May 13, 2014

NMI Holdings, Inc. Reports First Quarter 2014 Financial Results

EMERYVILLE, Calif., May 13, 2014 /PRNewswire/ -- NMI Holdings, Inc., (NASDAQ:  NMIH) (the "Company"), the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company, today reported its results for the three months ended March 31, 2014.  The Company reported a net loss for the quarter ended March 31, 2014 of $15.1 million, or $0.26 per share.

Founded in 2012, National Mortgage Insurance Corporation (National MI) is headquartered in Emeryville, California, in the San Francisco Bay Area. NMI Holdings, Inc., National MI's parent company, raised over $500 million of capital in a private placement of its securities in April 2012 and is led by an experienced management team. National MI is 
approved to provide mortgage insurance nationwide. To learn more about National MI, visit www.nationalmi.com (http://www.nationalmi.com).

In the first quarter of 2014, the Company had primary new insurance written of $354.3 million compared to $157.6 million of primary new insurance written in the quarter ended December 31, 2013.  The Company did not write any new pool insurance in the quarter.

"National MI is off to a great start in 2014," said Bradley Shuster, president and CEO of NMI Holdings, Inc. "There has been a tremendous response from our existing customers and we continue to build new relationships with additional mortgage banks, lenders and credit unions."

As of March 31, 2014, the Company had primary risk-in-force of $115.5 million compared to primary risk-in-force of $36.5 million as of December 31, 2013.  Pool risk-in-force as of March 31, 2014 was $93.1 million.

In the first quarter of 2014, the Company had total revenues of $4.2 million, comprised of $1.9 million in premiums earned, $1.5 million of investment income and $0.8 million of gain from the change in the fair value of the warrant liability.  Total expenses for the quarter were $19.3 million

At March 31, 2014, the Company had approximately $453.7 million of cash and investments and book equity of $453.5 million or $7.81 in book value per share, based on shares outstanding of 58,067,326.  This book value excludes any benefit attributable to the Company's net deferred tax asset.

Cash and investments at the holding company stood at $246.4 million at March 31, 2014, excluding investments in the Company's insurance subsidiaries. Cash and investments at the Company's insurance subsidiaries at March 31, 2014 was $207.3 million.

"National MI is the first and only mortgage insurer to underwrite every loan, which has resonated very well in the mortgage industry based on our customer feedback," Shuster said. "In fact, we believe National MI's innovative approach to mortgage insurance and our unique business model have fundamentally changed the way the industry and our customers view the risk and underwriting process."

"National MI led the industry by introducing rescission relief after 12 months.  Today, we remain the only mortgage insurer to grant 12 month rescission relief on every loan we insure, through both delegated and non-delegated channels," Shuster added.  "The entire team at National MI is excited about continuing to bring innovative change to the industry in 2014, our first full year of providing mortgage insurance and helping families in all 50 states and the District of Columbia achieve homeownership," Shuster said.

Conference Call and Webcast Details

NMI Holdings, Inc. will hold a conference call tomorrow, May 14, 2014 at 5:00 a.m. Pacific time / 8:00 a.m. Eastern time to allow analysts and stockholders the opportunity to hear management discuss the Company's quarterly results.  The conference call will be broadcast live on the Company's website, on the "Events and Presentations" page of the "Investors" section at http://ir.nationalmi.com.  The call may also be accessed by dialing (888) 734-0328 inside the U.S., or (678) 894-3054 for international callers, using conference ID:  51892317 or by referencing NMI Holdings, Inc.  Investors and analysts are asked to dial-in ten minutes before the conference call begins.

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 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.  Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking.  These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases.  All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that 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.  These risks and uncertainties include, but are not limited to, those set forth under the heading "Risk Factors" in our most recent Registration Statement on Form S-1, and described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission, including our Risk Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2013.  Any or all of our forward-looking statements in this press release may turn out to be inaccurate.  Consequently, our actual results could differ materially from those anticipated in such forward-looking statements contained in this press release.  Any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

Media Contact:
Mary McGarity
Strategic Vantage Marketing & Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com 

 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


For the Quarter Ended March 31,


2014



2013



(In Thousands, except per share data)

Revenues






Premiums written






Direct

$

5,178



$


Net premiums written

5,178




Increase in unearned premiums

(3,274)




Net premiums earned

1,904




Net investment income

1,489



410


Net realized investment gains



28


Gain from change in fair value of warrant liability

817



35


Gain from settlement of warrants

37




Total Revenues

4,247



473


Expenses






Insurance claims and claims expenses, net




Amortization of deferred policy acquisition costs

19




Other underwriting and operating expenses

19,283



12,426


Total Expenses

19,302



12,426


Net Loss

$

(15,055)



$

(11,953)








