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nmih-20210803
0001547903false00015479032021-08-032021-08-03

 
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): August 3, 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 August 3, 2021, NMI Holdings, Inc. issued a press release announcing its financial results for the quarter ended June 30, 2021. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this report has been "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "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 August 3, 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: August 3, 2021By:/s/ William J. Leatherberry
William J. Leatherberry
EVP, General Counsel

2
Document
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NMI Holdings, Inc. Reports Second Quarter 2021 Financial Results
EMERYVILLE, Calif., Aug. 3, 2021 -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $57.5 million, or $0.65 per diluted share, for the second quarter ended June 30, 2021, which compares to $52.9 million, or $0.61 per diluted share, in the first quarter ended March 31, 2021 and $26.8 million, or $0.36 per diluted share, in the second quarter ended June 30, 2020. Adjusted net income for the quarter was $58.1 million, or $0.67 per diluted share, which compares to $53.4 million, or $0.62 per diluted share, in the first quarter ended March 31, 2021 and $29.7 million, or $0.40 per diluted share, in the second quarter ended June 30, 2020. 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, “We delivered strong operating performance, significant growth in our high-quality insured portfolio and record financial results in the second quarter. Our credit performance continued to trend in a favorable direction, and we remain optimistic about the broad strength of the economic recovery and resiliency of the housing market. We believe we are well positioned to continue to win with customers, drive disciplined growth in our insurance in-force, deliver strong returns and consistently compound book value going forward.”

Selected second quarter 2021 highlights include:

•Primary insurance-in-force at quarter end was $136.6 billion, up 10% from $123.8 billion in the first quarter and 38% compared to $98.9 billion in the second quarter of 2020

•Net premiums earned were $110.9 million, up 5% compared to $105.9 million in the first quarter and 12% compared to $98.9 million in the second quarter of 2020

•Underwriting and operating expenses were $34.7 million, including $1.6 million of capital market transaction costs, compared to $34.1 million in the first quarter and $30.4 million in the second quarter of 2020

•Insurance claims and claim expenses were $4.6 million, compared to $5.0 million in the first quarter and $34.3 million in the second quarter of 2020

•Shareholders' equity was $1.5 billion at quarter end, equal to $17.03 per share, up 6% compared to $16.13 per share in the first quarter and 15% compared to $14.82 per share in the second quarter of 2020

•Annualized return on equity for the quarter was 16.2% and annualized adjusted return on equity was 16.4%

•At quarter-end, total PMIERs available assets were $1.9 billion and net risk-based required assets were $1.2 billion

1
EXHIBIT 99.1
Quarter EndedQuarter EndedQuarter Ended
Change (1)
Change (1)
6/30/20213/31/20216/30/2020Q/QY/Y
INSURANCE METRICS ($billions)
Primary Insurance-in-Force $136.6 $123.8 $98.9 10 %38 %
New Insurance Written - NIW
Monthly premium19.4 23.8 11.9 (18)%63 %
Single premium3.3 2.6 1.2 26 %169 %
Total (2)
22.8 26.4 13.1 (14)%73 %
FINANCIAL HIGHLIGHTS ($millions, except per share amounts)
Net Premiums Earned$110.9 $105.9 $98.9 5 %12 %
Insurance Claims and Claim Expenses4.6 5.0 34.3 (6)%(86)%
Underwriting and Operating Expenses 34.7 34.1 30.4 2 %14 %
Net Income 57.5 52.9 26.8 9 %114 %
Adjusted Net Income 58.1 53.4 29.7 9 %96 %
Cash and Investments 2,062 1,947 1,855 6 %11 %
Shareholders' Equity 1,460 1,380 1,257 6 %16 %
Book Value per Share17.03 16.13 14.82 6 %15 %
Loss Ratio4.2 %4.7 %34.7 %
Expense Ratio 31.3 %32.2 %30.7 %

(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, August 3, 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: 5182409 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 statements include, but are not limited to: uncertainty relating to the COVID-19 pandemic and the measures taken by governmental authorities and
2
EXHIBIT 99.1
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 "Qualified Mortgage" and “Qualified Residential Mortgage” definitions and the expiration of the “QM Patch” 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, 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.
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.
3
EXHIBIT 99.1
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

