0001547903false00015479032024-02-142024-02-14

 
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 14, 2024

NMI Holdings, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware001-3617445-4914248
(State or Other Jurisdiction
 of Incorporation)		(Commission
 File Number)		(IRS Employer
 Identification No.)
2100 Powell Street, 12th Floor, Emeryville, CA
(Address of Principal Executive Offices)
94608
(Zip Code)
(855) 530-6642
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)

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

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

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

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

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



Item 2.02    Results of Operations and Financial Condition
On February 14, 2024, NMI Holdings, Inc. (the "Company") issued a press release announcing its financial results for the quarter and year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this report.
The information included in, or furnished with, this Item 2.02, including Exhibit 99.1, has been "furnished" and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, ("Exchange Act") nor shall it be deemed incorporated by reference in any filing or other document under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing or document.
Item 9.01.    Financial Statements and Exhibits
(d) Exhibits.
Exhibit No.    Description
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)
1

SIGNATURES

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


NMI Holdings, Inc.
(Registrant)

                
Date: February 14, 2024By:/s/ William J. Leatherberry
William J. Leatherberry
EVP, Chief Administrative Officer & General Counsel

2
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
NMI Holdings, Inc. Reports Fourth Quarter and Full Year 2023 Financial Results
EMERYVILLE, Calif., Feb. 14, 2024 -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $83.4 million, or $1.01 per diluted share, for the fourth quarter ended December 31, 2023, which compares to $84.0 million, or $1.00 per diluted share, in the third quarter ended September 30, 2023 and $72.9 million, or $0.86 per diluted share, in the fourth quarter ended December 31, 2022. Adjusted net income for the quarter was $83.4 million, or $1.01 per diluted share, which compares to $84.0 million, or $1.00 per diluted share, in the third quarter ended September 30, 2023 and $72.9 million, or $0.86 per diluted share, in the fourth quarter ended December 31, 2022.

Net income for the full year ended December 31, 2023 was $322.1 million or $3.84 per diluted share, which compares to $292.9 million, or $3.39 per diluted share, for the year ended December 31, 2022. Adjusted net income for the year was $322.1 million or $3.84 per diluted share, which compares to $291.6 million, or $3.39 per diluted share, for the year ended December 31, 2022. 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.

Adam Pollitzer, President and Chief Executive Officer of National MI, said, “The fourth quarter capped another year of standout success for National MI. In 2023, we delivered strong operating performance, generated significant NIW volume and consistent growth in our insured portfolio, and achieved record financial results and an 18.2% return on equity. We have built an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, our credit performance continues to stand ahead, and we have a robust balance sheet supported by the significant earnings power of our platform. Looking forward, we’re well-positioned to continue delivering differentiated growth, returns and value for our shareholders.”

Selected fourth quarter 2023 highlights include:

•Primary insurance-in-force at quarter end was $197.0 billion, compared to $194.8 billion at the end of the third quarter and $184.0 billion at the end of the fourth quarter of 2022

•Net premiums earned were $132.9 million, compared to $130.1 million in the third quarter and $119.6 million in the fourth quarter of 2022

•Total revenue was $151.4 million, compared to $148.2 million in the third quarter and $133.1 million in the fourth quarter of 2022

•Underwriting and operating expenses were $29.7 million, compared to $27.7 million in the third quarter and $26.7 million in the fourth quarter of 2022

•Insurance claims and claim expenses were $8.2 million, compared to $4.8 million in the third quarter and $3.4 million in the fourth quarter of 2022

•Shareholders’ equity was $1.9 billion at quarter end and book value per share was $23.81. Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $25.54, up 4% compared to $24.56 in the third quarter and 17% compared to $21.76 in the fourth quarter of 2022

•Annualized return on equity for the quarter was 18.0%, compared to 19.0% in the third quarter and 18.6% in the fourth quarter of 2022

