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nmih-20210216
0001547903false00015479032021-02-162021-02-16


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): February 16, 2021

NMI Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware001-3617445-4914248
(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)
(855) 530-6642
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐     Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐     Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐     Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐     Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Class A Common Stock, par value $0.01NMIHNasdaq
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 



Item 2.02    Results of Operations and Financial Condition
On February 16, 2021, NMI Holdings, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2020. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this Item 2.02, including Exhibit 99.1, has been "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, ("Exchange Act") nor shall it be deemed incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.
Item 9.01.    Financial Statements and Exhibits
(d) Exhibits.
Exhibit No.    Description
99.1    NMI Holdings, Inc. Press Release Dated February 16, 2021
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)
1

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


NMI Holdings, Inc.
(Registrant)

                
Date: February 16, 2021By:/s/ Nicole C. Sanchez
Nicole C. Sanchez
VP, Associate General Counsel

2
Document
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NMI Holdings, Inc. Reports Fourth Quarter and Full Year 2020 Financial Results
EMERYVILLE, Calif., Feb. 16, 2021 -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $48.3 million, or $0.56 per diluted share, for the fourth quarter ended December 31, 2020, which compares to $38.2 million, or $0.45 per diluted share, in the third quarter ended September 30, 2020 and $50.2 million, or $0.71 per diluted share, in the fourth quarter ended December 31, 2019. Adjusted net income for the quarter was $50.8 million or $0.59 per diluted share, which compares to $40.4 million or $0.47 per diluted share in the third quarter ended September 30, 2020 and $52.6 million or $0.75 per diluted share in the fourth quarter ended December 31, 2019.

Net income for the full year ended December 31, 2020 was $171.6 million or $2.13 per diluted share, which compares to $172.0 million or $2.47 per diluted share, for the year ended December 31, 2019. Adjusted net income for the year was $173.6 million or $2.19 per diluted share, which compares to $182.4 million or $2.62 per diluted share, for the year ended December 31, 2019. The non-GAAP financial measures adjusted net income, adjusted diluted earnings per share and adjusted return on equity are presented in this release to enhance the comparability of financial results between periods. See "Use of Non-GAAP Financial Measures" and our reconciliation of such measures to their most comparable GAAP measures, below.

Claudia Merkle, CEO of National MI, said, “The fourth quarter capped an unprecedented year of challenge, resiliency and reward for National MI. In 2020, we helped over 250,000 borrowers gain access to housing, allowing them to establish a safe and secure environment in which to shelter through the COVID pandemic. We expanded our customer franchise, delivered record NIW volume, grew our high-quality insured portfolio and balance sheet, and delivered significant profitability, all while absorbing the impact of COVID through the year.”

Selected fourth quarter 2020 highlights include:

•New insurance written was $19.8 billion, up 7% compared to $18.5 billion in the third quarter and 66% compared to $11.9 billion in the fourth quarter of 2019
•Primary insurance-in-force at quarter end was $111.3 billion, up 6% from $104.5 billion at the end of the third quarter and 17% compared to the fourth quarter of 2019
•Net premiums earned were $100.7 million, up 2% compared $98.8 million in the third quarter and 5% compared to $95.5 million in the fourth quarter of 2019
•Underwriting and operating expenses were $35.0 million, including $1.7 million of capital market transaction costs, compared to $34.0 million in the third quarter and $31.3 million in the fourth quarter of 2019
•Insurance claims and claim expenses were $3.5 million, compared to $15.7 million in the third quarter and $4.3 million in the fourth quarter of 2019
•At quarter-end, cash and investments were $1.9 billion and shareholders’ equity was $1.4 billion, equal to $16.08 per share
•Annualized return on equity for the quarter was 14.4% and annualized adjusted return on equity was 15.2%
•At quarter-end, the company reported total PMIERs available assets of $1.8 billion and net risk-based required assets of $984 million
1
EXHIBIT 99.1
Quarter EndedQuarter EndedQuarter Ended
Change (1)
Change (1)
12/31/20209/30/202012/31/2019Q/QY/Y
INSURANCE METRICS ($billions)
Primary Insurance-in-Force $111.3 $104.5 $94.8 6 %17 %
New Insurance Written - NIW
Monthly premium17.8 16.5 11.1 8 %60 %
Single premium2.0 2.0 0.9 1 %131 %
Total (2)
19.8 18.5 11.9 7 %66 %
FINANCIAL HIGHLIGHTS ($millions, except per share amounts)
Net Premiums Earned100.7 98.8 95.5 2 %5 %
Insurance Claims and Claim Expenses3.5 15.7 4.3 (77)%(17)%
Underwriting and Operating Expenses35.0 34.0 31.3 3 %12 %
Net Income 48.3 38.2 50.2 26 %(4)%
Adjusted Net Income 50.8 40.4 52.6 26 %(4)%
Cash and Investments $1,931 $1,884 $1,182 3 %63 %
Shareholders' Equity 1,370 1,308 930 5 %47 %
Book Value per Share$16.08 $15.42 $13.61 4 %18 %
Loss Ratio3.5 %15.9 %4.5 %
Expense Ratio34.7 %34.4 %32.8 %
(1)    Percentages may not be replicated based on the rounded figures presented in the table.
(2)    Total may not foot due to rounding.

Conference Call and Webcast Details
The company will hold a conference call, which will be webcast live today, February 16, 2021, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The webcast will be available on the company's website, www.nationalmi.com, in the "Investor Relations" section. The conference call can also be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 internationally, and using Conference ID: 1798854 or by referencing NMI Holdings, Inc

About NMI Holdings, Inc.

NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), 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 (the "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
2
EXHIBIT 99.1
statements include, but are not limited to: uncertainty relating to the coronavirus ("COVID-19") pandemic and the measures taken by governmental authorities and other third parties to combat it, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and the Company’s business, operations and personnel, changes in the business practices of Fannie Mae and Freddie Mac (collectively, the "GSEs"), including decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements ("PMIERs") and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia ("D.C.") and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers, such as the Federal Housing Administration, U.S. Department of Agriculture's Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; developments in the world’s financial and capital markets and our access to such markets, including reinsurance; adoption of new or changes to existing laws and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the timing and eventual implementation of the final rules concerning the expiration of the "QM Patch" and "Qualified Mortgage" definitions under the Dodd-Frank Act Ability to Repay/Qualified Mortgage rule; legislative or regulatory changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; changes in general economic, market and political conditions and policies, interest rates, inflation and investment results or other conditions that affect the housing market or the markets for home mortgages or mortgage insurance; our ability to successfully execute and implement our capital plans, including our ability to access the capital, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low-down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters, including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; the inability of our counterparties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; and, our ability to recruit, train and retain key personnel. 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, 2019 and in Part II, Item 1A of our Quarterly Reports on Form 10-Q for the quarters ended June 30 and September 30, 2020, 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.

Use of Non-GAAP Financial Measures

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return on equity, adjusted expense ratio and adjusted combined ratio enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company's business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; their measures may not be comparable to those we calculate and present.

Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, net realized gains or losses from our investment portfolio, and discrete, non-recurring and non-operating items in the periods in which such items are incurred.

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EXHIBIT 99.1
Adjusted net income is defined as GAAP net income, excluding the after-tax effects of the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, net realized gains or losses from our investment portfolio, and discrete, non-recurring and non-operating items in the periods in which such items are incurred. Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods.

Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP.

Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders' equity for the period.

Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned.

Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned.

Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return on equity, adjusted expense ratio and adjusted combined ratio exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below.

