MILWAUKEE, Jan. 11 /PRNewswire-FirstCall/ — MGIC Investment Corporation (NYSE:MTG) today reported net income for the quarter ended December 31, 2006 of $121.5 million, compared with the $128.1 million for the same quarter a year ago, a decrease of 5.2%. Diluted earnings per share was $1.47 for the quarter ending December 31, 2006, compared to $1.44 for the same quarter a year ago, an increase of 2.1%.
Net income for the full year of 2006 was $564.7 million, compared with $626.9 million for 2005, a decrease of 9.9%. Diluted earnings per share for the full year was $6.65 compared with $6.78 in 2005, a decrease of 1.9%.
Curt S. Culver, chairman and chief executive officer of MGIC Investment Corporation and Mortgage Guaranty Insurance Corporation (MGIC), said that the financial performance of 2006 reflects higher credit losses, the strong contribution of our joint ventures, the resumption of growth of insurance in force, and strong cashflows that enabled the repurchase of 6.1 million shares.
Total revenues for the fourth quarter were $367.2 million, down 1.0 percent from $370.9 million in the fourth quarter of 2005. The decline in revenues resulted from a 2.7 percent decrease in net premiums earned to $297.0 million. Net premiums written for the quarter were $305.6 million, compared with $316.7 million in the fourth quarter last year, a decrease of 3.5 percent.
Total revenues for the year were $1.47 billion, compared with $1.53 billion in 2005. The decrease in revenues for the year resulted primarily from a 4.1 percent decrease in premiums earned to $1.19 billion from $1.24 billion last year and decreases in realized gains. Net premiums written for the year were $1.22 billion, compared with $1.25 billion in 2005, a decrease of 2.8 percent.
New insurance written in the fourth quarter was $15.5 billion, compared to $15.3 billion in the fourth quarter of 2005. New insurance written for the quarter included $5.1 billion of bulk business compared with $5.9 billion in the same period last year. New insurance written for the full year of 2006 was $58.2 billion compared to $61.5 billion in 2005 and included $18.9 billion of bulk business compared to $21.4 billion in 2005.
Persistency, or the percentage of insurance remaining in force from one year prior, was 69.6 percent at December 31, 2006, compared with 61.3 percent at December 31, 2005, and 60.2 percent at December 31, 2004.
As of December 31, 2006, MGIC’s primary insurance in force was $176.5 billion, compared with $170.0 billion at December 31, 2005, and $177.1 billion at December 31, 2004. The book value of MGIC Investment Corporation’s investment portfolio was $5.3 billion at December 31, 2006, compared with $5.3 billion at December 31, 2005, and $5.4 billion at December 31, 2004.
At December 31, 2006, the percentage of loans that were delinquent, excluding bulk loans, was 4.08 percent, compared with 4.52 percent at December 31, 2005, and 3.99 percent at December 31, 2004. Including bulk loans, the percentage of loans that were delinquent at December 31, 2006 was 6.13 percent, compared to 6.58 percent at December 31, 2005, and 6.05 percent at December 31, 2004.
Losses incurred in the fourth quarter were $187.3 million, up from $171.6 million reported for the same period last year. Losses incurred for the full year 2006 were $613.6 million up from $553.5 million in 2005. Underwriting expenses were $75.4 million in the fourth quarter verses $70.8 million reported for the same period last year. Underwriting expenses for the full year 2006 were $294.8 million up from $279.0 million in 2005.
Income from joint ventures, net of tax, for the quarter was $47.0 million, up from $36.8 million for the same period last year. Full year 2006 joint venture contributions, net of tax, were $169.5 million versus $147.3 million in 2005.
MGIC ( http://www.mgic.com/ ), the principal subsidiary of MGIC Investment Corporation, is the nation’s leading provider of private mortgage insurance coverage with $176.5 billion primary insurance in force covering 1.3 million mortgages as of December 31, 2006. MGIC serves approximately 5,000 lenders with locations across the country and in Puerto Rico, helping families achieve homeownership sooner by making affordable low-down-payment mortgages a reality.
As previously announced, MGIC Investment Corporation will hold a webcast today at 10 a.m. ET to allow securities analysts and shareholders the opportunity to hear management discuss the company’s quarterly results. To attend the webcast, go to www.mgic.com, click on the “Investor” button, then click the “News Releases” button, proceed to “Webcasts/Presentations,” and select “Audio Archives” at the company’s website at http://www.mgic.com/ . The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Investors can listen to the call through CCBN’s individual investor center at http://www.companyboardroom.com/ or by visiting any of the investor sites in CCBN’s Individual Investor Network. The webcast will be available for replay through February 13, 2007.
This press release, which includes certain additional statistical and other information, including non-GAAP financial information, is available on the Company’s website at http://www.mgic.com/ under “Investor — News and Financials — News Releases.”