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MGIC Investment reports higher net income, revenues YOY in Q4'16

MGIC Investment Corp. posted fourth-quarter 2016 net income of $107.5 million, or 28 cents per share, up from $102.4 million, or 24 cents per share, in the year-ago quarter.

Net operating income for the quarter increased to $107.5 million, or 28 cents per share, from $76.6 million, or 19 cents per share, in the prior-year period.

The S&P Capital IQ consensus normalized EPS estimate for the quarter was 22 cents.

Total revenues for the quarter climbed year over year to $266.5 million from $258.4 million. Net premiums written for the quarter rose to $243.5 million from $241.1 million in the year-ago period. Net premiums earned came in at $235.1 million for the quarter, up from $226.2 million in prior-year period.

New insurance written in the fourth quarter was $12.8 billion, up from $9.8 billion in the fourth quarter of 2015. Persistency, or the percentage of insurance remaining in force from one year prior, was 76.9% at Dec. 31, 2016, versus 79.7% at Dec. 31, 2015.

"We expect to write slightly less new insurance in 2017 compared to 2016 reflecting the current market conditions and a smaller origination market, however, when combined with an improvement in annual persistency we expect that our insurance in force portfolio will continue to grow, " CEO Patrick Sinks said in a statement.

Losses incurred during the quarter fell to $47.7 million from $95.1 million in the year-ago quarter. The company said it experienced a $43.0 million reduction in losses incurred in the fourth quarter of 2016 due to positive development on its prior period primary loss reserves, lower level of new delinquent notices received and a lower claim rate compared to the prior-year quarter.

The company's GAAP loss ratio from insurance operations was 20.3% for the quarter, compared with 42.0% in the year-ago period. Its GAAP underwriting expense ratio from insurance operations was 15.8% for the quarter, compared with 13.9% in prior-year quarter.

Book value per share was $7.48 at Dec. 31, 2016, compared with $6.58 at Dec. 31, 2015.

For the full year 2016, the company reported net income of $342.5 million, or 86 cents per share, compared with $1.17 billion, or $2.60 per share, in 2015. Net income for 2015 included $847.8 million associated with the change in the company's deferred tax asset valuation allowance, MGIC said.

Net operating income for 2016 was $395.6 million, or 99 cents per share, up from $306.1 million, or 75 cents per share, in the previous year.

The S&P Capital IQ consensus normalized EPS estimate for 2016 was 90 cents.