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FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended
March 31, 2025
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number1-10816
download.jpg
MGIC Investment Corporation
(Exact name of registrant as specified in its charter)
Wisconsin39-1486475
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
250 E. Kilbourn Avenue53202
Milwaukee,Wisconsin(Zip Code)
(Address of principal executive offices) 
(414)347-6480
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stockMTGNew York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☒

Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company☐(Do not check if a smaller reporting company)
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of April 25, 2025, there were 237,437,433 shares of common stock of the registrant, par value $1.00 per share, outstanding.




Forward Looking and Other Statements

All statements in this report that address events, developments or results that we expect or anticipate may occur in the future are “forward looking statements.” Forward looking statements consist of statements that relate to matters other than historical fact. In most cases, forward looking statements may be identified by words such as “believe,” “anticipate” or “expect,” or words of similar import. The Risk Factors referred to in “Forward Looking Statements and Risk Factors – Location of Risk Factors” in Management’s Discussion and Analysis of Financial Condition and Results of Operations below, may cause our actual results to differ materially from the results contemplated by forward looking statements that we may make. We are not undertaking any obligation to update any forward looking statements or other statements we may make in this document even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. Therefore, no reader of this document should rely on these statements being current as of any time other than the time at which this document was filed with the Securities and Exchange Commission.

MGIC Investment Corporation - Q1 2025 | 2

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES

FORM 10-Q

FOR THE QUARTER ENDED March 31, 2025
Table of contents
Page
Consolidated Balance Sheets - March 31, 2025 (Unaudited) and December 31, 2024
Consolidated Statements of Operations (Unaudited) - Three Months Ended March 31, 2025 and 2024
Consolidated Statements of Comprehensive Income (Unaudited) - Three Months Ended March 31, 2025 and 2024
Consolidated Statements of Shareholders’ Equity (Unaudited) - Three Months Ended March 31, 2025 and 2024
Consolidated Statements of Cash Flows (Unaudited) - Three Months Ended March 31, 2025 and 2024
Item 2
MGIC Investment Corporation - Q1 2025 | 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.

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

/ 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
Earnings per share

/ F
Fannie Mae
Federal National Mortgage Association

FCRA
Fair Credit Reporting Act

FHA
Federal Housing Administration

FHFA
Federal Housing Finance Agency

FHLB
Federal Home Loan Bank of Chicago, of which MGIC is a member

FICO score
A measure of consumer credit risk provided by credit bureaus, typically produced from statistical models by Fair Isaac Corporation utilizing data collected by the credit bureaus

Freddie Mac
Federal Home Loan Mortgage Corporation

/ G
GAAP
Generally Accepted Accounting Principles in the United States

GSEs
Government Sponsored Enterprise. Collectively, Fannie Mae and Freddie Mac

/ H
HAMP
Home Affordable Modification Program

HARP
Home Affordable Refinance Program

MGIC Investment Corporation - Q1 2025 | 4

Home Re Entities
Unaffiliated special purpose insurers domiciled in Bermuda that participate in our aggregate XOL Transactions through the ILN market

Home Re Transactions
Excess-of-loss reinsurance transactions with the Home Re Entities

HOPA
Homeowners Protection Act

/ I
IBNR Reserves
Loss reserves established on loans we estimate are delinquent, but for which the delinquency has not been reported to us

IIF
Insurance in force is the unpaid principal balance, either estimated by us or reported to us by mortgage servicers, for the loans we insure. In the third quarter of 2024, we updated our method for calculating the unpaid principal balance on our in force loans.

ILN
Insurance-linked notes

/ L
LAE
Loss adjustment expenses, which includes the costs of settling claims, including legal and other expenses and general expenses of administering the claims settlement process

Loan-to-value ("LTV") ratio
The ratio, expressed as a percentage, of the dollar amount of the first mortgage loan to the value of the property at the time the loan became insured and does not reflect subsequent housing price appreciation or depreciation. Subordinate mortgages may also be present

Long-term debt:
5.25% Notes
5.25% Senior Notes due on August 15, 2028, with interest payable semi-annually on February 15 and August 15 of each year

Loss ratio
The ratio, expressed as a percentage, of losses incurred, net to net premiums earned

Low down payment loans or mortgages
Loans with less than 20% down payments

LPMI
Lender-paid mortgage insurance

/ M
MBS
Mortgage-backed securities

MD&A
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

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 a delinquent loans, at any stage in their 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
MGIC Investment Corporation - Q1 2025 | 5

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 Yield
The ratio of premium earned divided by the average IIF outstanding for the period measured

Premium Rate
The contractual rate charged for coverage under our insurance policies

Primary Insurance
Insurance that provides mortgage default protection on individual loans.

Profit Commission
Payments we receive from reinsurers under each of our quota share reinsurance transactions if the annual loss ratio is below levels specified in the quota share reinsurance transaction

/ Q
QSR Transaction
Quota share reinsurance transaction with a group of unaffiliated reinsurers

2021 QSR
Our QSR transaction that provides coverage on eligible NIW from 2021

2022 QSR
Our QSR transaction that provides coverage on eligible NIW from 2022

2023 QSR
Our QSR transaction that provides coverage on eligible NIW from 2023

2024 QSR
Our QSR transaction that provides coverage on eligible NIW from 2024

2025 QSR
Our QSR transaction that provides coverage on eligible NIW from 2025

2026 QSR
Our QSR transaction that will provide coverage on eligible NIW in 2026

Credit Union QSR
Our QSR transaction that provides coverage on eligible NIW from credit union institutions originated from April 1, 2020 through December 31, 2025

/ R
RESPA
Real Estate Settlement Procedures Act

RIF
Risk in force, which for an individual loan insured by us, is equal to the unpaid loan principal balance, as reported to us, multiplied by the insurance coverage percentage. RIF is sometimes referred to as exposure

Risk-to-capital
Under certain state regulations, the ratio of RIF, net of reinsurance and exposure on policies currently in default and for which loss reserves have been established, to the level of statutory capital

RMBS
Residential mortgage-backed securities

/ S
State Capital Requirements
Under certain state regulations, the minimum amount of statutory capital relative to risk in force (or similar measure)

/ T
TILA
Truth in Lending Act

Traditional XOL Transaction
Excess-of-loss reinsurance transaction with a group of unaffiliated reinsurers

2020 Traditional XOL
Our XOL transaction that provides coverage on eligible NIW from 2020

2022 Traditional XOL
Our XOL transaction that provides coverage on eligible NIW from 2022

2023 Traditional XOL
Our XOL transaction that provides coverage on eligible NIW from 2023

2024 Traditional XOL
Our XOL transaction that provides coverage on eligible NIW from 2024

/ U
Underwriting expense ratio
The ratio, expressed as a percentage, of other underwriting and operating expenses, net, and amortization of DAC to net premiums written

Underwriting profit
Net premiums earned minus losses incurred, net and other underwriting and operating expenses, net

USDA
U.S. Department of Agriculture

MGIC Investment Corporation - Q1 2025 | 6

/ V
VA
U.S. Department of Veterans Affairs

VIE
Variable interest entity

/ X
XOL Transactions
Excess-of-loss reinsurance transactions executed through the Home Re Transactions and the Traditional XOL Transactions
MGIC Investment Corporation - Q1 2025 | 7

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)NoteMarch 31, 2025December 31, 2024
(Unaudited)
ASSETS
Investment portfolio: 7 / 8
Fixed income, available-for-sale, at fair value (amortized cost 2025 - $5,803,937; 2024 - $5,838,145)$5,542,864 $5,511,564 
Short-term, fixed income, available-for-sale, at fair value (amortized cost 2025 - $342,118; 2024 - $339,978)342,169 340,125 
Equity securities, at fair value (cost 2025 - $16,180; 2024 - $16,146)14,915 14,762 
Other invested assets, at cost1,109 1,109 
Total investment portfolio5,901,057 5,867,560 
Cash and cash equivalents206,988 229,485 
Restricted cash and cash equivalents5,705 5,142 
Accrued investment income58,768 61,064 
Reinsurance recoverable on loss reserves451,864 47,281 
Reinsurance recoverable on paid losses41,847 4,197 
Premiums receivable56,273 57,536 
Home office and equipment, net34,468 35,679 
Deferred insurance policy acquisition costs11,114 11,694 
Deferred income taxes, net46,196 69,875 
Other assets160,856 157,722 
Total assets$6,535,136 $6,547,235 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Loss reserves$465,033 $462,662 
Unearned premiums111,987 120,360 
Senior notes645,035 644,667 
Other liabilities173,197 147,171 
Total liabilities1,395,252 1,374,860 
Contingencies
Shareholders’ equity:
Common stock ($1.00 par value, shares authorized 1,000,000; shares issued 2025 - 240,194; 2024 - 248,449; shares outstanding 2025 - 240,194; 2024 - 248,449)
240,194 248,449 
Paid-in capital1,796,475 1,808,236 
Accumulated other comprehensive income (loss), net of tax 9(236,445)(288,162)
Retained earnings3,339,660 3,403,852 
Total shareholders’ equity5,139,884 5,172,375 
Total liabilities and shareholders’ equity$6,535,136 $6,547,235 
See accompanying notes to consolidated financial statements.
MGIC Investment Corporation - Q1 2025 | 8

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three Months Ended March 31,
(In thousands, except per share data)Note20252024
Revenues:
Premiums written:
Direct$276,471 $275,203 
Assumed3,538 3,416 
Ceded(44,663)(44,819)
Net premiums written235,346 233,800 
Decrease in unearned premiums, net8,373 8,844 
Net premiums earned243,719 242,644 
Investment income, net of expenses61,443 59,744 
Net gains (losses) on investments and other financial instruments 741 (8,509)
Other revenue 331 482 
Total revenues306,234 294,361 
Losses and expenses:
Losses incurred, net9,591 4,555 
Amortization of deferred insurance policy acquisition costs
1,657 2,009 
Other underwriting and operating expenses, net51,406 59,018 
Interest expense8,899 8,899 
Total losses and expenses71,553 74,481 
Income before tax234,681 219,880 
Provision for income tax49,221 45,783 
Net income$185,460 $174,097 
Earnings per share:
Basic$0.76 $0.64 
Diluted$0.75 $0.64 
Weighted average common shares outstanding - basic244,147 270,314 
Weighted average common shares outstanding - diluted246,490 273,108 

See accompanying notes to consolidated financial statements.

MGIC Investment Corporation - Q1 2025 | 9

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
Three Months Ended March 31,
(In thousands)Note20252024
Net income$185,460 $174,097 
Other comprehensive income (loss), net of tax:
Change in unrealized investment gains and losses51,671 (10,392)
Benefit plan adjustments46 539 
Other comprehensive income (loss), net of tax51,717 (9,853)
Comprehensive income (loss)$237,177 $164,244 

See accompanying notes to consolidated financial statements.

MGIC Investment Corporation - Q1 2025 | 10

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Three Months Ended March 31,
(In thousands)Note20252024
Common stock
Balance, beginning of period
$248,449 $371,353 
Issuance of common stock, net under share-based compensation plans980 — 
Purchases of common stock
(9,235)— 
Balance, end of period240,194 371,353 
Paid-in capital
Balance, beginning of period1,808,236 1,808,113 
Issuance of common stock, net under share-based compensation plans(19,848)— 
Reissuance of treasury stock, net under share-based compensation plans— (31,168)
Equity compensation
13
8,087 11,105 
Balance, end of period1,796,475 1,788,050 
Treasury stock
Balance, beginning of period— (1,384,293)
Purchases of common stock
— (94,053)
Reissuance of treasury stock, net under share-based compensation plans— 12,122 
Balance, end of period— (1,466,224)
Accumulated other comprehensive income (loss)
Balance, beginning of period(288,162)(316,281)
Other comprehensive income (loss), net of tax51,717 (9,853)
Balance, end of period(236,445)(326,134)
Retained earnings
Balance, beginning of period3,403,852 4,593,125 
Purchases of common stock
12(217,104)— 
Net income185,460 174,097 
Cash dividends(32,548)(31,924)
Balance, end of period3,339,660 4,735,298 
Total shareholders’ equity$5,139,884 $5,102,343 

See accompanying notes to consolidated financial statements.



MGIC Investment Corporation - Q1 2025 | 11

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended March 31,
(In thousands)20252024
Cash flows from operating activities:
Net income$185,460 $174,097 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization2,694 6,485 
Deferred tax expense (benefit)9,932 6,131 
Equity compensation8,087 11,105 
Net (gains) losses on investments and other financial instruments(741)8,509 
Change in certain assets and liabilities:
Accrued investment income2,296 681 
Reinsurance recoverable on loss reserves(4,583)(5,898)
Reinsurance recoverable on paid losses2,350 9,341 
Premiums receivable1,263 2,466 
Deferred insurance policy acquisition costs580 745 
Loss reserves2,371 (932)
Unearned premiums(8,373)(8,844)
Return premium accrual(1,426)(2,600)
Current income taxes61,087 39,839 
Other, net(37,343)(50,588)
Net cash provided by (used in) operating activities223,654 190,537 
Cash flows from investing activities:
Purchases of investments(455,780)(327,757)
Proceeds from sales of investments20,737 14,841 
Proceeds from maturity of fixed income securities467,543 338,885 
Additions to property and equipment(125)— 
Net cash provided by (used in) investing activities32,375 25,969 
Cash flows from financing activities:
Repurchase of common stock(225,176)(95,183)
Dividends paid(33,919)(33,353)
Payment of withholding taxes related to share-based compensation net share settlement(18,868)(19,046)
Net cash provided by (used in) financing activities(277,963)(147,582)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents(21,934)68,924 
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period234,627 370,644 
Cash and cash equivalents and restricted cash and cash equivalents at end of period$212,693 $439,568 
See accompanying notes to consolidated financial statements.

MGIC Investment Corporation - Q1 2025 | 12

MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2025
(Unaudited)

Note 1. Nature of Business and Basis of Presentation
MGIC Investment Corporation is a holding company which, through Mortgage Guaranty Insurance Corporation (“MGIC”), is principally engaged in the mortgage insurance business. We provide mortgage insurance to lenders throughout the United States and to government sponsored entities to protect against loss from defaults on low down payment residential mortgage loans. MGIC Assurance Corporation (“MAC”) and MGIC Indemnity Corporation (“MIC”), insurance subsidiaries of MGIC, provide insurance for certain mortgages under Fannie Mae and Freddie Mac (the “GSEs”) credit risk transfer programs. We operate as a single segment for purposes of evaluating financial performance and allocating resources.

The accompanying unaudited consolidated financial statements of MGIC Investment Corporation and its wholly-owned subsidiaries have been prepared in accordance with the instructions to Form 10-Q as prescribed by the Securities and Exchange Commission (“SEC”) for interim reporting and do not include all of the other information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”). These statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2024 included in our 2024 Annual Report on Form 10-K. As used below, “we,” “our” and “us” refer to MGIC Investment Corporation’s consolidated operations or to MGIC Investment Corporation, as the context requires.

In the opinion of management, the accompanying financial statements include all adjustments, consisting primarily of normal recurring accruals, necessary to fairly state our consolidated financial position and consolidated results of operations for the periods indicated. The consolidated results of operations for an interim period are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The substantial majority of our NIW has been for loans purchased by the GSEs. The current private mortgage insurer eligibility requirements ("PMIERs") of the GSEs include financial requirements, as well as business, quality control and certain transactional approval requirements. The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are based on an insurer's book of risk in force, and calculated from tables of factors with several risk dimensions). Based on our application of the PMIERs, as of March 31, 2025, MGIC’s Available Assets are in excess of its Minimum Required Assets; therefore MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs.

Subsequent events
We have considered subsequent events through the date of this filing.



MGIC Investment Corporation - Q1 2025 | 13

Note 2. Significant Accounting Policies
Prospective accounting and reporting developments
Relevant new amendments to accounting standards, which are not yet effective or adopted.

Improvements to Income Tax Disclosures: ASU 2023-09
In December 2023, the FASB issued ASU 2023-09 to enhance the transparency and decision usefulness of income tax disclosures. This guidance for income tax disclosures requires consistent categories and greater disaggregations of information in the rate reconciliation and disclosure of income taxes paid by jurisdiction. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis with the option to apply the standard retrospectively. We have evaluated the impacts the adoption of this guidance will have on our consolidated financial statements and determined that it will not have a material impact.

Disaggregation of Income Statement Expenses: ASU 2024-03
In November 2024, the FASB issued ASU 2024-03 requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within annual reporting periods beginning after December 15, 2027, as clarified by ASU 2025-01, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. We are currently evaluating the impacts the adoption of this guidance will have on our disclosures, but do not expect it to have a material impact.

Note 3. Debt
Debt obligations
The aggregate carrying value of our 5.25% Senior Notes (“5.25% Notes”) and the par value as of March 31, 2025 and December 31, 2024 is presented in table 3.1 below.
Long-term debt obligation, carrying value
Table
3.1
(In thousands)March 31, 2025December 31, 2024
5.25% Notes, due August 2028 (par value: $650 million)
$645,035 $644,667 

The 5.25% Notes are an obligation of our holding company, MGIC Investment Corporation.

See Note 7 - “Debt” in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information pertaining to our debt obligation. As of March 31, 2025, we are in compliance with our debt covenants.

Interest payments
Interest payments were $17.1 million for the three months ended March 31, 2025 and 2024.

