NMI Holdings, Inc. Reports Second Quarter Net Income of $2 Million, Enters Into Reinsurance Treaty to Support Growth
EMERYVILLE, CA -- (Marketwired) -- 08/02/16 --
NMI Holdings, Inc. (NASDAQ: NMIH) today reported net income of $2.0 million, or $0.03 per share, for the second quarter ended June 30, 2016. This compares with a net loss of $3.9 million, or $(0.07) per share, in the prior quarter and a net loss of $10.4 million, or $(0.18) per share, in the second quarter of 2015. Total revenue for the quarter was $29.6 million, up 33% from $22.2 million in the prior quarter and up 171% from $10.9 million in the second quarter of 2015.
The company also announced today that it has entered into a quota share reinsurance agreement with a panel of third-party reinsurance providers. The company expects that Fannie Mae and Freddie Mac will allow full credit under the Private Mortgage Insurer Eligibility Requirements (PMIERs) for risk ceded under the agreement.
Bradley Shuster, chairman and CEO of National MI, said, "In the second quarter we achieved GAAP profitability, a significant milestone for this young company just three years after writing our first mortgage insurance policy. It is a reflection of our dedication to customer service, our disciplined approach to account development, and diligent management of both risk and expenses. We are grateful to our customers for their belief in us, our employees for their hard work and loyalty, and our shareholders and other business partners for their support of National MI since its founding. We are at an exciting inflection point in our development as we now have visibility to rapid earnings growth for many years to come. Looking ahead, we now expect to report pre-tax income of $7 to $10 million for the full year 2016, and are reaffirming our guidance for pre-tax income of at least $60 million in 2017."
- As of June 30, 2016, the company had primary insurance-in-force of $23.6 billion, up 27% from $18.6 billion at the prior quarter end and up 229% over $7.2 billion as of June 30, 2015.
- Premiums earned for the quarter were $26.0 million, up 31% from $19.8 million in the prior quarter and up 194% over $8.9 million in the same quarter a year ago.
- Total NIW of $5.8 billion in the second quarter was up 37% over $4.3 billion in the prior quarter and up 129% over $2.5 billion in the second quarter of 2015.
- Monthly premium NIW was $3.7 billion, an increase of 49% over $2.5 billion in the prior quarter and an increase of 153% over the second quarter of 2015. Single premium NIW of $2.1 billion was up 21% from the prior quarter and up 96% compared with the same quarter a year ago.
- Total underwriting and operating expenses in the second quarter were $23.2 million, including share-based compensation expense of $1.8 million. This compares with total underwriting and operating expenses of $22.7 million, including $1.4 million of share-based compensation, in the prior quarter, and $20.9 million, including $2.1 million of share-based compensation, in the same quarter a year ago.
- Loss expense for the quarter was $0.4 million, resulting in a loss ratio of 1.8%.
- As of the end of the second quarter, the company had approved master policies in place with 1,061 customers, up from 1,023 as of the end of the prior quarter, and up from 842 as of the end of the second quarter of 2015. Customers delivering NIW in the quarter grew to a new high of 518, which compares with 469 in the prior quarter and 340 in the same quarter a year ago. On an ever-to-date basis, customers delivering NIW grew to 649.
- At quarter-end, cash and investments were $654 million, including $78 million at the holding company, and book equity was $422 million, equal to $7.14 per share. This book value excludes any benefit attributable to the company's deferred tax asset of approximately $66 million as of Dec. 31, 2015.
- At quarter-end, the company had total PMIERs available assets of $432 million, which compares with risk- based required assets under PMIERs of $377 million.
