Quarterly new business climbed, the book of business expanded and loan performance improved at MGIC Guaranty Insurance Corp. Still, earnings deteriorated.
Before income taxes, MGIC earned $84 million from July 1 through Sept. 30, according to the mortgage insurance company’s third-quarter earnings report.
Income sank compared to the prior period, when the Milwaukee-based organization earned $165 million, and a year prior, when earnings were $127 million.
The decline in earnings was driven by a $75 million loss on debt extinguishment, soaring from $2 million in the second quarter and none reported for the third-quarter 2015.
“Gains and losses on debt extinguishment result from discretionary activities that are undertaken to take advantage of market opportunities to strengthen our financial position,” MGIC explained.
MGIC reported that it wrote $14.2 billion in new primary insurance during the most-recent three-month period. Business was better than $12.6 billion written in the second quarter and $12.4 billion written in the third-quarter 2015.
For all nine months that have elapsed this year, $35.1 billion in primary new insurance has been written.
The latest activity left $180.1 billion primary insurance in force as of Sept. 30, 2016.
The mortgage insurer’s book of business increased from $177.5 billion three months earlier and $172.7 billion one year earlier.
The default rate on primary insurance in force was 5.16 percent at the end of last month. Loan performance improved from mid-2016, when the rate was 5.30 percent, and from Sept. 30, 2015, when the rate was 6.54 percent.