(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 statement of operations in the period in which the change occurred. The change in fair value of our warrant liability can vary significantly across periods and is influenced principally by equity market and general economic factors that do not impact or reflect our current period operating results. We believe trends in our operating performance can be more clearly identified by excluding fluctuations related to the change in fair value of our warrant liability.
(2)    Capital markets transaction costs. Capital markets transaction costs result from 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 that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles.
(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 is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.
(4)    Infrequent or unusual non-operating items. Items that are the result of unforeseen or uncommon events, which occur separately from operating earnings and are not expected to recur in the future. Identification and exclusion of these items provides clarity about the impact special or rare occurrences may have on our current financial performance. Past adjustments under this category include the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017. We believe such items are non-recurring in nature, are not part of our primary operating activities and do not reflect our current period operating results.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417
Press Contact
4
EXHIBIT 99.1
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com








5
EXHIBIT 99.1
Consolidated statements of operations and comprehensive income For the three months ended December 31,For the year ended December 31,
2020201920202019
Revenues(In Thousands, except for per share data)
Net premiums earned$100,709 $95,517 $397,172 $345,015 
Net investment income8,386 7,962 31,897 30,856 
Net realized investment gains 295 264 930 45 
Other revenues513 1,154 3,284 2,855 
Total revenues109,903 104,897 433,283 378,771 
Expenses
Insurance claims and claim expenses3,549 4,269 59,247 12,507 
Underwriting and operating expenses34,994 31,296 131,610 126,621 
Service expenses459 937 2,840 2,248 
Interest expense7,906 2,974 24,387 12,085 
Loss (gain) from change in fair value of warrant liability1,379 2,632 (2,907)8,657 
Total expenses48,287 42,108 215,177 162,118 
Income before income taxes61,616 62,789 218,106 216,653 
Income tax expense 13,348 12,594 46,540 44,696 
Net income $48,268 $50,195 $171,566 $171,957 
Earnings per share
Basic$0.57 $0.74 $2.20 $2.54 
Diluted$0.56 $0.71 $2.13 $2.47 
Weighted average common shares outstanding
Basic84,956 68,140 78,023 67,573 
Diluted86,250 70,276 79,263 69,721 
Loss ratio(1)
3.5 %4.5 %14.9 %3.6 %
Expense ratio(2)
34.7 %32.8 %33.1 %36.7 %
Combined ratio (3)
38.3 %37.2 %48.1 %40.3 %
Net income $48,268 $50,195 $171,566 $171,957 
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $1,869 and ($444) for the three months ended December 31, 2020 and 2019, respectively, and $9,525 and $8,548 for the years ended December 31, 2020, and 2019, respectively7,031 (1,668)35,829 32,155 
Reclassification adjustment for realized (gains) losses included in net income, net of tax expense (benefit) of $62 and $55 for the three months ended December 31, 2020 and 2019, respectively, and ($196) and $9 for the years ended December 31, 2020, and 2019 respectively(233)(208)739 (35)
Other comprehensive income (loss), net of tax6,798 (1,876)36,568 32,120 
Comprehensive income $55,066 $48,319 $208,134 $204,077 
(1)    Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)    Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.
(3)    Combined ratio may not foot due to rounding.
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EXHIBIT 99.1
Consolidated balance sheetsDecember 31, 2020December 31, 2019
Assets(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $1,730,835 and $1,113,779 as of December 31, 2020 and December 31, 2019, respectively)$1,804,286 $1,140,940 
Cash and cash equivalents (including restricted cash of $5,555 and $2,662 as of December 31, 2020 and December 31, 2019, respectively)126,937 41,089 
Premiums receivable49,779 46,085 
Accrued investment income9,862 6,831 
Prepaid expenses3,292 3,512 
Deferred policy acquisition costs, net62,225 59,972 
Software and equipment, net29,665 26,096 
Intangible assets and goodwill3,634 3,634 
Prepaid reinsurance premiums6,190 15,488 
Reinsurance recoverable (1)
17,608 4,939 
Other assets (1)
53,188 16,232 
Total assets$2,166,666 $1,364,818 
Liabilities
Debt$393,301 $145,764 
Unearned premiums118,817 136,642 
Accounts payable and accrued expenses61,716 39,904 
Reserve for insurance claims and claim expenses90,567 23,752 
Reinsurance funds withheld8,653 14,310 
Warrant liability, at fair value4,409 7,641 
Deferred tax liability, net112,586 56,360 
Other liabilities7,026 10,025 
Total liabilities797,075 434,398 
Shareholders' equity
Common stock - class A shares, $0.01 par value; 85,163,039 and 68,358,074 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively (250,000,000 shares authorized)852 684 
Additional paid-in capital937,872 707,003 
Accumulated other comprehensive income, net of tax53,856 17,288 
Retained earnings 377,011 205,445 
Total shareholders' equity1,369,591 930,420 
Total liabilities and shareholders' equity$2,166,666 $1,364,818 
(1)    Reinsurance recoverable has been reclassified to "Other assets" in the prior periods.








