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nmih-20220215
0001547903false00015479032022-02-152022-02-15

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 15, 2022

NMI Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware001-3617445-4914248
(State or Other Jurisdiction
 of Incorporation)		(Commission
 File Number)		(IRS Employer
 Identification No.)
2100 Powell Street, 12th Floor, Emeryville, CA
(Address of Principal Executive Offices)
94608
(Zip Code)
(855) 530-6642
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01NMIHNasdaq
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 



Item 2.02    Results of Operations and Financial Condition
On February 15, 2022, NMI Holdings, Inc. (the "Company") issued a press release announcing its financial results for the quarter and year ended December 31, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this Item 2.02, including Exhibit 99.1, has been "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, ("Exchange Act") nor shall it be deemed incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.
Item 8.01    Other Events
On February 15, 2022, the Company issued a press release announcing that its Board of Directors has approved a new stock repurchase program (the "Stock Repurchase Program") granting the Company the authority to repurchase up to $125 million in common stock, par value $0.01 per share, through December 31, 2023. The Stock Repurchase Program may be executed from time to time through various means, including, without limitation, open market or privately negotiated transactions. A copy of the press release is furnished as Exhibit 99.1 to this report.
Item 9.01.    Financial Statements and Exhibits
(d) Exhibits.
Exhibit No.    Description
99.1    NMI Holdings, Inc. Press Release Dated February 15, 2022
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)
1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


NMI Holdings, Inc.
(Registrant)

                
Date: February 15, 2022By:/s/ William J. Leatherberry
William J. Leatherberry
EVP, General Counsel

2
Document
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NMI Holdings, Inc. Reports Fourth Quarter and Full Year 2021 Financial Results;
Announces $125 Million Share Repurchase Authorization
EMERYVILLE, Calif., Feb. 15, 2022 -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $60.5 million, or $0.69 per diluted share, for the fourth quarter ended December 31, 2021, which compares to $60.2 million, or $0.69 per diluted share, in the third quarter ended September 30, 2021 and $48.3 million, or $0.56 per diluted share, in the fourth quarter ended December 31, 2020. Adjusted net income for the quarter was $63.5 million or $0.73 per diluted share, which compares to $61.8 million or $0.71 per diluted share in the third quarter ended September 30, 2021 and $50.8 million or $0.59 per diluted share in the fourth quarter ended December 31, 2020.

Net income for the full year ended December 31, 2021 was $231.1 million or $2.65 per diluted share, which compares to $171.6 million, or $2.13 per diluted share, for the year ended December 31, 2020. Adjusted net income for the year was $236.8 million or $2.73 per diluted share, which compares to $173.6 million, or $2.19 per diluted share, for the year ended December 31, 2020. The non-GAAP financial measures adjusted net income, adjusted diluted earnings per share and adjusted return on equity are presented in this release to enhance the comparability of financial results between periods. See "Use of Non-GAAP Financial Measures" and our reconciliation of such measures to their most comparable GAAP measures, below.

The company also announced today that its Board of Directors has authorized a $125 million share repurchase plan effective through December 31, 2023.

Adam Pollitzer, President and Chief Executive Officer of National MI, said, “The fourth quarter capped a year of standout success for National MI. In 2021, we delivered record NIW volume, grew our high-quality insured portfolio, and achieved record profitability and consistently strong mid-teen returns. We ended the year with a robust funding position and are pleased to announce our $125 million debut share repurchase program. We are excited to progress along our capital roadmap and provide investors with the ability to directly access value as we continue to perform, grow our earnings and compound book value. National MI is leading with impact; helping a record number of borrowers gain access to housing and providing them support as they build long-term value and community. Looking forward, we see a compelling opportunity to continue to support borrowers in need, drive strong growth in our high-quality insurance in-force and deliver strong risk-adjusted returns.”

