the results contemplated by forward looking statements that the
Company may make. Forward looking statements consist of statements which relate
to matters other than historical fact. Among others, statements that include
words such as the Company "believes", "anticipates" or "expects", or words of
similar import, are forward looking statements. The Company is not undertaking
any obligation to update any forward looking statements it may make even though
these statements may be affected by events or circumstances occurring after the
forward looking statements were made.
The amount of insurance the Company writes could be adversely affected if
lenders and investors select alternatives to private mortgage insurance.
These alternatives to private mortgage insurance include:
o lenders originating mortgages using piggyback structures to avoid private
mortgage insurance, such as a first mortgage with an 80% loan-to-value
ratio and a second mortgage with a 10%, 15% or 20% loan-to-value ratio
(referred to as 80-10-10, 80-15-5 or 80-20 loans, respectively) rather than
a first mortgage with a 90%, 95% or 100% loan-to-value ratio,
o investors holding mortgages in portfolio and self-insuring,
o investors using credit enhancements other than private mortgage insurance
or using other credit enhancements in conjunction with reduced levels of
private mortgage insurance coverage, and
O lenders using government mortgage insurance programs, including those of
the Federal Housing Administration and the Veterans Administration.
While no data is publicly available, the Company believes that piggyback loans
are a significant percentage of mortgage originations in which borrowers make
down payments of less than 20% and that their use is primarily by borrowers with
higher credit scores. During the fourth quarter of 2004, the Company introduced
on a national basis a program designed to recapture business lost to these
mortgage insurance avoidance products. This program accounted for 7.5% of flow
new insurance written in the fourth quarter of 2005 and 6.3% of flow new
insurance written for all of 2005.
Deterioration in the domestic economy or changes in the mix of business may
result in more homeowners defaulting and the Company's losses increasing.
Losses result from events that reduce a borrower's ability to continue to make
mortgage payments, such as unemployment, and whether the home of a borrower who
defaults on his mortgage can be sold for an amount that will cover unpaid
principal and interest and the expenses of the sale. Favorable economic
conditions generally reduce the likelihood that borrowers will lack sufficient
income to pay their mortgages and also favorably affect the value of homes,
thereby reducing and in some cases even eliminating a loss from a mortgage
default. A deterioration in economic conditions generally increases the
likelihood that borrowers will not have sufficient income to pay their mortgages
and can also adversely affect housing values.
Approximately 8.6% of the Company's primary risk in force is located in areas
within Alabama (0.3%), Florida (4.5%), Louisiana (1.0%), Mississippi (0.6%) and
Texas (2.2%) that have been declared eligible for individual and public
assistance by the Federal Emergency Management Agency as a result of Hurricanes
Katrina, Rita and Wilma. The effect on the Company from these hurricanes,
however, will not be limited to these areas to the extent that the borrowers in
areas that have not experienced wind or water damage are adversely affected due
to deteriorating economic conditions attributable to these hurricanes.
The mix of business the Company writes also affects the likelihood of losses
occurring. In recent years, the percentage of the Company's volume written on a
flow basis that includes segments the Company views as having a higher
probability of claim has continued to increase. These segments include loans
with loan-to-value ("LTV") ratios over 95% (including loans with 100% LTV
ratios), "FICO" credit scores below 620, limited underwriting, including limited
borrower documentation, or total debt-to-income ratios of 38% or higher, as well
as loans having combinations of higher risk factors.
Approximately 9% of the Company's primary risk in force written through the flow
channel, and 72% of the Company's primary risk in force written through the bulk
channel, consists of adjustable rate mortgages ("ARMs"). The Company believes
that during a prolonged period of rising interest rates, claims on ARMs would be
substantially higher than for fixed rate loans, although the performance of ARMs
has not been tested in such an environment. In addition, the Company believes
the volume of "interest-only" loans (which may also be ARMs) and other loans
with negative amortization features, such as pay option ARMs, increased in 2004
and 2005. Because interest-only loans and pay option ARMs are a relatively
recent development, the Company has no data on their historical performance. The
Company believes claim rates on certain of these loans will be substantially
higher than on comparable loans that do not have negative amortization.
Competition or changes in the Company's relationships with its customers could
reduce the Company's revenues or increase its losses.
