MGIC Investment Corp. Files 2023 Annual Report on Form 10-K

TL;DR

<b>MGIC Investment Corp. has filed its 2023 annual report (10-K) detailing its financial performance and operations for the fiscal year ending December 31, 2023.</b>

AI Summary

MGIC INVESTMENT CORP (MTG) filed a Annual Report (10-K) with the SEC on February 21, 2024. MGIC Investment Corp. filed its 2023 Form 10-K on February 21, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal business is Surety Insurance. MGIC Investment Corp. is incorporated in Wisconsin. The filing includes financial data for the fiscal years 2021, 2022, and 2023.

Why It Matters

For investors and stakeholders tracking MGIC INVESTMENT CORP, this filing contains several important signals. This 10-K filing provides a comprehensive overview of MGIC Investment Corp.'s financial health, operational performance, and risk factors for the fiscal year 2023, which is crucial for investors and stakeholders to assess the company's current standing and future prospects. As a surety insurance provider, the detailed financial statements and disclosures in this report are essential for understanding the company's exposure, capital adequacy, and profitability within the insurance sector.

Risk Assessment

Risk Level: medium — MGIC INVESTMENT CORP shows moderate risk based on this filing. The company operates in the surety insurance industry, which is subject to regulatory oversight and market fluctuations that can impact financial performance and risk exposure.

Analyst Insight

Review the detailed financial statements and risk factors in the 10-K to understand MGIC Investment Corp.'s financial health and operational risks for 2023.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-21 — Filing Date (Date of submission)
• 6351 — SIC Code (Industry classification)
• WI — State of Incorporation (Legal domicile)

Key Players & Entities

• MGIC INVESTMENT CORP (company) — Filer name
• MTG (company) — Ticker symbol
• 2024-02-21 (date) — Filing date
• 2023-12-31 (date) — Fiscal year end
• WI (location) — State of incorporation
• 391486475 (identifier) — IRS number
• 6351 (industry_code) — Standard Industrial Classification
• 250 EAST KILBOURN AVENUE (address) — Business address

FAQ

Industry Context

MGIC Investment Corp. operates within the surety insurance industry, providing financial guarantees for various obligations.

Regulatory Implications

The surety insurance industry is subject to state-specific regulations and oversight, impacting operations and financial reporting requirements.

What Investors Should Do

1. Analyze the financial statements for the fiscal years 2021, 2022, and 2023 to identify trends in revenue, net income, and other key metrics.
2. Review any disclosed risk factors to understand potential challenges and their impact on the company's operations and profitability.
3. Examine the company's capital structure and debt levels as presented in the balance sheet to assess financial stability.

Key Dates

• 2024-02-21: 10-K Filing — Annual report submission for fiscal year 2023
• 2023-12-31: Fiscal Year End — End date of the reporting period

Year-Over-Year Comparison

This filing represents the annual report for fiscal year 2023, providing updated financial and operational information compared to previous filings.

Key Financial Figures

• $1 — ich registered Common stock, par value $1 per share MTG New York Stock Exchange
• $1.00 — mmon stock of the registrant, par value $1.00 per share, outstanding. The following
• $400 million — transactions, and subject to a floor of $400 million MGIC Investment Corporation 2023 Form
• $1.2 billion — vices. In 2023, our total revenues were $1.2 billion and our primary NIW was $46.1 billion.
• $46.1 billion — re $1.2 billion and our primary NIW was $46.1 billion. As of December 31, 2023, our direct pr
• $293.5 billion — er 31, 2023, our direct primary IIF was $293.5 billion and our direct primary RIF was $77.2 bi
• $77.2 billion — billion and our direct primary RIF was $77.2 billion. For further information about our resu
• $713 million — thered our business strategies. Earned $713 million of net income ($2.49 per diluted share)
• $2.49 — es. Earned $713 million of net income ($2.49 per diluted share) for the year, compar
• $865 million — iluted share) for the year, compared to $865 million ($2.79 per diluted share) in 2022. Exp
• $2.79 — for the year, compared to $865 million ($2.79 per diluted share) in 2022. Expanded o
• $330 million — ajority of our 2024 NIW, entered into a $330 million excess of loss reinsurance agreement ex
• $187.1 million — uction in the insurance-linked notes of $187.1 million for the Home Re 2019-1 Ltd, $91.1 milli
• $91.1 million — 7.1 million for the Home Re 2019-1 Ltd, $91.1 million for the Home Re 2021-1 Ltd., and $106.7
• $106.7 million — illion for the Home Re 2021-1 Ltd., and $106.7 million for the Home Re 2021-2 Ltd. Paid $600

