MGIC Investment (MTG) 8 May 202020 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the MGIC Investment Corporation First Quarter Earnings Call. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to hand the conference over to Mr. Mike Zimmerman. Please go ahead, sir.

Sean. you, Thank thank for and joining this us Good interest you in and your MGIC morning morning for Investment Corporation.

the quarter Chief Joining for Nathan Colson. and on call discuss Officer, to me the Chief the Financial first Officer, of Executive our XXXX, Tim Mattke; today results

I time that our I remind includes underwriting pertaining may investors company’s located is at our in and that under well. Newsroom, all corrections and will contains other our this new to about that the information, release of we written valuable which to want which MGIC’s post information primary parties presentations remind may information find during other a and that website financial insurance force, to results risk and our website, information listeners as that want to past time, to also on to additional quarterly about certain may morning, presentation includes find on we be measures. from we participants the or earnings presentations accessed our refer valuable. on mtg.mgic.com guidelines posted We’ve other think call interested you’ll non-GAAP website

may During contained of differ the materially of in make this from these Actual results comments we course about expectations those future. our call, the could forward-looking statements.

the or rely or the no obligation statements, issuance in other of Form are are in actual any future differ at forward-looking materially or last makes are to contained results fact the any from this interested light we X-K filed the that If in X-K party about statements information developments. those call guidance cause that of update Further, time of than the XX-Q. on current the COVID-XX factors, company time statements such the on not those should the discussed could Additional undertaking night. and forward-looking was call that including those to XX-Q Form subsequent

over call CEO. to the turn will I time, Tim? our Tim this At Mattke,

Mike who by want everyone. good well. to hope I everyone listening and is safe morning and start Thanks, I is saying that

Next to and admiration I fellow and want to express MGIC my their coworkers gratitude families. my

in fellow communities over coping own has and while our several with last local your personal culture and customers, support day always day efforts your coworkers, circumstances of Your your the the weeks defined MGIC. out this to

So thank you.

operated and responsibility, and The time, not environment. our take coworkers occasionally by while to event. and work By that safety only has afternoon health typically customers. some entire I On organization this to to operations our had remote mid-March, logged their remotely I serve standing decision a lightly. as for every a for and our to we made serve as since a families day remotely of our had in continued the weather done to Friday customers the the nearly transition then teams Certain ready MGIC our on related am well. proud following Monday say decision do was

In routine current working becoming we sign as our perhaps remotely solely of adapt the is of a a environment. resiliency matter

for best customers uses programs, this and and sources is a competitive offering focus is to the on with and maintaining employees our through strive market; and things, over as as navigate other our current positioning two, the one, environment our capital. stakeholders GSEs avoidance provide goals approach and and our are to working on; to products particularly we managed sharp servicers situation. we prosper focused support health long-term. of housing the services to among We achieve current the on the relevant addition critical safety the the company through all by loss of think the We those In we and current continuing to

summary level details financial Then results. spend a some a financial quarter the more on to results will current in the Nathan the but for first minute, position. More a minutes high I our of want financial cover of and future providing first few our

the years continued. the During first credit trends for few quarter, last favorable and we’ve the experienced new business

force was delinquency insurance number our of net is notices income in and the continued declined. increased first variability what previously Losses and X.X% favorable delinquent approximately million. the for activity cures the activity The $XXX.X loans in quarter. given reported any GAAP creates typically of year-over-year Our in results of incurred in quarter new period. notice

pipeline changes visibility robust. lender current we through our provide us cover into perspective did our will of reasonable the reserve the environment, and loss applications with next NIW April, However, reports that more new to reflect make combination in over months. detail. couple remain modest The Nathan business estimates to the MBA applications of of a current some From our indices

although meaningful despite a considerably our point the lenders Discussions purchase increases environment. year-over-year. application, up with current in recent data, application remains XXX% while However, remain robust, as visibility business, to less the most contraction the future refinanced than pipeline MBA recent transactions there’s current the index regarding especially and well more as

and when insurance persistency of and of year insurance the level purchase refinance about the impact growth. it market, early the activity will in to written, force fully of size high to-date the on ultimate still is draw the conclusions full uncertainty meaningful and activity any new Given too recover

environment capital the discussed our difficult in confidently of resulting position. and We our expect very of as of many current reduce COVID-XX in that uncertainty and our restrictions to the pertaining in impact economic Factors forecast results In the impact we Risk the to transmission XX-Q from is uncertainties increase financial putting shelter-in-place to because negatively COVID-XX, initiatives business. unemployment the will and

with has requirements the and required we PMIERs of of that this program. flow by investment nearly quality and Mae premium and March supported reinsurance high to the is low Fannie uncertainty and book delinquencies we that portfolio, capital billion debt enter we’re assets minimum of the of Mac. Freddie a with period contractual in GSEs required $X eligibility ratio $X had We the balance as by lower business estimate a billion a robust at insurance of sheet mortgage of However, end that a or are approximately excess private

