MTG - Earnings call transcript Q4 2021 | MGIC Investment Corporation

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the MGIC Investment Corporation Fourth Quarter 2021 Earnings Call. At this time, all lines have been placed on mute to prevent any background noise. At the end of today's presentation, we will have a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Mike Zimmerman. Please go ahead.

Mike Zimmerman

Jay. Thanks, thank in us MGIC and for morning for interest your Investment you morning this joining and Good Corporation.

will Executive of Joining to me Colson. our our I quarter participants remind Officer, mtg.mgic.com, on quarterly evening which measures includes GAAP earnings website discuss of located to we today Mattke; additional results Chief XXXX, that about the accessed results want Chief which reconciliation on for the MGIC's Nathan be measures. the call at may Financial to the Officer, company's information the Tim call that release all last a and comparable to and refer fourth of during is their includes most financial non-GAAP

that risk and find our pertaining We have remind contains think which listeners wanted always, posted information may remind and to past time-to-time, in reinsurance transactions about find new investors corrections -- on our or primary other presentations insurance other wanted information and underwriting to written information I also on we parties you'll website we presentation post to I valuable. guidelines our force, a valuable. may interested presentations that and to that other from our website

we call, those expectations could differ this contained statements. of make future. materially in course Actual the comments about our from may the During of results these forward-looking

to issuance in any statements rely call current night. call the Further, fact any contained X-K. that, the no light or undertaking such cause like other the to last of or the the I'd obligation update With in on time at Mattke. than forward-looking the differ turn call results company that are makes that Form materially statements this was to subsequent actual interested about to party discussed over in of we're guidance information forward-looking Tim developments. should could including those are time in of factors, those not the future Additional the COVID-XX, those X-K an If from statements, filed the that

Tim Mattke

we I XXXX. achieved fourth provide for force, the These Thanks, as the everyone. Mike rate and by growing on the of and our will our market current discussing in Then financial housing environment, the open favorable the a opening morning, that policy. up results of the our strategy. management delinquency related questions, good we strong we and full market, strong Nathan very to report the more on and housing financial quality conditions. wrap presence my matter, activities have year made insurance remarks, the results reflect before economic will our After current progress executing results that finance credit solid well operating review in I'm decreasing as capital for pleased line detail quarter to including

more net GAAP earned XX% nearly we quarter, of the the During $XXX same year. income than period last million,

we XXXX. throughout optimistic am to reflects of The that XXXX. level For compared the million lower continue incurred the reported to million XX% income annual $XXX financial credit received policies throughout trends XXXX performance have that improved delinquency delinquent. the the rates notices cure delinquency lower favorable new I improved will and been previously on experiencing and XXXX improved losses full year of the in when $XXX increased same were periods These to compared XXXX, quarterly XXXX. GAAP of because compared materially results strong primarily net to

billion, our billion XX% increasing last quarter. billion In insurance, persistency $XX same in of the largest year. of to business the the annual new level a than in force one we in capitalized addition incurred, markets new by insurance mortgage writing $XXX the a writings higher of in This record on period our XXXX, fourth $XXX including improvement with XX-year higher combined insurance history in losses to company's resulted in

persist. record the and be that improving purchase compared strong and remained to focus these said, expect demand still on housing in in decline off single-family do number borrowers. mortgage GSEs The That their mortgages, low The attractive will the standards. just by despite of a interest private driven FHFA opportunity increasing ranking reduction refinanced to last transactions XXXX, lows, overall to XXXX. robust two This XXXX, leads rising the of market access time we factors combination the insurance by are us market rates years conditions will for moderate will primarily income be into are expect especially smaller historical below recent Going the first and of in volume. for

XX% For The on refis with reflects have performance in in-force Based composition the currently our combined annual the We Taking a a persistency the less result our interest loss our than with pipeline purchase negative end in of in at experienced. we that of new in in quarter. XX% recently than we quarter path was at of to insurance first growing the expectation. more increasing portfolio the business portfolio, two a that XX% look application slower total spectrum of ratio pace than force XXXX, to the in what things. on supports transaction NIW our expect in quarter. This rewrite, our modestly result expected fourth will the for rates, XXXX. accounted some refinances remain expect low of the context, ranging XX% from current XX%