Quarter Quarter Quarter
Growth Growth
Ended Ended Ended
6/30/20 3/31/20 6/30/20
16 16 15 Q/Q Y/Y
------- ------- ------- ------ ------
Primary Insurance-in-Force
($billions) 23.62 18.56 7.19 27% 228%
New Insurance Written - NIW
($billions)
Monthly premium 3.70 2.49 1.46 49% 153%
Single premium 2.14 1.76 1.09 21% 96%
Total 5.84 4.25 2.55 37% 129%
Premiums Earned ($millions) 26.04 19.81 8.86 31% 194%
Underwriting & Operating Expense
($millions) 23.23 22.67 20.91 2% 11%
Loss Expense ($millions) 0.47 0.46 - 3% -
Loss Ratio 1.8% 2.3% -
Cash & Investments ($millions) 654 630 434 4% 51%
Book Equity ($millions) 422 410 412 3% 2%
Book Value per Share $ 7.14 $ 6.94 $ 7.01 3% 2%
Approved Master Policies 1061 1023 842 4% 26%
Customers Generating NIW 518 469 340 10% 52%
Reinsurance Agreement
Effective Sept. 1, 2016, the company's quota share reinsurance agreement covers the following components of its portfolio, subject to certain limitations and conditions:
- Approximately 23% of existing policies written as of Aug. 31, 2016.
- Approximately 95% of the company's pool agreement with Fannie Mae.
- Approximately 23% of policies written from Sept. 1, 2016 through Dec. 31, 2017.
National MI will receive a 20% ceding commission for ceded premiums related to this transaction, as well as a profit commission provided that the loss ratio on the loans covered under the agreement generally remains below 60%. For risk ceded under the agreement, the implied after-tax cost of capital over the term of the transaction is expected to be approximately 3%.
Conference Call and Webcast Details
The company will hold a conference call and live webcast today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The webcast will be available on the company's website, www.nationalmi.com, in the "Investor Relations" section. The call also can be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 for international callers using Conference ID: 40158937, or by referencing NMI Holdings, Inc.
About National MI
National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. (NASDAQ: NMIH), is a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides a "safe harbor" for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "plan," "project," "continuing," "ongoing," "expect," "intend" and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: our ability to implement our business strategy, including our ability to attract and retain a diverse customer base and to achieve a diversified mix of business across the spectrum of our product offerings; changes in the business practices of the GSEs that may impact the use of private mortgage insurance; our ongoing ability to comply with the financial requirements of the PMIERs; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; our ability to successfully execute and implement our capital plans, including our ability to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us and to the GSEs; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; emergence of unexpected claims and coverage issues, including claims exceeding our reserves or amounts we expected to experience; our ability to utilize our net operating loss carryforwards, which could be limited or eliminated in various ways, including if we experience an ownership change as defined in Section 382 of the Internal Revenue Code; and general economic downturns and volatility. These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2015, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.
Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
[email protected]
(510) 788-8417
Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
[email protected]
Consolidated statements
of operations and
comprehensive income
For the three months For the six months ended
ended June 30, June 30,
------------------------ ------------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