Filing Documents

• mtg-20231231.htm (10-K) — 3728KB
• mtg-123123xex43q42023.htm (EX-4.3) — 11KB
• mtg-123123xex10224q42023.htm (EX-10.2 24) — 55KB
• mtg-123123xex10227q42023.htm (EX-10.2 27) — 27KB
• mtg-123123xex10228q42023.htm (EX-10.2 28) — 58KB
• mtg-123123xex106q42023.htm (EX-10.6) — 4KB
• mtg-123123xex108q42023.htm (EX-10.8) — 89KB
• mtg-123123xex1012q42023.htm (EX-10.12) — 11KB
• mtg-123123xex19q42023.htm (EX-19) — 54KB
• mtg-123123xex21q42023.htm (EX-21) — 12KB
• mtg-123123xex23q42023.htm (EX-23) — 2KB
• mtg-123123xex311q42023.htm (EX-31.1) — 9KB
• mtg-123123xex312q42023.htm (EX-31.2) — 9KB
• mtg123123-ex32q42023.htm (EX-32) — 5KB
• mtg-123123xex97q42023.htm (EX-97) — 22KB
• mtg-20231231_g1.jpg (GRAPHIC) — 8KB
• mtg-20231231_g2.jpg (GRAPHIC) — 66KB
• mtg-20231231_g3.jpg (GRAPHIC) — 3KB
• 0000876437-24-000024.txt (&nbsp;) — 17204KB
• mtg-20231231.xsd (EX-101.SCH) — 80KB
• mtg-20231231_cal.xml (EX-101.CAL) — 120KB
• mtg-20231231_def.xml (EX-101.DEF) — 533KB
• mtg-20231231_lab.xml (EX-101.LAB) — 1089KB
• mtg-20231231_pre.xml (EX-101.PRE) — 809KB
• mtg-20231231_htm.xml (XML) — 3167KB

Business

Item 1. Business. 8

Risk Factors

Item 1A. Risk Factors. 27

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments. 40 Item 1C. Cybersecurity 4 1

Properties

Item 2. Properties. 41

Legal Proceedings

Item 3. Legal Proceedings. 41

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 41 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. 43

Reserved. 44

Item 6. Reserved. 44

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. 45

Quantitative and Qualitative Disclosures About Market Risk

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 80

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data. 81

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. 124

Controls and Procedures

Item 9A. Controls and Procedures. 124

Other Information

Item 9B. Other Information. 124

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 124 PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance. 125

Executive Compensation

Item 11. Executive Compensation. 125

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. 125

Certain Relationships and Related Transactions, and Director Independence

Item 13. Certain Relationships and Related Transactions, and Director Independence. 126

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services. 126 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules. 127

Form 10-K Summary (optional)

Item 16. Form 10-K Summary (optional) 130

SIGNATURES

SIGNATURES 131 MGIC Investment Corporation 2023 Form 10-K | 3 Glossary of terms and acronyms / A ARMs Adjustable rate mortgages ABS Asset-backed securities Annual Persistency The percentage of our insurance remaining in force from one year prior. As of September 30, 2023, we refined our methodology for calculating our Annual Persistency by excluding the amortization of the principal balance. All prior periods have been revised ASC Accounting Standards Codification Available Assets Assets, as designated under the PMIERs, that are readily available to pay claims, and include the most liquid investments / B Book or book year A group of loans insured in a particular calendar year BPMI Borrower-paid mortgage insurance BPS Basis Points / C CECL Current expected credit losses covered under ASC 326 CFPB Consumer Financial Protection Bureau CLO Collateralized loan obligations CMBS Commercial mortgage-backed securities COVID-19 Pandemic An outbreak of the novel coronavirus disease, later named COVID-19. The outbreak of COVID-19 was declared a pandemic by the World Health Organization and a national emergency in the United States in March 2020 CRT Credit risk transfer. The transfer of a portion of mortgage credit risk to the private sector through different forms of transactions and structures / D DAC Deferred insurance policy acquisition costs Debt-to-income ("DTI") ratio The ratio, expressed as a percentage, of a borrower's total debt payments to gross income Delinquent Loan A loan that is past due on a mortgage payment. A delinquent loan is typically reported to us by servicers when the loan has missed two or more payments. A loan will continue to be reported as delinquent until it becomes current or a claim payment has been made. A delinquent loan is also referred to as a default Delinquency Rate The percentage of insured loans that are delinquent Direct Before giving effect to reinsurance / E EPS Earnin

