MGIC Investment Corp., Milwaukee, posted a loss of $187 million for the fourth quarter, an improvement over the $280 million loss for the same period in 2009, but worse than the $52 million in the third quarter of 2010. Company executives had previously warned the fourth quarter would see a higher loss than the third, however these losses are even higher than what analysts had expected.
These poor results are not only pulling down MGIC's common stock price in trading on Wednesday morning, they are also pulling down its competition.
As of 11:30, MGIC's stock price was off over 15% or $1.77 per share to $9.88. Radian Group was down 11% or $1.06 per share to $8.58 and PMI Group was down over 12% or $0.49 per share to $3.50. Also seeing their prices down, but not as severely on a percentage basis are Old Republic International, down only 0.38%, and Genworth, down 3.6% (but off $0.50 per share to $13.65).
For the year, the company lost $364 million (which included a $26 million net profit in the second quarter). This is still much improved over the $1.3 billion loss for 2009.
New insurance written for the fourth quarter was $4.2 billion, which does not include $1.1 billion of NIW as a result of Home Affordable Refinance Program transactions. For the fourth quarter 2009, there was $3.0 billion of NIW.
However, for the full year, MGIC saw its NIW decrease from $20 billion for 2009 to $12.3 billion in 2010.
As of Dec. 31, 2010, MGIC’s total delinquency rate was 17.48%, compared with 18.41% on the same day one year prior.
Losses incurred during the fourth quarter were $448 million, down from $881 million for the fourth quarter of 2009, as MGIC saw a decrease in its defaulted loan inventory.
MGIC's risk-to-capital ratio as of Dec. 31 was 19.8:1, up from 17.7:1 at the end of the third quarter.
