MGIC Investment (NYSE:MTG) reported second-quarter 2026 net income of $182 million, or $0.86 per diluted share, as favorable reserve development and lower operating expenses supported results. The mortgage insurer recorded an annualized return on equity of 14.5% and said book value per share rose 10% from a year earlier to $24.27.
Chief Executive Officer Tim Mattke said the company wrote $18 billion in new insurance written during the quarter, up 8.5% from the second quarter of 2025 and its highest quarterly level since the third quarter of 2022. He attributed the increase to a slightly larger mortgage-origination market, supported by seasonal growth in purchase activity.
Credit Trends and Reserve Development
Chief Financial Officer Nathan Colson said the company recognized $43 million in favorable loss reserve development during the quarter, primarily reflecting better-than-expected cure activity among delinquency notices received in 2025.
MGIC maintained its initial claim-rate assumption of 7.5% for new delinquency notices received in the second quarter. Its count-based delinquency rate declined seven basis points from the prior quarter, which Colson said was expected to reflect seasonal trends. The delinquency rate was nevertheless 16 basis points higher than a year earlier at 2.37%.
Management expects seasonal patterns to contribute to higher delinquencies in the second half of 2026, but said credit performance remains consistent with the “credit normalization” the company has experienced over the past three years. The delinquency rate remained 43 basis points below the level reported in the second quarter of 2019.
In response to questions about the composition of new delinquencies, Colson said the company has not seen meaningful changes by geography, key credit variables or home-price performance. He said the trends appeared broad-based rather than indicative of deterioration in a particular segment.
Colson said fully developed claim rates for delinquency notices from two or three years ago have generally been in the 2% to 3% range, while more recent notices may trend modestly higher. Management currently sees fully developed notice quarters at roughly 3% to 4% ultimate claim rates, still below the 7.5% assumption used for newly reported notices. If current credit conditions continue, the company expects it could have further reserve redundancy available for release through favorable development.
Premiums, Expenses and Housing Market Outlook
MGIC’s in-force premium yield was 38 basis points in the quarter, down by less than one basis point over the past three years. Colson said that with persistency expected to remain high in 2026 and mortgage-insurance origination trends resembling last year’s levels, the yield is expected to continue along a similar trajectory.
Mattke described the mortgage insurance market as competitive, with six active participants. He said gross premium rates declined slightly during the quarter, continuing a gradual multiyear trend, but added that the company did not see a material change in competitive conditions or a steepening in the rate decline.
Management said affordability remains strained by mortgage rates and home prices, while the refinance market is likely to remain limited at current interest-rate levels. Mattke said the purchase market showed positive signs during the quarter, but that the company does not expect a major change in the broader market in the foreseeable future.
MGIC has not made meaningful changes to its underwriting guidelines, Colson said. The mix of business has remained broadly consistent, although the amount of business with debt-to-income ratios above 45% has declined modestly over the past two years. He said management is comfortable with the current mix and does not see a need for significant underwriting changes.
Investment income totaled $59 million, with the investment portfolio’s book yield remaining near 4%. Reinvestment rates on fixed-income securities continued to exceed the book yield, although capital-return activity has limited investment portfolio growth. Underwriting and other expenses declined to $46 million from $52 million a year earlier. The company now expects full-year operating expenses to fall toward the low end of its previously stated $190 million to $200 million range.
Capital Returns and Reinsurance
MGIC paid a quarterly common dividend of $0.15 per share and repurchased 6.6 million shares for $177 million during the second quarter. Over the past four quarters, the company repurchased $746 million of shares and paid $135 million in dividends, representing 124% of net income over that period.
The board approved an increase in the quarterly common dividend to $0.17 per share. Colson said the increase marked the company’s sixth consecutive year of dividend growth, representing a 19% compound annual growth rate over that period.
Management said share repurchases are being targeted at approximately the level of net income while insurance in force has limited growth and credit performance remains strong. Mattke said the company’s new repurchase authorization should be viewed as a continuation of its existing capital-return approach rather than an acceleration.
The company ended the quarter with $6 billion of balance-sheet capital. Its reinsurance program reduced PMIERs required assets by $3.1 billion, or about 52%, at quarter-end. During the quarter, MGIC completed a traditional excess-of-loss reinsurance transaction that provides up to $168 million of protection on eligible 2027 new insurance written.
Colson said MGIC intends to remain active in quota-share, excess-of-loss and insurance-linked note markets. The company generally seeks to allocate risk-sharing across those three channels, while using differing structures based on the timing and characteristics of the underlying insured loans.
About MGIC Investment (NYSE:MTG)
MGIC Investment Corporation (NYSE: MTG) is a leading provider of private mortgage insurance in the United States. Established in 1957 as the nation’s first private mortgage insurer, MGIC helps lenders manage credit risk and facilitates homeownership by protecting mortgage loans against default. Headquartered in Milwaukee, Wisconsin, the company operates through its principal subsidiary, Mortgage Guaranty Insurance Corporation, and maintains relationships with a broad network of originators and servicers nationwide.
The company’s primary business activity involves issuing mortgage insurance policies that enable borrowers to purchase homes with down payments below traditional lending thresholds.