Revenues (In Thousands, except for share data)
Net premiums written $ 48,862 $ 20,347 $ 86,991 $ 33,268
Increase in unearned
premiums (22,821) (11,491) (41,143) (17,476)
----------- ----------- ----------- -----------
Net premiums earned 26,041 8,856 45,848 15,792
Net investment income 3,342 1,688 6,573 3,283
Net realized
investment gains
(losses) 61 354 (824) 967
Other revenues 37 - 69 -
----------- ----------- ----------- -----------
Total revenues 29,481 10,898 51,666 20,042
----------- ----------- ----------- -----------
Expenses
Insurance claims and
claims expenses 470 (6) 928 98
Underwriting and
operating expenses 23,234 20,910 45,906 39,259
----------- ----------- ----------- -----------
Total expenses 23,704 20,904 46,834 39,357
----------- ----------- ----------- -----------
Other (expense) income
(Loss) gain from
change in fair value
of warrant
liability (59) (106) 611 1,142
Interest expense (3,707) - (7,339) -
----------- ----------- ----------- -----------
Total other (expense)
income (3,766) (106) (6,728) 1,142
----------- ----------- ----------- -----------
Income (loss) before
income taxes 2,011 (10,112) (1,896) (18,173)
Income tax expense - 241 - -
----------- ----------- ----------- -----------
Net income (loss) $ 2,011 $ (10,353) $ (1,896) $ (18,173)
=========== =========== =========== ===========
Earnings (loss) per
share
Basic $ 0.03 $ (0.18) $ (0.03) $ (0.31)
Diluted $ 0.03 $ (0.18) $ (0.03) $ (0.31)
Weighted average common
shares outstanding
Basic 59,105,613 58,720,095 59,005,983 58,603,644
Diluted 59,830,899 58,720,095 59,005,983 58,603,644
Loss Ratio(1) 2% -% 2% 1%
Expense Ratio(2) 89 236 100 249
----------- ----------- ----------- -----------
Combined ratio 91% 236% 102% 249%
Net income (loss) $ 2,011 $ (10,353) $ (1,896) $ (18,173)
Other comprehensive
income (loss), net of
tax:
Net unrealized gains
(losses) in
accumulated other
comprehensive gain
(loss), net of tax
(benefit) expense of
$0 and ($1,431) for
the three monthsended
June 30, 2016 and
2015, respectively,
and $0 for both the
six months ended June
30, 2016 and 2015 8,670 (2,205) 17,771 467
Reclassification
adjustment for losses
(gains) included in
net loss, net of tax
expense of $0 for all
periods presented (61) (354) 824 (967)
----------- ----------- ----------- -----------
Other comprehensive
income (loss), net of
tax 8,609 (2,559) 18,595 (500)
----------- ----------- ----------- -----------
Comprehensive income
(loss) $ 10,620 $ (12,912) $ 16,699 $ (18,673)
=========== =========== =========== ===========
(1) Loss ratio is calculated by dividing the provision for insurance claims
and claims expenses by net premiums earned.
(2) Expense ratio is calculated by dividing other underwriting and operating
expenses by net premiums earned.
June 30, December 31,
Consolidated balance sheets 2016 2015
------------ ------------
(In Thousands, except for
Assets share data)
Fixed maturities, available-for-sale, at fair
value (amortized cost of $593,807 and
$564,319 as of June 30, 2016 and December 31,
2015, respectively) $ 607,318 $ 559,235
Cash and cash equivalents 46,827 57,317
Premiums receivable 8,868 5,143
Accrued investment income 3,068 2,873
Prepaid expenses 1,810 1,428
Deferred policy acquisition costs, net 25,128 17,530
Software and equipment, net 19,690 15,201
Intangible assets and goodwill 3,634 3,634
Other assets 85 90
------------ ------------
Total assets $ 716,428 $ 662,451
============ ============
Liabilities
Term loan $ 144,107 $ 143,939
Unearned premiums 131,916 90,773
Accounts payable and accrued expenses 15,502 22,725
Reserve for insurance claims and claim
expenses 1,475 679
Warrant liability, at fair value 856 1,467
Deferred tax 137 137
------------ ------------
Total liabilities 293,993 259,720
------------ ------------
Commitments and contingencies
Shareholders' equity
Common stock - class A shares, $0.01 par
