NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of
$80.3 million, or $0.95 per diluted share, for the second quarter
ended June 30, 2023, which compares to $74.5 million, or $0.88
per diluted share, in the first quarter ended March 31, 2023 and
$75.4 million, or $0.86 per diluted share, in the second quarter
ended June 30, 2022. Adjusted net income for the quarter was $80.3
million, or $0.95 per diluted share, which compares to $74.5
million, or $0.88 per diluted share, in the first quarter ended
March 31, 2023 and $74.3 million, or $0.86 per diluted share, in
the second quarter ended June 30, 2022.
The company also announced today that its Board
of Directors has authorized an additional $200 million share
repurchase plan effective through December 31, 2025.
Adam Pollitzer, President and Chief Executive
Officer of National MI, said, “We’re proud to have again delivered
standout results in the second quarter, including continued growth
in our high-quality insured portfolio, record profitability and
strong returns. We ended the quarter with a robust funding position
and our additional $200 million repurchase authorization will
provide investors with further ability to directly access value as
we continue to perform, grow our earnings and compound book value.
Looking forward, we’re well positioned to continue to serve our
customers and their borrowers, support our talented team, and
deliver sustained long-term performance for our shareholders.”
Selected second quarter 2023 highlights
include:
- Primary
insurance-in-force at quarter end was $191.3 billion, compared to
$186.7 billion at the end of the first quarter and $168.6 billion
at the end of the second quarter of 2022
- Net premiums
earned were $126.0 million, compared to $121.8 million in the first
quarter and $120.9 million in the second quarter of 2022
- Total revenue
was $142.7 million, compared to $136.8 million in the first quarter
and $132.2 million in the second quarter of 2022
- Underwriting and
operating expenses were $27.4 million, compared to $25.8 million in
the first quarter and $30.7 million in the second quarter of
2022
- Insurance claims
and claim expenses were $2.9 million, compared to $6.7 million in
the first quarter and a benefit of $3.0 million in the second
quarter of 2022
- Shareholders’
equity was $1.7 billion at quarter end and book value per share was
$21.25. Book value per share excluding the impact of net unrealized
gains and losses in the investment portfolio was $23.53, up 4%
compared to $22.56 in the first quarter and 18% compared to $19.91
in the second quarter of 2022
- Annualized
return on equity for the quarter was 18.6%, compared to 17.9% in
the first quarter and 19.7% in the second quarter of 2022
- At quarter-end,
total PMIERs available assets were $2.5 billion and net risk-based
required assets were $1.3 billion
|
|
Quarter Ended |
Quarter Ended |
Quarter Ended |
Change(1) |
Change(1) |
|
|
6/30/2023 |
3/31/2023 |
6/30/2022 |
Q/Q |
Y/Y |
INSURANCE METRICS
($billions) |
Primary Insurance-in-Force |
|
$ |
191.3 |
|
$ |
186.7 |
|
$ |
168.6 |
|
2 |
% |
13 |
% |
New Insurance Written -
NIW |
|
|
|
|
|
|
|
Monthly premium |
|
11.3 |
|
|
8.6 |
|
|
15.7 |
|
32 |
% |
(28)% |
|
Single premium |
|
0.2 |
|
|
0.2 |
|
|
0.9 |
|
15 |
% |
(77)% |
|
Total(2) |
|
11.5 |
|
|
8.7 |
|
|
16.6 |
|
31 |
% |
(31)% |
|
|
|
|
|
|
|
FINANCIAL
HIGHLIGHTS (Unaudited, $millions, except per share amounts) |
|
|
|
|
|
|
|
Net Premiums Earned |
|
|
126.0 |
|
|
121.8 |
|
|
120.9 |
|
3 |
% |
4 |
% |
Insurance Claims
and Claim Expenses (Benefits) |
|
2.9 |
|
|
6.7 |
|
|
(3.0 |
) |
(57)% |
N/A |
Underwriting and
Operating Expenses |
|
27.4 |
|
|
25.8 |
|
|
30.7 |
|
6 |
% |
(11)% |
Net Income |
|
|
80.3 |
|
|
74.5 |
|
|
75.4 |
|
8 |
% |
6 |
% |
Book Value per
Share (excluding net unrealized gains and losses)(3) |
|
23.53 |
|
|
22.56 |
|
|
19.91 |
|
4 |
% |
18 |
% |
Loss Ratio |
|
|
2.3 |
% |
|
5.5 |
% |
|
(2.5) |
% |
|
|
Expense Ratio |
|
|
