MGIC Investment Corporation

Ladies and gentlemen, thank you for standing by and welcome to the MGIC Investment Corporation first quarter 2025 earnings call. At this time, all lines have been placed on mute to prevent any background noise. At the end of today's presentation, we'll have a question and answer session. I will now turn the conference over to Diana Higgins, head of investor relations. Please go ahead.

Good morning and welcome everyone. Thank you for your interest in MGIC. Joining me on the call today to discuss our results for the first quarter are Tim Mackey, Chief Executive Officer, and Nathan Colson, Chief Financial Officer and Chief Risk Officer. Our press release, which contains MGIC's first quarter financial results, was issued yesterday and is available on our website at mtg.mgic.com under Newsroom, includes additional information about our quarterly results that we will refer to during the call today. It also includes a reconciliation of non-GAAP financial measures to their most comparable GAAP measures. In addition, we posted on our website a quarterly supplement that contains information pertaining to our primary risk and force and other information you may find valuable. As a reminder, from time to time, we may post information about our underwriting guidelines and other presentations or corrections to past presentations on our website. Before getting started today, I want to remind everyone that 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 the factors that could cause actual results to differ materially from those discussed on the call today are contained in our Form 8-K and 10-Q also filed yesterday. If we make any forward-looking statements, we are not undertaking an obligation to update those statements in the future in light of subsequent developments. No one 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 our 8K or 10Q. With that, I now have the pleasure to turn the call over to Tim.

Thank you, Diana, and good morning, everyone. We are very pleased with our first quarter financial results, a strong start to the year which builds on the momentum we've sustained over the past few years. For the first quarter, we reported net income of $186 million and generated an annualized 14.3% return on equity. At the same time, we continue to return meaningful capital to our shareholders while creating long-term value for all of our stakeholders. Our performance reflects our position as a market leader and our disciplined and balanced approach to the market. We demonstrate our discipline in the way in which we acquire, manage, and distribute risk, enhancing both capital efficiency and risk mitigation, and thoughtfully and prudently allocating capital for the benefit of stakeholders. During the quarter, we wrote $10 billion of new insurance. Insurance and force, the primary driver of our revenue, ended the quarter at $294 billion, with annual persistency ending the quarter at 85%. Both have remained relatively flat over the past several quarters, consistent with what we expected. We are pleased with the credit quality and performance of our portfolio. Our underwriting standards remain strong, and the new insurance we write continues to have solid credit characteristics. We remain focused on maintaining a high-quality, well-balanced insurance portfolio. Turning to capital management. The foundation of our strategy is to maintain financial strength and flexibility and position ourselves for success across a wide range of economic environments. Key objectives include maintaining capital to support growth at the operating company, at the holding company, maintaining a low-to-mid-teens debt-to-capital ratio and liquidity buffer while returning excess capital to shareholders in the form of share repurchases and common stock dividends. We continue to allocate excess capital to share repurchases, which totaled 9.2 million shares for $224 million in the first quarter. We also paid a quarterly common stock dividend of $33 million. Over the prior four quarters, share repurchases totaled $698 million and shareholder dividends totaled $130 million. Combined, they represented a 107% payout of the net income we earned over that period. The holding company ended the quarter with $824 million in liquidity. In the second quarter, through April 25th, we repurchased an additional 2.8 million shares of common stock for $66 million. The share repurchase activity I just discussed continues to reflect our capital strength, solid financial results, and share price levels that we believe are attractive to generate long-term value for our shareholders. We expect share repurchases to remain our primary method of returning capital to shareholders while at the same time continuing to pay a quarterly common stock dividend. Also in April, and as previously announced, the board approved an additional $750 million share repurchase program and a 13 cents per share common stock dividend payable on May 21st. Earlier this week, we paid a $400 million dividend from MGIC to the holding company. These actions are consistent with our overall capital management strategy. While we prioritize prudent growth over capital return, Market conditions have constrained growth on our insurance and force over the last few years, which we expect will persist this year. Therefore, if credit performance stays strong, we'd expect capital levels at both MGIC and the holding company to stay above targets, supporting continued elevated payout ratios. Looking more broadly at the macro environment, we recognize that there are uncertainties around the current economic and geopolitical conditions. However, we remain confident in the solid fundamentals of the housing market. Several key trends continue to support its resilience. Demographic tailwinds, particularly from millennials, are driving sustained strong demand and desire for homeownership. Housing inventory is gradually increasing and home price growth is moderating. These factors have contributed to a housing market that has remained stable. Although housing affordability continues to pose challenges for homebuyers, private mortgage insurance enables low down payment borrowers to achieve the American dream of homeownership sooner. With that, let me turn it over to Nathan to get into more details on our financial results and capital management activities for the quarter.