MGIC Investment (MTG) 6 Nov 202020 Q3 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and welcome to the MGIC Investment Corporation Third Quarter Earnings Call. At this time all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] And please be advised that today's conference is being recorded. [Operator Instructions] And now I would like to hand the conference over to your speaker today, Mr. Zimmerman. Mike you. Thank sir. ahead, Please go

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

accessed Joining wanted Officer, that Tim the and Chief earnings to about quarter on Newsroom, issued company's call release our located Nathan XXXX all non-GAAP Mattke; can me Colson. participants last was Officer, the our we I under information of night financial at Executive during it for that includes results remind third be discuss Chief are additional Financial to on the the the and quarterly to mtg.mgic.com measures. refer results includes website will call, today certain that

information time, underwriting presentations written presentations post from may our new find that have in may force, other risk and information we valuable. find pertaining listeners to to think website valuable. We our our I on that on corrections posted you insurance primary our that about other or website investors information we that time interested a remind and wanted will also parties other contains and to to guidelines presentation past

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

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

good morning of results. nearly that Mike, up respect, reform. financial I a detail finance about wrap provide of summary Colson, report will our our state Thanks, I'm Nathan quarter housing the high-level minute in CFO, third will very financials a a Then everyone. you to every our pleased and with by provide had and more discussing we solid I'll

while their customers, coworkers, and today. been I continue by it made their circumstances First, want express and families, efforts unique fellow communities my to our is what day day of their to to continue with and local MDIC have over our do about gratitude so support to own to they fellow years my coping in team brought COVID-XX remarkable. co-workers XX has for and the MGIC pandemic out People

continue our programs loss is the customers achieve our Our first our uses offering and sources especially and and to and assist to market, homeowners, to align goal housing products support strive main moderate with objective provide things, other to time low homebuyers. and business We resources a the wealth among working competitive on critical to our services by that mitigation GSEs focus to in maintaining sharp investors, capital. that of

are part. well strong on doing our way the to national environment, healthcare gets purchase to recent crisis. proud mortgage to doing are remotely working whom closely business to done, health strategies housing the coworkers during be so we ecosystem with we Based we're their and execute and working the our evolving especially customers, As appears families, a our originations, are of our in many continue and on for the functioning work of of adapt remote volume refinance a finance we also business be

net the GAAP materially for quarter compared results, from to as $XXX income better level than losses that's notices reflects the lower This quarter far a incurred up our was quarter. second new last second of the was significantly financial significantly credit quarter. million, As especially received delinquent performance,

XX% the continue wrote the originations And books both slower year of we mentioned despite of of levels. purchase our of for on and purchase even quarter. business, family volume are force billion activity. insurance for is by has year-over-year. moving housing refinance a I in increased insurance into $XX.X the the stayed persistency as As lower time mortgage We our demand in pressure new of strong single resilient nearly existing what The traditionally

heavily for the be continue accounted recent XX% to in application. our which for transactions, business XX% new to Our quarter weighted to purchase NIW writings of

attractive Of continues very for environment many to course, rate the borrowers. low refinancing make interest

to steady months. we As relatively next continued write our a a visibility we into a refinance industry remain prior transactions to expect the relatively gain reasonable several of sources, the can than result, share of market periods. larger refinances over insurance and variety enjoy a in Through

less COVID-XX especially considerably the there's could uncertainty that beyond have regional impact visibility, and national both on However, given economies.

to are Today, are book and in have that We we the our will confident resilient, a market of that business in characteristics. housing strong positioning remain hopeful credit continue has we market. this

billion note bolstered by In contractual linked premium risk additional between robust addition, a covers by and January that through we XXst. that transaction program has an in insurance reinsurance balance modest cash are and supported leverage sheet July flow, $X.X a of investments,

forbearance received quarter the elevated of be While loans declined they third inventory The month each compared for ended at in pre-COVID the lower in our delinquency Approximately XX% quarter. second in X.X% environment. the the were and reported September delinquency in than delinquency notices to still third quarter, in quarter plan. rate the XX to were materially

by loan assets minimum $X.X required the the available assets to estimate PMIERs September, and COVID-XX While that an number as first corresponding in delinquencies of in we billion. compared of resulted pandemic of has increased of the quarter, the assets PMIERs our the end end a increase exceeded required minimum PMIERs

higher There said and about credit the more uncertainty paid In we minimum and Capital potential pandemic position lives. potential addition, our $X.X Requirements. credit to much higher caused That by impacts business emergency, notably was and in our the for billion policyholder in as impact State performance by remains national the material improvement than losses. the ultimately third many continues encouraged market to performance housing losses homeowners incurred of the the quarter resilience the are the

quarter, we it me internal over on results more the management our on During strong and into position to building our and both several get external Nathan. capital financial focus flexibility Nathan detail financial turn that continue to with will on let our and transactions. With activities. capital

third few to same third in in impact period the transactions diluted to press GAAP per our per last the the I'll and adjusted and significant financial capital share we of under can quarter versus or completed. Thanks, intercompany income same the In year. million operating from about share in be an year. last compared net diluted income, we operating A per million and diluted XX-Q. basis, $X.XX $X.XX Tim, that income the minutes adjusted spend and drivers good net found income detailed $XXX morning. results On recently $XXX of net release results. period net are a Then share our talking or share the quarter, the $X.XX earned diluted $X.XX we I'll reconciliation discuss per

as is revenues parts, losses in the year-over-year Year-to-date COVID-XX. result primarily due of at approximately to a are primary lot million. While last flat compared $XXX same difference the higher incurred the results to of period were a moving there total year

lower due $XXX to During to $XXX net million premiums last were the quarter, year, compared lower income. investment million total earned and revenues