21.8 |
% |
|
21.2 |
% |
|
25.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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, August 1, 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 June 30, |
|
For the six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
Net premiums earned |
$ |
125,985 |
|
|
$ |
120,870 |
|
|
$ |
247,739 |
|
|
$ |
237,365 |
|
Net investment income |
|
16,518 |
|
|
|
10,921 |
|
|
|
31,412 |
|
|
|
21,120 |
|
Net realized investment gains (losses) |
|
— |
|
|
|
53 |
|
|
|
(33 |
) |
|
|
461 |
|
Other revenues |
|
182 |
|
|
|
376 |
|
|
|
346 |
|
|
|
715 |
|
Total revenues |
|
142,685 |
|
|
|
132,220 |
|
|
|
279,464 |
|
|
|
259,661 |
|
Expenses |
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
2,873 |
|
|
|
(3,036 |
) |
|
|
9,574 |
|
|
|
(3,655 |
) |
Underwriting and operating expenses |
|
27,448 |
|
|
|
30,700 |
|
|
|
53,234 |
|
|
|
63,635 |
|
Service expenses |
|
267 |
|
|
|
336 |
|
|
|
347 |
|
|
|
766 |
|
Interest expense |
|
8,048 |
|
|
|
8,051 |
|
|
|
16,087 |
|
|
|
16,092 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
(1,020 |
) |
|
|
— |
|
|
|
(1,113 |
) |
Total expenses |
|
38,636 |
|
|
|
35,031 |
|
|
|
79,242 |
|
|
|
75,725 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
104,049 |
|
|
|
97,189 |
|
|
|
200,222 |
|
|
|
183,936 |
|
Income tax expense |
|
23,765 |
|
|
|
21,745 |
|
|
|
45,480 |
|
|
|
40,812 |
|
Net income |
$ |
80,284 |
|
|
$ |
75,444 |
|
|
$ |
154,742 |
|
|
$ |
143,124 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
0.97 |
|
|
$ |
0.88 |
|
|
$ |
1.86 |
|
|
$ |
1.67 |
|
Diluted |
$ |
0.95 |
|
|
$ |
0.86 |
|
|
$ |
1.83 |
|
|
$ |
1.63 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
82,958 |
|
|
|
85,734 |
|
|
|
83,277 |
|
|
|
85,842 |
|
Diluted |
|
84,190 |
|
|
|
86,577 |
|
|
|
84,504 |
|
|
|
86,943 |
|
|
|
|
|
|
|
|
|
Loss ratio(1) |
|
2.3 |
% |
|
|
(2.5) |
% |
|
|
3.9 |
% |
|
|
(1.5) |
% |
Expense ratio(2) |
|
21.8 |
% |
|
|
25.4 |
% |
|
|
21.5 |
% |
|
|
26.8 |
% |
Combined ratio(3) |
|
24.1 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
25.3 |
% |
|
|
|
|
|
|
|
|
Net income |
$ |
80,284 |
|
|
$ |
75,444 |
|
|
$ |
154,742 |
|
|
$ |
143,124 |
|
Other comprehensive (loss)
income, net of tax: |
|
|
|
|
|
|
|
Unrealized (losses) gains in
accumulated other comprehensive (loss) income, net of tax (benefit)
expense of $(4,120) and $(17,004) for the three months ended
June 30, 2023 and 2022, and $4,513 and $(43,180) for the six
months ended June 30, 2023 and 2022, respectively |
|
(15,499 |
) |
|
|
(63,967 |
) |
|
|
16,977 |
|
|
|
(162,438 |
) |
Reclassification adjustment
for realized (gains) losses included in net income, net of tax
expense (benefit) of $0 and $11 for the three months ended
June 30, 2023 and 2022, and $(7) and $97 for the six months
ended June 30, 2023 and 2022, respectively |
|
— |
|
|
|
(44 |
) |
|
|
26 |
|
|
|
(367 |
) |
Other comprehensive (loss)
income, net of tax |
|
(15,499 |
) |
|
|
(64,011 |
) |
|
|
17,003 |
|
|
|
(162,805 |
) |
Comprehensive income
(loss) |
$ |
64,785 |
|
|
$ |
11,433 |
|
|
$ |
171,745 |
|
|
$ |
(19,681 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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) |
June 30, 2023 |
|
December 31, 2022 |
Assets |
(In Thousands, except for share data) |
Fixed maturities, available-for-sale, at fair value (amortized cost
of $2,465,556 and $2,352,747 as of June 30, 2023 and
December 31, 2022, respectively) |
$ |
2,233,656 |
|
|
$ |
2,099,389 |
|
Cash and cash equivalents (including restricted cash of $2,222 and
$2,176 as of June 30, 2023 and December 31, 2022,
respectively) |
|
73,319 |
|
|
|
44,426 |
|
Premiums receivable |
|
72,367 |
|
|
|
69,680 |
|
Accrued investment income |
|
17,393 |
|
|
|
14,144 |
|
Deferred policy acquisition costs, net |
|
61,162 |
|
|
|
58,564 |
|
Software and equipment, net |
|
32,262 |
|
|
|
31,930 |
|
Intangible assets and goodwill |
|
3,634 |
|
|
|
3,634 |
|
Reinsurance recoverable |
|
24,023 |
|
|
|