Selected fourth quarter 2021 highlights include:

•New insurance written was $18.3 billion, compared to $18.1 billion in the third quarter and $19.8 billion in the fourth quarter of 2020, primarily reflecting a decline in refinancing origination volume year-on-year

•Primary insurance-in-force at quarter-end was $152.3 billion, up 6% from $143.6 billion in the third quarter and 37% compared to $111.3 billion in the fourth quarter of 2020

•Net premiums earned were $113.9 million, compared to $113.6 million in the third quarter and $100.7 million in the fourth quarter of 2020

•Underwriting and operating expenses were $38.8 million, including $2.5 million of costs incurred in connection with our CEO transition and $1.5 million of capital market transaction costs, compared to $34.7 million in the third quarter and $35.0 million in the fourth quarter of 2020

1
EXHIBIT 99.1
•Insurance claims and claim expenses was a benefit of $0.5 million, compared to an expense of $3.2 million in the third quarter and $3.5 million in the fourth quarter of 2020

•Shareholders' equity was $1.6 billion at quarter end, equal to $18.25 per share, up 3% compared to $17.68 per share in the third quarter and 13% compared to $16.08 per share in the fourth quarter of 2020

•Annualized return on equity for the quarter was 15.7% and annualized adjusted return on equity was 16.5%

•At quarter-end, total PMIERs available assets were $2.0 billion and net risk-based required assets of $1.2 billion

Quarter EndedQuarter EndedQuarter Ended
Change (1)
Change (1)
12/31/20219/30/202112/31/2020Q/QY/Y
INSURANCE METRICS ($billions)
Primary Insurance-in-Force $152.3 $143.6 $111.3 6 %37 %
New Insurance Written - NIW
Monthly premium17.0 16.9 17.8 1 %(5)%
Single premium1.4 1.2 2.0 12 %(31)%
Total (2)
18.3 18.1 19.8 1 %(7)%
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts)
Net Premiums Earned113.9 113.6 100.7 — %13 %
Insurance Claims and Claim Expenses(0.5)3.2 3.5 (116)%(114)%
Underwriting and Operating Expenses38.8 34.7 35.0 12 %11 %
Net Income 60.5 60.2 48.3 1 %25 %
Adjusted Net Income 63.5 61.8 50.8 3 %25 %
Cash and Investments 2,163 2,152 1,931 1 %12 %
Shareholders' Equity 1,566 1,516 1,370 3 %14 %
Book Value per Share18.25 17.68 16.08 3 %13 %
Loss Ratio(0.4)%2.8 %3.5 %
Expense Ratio34.1 %30.5 %34.7 %
(1)    Percentages may not be replicated based on the rounded figures presented in the table.
(2)    Total may not foot due to rounding.

Conference Call and Webcast Details
The company will hold a conference call, which will be webcast live today, February 15, 2022, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The webcast will be available on the company's website, www.nationalmi.com, in the "Investor Relations" section. The conference call can also be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 internationally, and using Conference ID: 9990952 or by referencing NMI Holdings, Inc

About NMI Holdings, Inc.

NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), 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

2
EXHIBIT 99.1
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 (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the U.S. Private Securities Litigation Reform Act of 1995 (the "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: uncertainty relating to the coronavirus ("COVID-19") pandemic and the measures taken by governmental authorities and other third parties to combat it, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and the Company’s business, operations and personnel; changes in the charters, business practices, policy or priorities of Fannie Mae and Freddie Mac (collectively, the "GSEs"), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency (FHFA), such as the FHFA's priority to increase the accessibility and affordability of homeownership for low-and-moderate income borrowers and minority communities; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements ("PMIERs") and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia ("D.C.") and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers, such as the Federal Housing Administration, U.S. Department of Agriculture's Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; developments in the world’s financial and capital markets and our access to such markets, including reinsurance; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning "Qualified Mortgage" and “Qualified Residential Mortgage”; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; legislative or regulatory changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; changes in general economic, market and political conditions and policies, interest rates, inflation and investment results or other conditions that affect the housing market or the markets for home mortgages or mortgage insurance; our ability to successfully execute and implement our capital plans, including our ability to access the capital, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low-down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters, including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; the inability of our counterparties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks; and, our ability to recruit, train and retain key personnel. 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, 2020, 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.
3
EXHIBIT 99.1
Use of Non-GAAP Financial Measures

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio and adjusted combined ratio enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company's business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; their measures may not be comparable to those we calculate and present.
Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, net realized gains or losses from our investment portfolio, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted net income is defined as GAAP net income, excluding the after-tax effects of the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, net realized gains or losses from our investment portfolio, and other infrequent, unusual or non-operating items in the periods in which such items are incurred. Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods.

Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP.
Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders' equity for the period.
Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned.
Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned.
Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio and adjusted combined ratio exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below.
(1)    Change in fair value of warrant liability. Outstanding warrants at the end of each reporting period are revalued, and any change in fair value is reported in the statement of operations in the period in which the change occurred. The change in fair value of our warrant liability can vary significantly across periods and is influenced principally by equity market and general economic factors that do not impact or reflect our current period operating results. We believe trends in our operating performance can be more clearly identified by excluding fluctuations related to the change in fair value of our warrant liability.
(2)    Capital markets transaction costs. Capital markets transaction costs result from activities that are undertaken to improve our debt profile or enhance our capital position through activities such as debt refinancing and capital markets reinsurance transactions that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles.
(3)    Net realized investment gains and losses. The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.
(4)    Other infrequent, unusual or non-operating items. Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency in the future. Identification and exclusion of these items provides clarity about the
4
EXHIBIT 99.1
impact special or rare occurrences may have on our current financial performance. Infrequent, unusual or non-operating adjustments for the three and twelve months ended December 31, 2021, include severance, restricted stock modification and other expenses incurred in connection with the CEO transition we announced on September 9, 2021. Past adjustments under this category include the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017. We believe such items are infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business.


Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417
5
EXHIBIT 99.1
Consolidated statements of operations and comprehensive income (unaudited)For the three months ended December 31,For the year ended December 31,
2021202020212020
Revenues(In Thousands, except for per share data)
Net premiums earned$113,933 $100,709 $444,294 $397,172 
Net investment income10,045 8,386 38,072 31,897 
Net realized investment gains 714 295 729 930 
Other revenues380 513 1,977 3,284 
Total revenues125,072 109,903 485,072 433,283 
Expenses
Insurance claims and claim (benefits) expenses(500)3,549 12,305 59,247 
Underwriting and operating expenses38,843 34,994 142,303 131,610 
Service expenses650 459 2,509 2,840 
Interest expense8,029 7,906 31,796 24,387 
(Gain) loss from change in fair value of warrant liability(112)1,379 (566)(2,907)
Total expenses46,910 48,287 188,347 215,177 
Income before income taxes78,162 61,616 296,725 218,106 
Income tax expense 17,639 13,348 65,595 46,540 
Net income $60,523 $48,268 $231,130 $171,566 
Earnings per share
Basic$0.71 $0.57 $2.70 $2.20 
Diluted$0.69 $0.56 $2.65 $2.13 
Weighted average common shares outstanding
Basic85,757 84,956 85,620 78,023 
Diluted87,117 86,250 86,885 79,263 
Loss ratio(1)
(0.4)%3.5 %2.8 %14.9 %
Expense ratio(2)
34.1 %34.7 %32.0 %33.1 %
Combined ratio (3)
33.7 %38.3 %34.8 %48.1 %
Net income $60,523 $48,268 $231,130 $171,566 
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains in accumulated other comprehensive income, net of tax (benefit) expense of $(4,601) and $1,869 for the three months ended December 31, 2021 and 2020, respectively, and $(13,768) and $9,525 for the years ended December 31, 2021, and 2020, respectively(17,307)7,031 (51,795)35,829 
Reclassification adjustment for realized (gains) losses included in net income, net of tax expense (benefit) of $150 and $62 for the three months ended December 31, 2021 and 2020, respectively, and $153 and $(196) for the years ended December 31, 2021, and 2020 respectively(564)(233)(576)739 
Other comprehensive income (loss), net of tax(17,871)6,798 (52,371)36,568 
Comprehensive income $42,652 $55,066 $178,759 $208,134 
(1)    Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)    Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.
(3)    Combined ratio may not foot due to rounding.
6
EXHIBIT 99.1
Consolidated balance sheets (unaudited)December 31, 2021December 31, 2020
Assets(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,078,773 and $1,730,835 as of December 31, 2021 and December 31, 2020, respectively)$2,085,931 $1,804,286 
Cash and cash equivalents (including restricted cash of $3,165 and $5,555 as of December 31, 2021 and December 31, 2020, respectively)76,646 126,937 
Premiums receivable60,358 49,779 
Accrued investment income11,900 9,862 
Prepaid expenses3,530 3,292 
Deferred policy acquisition costs, net59,584 62,225 
Software and equipment, net32,047 29,665 
Intangible assets and goodwill3,634 3,634 
Prepaid reinsurance premiums2,393 6,190 
Reinsurance recoverable 20,320 17,608 
Other assets 94,238 53,188 
Total assets$2,450,581 $2,166,666 
Liabilities
Debt$394,623 $393,301 
Unearned premiums139,237 118,817 
Accounts payable and accrued expenses72,000 61,716 
Reserve for insurance claims and claim expenses103,551 90,567 
Reinsurance funds withheld5,601 8,653 
Warrant liability, at fair value2,363 4,409 
Deferred tax liability, net164,175 112,586 
Other liabilities3,245 7,026 
Total liabilities884,795 797,075 
Shareholders' equity
Common stock - class A shares, $0.01 par value; 85,792,849 and 85,163,039 shares issued and outstanding as of December 31, 2021 and December 31, 2020, respectively (250,000,000 shares authorized)858 852 
Additional paid-in capital955,302 937,872 
Accumulated other comprehensive income, net of tax1,485 53,856 
Retained earnings 608,141 377,011 
Total shareholders' equity1,565,786 1,369,591 
Total liabilities and shareholders' equity$2,450,581 $2,166,666 









