October 27, 2015

NMI Holdings, Inc. Reports Third Quarter 2015 Financial Results

New Insurance Written Grows 43% Sequentially

EMERYVILLE, Calif., Oct. 27, 2015 /PRNewswire/ -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported results for the third quarter ended Sep. 30, 2015.  The company reported a net loss for the third quarter of $4.8 million, or $0.08 per share, which compares with a net loss of $10.4 million, or $0.18 per share, in the prior quarter, and a net loss of $11.0 million, or $0.19 per share, in the third quarter of 2014.

Bradley Shuster, chairman and CEO of National MI, said, "In the third quarter, we continued to execute on our growth plan, as our 43% sequential increase in new insurance written significantly exceeded estimated market growth for the quarter.  Strength in our flow business drove the majority of the gains.  For the quarter, we grew cash and investments by approximately $13 million, signed up 64 new customers to master policies, and achieved record premiums earned.  We expect to end the year in a solid competitive position, and look forward to continued growth and becoming profitable in 2016."

  • Total new insurance written (NIW) for the third quarter was $3.6 billion, up 43% from $2.5 billion in the prior quarter.
  • Premiums earned for the quarter were $12.8 million, up from $8.9 million in the prior quarter.  Investment income in the third quarter was $1.9 million, up from $1.7 million in the prior quarter. Total revenues were $14.7 million, up from $10.9 million in the prior quarter.
  • Total underwriting and operating expenses in the third quarter were $19.7 million, including share-based compensation expense of $1.8 million.  This compares with total underwriting and operating expenses of $20.9 million, including $2.1 million of share-based compensation, in the prior quarter.
  • As of the end of the third quarter, the company had approved master policies in place with 906 customers, up from 842 as of the end of the prior quarter, and up from 664 as of the end of the third quarter of 2014.  Customers delivering NIW in the quarter grew to 391, which compares with 340 in the prior quarter and 180 in the same quarter a year ago.
  • As of Sep. 30, 2015, the company had primary insurance-in-force of $10.6 billion, which compares with $7.2 billion at the prior quarter end and $1.8 billion as of Sep. 30, 2014.  Pool insurance-in-force as of the end of the third quarter was $4.3 billion, which compares with $4.5 billion at the prior quarter-end and $4.8 billion as of Sep. 30, 2014.
  • As of Sep. 30, 2015, cash and investments were $447 million, including $161 million at the holding company, and book equity was $408 million, equal to $6.95 per share.  This book value excludes any benefit attributable to the company's deferred tax asset of approximately $54 million as of Dec. 31, 2014.
  • As of Sep. 30, 2015, the company's risk-to-available assets ratio in its primary insurance company was 11.6:1.

Conference Call and Webcast Details

NMI Holdings, Inc. will hold a conference call today, Oct. 27, 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 (914) 495-8578 for international callers using Conference ID: 60950406, 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 (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 ability to comply with the financial requirements of the PMIERs, once effective; 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; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators, including 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 and potential future lawsuits, investigations or inquiries or resolution of current inquiries, including a June 2015 letter from the Wisconsin Office of the Commissioner of Insurance requesting that each MI company, including us, respond to a number of inquiries related to whether the company has offered customized terms or rates; 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, 2014 as updated in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and 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
(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 September 30,


For the nine months ended September 30,


2015


2014


2015


2014

Revenues

(In Thousands)

Net premiums written

$

35,360



$

9,661



$

68,629



$

19,890


Increase in unearned premiums

(22,526)



(5,761)



(40,003)



(11,993)


Net premiums earned

12,834



3,900



28,626



7,897


Net investment income

1,884



1,342



5,168



4,299


Net realized investment (losses) gains

(15)



134



952



134


Total revenues

14,703



5,376



34,746



12,330


Expenses








Insurance claims and claims expenses

181



(26)



279



2


Underwriting and operating expenses

19,653



17,895



58,912



55,833


Total expenses

19,834



17,869



59,191



55,835


Other income








Gain from change in fair value of warrant liability

332



1,240



1,473



3,009


Gain from settlement of warrants







37


Loss before income taxes

(4,799)



(11,253)



(22,972)



(40,459)


Income tax benefit



(277)





(1,574)


Net loss

$

(4,799)



$

(10,976)



$

(22,972)



$

(38,885)


 

Condensed consolidated balance sheets (unaudited)

September 30, 2015


December 31, 2014


(In Thousands)

Total investment portfolio

$

314,455



$

336,501


Cash and cash equivalents

132,791



103,021


Deferred policy acquisition costs, net

12,181



2,985


Software and equipment, net

13,902



11,806


Other assets

13,568



8,952


Total assets

$

486,897



$

463,265


Unearned premiums

62,072



22,069


Reserve for insurance claims and claims expenses

$

358



$

83


Accounts payable and accrued expenses

14,230



10,646


Warrant liability

1,899



3,372


Deferred tax liability

137



137


Total liabilities

78,696



36,307


Total shareholders' equity

408,201



426,958


Total liabilities and shareholders' equity

$

486,897



$

463,265


 

 

New Insurance Written, Insurance in Force and Premiums


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


Primary and pool IIF and NIW

As of and for the quarter ended


For the nine months ended


September 30, 2015


June 30, 2015


September 30, 2015


IIF


NIW


IIF


NIW


NIW


(In Thousands)

