MGIC Investment Corp. (MTG)’s Fourth Quarter 2014 Earnings Call Trasncript

Q: Just going to the origination size, what’s the underlying market size that you’re using in your estimates when you said it would be smaller year over year?

Timothy J. Mattke – EVP and CFO
About a $1 trillion, $1.2 trillion right now, to recall caveats that Pat just mentioned.

Q: Yeah, it’s January. I am not going to hold you to that. On the pricing reduction side, can you just clarify the 5% PMIER, are you saying the 5% reduction to what a monthly would have been or 5% per reduction on the LPMI?

Timothy J. Mattke – EVP and CFO
To the LPMI. So that’s 14% lender payable from LPMI base rate.

Q: Okay, so the 55% reduction to the LPMI base rate?

Timothy J. Mattke – EVP and CFO
Right.

Q: Is there any offset on cost at all if you are doing kind of more bulk pricing or is just there is no additional offset to that?

Timothy J. Mattke – EVP and CFO
I think the LPMI pricing is with discount is allowed by a rate card filings because of the lender performance, good geographic mix, good DTI mix all of which are factors that are not normally addressed in our day to day standard rate card.

Q: Got you, and then what’s the most updated size of the DTI that you can recover?

Timothy J. Mattke – EVP and CFO
It would be around $850 million-$900 million.

Q: 859 million?

Timothy J. Mattke – EVP and CFO
Yeah, $850 to $900 million. Some will come back through the income statements and some will just come back on through OCI. So the total impact I think on the balance sheet will be around 900 million, was about 850 million of it falling through the income statement overtime.

Q: Perfect, thank you so much.

Curt S. Culver – Chairman and CEO
Thanks Chris.

Operator
I’m showing no further questions, I will now turn the call back over to management for final remarks.

Patrick Sinks – President and COO
This is Pat, if I can jump in for a moment. I am going to take a second to embarrass Curt. A number of people have already acknowledged this is his last call. So before we sign off I want to acknowledge Curt’s contribution to MGIC. Curt is staying on as Chairman but he is retiring as CEO at the end of February. So this is his last call. For those of you who don’t know Curt has actually been with MGIC for more than 32 years and as he said he has been in the business for 40. He has been our CEO since 1999 and of course there’s been a number of business cycles through that past 16 years that he has let us through.