February 19, 2015

NMI Holdings, Inc. Reports Fourth Quarter 2014 Financial Results, Flow NIW Grows 68% Sequentially

EMERYVILLE, Calif., Feb 19, 2015 /PRNewswire/ -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported results for the fourth quarter and year ended December 31, 2014.  The company reported a net loss for the fourth quarter of $10.0 million or $0.17 per share, which compares with a loss of $11.0 million, or $0.19 per share, in the prior quarter, and $13.1 million, or $0.23 per share, in the fourth quarter of 2013.

  • For the fourth quarter, primary new insurance written (NIW) was $1.7 billion, compared with $975 million in the prior quarter and $158 million in the same quarter a year ago.
  • Excluding aggregated single, the company's "flow" NIW for the fourth quarter was $936 million, up 68% from $557 million in the prior quarter.  Aggregated single for the fourth quarter was $757 million, compared with $418 million in the prior quarter.
  • As of the end of the quarter, the company had approved master policies in place with 735 customers, up from 664 as of the prior quarter end, and up from 305 as of the end of 2013.
  • As of December 31, 2014, the company had primary risk-in-force of $802 million, which compares with $436 million as of September 30, 2014.  Pool risk-in-force was unchanged as of December 31, 2014, remaining at $93 million.
  • As of December 31, 2014, cash and investments were $440 million, and book equity was $427 million, equal to $7.31 per share.  This book value excludes any benefit attributable to the company's deferred tax asset.

Bradley Shuster, chairman and CEO of National MI, said, "In the fourth quarter, we delivered strong sequential growth in flow NIW, driven by the continued penetration and ramp of new lenders.  Fully 26% of our flow volume in the quarter was generated from customers who had not previously contributed flow NIW.  Our ability to rapidly gain share in a competitive marketplace reflects the strength of our team and our differentiated value proposition.  We are off to a strong start in 2015 and look forward to another year of solid growth in new master policies, active customers, and NIW."

Conference Call and Webcast Details

NMI Holdings, Inc. will hold a conference call today, February 19, 2015 at 2:00 p.m. Pacific / 5:00 p.m. Eastern to discuss results for the quarter.  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: 67081098 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 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 ("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," "plans," "projects," "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, including the timing of and final requirements in their proposed new mortgage insurer eligibility requirements ("PMIERs"), which remains uncertain, or any of their decisions that may impact the use of private mortgage insurance; our ability to comply with the financial requirements of the PMIERs, once adopted; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; changes to laws and regulations that impact the role of the GSEs in the secondary market or the use of private mortgage insurance; 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, 2013 and 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
(510) 788-8417
john.swenson@nationalmi.com

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com

 

 

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


For the Three Months Ended December 31,


For the Year Ended December 31,


2014



2013



2014



2013


Revenues

(In Thousands, except for share data)

Premiums written












Direct

$

14,139



$

3,058



$

34,029



$

3,541


Net premiums written

14,139



3,058



34,029



3,541


Increase in unearned premiums

(8,629)



(1,446)



(20,622)



(1,446)


Net premiums earned

5,510



1,612



13,407



2,095


Net investment income

1,319



1,472



5,618



4,808


Net realized investment gains

63



14



197



186


Gain (loss) from change in fair value of warrant liability

(60)



(918)



2,949



(1,529)


Gain from settlement of warrants





37




Total revenues

6,832



2,180



22,208



5,560


Expenses












Insurance claims and claims expenses

81





83




Amortization of deferred policy acquisition costs

265



1



373



1


Underwriting and operating expenses

17,318



15,263



73,044



60,743


Total expenses

17,664



15,264



73,500



60,744


Loss before income taxes

(10,832)



(13,084)



(51,292)



(55,184)


Income tax benefit

(812)





(2,386)




Net loss

$

(10,020)



$

(13,084)



$

(48,906)



$

(55,184)














Loss per share












Basic and diluted loss per share

$

(0.17)



$

(0.23)



$

(0.84)



$

(0.99)


Weighted average common shares outstanding

58,406,574



57,238,730



58,281,425



56,005,326


 

