NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of
$60.5 million, or $0.69 per diluted share, for the fourth quarter
ended December 31, 2021, which compares to $60.2 million, or $0.69
per diluted share, in the third quarter ended September 30, 2021
and $48.3 million, or $0.56 per diluted share, in the fourth
quarter ended December 31, 2020. Adjusted net income for the
quarter was $63.5 million or $0.73 per diluted share, which
compares to $61.8 million or $0.71 per diluted share in the third
quarter ended September 30, 2021 and $50.8 million or $0.59 per
diluted share in the fourth quarter ended December 31, 2020.
Net income for the full year ended December 31,
2021 was $231.1 million or $2.65 per diluted share, which compares
to $171.6 million, or $2.13 per diluted share, for the year ended
December 31, 2020. Adjusted net income for the year was $236.8
million or $2.73 per diluted share, which compares to $173.6
million, or $2.19 per diluted share, for the year ended December
31, 2020. 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.
The company also announced today that its Board
of Directors has authorized a $125 million share repurchase plan
effective through December 31, 2023.
Adam Pollitzer, President and Chief Executive
Officer of National MI, said, “The fourth quarter capped a year of
standout success for National MI. In 2021, we delivered record NIW
volume, grew our high-quality insured portfolio, and achieved
record profitability and consistently strong mid-teen returns. We
ended the year with a robust funding position and are pleased to
announce our $125 million debut share repurchase program. We are
excited to progress along our capital roadmap and provide investors
with the ability to directly access value as we continue to
perform, grow our earnings and compound book value. National MI is
leading with impact; helping a record number of borrowers gain
access to housing and providing them support as they build
long-term value and community. Looking forward, we see a compelling
opportunity to continue to support borrowers in need, drive strong
growth in our high-quality insurance in-force and deliver strong
risk-adjusted returns.”
Selected fourth quarter 2021 highlights
include:
- New insurance written was $18.3 billion, compared to $18.1
billion in the third quarter and $19.8 billion in the fourth
quarter of 2020, primarily reflecting a decline in refinancing
origination volume year-on-year
- Primary insurance-in-force at quarter-end was $152.3 billion,
up 6% from $143.6 billion in the third quarter and 37% compared to
$111.3 billion in the fourth quarter of 2020
- Net premiums earned were $113.9 million, compared to $113.6
million in the third quarter and $100.7 million in the fourth
quarter of 2020
- Underwriting and operating expenses were $38.8 million,
including $2.5 million of costs incurred in connection with our CEO
transition and $1.5 million of capital market transaction costs,
compared to $34.7 million in the third quarter and $35.0 million in
the fourth quarter of 2020
- Insurance claims and claim expenses was a benefit of $0.5
million, compared to an expense of $3.2 million in the third
quarter and $3.5 million in the fourth quarter of 2020
- Shareholders' equity was $1.6 billion at quarter end, equal to
$18.25 per share, up 3% compared to $17.68 per share in the third
quarter and 13% compared to $16.08 per share in the fourth quarter
of 2020
- Annualized return on equity for the quarter was 15.7% and
annualized adjusted return on equity was 16.5%
- At quarter-end, total PMIERs available assets were $2.0 billion