MGIC Investment Corporation - Q1 2025 | 14

Note 4. Reinsurance
We have in place reinsurance agreements executed under quota share reinsurance (“QSR”) transactions and excess-of-loss (“XOL”) transactions as discussed below. The effect of all of our reinsurance transactions on our consolidated statement of operations is shown in table 4.1 below.
Reinsurance
Table
4.1
 Three Months Ended March 31,
(In thousands)20252024
Premiums earned:
Direct$284,821 $284,021 
Assumed 3,561 3,442 
Ceded:
Ceded - quota share reinsurance (1)
(29,943)(28,715)
Ceded - excess-of-loss reinsurance(14,720)(16,104)
Total ceded(44,663)(44,819)
Net premiums earned$243,719 $242,644 
Losses incurred:
Direct$16,017 $10,979 
Assumed5 29 
Ceded - quota share reinsurance(6,431)(6,453)
Losses incurred, net$9,591 $4,555 
Other Reinsurance Impacts:
Profit commission on quota share reinsurance (1)
$28,695 $24,584 
Ceding commission on quota share reinsurance11,727 10,660 
(1)Ceded premiums earned are shown net of profit commission.

Quota share reinsurance
We have entered into QSR Transactions with panels of third-party reinsurers to cede a fixed percentage of premiums earned and received and losses incurred on insurance covered by the transactions. We receive the benefit of a ceding commission equal to 20% of premiums ceded before profit commission. We also receive the benefit of a profit commission through a reduction of premiums we cede. The profit commission varies inversely with the level of losses on a “dollar for dollar” basis and can be eliminated at certain annual loss ratios as defined below. Ceded losses incurred are impacted by the delinquencies covered by our QSR Transactions, our estimates of payments that will be ultimately made on those delinquencies, and claim payments covered by our QSR Transactions.

Each of our QSR Transactions typically have annual loss ratio caps of 300% and lifetime loss ratio caps of 200%.

Table 4.2 below provides additional detail regarding our QSR Transactions.

Quota Share Reinsurance
Table4.2
Quota Share ContractCovered Policy YearsQuota Share %
Annual Loss Ratio to Exhaust Profit Commission (1)
Contractual Termination Date
2020 QSR and 2021 QSR
2021
14.8 %69.0 %December 31, 2036
2021 QSR and 2022 QSR202111.1 %69.0 %December 31, 2036
2021 QSR and 2022 QSR202215.0 %57.5 %December 31, 2033
2022 QSR and 2023 QSR202215.0 %62.0 %December 31, 2033
2022 QSR and 2023 QSR202315.0 %62.0 %December 31, 2034
2023 QSR202310.0 %58.5 %December 31, 2034
2024 QSR
2024
30.0 %56.0 %
'December 31, 2035
2025 QSR
2025
40.0 %63.0 %
'December 31, 2036
Credit Union QSR 2020-202565.0 %50.0 %December 31, 2039
(1) We will receive a profit commission provided the annual loss ratio on policies covered under the transaction remains below this ratio.


MGIC Investment Corporation - Q1 2025 | 15

We can elect to terminate the QSR Transactions under specified scenarios without penalty upon prior written notice, including if we will receive less than 90% (80% for the Credit Union QSR Transaction) of the full credit amount under the PMIERs, full financial statement credit or full credit under applicable regulatory capital requirements for the risk ceded in any required calculation period.

Table 4.3 provides additional details regarding optional termination dates and optional reductions to our quota share percentage which can, in each case, be elected by us for a fee. Under the optional reduction to the quota share percentage, we may reduce our quota share percentage from the original percentage shown in table 4.2 to the percentage shown in table 4.3.

Quota Share Reinsurance
Table4.3
Quota Share ContractCovered Policy Years
Optional Termination Date (1)
Optional Quota Share % Reduction Date (2)
Optional Reduced Quota Share %
2020 QSR and 2021 QSR
2021
December 31, 2027
January 1, 2028
12.3% or 10%
2021 QSR and 2022 QSR
2021
December 31, 2027
January 1, 2028
9.4% or 7%
2021 QSR and 2022 QSR2022
July 1, 2025
January 1, 2025
12.5% or 10%
2022 QSR and 2023 QSR2022
July 1, 2025
January 1, 2025
12.5% or 10%
2022 QSR and 2023 QSR2023December 31, 2025January 1, 2025
12.5% or 10%
2023 QSR2023December 31, 2025January 1, 2025
8% or 7%
2024 QSR
2024
December 31, 2027
December 31, 2027
23% or 15%
2025 QSR
2025
December 31, 2027
December 31, 2027
30% or 20%
(1) We can elect early termination of the QSR Transaction beginning on this date, and semi-annually thereafter.
(2) We can elect to reduce the quota share percentage beginning on this date, and semi-annually thereafter.

We have executed a 40% QSR transaction with a group of unaffiliated reinsurers covering most of our new insurance written in 2026.

Under the terms of our QSR Transactions, ceded premiums earned, ceding commissions, profit commission, and ceded paid loss and LAE are settled net on a quarterly basis. The ceded premiums earned due, after deducting the related ceding commission and profit commission, is reported within Other liabilities on the consolidated balance sheets.

The reinsurance recoverable on loss reserves related to our QSR Transactions was $51.9 million as of March 31, 2025 and $47.3 million as of December 31, 2024. The reinsurance recoverable balance is secured by funds on deposit from reinsurers (which does not include letters of credit), the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. Each of the reinsurers under our QSR Transactions described above has an insurer financial strength rating of A- or better (or a comparable rating) by Standard and Poor's Rating Services, A.M. Best, Moody's, or a combination of the three.

Excess of loss reinsurance
We have XOL Transactions with a panel of unaffiliated reinsurers executed through the traditional reinsurance market (“Traditional XOL Transactions”) and with unaffiliated special purpose insurers (“Home Re Transactions”).

For policies covered under our Traditional XOL Transactions, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. The reinsurance coverage is subject to adjustment based on the risk characteristics of the covered loans until the initial excess of loss reinsurance coverage layer has been finalized.

We can elect to terminate our Traditional XOL Transactions under specified scenarios without penalty upon prior written notice, including if we will receive less than the full credit amount under the PMIERs, full financial statement credit or full credit under applicable regulatory capital requirements for the risk ceded in any required calculation period. The reinsurance premiums ceded under the Traditional XOL Transactions are based off the remaining reinsurance coverage levels. The reinsured coverage levels are secured by funds on deposit from reinsurers (which does not include letters of credit), the minimum amount of which is based on the greater of 1) a reinsurer's funding requirements under PMIERs or 2) ceded reserves and unpaid losses. Each of the reinsurers under our Traditional XOL Transactions has an insurer financial strength rating of A- or better (or a comparable rating) by Standard and Poor’s Rating Services, A.M. Best, Moody’s, or a combination of the three.

The Home Re Transactions are executed with unaffiliated special purpose insurers (“Home Re Entities”). For the reinsurance coverage periods, we retain the first layer of the respective aggregate losses paid, and a Home Re Entity will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. Subject to certain conditions, the reinsurance coverage decreases as the underlying covered mortgages amortize or are repaid, or mortgage insurance losses are paid.


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The Home Re Entities financed the coverages by issuing mortgage insurance-linked notes (“ILNs”) to unaffiliated investors in an aggregate amount equal to the initial reinsurance coverage amounts. Each ILN is non-recourse to any assets of MGIC or affiliates. The proceeds of the ILNs, which were deposited into reinsurance trusts for the benefit of MGIC, will be the source of reinsurance claim payments to MGIC and principal repayments on the ILNs.

Payment of principal on the related insurance-linked notes will be suspended and the reinsurance coverage available to MGIC under the transactions will not be reduced by such principal payments until a target level of credit enhancement is obtained or if certain thresholds or “Trigger Events” are reached, as defined in the related insurance-linked notes transaction agreement. As of March 31, 2025, there were no "Trigger Events".

Table 4.4a, 4.4b, and 4.4c provide a summary of our XOL Transactions as of March 31, 2025 and December 31, 2024.

Excess of Loss Reinsurance
Table 4.4a
Issue DatePolicy In force Dates
Optional Call Date (1)
Legal Maturity
2024 Traditional XOL
April 1, 2024
January 1, 2024 - December 31, 2024
January 1, 203010 years
2023 Traditional XOLApril 1, 2023January 1, 2023 - December 29, 2023January 1, 203110 years
2022 Traditional XOLApril 1, 2022January 1, 2022 - December 30, 2022January 1, 203010 years
2020 Traditional XOL
March 1, 2025
January 1, 2020 - December 31, 2020
April 1, 203010 years
Home Re 2023-1, Ltd.October 23, 2023June 1, 2022 - August 31, 2023October 25, 202810 years
Home Re 2022-1, Ltd.April 26, 2022May 29, 2021 - December 31, 2021April 25, 202812.5 years
Home Re 2021-2, Ltd.August 3, 2021January 1, 2021 - May 28, 2021July 25, 202812.5 years
Home Re 2021-1, Ltd.February 2, 2021August 1, 2020 - December 31, 2020January 25, 202812.5 years
(1) We have the right to terminate the Home Re Transactions under certain circumstances, including an optional call feature that provides us the right to terminate if the outstanding principal balance of the related insurance-linked notes falls below 10% of the initial principal balance of the related insurance-linked notes, and on any payment date on or after the respective Optional Call Date. We can elect early termination of the Traditional XOL Transactions beginning on this date, and quarterly thereafter.

Excess of Loss Reinsurance
Table 4.4b
Remaining First Layer Retention
($ in thousands)Initial First Layer Retention
March 31, 2025
December 31, 2024
2024 Traditional XOL
$125,016 $124,985 $125,016 
2023 Traditional XOL70,578 70,218 70,401 
2022 Traditional XOL82,523 80,346 81,112 
2020 Traditional XOL
68,343 68,343 — 
Home Re 2023-1, Ltd.
272,961 271,268 272,269 
Home Re 2022-1, Ltd.325,589 321,918 322,566 
Home Re 2021-2, Ltd.190,159 187,889 188,211 
Home Re 2021-1, Ltd.
211,159 209,913 210,027 
Table 4.4c
Remaining Excess of Loss Reinsurance Coverage (1)
($ in thousands)
Initial Excess of Loss Reinsurance Coverage (1)
Initial Funding Percentage (2)
Funding Percentage at 3/31/2025 (2)
March 31, 2025
December 31, 2024
2024 Traditional XOL
$187,220 
N/A
N/A
$187,220 $187,220 
2023 Traditional XOL96,942 
N/A
N/A87,542 91,404 
2022 Traditional XOL142,642 
N/A
N/A118,729 124,344 
2020 Traditional XOL
250,592 
N/A
N/A250,592 — 
Home Re 2023-1, Ltd.330,277 97 %96 %285,333 299,325 
Home Re 2022-1, Ltd.473,575 100 %100 %282,008 305,639 
Home Re 2021-2, Ltd. (3)
398,429 100 %88 %120,163 132,424 
Home Re 2021-1, Ltd.
398,848 100 %100 %75,906 92,019 
(1)The initial and remaining excess of loss reinsurance coverage is reduced by the applicable funding percentage.
(2)The funding percentage represents the aggregate outstanding note balances divided by the aggregate ending coverage amounts.
(3)The funding percentage on the 2021-2 was reduced from 100% after the tender offers were conducted in the fourth quarter of 2023.


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The reinsurance premiums ceded to each Home Re Entity are composed of coverage, initial expense and supplemental premiums. The coverage premiums are generally calculated as the difference between the amount of interest payable by the Home Re Entity on the remaining reinsurance coverage levels, and the investment income collected on the collateral assets held in a reinsurance trust account and used to collateralize the Home Re Entity’s reinsurance obligation to MGIC. The amount of monthly reinsurance coverage premium ceded will fluctuate due to changes in the reference rate and changes in money market rates that affect investment income collected on the assets in the reinsurance trust. As a result, we concluded that each Home Re Transaction contains an embedded derivative that is accounted for separately as a freestanding derivative. The fair values of the derivatives at March 31, 2025 and December 31, 2024, were not material to our consolidated balance sheet and the change in fair value during the three months ended March 31, 2025 and March 31, 2024 were not material to our consolidated statements of operations. (See Note 7 - “Investments” and Note 8 - “Fair Value Measurements”.)

At the time the Home Re Transactions were entered into, we concluded that each Home Re Entity is a variable interest entity (“VIE”). A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make sufficient decisions relating to the entity’s operations through voting rights or do not substantively participate in gains and losses of the entity. Given that MGIC (1) does not have the unilateral power to direct the activities that most significantly affect each Home Re Entity’s economic performance and (2) does not have the obligation, outside the terms of the reinsurance agreement, to absorb losses or the right to receive benefits of each Home Re Entity that could be significant to the Home Re Entity, consolidation of the Home Re Entities is not required.

We are required to disclose our maximum exposure to loss, which we consider to be an amount that we could be required to record in our statements of operations, as a result of our involvement with the VIEs under our Home Re Transactions. As of March 31, 2025, and December 31, 2024, we did not have material exposure to the VIEs as we have no investment in the VIEs and had no reinsurance claim payments due from the VIEs under our reinsurance transactions. We are unable to determine the timing or extent of claims from losses that are ceded under the reinsurance transactions. The VIE assets are deposited in reinsurance trusts for the benefit of MGIC that will be the source of reinsurance claim payments to MGIC. The purpose of the reinsurance trusts is to provide security to MGIC for the obligations of the VIEs under the reinsurance transactions. The trustee of the reinsurance trusts, a recognized provider of corporate trust services, has established segregated accounts within the reinsurance trusts for the benefit of MGIC, pursuant to the trust agreements. The trust agreements are governed by, and construed in accordance with, the laws of the State of New York. If the trustee of the reinsurance trusts failed to distribute claim payments to us as provided in the reinsurance trusts, we would incur a loss related to our losses ceded under the reinsurance transactions and deemed unrecoverable. We are also unable to determine the impact such possible failure by the trustee to perform pursuant to the reinsurance trust agreements may have on our consolidated financial statements. As a result, we are unable to quantify our maximum exposure to loss related to our involvement with the VIEs. MGIC has certain termination rights under the reinsurance transactions should its claims not be paid. We consider our exposure to loss from our reinsurance transactions with the VIEs to be remote.

Table 4.5 presents the total assets of the Home Re Entities as of March 31, 2025 and December 31, 2024.
Home Re total assets
Table4.5
(In thousands)Total VIE Assets
Home Re Entity
March 31, 2025
December 31, 2024
Home Re 2023-1 Ltd.$290,619 $303,733 
Home Re 2022-1 Ltd.290,274 313,229 
Home Re 2021-2 Ltd.124,487 136,486 
Home Re 2021-1 Ltd.81,406 97,373 
The reinsurance trust agreements provide that the trust assets may generally only be invested in certain money market funds that (i) invest at least 99.5% of their total assets in cash or direct U.S. federal government obligations, such as U.S. Treasury bills, as well as other short-term securities backed by the full faith and credit of the U.S. federal government or issued by an agency of the U.S. federal government, (ii) have a principal stability fund rating of “AAAm” by S&P or a money market fund rating of “Aaamf” by Moody’s as of the Closing Date and thereafter maintain any rating with either S&P or Moody’s, and (iii) are permitted investments under the applicable credit for reinsurance laws and applicable PMIERs credit for reinsurance requirements.

The total calculated PMIERs credit for risk ceded under our XOL Transactions are generally based on the PMIERs requirement of the covered policies and the attachment and detachment points of the coverage, all of which fluctuate over time. (See Note 1 - “Nature of Business and Basis of Presentation”.)

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Note 5. Litigation and Contingencies
We operate in a highly regulated industry that is subject to the risk of litigation and regulatory proceedings, including related to our claims paying practices. From time to time, we are involved in disputes and legal proceedings in the ordinary course of business. In our opinion, based on the facts known at this time, the ultimate resolution of these ordinary course disputes and legal proceedings will not have a material adverse effect on our financial condition or results of operations.
Under ASC 450-20, until a loss associated with settlement discussions or legal proceedings becomes probable and can be reasonably estimated, we do not accrue an estimated loss. When we determine that a loss is probable and can be reasonably estimated, we record our best estimate of our probable loss.


Note 6. Earnings per Share
Basic earnings per share (“EPS”) is calculated by dividing net income by the weighted average number of shares of common stock outstanding, including participating securities. Our “participating securities” are comprised of vested restricted stock and restricted stock units (“RSUs”) with non-forfeitable rights to dividends. Diluted EPS includes the components of basic EPS and also gives effect to dilutive common stock equivalents. The determination of whether components are dilutive is calculated independently for each period. We calculate diluted EPS using the treasury stock method which reflects the potential dilution that could occur if unvested RSUs result in the issuance of common stock.

Table 6.1 reconciles the numerators and denominators used to calculate basic and diluted EPS.
Earnings per share
Table
6.1
 Three Months Ended March 31,
(In thousands, except per share data)20252024
Net income - basic and diluted
$185,460 $174,097 
Basic weighted average common shares outstanding
244,147 270,314 
Dilutive effect of unvested RSUs
2,343 2,794 
Diluted weighted average common shares outstanding
246,490 273,108 
Earnings per share:
Basic earnings per share
$0.76 $0.64 
Diluted earnings per share$0.75 $0.64 


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Note 7. Investments
Fixed income securities
Our fixed income securities classified as available-for-sale at March 31, 2025 and December 31, 2024 are shown in tables 7.1a and 7.1b below.
Details of fixed income securities by category as of March 31, 2025
Table7.1a
(In thousands)Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies$275,166 $340 $(3,812)$271,694 
Obligations of U.S. states and political subdivisions2,026,899 3,915 (165,119)1,865,695 
Corporate debt securities2,858,150 18,082 (93,465)2,782,767 
ABS180,604 2,702 (915)182,391 
RMBS375,046 4,463 (21,520)357,989 
CMBS264,095 421 (5,571)258,945 
CLOs146,537 76 (32)146,581 
Foreign government debt4,487 — (587)3,900 
Commercial paper15,071 — — 15,071 
Total fixed income securities
$6,146,055 $29,999 $(291,021)$5,885,033 
Details of fixed income securities by category as of December 31, 2024
Table7.1b
(In thousands)Amortized CostGross Unrealized GainsGross Unrealized (Losses)Fair Value
U.S. Treasury securities and obligations of U.S. government corporations and agencies$265,349 $231 $(5,087)$260,493 
Obligations of U.S. states and political subdivisions2,065,953 2,331 (192,789)1,875,495 
Corporate debt securities2,857,627 12,593 (112,839)2,757,381 
ABS155,594 2,157 (1,234)156,517 
RMBS373,485 2,103 (25,528)350,060 
CMBS243,840 21 (7,990)235,871 
CLOs199,773 286 — 200,059 
Foreign government debt4,487 — (689)3,798 
Commercial paper12,015 — — 12,015 
Total fixed income securities
$6,178,123 $19,722 $(346,156)$5,851,689 
We had $12.3 million and $12.2 million of investments at fair value on deposit with various states as of March 31, 2025 and December 31, 2024, respectively, due to regulatory requirements of those state insurance departments.