Competition for private mortgage insurance premiums occurs not only among
private mortgage insurers but also with mortgage lenders through captive
mortgage reinsurance transactions. In these transactions, a lender's affiliate
reinsures a portion of the insurance written by a private mortgage insurer on
mortgages originated or serviced by the lender. As discussed under "The mortgage
insurance industry is subject to risk from private litigation and regulatory
proceedings" below, the Company provided information to the New York Insurance
Department and the Minnesota Department of Commerce about captive mortgage
reinsurance arrangements.
It has been publicly reported that certain other insurance departments may
review or investigate such arrangements. The level of competition within the
private mortgage insurance industry has also increased as many large mortgage
lenders have reduced the number of private mortgage insurers with whom they do
business. At the same time, consolidation among mortgage lenders has increased
the share of the mortgage lending market held by large lenders.
The Company's private mortgage insurance competitors include:
o PMI Mortgage Insurance Company,
o Genworth Mortgage Insurance Corporation,
o United Guaranty Residential Insurance Company,
o Radian Guaranty Inc.,
o Republic Mortgage Insurance Company,
o Triad Guaranty Insurance Corporation, and
o CMG Mortgage Insurance Company.
If interest rates decline, house prices appreciate or mortgage insurance
cancellation requirements change, the length of time that the Company's policies
remain in force could decline and result in declines in the Company's revenue.
In each year, most of the Company's premiums are from insurance that has been
written in prior years. As a result, the length of time insurance remains in
force (which is also generally referred to as persistency) is an important
determinant of revenues. The factors affecting the length of time the Company's
insurance remains in force include:
o the level of current mortgage interest rates compared to the mortgage
coupon rates on the insurance in force, which affects the vulnerability of
the insurance in force to refinancings, and
o mortgage insurance cancellation policies of mortgage investors along with
the rate of home price appreciation experienced by the homes underlying the
mortgages in the insurance in force.
During the 1990s, the Company's year-end persistency ranged from a high of 87.4%
at December 31, 1990 to a low of 68.1% at December 31, 1998. At March 31, 2006
persistency was at 62.0%, compared to the record low of 44.9% at September 30,
2003. Over the past several years, refinancing has become easier to accomplish
and less costly for many consumers. Hence, even in an interest rate environment
favorable to persistency improvement, the Company does not expect persistency
will approach its December 31, 1990 level.
If the volume of low down payment home mortgage originations declines, the
amount of insurance that the Company writes could decline which would reduce the
Company's revenues.
The factors that affect the volume of low-down-payment mortgage originations
include:
o The level of home mortgage interest rates,
o the health of the domestic economy as well as conditions in regional and
local economies,
o housing affordability,
o population trends, including the rate of household formation,
o the rate of home price appreciation, which in times of heavy refinancing
can affect whether refinance loans have loan-to-value ratios that require
private mortgage insurance, and
o government housing policy encouraging loans to first-time homebuyers.
In general, the majority of the underwriting profit (premium revenue minus
losses) that a book of mortgage insurance generates occurs in the early years of
the book, with the largest portion of the underwriting profit realized in the
first year. Subsequent years of a book generally result in modest underwriting
profit or underwriting losses. This pattern of results occurs because relatively
few of the claims that a book will ultimately experience occur in the first few
years of the book, when premium revenue is highest, while subsequent years are
affected by declining premium revenues, as persistency decreases due to loan
prepayments, and higher losses.
If all other things were equal, a decline in new insurance written in a year
that followed a number of years of higher volume could result in a lower
contribution to the mortgage insurer's overall results. This effect may occur
because the older books will be experiencing declines in revenue and increases
in losses with a lower amount of underwriting profit on the new book available
to offset these results.
Whether such a lower contribution would in fact occur depends in part on the
extent of the volume decline. Even with a substantial decline in volume, there
may be offsetting factors that could increase the contribution in the current
year. These offsetting factors include higher persistency and a mix of business
with higher average premiums, which could have the effect of increasing
revenues, and improvements in the economy, which could have the effect of
reducing losses. In addition, the effect on the insurer's overall results from
such a lower contribution may be offset by decreases in the mortgage insurer's
expenses that are unrelated to claim or default activity, including those
related to lower volume.
Changes in the business practices of Fannie Mae and Freddie Mac could reduce the
Company's revenues or increase its losses.