We requirements. excess in of state the also had capital minimum billion $X.X

During common the stock. X.X shares our we repurchased quarter, of million

While of XXXX uncertainty $XXX approximately under remaining that and COVID-XX at we investments to of temporarily surrounding cash the share million the $XXX authorization company, and to end expires million suspended the there’s holding have repurchases. due

March last same April we on During of rates surprisingly, the in fewer that a in environment several in weeks. those loans on the first over period notices current June, light reported rate quarter, Not but the new reflecting we especially received anticipate the higher and increased received in more received GSE slightly claim will occur used number forbearance in from and we the significant notices. the notices May delinquency past increase year,

confidence questions not about Unfortunately the caused a result, loss data our we of expect be incurred potential do address the business some level magnitude of of the there a of a losses. will ultimately our number the we incurred The received any paid. today impacts will to of potential As in for have of incurred increase losses claim would like. as we assets. results and sufficient a lot notices that are increased required the paid our well available minimum by function Understandably, PMIERs to higher higher COVID-XX, eventually notably

over turn me let Nathan. that, to it With

turn some In same the share by about talking the same Tim that from first of spend few last Thanks, net the was to minutes period net then a earned to million income quarter first I’ll of per share, or period and quarter, per uncertainties $XXX.X X% driven of the income which Net year. or factors. diluted $X.XX $XXX.X Tim. we increased $X.XX million to we’ll mentioned. two diluted compares which the premiums primarily year, earned compared last

First, in by offset insurance rates although partially force. higher, premium force was insurance in average lower on was that this

from premium Second, $X cancellations of million the to accelerated policy quarter market. reflecting the quarter refinance XXXX, in first increased the million first from strong XXXX premiums $XX in $X increased single of million,

were X%, of than fewer last on In the notices incurred notices last new approximately to did given X% compared same that some we delinquent first year. received quarters, used quarter X% is claim rate $XX received before of we in million impacts the several same million we period the of in was losses broadest estimated the the reflecting rate current the quarter that which COVID-XX uncertainty the were delinquency environment, for macroeconomic XXXX, first The $XX period in the year. the new higher level than Net last borrowers from XXXX especially pandemic.

million loans favorable reserve last previous remains reserves and in from to the delinquency the first recorded our had including quarter or reported, $XX delinquencies quarter first development first also $XX adverse number we million but million. development In the development. quarters, our we loss not of $XX in several on IBNR, re-estimation of XXXX. XXXX, incurred reserve quarter the favorable of in the $X past increased delinquency million in resulted reserve of The of of the to Over our XXXX, in to period months would inventory low slow declined XX-year expect payments the XX% million and next level from inventory of from XX% reflecting year. the $XX over rates, few in near claims the claim place. the Primary received lows $XX the paid are number improved same quarter, moratoriums quarter the due of claims that foreclosure declined to cure decreased We by In million.

Net points. is quarter yield premium portfolio are yield the premium which several press our component detailed for largest the reflects we components, premium and of components XX.X premium The yield, basis has the was in the effect on what insurance in yield of release. The today’s force. net net call the in force first XXXX rates

underwriting diligently stock $XX the continue expenses the XXXX. which totaled first to certain material expenses, difference in price. related We is A of to seeding of portion before quarter other to and tied year-over-year our net million commission monitor

regulator, after determined to paid Wisconsin basis, first During request to estimates $XXX to not Future length and the MGIC board, about paid of company. the MGIC the payments pandemic economic a COVID-XX the will quarter. dividend planning of consultation total the company any a in on the on divided impacts the from updated holding our to in from severity be in holding the the with to of quarterly second its dividends MGIC be business. and quarter, considering OCI, the million company is holding a

company. object to holding We dividends also ask before pays to Wisconsin the the MGIC not OCI

shares during a mentioned, the we quarter, $XXX million. for common repurchased first total cost million X.X of our Tim of As stock

of million have runs share million our end $XXX through the which repurchase authorization We program, under approximately $XXX XXXX. remaining

However, pandemic, temporarily COVID-XX due repurchases. suspended to surrounding the uncertainty the we have

declared As by Board. the previously cash on disclosed of XX. disclosed, per share a be the Any and will payable future dividend – approved May determined a dividends Board basis as $X.XX quarterly