7
EXHIBIT 99.1
Non-GAAP Financial Measure Reconciliations
For the three months endedFor the year ended
12/31/20209/30/202012/31/201912/31/202012/31/2019
 As Reported(In Thousands, except for per share data)
Revenues
Net premiums earned$100,709 $98,802 $95,517 $397,172 $345,015 
Net investment income8,386 8,337 7,962 31,897 30,856 
Net realized investment gains (losses)295 (4)264 930 45 
Other revenues513 648 1,154 3,284 2,855 
Total revenues109,903 107,783 104,897 433,283 378,771 
Expenses
Insurance claims and claim expenses3,549 15,667 4,269 59,247 12,507 
Underwriting and operating expenses34,994 33,969 31,296 131,610 126,621 
Service expenses459 557 937 2,840 2,248 
Interest expense7,906 7,796 2,974 24,387 12,085 
Loss (gain) from change in fair value of warrant liability1,379 437 2,632 (2,907)8,657 
Total expenses48,287 58,426 42,108 215,177 162,118 
Income before income taxes61,616 49,357 62,789 218,106 216,653 
Income tax expense 13,348 11,178 12,594 46,540 44,696 
Net income $48,268 $38,179 $50,195 $171,566 171,957 
Adjustments:
Net realized investment (gains) losses(295)4 (264)(930)(45)
Loss (gain) from change in fair value of warrant liability1,379 437 2,632 (2,907)8,657 
Capital markets transaction costs1,719 2,254 — 7,237 2,353 
Adjusted income before taxes64,419 52,052 65,157 221,506 227,618 
Income tax expense on adjustments299 474 (55)1,324 485 
Adjusted net income$50,772 $40,400 $52,618 $173,642 $182,437 
Weighted average diluted shares outstanding 86,250 85,599 70,276 79,263 69,721 
Diluted EPS$0.56 $0.45 $0.71 $2.13 (1)$2.47 
Adjusted diluted EPS $0.59 $0.47 $0.75 $2.19 $2.62 
Return on equity (2)
14.4 %11.9 %22.3 %14.9 %21.1 %
Adjusted return on equity (3)
15.2 %12.6 %23.3 %15.1 %22.4 %
Expense ratio (4)
34.7 %34.4 %32.8 %33.1 %36.7 %
Adjusted expense ratio (5)
33.0 %32.1 %32.8 %32.0 %36.0 %
Combined ratio (6)
38.3 %50.2 %37.2 %48.1 %40.3 %
Adjusted combined ratio (7)
36.6 %48.0 %37.2 %46.9 %39.6 %
(1)    Diluted net income for the year ended December 31, 2020 excludes the impact of the warrant fair value change as it was anti-dilutive. For all other periods presented, diluted net income equals reported net income as the impact of the warrant fair value change was dilutive.
(2)    Return on equity is calculated by dividing net income on an annualized basis by the average shareholders' equity for the period
(3)    Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders' equity for the period.
(4)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
8
EXHIBIT 99.1
(5)    Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions) by net premiums earned.
(6)    Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claims expense by net premiums earned.
(7)    Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction) and insurance claims and claims expense by net premiums earned.


