NMI Holdings, Inc. Reports Record Third Quarter Net Income of $6.2 Million
EMERYVILLE, CA -- (Marketwired) -- 11/01/16 --
NMI Holdings, Inc. (NASDAQ: NMIH) today reported net income of $6.2 million, or $0.10 per share, for the third quarter ended Sep. 30, 2016. This compares with net income of $2.0 million, or $0.03 per share, in the prior quarter and a net loss of ($4.8) million, or ($0.08) per share, in the third quarter of 2015. Total revenue for the quarter was $35.5 million, up 20% from $29.5 million in the prior quarter and up 141% from $14.7 million in the third quarter of 2015.
Bradley Shuster, chairman and CEO of National MI, said, "We continued our positive momentum in the third quarter, delivering record net income and returns, trends that we expect will continue for the foreseeable future. We grew our high-quality insurance-in-force by 19% over the prior quarter and 166% over the third quarter last year. We also continued to shift our mix to high-return monthly product, which grew to 71% of total new insurance written in the quarter. Cessions commenced under our reinsurance agreement and we expect to continue to take advantage of the low cost of capital provided by reinsurance to support our future growth."
- As of Sep. 30, 2016, the company had primary insurance-in-force of $28.2 billion, up 19% from $23.6 billion at the prior quarter end and up 166% over $10.6 billion as of Sep. 30, 2015.
- Premiums earned for the quarter were $31.8 million, up 22% from $26.0 million in the prior quarter and up 148% over $12.8 million in the same quarter a year ago
- Monthly premium NIW was $4.16 billion, an increase of 12% over $3.70 billion in the prior quarter and an increase of 163% over the third quarter of 2015. Single premium NIW of $1.70 billion was down 21% from the prior quarter and down 17% compared with the same quarter a year ago.
- Total NIW in the third quarter was $5.86 billion, which compares with $5.84 billion in the prior quarter and $3.63 billion in the third quarter of 2015.
- Total underwriting and operating expenses in the third quarter were $24.0 million, including share-based compensation expense of $1.8 million. This compares with total underwriting and operating expenses of $23.2 million, including $1.8 million of share-based compensation, in the prior quarter, and $19.7 million, including $1.8 million of share-based compensation, in the same quarter a year ago.
- Loss expense for the quarter was $0.7 million, resulting in a loss ratio of 2.1%.
- As of the end of the third quarter, the company had approved master policies in place with 1,100 customers, up from 1,061 as of the end of the prior quarter, and up from 906 as of the end of the third quarter of 2015. Customers delivering NIW in the quarter grew to a new high of 525, which compares with 518 in the prior quarter and 391 in the same quarter a year ago.
- At quarter-end, cash and investments were $686 million, including $77 million at the holding company, and book equity was $430 million, equal to $7.28 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.
- In the first nine months of 2016, the company generated $52.2 million of cash from operations, which compares with $16.2 million for the same period in 2015.
- At quarter-end, the company had total PMIERs available assets of $489 million, which compares with risk- based required assets under PMIERs of $321 million.