First, reflect resulted of third XXXX were the our loss on reestimation reserves that in prior. reserve rates in on and loans favorable better-than-expected development, cure quarter delinquent to of primarily delinquencies loss prior

the our the strength of new by encouraged high Second, the be I writings the We created and new more business in-force. level business value the which low of January. that retiring mortgage this Last notices strategy persisted financial we fourth holding writing writing create stock. both believe to shareholders. dividends our insurance, our or capital can continue current to maintaining discussed and environment number debt, has delinquencies pursuing on for the be and protect of the low, of opportunities, in management business our company new new quarter, of and primary delinquent the company throughout flexibility insurance was paying quarter quality centers value repurchasing to policyholders long-term by reflecting

position, During reflecting several favorable our expectations of company the liquidity the options of executed and the to our shareholders exceptional sheet our strength results, these financial maintaining increase on continued long-term for our financial quarter, of strength. balance while to we value

a $XXX MGIC to paid company. Specifically, million the holding dividend

capital million approximately diluted of million potentially million, our the stock in quarterly million. due of junior also significant the of $XX of X through returned the convertible of our million $XXX of a and debentures repurchase of $XX the We X% payment to par stock shares shares common for value of amount shareholders X.X common XXXX, eliminating repurchase dividends

March to stock go in common We than on also XX% fully common book dividend outstanding Nathan Board navigating XX%, X, per balance and in a more over In these the will In sheet. two stock We're a have by the are summary, strong number the market diluted share well-capitalized years, share write that dividends. despite by this us and our continuing increasing near-term create by while actions payable our value allow to XXXX. of we that dividend $X.XX value long-term to excited our an like equation more take conditions all strategy the Finally, on insurance distributing the dynamic return $XXX shares meets capital confident remaining through and the the will opportunities that per believe of in increased COVID-related minute. and new last significant counterparty. detail million recently current objectives in XX% business for management offered amount of declared advantage reduced challenges, positioning about after the a we business future. and we shareholders risk-reward

it me over to let that, with Nathan. So turn

Nathan Colson

morning. good and Tim Thanks,

share we XX.X% another the XXXX on equity. beginning and of we or financial results. $X.XX quarter income As earned ended per $XXX mentioned, with generated an annualized Tim shareholders' strong net fourth return quarter, million of In diluted

For we to versus XXXX. was the million XX.X% return or in On to share in million per net $XXX diluted equity income adjusted share full diluted share share quarter, earned year. the $X.XX net beginning year, $XXX per operating shareholders' diluted XXXX. income fourth $X.XX XX.X% $X.XX in in per on last $X.XX compared basis, The XXXX compared diluted or per was

year, in the found share of in income $X.XX versus A net detailed For can XXXX. release. income earned the GAAP reconciliation diluted be we operating press $X.XX per to full adjusted net

be basis the million XX.X total fourth in were net quarter, compared and basis premium year. quarter level to premium which in-force During down of down premium low older the X.X points quarter yield run decline compared the earned single fourth net activity The lower of continues off the premiums result last to decreased points from generally XXXX. was $XXX the revenues the rates. with The primarily decrease to the to premium cancellations. of a have million from policies quarter be yield refinance the X.X basis accelerated as policies points policy last which $XXX continue premium yield and was in replaced for amount of The

were fourth down in was which the million last $XX they quarter, from the $XX million to During but flat quarter quarter earned XXXX. of

in-force that it as yield decline continue similar will that run at the pace off, to the continue did XXXX. expect throughout to premium older XXXX We vintages a in

on quota XX% a both bringing reinsurance XX% front, and additional to XXXX NIW. our On NIW, share quota XX% XXXX have place share to terms to an the our agreed total quota we on the share

During year. million to the same compared were $XX last quarter, million $XX the operating expenses period for

of of the was were $XXX that data are million we in infrastructures onetime the year-over-year timing and result which lower to recur. the in The year, making do technology certain fourth expect majority the investments how not increase our million and The items and $XXX expenses the to operating in was level we due already are For largely quarter of dividends we market. approach paying versus expenses XXXX. full in analytics

million in we operating the decline XX,XXX less to notices investments. of last million of these start quarter, in realize For fourth over to the credit; loans year. the we as last our the $XX In $XXX as the quarter approximately continue than quarter losses are fourth the $XX to be some expect full represents the to million and $XX the million of we of Shifting these XXXX, and year we $XXX quarter. which value investing negative expenses the the insured Over received from incremental at million full completed in expect in spending range continue time, were delinquency quarter new will initiatives level platform. X% we to net transformational compared that incurred

received is XX% of than less While new we the XX% third the less from The fourth quarter fourth received X,XXX the XXXX in notices notices received number than quarter. and in in the of number of up received quarter XXXX. the