Historical Quarterly Data20202019
December 31September 30June 30March 31December 31September 30
Revenues(In Thousands, except for per share data)
Net premiums earned$100,709 $98,802 $98,944 $98,717 $95,517 $92,381 
Net investment income8,386 8,337 7,070 8,104 7,962 7,882 
Net realized investment gains (losses) 295 (4)711 (72)264 81 
Other revenues513 648 1,223 900 1,154 1,244 
Total revenues109,903 107,783 107,948 107,649 104,897 101,588 
Expenses
Insurance claims and claim expenses3,549 15,667 34,334 5,697 4,269 2,572 
Underwriting and operating expenses34,994 33,969 30,370 32,277 31,296 32,335 
Service expenses459 557 1,090 734 937 909 
Interest expense7,906 7,796 5,941 2,744 2,974 2,979 
Loss (gain) from change in fair value of warrant liability1,379 437 1,236 (5,959)2,632 (1,139)
Total expenses48,287 58,426 72,971 35,493 42,108 37,656 
Income before income taxes61,616 49,357 34,977 72,156 62,789 63,932 
Income tax expense 13,348 11,178 8,129 13,885 12,594 14,169 
Net income $48,268 $38,179 $26,848 $58,271 $50,195 $49,763 
Earnings per share
Basic$0.57 $0.45 $0.36 $0.85 $0.74 $0.73 
Diluted$0.56 $0.45 $0.36 $0.74 $0.71 $0.69 
Weighted average common shares outstanding
Basic84,956 84,805 73,617 68,563 68,140 67,849 
Diluted86,250 85,599 74,174 70,401 70,276 70,137 
Other data
Loss Ratio(2)
3.5 %15.9 %34.7 %5.8 %4.5 %2.8 %
Expense Ratio(3)
34.7 %34.4 %30.7 %32.7 %32.8 %35.0 %
Combined ratio (4)
38.3 %50.2 %65.4 %38.5 %37.2 %37.8 %
(1)    Certain "Underwriting and operating expenses" have been reclassified as "Service expenses" in prior periods.
(2)    Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(3)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(4)    Combined ratio may not foot due to rounding.



9
EXHIBIT 99.1
Portfolio Statistics
The table below highlights trends in our primary portfolio as of the date and for the periods indicated.
Primary portfolio trendsAs of and for the three months ended
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
($ Values In Millions)
New insurance written $19,782 $18,499 $13,124 $11,297 $11,949 $14,100 
New risk written4,868 4,577 3,260 2,897 3,082 3,651 
Insurance in force (IIF) (1)
111,252 104,494 98,905 98,494 94,754 89,713 
Risk in force (1)
28,164 26,568 25,238 25,192 24,173 22,810 
Policies in force (count) (1)
399,429 381,899 372,934 376,852 366,039 350,395 
Average loan size ($ value in thousands) (1)
$279 $274 $265 $261 $259 $256 
Coverage percentage (2)
25.3 %25.4 %25.5 %25.6 %25.5 %25.4 %
Loans in default (count) (1)
12,209 13,765 10,816 1,449 1,448 1,230 
Default rate (1)
3.06 %3.60 %2.90 %0.38 %0.40 %0.35 %
Risk in force on defaulted loans (1)
$874 $1,008 $799 $84 $84 $70 
Net premium yield (3)
0.37 %0.39 %0.40 %0.41 %0.41 %0.43 %
Earnings from cancellations$11.7 $12.6 $15.5 $8.6 $8.0 $7.4 
Annual persistency (4)
55.9 %60.0 %64.1 %71.7 %76.8 %82.4 %
Quarterly run-off (5)
12.5 %13.1 %12.9 %8.0 %7.7 %7.5 %
(1)    Reported as of the end of the period.
(2)    Calculated as end of period risk-in-force (RIF) divided by end of period IIF.
(3)    Calculated as net premiums earned, divided by average primary IIF for the period, annualized.
(4)    Defined as the percentage of IIF that remains on our books after a given 12-month period.
(5)    Defined as the percentage of IIF that is no longer on our books after a given three month period.
New Insurance Written (NIW), Insurance in Force (IIF) and Premiums
The tables below present primary NIW and primary and pool IIF, as of the dates and for the periods indicated
Primary NIWFor the three months ended
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
(In Millions)
Monthly$17,789 $16,516 $11,885 $10,461 $11,085 $12,994 
Single1,993 1,983 1,239 836 864 1,106 
Primary$19,782 $18,499 $13,124 $11,297 $11,949 $14,100 
10
EXHIBIT 99.1
Primary and pool IIFAs of
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
(In Millions)
Monthly$95,336 $88,584 $82,848 $81,347 $77,097 $71,814 
Single15,916 15,910 16,057 17,147 17,657 17,899 
Primary111,252 104,494 98,905 98,494 94,754 89,713 
Pool1,855 2,115 2,340 2,487 2,570 2,668 
Total$113,107 $106,609 $101,245 $100,981 $97,324 $92,381 

