MGIC INVESTMENT CORPORATION
THIRD QUARTER EARNINGS PER SHARE UP 23 PERCENT
MILWAUKEE (Tuesday, October 10, 2000) -- MGIC Investment Corporation (NYSE:MTG)
today reported earnings for the quarter ended September 30, 2000, of $146.4
million, an increase of 19 percent over the $122.9 million in earnings reported
in the third quarter of 1999. Earnings per share for the quarter totaled $1.36,
compared with $1.11 for the third quarter of 1999, an increase of 23 percent.
For the first nine months of 2000, net income totaled $409.7 million, as
compared to $336.3 million last year, an increase of 22 percent. Earnings per
share for the first nine months of 2000 increased 26 percent to $3.83, from
$3.06 for the same period last year. Last year's nine-month earnings per share
results included $0.02 per share for realized gains.
Curt S. Culver, president and chief executive officer of MGIC Investment
Corporation said the company's record earnings in the third quarter resulted
from continued strong performance in each of the key areas of the business -
insurance in force growth, loss development, and expense control.
Total revenues for the third quarter were $283 million, up from $250
million in the third quarter of 1999. The growth in revenues resulted from a 15
percent increase in net premiums earned to $229 million, and a 17 percent
increase in investment income to $46 million. Net premiums written for the third
quarter were $236 million, compared with $208 million for the third quarter of
1999, an increase of 14 percent.
The percentage of MGIC's insured loans in default was 2.17 percent at
September 30, 2000, compared with 2.17 percent at December 31, 1999, and 1.99
percent at September 30, 1999.
New insurance written in the third quarter was $12.7 billion, compared to
$13.1 billion in the third quarter of 1999. New insurance written for the
current quarter included $2.6 billion from a one-time transaction. For the first
nine months of 2000, new insurance written was $30.7 billion, compared to $37.2
billion written in the first nine months of 1999. Persistency, or the percentage
of insurance remaining in force from one year prior, was 80.3 percent at
September 30, 2000, compared with 72.9 percent at December 31, 1999, and 69.1
percent at September 30, 1999.
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As of September 30, 2000, MGIC's primary insurance in force was $157.0
billion, compared with $147.6 billion at December 31, 1999, and $145.1 billion
at September 30, 1999. The book value of MGIC Investment Corporation's
investment portfolio was $3.2 billion at September 30, 2000, compared with $2.8
billion at December 31, 1999, and $2.8 billion at September 30, 1999.
MGIC, the principal subsidiary of MGIC Investment Corporation (NYSE:MTG),
is the nation's leading provider of private mortgage insurance with $157.0
billion insurance in force covering 1.4 million mortgages as of September 30,
2000. MGIC serves over 9,000 lenders representing more than 22,000 locations
nationwide and in Puerto Rico, helping families achieve homeownership sooner by
making affordable low-down-payment mortgages a reality.