XX.X premium net quarter points basis quarter. XX.X net and from points the declined the of For premiums but decreased last the XXXX, XX.X points yield third up basis X% from earned quarter in basis to

increased with competitive premium well use the portfolio credit higher year-over-year, release, a policies reinsurance the policies declined declined commission capital policies, premium premium on policies newer ran rate lower premium by transactions yield profit as also lower single premium ceded premiums losses. newer of off provided I'll provide of new older strong which rates canceled of result use by in a lower the rates. the the reinsurance net effective of the the that we of and yield as on highlight with share reflect higher our policies, yield were effects pricing, The quota points because press These premium now. have the the on replaced reconciliation as of from the accelerated by of in-force their were The profile refinancings. primarily declined end cost The offset as premium before premium a generally risk-based landscape. as partially decline year-over-year lives rates the While couple net the estimated the increased

or estimate The on used COVID-XX part delinquent were notice quarter, notices the third ceded new by it by result actual care and in amount in cancellations a new lower second forbearance the higher We unemployment performance third economic economic Accelerated million quarter delinquencies XXXX, of strong have reflecting levels. the monitor and the current X%. last year, third and secured, were year. hardship expected While a new elevated to by loans inventory and rate of ultimate reported the the the XXXX, a that net last portfolio size the on we quarter. to approximately in down notices rates same the to million last month XX,XXX to the expected of claim to new to XXXX the of incurred third $XX decrease the new the period the due the notices quarter The plans on of and loan $XX how level relatively period ultimate When compared loss modestly level in steady and received quarter of and existing mortgage influenced premiums state the workouts percentage influenced rate of transactions and in we that we third last and for delinquency to is received million estimated price from expect new expectations remain the that from in unemployment million encouraged quarter by a single period of the will in and same suffered claim delinquent a number was rate after part to notices successful reflects policy conditions forbearance estimate will commission the in than appreciation, notices it last in the future as to of second the severity compared XX,XXX received October. higher approximately the to rate the reinsurance rate the last and the for in million compared more of loans, was quarter increased establish losses claim was was is plans new received, premium refinance of us flat delinquencies. yield of than Net $XX claim premium reported quarter XX,XXX result than third $XX quarter. represents reserves, both including quarter. in delinquency due forbearance losses our when offset in home compared borrowers pre-COVID loans claims, were the for of we The uptake the the lower the In claim to This plan. to expected on activity the $XX remain whose premium higher quarter decreased over. long performance activity was financial in of This continued as impact in-force quarter market entered year rate profit of percentage forbearance the and cures the insurance compared cures,

much reserve to re-estimation compared resulted $XX year loss third development there these remains no ultimate $XXX of course, and loss XXXX, effectively adverse of the of performance delinquent reserves with In of in previous favorable same million about quarter. Of our million in loans. the associated last uncertainty last the of quarter period delinquencies development development

year, an of December notices the to others, million. and in To but missed by GSEs expire foreclosure also from million foreclosure the same from reported the payment number also $XX IBNR claims borrowers the the prior reported the period reserve last by the claims of as occurring IBNR the number or not $XX from Most IBNR to the currently our had reported us. estimated to have by delinquent. moratoriums the estimate to We incurred received but XX. enacted losses nearly been Reflecting moratoriums that a nearly $XX are accounting of by to declined reflects million. yet XX% paid set delinquencies not and XX% declined quarter us primary delinquency reserve, period of loans not we establish on close decreased whose

the modest forbearance However, due we place. both in for to effects to that several claim expect the of quarters are the payments and plans moratoriums remain

expenses. net to monitor continue We diligently underwriting and other

Before million quarter third XXXX, ceding commission, totaled flat year. $XX the to of in period same the which they is last

a third the dividend While cash the quarter, transactions. significant complete several we company to did not pay did MGIC in holding

of Reinsurance held MGIC MGIC. considered support previously to of available MGIC was that First, MGIC. resulted following approvals and subsidiary MRCW invested MGIC GSEs Wisconsin by held cash assets agreement Wisconsin, terminated not merger XXXX. million from Corporation those intercompany were a MRCW, merged approximately $XXX assets of of OCI, transfer the The the in MGIC or into assets under and to was in assets PMIERs. Those when were they reinsurance with an for MRCW

then MGIC approvals interest from million in were to of convertible holding securities the service were our transfer its holding dividend million retired an of assets, debt holding our eliminated junior GSEs annual as the and following MGIC's importantly, from company. was paid debentures. OCI, principal $XXX These company. by Wisconsin holding no to and such, $XX in-kind company's impact The X% Second, position the ownership not PMIER and there company PMIERs-eligible amount of the debentures