7
EXHIBIT 99.1
Non-GAAP Financial Measure Reconciliations (unaudited)
For the three months endedFor the year ended
12/31/20219/30/202112/31/202012/31/202112/31/2020
 As Reported(In Thousands, except for per share data)
Revenues
Net premiums earned$113,933 $113,594 $100,709 $444,294 $397,172 
Net investment income10,045 9,831 8,386 38,072 31,897 
Net realized investment gains714 3 295 729 930 
Other revenues380 613 513 1,977 3,284 
Total revenues125,072 124,041 109,903 485,072 433,283 
Expenses
Insurance claims and claim (benefits) expenses(500)3,204 3,549 12,305 59,247 
Underwriting and operating expenses38,843 34,669 34,994 142,303 131,610 
Service expenses650 787 459 2,509 2,840 
Interest expense8,029 7,930 7,906 31,796 24,387 
(Gain) loss from change in fair value of warrant liability(112)— 1,379 (566)(2,907)
Total expenses46,910 46,590 48,287 188,347 215,177 
Income before income taxes78,162 77,451 61,616 296,725 218,106 
Income tax expense 17,639 17,258 13,348 65,595 46,540 
Net income $60,523 $60,193 $48,268 $231,130 $171,566 
Adjustments:
Net realized investment gains(714)(3)(295)(729)(930)
(Gain) loss from change in fair value of warrant liability(112)— 1,379 (566)(2,907)
Capital markets transaction costs1,505 481 1,719 3,979 7,237 
Other infrequent, unusual or non-operating items (6)
2,540 1,289 — 3,829 — 
Adjusted income before taxes81,381 79,218 64,419 303,238 221,506 
Income tax expense on adjustments (7)
251 139 299 806 1,324 
Adjusted net income$63,491 $61,821 $50,772 $236,837 $173,642 
Weighted average diluted shares outstanding 87,117 86,880 86,250 86,885 79,263 
Adjusted weighted average diluted shares outstanding87,117 86,880 86,250 86,885 79,263 
Diluted EPS (1)
$0.69 $0.69 $0.56 $2.65 (1)$2.13 
Adjusted diluted EPS $0.73 $0.71 $0.59 $2.73 $2.19 
Return on equity 15.7 %16.2 %14.4 %15.7 %14.9 %
Adjusted return on equity16.5 %16.6 %15.2 %16.1 %15.1 %
Expense ratio (2)
34.1 %30.5 %34.7 %32.0 %33.1 %
Adjusted expense ratio (3)
30.5 %29.0 %33.0 %30.3 %32.0 %
Combined ratio (4)
33.7 %33.3 %38.3 %34.8 %48.1 %
Adjusted combined ratio (5)
30.1 %31.8 %36.6 %33.0 %46.9 %
(1)    Diluted net income for the three months ended December 31, 2021, the year ended December 31, 2021 and 2020, excludes the impact of the warrant fair value change as it was dilutive. For all other periods presented, diluted net income equals reported net income as the impact of the warrant fair value change was anti-dilutive.
(2)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
8
EXHIBIT 99.1
(3)    Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions and infrequent or unusual non-operating items) by net premiums earned.
(4)    Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claims expense by net premiums earned.
(5)    Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction and infrequent or unusual non-operating items) and insurance claims and claims expense by net premiums earned.
(6)    Represents severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced on September 9, 2021.
(7)    Marginal tax impact of non-GAAP adjustments is calculated based on our statutory U.S. federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction. Such non-deductible items include gains or losses from the change in the fair value of our warrant liability and certain costs incurred in connection with the CEO transition, which are limited under Section 162(m) of the Internal Revenue Code.


