MGIC Reports $1.47B 4Q Loss

MGIC Investment Corp., Milwaukee, has reported a loss of $1.47 billion ($18.17 per share) for the fourth quarter, compared with net income of $121.5 million ($1.47 per share) a year earlier. Affecting MGIC's results was the establishment of a $1.2 billion (pretax) premium deficiency reserve relating to Wall Street bulk transactions. Also included is an after-tax charge of $33 million related to equity losses incurred by C-BASS in the quarter. The charge reduces the carrying value of a $50 million note from C-BASS to zero. For the full year, MGIC lost $1.67 billion ($20.54 per share) compared with net income of $564.7 million ($6.65 per share) in 2006. Curt S. Culver, MGIC's chairman and chief executive, said that unless the cure rate and loss severity improves, 2008 will not be a profitable year for the company. MGIC said it has retained an adviser to assist it in exploring alternatives for increasing its capital. But Mr. Culver said MGIC has adequate capital to meet its claim obligations. The percentage of loans that are delinquent stood at 7.45%, compared with 6.13% a year earlier. Excluding loans insured through the bulk channel, MGIC had a 4.99% delinquency rate, compared with 4.08% a year earlier.