The business practices of the Federal National Mortgage Association ("Fannie
Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac"), each of
which is a government sponsored entity ("GSE"), affect the entire relationship
between them and mortgage insurers and include:
o the level of private mortgage insurance coverage, subject to the
limitations of Fannie Mae and Freddie Mac's charters, when private mortgage
insurance is used as the required credit enhancement on low down payment
mortgages,
o whether Fannie Mae or Freddie Mac influence the mortgage lender's selection
of the mortgage insurer providing coverage and, if so, any transactions
that are related to that selection,
o whether Fannie Mae or Freddie Mac will give mortgage lenders an incentive,
such as a reduced guaranty fee, to select a mortgage insurer that has a
"AAA" claims-paying ability,
o rating to benefit from the lower capital requirements for Fannie Mae and
Freddie Mac when a mortgage is insured by a company with that rating,
o the underwriting standards that determine what loans are eligible for
purchase by Fannie Mae or Freddie Mac, which thereby affect the quality of
the risk insured by the mortgage insurer and the availability of mortgage
loans,
o the terms on which mortgage insurance coverage can be canceled before
reaching the cancellation thresholds established by law, and
o the circumstances in which mortgage servicers must perform activities
intended to avoid or mitigate loss on insured mortgages that are
delinquent.
The mortgage insurance industry is subject to the risk of private litigation and
regulatory proceedings.
Consumers are bringing a growing number of lawsuits against home mortgage
lenders and settlement service providers. In recent years, seven mortgage
insurers, including MGIC, have been involved in litigation alleging
violations of the anti-referral fee provisions of the Real Estate Settlement
Procedures Act, which is commonly known as RESPA, and the notice provisions of
the Fair Credit Reporting Act, which is commonly known as FCRA. MGIC's
settlement of class action litigation against it under RESPA became final in
October 2003. MGIC settled the named plaintiffs' claims in litigation against it
under FCRA in late December 2004 following denial of class certification in June
2004. There can be no assurance that MGIC will not be subject to future
litigation under RESPA or FCRA or that the outcome of any such litigation would
not have a material adverse effect on the Company. In August 2005, the United
States Court of Appeals for the Ninth Circuit decided a case under FCRA to which
the Company was not a party that may make it more likely that the Company will
be subject to future litigation regarding when notices to borrowers are required
by FCRA.
In June 2005, in response to a letter from the New York Insurance Department
("NYID"), the Company provided information regarding captive mortgage
reinsurance arrangements and other types of arrangements in which lenders
receive compensation. In February 2006, the NYID requested MGIC to review its
premium rates in New York and to file adjusted rates based on recent years'
experience or to explain why such experience would not alter rates. In March
2006, MGIC advised the NYID that it believes its premium rates are reasonable
and that, given the nature of mortgage insurance risk, premium rates should not
be determined only by the experience of recent years. In February 2006, in
response to an administrative subpoena from the Minnesota Department of Commerce
(the "MDC"), which regulates insurance, the Company provided the MDC with
information about captive mortgage reinsurance and certain other matters. In the
spring of 2005, spokesmen for insurance commissioners in Colorado and North
Carolina were publicly reported as saying that those commissioners are
considering investigating or reviewing captive mortgage reinsurance
arrangements. Insurance departments or other officials in other states may also
conduct such investigations or reviews.
The anti-referral fee provisions of RESPA provide that the Department of Housing
and Urban Development ("HUD") as well as the insurance commissioner or attorney
general of any state may bring an action to enjoin violations of these
provisions of RESPA. The insurance law provisions of many states prohibit paying
for the referral of insurance business and provide various mechanisms to enforce
this prohibition. While the Company believes its captive reinsurance
arrangements are in conformity with applicable laws and regulations, it is not
possible to predict the outcome of any such reviews or investigations nor is it
possible to predict their effect on the Company or the mortgage insurance
industry.
Net premiums written could be adversely affected if the Department of Housing
and Urban Development reproposes and adopts a regulation under the Real Estate
Settlement Procedures Act that is equivalent to a proposed regulation that was
withdrawn in 2004.
HUD regulations under RESPA prohibit paying lenders for the referral of
settlement services, including mortgage insurance, and prohibit lenders from
receiving such payments. In July 2002, HUD proposed a regulation that would
exclude from these anti-referral fee provisions settlement services included in
a package of settlement services offered to a borrower at a guaranteed price.
HUD withdrew this proposed regulation in March 2004. Under the proposed
regulation, if mortgage insurance were required on a loan, the package must
include any mortgage insurance premium paid at settlement. Although certain
state insurance regulations prohibit an insurer's payment of referral fees, had
this regulation been adopted in this form, the Company's revenues could have
been adversely affected to the extent that lenders offered such packages and
received value from the Company in excess of what they could have received were
the anti-referral fee provisions of RESPA to apply and if such state regulations
were not applied to prohibit such payments.