and net risk-based required assets of $1.2 billion
|
|
Quarter Ended |
Quarter Ended |
Quarter Ended |
Change (1) |
Change (1) |
|
|
12/31/2021 |
9/30/2021 |
12/31/2020 |
Q/Q |
Y/Y |
INSURANCE METRICS
($billions) |
Primary
Insurance-in-Force |
$ |
152.3 |
|
$ |
143.6 |
|
$ |
111.3 |
|
6 |
% |
37 |
% |
New Insurance
Written - NIW |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Monthly premium |
|
17.0 |
|
|
16.9 |
|
|
17.8 |
|
1 |
% |
(5 |
)% |
|
Single premium |
|
1.4 |
|
|
1.2 |
|
|
2.0 |
|
12 |
% |
(31 |
)% |
|
Total (2) |
|
18.3 |
|
|
18.1 |
|
|
19.8 |
|
1 |
% |
(7 |
)% |
|
|
|
|
|
|
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share
amounts) |
Net Premiums
Earned |
|
113.9 |
|
|
113.6 |
|
|
100.7 |
|
— |
% |
13 |
% |
Insurance Claims
and Claim Expenses |
|
(0.5 |
) |
|
3.2 |
|
|
3.5 |
|
(116 |
)% |
(114 |
)% |
Underwriting and
Operating Expenses |
|
38.8 |
|
|
34.7 |
|
|
35.0 |
|
12 |
% |
11 |
% |
Net
Income |
|
60.5 |
|
|
60.2 |
|
|
48.3 |
|
1 |
% |
25 |
% |
Adjusted Net
Income |
|
63.5 |
|
|
61.8 |
|
|
50.8 |
|
3 |
% |
25 |
% |
Cash and
Investments |
|
2,163 |
|
|
2,152 |
|
|
1,931 |
|
1 |
% |
12 |
% |
Shareholders'
Equity |
|
1,566 |
|
|
1,516 |
|
|
1,370 |
|
3 |
% |
14 |
% |
Book Value per
Share |
|
18.25 |
|
|
17.68 |
|
|
16.08 |
|
3 |
% |
13 |
% |
Loss
Ratio |
|
(0.4 |
)% |
|
2.8 |
% |
|
3.5 |
% |
|
|
|
|
Expense
Ratio |
|
34.1 |
% |
|
30.5 |
% |
|
34.7 |
% |
|
|
|
|
(1) |
Percentages
may not be replicated based on the rounded figures presented in the
table. |
(2) |
Total may not foot due to rounding. |
Conference Call and Webcast Details
The company will hold a conference call, which
will be webcast live today, February 15, 2022, 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 (888)
734-0328 in the U.S., or (914) 495-8578 internationally, and using
Conference ID: 9990952 or 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," "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:
uncertainty relating to the coronavirus ("COVID-19") pandemic and
the measures taken by governmental authorities and other third
parties to combat it, including their impact on the global economy,
the U.S. housing, real estate, housing finance and mortgage
insurance markets, and the Company’s business, operations and
personnel; changes in the charters, business practices, policy 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
and affordability of homeownership for low-and-moderate income
borrowers and minority 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, 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; developments
in the world’s financial and capital markets and our access to such
markets, including reinsurance; 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 future lawsuits, investigations or inquiries or
resolution of current lawsuits or inquiries; changes in general
economic, market and political conditions and policies, interest
rates, inflation and investment results or other conditions that
affect the housing market or the markets for home mortgages or
mortgage insurance; our ability to successfully execute and
implement our capital plans, including our ability to access the
capital, 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;
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; the inability
of our counterparties, 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; and, our 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, 2020, 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 and adjusted
combined ratio 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.