Historical Quarterly Data20212020
December 31September 30June 30March 31December 31September 30
Revenues(In Thousands, except for per share data)
Net premiums earned$113,933 $113,594 $110,888 $105,879 $100,709 $98,802 
Net investment income10,045 9,831 9,382 8,814 8,386 8,337 
Net realized investment gains (losses) 714 3 12 — 295 (4)
Other revenues380 613 483 501 513 648 
Total revenues125,072 124,041 120,765 115,194 109,903 107,783 
Expenses
Insurance claims and claim (benefits) expenses(500)3,204 4,640 4,962 3,549 15,667 
Underwriting and operating expenses38,843 34,669 34,725 34,065 34,994 33,969 
Service expenses650 787 481 591 459 557 
Interest expense8,029 7,930 7,922 7,915 7,906 7,796 
(Gain) loss from change in fair value of warrant liability(112)— (658)205 1,379 437 
Total expenses46,910 46,590 47,110 47,738 48,287 58,426 
Income before income taxes78,162 77,451 73,655 67,456 61,616 49,357 
Income tax expense 17,639 17,258 16,133 14,565 13,348 11,178 
Net income $60,523 $60,193 $57,522 $52,891 $48,268 $38,179 
Earnings per share
Basic$0.71 $0.70 $0.67 $0.62 $0.57 $0.45 
Diluted$0.69 $0.69 $0.65 $0.61 $0.56 $0.45 
Weighted average common shares outstanding
Basic85,757 85,721 85,467 85,317 84,956 84,805 
Diluted87,117 86,880 86,819 86,487 86,250 85,599 
Other data
Loss Ratio(1)
(0.4)%2.8 %4.2 %4.7 %3.5 %15.9 %
Expense Ratio(2)
34.1 %30.5 %31.3 %32.2 %34.7 %34.4 %
Combined ratio (3)
33.7 %33.3 %35.5 %36.9 %38.3 %50.2 %
(1)    Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)    Combined ratio may not foot due to rounding.
.


