NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of
$74.5 million, or $0.88 per diluted share, for the first quarter
ended March 31, 2023, which compares to $72.9 million, or
$0.86 per diluted share, in the fourth quarter ended December 31,
2022 and $67.7 million, or $0.77 per diluted share, in the first
quarter ended March 31, 2022. Adjusted net income for the quarter
was $74.5 million, or $0.88 per diluted share, which compares to
$72.9 million, or $0.86 per diluted share, in the fourth quarter
ended December 31, 2022 and $67.5 million, or $0.77 per diluted
share, in the first quarter ended March 31, 2022.
Adam Pollitzer, President and Chief Executive
Officer of National MI, said, “We started the year with significant
momentum, delivering strong operating performance, continued growth
in our high-quality insured portfolio, and standout financial
results in the first quarter. We continue to manage our business
with discipline and a focus on through-the-cycle performance, and
looking forward, we’re well positioned to continue to serve our
customers and their borrowers, support our talented team, and
deliver sustained performance and long-term value for our
shareholders.”
Selected first quarter 2023 highlights
include:
- Primary insurance-in-force at
quarter end was $186.7 billion, compared to $184.0 billion at the
end of the fourth quarter of 2022 and $158.9 billion at the end of
the first quarter of 2022
- Net premiums earned were $121.8
million, compared to $119.6 million in the fourth quarter of 2022
and $116.5 million in the first quarter of 2022
- Total revenue was $136.8 million,
compared to $133.1 million in the fourth quarter of 2022 and $127.4
million in the first quarter of 2022
- Underwriting and operating expenses
were $25.8 million, compared to $26.7 million in the fourth quarter
of 2022 and $32.9 million in the first quarter of 2022
- Insurance claims and claim expenses
were $6.7 million, compared to $3.4 million in the fourth quarter
of 2022 and a benefit of $0.6 million in the first quarter of
2022
- Shareholders’ equity was $1.7
billion at quarter end and book value per share was $20.49. Book
value per share excluding the impact of net unrealized gains and
losses in the investment portfolio was $22.56, up 4% compared to
$21.76 in the fourth quarter of 2022 and 19% compared to $18.97 in
the first quarter of 2022
- Annualized return on equity for the
quarter was 17.9%, compared to 18.6% in the fourth quarter of 2022
and 17.5% in the first quarter of 2022
- At quarter-end, total PMIERs
available assets were $2.5 billion and net risk-based required
assets were $1.2 billion
|
Quarter Ended |
Quarter Ended |
Quarter Ended |
Change(1) |
Change(1) |
|
3/31/2023 |
12/31/2022 |
3/31/2022 |
Q/Q |
Y/Y |
INSURANCE METRICS
($billions) |
Primary
Insurance-in-Force |
$ |
186.7 |
|
$ |
184.0 |
|
$ |
158.9 |
|
1% |
18% |
New Insurance
Written - NIW |
|
|
|
|
|
|
Monthly premium |
|
8.6 |
|
|
10.5 |
|
|
13.1 |
|
(18)% |
(35)% |
|
Single premium |
|
0.2 |
|
|
0.3 |
|
|
1.1 |
|
(31)% |
(83)% |
|
Total(2) |
|
8.7 |
|
|
10.7 |
|
|
14.2 |
|
(19)% |
(38)% |
|
|
|
|
|
|
FINANCIAL
HIGHLIGHTS (Unaudited, $millions, except per share amounts) |
|
|
|
|
|
|
Net Premiums
Earned |
|
121.8 |
|
|
119.6 |
|
|
116.5 |
|
2% |
5% |
Insurance Claims
and Claim Expenses (Benefits) |
|
6.7 |
|
|
3.4 |
|
|
(0.6 |
) |
94% |
N/A |
Underwriting and
Operating Expenses |
|
25.8 |
|
|
26.7 |
|
|
32.9 |
|
(3)% |
(22)% |
Net Income |
|
74.5 |
|
|
72.9 |
|
|
67.7 |
|
2% |
10% |
Book Value per
Share (excluding net unrealized gains and losses)(3) |
|
22.56 |
|
|
21.76 |
|
|
18.97 |
|
4% |
19% |
Loss Ratio |
|
5.5 |
% |
|
2.9 |
% |
|
(0.5 |
)% |
|
|
Expense Ratio |
|
21.2 |
% |
|
22.3 |
% |
|
28.3 |
% |
|
|
(1) Percentages may not be replicated
based on the rounded figures presented in the table.(2) Total
may not foot due to rounding. (3) Book value per share (excluding
net unrealized gains and losses) is defined as total shareholder's
equity, excluding the after-tax effects of unrealized gains and
losses on our investment portfolio, divided by shares
outstanding.
Conference Call and Webcast
Details
The company will hold a conference call, which
will be webcast live today, May 2, 2023, 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 (844)
481-2708 in the U.S., or (412) 317-0664 internationally 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," "perceive," "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: changes in general economic, market and
political conditions and policies (including rising interest rates
and inflation) and investment results or other conditions that
affect the U.S. housing market or the U.S. markets for home
mortgages, mortgage insurance, reinsurance and credit risk transfer
markets, including the risk related to geopolitical instability,
inflation, an economic downturn (including any decline in home
prices) or recession, and their impacts on our business, operations
and personnel; changes in the charters, business practices, policy,
pricing or priorities of Fannie Mae and Freddie Mac (collectively,
the GSEs), which may include 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; or changes in the direction of
housing policy objectives of the Federal Housing Finance Agency
(FHFA), such as the FHFA's priority to increase the accessibility
to and affordability of homeownership for low-and-moderate income
borrowers and underrepresented communities; 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, the U.S.