Quarter Quarter Quarter Growth Growth
Ended Ended Ended Q/Q Y/Y
9/30/2016 6/30/2016 9/30/2015
Primary Insurance-in-
Force ($billions) 28.22 23.62 10.60 19% 166%
New Insurance Written -
NIW ($billions)
Monthly premium 4.16 3.70 1.58 12% 163%
Single premium 1.70 2.14 2.05 -21% -17%
Total 5.86 5.84 3.63 - 61%
Premiums Earned
($millions) 31.81 26.04 12.83 22% 148%
Underwriting & Operating
Expense ($millions) 24.04 23.23 19.65 3% 22%
Loss Expense ($millions) 0.66 0.47 0.18 40% 267%
Loss Ratio 2.1% 1.8% 1.4%
Cash & Investments
($millions) 686 654 447 5% 53%
Book Equity ($millions) 430 422 408 2% 5%
Book Value per Share $ 7.28 $ 7.14 $ 6.95 2% 5%
Approved Master Policies 1100 1061 906 4% 21%
Customers Generating NIW 525 518 391 1% 34%
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: 93562675, 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 access the reinsurance market and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; 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 For the three months For the nine months
operations and ended ended September
comprehensive income September 30, 30,
----------------------- -----------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
Revenues (In Thousands, except for share data)
Net premiums earned $ 31,808 $ 12,834 $ 77,656 $ 28,626
Net investment income 3,544 1,884 10,117 5,168
Net realized investment
gains (losses) 66 (15) (758) 952
Other revenues 102 - 172 -
----------- ----------- ----------- -----------
Total revenues 35,520 14,703 87,187 34,746
----------- ----------- ----------- -----------
Expenses
Insurance claims and claims
expenses 664 181 1,592 279
Underwriting and operating
expenses 24,037 19,653 69,943 58,912
----------- ----------- ----------- -----------
Total expenses 24,701 19,834 71,535 59,191
----------- ----------- ----------- -----------
Other (expense) income
(Loss) gain from change in
fair value of warrant (797) 332 (187) 1,473
liability
Interest expense (3,733) - (11,072) -
----------- ----------- ----------- -----------
Total other (expense) income (4,530) 332 (11,259) 1,473
----------- ----------- ----------- -----------
Income (loss) before income
taxes 6,289 (4,799) 4,393 (22,972)
Income tax expense 114 - 114 -
----------- ----------- ----------- -----------
Net income (loss) $ 6,175 $ (4,799) $ 4,279 $ (22,972)
=========== =========== =========== ===========
Earnings (loss) per share
Basic $ 0.10 $ (0.08) $ 0.07 $ (0.39)
Diluted $ 0.10 $ (0.08) $ 0.07 $ (0.39)
Weighted average common
shares outstanding
Basic 59,130,401 58,741,328 59,047,758 58,650,043
Diluted 60,284,746 58,741,328 59,861,916 58,650,043
Loss Ratio(1) 2% 1% 2% 1%
Expense Ratio(2) 76 153 90 206
----------- ----------- ----------- -----------
Combined ratio 78% 155% 92% 207%
Net income (loss) $ 6,175 $ (4,799) $ 4,279 $ (22,972)
Other comprehensive income
(loss), net of tax:
Net unrealized gains
(losses) in accumulated
other comprehensive gain
(loss), net of tax (82) (483) 17,690 (15)
(benefit) expense of $0
for all periods presented
Reclassification adjustment
for losses (gains)
included in net loss, net (66) 15 758 (952)
of tax expense of $0 for
all periods presented
----------- ----------- ----------- -----------
Other comprehensive income
(loss), net of tax (148) (468) 18,448 (967)
----------- ----------- ----------- -----------
Comprehensive income (loss) $ 6,027 $ (5,267) $ 22,727 $ (23,939)
=========== =========== =========== ===========
(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.
September December
Consolidated balance sheets 30, 2016 31, 2015
----------- -----------
(In Thousands, except
Assets for share data)
Fixed maturities, available-for-sale, at fair
value (amortized cost of $628,209 and $564,319 as
of September 30, 2016 and December 31, 2015, 641,572 559,235
respectively) $ $
Cash and cash equivalents 44,522 57,317
Premiums receivable 11,378 5,143
Accrued investment income 3,615 2,873
Prepaid expenses 2,313 1,428
Deferred policy acquisition costs, net 28,911 17,530
Software and equipment, net 19,924 15,201
Intangible assets and goodwill 3,634 3,634
Prepaid reinsurance premiums 36,091 -
Other assets 206 90
----------- -----------
Total assets $ 792,166 $ 662,451
=========== ===========
Liabilities
Term loan $ 144,230 $ 143,939
Unearned premiums 145,401 90,773
Accounts payable and accrued expenses 32,568 22,725
Reserve for insurance claims and claim expenses 2,133 679
Reinsurance funds withheld 28,963 -
Deferred ceding commission
6,697 -
Warrant liability, at fair value 1,654 1,467
Current tax payable 114 -
Deferred tax 137 137
----------- -----------
Total liabilities 361,897 259,720
----------- -----------
Commitments and contingencies
Shareholders' equity
Common stock - class A shares, $0.01 par value;