value; 59,128,011 and 58,807,825 shares
issued and outstanding as of June 30, 2016
and December 31, 2015, respectively
(250,000,000 shares authorized) 591 588
Additional paid-in capital 573,342 570,340
Accumulated other comprehensive income (loss),
net of tax 11,121 (7,474)
Accumulated deficit (162,619) (160,723)
------------ ------------
Total shareholders' equity 422,435 402,731
------------ ------------
Total liabilities and shareholders' equity $ 716,428 $ 662,451
============ ============
Historical Quarterly
Data 2016
------------------------
June 30 March 31
----------- -----------
(In Thousands, except for
Revenues share data)
Net premiums written $ 48,862 $ 38,129
Increase in unearned
premiums (22,821) (18,322)
----------- -----------
Net premiums earned 26,041 19,807
Net investment income 3,342 3,231
Net realized
investment gains
(losses) 61 (885)
Other revenues 37 32
----------- -----------
Total revenues 29,481 22,185
----------- -----------
Expenses
Insurance claims and
claims expenses 470 458
Underwriting and
operating expenses 23,234 22,672
----------- -----------
Total expenses 23,704 23,130
----------- -----------
Other (expense) income
(1) (3,766) (2,962)
Income (loss) before
income taxes 2,011 (3,907)
Income tax expense
(benefit) - -
----------- -----------
Net income (loss) $ 2,011 $ (3,907)
=========== ===========
Earnings (loss) per
share
Basic $ 0.03 $ (0.07)
Diluted 0.03 (0.07)
Weighted average common
shares
outstanding
Basic 59,105,613 58,936,694
Diluted 59,830,899 58,936,694
Other data
Loss Ratio (2) 2% 2%
Expense Ratio (3) 89% 114%
----------- -----------
Combined ratio 91% 117%
Historical Quarterly
Data 2015
--------------------------------------------------
December 31 September 30 June 30 March 31
----------- ----------- ----------- -----------
Revenues (In Thousands, except for share data)
Net premiums written $ 45,582 $ 35,360 $ 20,347 $ 12,921
Increase in unearned
premiums (28,702) (22,526) (11,491) (5,985)
----------- ----------- ----------- -----------
Net premiums earned 16,880 12,834 8,856 6,936
Net investment income 2,078 1,884 1,688 1,596
Net realized
investment gains
(losses) (121) (15) 354 613
Other revenues 25 - - -
----------- ----------- ----------- -----------
Total revenues 18,862 14,703 10,898 9,145
----------- ----------- ----------- -----------
Expenses
Insurance claims and
claims expenses 371 181 (6) 104
Underwriting and
operating expenses 21,686 19,653 20,910 18,350
----------- ----------- ----------- -----------
Total expenses 22,057 19,834 20,904 18,454
----------- ----------- ----------- -----------
Other (expense) income
(1) (1,626) 332 (106) 1,248
Income (loss) before
income taxes (4,821) (4,799) (10,112) (8,061)
Income tax expense
(benefit) - - 241 (241)
----------- ----------- ----------- -----------
Net income (loss) $ (4,821) $ (4,799) $ (10,353) $ (7,820)
=========== =========== =========== ===========
Earnings (loss) per
share
Basic $ (0.08) $ (0.08) $ (0.18) $ (0.13)
Diluted (0.08) (0.08) (0.18) (0.13)
Weighted average common
shares
outstanding
Basic 58,781,566 58,741,328 58,720,095 58,485,899
Diluted 58,781,566 58,741,328 58,720,095 58,485,899
Other data
Loss Ratio (2) 2% 1% -% 1%
Expense Ratio (3) 128% 153% 236% 265%
----------- ----------- ----------- -----------
Combined ratio 131% 155% 236% 266%
(1) Other (expense) income includes the gain from change in fair value of
warrant liability, gain from settlement of warrants, and interest
expense.
(2) Loss ratio is calculated by dividing the provision for insurance claims
and claims expenses by net premiums earned.
(3) Expense ratio is calculated by dividing other underwriting and operating
expenses by net premiums earned.
New Insurance Written (NIW), Insurance in Force (IIF) and Premiums
The tables below show primary and pool NIW and IIF, by
quarter, for the last six quarters.