In connection with our insurance and reinsurance activities within MAC and MIC, we are required to maintain assets in trusts for the benefit of contractual counterparties, which had investments at fair value of $182.8 million and $199.9 million at March 31, 2025 and December 31, 2024, respectively.


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The amortized cost and fair values of fixed income securities at March 31, 2025, by contractual maturity, are shown in table 7.2 below. Actual maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most mortgage and asset-backed securities are not due at a single maturity date, they are listed in separate categories.
Fixed income securities maturity schedule
Table7.2
March 31, 2025
(In thousands)Amortized costFair Value
Due in one year or less$742,080 $740,345 
Due after one year through five years1,664,014 1,634,666 
Due after five years through ten years1,809,299 1,717,716 
Due after ten years964,380 846,400 
5,179,773 4,939,127 
ABS180,604 182,391 
RMBS375,046 357,989 
CMBS264,095 258,945 
CLOs146,537 146,581 
Total$6,146,055 $5,885,033 

Equity securities
The cost and fair value of investments in equity securities at March 31, 2025 and December 31, 2024 are shown in tables 7.3a and 7.3b below.
Details of equity security investments as of March 31, 2025
Table7.3a
(In thousands)Cost
Fair Value Gains
Fair Value Losses
Fair Value
Equity securities$16,180 $23 $(1,288)$14,915 
Details of equity security investments as of December 31, 2024
Table7.3b
(In thousands)CostFair Value GainsFair Value LossesFair Value
Equity securities$16,146 $8 $(1,392)$14,762 

Net gains (losses) on investments and other financial instruments
The net gains (losses) on investments and other financial instruments and the proceeds from the sale of fixed income securities classified as available-for-sale securities are shown in table 7.4 below.

Details of net gains (losses) on investments and other financial instruments
Table7.4Three Months Ended March 31,
(in thousands)20252024
Fixed income securities:
Gains on sales$349 $55 
Losses on sales(29)(5,485)
Equity securities gains (losses):
Changes in fair value
120 (103)
Change in embedded derivative on Home Re Transactions(1)
301 (2,976)
Other:
Gains (losses) on sales— 1 
Market adjustment— (1)
Net gains (losses) on investments and other financial instruments$741 $(8,509)
Proceeds from sales of fixed income securities$20,737 $14,886 
(1) See Note 8 "Fair Value Measurements" for discussion of the embedded derivative on the Home Re Transactions.

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Other invested assets
Our other invested assets balance includes an investment in FHLB stock that is carried at cost, which due to its nature approximates fair value. Ownership of FHLB stock provides access to a secured lending facility, subject to certain conditions, which includes requirements to post collateral and to maintain a minimum investment in FHLB stock.

Unrealized investment losses
Tables 7.5a and 7.5b below summarize, for all available-for-sale investments in an unrealized loss position at March 31, 2025 and December 31, 2024, the aggregate fair value and gross unrealized loss by the length of time those securities have been continuously in an unrealized loss position. The fair value amounts reported in tables 7.5a and 7.5b are estimated using the process described in Note 8 - “Fair Value Measurements” to these consolidated financial statements and in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2024 Annual Report on Form 10-K.
Unrealized loss aging for securities by type and length of time as of March 31, 2025
Table7.5a
Less Than 12 Months12 Months or GreaterTotal
(In thousands)Fair ValueUnrealized LossesFair ValueUnrealized LossesFair ValueUnrealized Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies$36,101 $(63)$66,902 $(3,749)$103,003 $(3,812)
Obligations of U.S. states and political subdivisions378,830 (6,953)1,204,931 (158,166)1,583,761 (165,119)
Corporate debt securities595,473 (5,842)1,013,348 (87,623)1,608,821 (93,465)
ABS9,237 (94)37,330 (821)46,567 (915)
RMBS31,034 (379)194,501 (21,141)225,535 (21,520)
CMBS81,237 (864)136,860 (4,707)218,097 (5,571)
CLOs49,747 (32)— — 49,747 (32)
Foreign government debt— — 3,900 (587)3,900 (587)
Total$1,181,659 $(14,227)$2,657,772 $(276,794)$3,839,431 $(291,021)
Unrealized loss aging for securities by type and length of time as of December 31, 2024
Table7.5b
Less Than 12 Months12 Months or GreaterTotal
(In thousands)Fair Value
Unrealized
 Losses
Fair Value
Unrealized
Losses
Fair Value
Unrealized
 Losses
U.S. Treasury securities and obligations of U.S. government corporations and agencies$37,017 $(437)$69,959 $(4,650)$106,976 $(5,087)
Obligations of U.S. states and political subdivisions409,406 (5,621)1,195,869 (187,168)1,605,275 (192,789)
Corporate debt securities852,752 (10,334)1,051,862 (102,505)1,904,614 (112,839)
ABS20,090 (184)49,640 (1,050)69,730 (1,234)
RMBS171,654 (5,498)151,893 (20,030)323,547 (25,528)
CMBS77,567 (1,774)151,188 (6,216)228,755 (7,990)
Foreign government debt— — 3,798 (689)3,798 (689)
Total$1,568,486 $(23,848)$2,674,209 $(322,308)$4,242,695 $(346,156)

There were 986 and 1,020 securities in an unrealized loss position at March 31, 2025 and December 31, 2024, respectively. Based on current facts and circumstances, we believe the unrealized losses as of March 31, 2025 presented in table 7.5a above are not indicative of the ultimate collectability of the par value of the securities. The unrealized losses in all categories of our investments at March 31, 2025 were primarily caused by an increase in prevailing interest rates. We also rely upon estimates of several credit and non-credit factors in our review and evaluation of individual investments to determine whether a credit impairment exists. All of the securities in an unrealized loss position are current with respect to their interest obligations.


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Note 8. Fair Value Measurements
Recurring fair value measurements
The following describes the valuation methodologies generally used by the independent pricing sources, or by us, to measure financial instruments at fair value, including the general classification of such financial instruments pursuant to the valuation hierarchy.

•Fixed income securities:
U.S. Treasury Securities and Obligations of U.S. Government Corporations and Agencies: Securities with valuations derived from quoted prices for identical instruments in active markets that we can access are categorized in Level 1 of the fair value hierarchy. Securities valued by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information in the valuation process are categorized as Level 2 of the fair value hierarchy.
Corporate Debt Securities are valued by obtaining relevant trade data, benchmark quotes and spreads and broker/dealer quotes and incorporating this information into the valuation process. These securities are generally categorized in Level 2 of the fair value hierarchy.
Obligations of U.S. States & Political Subdivisions are valued by tracking, capturing, and analyzing quotes for active issues and trades reported via the Municipal Securities Rulemaking Board records. Daily briefings and reviews of current economic conditions, trading levels, spread relationships, and the slope of the yield curve provide further data for evaluation. These securities are generally categorized in Level 2 of the fair value hierarchy.
Residential Mortgage-Backed Securities ("RMBS") are valued by monitoring interest rate movements, and other pertinent data daily. Incoming market data is enriched to derive spread, yield and/or price data as appropriate, enabling known data points to be extrapolated for valuation application across a range of related securities. These securities are generally categorized in Level 2 of the fair value hierarchy.
Commercial Mortgage-Backed Securities ("CMBS") are valued using techniques that reflect market participants’ assumptions and maximize the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves and market corroborated inputs. Evaluation uses regular reviews of the inputs for securities covered, including executed trades, broker quotes, credit information, collateral attributes and/or cash flow waterfall as applicable. These securities are generally categorized in Level 2 of the fair value hierarchy.
Asset-Backed Securities ("ABS") are valued using spreads and other information solicited from market buy-and-sell-side sources, including primary and secondary dealers, portfolio managers, and research analysts. Cash flows are generated for each tranche, benchmark yields are determined, and deal collateral performance and tranche level attributes including trade activity, bids, and offers are applied, resulting in tranche specific prices. These securities are generally categorized in Level 2 of the fair value hierarchy.
Collateralized loan obligations ("CLOs") are valued by evaluating manager rating, seniority in the capital structure, assumptions about prepayment, default and recovery and their impact on cash flow generation. Loan level net asset values are determined and aggregated for tranches and as a final step prices are checked against available recent trade activity. These securities are generally categorized in Level 2 of the fair value hierarchy.
Foreign government debt is valued by surveying the dealer community, obtaining relevant trade data, benchmark quotes and spreads and incorporating this information into the valuation process. These securities are generally categorized in Level 2 of the fair value hierarchy.
Commercial Paper, with an original maturity greater than 90 days, is valued using market data for comparable instruments of similar maturity and average yields. These securities are generally categorized in Level 2 of the fair value hierarchy.
•Equity securities: Consist of actively traded, exchange-listed equity securities, including exchange traded funds (“ETFs”) and Bond Mutual Funds, with valuations derived from quoted prices for identical assets in active markets that we can access. These securities are valued in Level 1 of the fair value hierarchy.
•Cash Equivalents: Consist of money market funds and treasury bills with valuations derived from quoted prices for identical assets in active markets that we can access. These securities are valued in level 1 of the fair value hierarchy. Instruments in this category valued using market data for comparable instruments are classified as level 2 in the fair value hierarchy.




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Assets measured at fair value, by hierarchy level, as of March 31, 2025 and December 31, 2024 are shown in tables 8.1a and 8.1b below. The fair value of the assets is estimated using the process described above, and more fully in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2024 Annual Report on Form 10-K.
Assets carried at fair value by hierarchy level as of March 31, 2025
Table8.1a
(In thousands)Total Fair Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
U.S. Treasury securities and obligations of U.S. government corporations and agencies$271,694 $238,854 $32,840 
Obligations of U.S. states and political subdivisions1,865,695 — 1,865,695 
Corporate debt securities2,782,767 — 2,782,767 
ABS182,391 — 182,391 
RMBS357,989 — 357,989 
CMBS258,945 — 258,945 
CLOs146,581 — 146,581 
Foreign government debt3,900 — 3,900 
Commercial paper15,071 — 15,071 
Total fixed income securities5,885,033 238,854 5,646,179 
Equity securities14,915 14,915 — 
Cash equivalents (1)
209,501 200,260 9,241 
Total$6,109,449 $454,029 $5,655,420 
Assets carried at fair value by hierarchy level as of December 31, 2024
Table8.1b
(In thousands)Total Fair Value
Quoted Prices in Active Markets for Identical Assets
(Level 1)
Significant Other Observable Inputs
(Level 2)
U.S. Treasury securities and obligations of U.S. government corporations and agencies$260,493 $220,369 $40,124 
Obligations of U.S. states and political subdivisions1,875,495 — 1,875,495 
Corporate debt securities2,757,381 — 2,757,381 
ABS156,517 — 156,517 
RMBS350,060 — 350,060 
CMBS235,871 — 235,871 
CLOs200,059 — 200,059 
Foreign government debt3,798 — 3,798 
Commercial paper12,015 — 12,015 
Total fixed income securities5,851,689 220,369 5,631,320 
Equity securities14,762 14,762 — 
Cash equivalents (1)
230,156 219,943 10,213 
Total$6,096,607 $455,074 $5,641,533 
(1) Includes restricted cash equivalents
Certain financial instruments, including insurance contracts, are excluded from these fair value disclosure requirements. Additional fair value disclosures related to our investment portfolio are included in Note 7 – “Investments.”

In addition to the assets carried at fair value discussed above, we have embedded derivatives carried at fair value related to our Home Re Transactions that are classified as “Other liabilities” or “Other assets” in our consolidated balance sheets. The estimated fair value related to our embedded derivatives reflects the present value impact of the variation in investment income on the assets held by the reinsurance trusts and the contractual reference rate on the Home Re Transactions used to calculate the reinsurance premiums we estimate we will pay over the estimated remaining life. These liabilities or assets are categorized in Level 3 of the fair value hierarchy. At March 31, 2025 and December 31, 2024, the fair value of the embedded derivatives was a liability of $0.1 million and $0.4 million, respectively. (See Note 4 - "Reinsurance" for more information about our reinsurance programs.)

Real estate acquired through claim settlement is carried at fair values and is reported in “Other assets” on the consolidated balance sheet. These assets are categorized as Level 3 of the fair value hierarchy. For the three months ended March 31, 2025 and 2024, purchases of real estate acquired were $0.7 million and $1.0 million, respectively. For the three months ended March 31, 2025 and 2024, sales of real estate acquired were $1.1 million and zero, respectively.

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Financial assets and liabilities not measured at fair value
Other invested assets include an investment in FHLB stock that is carried at cost, which due to restrictions that require it to be redeemed or sold only to the security issuer at par value, approximates fair value. The fair value of other invested assets is categorized as Level 2.
Financial liabilities include our outstanding debt obligation. The fair value of our 5.25% Notes was based on observable market prices and is categorized as level 2.
Table 8.2 presents the carrying value and fair value of our financial assets and liabilities disclosed, but not carried, at fair value at March 31, 2025 and December 31, 2024.
Financial assets and liabilities not measured at fair value
Table8.2
March 31, 2025December 31, 2024
(In thousands)Carrying ValueFair ValueCarrying ValueFair Value
Financial assets
Other invested assets$1,109 $1,109 $1,109 $1,109 
Financial liabilities
5.25% Senior Notes645,035 643,689 644,667 636,883 

MGIC Investment Corporation - Q1 2025 | 25

Note 9. Other Comprehensive Income
The pretax and related income tax benefit (expense) components of our other comprehensive income (loss) for the three months ended March 31, 2025 and 2024 are included in table 9.1 below.
Components of other comprehensive income (loss)
Table
9.1
Three Months Ended March 31,
(In thousands)2025
2024
Net unrealized investment gains (losses) arising during the period$65,406 $(13,154)
Total income tax benefit (expense)(13,735)2,762 
Net of tax
51,671 (10,392)
Net changes in benefit plan assets and obligations58 682 
Total income tax benefit (expense)(12)(143)
Net of tax
46 539 
Total other comprehensive income (loss)$65,464 (12,472)
Total income tax benefit (expense)(13,747)2,619 
Total other comprehensive income (loss), net of tax$51,717 $(9,853)

The pretax and related income tax benefit (expense) components of the amounts reclassified from our accumulated other comprehensive income (loss) (“AOCI”) to our consolidated statements of operations for the three months ended March 31, 2025 and 2024 are included in table 9.2 below.
Reclassifications from AOCI
Table
9.2
Three Months Ended March 31,
(In thousands)2025
2024
Reclassification adjustment for net realized (losses) gains (1)
$(5,981)$(9,973)
Income tax benefit (expense)1,256 2,094 
Net of tax
(4,725)(7,879)
Reclassification adjustment related to benefit plan assets and obligations (2)
(58)(682)
Income tax benefit (expense)12 143 
Net of tax
(46)(539)
Total reclassifications(6,039)(10,655)
Income tax benefit (expense)1,268 2,237 
Total reclassifications, net of tax$(4,771)$(8,418)
(1)Increases (decreases) Net realized investment gains (losses) on the consolidated statements of operations.
(2)Decreases (increases) Other underwriting and operating expenses, net on the consolidated statements of operations.

A rollforward of AOCI for the three months ended March 31, 2025, including amounts reclassified from AOCI, are included in table 9.3 below.
Rollforward of AOCI
Table
9.3
Three Months Ended March 31, 2025
(In thousands)Net unrealized gains and (losses) on available-for-sale securitiesNet benefit plan assets and (obligations) recognized in shareholders' equityTotal accumulated other comprehensive income (loss)
Balance at December 31, 2024, net of tax$(257,878)$(30,284)$(288,162)
Other comprehensive income (loss) before reclassifications46,946 — 46,946 
Less: Amounts reclassified from AOCI(4,725)(46)(4,771)
Balance, March 31, 2025, net of tax$(206,207)$(30,238)$(236,445)


MGIC Investment Corporation - Q1 2025 | 26

Note 10. Benefit Plans
We have a non-contributory defined benefit pension plan, as well as a supplemental executive retirement plan that covered eligible employees through December 31, 2022. Effective January 1, 2023, these plans were frozen (no future benefits will be accrued for participants due to employment and no new participants will be added). Participants in these plans were fully vested in their benefits as of December 31, 2022.
Table 10.1 provides the components of net periodic benefit cost for our pension, supplemental executive retirement and other postretirement benefit plans for the three months ended March 31, 2025 and 2024.
Components of net periodic benefit cost
Table
10.1
Three Months Ended March 31,
Pension and Supplemental Executive Retirement PlansOther Postretirement Benefit Plans
(In thousands)2025202420252024
Company service cost$— $— $234 $417 
Interest cost3,299 3,247 311 375 
Expected return on plan assets(3,442)(3,644)(2,911)(2,494)
Amortization of:
Net actuarial losses (gains)546 523 (692)(380)
Prior service cost (credit)86 86 118 453 
Cost of settlements and curtailments— — — — 
Net periodic benefit cost (benefit)$489 $212 $(2,940)$(1,629)

In the first quarter of 2025, we made a contribution to our qualified pension plan of $7.5 million.