Department of Agriculture's Rural Housing Service and the U.S.
Department of Veterans Affairs (collectively, government MIs), and
potential market entry by new competitors or consolidation of
existing competitors; adoption of new or changes to existing laws,
rules 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
implementation of the final rules defining and/or concerning
"Qualified Mortgage" and "Qualified Residential Mortgage"; U.S.
federal tax reform and other potential changes in tax law and their
impact on us and our operations; 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 legal and
regulatory claims, investigations, actions, audits or inquiries
that could result in adverse judgements, settlements, fines or
other reliefs that could require significant expenditures or have
other negative effects on our business; uncertainty relating to the
coronavirus (COVID-19) virus and its variants or the measures taken
by governmental authorities and other third-parties to contain the
spread of COVID-19, including their impact on the global economy,
the U.S. housing, real estate, housing finance and mortgage
insurance markets, and our business, operations and personnel; our
ability to successfully execute and implement our capital plans,
including our ability to access the equity, 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; lenders, the GSEs, or other market
participants seeking alternatives to private mortgage insurance;
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; decrease in the length of time our insurance
policies are in force; 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; climate risk
and efforts to manage or regulate climate risk by government
agencies could affect our business and operations; potential
adverse impacts arising from the occurrence of any man-made
disasters or public health emergencies, including pandemics; the
inability of our counter-parties, 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; effectiveness and
security of our information technology systems and digital products
and services, including the risks these systems, products or
services may fail to operate as expected or planned, or expose us
to cybersecurity or third-party risks (including exposure of our
confidential customer and other confidential information); and
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,
2022, 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, adjusted
combined ratio and book value per share (excluding net unrealized
gains and losses) 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 other infrequent, unusual or
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 other infrequent, unusual or 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.
Book value per share (excluding net
unrealized gains and losses) is defined as total
shareholder's equity, excluding the after-tax effects of unrealized
gains and losses on investments, divided by shares outstanding.
Although adjusted income before tax, adjusted
net income, adjusted diluted EPS, adjusted return-on-equity,
adjusted expense ratio, adjusted combined ratio and book value per
share (excluding net unrealized gains and losses) 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. Furthermore, all
unexercised warrants expired in April 2022 and, as such, no change
in fair value will be recognized in future reporting periods. 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) Other infrequent, unusual or
non-operating items. Items that are the result of unforeseen or
uncommon events, and are not expected to recur with frequency 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 infrequent, unusual or non-operating adjustments
related to severance, restricted stock modification and other
expenses incurred in connection with the CEO transition announced
in September 2021 and 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 infrequent or non-recurring in nature, and
are not indicative of the performance of, or ongoing trends in, our
primary operating activities or business.
(5) Net unrealized gains and losses on
investments. The recognition of the net unrealized gains or losses
on investment can vary significantly across periods and is
influenced by factors such as interest rate movement, overall
market and economic conditions, and tax and capital profiles. These
valuation adjustments may not necessarily result in economic gains
or losses and not reflective of ongoing operations. Trends in the
profitability of our fundamental operating activities can be more
clearly identified without the fluctuations of these unrealized
gains or losses.
Investor ContactJohn M.
SwensonVice President, Investor Relations and
Treasuryjohn.swenson@nationalmi.com(510) 788-8417
Consolidated
statements of operations and comprehensive income (loss)
(unaudited) |
For the three months ended March 31, |
|
|
2023 |
|
|
|
2022 |
|
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
Net premiums earned |
$ |
121,754 |
|
|
$ |
116,495 |
|
Net investment income |
|
14,894 |
|
|
|
10,199 |
|
Net realized investment (losses) gains |
|
(33 |
) |
|
|
408 |
|
Other revenues |
|
164 |
|
|
|
339 |
|
Total revenues |
|
136,779 |
|
|
|
127,441 |
|
Expenses |
|
|
|
Insurance claims and claim expenses (benefits) |
|
6,701 |
|
|
|
(619 |
) |
Underwriting and operating expenses |
|
25,786 |
|
|
|
32,935 |
|
Service expenses |
|
80 |
|
|
|
430 |
|
Interest expense |
|
8,039 |
|
|
|
8,041 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
(93 |
) |
Total expenses |
|
40,606 |
|
|
|
40,694 |
|
|
|
|
|
Income before income
taxes |
|
96,173 |
|
|
|
86,747 |
|
Income tax expense |
|
21,715 |
|
|
|
19,067 |
|
Net income |
$ |
74,458 |
|
|
$ |
67,680 |
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.89 |
|
|
$ |
0.79 |
|
Diluted |
$ |
0.88 |
|
|
$ |
0.77 |
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
Basic |
|
83,600 |
|
|
|
85,953 |
|
Diluted |
|
84,840 |
|
|
|
87,310 |
|
|
|
|
|
Loss ratio(1) |
|
5.5 |
% |
|
|
(0.5 |
)% |
Expense ratio(2) |
|
21.2 |
% |
|
|
28.3 |
% |
Combined ratio(3) |
|
26.7 |
% |
|
|
27.7 |
% |
|
|
|
|
Net income |
$ |
74,458 |
|
|
$ |
67,680 |
|
Other comprehensive income
(loss), net of tax: |
|
|
|
Unrealized gains (losses) in
accumulated other comprehensive income (loss), net of tax expense
(benefit) of $8,633 and $(26,176) for the quarters ended
March 31, 2023 and 2022, respectively |
|
32,476 |
|
|
|
(98,471 |
) |
Reclassification adjustment
for realized losses (gains) included in net income, net of tax
(benefit) expense of $(7) and $86 for the quarters ended
March 31, 2023 and 2022, respectively |
|
26 |
|
|
|
(323 |
) |
Other comprehensive income
(loss), net of tax |
|
32,502 |
|
|
|
(98,794 |
) |
Comprehensive income
(loss) |
$ |
106,960 |
|
|
$ |
(31,114 |
) |
(1) Loss ratio is calculated by dividing
insurance claims and claim expenses (benefits) 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.
