Delaware | 001-36174 | 45-4914248 |
(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) |
Large accelerated filer o | Accelerated filer x | Non-accelerated filer o | Smaller reporting company o |
(Do not check if a smaller reporting company) | |||
Emerging growth company x |
Date: August 1, 2018 | By: | /s/ Nicole C. Sanchez |
Nicole C. Sanchez | ||
VP, Associate General Counsel |
• | As of June 30, 2018, the company had primary insurance-in-force of $58.1 billion, up 9% from $53.4 billion at the prior quarter end and up 51% over $38.6 billion as of June 30, 2017. |
• | Net premiums earned for the quarter were $61.6 million, including $3.1 million attributable to cancellation of single premium policies, which compares with $54.9 million, including $2.8 million related to cancellations, in the prior quarter. Net premiums earned in the second quarter of 2018 were up 63% over net premiums earned of $37.9 million in the same quarter a year ago, which included $3.8 million related to cancellations. |
• | NIW mix was 88% monthly premium product, which compares with 84% in the prior quarter and 81% in the second quarter of 2017. |
• | Total underwriting and operating expenses in the second quarter were $29.0 million, including approximately $0.7 million of fees and expenses related to the recently completed Insurance-Linked Notes transaction. This compares with total underwriting and operating expense of $28.5 million in the prior quarter and $28.0 million in the same quarter a year ago, which included approximately $3.1 million of fees and expenses related to the issuance of Insurance-Linked Notes completed in May 2017. |
• | At quarter-end, cash and investments were $855 million and book equity was $630 million, equal to $9.58 per share. Return on equity for the quarter was 16.4% and adjusted return on equity was 17.8%. |
• | At quarter-end, the company had total PMIERs available assets of $653 million, which compares with risk-based required assets under PMIERs of $587 million. The PMIERs required assets do not reflect the benefit of the recently completed Insurance-Linked Notes transaction and related excess-of-loss reinsurance coverage, which occurred after the close of the quarter. During the second quarter of 2018, the company contributed $70 million to National Mortgage Insurance Corporation, its primary mortgage insurance subsidiary. |
Quarter Ended | Quarter Ended | Quarter Ended | Change | Change | ||||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | Q/Q | Y/Y | ||||||||||
Primary Insurance-in-Force ($billions) | $ | 58.1 | $ | 53.4 | $ | 38.6 | 9 | % | 51 | % | ||||
New Insurance Written - NIW ($billions) | ||||||||||||||
Monthly premium | 5.7 | 5.5 | 4.1 | 4 | % | 39 | % | |||||||
Single premium | 0.8 | 1.0 | 0.9 | (20 | )% | (11 | )% | |||||||
Total | 6.5 | 6.5 | 5.0 | — | % | 30 | % | |||||||
Premiums Earned ($millions) | 61.6 | 54.9 | 37.9 | 12 | % | 63 | % | |||||||
Underwriting & Operating Expense ($millions) | 29.0 | 28.5 | 28.0 | 2 | % | 4 | % | |||||||
Loss Expense ($millions) | 0.6 | 1.6 | 1.4 | (63 | )% | (57 | )% | |||||||
Loss Ratio | 1.0 | % | 2.9 | % | 3.6 | % | ||||||||
Cash & Investments ($millions) | $ | 854.7 | $ | 825.7 | $ | 693.7 | 4 | % | 23 | % | ||||