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MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
<CAPTION>
Three Months Ended Nine Months Ended
----------------------------------- ----------------------------------
September 30, September 30,
----------------------------------- ----------------------------------
2000 1999 2000 1999
---------------- ---------------- ---------------- ---------------
(In thousands of dollars, except per share data)
<S> <C> <C> <C> <C>
Net premiums written $ 236,208 $ 207,582 $ 656,342 $ 587,967
================ ================ ================ ===============
Net premiums earned $ 229,208 $ 200,042 $ 657,746 $ 588,789
Investment income 46,125 39,303 129,465 114,845
Realized gains 422 48 585 3,401
Other revenue 6,963 10,990 30,259 39,946
---------------- ---------------- ---------------- ---------------
Total revenues 282,718 250,383 818,055 746,981
Losses and expenses:
Losses incurred 21,442 19,533 66,597 94,706
Underwriting, other expenses 41,493 48,289 136,145 153,471
Interest expense 7,412 4,788 21,085 14,830
Ceding commission (1,438) (813) (2,884) (1,739)
---------------- ---------------- ---------------- ---------------
Total losses and expenses 68,909 71,797 220,943 261,268
---------------- ---------------- ---------------- ---------------
Income before tax 213,809 178,586 597,112 485,713
Provision for income tax 67,454 55,677 187,434 149,452
---------------- ---------------- ---------------- ---------------
Net income $ 146,355 $ 122,909 $ 409,678 $ 336,261
================ ================ ================ ===============
Weighted average common shares outstanding
(Shares in thousands) (1) 107,339 110,261 107,065 109,993
================ ================ ================ ===============
Diluted earnings per share $ 1.36 $ 1.11 $ 3.83 $ 3.06
================ ================ ================ ===============
OTHER INFORMATION
New primary insurance written ("NIW") ($ millions) $ 12,704 $ 13,074 $ 30,652 $ 37,238
================ ================ ================ ===============
New primary risk written ($ millions) $ 3,179 $ 3,137 $ 7,647 $ 8,989
================ ================ ================ ===============
Product mix as a % of primary NIW
95% LTVs 43% 42% 42% 37%
ARMs 9% 9% 11% 6%
95% LTV / 30% coverage 33% 33% 32% 32%
90% LTV / 25% coverage 28% 33% 30% 36%
Refinances 11% 16% 13% 28%
================ ================ ================ ===============
New pool risk written ($ millions) $ 87 $ 125 $ 270 $ 499
================ ================ ================ ===============
(1) The Company repurchased approximately 3.6 million shares of its outstanding common stock during the third quarter of 1999.
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MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET AS OF
<CAPTION>
September 30, December 31, September 30,
2000 1999 1999
---------------- ---------------- ---------------
(In thousands of dollars)
ASSETS
<S> <C> <C> <C>
Investments(1) $ 3,235,217 $ 2,789,734 $ 2,760,738
Cash 4,239 2,322 6,766
Reinsurance recoverable on loss reserves 34,878 35,821 39,467
Reinsurance recoverable on unearned premiums 9,096 6,630 6,918
Home office and equipment, net 31,255 32,880 33,270
Deferred insurance policy acquisition costs 25,970 22,350 22,625
Other assets 241,598 214,656 203,039
---------------- ---------------- ---------------
$ 3,582,253 $ 3,104,393 $ 3,072,823
================ ================ ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Loss reserves $ 614,853 $ 641,978 $ 673,040
Unearned premiums 182,440 181,378 181,081
Notes payable 410,000 425,000 411,000
Other liabilities 122,339 80,048 88,044
---------------- ---------------- ---------------
Total liabilities 1,329,632 1,328,404 1,353,165
Shareholders' equity 2,252,621 1,775,989 1,719,658
---------------- ---------------- ---------------
$ 3,582,253 $ 3,104,393 $ 3,072,823
================ ================ ===============
Book value per share (2) $ 21.15 $ 16.79 $ 16.30
================ ================ ===============
(1) Investments include unrealized gains (losses) on securities
marked to market pursuant to FAS 115. ($ thousands) $ 13,850 $ (62,665) $ (12,155)
(2) Through the nine months ended September 1999, the Company repurchased
approximately 3.6 million shares of its outstanding common stock.
OTHER STATISTICAL INFORMATION
September 30, December 31, September 30,
2000 1999 1999
---------------- ---------------- ---------------
Direct Primary Insurance In Force ($ millions) $ 156,956 $ 147,607 $ 145,109
Direct Primary Risk In Force ($ millions) 38,244 35,623 34,876
Direct Pool Risk In Force ($ millions) 1,805 1,557 1,520
Mortgage Guaranty Insurance Corporation -
Risk-to-capital ratio 10.8:1 11.9:1 12.5:1
Primary Insurance:
Insured loans 1,432,792 1,370,020 1,359,504
Persistency 80.3% 72.9% 69.1%
Loans in default 31,095 29,761 27,102
Percentage of loans in default (default rate) 2.17% 2.17% 1.99%
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