9
EXHIBIT 99.1

Portfolio Statistics
The table below highlights trends in our primary portfolio as of the date and for the periods indicated.
Primary portfolio trendsAs of and for the three months ended
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020September 30, 2020
($ Values In Millions)
New insurance written $18,342 $18,084 $22,751 $26,397 $19,782 $18,499 
New risk written$4,786 4,640 5,650 6,531 4,868 4,577 
Insurance in force (IIF) (1)
152,343 143,618 136,598 123,777 111,252 104,494 
Risk in force (1)
$38,661 36,253 34,366 31,206 28,164 26,568 
Policies in force (count) (1)
512,316 490,714 471,794 436,652 399,429 381,899 
Average loan size ($ value in thousands) (1)
$297 $293 $290 $283 $279 $274 
Coverage percentage (2)
25.4 %25.2 %25.2 %25.2 %25.3 %25.4 %
Loans in default (count) (1)
6,227 7,670 8,764 11,090 12,209 13,765 
Default rate (1)
1.22 %1.56 %1.86 %2.54 %3.06 %3.60 %
Risk in force on defaulted loans (1)
$435 $546 $625 $785 $874 $1,008 
Net premium yield (3)
0.34 %0.32 %0.34 %0.36 %0.37 %0.39 %
Earnings from cancellations$5.1 $7.7 $7.0 $9.9 $11.7 $12.6 
Annual persistency (4)
63.8 %58.1 %53.9 %51.9 %55.9 %60.0 %
Quarterly run-off (5)
6.7 %8.1 %8.0 %12.5 %12.5 %13.1 %
(1)    Reported as of the end of the period.
(2)    Calculated as end of period risk-in-force (RIF) divided by end of period IIF.
(3)    Calculated as net premiums earned, divided by average primary IIF for the period, annualized.
(4)    Defined as the percentage of IIF that remains on our books after a given twelve-month period.
(5)    Defined as the percentage of IIF that is no longer on our books after a given three-month period.
New Insurance Written (NIW), Insurance in Force (IIF) and Premiums
The tables below present primary NIW and primary and pool IIF, as of the dates and for the periods indicated
Primary NIWFor the three months ended
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020September 30, 2020
(In Millions)
Monthly$16,972 $16,861 $19,422 $23,764 $17,789 $16,516 
Single1,370 1,223 3,329 2,633 1,993 1,983 
Primary$18,342 $18,084 $22,751 $26,397 $19,782 $18,499 
10
EXHIBIT 99.1
Primary and pool IIFAs of
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020September 30, 2020
(In Millions)
Monthly$133,104 $124,767 $117,629 $106,920 $95,336 $88,584 
Single19,239 18,851 18,969 16,857 15,916 15,910 
Primary152,343 143,618 136,598 123,777 111,252 104,494 
Pool1,229 1,339 1,460 1,642 1,855 2,115 
Total$153,572 $144,957 $138,058 $125,419 $113,107 $106,609 

