MGIC INVESTMENT CORP

Previous wording

The following is management’s discussion and analysis of the financial condition and results of operations of MGIC Investment Corporation for the second quarter of 2026. 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, 2025. 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” above, and they are an integral part of the MD&A.

Current wording

The following is management’s discussion and analysis of the financial condition and results of operations of MGIC Investment Corporation for the third quarter of 2026. 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, 2025. 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” above, and they are an integral part of the MD&A.

Previous wording

As of June 30, 2026, we had $304.8 billion of primary insurance in force and $81.8 billion of primary risk in force.

Current wording

As of September 30, 2026, we had $307.3 billion of primary insurance in force and $82.5 billion of primary risk in force.

Previous wording

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 June 30, 2026, MGIC’s Available Assets totaled $5.6 billion, or $2.7 billion in excess of its Minimum Required Assets.

Current wording

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 September 30, 2026, MGIC’s Available Assets totaled $5.8 billion, or $2.8 billion in excess of its Minimum Required Assets.

Previous wording

•Changes to the amount of credit we receive for risk ceded under our QSR and XOL Transactions. 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. For additional information see our risk factors titled"Our underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring" and "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"in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

•Changes to the amount of credit we receive for risk ceded under our QSR and XOL Transactions. 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. For additional information see our risk factors titled"Our underwriting practices and the mix of business we write affects our Minimum Required Assets under the PMIERs, our premium yields and the likelihood of losses occurring" and "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"in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

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”in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

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”in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

As of June 30, 2026, MGIC’s risk-to-capital ratio was 9.9 to 1, below the maximum allowed by the jurisdictions with State Capital Requirements, and its policyholder position was $3.6 billion above the required MPP of $2.1 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.

Current wording

As of September 30, 2026, MGIC’s risk-to-capital ratio was 9.6 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 $2.1 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.

Previous wording

At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, for additional information about matters that could negatively impact our compliance with State Capital Requirements refer to our risk factor titled“State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis”in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

At this time, we expect MGIC to continue to comply with the current State Capital Requirements; however, for additional information about matters that could negatively impact our compliance with State Capital Requirements refer to our risk factor titled“State capital requirements may prevent us from continuing to write new insurance on an uninterrupted basis”in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

In recent years, the FHFA and the GSEs have undertaken initiatives to modernize the credit scoring framework used in mortgage underwriting and securitization. In June 2025, the FHFA directed the GSEs to adopt updated credit scoring models, including VantageScore 4.0 and FICO Score 10T, as part of a broader credit score modernization initiative. In April 2026, the GSEs began a phased implementation, initially permitting limited use of VantageScore 4.0 by certain approved lenders. FICO Score 10T is expected to be implemented at a later date. These changes may affect borrower eligibility and the mix of insured business, and the extent of any impact will depend on the pace of adoption and broader economic conditions.

Current wording

In recent years, the FHFA and the GSEs have undertaken initiatives to modernize the credit scoring framework used in mortgage underwriting and securitization. In June 2025, the FHFA directed the GSEs to adopt updated credit scoring models, including VantageScore 4.0 and FICO Score 10T, as part of a broader credit score modernization initiative. In April 2026, the GSEs began a phased implementation, initially permitting limited use of VantageScore 4.0 by certain approved lenders. In September 2026, the GSEs expanded VantageScore 4.0 availability to all approved lenders and moved to one loan-level pricing adjustment grid across VantageScore 4.0 and Classic FICO. FICO Score 10T is expected to be implemented at a later date. These changes may affect borrower eligibility, the mix of insured business, our premium rates on new business, and the extent of any impact will depend on the level and pace of lender adoption and broader economic conditions.

Previous wording

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 on and costs of mortgage credit, and other factors. For additional information on how our business may be impacted by such circumstances refer to our Risk Factors published in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

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 on and costs of mortgage credit, and other factors. For additional information on how our business may be impacted by such circumstances refer to our Risk Factors published in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

For additional information about our IT systems and cybersecurity, see our risk factor titled “Failed, disrupted, or inadequate information technology systems 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" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

For additional information about our IT systems and cybersecurity, see our risk factor titled “Failed, disrupted, or inadequate information technology systems 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" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

NIW for the second quarter of 2026 was $17.8 billion (Q2 2025: $16.4 billion) and $32.2 billion for the six months ended June 30, 2026 (YTD June 30, 2025: $26.6 billion). The increase for the six months ended June 30, 2026 reflects a larger expected purchase origination market. We expect our full-year 2026 NIW to remain relatively flat compared with 2025.