59,138,663 and 58,807,825 shares issued and
outstanding as of September 30, 2016 and December
31, 2015, respectively (250,000,000 shares
authorized) 591 588
Additional paid-in capital 575,148 570,340
Accumulated other comprehensive income (loss), net
of tax 10,974 (7,474)
Accumulated deficit (156,444) (160,723)
----------- -----------
Total shareholders' equity 430,269 402,731
----------- -----------
Total liabilities and shareholders' equity $ 792,166 $ 662,451
=========== ===========
Historical Quarterly Data 2016
---------------------------------------
September 30 June 30 March 31
------------- ------------ ------------
(In Thousands, except for share
Revenues data)
Net premiums earned $ 31,808 $ 26,041 $ 19,807
Net investment income 3,544 3,342 3,231
Net realized investment gains
(losses) 66 61 (885)
Other revenues 102 37 32
------------- ------------ ------------
Total revenues 35,520 29,481 22,185
------------- ------------ ------------
Expenses
Insurance claims and claims
expenses 664 470 458
Underwriting and operating
expenses 24,037 23,234 22,672
------------- ------------ ------------
Total expenses 24,701 23,704 23,130
------------- ------------ ------------
Other (expense) income (1) (4,530) (3,766) (2,962)
Income (loss) before income taxes 6,289 2,011 (3,907)
Income tax expense (benefit) 114 - -
------------- ------------ ------------
Net income (loss) $ 6,175 $ 2,011 $ (3,907)
============= ============ ============
Earnings (loss) per share
Basic $ 0.10 $ 0.03 $ (0.07)
Diluted $ 0.10 0.03 (0.07)
Weighted average common shares
outstanding
Basic 59,130,401 59,105,613 58,936,694
Diluted 60,284,746 59,830,899 58,936,694
Other data
Loss Ratio (2) 2% 2% 2%
Expense Ratio (3) 76% 89% 114%
------------- ------------ ------------
Combined ratio 78% 91% 117%
Historical Quarterly Data 2015
--------------------------------------
September
December 31 30 June 30
------------ ------------ ------------
(In Thousands, except for
Revenues share data)
Net premiums earned $ 16,880 $ 12,834 $ 8,856
Net investment income 2,078 1,884 1,688
Net realized investment gains
(losses) (121) (15) 354
Other revenues 25 - -
------------ ------------ ------------
Total revenues 18,862 14,703 10,898
------------ ------------ ------------
Expenses
Insurance claims and claims
expenses 371 181 (6)
Underwriting and operating
expenses 21,686 19,653 20,910
------------ ------------ ------------
Total expenses 22,057 19,834 20,903
------------ ------------ ------------
Other (expense) income (1) (1,626) 332 (106)
Income (loss) before income taxes (4,821) (4,799) (10,112)
Income tax expense (benefit) - - 241
------------ ------------ ------------
Net income (loss) $ (4,821) $ (4,799) $ (10,353)
============ ============ ============
Earnings (loss) per share
Basic $ (0.08) $ (0.08) $ (0.18)
Diluted (0.08) (0.08) (0.18)
Weighted average common shares
outstanding
Basic 58,781,566 58,741,328 58,720,095
Diluted 58,781,566 58,741,328 58,720,095
Other data
Loss Ratio (2) 2% 1% -%
Expense Ratio (3) 128% 153% 236%
------------ ------------ ------------
Combined ratio 131% 155% 236%
(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
------------------------------------------
September March 31,
30, 2016 June 30, 2016 2016
------------------------------------------
(In Millions)
Monthly $ 4,162 $ 3,700 $ 2,492
Single 1,695 2,138 1,762
------------- ------------- -------------
Primary $ 5,857 $ 5,838 $ 4,254
Primary and pool IIF As of
------------------------------------------
September March 31,
30, 2016 June 30, 2016 2016
------------------------------------------
(In
Millions)
Monthly $ 16,038 $ 12,529 $ 9,210
Single 12,190 11,095 9,354
------------- ------------- -------------
Primary 28,228 23,624 18,564
Pool 3,826 3,999 4,136
------------- ------------- -------------
Total $ 32,054 $ 27,623 $ 22,700
============= ============= =============
Primary NIW Three months ended
------------------------------------------
December 31, September
2015 30, 2015 June 30, 2015
------------------------------------------
(In Millions)
Monthly $ 2,029 $ 1,582 $ 1,460
Single 2,518 2,051 1,089
------------- ------------- -------------
Primary $ 4,547 $ 3,633 $ 2,549
Primary and pool IIF As of
------------------------------------------
December 31, September
2015 30, 2015 June 30, 2015
------------------------------------------
(In Millions)
Monthly $ 6,958 $ 5,087 $ 3,617
Single 7,866 5,514 3,573
------------- ------------- -------------
Primary 14,824 10,601 7,190
Pool 4,238 4,340 4,476
------------- ------------- -------------
Total $ 19,062 $ 14,941 $ 11,666
============= ============= =============
Portfolio Statistics
The table below shows primary portfolio trends, by quarter, for the last six quarters.