Book Equity ($millions) | 629.6 | 601.9 | 495.0 | 5 | % | 27 | % | |||||||
Book Value per Share | 9.58 | 9.18 | 8.27 | 4 | % | 16 | % |
(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 statements of operations in the period in which the change occurred. The change in the fair value of our warrant liability can vary significantly across periods and is influenced principally by equity market and general economic factors which may not impact or reflect our current period operating results. Trends in our operating performance can be more clearly identified without the fluctuations of the change in fair value of our warrant liability. |
(2) | Capital markets transaction costs. Capital markets transaction costs result from discretionary 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. |
(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 of specific securities sold is highly discretionary and is influenced by the factors as market opportunities, tax and capital profile and overall market cycles. |
(4) | Infrequent or unusual non-operating items. Income Statement items occurring separately from operating earnings that are not expected to recur in the future. They are the result of unforeseen or uncommon events. Exclusion of these items provides clarity about the impact of special or rare circumstances on current financial performance. An example is income tax expense adjustments due to a re-measurement of the net deferred tax assets in connection with tax reform, which are non-recurring in nature and are not part of our primary operating activities. We did not adjust for any infrequent or unusual non-operating items to calculate the non-GAAP measures presented in this release. |
Consolidated statements of operations and comprehensive income | For the three months ended June 30, | For the six months ended June 30, | |||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenues | (In Thousands, except for per share data) | ||||||||||||||
Net premiums earned | $ | 61,615 | $ | 37,917 | $ | 116,529 | $ | 71,142 | |||||||
Net investment income | 5,735 | 3,908 | 10,309 | 7,715 | |||||||||||
Net realized investment gains | 59 | 188 | 59 | 130 | |||||||||||
Other revenues | 44 | 185 | 108 | 265 | |||||||||||
Total revenues | 67,453 | 42,198 | 127,005 | 79,252 | |||||||||||
Expenses | |||||||||||||||
Insurance claims and claim expenses | 643 | 1,373 | 2,212 | 2,008 | |||||||||||
Underwriting and operating expenses | 29,020 | 28,048 | 57,473 | 54,037 | |||||||||||
Total expenses | 29,663 | 29,421 | 59,685 | 56,045 | |||||||||||
Other expense | |||||||||||||||
Gain (Loss) from change in fair value of warrant liability | 109 | 19 | 529 | (177 | ) | ||||||||||
Interest expense | (5,560 | ) | (3,300 | ) | (8,979 | ) | (6,794 | ) | |||||||
Total other expense | (5,451 | ) | (3,281 | ) | (8,450 | ) | (6,971 | ) | |||||||
Income before income taxes | 32,339 | 9,496 | 58,870 | 16,236 | |||||||||||
Income tax expense | 7,098 | 3,484 | 11,274 | 4,732 | |||||||||||
Net income | $ | 25,241 | $ | 6,012 | $ | 47,596 | $ | 11,504 | |||||||
Earnings per share | |||||||||||||||
Basic | $ | 0.38 | $ | 0.10 | $ | 0.74 | $ | 0.19 | |||||||
