MGIC Investment Corp. promoted Patrick Sinks to chief executive officer as the mortgage insurer looks for ways to raise capital to meet new industry standards proposed by a U.S. regulator.
Sinks, 57, is chief operating officer, and will replace Curt Culver, 62, who is stepping down as CEO March 1 and will become non-executive chairman, the Milwaukee-based insurer said today in a statement.
MGIC may issue debt and modify reinsurance agreements to bolster capital because of proposed changes to financial standards, the company said July 11. The insurer could face a shortfall of about $600 million under the plan by the Federal Housing Finance Agency. Culver previously issued debt and stock to help the insurer emerge from the financial crisis that felled rivals and led to the call for tighter capital rules.
"Our company is well positioned for the future and our management team is as strong as it has ever been," Sinks said in the statement.
The shares soared more than 200% last year as the housing market rebounded and Culver shored up capital. Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs.
MGIC closed at more than $60 on Dec. 31, 1999, the last day before Culver, who joined the firm in 1982, became CEO. The shares traded below 66 cents in 2012, as MGIC worked through losses from the housing crash. John Paulson’s hedge fund firm and Lee Ainslie's Maverick Capital are among the biggest investors in MGIC, which advanced 1 cent to $8.01 at 9:47 a.m. in New York.
Sinks has been president and operating chief at MGIC since 2006, after working as executive vice president for field operations since 2002.