8-K


 
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 18, 2016

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.
(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))
 





Item 2.02.     Results of Operations and Financial Condition

On February 18, 2016, NMI Holdings, Inc. issued a news release announcing its financial results for the quarter and year to date periods ended December 31, 2015. A copy of this news 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.

99.1*               NMI Holdings, Inc. News Release dated February 18, 2016.

_____________________

*  Furnished herewith.

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 18, 2016
By:
/s/ Nicole C. Sanchez
 
 
Nicole C. Sanchez
 
 
VP, Assistant General Counsel










2




EXHIBIT INDEX


Exhibit No.    Description

99.1*         NMI Holdings, Inc. News Release dated February 18, 2016.


*  Furnished herewith





























i
Exhibit
EXHIBIT 99.1



NMI Holdings, Inc. Reports Record Fourth Quarter and Full Year 2015 Financial Results,
New Insurance Written Grows 25% Sequentially
EMERYVILLE, CALIF., Feb. 18, 2016 -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported results for the fourth quarter and year ended Dec. 31, 2015. In the fourth quarter, monthly premium new insurance written (NIW) was $2.0 billion, an increase of 28% over the prior quarter. Overall NIW of $4.5 billion increased 25% over $3.6 billion in the prior quarter. For the year, total NIW of $12.4 billion was up 254% from $3.5 billion in 2014.
The company reported a net loss for the fourth quarter of $4.8 million, or $0.08 per share, which includes interest expense of $2.1 million related to the company’s term loan, which was entered into in the fourth quarter of 2015. This compares with a net loss of $4.8 million, or $0.08 per share, in the prior quarter, and a net loss of $10.0 million, or $0.17 per share, in the fourth quarter of 2014. Total net loss for the year ended Dec. 31, 2015 was $27.8 million, or $0.47 per share, which compares with $48.9 million, or $0.84 per share, for the year ended Dec. 31, 2014. In the fourth quarter, total revenue was $18.9 million, which compares with $14.7 million in the prior quarter. For the year, total revenue was $53.6 million, compared with $19.2 million in 2014.
Bradley Shuster, chairman and CEO of National MI, said, “In the fourth quarter we continued our strong growth trajectory, driven by our monthly premium product, which was up 28% over the prior quarter. We also achieved full compliance with the PMIERs requirements as of year-end. For 2016, we are focused on continuing to grow high-quality insurance-in-force, particularly monthly premium product, deploying our capital at attractive mid-teens returns. We expect to achieve GAAP profitability during the second half of 2016 and thereafter to demonstrate growing earnings leverage as we scale into our largely fixed expense base. With our continuing growth, we are evaluating capital alternatives, which include potential reinsurance relationships to help us continue to efficiently manage capital and risk in 2016 and beyond.”
Premiums earned for the quarter were $16.9 million, up from $12.8 million in the prior quarter. For the year, premiums earned were $45.5 million, up from $13.4 million in the prior year.

Investment income in the fourth quarter was $2.1 million, up from $1.9 million in the prior quarter. Investment income for the year was $7.2 million, up from $5.6 million in 2014.

Total underwriting and operating expenses in the fourth quarter were $21.7 million, including share-based compensation expense of $2.3 million. This compares with total underwriting and operating expenses of $19.7 million, including $1.8 million of share-based compensation, in the prior quarter. For the year, total underwriting and operating expenses were $80.6 million, including share-based compensation expense of $8.2 million. This compares with operating expenses of $73.4 million, including share-based compensation expense of $9.2 million, in 2014.

As of the end of the fourth quarter, the company had approved master policies in place with 964 customers, up from 906 as of the end of the prior quarter, and up from 735 as of the end of the fourth quarter of 2014. Customers delivering NIW in the quarter grew to a new high of 427, which compares with 391 in the prior quarter and 277 in the same quarter a year ago.

As of Dec. 31, 2015, the company had primary insurance-in-force of $14.8 billion, which compares with $10.6 billion at the prior quarter end and $3.4 billion as of Dec. 31, 2014. Pool insurance-in-force as of the end of the fourth quarter was $4.2 billion, which compares with $4.3 billion at the prior quarter-end and $4.7 billion as of Dec. 31, 2014.