Diluted | $ | 0.37 | $ | 0.10 | $ | 0.70 | $ | 0.18 | |||||||
Weighted average common shares outstanding | |||||||||||||||
Basic | 65,664 | 59,823 | 63,891 | 59,577 | |||||||||||
Diluted | 68,616 | 63,010 | 67,171 | 62,689 | |||||||||||
Loss Ratio(1) | 1.0 | % | 3.6 | % | 1.9 | % | 2.8 | % | |||||||
Expense Ratio(2) | 47.1 | % | 74.0 | % | 49.3 | % | 76.0 | % | |||||||
Combined ratio | 48.1 | % | 77.6 | % | 51.2 | % | 78.8 | % | |||||||
Net income | $ | 25,241 | $ | 6,012 | $ | 47,596 | $ | 11,504 | |||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||
Net unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of ($2,879) and $1,388 for the three months ended June 30, 2018 and 2017, respectively, and ($3,304) and $2,073 for the six months ended June 30, 2018 and 2017 | (1,464 | ) | 2,822 | (12,429 | ) | 4,017 | |||||||||
Reclassification adjustment for realized (gains) included in net income, net of tax expenses of $12 and $66 for the three months ended June 30, 2018 and 2017, respectively, and $10 and $45 for the six months ended June 30, 2018 and 2017 | (46 | ) | (122 | ) | (37 | ) | (84 | ) | |||||||
Other comprehensive income (loss), net of tax | (1,510 | ) | 2,700 | (12,466 | ) | 3,933 | |||||||||
Comprehensive income | $ | 23,731 | $ | 8,712 | $ | 35,130 | $ | 15,437 |
Consolidated balance sheets | June 30, 2018 | December 31, 2017 | |||||
Assets | (In Thousands, except for share data) | ||||||
Fixed maturities, available-for-sale, at fair value (amortized cost of $852,029 and $713,859 as of June 30, 2018 and December 31, 2017, respectively) | $ | 838,265 | $ | 715,875 | |||
Cash and cash equivalents | 16,454 | 19,196 | |||||
Premiums receivable | 31,252 | 25,179 | |||||
Accrued investment income | 4,789 | 4,212 | |||||
Prepaid expenses | 2,907 | 2,151 | |||||
Deferred policy acquisition costs, net | 42,363 | 37,925 | |||||
Software and equipment, net | 22,803 | 22,802 | |||||
Intangible assets and goodwill | 3,634 | 3,634 | |||||
Prepaid reinsurance premiums | 35,798 | 40,250 | |||||
Deferred tax asset, net | 12,378 | 19,929 | |||||
Other assets | 5,836 | 3,695 | |||||
Total assets | $ | 1,016,479 | $ | 894,848 | |||
Liabilities | |||||||
Term loan | $ | 147,262 | $ | 143,882 | |||
Unearned premiums | 165,658 | 163,166 | |||||
Accounts payable and accrued expenses | 21,407 | 23,364 | |||||
Reserve for insurance claims and claim expenses | 10,601 | 8,761 | |||||
Reinsurance funds withheld | 31,011 | 34,102 | |||||
Deferred ceding commission | 4,507 | 5,024 | |||||
Warrant liability, at fair value | 6,391 | 7,472 | |||||
Total liabilities | 386,837 | 385,771 | |||||
Commitments and contingencies | |||||||
Shareholders' equity | |||||||
Common stock - class A shares, $0.01 par value; 65,753,784 and 60,517,512 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively (250,000,000 shares authorized) | 658 | 605 | |||||
Additional paid-in capital | 670,870 | 585,488 | |||||
Accumulated other comprehensive loss, net of tax | (15,043 | ) | (2,859 | ) | |||
Accumulated deficit | (26,843 | ) | (74,157 | ) | |||
Total shareholders' equity | 629,642 | 509,077 | |||||
Total liabilities and shareholders' equity | $ | 1,016,479 | $ | 894,848 |