the resulted quarter and trends rate experiencing, quarter million including prior we've early of market primarily We are result, in to has adjusted was fourth and defaults payment related and exceeded estimated Secure we last credit near-term activity date housing loss credit unfavorable third of claim by in compared quarter ultimate of strength the the they loss on encouraged in on of since reinsurance level the the expectations in the new approximately last quarter our was reestimation of of the are of new quarter, development immaterial quarter of loss received development notices the Favorable to believe $XX $X on performance. notices delinquencies prior. XXXX. fourth the level claim low down. rate notices are and at XXXX indicators of X.X%. development those delinquencies of good The favorable our received our expectations favorable this to The has the as and quarter reserve million been net on year. development delinquency In a fourth reserves XXXX in

primarily For $XX quarter was favorable forbearance losses XX, December Of received very estimate to we the and the were incurred of reserve X/X XXXX new to period million us in lower in at notices of XX% will by we all the result those or $XX compared forbearance development. reported XX,XXX XXXX. new of end XXXX, the in loans fewer notices million of of to million forbearance approximately in reach number be approximately in middle claims of of and a compared on in the those level The loans the XXXX. inventory incurred our stable XX,XXX their low. claim received XXXX, loss totaled $XXX delinquency to of losses The remained loans majority that rate

the the CFPB. to expect additional and were with and $XX safeguards claim by of procedural million given last few the quarter We quarter $XX million million and for the quarter remain payments imposed Primary to the the fourth to continue lines time for quarters, in XXXX. low loans evictions in GSE next paid associated foreclosure claims compared $XX

want recently and talking our quarter I minutes levels mentioned actions at both strategy to capital of taken. holding liquidity management couple Next, the the above at I last levels our our spend capital about a capital that MGIC targets. we have company were and

As paid several the in dividend the received company. fourth holding actions holding a we company management capital from the OCI executed and MGIC result, quarter. the And quarter, million a on $XXX approval in to

total As we repurchased shares in for $XX $XXX million. Tim quarter, million paid per for mentioned, share and stock of X the a fourth $X.XX of an million dividend common

The of and repurchase of XX X.X% year at of XX For stock the of $XX the outstanding shares approximately stock million. common shares number the million beginning for common dividends million in repurchased the $XXX paid shares full of was XXXX, we year. million

quarter, repurchased quarter I a our junior the was due X.X the pro at forma par in X% retiring and our us reduced in December year-end reduced of debt-to-capital shares, to last a we million mentioned points convertible XX% $XX of potentially $X also a expense interest the million debentures debentures XXX by basis by our and basis level value priority that During diluted on repurchases for million XXXX. annualized ratio below year-end. eliminated

exceeded XXXX, shares delever expect our longer-term target. in for We of to low year-end, also time The per debt-to-capital million $X.XX share repurchasing declared Board continue At dividend million in X. to we to the company's X.X March debentures. payable And $XX share an mid-teens. approach to program on $XXX January. to continued repurchase a million the liquidity in holding ratio our back over and recently Circling our

XX price level debentures As principal share certain a for trading plus above our a reminder, redeem of days. accrued the we interest consecutive can when for remaining closes XX

of notice would share when date. we to their expect into deals. MGIC's would XXX% met provide from flow to debentures the expect or For exceeded million offset At available our Under the days decreased quarter later. $XXX access two largely PMIERs ratio of PMIERs to company price existing redemption a virtually provide XX $XX.XX. was to current capital for expect recently flat We ILN operations. The If target its XXXX, that at excess during is the of date that as its persists, assets its cancellation holding requirement a We holders all redemption is expect debentures notice. to stock the MGIC lieu redemption of of our terms level may of the by level. currently we current in -- amount the with do of due excess would its least will target during we on the convert the assets issuing minimum debentures requirements had of we quota $X.X to the of increased in the cash elect the quarter and as redemption share sufficiency the growth the required PMIERs pay so. available writing the year-end, which the common PMIERs in assets in-force, the runoff agreements before environment the of MGIC's of risk increase level. relatively debentures, to we reinsurance of shares dividend cash continue strong company level billion benefit were and the minimum of macroeconomic were

to as MGIC's continue continue additional our OCI, will appropriate. holding with regulator, discussions We provide position and assess to capital company our the we'll dividends

the frequently had quarterly any mentioned occur I pre-COVID. we cadence As we expect last to than dividends less quarter,

capital maintaining accessing or with debt, share turn both a let strong flexibility that We repurchasing it forward quota using holding and paying Tim. and back including capital to loss provides value by position the company treaties value writing retiring primary long-term business commitment believe that, transactions, dividends our pursuing company. to continue excess be approach of And more me insurance, opportunities, of new the for created mortgage ILN stock. writing can This balanced markets the reinsurance to to via maximize