    The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR Transaction, and 2022 QSR Transaction, and collectively, the QSR Transactions), and Insurance-Linked Note transactions (the 2017 ILN Transaction, 2018 ILN Transaction, 2019 ILN Transaction, 2020-1 ILN Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and 2021-2 ILN Transaction and and collectively, the ILN Transactions) for the periods indicated.
For the three months ended
December 31, 2021September 30, 2021June 30, 2021March 31, 2021December 31, 2020September 30, 2020
(In Thousands)
The QSR Transactions
Ceded risk-in-force$8,194,604 $7,610,870 $7,113,707 $6,330,409 $5,543,969 $5,159,061 
Ceded premiums earned(28,490)(28,366)(27,537)(25,747)(24,161)(24,517)
Ceded claims and claim expenses19 840 1,194 1,180 601 3,200 
Ceding commission earned6,208 6,142 5,961 5,162 4,787 4,798 
Profit commission16,142 15,191 14,391 13,380 13,184 11,034 
The ILN Transactions
Ceded premiums$(11,344)$(10,390)$(10,169)$(9,397)$(9,422)$(6,268)
    The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated.
Primary NIW by FICOFor the three months endedFor the year ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
($ In Millions)
>= 760$8,032 $8,073 $11,495 $40,408 $37,437 
740-7593,115 3,254 3,387 15,927 9,443 
720-7392,833 2,563 2,447 12,511 7,820 
700-7192,196 2,099 1,430 8,450 4,644 
680-6991,653 1,487 820 5,792 2,692 
<=679514 608 203 2,486 666 
Total$18,342 $18,084 $19,782 $85,574 $62,702 
Weighted average FICO748 749 761 752 761 
11
EXHIBIT 99.1
Primary NIW by LTVFor the three months ended For the year ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
(In Millions)
95.01% and above$1,569 $1,957 $1,877 $8,153 $3,732 
90.01% to 95.00%8,879 8,344 7,839 38,215 26,000 
85.01% to 90.00%5,583 4,961 6,239 24,655 22,356 
85.00% and below2,311 2,822 3,827 14,551 10,614 
Total$18,342 $18,084 $19,782 $85,574 $62,702 
Weighted average LTV91.9 %91.8 %90.9 %91.4 %90.9 %
Primary NIW by purchase/refinance mixFor the three months endedFor the year ended
December 31, 2021September 30, 2021December 31, 2020December 31, 2021December 31, 2020
(In Millions)
Purchase$17,097 $16,400 $13,085 $70,318 $41,616 
Refinance1,245 1,684 6,697 15,256 21,086 
Total$18,342 $18,084 $19,782 $85,574 $62,702 
The table below presents a summary of our primary IIF and RIF by book year as of December 31, 2021.
Primary IIF and RIFAs of December 31, 2021
IIFRIF
(In Millions)
December 31, 2021$81,226 $20,591 
202043,795 11,023 
201912,407 3,249 
20184,929 1,258 
20174,233 1,062 
2016 and before 5,753 1,478 
Total$152,343 $38,661 
    The tables below present our total primary IIF and RIF by FICO and LTV and total primary RIF by loan type as of the dates indicated.
Primary IIF by FICOAs of
December 31, 2021September 30, 2021December 31, 2020
(In Millions)
>= 760$76,449 $73,080 $58,368 
740-75926,219 24,676 17,442 
720-73921,356 19,898 15,091 
700-71914,401 13,206 10,442 
680-6999,654 8,678 6,777 
<=6794,264 4,080 3,132 
Total$152,343 $143,618 $111,252 
12
EXHIBIT 99.1
Primary RIF by FICOAs of
December 31, 2021September 30, 2021December 31, 2020
(In Millions)
>= 760$19,125 $18,200 $14,634 
740-7596,707 6,280 4,449 
720-7395,497 5,086 3,868 
700-7193,771 3,432 2,692 
680-6992,511 2,243 1,748 
<=6791,050 1,012 773 
Total$38,661 $36,253 $28,164 
Primary IIF by LTVAs of
December 31, 2021September 30, 2021December 31, 2020
(In Millions)
95.01% and above$14,058 $13,179 $9,129 
90.01% to 95.00%68,537 63,828 49,898 
85.01% to 90.00%46,971 44,451 36,972 
85.00% and below22,777 22,160 15,253 
Total$152,343 $143,618 $111,252 
Primary RIF by LTVAs of
December 31, 2021September 30, 2021December 31, 2020
(In Millions)
95.01% and above$4,230 $3,932 $2,637 
90.01% to 95.00%20,210 18,810 14,673 
85.01% to 90.00%11,533 10,902 9,067 
85.00% and below2,688 2,609 1,787 
Total$38,661 $36,253 $28,164 
Primary RIF by Loan TypeAs of
December 31, 2021September 30, 2021December 31, 2020
Fixed99 %99 %99 %
Adjustable rate mortgages:
Less than five years— — — 
Five years and longer1 1 1 
Total100 %100 %100 %
The table below presents a summary of the change in total primary IIF during the periods indicated.
Primary IIFFor the three months ended
December 31, 2021September 30, 2021December 31, 2020
(In Millions)
IIF, beginning of period$143,618 $136,598 $104,494 
NIW18,342 18,084 19,782 
Cancellations, principal repayments and other reductions(9,617)(11,064)(13,024)
IIF, end of period$152,343 $143,618 $111,252 
13
EXHIBIT 99.1
Geographic Dispersion
The following table shows the distribution by state of our primary RIF as of the periods indicated.
Top 10 primary RIF by stateAs of
December 31, 2021September 30, 2021December 31, 2020
California10.4 %10.2 %11.2 %
Texas9.7 9.9 8.8 
Florida8.6 8.6 7.3 
Virginia4.7 4.9 5.1 
Colorado3.8 4.0 4.1 
Georgia3.8 3.7 3.1 
Maryland3.7 3.8 3.7 
Washington3.7 3.5 3.5 
Illinois3.6 3.7 3.8 
Pennsylvania3.3 3.2 3.4 
Total55.3 %55.5 %54.0 %