Non-GAAP Financial Measure Reconciliations | |||||||||||
Quarter ended | Quarter ended | Quarter ended | |||||||||
6/30/2018 | 3/31/2018 | 6/30/2017 | |||||||||
As Reported | (In Thousands, except for per share data) | ||||||||||
Revenues | |||||||||||
Net premiums earned | $ | 61,615 | $ | 54,914 | $ | 37,917 | |||||
Net investment income | 5,735 | 4,574 | 3,908 | ||||||||
Net realized investment gains | 59 | — | 188 | ||||||||
Other revenues | 44 | 64 | 185 | ||||||||
Total revenues | 67,453 | 59,552 | 42,198 | ||||||||
Expenses | |||||||||||
Insurance claims and claims expenses | 643 | 1,569 | 1,373 | ||||||||
Underwriting and operating expenses | 29,020 | 28,453 | 28,048 | ||||||||
Total expenses | 29,663 | 30,022 | 29,421 | ||||||||
Other Expense | |||||||||||
Gain from change in fair value of warrant liability | 109 | 420 | 19 | ||||||||
Interest expense | (5,560 | ) | (3,419 | ) | (3,300 | ) | |||||
Total other expense | (5,451 | ) | (2,999 | ) | (3,281 | ) | |||||
Income before income taxes | 32,339 | 26,531 | 9,496 | ||||||||
Income tax expense | 7,098 | 4,176 | 3,484 | ||||||||
Net income | $ | 25,241 | $ | 22,355 | $ | 6,012 | |||||
Adjustments: | |||||||||||
Net realized investment gains | (59 | ) | — | (188 | ) | ||||||
Gain from change in fair value of warrant liability | (109 | ) | (420 | ) | (19 | ) | |||||
Capital markets transaction costs | 2,921 | — | 3,105 | ||||||||
Adjusted income before income taxes | 35,092 | 26,111 | 12,394 | ||||||||
Income tax expense (benefit) on adjustments | 578 | (88 | ) | 1,014 | |||||||
Adjusted net income | $ | 27,416 | $ | 22,023 | $ | 7,896 | |||||
Weighted average diluted shares outstanding - Reported | 68,616 | 65,697 | 63,010 | ||||||||
Dilutive effect of non-vested shares and warrants | — | — | — | ||||||||
Weighted average diluted shares outstanding - Adjusted | 68,616 | 65,697 | 63,010 | ||||||||
Diluted EPS - Reported | $ | 0.37 | $ | 0.34 | $ | 0.10 | |||||
Diluted EPS - Adjusted | $ | 0.40 | $ | 0.34 | $ | 0.13 | |||||
Return on Equity - Reported | 16.4 | % | 16.1 | % | 4.9 | % | |||||
Return on Equity - Adjusted | 17.8 | % | 15.9 | % | 6.5 | % |
Historical Quarterly Data | 2018 | 2017 | |||||||||||||||||||||
June 30 | March 31 | December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||
Revenues | (In Thousands, except for per share data) | ||||||||||||||||||||||
Net premiums earned | $ | 61,615 | $ | 54,914 | $ | 50,079 | $ | 44,519 | $ | 37,917 | $ | 33,225 | |||||||||||
Net investment income | 5,735 | 4,574 | 4,388 | 4,170 | 3,908 | 3,807 | |||||||||||||||||
Net realized investment gains (losses) | 59 | — | 9 | 69 | 188 | (58 | ) | ||||||||||||||||
Other revenues | 44 | 64 | 62 | 195 | 185 | 80 | |||||||||||||||||
Total revenues | 67,453 | 59,552 | 54,538 | 48,953 | 42,198 | 37,054 | |||||||||||||||||
Expenses | |||||||||||||||||||||||
Insurance claims and claim expenses | 643 | 1,569 | 2,374 | 957 | 1,373 | 635 | |||||||||||||||||
Underwriting and operating expenses | 29,020 | 28,453 | 28,297 | 24,645 | 28,048 | 25,989 | |||||||||||||||||
Total expenses | 29,663 | 30,022 | 30,671 | 25,602 | 29,421 | 26,624 | |||||||||||||||||
Other expense (1) | (5,451 | ) | (2,999 | ) | (6,808 | ) | (3,854 | ) | (3,281 | ) | (3,690 | ) | |||||||||||