Although adjusted income before tax, adjusted
net income, adjusted diluted EPS, adjusted return-on-equity,
adjusted expense ratio and adjusted combined ratio 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. 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.
Infrequent, unusual or non-operating adjustments for the three and
twelve months ended December 31, 2021, include severance,
restricted stock modification and other expenses incurred in
connection with the CEO transition we announced on September 9,
2021. Past adjustments under this category include 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. |
Investor ContactJohn M.
SwensonVice President, Investor Relations and
Treasuryjohn.swenson@nationalmi.com(510) 788-8417
Consolidated
statements of operations and comprehensive income
(unaudited) |
For the three months ended December 31, |
|
For the year ended December 31, |
|
|
2021 |
|
|
|
2020 |
|
|
|
2021 |
|
|
|
2020 |
|
Revenues |
(In Thousands, except for per share data) |
Net premiums earned |
$ |
113,933 |
|
|
$ |
100,709 |
|
|
$ |
444,294 |
|
|
$ |
397,172 |
|
Net investment income |
|
10,045 |
|
|
|
8,386 |
|
|
|
38,072 |
|
|
|
31,897 |
|
Net realized investment gains |
|
714 |
|
|
|
295 |
|
|
|
729 |
|
|
|
930 |
|
Other revenues |
|
380 |
|
|
|
513 |
|
|
|
1,977 |
|
|
|
3,284 |
|
Total revenues |
|
125,072 |
|
|
|
109,903 |
|
|
|
485,072 |
|
|
|
433,283 |
|
Expenses |
|
|
|
|
|
|
|
Insurance claims and claim (benefits) expenses |
|
(500 |
) |
|
|
3,549 |
|
|
|
12,305 |
|
|
|
59,247 |
|
Underwriting and operating expenses |
|
38,843 |
|
|
|
34,994 |
|
|
|
142,303 |
|
|
|
131,610 |
|
Service expenses |
|
650 |
|
|
|
459 |
|
|
|
2,509 |
|
|
|
2,840 |
|
Interest expense |
|
8,029 |
|
|
|
7,906 |
|
|
|
31,796 |
|
|
|
24,387 |
|
(Gain) loss from change in fair value of warrant liability |
|
(112 |
) |
|
|
1,379 |
|
|
|
(566 |
) |
|
|
(2,907 |
) |
Total expenses |
|
46,910 |
|
|
|
48,287 |
|
|
|
188,347 |
|
|
|
215,177 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
78,162 |
|
|
|
61,616 |
|
|
|
296,725 |
|
|
|
218,106 |
|
Income tax expense |
|
17,639 |
|
|
|
13,348 |
|
|
|
65,595 |
|
|
|
46,540 |
|
Net income |
$ |
60,523 |
|
|
$ |
48,268 |
|
|
$ |
231,130 |
|
|
$ |
171,566 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
0.71 |
|
|
$ |
0.57 |
|
|
$ |
2.70 |
|
|
$ |
2.20 |
|
Diluted |
$ |
0.69 |
|
|
$ |
0.56 |
|
|
$ |
2.65 |
|
|
$ |
2.13 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
85,757 |
|
|
|
84,956 |
|
|
|
85,620 |
|
|
|
78,023 |
|
Diluted |
|
87,117 |
|
|
|
86,250 |
|
|
|
86,885 |
|
|
|
79,263 |
|
|
|
|
|
|
|
|
|
Loss ratio(1) |
|
(0.4 |
)% |
|
|
3.5 |
% |
|
|
2.8 |
% |
|
|
14.9 |
% |
Expense ratio(2) |
|
34.1 |
% |
|
|
34.7 |
% |
|
|
32.0 |
% |
|
|
33.1 |
% |
Combined ratio (3) |
|
33.7 |
% |
|
|
38.3 |
% |
|
|
34.8 |
% |
|
|
48.1 |
% |
|
|
|
|
|
|
|
|
Net income |
$ |
60,523 |
|
|
$ |
48,268 |
|
|
$ |
231,130 |
|
|
$ |
171,566 |
|
Other comprehensive (loss)
income, net of tax: |
|
|
|
|
|
|
|
Unrealized (losses) gains in
accumulated other comprehensive income, net of tax (benefit)
expense of $(4,601) and $1,869 for the three months ended December
31, 2021 and 2020, respectively, and $(13,768) and $9,525 for the
years ended December 31, 2021, and 2020, respectively |
|
(17,307 |
) |
|
|
7,031 |
|
|
|
(51,795 |
) |
|
|
35,829 |
|
Reclassification adjustment
for realized (gains) losses included in net income, net of tax
expense (benefit) of $150 and $62 for the three months ended
December 31, 2021 and 2020, respectively, and $153 and $(196) for
the years ended December 31, 2021, and 2020 respectively |
|
(564 |
) |
|
|