The Company could be adversely affected if personal information on consumers
that it maintains is improperly disclosed.
As part of its business, the Company maintains large amounts of personal
information on consumers. While the Company believes it has appropriate
information security policies and systems to prevent unauthorized disclosure,
there can be no assurance that unauthorized disclosure, either through the
actions of third parties or employees, will not occur. Unauthorized disclosure
could aversely affect the Company's reputation and expose it to material claims
for damages.
The Company's income from joint ventures could be adversely affected by credit
losses, insufficient liquidity or competition affecting those businesses.
C-BASS: Credit-Based Asset Servicing and Securitization LLC ("C-BASS") is
particularly exposed to credit risk and funding risk. In addition, C-BASS's
results are sensitive to its ability to purchase mortgage loans and securities
on terms that it projects will meet its return targets. With respect to credit
risk, a higher proportion of non-conforming mortgage originations (the types of
mortgages C-BASS principally purchases) in 2005 compared to 2004 were products,
such as interest only loans to subprime borrowers, that are viewed by C-BASS as
having greater credit risk. In addition, credit losses are a function of housing
prices, which in certain regions have experienced rates of increase greater than
historical norms and greater than growth in median incomes. With respect to
liquidity, the substantial majority of C-BASS's on-balance sheet financing for
its mortgage and securities portfolio is short-term and dependent on the value
of the collateral that secures this debt. While C-BASS's policies governing the
management of capital at risk are intended to provide sufficient liquidity to
cover an instantaneous and substantial decline in value, such policies cannot
guaranty that all liquidity required will in fact be available. Although there
has been growth in the volume of non-conforming mortgage originations in recent
years, volume is expected to decline in 2006. There is an increasing amount of
competition to purchase non-conforming mortgages, including from real estate
investment trusts and from firms that in the past acted as mortgage securities
intermediaries but which are now establishing their own captive origination
capacity. Decreasing credit spreads also heighten competition in the purchase of
non-conforming mortgages and other securities.
Sherman: The results of Sherman Financial Group LLC are sensitive to its ability
to purchase receivable portfolios on terms that it projects will meet its return
targets. While the volume of charged-off consumer receivables and the portion of
these receivables that have been sold to third parties such as Sherman has grown
in recent years, there is an increasing amount of competition to purchase such
portfolios, including from new entrants to the industry, which has resulted in
increases in the prices at which portfolios can be purchased.
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<Table>
<Caption>
Three Months Ended March 31,
-------------------------------------------------
2006 2005
-------------------------------------------------
(in thousands of dollars, except per share data)
Net premiums written $ 300,472 $ 312,239
========= =========
Net premiums earned $ 299,667 $ 316,079
Investment income 57,964 57,003
Realized gains 87 1,565
Other revenue 11,314 10,261
--------- ---------
Total revenues 369,032 384,908
Losses and expenses:
Losses incurred 114,885 98,866
Underwriting, other expenses 75,352 68,786
Interest expense 9,315 10,722
Ceding commission (1,087) (891)
--------- ---------
Total losses and expenses 198,465 177,483
--------- ---------
Income before tax and joint ventures 170,567 207,425
Provision for income tax 46,166 59,660
Income from joint ventures, net of tax (1) 39,052 34,248
--------- ---------
Net income $ 163,453 $ 182,013
========= =========
Diluted weighted average common shares
outstanding (Shares in thousands) 87,227 95,784
========= =========
Diluted earnings per share $ 1.87 $ 1.90
========= =========
(1) Diluted EPS contribution from C-BASS $ 0.22 $ 0.19
Diluted EPS contribution from Sherman $ 0.21 $ 0.16
</Table>
NOTE: See "Certain Non-GAAP Financial Measures" for diluted earnings per share
contribution from realized gains.
MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF
<Table>
<Caption>
March 31, December 31, March 31,
2006 2005 2005
------------------------------------------------
(in thousands of dollars, except per share data)
ASSETS
Investments (1) $5,237,080 $5,295,430 $5,481,961
Cash and cash equivalents 206,595 195,256 187,096
Reinsurance recoverable on loss reserves (2) 14,039 14,787 16,233
Prepaid reinsurance premiums 9,110 9,608 6,344
Home office and equipment, net 32,579 32,666 33,954
Deferred insurance policy acquisition costs 16,934 18,416 26,663
Other assets 807,881 791,406 692,227
---------- ---------- ----------
$6,324,218 $6,357,569 $6,444,478
========== ========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loss reserves (2) 1,103,557 1,124,454 1,134,100
Unearned premiums 160,130 159,823 139,101
Short- and long-term debt 597,674 685,163 655,215
Other liabilities 267,331 223,074 318,381
---------- ---------- ----------
Total liabilities 2,128,692 2,192,514 2,246,797
Shareholders' equity 4,195,526 4,165,055 4,197,681
---------- ---------- ----------
$6,324,218 $6,357,569 $6,444,478
========== ========== ==========
Book value per share $ 48.08 $ 47.31 $ 43.92
========== ========== ==========
(1) Investments include unrealized gains on securities
marked to market pursuant to FAS 115 70,086 119,836 104,086
(2) Loss reserves, net of reinsurance recoverable on loss reserves 1,089,518 1,109,667 1,117,867
</Table>
CERTAIN NON-GAAP FINANCIAL MEASURES
<Table>
<Caption>
Three Months Ended March 31,
--------------------------------------
2006 2005
--------------------------------------
(in thousands of dollars, except per share data)
Diluted earnings per share contribution from realized gains:
Realized gains $ 87 $ 1,565
Income taxes at 35% 30 548
------------ -------------
After tax realized gains 57 1,017
Weighted average shares 87,227 95,784
------------ -------------
Diluted EPS contribution from realized gains $ -- $ 0.01
============ =============
</Table>
Management believes the diluted earnings per share contribution from realized
gains provides useful information to investors because it shows the after-tax
effect that sales of securities from the Company's investment portfolio, which
are discretionary transactions, had on earnings.
OTHER INFORMATION
<Table>
New primary insurance written ("NIW") ($ millions) $ 10,032 $ 11,407
============== ================
New risk written ($ millions):
Primary $ 2,725 $ 3,065
============== ================
Pool (1) $ 68 $ 48
============== ================
Product mix as a % of primary flow NIW
95% LTVs 24% 27%
ARMs 11% 13%
Refinances 28% 33%
Net paid claims ($ millions)
Flow $ 62 $ 71
Bulk (2) 53 58
Other 20 20
-------------- ----------------
$ 135 $ 149
============== ================
</Table>
(1) Represents contractual aggregate loss limits and, for the three months
ended March 31, 2006 and 2005, for $19 million and $361 million,
respectively, of risk without such limits, risk is calculated at $1 million
and $20 million, respectively, the estimated amount that would credit
enhance these loans to a 'AA' level based on a rating agency model.
(2) Bulk loans are those that are part of a negotiated transaction between the
lender and the mortgage insurer.
OTHER INFORMATION
<Table>
<Caption>
As of
---------------------------------------
March 31, December 31, March 31,
2006 2005 2005
----------------------------------------
Direct Primary Insurance In Force ($ millions) 166,881 170,029 172,051
Direct Primary Risk In Force ($ millions) 44,107 44,860 44,747
Direct Pool Risk In Force ($ millions) (1) 2,968 2,909 3,053
Mortgage Guaranty Insurance Corporation - Risk-to-capital ratio 6.2:1 6.3:1 6.4:1
Primary Insurance:
Insured Loans 1,273,382 1,303,084 1,370,852
Persistency 62.0% 61.3% 59.7%
Total loans delinquent 76,362 85,788 78,234
Percentage of loans delinquent (delinquency rate) 6.00% 6.58% 5.71%
Loans delinquent excluding bulk loans 41,022 47,051 41,469
Percentage of loans delinquent excluding bulk loans (delinquency rate) 4.00% 4.52% 3.77%
Bulk loans delinquent 35,340 38,737 36,765
Percentage of bulk loans delinquent (delinquency rate) 14.31% 14.72% 13.59%
A-minus and subprime credit loans delinquent (2) 33,085 36,485 32,545
Percentage of A-minus and subprime credit loans delinquent (delinquency rate) 17.32% 18.30% 15.66%
</Table>
(1) Represents contractual aggregate loss limits and, at March 31, 2006,
December 31, 2005 and March 31, 2005, respectively, for $4.8 billion, $5.0
billion and $5.1 billion of risk without such limits, risk is calculated at
$470 million, $469 million and $438 million, the estimated amounts that
would credit enhance these loans to a 'AA' level based on a rating agency
model.
