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) May 13, 2014
NMI Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
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. | 94608 |
(Address of Principal Executive Offices) | (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))
Item 2.02. Results of Operations and Financial Condition
On May 13, 2014, NMI Holdings, Inc. issued a news release announcing its financial results for the quarter ended March 31, 2014. A copy of this news release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this report shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1* NMI Holdings, Inc. News Release dated May 13, 2014.
_____________________
* Furnished herewith.
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: May 13, 2014
By: | /s/ John (Jay) M. Sherwood, Jr. |
John (Jay) M. Sherwood, Jr. | |
Chief Financial Officer | |
EXHIBIT INDEX
Exhibit No. Description
99.1* NMI Holdings, Inc. News Release dated May 13, 2014.
* Furnished herewith
EXHIBIT 99.1
NMI Holdings, Inc. Reports First Quarter 2014 Financial Results
EMERYVILLE, CA - May 13, 2014 - NMI Holdings, Inc., (NASDAQ: NMIH) (the “Company”), the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company, today reported its results for the three months ended March 31, 2014. The Company reported a net loss for the quarter ended March 31, 2014 of $15.1 million, or $0.26 per share.
In the first quarter of 2014, the Company had primary new insurance written of $354.3 million compared to $157.6 million of primary new insurance written in the quarter ended December 31, 2013. The Company did not write any new pool insurance in the quarter.
"National MI is off to a great start in 2014," said Bradley Shuster, president and CEO of NMI Holdings, Inc. "There has been a tremendous response from our existing customers and we continue to build new relationships with additional mortgage banks, lenders and credit unions."
As of March 31, 2014, the Company had primary risk-in-force of $115.5 million compared to primary risk-in-force of $36.5 million as of December 31, 2013. Pool risk-in-force as of March 31, 2014 was $93.1 million.
In the first quarter of 2014, the Company had total revenues of $4.2 million, comprised of $1.9 million in premiums earned, $1.5 million of investment income and $0.8 million of gain from the change in the fair value of the warrant liability. Total expenses for the quarter were $19.3 million.
At March 31, 2014, the Company had approximately $453.7 million of cash and investments and book equity of $453.5 million or $7.81 in book value per share, based on shares outstanding of 58,067,326. This book value excludes any benefit attributable to the Company’s net deferred tax asset.
Cash and investments at the holding company stood at $246.4 million at March 31, 2014, excluding investments in the Company's insurance subsidiaries. Cash and investments at the Company's insurance subsidiaries at March 31, 2014 was $207.3 million.
"National MI is the first and only mortgage insurer to underwrite every loan, which has resonated very well in the mortgage industry based on our customer feedback," Shuster said. "In fact, we believe National MI's innovative approach to mortgage insurance and our unique business model have fundamentally changed the way the industry and our customers view the risk and underwriting process."
"National MI led the industry by introducing rescission relief after 12 months. Today, we remain the only mortgage insurer to grant 12 month rescission relief on every loan we insure, through both delegated and non-delegated channels," Shuster added. "The entire team at National MI is excited about continuing to bring innovative change to the industry in 2014, our first full year of providing mortgage insurance and helping families in all 50 states and the District of Columbia achieve home ownership," Shuster said.
Conference Call and Webcast Details
NMI Holdings, Inc. will hold a conference call tomorrow, May 14, 2014 at 5:00 a.m. Pacific time / 8:00 a.m. Eastern time to allow analysts and stockholders the opportunity to hear management discuss the Company's quarterly results. The conference call will be broadcast live on the Company’s website, on the "Events and Presentations" page of the "Investors" section at http://ir.nationalmi.com. The call may also be accessed by dialing (888) 734-0328 inside the U.S., or (678) 894-3054 for international callers, using conference ID: 51892317 or by referencing NMI Holdings, Inc. Investors and analysts are asked to dial-in ten minutes before the conference call begins.
About National MI
National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. (NASDAQ: NMIH), is a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com.