 

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)


December 31, 2014


December 31, 2013


(In Thousands)

Total investment portfolio

$

336,501



$

409,088


Cash and cash equivalents

103,021



55,929


Deferred policy acquisition costs, net

2,985



90


Software and equipment, net

11,806



8,876


Other assets

8,952



7,236


Total assets

$

463,265



$

481,219


Reserve for insurance claims and claims expenses

$

83



$


Accounts payable and accrued expenses

10,646



10,052


Unearned premiums

22,069



1,446


Warrant liability

3,372



6,371


Deferred tax liability

137



133


Total liabilities

36,307



18,002


Total shareholders' equity

426,958



463,217


Total liabilities and shareholders' equity

$

463,265



$

481,219


 


New Insurance Written ("NIW"), Insurance in Force ("IIF") and Risk in Force ("RIF")

The table below shows NIW, IIF, RIF, policies in force, the weighted-average coverage and loans in default, by quarter, for the last five quarters, for the company's primary book.

 

Primary

Three Months Ended


December 31, 2014


September 30, 2014


June 30, 2014


March 31, 2014


December 31, 2013


(Dollars in Thousands)

New insurance written

$

1,692,187



$

974,910



$

429,944



$

354,313



$

157,568


Insurance in force (1)

$

3,369,664



$

1,812,956



$

939,753



$

514,796



$

161,731


Risk in force (1)

$

801,561



$

435,722



$

220,949



$

115,467



$

36,516


Policies in force (1)

14,603



7,628



3,865



2,072



653


Weighted-average coverage (2)

23.8

%


24.0

%


23.5

%


22.4

%


22.6

%

Loans in default (count)

4





1






Risk in force on defaulted loans

$

208



$



$

100



$



$


(1)  Reported as of the end of the period.
(2)  End of period RIF divided by IIF.

The table below shows primary and pool IIF, NIW and premiums written and earned.

 

Primary and Pool


As of and for the Year Ended December 31, 2014


As of and for the Year Ended December 31, 2013


IIF

NIW

Premiums
Written

Premiums
Earned


IIF

NIW

Premiums
Written

Premiums
Earned


(In Thousands)

Primary

$

3,369,664


$

3,451,354


$

28,611


$

7,989



$

161,731


$

162,172


$

1,651


$

205


Pool

4,721,674



5,418


5,418



5,089,517


5,171,664


1,890


1,890


Total

$

8,091,338


$

3,451,354


$

34,029


$

13,407



$

5,251,248


$

5,333,836


$

3,541


$

2,095


 

The tables below show the weighted average FICO and the weighted average LTV, by policy type, for the quarter in which the policy was originated.

 

Weighted Average FICO





December 31, 2014


September 30, 2014


June 30, 2014


March 31, 2014


December 31, 2013

Monthly

740



746



747



749



747


Single

753



756



754



759



757


Annual

725










 

Weighted Average LTV





December 31, 2014


September 30, 2014


June 30, 2014


March 31, 2014


December 31, 2013

Monthly

91

%


92

%


93

%


92

%


93

%

Single

90



90



90



89



89


Annual

90










 

The table below reflects our total NIW, IIF and RIF by FICO as of December 31, 2014.

 

Total Portfolio

IIF


RIF


(Dollars in Thousands)


As of December 31, 2014

> = 740

$

5,947,805


73.5

%


$

571,549


63.9

%

680 - 739

1,892,596


23.4



292,048


32.6


620 - 679

250,937


3.1



31,054


3.5


< = 619






Total

$

8,091,338


100.0

%


$

894,651


100.0

%

 

The table below reflects the company's primary NIW, IIF and RIF by FICO for the 2014 and 2013 books as of December 31, 2014.