•At quarter-end, total PMIERs available assets were $2.7 billion and net risk-based required assets were $1.5 billion
1
EXHIBIT 99.1
Quarter EndedQuarter EndedQuarter Ended
Change (1)
Change (1)
12/31/20239/30/202312/31/2022Q/QY/Y
INSURANCE METRICS ($billions)
Primary Insurance-in-Force $197.0 $194.8 $184.0 1 %7 %
New Insurance Written - NIW
Monthly premium8.6 11.0 10.5 (22)%(18)%
Single premium0.3 0.3 0.3 6 %17 %
Total (2)
8.9 11.3 10.7 (21)%(17)%
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts)
Net Premiums Earned132.9 130.1 119.6 2 %11 %
Insurance Claims and Claim Expenses
8.2 4.8 3.4 71 %139 %
Underwriting and Operating Expenses29.7 27.7 26.7 7 %11 %
Net Income 83.4 84.0 72.9 (1)%14 %
Book Value per Share (excluding net unrealized gains and losses) (3)
25.54 24.56 21.76 4 %17 %
Loss Ratio6.2 %3.7 %2.9 %
Expense Ratio22.4 %21.3 %22.3 %

(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 shareholders' 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, February 14, 2024, 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, Section 21E of the Securities Exchange Act of 1934, as amended, 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 changes in 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,
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EXHIBIT 99.1
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, 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 virus and its variants, 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 the exposure of our confidential customer and other 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, 2023, 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) and 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.
3
EXHIBIT 99.1
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.
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EXHIBIT 99.1
(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 Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417
5
EXHIBIT 99.1
Consolidated statements of operations and comprehensive income (unaudited)For the three months ended December 31,For the year ended December 31,
2023202220232022
(In Thousands, except for per share data)
Revenues
Net premiums earned$132,940 $119,584 $510,768 $475,266 
Net investment income18,247 13,341 67,512 46,406 
Net realized investment gains (losses)
— 6 (33)481 
Other revenues193 176 756 1,192 
Total revenues151,380 133,107 579,003 523,345 
Expenses
Insurance claims and claim expenses (benefits)8,232 3,450 22,618 (3,594)
Underwriting and operating expenses29,716 26,711 110,699 117,490 
Service expenses185 131 771 1,094 
Interest expense8,066 8,035 32,212 32,163 
Gain from change in fair value of warrant liability— — — (1,113)
Total expenses46,199 38,327 166,300 146,040 
Income before income taxes105,181 94,780 412,703 377,305 
Income tax expense 21,768 21,840 90,593 84,403 
Net income $83,413 $72,940 $322,110 $292,902 
Earnings per share
Basic$1.03 $0.87 $3.91 $3.45 
Diluted$1.01 $0.86 $3.84 $3.39 
Weighted average common shares outstanding
Basic81,005 83,592 82,407 84,921 
Diluted82,685 84,809 83,854 85,999 
Loss ratio (1)
6.2 %2.9 %4.4 %(0.8)%
Expense ratio (2)
22.4 %22.3 %21.7 %24.7 %
Combined ratio (3)
28.5 %25.2 %26.1 %24.0 %
Net income $83,413 $72,940 $322,110 $292,902 
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $19,580 and $4,505 for the three months ended December 31, 2023 and 2022, and $17,113 and $(54,608) for the years ended December 31, 2023 and 2022, respectively
73,660 16,948 64,380 (205,428)
Reclassification adjustment for realized (gains) losses included in net income, net of tax expense (benefit) of $0 and $1 for the three months ended December 31, 2023 and 2022, and $(7) and $101 for the years ended December 31, 2023, and 2022, respectively
— (5)26 (380)
Other comprehensive income (loss), net of tax
73,660 16,943 64,406 (205,808)
Comprehensive income $157,073 $89,883 $386,516 $87,094 
(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.
6
EXHIBIT 99.1
Consolidated balance sheets (unaudited)December 31, 2023December 31, 2022
Assets(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,542,862 and $2,352,747 as of December 31, 2023 and December 31, 2022, respectively)$2,371,021 $2,099,389 
Cash and cash equivalents (including restricted cash of $1,338 and $2,176 as of December 31, 2023 and December 31, 2022, respectively)96,689 44,426 
Premiums receivable76,456 69,680 
Accrued investment income19,785 14,144 
Deferred policy acquisition costs, net62,905 58,564 
Software and equipment, net30,252 31,930 
Intangible assets and goodwill3,634 3,634 
Reinsurance recoverable 27,514 21,587 
Prepaid federal income taxes235,286 154,409 
Other assets16,965 18,267 
Total assets$2,940,507 $2,516,030 
Liabilities
Debt$397,595 $396,051 
Unearned premiums92,295 123,035 
Accounts payable and accrued expenses86,189 74,576 
Reserve for insurance claims and claim expenses123,974 99,836 
Reinsurance funds withheld1,421 2,674 
Deferred tax liability, net301,573 193,859 
Other liabilities11,456 12,272 
Total liabilities1,014,503 902,303 
Shareholders' equity
Common stock - class A shares, $0.01 par value; 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 and 86,472,742 shares issued and 83,549,879 shares outstanding as of December 31, 2022 (250,000,000 shares authorized)873 865 
Additional paid-in capital990,816 972,717 
Treasury stock, at cost: 6,452,858 and 2,922,863 common shares as of December 31, 2023 and December 31, 2022, respectively(148,921)(56,575)
Accumulated other comprehensive loss, net of tax(139,917)(204,323)
Retained earnings 1,223,153 901,043 
Total shareholders' equity1,926,004 1,613,727 
Total liabilities and shareholders' equity$2,940,507 $2,516,030 









