NMI Holdings, Inc. Reports Fourth Quarter 2014 Financial Results, Flow NIW Grows 68% Sequentially
- 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 ofSeptember 30, 2014 . Pool risk-in-force was unchanged as ofDecember 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.
Conference Call and Webcast Details
About National MI
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
Investor Contact
Vice President, Investor Relations and Treasury
(510) 788-8417
john.swenson@nationalmi.com
Press Contact
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
For the Three Months Ended |
For the Year Ended | ||||||||||||||
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) | |||||||
|
| ||||||
(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 | ||||||||||||||||||
|
|
|
|
| |||||||||||||||
(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 |
As of and for the Year Ended | ||||||||||||||||||||||||
IIF |
NIW |
Premiums |
Premiums |
IIF |
NIW |
Premiums |
Premiums | ||||||||||||||||||
(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 |
||||||||||||||
|
|
|
|
| ||||||||||
Monthly |
740 |
746 |
747 |
749 |
747 |
|||||||||
Single |
753 |
756 |
754 |
759 |
757 |
|||||||||
Annual |
725 |
— |
— |
— |
— |
Weighted Average LTV |
||||||||||||||
|
|
|
|
| ||||||||||
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
Total Portfolio |
IIF |
RIF | |||||||||
(Dollars in Thousands) | |||||||||||
As of | |||||||||||
> = 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
Primary - 2014 Book |
NIW |
IIF |
RIF | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
As of | |||||||||||||||||
> = 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 | |||||||||||||||||
> = 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
Pool - 2013 Book |
NIW * |
IIF |
RIF | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
As of | |||||||||||||||||
> = 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
The tables below reflect the company's average primary loan size by FICO and the percentage of our RIF by loan type.
|
| ||||||
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 |
|||||
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 |
Policy Count |
RIF |
% of Total |
Policy Count | ||||||||||||||
As of |
(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
Top 10 Primary IIF and RIF by State |
IIF |
RIF | ||||
As of |
||||||
1. |
|
16.6 |
% |
16.3 |
% | |
2. |
|
6.2 |
6.6 |
|||
3. |
|
4.8 |
4.7 |
|||
4. |
|
4.7 |
4.6 |
|||
5. |
|
3.8 |
3.9 |
|||
6. |
|
3.7 |
3.7 |
|||
7. |
|
3.6 |
3.8 |
|||
8. |
|
3.6 |
3.5 |
|||
9. |
|
3.5 |
3.5 |
|||
10. |
|
3.5 |
3.6 |
|||
Total |
54.0 |
% |
54.2 |
% |
Top 10 Pool IIF and RIF by State |
IIF |
RIF | ||||
As of |
||||||
1. |
|
28.6 |
% |
28.0 |
% | |
2. |
|
5.4 |
5.4 |
|||
3. |
|
3.9 |
3.9 |
|||
4. |
|
3.9 |
3.8 |
|||
5. |
|
3.7 |
3.6 |
|||
6. |
|
3.7 |
3.7 |
|||
7. |
|
3.7 |
3.7 |
|||
8. |
|
2.8 |
2.8 |
|||
9. |
|
2.8 |
2.8 |
|||
10. |
|
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
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