21,587 |
|
Prepaid federal income taxes |
|
154,409 |
|
|
|
154,409 |
|
Other assets |
|
17,625 |
|
|
|
18,267 |
|
Total assets |
$ |
2,689,850 |
|
|
$ |
2,516,030 |
|
|
|
|
|
Liabilities |
|
|
|
Debt |
$ |
396,808 |
|
|
$ |
396,051 |
|
Unearned premiums |
|
105,067 |
|
|
|
123,035 |
|
Accounts payable and accrued expenses |
|
72,506 |
|
|
|
74,576 |
|
Reserve for insurance claims and claim expenses |
|
110,448 |
|
|
|
99,836 |
|
Reinsurance funds withheld |
|
1,696 |
|
|
|
2,674 |
|
Deferred tax liability, net |
|
242,144 |
|
|
|
193,859 |
|
Other liabilities |
|
12,226 |
|
|
|
12,272 |
|
Total liabilities |
|
940,895 |
|
|
|
902,303 |
|
|
|
|
|
Shareholders' equity |
|
|
|
Common stock - class A shares, $0.01 par value; 86,925,030 shares
issued and 82,289,763 shares outstanding as of June 30, 2023
and 86,472,742 shares issued and 83,549,879 shares outstanding as
of December 31, 2022 (250,000,000 shares authorized) |
|
870 |
|
|
|
865 |
|
Additional paid-in capital |
|
977,295 |
|
|
|
972,717 |
|
Treasury Stock, at cost: 4,635,267 and 2,922,863 common shares as
of June 30, 2023 and December 31, 2022, respectively |
|
(97,675 |
) |
|
|
(56,575 |
) |
Accumulated other comprehensive loss, net of tax |
|
(187,320 |
) |
|
|
(204,323 |
) |
Retained earnings |
|
1,055,785 |
|
|
|
901,043 |
|
Total shareholders'
equity |
|
1,748,955 |
|
|
|
1,613,727 |
|
Total liabilities and
shareholders' equity |
$ |
2,689,850 |
|
|
$ |
2,516,030 |
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measure Reconciliations (unaudited) |
|
As of and for the three months ended |
|
For the six months ended |
|
6/30/2023 |
|
3/31/2023 |
|
6/30/2022 |
|
06/30/23 |
|
6/30/2022 |
As
Reported |
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
125,985 |
|
|
$ |
121,754 |
|
|
$ |
120,870 |
|
|
$ |
247,739 |
|
|
$ |
237,365 |
|
Net investment income |
|
16,518 |
|
|
|
14,894 |
|
|
|
10,921 |
|
|
|
31,412 |
|
|
|
21,120 |
|
Net realized investment (losses) gains |
|
— |
|
|
|
(33 |
) |
|
|
53 |
|
|
|
(33 |
) |
|
|
461 |
|
Other revenues |
|
182 |
|
|
|
164 |
|
|
|
376 |
|
|
|
346 |
|
|
|
715 |
|
Total revenues |
|
142,685 |
|
|
|
136,779 |
|
|
|
132,220 |
|
|
|
279,464 |
|
|
|
259,661 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
2,873 |
|
|
|
6,701 |
|
|
|
(3,036 |
) |
|
|
9,574 |
|
|
|
(3,655 |
) |
Underwriting and operating expenses |
|
27,448 |
|
|
|
25,786 |
|
|
|
30,700 |
|
|
|
53,234 |
|
|
|
63,635 |
|
Service expenses |
|
267 |
|
|
|
80 |
|
|
|
336 |
|
|
|
347 |
|
|
|
766 |
|
Interest expense |
|
8,048 |
|
|
|
8,039 |
|
|
|
8,051 |
|
|
|
16,087 |
|
|
|
16,092 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
(1,020 |
) |
|
|
— |
|
|
|
(1,113 |
) |
Total expenses |
|
38,636 |
|
|
|
40,606 |
|
|
|
35,031 |
|
|
|
79,242 |
|
|
|
75,725 |
|
Income before income
taxes |
|
104,049 |
|
|
|
96,173 |
|
|
|
97,189 |
|
|
|
200,222 |
|
|
|
183,936 |
|
Income tax expense |
|
23,765 |
|
|
|
21,715 |
|
|
|
21,745 |
|
|
|
45,480 |
|
|
|
40,812 |
|
Net
income |
$ |
80,284 |
|
|
$ |
74,458 |
|
|
$ |
75,444 |
|
|
$ |
154,742 |
|
|
$ |
143,124 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net realized investment losses
(gains) |
|
— |
|
|
|
33 |
|
|
|
(53 |
) |
|
|
33 |
|
|
|
(461 |
) |
Gain from change in fair value
of warrant liability |
|
— |
|
|
|
— |
|
|
|
(1,020 |
) |
|
|
— |
|
|
|
(1,113 |
) |
Capital markets transaction
costs |
|
— |
|
|
|
— |
|
|
|
(55 |
) |
|
|
— |
|
|
|
205 |
|
Adjusted income before
taxes |
|
104,049 |
|
|
|
96,206 |
|
|
|
96,061 |
|
|
|
200,255 |
|
|
|
182,567 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense (benefit)
on adjustments (1) |
|
— |
|
|
|
7 |
|
|
|
(23 |
) |
|
|
7 |
|
|
|
(54 |
) |
Adjusted net
income |
$ |
80,284 |
|
|
$ |
74,484 |
|
|
$ |
74,339 |
|
|
$ |
154,768 |
|
|
$ |
141,809 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
84,190 |
|
|
|
84,840 |
|
|
|
86,577 |
|
|
|
84,504 |
|
|
|
86,943 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
0.95 |
|
|