7
EXHIBIT 99.1
Non-GAAP Financial Measure Reconciliations (unaudited)
As of and for the three months ended
For the year ended
12/31/20239/30/202312/31/202212/31/202312/31/2022
 As Reported(In Thousands, except for per share data)
Revenues
Net premiums earned$132,940 $130,089 $119,584 $510,768 $475,266 
Net investment income18,247 17,853 13,341 67,512 46,406 
Net realized investment gains (losses)
— — 6 (33)481 
Other revenues193 217 176 756 1,192 
Total revenues151,380 148,159 133,107 579,003 523,345 
Expenses
Insurance claims and claim expenses (benefits)
8,232 4,812 3,450 22,618 (3,594)
Underwriting and operating expenses29,716 27,749 26,711 110,699 117,490 
Service expenses185 239 131 771 1,094 
Interest expense8,066 8,059 8,035 32,212 32,163 
Gain from change in fair value of warrant liability— — — — (1,113)
Total expenses46,199 40,859 38,327 166,300 146,040 
Income before income taxes105,181 107,300 94,780 412,703 377,305 
Income tax expense 21,768 23,345 21,840 90,593 84,403 
Net income $83,413 $83,955 $72,940 $322,110 $292,902 
Adjustments:
Net realized investment (gains) losses
— — (6)33 (481)
Gain from change in fair value of warrant liability— — — — (1,113)
Capital markets transaction costs— — — — 205 
Adjusted income before taxes105,181 107,300 94,774 412,736 375,916 
Income tax (benefit) expense on adjustments (1)
— — (1)7 (58)
Adjusted net income$83,413 $83,955 $72,935 $322,136 $291,571 
Weighted average diluted shares outstanding 82,685 83,670 84,809 83,85485,999 
Diluted EPS $1.01 $1.00 $0.86 $3.84 $3.39 
Adjusted diluted EPS $1.01 $1.00 $0.86 $3.84 $3.39 
Return-on-equity 18.0 %19.0 %18.6 %18.2 %18.4 %
Adjusted return-on-equity18.0 %19.0 %18.6 %18.2 %18.3 %
Expense ratio (2)
22.4 %21.3 %22.3 %21.7 %24.7 %
Adjusted expense ratio (3)
22.4 %21.3 %22.3 %21.7 %24.7 %
Combined ratio (4)
28.5 %25.0 %25.2 %26.1 %24.0 %
Adjusted combined ratio (5)
28.5 %25.0 %25.2 %26.1 %23.9 %
Book value per share (6)
$23.81 $21.94 $19.31 
Book value per share (excluding net unrealized gains and losses) (7)
$25.54 $24.56 $21.76 
(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.
8
EXHIBIT 99.1
(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 claim expenses (benefits) 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 claim expenses (benefits) 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 Data20232022
December 31September 30June 30March 31December 31September 30
(In Thousands, except for per share data)
Revenues
Net premiums earned$132,940 $130,089 $125,985 $121,754 $119,584 $118,317 
Net investment income18,247 17,853 16,518 14,894 13,341 11,945 
Net realized investment (losses) gains
— — — (33)6 14 
Other revenues193 217 182 164 176 301 
Total revenues151,380 148,159 142,685 136,779 133,107 130,577 
Expenses
Insurance claims and claim expenses (benefits)
8,232 4,812 2,873 6,701 3,450 (3,389)
Underwriting and operating expenses29,716 27,749 27,448 25,786 26,711 27,144 
Service expenses185 239 267 80 131 197 
Interest expense8,066 8,059 8,048 8,039 8,035 8,036 
Total expenses46,199 40,859 38,636 40,606 38,327 31,988 
Income before income taxes105,181 107,300 104,049 96,173 94,780 98,589 
Income tax expense 21,768 23,345 23,765 21,715 21,840 21,751 
Net income $83,413 $83,955 $80,284 $74,458 $72,940 $76,838 
Earnings per share
Basic$1.03 $1.02 $0.97 $0.89 $0.87 $0.91 
Diluted$1.01 $1.00 $0.95 $0.88 $0.86 $0.90 
Weighted average common shares outstanding
Basic81,005 82,096 82,958 83,600 83,592 84,444 
Diluted82,685 83,670 84,190 84,840 84,809 85,485 
Other data
Loss Ratio (1)
6.2 %3.7 %2.3 %5.5 %2.9 %(2.9)%
Expense Ratio (2)
22.4 %21.3 %21.8 %21.2 %22.3 %22.9 %
Combined ratio (3)
28.5 %25.0 %24.1 %26.7 %25.2 %20.1 %
(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.