Primary
NIW Three months ended
-----------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30 March 31,
2016 2016 2015 2015 2015 2015
-----------------------------------------------------------------
(In Millions)
Monthly $ 3,700 $ 2,492 $ 2,029 $ 1,582 $ 1,460 $ 919
Single 2,138 1,762 2,518 2,051 1,089 777
--------- --------- ------------ ------------- -------- ---------
Primary $ 5,838 $ 4,254 $ 4,547 $ 3,633 $ 2,549 $ 1,696
Primary
and pool
IIF As of
-----------------------------------------------------------------
June 30, March 31, December 31, September 30, June 30 March 31,
2016 2016 2015 2015 2015 2015
-----------------------------------------------------------------
(In Millions)
Monthly $ 12,529 $ 9,210 $ 6,958 $ 5,087 $ 3,617 $ 2,259
Single 11,095 9,354 7,866 5,514 3,573 2,576
--------- --------- ------------ ------------- -------- ---------
Primary 23,624 18,564 14,824 10,601 7,190 4,835
Pool 3,999 4,136 4,238 4,340 4,476 4,621
--------- --------- ------------ ------------- -------- ---------
Total $ 27,623 $ 22,700 $ 19,062 $ 14,941 $ 11,666 $ 9,457
========= ========= ============ ============= ======== =========
Portfolio Statistics
The table below shows primary portfolio trends, by quarter, for the last
six quarters.
Primary
portfolio As of and for the
trends quarter ended
--------------------------------------------------------------
December September
June 30, March 31, 31, 30, June 30, March 31,
2016 2016 2015 2015 2015 2015
--------------------------------------------------------------
($ Values In Millions)
New
insurance
written $ 5,838 $ 4,254 $ 4,547 $ 3,633 $ 2,549 $ 1,696
New risk
written 1,411 1,016 1,105 887 615 396
Insurance in
force (1) 23,624 18,564 14,824 10,601 7,190 4,835
Risk in
force (1) 5,721 4,487 3,586 2,553 1,715 1,146
Policies in
force
(count) (1) 100,547 79,700 63,948 46,175 31,682 21,225
Weighted-
average
coverage
(2) 24.2% 24.2% 24.2% 24.1% 23.9% 23.7%
Loans in
default
(count) 79 55 36 20 9 6
Percentage
of loans in
default 0.1% 0.1% 0.1% -% -% -%
Risk in
force on
defaulted
loans $ 4 $ 3 $ 2 $ 1 $ 1 $ -
Average
premium
yield (3) 0.47% 0.45% 0.49% 0.52% 0.51% 0.55%
Annual
persistency
(4) 83.3% 82.7% 79.6% 71.6% 65.5% 59.2%
(1) Reported as of the end of the period.
(2) End of period risk in force (RIF) divided by IIF.
Average premium yield is calculated by dividing primary net premiums
(3) earned by average IIF for the period, annualized.
Defined as the percentage of IIF that remains on our books after any 12-
(4) month period.
The tables below reflect our total primary NIW by FICO, LTV, and
purchase/refinance mix.
Primary NIW by FICO Three months ended
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
> = 760 $ 3,160 $ 2,283 $ 1,182
740-759 961 712 377
720-739 672 473 422
700-719 541 411 242
680-699 308 245 203
< =679 196 130 123
------------- -------------- -------------
Total $ 5,838 $ 4,254 $ 2,549
============= ============== =============
Primary NIW by LTV Three months ended
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
95.01% and above $ 362 $ 209 $ 84
90.01% to 95.00% 2,633 1,816 1,149
85.01% to 90.00% 1,732 1,420 842
85.00% and below 1,111 809 474
------------- -------------- -------------
Total $ 5,838 $ 4,254 $ 2,549
============= ============== =============
Primary NIW by
purchase/refinance mix Three months ended
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
Purchase $ 4,199 $ 2,919 $ 1,619
Refinance 1,639 1,335 930
------------- -------------- -------------
Total $ 5,838 $ 4,254 $ 2,549
============= ============== =============
The tables below show the primary weighted average FICO and the weighted
average loan-to-value ratio (LTV), by policy type, for NIW in the quarters
presented.