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
1.83 |
|
|
$ |
1.63 |
|
Adjusted diluted
EPS |
$ |
0.95 |
|
|
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
1.83 |
|
|
$ |
1.63 |
|
|
|
|
|
|
|
|
|
|
|
Return-on-equity |
|
18.6 |
% |
|
|
17.9 |
% |
|
|
19.7 |
% |
|
|
18.4 |
% |
|
|
18.5 |
% |
Adjusted
return-on-equity |
|
18.6 |
% |
|
|
17.9 |
% |
|
|
19.4 |
% |
|
|
18.4 |
% |
|
|
18.4 |
% |
|
|
|
|
|
|
|
|
|
|
Expense ratio
(2) |
|
21.8 |
% |
|
|
21.2 |
% |
|
|
25.4 |
% |
|
|
21.5 |
% |
|
|
26.8 |
% |
Adjusted expense
ratio (3) |
|
21.8 |
% |
|
|
21.2 |
% |
|
|
25.4 |
% |
|
|
21.5 |
% |
|
|
26.7 |
% |
|
|
|
|
|
|
|
|
|
|
Combined
ratio (4) |
|
24.1 |
% |
|
|
26.7 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
25.3 |
% |
Adjusted combined
ratio (5) |
|
24.1 |
% |
|
|
26.7 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
25.2 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per
share (6) |
$ |
21.25 |
|
|
$ |
20.49 |
|
|
$ |
18.01 |
|
|
|
|
|
Book value per share
(excluding net unrealized gains and losses)
(7) |
$ |
23.53 |
|
|
$ |
22.56 |
|
|
$ |
19.91 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 expenses (benefit) 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 expenses (benefit) 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 |
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
125,985 |
|
|
$ |
121,754 |
|
|
$ |
119,584 |
|
|
$ |
118,317 |
|
|
$ |
120,870 |
|
|
$ |
116,495 |
|
Net investment income |
|
16,518 |
|
|
|
14,894 |
|
|
|
13,341 |
|
|
|
11,945 |
|
|
|
10,921 |
|
|
|
10,199 |
|
Net realized investment (losses) gains |
|
— |
|
|
|
(33 |
) |
|
|
6 |
|
|
|
14 |
|
|
|
53 |
|
|
|
408 |
|
Other revenues |
|
182 |
|
|
|
164 |
|
|
|
176 |
|
|
|
301 |
|
|
|
376 |
|
|
|
339 |
|
Total revenues |
|
142,685 |
|
|
|
136,779 |
|
|
|
133,107 |
|
|
|
130,577 |
|
|
|
132,220 |
|
|
|
127,441 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
2,873 |
|
|
|
6,701 |
|
|
|
3,450 |
|
|
|
(3,389 |
) |
|
|
(3,036 |
) |
|
|
(619 |
) |
Underwriting and operating expenses |
|
27,448 |
|
|
|
25,786 |
|
|
|
26,711 |
|
|
|
27,144 |
|
|
|
30,700 |
|
|
|
32,935 |
|
Service expenses |
|
267 |
|
|
|
80 |
|
|
|
131 |
|
|
|
197 |
|
|
|
336 |
|
|
|
430 |
|
Interest expense |
|
8,048 |
|
|
|
8,039 |
|
|
|
8,035 |
|
|
|
8,036 |
|
|
|
8,051 |
|
|
|
8,041 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(1,020 |
) |
|
|
(93 |
) |
Total expenses |
|
38,636 |
|
|
|
40,606 |
|
|
|
38,327 |
|
|
|
31,988 |
|
|
|
35,031 |
|
|
|
40,694 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
104,049 |
|
|
|
96,173 |
|
|
|
94,780 |
|
|
|
98,589 |
|
|
|
97,189 |
|
|
|
86,747 |
|
Income tax expense |
|
23,765 |
|
|
|
21,715 |
|
|
|
21,840 |
|
|
|
21,751 |
|
|
|
21,745 |
|
|
|
19,067 |
|
Net income |
$ |
80,284 |
|
|
$ |
74,458 |
|
|
$ |
72,940 |
|
|
$ |
76,838 |
|
|
$ |
75,444 |
|
|
$ |
67,680 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.97 |
|
|
$ |
0.89 |
|
|
$ |
0.87 |
|
|
$ |
0.91 |
|
|
$ |
0.88 |
|
|
$ |
0.79 |
|
Diluted |
$ |
0.95 |
|
|
$ |
0.88 |
|
|
$ |
0.86 |
|
|
$ |
0.90 |
|
|
$ |
0.86 |
|
|
$ |
0.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
82,958 |
|
|
|
83,600 |
|
|
|
83,592 |
|
|
|
84,444 |
|
|
|
85,734 |
|
|
|
85,953 |
|
Diluted |
|
84,190 |
|
|
|
84,840 |
|
|
|
84,809 |
|
|
|
85,485 |
|
|
|
86,577 |
|
|
|
87,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
Loss ratio(1) |
|
2.3 |
% |
|
|
5.5 |
% |
|
|
2.9 |
% |
|
|
(2.9) |
% |
|
|
(2.5) |
% |
|
|
(0.5) |
% |
Expense ratio(2) |
|
21.8 |
% |
|
|
21.2 |
% |
|
|
22.3 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
28.3 |
% |
Combined ratio(3) |
|
24.1 |
% |
|
|
26.7 |
% |
|
|
25.2 |
% |
|
|
20.1 |
% |
|
|
22.9 |
% |
|
|
27.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
($ Values In Millions, except as noted below) |
New insurance written (NIW) |
$ |
11,478 |
|
|
$ |
8,734 |
|
|
$ |
10,719 |
|
|
$ |
17,239 |
|
|
$ |
16,611 |
|
|
$ |
14,165 |
|
New risk written |
|
3,022 |
|
|
|
2,258 |
|
|
|
2,797 |