MGIC Investment Corporation - Q1 2025 | 27

Note 11. Loss Reserves
We establish case reserves and LAE reserves on delinquent loans that were reported to us as two or more payments past due and have not become current or resulted in a claim payment. Such loans are referred to as being in our delinquency inventory. Case reserves are established by estimating the number of loans in our delinquency inventory that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity.

IBNR reserves are established for estimated losses from delinquencies we estimate have occurred prior to the close of an accounting period but have not yet been reported to us. IBNR reserves are also established using estimated claim rates and claim severities.

Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); and curtailments and rescissions. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, the impact of past and future government initiatives and actions taken by the GSEs, and a drop in housing values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Loss reserves in future periods will also be dependent on the number of loans reported to us as delinquent.

Changes to our estimates could result in a material impact to our consolidated results of operations and financial position, even in a stable economic environment. Given the uncertainty of the macroeconomic environment, including the effectiveness of loss mitigation efforts, changes in home prices, and level of employment, our loss reserve estimates may continue to be impacted.

In considering the potential sensitivity of the factors underlying our estimate of loss reserves, it is possible that even a relatively small change in our estimated claim rate or claim severity could have a material impact on loss reserves and, correspondingly, on our consolidated results of operations even in a stable economic environment. For example, as of March 31, 2025, assuming all other factors remain constant, a $1,000 increase/decrease in the average severity reserve factor would change the loss reserve amount by approximately +/- $7 million. A one percentage point increase/decrease in the average claim rate reserve factor would change the loss reserve amount by approximately +/- $18 million.

The “Losses incurred” section of table 11.1 below shows losses incurred on delinquencies that occurred in the current year and in prior years. The amount of losses incurred relating to delinquencies that occurred in the current year represents the estimated amount to be ultimately paid on such delinquencies. The amount of losses incurred relating to delinquencies that occurred in prior years represents the difference between the actual claim rate and claim severity associated with those delinquencies resolved in the current year compared to the estimated claim rate and claim severity at the prior year-end, as well as a re-estimation of amounts to be ultimately paid on delinquencies continuing from the end of the prior year. This re-estimation of the claim rate and claim severity is the result of our review of current trends in the delinquency inventory, such as percentages of delinquencies that have resulted in a claim, the amount of the claims relative to the average loan exposure, changes in the relative level of delinquencies by geography and changes in average loan exposure.






MGIC Investment Corporation - Q1 2025 | 28

The “Losses paid” section of table 11.1 below shows the amount of losses paid on delinquencies that occurred in the current year and losses paid on delinquencies that occurred in prior years.

Table 11.1 provides a reconciliation of beginning and ending loss reserves as of and for the three months ended March 31, 2025 and 2024.
Development of reserves for losses and loss adjustment expenses
Table
11.1
Three Months Ended March 31,
(In thousands)20252024
Reserve at beginning of period$462,662 $505,379 
Less reinsurance recoverable47,281 33,302 
Net reserve at beginning of period415,381 472,077 
Losses incurred:
Losses and LAE incurred in respect of delinquency notices received in:
Current year59,497 53,436 
Prior years (1)
(49,906)(48,881)
Total losses incurred9,591 4,555 
Losses paid:
Losses and LAE paid in respect of delinquency notices received in:
Current year— — 
Prior years11,803 11,385 
Total losses paid11,803 11,385 
Net reserve at end of period413,169 465,247 
Plus reinsurance recoverable51,864 39,200 
Reserve at end of period$465,033 $504,447 
(1)A positive number for prior year loss reserve development indicates a deficiency of prior year reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves. See the following table for more information about prior year loss reserve development.

The increase in the current year losses incurred in the three months ended March 31, 2025 as compared to the three months ended March 31, 2024 is primarily due to an increase in estimated severity on current year delinquencies and an increase in new delinquencies reported.

The favorable loss development on previously received delinquencies for the three months ended March 31, 2025 and March 31, 2024 primarily resulted from a decrease in the expected claim rate on previously received delinquencies. Home price appreciation experienced in recent years has allowed some borrowers to cure their delinquencies through the sale of their property.

The prior year loss reserve development for the three months ended March 31, 2025 and 2024 is shown in table 11.2 below.
Reserve development on previously received delinquencies
Table
11.2
Three Months Ended March 31,
(In thousands)20252024
Increase (decrease) in estimated claim rate on primary defaults$(46,497)$(41,079)
Change in estimates related to severity on primary defaults, pool reserves, LAE reserves, reinsurance, and other(3,409)(7,802)
Total prior year loss development (1)
$(49,906)$(48,881)
(1)A positive number for prior year loss reserve development indicates a deficiency of prior year loss reserves. A negative number for prior year loss reserve development indicates a redundancy of prior year loss reserves.

Premium refunds
Our estimate of premiums to be refunded on expected claim payments is accrued for separately in “Other Liabilities” on our consolidated balance sheets and was $11.1 million and $12.5 million at March 31, 2025 and December 31, 2024, respectively.

MGIC Investment Corporation - Q1 2025 | 29

Note 12. Shareholders’ Equity
Treasury stock
Prior to November 15, 2024, shares we repurchased were held in treasury stock unless they were reissued under the discretion of our Board of Directors. As of November 15, 2024, we retired all shares of our treasury stock, which resulted in an adjustment to retained earnings equal to the cumulative amount of repurchase price paid in excess of par value for treasury stock held as of that date. Subsequent to the retirement of the treasury stock, all shares of our common stock that we repurchase are immediately retired. Going forward, the amount of the repurchase price paid in excess of par value for repurchased shares will be recorded as an adjustment to retained earnings.

Share repurchase programs
Repurchases of our common stock may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. In the three months ended March 31, 2025, we repurchased 9.2 million shares for $224.3 million, inclusive of commissions. In 2024, we repurchased approximately 25.3 million shares of our common stock for $566.6 million, inclusive of commissions. As of March 31, 2025, we had remaining authorization to repurchase $232.9 million through December 31, 2026, under a share repurchase program approved by the Board of Directors in 2024. Through April 25, 2025, we repurchased an additional 2.8 million shares totaling $65.8 million, inclusive of commissions.

In April 2025, our Board of Directors approved an additional share repurchase program, authorizing us to purchase up to $750 million of common stock prior to December 31, 2027.

Cash dividends
In the first quarter of 2025, we paid quarterly cash dividends of $0.13 per share which totaled $32.5 million. On April 24, 2025, the Board of Directors declared a quarterly cash dividend to the holders of the company’s common stock of $0.13 per share payable on May 21, 2025, to shareholders of record on May 8, 2025.


Note 13. Share-Based Compensation
We have certain share-based compensation plans. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period which generally corresponds to the vesting period. Awards under our plans generally vest over periods ranging from one to three years, although awards to our non-employee directors vest immediately. The grant date fair value of awards granted to executive officers and non-employee directors in 2025, is calculated based on the stock price as of the grant date, discounted to account for the one year post-vesting holding period to which the awards are subject.

Table 13.1 shows the number of restricted stock units (RSUs) granted to employees and non-employee directors and the weighted average fair value per share during the periods presented.
Restricted stock unit grants
Table
13.1
Three months ended March 31,
20252024
RSUs Granted
(in thousands)
Weighted Average Fair Value per Share
RSUs Granted
(in thousands)
Weighted Average Fair Value per Share
RSUs subject to performance conditions(1)337 $24.28 634 $19.81 
RSUs subject only to service conditions317 24.64 248 19.81 
Non-employee director RSUs59 24.12 76 19.81 
(1)Shares granted are subject to performance conditions under which the target number of shares granted may vest from 0% to 200%.

MGIC Investment Corporation - Q1 2025 | 30

Note 14. Statutory Information
Statutory Capital Requirements
The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to the RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements” and, together with the GSE Financial Requirements, as the “Financial Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a minimum policyholder position (“MPP”). MGIC’s “policyholder position” includes its net worth or surplus, and its contingency loss reserve. Our policyholders position was above the required MPP and our risk-to-capital ratio was below the maximum allowed by jurisdictions with State Capital Requirements at March 31, 2025.

In 2023, the NAIC adopted a revised Mortgage Guaranty Insurance Model Act. The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements. It is uncertain when the revised Model Act will be adopted in any jurisdiction. It is unknown whether any changes will be made by state legislatures prior to adoption, and the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business. Wisconsin has begun the process to replace current mortgage insurance regulations with the Model Act, though it is expected that some changes will be made before formal adoption.

Dividend restrictions
MGIC is subject to statutory regulations as to payment of dividends. The maximum amount of dividends that MGIC may pay in any twelve-month period without regulatory approval by the OCI is the lesser of adjusted statutory net income or 10% of statutory policyholders’ surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. The maximum dividend that could be paid, without regulatory approval, is reduced by dividends paid in the twelve months preceding the dividend payment date. Before making any dividend payments, we notify the OCI to ensure it does not object. In April 2025, MGIC paid a dividend of $400 million to the holding company.

Statutory Financial Information
The OCI recognizes only statutory accounting principles prescribed, or practices permitted by the State of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company. The OCI has adopted certain prescribed accounting practices that differ from those found in other states. Specifically, Wisconsin domiciled companies record changes in the contingency loss reserves through their income statement as a change in underwriting deduction. As a result, in periods in which MGIC is increasing contingency loss reserves, statutory net income is reduced. The statutory net income, policyholders’ surplus, and contingency loss reserves of our insurance subsidiaries, including MGIC, are shown in table 14.1.

Financial information of our insurance subsidiaries (including MGIC)
Table 14.1
As of and for the Three Months Ended March 31,
(In thousands)20252024
Statutory net income$172,182 $72,714 
Statutory policyholders' surplus1,142,387 711,990 
Contingency loss reserves4,950,412 5,333,024 

The increase in statutory net income for the three months ended March 31, 2025 compared with March 31, 2024 was primarily driven by a decrease in contingency reserve contribution during the period. The increase in statutory policyholders’ surplus from March 31, 2024 to March 31, 2025, is primarily due to statutory net income, offset by dividend payments to MGIC Investment Corporation.

MGIC Investment Corporation - Q1 2025 | 31

Note 15. Segment Reporting
We operate as a single reportable segment, which is defined as Mortgage Insurance. This segment generates revenue through mortgage insurance and reinsurance provided under the GSEs credit risk transfer programs. The results of our Mortgage Insurance segment are reported within our financial statements as the consolidated financial results for MGIC Investment Corporation and subsidiaries. The accounting policies of the Mortgage Insurance segment are the same as those described in Note 3 - “Significant Accounting Policies” to the consolidated financial statements in our 2024 Annual Report on Form 10-K.

The Senior Management Oversight Committee (“SMOC”), acts as the Company's chief operating decision maker (“CODM”). The CODM uses consolidated net income (loss) as the primary GAAP measure to evaluate actual financial performance versus planned financial performance and to allocate resources. The measure of segment assets is reported on the balance sheet as total consolidated assets.

The table below presents a disaggregation of significant segment expenses as monitored by our CODM:
Significant segment expenses
Table15.1
Three Months Ended March 31,
(In thousands)
20252024
Other underwriting and operating expenses net:
Employee costs
$36,960 $43,725 
Outside services (1)
7,811 8,069 
Premium taxes (2)
5,410 5,329 
Depreciation expense
943 1,140 
All other underwriting and operating (3)
282 755 
Total other underwriting and operating expenses net
$51,406 $59,018 
(1)Outside services expense generally includes expenses related to outsourced IT services and consulting services.
(2)Premium taxes are taxes paid to states and municipalities based upon the amount of premiums written.
(3)All other underwriting and operating expenses include ceding commissions (a reduction to our underwriting expenses, see Note 4 - "Reinsurance"), computer hardware and software expenses, legal, audit, insurance, and general and administrative expenses.

MGIC Investment Corporation - Q1 2025 | 32

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction
The following is management’s discussion and analysis of the financial condition and results of operations of MGIC Investment Corporation for the first quarter of 2025. As used below, “we” and “our” refer to MGIC Investment Corporation’s consolidated operations. This form 10-Q should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024. See the “Glossary of terms and acronyms” for definitions and descriptions of terms used throughout this MD&A. Our revenues and losses could be affected by the Risk Factors referred to under “Forward Looking Statements and Risk Factors” below, and they are an integral part of the MD&A.

Forward Looking and Other Statements
As discussed under “Forward Looking Statements and Risk Factors” below, actual results may differ materially from the results contemplated by forward looking statements. These forward looking statements speak only as of the date of this filing and are subject to change without notice. We are not undertaking any obligation to update any forward looking statements or other statements we may make in the following discussion or elsewhere in this document even though these statements may be affected by events or circumstances occurring after the forward looking statements or other statements were made. Therefore, no reader of this document should rely on these statements being current as of any time other than the time at which this document was filed with the Securities and Exchange Commission.



MGIC Investment Corporation - Q1 2025 | 33

Overview
Summary financial results of MGIC Investment Corporation
Three Months Ended March 31,
(In thousands, except per share data, unaudited)
20252024% Change
Selected statement of operations data
Net premiums earned$243,719 $242,644 0 
Investment income, net of expenses61,443 59,744 3 
Net gains (losses) on investments and other financial instruments
741 (8,509)109 
Losses incurred, net9,591 4,555 111 
Other underwriting and operating expenses, net51,406 59,018 (13)
Income before tax234,681 219,880 7 
Provision for income taxes49,221 45,783 8 
Net income
185,460 174,097 7 
Diluted income per share$0.75 $0.64 17 
Non-GAAP Financial Measures (1)
Adjusted pre-tax operating income$234,362 $225,309 4 
Adjusted net operating income185,208 178,386 4 
Adjusted net operating income per diluted share$0.75 $0.65 15 
(1) See “Explanation and reconciliation of our use of Non-GAAP financial measures.”

Summary of first quarter 2025 results
Comparative quarterly results
We recorded first quarter 2025 net income of $185.5 million, or $0.75 per diluted share. Net income increased by $11.4 million from net income of $174.1 million, or $0.64 per diluted share, in the prior year. The increase is primarily due to the change in net gains and losses on investments and other financial instruments in addition to a decrease in other underwriting and operating expenses net, in the three months ended March 31, 2025 compared to the same period in the prior year. This was partially offset by an increase in losses incurred, net and an increase in provision for income taxes. Diluted income per share increased primarily due to an increase in net income and a decrease in the number of diluted weighted shares outstanding.

Adjusted net operating income for the first quarter 2025 was $185.2 million (Q1 2024: $178.4 million) and adjusted net operating income per diluted share was $0.75 (Q1 2024: $0.65). The increase in adjusted net operating income primarily reflects an increase in net income. The increase in adjusted net operating income per diluted share primarily reflects an increase in adjusted net operating income and a decrease in the number of diluted weighted shares outstanding.

Net gains (losses) on investments and other financial instruments were $0.7 million, compared with $(8.5) million for the same period last year. Changes in the recognition of net realized investment gains (losses) are primarily driven by the timing of individual securities sales and such timing is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles. See Note 7 - “Investments,” to our consolidated financial statements for additional discussion of net gains (losses) on investments and other financial instruments.

Losses incurred, net for the first quarter of 2025 were $9.6 million, compared with $4.6 million for the same period last year. While new delinquency notices added approximately $59.5 million for the three months ended March 31, 2025, our re-estimation of loss reserves on previously received delinquency notices resulted in favorable development of approximately $49.9 million. For the three months ended March 31, 2024, new delinquency notices added approximately $53.4 million, offset by our re-estimation of loss reserves on previously received delinquency notices resulting in favorable development of approximately $48.9 million. The favorable development for both periods primarily resulted from a decrease in the expected claim rate on previously received delinquencies. Home price appreciation experienced in recent years has allowed some borrowers to cure their delinquencies through the sale of their property.

Underwriting and other expenses, net were $51.4 million in the first quarter of 2025 as compared to $59.0 million for the same period last year. The decrease in underwriting and other expenses, net was primarily due to a decrease in employee costs. See Note 15 - “Segment Reporting,” to our consolidated financial statements for additional discussion of significant segment expenses.

The increase in our provision for income taxes in the first quarter of 2025 as compared to the same period in the prior year was primarily due to an increase in income before tax.


MGIC Investment Corporation - Q1 2025 | 34

Capital
MGIC dividend payments to our holding company
The ability of MGIC to pay dividends is restricted by insurance regulation. Amounts in excess of prescribed limits are deemed “extraordinary” and may not be paid if disapproved by the OCI. A dividend is extraordinary when the proposed dividend amount, plus dividends paid in the twelve months preceding the dividend payment date exceed the ordinary dividend level. In 2025, MGIC can pay $97 million of ordinary dividends without OCI approval, before taking into consideration dividends paid in the preceding twelve months. In the three months ended March 31, 2025, and 2024, we did not make dividend payments to the holding company. Future dividend payments from MGIC to the holding company will continue to be determined in consultation with the board and after considering any updated estimates about our business, subject to regulatory approval. In April 2025, MGIC paid a $400 million dividend to our holding company.

Share repurchase programs
Repurchases may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. In the three months ended March 31, 2025, and for the full year of 2024, we repurchased 9.2 million and 25.3 million shares of common stock, for $224.3 million and $566.6 million, respectively. As of March 31, 2025, we had $232.9 million of remaining authorization to repurchase our common stock through December 31, 2026 under a $750 million share repurchase program approved by our Board of Directors in April 2024. As of March 31, 2025, we had approximately 240.2 million shares of common stock outstanding.

In April 2025, our Board of Directors approved an additional share repurchase program, authorizing us to purchase up to $750 million of common stock prior to December 31, 2027.

Dividends to shareholders
In the first quarter of 2025, we paid quarterly cash dividends of $0.13 per share which totaled $32.5 million. On April 24, 2025, the Board of Directors declared a quarterly cash dividend to the holders of the company’s common stock of $0.13 per share to shareholders of record on May 8, 2025.