$XXX April the at of have million holding XX, investments we company. and As cash approximately of

interest our gets and Our next an years debt paid is MGIC. million to is maturity approximately of which $XX year, million expense $XX three approximately per

pretax At cash holding quarter duration and net X.X% end, of investment of portfolio at result billion, our mix and including was company. and XXXX. and taxable portfolio million XXXX of a as The $XX primarily income gain consolidated XX% April at yield totaled tax-exempt December XX% year-over-year, a $X.X Investment the the at a the and XXXX, years. unrealized consolidated XX, of four a larger XX, increased The portfolio. $XXX investment at million XX, had a securities, of million investments March cash $XXX investments

excess debt-to-total-capital XX%, use billion billion, know expected over results, available delinquency PMIERs assets. quarter, severity establish of what purposes end I first minimum MGIC’s will claim $X.X for many for assets ratio the required of this rate factors and resulting reserve want the of totaled future rate we our and the expect duration the was claim about the a in to approximately to and for $X you realize during we payments. we how thinking GAAP that primarily crisis At

to a addressing want minutes spend I couple questions. those So

consistently the loss in we use to establish grounded be reserves. will process Our process same

several the that expected after Over we using that the Ultimate expect level MI data, and on period reflect new the loss results a months, and notices the delinquency cures, of ultimate over. cures and And best reserves will secured, forbearance we economic the next level plans establish that our of successful to will of and activity. in uptake losses current existing received, of due including we are is estimate monitor new forbearance net of those delinquencies. workouts items both loan expected our claims

the and informative for begin in activity results, forbearance are we general These be actual Therefore, quarter. will next our severity of the employment very claim factors report few programs few impact to the as have as second changes delinquencies various well establish expected observing in economic over will months. rate when next we the the as quarter observations Increased of activity. second months, we and the benefit the loan

make the experiencing reporting and purposes. COVID-XX period, generally XXX COVID-XX loans such, pandemic so will as the they not us as to a initiated they to loans. from during CARES does forbearance hardship payment payments credit loan us reported days require up current GSEs, forbearance the by Act the for initiate the a servicers. may loans to purposes PMIERs, for significantly minimum are more of the programs as If not treated Under be assets performing forbearance that PMIERs delinquent are borrower consumer reported during the maintain related borrowers delinquent required obtain than for for delinquent or

for a provides delinquent claim those that FEMA disaster are are area. are to asset major been factors the for reported be declared loans and The on in delinquent a required reduced loans factors received. of based on PMIERs The has whether number PMIERs that mispayments

this reduces forbearance the XX% FEMA asset the and the default that at required state disaster is individual loan longer plan a the least days minimum provides assistance. for major in Specifically, by to from a subject date declaration charge is for where initial if XXX

XX% that disaster is our approximately and floors Currently, with assistance. designated located individual FEMA we risk of estimate in areas

that loan to just to as forbearance in for delinquent incremental This will expect each that smaller capital in servicers reporting a requirement is us they a required do delinquency. GSEs. are the new for results We be

complicated will periods. number nor persist, long as cannot be of result the will because minimum required the the occur However, how COVID-XX predict exercises delinquencies pandemic. This estimate currently they required further a we amount will for we assets, who increased to that cannot hold future of of estimation

need made business be new about written of assumptions persistency. As a and level items number the of to including

considering and Required the incremental approximately billion website, XX, our major forma the on could that pro forma to delinquent consume analysis incremental existed of of of portfolio assumptions March order In an all received as excess basis, basis available certain March available XX% the to current illustrative to over simplify assets FEMA incremental after on Minimum the a at reduction excess Assets supplement posted provided our have the assets would pro taken loans $X delinquent disasters. quarter that absorbed reinsurance have example delinquencies assuming loans XXX,XXX the for we it level declared of PMIERs Making XX. share a in

turn back With Tim. to it that, me let

Thanks, Nathan.

in includes Before months political personal it couple the moving discuss. that and to temporarily is clear all on agendas to questions, housing normally how the last professional post housing finance turned world. attention centered topics objectives. the and of that everyone’s COVID-XX current has and and was reform regulatory D.C. the paused functioning That have has changed we market keep attention the been and Washington, in to the Nearly nearly

will the rule, capital GSE of GSE the activities some time. QM be by all the Patch reviews that of expect other FHFA reproposed for and period including rule, We GSE delayed

taken consumers, Protection have help and items, of the among consumer reaction These the significant Program actions unemployment other Paycheck numbers Now benefits. include to crisis. the their already economy government American weather to payments direct actions to enhance front

of to easier pay is making complete, On some front, that origination ease transaction of borrower’s of ability others. for borrower’s lenders a taken the the changes mortgage which supportive ability a forth on and the have while all steps refinance GSEs either GSEs put appropriately ensuring the to pay, that a Nearly, are guidelines, to supportive to have sustainable. tightening purchase number improves certain the

experiencing adverse hardships. and XX Act and a We as XX at the as the result temporarily can like that GSEs closures last forbearance believe appropriate, side, of which least CARES programs, programs borrowers forbearance the loan can hurricanes for a the designed will other workout make help servicing financial completed be are credit they bring are modification programs disaster. natural at avoid and unemployed for current. days to implications loan programs the while These months, to much to these foreclosure On up available borrowers GSE disasters for for the suspended or point, loan and