|
|
|
4,616 |
|
|
|
4,386 |
|
|
|
3,721 |
|
Insurance in force (IIF)(1) |
|
191,306 |
|
|
|
186,724 |
|
|
|
183,968 |
|
|
|
179,173 |
|
|
|
168,639 |
|
|
|
158,877 |
|
Risk in force(1) |
|
49,875 |
|
|
|
48,494 |
|
|
|
47,648 |
|
|
|
46,259 |
|
|
|
43,260 |
|
|
|
40,522 |
|
Policies in force (count)(1) |
|
611,441 |
|
|
|
600,294 |
|
|
|
594,142 |
|
|
|
580,525 |
|
|
|
551,543 |
|
|
|
526,976 |
|
Average loan size($ value in thousands)(1) |
$ |
313 |
|
|
$ |
311 |
|
|
$ |
310 |
|
|
$ |
309 |
|
|
$ |
306 |
|
|
$ |
301 |
|
Coverage percentage(2) |
|
26.1 |
% |
|
|
26.0 |
% |
|
|
25.9 |
% |
|
|
25.8 |
% |
|
|
25.7 |
% |
|
|
25.5 |
% |
Loans in default (count)(1) |
|
4,349 |
|
|
|
4,475 |
|
|
|
4,449 |
|
|
|
4,096 |
|
|
|
4,271 |
|
|
|
5,238 |
|
Default rate(1) |
|
0.71 |
% |
|
|
0.75 |
% |
|
|
0.75 |
% |
|
|
0.71 |
% |
|
|
0.77 |
% |
|
|
0.99 |
% |
Risk in force on defaulted loans(1) |
$ |
335 |
|
|
$ |
337 |
|
|
$ |
323 |
|
|
$ |
284 |
|
|
$ |
295 |
|
|
$ |
362 |
|
Net premium yield(3) |
|
0.27 |
% |
|
|
0.26 |
% |
|
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.30 |
% |
|
|
0.30 |
% |
Earnings from cancellations |
$ |
1.1 |
|
|
$ |
1.4 |
|
|
$ |
1.5 |
|
|
$ |
1.8 |
|
|
$ |
2.2 |
|
|
$ |
2.9 |
|
Annual persistency(4) |
|
86.0 |
% |
|
|
85.1 |
% |
|
|
83.5 |
% |
|
|
80.1 |
% |
|
|
76.0 |
% |
|
|
71.5 |
% |
Quarterly run-off(5) |
|
3.7 |
% |
|
|
3.2 |
% |
|
|
3.3 |
% |
|
|
4.0 |
% |
|
|
4.3 |
% |
|
|
5.0 |
% |
(1) Reported as of the end of the period.(2)
Calculated as end of period risk-in-force (RIF) divided by end of
period IIF.(3) Calculated as net premiums earned, divided by
average primary IIF for the period, annualized.(4) Defined as the
percentage of IIF that remains on our books after a given
twelve-month period.(5) Defined as the percentage of IIF that is no
longer on our books after a given three-month period.
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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
(In Millions) |
Monthly |
$ |
11,266 |
|
$ |
8,550 |
|
$ |
10,451 |
|
$ |
16,676 |
|
$ |
15,695 |
|
$ |
13,094 |
Single |
|
212 |
|
|
184 |
|
|
268 |
|
|
563 |
|
|
916 |
|
|
1,071 |
Primary |
$ |
11,478 |
|
$ |
8,734 |
|
$ |
10,719 |
|
$ |
17,239 |
|
$ |
16,611 |
|
$ |
14,165 |
Primary and pool
IIF |
As of |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
(In Millions) |
Monthly |
$ |
171,685 |
|
$ |
166,924 |
|
$ |
163,903 |
|
$ |
158,897 |
|
$ |
148,488 |
|
$ |
139,156 |
Single |
|
19,621 |
|
|
19,800 |
|
|
20,065 |
|
|
20,276 |
|
|
20,151 |
|
|
19,721 |
Primary |
|
191,306 |
|
|
186,724 |
|
|
183,968 |
|
|
179,173 |
|
|
168,639 |
|
|
158,877 |
|
|
|
|
|
|
|
|
|
|
|
|
Pool |
|
1,000 |
|
|
1,025 |
|
|
1,049 |
|
|
1,078 |
|
|
1,114 |
|
|
1,162 |
Total |
$ |
192,306 |
|
$ |
187,749 |
|
$ |
185,017 |
|
$ |
180,251 |
|
$ |
169,753 |
|
$ |
160,039 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
(In Thousands) |
The QSR Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded risk-in-force |
$ |
12,761,294 |
|
|
$ |
12,635,442 |
|
|
$ |
12,617,169 |
|
|
$ |
12,511,797 |
|
|
$ |
9,040,944 |
|
|
$ |
8,504,853 |
|
Ceded premiums earned |
|
(42,002 |
) |
|
|
(42,096 |
) |
|
|
(42,246 |
) |
|
|
(42,265 |
) |
|
|
(30,231 |
) |
|
|
(29,005 |
) |
Ceded claims and claim expenses (benefits) |
|
803 |
|
|
|
1,965 |
|
|
|
1,934 |
|
|
|
248 |
|
|
|
(403 |
) |
|
|
(159 |
) |
Ceding commission earned |
|
9,877 |
|
|
|
9,965 |
|
|
|
10,089 |
|
|
|
10,193 |
|
|
|
6,146 |
|
|
|
5,886 |
|
Profit commission |
|
23,486 |
|
|
|
22,279 |
|
|
|
22,314 |
|
|
|
23,899 |
|
|
|
17,778 |
|
|
|
16,723 |
|
The ILN Transactions(1) |
|
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(8,815 |
) |
|
$ |
(9,095 |
) |
|
$ |
(10,112 |
) |
|
$ |
(10,730 |
) |
|
$ |
(10,132 |
) |
|
$ |
(10,939 |
) |
The XOL Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded Premiums |
$ |
(7,672 |
) |
|
$ |
(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.
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.