$XX X.XX% junior the due We with opportunistically million used senior approximately with debt value and dilutive $XXX.X the senior X.X million proceeds and notes in service balance of the holding XX%. incurred proceeds approximately the the activity. is The $XXX this in of on than remain the is XXXX debt-to-capital million call accessed approximately to the XXXX of of debentures portion due company notes We repurchase the of these with pretax consolidated of the $XX.X million convertible the par we at considering XXXX the capital holding company. and in potentially annual transactions, eliminated associated Third, value less a due $XX extinguishment a of After to million repurchase issued loss on par million markets ratio debt three-year debentures. The also feature. shares. notes

of Board. of million holding the share end, our partially totaled quarter XX. Our determined a $X.XX in consultation payable next investments including $XXX XX% was the $XXX debt future a a of securities, is on holding and consolidated investments years. of X.X investments primarily XXXX, the million cash dividends will XX, at duration had Last approximately had company. portfolio in mix company income cash consolidated August XX% September Investment and $X.X a lower billion, taxable we due maturity was At November the with common and Any per lower X.X% and cash Board tax-exempt as approved be and week, offset of portfolio The at investment dividend stock of cash as the of holding yield and investment by yields. pretax company. larger year-over-year, also

I from positive trends MGIC notice organic Earlier, at PMIERs, outflows as of by activity. expenses $XXX XX, million over I and the are December MRCW meaningfully XX, in cure by of had in and cash excess September Shifting a by premium billion, cash the available assets $XXX September was asset operating in and MGIC's $X quarter, losses. that unrealized XXXX the encouraged portfolio to approximately generation $XXX million part the our totaled income approximately XXXX from million XXXX. and $XXX the at transfer and $XXX resulting XX, by minimum mentioned assets $X.X operations available driven In million grew the at a recent from from billion exceeding in required paid our to part gain investment assets. from Our available new investment million, flows cash net inflows from

and the required missed although PMIERs assets of we in delinquent reduce to are We since related for the for of XX% are have thirds because the in assets positive assets amount are and we hold reduction This flow benefited cash to amount number a the inventory our from are is and plan two in of our June, delinquent during loans minimum for by delinquencies allowed nearly circumstances, transactions, quarter, payments inventory assets a forbearance that a the nearly bottom under line we increases increases, strong although excess under certain COVID-XX-related the increased required required quarter. certain application we modestly a declining plan. XX% hold forbearance the in more of of loans a required million delinquent loans $XXX as intercompany of to is benefit the our the PMIERs result as by The including of COVID-XX. to

back of reinsurance turn insurer, through the an July comments force The substantial Transaction ILN few about a through loss to we or with to note me risk I recently for supported make let reinsurance receive covers other the the January by it Before that purpose PMIERs in XXXX. in transactions. excess and special expect ILN our transaction the from all closed to virtually capital by October. approximately have we of insurance-linked Tim, million of transaction obtained issued related is a notes we $XXX proceeds our as benefit NIW

important flexibility and balance our the the And company. maintaining treaties and using let with company quota maximum the its balance that each of both considered. supplement like mention all strong In sheet is ILN Tim. capital it summarized to that, own our is would writing of accessing We quarterly closing, me sheet, have of be markets balanced holding approach to back I strengths that transactions sources share for weaknesses the our on website. using own a forward commitment that to and a turn capital and believe has that We in our must

Thanks, Nathan.

questions, topics. address to a few let me moving additional Before

which setting activities be on say FHFA know comments at in capital industry. this GSEs. to we how prior shape comments rule, FHFA framework it year. to finalized MI the they would the are will point like Since hard mentioned it of rule final forth received the the re-proposed has The the has currently the and a role The FHFA replace and Earlier so-called in of our don’t to the FHFA GSE provide merits The changes advanced further comment. yet we the determining proposed director will GSE for GSEs said, the stated evidence the is new in GSEs XXXX. public what new new defined rule housing product if in a have revisions year, qualified revised wants be rule a ratio or that As on establishes notice if this that any new rule. seems to CFPB for criteria patch. relative revised reviewing the This that the other continuing public to impact company approval The re-proposed proposed the structure determining activities less for definition The notice debt-to-income final requires effect mortgage the agency activity whether today. borrower’s quarters, be activity and system the solutions. will since that is of launching that the and more recently I proposal do an to definition would rule believe proposed regulated changes has the the for that targeted of a of to finance to publication notice is the threshold. to FHFA is it would is also that That GSEs for to the to The benefits The have date prior been review effective insurance FHFA appreciates to was obtain capital the than clearly this April the markets require can FHFA products. before or recently provide all patch, the or The expire XXXX period and XXXX GSEs the XXXX extend QM of until a exit to perhaps six first. said QX pricing a of whichever the date with later. would CFPB definition rule, in and X, conservatorship, occurs effective of ended set new they proposal proposed CFPB XXXX when January be they months comment the September the GSE QX

can and GSEs enhancement to be company credit solutions for unavailable all at various points and lenders, the borrowers economic provide of our or environments. to cycle, options the in our market scarce other continues credit While industry economic enhancement

on continue While prudent the we discussions current are engaged we housing to for to the environment, be in responses future. finance focused regarding actively policies

housing We continue industry use the mortgage encouraged continues advocate about such barrier lenders to that FHFA, it many and legislature any Long-term, to including the Private in of our private and payment. capital, be for to gauge may insurance and one the of overcome we and private but company mortgage finance, and actions offers by homeownership, for insurance. what remain actions. future value to the difficult increased number role the can solutions be the a consumers the taken great CFPB play proposition timing down to

flow strong are a billion, a characteristics, navigating a reinsurance premium nearly balance portfolio of this underlying and we credit period and an $X with book low that business robust of debt-to-capital of We sheet ratio, uncertainty contractual has by program. a supported that has are investment