    The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction and 2020 QSR Transaction, and collectively, the QSR Transactions), and Insurance-Linked Note transactions (the 2017 ILN Transaction, 2018 ILN Transaction, 2019 ILN Transaction, 2020-1 ILN Transaction and 2020-2 ILN Transaction, and collectively, the ILN Transactions) for the periods indicated.
For the three months ended
December 31, 2020September 30, 2020June 30, 2020March 31, 2020December 31, 2019September 30, 2019
(In Thousands)
The QSR Transactions
Ceded risk-in-force$5,543,969 $5,159,061 $4,563,676 $4,843,715 $5,137,249 $4,901,809 
Ceded premiums earned(24,161)(24,517)(23,210)(23,011)(23,673)(23,151)
Ceded claims and claim expenses601 3,200 8,669 1,532 1,030 766 
Ceding commission earned4,787 4,798 4,428 4,513 4,691 4,584 
Profit commission13,184 11,034 5,271 12,413 13,314 13,254 
The ILN Transactions
Ceded premiums$(9,422)$(6,268)$(3,267)$(3,872)$(4,263)$(4,409)
    The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated.
Primary NIW by FICOFor the three months endedFor the year ended
December 31, 2020September 30, 2020December 31, 2019December 31, 2020December 31, 2019
($ In Millions)
>= 760$11,495 $11,600 $6,253 $37,437 $21,931 
740-7593,387 2,575 1,864 9,443 7,541 
720-7392,447 2,187 1,712 7,820 6,643 
700-7191,430 1,217 1,204 4,644 4,783 
680-699820 793 662 2,692 3,021 
<=679203 127 254 666 1,222 
Total$19,782 $18,499 $11,949 $62,702 $45,141 
Weighted average FICO761 764 756 761 753 
11
EXHIBIT 99.1
Primary NIW by LTVFor the three months ended For the year ended
December 31, 2020September 30, 2020December 31, 2019December 31, 2020December 31, 2019
(In Millions)
95.01% and above$1,877 $587 $663 $3,732 $3,192 
90.01% to 95.00%7,839 7,767 5,528 26,000 21,475 
85.01% to 90.00%6,239 6,968 4,296 22,356 15,555 
85.00% and below3,827 3,177 1,462 10,614 4,919 
Total$19,782 $18,499 $11,949 $62,702 $45,141 
Weighted average LTV90.9 %90.7 %91.4 %90.9 %91.8 %
Primary NIW by purchase/refinance mixFor the three months endedFor the year ended
December 31, 2020September 30, 2020December 31, 2019December 31, 2020December 31, 2019
(In Millions)
Purchase$13,085 $12,764 $9,041 $41,616 $37,405 
Refinance6,697 5,735 2,908 21,086 7,736 
Total$19,782 $18,499 $11,949 $62,702 $45,141 
The table below presents a summary of our primary IIF and RIF by book year as of December 31, 2020.
Primary IIF and RIFAs of December 31, 2020
IIFRIF
(In Millions)
December 31, 2020$58,232 $14,510 