(233 |
) |
|
|
(576 |
) |
|
|
739 |
|
Other comprehensive income
(loss), net of tax |
|
(17,871 |
) |
|
|
6,798 |
|
|
|
(52,371 |
) |
|
|
36,568 |
|
Comprehensive income |
$ |
42,652 |
|
|
$ |
55,066 |
|
|
$ |
178,759 |
|
|
$ |
208,134 |
|
(1) |
Loss ratio is
calculated by dividing insurance claims and claim expenses 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) |
December 31, 2021 |
|
December 31, 2020 |
Assets |
(In Thousands, except for share data) |
Fixed maturities, available-for-sale, at fair value (amortized cost
of $2,078,773 and $1,730,835 as of December 31, 2021 and December
31, 2020, respectively) |
$ |
2,085,931 |
|
$ |
1,804,286 |
Cash and cash equivalents (including restricted cash of $3,165 and
$5,555 as of December 31, 2021 and December 31, 2020,
respectively) |
|
76,646 |
|
|
126,937 |
Premiums receivable |
|
60,358 |
|
|
49,779 |
Accrued investment income |
|
11,900 |
|
|
9,862 |
Prepaid expenses |
|
3,530 |
|
|
3,292 |
Deferred policy acquisition costs, net |
|
59,584 |
|
|
62,225 |
Software and equipment, net |
|
32,047 |
|
|
29,665 |
Intangible assets and goodwill |
|
3,634 |
|
|
3,634 |
Prepaid reinsurance premiums |
|
2,393 |
|
|
6,190 |
Reinsurance recoverable |
|
20,320 |
|
|
17,608 |
Other assets |
|
94,238 |
|
|
53,188 |
Total assets |
$ |
2,450,581 |
|
$ |
2,166,666 |
|
|
|
|
Liabilities |
|
|
|
Debt |
$ |
394,623 |
|
$ |
393,301 |
Unearned premiums |
|
139,237 |
|
|
118,817 |
Accounts payable and accrued expenses |
|
72,000 |
|
|
61,716 |
Reserve for insurance claims and claim expenses |
|
103,551 |
|
|
90,567 |
Reinsurance funds withheld |
|
5,601 |
|
|
8,653 |
Warrant liability, at fair value |
|
2,363 |
|
|
4,409 |
Deferred tax liability, net |
|
164,175 |
|
|
112,586 |
Other liabilities |
|
3,245 |
|
|
7,026 |
Total liabilities |
|
884,795 |
|
|
797,075 |
|
|
|
|
Shareholders' equity |
|
|
|
Common stock - class A shares, $0.01 par value; 85,792,849 and
85,163,039 shares issued and outstanding as of December 31, 2021
and December 31, 2020, respectively (250,000,000 shares
authorized) |
|
858 |
|
|
852 |
Additional paid-in capital |
|
955,302 |
|
|
937,872 |
Accumulated other comprehensive income, net of tax |
|
1,485 |
|
|
53,856 |
Retained earnings |
|
608,141 |
|
|
377,011 |
Total shareholders'
equity |
|
1,565,786 |
|
|
1,369,591 |
Total liabilities and
shareholders' equity |
$ |
2,450,581 |
|
$ |
2,166,666 |
Non-GAAP
Financial Measure Reconciliations (unaudited) |
|
For the three months ended |
|
For the year ended |
|
12/31/2021 |
|
9/30/2021 |
|
12/31/2020 |
|
12/31/2021 |
|
12/31/2020 |
As
Reported |
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
113,933 |
|
|
$ |
113,594 |
|
|
$ |
100,709 |
|
|
$ |
444,294 |
|
|
$ |
397,172 |
|
Net investment income |
|
10,045 |
|
|
|
9,831 |
|
|
|
8,386 |
|
|
|
38,072 |
|
|
|
31,897 |
|
Net realized investment gains |
|
714 |
|
|
|
3 |
|
|
|
295 |
|
|
|
729 |
|
|
|
930 |
|
Other revenues |
|
380 |
|
|
|
613 |
|
|
|
513 |
|
|
|
1,977 |
|
|
|
3,284 |
|
Total revenues |
|
125,072 |
|
|
|
124,041 |
|
|
|
109,903 |
|
|
|
485,072 |
|
|
|
433,283 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Insurance claims and claim (benefits) expenses |
|
(500 |
) |
|
|
3,204 |
|
|
|
3,549 |
|
|
|
12,305 |
|
|
|
59,247 |
|
Underwriting and operating expenses |
|
38,843 |
|
|
|
34,669 |
|
|
|
34,994 |
|
|
|
142,303 |
|
|
|
131,610 |
|
Service expenses |
|
650 |
|
|
|
787 |
|
|
|
459 |
|
|
|
2,509 |
|
|
|
2,840 |
|
Interest expense |
|
8,029 |
|
|
|
7,930 |
|
|
|
7,906 |
|
|
|
31,796 |
|
|
|
24,387 |
|
(Gain) loss from change in fair value of warrant liability |
|
(112 |
) |