4
EXHIBIT 99.1
Consolidated statements of operations and comprehensive income For the three months ended June 30,For the six months ended June 30,
2021202020212020
Revenues(In Thousands, except for per share data)
Net premiums earned$110,888$98,944$216,767$197,661
Net investment income9,3827,07018,19615,174
Net realized investment gains1271112639
Other revenues4831,2239842,123
Total revenues120,765107,948235,959215,597
Expenses
Insurance claims and claim expenses4,64034,3349,60240,031
Underwriting and operating expenses34,72530,37068,79062,647
Service expenses4811,0901,0721,824
Interest expense7,9225,94115,8378,685
(Gain) loss from change in fair value of warrant liability(658)1,236(453)(4,723)
Total expenses47,11072,97194,848108,464
Income before income taxes73,65534,977141,111107,133
Income tax expense 16,1338,12930,69722,014
Net income $57,522$26,848$110,414$85,119
Earnings per share
Basic$0.67$0.36$1.29$1.20
Diluted$0.65$0.36$1.27$1.11
Weighted average common shares outstanding
Basic85,64773,61785,48371,090
Diluted86,81974,17486,72972,407
Loss ratio (1)
4.2%34.7%4.4%20.3%
Expense ratio (2)
31.3%30.7%31.7%31.7%
Combined ratio (3)
35.5%65.4%36.2%51.9%
Net income $57,522$26,848$110,414$85,119
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) in accumulated other comprehensive gain (loss), net of tax expense (benefit) of $4,995 and $8,978 for the three months ended June 30, 2021 and 2020, and $(7,003) and $5,162 for the six months ended June 30, 2021 and 2020, respectively18,79033,773(26,343)19,418
Reclassification adjustment for realized (gains) losses included in net income, net of tax expense (benefit) of $3 and $149 for the three months ended June 30, 2021 and 2020, and $3 and ($258) for the six months ended June 30, 2021 and 2020, respectively(10)(562)(10)969
Other comprehensive income (loss), net of tax18,78033,211(26,353)20,387
Comprehensive income $76,302$60,059$84,061$105,506

(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

5
EXHIBIT 99.1
Consolidated balance sheetsJune 30, 2021December 31, 2020
Assets(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $1,954,187 and $1,730,835 as of June 30, 2021 and December 31, 2020, respectively)$1,994,280 $1,804,286 
Cash and cash equivalents (including restricted cash of $4,159 and $5,555 as of June 30, 2021 and December 31, 2020, respectively)68,080 126,937 
Premiums receivable55,939 49,779 
Accrued investment income11,148 9,862 
Prepaid expenses4,095 3,292 
Deferred policy acquisition costs, net62,137 62,225 
Software and equipment, net31,443 29,665 
Intangible assets and goodwill3,634 3,634 
Prepaid reinsurance premiums3,831 6,190 
Reinsurance recoverable 19,726 17,608 
Other assets 51,565 53,188 
Total assets$2,305,878 $2,166,666 
Liabilities
Debt$393,949 $393,301 
Unearned premiums142,148 118,817 
Accounts payable and accrued expenses56,803 61,716 
Reserve for insurance claims and claim expenses101,235 90,567 
Reinsurance funds withheld6,904 8,653 
Warrant liability, at fair value3,385 4,409 
Deferred tax liability, net136,273 112,586 
Other liabilities 5,276 7,026 
Total liabilities845,973 797,075 
Shareholders' equity
Common stock - class A shares, $0.01 par value; 85,703,487 and 85,163,039 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively (250,000,000 shares authorized)857 852 
Additional paid-in capital944,121 937,872 
Accumulated other comprehensive income, net of tax27,503 53,856 
Retained earnings 487,424 377,011 
Total shareholders' equity1,459,905 1,369,591 
Total liabilities and shareholders' equity$2,305,878 $2,166,666 