Historically with borrowers were plan and these natural other hurricanes later, forbearance very as several programs months are or who entered most temporary hardship the disasters, current successful ended. reported

seen it’s the nation a reduction course, dramatic never like in Of of occurring now. short has to a such our time economy period

on As GSEs more clarity Nathan to Federal a basis, discussed, PMIER several of current the application the we these and the PMIERs of Agency reduce of well and other as the discussions the programs are the have about other longer for Assets loans and term insurers environment. implications XX%, mortgage Required engaged PMIERs and requirements Minimum Finance in constructive all application by to including the forbearance as the to Housing provisions gain with continue

our and While to other continue are for credit solutions market to the enhancement enhancement provide industry and current unavailable, our options borrowers, company lenders, GSEs.

current prudent and that is on advocate use While will continue optimistic and to the priority capital, engaged discussions for working of policies housing we the private to including our and responses environment, occur and continue to actively solutions MI. in be private do we the include changes remain

Long insurance offers may down finance, in to company barrier be and one plan term, payment. the lenders the a such engage many actions consumers a the the great encouraged our of it proposition what role Private result any home number and as we taken and can the still be overcome that actions remain to solutions COVID-XX. to difficult in future mortgage value for ownership continues timing and housing to so about industry

that flow has and nearly investment book billion period a business contractual with is low a reinsurance supported robust we with premium program. and low high-quality a a portfolio, sheet uncertainty of delinquencies this $X ratio, that entered debt-to-capital of We balance of by were

to safety positioning we the XXXX. and in prosper health remarks, in beginning to our to mentioned housing provide founded company remind to my company current addition I to that I as on continuing of long our want over support at the and listeners of the the focused are closing, was In our market employees, critical term.

and provided many successfully options. low have and continually navigated payment borrowers lenders We it’s and economic cycles prudent affordable with down

I service the and have continue navigate we expect confident right team MGIC. deliver products through period place that quality to of come to in and am from customers uncertainty this have our to the will

With that operator, let’s questions. take

of SIG. Jack from your And line first the Instructions] [Operator of question Micenko comes

are is everybody illustrative Hope everybody. a portfolio morning, today. that’s XX% XXX,XXX where to to cushion, you just X% Good about assuming X% Nathan, about I’ll that that a the I Or rate stands to guess my for XXX,XXX about first DQs, X% of stop those XX%, X-plus you the matriculate time? Thanks. question. to in the sort the talked bucket time? back example, over there to well. talk X% going When DQ And available through is point you on

question. is, assume a think to time was the three does loans and the mispayment at view bucket. as point I over really are more all in did kind it the footnote be for It Yes, in try to two on thanks assumptions, meant of It that we to delinquent something to incremental time. opposed

Got it.

FICO assumption the observed actual claim limited What time. I sort rates in were then and the IBNR the business, assumption? around us rules. And of for XXXX what guess X% was ahead in maybe can you’re that rate accounting per rate of your there’s And doing frame? development, lastly, remind kind claim was XXXX, Okay. what time was I of you X% claim the what with you to know then, or hurricanes? XXX-plus Can negative maybe

here. certainly the question can first of I take hurricane-related part that Yes.

claim hurricane-related past, in that claim We have rates used range. lower to on in X% the rates X% notices

you. we’re from the crisis, but for have have directly delinquent certainly, I overall of specific than terms don’t the the we ultimate claim have me, But basis, – on higher number an of on cohorts rates I in claim using we today. I think precise a experience, or X% items don’t front or X% that In that did rates –

Okay.

just one in for NIW. increase me. year-over-year So then big A more

I bit as think well. refi you had a more little

Anything comp kind some just growth reported XX% of I like one others that were year excess think is Or the was think of an because easier I in you well ago? maybe so Or there? year far. pretty there that color refi. you’re against rate

deploy obviously, think standpoint, Yes. think little look win that a our the I mean, return, – and think, around where can bit I capital comp mean, don’t risk I move quarter-to-quarter. anything business, there’s as a a from I we we good to

any And to conscious as what know risk of return – say, so is. target trend, sort just segments we the specific I don’t right I look think it’s let’s at versus there don’t

with from acquire happy very were what able NIW in we quarter. We’re to the

Thanks. it. appreciate Also I Good luck.

