Asked if the 90% cure rate for post-COVID vintages is expected to normalize lower, given pre-pandemic rates were lower.

Management focuses on the ultimate claim rate (currently 7.5% initial assumption). While post-COVID ultimate claim rates were very low (less than 1% for Q2 2020), more recent fully developed notice quarters are in the 2-3% range, trending slightly higher to 3-4%. They remain comfortable with the 7.5% initial assumption, expecting continued favorable development if credit conditions hold. “fully developed notice quarters today, we might be thinking 3% to 4% ultimate claim rate. So still quite a bit lower than what we're expecting on new notices.”

Inquired about competitive trends in the market and if the slight tick down in gross premium yield was noise or a trend.

Management noted the market remains competitive with six active participants but no major changes this quarter. The gross premium rate has been on a slight downward trend over the last couple of years, which is not unexpected and not steepening. “it did grind down a little bit more this quarter, and that's sort of been the trend over the last couple of years, quite frankly.”

MTG

MGIC Investment (MTG) Q2 FY26 earnings call: guidance and Q&A

Q: Asked for views on housing fundamentals, industry NIW for the year, and whether the company is adjusting its underwriting posture.

Management expects the market size to be consistent with prior expectations, with modest home price appreciation and positive signs in the purchase market. The refi market is stunted by high rates, and affordability is stretched. They anticipate the current market conditions to persist. No meaningful changes to underwriting guidelines have been made, as they are comfortable with the current mix and risk-adjusted returns. “I'm a general believer that sort of the market we felt for this quarter and feels like we've been in for the last year for the most part in the little mini refi waves is sort of what we're in for the foreseeable future.”

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 30, 2026

Source: earnings call transcript

Executive summary

MGIC Investment Corporation Q2 FY26 — Strong Profitability and Capital Returns Amidst Credit Normalization

MGIC delivered solid Q2 FY26 results, driven by strong underwriting and effective capital management, including significant share repurchases and a dividend increase. While credit normalization continues with a slight increase in delinquencies, the company maintains a robust balance sheet and expects continued favorable credit performance. The market remains competitive, and the company is focused on disciplined execution and strategic reinsurance to navigate evolving conditions.

Highlights

Net income of $182 million, delivering an annualized return on equity of 14.5%.
Book value per share increased 10% year-over-year to $24.27.
New insurance written (NIW) of $18 billion, up 8.5% from Q2 2025 and highest since Q3 2022.
Favorable loss reserve development of $43 million due to better-than-expected cure activity.
Approved an increase to quarterly common stock dividend to $0.17 per share, marking 6 consecutive years of increases.

Concerns

Delinquency rate increased 16 basis points year-over-year to 2.37%.
In-force premium yield continued its slight downward trend, down a little less than 1 basis point in the past 3 years.
Investment portfolio growth and resulting investment income limited by capital return activities.
Affordability remains stretched due to high interest rates and home prices, limiting market growth.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year operating expenses	toward the low end of the $190 million to $200 million range medium materiality	FY26	High
In-force premium yield trajectory	continue on a similar path to the past couple of years medium materiality	Future	Medium
Delinquency rate trend	increase in delinquencies in the second half of the year medium materiality	H2 FY26	High

MTG operating KPIs by quarter

MTG operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Mar 2026 Q1 FY26	This call Jun 2026 Q2 FY26	Change vs prior quarter
New insurance written	$14B [indiscernible] $14 billion of new insurance in the first quarter, an increase of 41% from last year, and our largest first quarter of NIW since 2022. Source: earnings call transcript	$18B We wrote $18 billion of new insurance in the second quarter, an increase of 8.5% from the second quarter of 2025, and our highest NIW since the third quarter of 2022. Source: earnings call transcript	+28.6%
Insurance in force	~$303B Insurance in force at the end of the first quarter stood at approximately $303 billion, relatively flat quarter-over-quarter, and up 3% from a year ago, with annual [indiscernible] the quarter at 84%, down from 85% last quarter. Source: earnings call transcript	$305B Insurance in force ended of the quarter at $305 billion, up slightly in the quarter and up 2.6% from a year ago. Source: earnings call transcript	—
Initial claim rate assumption	7.5% For the delinquency notices we received in the quarter, we continue to apply the initial claim rate assumption of 7.5%. Source: earnings call transcript	7.5% For new delinquency notices received in the second quarter, we continue to apply our initial claim rate assumption of 7.5%. Source: earnings call transcript	0 pt

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

panel of highly rated reinsurers Traditional excess of loss reinsurance transaction up to $168 million

Further enhanced the reinsurance program by executing a traditional excess of loss reinsurance transaction.