As of Dec. 31, 2015, cash and investments were $616.6 million, including $100.2 million at the holding company, and book equity was $402.7 million, equal to $6.85 per share. This book value excludes any benefit attributable to the company’s deferred tax asset of approximately $66 million as of Dec. 31, 2015.


1

EXHIBIT 99.1

As of Dec. 31, 2015, the company’s risk-to-available assets ratio in its primary insurance company was 8.5:1 and it was compliant with the Private Mortgage Insurers Eligibility Requirements (PMIERs), including the minimum available asset requirement of $400 million.


Conference Call and Webcast Details
NMI Holdings, Inc. will hold a conference call today, February 18, 2016, at 1:30 p.m. Pacific / 4:30 p.m. Eastern to discuss results for the quarter. 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 (914) 495-8578 for international callers using Conference ID: 26684423, 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.

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 (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides a "safe harbor" for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "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: our ability to implement our business strategy, including our ability to attract and retain a diverse customer base and to achieve a diversified mix of business across the spectrum of our product offerings; changes in the business practices of the GSEs that may impact the use of private mortgage insurance; our ongoing ability to comply with the financial requirements of the PMIERs; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current inquiries; and general economic downturns and volatility. These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2014, as updated in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015. 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.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
(510) 788-8417
john.swenson@nationalmi.com

Press Contact
Mary McGarity

2

EXHIBIT 99.1

Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com

3

EXHIBIT 99.1



Consolidated statements of operations
For the year ended December 31,
 
2015
 
2014
 
2013
Revenues
(In Thousands, except for share data)
Net premiums written
$
114,210

 
$
34,029

 
$
3,541

Increase in unearned premiums
(68,704
)
 
(20,622
)
 
(1,446
)
Net premiums earned
45,506

 
13,407

 
2,095

Net investment income
7,246

 
5,618

 
4,808

Net realized investment gains
831

 
197

 
186

Other revenues
25

 

 

Total revenues
53,608

 
19,222

 
7,089

Expenses
 
 
 
 
 
Insurance claims and claims expenses
650

 
83

 

Underwriting and operating expenses
80,599

 
73,417

 
60,744

Total expenses
81,249

 
73,500

 
60,744

Other income (expense)
 
 
 
 
 
Gain (loss) from change in fair value of warrant liability
1,905

 
2,949

 
(1,529
)
Gain from settlement of warrants

 
37

 

Interest expense
(2,057
)
 

 

Loss before income taxes
(27,793
)
 
(51,292
)
 
(55,184
)
Income tax benefit

 
(2,386
)
 

Net loss
$
(27,793
)
 
$
(48,906
)
 
$
(55,184
)

Consolidated balance sheets
December 31, 2015
 
December 31, 2014
 
(In Thousands)
Total investment portfolio
$
559,235

 
$
336,501

Cash and cash equivalents
57,317

 
103,021

Deferred policy acquisition costs, net
17,530

 
2,985

Software and equipment, net
15,201

 
11,806

Other assets
13,168

 
8,952

Total assets
$
662,451

 
$
463,265

Term loan
$
143,939

 
$

Unearned premiums
90,773

 
22,069

Reserve for insurance claims and claims expenses
679

 
83

Accounts payable and accrued expenses
22,725

 
10,646

Warrant liability
1,467

 
3,372

Deferred tax liability
137

 
137

Total liabilities
259,720

 
36,307

Total shareholders' equity
402,731

 
426,958

Total liabilities and shareholders' equity
$
662,451

 
$
463,265



4

EXHIBIT 99.1

New Insurance Written, Insurance in Force and Premiums

The table below shows primary and pool IIF, NIW and premiums written and earned.
Primary and pool IIF and NIW
As of and for the year ended
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
 
IIF
 
NIW
 
IIF
 
NIW
 
IIF
 
NIW
 
(In Thousands)
Monthly
$
6,957,788

 
$
5,989,731

 
$
1,400,893

 
$
1,416,087

 
$
24,558

 
$
24,999

Single
7,866,138

 
6,434,425

 
1,968,771

 
2,035,267

 
137,173

 
137,173

Primary
14,823,926

 
12,424,156

 
3,369,664

 
3,451,354

 
161,731

 
162,172

 
 
