Mortgage insurance company Genworth Mortgage Holdings, Inc., a subsidiary of Genworth Financial, is looking to go public through an IPO. On April 19, the company announced that it had filed Form S-1 with the SEC.
Currently, company officials haven't determined the number of shares that will be offered and what the price of those shares will be. The company intends to have the stock trade on Nasdaq, but the ticker symbol also hasn’t been determined.
JPMorgan and Goldman Sachs are the underwriters of the IPO. Parent company Genworth Financial will continue to own a majority of the common stock.
Genworth expects to benefit from the housing boom.
In its prospectus filed with the SEC, the company indicates that it’s well-positioned to ride the wave of low-interest rates, rising home prices, and reduced risk in mortgage lending.
“We believe that we are well-positioned to benefit from these continuing trends and will be able to write a significant volume of highly attractive new business,” the prospectus reads. “We believe the industry is insuring loans from borrowers who should be better positioned to meet their mortgage obligations, which should translate into fewer claims for the mortgage insurance industry.”
Genworth Mortgage Holdings is a leading private mortgage insurance company that has been serving the U.S. housing finance market since 1981. The company provides credit protection to mortgage lenders and investors by covering a portion of the unpaid principal balance of mortgage loans when the loan amount exceeds 80 percent of the value of the home.
The company’s mission is to help people buy a house and keep it their home.
“Our credit protection frequently provides families access to homeownership sooner than would otherwise be possible,” the company says in its prospectus.
With operations in all 50 states and the District of Columbia, Genworth has over 1,800 active customers through its long-standing relationships with national banks, non-bank mortgage lenders, local mortgage bankers, community banks, and credit unions.
What Genworth Mortgage Holdings financials look like
In 2020, Genworth Mortgage generated about $99.9 billion in new insurance written, which was a gradual increase of $61 billion over the past three years.
The market share for the same period was approximately 16.6 percent having grown from 12.0 percent in 2012.
However, the company also had its share of losses in 2020 due to the COVID-19 pandemic. The net income for 2020 was down by about $308 million over 2019. The adjusted operating income was also down about $189 million from 2019 when it was $562 million.
The company's prospectus points to a brighter future on the horizon.
“The demand for mortgage insurance is strong and has remained resilient even in the face of the COVID-19 pandemic, providing us with significant continued opportunities to write attractive, profitable new business. Record low-interest rates and strong underlying demographics have provided tailwinds to the overall housing market, resulting in record levels of new insurance written,” the prospectus states.
The prospectus indicates a number of risks that the company’s earnings could face including uncertainty of future developments after the COVID-19 pandemic, deteriorating economic conditions, or a possible decline in home prices.