9
EXHIBIT 99.1
Portfolio Statistics
The table below highlights trends in our primary portfolio as of the date and for the periods indicated.
Primary portfolio trendsAs of and for the three months ended
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
($ Values In Millions, except as noted below)
New insurance written (NIW)
$8,927 $11,334 $11,478 $8,734 $10,719 $17,239 
New risk written2,354 3,027 3,022 2,258 2,797 4,616 
Insurance-in-force (IIF) (1)
197,029 194,781 191,306 186,724 183,968 179,173 
Risk-in-force (RIF) (1)
51,796 51,011 49,875 48,494 47,648 46,259 
Policies in force (count) (1)
629,690 622,993 611,441 600,294 594,142 580,525 
Average loan size ($ value in thousands) (1)
$313 $313 $313 $311 $310 $309 
Coverage percentage (2)
26.3 %26.2 %26.1 %26.0 %25.9 %25.8 %
Loans in default (count) (1)
5,099 4,594 4,349 4,475 4,449 4,096 
Default rate (1)
0.81 %0.74 %0.71 %0.75 %0.75 %0.71 %
Risk-in-force on defaulted loans (1)
$408 $359 $335 $337 $323 $284 
Average net premium yield (3)
0.27 %0.27 %0.27 %0.26 %0.26 %0.27 %
Earnings from cancellations$1.0 $0.9 $1.1 $1.4 $1.5 $1.8 
Annual persistency (4)
86.1 %86.2 %86.0 %85.1 %83.5 %80.1 %
Quarterly run-off (5)
3.4 %4.1 %3.7 %3.2 %3.3 %4.0 %
(1)    Reported as of the end of the period.
(2)    Calculated as end of period 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 NIWFor the three months ended
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
(In Millions)
Monthly$8,614 $11,038 $11,266 $8,550 $10,451 $16,676 
Single313 296 212 184 268 563 
Primary$8,927 $11,334 $11,478 $8,734 $10,719 $17,239 
10
EXHIBIT 99.1
Primary and pool IIFAs of
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
(In Millions)
Monthly$177,764 $175,308 $171,685 $166,924 $163,903 $158,897 
Single19,265 19,473 19,621 19,800 20,065 20,276 
Primary197,029 194,781 191,306 186,724 183,968 179,173 
Pool— — 1,000 1,025 1,049 1,078 
Total$197,029 $194,781 $192,306 $187,749 $185,017 $180,251 

