MGIC INVESTMENT CORP
For the period ended Dec 31, 2023. Filed Feb 21, 2024.
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FY2023 · Filed Feb 21, 2024
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 February 21, 2024.
/s/ Timothy J. Mattke
Timothy J. Mattke
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below as of the date set forth above by the following persons on behalf of the registrant and in the capacities indicated.
| /s/ Timothy J. Mattke | /s/ Jay C. Hartzell |
|---|---|
| Timothy J. Mattke | Jay C. Hartzell, Director |
| Chief Executive Officer and Director | |
| /s/ Timothy A. Holt | |
| /s/ Nathaniel H. Colson | Timothy A. Holt, Director |
| Nathaniel H. Colson | |
| Executive Vice President and | |
| Chief Financial Officer | /s/ Jodeen A. Kozlak |
| (Principal Financial Officer) | Jodeen A. Kozlak, Director |
| /s/ Julie K. Sperber | /s/ Michael E. Lehman |
| Julie K. Sperber | Michael E. Lehman, Director |
| Vice President, Controller and | |
| Chief Accounting Officer | |
| (Principal Accounting Officer) | /s/ Teresita M. Lowman |
| Teresita M. Lowman | |
| /s/ Analisa M. Allen | |
| Analisa M. Allen, Director | /s/ Sheryl L. Sculley |
| Sheryl L. Sculley, Director | |
| /s/ Daniel A. Arrigoni | |
| Daniel A. Arrigoni, Director | /s/ Michael L. Thompson |
| Michael L. Thompson, Director | |
| /s/ C. Edward Chaplin | |
| C. Edward Chaplin, Director | /s/ Mark M. Zandi |
| Mark M. Zandi, Director | |
| /s/ Curt S. Culver | |
| Curt S. Culver, Director | |
| SCHEDULE I — Summary of investments - Other than investments in related parties - December 31, 2023 | |||
|---|---|---|---|
| (In thousands) | Amortized Cost | Fair Value | Amount at which shown in the balance sheet |
| Fixed income: | |||
| Bonds: | |||
| U.S. Treasury securities and obligations of U.S. government corporations and agencies | $167,995 | $161,682 | $161,682 |
| Obligations of U.S. states and political subdivisions | 2,092,754 | 1,908,078 | 1,908,078 |
| Foreign government debt | 4,486 | 3,843 | 3,843 |
| Public utilities | 251,151 | 250,952 | 250,952 |
| ABS | 173,256 | 171,273 | 171,273 |
| CLOs | 327,467 | 326,096 | 326,096 |
| Mortgage-backed | 640,336 | 608,230 | 608,230 |
| All other corporate debt securities | 2,375,250 | 2,264,629 | 2,264,629 |
| Commercial paper | 28,327 | 28,330 | 28,330 |
| Total fixed income | 6,061,022 | 5,723,113 | 5,723,113 |
| Equity securities: | |||
| Common stocks: | |||
| Industrial, miscellaneous and all other | 16,025 | 14,771 | 14,771 |
| Total equity securities | 16,025 | 14,771 | 14,771 |
| Total investments | $6,077,047 | $5,737,884 | $5,737,884 |
| SCHEDULE II - Condensed Financial Information of RegistrantCondensed Balance SheetsParent Company Only | ||
|---|---|---|
| December 31, | ||
| (In thousands) | 2023 | 2022 |
| ASSETS | ||
| Fixed income, available-for-sale, at fair value (amortized cost, 2023 – $597,944 ; 2022 – $299,649) | $598,420 | $287,332 |
| Short-term, fixed income, available-for-sale, at fair value (amortized cost, 2023 – $110,889 ; 2022 – $120,102) | 110,913 | 120,177 |
| Total investment portfolio | $709,333 | 407,509 |
| Cash and cash equivalents | 208,600 | 239,404 |
| Investment in subsidiaries, at equity in net assets | 4,777,121 | 4,502,261 |
| Accounts receivable - affiliates | 2,860 | 864 |
| Income taxes - current and deferred | 34,597 | 167,966 |
| Accrued investment income | 5,975 | 3,387 |
| Total assets | $5,738,486 | $5,321,391 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||
| Liabilities: | ||
| Senior notes | $643,196 | $641,724 |
| Convertible junior subordinated debentures | — | 21,086 |
| Accrued interest | 12,797 | 13,271 |
| Other liabilities | 10,476 | 2,570 |
| Total liabilities | 666,469 | 678,651 |
| Shareholders’ equity: | ||
| Common stock ($1.00 par value, shares authorized 1,000,000; shares issued 2023 - 371,353; 2022 - 371,353; shares outstanding 2023 - 272,494; 2022 - 293,433) | 371,353 | 371,353 |
| Paid-in capital | 1,808,113 | 1,798,842 |
| Treasury stock at cost (shares 2023 - 98,859; 2022 - 77,920) | (1,384,293) | (1,050,238) |
| Accumulated other comprehensive income, net of tax | (316,281) | (481,511) |
| Retained earnings | 4,593,125 | 4,004,294 |
| Total shareholders’ equity | 5,072,017 | 4,642,740 |
| Total liabilities and shareholders’ equity | $5,738,486 | $5,321,391 |
| SCHEDULE II - Condensed Financial Information of RegistrantCondensed Statements of OperationsParent Company Only | |||
|---|---|---|---|
| Years Ended December 31, | |||
| (In thousands) | 2023 | 2022 | 2021 |
| Revenues: | |||
| Investment income, net of expenses | $30,123 | $7,193 | $3,850 |
| Net realized investment gains (losses) | (47) | (2,628) | 490 |
| Total revenues | 30,076 | 4,565 | 4,340 |
| Expenses: | |||
| Operating expenses | 1,555 | 1,575 | 1,644 |