Income before income taxes | 32,339 | 26,531 | 17,059 | 19,497 | 9,496 | 6,740 | |||||||||||||||||
Income tax expense | 7,098 | 4,176 | 18,825 | 7,185 | 3,484 | 1,248 | |||||||||||||||||
Net income | $ | 25,241 | $ | 22,355 | $ | (1,766 | ) | $ | 12,312 | $ | 6,012 | $ | 5,492 | ||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.36 | $ | (0.03 | ) | $ | 0.21 | $ | 0.10 | $ | 0.09 | ||||||||||
Diluted | $ | 0.37 | $ | 0.34 | $ | (0.03 | ) | $ | 0.20 | $ | 0.10 | $ | 0.09 | ||||||||||
Weighted average common shares outstanding | |||||||||||||||||||||||
Basic | 65,664 | 62,099 | 60,219 | 59,884 | 59,823 | 59,184 | |||||||||||||||||
Diluted | 68,616 | 65,697 | 60,219 | 63,089 | 63,010 | 62,339 | |||||||||||||||||
Other data | |||||||||||||||||||||||
Loss Ratio (2) | 1.0 | % | 2.9 | % | 4.7 | % | 2.1 | % | 3.6 | % | 1.9 | % | |||||||||||
Expense Ratio (3) | 47.1 | % | 51.8 | % | 56.5 | % | 55.4 | % | 74.0 | % | 78.2 | % | |||||||||||
Combined ratio | 48.1 | % | 54.7 | % | 61.2 | % | 57.5 | % | 77.6 | % | 80.1 | % |
Primary NIW | Three months ended | ||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Monthly | $ | 5,711 | $ | 5,441 | $ | 5,736 | $ | 4,833 | $ | 4,099 | $ | 2,892 | |||||||||||
Single | 802 | 1,019 | 1,140 | 1,282 | 938 | 667 | |||||||||||||||||
Primary | $ | 6,513 | $ | 6,460 | $ | 6,876 | $ | 6,115 | $ | 5,037 | $ | 3,559 |
Primary and pool IIF | As of | ||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||
(In Millions) | |||||||||||||||||||||||
Monthly | $ | 41,843 | $ | 37,574 | $ | 33,268 | $ | 28,707 | $ | 24,865 | $ | 21,511 | |||||||||||
Single | 16,246 | 15,860 | 15,197 | 14,552 | 13,764 | 13,268 | |||||||||||||||||
Primary | 58,089 | 53,434 | 48,465 | 43,259 | 38,629 | 34,779 | |||||||||||||||||
Pool | 3,064 | 3,153 | 3,233 | 3,330 | 3,447 | 3,545 | |||||||||||||||||
Total | $ | 61,153 | $ | 56,587 | $ | 51,698 | $ | 46,589 | $ | 42,076 | $ | 38,324 |
As of and for the three months ended | ||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | |||||||||||||||||
(In Thousands) | ||||||||||||||||||||||
Ceded risk-in-force | 3,606,928 | $ | 3,304,335 | $ | 2,983,353 | $ | 2,682,982 | $ | 2,403,027 | $ | 2,167,745 | |||||||||||
Ceded premiums written | (15,318 | ) | (14,525 | ) | (15,233 | ) | (14,389 | ) | (12,034 | ) | (10,292 | ) | ||||||||||
Ceded premiums earned | (18,077 | ) | (16,218 | ) | (14,898 | ) | (13,393 | ) | (11,463 | ) | (9,865 | ) | ||||||||||
Ceded claims and claims expenses | 173 | 543 | 800 | 277 | 342 | 268 | ||||||||||||||||
Ceding commission written | 3,064 | 2,905 | 3,047 | 2,878 | 2,407 | 2,058 | ||||||||||||||||
Ceding commission earned | 3,536 | 3,151 | 2,885 | 2,581 | 2,275 | 2,065 | ||||||||||||||||
Profit commission | 10,707 | 9,201 | 8,139 | 7,758 | 6,536 | 5,651 |
Primary portfolio trends | As of and for the three months ended | ||||||||||||||||||||||
June 30, 2018 | March 31, 2018 | December 31, 2017 | September 30, 2017 | June 30, 2017 | March 31, 2017 | ||||||||||||||||||
($ Values In Millions) | |||||||||||||||||||||||
New insurance written | $ | 6,513 | $ | 6,460 | $ | 6,876 | $ | 6,115 | $ | 5,037 | $ | 3,559 | |||||||||||