Current wording

NIW for the third quarter of 2026 was $17.1 billion (Q3 2025: $16.5 billion) and $49.3 billion for the nine months ended September 30, 2026 (YTD September 30, 2025: $43.1 billion). The increase for the nine months ended September 30, 2026 reflects a larger expected purchase origination market. We expect a modest increase in our full-year 2026 NIW compared with 2025.

Previous wording

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 is impacted by refinancing activity, policies cancelled when borrowers achieve the required amount of home equity, and cancellations due to claim payment. Refinancing activity has historically been affected by the level of mortgage interest rates and the level of home price appreciation. Cancellations generally move inversely to the change in the direction of interest rates, although they generally lag a change in direction. The following table presents a summary of the change in our IIF and RIF for the periods indicated.

Current wording

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. For additional information on factors that impact our IIF and RIF see“Overview - Key Factors Affecting Our Results.” The following table presents a summary of the change in our IIF and RIF for the periods indicated.

Previous wording

Our Annual Persistency was 83.3% at June 30, 2026 compared with 84.7% at June 30, 2025. 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.

Current wording

Our Annual Persistency was 82.5% at September 30, 2026 compared with 85.0% at September 30, 2025. 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.

Previous wording

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 $495 million and $482 million as of June 30, 2026 and December 31, 2025, respectively.

Current wording

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 $506 million and $482 million as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

The following section of the MD&A provides a comparative discussion of MGIC Investment Corporation’s Consolidated Results of Operations for the three and six months ended June 30, 2026 and 2025.

Current wording

The following section of the MD&A provides a comparative discussion of MGIC Investment Corporation’s Consolidated Results of Operations for the three and nine months ended September 30, 2026 and 2025.

Previous wording

The decrease in net income and adjusted net operating income for the three and six months ended June 30, 2026, is primarily due to an increase in losses incurred, net and a decrease in net premiums earned, partially offset by a decrease in underwriting and other expenses, net and a decrease in the provision for income taxes. Diluted income per share and adjusted operating income per diluted share increased primarily due to decreases in the number of diluted weighted shares outstanding partially offset by decreases in net income.

Current wording

The decrease in net income and adjusted net operating income for the three and nine months ended September 30, 2026, is primarily due to an increase in losses incurred, net and a decrease in net premiums earned, partially offset by a decrease in underwriting and other expenses, net. Diluted income per share and adjusted operating income per diluted share increased primarily due to decreases in the number of diluted weighted shares outstanding partially offset by decreases in net income.

Previous wording

The decrease in net premiums earned for the three and six months ended June 30, 2026, was primarily driven by an increase in ceded premiums written.

Current wording

The decrease in net premiums earned for the three and nine months ended September 30, 2026, was primarily driven by an increase in ceded premiums earned.

Previous wording

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 and six months ended June 30, 2026 and June 30, 2025.

Current wording

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 and nine months ended September 30, 2026 and September 30, 2025.

Previous wording

(2) Assumed premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.4 bps and 0.5 bps for the six months ended June 30, 2026 and June 30, 2025, respectively.

Current wording

(2) Other premiums include those from our participation in GSE CRT programs, of which the impact on the net premium yield was 0.4 bps and 0.5 bps for the nine months ended September 30, 2026 and September 30, 2025, respectively.

Previous wording

See“Overview - Factors Affecting Our Results” for factors that influence the amount of net premiums written and earned during a given period.

Current wording

For further information on factors that influence the amount of net premiums written and earned during a given period see“Overview -Key Factors Affecting Our Results.”

Previous wording

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 haircut for the uncollateralized portion of the reinsured risk and is generally not given for the reinsured risk above the PMIERs requirement. The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions as of June 30, 2026, are presented in the table below. The table below excludes the 2026 Traditional XOL which is still within its contractual fill-up period covering policies in force from January 1, 2026 through

Current wording

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 haircut for the uncollateralized portion of the reinsured risk and is generally not given for the reinsured risk above the PMIERs requirement. The current attachment, current detachment, and PMIERs required asset credit for each of our XOL Transactions as of September 30, 2026, are presented in the table below. The table below excludes the 2026 Traditional XOL which is still within its contractual fill-up period covering policies in force from January 1, 2026 through December 31, 2026.

Previous wording

Ceded premiums on our XOL Transactions were $16.3 million and $34.1 million for the three and six months ended June 30, 2026, and $15.4 million and $30.1 million for the three and six months ended June 30, 2025.

Current wording

Ceded premiums on our XOL Transactions were $15.6 million and $49.7 million for the three and nine months ended September 30, 2026, and $16.2 million and $46.3 million for the three and nine months ended September 30, 2025.