Primary portfolio trends As of and for the quarter ended
--------------------------------------------
September June 30, March 31,
30, 2016 2016 2016
--------------------------------------------
($ Values In Millions)
New insurance written $ 5,857 $ 5,838 $ 4,254
New risk written 1,415 1,411 1,016
Insurance in force (1) 28,228 23,624 18,564
Risk in force (1) 6,847 5,721 4,487
Policies in force (count) (1) 119,002 100,547 79,700
Weighted-average coverage (2) 24.3% 24.2% 24.2%
Loans in default (count) 115 79 55
Percentage of loans in default 0.1% 0.1% 0.1%
Risk in force on defaulted
loans $ 6 $ 4 $ 3
Average premium yield (3) 0.48% 0.47% 0.45%
Annual persistency (4) 81.8% 83.3% 82.7%
Primary portfolio trends As of and for the quarter ended
---------------------------------------------
December 31, September
2015 30, 2015 June 30, 2015
---------------------------------------------
($ Values In Millions)
New insurance written $ 4,547 $ 3,633 $ 2,549
New risk written 1,105 887 615
Insurance in force (1) 14,824 10,601 7,190
Risk in force (1) 3,586 2,553 1,715
Policies in force (count) (1) 63,948 46,175 31,682
Weighted-average coverage (2) 24.2% 24.1% 23.9%
Loans in default (count) 36 20 9
Percentage of loans in default 0.1% -% -%
Risk in force on defaulted
loans $ 2 $ 1 $ 1
Average premium yield (3) 0.49% 0.52% 0.51%
Annual persistency (4) 79.6% 71.6% 65.5%
(1) Reported as of the end of the period.
(2) End of period risk in force (RIF) divided by IIF.
(3) Average premium yield is calculated by dividing primary net premiums
earned, net of reinsurance, by average gross IIF for the period,
annualized.
(4) Defined as the percentage of IIF that remains on our books after any
12-month period.
The tables below reflect our total primary NIW by FICO, loan-to-value (LTV), and purchase/refinance mix.
Three months
Primary NIW by FICO ended
-----------------------------------------
September 30, September 30,
2016 June 30, 2016 2015
------------- ------------- -------------
(In
Millions)
greater than = 760 $ 2,975 $ 3,160 $ 1,755
740-759 934 961 583
720-739 725 672 505
700-719 588 541 376
680-699 387 308 271
less than =679 248 196 143
------------- ------------- -------------
Total $ 5,857 $ 5,838 $ 3,633
============= ============= =============
Three months
Primary NIW by LTV ended
-----------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------- ------------- -------------
(In
Millions)
95.01% and above $ 347 $ 362 $ 162
90.01% to 95.00% 2,557 2,633 1,656
85.01% to 90.00% 1,844 1,732 1,208
85.00% and below 1,109 1,111 607
------------- ------------- -------------
Total $ 5,857 $ 5,838 $ 3,633
============= ============= =============
Primary NIW by purchase/refinance Three months
mix ended
-----------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------- ------------- -------------
(In
Millions)
Purchase $ 4,400 $ 4,199 $ 2,604
Refinance 1,457 1,639 1,029
------------- ------------- -------------
Total $ 5,857 $ 5,838 $ 3,633
============= ============= =============
The tables below show the primary weighted average FICO and the weighted average LTV, by policy type, for NIW in the quarters presented.
Weighted Average FICO
-----------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------- ------------- -------------
Monthly 748 752 742
Single 763 762 758
Weighted Average LTV
-----------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------- ------------- -------------
Monthly 91% 92% 92%
Single 90 91 91
The table below reflects a summary of our primary IIF and RIF by book year.
