MGIC Investment Corporation Shines in Q1 2025: Strong Financials, Disciplined Approach, and Shareholder-Friendly Capital Management
MGIC Investment Corporation has reported a stellar first quarter for 2025, with the company delivering net income of $186 million and an annualized return on equity (ROE) of 14.3%. This impressive performance marks a strong start to the year, building on the momentum sustained over the past few years.
According to Timothy Mattke, Chief Executive Officer, MGIC's success is a direct result of its disciplined and balanced approach to the market. "We are very pleased with our first quarter financial results, which reflects our position as a market leader in our industry," he said during the company's earnings call.
The company wrote $10 billion of new insurance during the quarter, with insurance in force ending at $294 billion and annual persistency reaching 85%. MGIC remains focused on maintaining a high-quality, well-balanced insurance portfolio, with its underwriting standards continuing to be strong. The credit quality and performance of its portfolio have also remained solid, with new insurance written having good credit characteristics.
MGIC's capital management strategy is centered around maintaining financial strength and flexibility, positioning the company for success across a wide range of economic environments. Key objectives include maintaining capital to support growth at both the operating company and holding company levels, while keeping debt-to-capital ratios in the low-to-mid teens and liquidity buffers in place.
The company continued its share repurchase program during Q1 2025, buying back 9.2 million shares for $224 million. This activity has been ongoing over the past four quarters, with a total of $698 million spent on share repurchases and $130 million paid out as common stock dividends. The holding company ended the quarter with $824 million in liquidity, with an additional $66 million being used to repurchase 2.8 million shares of common stock through April 25.
In fact, MGIC's capital management strategy has been so successful that it has already exceeded its target payout ratio for shareholders. Over the prior four quarters, share repurchases and shareholder dividends combined have represented a 107% payout of net income earned during this period.
The Board recently approved an additional $750 million share repurchase program and a new dividend distribution plan, further demonstrating MGIC's commitment to returning value to its shareholders while maintaining financial flexibility. The company expects share repurchases to remain its primary method of returning capital to shareholders, with continued quarterly common stock dividends also being paid.