EXHIBIT 99.1
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in this press release 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. Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “intends” and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that 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. These risks and uncertainties include, but are not limited to, those set forth under the heading “Risk Factors” in our most recent Registration Statement on Form S-1, and described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission, including our Risk Factors detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2013. Any or all of our forward-looking statements in this press release may turn out to be inaccurate. Consequently, our actual results could differ materially from those anticipated in such forward-looking statements contained in this press release. Any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.
Media Contact:
Mary McGarity
Strategic Vantage Marketing & Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com
EXHIBIT 99.1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
For the Quarter Ended March 31, | |||||||
2014 | 2013 | ||||||
(In Thousands, except per share data) | |||||||
Revenues | |||||||
Premiums written | |||||||
Direct | $ | 5,178 | $ | — | |||
Net premiums written | 5,178 | — | |||||
Increase in unearned premiums | (3,274 | ) | — | ||||
Net premiums earned | 1,904 | — | |||||
Net investment income | 1,489 | 410 | |||||
Net realized investment gains | — | 28 | |||||
Gain from change in fair value of warrant liability | 817 | 35 | |||||
Gain from settlement of warrants | 37 | — | |||||
Total Revenues | 4,247 | 473 | |||||
Expenses | |||||||
Insurance claims and claims expenses, net | — | — | |||||
Amortization of deferred policy acquisition costs | 19 | — | |||||
Other underwriting and operating expenses | 19,283 | 12,426 | |||||
Total Expenses | 19,302 | 12,426 | |||||
Net Loss | $ | (15,055 | ) | $ | (11,953 | ) | |
Loss per share | |||||||
Basic and diluted loss per share | $ | (0.26 | ) | $ | (0.22 | ) | |
Weighted average common shares outstanding | 58,061,299 | 55,500,100 | |||||
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
March 31, 2014 | December 31, 2013 | ||||||
(In Thousands) | |||||||
Total investment portfolio | $ | 410,876 | $ | 409,088 | |||
Cash and cash equivalents | 42,792 | 55,929 | |||||
Deferred policy acquisition costs, net | 977 | 90 | |||||
Software and equipment, net | 9,226 | 8,876 | |||||
Other assets | 7,313 | 7,236 | |||||
Total Assets | $ | 471,184 | $ | 481,219 | |||
Reserve for insurance claims and claims expenses | $ | — | $ | — | |||
Accounts payable and accrued expenses | 7,373 | 10,052 | |||||
Unearned premium | 4,721 | 1,446 | |||||
Warrant liability | 5,504 | 6,371 | |||||
Other liabilities | 133 | 133 | |||||
Total Liabilities | 17,731 | 18,002 | |||||
Total Shareholders' Equity | 453,453 | 463,217 | |||||
Total Liabilities and Shareholders' Equity | $ | 471,184 | $ | 481,219 | |||
EXHIBIT 99.1
New Insurance Written, Insurance in Force, and Risk in Force
March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2013 | ||||||||||||
Primary | (Dollars in Thousands) | ||||||||||||||
New insurance written | $ | 354,313 | $ | 157,568 | $ | 3,560 | $ | 1,045 | |||||||
Insurance in force (end of period) | $ | 514,796 | $ | 161,731 | $ | 4,604 | $ | 1,045 | |||||||
Risk in force (end of period) | $ | 115,467 | $ | 36,516 | $ | 1,196 | $ | 257 | |||||||
Policies in force (end of period) | 2,072 | 653 | 22 | 6 | |||||||||||
Weighted-average coverage (1) | 22.4 | % | 22.6 | % | 26.0 | % | 24.6 | % | |||||||
Loans in default (count) | — | — | — | — | |||||||||||
(1) End of period RIF divided by IIF.
The table below reflects our primary NIW, IIF and RIF by FICO for the 2014 and 2013 books as of March 31, 2014.