New risk written | 1,647 | 1,580 | 1,665 | 1,496 | 1,242 | 868 | |||||||||||||||||
Insurance in force (IIF) (1) | 58,089 | 53,434 | 48,465 | 43,259 | 38,629 | 34,779 | |||||||||||||||||
Risk in force (1) | 14,308 | 13,085 | 11,843 | 10,572 | 9,417 | 8,444 | |||||||||||||||||
Policies in force (count) (1) | 241,993 | 223,263 | 202,351 | 180,089 | 161,195 | 145,632 | |||||||||||||||||
Average loan size (1) | $ | 0.240 | $ | 0.239 | $ | 0.240 | $ | 0.240 | $ | 0.240 | $ | 0.239 | |||||||||||
Average coverage (2) | 24.6 | % | 24.5 | % | 24.4 | % | 24.4 | % | 24.4 | % | 24.3 | % | |||||||||||
Loans in default (count) | 768 | 1,000 | 928 | 350 | 249 | 207 | |||||||||||||||||
Percentage of loans in default | 0.3 | % | 0.5 | % | 0.5 | % | 0.2 | % | 0.2 | % | 0.1 | % | |||||||||||
Risk in force on defaulted loans | $ | 43 | $ | 57 | $ | 53 | $ | 19 | $ | 14 | $ | 12 | |||||||||||
Average premium yield (3) | 0.44 | % | 0.43 | % | 0.44 | % | 0.43 | % | 0.41 | % | 0.40 | % | |||||||||||
Earnings from cancellations | $ | 3.1 | $ | 2.8 | $ | 4.2 | $ | 4.3 | $ | 3.8 | $ | 2.5 | |||||||||||
Annual persistency (4) | 85.5 | % | 85.7 | % | 86.1 | % | 85.1 | % | 83.1 | % | 81.3 | % | |||||||||||
Quarterly run-off (5) | 3.5 | % | 3.1 | % | 3.9 | % | 3.8 | % | 3.4 | % | 2.9 | % |
(1) | Reported as of the end of the period. |
(2) | Calculated as end of period risk in force (RIF) divided by IIF. |
(3) | Calculated as net primary and pool premiums earned, net of reinsurance, divided by average gross IIF for the period, annualized. |
(4) | Defined as the percentage of IIF that remains on our books after any 12-month period. |
(5) | Defined as the percentage of IIF that are no longer on our books after any 3-month period |
Primary NIW by FICO | For the three months ended | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
($ In Millions) | |||||||||||
>= 760 | $ | 2,807 | $ | 2,619 | $ | 2,376 | |||||
740-759 | 1,129 | 1,073 | 793 | ||||||||
720-739 | 964 | 914 | 626 | ||||||||
700-719 | 747 | 811 | 568 | ||||||||
680-699 | 469 | 567 | 368 | ||||||||
<=679 | 397 | 476 | 306 | ||||||||
Total | $ | 6,513 | $ | 6,460 | $ | 5,037 | |||||
Weighted average FICO | 747 | 743 | 749 |
Primary NIW by LTV | For the three months ended | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
95.01% and above | $ | 971 | $ | 997 | $ | 474 | |||||
90.01% to 95.00% | 2,932 | 2,765 | 2,297 | ||||||||
85.01% to 90.00% | 1,888 | 1,755 | 1,506 | ||||||||
85.00% and below | 722 | 943 | 760 | ||||||||
Total | $ | 6,513 | $ | 6,460 | $ | 5,037 | |||||
Weighted average LTV | 92.7 | % | 92.5 | % | 92.2 | % |
Primary NIW by purchase/refinance mix | For the three months ended | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||||||
(In Millions) | ||||||||||||
Purchase | $ | 6,137 | 376,230 | $ | 5,425 | $ | 4,518 | |||||
Refinance | 376 | 1,035 | 519 | |||||||||
Total | $ | 6,513 | $ | 6,460 | $ | 5,037 |
Primary IIF and RIF | As of June 30, 2018 | ||||||
IIF | RIF | ||||||
(In Millions) | |||||||
June 30, 2018 | $ | 12,758 | $ | 3,174 | |||
2017 | 19,784 | 4,837 | |||||
2016 | 16,800 | 4,109 | |||||
2015 | 7,505 | 1,877 | |||||
2014 | 1,210 | 303 | |||||
2013 | 32 | 8 | |||||
Total | $ | 58,089 | $ | 14,308 |