Tim Mattke

Nathan. Thanks,

address policy the FHA, various Before housing, let and a The government FHFA, CFPB economic continues risk and by additional focus topics. its finance questions, on foreclosure promoting efforts changes access the moving affordable successful to through and including housing homeowners ensuring recovery COVID-XX as to equitable eviction sustainable to agencies, few federal to impacted housing mitigating a making large-scale for the and infrastructure. opposed me to

The of by million encouraged exposure industry the private insurance while housing reduced industry system. share still by in we income, are We a I for our MGIC, housing moderate finance reduce to that that insurance the book to company can play book in and to maintaining income of also offers organized focused policymakers high economic wrote first-time in for are $XXX very mortgage Not low and and housing successful credit the business support we is finance only on experiencing We use robust industry private portfolio the down net company many delivered and per a housing the increased finance that out view dedicated but and role advocate $X positioning future number In on in payment. that reward solutions insurance XX%, and day homebuyers. have sheet in-force are low confident overcome enhancement solutions many had and providing billion, $XXX a low our X.X%. housing of book we At value quality #X has X solely barrier to taxpayer new in record the a our through conditions and lenders, nearly -- we capital and new about a a and investment and does by offer. business regulators writing will return characteristics of debt-to-capital contractual borrowers billion dynamic of a industry and in day GSEs We and insurance homeownership, with cycles. offer improved of to I'm mortgage robust order the resilient which like housing supported Longer current the flow equity, and proposition the outstanding shares and our great to market, all consumers levels by are X.X% market a summary, delinquencies. currently to generated remain especially a as provide equation continue in risk to critical market levels balance a the of to similar value the lenders remains underlying this and housing year. share strong credit premium an reinsurance ratio, believe term, program. XX.X% the of strong

right service to in deliver We team continue operator, have for competitive generate take build our let's up that, best-in-class the our shareholders through as to customers and offerings foundation solid well questions. With place returns. to capital our core as the strong returns and our to business

Operator

first of Harter Thank you. Credit of from Suisse. Our line comes Doug [Operator Instructions] question the

open. is line Your

Douglas Harter

magnitude of yield your level ultimately prepared us mentioned sense you give course out? there remarks, you where written maybe a that any just insurance sense yield Thanks. Is to over In new the the as on to to yield, as 'XX versus that where decline. to get in-force of the the you is continue might to expect in-force can

Nathan Colson

Hey, the question. Nathan. it's Doug, Thanks for

-- new basis what rate most we of think current for kind We But XXXX. the quarter a business of what kind down likely That's saw is about haven't a throughout we're XXXX. come we is. what in-force scenario disclosed yield point the on the

Douglas Harter

of have has guess kind then set more is on down given kind persistency there Great. already to number pressure Or that the premium I single stabilized? rates as that cancellation further? is of -- risen, come And that improves

Nathan Colson

again. Nathan It's Yes.

refinance of some see think than off. seeing as single transaction. of that of we we're some environment with level XX% kind will accelerated now environments I fall in flat that where even normal or even an the reflects level had But less cancellation we rates, rising we just see level

it's could to to Certainly. just go go from because But lower think rising. not rates So going as here? it's I if it are don't X

Douglas Harter

That's helpful. Nathan. Thank you,

Operator

you. Thank

comes question next of Our Johnson from Riley. line the Cullen of

Your open. line is

Cullen Johnson

kind for policy at appears by had policy thanks of When XX% about my Hey, force, historical the questions. in for good look years concentrated two risk of just you morning, any the XXXX, XXXX that it's high levels. taking years in and percentage it

two do to forward? how policy you curious level of risk, speak, so concentration maybe think I'm going those So about that years in

Tim Mattke

Hey question. a Cullen, it's good Tim. It's

I two right? think cognizant markets history. our biggest of And sort in we're it's of something of, the

XXXX. look I think also we at

said, large we another we to think that's market. As be going

So we of think that. diversification that about sort temporal with have you'll

that years, especially home to the the what's business the about quality ultimately, prior of underlying a good, originated we credit business with credit great over sort books of last confidence appreciation those feel obviously, been the quality happened that that's is home think sort also happening. of of of happened a I at appreciation But price lot appreciation. couple of in look have that with have price and would of amount book absent what of XXXX [ph]

keep I it's about qualities something concerned we on. I would of based while say an those we're discussed. eye that sort not all that something It's upon So do