 
 
 
 
 
 
 
 
 
 
Pool
4,237,842

 

 
4,721,674

 

 
5,089,517

 
5,171,664

Total
$
19,061,768

 
$
12,424,156

 
$
8,091,338

 
$
3,451,354

 
$
5,251,248

 
$
5,333,836

Primary and pool premiums written and earned
For the year ended
 
December 31, 2015
 
December 31, 2014
 
December 31, 2013
 
(In Thousands)
Net premiums written
$
114,210

 
$
34,029

 
$
3,541

Net premiums earned
45,506

 
13,407

 
2,095

Portfolio Statistics
The table below shows primary NIW, IIF, RIF, policies in force, the weighted average coverage and loans in default, by quarter, for the last five quarters.
Primary portfolio trends
As of and for the quarter ended
 
December 31, 2015
 
September 30, 2015
 
June 30, 2015
 
March 31, 2015
 
December 31, 2014
 
(Dollars in Thousands)
New insurance written
$
4,546,759

 
$
3,632,740

 
$
2,548,515

 
$
1,696,142

 
$
1,692,187

Insurance in force (1)
$
14,823,926

 
$
10,601,492

 
$
7,190,414

 
$
4,835,248

 
$
3,369,664

Risk in force (1)
$
3,586,462

 
$
2,553,347

 
$
1,715,442

 
$
1,145,602

 
$
801,561

Policies in force (1)
63,948

 
46,175

 
31,682

 
21,225

 
14,603

Weighted average coverage (2)
24.2
%
 
24.1
%
 
23.9
%
 
23.7
%
 
23.8
%
Loans in default (count)
36

 
20

 
9

 
6

 
4

Risk in force on defaulted loans
$
1,705

 
$
962

 
$
528

 
$
350

 
$
208


(1) 
Reported as of the end of the period.
(2) 
End of period RIF divided by IIF.
The table below reflects a summary of the change in total primary IIF for the years ended December 31, 2015 and 2014.
Primary IIF
For the year ended December 31,
 
2015
 
2014
 
(In Thousands)
IIF, beginning of period
$
3,369,664

 
$
161,731

NIW
12,424,156

 
3,451,354

Cancellations and other reductions
(969,894
)
 
(243,421
)
IIF, end of period
$
14,823,926

 
$
3,369,664


5

EXHIBIT 99.1

The table below reflects a summary of our primary IIF and RIF by book year.
Primary IIF and RIF
As of December 31, 2015
 
As of December 31, 2014
 
IIF
 
RIF
 
IIF
 
RIF
 
(In Thousands)
2015
$
12,110,411

 
$
2,932,035

 
$

 
$

2014
2,643,804

 
638,039

 
3,256,753

 
775,575

2013
69,711

 
16,388

 
112,911

 
25,986

Total
$
14,823,926

 
$
3,586,462

 
$
3,369,664

 
$
801,561

The tables below reflect our total primary IIF, RIF and average loan size, by FICO.
 
As of December 31, 2015
Primary
IIF
 
RIF
 
Average primary loan size
 
(Dollars in Thousands)
>= 740
$
9,529,358

64.3
%
 
$
2,297,405

64.1
%
 
$
239

680 - 739
4,725,731

31.9

 
1,154,969

32.2

 
223

620 - 679
568,837

3.8

 
134,088

3.7

 
204

<= 619


 


 

Total
$
14,823,926

100.0
%
 
$
3,586,462

100.0
%
 
 
 
As of December 31, 2014
Primary
IIF
 
RIF
 
Average primary loan size
 
(Dollars in Thousands)
>= 740
$
2,116,068

62.8
%
 
$
496,172

61.9
%
 
$
236

680 - 739
1,138,843

33.8

 
277,047

34.6

 
225

620 - 679
114,753

3.4

 
28,342

3.5

 
205

<= 619


 


 

Total
$
3,369,664

100.0
%
 
$
801,561

100.0
%
 
 

The table below reflects the percentage of our primary RIF by loan type.
Percentage of Primary RIF by loan type
As of December 31, 2015
 
As of December 31, 2014
 
 
 
 
Fixed
97.8
%
 
95.5
%
Adjustable rate mortgages:
 
 
 
Less than five years

 
0.1

Five years and longer
2.2

 
4.4

Total
100.0
%
 
100.0
%
As of December 31, 2015 and 2014, 100% of our pool risk-in-force was comprised of insurance on fixed rate mortgages.