201925,038 6,548 
20189,788 2,494 
20178,009 2,002 
20166,756 1,732 
2015 and before 3,429 878 
Total$111,252 $28,164 
    The tables below present our total primary IIF and RIF by FICO and LTV and total primary RIF by loan type as of the dates indicated.
Primary IIF by FICOAs of
December 31, 2020September 30, 2020December 31, 2019
(In Millions)
>= 760$58,368 $53,742 $44,793 
740-75917,442 16,193 15,728 
720-73915,091 14,352 13,417 
700-71910,442 10,235 10,284 
680-6996,777 6,713 6,774 
<=6793,132 3,259 3,758 
Total$111,252 $104,494 $94,754 
12
EXHIBIT 99.1
Primary RIF by FICOAs of
December 31, 2020September 30, 2020December 31, 2019
(In Millions)
>= 760$14,634 $13,563 $11,388 
740-7594,449 4,141 4,034 
720-7393,868 3,694 3,465 
700-7192,692 2,635 2,632 
680-6991,748 1,730 1,728 
<=679773 805 926 
Total$28,164 $26,568 $24,173 
Primary IIF by LTVAs of
December 31, 2020September 30, 2020December 31, 2019
(In Millions)
95.01% and above$9,129 $8,130 $8,640 
90.01% to 95.00%49,898 47,828 44,668 
85.01% to 90.00%36,972 35,224 30,163 
85.00% and below15,253 13,312 11,283 
Total$111,252 $104,494 $94,754 
Primary RIF by LTVAs of
December 31, 2020September 30, 2020December 31, 2019
(In Millions)
95.01% and above$2,637 $2,310 $2,390 
90.01% to 95.00%14,673 14,056 13,086 
85.01% to 90.00%9,067 8,642 7,376 
85.00% and below1,787 1,560 1,321 
Total$28,164 $26,568 $24,173 
Primary RIF by Loan TypeAs of
December 31, 2020September 30, 2020December 31, 2019
Fixed99 %99 %98 %
Adjustable rate mortgages:
Less than five years— — — 
Five years and longer1 1 2 
Total100 %100 %100 %
The table below presents a summary of the change in total primary IIF during the periods indicated.
Primary IIFFor the three months ended
December 31, 2020September 30, 2020December 31, 2019
(In Millions)
IIF, beginning of period$104,494 $98,905 $89,713 
NIW19,782 18,499 11,949 
Cancellations, principal repayments and other reductions(13,024)(12,910)(6,908)
IIF, end of period$111,252 $104,494 $94,754 
13
EXHIBIT 99.1
Geographic Dispersion
The following table shows the distribution by state of our primary RIF as of the periods indicated.
Top 10 primary RIF by stateAs of
December 31, 2020September 30, 2020December 31, 2019
California11.2 %11.3 %11.8 %
Texas8.8 8.3 8.2 
Florida7.3 6.7 5.7 
Virginia5.1 5.4 5.3 
Colorado 4.1 4.0 3.4 
Illinois3.8 4.0 3.8 
Maryland3.7 3.6 3.4 
Washington3.5 3.5 3.3 
Pennsylvania3.4 3.5 3.6 
Massachusetts3.3 3.5 3.3 
Total54.2 %53.8 %51.8 %