Management's discussion and analysis of financial condition and results of operations

Management's discussion and analysis of financial condition and results of operations MGIC Mortgage Guaranty Insurance Corporation, a subsidiary of MGIC Investment Corporation MAC MGIC Assurance Corporation, a subsidiary of MGIC Minimum Required Assets The minimum amount of Available Assets that must be held under the PMIERs, which is based on an insurer's book of RIF and is calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance transactions, and subject to a floor of $400 million MGIC Investment Corporation 2023 Form 10-K | 5 MGIC Investment Corporation and Subsidiaries MPP Minimum Policyholder Position, as required under certain state requirements. The "policyholder position" of a mortgage insurer is its net worth or surplus, contingency reserve and a portion of the reserves for unearned premiums / N N/A Not applicable for the period presented NAIC The National Association of Insurance Commissioners NIW New Insurance Written, is the aggregate original principal amount of the mortgages that are insured during a period N/M Data, or calculation, deemed not meaningful for the period presented NPL Settlement The commutation of coverage on non-performing loans, which are delinquent loans, at any stage in its delinquency / O OCI Office of the Commissioner of Insurance of the State of Wisconsin / P PMI Private Mortgage Insurance (as an industry or product type) PMIERs Private Mortgage Insurer Eligibility Requirements issued by each of Fannie Mae and Freddie Mac to set forth requirements that an approved insurer must meet and maintain to provide mortgage guaranty insurance on loans delivered to or acquired by Fannie Mae or Freddie Mac, as applicable Premium Rate The contractual rate charged for coverage under our insurance policies Premium Yield The ratio of premium earned divided by the average IIF outstanding for the period measured Primary Insurance Ins

Business

Item 1. Business See the "Glossary of terms and acronyms" for definitions and descriptions of terms used throughout this annual report. A. General We are a holding company and through wholly-owned subsidiaries we provide private mortgage insurance, other mortgage credit risk management solutions, and ancillary services. In 2023, our total revenues were $1.2 billion and our primary NIW was $46.1 billion. As of December 31, 2023, our direct primary IIF was $293.5 billion and our direct primary RIF was $77.2 billion. For further information about our results of operations, see our consolidated financial statements in Item 8 and our MD&A in Item 7. As of December 31, 2023, our principal mortgage insurance subsidiary, MGIC, was licensed in all 50 states of the United States, the District of Columbia, Puerto Rico and Guam. During 2023, we wrote new insurance in each of those jurisdictions. 2024 BUSINESS STRATEGIES Our business strategies continue to be to 1) maximize the value we create through our mortgage credit enhancement activities; 2) differentiate ourselves through our customer experience; 3) establish a competitive advantage through our digital and analytical capabilities; 4) excel at acquiring, managing and distributing mortgage credit risk and the related capital; 5) maintain financial strength through economic cycles; and 6) foster an environment that embraces diversity and best positions our people to succeed. 2023 ACCOMPLISHMENTS Following are several of our 2023 accomplishments that furthered our business strategies. Earned $713 million of net income ($2.49 per diluted share) for the year, compared to $865 million ($2.79 per diluted share) in 2022. Expanded our reinsurance program by securing quota share reinsurance covering the majority of our 2024 NIW, entered into a $330 million excess of loss reinsurance agreement executed through a mortgage insurance linked notes transaction in the capital market, and placed a forward-commitment excess of loss