MGIC Investment Corporation

today's conference is scheduled to begin shortly please continue to stand by thank you for your patience today's conference is scheduled to begin shortly please continue to stand by thank you for your patience Thank you. Good day and thank you for standing by. Welcome to MGIC Investment Corporation second quarter 2021 earnings call. At this time, all participants line are in the listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the call over to your speaker today, Mr. Mike Zimmerman, Senior Vice President, Investor Relations. Please go ahead.

Thanks, Elena. Good morning, and thank you for joining us this morning and for your interest in MGIC Investment Corporation. Joining me on the call today to discuss the results for the second quarter of 2021 are Chief Executive Officer Tim Matkey and Chief Financial Officer Nathan Coulson. I want to remind all participants that our earnings release of last evening, which may be accessed on MGIC's website, which is located at mtg.mgic.com under newsroom, includes additional information about the company's quarterly results that we'll refer to during the call, and includes a reconciliation of non-GAAP financial measures to the most comparable GAAP measures. We've also posted on our website a presentation that contains information pertaining to our primary risk and force, new insurance written, reinsurance transactions, and other information which we think you will find valuable. I also want to remind listeners that from time to time we may post information about our underwriting guidelines and other presentations or corrections to past presentations on our website that investors and other interested parties would find valuable as well. During the course of this call, we may make comments about our expectations of the future. Actual results could differ materially from those contained in these forward-looking statements. Additional information about those factors, including COVID-19, that could cause actual results to differ materially from those discussed in the call, are contained in the Form 8K and Form 10Q that were filed last night. If the company makes any forward-looking statements, we're not undertaking an obligation to update those statements in the future in light of subsequent developments. Further, no interested party should rely on the fact that such guidance or forward-looking statements are current. at any time other than the time of this call or the issuance of the Form 8-K or Form 10-Q. With that, I'd like to turn the call over to Tim Mackey.

Tim Mackey Thanks, Mike. Good morning, everyone. I'm pleased to report that we produced another quarter of very strong financial results. After my opening remarks, Nathan will provide more detail about our financial results and capital position. Then, before we open up the line for questions, I'll wrap up by discussing the current operating environment, including activities related to finance housing policy. During the quarter, we earned GAAP net income of $153.1 million. Our quarterly financial results reflect the solid credit quality of our insurance in force, a strong housing market, a decreasing delinquency rate, and improving economic conditions as many local economies return to pre-pandemic levels of activity. We had another busy quarter as we wrote a record $33.6 billion of new business, which more than offset the pressure of lower annual persistency on our existing book of business and resulted in our insurance and force growing to $262 billion, nearly 14% higher than the same period last year. An increasing percentage of our new insurance written is from purchase transactions, accounting for 79% of our NIW in the second quarter compared to 60% last quarter. Our application pipeline, a leading indicator of NIW, indicates this trend has continued with purchase transactions continuing to account for more than 85% of applications received in recent months. While NIW in the first half of the year was strong, we expect that NIW will slow in the second half of the year, primarily due to the reduction of refinance activity. While the current supply of housing inventory available for purchase remains low, we still expect robust purchase market conditions to persist. Consumer demand, for many reasons, remains strong, and interest rates are attractive, especially by historical standards. Home prices have been increasing rapidly given the low housing inventory and the strong demand. We believe that home prices may be increasing for more sound reasons than in the 2005-2007 cycle. So while we do not expect broad declines in home prices, we do expect that the rate of increase will slow. These conditions, along with increasing annual persistency, should allow our insurance and force to continue to grow. although perhaps at a slower annual rate than we have been enjoying in recent quarters. Taking a look at our insurance and force portfolio, our loss ratio was a low 11.6% in the quarter. This result primarily reflects improving economic conditions, the quality of our existing book of business, and the low number of new delinquency notices received. I continue to be encouraged by the positive trends we are seeing in credit performance, which continue through July. At quarter end, we maintained a $2.3 billion excess over PMIR's minimum required assets, and our PMIR sufficiency ratio was 167% at the end of the second quarter. Reflecting our capital position and long-term confidence in our transformed business model, a $150 million dividend from MGIC to our holding company was declared and paid after the end of the second quarter, and the holding company board authorized a 33% increase in the quarterly common stock dividends. Our capital management strategy centers on maintaining financial flexibility at both the holding company and the writing company to protect our policyholders and to create long-term value for shareholders. This value can be created by writing more primary mortgage insurance, pursuing new business opportunities, retiring debt, paying dividends, or repurchasing stock. In summary, we continually look for ways to maximize near-term business opportunities while remaining focused on the long-term success of the company. I believe the actions we have taken prior to and during the COVID pandemic support the statement. We have a strong and dynamic balance sheet. We are confident in our positioning in this market, and we like the risk-reward equation that the current conditions offer. With that, let me turn it over to Nathan.