6
EXHIBIT 99.1
Non-GAAP Financial Measure Reconciliations
For the three months endedFor the six months ended
6/30/20213/31/20216/30/20206/30/20216/30/2020
 As Reported(In Thousands, except for per share data)
Revenues
Net premiums earned$110,888 $105,879 $98,944 $216,767 $197,661 
Net investment income9,382 8,814 7,070 18,196 15,174 
Net realized investment gains 12 — 711 12 639 
Other revenues483 501 1,223 984 2,123 
Total revenues120,765 115,194 107,948 235,959 215,597 
Expenses
Insurance claims and claim expenses4,640 4,962 34,334 9,602 40,031 
Underwriting and operating expenses34,725 34,065 30,370 68,790 62,647 
Service expenses481 591 1,090 1,072 1,824 
Interest expense7,922 7,915 5,941 15,837 8,685 
(Gain) loss from change in fair value of warrant liability(658)205 1,236 (453)(4,723)
Total expenses47,110 47,738 72,971 94,848 108,464 
Income before income taxes73,655 67,456 34,977 141,111 107,133 
Income tax expense 16,133 14,565 8,129 30,697 (6)22,014 
Net income $57,522 $52,891 $26,848 $110,414 (6)$85,119 
Adjustments:
Net realized investment (gains)(12)— (711)(12)(639)
(Gain) loss from change in fair value of warrant liability(658)205 1,236 (453)(4,723)
Capital markets transaction costs1,615 378 2,790 1,993 3,264 
Adjusted income before taxes74,600 68,039 38,292 142,639 105,035 
Income tax expense on adjustments337 79 437 416 551 
Adjusted net income$58,130 $53,395 $29,726 $111,526 $82,470 
Weighted average diluted shares outstanding 86,819 86,487 74,174 86,729 72,407 
Diluted EPS (1)
$0.65 $0.61 $0.36 $1.27 $1.11 
Adjusted diluted EPS $0.67 $0.62 $0.40 $1.29 $1.14 
Return-on-equity 16.2 %15.4 %9.6 %15.6 %15.6 %
Adjusted return-on-equity16.4 %15.5 %10.7 %15.8 %15.1 %
Expense ratio (2)
31.3 %32.2 %30.7 %31.7 %31.7 %
Adjusted expense ratio (3)
29.9 %31.8 %30.5 %30.8 %31.4 %
Combined ratio (4)
35.5 %36.9 %65.4 %36.2 %51.9 %
Adjusted combined ratio (5)
34.0 %36.5 %65.2 %35.2 %51.6 %

7
EXHIBIT 99.1
(1)    Diluted net income for the quarter ended March 31, 2021 and June 30, 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)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)    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.
(4)    Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claims expense by net premiums earned.
(5)    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.
(6)    May not foot by summing up the quarterly results due to rounding.
8
EXHIBIT 99.1
Historical Quarterly Data20212020
June 30March 31December 31September 30June 30March 31
Revenues(In Thousands, except for per share data)
Net premiums earned$110,888 $105,879 $100,709 $98,802 $98,944 $98,717 
Net investment income9,382 8,814 8,386 8,337 7,070 8,104 
Net realized investment gains (losses)12 — 295 (4)711 (72)
Other revenues483 501 513 648 1,223 900 
Total revenues120,765 115,194 109,903 107,783 107,948 107,649 
Expenses
Insurance claims and claim expenses4,640 4,962 3,549 15,667 34,334 5,697 
Underwriting and operating expenses34,725 34,065 34,994 33,969 30,370 32,277 
Service expenses481 591 459 557 1,090 734 
Interest expense7,922 7,915 7,906 7,796 5,941 2,744 
(Gain ) loss from change in fair value of warrant liability(658)205 1,379 437 1,236 (5,959)
Total expenses47,110 47,738 48,287 58,426 72,971 35,493 
Income before income taxes73,655 67,456 61,616 49,357 34,977 72,156 
Income tax expense 16,133 14,565 13,348 11,178 8,129 13,885 
Net income $57,522 $52,891 $48,268 $38,179 $26,848 $58,271 
Earnings per share
Basic$0.67 $0.62 $0.57 $0.45 $0.36 $0.85 
Diluted$0.65 $0.61 $0.56 $0.45 $0.36 $0.74 
Weighted average common shares outstanding
Basic85,647 85,317 84,956 84,805 73,617 68,563 
Diluted86,819 86,487 86,250 85,599 74,174 70,401 
Other data
Loss Ratio(1)
4.2 %4.7 %3.5 %15.9 %34.7 %5.8 %
Expense Ratio(2)
31.3 %32.2 %34.7 %34.4 %30.7 %32.7 %
Combined ratio (3)
35.5 %36.9 %38.3 %50.2 %65.4 %38.5 %