Weighted Average FICO
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
Monthly 752 753 742
Single 762 759 760
Weighted Average LTV
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
Monthly 92% 92% 92%
Single 91 91 91
The table below reflects a summary of our primary IIF and RIF by book year.
Primary IIF and RIF As of June 30, 2016
----------------------------
IIF RIF
-------------- -------------
(In Millions)
June 30, 2016 $ 9,951 $ 2,393
2015 11,348 2,762
2014 2,266 552
2013 59 14
-------------- -------------
Total $ 23,624 $ 5,721
============== =============
The tables below reflect our total primary IIF and RIF by FICO, average loan
size, LTV, and loan type.
Primary IIF by FICO As of
------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
> = 760 $ 11,929 $ 9,146 $ 3,323
740-759 3,876 3,045 1,153
720-739 3,082 2,515 1,109
700-719 2,341 1,877 706
680-699 1,561 1,305 595
< =679 835 676 304
------------- -------------- -------------
Total $ 23,624 $ 18,564 $ 7,190
============= ============== =============
Primary RIF by FICO As of
------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
> = 760 $ 2,895 $ 2,206 $ 772
740-759 951 747 276
720-739 750 614 273
700-719 566 453 173
680-699 369 312 147
< =679 190 155 74
------------- -------------- -------------
Total $ 5,721 $ 4,487 $ 1,715
============= ============== =============
Primary Average Loan Size by FICO As of
------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
> = 760 $ 249 $ 247 $ 241
740-759 239 237 233
720-739 234 232 227
700-719 232 229 221
680-699 223 220 217
< =679 209 206 205
Primary IIF by LTV As of
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
95.01% and above $ 1,049 $ 699 $ 122
90.01% to 95.00% 10,574 8,220 3,132
85.01% to 90.00% 7,754 6,326 2,534
85.00% and below 4,247 3,319 1,402
------------- -------------- -------------
Total $ 23,624 $ 18,564 $ 7,190
============= ============== =============
Primary RIF by LTV As of
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
95.01% and above $ 293 $ 196 $ 36
90.01% to 95.00% 3,116 2,423 927
85.01% to 90.00% 1,838 1,498 598
85.00% and below 474 370 154
------------- -------------- -------------
Total $ 5,721 $ 4,487 $ 1,715
============= ============== =============
Primary RIF by Loan Type As of
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
Fixed 98% 98% 97%
Adjustable rate mortgages:
Less than five years - - -
Five years and longer 2 2 3
------------- -------------- -------------
Total 100% 100% 100%
As of June 30, 2016 and June 30, 2015, 100% of our pool IIF and RIF was
comprised of insurance on fixed rate mortgages.
The table below reflects a summary of the change in total primary IIF for
the following periods.
Primary IIF Three months ended
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In Millions)
IIF, beginning of period $ 18,564 $ 14,824 $ 4,835
NIW 5,838 4,254 2,548
Cancellations and other
reductions (778) (514) (193)
------------- -------------- -------------
IIF, end of period $ 23,624 $ 18,564 $ 7,190
============= ============== =============
Geographic Dispersion
The following table shows the distribution by state of our primary RIF.
Top 10 primary RIF by state As of
-----------------------------------------
June 30, March 31, June 30,
2016 2016 2015
------------ ------------- ------------
California 13.0% 13.2% 13.6%
Texas 6.8 6.8 7.4
Virginia 6.4 5.8 5.3
Florida 5.0 5.3 4.8
Colorado 4.1 4.3 4.2
Michigan 4.1 4.1 3.6
Arizona 3.8 3.8 3.7
Pennsylvania 3.5 3.5 3.3
Maryland 3.4 3.6 3.5
North Carolina 3.4 3.1 2.1
------------ ------------- ------------
Total 53.5% 53.5% 51.5%
============ ============= ============
The following table shows portfolio data by origination year.
