Mgic Investment Corporation · NYSE:MTG
Mgic Investment — Q1 2020 Earnings Presentation
19 slides from Mgic Investment's earnings presentation, May 8, 2020
Slide 1: MGIC Investment Corporation Portfolio Supplement Q1 2020
MGIC Investment Corporation Portfolio Supplement Q1 2020 NYSE: MTG
Slide 2: Forward Looking Statements
Forward Looking Statements As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires, and “MGIC” refers to Mortgage Guaranty Insurance Corporation. This presentation may contain forward looking statem
Slide 3: Primary Risk in Force: Year of Origination and Top 10 Jurisdictions
Primary Risk in Force March 31, Year of Origination Top 10 Jurisdictions 30% 10% 25.6% 8.4% 25% 8% 7.1% 20% 6.4% 15.1% 6% 14.2% 15% 5.3% 11.7% 4.4% 4.2% 10% 7.6% 4% 3.6% 3.4% 6.1% 3.3% 3.2% 4.8% 5% 4.1% 2.2% 2.0% 2.4% 1.1% 1.3% 1.3% 0.3% 0.1% 0.2% 2% 0% 2020 2019 2018 2017 2016 2015 2014 2013 2012 2
Slide 4: Primary Risk in Force March 31, 2020
Primary Risk in Force March 31, 2020 Origination year: 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 & Prior Original risk written (billions) $3.6 $16.2 $12.5 $12.3 $11.9 $10.8 $8.7 $7.4 $6.1 $3.5 $3.1 $4.0 $10.7 $20.1 $16.1 $16.8 $181.5 % of original risk rema
Slide 5: Primary Risk in Force March 31, 2020: Delinquency Statistics
Primary Risk in Force March 31, 2020 Origination year: 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 & Prior Delinquency statistics: (1) Risk in force delinquent (%) - 0.2 1.0 1.2 1.1 1.5 1.9 1.8 1.5 3.5 9.7 5.2 6.3 10.0 15.0 16.5 17.5 # of loans delinquent 1 4
Slide 6: Flow Primary Risk in Force: Static Pool Delinquency Rates
Flow Primary Risk in Force March 31, 2020 Static Pool Delinquency Rates Based on Loan Count 18% 1.5% 17% 16% 15% 14% 13% 1.0% 12% 11% 10% 9% 8% 7% 0.5% 6% 5% 4% 3% 2% 0.0% 1% Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19 Q21 Q23 Q25 Q27 Q29 Q31 Q33 Q35 Q37 Q39 Q41 Q43 Q45 0% Q1 Q3 Q5 Q7 Q9 Q11 Q13 Q15 Q17 Q19
Slide 7: COVID-19
COVID-19 External Actions That Will Impact MGIC MGIC Specific Actions • Material increase in unemployment will lead to increased • Operational Health and Safety loan delinquencies, incurred losses, additional PMIERs- • Our Crisis Management Team (CMT) implemented our required capital and, in time, c
Slide 8: Illustration of Delinquent Loans Excess over PMIERs Minimum Required Assets Could Absorb
Illustration of the Amount of Delinquent Loans Our Excess over PMIERs Minimum Required Assets Could Absorb Pro-forma March 31, 2020 Under PMIERs delinquent loans are subject to separate non-performing risk charges based on missed payments and whether a claim has been Required Assets received. For lo
Slide 9: Summary of Loan Modification and HARP Activity
Summary of Loan Modification and HARP Activity Risk in Force Risk in Force Risk in Force Total Primary Book Flow Primary Book 2007 Flow Primary Book HARP/RTM HAMP & HARP/RTM HAMP & 4% Other Mods 4% Other Mods 5% 4% HARP/RTM 45% HAMP & Other Mods 36% % Current at 03/31/2020 % Current at 03/31/2020 %
Slide 10: Primary Risk in Force: Original LTV and Original FICO
Primary Risk in Force March 31, Original LTV Original FICO 100% 100% 15.2% 13.9% 15.8% 18.7% 29.9% 33.6% 39.2% 36.8% 75% 75% 10.7% 11.1% 52.2% 52.2% 48.7% 13.8% 29.8% 15.1% 11.7% 50% 50% 16.8% 13.2% 13.7% 11.6% 14.0% 10.8% 10.1% 11.2% 25% 29.8% 25% 11.2% 9.7% 29.7% 8.5% 27.1% 28.1% 9.0% 8.2% 6.1% 5.
Slide 11: Primary Risk in Force: Loan Amount and Loan Purpose
Primary Risk in Force March 31, Loan Amount (1) Loan Purpose 100% 2.6% 2.4% 2.2% 4.7% 100% 2.4% 3.8% 6.1% 12.5% 11.8% 14.8% 16.1% 14.2% 26.5% 32.2% 37.4% 13.3% 75% 75% 25.8% 30.9% 50% 30.8% 50% 30.6% 85.1% 84.4% 79.7% 71.9% 40.8% 25% 33.5% 25% 29.3% 25.5% 12.6% 4.0% 5.3% 6.8% 0% 0% 2020 2018 2016 YE
Slide 12: Primary Risk in Force: Loan Type and Documentation
Primary Risk in Force March 31, Loan Type (1) Documentation (2) 100% 0.9% 1.6% 2.9% 100% 1.4% 2.3% 3.7% 0.8% 1.3% 1.9% 14.0% 13.6% 3.0% 75% 75% 50% 98.3% 97.1% 95.2% 50% 98.6% 97.7% 96.3% 83.0% 86.4% 25% 25% 0% 0% 2020 2018 2016 YE 2008* 2020 2018 2016 YE 2008* Full Stated/No Doc FRM FRM I/O ARM (1)
Slide 13: Primary Risk in Force: Property Type and Occupancy
Primary Risk in Force March 31, Property Type Occupancy 100% 100% 2.4% 2.6% 3.2% 6.9% 12.4% 12.4% 12.5% 15.6% 75% 75% 50% 50% 97.6% 97.4% 96.8% 93.1% 87.6% 87.6% 87.5% 84.4% 25% 25% 0% 0% 2020 2018 2016 YE 2008* 2020 2018 2016 YE 2008* Owner 2nd Home/Investor Single Family Attached Condo/Townhouse/O
Slide 14: Risk Factors
Risk Factors Below are risk factors that could cause the issuer’s results to differ materially from those expressed in, or implied by, the forward looking statements included in this presentation. Before investing in the issuer’s securities, investors should read and carefully consider the risks des
Slide 15: Risk Factors
Risk Factors Downturns in the domestic economy or declines in the value of borrowers’ homes from their value at the time their loans closed may result in more homeowners defaulting and our losses increasing, with a corresponding decrease in our returns. Losses result from events that reduce a borrow
Slide 16: Risk Factors
Risk Factors We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility. We must comply with a GSE's PMIERs to be eligible to insure loans delivered to or purcha
Slide 17: Risk Factors
Risk Factors We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility (continued) 4) Although we have requested servicers to provide us with information about
Slide 18: Risk Factors
Risk Factors Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods. In accordance with accounting principles generally accepted in th
Slide 19: Risk Factors
Risk Factors The below is a brief summary of the remaining risk factors:. • The premiums we charge may not be adequate to compensate us for our liabilities for losses and as a result any inadequacy could materially affect our financial condition and results of operations. • Competition or changes in