    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 amended effective January 1, 2024), 2021 QSR Transaction, 2022 QSR Transaction, 2022 Seasoned QSR Transaction, and 2023 QSR Transaction and collectively, the QSR Transactions), insurance-linked note transactions (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, 2023-1 XOL Transaction, and 2023-2 XOL Transaction and collectively, the XOL Transactions) for the periods indicated.
For the three months ended
December 31, 2023September 30, 2023June 30, 2023March 31, 2023December 31, 2022September 30, 2022
(In Thousands)
The QSR Transactions
Ceded risk-in-force$12,626,541 $12,753,261 $12,761,294 $12,635,442 $12,617,169 $12,511,797 
Ceded premiums earned(41,218)(42,015)(42,002)(42,096)(42,246)(42,265)
Ceded claims and claim expenses
2,447 2,221 803 1,965 1,934 248 
Ceding commission earned9,561 9,808 9,877 9,965 10,089 10,193 
Profit commission22,057 22,184 23,486 22,279 22,314 23,899 
The ILN Transactions (1)
Ceded premiums$(6,305)$(6,925)$(8,815)$(9,095)$(10,112)$(10,730)
The XOL Transactions
Ceded premiums$(8,302)$(7,968)$(7,672)$(7,237)$(6,199)$(4,808)
(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. Effective July 25, 2023, NMIC exercised its optional call to terminate and commute its previously outstanding excess of loss reinsurance agreement with Oaktown Re II Ltd. NMIC no longer makes risk premium payments to Oaktown Re Ltd., Oaktown Re II Ltd. and Oaktown Re IV Ltd., thereafter.
11
EXHIBIT 99.1
    The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated.
Primary NIW by FICOFor the three months endedFor the year ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
(In Millions)
>= 760$4,564 $6,261 $5,574 $22,995 $26,751 
740-7591,542 1,877 1,902 6,769 10,853 
720-7391,280 1,556 1,564 5,484 8,308 
700-719816 876 918 2,816 6,452 
680-699568 623 638 1,946 4,636 
<=679157 141 123 463 1,734 
Total$8,927 $11,334 $10,719 $40,473 $58,734 
Weighted average FICO755 758 756 760 750 
Primary NIW by LTVFor the three months ended For the year ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
(In Millions)
95.01% and above$990 $1,362 $646 $3,713 $5,199 
90.01% to 95.00%4,107 5,414 5,325 18,929 30,031 
85.01% to 90.00%2,947 3,525 3,492 13,597 16,637 
85.00% and below883 1,033 1,256 4,234 6,867 
Total$8,927 $11,334 $10,719 $40,473 $58,734 
Weighted average LTV92.2 %92.4 %92.0 %92.1 %92.2 %
Primary NIW by purchase/refinance mixFor the three months endedFor the year ended
December 31, 2023September 30, 2023December 31, 2022December 31, 2023December 31, 2022
(In Millions)
Purchase$8,759 $11,143 $10,500 $39,629 $57,045 
Refinance168 191 219 844 1,689 
Total$8,927 $11,334 $10,719 $40,473 $58,734 
The table below presents a summary of our primary IIF and RIF by book year as of December 31, 2023.
Primary IIF and RIFAs of December 31, 2023
IIFRIF
Book Year
(In Millions)
2023$38,586 $10,162 
202252,783 14,003 
202162,051 16,190 
202027,428 7,210 
20197,602 2,030 
2018 and before 8,579 2,201 
Total$197,029 $51,796 
12
EXHIBIT 99.1
    The tables below present our total primary IIF and RIF by FICO and LTV, and total primary RIF by loan type as of the dates indicated.
Primary IIF by FICOAs of
December 31, 2023September 30, 2023December 31, 2022
(In Millions)
>= 760$98,034 $97,026 $89,554 
740-75934,829 34,394 32,691 
720-73927,755 27,360 25,910 
700-71918,734 18,484 18,245 
680-69912,867 12,683 12,480 
<=6794,810 4,834 5,088 
Total$197,029 $194,781 $183,968 
Primary RIF by FICOAs of
December 31, 2023September 30, 2023December 31, 2022
(In Millions)
>= 760$25,523 $25,149 $22,834 
740-7599,207 9,067 8,556 
720-7397,387 7,254 6,807 
700-7195,021 4,938 4,859 
680-6993,433 3,373 3,305 
<=6791,225 1,230 1,287 
Total$51,796 $51,011 $47,648 
Primary IIF by LTVAs of
December 31, 2023September 30, 2023December 31, 2022
(In Millions)
95.01% and above$19,609 $19,007 $17,577 
90.01% to 95.00%95,415 93,908 87,354 
85.01% to 90.00%60,348 59,371 55,075 
85.00% and below21,657 22,495 23,962 
Total$197,029 $194,781 $183,968 
Primary RIF by LTVAs of
December 31, 2023September 30, 2023December 31, 2022
(In Millions)
95.01% and above$6,062 $5,876 $5,408 
90.01% to 95.00%28,184 27,741 25,797 
85.01% to 90.00%14,961 14,704 13,584 
85.00% and below2,589 2,690 2,859 
Total$51,796 $51,011 $47,648 
Primary RIF by Loan TypeAs of
December 31, 2023September 30, 2023December 31, 2022
Fixed98 %98 %99 %
Adjustable rate mortgages:
Less than five years— — — 
Five years and longer2 2 1 
Total100 %100 %100 %
13
EXHIBIT 99.1
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
December 31, 2023September 30, 2023December 31, 2022
(In Millions)
IIF, beginning of period$194,781 $191,306 $179,173 
NIW8,927 11,334 10,719 
Cancellations, principal repayments and other reductions(6,679)(7,859)(5,924)
IIF, end of period$197,029 $194,781 $183,968 
Geographic Dispersion
The following table shows the distribution by state of our primary RIF as of the periods indicated.
Top 10 primary RIF by stateAs of
December 31, 2023September 30, 2023December 31, 2022
California10.2 %10.3 %10.6 %
Texas8.7 8.7 8.7 
Florida7.6 7.7 8.2 
Georgia4.1 4.1 4.1 
Washington4.0 4.0 3.9 
Illinois4.0 3.9 3.9 
Virginia3.9 4.0 4.1 
Pennsylvania3.4 3.4 3.4 
Maryland3.3 3.3 3.4 
Colorado3.2 3.3 3.5 
Total52.4 %52.7 %53.8 %