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 |
|
For the six months ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
(In Millions) |
>= 760 |
$ |
6,919 |
|
$ |
5,251 |
|
$ |
7,990 |
|
$ |
12,170 |
|
$ |
14,362 |
740-759 |
|
1,836 |
|
|
1,514 |
|
|
2,900 |
|
|
3,350 |
|
|
5,288 |
720-739 |
|
1,541 |
|
|
1,107 |
|
|
2,056 |
|
|
2,648 |
|
|
3,993 |
700-719 |
|
668 |
|
|
456 |
|
|
1,650 |
|
|
1,124 |
|
|
3,289 |
680-699 |
|
413 |
|
|
342 |
|
|
1,277 |
|
|
755 |
|
|
2,521 |
<=679 |
|
101 |
|
|
64 |
|
|
738 |
|
|
165 |
|
|
1,323 |
Total |
$ |
11,478 |
|
$ |
8,734 |
|
$ |
16,611 |
|
$ |
20,212 |
|
$ |
30,776 |
Weighted average FICO |
|
763 |
|
|
762 |
|
|
751 |
|
|
762 |
|
|
750 |
Primary NIW by
LTV |
For the three months ended |
|
For the six months ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
(In Millions) |
95.01% and above |
$ |
1,003 |
|
|
$ |
358 |
|
|
$ |
1,577 |
|
|
$ |
1,361 |
|
|
$ |
2,943 |
|
90.01% to 95.00% |
|
5,323 |
|
|
|
4,085 |
|
|
|
8,253 |
|
|
|
9,408 |
|
|
|
15,308 |
|
85.01% to 90.00% |
|
3,891 |
|
|
|
3,234 |
|
|
|
4,772 |
|
|
|
7,125 |
|
|
|
8,640 |
|
85.00% and below |
|
1,261 |
|
|
|
1,057 |
|
|
|
2,009 |
|
|
|
2,318 |
|
|
|
3,885 |
|
Total |
$ |
11,478 |
|
|
$ |
8,734 |
|
|
$ |
16,611 |
|
|
$ |
20,212 |
|
|
$ |
30,776 |
|
Weighted average LTV |
|
92.0 |
% |
|
|
91.6 |
% |
|
|
92.2 |
% |
|
|
91.9 |
% |
|
|
92.1 |
% |
Primary NIW by
purchase/refinance mix |
For the three months ended |
|
For the six months ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
June 30, 2023 |
|
June 30, 2022 |
|
(In Millions) |
Purchase |
$ |
11,233 |
|
$ |
8,494 |
|
$ |
16,203 |
|
$ |
19,727 |
|
$ |
29,601 |
Refinance |
|
245 |
|
|
240 |
|
|
408 |
|
|
485 |
|
|
1,175 |
Total |
$ |
11,478 |
|
$ |
8,734 |
|
$ |
16,611 |
|
$ |
20,212 |
|
$ |
30,776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below presents a summary of our primary IIF and RIF by
book year as of June 30, 2023.
Primary IIF and
RIF |
As of June 30, 2023 |
|
IIF |
|
RIF |
|
(In Millions) |
June 30, 2023 |
$ |
19,811 |
|
$ |
5,176 |
2022 |
|
54,739 |
|
|
14,496 |
2021 |
|
68,016 |
|
|
17,553 |
2020 |
|
30,799 |
|
|
7,978 |
2019 |
|
8,385 |
|
|
2,220 |
2018 and before |
|
9,556 |
|
|
2,452 |
Total |
$ |
191,306 |
|
$ |
49,875 |
|
|
|
|
|
|
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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Millions) |
>= 760 |
$ |
94,931 |
|
$ |
91,623 |
|
$ |
83,769 |
740-759 |
|
33,841 |
|
|
33,156 |
|
|
29,195 |
720-739 |
|
26,862 |
|
|
26,233 |
|
|
23,240 |
700-719 |
|
18,261 |
|
|
18,203 |
|
|
16,221 |
680-699 |
|
12,506 |
|
|
12,502 |
|
|
11,160 |
<=679 |
|
4,905 |
|
|
5,007 |
|
|
5,054 |
Total |
$ |
191,306 |
|
$ |
186,724 |
|
$ |
168,639 |
Primary RIF by
FICO |
As of |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Millions) |
>= 760 |
$ |
24,472 |
|
$ |
23,472 |
|
$ |
21,159 |
740-759 |
|
8,888 |
|
|
8,692 |
|
|
7,564 |
720-739 |
|
7,090 |
|
|
6,903 |
|
|
6,044 |
700-719 |
|
4,865 |
|
|
4,847 |
|
|
4,289 |
680-699 |
|
3,315 |
|
|
3,311 |
|
|
2,936 |
<=679 |
|
1,245 |
|
|
1,269 |
|
|
1,268 |
Total |
$ |
49,875 |
|
$ |
48,494 |
|
$ |
43,260 |
Primary IIF by
LTV |
As of |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Millions) |
95.01% and above |
$ |
18,141 |
|
$ |
17,583 |
|
$ |
16,068 |
90.01% to 95.00% |
|
91,719 |
|
|
89,125 |
|
|
77,804 |
85.01% to 90.00% |
|
58,210 |
|
|
56,425 |
|
|
51,029 |
85.00% and below |
|
23,236 |
|
|
23,591 |
|
|
23,738 |
Total |
$ |
191,306 |
|
$ |
186,724 |
|
$ |
168,639 |
Primary RIF by
LTV |
As of |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Millions) |
95.01% and above |
$ |
5,600 |
|
$ |
5,413 |
|
$ |
4,914 |
90.01% to 95.00% |
|
27,097 |
|
|
26,326 |
|
|
22,974 |
85.01% to 90.00% |
|
14,400 |
|
|
13,937 |
|
|
12,553 |
85.00% and below |
|
2,778 |
|
|
2,818 |
|
|
2,819 |
Total |
$ |
49,875 |
|
$ |
48,494 |
|
$ |
43,260 |
Primary RIF by Loan
Type |
As of |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
Fixed |
98 |
% |
|
98 |
% |
|
99 |
% |
Adjustable rate mortgages: |
|
|
|
|
|
Less than five years |
— |
|
|
— |
|
|
— |
|
Five years and longer |
2 |
|
|
2 |
|
|
1 |
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
|
|
|
|
|
|
|
|
|
The table below presents a summary of the change
in total primary IIF for the dates and periods indicated.