Cullen Johnson

mentioned Or you the curious QSR and drove advantages maybe XXXX are that I'm then ending QSR helpful. broadly, early? That's just what the Got quarter. decision? that the kind policy just transactions of XXXX it. more terminated of maybe release And what the in a

Nathan Colson

last was one large for benefit that $XX amounts maybe runoff is a we just to PMIERs call of the have period. million But think mentioned relatively the out give really to Cullen, notice We deals those of on quarter had small. the we rationale it's us. Nathan. elected cancel of gotten those than providing less Yes. Yes, of book had of those. that because Each I kind years,

just from partially, think could position, and that XXXX. coming from taking for I on as to incremental on given well. certainly felt we absorb answer our like administratively, the that loans really capital comfortable risk feel right a And risk So us and were written -- back XXXX in

Cullen Johnson

you Thanks, all sense. makes That great. answered of my questions. Okay,

Nathan Colson

Thanks.

Operator

Thank you.

Next of line Mark question comes the from DeVries Barclays. of

open. Your line is

Mark DeVries

Yes, a already on have I topics Actually, thanks. addressed. couple follow-ups of

Nathan, premium, one fade business is past. runoff the into On written as the kind some go accelerated higher of refinance XXXX, release that headwind headwinds you understanding has of least expect falls is the my to in we average been the that of at off? premium Wouldn't

Nathan Colson

Yes. XXXX No, Mark, do expect be large a it's to good market think question. we well. that going is I as a

Some is yield. of that to little current bit written business but being a off new may start fall below in-force the average

But we to over So next think down. it's that lot naturally, a dynamics just do of in just and cetera. evolve point size down conviction to a have come to coming I in-force continuing et and yield guide on market us Certainly quarter to than a XXXX. going because the continue the basis market beyond two through for think more about the quarter the that or runoff, that

Mark DeVries

the who had lower-income having as And you could the out HPA and quality higher into kind what some Okay, loans to borrowers high of to pushing we've ensuring? you're have higher-income buy MI a seen impact of put with down got otherwise discuss on might borrowers it. borrowers pushing prices home? money then, enough needing Are maybe

Mike Zimmerman

Mike. it's Mark, Hey

a the around for market but in above the you up margin, but XX% pretty or reflective us of which of HPA tighten couple see XX%, a XX% little that years, it's bit drift can still the bit the last on in purchase more the And LTV. DTIs bit a lower percentage of to that. that above little because so low, any -- XX%, little -- kind a somewhere a little say, bit higher remains I'll On probably I'd of really see yes, certainly say, over you that of

So of on nature, a broad look and there haven't seen say the not FICO that's material the distributions margin, certainly of at there's changes the on that the margin. -- case but when we things but I'd you swath

Mark DeVries

mean, on And it's on a when an that about that; and which Yes. positive for new question I risk. of for year-over-year, how But of risk? do you existing correction you the obviously, of think a HPA just about could you writing unmitigated then how credit your impact prices new XX% on related kind think business on about up think do the that risk are business? what do

Tim Mattke

it's of Yes something think we can of I It's as -- peak to Mark, stress can asset scenarios it's what about, mean sort you Tim. be depreciation, the right? when and about that with there's to sort be. have what think trough any increased

consider I worse -- you're sort home When books paint really pricing right. think now you and to us, good return, risk I get safe to dynamics even dire we say, of it's stress do mean you especially you still you right feel what able confident to think when it we it about really already sort with to focused our that I for still books scenarios about of really credit your the -- I of the that business always feel to good makes but the really does have tough be think you've like business, written it's a price although the are pretty the feel we're we paint scenarios, appreciation, business about on pricing to of we equation. on scenarios is our the stress what of of all behind confident have think with as I well. quality taking stress feel book reinsurance can we're in work and account do dynamics into pricing we in But think return

Mark DeVries

Okay, helpful. That's Tim.

Mike Zimmerman

obviously, period place of that, add reinsurance. the the with bit -- there's going on that, lot just But comment Tim's to was last in to there the programs of a reinsurance about is to having I Mark, the that Tim, a point. of capital made Yes. the recent over multiple benefits values focus

Mark DeVries

that makes sense. Thank you. Yes,

Mike Zimmerman

Thanks.