(1)    Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)    Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)    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
June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
($ Values In Millions, except as noted below)
New insurance written $22,751 $26,397 $19,782 $18,499 $13,124 $11,297 
New risk written5,650 6,531 4,868 4,577 3,260 2,897 
Insurance in force (IIF) (1)
136,598 123,777 111,252 104,494 98,905 98,494 
Risk in force (1)
34,366 31,206 28,164 26,568 25,238 25,192 
Policies in force (count) (1)
471,794 436,652 399,429 381,899 372,934 376,852 
Average loan size ($ value in thousands) (1)
$290 $283 $279 $274 $265 $261 
Coverage percentage (2)
25.2 %25.2 %25.3 %25.4 %25.5 %25.6 %
Loans in default (count) (1)
8,764 11,090 12,209 13,765 10,816 1,449 
Default rate (1)
1.86 %2.54 %3.06 %3.60 %2.90 %0.38 %
Risk in force on defaulted loans (1)
$625 $785 $874 $1,008 $799 $84 
Net premium yield (3)
0.34 %0.36 %0.37 %0.39 %0.40 %0.41 %
Earnings from cancellations$7.0 $9.9 $11.7 $12.6 $15.5 $8.6 
Annual persistency (4)
53.9 %51.9 %55.9 %60.0 %64.1 %71.7 %
Quarterly run-off (5)
8.0 %12.5 %12.5 %13.1 %12.9 %8.0 %

(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 twelve-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 NIWThree months ended
June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
(In Millions)
Monthly$19,422 $23,764 $17,789 $16,516 $11,885 $10,461 
Single3,329 2,633 1,993 1,983 1,239 836 
Primary$22,751 $26,397 $19,782 $18,499 $13,124 $11,297 
Primary and pool IIFAs of
June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
(In Millions)
Monthly$117,629 $106,920 $95,336 $88,584 $82,848 $81,347 
Single18,969 16,857 15,916 15,910 16,057 17,147 
Primary136,598 123,777 111,252 104,494 98,905 98,494 
Pool1,460 1,642 1,855 2,115 2,340 2,487 
Total$138,058 $125,419 $113,107 $106,609 $101,245 $100,981 
10
EXHIBIT 99.1

    The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction and 2021 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, 2020-2 ILN Transaction and 2021 -1 ILN Transaction and collectively, the ILN Transactions) for the periods indicated.
For the three months ended
June 30, 2021March 31, 2021December 31, 2020September 30, 2020June 30, 2020March 31, 2020
(In Thousands)
The QSR Transactions
Ceded risk-in-force$7,113,707 $6,330,409 $5,543,969 $5,159,061 $4,563,676 $4,843,715 
Ceded premiums earned(27,537)(25,747)(24,161)(24,517)(23,210)(23,011)
Ceded claims and claim expenses1,194 1,180 601 3,200 8,669 1,532 
Ceding commission earned5,961 5,162 4,787 4,798 4,428 4,513 
Profit commission14,391 13,380 13,184 11,034 5,271 12,413 
The ILN Transactions
Ceded premiums$(10,169)$(9,397)$(9,422)$(6,268)$(3,267)$(3,872)