Previous wording

For information on how pandemics and natural disasters could affect losses incurred, net see our Risk Factors titled “The effects ofpandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition". in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. 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 June 30, 2026 through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan. See 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” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.

Current wording

For information on how pandemics and natural disasters could affect losses incurred, net see our Risk Factors titled “The effects ofpandemics, severe weather events, or other disasters may adversely impact our results of operations and financial condition". in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025. 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 September 30, 2026 through our IBNR reserve, then we have not yet recorded an incurred loss with respect to that loan. See 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” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025, and as supplemented by Part II, Item 1A of this quarterly report on Form 10-Q.

Previous wording

The increase in current year losses incurred for the three and six months ended June 30, 2026 compared with the same periods in the prior year is primarily due to an increase in new delinquencies reported and an increase in estimated severity on current year delinquencies.

Current wording

The increase in current year losses incurred for the three and nine months ended September 30, 2026 compared with the same periods in the prior year is primarily due to an increase in new delinquencies reported and an increase in estimated severity on current year delinquencies.

Previous wording

A rollforward of our primary delinquency inventory for the three and six months ended June 30, 2026 and 2025 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.

Current wording

A rollforward of our primary delinquency inventory for the three and nine months ended September 30, 2026 and 2025 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.

Previous wording

The majority of loans insured prior to 2014 (which represent 23% 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.

Current wording

The majority of loans insured prior to 2014 (which represent 21% 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.

Previous wording

The increase in net losses and LAE paid during the three and six months ended June 30, 2026 when compared with the same periods in the prior year was primarily driven by an increase in our claims received along with an increase in the average claim paid. 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. Home price appreciation and pre-claim third-party sales have mitigated net losses and LAE in recent years; however, the positive impact of both factors has moderated relative to prior years. We expect net losses and LAE paid to increase; however, the magnitude and timing of their increase is uncertain.

Current wording

The increase in net losses and LAE paid during the three and nine months ended September 30, 2026 when compared with the same periods in the prior year was primarily driven by an increase in our claims received along with an increase in the average claim paid. 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. Home price appreciation and pre-claim third-party sales have mitigated net losses and LAE in recent years; however, the positive impact of both factors has moderated relative to prior years. We expect net losses and LAE paid to increase; however, the magnitude and timing of their increase is uncertain.

Previous wording

The primary average RIF on all loans was $73,990, $72,995, and $71,741 at June 30, 2026, December 31, 2025, and June 30, 2025, respectively.

Current wording

The primary average RIF on all loans was $74,906, $72,995, and $72,480 at September 30, 2026, December 31, 2025, and September 30, 2025, respectively.

Previous wording

Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices. Factors such as Annual Persistency and economic conditions can impact the level and frequency of new notices we receive during a given period. As of June 30, 2026, 50% of our primary RIF was written subsequent to December 31, 2022, 66% of our primary RIF was written subsequent to December 31, 2021, and 83% of our primary RIF was written subsequent to December 31, 2020.

Current wording

Generally, on our primary business, the third and fourth year after loan origination have been periods with the highest level of new delinquency notices. Factors such as Annual Persistency and economic conditions can impact the level and frequency of new notices we receive during a given period. As of September 30, 2026, 53% of our primary RIF was written subsequent to December 31, 2022, 68% of our primary RIF was written subsequent to December 31, 2021, and 85% of our primary RIF was written subsequent to December 31, 2020.

Previous wording

Underwriting and other expenses, net for the three and six months ended June 30, 2026 were $45.6 million and $93.7 million, respectively, compared with $52.1 million and $105.2 million for the three and six months ended June 30, 2025. The decreases were primarily attributable to a decrease in outside service expenses and employee costs. See Note 14 - “Segment Reporting,” to our consolidated financial statements for additional discussion of significant segment expenses.

Current wording

Underwriting and other expenses, net for the three and nine months ended September 30, 2026 were $44.9 million and $138.6 million, respectively, compared with $49.6 million and $154.8 million for the three and nine months ended September 30, 2025. The decreases were primarily attributable to a decrease in outside service expenses and employee costs. See Note 14 - “Segment Reporting,” to our consolidated financial statements for additional discussion of significant segment expenses.

Previous wording

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 and six months ended June 30, 2026, decreased compared with the same periods in the prior year primarily due to a decrease in underwriting and other expenses, net.

Current wording

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 and nine months ended September 30, 2026, decreased compared with the same periods in the prior year primarily due to a decrease in underwriting and other expenses, net.