In have take we in economic service our down borrowers many prudent mentioned to expect the company place the remind have provide positioning continually provided of in are confident to XXXX, the the let’s addition affordable closing, successfully right I to quality of founding I well-being have one, my housing listeners to on: that at we remarks, prosper to employees, in long-term. to continuing our team to that, low two, I products As to and market; the have over payment lenders With focused our our operator, questions. want come navigated and and support since current the cycles options. from critical we and that deliver beginning continue with and MGIC. customers am

first Sam Suisse. And from Credit comes of [Operator the Instructions] question line from your Choe

open. is line Your now

that? still might Since on guys. morning, regulatory updates, on on I’m getting given that ended a trends little of that change if some be anticipate, of the good we’re this might in the How for landscape. you’ve do some today. we political been administration, that Doug thinking you some Hi, regulatory you be are there premature, is about altered? clarity But seeing the a

of – is say. would comes or watching Biden of see going it’s we’ll whether This you House, finally I focus And mean, and how Senate really It’s the And it a it that coming when a out any to down of out be if sort be obviously, lot and about know it. results time a at election I look Tim. Yes. but what hard and election we the it’s the more to the building too and it are, obviously, seems there’s will we look we’re all he the that in victory. on and middle. talk tell results the cabinet more wait the I the changes, are about individuals Trump that and down cabinets out, has to get And built don’t places. him worrying the Then today. spend and it making it much like you down victory it’s

really we about navigate general, our And environment. through ability so in I think of feel good that sort to

it, Got That’s helpful. okay.

of XXXX? what the the was it like in-force been basis, set a part Is does So the assumption I’m up October be your I mean, a to numbers, year-over-year for of we’ve quarter. remainder how third maybe the similar insurance in looking trending, seems And for and that at growth seeing early year? on seemed it – reasonable that to

again. Tim is This

some activity still. refi heavy out think been there’s there I pretty

out to has so my obviously, which be done. has volume strong And mentioned be even been in down. seasonally And as there the some but pretty comments, would challenged recently, persistency purchase volume strong I stayed their

stay So that to same. going it’s tough is trajectory that, say to the

But tougher what’s about our happening good deploy a grows, now, of in-force going same right really trajectory. Just ability market that’s the good returns. here. feel continue And keep as period capital think we becomes good in housing time book for to the to it that we at to

Got it.

hard say you at are to entire that guys or to able NIW production for kind is might at be year this of just point? So year-end that the what guess

Hey Sam, it’s Mike Zimmerman here.

will mean, the within not on forecast volatility while XX, insurance it’s in to usually there’s if that numbers. XX because we’re days. obviously, going already month you So with can applications, you one go bank, see I such the the in-force, a got we’ve the a and

do probably have still some least through December certainly November, out. at So �� to has there, but we visibility play through

those So specific we’ll answering back to that. off

Thank Got it. All guys. much, right. you so

you. Thank Sure.

comes from the of question next line Bose of George KBW. your And

is now line open. Your

guys. morning. Good Hey,

ask home do been So prices how does strong. of in I And mechanic to have kind it flow wanted I’m existing standpoint, to to – expectations? what home from from claim impact How obviously assuming terms the a loss just does about And inventory very curious default through your just provision? your just that prices? you of on

be the like appreciation one. the it’s country, parts lot just I’ll accelerated. been Nathan. mean, price seen is seems It really really in certainly we’ve to this Yes, of couple year has home the of I over take continued that last strong. that not the last a of but months,

appreciation out over I that forward I there’s there as the that markets uncertainty uncertain also, is though, home certainly, where claims think a what exists. that we’ve time in is then going that look you price more that. home we distribution is of And still think macroeconomic observed appreciation get with price

we consideration, it’s at, loss I that when of new and So terms parts it’s it’s but now, the of assumptions but looking we’re we both a a factor, in to development positive moving rate certainly the a there’s setting unfavorable claim obviously things macro and favorable notice think have. comes a that right lot influence,

it the makes sense? presumably, remains increase if given That very But ability it strong, Okay. would to cure.

if that kind persists. of So it? a that to claim eventually Is should think it default way about the rate, reduce to

Yes.