14
EXHIBIT 99.1
The table below presents selected primary portfolio statistics, by book year, as of December 31, 2023.
As of December 31, 2023
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)
2014 and prior$3,613 $157 4 %15,441 980 20 57 3.7 %0.5 %2.0 %
201512,422 990 8 %52,548 5,561 84 141 2.5 %0.4 %1.5 %
2016 21,187 2,011 9 %83,626 10,697 209 170 1.8 %0.5 %2.0 %
201721,582 2,487 12 %85,897 13,684 336 153 2.2 %0.6 %2.5 %
201827,295 2,934 11 %104,043 15,452 481 150 3.1 %0.6 %3.1 %
201945,141 7,602 17 %148,423 32,733 505 59 2.3 %0.4 %1.5 %
202062,702 27,428 44 %186,174 92,425 581 21 1.9 %0.3 %0.6 %
202185,574 62,051 73 %257,972 199,115 1,476 28 4.6 %0.6 %0.7 %
202258,734 52,783 90 %163,281 150,963 1,262 7 20.9 %0.8 %0.8 %
202340,473 38,586 95 %111,994 108,080 145 1 8.9 %(4)0.1 %0.1 %
Total$378,723 $197,029 1,209,399 629,690 5,099 787 
(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.
(4)    Excludes a termination fee of $0.7 million incurred in the year of 2023 in connection with the amendment of the 2020 QSR Transaction.
15
EXHIBIT 99.1
    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 For the year ended
December 31, 2023December 31, 2022December 31, 2023December 31, 2022
(In Thousands)
Beginning balance$116,078 $94,944 $99,836 $103,551 
Less reinsurance recoverables (1)
(25,956)(19,755)(21,587)(20,320)
Beginning balance, net of reinsurance recoverables90,122 75,189 78,249 83,231 
Add claims incurred:
Claims and claim expenses (benefits) incurred:
Current year (2)
17,298 17,033 78,285 45,168 
Prior years (3)
(9,789)(13,583)(56,390)(48,762)
Total claims and claim expenses (benefits) incurred (4)
7,509 3,450 21,895 (3,594)
Less claims paid:
Claims and claim expenses paid:
Current year (2)
481 1 600 74 
Prior years (3)
1,181 389 3,575 1,314 
Reinsurance terminations
(491)— (491)— 
Total claims and claim expenses paid1,171 390 3,684 1,388 
Reserve at end of period, net of reinsurance recoverables96,460 78,249 96,460 78,249 
Add reinsurance recoverables (1)
27,514 21,587 27,514 21,587 
Ending balance$123,974 $99,836 $123,974 $99,836 
(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 $70.6 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2023, $39.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 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 $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023, $42.5 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the year ended December 31, 2022.
(4)    Excludes a termination fee for the year ended December 31, 2023, of $0.7 million incurred in connection with the amendment of the 2020 QSR Transaction.