NIW | IIF | RIF | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Primary - 2014 Book | As of March 31, 2014 | ||||||||||||||||
>= 740 | $ | 255,210 | 72.0 | % | $ | 254,904 | 72.0 | % | $ | 56,089 | 70.9 | % | |||||
680 - 739 | 96,708 | 27.3 | 96,701 | 27.3 | 22,498 | 28.4 | |||||||||||
620 - 679 | 2,395 | 0.7 | 2,231 | 0.7 | 557 | 0.7 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 354,313 | 100.0 | % | $ | 353,836 | 100.0 | % | $ | 79,144 | 100.0 | % | |||||
Primary - 2013 Book | As of March 31, 2014 | ||||||||||||||||
>= 740 | $ | 113,907 | 70.2 | % | $ | 114,452 | 71.1 | % | $ | 25,510 | 70.2 | % | |||||
680 - 739 | 47,102 | 29.0 | 45,499 | 28.3 | 10,539 | 29.0 | |||||||||||
620 - 679 | 1,163 | 0.8 | 1,009 | 0.6 | 274 | 0.8 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 162,172 | 100.0 | % | $ | 160,960 | 100.0 | % | $ | 36,323 | 100.0 | % | |||||
The table below reflects our pool NIW, IIF, and RIF by FICO for the 2013 book as of March 31, 2014.
NIW | IIF | RIF | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Pool - 2013 Book | As of March 31, 2014 | ||||||||||||||||
>= 740 | $ | 4,186,844 | 81.0 | % | $ | 4,072,426 | 81.0 | % | $ | 75,195 | 80.8 | % | |||||
680 - 739 | 832,755 | 16.1 | 809,222 | 16.1 | 15,146 | 16.2 | |||||||||||
620 - 679 | 152,065 | 2.9 | 147,029 | 2.9 | 2,749 | 3.0 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 5,171,664 | 100.0 | % | $ | 5,028,677 | 100.0 | % | $ | 93,090 | 100.0 | % | |||||
EXHIBIT 99.1
NIW | IIF | RIF | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
Total Portfolio | As of March 31, 2014 | ||||||||||||||||
>= 740 | $ | 4,555,961 | 80.1 | % | $ | 4,441,782 | 80.1 | % | $ | 156,794 | 75.2 | % | |||||
680 - 739 | 976,565 | 17.2 | 951,422 | 17.2 | 48,183 | 23.1 | |||||||||||
620 - 679 | 155,623 | 2.7 | 150,269 | 2.7 | 3,580 | 1.7 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 5,688,149 | 100.0 | % | $ | 5,543,473 | 100.0 | % | $ | 208,557 | 100.0 | % | |||||
Total primary RIF on defaulted loans | $ | — | |||||||||||||||
As of March 31, 2014 | Primary | Pool | |||
Percentage of RIF by Loan Type | |||||
Fixed | 91.8 | % | 100.0 | % | |
Adjustable rate mortgages: | |||||
Less than five years | — | — | |||
Five years and longer | 8.2 | — | |||
Total | 100.0 | % | 100.0 | % | |
As of March 31, 2014 | Primary | Pool | |||||||||||||||||
RIF | % of Total LTV | Policy Count | RIF | % of Total LTV | Policy Count | ||||||||||||||
Total RIF by LTV | (Dollars in Thousands) | ||||||||||||||||||
95.01% and above | $ | 464 | 0.4 | % | 6 | $ | — | — | % | — | |||||||||
90.01% to 95.00% | 54,430 | 47.1 | 811 | — | — | — | |||||||||||||
85.01% to 90.00% | 47,435 | 41.1 | 787 | — | — | — | |||||||||||||
80.01% to 85.00% | 13,138 | 11.4 | 468 | — | — | — | |||||||||||||
80.00% and below | — | — | — | 93,090 | 100.0 | 21,538 | |||||||||||||
Total RIF | $ | 115,467 | 100.0 | % | 2,072 | $ | 93,090 | 100.0 | % | 21,538 | |||||||||
March 31, 2014 | December 31, 2013 | ||||||
Average Primary Loan Size by FICO | (In Thousands) | ||||||
>= 740 | $ | 251 | $ | 253 | |||
680 - 739 | 244 | 237 | |||||
620 - 679 | 223 | 194 | |||||
<= 619 | — | — | |||||