6

EXHIBIT 99.1

The following table reflects the percentage and policy count of our RIF by LTV.
Total RIF by LTV
As of December 31, 2015
 
As of December 31, 2014
 
% of Total RIF
 
Policy Count
 
% of Total RIF
 
Policy Count
Primary
 
 
 
 
 
95.01% and above
3.9
%
 
2,641

 
0.5
%
 
76

90.01% to 95.00%
54.2

 
30,165

 
54.4

 
6,832

85.01% to 90.00%
33.7

 
20,388

 
36.4

 
4,929

80.01% to 85.00%
8.2

 
10,752

 
8.7

 
2,765

80.00% and below

 
2

 

 
1

Total primary
100.0
%
 
63,948

 
100
%
 
14,603

Pool
 
 
 
 
 
 
 
80.00% and below
100.0
%
 
18,955

 
100
%
 
20,573

Total pool
100.0
%
 
18,955

 
100
%
 
20,573


Geographic Dispersion
The following tables show the distribution by state of our IIF and RIF, for both primary and pool insurance.
Top 10 primary IIF and RIF by state
IIF
 
RIF
As of December 31, 2015
 
1.
California
13.8
%
 
12.9
%
2.
Texas
6.5

 
6.8

3.
Virginia
5.3

 
5.2

4.
Florida
5.1

 
5.3

5.
Michigan
4.3

 
4.4

6.
Colorado
4.2

 
4.2

7.
Arizona
3.6

 
3.7

8.
Pennsylvania
3.6

 
3.7

9.
North Carolina
3.5

 
3.5

10.
New Jersey
3.4

 
3.1

 
Total
53.3
%
 
52.8
%
Top 10 pool IIF and RIF by state
IIF
 
RIF
As of December 31, 2015
 
1.
California
28.3
%
 
27.7
%
2.
Texas
5.2

 
5.3

3.
Washington
3.9

 
3.9

4.
Colorado
3.8

 
3.8

5.
Massachusetts
3.7

 
3.7

6.
Illinois
3.7

 
3.7

7.
Virginia
3.6

 
3.6

8.
New York
2.9

 
2.9

9.
New Jersey
2.8

 
2.8

10.
Florida
2.8

 
2.8

 
Total
60.7
%
 
60.2
%

7

EXHIBIT 99.1

Top 10 Primary IIF and RIF by State
IIF
 
RIF
As of December 31, 2014
 
1.
California
16.6
%
 
16.3
%
2.
Texas
6.2

 
6.6

3.
Michigan
4.8

 
4.7

4.
Florida
4.7

 
4.6

5.
Arizona
3.8

 
3.9

6.
Pennsylvania
3.7

 
3.7

7.
Ohio
3.6

 
3.8

8.
Virginia
3.6

 
3.5

9.
Colorado
3.5

 
3.5

10.
North Carolina
3.5

 
3.6

 
Total
54.0
%
 
54.2
%
Top 10 Pool IIF and RIF by State
IIF
 
RIF
As of December 31, 2014
 
1.
California
28.6
%
 
28.0
%
2.
Texas
5.4

 
5.4

3.
Colorado
3.9

 
3.9

4.
Washington
3.9

 
3.8

5.
Massachusetts
3.7

 
3.6

6.
Virginia
3.7

 
3.7

7.
Illinois
3.7

 
3.7

8.
New York
2.8

 
2.8

9.
Florida
2.8

 
2.8

10.
New Jersey
2.8

 
2.8

 
Total
61.3
%
 
60.5
%


8