Consolidated balance
sheets (unaudited) |
March 31, 2023 |
|
December 31, 2022 |
Assets |
(In Thousands, except for share data) |
Fixed maturities, available-for-sale, at fair value (amortized cost
of $2,383,982 and $2,352,747 as of March 31, 2023 and
December 31, 2022, respectively) |
$ |
2,171,766 |
|
|
$ |
2,099,389 |
|
Cash and cash equivalents (including restricted cash of $2,197 and
$2,176 as of March 31, 2023 and December 31, 2022,
respectively) |
|
83,104 |
|
|
|
44,426 |
|
Premiums receivable |
|
70,198 |
|
|
|
69,680 |
|
Accrued investment income |
|
15,702 |
|
|
|
14,144 |
|
Deferred policy acquisition costs, net |
|
59,921 |
|
|
|
58,564 |
|
Software and equipment, net |
|
31,830 |
|
|
|
31,930 |
|
Intangible assets and goodwill |
|
3,634 |
|
|
|
3,634 |
|
Reinsurance recoverable |
|
23,479 |
|
|
|
21,587 |
|
Prepaid federal income taxes |
|
154,409 |
|
|
|
154,409 |
|
Other assets |
|
19,733 |
|
|
|
18,267 |
|
Total assets |
$ |
2,633,776 |
|
|
$ |
2,516,030 |
|
|
|
|
|
Liabilities |
|
|
|
Debt |
$ |
396,426 |
|
|
$ |
396,051 |
|
Unearned premiums |
|
114,064 |
|
|
|
123,035 |
|
Accounts payable and accrued expenses |
|
70,341 |
|
|
|
74,576 |
|
Reserve for insurance claims and claim expenses |
|
108,157 |
|
|
|
99,836 |
|
Reinsurance funds withheld |
|
2,313 |
|
|
|
2,674 |
|
Deferred tax liability, net |
|
223,368 |
|
|
|
193,859 |
|
Other liabilities |
|
12,396 |
|
|
|
12,272 |
|
Total liabilities |
|
927,065 |
|
|
|
902,303 |
|
|
|
|
|
Shareholders' equity |
|
|
|
Common stock - class A shares, $0.01 par value; 86,869,169 shares
issued and 83,279,886 shares outstanding as of March 31, 2023
and 86,472,742 shares issued and 83,549,879 shares outstanding as
of December 31, 2022 (250,000,000 shares authorized) |
|
869 |
|
|
|
865 |
|
Additional paid-in capital |
|
973,599 |
|
|
|
972,717 |
|
Treasury Stock, at cost: 3,589,283 and 2,922,863 common shares as
of March 31, 2023 and December 31, 2022,
respectively |
|
(71,437 |
) |
|
|
(56,575 |
) |
Accumulated other comprehensive loss, net of tax |
|
(171,821 |
) |
|
|
(204,323 |
) |
Retained earnings |
|
975,501 |
|
|
|
901,043 |
|
Total shareholders'
equity |
|
1,706,711 |
|
|
|
1,613,727 |
|
Total liabilities and
shareholders' equity |
$ |
2,633,776 |
|
|
$ |
2,516,030 |
|
Non-GAAP
Financial Measure Reconciliations (unaudited) |
|
For the three months ended |
|
3/31/2023 |
|
12/31/2022 |
|
3/31/2022 |
As
Reported |
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
Net premiums earned |
$ |
121,754 |
|
|
$ |
119,584 |
|
|
$ |
116,495 |
|
Net investment income |
|
14,894 |
|
|
|
13,341 |
|
|
|
10,199 |
|
Net realized investment (losses) gains |
|
(33 |
) |
|
|
6 |
|
|
|
408 |
|
Other revenues |
|
164 |
|
|
|
176 |
|
|
|
339 |
|
Total revenues |
|
136,779 |
|
|
|
133,107 |
|
|
|
127,441 |
|
Expenses |
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
6,701 |
|
|
|
3,450 |
|
|
|
(619 |
) |
Underwriting and operating expenses |
|
25,786 |
|
|
|
26,711 |
|
|
|
32,935 |
|
Service expenses |
|
80 |
|
|
|
131 |
|
|
|
430 |
|
Interest expense |
|
8,039 |
|
|
|
8,035 |
|
|
|
8,041 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
(93 |
) |
Total expenses |
|
40,606 |
|
|
|
38,327 |
|
|
|
40,694 |
|
Income before income
taxes |
|
96,173 |
|
|
|
94,780 |
|
|
|
86,747 |
|
Income tax expense |
|
21,715 |
|
|
|
21,840 |
|
|
|
19,067 |
|
Net
income |
$ |
74,458 |
|
|
$ |
72,940 |
|
|
$ |
67,680 |
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Net realized investment losses
(gains) |
|
33 |
|
|
|
(6 |
) |
|
|
(408 |
) |
Gain from change in fair value
of warrant liability |
|
— |
|
|
|
— |
|
|
|
(93 |
) |
Capital markets transaction
costs |
|
— |
|
|
|
— |
|
|
|
260 |
|
Adjusted income before
taxes |
|
96,206 |
|
|
|
94,774 |
|
|
|
86,506 |
|
|
|
|
|
|
|
Income tax expense (benefit)
on adjustments(1) |
|
7 |
|
|
|
(1 |
) |
|
|
(31 |
) |
Adjusted net
income |
$ |
74,484 |
|
|
$ |
72,935 |
|
|
$ |
67,470 |
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
84,840 |
|
|
|
84,809 |
|
|
|
87,310 |
|
|
|
|