 

Primary - 2014 Book

NIW


IIF


RIF


(Dollars in Thousands)


As of December 31, 2014

> = 740

$

2,178,995


63.1

%


$

2,040,422


62.7

%


$

479,076


61.8

%

680 - 739

1,156,785


33.6



1,102,579


33.8



268,429


34.6


620 - 679

115,574


3.3



113,752


3.5



28,070


3.6


< = 619









Total

$

3,451,354


100.0

%


$

3,256,753


100.0

%


$

775,575


100.0

%

 

Primary - 2013 Book

NIW *


IIF


RIF


(Dollars in Thousands)


As of December 31, 2014

> = 740

$

113,907


70.2

%


$

75,646


67.0

%


$

17,096


65.8

%

680 - 739

47,102


29.0



36,264


32.1



8,618


33.2


620 - 679

1,163


0.8



1,001


0.9



272


1.0


< = 619









Total

$

162,172


100.0

%


$

112,911


100.0

%


$

25,986


100.0

%

 

The table below reflects the company's pool NIW, IIF and RIF by FICO for the 2013 book as of December 31, 2014.

 

Pool - 2013 Book

NIW *


IIF


RIF


(Dollars in Thousands)


As of December 31, 2014

> = 740

$

4,186,844


81.0

%


$

3,831,737


81.2

%


$

75,377


81.0

%

680 - 739

832,755


16.1



753,753


16.0



15,001


16.1


620 - 679

152,065


2.9



136,184


2.8



2,712


2.9


< = 619









Total

$

5,171,664


100.0

%


$

4,721,674


100.0

%


$

93,090


100.0

%

*  Represents total NIW for the year ended December 31, 2013.

The tables below reflect the company's average primary loan size by FICO and the percentage of our RIF by loan type.

 


December 31, 2014


December 31, 2013

Average Primary Loan Size by FICO

(In Thousands)

> = 740

$

236



$

253


680 - 739

225



237


620 - 679

205



194


< = 619




 

Percentage of RIF by Loan Type

Primary


Pool

As of December 31, 2014






Fixed

95.5

%


100.0

%

Adjustable rate mortgages:






Less than five years

0.1




Five years and longer

4.4




Total

100.0

%


100.0

%

 

The following table reflects the company's RIF by LTV ratio.  The company calculates the LTV ratio of a loan as a percentage of the original loan amount to the original value of the property securing the loan.

 

Total RIF by LTV

Primary


Pool


RIF


% of Total
LTV


Policy Count


RIF


% of Total
LTV


Policy Count

As of December 31, 2014

(Dollars in Thousands)

95.01% and above

$

3,695



0.5

%


76



$



%



90.01% to 95.00%

435,950



54.4



6,832








85.01% to 90.00%

291,711



36.4



4,929








80.01% to 85.00%

70,191



8.7



2,765








80.00% and below

14





1



93,090



100.0



20,573


Total RIF

$

801,561



100.0

%


14,603



$

93,090



100.0

%


20,573


 

The following tables show the distribution by state of the company's IIF and RIF for primary and pool insurance.  The distribution of risk across the states as of December 31, 2014 is not necessarily representative of the geographic distribution the company expects in the future.

 

Top 10 Primary IIF and RIF by State

IIF


RIF

As of December 31, 2014


1.

California

16.6

%


16.3

%

2.

Texas

6.2



6.6


3.

Michigan

4.8



4.7


4.

Florida

4.7



4.6


5.

Arizona

3.8



3.9


6.

Pennsylvania

3.7



3.7


7.

Ohio

3.6



3.8


8.

Virginia

3.6



3.5


9.

Colorado

3.5



3.5


10.

North Carolina

3.5



3.6



Total

54.0

%


54.2

%

 

Top 10 Pool IIF and RIF by State

IIF


RIF

As of December 31, 2014


1.

California

28.6

%


28.0

%

2.

Texas

5.4



5.4


3.

Colorado

3.9



3.9


4.

Washington

3.9



3.8


5.

Massachusetts

3.7



3.6


6.

Virginia

3.7



3.7


7.

Illinois

3.7



3.7


8.

New York

2.8



2.8


9.

Florida

2.8



2.8


10.

New Jersey

2.8



2.8



Total

61.3

%


60.5

%

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nmi-holdings-inc-reports-fourth-quarter-2014-financial-results-flow-niw-grows-68-sequentially-300038679.html

SOURCE NMI Holdings, Inc.

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