Nathan, again. is that think this – I

think I it. think that about is the right way to

last your from done Okay, quarter production the a great. quite on X%, levels. is making? have Thanks. singles, oral industry and a something over in quite position the bit a then that bit year’s And that the last guys or Is was just it’s been you product that

Mike. marketplace what of there. Bose, out this really is reflective Yes, I’d say, Hey, the it’s is

there. prevalent refinance transactions, are with less Given right, the usually, singles

that the all obviously, have comes and very and into with pricing, low phenomenon, you risk the interest play. So LTV mix based rates,

versus more part. I certainly on So of thing it’s an really our just think strategy, industry any deliberate

that. Okay. – this because the that just are similar a pretty in market. in product case it past, of And Is to that kind one I competition the actually remember more of still the increased lower just the a or on returns was market. kind return was of

this Mike. Again, is

the I that think, don’t pricing probably would would as et risk go statement engines, that is several accurate several have been think I came of years back all into pricing the that play. ago. the for cetera, fair you and years it be statement with last the that years if several a accurate adjusted and

Thanks. great. Okay,

And line comes Randy Binner from the Riley. next of B. your question from

Your is open. line now

to thought rates just tailwind to you. specifically seem kind market. there all off, challenge. or be that these be people from because you around more potential clearly, of COVID tailwinds. a housing want as that would a think And out And Thank one macro a tailwinds that wears there’s of headwind stimulus do the there’s increased more on from who But as support unknown lot kind have to space. there could the view opposed and and I interest of I want commentary try just demand

bit Randy, let little static the question. Tim a there was is Mike. connection. the this I’ll But with answer

a and through, it have housing, any third heard on So if business, wave you additional right. or the just more really could I that want that to of through came sure a macro economic make potential whether or It’s impact whatever, question, view second right. on the

Correct.

Okay.

Randy. I think that’s question, a good

we be obviously to if blue think, there which our Obviously, some think difficult speculation of of stronger ultimately, still going to that has I have was it think the amount more there part stimulus. know. would is is some be some to was I of a the of we there I what But expectation additional virus will path wave, do; that might is, there that expect view that stimulus be stimulus. there’s

through will being to think But housing again, I’d I trending. the some all be ultimately it, this. think Although, seems general, where discussion view resilient as there probably say about more a again, lot I they’ll be we guess, and in be extremely I election

size a the it while think housing standpoint. little matters I less matter, So a bit from can probably

the this were down question zero question with And refi. hopefully, that confirming the model, can to – debentures the detailed just hear you on paid

We’ve Nathan. million approximately the $XX amount repurchased is principal This like debentures. of

did the debenture we also debentures company, a little intercompany million move and previously that held, back of are are the MGIC to where $XXX still retired. we still $XXX million those outstanding. the And were So of then But the the holding there over retired. those

total? X% of million or $XXX million the $XXX

X% so. the Of $XXX million X%. of the or

I that. on might you. follow-up Okay. Thank

Sure. Thanks.

Micenko question from And comes your the Jack line SIG. of next from

is open. Your now line

quarter. hoping claim Good morning. little more for bit I’m unpack the a rate the to

number think X% lower X%. that was you said in went a the increase you of rate. get I the from last that mix of Nathan, new because What XX. you had motivated to think forbearance, claim DQs trying And sense Just last it was quarter? magnitude are quarter I in that to

that and that notices number referring in in Yes. is This from is the forbearance. forbearance. new the the amount the delinquent changed to And of much I received Nathan very plan. the third was forbearance that I second although, know second notices And we the quarter, put XX% think I were is that the quarter, hasn’t we but amounts we lower quarter actually in out like quarter. receive out it the previously to number think I forbearance number, What was modestly XX were in inventory the amount I was of notices the statistics third was statistics new in have have don’t put monthly on the the that exact we and plans. something in monthly new that

have there. don’t out it’s it me. I So of front in just

there was development And no Okay. change.

back last recasting quarter, to you’re correct? X% not an So

were we feel with That’s for June comfortable where we really of at the end those think positioned I still correct. items. No, delinquent

corporate in benefit the Okay. industry when industry the expect we that and event pricing most And don’t Trump then tax on the some back and tax we you prices in pricing. the of and have the on happens gridlocked to MI to, that passed onto something MGIC industries got rather raise a some side. XXXX, Congress cuts to Would both

to This would increase, guess don’t what if it’s the a we hard response is, but Tim. be. hopeful I’m one I there that market speculate is two, exactly have tax

would the hopeful tax reacted. with a marketplace cut I'm that that I don't think the And industry a others or same we we a not, but the response be tax just again, from it increase, response, and tax tough with rational see was it the in it’s to ultimately. speculate that increase

done valuation fair value the Just shares – foreclosures? the all is the in growing Okay. liquidity, well, and end like? is things that you you now after given XQ Is deploy that here, depressed restart – you've for of forbearance take completed – the quarter. And so you the because has ask the the your the and on two just is NIW kind okay, what excess are XQ meet period last this could some balance value in quarters of the are significant where Is delinquency XX% been? we're of you've one and want if the and billion is going to to two just higher $X.X on it Or that to a the the I amount looking the island What book advantage trends? more on the the much looks it buyback, just sheet got on let's of of demand as excess it moratoriums what be the capital? business it clear able of

there, through but my probably lists go Nathan, it's I'd Jack, to Well, did main two lot things. of maybe point a you

market. had the previously we want business certainly in I how the positioned we growing with volume is of think business than the faster we're and

all appropriate be PMIERs capital, in achieve the the able two that that we're been increased an quarters. able maintain with which to think can last want through to generated even fund have still can to we and access fund So able growth to we've period this growth of internally I and confidence we do that to

to see increased growth. might I percent overall, we is I of it's that purchase I want remain activity, So volume see to even going a to more think expectation starts as the our especially that pick the up if strong. think, Obviously the refi

a of might loans got for six those about that CARES obviously they thought set path And rolled allowed is is that post-forbearance to in days be and there's like delinquent month received June growth the Act. think months, the which forbearance, in some in big they're October large about but resolved XXX rates. in in then of seven, they've of we other under little as part seems the So that the future uncertainty I large thing bit particular. the We May it

first be while provisioning next really into our looks the may and path it quarter of resolution lot what in meaningful year those positioning, of like. to before So we out reserve about post-forbearance a is of uncertainty on there we And, continue some see items. feel our the confident