|
|
— |
|
|
|
1,379 |
|
|
|
(566 |
) |
|
|
(2,907 |
) |
Total expenses |
|
46,910 |
|
|
|
46,590 |
|
|
|
48,287 |
|
|
|
188,347 |
|
|
|
215,177 |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
78,162 |
|
|
|
77,451 |
|
|
|
61,616 |
|
|
|
296,725 |
|
|
|
218,106 |
|
Income tax expense |
|
17,639 |
|
|
|
17,258 |
|
|
|
13,348 |
|
|
|
65,595 |
|
|
|
46,540 |
|
Net
income |
$ |
60,523 |
|
|
$ |
60,193 |
|
|
$ |
48,268 |
|
|
$ |
231,130 |
|
|
$ |
171,566 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net realized investment
gains |
|
(714 |
) |
|
|
(3 |
) |
|
|
(295 |
) |
|
|
(729 |
) |
|
|
(930 |
) |
(Gain) loss from change in
fair value of warrant liability |
|
(112 |
) |
|
|
— |
|
|
|
1,379 |
|
|
|
(566 |
) |
|
|
(2,907 |
) |
Capital markets transaction
costs |
|
1,505 |
|
|
|
481 |
|
|
|
1,719 |
|
|
|
3,979 |
|
|
|
7,237 |
|
Other infrequent, unusual or
non-operating items (6) |
|
2,540 |
|
|
|
1,289 |
|
|
|
— |
|
|
|
3,829 |
|
|
|
— |
|
Adjusted income before
taxes |
|
81,381 |
|
|
|
79,218 |
|
|
|
64,419 |
|
|
|
303,238 |
|
|
|
221,506 |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense on
adjustments (7) |
|
251 |
|
|
|
139 |
|
|
|
299 |
|
|
|
806 |
|
|
|
1,324 |
|
Adjusted net
income |
$ |
63,491 |
|
|
$ |
61,821 |
|
|
$ |
50,772 |
|
|
$ |
236,837 |
|
|
$ |
173,642 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
87,117 |
|
|
|
86,880 |
|
|
|
86,250 |
|
|
|
86,885 |
|
|
|
79,263 |
|
Adjusted weighted average
diluted shares outstanding |
|
87,117 |
|
|
|
86,880 |
|
|
|
86,250 |
|
|
|
86,885 |
|
|
|
79,263 |
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS (1) |
$ |
0.69 |
|
|
$ |
0.69 |
|
|
$ |
0.56 |
|
|
$ |
2.65 |
|
(1 |
) |
$ |
2.13 |
|
Adjusted diluted
EPS |
$ |
0.73 |
|
|
$ |
0.71 |
|
|
$ |
0.59 |
|
|
$ |
2.73 |
|
|
$ |
2.19 |
|
|
|
|
|
|
|
|
|
|
|
Return on
equity |
|
15.7 |
% |
|
|
16.2 |
% |
|
|
14.4 |
% |
|
|
15.7 |
% |
|
|
14.9 |
% |
Adjusted return on
equity |
|
16.5 |
% |
|
|
16.6 |
% |
|
|
15.2 |
% |
|
|
16.1 |
% |
|
|
15.1 |
% |
|
|
|
|
|
|
|
|
|
|
Expense ratio
(2) |
|
34.1 |
% |
|
|
30.5 |
% |
|
|
34.7 |
% |
|
|
32.0 |
% |
|
|
33.1 |
% |
Adjusted expense
ratio (3) |
|
30.5 |
% |
|
|
29.0 |
% |
|
|
33.0 |
% |
|
|
30.3 |
% |
|
|
32.0 |
% |
|
|
|
|
|
|
|
|
|
|
Combined
ratio (4) |
|
33.7 |
% |
|
|
33.3 |
% |
|
|
38.3 |
% |
|
|
34.8 |
% |
|
|
48.1 |
% |
Adjusted combined
ratio (5) |
|
30.1 |
% |
|
|
31.8 |
% |
|
|
36.6 |
% |
|
|
33.0 |
% |
|
|
46.9 |
% |
(1) |
Diluted net income for the three months ended December 31, 2021,
the year ended December 31, 2021 and 2020, excludes the impact of
the warrant fair value change as it was dilutive. For all other
periods presented, diluted net income equals reported net income as
the impact of the warrant fair value change was anti-dilutive. |
(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 and infrequent or unusual non-operating items) by net
premiums earned. |
(4) |
Combined ratio is calculated by dividing the total of underwriting
and operating expenses and insurance claims and claims expense by
net premiums earned. |
(5) |
Adjusted combined ratio is calculated by dividing the total of
adjusted underwriting and operating expenses (underwriting and
operating expenses excluding costs related to capital market
reinsurance transaction and infrequent or unusual non-operating
items) and insurance claims and claims expense by net premiums
earned. |
(6) |
Represents severance, restricted stock modification and other
expenses incurred in connection with the CEO transition announced
on September 9, 2021. |
(7) |
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.