Primary IIF and RIF As of September 30, 2016
-------------------------------
IIF RIF
--------------- ---------------
(In Millions)
September 30, 2016 $ 15,433 $ 3,719
2015 10,679 2,610
2014 2,062 505
2013 54 13
--------------- ---------------
Total $ 28,228 $ 6,847
=============== ===============
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
--------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------ ------------ ------------
(In
Millions)
greater than = 760 $ 14,258 $ 11,929 $ 4,969
740-759 4,612 3,876 1,703
720-739 3,648 3,082 1,582
700-719 2,813 2,341 1,063
680-699 1,863 1,561 848
less than = 679 1,034 835 436
------------ ------------ ------------
Total $ 28,228 $ 23,624 $ 10,601
============ ============ ============
Primary RIF by FICO As of
--------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------ ------------ ------------
(In
Millions)
greater than = 760 $ 3,470 $ 2,895 $ 1,174
740-759 1,130 951 413
720-739 887 750 391
700-719 680 566 260
680-699 443 369 209
less than = 679 237 190 106
------------ ------------ ------------
Total $ 6,847 $ 5,721 $ 2,553
============ ============ ============
Primary Average Loan Size by FICO As of
--------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------ ------------ ------------
(In
Thousands)
greater than = 760 $ 250 $ 249 $ 244
740-759 240 239 234
720-739 235 234 227
700-719 233 232 225
680-699 224 223 218
less than = 679 209 209 207
Primary IIF by LTV As of
--------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------ ------------ ------------
(In
Millions)
95.01% and above $ 1,363 $ 1,049 $ 282
90.01% to 95.00% 12,644 10,574 4,710
85.01% to 90.00% 9,157 7,754 3,658
85.00% and below 5,064 4,247 1,951
------------ ------------ ------------
Total $ 28,228 $ 23,624 $ 10,601
============ ============ ============
Primary RIF by LTV As of
--------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------ ------------ ------------
(In
Millions)
95.01% and above $ 380 $ 293 $ 80
90.01% to 95.00% 3,725 3,116 1,392
85.01% to 90.00% 2,174 1,838 866
85.00% and below 568 474 215
------------ ------------ ------------
Total $ 6,847 $ 5,721 $ 2,553
============ ============ ============
Primary RIF by Loan Type As of
--------------------------------------
September June 30, September
30, 2016 2016 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 September 30, 2016 and September 30, 2015, 100% of each 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.
Three months
Primary IIF ended
-----------------------------------------
September 30, September 30,
2016 June 30, 2016 2015
------------- ------------- -------------
(In Millions)
IIF, beginning of period $ 23,624 $ 18,564 $ 7,190
NIW 5,857 5,838 3,633
Cancellations and other
reductions (1,253) (778) (222)
------------- ------------- -------------
IIF, end of period $ 28,228 $ 23,624 $ 10,601
============= ============= =============
Geographic Dispersion
The following table shows the distribution by state of our primary RIF.
Top 10 primary RIF by state As of
-----------------------------------------
September June 30, September
30, 2016 2016 30, 2015
------------- ------------- -------------
California 13.2% 13.0% 13.2%
Texas 6.8 6.8 7.1
Virginia 6.6 6.4 3.9
Florida 4.7 5.0 5.4
Colorado 4.0 4.1 4.3
Michigan 3.9 4.1 4.6
Arizona 3.8 3.8 3.6
Maryland 3.6 3.4 3.5
Pennsylvania 3.6 2.3 3.9
Utah 3.6 3.3 2.6
------------- ------------- -------------
Total 53.8% 52.2% 52.1%
============= ============= =============
The following table shows portfolio data by origination year.