    The following table provides a reconciliation of the beginning and ending count of loans in default:
For the three months ended For the year ended
December 31, 2023December 31, 2022December 31, 2023December 31, 2022
Beginning default inventory4,594 4,096 4,449 6,227 
Plus: new defaults2,039 1,639 6,758 5,225 
Less: cures(1,458)(1,262)(5,892)(6,916)
Less: claims paid(70)(22)(199)(81)
Less: rescission and claims denied(6)(2)(17)(6)
Ending default inventory5,099 4,449 5,099 4,449 

16
EXHIBIT 99.1
    The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated.
For the three months endedFor the year ended
December 31, 2023December 31, 2022December 31, 2023December 31, 2022
(In Thousands)
Number of claims paid (1)
70 22 199 81 
Total amount paid for claims$2,060 $492 $5,192 $1,741 
Average amount paid per claim
$29 $22 $26 $21 
Severity (2)
64 %
60%
55 %49 %
(1)    Count includes 23 and 70 claims settled without payment during the three months and year ended December 31, 2023, respectively, and 11 and 30 claims settled without payment during the three months and year ended December 31, 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:
Average reserve per default:
As of
December 31, 2023December 31, 2022
(In Thousands)
Case (1)
$22.4 $20.8 
IBNR (1) (2)
1.9 1.6 
Total$24.3 $22.4 
(1)    Defined as the gross reserve per insured loan in default.
(2)    Amount includes claims adjustment expenses.
    The following table provides a comparison of the PMIERs available assets and risk-based required asset amount as reported by NMIC as of the dates indicated.
As of
December 31, 2023September 30, 2023December 31, 2022
(In Thousands)
Available assets
$2,717,804 $2,602,680 $2,378,627 
Risk-based required assets
1,516,140 1,414,233 1,203,708 

17
v3.24.0.1
Cover Page
Feb. 14, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 14, 2024
Entity Registrant Name NMI Holdings, Inc.
Entity Central Index Key 0001547903
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-36174
Entity Tax Identification Number 45-4914248
Entity Address, Address Line One 2100 Powell Street
Entity Address, Address Line Two 12th Floor
Entity Address, City or Town Emeryville
Entity Address, State or Province CA
Entity Address, Postal Zip Code 94608
City Area Code 855
Local Phone Number 530-6642
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A Common Stock, par value $0.01
Trading Symbol NMIH
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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