Operator

Thank you.

comes of Bose George from line Next the question of KBW.

open. is line Your

Mike Zimmerman

Bose?

Bose George

Hi, guys. me? Can hear you

Mike Zimmerman

Yes.

Tim Mattke

Yes.

Bose George

Great.

of about how dividends could potential what size up year in company XXXX? this to the just talk think back First, we -- actually, you can to holding the paid about paid relative you've

Nathan Colson

Nathan. that Bose, one. take I'll it's

are we be really the we've time, I some throughout the like for on said going it's to that situation dependent think year. capital

think supportive So macroeconomic to if And dividends that environment, of fairly shown we there will target the pay and to for levels. can generate we're that we've this That going our do condition a half that us is we attractive at continue be in we above high year capital have last favorable think dividends. the a in we're is I that think environment we rate. excess capital. first But order of

we'll continue appropriate dividends. and look So And an we'll to we our continue pay the approvals that get that's from evaluation make. if regulators, if can to to

Bose George

follow-up of the a of a mean -- more of guess, 'XX. $XXX annualized a that that in the you that year? back did, level I the maybe payout should the that. bit dividends guess million think of for catch-up in effectively that's on -- we was I an of as I just sense that And of half

Nathan Colson

given I of to, the the the follow continue the level, then end going we second quarter the position feel $XXX forward. supports environment that kind or Again, of I or third the and quarter, higher dividends think our that path lower, capital that that's to million we'll would capital And Yes. million our the just the dividend. end We'll dividend and comfortable and point of if at reassess. of at position both with kind $XXX then

Bose George

I Okay. we expected. actually on And in tell it's came little a guess, early your but mean, market share. had NIW just better than looks then to one I it

then And a that in Or share market, is how related the curious thoughts bulk Thanks. that trending? see also market? on how is moving little on you a just around note, Just the your well? bit as share in your

Tim Mattke

exactly know fall I -- around. there's know It's release, the tough from where where guess, only to a I a people other obviously to, it's really much again, to market share. being removing tough are bulk think I don't to don't market, on focus there second share in we

I good. on fall think back quarter, about capital, this felt we the -- were market deploy the able felt good to we we really was

of a that's of And to that good is feel the we're sort writing. customers service on customer pretty I pricing of we in our that into think good we delivering business read they want what high-quality like and translating I lot sort also market. the and we're that market the have a think

So in were what feel quarter. we'll we to we about good other but people report able wait fourth see what the accomplish and

Bose George

great. Thanks. Okay,

Operator

you. Thank

from of America. Bank Mihir Bhatia Next the comes of question line of

Your line is open.

Mihir Bhatia

thank you questions. taking good my and morning Hi, for

performance Or Just loan about they the they to in forbearance particular. performing cure? with loans as did to in in want one line performing regular more mortgages? maybe reperforming with mortgages ask just start, Are line it I of is

Mike Zimmerman

is when this all reperforming. Mihir, mean, they're following I Mike. they're Hey both because If reperforming, right, I'm

need but on and that reporting you're higher the we when obligations complete majority get, we recurrent. coming program of are monthly are continuing these deferral that are don't got have they considered to coming But them out the they're reporting loans their of out used So the and same forbearance, get staying current the current.

borrower our current performing any other is on obligations. that like So just

Mihir Bhatia

versus asking like Okay. it regular... Yes, have maybe I'm not mortgages higher to seems it delinquent be to what I trying clearly. like guess again understand previously was delinquent I is tendency a

Mike Zimmerman

in No, not perform. The mortgages those HAMP right? I to vast weren't Yes. like you. see. Yes, go I think did But I redefault. just And got the I early with HAMP there. up. They on continue like the majority don't capitalized. cycle I the payments of the borrowers' The think modifications, too modifications, No, mean,

think better, definitive expect on extended early out we'd too the anything to tell it. these they of payments performance similar, but out not because just I if mortgage

Mihir Bhatia

other just question. then, And Understood. one

a understand you In level LTV price price delinquent a terms appreciation give how home versus inventory? has has, but inventory, like much know, much given of just probably on the understand it's much As inventory you of don't home MSA an to level trying statistic give or I I estimated, -- your delinquent appreciation, can how just statistic your at on you individual like can below how the XX%?