Primary NIW by FICOFor the three months endedFor the six months ended
June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
($ In Millions)
>= 760$11,390 $12,914 $8,052 $24,304 $14,342 
740-7594,246 5,312 1,866 9,558 3,481 
720-7393,152 3,963 1,607 7,115 3,186 
700-7191,798 2,358 959 4,156 1,997 
680-6991,292 1,360 514 2,652 1,079 
<=679873 490 126 1,363 336 
Total$22,751 $26,397 $13,124 $49,148 $24,421 
Weighted average FICO754 755 762755 760 
Primary NIW by LTVFor the three months ended For the six months ended
June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
(In Millions)
95.01% and above$2,177 $2,451 $547 $4,628 $1,268 
90.01% to 95.00%9,941 11,051 5,385 20,992 10,394 
85.01% to 90.00%6,262 7,848 5,067 14,110 9,149 
85.00% and below4,371 5,047 2,125 9,418 3,610 
Total$22,751 $26,397 $13,124 $49,148 $24,421 
Weighted average LTV91.3 %91.0 %90.7 %91.1 %91.0 %
Primary NIW by purchase/refinance mixFor the three months endedFor the six months ended
June 30, 2021March 31, 2021June 30, 2020June 30, 2021June 30, 2020
(In Millions)
Purchase$18,911 $17,909 $7,776 $36,820 $15,767 
Refinance
3,840 8,488 5,348 12,328 8,654 
Total$22,751 $26,397 $13,124 $49,148 $24,421 
11
EXHIBIT 99.1


The table below presents a summary of our primary IIF and RIF by book year as of June 30, 2021.
Primary IIF and RIFAs of June 30, 2021
IIFRIF
(In Millions)
June 30, 2021$48,314 $11,986 
202051,100 12,792 
201917,279 4,527 
20186,745 1,719 
20175,687 1,424 
2016 and before 7,473 1,918 
Total$136,598 $34,366 
    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
June 30, 2021March 31, 2021June 30, 2020
(In Millions)
>= 760$70,583 $63,919 $48,898 
740-75923,175 20,537 15,764 
720-73918,857 17,167 13,882 
700-71912,230 11,536 10,228 
680-6997,927 7,329 6,657 
<=6793,826 3,289 3,476 
Total$136,598 $123,777 $98,905 
Primary RIF by FICOAs of
June 30, 2021March 31, 2021June 30, 2020
(In Millions)
>= 760$17,531 $15,920 $12,433 
740-7595,873 5,214 4,031 
720-7394,798 4,378 3,585 
700-7193,161 2,981 2,625 
680-6992,047 1,896 1,706 
<=679 956 817 858 
Total$34,366 $31,206 $25,238 

Primary IIF by LTVAs of
June 30, 2021March 31, 2021June 30, 2020
(In Millions)
95.01% and above$12,026 $10,616 $8,453 
90.01% to 95.00%60,358 54,832 45,862 
85.01% to 90.00%43,064 40,057 32,603 
85.00% and below21,150 18,272 11,987 
Total$136,598 $123,777 $98,905 
12
EXHIBIT 99.1
Primary RIF by LTVAs of
June 30, 2021March 31, 2021June 30, 2020
(In Millions)
95.01% and above$3,552 $3,106 $2,387 
90.01% to 95.00%17,774 16,139 13,463 
85.01% to 90.00%10,555 9,818 7,985 
85.00% and below2,485 2,143 1,403 
Total$34,366 $31,206 $25,238 
Primary RIF by Loan TypeAs of
June 30, 2021March 31, 2021June 30, 2020
Fixed99 %99 %98 %
Adjustable rate mortgages
Less than five years— — — 
Five years and longer1 1 2 
Total 100 %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
June 30, 2021March 31, 2021June 30, 2020
(In Millions)
IIF, beginning of period$123,777 $111,252 $98,494 
NIW22,751 26,397 13,124 
Cancellations, principal repayments and other reductions(9,930)(13,872)(12,713)
IIF, end of period$136,598 $123,777 $98,905 
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
June 30, 2021March 31, 2021June 30, 2020
California10.3 %10.8 %11.3 %
Texas9.8 9.5 8.1 
Florida8.3 7.9 6.2 
Virginia5.0 5.0 5.4 
Colorado4.1 4.1 3.8 
Maryland3.9 3.8 3.5 
Illinois3.8 3.7 4.0 
Washington3.6 3.5 3.4 
Georgia3.5 3.3 2.8 
Pennsylvania3.2 3.3 3.6 
Total55.5 %54.9 %52.1 %