Risks & headwinds

Seasonal increase in delinquencies second half of the year

expect seasonality to lead to an increase in delinquencies

Mitigation:delinquency trends remain consistent with credit normalization experienced over the past 3 years

Stunted refi market foreseeable future

Refi market, obviously, is going to be really stunted by where rates are right now.

Mitigation:company content to return capital to shareholders if in-force portfolio is not growing

Affordability challenges

Affordability definitely continues to be stretched, again, with where interest rates are and where home prices are.

Mitigation:no meaningful underwriting changes needed given expected performance and risk-adjusted returns

Competitive marketplace ongoing

competitive marketplace, right? With 6 active participants.

Mitigation:disciplined execution and strategy refinement

Downward trend in in-force premium yield ongoing

down a little less than 1 basis point in the past 3 years

Mitigation:expected to continue on a similar path, not unexpected

Limited investment portfolio growth ongoing

capital return activities have limited the growth in the investment portfolio and the resulting investment income.

Mitigation:prioritizes prudent insurance in-force growth over capital return; capital return reflects strong credit performance and robust financial position

What to watch in Q3 FY26

Delinquency rate trend

H2 FY26

Current 2.37% (decreased 7 bps QoQ, increased 16 bps YoY)

Target seasonal increase in H2 FY26

Why it matters

Management expects a seasonal increase in delinquencies in the second half of the year, which will test the consistency of the ongoing credit normalization trend.

While we expect seasonality to lead to an increase in delinquencies in the second half of the year, the delinquency trends through the second quarter remain consistent with the credit normalization we have been experiencing for the past 3 years.

Find out whether MTG delivers this. Inve re-checks your case every morning.

Q&A highlights

Seeking color on new notices by region or vintage to inform future credit views, given the 10-15 bps YoY increase in delinquency rate is consistent with normalization.

Management stated that other than the natural roll-forward to more recent vintages, they see no significant differences in the mix of new delinquencies across key credit variables, regions, or correlation to home price changes. This reinforces confidence in broad-based credit normalization.

“we really don't see a lot of difference in the mix, and we're not seeing it geographically. We're not seeing it really correlated to, say, home price changes in various states.”

asked by Terry Ma · answered by Nathaniel Colson

2 min read 6 chapters

Detailed narrative

Financial Performance Highlights

MGIC reported net income of $182 million, translating to an annualized return on equity of 14.5%. Diluted EPS was $0.86, up from $0.81 last year. Book value per share reached $24.27, a 10% increase year-over-year, reflecting the company's strong financial health and consistent execution.

Credit Quality and Delinquency Trends

The company experienced $43 million in favorable loss reserve development, primarily due to better-than-expected cure activity on 2025 delinquencies. While the count-based delinquency rate decreased 7 basis points quarter-over-quarter due to seasonality, it increased 16 basis points year-over-year to 2.37%. Management noted that delinquency trends are consistent with credit normalization and remain below 2019 levels.

Capital Management and Shareholder Returns

MGIC maintains a robust capital structure with $6 billion of balance sheet capital. The company paid a common stock dividend of $0.15 per share and repurchased 6.6 million shares for $177 million in Q2. Over the prior four quarters, share repurchases totaled $746 million and dividends $135 million, representing a 124% payout of net income.

The Board approved an increase in the quarterly dividend to $0.17 per share, marking six consecutive years of increases.

Reinsurance Strategy

MGIC's reinsurance program significantly reduced PMIERs required assets by $3.1 billion (approximately 52%). The company executed a traditional excess of loss reinsurance transaction providing up to $168 million of protection on eligible NIW in 2027, complementing its programmatic approach to both XOL and ILN markets. Management aims for approximately one-third risk sharing across quota share, traditional XOL, and ILN.

Market Conditions and Underwriting Posture

New insurance written (NIW) reached $18 billion, an 8.5% increase year-over-year, driven by seasonal growth in the purchase market. However, the refi market remains stunted by high interest rates, and affordability challenges persist. Management indicated no meaningful changes to underwriting guidelines, remaining comfortable with the current mix of business and risk-adjusted returns.

Industry Representation

CEO Tim Mattke assumed the role of Chairman of USMI, the industry's trade association, highlighting the company's commitment to informing policy discussions with data and experience regarding mortgage insurance's value to the housing finance system.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.