[Keefe, the comes line George next from Your Bruyette & of question Woods]. Bose

morning. Good

number, do Slide right? mean could So well XX.X% So that look note that at as to that, need going that like to numbers. company we sort I back holding that assume you capacity, any when of at mean, – beat right? just actually to there incremental X, forbearance forma the is to is a just it the pro both that capital there, capital to the your you the Is I of

This Yes, that’s today. represents PMIERs correct. excess is funds are in That the that MGIC Nathan.

So it at any the company. holding doesn’t funds the of include

with PMIERs that our are it MGIC other $XXX also in that capital – included would counted million capital. approximately out, is The I excess of we not point statutory well, has although thing have subsidiaries in as

to increase levers holding a than that, from company. certainly just the have So more

Okay.

a case, the we $XXX So million this holding million-odd the about a availability plus at to subsidiaries? when at think of the company – there’s bit stress the in $XXX

that capital technically, be there. Both. carry available the all is cash right. so available. think there’s Certainly, I This obligations, All cautious somewhat can’t Holding mean, right? is on. contributing interest So holding company. to when you that’s is Mike. yes, got Yes. company you’ve mean, assume has and I I

basis, on but technical a you So correct. are –

prices? of you so, Peers guys kind what Do magnitude? actually, have ask pricing in the then wanted raise have if to I just market. talked to increases, about And seeing? what Great. you And Okay. are about price

take Tim. It’s I’ll Yes. that.

are we the at we look do, mix, loss we write. credit rates, and business have we that premium to consider the expectations our charges as against what hold always capital we As

we accordingly, about depending XX% to to XX%, So conditions. our XX% MiQ, change within our business pricing X/XX. And that probably increase did we approximately our did loan, XX% react as change, the of engine characteristics risk-based of risk probably premium, of upon the somewhere the approximated we

So okay. Great. you. Thank

Our next question line Chris comes Point. of from Compass the from Gamaitoni

remaining Nathan, $XXX of coverage, PMIERs? the available much that assets minimum the of of how million ILN under reduces required

Yes.

a maybe the is maybe but I little answer outstanding there, think and I I give the – – just I’ll credit bit the X/XX differently. PMIERs think get you’re question that I’d million. of that the don’t asking as of you was we number between the that the difference that about number the have $XX ILN amount under number for

an for true-up initial And have to borrower guessing not these automatic standpoint, a forbearance forbearances to forbearance very so months That’s you of you give or helpful. strikes accounting progress, delinquencies of to whether comp those right kind the understand me programs really months difficult. evaluate default-to-claim that aging until irrelevant the of do it up Meaning from extension, over. But XX estimate? will completely the Okay. six be is that we the and is as how as

versus So factor how the underlying the of macroeconomic model? estimate? does view is you it changes primarily initial development just kind your Or

payments. enter plans I kind of forbearance Nathan. a people make there’s will take Yes. six not whether It’s automatically do that uncertainty lot think as that I’ll one. of to

after are some I entering forbearance, that indicate they making data payments. even are people that seen points think still we’ve

guess full think full people what automatically thing go be data or that, that over year. I early initial was the that I information be is the have But we’ll like, reaction time would that So even months my case. one more not that look will the would and the on think for may aging six I certainly indicate

aging I that not forbearance think ultimately just different. do uncertainty. What terms of that I relevant time, that over the or is there’s non factor I certainly correct But picks that. than how have in a to loans us think you’re – being certainly appropriately that development means think there’s out as will about we for lot future, a to claim reflect it’s about into point the of rate for think

Okay. – your from very then you on, it, the amount just we is are. it the call return high, what NIW Or today, handle trying delinquency at is? on least forbearance focuses where rates do best forbearance that targeting is capital where And new in the most changed have targeted PMIERs to load? Have of focusing know you any focus performing still is economic your – think specifically to the way business you

Chris, Tim. is this

latter. the it’s think I

of conserve of your – question, NIW somehow part of We what amount guess, aren’t I read not that’s into think sort the the I the first we to the control case. to, was, I we trying capital, write amount

expect – that’s a I we the and that’s sort dealing for We are our to appropriate where continue. capital been very that’s the focused can get are currently. that’s we’ve be, but equation we’re on feel the with risk return and of where that have that’s to deploying where going we going and expectation we think that, returns, while

you all Thank much. That’s so I had. Perfect.