As of September 30, 2016
--------------------------------------------
%
Original Remaining Remaining
Insurance Insurance in of Original
Origination year Written Force Insurance
-------------- -------------- --------------
($ Values in Millions)
2013 $ 162 $ 54 33%
2014 3,451 2,062 60%
2015 12,422 10,678 86%
2016 (through September 30) 15,949 15,434 97%
-------------- --------------
Total $ 31,984 $ 28,228
============== ==============
As of September 30, 2016
---------------------------------------------
Policies Number of Number
Ever in Policies in of Loans
Origination year Force Force in Default
-------------- -------------- -------------
($ Values in Millions)
2013 655 264 -
2014 14,786 9,824 46
2015 52,550 46,902 61
2016 (through September 30) 63,519 62,012 8
-------------- -------------- -------------
Total 131,510 119,002 115
============== ============== =============
As of September 30, 2016
---------------------------------------------
Incurred
# of Loss Ratio Cumulative
Claims (Inception to default rate
Origination year Paid Date) (1) (2)
------------- --------------- ---------------
($ Values in Millions)
2013 1 -% 0.2%
2014 2 2.7% 0.3%
2015 5 1.7% 0.1%
2016 (through September 30) - 0.3% -%
-------------
Total 8
=============
(1) The ratio of total losses incurred (paid and reserved) divided by
cumulative premiums earned, without the effects of reinsurance.
(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:
For the three months For the nine months
ended September ended September
30, 30,
-----------------------------------------------
2016 2015 2016 2015
----------- ----------- ----------- -----------
(In Thousands)
Beginning balance $ 1,475 $ 181 $ 679 $ 83
Less reinsurance
recoverables (1) - - - -
----------- ----------- ----------- -----------
Beginning balance, net of
reinsurance recoverables 1,475 181 679 83
----------- ----------- ----------- -----------
Add claims incurred:
Claims and claim expenses
incurred:
Current year (2) 690 219 1,803 358
Prior years (3) (29) (38) (214) (79)
----------- ----------- ----------- -----------
Total claims and claims
expenses incurred 661 181 1,589 279
----------- ----------- ----------- -----------
Less claims paid:
Claims and claim expenses
paid:
Current year (2) - - - -
Prior years (3) 93 4 225 4
----------- ----------- ----------- -----------
Total claims and claim
expenses paid 93 4 225 4
----------- ----------- ----------- -----------
Reserve at end of period,
net of reinsurance
recoverables 2,043 358 2,043 358
----------- ----------- ----------- -----------
Add reinsurance recoverables
(1) 90 - 90 -
----------- ----------- ----------- -----------
Balance, September 30 $ 2,133 $ 358 $ 2,133 $ 358
=========== =========== =========== ===========
(1) Related to ceded losses recoverable on the 2016 QSR Transaction. To
date, ceded losses have been immaterial.
(2) Related to defaults occurring in the current year.
(3) Related to defaults occurring in prior years.
The following table provides a reconciliation of the beginning and ending count of loans in default.
Three months ended Nine months ended
---------------------- ----------------------
September September September September
30, 30, 30, 30,
2016 2015 2016 2015
---------- ---------- ---------- ----------
Beginning default inventory 79 9 36 4
Plus: new defaults 69 21 158 24
Less: cures (30) (9) (73) (7)
Less: claims paid (3) (1) (6) (1)
---------- ---------- ---------- ----------
Ending default inventory 115 20 115 20
========== ========== ========== ==========
The following tables provide details of our claims and reserves.
Three months ended Nine months ended
------------------------- -------------------------
September September September September
30, 30, 30, 30,
2016 2015 2016 2015
------------ ------------ ------------ ------------
($ Values In Thousands)
Number of claims paid 3 1 6 1
Total amount paid for
claims $ 93 $ 4 $ 225 $ 4
Average amount paid per
claim $ 31 $ 4 $ 32 $ 4
Severity 53% 5% 62% 5%
As of As of
September 30, September 30,
Average reserve per default: 2016 2015
------------- -------------
(In Thousands)
Case $ 17 $ 17
IBNR 1 1
------------- -------------
Total $ 18 $ 18
The following table provides a comparison of the PMIERs financial requirements as reported by National MI.
As of
----------- ----------- -----------
September June 30, December
30, 2016 2016 31, 2015
----------- ----------- -----------
(In thousands)
Available Assets $ 488,635 $ 432,074 $ 431,411
Net Risk-Based Required Assets 320,609 377,468 249,805
Asset charge % (1) 6.14% 6.10% 6.17%
(1) Asset charge represents the risk based required asset amount as defined
in the PMIERs, 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.