Loss per share






Basic and diluted loss per share

$

(0.26)



$

(0.22)


Weighted average common shares outstanding

58,061,299



55,500,100


 


CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


March 31, 2014


December 31, 2013


(In Thousands)

Total investment portfolio

$

410,876



$

409,088


Cash and cash equivalents

42,792



55,929


Deferred policy acquisition costs, net

977



90


Software and equipment, net

9,226



8,876


Other assets

7,313



7,236


Total Assets

$

471,184



$

481,219


Reserve for insurance claims and claims expenses

$



$


Accounts payable and accrued expenses

7,373



10,052


Unearned premium

4,721



1,446


Warrant liability

5,504



6,371


Other liabilities

133



133


Total Liabilities

17,731



18,002


Total Shareholders' Equity

453,453



463,217


Total Liabilities and Shareholders' Equity

$

471,184



$

481,219


 

New Insurance Written, Insurance in Force, and Risk in Force










March 31, 2014


December 31, 2013


September 30, 2013


June 30, 2013

Primary

(Dollars in Thousands)

New insurance written

$

354,313



$

157,568



$

3,560



$

1,045


Insurance in force (end of period)

$

514,796



$

161,731



$

4,604



$

1,045


Risk in force (end of period)

$

115,467



$

36,516



$

1,196



$

257


Policies in force (end of period)

2,072



653



22



6


Weighted-average coverage (1)

22.4

%


22.6

%


26.0

%


24.6

%

Loans in default (count)




















(1) End of period RIF divided by IIF.









               


The table below reflects our primary NIW, IIF and RIF by FICO for the 2014 and 2013 books as of March 31, 2014.








NIW


IIF


RIF


(Dollars in Thousands)

Primary - 2014 Book

As of March 31, 2014

> = 740

$

255,210


72.0

%


$

254,904


72.0

%


$

56,089


70.9

%

680 - 739

96,708


27.3



96,701


27.3



22,498


28.4


620 - 679

2,395


0.7



2,231


0.7



557


0.7


< = 619









Total

$

354,313


100.0

%


$

353,836


100.0

%


$

79,144


100.0

%





Primary - 2013 Book

As of March 31, 2014

> = 740

$

113,907


70.2

%


$

114,452


71.1

%


$

25,510


70.2

%

680 - 739

47,102


29.0



45,499


28.3



10,539


29.0


620 - 679

1,163


0.8



1,009


0.6



274


0.8


< = 619









Total

$

162,172


100.0

%


$

160,960


100.0

%


$

36,323


100.0

%

 


The table below reflects our pool NIW, IIF, and RIF by FICO for the 2013 book as of March 31, 2014.








NIW


IIF


RIF


(Dollars in Thousands)

Pool - 2013 Book

As of March 31, 2014

> = 740

$

4,186,844


81.0

%


$

4,072,426


81.0

%


$

75,195


80.8

%

680 - 739

832,755


16.1



809,222


16.1



15,146


16.2


620 - 679

152,065


2.9



147,029


2.9



2,749


3.0


< = 619









Total

$

5,171,664


100.0

%


$

5,028,677


100.0

%


$

93,090


100.0

%

 


NIW


IIF


RIF


(Dollars in Thousands)

Total Portfolio

As of March 31, 2014

> = 740

$

4,555,961


80.1

%


$

4,441,782


80.1

%


$

156,794


75.2

%

680 - 739

976,565


17.2



951,422


17.2



48,183


23.1


620 - 679

155,623


2.7



150,269


2.7



3,580


1.7


< = 619









Total

$

5,688,149


100.0

%


$

5,543,473


100.0

%


$

208,557


100.0

%
















Total primary RIF on defaulted loans









$




 

As of March 31, 2014

Primary


Pool

Percentage of RIF by Loan Type






Fixed

91.8

%


100.0

%

Adjustable rate mortgages:






Less than five years




Five years and longer

8.2




Total

100.0

%


100.0

%

 

As of March 31, 2014

Primary


Pool


RIF


% of Total LTV


Policy Count


RIF


% of Total LTV


Policy Count

Total RIF by LTV

(Dollars in Thousands)

95.01% and above

$

464



0.4

%


6



$



%



90.01% to 95.00%

54,430



47.1



811








85.01% to 90.00%

47,435



41.1



787








80.01% to 85.00%

13,138



11.4



468








80.00% and below







93,090



100.0



21,538


Total RIF

$

115,467



100.0

%


2,072



$

93,090



100.0

%


21,538


 


March 31, 2014


December 31, 2013

Average Primary Loan Size by FICO

(In Thousands)

> = 740

$

251



$

253


680 - 739

244



237


620 - 679

223



194


< = 619




 

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SOURCE NMI Holdings, Inc.

News Provided by Acquire Media


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