is caller next [Bank America]. of Mihir Our

noted? I had And two going terms it, is get of better actually questions. the kind and for So delinquent, not now is Or advances just payments is that, loan so have are servicer how just gone coming? saying do my I guess hope I of additional taking wanted two in just if on back understanding healthy. you get and for data are loans does how was these reacting you what of to a delinquent? they into first even the forbearance, payments start trends. you this much to hey, forbearance safe Thanks just everyone question like tell forbearance wanted I much

it choppy Yes. reporting It Sure. write-up, followed a This all from you’re far servicers, right. right. but Mike. as is as the was I little

a just remind basis. kind monthly on flow kind start of of us let’s So just the

each late we from files So in servicers. month, receive

is reporting in then comes to for what payment, – X That’s is like missed reporting forbearance? to not delinquency are the So the various it April coding. they that – April, we they in Included delinquency GSEs, what Is a example, in in – they triggers March in us us, that the kind Is their that the need that to in like and to us Is were – it that’s status? delinquency? late either revealed standard. report they loans reason do the loans received of X delinquent, plan? this and the forbearance? It’s for right? repayment Fair. the that all with files What’s

to we that, do of lot a servicers rely get upon in. the Now that

– servicers So information. the reporting to to will the has upon rely it do we come in, that but

So we coming expect do we – receive it will to in.

working along with with GSEs, gets to MI appropriately. have they industry, been make the recorded coding the sure that together along the Servicers,

And we do to expect in. receive coming so it

We not are these increase right, to going it an of information much be we going expect forward. to have date, – because received

have of it’s some with very forbearance We the to month we’ve through data. delinquent. know. that surveys, seen that MBA press only consistent are caution the by don’t limited we number reported been We I loans say if received April, Black because we’re an know would rates the data that’s reported that that it’s in what Knight somewhat all-inclusive But getting

will not the loan is a continues purposes. make never to it’s period, beat reporting if and Because So those current be to into us forbearance a due example, it it if reported payments. and for for won’t past trigger enters

that’s hopefully, responsive question your to what was. So

last I that clarify. one, on if Actually, could just No. Yes.

June? – payment. a – my COVID happens, sorry, borrower their – then in still and right, plan, I that so considered they make their and forbearance then let’s if call they be March April proactive, they’re say, – into Would delinquent, would enter servicer, a they that makes that payment, missed So borrower May if just

us. The expect to their would payment made reported their accepted would in March in filed us we X out to it, into made and – they’ve we made delinquent that they’re to they then forbearance a entered the X April payment, forbearance, see, to it never would or here loan they April We be not get April I X reported payment, June, we but What due – loan be X. be us, that to reported that for yes. pointing and expect was was would would that delinquent

terms what just Okay. And make the Thank clarifying. No, guess, seeing terms ILN helpful want But understood. even seeing you comments have? actually reinsurance any sure you Thank you’re what just and QSR. That in plans in other market entered you’re one. one in just or your then of there, you. is of I to you. question in

Yes, do Yes, have we a Nathan. of our business. we our this – program, is share quota XX% the majority you mentioned covering quota did XXXX share

as when what the distressed is sense. the like market, think of we I Right would to is been, always still. subset market view market. that always issuers market terms makes ILN ILN Really, it in be that In of would programmatic I a think really market it now I that we’ve said GSE the has CRT

think for back out issuance, the ILN market GSE when issuance primary positive first potentially CRT the of indicator So MI that up space. and opens be the I will future for

Understood. Thank Thank Those you. are questions. my you.

yourself. introduce please caller, And

that delinquent loans on still or Are you It’s Adam premium not? at Gulfside Management. collecting they’re forbearance, are whether in Starr Asset

Good to from the receive – from it’s to current and expect continue receive to do delinquent. they’re premium, you. we Adam, Yes, premium on all continue Yes, we whether policies, Mike. to would hear or

rates loans, refund that claim and to for servicers under our they a master but paid obligated delinquent, – a GSEs the our are goes a reserve it. the in premium to that policy, the it up get typically – once loan a as just because of obligated reminder, set policy delinquent, event do But is premium we estimated based occurred, Now premium though, are on back. not does we as advance delinquent not the on

revenue. don’t delinquent we to claims count associated that we as premium with expect be So

don’t the earnings. cash, in it you but You accrue get

it. offset You

Correct.

wishing very appreciate best call. and and much the you doing your the all you Thank

Thanks.