|
|
|
Diluted
EPS |
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
0.77 |
|
Adjusted diluted
EPS |
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
0.77 |
|
|
|
|
|
|
|
Return-on-equity |
|
17.9 |
% |
|
|
18.6 |
% |
|
|
17.5 |
% |
Adjusted
return-on-equity |
|
17.9 |
% |
|
|
18.6 |
% |
|
|
17.4 |
% |
|
|
|
|
|
|
Expense
ratio(2) |
|
21.2 |
% |
|
|
22.3 |
% |
|
|
28.3 |
% |
Adjusted expense
ratio(3) |
|
21.2 |
% |
|
|
22.3 |
% |
|
|
28.0 |
% |
|
|
|
|
|
|
Combined
ratio(4) |
|
26.7 |
% |
|
|
25.2 |
% |
|
|
27.7 |
% |
Adjusted combined
ratio(5) |
|
26.7 |
% |
|
|
25.2 |
% |
|
|
27.5 |
% |
|
|
|
|
|
|
Book value per
share(6) |
$ |
20.49 |
|
|
$ |
19.31 |
|
|
$ |
17.84 |
|
Book value per share
(excluding net unrealized gains and
losses)(7) |
$ |
22.56 |
|
|
$ |
21.76 |
|
|
$ |
18.97 |
|
(1) Marginal tax impact of non-GAAP adjustments
is calculated based on our statutory U.S. federal corporate income
tax rate of 21%, except for those items that are not eligible for
an income tax deduction.(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) Book value per share is calculated by
dividing total shareholder's equity by shares outstanding.(7) Book
value per share (excluding net unrealized gains and losses) is
defined as total shareholder's equity, excluding the after-tax
effects of unrealized gains and losses on our investment portfolio,
divided by shares outstanding.
Historical Quarterly
Data |
|
2023 |
|
|
|
2022 |
|
|
|
2021 |
|
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
121,754 |
|
|
$ |
119,584 |
|
|
$ |
118,317 |
|
|
$ |
120,870 |
|
|
$ |
116,495 |
|
|
$ |
113,933 |
|
Net investment income |
|
14,894 |
|
|
|
13,341 |
|
|
|
11,945 |
|
|
|
10,921 |
|
|
|
10,199 |
|
|
|
10,045 |
|
Net realized investment (losses) gains |
|
(33 |
) |
|
|
6 |
|
|
|
14 |
|
|
|
53 |
|
|
|
408 |
|
|
|
714 |
|
Other revenues |
|
164 |
|
|
|
176 |
|
|
|
301 |
|
|
|
376 |
|
|
|
339 |
|
|
|
380 |
|
Total revenues |
|
136,779 |
|
|
|
133,107 |
|
|
|
130,577 |
|
|
|
132,220 |
|
|
|
127,441 |
|
|
|
125,072 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
6,701 |
|
|
|
3,450 |
|
|
|
(3,389 |
) |
|
|
(3,036 |
) |
|
|
(619 |
) |
|
|
(500 |
) |
Underwriting and operating expenses |
|
25,786 |
|
|
|
26,711 |
|
|
|
27,144 |
|
|
|
30,700 |
|
|
|
32,935 |
|
|
|
38,843 |
|
Service expenses |
|
80 |
|
|
|
131 |
|
|
|
197 |
|
|
|
336 |
|
|
|
430 |
|
|
|
650 |
|
Interest expense |
|
8,039 |
|
|
|
8,035 |
|
|
|
8,036 |
|
|
|
8,051 |
|
|
|
8,041 |
|
|
|
8,029 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,020 |
) |
|
|
(93 |
) |
|
|
(112 |
) |
Total expenses |
|
40,606 |
|
|
|
38,327 |
|
|
|
31,988 |
|
|
|
35,031 |
|
|
|
40,694 |
|
|
|
46,910 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
96,173 |
|
|
|
94,780 |
|
|
|
98,589 |
|
|
|
97,189 |
|
|
|
86,747 |
|
|
|
78,162 |
|
Income tax expense |
|
21,715 |
|
|
|
21,840 |
|
|
|
21,751 |
|
|
|
21,745 |
|
|
|
19,067 |
|
|
|
17,639 |
|
Net income |
$ |
74,458 |
|
|
$ |
72,940 |
|
|
$ |
76,838 |
|
|
$ |
75,444 |
|
|
$ |
67,680 |
|
|
$ |
60,523 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.89 |
|
|
$ |
0.87 |
|
|
$ |
0.91 |
|
|
$ |
0.88 |
|
|
$ |
0.79 |
|
|
$ |
0.71 |
|
Diluted |
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
0.90 |
|
|
$ |
0.86 |
|
|
$ |
0.77 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
83,600 |
|
|
|
83,592 |
|
|
|
84,444 |
|
|
|
85,734 |
|
|
|
85,953 |
|
|
|
85,757 |
|
Diluted |
|
84,840 |
|
|
|
84,809 |
|
|
|
85,485 |
|
|
|
86,577 |
|
|
|
87,310 |
|
|
|
87,117 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
Loss ratio(1) |
|
5.5 |
% |
|
|
2.9 |
% |
|
|
(2.9 |
)% |
|
|
(2.5 |
)% |
|
|
(0.5 |
)% |
|
|
(0.4 |
)% |
Expense ratio(2) |
|
21.2 |
% |
|
|
22.3 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
28.3 |
% |
|
|
34.1 |
% |
Combined ratio(3) |
|
26.7 |
% |
|
|
25.2 |
% |
|
|
20.1 |
% |
|
|
22.9 |
% |
|
|
27.7 |
% |
|
|
33.7 |
% |
(1) Loss ratio is calculated by dividing
insurance claims and claim expenses (benefits) 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.