(2) A-minus and subprime credit is included in flow, bulk and total.
<Table>
<Caption>
Q1 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 Q1 2006
------- ------- ------- ------- ------- -------
Insurance inforce
Flow ($ bil) $143.0 $135.1 $132.8 $130.9 $129.5 $128.6
Bulk ($ bil) $42.3 $37.0 $39.0 $39.3 $40.5 $38.3
RISK INFORCE
% Prime (FICO 620 & >) 83.0% 84.6% 84.2% 84.0% 84.3% 84.8%
% A minus (FICO 575 - 619) 12.3% 11.0% 11.1% 11.1% 10.9% 10.6%
% Subprime (FICO < 575) 4.7% 4.4% 4.7% 4.9% 4.8% 4.6%
BULK % OF RISK INFORCE BY CREDIT GRADE
Prime (FICO 620 & >) 55.6% 58.4% 58.0% 57.5% 59.6% 59.9%
A minus (FICO 575 - 619) 29.9% 27.1% 26.7% 26.8% 25.3% 25.2%
Subprime (FICO < 575) 14.5% 14.5% 15.3% 15.7% 15.1% 14.9%
FLOW % OF RISK INFORCE BY CREDIT GRADE
% Prime (FICO 700 and >) 49.9% 51.4% 51.9% 52.3% 52.6% 52.7%
% Prime (FICO 620 - 699) 43.0% 41.8% 41.5% 41.2% 41.0% 41.0%
% A minus (FICO 575 - 619) 5.9% 5.7% 5.6% 5.5% 5.4% 5.4%
% Subprime (FICO < 575) 1.2% 1.1% 1.0% 1.0% 1.0% 0.9%
NEW INSURANCE WRITTEN
Flow ($ bil) $10.8 $8.9 $10.4 $11.4 $9.4 $7.9
Bulk ($ bil) $2.1 $2.5 $6.2 $6.8 $5.9 $2.1
AVERAGE LOAN SIZE OF INSURANCE IN FORCE (000'S)
Flow $120.9 $122.7 $123.2 $123.8 $124.6 $125.3
Bulk $127.8 $136.7 $141.7 $147.8 $153.9 $155.2
AVERAGE COVERAGE RATE OF INSURANCE IN FORCE
Flow 24.4% 24.8% 25.0% 25.1% 25.2% 25.3%
Bulk 30.2% 30.3% 30.0% 30.1% 30.3% 30.3%
PAID LOSSES (000'S)
Average claim payment - flow $25.0 $26.5 $25.8 $26.4 $26.5 $26.4
Average claim payment - bulk $22.8 $25.6 $25.6 $27.1 $27.5 $27.3
Average claim payment - total $24.0 $26.1 $25.7 $26.7 $27.0 $26.9
RISK SHARING ARRANGEMENTS - FLOW ONLY
% insurance inforce subject to risk sharing (1) 46.7% 48.0% 48.0% 47.7% 47.8%
% Quarterly NIW subject to risk sharing (1) 51.2% 47.0% 46.7% 47.8% 49.0%
Premium ceded (millions) $29.0 $30.2 $30.3 $30.5 $31.9 $32.4
DOCUMENTATION TYPE - % OF RISK IN FORCE THAT IS ALT A
Bulk 24.7% 26.7% 27.8% 29.5% 32.5% 33.4%
Flow 6.9% 6.7% 6.6% 6.7% 6.9% 7.1%
Total 11.7% 11.7% 12.1% 12.7% 13.9% 14.0%
OTHER:
Shares repurchased
# of shares (000) 395.0 1,100.1 3,350.0 1,109.3 3,183.1 1,372.9
Average price $67.48 $ 62.33 $60.73 62.84 $60.35 $ 66.67
C-BASS Investment $228.7 $304.8 $330.6 $341.8 $362.6 $385.5
Sherman Investment $45.8 $69.4 $101.4 $50.9 $79.3 $47.2
GAAP loss ratio (insurance operations only) 55.8% 31.3% 43.9% 47.8% 56.2% 38.3%
GAAP expense ratio (insurance operations only) 13.7% 15.9% 15.1% 15.7% 16.9% 17.5%
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FOOTNOTES:
(1) Latest Quarter data not available due to lag in reporting