July 23 (Bloomberg) -- MGIC Investment Corp., the mortgage insurer that raised more than $1 billion in capital this year, rallied after reporting its first quarterly profit since 2010.
MGIC gained 10 percent to $7.35 at 4:15 p.m. in New York. The Milwaukee-based firm surged 176 percent this year as it replenished capital by selling shares and debt.
“We expect profitability metrics at MTG to gradually improve,” Jason Stewart, an analyst at Compass Point Research & Trading LLC., wrote in a research note today, using MGIC’s ticker symbol. “The primary driver of the earnings beat was a lower incurred loss.”
Net income was $12.4 million, or 4 cents a share, in the second quarter compared with a loss of $273.9 million, or $1.36, a year earlier, MGIC said in a statement today. Claims costs tied to soured home loans shrank to $196.3 million in the quarter from $551.4 million in the same period a year earlier, as delinquencies declined.
“I am pleased with the credit quality and performance of the new business we have written since 2009,” Chief Executive Officer Curt Culver, 61, said in the statement.
Mortgage insurers cover losses when homeowners default and foreclosures fail to recoup costs. Expenses tied to the housing crash pushed some guarantors from the business and drained capital at companies including MGIC and rival Radian Group Inc.
Radian, which is scheduled to report second-quarter results tomorrow, advanced 4.1 percent to $13.83. The Philadelphia-based company also sold shares and debt this year. Genworth Financial Inc., which sells life insurance in addition to mortgage guaranties, rose 0.4 percent.
To contact the reporter on this story: Zachary Tracer in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Dan Kraut at email@example.com MTG US <Equity> CN RDN US <Equity> CN GNW US <Equity> CN