Primary
IIF |
As of and for the three months ended |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Millions) |
IIF, beginning of period |
$ |
186,724 |
|
|
$ |
183,968 |
|
|
$ |
158,877 |
|
NIW |
|
11,478 |
|
|
|
8,734 |
|
|
|
16,611 |
|
Cancellations, principal repayments and other reductions |
|
(6,896 |
) |
|
|
(5,978 |
) |
|
|
(6,849 |
) |
IIF, end of period |
$ |
191,306 |
|
|
$ |
186,724 |
|
|
$ |
168,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
California |
10.4 |
% |
|
10.5 |
% |
|
10.8 |
% |
Texas |
8.7 |
|
|
8.8 |
|
|
9.0 |
|
Florida |
7.9 |
|
|
8.0 |
|
|
8.3 |
|
Georgia |
4.1 |
|
|
4.1 |
|
|
4.0 |
|
Virginia |
4.0 |
|
|
4.1 |
|
|
4.3 |
|
Washington |
4.0 |
|
|
4.0 |
|
|
3.9 |
|
Illinois |
3.9 |
|
|
3.9 |
|
|
3.9 |
|
Pennsylvania |
3.4 |
|
|
3.4 |
|
|
3.3 |
|
Colorado |
3.4 |
|
|
3.5 |
|
|
3.7 |
|
Maryland |
3.3 |
|
|
3.3 |
|
|
3.5 |
|
Total |
53.1 |
% |
|
53.6 |
% |
|
54.7 |
% |
|
|
|
|
|
|
|
|
|
The table below presents selected primary
portfolio statistics, by book year, as of June 30, 2023.
|
As of June 30, 2023 |
Book
Year |
Original Insurance Written |
|
Remaining Insurance in Force |
|
% Remaining of Original Insurance |
|
PoliciesEver inForce |
|
Number of Policies in Force |
|
Number of Loans in Default |
|
# of Claims Paid |
|
IncurredLoss Ratio (Inception to
Date)(1) |
|
Cumulative DefaultRate(2) |
|
Currentdefaultrate(3) |
|
($ Values In Millions) |
|
|
2014 and prior |
$ |
3,613 |
|
$ |
188 |
|
5 |
% |
|
15,441 |
|
1,191 |
|
14 |
|
56 |
|
3.7 |
% |
|
0.5 |
% |
|
1.2 |
% |
2015 |
|
12,422 |
|
|
1,098 |
|
9 |
% |
|
52,548 |
|
6,170 |
|
104 |
|
131 |
|
2.5 |
% |
|
0.4 |
% |
|
1.7 |
% |
2016 |
|
21,187 |
|
|
2,263 |
|
11 |
% |
|
83,626 |
|
11,926 |
|
220 |
|
157 |
|
1.8 |
% |
|
0.5 |
% |
|
1.8 |
% |
2017 |
|
21,582 |
|
|
2,782 |
|
13 |
% |
|
85,897 |
|
14,989 |
|
403 |
|
129 |
|
2.4 |
% |
|
0.6 |
% |
|
2.7 |
% |
2018 |
|
27,295 |
|
|
3,225 |
|
12 |
% |
|
104,043 |
|
16,736 |
|
480 |
|
121 |
|
3.6 |
% |
|
0.6 |
% |
|
2.9 |
% |
2019 |
|
45,141 |
|
|
8,385 |
|
19 |
% |
|
148,423 |
|
35,522 |
|
546 |
|
44 |
|
3.3 |
% |
|
0.4 |
% |
|
1.5 |
% |
2020 |
|
62,702 |
|
|
30,799 |
|
49 |
% |
|
186,174 |
|
101,899 |
|
538 |
|
10 |
|
2.1 |
% |
|
0.3 |
% |
|
0.5 |
% |
2021 |
|
85,574 |
|
|
68,016 |
|
79 |
% |
|
257,972 |
|
214,464 |
|
1,283 |
|
7 |
|
5.3 |
% |
|
0.5 |
% |
|
0.6 |
% |
2022 |
|
58,734 |
|
|
54,739 |
|
93 |
% |
|
163,281 |
|
154,826 |
|
753 |
|
— |
|
21.8 |
% |
|
0.5 |
% |
|
0.5 |
% |
2023 |
|
20,212 |
|
|
19,811 |
|
98 |
% |
|
54,625 |
|
53,718 |
|
8 |
|
— |
|
0.2 |
% |
|
— |
% |
|
— |
% |
Total |
$ |
358,462 |
|
$ |
191,306 |
|
|
|
1,152,030 |
|
611,441 |
|
4,349 |
|
655 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 June 30, |
|
For the six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|
(In Thousands) |
Beginning balance |
$ |
108,157 |
|
|
$ |
102,372 |
|
|
$ |
99,836 |
|
|
$ |
103,551 |
|
Less reinsurance
recoverables(1) |
|
(23,479 |
) |
|
|
(20,080 |
) |
|
|
(21,587 |
) |
|
|
(20,320 |
) |
Beginning balance, net of
reinsurance recoverables |
|
84,678 |
|
|
|
82,292 |
|
|
|
78,249 |
|
|
|
83,231 |
|
|
|
|
|
|
|
|
|
Add claims incurred: |
|
|
|
|
|
|
|
Claims and claim expenses (benefits) incurred: |
|
|
|
|
|
|
|
Current year(2) |
|
17,262 |
|
|
|
8,707 |
|
|
|
44,870 |
|
|
|
18,787 |
|
Prior years(3) |
|
(14,389 |
) |
|
|
(11,743 |
) |
|
|
(35,296 |
) |
|
|
(22,442 |
) |
Total claims and claim expenses (benefits) incurred |