GSEs
We must comply with a GSE’s PMIERs to be eligible to insure loans delivered to or purchased by that GSE. The PMIERs include financial requirements, as well as business, quality control and certain transaction approval requirements. The PMIERs provide that the GSEs may amend any provision of the PMIERs or impose additional requirements with an effective date specified by the GSEs. MGIC is in compliance with the PMIERs and eligible to insure loans purchased by the GSEs.

The financial requirements of the PMIERs require a mortgage insurer’s "Available Assets" (generally only the most liquid assets of an insurer) to equal or exceed its "Minimum Required Assets" (which are generally based on an insurer's book of risk in force and calculated from tables of factors with several risk dimensions, reduced for credit given for risk ceded under reinsurance agreements and subject to a floor amount). Based on our application of the PMIERs as of March 31, 2025, MGIC’s Available Assets totaled $5.9 billion, or $2.6 billion in excess of its Minimum Required Assets. In August 2024, the GSEs issued updates to the calculation of Available Assets. The updates will be implemented through a 24-month phased-in approach, with a fully effective date of September 30, 2026. If these changes were effective as of March 31, 2025, without a graduated implementation period, MGIC's Available Assets of $5.9 billion would decrease by approximately 1% or $50 million, and MGIC's PMIERs excess would be $2.5 billion.

The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases.

Our reinsurance transactions enable us to earn higher returns on our Minimum Required Assets than we would without them because they generally reduce the Minimum Required Assets we must hold under PMIERs. However, reinsurance may not always be available to us, or available only on terms, or costs, that we find unacceptable.

The calculated credit for XOL Transactions under PMIERs is generally based on the PMIERs requirement of the covered loans and the attachment and detachment point of the coverage. PMIERs credit is generally not given for the reinsured risk above the PMIERs requirement. Our existing reinsurance transactions are subject to periodic review by the GSEs and there is a risk we will not receive our current level of credit in future periods for the risk ceded under them. In addition, we may not receive the same level of credit under future transactions that we receive under existing transactions. If MGIC is not allowed certain levels of credit under the PMIERs, under certain circumstances, MGIC may terminate the reinsurance transactions without penalties.

For additional information about our reinsurance transactions, see our Risk Factor titled “Reinsurance may be unavailable at current levels and prices, and/or the GSEs may reduce the amount of capital credit we receive for our reinsurance transactions.”

GSE reform
The FHFA has been the conservator of the GSEs since 2008 and has the authority to control and direct their operations. Given that the Director of the FHFA is removable by the President at will, the agency’s agenda, policies, and actions are influenced by the current administration. The increased role that the federal government has assumed in the residential housing finance system through the GSE

MGIC Investment Corporation - Q1 2025 | 35

conservatorships may increase the likelihood that the business practices of the GSEs change, including through administration changes and actions. Such changes could have a material adverse effect on us.

It is uncertain what role the GSEs, FHA and private capital, including private mortgage insurance, will play in the residential housing finance system in the future. The timing and impact on our business of any resulting changes is uncertain. Many of the proposed changes would require Congressional action to implement and it is difficult to estimate when Congressional action would be final and how long any associated phase-in period may last.

For additional information about the business practices of the GSEs, see our Risk Factor titled “Changes in the business practices of Fannie Mae and Freddie Mac ("the GSEs"), federal legislation that changes their charters or a restructuring of the GSEs could reduce our revenues or increase our losses.”

State Regulations
The insurance laws of 16 jurisdictions, including Wisconsin, our domiciliary state, require a mortgage insurer to maintain a minimum amount of statutory capital relative to its RIF (or a similar measure) in order for the mortgage insurer to continue to write new business. We refer to these requirements as the “State Capital Requirements.” While they vary among jurisdictions, the most common State Capital Requirements allow for a maximum risk-to-capital ratio of 25 to 1. A risk-to-capital ratio will increase if (i) the percentage decrease in capital exceeds the percentage decrease in insured risk, or (ii) the percentage increase in capital is less than the percentage increase in insured risk. Wisconsin does not regulate capital by using a risk-to-capital measure but instead requires a MPP. MGIC’s “policyholder position” includes its net worth or surplus and its contingency reserve.

At March 31, 2025, MGIC’s risk-to-capital ratio was 9.8 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.8 billion above the required MPP of $2.2 billion. The calculation of our risk-to-capital ratio and MPP reflect full credit for the risk ceded under our reinsurance transactions. It is possible that under the revised State Capital Requirements discussed below, MGIC will not be allowed full credit for the risk ceded under such transactions. If MGIC is not allowed an agreed level of credit under either the State Capital Requirements or the PMIERs, MGIC may terminate the reinsurance transactions, without penalty.

In 2023, the NAIC adopted a revised Mortgage Guaranty Insurance Model Act. The updated Model Act includes requirements relating to, among other things: (i) capital and minimum capital requirements, and contingency reserves; (ii) restrictions on mortgage insurers’ investments in notes secured by mortgages; (iii) prudent underwriting standards and formal underwriting guidelines; (iv) the establishment of formal, internal “Mortgage Guaranty Quality Control Programs” with respect to in-force business; and (v) reinsurance and prohibitions on captive reinsurance arrangements. It is uncertain when the revised Model Act will be adopted in any jurisdiction. The provisions of the Model Act, if adopted in their final form, are not expected to have a material adverse effect on our business. It is unknown whether any changes will be made by state legislatures prior to adoption, and the effect changes, if any, will have on the mortgage guaranty insurance market generally, or on our business. Wisconsin, where MGIC is domiciled, has begun the process to replace current Mortgage Insurance regulations with the Model Act, though it is expected that some changes will be made before formal adoption.

At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, refer to our risk factor titled “State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis” for more information about matters that could negatively impact our compliance with State Capital Requirements.
Factors affecting our results
Our current and future business, results of operations and financial condition are impacted by macroeconomic conditions, such as interest rates, home prices, housing demand, level of employment, inflation, pandemics, restrictions and costs on mortgage credit, and other factors. For additional information on how our business may be impacted see our Risk Factor titled “Downturns in the domestic economy or declines in home prices may result in more homeowners defaulting and our losses increasing, with a corresponding decrease in our returns.”

The future effects of climate change on our business are uncertain. For information about possible effects, please refer to our Risk Factor titled “Pandemics, hurricanes and other disasters may adversely impact our results of operations and financial condition.”
Our results of operations are affected by:

Premiums written and earned
Premiums written and earned in a year are influenced by:

•NIW, which increases IIF. Many factors affect NIW, including the volume of low down payment home mortgage originations and competition to provide credit enhancement on those mortgages from the FHA, the VA, and other mortgage insurers. Other alternatives to mortgage insurance also impact NIW, including GSE programs that may reduce or eliminate the demand for mortgage insurance. NIW does not include loans previously insured by us that are modified, such as loans modified under HARP.
•Cancellations, which reduce IIF. Cancellations from refinancings may occur when borrowers achieve the required amount of home equity through loan amortization, loan payoffs, or home price appreciation. Refinance-related cancellations are influenced by the

MGIC Investment Corporation - Q1 2025 | 36

level of current mortgage interest rates compared to the mortgage coupon rates throughout the in force book, current home values relative to values when the loans in the in force book were insured and the terms on which mortgage credit is available. Policy rescissions, also cause cancellations, requiring us to return any premiums received, from the date of default, on the rescinded policies and claim payments. Cancellations of single premium policies, which are generally non-refundable, result in immediate recognition of any remaining unearned premium.
•Premium rates, which vary by product type, the risk characteristics of the insured loans, competitive pressures, the percentage of coverage on the insured loans, and PMIERs capital requirements. The substantial majority of our monthly and annual mortgage insurance premiums are under premium plans for which, for the first ten years of the policy, the amount of premium is determined by multiplying the initial premium rate by the original loan balance; thereafter, the premium rate resets to a lower rate used for the remaining life of the policy. The remainder of our monthly and annual premiums are under premium plans for which premiums are determined by a fixed percentage of the loan’s amortizing balance over the life of the policy.
•Premiums ceded, net of profit commission, under our QSR Transactions and premiums ceded under our XOL Transactions are primarily affected by the percentage of our IIF subject to our reinsurance transactions. The profit commission under our QSR Transactions also varies inversely with the level of ceded losses incurred on a “dollar for dollar” basis and can be eliminated at ceded loss levels higher than what we have experienced on our QSR Transactions. As a result, lower levels of losses incurred result in a higher profit commission and less benefit from ceded losses incurred; higher levels of losses incurred result in more benefit from ceded losses incurred and a lower profit commission (or for certain levels of accident year loss ratios, its elimination). (See Note 4 - “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions.)

Premiums earned are generated by the insurance that is in force during all or a portion of the period. A change in the average IIF in the current period compared to an earlier period is a factor that will increase (when the average in force is higher) or reduce (when it is lower) premiums written and earned in the current period, although this effect may be enhanced (or mitigated) by the factors discussed above.

Investment income
Our investment portfolio is composed principally of investment grade fixed income securities. The principal factors that influence investment income are the size of the portfolio and its yield. As measured by amortized cost (which excludes changes in fair value, such as from changes in interest rates), the size of the investment portfolio is mainly a function of cash generated from (or used in) operations, such as net premiums written, investment income, net claim payments and expenses, and cash provided by (or used for) non-operating activities, such as debt or stock issuances or repurchases, and dividends.

Losses incurred
Losses incurred are the current expense that reflects claim payments, costs of settling claims, and changes in our estimates of payments that will ultimately be made as a result of delinquencies on insured loans. As explained under “Critical Accounting Estimates” in our 2024 10-K MD&A, except in the case of a premium deficiency reserve, we recognize an estimate of this expense only for delinquent loans. The level of new delinquencies has historically followed a seasonal pattern, with new delinquencies in the first half of the year lower than new delinquencies in the latter half of the year. The state of the economy, local housing markets, pandemics, natural disasters and various other factors, may result in delinquencies not following the typical pattern. Losses incurred are generally affected by:

•The state of the economy, including unemployment and housing values, each of which affects the likelihood that loans will become delinquent and whether loans that are delinquent cure their delinquency.
•The product mix of the in force book, with loans having higher risk characteristics generally resulting in higher delinquencies and claims.
•The size of loans insured, with higher average loan amounts on delinquent loans tending to increase incurred losses.
•The percentage of coverage on insured loans, with deeper average coverage on delinquent loans tending to increase incurred losses.
•The distribution of claims over the life of a book. Historically, the first few years after loans are originated are a period of relatively low claims, with claims increasing substantially for several years subsequent and then declining. Annual persistency, the condition of the economy, including unemployment and housing prices, and other factors can affect this pattern. For example, a weak economy or housing value declines can lead to claims from older books increasing, continuing at stable levels or experiencing a lower rate of decline. See further information under “Mortgage insurance earnings and cash flow cycle” below.
•Losses ceded under reinsurance transactions which will decrease losses incurred, net when a delinquency or an insured is covered by a reinsurance transaction. See Note 4 - “Reinsurance” to our consolidated financial statements for a discussion of our reinsurance transactions.
•The rate at which we rescind policies or curtail claims. Our estimated loss reserves incorporate our estimates of future rescissions of policies and curtailments of claims, and reversals of rescissions and curtailments. We collectively refer to such rescissions and denials as “rescissions” and variations of this term. We call reductions to claims “curtailments.”

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Underwriting and other expenses
Underwriting and other expenses includes items such as employee compensation, fees for professional and consulting services, depreciation and maintenance expense, and premium taxes, and are reported net of ceding commissions associated with our QSR Transactions. Employee compensation expenses are variable due to share-based compensation, changes in benefits, and changes in headcount (which can fluctuate due to volume of NIW). See Note 4 - “Reinsurance” and Note 15 - “Segment Reporting” to our consolidated financial statements for a discussion of ceding commission on our QSR Transactions and discussion on significant segment expenses.

Interest expense
Interest expense reflects the interest associated with our outstanding debt obligation discussed in Note 3 - “Debt” to our consolidated financial statements and under “Liquidity and Capital Resources” below.

Other
Certain activities that we do not consider being part of our fundamental operating activities may also impact our results of operations and are described below.
Gains (losses) on investments and other financial instruments
Fixed income securities. Investment gains and losses reflect the difference between the amount received on the sale of a fixed income security and the fixed income security’s cost basis, as well as any credit allowances and any impairments on securities we intend to sell prior to recovery of its amortized cost basis. The amount received on the sale of fixed income securities is affected by the coupon rate of the security compared to the yield of comparable securities at the time of sale.
Equity securities. Investment gains and losses reflect the periodic change in fair value.
Financial instruments. Investment gains and losses on the embedded derivative on our Home Re Transactions reflect the present value impact of the variation in investment income on assets on the insurance-linked notes held by the reinsurance trusts and the contractual reference rate used to calculate the reinsurance premiums we estimate we will pay over the estimated remaining life.

Gains and losses on debt extinguishment
Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position, and/or improve our debt profile. Extinguishing our outstanding debt obligations early through these discretionary activities may result in gains or losses primarily driven by differences in the payment of consideration from the carrying value, and the write off of unamortized debt issuance costs on the extinguished portion of the debt.

Refer to “Explanation and reconciliation of our use of Non-GAAP financial measures” below to understand how these items impact our evaluation of our core financial performance.

Mortgage insurance earnings and cash flow cycle
In general, the majority of any underwriting profit that a book generates occurs in the early years of the book, with the largest portion of any underwriting profit realized in the first year following the year the book was written. Subsequent years of a book may result in either underwriting profit or underwriting losses. This pattern of results typically occurs because relatively few of the incurred losses on delinquencies that a book will ultimately experience typically occur in the first few years of the book, when premium revenue is highest, while subsequent years are affected by declining premium revenues, as the number of insured loans decreases (primarily due to loan prepayments) and increasing losses. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern.

Cybersecurity
As part of our business, we maintain large amounts of confidential and proprietary information both on our own servers and those of cloud computing services. This includes personal information of consumers and our employees. Personal information is subject to an increasing number of federal and state laws and regulations regarding privacy and data security, as well as contractual commitments. Any failure or perceived failure by us, or by the vendors with whom we share this information, to comply with such obligations may result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction.

All information technology systems are potentially vulnerable to damage or interruption from a variety of sources, including by cyber attacks, such as those involving ransomware. The Company discovers vulnerabilities and regularly blocks attempts at unauthorized access to its systems, through threats such as malware and computer virus attacks, unauthorized access, system failures and disruptions. Threats have the potential to jeopardize the information processed and stored in, and transmitted through, our computer systems and networks and otherwise cause interruptions or malfunctions in our operations, which could result in damage to our reputation, financial losses, litigation, increased costs, regulatory penalties or customer dissatisfaction. We could be similarly affected by threats against our vendors and/or third-parties with whom we share information.

Globally, attacks are expected to continue accelerating in both frequency and sophistication with increasing use by actors of tools, techniques, and technological advances that may hinder the Company’s ability to identify, investigate and recover from incidents. Such attacks may also increase as a result of retaliation by threat actors against actions taken by the U.S. and other countries in connection

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with wars and other global events. The Company operates under a hybrid workforce model and such model may be more vulnerable to security breaches.

While we have information security policies and systems in place to secure our information technology systems and to prevent unauthorized access to or disclosure of sensitive information, there can be no assurance with respect to our systems and those of our third-party vendors that unauthorized access to the systems or disclosure of the sensitive information, either through the actions of third parties or employees, will not occur. Due to our reliance on information technology systems, including ours and those of our customers and third-party service providers, and to the sensitivity of the information that we maintain, unauthorized access to the systems or disclosure of the information could adversely affect our reputation, severely disrupt our operations, result in a loss of business and expose us to material claims for damages and may require that we provide free credit monitoring services to individuals affected by a security breach.

Should we experience an unauthorized disclosure of information or a cyber attack, including those involving ransomware, some of the costs we incur may not be recoverable through insurance, or legal or other processes, and this may have a material adverse effect on our results of operations.

For additional information about our IT systems and cybersecurity, see our risk factor titled “Information technology system failures or interruptions may materially impact our operations and adversely affect our financial results" and "We could be materially adversely affected by a cyber security breach or failure of information security controls."

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Explanation and reconciliation of our use of non-GAAP financial measures

Non-GAAP financial measures
We believe that use of the Non-GAAP financial measures of adjusted pre-tax operating income (loss), adjusted net operating income (loss) and adjusted net operating income (loss) per diluted share facilitate the evaluation of the company's core financial performance thereby providing relevant information to investors. These measures are not recognized in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance.

Adjusted pre-tax operating income (loss) is defined as GAAP income (loss) before tax, excluding the effects of net realized investment gains (losses), gain and losses on debt extinguishment, and infrequent or unusual non-operating items where applicable.
    
Adjusted net operating income (loss) is defined as GAAP net income (loss) excluding the after-tax effects of net realized investment gains (losses), gain and losses on debt extinguishment and infrequent or unusual non-operating items where applicable. The amounts of adjustments to components of pre-tax operating income (loss) are tax effected using a federal statutory tax rate of 21%.
    
Adjusted net operating income (loss) per diluted share is calculated in a manner consistent with the accounting standard regarding earnings per share by dividing (i) adjusted net operating income (loss) by (ii) diluted weighted average common shares outstanding, which reflects share dilution from unvested restricted stock units.

Although adjusted pre-tax operating income (loss) and adjusted net operating income (loss) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items represent items that are: (1) not viewed as part of the operating performance of our primary activities; or (2) impacted by both discretionary and other economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, along with the reasons for their treatment, are described below. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these adjustments. Other companies may calculate these measures differently. Therefore, their measures may not be comparable to those used by us.