The table below presents selected primary portfolio statistics, by book year, as of December 31, 2020.
As of December 31, 2020
Book yearOriginal Insurance WrittenRemaining Insurance in Force% Remaining of Original InsurancePolicies Ever in ForceNumber of Policies in ForceNumber of Loans in Default# of Claims Paid
Incurred Loss Ratio (Inception to Date) (1)
Cumulative Default Rate (2)
Current default rate (3)
($ Values in Millions)
2013$162 $12 7 %655 74 1 1 0.2 %0.3 %1.4 %
20143,451 478 14 %14,786 2,783 128 48 4.2 %1.2 %4.6 %
201512,422 2,939 24 %52,548 15,201 597 111 3.2 %1.3 %3.9 %
2016 21,187 6,756 32 %83,626 31,635 1,417 118 2.9 %1.8 %4.5 %
201721,582 8,009 37 %85,897 37,919 2,219 82 4.6 %2.7 %5.9 %
201827,295 9,788 36 %104,043 44,969 2,962 57 8.4 %2.9 %6.6 %
201945,141 25,038 55 %148,423 91,657 3,724 8 14.7 %2.5 %4.1 %
202062,702 58,232 93 %186,174 175,191 1,161 — 9.4 %0.6 %0.7 %
Total$193,942 $111,252 676,152 399,429 12,209 425 
(1)    Calculated as total claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance.
(2)    Calculated as the sum of the number of claims paid ever to date and number of loans in default divided by policies ever in force.
(3)    Calculated as the number of loans in default divided by number of policies in force.
14
EXHIBIT 99.1
    The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claim expenses:
For the three months ended For the year ended
December 31, 2020December 31, 2019December 31, 2020December 31, 2019
(In Thousands)
Beginning balance$87,230 $20,505 $23,752 $12,811 
Less reinsurance recoverables (1)
(17,180)(4,309)(4,939)(3,001)
Beginning balance, net of reinsurance recoverables70,050 16,196 18,813 9,810 
Add claims incurred:
Claims and claim expenses incurred:
Current year (2)
5,745 3,789 66,943 14,737 
Prior years (3)
(2,196)480 (7,696)(2,230)
Total claims and claim expenses incurred3,549 4,269 59,247 12,507 
Less claims paid:
Claims and claim expenses paid:
Current year (2)
434 204 586 204 
Prior years (3)
206 1,448 4,515 3,849 
Reinsurance terminations (4)
— — — (549)
Total claims and claim expenses paid640 1,652 5,101 3,504 
Reserve at end of period, net of reinsurance recoverables72,959 18,813 72,959 18,813 
Add reinsurance recoverables (1)
17,608 4,939 17,608 4,939 
Ending balance$90,567 $23,752 $90,567 $23,752 
(1)    Related to ceded losses recoverable under the QSR Transactions
(2)    Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan had defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance.
(3)    Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance.
(4)    Represents the settlement of reinsurance recoverables in conjunction with the termination of one reinsurer under the 2016 QSR Transaction on a cut-off basis.  
    The following table provides a reconciliation of the beginning and ending count of loans in default for the periods indicated.
For the three months ended For the year ended
December 31, 2020December 31, 2019December 31, 2020December 31, 2019
Beginning default inventory13,765 1,230 1,448 877 
Plus: new defaults2,589 591 19,459 2,429 
Less: cures(4,122)(319)(8,548)(1,702)
Less: claims paid(20)(54)(143)(152)
Less: claims denied(3)— (7)(4)
Ending default inventory12,209 1,448 12,209 1,448 

15
EXHIBIT 99.1
    The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated.
For the three months endedFor the year ended
December 31, 2020December 31, 2019December 31, 2020December 31, 2019
(In Thousands)
Number of claims paid (1)
20 54 143 152 
Total amount paid for claims$813 $2,051 $6,434 $5,030 
Average amount paid per claim
$41 $38 $45 $33 
Severity(2)
75%80 %80 %74 %
(1)    Count includes one and nine claims settled without payment for the three months and year ended December 31, 2020, respectively, and five and 19 claims settled without payment for the three months and year ended December 31, 2019, respectively.
(2)    Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.
    The following table shows our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the periods indicated.
Average reserve per default:As of December 31, 2020As of December 31, 2019
(In Thousands)
Case (1)
$6.8 $15.0 
IBNR (2)
$0.6 $1.4 
Total$7.4 $16.4 
(1)    Defined as the gross reserve per insured loan in default.
(2)    Amount includes claims adjustment expenses.
    The following table provides a comparison of the PMIERs financial requirements as reported by NMIC as of the dates indicated.
As of
December 31, 2020September 30, 2020December 31, 2019
(In Thousands)
Available Assets$1,750,668 $1,671,990 $1,016,387 
Risk-Based Required Assets984,372 990,678 773,474 

16