Such non-deductible items include gains or losses from the change
in the fair value of our warrant liability and certain costs
incurred in connection with the CEO transition, which are limited
under Section 162(m) of the Internal Revenue Code. |
Historical Quarterly
Data |
|
2021 |
|
|
|
2020 |
|
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
Revenues |
(In Thousands, except for per share data) |
Net premiums earned |
$ |
113,933 |
|
|
$ |
113,594 |
|
|
$ |
110,888 |
|
|
$ |
105,879 |
|
|
$ |
100,709 |
|
|
$ |
98,802 |
|
Net investment income |
|
10,045 |
|
|
|
9,831 |
|
|
|
9,382 |
|
|
|
8,814 |
|
|
|
8,386 |
|
|
|
8,337 |
|
Net realized investment gains (losses) |
|
714 |
|
|
|
3 |
|
|
|
12 |
|
|
|
— |
|
|
|
295 |
|
|
|
(4 |
) |
Other revenues |
|
380 |
|
|
|
613 |
|
|
|
483 |
|
|
|
501 |
|
|
|
513 |
|
|
|
648 |
|
Total revenues |
|
125,072 |
|
|
|
124,041 |
|
|
|
120,765 |
|
|
|
115,194 |
|
|
|
109,903 |
|
|
|
107,783 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Insurance claims and claim (benefits) expenses |
|
(500 |
) |
|
|
3,204 |
|
|
|
4,640 |
|
|
|
4,962 |
|
|
|
3,549 |
|
|
|
15,667 |
|
Underwriting and operating expenses |
|
38,843 |
|
|
|
34,669 |
|
|
|
34,725 |
|
|
|
34,065 |
|
|
|
34,994 |
|
|
|
33,969 |
|
Service expenses |
|
650 |
|
|
|
787 |
|
|
|
481 |
|
|
|
591 |
|
|
|
459 |
|
|
|
557 |
|
Interest expense |
|
8,029 |
|
|
|
7,930 |
|
|
|
7,922 |
|
|
|
7,915 |
|
|
|
7,906 |
|
|
|
7,796 |
|
(Gain) loss from change in fair value of warrant liability |
|
(112 |
) |
|
|
— |
|
|
|
(658 |
) |
|
|
205 |
|
|
|
1,379 |
|
|
|
437 |
|
Total expenses |
|
46,910 |
|
|
|
46,590 |
|
|
|
47,110 |
|
|
|
47,738 |
|
|
|
48,287 |
|
|
|
58,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
78,162 |
|
|
|
77,451 |
|
|
|
73,655 |
|
|
|
67,456 |
|
|
|
61,616 |
|
|
|
49,357 |
|
Income tax expense |
|
17,639 |
|
|
|
17,258 |
|
|
|
16,133 |
|
|
|
14,565 |
|
|
|
13,348 |
|
|
|
11,178 |
|
Net income |
$ |
60,523 |
|
|
$ |
60,193 |
|
|
$ |
57,522 |
|
|
$ |
52,891 |
|
|
$ |
48,268 |
|
|
$ |
38,179 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.71 |
|
|
$ |
0.70 |
|
|
$ |
0.67 |
|
|
$ |
0.62 |
|
|
$ |
0.57 |
|
|
$ |
0.45 |
|
Diluted |
$ |
0.69 |
|
|
$ |
0.69 |
|
|
$ |
0.65 |
|
|
$ |
0.61 |
|
|
$ |
0.56 |
|
|
$ |
0.45 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
85,757 |
|
|
|
85,721 |
|
|
|
85,467 |
|
|
|
85,317 |
|
|
|
84,956 |
|
|
|
84,805 |
|
Diluted |
|
87,117 |
|
|
|
86,880 |
|
|
|
86,819 |
|
|
|
86,487 |
|
|
|
86,250 |
|
|
|
85,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
Loss Ratio(1) |
|
(0.4 |
)% |
|
|
2.8 |
% |
|
|
4.2 |
% |
|
|
4.7 |
% |
|
|
3.5 |
% |
|
|
15.9 |
% |
Expense Ratio(2) |
|
34.1 |
% |
|
|
30.5 |
% |
|
|
31.3 |
% |
|
|
32.2 |
% |
|
|
34.7 |
% |
|
|
34.4 |
% |
Combined ratio (3) |
|
33.7 |
% |
|
|
33.3 |
% |
|
|
35.5 |
% |
|
|
36.9 |
% |
|
|
38.3 |
% |
|
|
50.2 |
% |
(1) |
Loss ratio is calculated by dividing insurance claims and claim
expenses 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 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
($ Values In Millions) |