(1)Net realized investment gains (losses). The recognition of net realized investment gains or losses can vary significantly across periods as the timing of individual securities sales is highly discretionary and is influenced by such factors as market opportunities, our tax and capital profile, and overall market cycles.
(2)Gains and losses on debt extinguishment. Gains and losses on debt extinguishment result from discretionary activities that are undertaken to enhance our capital position and/or improve our debt profile.
(3)Infrequent or unusual non-operating items. Items that are non-recurring in nature and are not part of our primary operating activities.


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Non-GAAP reconciliations
Reconciliation of Income before tax / Net income to Adjusted pre-tax operating income / Adjusted net operating income
Three Months Ended March 31,
20252024
(In thousands, except per share amounts)Pre-taxTax effectNet
(after-tax)		Pre-taxTax effectNet
(after-tax)
Income before tax / Net income$234,681 49,221 $185,460 $219,880 45,783 $174,097 
Adjustments:
Net realized investment (gains) losses(319)(67)(252)5,429 1,140 4,289 
Adjusted pre-tax operating income / Adjusted net operating income$234,362 $49,154 $185,208 $225,309 $46,923 $178,386 
Reconciliation of Net income per diluted share to Adjusted net operating income per diluted share
Weighted average diluted shares outstanding246,490 273,108 
Net income per diluted share$0.75 $0.64 
Net realized investment (gains) losses0.00 0.02 
Adjusted net operating income per diluted share$0.75 $0.65 (1)
(1) Does not foot due to rounding.

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Mortgage Insurance Portfolio
Mortgage originations
Our NIW is affected by the total mortgage originations, the percentage of total mortgage originations using PMI, and our market share within the PMI industry.

The total amount of mortgage originations is generally influenced by the level of home sales, interest rates, the percentage of homes purchased for cash, and the level of refinance activity. PMI market share of total mortgage originations is influenced by the mix of purchase and refinance originations. PMI market share is also impacted by the market share of total originations of the FHA, VA, USDA, and other alternatives to mortgage insurance, including GSE programs that may reduce or eliminate the demand for mortgage insurance.

NIW for the first quarter of 2025 was $10.2 billion (Q1 2024: $9.1 billion). The increase reflects a higher expected market position in the current year compared with the same period in the prior year. For the full year, we expect our 2025 NIW to be higher than 2024.

The percentage of our NIW with DTI ratios over 45% and LTVs over 95% will fluctuate based on the mortgage conditions that could include the percentage of NIW from purchase transactions, changes in home prices, changes in mortgage rates, and GSE activities.

The following tables present characteristics of our primary NIW for the three months ended March 31, 2025 and 2024.

Primary NIW by FICO score
Three Months Ended March 31,
(% of primary NIW)
20252024
760 and greater51.0 %53.4 %
740 - 75917.3 %17.0 %
720 - 73913.3 %13.3 %
700 - 7199.4 %8.4 %
680 - 6995.3 %4.6 %
660 - 6792.7 %2.2 %
640 - 6590.7 %0.7 %
639 and less0.3 %0.4 %
Total
100 %100 %
Primary NIW by loan-to-value
Three Months Ended March 31,
(% of primary NIW)20252024
95.01% and above12.9 %15.4 %
90.01% to 95.00%45.5 %44.9 %
85.01% to 90.00%29.9 %29.0 %
80.01% to 85.00%11.7 %10.7 %
Total
100 %100 %
Primary NIW by debt-to-income ratio
Three Months Ended March 31,
(% of primary NIW)20252024
45.01% and above31.1 %27.9 %
38.01% to 45.00%30.5 %31.8 %
38.00% and below38.4 %40.3 %
Total
100 %100 %
Primary NIW by policy payment type
Three Months Ended March 31,
(% of primary NIW)20252024
Monthly premiums97.3 %96.6 %
Single premiums2.7 %3.4 %
Annual premiums0.0 %0.0 %
Total
100 %100 %

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Primary NIW by type of mortgage
Three Months Ended March 31,
(% of primary NIW)20252024
Purchases94.4 %97.6 %
Refinances5.6 %2.4 %
Total
100 %100 %

We consider a variety of loan characteristics when assessing the risk of a loan. The following table provides information about loans with one or more of the following characteristics associated with our NIW: LTV ratios greater than 95%, mortgages with borrowers having FICO scores below 680, and mortgages with borrowers having DTI ratios greater than 45%, each attribute as determined at the time of loan origination.
Primary NIW by number of attributes discussed above
Three Months Ended March 31,
(% of primary NIW)20252024
One38.2 %37.1 %
Two or more4.7 %4.7 %

Insurance and risk in force
The amount of our IIF and RIF is impacted by the amount of NIW, cancellations, and principal payments received on our primary IIF during the period. Cancellation activity primarily results from loan payoff and refinancing activity, or borrowers achieving the required amount of home equity through loan amortization, principal curtailment and/or home price appreciation. Claim resolutions also impact cancellations but to a much lesser extent. Cancellations generally move inversely to the change in the direction of interest rates, although they generally lag a change in direction.

Annual Persistency
Our annual persistency was 84.7% at March 31, 2025 compared to 85.7% at March 31, 2024. Since 2018, our annual persistency ranged from a high of 86.3% at September 30, 2023 to a low of 60.7% at March 31, 2021. Our persistency rate is primarily affected by the level of current mortgage interest rates compared to the mortgage coupon rates on our IIF, which affects the vulnerability of the IIF to refinancing; and the current amount of equity that borrowers have in the homes underlying our IIF.
IIF and RIF
Three Months Ended March 31,
(In billions)20252024
NIW$10.2 $9.1 
Cancellations, principal payments, and other reductions
(11.8)(11.7)
Increase (decrease) in primary IIF$(1.6)$(2.6)
Direct primary IIF as of March 31,$293.8 $290.9 
Direct primary RIF as of March 31,$78.5 $76.8 

Credit profile of our primary RIF
Our 2009 and later books possess significantly improved risk characteristics when compared to our 2005-2008 books. Modification and refinance programs, such as HAMP and HARP, which expired at the end of 2016 and 2018, respectively, but have been replaced by other GSE modification programs, make outstanding loans more affordable to borrowers with the goal of reducing the number of foreclosures. As of March 31, 2025, loans associated with modification programs accounted for 2.9% of our total RIF, compared to 3.0% at December 31, 2024. Loans associated with 88.1% of all our modifications were current as of March 31, 2025.

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The following table sets forth certain statistics associated with our primary IIF and RIF as of March 31, 2025:
Primary insurance in force and risk in force by policy year
(in billions)
Insurance in Force (1)
Risk In Force (1)
Weighted Avg. Interest RateDelinquency Rate
Cede Rate % (2)
% of Original Remaining
Policy YearTotal% of TotalTotal% of Total
2004 and prior$1.1 0.4 %$0.3 0.4 %7.3 %12.4 %— %NM
2005-20088.5 2.9 %2.3 2.9 %7.0 %9.5 %— %3.5 %
2009-201925.4 8.7 %6.7 8.6 %4.3 %3.8 %— %6.5 %
202035.9 12.2 %9.8 12.5 %3.2 %1.4 %5.0 %31.4 %
202166.4 22.6 %18.2 23.2 %3.1 %1.8 %27.1 %56.3 %
202257.5 19.6 %15.4 19.7 %4.9 %2.0 %30.7 %77.5 %
202337.9 12.8 %9.8 12.4 %6.6 %1.3 %26.7 %82.4 %
202452.3 17.8 %13.6 17.4 %6.7 %0.5 %30.5 %93.1 %
20258.7 3.0 %2.3 2.9 %6.8 %0.0 %39.2 %99.4 %
Total$293.8 $78.5 
(1)May not foot due to rounding
(2)Cede Rate % is calculated as the risk in force ceded to our QSR transactions divided by the total risk in force.

CRT and Pool Insurance
In connection with the GSEs' CRT programs, an insurance subsidiary of MGIC provides insurance and reinsurance covering portions of the credit risk related to certain reference pools of mortgages acquired by the GSEs. Our RIF, as reported to us, related to these programs was approximately $443 million and $392 million as of March 31, 2025 and December 31, 2024, respectively.

MGIC has written no new pool insurance since 2008; however, MGIC may write pool risk in the future. Our direct pool risk in force was $220 million ($173 million on pool policies with aggregate loss limits and $47 million on pool policies without aggregate loss limits) at March 31, 2025 compared to $226 million ($177 million on pool policies with aggregate loss limits and $49 million on pool policies without aggregate loss limits) at December 31, 2024.

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Consolidated Results of Operations
The following section of the MD&A provides a comparative discussion of MGIC Investment Corporation’s Consolidated Results of Operations for the three months ended March 31, 2025 and 2024.

Revenues
Three Months Ended March 31,
(in thousands)
20252024% Change
Net premiums written$235,346 $233,800 1 
Net premiums earned$243,719 $242,644 0 
Investment income, net of expenses61,443 59,744 3 
Net gains (losses) on investments and other financial instruments741 (8,509)109 
Other revenue331 482 (31)
Total revenues
$306,234 $294,361 4 

Net premiums written and earned
Comparative quarterly results
Premiums earned for the three months ended March 31, 2025 were $243.7 million, compared with $242.6 million for the same period last year. Net premiums written for the three months ended March 31, 2025 were $235.3 million, compared with $233.8 million for the same period last year.

See “Overview - Factors Affecting Our Results” above for factors that influenced the amount of net premiums written and earned during the periods. See “Reinsurance Transactions” below for discussion of our ceded premiums written and earned.

Premium yields
Net premium yield is net premiums earned divided by average IIF during the period. The following table presents the key drivers of our net premium yield for each of the three months ended March 31, 2025 and March 31, 2024.
Premium Yield
Three Months Ended March 31,
(in basis points)
2025
2024
In force portfolio yield (1)
38.4 38.5 
Premium refunds0.0 0.1 
Accelerated earnings on single premium policies0.2 0.3 
Total direct premium yield38.6 38.9 
Ceded premiums earned, net of profit commission and assumed premiums (2)
(5.6)(5.7)
Net premium yield33.0 33.2 
(1) Total direct premiums earned, excluding premium refunds and accelerated premiums from single premium policy cancellations divided by average primary insurance in force.
(2) Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.5 bps for the three months ended March 31, 2025 and the three months ended March 31, 2024.

The following provides more detail on the key drivers of our net premium yield:
In force Portfolio Yield
è
The yield on our current IIF is impacted by the premium rates on our IIF. Premium rates are generally affected by risk characteristics on our NIW, the amount of capital we are required to hold, and competition in the industry.
Premium Refunds
è
Premium refunds are primarily driven by our estimate of refundable premiums on our delinquency inventory and claim activity. Our estimate of refundable premium on our delinquency inventory fluctuates with changes in our delinquency inventory and our estimate of the number of loans in our delinquency inventory that will result in a claim. Lower levels of claims received results in a lower level of premium refunds.

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Accelerated earnings on single premium policies
è
A low level of refinance transactions reduces the benefit from accelerated earned premium from cancellation of single premium policies prior to their estimated policy life.
Ceded premiums earned, net of profit commission and assumed premiums
èCeded premiums earned, net of profit commission adversely impact our net premium yield. Ceded premiums earned, net of profit commission, are associated with the QSR Transactions and the XOL Transactions. Assumed premiums consists primarily of premiums from GSE CRT programs. See “Reinsurance Transactions“ below for further discussion on our reinsurance transactions.
As discussed in our Risk Factor titled “Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses,” the private mortgage insurance industry is highly competitive and premium rates have declined over the past several years. With a higher persistency rate and continued high credit quality for NIW expected in 2025, we expect our in force portfolio premium yield to remain relatively flat during 2025 compared to 2024.

Reinsurance Transactions
Quota share reinsurance
Our quota share reinsurance affects various lines of our statements of operations and therefore we believe it should be analyzed by reviewing its total effect on our pre-tax income, described as follows.
è
We cede a fixed percentage of premiums earned and received on insurance covered by the transactions.
è
We receive the benefit of a profit commission through a reduction in the premiums we cede. The profit commission varies inversely with the level of losses incurred on a “dollar for dollar” basis and can be eliminated at loss levels higher than what we have experienced on the QSR Transactions. As a result, lower levels of ceded losses incurred result in less benefit from ceded losses incurred and a higher profit commission; higher levels of ceded losses incurred result in more benefit from ceded losses incurred and a lower profit commission (or for certain levels of accident year loss ratios, its elimination).
èWe receive the benefit of a ceding commission through a reduction in underwriting expenses equal to 20% of premiums ceded (before the effect of the profit commission).
è
We cede a fixed percentage of losses incurred on insurance covered by the transactions.

The following table provides information related to our QSR Transactions for each of the three months ended and as of March 31, 2025 and March 31, 2024.
Quota Share Reinsurance
Three Months Ended March 31,
(Dollars in thousands)20252024
Ceded premiums written and earned, net of profit commission$29,943 $28,715 
% of direct premiums written11 %10 %
% of direct premiums earned11 %10 %
Profit commission$28,695 $24,584 
Ceding commissions$11,727 $10,660 
Ceded losses incurred$6,431 $6,454 
As of March 31,
Mortgage insurance portfolio:20252024
Ceded RIF (Dollars in millions)
2021 QSR4,310 5,867 
2022 QSR4,167 4,607 
2023 QSR2,082 2,344 
2024 QSR
3,519 609 
2025 QSR
584 — 
Credit Union QSR2,877 2,645 
Total ceded RIF$17,539 $16,072 

The increase in profit commission for the three months ended March 31, 2025, was primarily driven by an increase in the percentage of our IIF covered by the QSR Transactions as discussed below. Ceded losses incurred are impacted by the delinquencies covered by our QSR Transactions, our estimates of payments that will be ultimately made on those delinquencies, and claim payments covered by our QSR Transactions.

We executed a 40% QSR transaction with a group of unaffiliated reinsurers covering most of our new insurance written in 2026.

MGIC Investment Corporation - Q1 2025 | 46

Covered risk
The percentages of our NIW, new risk written, IIF, and RIF subject to our QSR Transactions as shown in the following table will vary from period to period in part due to the mix of our risk written during the period and the number of active QSR Transactions.
Quota Share Reinsurance
Three Months Ended March 31,
20252024
NIW subject to QSR Transactions86.8 %87.7 %
New Risk Written subject to QSR Transactions93.0 %93.3 %
IIF subject to QSR Transactions69.5 %62.1 %
RIF subject to QSR Transactions72.7 %65.7 %

The increase in IIF and RIF subject to QSR Transactions was primarily due to the increase in transactions subject to our 2024 QSR Transaction.

As of March 31, 2025, the weighted average coverage percentage of our QSR transactions was 31% based on RIF.

Excess of loss reinsurance
We have XOL Transactions with panels of unaffiliated reinsurers executed through the traditional reinsurance market (“Traditional XOL Transaction”) and with unaffiliated special purpose insurers (“Home Re Transactions”).

For policies covered by our Traditional XOL Transactions, we retain the first layer of the aggregate losses paid, and the reinsurers will then provide second layer coverage up to the outstanding reinsurance coverage amount. We retain losses paid in excess of the outstanding reinsurance coverage amount. The reinsurance coverage is subject to adjustment based on the risk characteristics of the covered loans until the initial excess of loss reinsurance coverage layer has been finalized.

The Home Re Transactions are executed through the issuance of insurance linked notes (“ILNs”). As of March 31, 2025 our Home Re Transactions provided $763.4 million of loss coverage on a portfolio of policies having an in force date from August 1, 2020 through December 31, 2021, and from June 1, 2022 through August 31, 2023; all dates inclusive. For this reinsurance coverage, we retain the first layer of the respective aggregate losses paid, and a Home Re Entity will then provide second layer coverage up to the outstanding reinsurance amount.

The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions, as of March 31, 2025, are as follows.
($ In thousands)
Initial Attachment % (1)
Initial Detachment % (2)
Current Attachment % (1)
Current Detachment % (2)
PMIERs Required Asset Credit
2024 Traditional XOL
2.67%6.67%2.74%6.84%$180,050 
2023 Traditional XOL2.91%6.91%3.35%7.54%84,069 
2022 Traditional XOL2.60%7.10%3.08%7.63%114,226 
2020 Traditional XOL
0.75%3.50%0.76%3.57%242,092 
Home Re 2023-1
3.00%6.75%3.47%7.25%269,936 
Home Re 2022-12.75%6.75%4.01%7.52%219,612 
Home Re 2021-22.10%6.50%4.22%7.28%98,756 
Home Re 2021-12.25%6.50%5.55%7.56%20,484 
(1) The percentage represents the cumulative losses as a percentage of adjusted risk in force that MGIC retains prior to the XOL taking losses.
(2) The percentage represents the cumulative losses as a percentage of adjusted risk in force that must be reached before MGIC begins absorbing losses after the XOL layer.

Ceded premiums on our XOL Transactions were $14.7 million for the three months ended March 31, 2025, and $16.1 million for the three months ended March 31, 2024.

See Note 4 - “Reinsurance" to our consolidated financial statements for additional discussion of our QSR and XOL Transactions.


MGIC Investment Corporation - Q1 2025 | 47

Investment income
Comparative quarterly results
Net investment income in the three months ended March 31, 2025 and 2024 was $61.4 million and $59.7 million, respectively.

Losses and expenses
Three Months Ended March 31,
(In thousands)
20252024% Change
Losses incurred, net$9,591 $4,555 111 
Amortization of deferred policy acquisition costs1,657 2,009 (18)
Other underwriting and operating expenses, net51,406 59,018 (13)
Interest expense8,899 8,899 — 
Total losses and expenses
$71,553 $74,481 (4)

Losses incurred, net
As discussed in “Critical Accounting Estimates” in our 2024 10-K MD&A, we establish case loss reserves for future claims on delinquent loans that were reported to us as two payments past due and have not become current or resulted in a claim payment. Such loans are referred to as being in our delinquency inventory. Case loss reserves are established based on estimating the number of loans in our delinquency inventory that will result in a claim payment, which is referred to as the claim rate, and further estimating the amount of the claim payment, which is referred to as claim severity.