Primary IIF by FICO | As of | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
>= 760 | $ | 27,311 | $ | 25,371 | $ | 19,224 | |||||
740-759 | 9,460 | 8,635 | 6,269 | ||||||||
720-739 | 7,722 | 6,981 | 4,927 | ||||||||
700-719 | 6,355 | 5,814 | 3,973 | ||||||||
680-699 | 4,174 | 3,852 | 2,615 | ||||||||
<=679 | 3,067 | 2,781 | 1,621 | ||||||||
Total | $ | 58,089 | $ | 53,434 | $ | 38,629 |
Primary RIF by FICO | As of | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
>= 760 | $ | 6,758 | $ | 6,246 | $ | 4,720 | |||||
740-759 | 2,344 | 2,125 | 1,535 | ||||||||
720-739 | 1,905 | 1,710 | 1,198 | ||||||||
700-719 | 1,558 | 1,416 | 960 | ||||||||
680-699 | 1,016 | 932 | 627 | ||||||||
<=679 | 727 | 656 | 377 | ||||||||
Total | $ | 14,308 | $ | 13,085 | $ | 9,417 |
Primary IIF by LTV | As of | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
95.01% and above | $ | 5,747 | $ | 4,872 | $ | 2,367 | |||||
90.01% to 95.00% | 26,119 | 23,937 | 17,441 | ||||||||
85.01% to 90.00% | 17,319 | 16,034 | 12,157 | ||||||||
85.00% and below | 8,904 | 8,591 | 6,664 | ||||||||
Total | $ | 58,089 | $ | 53,434 | $ | 38,629 |
Primary RIF by LTV | As of | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
95.01% and above | $ | 1,522 | $ | 1,294 | $ | 648 | |||||
90.01% to 95.00% | 7,610 | 6,978 | 5,120 | ||||||||
85.01% to 90.00% | 4,154 | 3,831 | 2,893 | ||||||||
85.00% and below | 1,022 | 982 | 756 | ||||||||
Total | $ | 14,308 | $ | 13,085 | $ | 9,417 |
Primary RIF by Loan Type | As of | |||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||
Fixed | 98 | % | 98 | % | 98 | % | ||
Adjustable rate mortgages: | ||||||||
Less than five years | — | — | — | |||||
Five years and longer | 2 | 2 | 2 | |||||
Total | 100 | % | 100 | % | 100 | % |
Primary IIF | For the three months ended | ||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Millions) | |||||||||||
IIF, beginning of period | $ | 53,434 | $ | 48,465 | $ | 34,779 | |||||
NIW | 6,513 | 6,460 | 5,037 | ||||||||
Cancellations and other reductions | (1,858 | ) | (1,491 | ) | (1,187 | ) | |||||
IIF, end of period | $ | 58,089 | $ | 53,434 | $ | 38,629 |
Top 10 primary RIF by state | As of | |||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | ||||||
California | 13.4 | % | 13.5 | % | 13.8 | % | ||
Texas | 8.0 | 8.0 | 7.5 | |||||
Arizona | 5.0 | 4.8 | 4.2 | |||||
Virginia | 5.0 | 5.1 | 6.0 | |||||
Florida | 4.7 | 4.7 | 4.4 | |||||
Michigan | 3.7 | 3.7 | 3.6 | |||||
Pennsylvania | 3.6 | 3.6 | 3.6 | |||||
Colorado | 3.5 | 3.5 | 3.9 | |||||
Utah | 3.3 | 3.4 | 3.7 | |||||
Illinois | 3.3 | 3.2 | 3.3 | |||||
Total | 53.5 | % | 53.5 | % | 54.0 | % |
As of June 30, 2018 | ||||||||||||||||||||||||||||
Book year | Original Insurance Written | Remaining Insurance in Force | % Remaining of Original Insurance | Policies Ever in Force | Number of Policies in Force | Number of Loans in Default | # of Claims Paid | Incurred Loss Ratio (Inception to Date) (1) | Cumulative default rate (2) | |||||||||||||||||||
($ Values in Millions) | ||||||||||||||||||||||||||||
2013 | $ | 162 | $ | 32 | 20 | % | 655 | 171 | 1 | 1 | 0.3 | % | 0.3 | % | ||||||||||||||
2014 | 3,451 | 1,210 | 35 | % | 14,786 | 6,245 | 54 | 21 | 3.6 | % | 0.5 | % | ||||||||||||||||