| Interest expense | 36,905 | 47,601 | 68,359 |
| Loss on debt extinguishment | — | 38,870 | 36,914 |
| Total expenses | 38,460 | 88,046 | 106,917 |
| Loss before tax | (8,384) | (83,481) | (102,577) |
| (Benefit from) provision for income taxes | (1,734) | (17,851) | (21,240) |
| Equity in net income of subsidiaries | 719,599 | 930,979 | 716,320 |
| Net income | 712,949 | 865,349 | 634,983 |
| Other comprehensive income (loss), net of tax | 165,230 | (601,208) | (97,124) |
| Comprehensive income | $878,179 | $264,141 | $537,859 |
| SCHEDULE II - Condensed Financial Information of RegistrantCondensed Statements of Cash FlowsParent Company Only | |||
|---|---|---|---|
| Years Ended December 31, | |||
| (In thousands) | 2023 | 2022 | 2021 |
| Cash flows from operating activities: | |||
| Net income | $712,949 | $865,349 | $634,983 |
| Adjustments to reconcile net income to net cash provided by operating activities: | |||
| Equity in net income of subsidiaries | (719,599) | (930,979) | (716,320) |
| Dividends received from subsidiaries | 326,013 | 626,695 | 400,000 |
| Deferred tax (benefit) expense | 86,219 | 119,588 | (21,551) |
| Loss on debt extinguishment | — | 38,870 | 36,914 |
| Other | 26,726 | 33,619 | 29,799 |
| Change in certain assets and liabilities: | |||
| Accounts receivable - affiliates | (1,996) | 1,266 | (680) |
| Income taxes receivable | 45,913 | (43,123) | (306) |
| Accrued investment income | (499) | 931 | 1,118 |
| Accrued interest | 349 | (7,230) | (2,503) |
| Net cash provided by operating activities | 476,075 | 704,986 | 361,454 |
| Cash flows from investing activities: | |||
| Purchases of investments | (566,795) | (1,457) | (339,384) |
| Proceeds from sales of investments | 555,957 | 287,924 | 556,384 |
| Net cash provided by (used in) investing activities | (10,838) | 286,467 | 217,000 |
| Cash flows from financing activities: | |||
| Conversion/Purchase of convertible junior subordinated debentures | (28,637) | (89,118) | (98,610) |
| Redemption of 5.75% senior notes | — | (242,296) | — |
| Cash portion of loss on debt extinguishment | — | (38,185) | (36,914) |
| Repurchase of common stock | (337,182) | (385,573) | (290,818) |
| Dividends paid | (122,965) | (110,947) | (94,219) |
| Payment of withholding taxes related to share-based compensation net share settlement | (7,257) | (10,094) | (6,729) |
| Net cash provided by (used in) financing activities | (496,041) | (876,213) | (527,290) |
| Net increase (decrease) in cash and cash equivalents | (30,804) | 115,240 | 51,164 |
| Cash and cash equivalents at beginning of year | 239,404 | 124,164 | 73,000 |
| Cash and cash equivalents at end of year | $208,600 | $239,404 | $124,164 |
SCHEDULE II — CONDENSED FINANCIAL INFORMATION OF REGISTRANT
PARENT COMPANY ONLY
SUPPLEMENTARY NOTES
Note A
The accompanying Parent Company financial statements should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements appearing this annual report.
Note B
Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders’ surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries 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 thethree calendar years preceding the date of the dividend less dividends paid within the firsttwo of the preceding three calendar years. The maximum dividend that could be paid is reduced by dividends paid in the twelve months preceding the dividend payment date. Before making any dividend payments in 2024, we will notify the OCI to ensure it does not object.
The payment of dividends from MGIC is the principal source of cash inflow for MGIC Investment Corporation, our holding company, other than investment income and raising capital in the public markets. The payment of dividends by our insurance subsidiaries is restricted by insurance regulation as discussed above. MGIC paid a total of $600 million, $800 million and $400 million in dividends in cash and fixed income securities to our holding company during 2023, 2022, and 2021, respectively. No contributions were made to our insurance subsidiaries in 2023, 2022, or 2021.
Note C
The 5.25% Senior Notes discussed in Note 7 – “Debt” to our consolidated financial statements, are obligations of MGIC Investment Corporation, our holding company, and not of its subsidiaries.
| SCHEDULE IV — ReinsuranceMortgage Insurance Premiums EarnedYears Ended December 31, 2023, 2022 and 2021 | |||||
|---|---|---|---|---|---|
| (Dollars in thousands) | Gross Amount | Ceded to Other Companies | Assumed From Other Companies | Net Amount | Percentage of Amount Assumed to Net |
| Years ended December 31, | |||||
| 2023 | $1,142,412 | $202,821 | $12,960 | $952,551 | 1.4% |
| 2022 | 1,154,728 | 156,373 | 8,778 | 1,007,133 | 0.9% |
| 2021 | 1,167,592 | 163,031 | 9,858 | 1,014,419 | 1.0% |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.