IBNR reserves are established for estimated losses from delinquencies we estimate have occurred prior to the close of an accounting period but have not yet been reported to us. IBNR reserves are also established using estimated claim rates and claim severities.

Estimation of losses is inherently judgmental. The conditions that affect the claim rate and claim severity include the current and future state of the domestic economy, including unemployment and the current and future strength of local housing markets; exposure on insured loans; the amount of time between delinquency and claim filing (all else being equal, the longer the period between delinquency and claim filing, the greater the severity); and curtailments and rescissions. The actual amount of the claim payments may be substantially different than our loss reserve estimates. Our estimates could be adversely affected by several factors, including a deterioration of regional or national economic conditions, including unemployment, leading to a reduction in borrowers’ income and thus their ability to make mortgage payments, the impact of past and future government initiatives and actions taken by the GSEs, and a drop in housing values which may affect borrower willingness to continue to make mortgage payments when the value of the home is below the mortgage balance. Loss reserves in future periods will also be dependent on the number of loans reported to us as delinquent.

Generally, losses follow a seasonal trend in which the second half of the year has weaker credit performance than the first half, with higher new notice activity and a lower cure rate. The state of the economy, local housing markets, pandemics, natural disasters, and various other factors may result in delinquencies not following the typical pattern.

For information on how pandemics and natural disasters could affect losses incurred, net see our Risk Factors titled “Pandemics, hurricanes and other disasters may adversely impact our results of operations and financial condition". As discussed in our Risk Factor titled “Because we establish loss reserves only upon a loan delinquency rather than based on estimates of our ultimate losses on risk in force, losses may have a disproportionate adverse effect on our earnings in certain periods” if we have not received a notice of delinquency with respect to a loan and if we have not estimated the loan to be delinquent as of March 31, 2025 through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan.

Comparative quarterly results
Losses incurred, net for the first quarter of 2025 were $9.6 million, an increase of $5.0 million compared to the first quarter of 2024 losses incurred, net of $4.6 million. While new delinquency notices added approximately $59.5 million for the three months ended March 31, 2025, our re-estimation of loss reserves on previously received delinquency notices resulted in favorable development of approximately $49.9 million. For three months ended March 31, 2024, new delinquency notices added approximately $53.4 million, offset by our re-estimation of loss reserves on previously received delinquency notices resulting in favorable development of approximately $48.9 million. The favorable development for both periods primarily resulted from a decrease in the expected claim rate on previously received delinquencies. Home price appreciation experienced in recent years has allowed some borrowers to cure their delinquencies through the sale of their property.


MGIC Investment Corporation - Q1 2025 | 48

Composition of losses incurred
Three Months Ended March 31,
(in thousands)
20252024
Current year / New notices$59,497 $53,436 
Prior year reserve development(49,906)(48,881)
Losses incurred, net
$9,591 $4,555 

Loss ratio
The loss ratio is the ratio, expressed as a percentage, of losses incurred, net to net premiums earned. The loss ratio was 3.9% for the three months ended March 31, 2025, compared with 1.9% for the three months ended March 31, 2024.

Delinquency inventory
A rollforward of our primary delinquency inventory for the three months ended March 31, 2025 and 2024 appears in the table below. The information concerning new notices and cures is compiled from monthly reports received from loan servicers. The level of new notice and cure activity reported in a particular month can be influenced by, among other things, the date on which a servicer generates its report, the number of business days in a month and transfers of servicing between loan servicers.
Delinquency inventory rollforward
Three Months Ended March 31,
20252024
Delinquency inventory at beginning of period26,791 25,650 
New notices12,965 12,177 
Cures(13,981)(13,314)
Paid claims(312)(352)
Rescissions and denials(25)(19)
Delinquency inventory at end of period25,43824,142

New notice activity
The table below presents our new delinquency notices received, delinquency inventory, and the average number of missed payments for the loans in our delinquency inventory by policy year:
New notices and delinquency inventory during the three months ended and as of:
March 31, 2025
Policy YearNew Delinquency Notices Received in the Three Months EndedDelinquency InventoryAvg. Number of Missed Payments of Delinquency Inventory
2004 and prior695 1,692 15
2005-20082,138 5,429 15
2009-2015344 874 10
2016341 702 8
2017576 1,098 8
2018669 1,483 8
2019730 1,378 7
20201,226 2,213 6
20212,474 4,379 6
20222,051 3,804 6
2023991 1,572 5
2024728 812 4 
20252 2 2 
Total12,965 25,438 9
Claim rate on new notices (1)
7.5 %

MGIC Investment Corporation - Q1 2025 | 49

March 31, 2024
Policy Year
New Delinquency Notices Received in the Three Months Ended
Delinquency InventoryAvg. Number of Missed Payments of Delinquency Inventory
2004 and prior750 1,888 18
2005-20082,484 6,377 17
2009-2015529 1,245 11
2016426 846 9
2017621 1,220 9
2018757 1,591 8
2019799 1,459 7
20201,308 2,242 6
20212,405 4,042 6
20221,605 2,729 5
2023493 503 3
2024— — — 
Total12,177 24,142 11
Claim rate on new notices (1)
7.5 %
(1) Claim rate at the time new delinquency notices are received as a year to date weighted average rate.

Claims severity
Factors that impact claim severity include:
èeconomic conditions at time of claim filing, including home prices compared to home prices at the time of placement of coverage,
èexposure of the loan, which is the unpaid principal balance of the loan times our insurance coverage percentage,
èlength of time between delinquency and claim filing (which impacts the amount of interest and expenses, with a longer time between default and claim filing generally increasing severity), and
ècurtailments.

As discussed in Note 11 - “Loss Reserves,” our loss reserves estimates take into consideration trends over time, because the development of the delinquencies may vary from period to period without establishing a meaningful trend. In recent years, an increase in third party property sales prior to claim settlement has resulted in a decrease in the average claim paid and the average claim paid as a percentage of exposure. We expect average claims paid as a percentage of exposure to increase as we receive delinquencies that have not experienced the same level of home price appreciation. The extent and timing of these increases are uncertain.

The majority of loans insured prior to 2014 (which represent 32% of the loans in the delinquency inventory) are covered by master policy terms that, except under certain circumstances, do not limit the number of years that an insured can include interest when filing a claim. Under our current master policy terms, an insured can include accumulated interest when filing a claim only for the first three years the loan is delinquent. In each case, the insured must comply with its obligations under the terms of the applicable master policy.
Claims severity trend for claims paid during the period
PeriodAverage exposure on claim paidAverage claim paid% Paid to exposureAverage number of missed payments at claim received date
Q1 2025
55,297 38,826 70.2 %34 
Q4 2024
51,368 34,042 66.3 %35 
Q3 2024
47,779 27,249 57.0 %34 
Q2 2024
49,623 30,578 61.6 %36 
Q1 2024
45,284 28,267 62.4 %40 
Note: Table excludes material settlements. Settlements include amounts paid in settlement disputes for claims paying practices and/or commutations of policies.


MGIC Investment Corporation - Q1 2025 | 50

The table below shows the number of consecutive months a borrower is delinquent. Historically as a delinquency ages it is more likely to result in a claim.
Primary delinquency inventory - consecutive months delinquent
March 31, 2025December 31, 2024March 31, 2024
3 months or less8,497 10,352 7,930 
4-11 months9,907 9,281 9,010 
12 months or more (1)
7,034 7,158 7,202 
Total 25,438 26,791 24,142 
3 months or less33 %38 %33 %
4-11 months39 %35 %38 %
12 months or more28 %27 %29 %
Total100 %100 %100 %
(1)Approximately 26%, 27%, and 35% of the primary delinquency inventory delinquent for 12 consecutive months or more has been delinquent for at least 36 consecutive months as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

The length of time a loan is in the delinquency inventory can differ from the number of payments that the borrower has not made or is considered delinquent. These differences typically result from a borrower making monthly payments that do not result in the loan becoming fully current. Generally, a defaulted loan with more missed payments is more likely to result in a claim. The number of payments that a borrower is delinquent is shown in the following table.
Primary delinquency inventory - number of payments delinquent
March 31, 2025
December 31, 2024March 31, 2024
3 payments or less12,319 14,135 11,620 
4-11 payments8,788 8,392 7,849 
12 payments or more (1)
4,331 4,264 4,673 
Total25,438 26,791 24,142 
3 payments or less48 %53 %48 %
4-11 payments35 %31 %33 %
12 payments or more17 %16 %19 %
Total100 %100 %100 %
(1)Approximately 22%, 25%, and 32% of the primary delinquency inventory with 12 payments or more delinquent has at least 36 payments delinquent as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

Net losses and LAE paid
Net losses and LAE paid in the three months ended March 31, 2025 were consistent with the same periods in the prior year. The primary average claim paid can vary materially from period to period based upon a variety of factors, including the local market conditions, average loan amount, average coverage percentage, the amount of time between delinquency and claim filing, and our loss mitigation efforts on loans for which claims are paid.

The following table presents our net losses and LAE paid for the three months ended March 31, 2025 and 2024.
Net losses and LAE paid
Three Months Ended March 31,
(In millions)20252024
Direct primary (excluding settlements)
$12 $9 
NPL settlements
— — 
Reinsurance(2)— 
LAE and other
2 1 
Net losses and LAE paid$12 $10 
Average Claim Paid$38,826 $28,267 
Net losses and LAE paid have been positively impacted by home price appreciation in recent years that has allowed more delinquent loans to cure through the sale of the property. In addition, an increase in third party property sales prior to claim settlement has resulted in a decrease in the average claim paid on the claims we do receive. We expect net losses and LAE paid to increase, however, the magnitude and timing of the increases are uncertain.



MGIC Investment Corporation - Q1 2025 | 51


Loss reserves
The gross reserves at March 31, 2025, December 31, 2024, and March 31, 2024 appear in the table below.
Gross reserves
March 31, 2025December 31, 2024March 31, 2024
Primary (in millions):
Direct case loss reserves
$404 $402 $447 
Direct IBNR and LAE reserves58 58 54 
Total primary direct loss reserves$462 $460 $501 
Ending delinquent inventory (count based)
25,438 26,791 24,142 
Percentage of loans delinquent (delinquency rate)2.30 %2.40 %2.15 %
Average total primary loss reserves per delinquency
$18,167 $17,159 $20,761 
Primary claims received inventory included in ending delinquent inventory (count based)
304 319 266 
Other gross reserves (1) (in millions)
$3 $3 $3 
(1)Other Gross Reserves includes direct and assumed reserves that are not included within our primary loss reserves.  


The primary delinquency inventory for the top 15 jurisdictions (based on March 31, 2025 delinquency inventory) at March 31, 2025, December 31, 2024 and March 31, 2024 appears in the following table.
Primary delinquency inventory by jurisdiction
March 31, 2025December 31, 2024March 31, 2024
Florida *
2,338 2,648 1,929 
Texas
2,031 2,207 1,920 
Illinois *1,664 1,762 1,604 
California
1,542 1,499 1,325 
Pennsylvania *1,390 1,504 1,382 
Ohio*
1,173 1,268 1,166 
New York *1,172 1,229 1,267 
Michigan1,171 1,231 1,081 
Georgia999 1,025 899 
North Carolina
756 880 664 
New Jersey *733 753 733 
Indiana *
651 690 614 
Maryland
641 655 641 
Minnesota612 616 544 
South Carolina *
511 597 450 
All other jurisdictions8,054 8,227 7,923 
Total25,438 26,791 24,142 
Note: Asterisk denotes jurisdictions in the table above that predominately use a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed.

The primary average RIF on delinquent loans at March 31, 2025, December 31, 2024 and March 31, 2024 for the top 5 jurisdictions (based on the March 31, 2025 delinquency inventory) appears in the following table.
Primary average RIF - delinquent loans
March 31, 2025December 31, 2024March 31, 2024
Florida
$69,480 $70,377 $65,769 
Texas
65,308 63,943 60,398 
Illinois46,242 46,311 44,990 
California
112,612 109,226 103,582 
Pennsylvania46,072 45,227 43,913 
All other jurisdictions57,680 56,525 55,789 
All jurisdictions$61,323 $60,148 $58,179 
The primary average RIF on all loans was $70,973, $70,475, and $68,379 at March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

MGIC Investment Corporation - Q1 2025 | 52

The primary delinquency inventory by policy year at March 31, 2025, December 31, 2024 and March 31, 2024 appears in the following table.
Primary delinquency inventory by policy year
March 31, 2025December 31, 2024March 31, 2024
Policy year:
2004 and prior1,692 1,793 1,888 
2004 and prior %7 %7 %8 %
2005 - 2008
5,429 5,857 6,377 
2005 - 2008 %21 %22 %26 %
2009 - 2015
874 976 1,245 
2009 - 2015 %3 %3 %5 %
2016702 772 846 
20171,098 1,205 1,220 
20181,483 1,628 1,591 
20191,378 1,505 1,459 
20202,213 2,421 2,242 
20214,379 4,796 4,042 
20223,804 3,803 2,729 
20231,572 1,464 503 
2024812 571 — 
20252 — — 
2016 and later %69 %68 %61 %
Total25,438 26,791 24,142 
On our primary business, the highest claim frequency years have typically been the third and fourth year after loan origination. However, the pattern of claim frequency can be affected by many factors, including persistency and deteriorating economic conditions. Deteriorating economic conditions can result in increasing claims following a period of declining claims. As of March 31, 2025, 52% of our primary RIF was written subsequent to December 31, 2021, 76% of our primary RIF was written subsequent to December 31, 2020, and 88% of our primary RIF was written subsequent to December 31, 2019.

Underwriting and other expenses, net
Underwriting and other expenses includes items such as employee compensation costs, outside service expenses, depreciation and maintenance expense, and premium taxes, and are reported net of ceding commissions.

Underwriting and other expenses, net for the three months ended March 31, 2025 and 2024, were $51.4 million and $59.0 million, respectively. The decrease in underwriting and other expenses, net was primarily due to a decrease in employee costs. See Note 15 - “Segment Reporting,” to our consolidated financial statements for additional discussion of significant segment expenses.
Three Months Ended March 31,
20252024
Underwriting expense ratio 22.5 %25.7 %
The underwriting expense ratio is the ratio, expressed as a percentage, of the underwriting and operating expenses, net and amortization of DAC to net premiums written. The underwriting expense ratio for the three months ended March 31, 2025, decreased compared with the same period in the prior year primarily due to a decrease in underwriting and other expenses, net, and an increase in net premiums written.

Provision for income taxes and effective tax rate
Income tax provision and effective tax rate
Three Months Ended March 31,
(In thousands, except rate)
20252024
Income before tax$234,681 $219,880 
Provision for income taxes$49,221 $45,783 
Effective tax rate21.0 %20.8 %
Our effective tax rate for the three months ended March 31, 2025 and 2024 approximated the statutory tax rate of 21%. We expect a modest decrease in our effective tax rate for the remainder of 2025 compared with 2024 due to purchases of transferable federal tax credits.

MGIC Investment Corporation - Q1 2025 | 53

Balance Sheet Review
The following sections mainly focus on the major developments on our Consolidated Balance Sheet since December 31, 2024.

Consolidated balance sheets - Assets
(in thousands)March 31, 2025
December 31, 2024
% Change
Investments$5,901,057 $5,867,560 1 
Cash and cash equivalents206,988 229,485 (10)
Reinsurance recoverable on loss reserves (1)
51,864 47,281 10 
Deferred incomes taxes, net (1)
46,196 69,875 (34)
Other assets329,031 333,034 (1)
Total Assets$6,535,136 $6,547,235 0 
(1) See "Liabilities and Equity" section below for further discussion.

Investments - Our investment portfolio primarily consists of a diverse mix of highly rated fixed income securities.

The average duration and investment yield of our investment portfolio as of March 31, 2025 and December 31, 2024 are shown in the table below.

Portfolio duration and embedded investment yield
March 31, 2025
December 31, 2024
Effective duration (in years)
4.03.9
Pre-tax yield (1)
4.0%4.0%
After-tax yield (1)
3.2%3.2%
(1)Embedded investment yield is calculated on a yield-to-worst basis.

The security ratings of our fixed income investments as of March 31, 2025 and December 31, 2024 are shown in the table below.

Fixed income security ratings
Security Ratings (1)
March 31, 2025December 31, 2024
AAA
11%10%
AA
34%34%
A
35%36%
BBB
20%20%
(1)Ratings are provided by one or more of: Moody's, Standard & Poor's and Fitch Ratings. If three ratings are available, the middle rating is used, otherwise the lowest rating is used.


Cash and cash equivalents - Our cash and cash equivalents balance decreased to $207.0 million as of March 31, 2025, from $229.5 million as of December 31, 2024, as cash used in financing activities was only partially offset by net cash generated by operating and investing activities.








MGIC Investment Corporation - Q1 2025 | 54

Consolidated balance sheets - Liabilities and equity
(in thousands)March 31, 2025
December 31, 2024
% Change
Loss reserves$465,033 $462,662 1 
Unearned premiums111,987 120,360 (7)
Long-term debt645,035 644,667 0 
Other liabilities173,197 147,171 18 
Total Liabilities$1,395,252 $1,374,860 1 
Common stock240,194 248,449 (3)
Paid-in capital1,796,475 1,808,236 (1)
Accumulated other comprehensive income (loss), net of tax(236,445)(288,162)18 
Retained earnings3,339,660 3,403,852 (2)
Shareholders’ equity$5,139,884 $5,172,375 (1)

Loss reserves and Reinsurance recoverable on loss reserves - Our loss reserves include estimates of losses and settlement expenses on (1) loans in our delinquency inventory (known as case reserves), (2) IBNR delinquencies, and (3) LAE. Our gross reserves are reduced by reinsurance recoverable on loss reserves to calculate a net reserve balance. Loss reserves increased to $465.0 million as of March 31, 2025, from $462.7 million as of December 31, 2024. Reinsurance recoverables on loss reserves were $51.9 million and $47.3 million as of March 31, 2025 and December 31, 2024, respectively. The reinsurance recoverable is impacted by the mix of delinquencies covered by our QSR Transactions.