Mike Zimmerman

about They LTV don't being and a maybe have the certainly question profile right the adjusted much We of look back business. do mark-to-market in to of risk 'XX kind at the referring [indiscernible]. the earlier so the

what you seen appreciation. vast think been have certainly you lot 'XX I I'd the at there's price you're are marketplace, because figure of majority But majority at it the level. of vast appreciation don't price I MSA look a are to have that the the ones you delinquent precise loans a [ph] to and that look 'XX and So across similar give. general 'XX, hearing for it. say the

Mihir Bhatia

looking Okay. now any very like gives housing it's And right anything environment, feels is very it are mean pause? credit markets, my at benign there where last you're it you just, I question backdrop. a favorable

So you back maybe giving bit? pulling comment I'm little a anything Anything there where that? be is Thank is looking out just might you. or you're thinking pause can curious, that on which there that you're you you at

Tim Mattke

we're for sectors. any markets, Tim. there's if looking mean It's it's Yes. weaknesses always I certain in certain if

we look So regularly. something it's at

think it's that through say when something continue sort right? HPA HPA you that watch good just broad, from of amount but don't I I It's to go gives as first what housing right into XXXX I factors we we say I first say of in that really specifically, in we'll monitoring and anything market I would about originating that But that's And concerned would as to we we 'XX. the written any I'd now. about again, feel feel think something tremendous continue talk in part move we're of still fair we've think about. say up, nothing month that I think here pretty prices of the it's pause. that where XXXX us -- about and the through we're but to think environment and affordability,

Mihir Bhatia

you. Thank

Tim Mattke

Sure.

Operator

you. Thank

the Dunn from Next Partners. & Geoffrey Dowling question comes line of of

Your line is open.

Geoffrey Dunn

it been two a is a historically Nathan, supplemented lumpy back been to an you've morning. just annual the the good going more of quarterly approach Obviously, on guys, basis revisit quarters special by a have consistent one-off going to regular dividend Hi Are of you forward? specials. payer discussion, specials? last quarterly dividend dividend Or MGIC. out

Nathan Colson

thanks to At But no, up dividend pre-COVID. the if obligations. of have holding much the holding But kind trying the dividends company's of recall, Yes. were for Geoff, sense as $XXX question. make million that quarterly company also us. we to you to time, a paid didn't the on MGIC, line really initially, special We dividend from top that. given our did position, the liquidity the

path But I wouldn't on hoc And so dividends of ad they're basis. seeking more the say a probably kind special we're down necessarily I think of annual.

they're they than could did pre-COVID. frequent like I don't be think going to more think I they happen annual. quarterly just

Geoffrey Dunn

And talk forward? kind Okay. that going remain mentioned does you MGIC for change that the And and run to does is you What do to are your that? business? little [ph]? expenses does rate call just then, return into expense base? more what them mean a transformational. elevated that? What improve it Tim, at about you What bit of with investment your might you tech underlying Can grow going when it And we it? Or

Tim Mattke

little a market approach different think pricing high the Nathan the sort how But or opening a the four bit smartly alluded are I of to guess, little about, the compete than let talk were we which dynamics ago. a to we from The And of understand it and couple a market. run and years bit we I'll environment level three in Nathan on invest in Yes. about standpoint that they remarks. need talk to rate. One how tried I dimensions. is, we've about I view

done of through job in and so that tried understanding And really investment. some that we've sort think of the dynamics to good that we've regard market invest a of

dive strongly appropriately. pricing about standpoint there's we that the things over think and in I that the underwriting too, bit process think risk deeper when from from an a little believe, you we a time analytical credit standpoint, can

I have in the about talked too. think industry, others that

I our on service, our how And -- we things we're is are, of that a surface our think looking top I platforms I pay to from we the and sure and but scratching really necessarily going And we who us just we're be so customers make an other types more staying way think seamlessly operation as how things then, right that quick to think on those about themselves. customers making allow with that. probably our integrate dividend standpoint interact to don't be think really -- and the over those to sure customer with time, efficient of

will company our want And pay maintaining as want so where want meet to interact make customers customer has as that it sure been. opposed that investment behind that. standpoint, be think sure I mortgage our that dividends with digitization well And great meet for can MGIC has in their met of expectations they from of can how of and with time forefront company as to on than exceed to when we're to ever And that service probably we lagging interact there's as and to that always we we more on customers. the to over think the the we we make and

Nathan Colson

we gave guidance Yes. we just And some of I of the rate level expect in relative run kind Geoff, and are to I today range. $XXX think versus of million future, elevated where do of the kind the investment. kind

think successes in we we think year -- and us. as on I market XXXX of to dependent largely what you down our the level I come compete there's XXXX, in what need Exactly continue to -- bit elevated starts think that to where looks a is of that. that be. that's for we think and little positioned be will today, think kind and But the another investment like to we about market point. if here that sit need we beyond well to we're reevaluate sure effectively do we'll make But where