I think to-date what it that's positive, expected. but looked we really

things going would that that early remain, the expected We activity most are continue be to that claims generally favorable out of anyway. come the of bucket and to ultimate

have know don't evidence is we've of that forbearance initial I a happened. lot good So conviction of path post what gotten our yet to views that actually

that want to see that we confidence our and can want So on to more have fund think, growth. I

you. thank Alright,

you the looking of you're the down close new notices to around back quarter, call just notices. as looking XX%, circle at say quarter, at I'd XX%, XX%, XX% going XX% on XX%, Jack, new they said, so month, percentage the average in number Hey second kind stepped the for third of in, were each on to of it

Thanks. Mike. Thanks

DeVries from Barclays. line Your of Mark the next comes question of

Your line is now open.

both of the wanted that the just obviously you kind commission and unwritten your a the profit bottoming, amortization you noise Thanks. accelerated if can to of thoughts from singles. There where the see just but parts average lot ignore of on premiums premium, around around impact get the moving on Nathan, are

premium quarter I implicitly things a commission question. The those to to accelerated It's impacted in deals. predict loss on found the the think prediction earnings profit the be single that always question. for difficult a Thanks hard the net you we've really, – very and that It's is on Yes. relative yield a good by question. to have share

when think a does you that, the we've And focused largely this new on it's to mix I that the it what talked that about So purchase that months, next the evolve XX period as and past, the XX was in a to refinance over of write portfolio the to even function think there. you where XX business in-force really about yield. and looks over

of make end you needing there. up a assumptions to lot So

down. trend think our the general I view has that is been

The in of see can that pace change higher. the trend in quarter we was the quarter-over-quarter that in You this supplement. have release earnings slightly

NIW in of there lot refinance the cancellations that owing that's of addition of that the we volume in this a the business in to wrote quarter. were wrote, and and this also think quarter to high-level activity, we I also

at the writing rates lower So levels associated the resetting resetting lot with capital today. but a also a it's of lot of that's premium at we're levels, lower levels of business that lower risk

quantity don't because assumptions think by make the the you driven type volume. level of I to So and the pacing refinance and you some write of on to have a of to largely that, I guide it's or relative specific number other business a might we that

commission rates on seeing as you're is losses because start you the paid. that actually Okay. favorable clarify, that the incurred to expect more see roll And loans, favorable is would it. of to wanted through to Got to opposed line? calculated forbearance premium development, profit these just of off we come And some if back

ceded out or that”. it ceded the point loss, I either case we that, get commission profit that the either lower to it the benefit, profit we on Yes. future, loss is ultimate losses. would today, are would “recapture in based get The benefit. a of that the as positive or re-insurance just a we if incurred the get in in a commission the would actual losses we're profit paid impact estimating including commission i.e., computed And on losses incurred able be future, benefit have But than as

does it items but income or a impact net bigger that line on, on it pre-tax income a So doesn't the basis have impact. up show things

it. Thank you. Got Okay.

from comes the America. of your from And Mihir next question line Bank of Bhatia

line now open. Your is

Hi. And questions. Good my you thank taking for morning.

yield. portfolio the question in-force a just little on bit portfolio to focusing Just wanted the to wanted yield. follow-up – on Maybe actually on

that writing saw capital persist understand you've and benefit bit? yes, this pace you extent – can next of the the given does expect the losses that business, for it's a market from quality for strong, the near to and continue to got of to X.XX, higher here the because quarter So and the XXXX quarter-over-quarter NIW in for business in the the should loss that in quarters? the couple been stays piece, housing think I argue you the decline I X.XX volume, to in you quality the a maybe like went of but the future term we days, higher of couple lower

it’s Nathan. Mihir, Hey

to there similar to say, lot of in-force next business a what down think It comes that impacts your the in, is are the big that rate. a six of your I impact assumptions around about I volume or expectations fourth cancellations write also think previously, existing months. mentioned I quarter or – of what the the persistency we

matters level of quarter loans canceling. order cancellations this which experience level did the business are we quarter, think of that the you writings we that So expect It magnitude. I also I on we if did something think could that then of and this also

of a makes do expect think, trend but directionally, impacts said to that assumptions change It over that that to lot are other makes lot certainly time. period time, there longer we quarter we've but hard to continue a you one a of even it it a of function of lower, the that pace So the over I really of forecast have make. is change,

Okay, helpful. you. Thank understood. That's

think re-delinquent or is performance a or any weaker Let the have me Just percent what I in look – forbearance of the you're rest or anything for to on may forbearance. share are delinquent. equity? the for switching is color any in book, what the you to – loans that early, point, little like that cured performance example, bit are like them you have would this have And forbearance also pool book, few among can regular differences it versus there have maybe bit seeing, worth calling your on are like loans forbearance XX% guess, any expected loans at than Does Can out loans you from under little of your statistics like what particular a that? a of regular pool similar already that, share them? your the out that I gears you your additional the

Hey, Mihir, it's Mike.