Portfolio Statistics
The table below highlights trends in our primary
portfolio as of the date and for the periods indicated.
Primary portfolio
trends |
As of and for the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
($ Values In Millions, except as noted below) |
New insurance written (NIW) |
$ |
8,734 |
|
|
$ |
10,719 |
|
|
$ |
17,239 |
|
|
$ |
16,611 |
|
|
$ |
14,165 |
|
|
$ |
18,342 |
|
New risk written |
|
2,258 |
|
|
|
2,797 |
|
|
|
4,616 |
|
|
|
4,386 |
|
|
|
3,721 |
|
|
|
4,786 |
|
Insurance in force (IIF)(1) |
|
186,724 |
|
|
|
183,968 |
|
|
|
179,173 |
|
|
|
168,639 |
|
|
|
158,877 |
|
|
|
152,343 |
|
Risk in force(1) |
|
48,494 |
|
|
|
47,648 |
|
|
|
46,259 |
|
|
|
43,260 |
|
|
|
40,522 |
|
|
|
38,661 |
|
Policies in force (count)(1) |
|
600,294 |
|
|
|
594,142 |
|
|
|
580,525 |
|
|
|
551,543 |
|
|
|
526,976 |
|
|
|
512,316 |
|
Average loan size($ value in thousands)(1) |
$ |
311 |
|
|
$ |
310 |
|
|
$ |
309 |
|
|
$ |
306 |
|
|
$ |
301 |
|
|
$ |
297 |
|
Coverage percentage(2) |
|
26.0 |
% |
|
|
25.9 |
% |
|
|
25.8 |
% |
|
|
25.7 |
% |
|
|
25.5 |
% |
|
|
25.4 |
% |
Loans in default (count)(1) |
|
4,475 |
|
|
|
4,449 |
|
|
|
4,096 |
|
|
|
4,271 |
|
|
|
5,238 |
|
|
|
6,227 |
|
Default rate(1) |
|
0.75 |
% |
|
|
0.75 |
% |
|
|
0.71 |
% |
|
|
0.77 |
% |
|
|
0.99 |
% |
|
|
1.22 |
% |
Risk in force on defaulted loans(1) |
$ |
337 |
|
|
$ |
323 |
|
|
$ |
284 |
|
|
$ |
295 |
|
|
$ |
362 |
|
|
$ |
435 |
|
Net premium yield(3) |
|
0.26 |
% |
|
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.30 |
% |
|
|
0.30 |
% |
|
|
0.31 |
% |
Earnings from cancellations |
$ |
1.4 |
|
|
$ |
1.5 |
|
|
$ |
1.8 |
|
|
$ |
2.2 |
|
|
$ |
2.9 |
|
|
$ |
5.1 |
|
Annual persistency(4) |
|
85.1 |
% |
|
|
83.5 |
% |
|
|
80.1 |
% |
|
|
76.0 |
% |
|
|
71.5 |
% |
|
|
63.8 |
% |
Quarterly run-off(5) |
|
3.2 |
% |
|
|
3.3 |
% |
|
|
4.0 |
% |
|
|
4.3 |
% |
|
|
5.0 |
% |
|
|
6.7 |
% |
(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.
NIW, IIF and Premiums
The tables below present primary NIW and primary and pool IIF,
as of the dates and for the periods indicated.
Primary
NIW |
For the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
(In Millions) |
Monthly |
$ |
8,550 |
|
$ |
10,451 |
|
$ |
16,676 |
|
$ |
15,695 |
|
$ |
13,094 |
|
$ |
16,972 |
Single |
|
184 |
|
|
268 |
|
|
563 |
|
|
916 |
|
|
1,071 |
|
|
1,370 |
Primary |
$ |
8,734 |
|
$ |
10,719 |
|
$ |
17,239 |
|
$ |
16,611 |
|
$ |
14,165 |
|
$ |
18,342 |
Primary and pool
IIF |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
(In Millions) |
Monthly |
$ |
166,924 |
|
$ |
163,903 |
|
$ |
158,897 |
|
$ |
148,488 |
|
$ |
139,156 |
|
$ |
133,104 |
Single |
|
19,800 |
|
|
20,065 |
|
|
20,276 |
|
|
20,151 |
|
|
19,721 |
|
|
19,239 |
Primary |
|
186,724 |
|
|
183,968 |
|
|
179,173 |
|
|
168,639 |
|
|
158,877 |
|
|
152,343 |
|
|
|
|
|
|
|
|
|
|
|
|
Pool |
|
1,025 |
|
|
1,049 |
|
|
1,078 |
|
|
1,114 |
|
|
1,162 |
|
|
1,229 |
Total |
$ |
187,749 |
|
$ |
185,017 |
|
$ |
180,251 |
|
$ |
169,753 |
|
$ |
160,039 |
|
$ |
153,572 |
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, 2021 QSR
Transaction, 2022 QSR Transaction, 2022 Seasoned QSR Transaction,
and 2023 QSR Transaction and collectively, the QSR Transactions),
insurance-linked note transactions (2018 ILN Transaction, 2019 ILN
Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and
2021-2 ILN Transaction and collectively, the ILN Transactions), and
traditional reinsurance transactions (2022-1 XOL Transaction,
2022-2 XOL Transaction, 2022-3 XOL Transaction and 2023-1 XOL
Transaction and collectively, the XOL Transactions) for the periods
indicated.