Monthly

$

5,087,431



$

1,581,617



$

3,616,951



$

1,460,166



$

3,960,480


Single

5,514,061



2,051,123



3,573,463



1,088,349



3,916,917


Primary

10,601,492



3,632,740



7,190,414



2,548,515



7,877,397












Pool

4,339,508





4,475,653






Total

$

14,941,000



$

3,632,740



$

11,666,067



$

2,548,515



$

7,877,397


 

Primary and pool premiums written and earned

For the quarter ended


September 30, 2015


June 30, 2015


(In Thousands)

Net premiums written

$

35,360



$

20,347


Net premiums earned

12,834



8,856


 

 

Portfolio Statistics


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


Primary portfolio trends

As of and for the quarter ended


September 30, 2015


June 30, 2015


March 31, 2015


December 31, 2014


September 30, 2014


(Dollars in Thousands)

New insurance written

$

3,632,740



$

2,548,515



$

1,696,142



$

1,692,187



$

974,910


Insurance in force (1)

$

10,601,492



$

7,190,414



$

4,835,248



$

3,369,664



$

1,812,956


Risk in force (1)

$

2,553,347



$

1,715,442



$

1,145,602



$

801,561



$

435,722


Policies in force (1)

46,175



31,682



21,225



14,603



7,628


Weighted average coverage (2)

24.1

%


23.9

%


23.7

%


23.8

%


24.0

%

Loans in default (count)

20



9



6



4




Risk in force on defaulted loans

$

962



$

528



$

350



$

208



$






















(1)              Reported as of the end of the period.




(2)              End of period RIF divided by IIF.




 

 

The table below reflects a summary of the change in total primary IIF for the three and nine months ended September 30,
2015 and 2014.


Primary IIF

For the three months ended September 30,


For the nine months ended September 30,


2015


2014


2015


2014


(In Thousands)

IIF, beginning of period

$

7,190,414



$

939,753



$

3,369,664



$

161,731


NIW

3,632,740



974,910



7,877,397



1,759,167


Cancellations and other reductions

(221,662)



(101,707)



(645,569)



(107,942)


IIF, end of period

$

10,601,492



$

1,812,956



$

10,601,492



$

1,812,956


 

 

The table below reflects a summary of our primary IIF and RIF by book year.


Primary IIF and RIF

As of September 30, 2015


IIF


RIF


(In Thousands)

2015, through September 30, 2015

$

7,725,632



$

1,862,737


2014

2,800,015



672,745


2013

75,845



17,865


Total

$

10,601,492



$

2,553,347


 

The table below reflects our total primary IIF, RIF and average loan size, by FICO.



As of September 30, 2015

Primary

IIF


RIF


Average primary loan
size


(Dollars in Thousands)

> = 740

$

6,673,029


63.0

%


$

1,587,567


62.2

%


$

237


680 - 739

3,492,541


32.9



859,823


33.7



221


620 - 679

435,922


4.1



105,957


4.1



205


< = 619








Total

$

10,601,492


100.0

%


$

2,553,347


100.0

%



 

 

The table below reflects the percentage of our primary RIF by loan type.


Percentage of Primary RIF by loan type


As of September 30, 2015




Fixed


97.5%

Adjustable rate mortgages:



Less than five years


Five years and longer


2.5

Total


100.0%



 

As of September 30, 2015, 100% of our pool risk-in-force was comprised of insurance on fixed rate mortgages.

 

 

 

The following table reflects the percentage and policy count of our RIF by LTV.


Total RIF by LTV

As of September 30, 2015


% of Total RIF


Policy Count

Primary


95.01% and above

3.1

%


1,520


90.01% to 95.00%

54.5



21,808


85.01% to 90.00%

34.0



14,803


80.01% to 85.00%

8.4



8,043


80.00% and below



1


Total primary

100.0

%


46,175


Pool




80.00% and below

100.0

%


19,296


Total pool

100.0

%


19,296


 

Geographic Dispersion


The following tables show the distribution by state of our IIF and RIF, for both primary and pool insurance.

 

Top 10 primary IIF and RIF by state

IIF


RIF

As of September 30, 2015


1.

California

14.0

%


13.2

%

2.

Texas

6.9



7.1


3.

Florida

5.2



5.4


4.

Michigan

4.5



4.6


5.

Colorado

4.3



4.3


6.

Virginia

4.0



3.9


7.

Pennsylvania

3.8



3.9


8.

New Jersey

3.7



3.4


9.

Ohio

3.6



3.8


10.

Arizona

3.5



3.6



Total

53.5

%


53.2

%

 

 

Top 10 pool IIF and RIF by state

IIF


RIF

As of September 30, 2015


1.

California

28.4

%


27.8

%

2.

Texas

5.3



5.4


3.

Washington

3.8



3.8


4.

Colorado

3.8



3.8


5.

Massachusetts

3.7



3.6


6.

Illinois

3.7



3.7


7.

Virginia

3.6



3.6


8.

New York

2.9



2.9


9.

New Jersey

2.8



2.8


10.

Florida

2.8



2.8



Total

60.8

%


60.2

%

 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/nmi-holdings-inc-reports-third-quarter-2015-financial-results-300167121.html

SOURCE NMI Holdings, Inc.

News Provided by Acquire Media


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