Unearned premiums - Our unearned premium decreased to $112.0 million as of March 31, 2025 from $120.4 million as of December 31, 2024 primarily due to the run-off of our existing portfolio of single premium policies outpacing the level of NIW from single premium policies.

Income Taxes - Our current income tax liability was $54.4 million as of March 31, 2025 and is included as a component of other liabilities in our consolidated balance sheets. Our current income tax receivable was $7.1 million as of December 31, 2024 and is included as a component of other assets in our consolidated balance sheets. The increase in our current income tax liability was primarily due to the recording of our first quarter income tax provision with respect to first quarter income while our first quarter estimated income tax payment is not remitted until the second quarter of 2025. Our net deferred tax asset was $46.2 million and $69.9 million at March 31, 2025 and December 31, 2024, respectively. The change in our deferred income tax asset was primarily due to the change in the fair market value of our investment portfolio during the three months ended March 31, 2025. We owned $946.3 million and $968.2 million of tax and loss bonds at March 31, 2025 and December 31, 2024, respectively.

Shareholder’s equity - The decrease in shareholders’ equity primarily relates to repurchases of our common stock and dividends paid to shareholders, partially offset by net income in the three months ended March 31, 2025.

MGIC Investment Corporation - Q1 2025 | 55

Liquidity and Capital Resources

Consolidated Cash Flow Analysis
We have three primary types of cash flows: (1) operating cash flows, which consist mainly of cash generated by our insurance operations and income earned on our investment portfolio, less amounts paid for claims, interest expense and operating expenses, (2) investing cash flows related to the purchase, sale and maturity of investments and purchases of property and equipment and (3) financing cash flows generally from activities that impact our capital structure, such as changes in debt and shares outstanding, and dividend payments. The following table summarizes our consolidated cash flows from operating, investing and financing activities:
Summary of consolidated cash flows
Three Months Ended March 31,
(In thousands)20252024
Total cash provided by (used in):
Operating activities$223,654 $190,537 
Investing activities32,375 25,969 
Financing activities(277,963)(147,582)
Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents$(21,934)$68,924 
Net cash provided by operating activities for the three months ended March 31, 2025 increased when compared with the same period of 2024 primarily due to a decrease in other underwriting and operating expenses, net, and an increase in investment income, and an increase in premiums written, partially offset by an increase in losses paid, net.

We also have purchase obligations totaling approximately $11.7 million which consist primarily of contracts related to our continued investment in our information technology infrastructure in the normal course of business. The majority of these obligations are under contracts that give us cancellation rights with notice. In the next twelve months we anticipate we will pay approximately $7.8 million for our purchase obligations.

Future contributions to our qualified pension plan are impacted by the net funded status (the market value of our plan assets compared to the projected benefit obligation).

Net cash provided by investing activities for the three months ended March 31, 2025 and 2024, primarily reflects sales and maturities of fixed income securities that exceeded purchases of fixed income securities during the period.

Net cash used in financing activities for the three months ended March 31, 2025 and 2024, primarily reflects repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.

Capitalization
Debt - holding company
As of March 31, 2025, our holding company’s debt obligations were $650 million in aggregate principal amount consisting of our 5.25% Notes due in 2028. See Note 7 – “Debt” to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024 for additional information about the terms of our indebtedness.

Liquidity analysis - holding company
As of March 31, 2025 and December 31, 2024, we had approximately $824 million and $1.1 billion, respectively, in cash and investments at our holding company. These resources are maintained primarily to service our debt interest expense, pay debt maturities, repurchase shares, pay dividends to shareholders, and to settle intercompany obligations. While these assets are held, we generate investment income that serves to offset a portion of our cash requirements. The payment of dividends from MGIC are the principal source of holding company cash inflow and their payment is restricted by insurance regulation. See Note 14 - “Statutory Information” to our consolidated financial statement for additional information about MGIC’s dividend restrictions. The payment of dividends from MGIC is also influenced by our view of the appropriate level of excess PMIERs Available Assets to maintain, which can change over time. Raising capital in the public markets is another potential source of holding company liquidity. The ability to raise capital in the public markets is subject to prevailing market conditions, investor demand for the securities to be issued, and our deemed creditworthiness.

In the three months ended March 31, 2025, we repurchased 9.2 million shares of our common stock for $224.3 million. As of March 31, 2025 we had remaining authorization to repurchase $232.9 million under our existing share repurchase program. Through April 25, 2025, we repurchased an additional 2.8 million shares totaling $65.8 million under the remaining authorization through December 31, 2026. Also in April of 2025, our Board of Directors approved a share repurchase program, authorizing us to repurchase up to $750 million of common stock prior to December 31, 2027.

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In the three months ended March 31, 2025, we paid $32.5 million in dividends to shareholders. On April 24, 2025, the Board of Directors declared a quarterly cash dividend to the holders of the company’s common stock of $0.13 per share to shareholders of record on May 8, 2025.

Over the next twelve months the principal demand on our holding company resources will be interest payments on our 5.25% Notes approximating $34.0 million and dividends to shareholders. We believe our holding company has sufficient sources of liquidity to meet its payment obligations for the foreseeable future.

We may also use holding company cash to repurchase additional shares, however, our repurchases are subject to variation based on a variety of factors including our capital and liquidity position and the share price of our common stock. Such repurchases may be material, may be made for cash (funded by debt) and/or exchanges for other securities, and may be made in open market purchases (including through 10b5-1 plans), privately negotiated acquisitions or other transactions. See "Overview-Capital" of this MD&A for a discussion of our share repurchase programs.

Significant cash and investments inflows at our holding company during the three months ended March 31, 2025:
•$10.0 million of investment income.
Significant cash outflows at our holding company during the three months ended March 31, 2025:
•$225.2 million of net share repurchase transactions,
•$33.9 million of cash dividends paid to shareholders, and
•$17.1 million of interest payments on our outstanding debt obligation.

The net unrealized gains on our holding company investment portfolio were approximately $2.0 million at March 31, 2025, and the portfolio had an effective duration of approximately 0.8 years.

MGIC did not pay dividends to our holding company in the three months ended March 31, 2025. Future dividend payments from MGIC to the holding company will be determined in consultation with the board, and after considering any updated estimates about our business. We ask the Wisconsin OCI not to object before MGIC pays dividends to the holding company. In April 2025, MGIC paid a $400 million dividend to our holding company.

Debt at subsidiaries
MGIC did not have any outstanding debt obligations at March 31, 2025. MGIC is a member of the FHLB, which provides MGIC access to an additional source of liquidity via a secured lending facility. We may borrow from the FHLB at any time.

Capital Adequacy
PMIERs
As of March 31, 2025, MGIC’s Available Assets under the PMIERs totaled approximately $5.9 billion, an excess of approximately $2.6 billion over its Minimum Required Assets; and MGIC is in compliance with the requirements of the PMIERs and eligible to insure loans delivered to or purchased by the GSEs. Our reinsurance transactions provided an aggregate of approximately $2.4 billion of capital credit under the PMIERs as of March 31, 2025. Refer to Note 4 - “Reinsurance” to our consolidated financial statements for additional information on our reinsurance transactions.

The table below presents the PMIERS capital credit for our reinsurance transactions.

PMIERs - Reinsurance Credit
(In millions)March 31, 2025December 31, 2024
QSR Transactions$1,210 $1,177 
Home Re Transactions609 666 
Traditional XOL Transactions620 388 
Total capital credit for Reinsurance Transactions$2,439 $2,231 

The PMIERs generally require us to hold significantly more Minimum Required Assets for delinquent loans than for performing loans and the Minimum Required Assets required to be held increases as the number of payments missed on a delinquent loan increases. Refer to “Overview - Capital - GSEs” of this MD&A and our risk factor titled “We may not continue to meet the GSEs’ private mortgage insurer eligibility requirements and our returns may decrease if we are required to maintain more capital in order to maintain our eligibility” for further discussion of PMIERs.

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Risk-to-capital
We compute our risk-to-capital ratio on a separate company statutory basis, as well as on a combined insurance operations basis. The risk-to-capital ratio is our net RIF divided by our policyholders’ position. Our net RIF includes both primary and pool risk in force, net of reinsurance and excludes risk on policies that are currently in default and for which case loss reserves have been established and the risk covered by reinsurance. The risk amount includes pools of loans with contractual aggregate loss limits and without these limits. MGIC’s policyholders’ position consists primarily of statutory policyholders’ surplus (which generally changes due to statutory net income/loss and dividends paid, among other things), plus the statutory contingency loss reserve. The statutory contingency loss reserve is reported as a liability on the statutory balance sheet. A mortgage insurance company is required to make annual additions to a contingency loss reserve of approximately 50% of earned premiums. These contributions must generally be maintained for a period of ten years. However, with regulatory approval a mortgage insurance company may make early withdrawals from the contingency loss reserve when incurred losses exceed 35% of earned premiums in a calendar year.

The table below presents our risk-to-capital calculation:
Risk-to-capital - MGIC
(In millions, except ratio)March 31, 2025December 31, 2024
RIF - net (1)
$58,440 $58,213 
Statutory policyholders’ surplus1,135 973 
Statutory contingency loss reserve4,858 4,833 
Statutory policyholders’ position$5,993 $5,806 
Risk-to-capital
9.8:1
10.0:1
(1)RIF – net, as shown in the table above is net of reinsurance and exposure on policies currently delinquent ($1.7 billion at March 31, 2025 and $1.8 billion at December 31, 2024) for which loss reserves have been established.

For additional information regarding regulatory capital see Note 14 – “Statutory Information” to our consolidated financial statements as well as our Risk Factor titled “State Capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis.”

Financial Strength Ratings
Financial strength ratings are published by third-party rating agencies as an independent opinion of an insurer’s financial strength and ability to meet ongoing insurance and contract obligations. The financial strength ratings for MGIC and MAC are listed below:
MGIC financial strength ratings
Rating AgencyRatingOutlook
Moody’s Investor ServicesA3
Positive
Standard and Poor’s Rating Services
A-
Stable
A.M. Best
A
Stable
MAC financial strength ratings
Rating AgencyRatingOutlook
Standard and Poor's Rating ServicesA-Stable
A.M. BestAStable

For further information about the importance of MGIC’s ratings, see our Risk Factor titled “Competition or changes in our relationships with our customers could reduce our revenues, reduce our premium yields and / or increase our losses.”


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Forward Looking Statements and Risk Factors
General: Our business, results of operations, and financial condition could be affected by the Risk Factors referred to under “Location of Risk Factors” below. These Risk Factors are an integral part of Management’s Discussion and Analysis.

These factors may also cause actual results to differ materially from the results contemplated by forward looking statements that we may make. Forward looking statements consist of statements which relate to matters other than historical fact. Among others, statements that include words such as we “believe,” “anticipate” or “expect,” or words of similar import, are forward looking statements. These Risk Factors speak only as of the date of this filing and are subject to change without notice as the Company cannot predict all risks relating to this evolving set of events. We are not undertaking any obligation to update any forward looking statements we may make even though these statements may be affected by events or circumstances occurring after the forward looking statements were made. Therefore, no reader of this document should rely on these statements being current as of any time other than the time at which this document was filed with the Securities and Exchange Commission.

While we communicate with security analysts from time to time, it is against our policy to disclose to them any material non-public information or other confidential information. Accordingly, investors should not assume that we agree with any statement or report issued by any analyst irrespective of the content of the statement or report, and such reports are not our responsibility.

Location of Risk Factors: The Risk Factors are in Item 1 A of our Annual Report on Form 10-K for the year ended December 31, 2024, as supplemented by Part II, Item 1 A of this quarterly report on form 10Q. The Risk Factors in the 10-K, as supplemented by this 10‑Q and through updating of various statistical and other information, are reproduced in Exhibit 99 to this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk
Our investment portfolio is essentially a fixed income portfolio and is exposed to market risk. Important drivers of the market risk are credit spread risk and interest rate risk.

Credit spread risk is the risk that we will incur a loss due to adverse changes in credit spreads. Credit spread is the additional yield on fixed income securities above the risk-free rate (typically referenced as the yield on U.S. Treasury securities) that market participants require to compensate them for assuming credit, liquidity and/or prepayment risks.
We manage credit risk via our investment policy guidelines which primarily place our investments in investment grade securities and limit the amount of our credit exposure to any one issue, issuer and type of instrument. Guideline and investment portfolio detail is available in "Business – Section E, Investment Portfolio" in Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2024.

Interest rate risk is the risk that we will incur a loss due to adverse changes in interest rates relative to the characteristics of our interest bearing assets.

One of the measures used to quantify this exposure is effective duration. Effective duration measures the price sensitivity of the assets to the changes in spreads. At March 31, 2025, the effective duration of our fixed income investment portfolio was 4.0 years, which means that an instantaneous parallel shift in the yield curve of 100 basis points would result in a change of 4.0% in the fair value of our fixed income portfolio. For an upward shift in the yield curve, the fair value of our portfolio would decrease and for a downward shift in the yield curve, the fair value would increase. See Note 7 – “Investments” to our consolidated financial statements for additional disclosure surrounding our investment portfolio.

Item 4. Controls and Procedures
Evaluation of disclosure controls and procedures
Our management, with the participation of our principal executive officer and principal financial officer, has evaluated our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our principal executive officer and principal financial officer concluded that such controls and procedures were effective as of the end of such period.

Changes in internal control over financial reporting
There were no changes in our internal control over financial reporting that occurred during the first quarter of 2025 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.


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PART II. OTHER INFORMATION

Item 1. Legal Proceedings
Certain legal proceedings arising in the ordinary course of business may be filed or pending against us from time to time. For information about such legal proceedings, you should review Note 5 - “Litigation and Contingencies” to our consolidated financial statements and our Risk Factor titled “We are subject to the risk of legal proceedings” in Exhibit 99.

Item 1 A. Risk Factors
As of March 31, 2025, there have been no material changes in our Risk Factors from the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. The risk factors in the 10-K, as supplemented by this 10-Q and through updating of various statistical and other information, are reproduced in their entirety in Exhibit 99 to this Quarterly Report on Form 10‑Q.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities
The following table provides information about purchases of MGIC Investment Corporation common stock by us during the three months ended March 31, 2025.
Share repurchases
Period BeginningPeriod EndingTotal number of shares purchasedAverage price paid per shareTotal number of shares purchased as part of publicly announced plans or programs
Approximate dollar value of shares that may yet be purchased under the programs (1)
January 1, 2025January 31, 20253,513,596 $24.34 3,513,596 $371,671,590 
February 1, 2025February 28, 20252,877,395 24.86 2,877,395 300,127,376 
March 1, 2025March 31, 20252,843,572 23.66 2,843,572 232,855,900 
9,234,563 $24.29 9,234,563 

(1)In April of 2024, our Board of Directors approved an additional share repurchase program, authorizing us to repurchase up to an additional $750 million of common stock prior to December 31, 2026. Repurchases may be made from time to time on the open market (including through 10b5-1 plans) or through privately negotiated transactions. The repurchase program may be suspended for periods or discontinued at any time. In April 2025, our Board of Directors approved a share repurchase program, authorizing us to purchase up to $750 million of common stock prior to December 31, 2027.

Item 5. Other Information
On February 28, 2025, Paula C. Maggio, Executive Vice President, General Counsel, and Secretary, adopted a written plan for the sale of MGIC common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. Ms. Maggio’s written plan provides for the sale of 80,000 shares of MGIC common stock in the aggregate. This written plan is scheduled to expire on the earlier of: (1) February 9, 2026; or (2) the date on which an aggregate of 80,000 shares of MGIC common stock have been sold.

On March 6, 2025, Salvatore A. Miosi, President and Chief Operating Officer, adopted a written plan for the sale of MGIC common stock that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act. Mr. Miosi’s written plan provides for the sale of up to 310,931 shares of MGIC common stock in the aggregate. This written plan is scheduled to expire on the earlier of: (1) June 5, 2026; or (2) the date on which an aggregate of 310,931 shares of MGIC common stock have been sold.



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Item 6. Exhibits
The accompanying Index to Exhibits is incorporated by reference in answer to this portion of this Item, and except as otherwise indicated in the next sentence, the Exhibits listed in such Index are filed as part of this Form 10-Q. Exhibit 32 is not filed as part of this Form 10-Q but accompanies this Form 10-Q.
(Part II, Item 6)

Index to exhibits
Exhibit NumberDescription of ExhibitFormExhibit(s)Filing Date
Certification of CEO under Section 302 of Sarbanes-Oxley Act of 2002 †
Certification of CFO under Section 302 of Sarbanes-Oxley Act of 2002 †
Certification of CEO and CFO under Section 906 of Sarbanes-Oxley Act of 2002 (as indicated in Item 6 of Part II, this Exhibit is not being “filed”) ††
Risk Factors included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024, as supplemented by Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 and through updating of various statistical and other information †
101.INSInline XBRL Instance Document
101.SCHInline XBRL Taxonomy Extension Schema Document
101.CALInline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document
101.LABInline XBRL Taxonomy Extension Label Linkbase Document
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*     Denotes a management contract or compensatory plan.
†    Filed herewith.
††    Furnished herewith.


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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized, on April 30, 2025.


MGIC INVESTMENT CORPORATION
 
/s/ Timothy J. Mattke
Timothy J. Mattke
Chief Executive Officer
/s/ Nathaniel H. Colson
Nathaniel H. Colson
Executive Vice President and
Chief Financial Officer

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