So inventory. on you some several give different if the forbearance will, you color

mix representative starting of maybe activity of the representative it's the when pretty I'd So say or look business. et on book the recent at and by pretty you writings cure composition, It's – LTVs it’s cetera. years,

Now its question level the careful post and mark-to-market kind it seconds LTVs, about and of earlier any in know the to below below place. mark-to-market on doing have LTVs got market. LTVs a we XX%, of responding mark-to-market overall, we But right may presence strong in was be that HBA mark-to-market basis. you Obviously, CBSA using, XX Nathan as to XX% don't type XX% get with and XX, been a of claims even

it's forbearance there whether or loans. it's and pretty not loans So forbearance similar,

And inventory so kind that's kind delinquent at XX we're of not when – the just looking of forbearances.

the the the inventory – of at cures, went end far of back as These end about cured about June, said June into looking through October, how the through that loans quarter. – actually, of those those September. as as We're cured of end XX%. of of the of we forbearance reported well, many XX% As of the in about end XX% end through XX% the and as of look then at of are

then seeing that they're the small that loans of months. one a so and make leave small percentage staying that a portion are percentage we're of forbearance, remains in a sizable kind seeing payment, but delinquent, three to that also forbearance We leave

seeing to would say. the characteristics activity, we're but hard of relative of levels to different performance, the So gauge. portfolio, representative The I

level this of had haven't We forbearance reporting.

anyway. building giving just the but characteristics database really behave, So we're just loans of you some forbearance those out

And last strategy. No, your just near-term that's on you. helpful. capital question, Thank my

it notes as HoldCo. would an to and Should resume special allow you them how resume quarter. the was the there just you pivot XX-K related to the around if in then and than So Or different that view X% department notes And dividends approval your a also was that openness future quarter. may materially to you amended like dividends, quarterly got indication that dividend, you repurchases don't will. they a was capital from strategy looks you the language just future? this in to I that's it junior this last your is take quarter think cash said we it to their junior to because in,

right also So So this just, the should just capital excess maybe into you. in about Thank of we that? level read you're environment. targeting talk anything

take the talk is the and capital. Nathan Mike, Well, one. easy I'll I'll This to let

we changed it's in same On that the thing the you there, it's means the that languages temporarily see before just suspended, could really suspended but same temporarily and we've – the XX-Q, repurchase. said we did words intent

So just want we to, it future. the in

clarify just suspended. statement we been has we've wanted So could that repurchase it share to made But the that temporarily forward. previously, that that we restart going

read Nathan, more any our intent don't reiterating you. So than intention. just let that I'll to

not the required just company the the Yes. Wisconsin quarter, what and OCI, GSEs. just able also third get of also for but going that kind MRCW the the inner needed the from we're the approvals both to company dividends The pleased say, for were in from merger means really approval, think junior Those the of the we we in and debentures. maybe transactions I that writing question forward. would that I about dividends

quarter? probably we any I you think also prudent execute think, this the have in cash remind would means I $XXX the cash a approval our for in What also early dividend for places that I little XX with that think, quarter. in dividends? the this at point. think holding too March it's we And happy require I million and really don't a thoughtful expect company. transactions. would GSEs. ability of So request say relationship fourth I to the those that dividends through at means point to, What first at to all the

flexibility So from enough writing we have dividends there the that company.

order things that. cash to writing in We the dividends from needing to affect company of do without company the at holding any have sufficient number

of that transactions require maybe there. a did a maybe couple But just our approval. thoughts So just reminder

the that and of reflection the the that a made fact that's think made I both they relationships at they sense, the good GSEs. – that maintained fact and OCI we've

to we'll the a be I'm So It's we too that have comes we to approvals that really And if that early point. future. what probably request? able down hopeful say at that to need prudent request thoughtful this in get it's the little does a

Understood. Thank questions. my for you. Thanks taking

from Geoffrey next question of Dunn line the of Partners. comes your And Dowling &

Your line is now open.

Thanks. Good morning.

option. new your can First a question, you world share basically about and have thoughts notices forbearance January beyond, don't where

economic Given be incidents would has sense than instance how the strong go for environment once How housing uncertainty, does been? away? options the normalized higher can level, forbearance economic frame offset it the would or a be you make by prospect that

do that be And this I is frankly would the response doing having are our of it mean, I that start sort or assume more won't big is the I as saw higher there forbearance quite of guess economy, similar I lot sort virus muted be better, and that maybe a the what will If what It's things the muted to that there's I more I'll on I going sort there's of strained I it. assume – if to is thing say. deal. that sort forbearance not the say is, of options out to the the has there. path delinquencies, earlier guess controlled to ultimately less and one Geoff, takes. a more we I are I think of guess potentially, my on the of economy with would year. virus that wouldn't is, view impact tough

response all that whatever standpoint, we've I to be and delinquencies. a see from would position I from a standpoint a I concern what of would end if that sort do and what clip a think impacting housing capital strong was tried there on of So really a could to situations. December clip have like not sort wave be there like a now of But some is it delinquencies. ready of would right we might expect second say for think is looks third and be. those a would planning new feel handle We capital you or