New insurance written |
$ |
18,342 |
|
|
$ |
18,084 |
|
|
$ |
22,751 |
|
|
$ |
26,397 |
|
|
$ |
19,782 |
|
|
$ |
18,499 |
|
New risk written |
$ |
4,786 |
|
|
|
4,640 |
|
|
|
5,650 |
|
|
|
6,531 |
|
|
|
4,868 |
|
|
|
4,577 |
|
Insurance in force (IIF) (1) |
|
152,343 |
|
|
|
143,618 |
|
|
|
136,598 |
|
|
|
123,777 |
|
|
|
111,252 |
|
|
|
104,494 |
|
Risk in force (1) |
$ |
38,661 |
|
|
|
36,253 |
|
|
|
34,366 |
|
|
|
31,206 |
|
|
|
28,164 |
|
|
|
26,568 |
|
Policies in force (count) (1) |
|
512,316 |
|
|
|
490,714 |
|
|
|
471,794 |
|
|
|
436,652 |
|
|
|
399,429 |
|
|
|
381,899 |
|
Average loan size ($ value in thousands) (1) |
$ |
297 |
|
|
$ |
293 |
|
|
$ |
290 |
|
|
$ |
283 |
|
|
$ |
279 |
|
|
$ |
274 |
|
Coverage percentage (2) |
|
25.4 |
% |
|
|
25.2 |
% |
|
|
25.2 |
% |
|
|
25.2 |
% |
|
|
25.3 |
% |
|
|
25.4 |
% |
Loans in default (count) (1) |
|
6,227 |
|
|
|
7,670 |
|
|
|
8,764 |
|
|
|
11,090 |
|
|
|
12,209 |
|
|
|
13,765 |
|
Default rate (1) |
|
1.22 |
% |
|
|
1.56 |
% |
|
|
1.86 |
% |
|
|
2.54 |
% |
|
|
3.06 |
% |
|
|
3.60 |
% |
Risk in force on defaulted loans (1) |
$ |
435 |
|
|
$ |
546 |
|
|
$ |
625 |
|
|
$ |
785 |
|
|
$ |
874 |
|
|
$ |
1,008 |
|
Net premium yield (3) |
|
0.34 |
% |
|
|
0.32 |
% |
|
|
0.34 |
% |
|
|
0.36 |
% |
|
|
0.37 |
% |
|
|
0.39 |
% |
Earnings from cancellations |
$ |
5.1 |
|
|
$ |
7.7 |
|
|
$ |
7.0 |
|
|
$ |
9.9 |
|
|
$ |
11.7 |
|
|
$ |
12.6 |
|
Annual persistency (4) |
|
63.8 |
% |
|
|
58.1 |
% |
|
|
53.9 |
% |
|
|
51.9 |
% |
|
|
55.9 |
% |
|
|
60.0 |
% |
Quarterly run-off (5) |
|
6.7 |
% |
|
|
8.1 |
% |
|
|
8.0 |
% |
|
|
12.5 |
% |
|
|
12.5 |
% |
|
|
13.1 |
% |
(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. |
New Insurance Written (NIW), Insurance
in Force (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 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
(In Millions) |
Monthly |
$ |
16,972 |
|
$ |
16,861 |
|
$ |
19,422 |
|
$ |
23,764 |
|
$ |
17,789 |
|
$ |
16,516 |
Single |
|
1,370 |
|
|
1,223 |
|
|
3,329 |
|
|
2,633 |
|
|
1,993 |
|
|
1,983 |
Primary |
$ |
18,342 |
|
$ |
18,084 |
|
$ |
22,751 |
|
$ |
26,397 |
|
$ |
19,782 |
|
$ |
18,499 |
Primary and pool
IIF |
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
(In Millions) |
Monthly |
$ |
133,104 |
|
$ |
124,767 |
|
$ |
117,629 |
|
$ |
106,920 |
|
$ |
95,336 |
|
$ |
88,584 |
Single |
|
19,239 |
|
|
18,851 |
|
|
18,969 |
|
|
16,857 |
|
|
15,916 |
|
|
15,910 |
Primary |
|
152,343 |
|
|
143,618 |
|
|
136,598 |
|
|
123,777 |
|
|
111,252 |
|
|
104,494 |
|
|
|
|
|
|
|
|
|
|
|
|
Pool |
|
1,229 |
|
|
1,339 |
|
|
1,460 |
|
|
1,642 |
|
|
1,855 |
|
|
2,115 |
Total |
$ |
153,572 |
|
$ |
144,957 |
|
$ |
138,058 |
|
$ |
125,419 |
|
$ |
113,107 |
|
$ |
106,609 |
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, and 2022 QSR Transaction, and collectively, the QSR
Transactions), and Insurance-Linked Note transactions (the 2017 ILN
Transaction, 2018 ILN Transaction, 2019 ILN Transaction, 2020-1 ILN
Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and
2021-2 ILN Transaction and and collectively, the ILN Transactions)
for the periods indicated.