Geoffrey Dunn

my Okay. cost ILN capital. last And is then on question of

still oldest the that upfront cycle after the true across you But the credit do you deal of you when it's are deals PMIERs capital outstanding, look you If no expense looks it your do to the is capital how the benefit? mid-single tax. get, about cost like at launched, low when providing two think digit

Nathan Colson

Nathan. it's Geoff, Yes

And two we'll kept delinquencies see in the which And loans kind -- where also doesn't that triggers you during has on loans COVID, the now of we thresholds. to the above losses, inception, deals scenarios, a benefit great the a think we're that, of rate which to it's capital were remaining continue wide I is, but happen that didn't question. scenario, it's very deals is just as increase expected that's kind the react at the which a delinquency fast of prepayments running kind delinquency take whole a I available. number off. for policies situation large deals, by including to think that two structured in-force large runoff of are not way consistent contemplate of think, our try looking divided doing again. we one thinking at has of long But on it's deal, the as the a about one cost down, [indiscernible] in the market most first scenarios market of good those a when why And with starting happening about we're or had recent where those of PMIERs of pay structure not changed to that is us, so for somewhere necessarily cost slow. number execute The with attractive to range

Geoffrey Dunn

Thank great. Okay, you.

Operator

you. Thank

Next BTIG. question comes from the line of Gilbert Ryan of

open. is line Your

Ryan Gilbert

everyone. good morning, Hi,

if think better you strong, I that the were details First growth? add I'm question expected. growth. just on purchase how there into NIW. growth that than driving think competitive differences year-over-year to peers drove your quarter? in that would looked wondering what any particularly was Or the volume fourth help. -- some you The details how do Any Is that that in And just relative can looked the is positioning you

Tim Mattke

Obviously, Tim. anything and regard. is did specific they're producing. I there it's by It's think where mostly our on that we that don't customers driven

don't great purchase trying the you it and a maybe just our that think I have we deploy positioning obviously But have that -- any what standpoint, there's heavy quarter. So fourth from performed a insights anything, than saw I why don't would as to in end, expected. wasn't capital to market on better

Ryan Gilbert

you the industries? PMI Thanks. around to it. some second then Is new question adjacent hear just that are you're looking love evaluating. the or color opportunities got would And business within at that business? details Or Okay, core

Tim Mattke

it's would -- about I would Tim. specific nothing I there. say that Yes. to talk there's

we have make sure say in want open to to to I the we is, eyes keep continue we that we'll what think our said past opportunities. and

obviously, and different at had ultimately capital type of that got to those quite cognizant and purchase least our the customers always we've there. debt, other down say market we opportunities the how we as best the point at we enhance we about currently then can some be term is And way that there's to that I or want out shareholders, in haven't found what the our thing anything to But would that the we of of that But think want that And the But could there purchasing there's and do opportunities consider -- could that, repurchases, shareholders. sort nothing do. frankly, share to we excess dividends the is service else. think I that do actionable could deploy near any be something either means. specific actionable First, really currently by about that we we for and here think out of them. opportunities be that's few think if

Ryan Gilbert

make Okay, the terms the just got it. versus change a to lot has any there you opportunities of of call been just warranted market laid out, this -- out quality sense. Yes. in quarter them Is pricing priorities of in others? there that as And or capital

Tim Mattke

or unusual in particular, in anything that I quarter the much how I -- to seemed think I at of shift mean, No. of react. the I market obviously anything think I how didn't little other people fourth maybe competition upon But saw a flows depending don't I we think behaving. specifically. maybe dictates what don't bit think you was that time certain significant

like again, we returns able a it, to we're deploy the it it. So very capital with able deploy it were the XXXX. to forward And felt looking was, to comfortable good felt again, quarter,

Ryan Gilbert

Thank very all have. I that's Okay, you much.

Tim Mattke

Thank you.

Operator

at call time. I would And are There turn questions like remarks. to no closing further presenters our for to this over the

Tim Mattke

great hope day. I interest and Thanks, MGIC everyone's a Jay. Okay. in appreciate everyone has

Operator

Ladies and gentlemen, for this you concludes today's participating. Thank conference call.

disconnect. a now may You day. great Have

MGIC Investment (MTG) 3 Feb 222021 Q4 Earnings call transcript