Okay.

is caller Winston from next Your A. Pilot Advisor.

to and you. the Thank following-up sense In for coming premium of into was April say Hi. some the from could us collections premiums. cash curious I or of February Adam’s give January if question, cash you actually compared MGIC

variability month change seen is meaningful month are the something we premium in haven’t over That’s of the policies in. up just any, that change focus I terms the of really that paid kind looked think February because a we single that March question. all is any any But front. to We This to Yes. premium obviously as of renewal policies, Nathan. April. with at really And there’s notice didn’t just little to January

the healthy is you’re So are saying? basically mortgage what for reasonably most part the services

to receiving just I this is about wouldn’t reiterate described. we’re others, say, what want but I statement Mike. want as Nathan to any – make the cash,

Thank much. you very

Okay.

Your next question comes from the line of Sam Choe, Credit Suisse.

today. I’m Doug guys. on for Hi

broader of earlier questions sense. So I of just one in ask the wanted to a more

disasters whether thinking about should and operationally? are like hurricanes like takeaways be related other what key – how that thinking natural credit XXXX it’s we’re the we the when about, and So

it’s – I guess Tim.

the way mean, a addressed bit comments. opening – we the little in I Just, I

that if people learned be is sort and there’s be in similarities to think that we early tried large forbearance a and and what spread those uptick, there’s that impact there’s out their to wide being going of and there a few what and offered, get there’s intervention to we think here large I expect can up as government so clear employment, is, from allowed widespread for point some when pretty months back a and a sort unemployment on I we uptick. of forbearance obviously that

think long a will know how economic don’t last. we difference little uncertainty I here is of bit the

economy uptick all that know gets the And we disaster, if they’ll get that. that we not don’t natural in of they quickly, It’s think their in to people back a foreclosures exact like do the especially working forbearance, But out within the reality similar. and that or with is, and months comp. an the expect quickly see relatively we’re following so few hopeful means come forbearance back while the a I very jobs and

comp. we the hurricanes use that’s think starting natural and a I the the So as for disasters why

Okay.

data? of your Do question. able so, guys employment that to share customers? And you statistics are keep Another for you track like, if

Sam, Mike. cetera. point scores, whether have it’s FICO The of the that’s the information that always we at et is origination

employment the guess, we I information. no, have be, answer, So current don’t would short

Got it.

much. Okay. so Thanks

Thanks.

Dunn open. Mr. line [Dowling Okay. your Partners], is &

Am sure me. I for on? if not I’m that’s

Geoff. Yes. Go ahead

hear analysis in says make benefit PMIERs. want you it there and operator. just the couldn’t out. there put the ILNs already the in reflected $X analysis? because I are billion considered. In have the further I Sorry, also we incremental are to Or the Is they effectively of have an to the are ILNs MRA adjustment excess one could to not footnote, on clarification refine on

amount mean not about I today. Geoff, currently million before, notes it’s absorb Nathan. $XX to ILN said, Chris I billion a good the the it are excess. insurance-linked more which Certainly, that considered, is when That’s a additional as point. capacity of was think included had PMIERs not $X in taking asked PMIERs of the that we benefit that’s

round $X So it’s billion if numbers. theoretically, we $X.XX billion, instead adjust wanted to of

not Yes. included The excess. PMIERs million is our $XX in

you. All Thanks. Got right.

Thanks, Geoff.

Bank. next line of question comes the from Your Deutsche Stefano, Phil

following the what in may like of? Thanks. default? am feels defaults Yes. why I – we April QX? ticked necessarily feels at case. reporting partially up that’s But my questions that that I And April When there’s even there somewhat look new guess in you like reported, Mihir’s from defaults, had Or And forbearances earlier. had saw not though as the you’re pop a – treating have I than for we in maybe of defaults it that bit the some guess aware up some it. a technically suspect is not anything a it I mind, you’re monthly that of it’s

so CARES think I make place, more the what payments started not of payment and I were I their happen. their people been Phil, had things that it likely to that miss and expecting sort March who entered think to April sort and they is impact for saw who did And COVID-XX, are that May April to already in missed then about What we’re their likely see June before there in then uptick were that sort the guess as their uptick. of forbearance, of would they an the payments. fully COVID-XX think way and the and prior they numbers, some to got I the start and meant who is, with people Act to have April of the payment there forbearance within current

you’re of So I then a is payment in and sort otherwise seeing those the payment would their what place, have us, to would delinquent COVID-XX and will missed and lot us. think a the missing up second with people of second reported payment, never times, have April get maybe forbearance ended not missed in who but to

press we so of from if X,XXX approximately X%. some. there’s release, loans add to just reporting entirety of I delinquency that number Within But we us, gotten gotten Phil. want that. gotten forbearance, but don’t the have have to and servicers, about been Sorry, have delinquent all the April from in that reported those reporting so in some the reported we forbearances services, know haven’t that’s to that’s we we population complete some that’s so

forbearance? of then way But world or I them guess, to just and go kind uptick it who them into to people defaulting about gave is right that apart this lifeline it fell this are around and cohort think a teetering the on the is that