|
For the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
(In Thousands) |
The QSR Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded risk-in-force |
$ |
12,635,442 |
|
|
$ |
12,617,169 |
|
|
$ |
12,511,797 |
|
|
$ |
9,040,944 |
|
|
$ |
8,504,853 |
|
|
$ |
8,194,604 |
|
Ceded premiums earned |
|
(42,096 |
) |
|
|
(42,246 |
) |
|
|
(42,265 |
) |
|
|
(30,231 |
) |
|
|
(29,005 |
) |
|
|
(28,490 |
) |
Ceded claims and claim expenses (benefits) |
|
1,965 |
|
|
|
1,934 |
|
|
|
248 |
|
|
|
(403 |
) |
|
|
(159 |
) |
|
|
19 |
|
Ceding commission earned |
|
9,965 |
|
|
|
10,089 |
|
|
|
10,193 |
|
|
|
6,146 |
|
|
|
5,886 |
|
|
|
6,208 |
|
Profit commission |
|
22,279 |
|
|
|
22,314 |
|
|
|
23,899 |
|
|
|
17,778 |
|
|
|
16,723 |
|
|
|
16,142 |
|
The ILN Transactions(1) |
|
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(9,095 |
) |
|
$ |
(10,112 |
) |
|
$ |
(10,730 |
) |
|
$ |
(10,132 |
) |
|
$ |
(10,939 |
) |
|
$ |
(11,344 |
) |
The XOL Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded Premiums |
$ |
(7,237 |
) |
|
$ |
(6,199 |
) |
|
$ |
(4,808 |
) |
|
$ |
(2,907 |
) |
|
$ |
— |
|
|
$ |
— |
|
(1) Effective March 25, 2022 and April 25, 2022,
NMIC exercised its optional clean-up call to terminate and commute
its previously outstanding excess of loss reinsurance agreements
with Oaktown Re Ltd. and Oaktown Re IV Ltd., respectively. NMIC no
longer makes risk premium payments to Oaktown Re Ltd. and Oaktown
Re IV Ltd. thereafter.
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
FICO |
For the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
>= 760 |
$ |
5,251 |
|
$ |
5,574 |
|
$ |
6,372 |
740-759 |
|
1,514 |
|
|
1,902 |
|
|
2,388 |
720-739 |
|
1,107 |
|
|
1,564 |
|
|
1,937 |
700-719 |
|
456 |
|
|
918 |
|
|
1,639 |
680-699 |
|
342 |
|
|
638 |
|
|
1,244 |
<=679 |
|
64 |
|
|
123 |
|
|
585 |
Total |
$ |
8,734 |
|
$ |
10,719 |
|
$ |
14,165 |
Weighted average FICO |
|
762 |
|
|
756 |
|
|
748 |
Primary NIW by
LTV |
For the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
95.01% and above |
$ |
358 |
|
|
$ |
646 |
|
|
$ |
1,366 |
|
90.01% to 95.00% |
|
4,085 |
|
|
|
5,325 |
|
|
|
7,055 |
|
85.01% to 90.00% |
|
3,234 |
|
|
|
3,492 |
|
|
|
3,868 |
|
85.00% and below |
|
1,057 |
|
|
|
1,256 |
|
|
|
1,876 |
|
Total |
$ |
8,734 |
|
|
$ |
10,719 |
|
|
$ |
14,165 |
|
Weighted average LTV |
|
91.6 |
% |
|
|
92.0 |
% |
|
|
92.1 |
% |
Primary NIW by
purchase/refinance mix |
For the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
Purchase |
$ |
8,494 |
|
$ |
10,500 |
|
$ |
13,398 |
Refinance |
|
240 |
|
|
219 |
|
|
767 |
Total |
$ |
8,734 |
|
$ |
10,719 |
|
$ |
14,165 |
The table below presents a summary of our primary IIF and RIF by
book year as of March 31, 2023.