The table below presents selected primary portfolio statistics, by book year, as of December 31, 2021.
As of December 31, 2021
Book yearOriginal Insurance WrittenRemaining Insurance in Force% Remaining of Original InsurancePolicies Ever in ForceNumber of Policies in ForceNumber of Loans in Default# of Claims Paid
Incurred Loss Ratio (Inception to Date) (1)
Cumulative Default Rate (2)
Current default rate (3)
($ Values in Millions)
2013$162 $6 4 %655 46 1 1 0.4 %0.3 %2.2 %
20143,451 274 8 %14,786 1,693 60 49 4.3 %0.7 %3.5 %
201512,422 1,706 14 %52,548 9,341 275 117 3.3 %0.7 %2.9 %
2016 21,187 3,768 18 %83,626 18,987 591 129 2.8 %0.9 %3.1 %
201721,582 4,233 20 %85,897 21,718 950 101 4.3 %1.2 %4.4 %
201827,295 4,928 18 %104,043 24,448 1,328 89 8.2 %1.4 %5.4 %
201945,141 12,407 27 %148,423 50,313 1,479 20 11.4 %1.0 %2.9 %
202062,702 43,795 70 %186,174 138,203 1,070 1 6.0 %0.6 %0.8 %
202185,574 81,226 95 %257,972 247,567 473 — 2.0 %0.2 %0.2 %
Total$279,516 $152,343 934,124 512,316 6,227 507 
(1)    Calculated as total claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance.
(2)    Calculated as the sum of the number of claims paid ever to date and number of loans in default divided by policies ever in force.
(3)    Calculated as the number of loans in default divided by number of policies in force.
14
EXHIBIT 99.1
    The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claim expenses:
For the three months ended For the year ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
(In Thousands)
Beginning balance$104,604 $87,230 $90,567 $23,752 
Less reinsurance recoverables (1)
(20,420)(17,180)(17,608)(4,939)
Beginning balance, net of reinsurance recoverables84,184 70,050 72,959 18,813 
Add claims incurred:
Claims and claim expenses incurred:
Current year (2)
4,159 5,745 23,433 66,943 
Prior years (3)
(4,659)(2,196)(11,128)(7,696)
Total claims and claim expenses incurred(500)3,549 12,305 59,247 
Less claims paid:
Claims and claim expenses paid:
Current year (2)
1 434 16 586 
Prior years (3)
452 206 2,017 4,515 
Total claims and claim expenses paid453 640 2,033 5,101 
Reserve at end of period, net of reinsurance recoverables83,231 72,959 83,231 72,959 
Add reinsurance recoverables (1)
20,320 17,608 20,320 17,608 
Ending balance$103,551 $90,567 $103,551 $90,567 
(1)    Related to ceded losses recoverable under the QSR Transactions
(2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $18.1 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2021, $60.8 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for year ended December 31, 2020.
(3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $6.3 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for the year ended December 31, 2021, $6.2 million attributed to net case reserves and $1.3 million attributed to net IBNR reserves for the year ended December 31, 2020.

    The following table provides a reconciliation of the beginning and ending count of loans in default for the periods indicated.
For the three months ended For the year ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Beginning default inventory7,670 13,765 12,209 1,448 
Plus: new defaults1,244 2,589 5,730 19,459 
Less: cures(2,664)(4,122)(11,626)(8,548)
Less: claims paid(23)(20)(82)(143)
Less: claims denied— (3)(4)(7)
Ending default inventory6,227 12,209 6,227 12,209 

15
EXHIBIT 99.1
    The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated.
For the three months endedFor the year ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
(In Thousands)
Number of claims paid (1)
23 20 82 143 
Total amount paid for claims$572 $813 $2,554 $6,434 
Average amount paid per claim
$25 $41 $31 $45 
Severity(2)
53%75%59 %80 %
(1)    Count includes five and 15 claims settled without payment for the three months and year ended December 31, 2021, respectively, and one and nine claims settled without payment for the three months and year ended December 31, 2020, respectively.
(2)    Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.
    The following table shows our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the periods indicated.
Average reserve per default:As of December 31, 2021As of December 31, 2020
(In Thousands)
Case (1)
$15.3 $6.8 
IBNR (1)(2)
1.3 0.6 
Total$16.6 $7.4 
(1)    Defined as the gross reserve per insured loan in default.
(2)    Amount includes claims adjustment expenses.
    The following table provides a comparison of the PMIERs financial requirements as reported by NMIC as of the dates indicated.
As of
December 31, 2021September 30, 2021December 31, 2020
(In Thousands)
Available Assets$2,041,193 $1,992,964 $1,750,668 
Risk-Based Required Assets1,186,272 1,365,656 984,372 

16