Previous wording

The decrease in our provision for income taxes in the three and six months ended June 30, 2026 as compared to the same periods in the prior year was primarily due to a decrease in income before tax. Our effective tax rate for the three and six months ended June 30, 2026 and 2025, approximated the federal statutory income tax rate of 21%.

Current wording

The decrease in our provision for income taxes in the nine months ended September 30, 2026, as compared to the same period in the prior year was primarily due to a decrease in income before tax.

Previous wording

Cash and Cash Equivalents -Our cash and cash equivalents balance decreased to $207.3 million as of June 30, 2026, from $369.0 million as of December 31, 2025, as cash used in financing activities was only partially offset by net cash generated from operating and investing activities.

Current wording

Cash and Cash Equivalents -Our cash and cash equivalents balance decreased to $215.4 million as of September 30, 2026, from $369.0 million as of December 31, 2025, as cash used in financing activities was only partially offset by net cash generated from operating and investing activities.

Previous wording

Deferred income taxes, net - Our net deferred tax asset was $131.2 million and $18.5 million at June 30, 2026 and December 31, 2025, respectively. The change was primarily attributable to the benefit associated with transferable tax credits that were purchased and deferred during the six months ended June 30, 2026.

Current wording

Deferred income taxes, net - Our net deferred tax asset was $139.6 million and $18.5 million at September 30, 2026 and December 31, 2025, respectively. The increase to our deferred tax asset was primarily attributable to the change in the fair market value of our investment portfolio and an increase in transferable tax credits that were purchased and deferred during the nine months ended September 30, 2026.

Previous wording

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. Reinsurance recoverables on loss reserves were $76.1 million and $65.1 million as of June 30, 2026 and December 31, 2025, respectively. The reinsurance recoverable is impacted by the mix of delinquencies covered by our QSR Transactions. The increase in loss reserves, net of reinsurance recoverable, is primarily due to loss reserves established on new notices partially offset by favorable development on previously received delinquencies. See Note 8 - “Loss Reserves,” to our consolidated financial statements for additional information on the composition of our loss reserves.

Current wording

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. Reinsurance recoverables on loss reserves were $80.6 million and $65.1 million as of September 30, 2026 and December 31, 2025, respectively. The reinsurance recoverable is impacted by the mix of delinquencies covered by our QSR Transactions. The increase in loss reserves, net of reinsurance recoverable, is primarily due to loss reserves established on new notices partially offset by favorable development on previously received delinquencies. See Note 8 - “Loss Reserves,” to our consolidated financial statements for additional information on the composition of our loss reserves.

Previous wording

Federal Tax Credit Payable - We have purchased transferable federal tax credits from third parties. The increase to the federal tax credit payable during the six months ended June 30, 2026, is primarily due to the purchase of additional tax credits, partially offset by the payment for amounts owed for tax credits.

Current wording

Federal Tax Credit Payable - We have purchased transferable federal tax credits from third parties. The increase to the federal tax credit payable during the nine months ended September 30, 2026, is primarily due to the purchase of additional tax credits, partially offset by the payment for amounts owed for tax credits.

Previous wording

The decrease in net cash provided by operating activities for the six months ended June 30, 2026 was primarily due to cash paid to third parties for the purchase of transferrable federal tax credits, a decrease in premiums received, and an increase in losses paid, partially offset by a decrease in underwriting expenses.

Current wording

The decrease in net cash provided by operating activities for the nine months ended September 30, 2026 was primarily due to cash paid to third parties for the purchase of transferrable federal tax credits, a decrease in premiums received, and an increase in losses paid, partially offset by a decrease in underwriting expenses.

Previous wording

Net cash provided by investing activities for the six months ended June 30, 2026 and 2025, primarily reflects sales and maturities of fixed income securities that exceeded purchases of fixed income securities during the period.

Current wording

Net cash provided by investing activities for the nine months ended September 30, 2026 and 2025, primarily reflects sales and maturities of fixed income securities that exceeded purchases of fixed income securities during the period.

Previous wording

Net cash used in financing activities for the six months ended June 30, 2026 and 2025, primarily reflects repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.

Current wording

Net cash used in financing activities for the nine months ended September 30, 2026 and 2025, primarily reflects repurchases of our common stock, dividends to shareholders, and the payment of withholding taxes related to share-based compensation net share settlement.

Previous wording

In the next twelve months we will pay approximately $154.4 million for amounts owed to third parties for our purchase of transferable federal tax credits.

Current wording

In the next twelve months we will pay approximately $154.4 million to third parties for our purchase of transferable federal tax credits.