Primary IIF and
RIF |
As of March 31, 2023 |
|
IIF |
|
RIF |
|
(In Millions) |
March 31, 2023 |
$ |
8,674 |
|
$ |
2,243 |
2022 |
|
55,664 |
|
|
14,730 |
2021 |
|
70,771 |
|
|
18,195 |
2020 |
|
32,679 |
|
|
8,403 |
2019 |
|
8,798 |
|
|
2,324 |
2018 and before |
|
10,138 |
|
|
2,599 |
Total |
$ |
186,724 |
|
$ |
48,494 |
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
FICO |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
>= 760 |
$ |
91,623 |
|
$ |
89,554 |
|
$ |
79,141 |
740-759 |
|
33,156 |
|
|
32,691 |
|
|
27,406 |
720-739 |
|
26,233 |
|
|
25,910 |
|
|
22,176 |
700-719 |
|
18,203 |
|
|
18,245 |
|
|
15,236 |
680-699 |
|
12,502 |
|
|
12,480 |
|
|
10,347 |
<=679 |
|
5,007 |
|
|
5,088 |
|
|
4,571 |
Total |
$ |
186,724 |
|
$ |
183,968 |
|
$ |
158,877 |
Primary RIF by
FICO |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
>= 760 |
$ |
23,472 |
|
$ |
22,834 |
|
$ |
19,883 |
740-759 |
|
8,692 |
|
|
8,556 |
|
|
7,054 |
720-739 |
|
6,903 |
|
|
6,807 |
|
|
5,735 |
700-719 |
|
4,847 |
|
|
4,859 |
|
|
4,010 |
680-699 |
|
3,311 |
|
|
3,305 |
|
|
2,706 |
<=679 |
|
1,269 |
|
|
1,287 |
|
|
1,134 |
Total |
$ |
48,494 |
|
$ |
47,648 |
|
$ |
40,522 |
Primary IIF by
LTV |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
95.01% and above |
$ |
17,583 |
|
$ |
17,577 |
|
$ |
14,918 |
90.01% to 95.00% |
|
89,125 |
|
|
87,354 |
|
|
72,381 |
85.01% to 90.00% |
|
56,425 |
|
|
55,075 |
|
|
48,406 |
85.00% and below |
|
23,591 |
|
|
23,962 |
|
|
23,172 |
Total |
$ |
186,724 |
|
$ |
183,968 |
|
$ |
158,877 |
Primary RIF by
LTV |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
95.01% and above |
$ |
5,413 |
|
$ |
5,408 |
|
$ |
4,527 |
90.01% to 95.00% |
|
26,326 |
|
|
25,797 |
|
|
21,358 |
85.01% to 90.00% |
|
13,937 |
|
|
13,584 |
|
|
11,895 |
85.00% and below |
|
2,818 |
|
|
2,859 |
|
|
2,742 |
Total |
$ |
48,494 |
|
$ |
47,648 |
|
$ |
40,522 |
Primary RIF by Loan
Type |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
Fixed |
98 |
% |
|
99 |
% |
|
99 |
% |
Adjustable rate mortgages: |
|
|
|
|
|
Less than five years |
— |
|
|
— |
|
|
— |
|
Five years and longer |
2 |
|
|
1 |
|
|
1 |
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
The table below presents a summary of the change
in total primary IIF during the periods indicated.
Primary
IIF |
As of and for the three months ended |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Millions) |
IIF, beginning of period |
$ |
183,968 |
|
|
$ |
179,173 |
|
|
$ |
152,343 |
|
NIW |
|
8,734 |
|
|
|
10,719 |
|
|
|
14,165 |
|
Cancellations, principal repayments and other reductions |
|
(5,978 |
) |
|
|
(5,924 |
) |
|
|
(7,631 |
) |
IIF, end of period |
$ |
186,724 |
|
|
$ |
183,968 |
|
|
$ |
158,877 |
|
Geographic Dispersion
The following table shows the distribution by state of our
primary RIF as of the periods indicated.
Top 10 primary RIF by
state |
As of |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
California |
10.5 |
% |
|
10.6 |
% |
|
10.8 |
% |
Texas |
8.8 |
|
|
8.7 |
|
|
9.5 |
|
Florida |
8.0 |
|
|
8.2 |
|
|
8.4 |
|
Georgia |
4.1 |
|
|
4.1 |
|
|
3.9 |
|
Virginia |
4.1 |
|
|
4.1 |
|
|
4.5 |
|
Washington |
4.0 |
|
|
3.9 |
|
|
3.7 |
|
Illinois |
3.9 |
|
|
3.9 |
|
|
3.8 |
|
Colorado |
3.5 |
|
|
3.5 |
|
|
3.7 |
|
Pennsylvania |
3.4 |
|
|
3.4 |
|
|
3.3 |
|
Maryland |
3.3 |
|
|
3.4 |
|
|
3.6 |
|
Total |
53.6 |
% |
|
53.8 |
% |
|
55.2 |
% |
The table below presents selected primary
portfolio statistics, by book year, as of March 31, 2023.