talk to you can Nathan, the continues portfolio? investment weigh environment The on Okay. to obviously yield. the

into pressure this future, spreads rates on duration and the the we could much where are remain consistent more given how cycle, we yield? foreseeable So see for if the

holding quarter purchase quarter always the just just we portfolio, that third at That's a cash good in Certainly, portfolio a affected credit lower as help our with does lot lower And holding frankly, company. cash operating question. holding higher so a more a and cash company compared a been on a yields And this of that yield uses the holding issuance. number quality, given in-force the at the lot to then more company debt this didn't things. company investments, which has at well, cash generating the the duration quite bit shorter the of number yield yield, point, than the were that weigh at things the

at what question given are in-force several in, quarters. looking in-force that a your and I premise that stay expect awhile, like for was if our in are that you're they and next do I for spreads below purchase looks we today, yield of what think yields invest decline So the the – where rates yield

frame how to we pressure can way much Any see? additional

think good the be number overall something really in different company question, dynamics really impact I an provide I quarter. hesitant dynamics, big better. Because the of a we would a holding it's portfolios I the think had operating the a bit a that could to clarify little because – company, of

more to and information So take away provide that's something the in try on that we future. can

last question. then And Okay.

market forward? expenses conditions? commissions, generally notably. rate double-digit just going expenses And incentive year-over-year. benign gross your like It pretty growth expect up related still ceding Excluding pretty can Is that largely we on a comp to picked looks

I a expense expect pretty from you think benign can Geoff, standpoint.

short-term. sort not details make viability, ensuring not making think just sure we've to thrive the the sure to as expenses are benefits. at say, time back long-term. lot sort we general from the vigilant of still is proven look incentive trying comp of on bit; it's would the on parts But sort and a being focus But in still a while tried to long-term, sort of I been be have but maintain higher little on to this focus moving You right to than comp But to flat, of in of think definitely way think I about in we that we forward. move able

relatively you – XXXX flat as well? for envision could you expenses So

Geoff. It's Nathan.

double-digits Just clarify, to year-over-year. you said up

reconcile $XX but periods, trying Just you're the numbers it – to different like maybe to had you're call in set I both million back you that a figures? have – sounds

backing follow online. I'll Maybe the just up commission. Maybe it's I'm Yes. ceding out how

Okay.

Okay. Thank you.

Geoff. Thanks,

Deutsche your from And Phil question line of Bank. the next comes from Stefano

now is open. line Your

morning. good and Thanks Yes.

though well the I the slow these the remarks, rates at refits comment think what that was there historic persistency continues a at I continue was point you And look near probably could and steady. in do to even are be does refit in prepared as pressured the down term? mid-XXXX – to us remain to hoping activity once around Q&A relatively some similar just lows? or give commentary

Well relative and are at start over with the market conditions. – Mike averages, they're I'll wider the and to it's than still today the when historic bit mean, you normal. those versus quite I spread, reverse margins look where order, look tenure spreads so at at a

lenders So a that stabilize note a adjust over up or rate. even tenure have bit, go margin little the to rates little ability even if the

transaction would continue the difficult I we think in So prominent mean, that I why marketplace. that's think to pretty the will suggested but say, be to refinance, we

in month depending or it volume, business refinanced on the the et given the around going XX% been in And of do us between XX% in at any really it's still business us, rates conversion cetera. For the be period, amount that can it's bounces lesser that – lenders, and forward. particular probably with –

rates got I create in the that from other go to opportunity could I should where you market an general, but is think to follow think are way at. So given right But persistency side lower, got the NIW see lower that on we perspective. pressured think persist really about it, staying rates

would And mean, this way period then that from remain is think as us any accelerated about the there singles? could benefit elevated persistency presumably, in is pressured, you I help the as well?

Yes. Well, I yes, think so.

left noted of last proportion what's way singles quarter that less at singles two. population the our a over recent or Now because we've of and year this as but been writing earlier, look that over just of periods, the not

dwindling. all population of relative singles But also things the is size Yes. So equal? the

Got it. Got it.

percentage Okay. were you think something I people contemplating panel way the And it quota that like queue something to that or to still saw in mid-teens Is is is that the from what shares the re-insurance, the for to treaty. the down moving adding at XXXX quarter for the percentage about session XX% from new looking share the pretty forward? the [indiscernible] mid-teens meaningfully, seems

So, it's Nathan.

Just maybe XXXX clarification end a XXXX. actually at the was a a point agreement panel the for into reinsurers of two XX.X% of with of year entered that we

know, our total we level. that got reinsurers up XX% that quarter one-year to you had, XXXX, share So for an of additional set also

reinsurers stage and about what XXXX. in We are appetite of early to discussions with on is that build the their for XX.X% opportunity kind

at we'll view wouldn't what that – see update the with level talk It's this market is. necessarily as XXXX. reinsurers any So I about wouldn't something the don't for I and that I But point. have

it. Got

sense. Thank Okay. Understood. you. makes That

may at you are time. there And questions no continue. further this Presenters

Sure.

interest you your Just in their MGIC, and are for I Thanks hope loved to and everyone happy thank want ones that healthy. and everyone.

Ladies today. and that our gentlemen, for conference you Thank participating. does conclude for

You all disconnect. may