13
EXHIBIT 99.1
    The table below presents selected primary portfolio statistics, by book year, as of June 30, 2021.
As of June 30, 2021
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 $8 5 %655 56 2 1 0.3 %0.5 %3.6 %
20143,451 357 10 %14,786 2,159 77 48 4.2 %0.8 %3.6 %
201512,422 2,186 18 %52,548 11,723 419 114 3.2 %1.0 %3.6 %
2016 21,187 4,922 23 %83,626 23,999 965 126 2.9 %1.3 %4.0 %
201721,582 5,687 26 %85,897 28,150 1,539 88 4.5 %1.9 %5.5 %
201827,295 6,745 25 %104,043 32,452 2,039 69 8.5 %2.0 %6.3 %
201945,141 17,279 38 %148,423 67,015 2,505 13 13.5 %1.7 %3.7 %
202062,702 51,100 81 %186,174 157,288 1,171 1 7.5 %0.6 %0.7 %
202149,148 48,314 98 %150,923 148,952 47 — 0.5 %— %— %
Total$243,090 $136,598 827,075 471,794 8,764 460 
(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.

    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 six months ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(In Thousands)
Beginning balance$96,103 $29,479 $90,567 $23,752 
Less reinsurance recoverables (1)
(18,686)(6,193)(17,608)(4,939)
Beginning balance, net of reinsurance recoverables77,417 23,286 72,959 18,813 
Add claims incurred:
Claims and claim expenses incurred:
Current year (2)
5,069 34,958 15,626 42,516 
Prior years (3)
(429)(624)(6,024)(2,485)
Total claims and claim expenses incurred4,640 34,334 9,602 40,031 
Less claims paid:
Claims and claim expenses paid:
Current year (2)
— 39 12 39 
Prior years (3)
548 1,985 1,040 3,209 
Total claims and claim expenses paid548 2,024 1,052 3,248 
Reserve at end of period, net of reinsurance recoverables81,509 55,596 81,509 55,596 
Add reinsurance recoverables (1)
19,726 14,307 19,726 14,307 
Ending balance$101,235 $69,903 $101,235 $69,903 

(1)    Related to ceded losses recoverable under the QSR Transactions.
14
EXHIBIT 99.1
(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 and included $9.8 million attributed to net case reserves and $5.6 million attributed to net IBNR reserves for the six months ended June 30, 2021 and $34.7 million attributed to net case reserves and $7.1 million attributed to net IBNR reserves for the six months ended June 30, 2020.
(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 and included $1.1 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for the six months ended June 30, 2021 and $1.1 million attributed to net case reserves and $1.3 million attributed to net IBNR reserves for the six months ended June 30, 2020.

    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 six months ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
Beginning default inventory11,090 1,449 12,209 1,448 
Plus: new defaults1,095 9,770 2,862 10,282 
Less: cures(3,402)(353)(6,270)(828)
Less: claims paid(19)(49)(35)(83)
Less: claims denied— (1)(2)(3)
Ending default inventory8,764 10,816 8,764 10,816 

    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 six months ended
June 30, 2021June 30, 2020June 30, 2021June 30, 2020
(In Thousands)
Number of claims paid (1)
19 49 35 83 
Total amount paid for claims$702 $2,578 $1,308 $4,081 
Average amount paid per claim
$37 $53 $37 $49 
Severity(2)
66 %89 %64 %87 %
(1)    Count includes three and four claims settled without payment during the three and six months ended June 30, 2021, respectively, and one and two claims settled without payment during the three and six months ended 2020, 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 June 30, 2021As of June 30, 2020
(In Thousands)
Case (1)
$10.6 $5.6 
IBNR (1)(2)
1.0 0.9 
Total$11.6 $6.5 
(1)    Defined as the gross reserve per insured loan in default.
(2)    Amount includes claims adjustment expenses.

15
EXHIBIT 99.1
    The following table provides a comparison of the PMIERs financial requirements as reported by NMIC as of the dates indicated.
As of
June 30, 2021March 31, 2021June 30, 2020
(In Thousands)
Available Assets$1,886,993 $1,809,589 $1,656,426 
Risk-Based Required Assets1,170,854 1,261,015 1,047,619 

16