|
As of March 31, 2023 |
Book
Year |
Original Insurance Written |
|
Remaining Insurance in Force |
|
% Remaining of Original Insurance |
|
Policies Ever in Force |
|
Number of Policies in Force |
|
Number of Loans in Default |
|
# of Claims Paid |
|
Incurred Loss Ratio (Inception to
Date)(1) |
|
Cumulative Default Rate(2) |
|
Current default rate(3) |
|
($ Values In Millions) |
|
|
2014 and prior |
$ |
3,613 |
|
$ |
198 |
|
5 |
% |
|
15,441 |
|
1,248 |
|
22 |
|
53 |
|
3.8 |
% |
|
0.5 |
% |
|
1.8 |
% |
2015 |
|
12,422 |
|
|
1,158 |
|
9 |
% |
|
52,548 |
|
6,488 |
|
119 |
|
129 |
|
2.6 |
% |
|
0.5 |
% |
|
1.8 |
% |
2016 |
|
21,187 |
|
|
2,447 |
|
12 |
% |
|
83,626 |
|
12,851 |
|
259 |
|
148 |
|
2.0 |
% |
|
0.5 |
% |
|
2.0 |
% |
2017 |
|
21,582 |
|
|
2,930 |
|
14 |
% |
|
85,897 |
|
15,691 |
|
422 |
|
122 |
|
2.7 |
% |
|
0.6 |
% |
|
2.7 |
% |
2018 |
|
27,295 |
|
|
3,405 |
|
12 |
% |
|
104,043 |
|
17,572 |
|
558 |
|
111 |
|
4.1 |
% |
|
0.6 |
% |
|
3.2 |
% |
2019 |
|
45,141 |
|
|
8,798 |
|
19 |
% |
|
148,423 |
|
37,100 |
|
595 |
|
35 |
|
4.1 |
% |
|
0.4 |
% |
|
1.6 |
% |
2020 |
|
62,702 |
|
|
32,679 |
|
52 |
% |
|
186,174 |
|
107,371 |
|
589 |
|
7 |
|
2.5 |
% |
|
0.3 |
% |
|
0.5 |
% |
2021 |
|
85,574 |
|
|
70,771 |
|
83 |
% |
|
257,972 |
|
222,036 |
|
1,339 |
|
4 |
|
6.2 |
% |
|
0.5 |
% |
|
0.6 |
% |
2022 |
|
58,734 |
|
|
55,664 |
|
95 |
% |
|
163,281 |
|
156,817 |
|
572 |
|
— |
|
19.3 |
% |
|
0.4 |
% |
|
0.4 |
% |
2023 |
|
8,734 |
|
|
8,674 |
|
99 |
% |
|
23,250 |
|
23,120 |
|
— |
|
— |
|
— |
% |
|
— |
% |
|
— |
% |
Total |
$ |
346,984 |
|
$ |
186,724 |
|
|
|
1,120,655 |
|
600,294 |
|
4,475 |
|
609 |
|
|
|
|
|
|
(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 (benefits).
|
For the three months ended |
|
March 31, 2023 |
|
March 31, 2022 |
|
(In Thousands) |
Beginning balance |
$ |
99,836 |
|
|
$ |
103,551 |
|
Less reinsurance
recoverables(1) |
|
(21,587 |
) |
|
|
(20,320 |
) |
Beginning balance, net of
reinsurance recoverables |
|
78,249 |
|
|
|
83,231 |
|
|
|
|
|
Add claims incurred: |
|
|
|
Claims and claim expenses (benefits) incurred: |
|
|
|
Current year(2) |
|
27,608 |
|
|
|
10,080 |
|
Prior years(3) |
|
(20,907 |
) |
|
|
(10,699 |
) |
Total claims and claim expenses (benefits) incurred |
|
6,701 |
|
|
|
(619 |
) |
|
|
|
|
Less claims paid: |
|
|
|
Claims and claim expenses paid: |
|
|
|
Current year(2) |
|
— |
|
|
|
— |
|
Prior years(3) |
|
272 |
|
|
|
320 |
|
Total claims and claim expenses paid |
|
272 |
|
|
|
320 |
|
|
|
|
|
Reserve at end of period, net
of reinsurance recoverables |
|
84,678 |
|
|
|
82,292 |
|
Add reinsurance
recoverables(1) |
|
23,479 |
|
|
|
20,080 |
|
Ending balance |
$ |
108,157 |
|
|
$ |
102,372 |
|
(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 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 $22.3 million attributed to net case
reserves and $4.9 million attributed to net IBNR reserves for
the three months ended March 31, 2023 and $5.2 million
attributed to net case reserves and $4.7 million attributed to
net IBNR reserves for the three months ended March 31,
2022.(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 $16.2 million attributed to net case reserves and
$4.5 million attributed to net IBNR reserves for the three
months ended March 31, 2023 and $5.8 million attributed
to net case reserves and $4.7 million attributed to net IBNR
reserves for the three months ended March 31, 2022.
The following table provides a reconciliation of
the beginning and ending count of loans in default for the periods
indicated.
|
For the three months ended |
|
March 31, 2023 |
|
March 31, 2022 |
Beginning default inventory |
4,449 |
|
|
6,227 |
|
Plus: new defaults |
1,558 |
|
|
1,163 |
|
Less: cures |
(1,507 |
) |
|
(2,132 |
) |
Less: claims paid |
(21 |
) |
|
(19 |
) |
Less: rescission and claims
denied |
(4 |
) |
|
(1 |
) |
Ending default inventory |
4,475 |
|
|
5,238 |
|
The following table provides details of our
claims paid, before giving effect to claims ceded under the QSR
Transactions, for the periods indicated.
|
For the three months ended |
|
March 31, 2023 |
|
March 31, 2022 |
|
($ Values In Thousands) |
Number of claims paid(1) |
|
21 |
|
|
|
19 |
|
Total amount paid for
claims |
$ |
344 |
|
|
$ |
402 |
|
Average amount paid per
claim |
$ |
16 |
|
|
$ |
21 |
|
Severity(2) |
|
39 |
% |
|
|
39 |
% |
(1) Count includes seven and six claims
settled without payment during the three months ended
March 31, 2023 and 2022, 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 dates indicated.
|
As of |
Average reserve per
default: |
March 31, 2023 |
|
March 31, 2022 |
|
(In Thousands) |
Case(1) |
$ |
22.4 |
|
$ |
18.0 |
IBNR(1)(2) |
|
1.8 |
|
|
1.5 |
Total |
$ |
24.2 |
|
$ |
19.5 |
(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 |
|
March 31, 2023 |
|
December 31, 2022 |
|
March 31, 2022 |
|
(In Thousands) |
Available Assets |
$ |
2,480,882 |
|
$ |
2,378,627 |
|
$ |
2,127,030 |
Risk-Based Required
Assets |
|
1,231,780 |
|
|
1,203,708 |
|
|
1,341,217 |
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