Origination year As of June 30, 2016
----------------------------------------------
%
Remaining Remaining
Original Insurance of Policies
Insurance in Original Ever in
Written Force Insurance Force
----------- ----------- ---------- ----------
($ Values in Millions)
2013 $ 162 $ 59 36% 655
2014 3,451 2,266 66% 14,786
2015 12,422 11,348 91% 52,550
2016 (through June
30) 10,092 9,951 99% 40,862
----------- ----------- ----------
Total $ 26,127 $ 23,624 108,853
=========== =========== ==========
Origination year As of June 30, 2016
--------------------------------------------------------
Incurred
Number of Loss Ratio
Policies Number of # of (Inception Cumulative
in Loans in Claims to default
Force Default Paid Date) (1) rate (2)
---------- ---------- ---------- ---------- ----------
($ Values in Millions)
2013 289 - 1 -% 0.2%
2014 10,640 30 2 2.0% -%
2015 49,180 47 2 1.9% 0.4%
2016 (through June
30) 40,438 2 - 0.2% -%
---------- ---------- ----------
Total 100,547 79 5
========== ========== ==========
(1) The ratio of total losses incurred (paid and reserved) divided by the
total premiums earned.
(2) The sum of claims paid ever to date and notices of default as of the end
of the period divided by policies ever in force.
The following table provides a reconciliation of the beginning and ending
reserve balances for primary insurance claims and claims expenses:
Three months ended Six months ended
-------------------- --------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
--------- --------- --------- ---------
(In Thousands)
Beginning balance $ 1,137 $ 187 $ 679 $ 83
Add claims incurred:
Claims and claim expenses
incurred:
Current year 560 59 1,113 139
Prior years (90) (65) (185) (41)
--------- --------- --------- ---------
Total claims and claims expenses
incurred 470 (6) 928 98
--------- --------- --------- ---------
Less claims paid:
Claims and claim expenses
paid:
Current year - - - -
Prior years 132 - 132 -
--------- --------- --------- ---------
Total claims and claim expenses
paid 132 - 132 -
--------- --------- --------- ---------
--------- --------- --------- ---------
Balance, June 30 $ 1,475 $ 181 $ 1,475 $ 181
========= ========= ========= =========
The following table provides a reconciliation of the beginning and ending
count of loans in default.
Three months ended Six months ended
------------------------------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
--------- --------- --------- ---------
Beginning default inventory 55 6 36 4
Plus: new defaults 50 5 89 10
Less: cures (23) (2) (43) (5)
Less: claims paid (3) - (3) -
--------- --------- --------- ---------
Ending default inventory 79 9 79 9
========= ========= ========= =========
The following tables provide details of our claims and reserves.
Three months ended Six months ended
------------------------------------------
June 30, June 30, June 30, June 30,
2016 2015 2016 2015
--------- --------- --------- ---------
($ Values In Thousands)
Number of claims paid 3 - 3 -
Total amount paid for claims $ 132 $ - $ 132 $ -
Average amount paid per claim $ 44 $ - $ 44 $ -
Severity 71% - 71% -
As of June 30, As of June 30,
Average reserve per default: 2016 2015
---------------- ----------------
(In Thousands)
Case $ 17 $ 19
IBNR 1 1
---------------- ----------------
Total $ 18 $ 20
The following table provides a trended comparison of the PMIERs financial
requirements as reported by National MI.
As of
--------------------------------------------
June 30, 2016 March 31, 2016 June 30, 2015
------------- -------------- -------------
(In thousands)
Available Assets $ 432,074 $ 434,138 $ 431,411
Risk-Based Required Assets 377,468 302,852 249,805
Asset charge % (1) 6.10% 6.12% 6.17%
(1) Asset charge represents the risk based required asset amount divided by
the outstanding RIF on performing primary loans.
Investor ContactJohn M. Swenson Vice President, Investor Relations and Treasury [email protected] (510) 788-8417 Press ContactMary McGarityStrategic Vantage Mortgage Public Relations(203) [email protected]
Source: NMI Holdings, Inc.