Phil, have to good hypothesis what I I generalities wouldn’t reluctant hard want guess, family generalities. be or I’m those it’s in, draw don’t not that draw your don’t every to But their visibility we is makes that. own could because reinforce into those decisions, and saying we’re so we visibility have to, incorrect.

enough. Fair

is reserve. that XX%, in and second premature, the consideration got it’s my should about to that involved talk Or ratios question extent Why what’s I to So And above How think wouldn’t loss about contingency you? of the trying that? likely but the access year why to – would I the wanted reserve? you? the for

we the the that above reserve. ratio I release way on contingency done rules on first-out year Yes. a release can mean, work is contingency loss if XX%, is for you’re then reserves is, It’s The that basis. Nathan. the the correct first-in,

added reserves maybe the that really XXXX So be in contingency we releasing period. from you’d time XXXX,

formulaic a almost as as we It’s not. it that to kind judgment capital. view of I to or release that – think opposed make just aside set really I would

moves into moving So that Really, surplus from reserve. it at contingency it just point.

I contingency done allowed think that’s that have loss something reserves. when that ratios had to we consistently we’ve release us

happen naturally that it would a circumstance. decisioning view were if on, really something just of in we wouldn’t that lot I something So that there’s as

I – much. is there Thank guess, bit it. discussion of is so more it. Okay. this to Got. Got you a

Okay.

please Next introduce caller, yourself.

Your open. line is

Sounds like breakfast.

Hello?

Yes. Hello?

DeVries Sorry, [Barclays]. Mark it’s

Mark. Hey,

the confusion. for Sorry

outside the there lines question be the credit? company? undrawn used like of available assets any So that support cash committed a the Anything company holding is, I of are have there could to to writing

holding Mark, don’t we this is the Nathan. have company facility at a credit this time. No, at

Mark, subsidiaries Mike, other that have. you that heard make just Nathan sure to about are this I the comments is made not want earlier we

that’s that in subsidiaries cushion. he that think million mentioned MGIC excess, other the that’s in on in not I reflected $XXX available

What of gave available of the necessary? to response. I how much view – outside you holding you know hear the is push down, the if if commitments company, didn’t this I I don’t

then capital this with capital. That will over take even upstreaming flexibility. obviously some more Nathan. us but in of think and I – company. – Well, place like loans, access generating mentioned period I subsidiaries of other levers this notices PMIERs gives just at parent organically currently operations delinquent Mike ability in, have strong other withstand mean, not things some this large time, cash the would will increases still At only even and in feel from its we’re be certainly their that that we come environment, its how to is we’re that this generate capital with back the of MGIC really that the And new and currently time, have but also evaluating to which

of we company there. the levers before So we funds like think feel holding have I lot we to that pulled a and think would be about go

you scenario that all have to absorb FHFA over Okay. to up delinquencies in and and your cushion you – existing out see see want laid to Got of it. required your And where assets? delinquencies think level of above kind XX% rising have whether really high excess. about and some with then How you you you do absorbed by up the could could would

Tim. Mark, it’s

we in place know something paid change and whenever they of, ask. we’re us, to compare claims. as their FHFA view claims. it’s insurance company. the can Obviously, to that good is. want think they a PMIERs the they think are do I don’t I make an get think GSEs sure and answer I as to they is they make My What put what look that PMIERs question it’s and is MIs to. sure want exact

I obviously, this. I thoughtful the we relationship comfortable through; with good feel feel about think with so about the of thought being that process went and them And they’re sort

to, will really all. to how change of hurricanes It’s any if to quite are, as lead could be as long as some if an PMIERs the though they – some haven’t could point we’ve dialogue had, has but indication the where around far need how they The frankly, the of as would case to not always this excess a if tough want with know on received to. as have nuances needed apply to exactly they they say industry knowing that we felt long under it’s that current situation, we’ve we for. been assumption me like of to duration I the only at operated that’s PMIERs they the believe forbearance

Got Thank Okay. it. you.

Sure.

will final it over now And there turn are no back to I questions. management.

Sean. Thanks,

responders are front the courage first this The of As the take to moment is to on just lines who a we close, pandemic. I appreciate all wanted inspiring.

early to to and out For into take weekend, hope listening Day safe this want else everyone moment to And families Mother’s all wish just are the there. I to head want happy your mothers I the healthy. finally, to call, you and a say as I we an

interest your MGIC. for you in thank So

And concludes conference. today’s this

may now You disconnect.