2015 | 12,422 | 7,505 | 60 | % | 52,548 | 34,641 | 235 | 33 | 2.9 | % | 0.5 | % | ||||||||||||||||
2016 | 21,187 | 16,800 | 79 | % | 83,626 | 69,454 | 283 | 18 | 2.2 | % | 0.4 | % | ||||||||||||||||
2017 | 21,582 | 19,784 | 92 | % | 85,897 | 80,646 | 188 | 1 | 2.0 | % | 0.2 | % | ||||||||||||||||
2018 | 12,973 | 12,758 | 98 | % | 51,457 | 50,836 | 7 | — | 0.5 | % | — | % | ||||||||||||||||
Total | $ | 71,777 | $ | 58,089 | 288,969 | 241,993 | 768 | 74 |
(1) | The ratio of claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance. |
(2) | The sum of claims paid ever to date and notices of default as of the end of the period divided by policies ever in force. |
For the three months ended | For the six months ended | ||||||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
(In Thousands) | |||||||||||||||
Beginning balance | $ | 10,391 | $ | 3,761 | $ | 8,761 | $ | 3,001 | |||||||
Less reinsurance recoverables (1) | (2,334 | ) | (564 | ) | (1,902 | ) | (297 | ) | |||||||
Beginning balance, net of reinsurance recoverables | 8,057 | 3,197 | 6,859 | 2,704 | |||||||||||
Add claims incurred: | |||||||||||||||
Claims and claim expenses incurred: | |||||||||||||||
Current year (2) | 1,212 | 1,376 | 3,152 | 2,331 | |||||||||||
Prior years (3) | (569 | ) | (3 | ) | (940 | ) | (323 | ) | |||||||
Total claims and claims expenses incurred | 643 | 1,373 | 2,212 | 2,008 | |||||||||||
Less claims paid: | |||||||||||||||
Claims and claim expenses paid: | |||||||||||||||
Current year (2) | — | — | — | — | |||||||||||
Prior years (3) | 481 | 421 | 852 | 563 | |||||||||||
Total claims and claim expenses paid | 481 | 421 | 852 | 563 | |||||||||||
Reserve at end of period, net of reinsurance recoverables | 8,219 | 4,149 | 8,219 | 4,149 | |||||||||||
Add reinsurance recoverables (1) | 2,382 | 899 | 2,382 | 899 | |||||||||||
Ending balance | $ | 10,601 | $ | 5,048 | $ | 10,601 | $ | 5,048 |
For the three months ended | For the six months ended | ||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||
Beginning default inventory | 1,000 | 207 | 928 | 179 | |||||||
Plus: new defaults | 287 | 147 | 700 | 271 | |||||||
Less: cures | (501 | ) | (97 | ) | (825 | ) | (189 | ) | |||
Less: claims paid | (18 | ) | (8 | ) | (35 | ) | (12 | ) | |||
Ending default inventory | 768 | 249 | 768 | 249 |
For the three months ended | For the six months ended | ||||||||||||||
June 30, 2018 | June 30, 2017 | June 30, 2018 | June 30, 2017 | ||||||||||||
(In Thousands) | |||||||||||||||
Number of claims paid (1) | 18 | 8 | 35 | 12 | |||||||||||
Total amount paid for claims | $ | 607 | $ | 429 | $ | 1,089 | $ | 571 | |||||||
Average amount paid per claim (2) | $ | 36 | $ | 54 | $ | 35 | $ | 48 | |||||||
Severity(3) | 78 | % | 86 | % | 76 | % | 87 | % |
Average reserve per default: | As of June 30, 2018 | As of June 30, 2017 | |||||
(In Thousands) | |||||||
Case (1) | $ | 13 | $ | 19 | |||
IBNR | 1 | 1 | |||||
Total | $ | 14 | $ | 20 |
As of | |||||||||||
June 30, 2018 | March 31, 2018 | June 30, 2017 | |||||||||
(In Thousands) | |||||||||||
Available assets | $ | 653,080 | $ | 555,336 | $ | 485,019 | |||||
Risk-based required assets | 587,235 | 522,260 | 298,091 | ||||||||