|
2,873 |
|
|
|
(3,036 |
) |
|
|
9,574 |
|
|
|
(3,655 |
) |
|
|
|
|
|
|
|
|
Less claims paid: |
|
|
|
|
|
|
|
Claims and claim expenses paid: |
|
|
|
|
|
|
|
Current year(2) |
|
54 |
|
|
|
26 |
|
|
|
54 |
|
|
|
26 |
|
Prior years(3) |
|
1,072 |
|
|
|
356 |
|
|
|
1,344 |
|
|
|
676 |
|
Total claims and claim expenses paid |
|
1,126 |
|
|
|
382 |
|
|
|
1,398 |
|
|
|
702 |
|
|
|
|
|
|
|
|
|
Reserve at end of period, net
of reinsurance recoverables |
|
86,425 |
|
|
|
78,874 |
|
|
|
86,425 |
|
|
|
78,874 |
|
Add reinsurance
recoverables(1) |
|
24,023 |
|
|
|
19,588 |
|
|
|
24,023 |
|
|
|
19,588 |
|
Ending balance |
$ |
110,448 |
|
|
$ |
98,462 |
|
|
$ |
110,448 |
|
|
$ |
98,462 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 $39.1 million attributed to net case reserves and
$5.0 million attributed to net IBNR reserves for the six
months ended June 30, 2023 and $14.0 million attributed
to net case reserves and $4.5 million attributed to net IBNR
reserves for the six months ended June 30, 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
$30.3 million attributed to net case reserves and
$4.5 million attributed to net IBNR reserves for the six
months ended June 30, 2023 and $17.0 million attributed
to net case reserves and $4.7 million attributed to net IBNR
reserves for the six months ended June 30, 2022.
The following table provides a reconciliation of
the beginning and ending count of loans in default:
|
For the three months ended June 30, |
|
For the six months ended June 30, |
|
2023 |
|
2022 |
|
2023 |
|
2022 |
Beginning default inventory |
4,475 |
|
|
5,238 |
|
|
4,449 |
|
|
6,227 |
|
Plus: new defaults |
1,417 |
|
|
1,069 |
|
|
2,975 |
|
|
2,232 |
|
Less: cures |
(1,493 |
) |
|
(2,011 |
) |
|
(3,000 |
) |
|
(4,143 |
) |
Less: claims paid |
(46 |
) |
|
(24 |
) |
|
(67 |
) |
|
(43 |
) |
Less: rescission and claims
denied |
(4 |
) |
|
(1 |
) |
|
(8 |
) |
|
(2 |
) |
Ending default inventory |
4,349 |
|
|
4,271 |
|
|
4,349 |
|
|
4,271 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table provides details of our
claims paid, before giving effect to claims ceded under the QSR
Transactions, for the periods indicated:
|
For the three months ended June 30, |
|
For the six months ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
($ Values In Thousands) |
Number of claims paid(1) |
|
46 |
|
|
|
24 |
|
|
|
67 |
|
|
|
43 |
|
Total amount paid for
claims |
$ |
1,386 |
|
|
$ |
471 |
|
|
$ |
1,730 |
|
|
$ |
873 |
|
Average amount paid per
claim |
$ |
30 |
|
|
$ |
20 |
|
|
$ |
26 |
|
|
$ |
20 |
|
Severity(2) |
|
62 |
% |
|
|
46 |
% |
|
|
56 |
% |
|
|
43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Count includes 17 and 24 claims settled
without payment during the three and six months ended June 30,
2023, respectively, and 10 and 16 claims settled without payment
during the three and six months ended June 30, 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 June 30, |
Average reserve per default: |
|
2023 |
|
|
2022 |
|
(In Thousands) |
Case(1) |
$ |
23.5 |
|
$ |
21.3 |
IBNR(1)(2) |
|
1.9 |
|
|
1.8 |
Total |
$ |
25.4 |
|
$ |
23.1 |
|
|
|
|
|
|
(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 |
|
June 30, 2023 |
|
March 31, 2023 |
|
June 30, 2022 |
|
(In Thousands) |
Available Assets |
$ |
2,491,280 |
|
$ |
2,480,882 |
|
$ |
2,169,388 |
Risk-Based Required
Assets |
|
1,317,961 |
|
|
1,231,780 |
|
|
1,240,143 |
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