|
For the three months ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
September 30, 2020 |
|
(In Thousands) |
The QSR Transactions |
|
|
|
|
|
|
|
|
|
|
Ceded risk-in-force |
$ |
8,194,604 |
|
|
$ |
7,610,870 |
|
|
$ |
7,113,707 |
|
|
$ |
6,330,409 |
|
|
$ |
5,543,969 |
|
$ |
5,159,061 |
|
Ceded premiums earned |
|
(28,490 |
) |
|
|
(28,366 |
) |
|
|
(27,537 |
) |
|
|
(25,747 |
) |
|
|
(24,161 |
) |
|
(24,517 |
) |
Ceded claims and claim expenses |
|
19 |
|
|
|
840 |
|
|
|
1,194 |
|
|
|
1,180 |
|
|
|
601 |
|
|
3,200 |
|
Ceding commission earned |
|
6,208 |
|
|
|
6,142 |
|
|
|
5,961 |
|
|
|
5,162 |
|
|
|
4,787 |
|
|
4,798 |
|
Profit commission |
|
16,142 |
|
|
|
15,191 |
|
|
|
14,391 |
|
|
|
13,380 |
|
|
|
13,184 |
|
|
11,034 |
|
|
|
|
|
|
|
|
|
|
|
|
The ILN Transactions |
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(11,344 |
) |
|
$ |
(10,390 |
) |
|
$ |
(10,169 |
) |
|
$ |
(9,397 |
) |
|
$ |
(9,422 |
) |
$ |
(6,268 |
) |
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 year ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
($ In Millions) |
>= 760 |
$ |
8,032 |
|
$ |
8,073 |
|
$ |
11,495 |
|
$ |
40,408 |
|
$ |
37,437 |
740-759 |
|
3,115 |
|
|
3,254 |
|
|
3,387 |
|
|
15,927 |
|
|
9,443 |
720-739 |
|
2,833 |
|
|
2,563 |
|
|
2,447 |
|
|
12,511 |
|
|
7,820 |
700-719 |
|
2,196 |
|
|
2,099 |
|
|
1,430 |
|
|
8,450 |
|
|
4,644 |
680-699 |
|
1,653 |
|
|
1,487 |
|
|
820 |
|
|
5,792 |
|
|
2,692 |
<=679 |
|
514 |
|
|
608 |
|
|
203 |
|
|
2,486 |
|
|
666 |
Total |
$ |
18,342 |
|
$ |
18,084 |
|
$ |
19,782 |
|
$ |
85,574 |
|
$ |
62,702 |
Weighted average FICO |
|
748 |
|
|
749 |
|
|
761 |
|
|
752 |
|
|
761 |
Primary NIW by
LTV |
For the three months ended |
|
For the year ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
(In Millions) |
95.01% and above |
$ |
1,569 |
|
|
$ |
1,957 |
|
|
$ |
1,877 |
|
|
$ |
8,153 |
|
|
$ |
3,732 |
|
90.01% to 95.00% |
|
8,879 |
|
|
|
8,344 |
|
|
|
7,839 |
|
|
|
38,215 |
|
|
|
26,000 |
|
85.01% to 90.00% |
|
5,583 |
|
|
|
4,961 |
|
|
|
6,239 |
|
|
|
24,655 |
|
|
|
22,356 |
|
85.00% and below |
|
2,311 |
|
|
|
2,822 |
|
|
|
3,827 |
|
|
|
14,551 |
|
|
|
10,614 |
|
Total |
$ |
18,342 |
|
|
$ |
18,084 |
|
|
$ |
19,782 |
|
|
$ |
85,574 |
|
|
$ |
62,702 |
|
Weighted average LTV |
|
91.9 |
% |
|
|
91.8 |
% |
|
|
90.9 |
% |
|
|
91.4 |
% |
|
|
90.9 |
% |
Primary NIW by
purchase/refinance mix |
For the three months ended |
|
For the year ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
(In Millions) |
Purchase |
$ |
17,097 |
|
$ |
16,400 |
|
$ |
13,085 |
|
$ |
70,318 |
|
$ |
41,616 |
Refinance |
|
1,245 |
|
|
1,684 |
|
|
6,697 |
|
|
15,256 |
|
|
21,086 |
Total |
$ |
18,342 |
|
$ |
18,084 |
|
$ |
19,782 |
|
$ |
85,574 |
|
$ |
62,702 |
The table below presents a summary of our primary IIF and RIF by
book year as of December 31, 2021.
Primary IIF and
RIF |
As of December 31, 2021 |
|
IIF |
|
RIF |
|
(In Millions) |
December 31, 2021 |
$ |
81,226 |
|
$ |
20,591 |
2020 |
|
43,795 |
|
|
11,023 |
2019 |
|
12,407 |
|
|
3,249 |
2018 |
|
4,929 |
|
|
1,258 |
2017 |
|
4,233 |
|
|
1,062 |
2016 and before |
|
5,753 |
|
|
1,478 |
Total |
$ |
152,343 |
|
$ |
38,661 |
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 |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Millions) |
>= 760 |
$ |
76,449 |
|
$ |
73,080 |
|
$ |
58,368 |
740-759 |
|
26,219 |
|
|
24,676 |
|
|
17,442 |
720-739 |
|
21,356 |
|
|
19,898 |
|
|
15,091 |
700-719 |
|
14,401 |
|
|
13,206 |
|
|
10,442 |
680-699 |
|
9,654 |
|
|
8,678 |
|
|
6,777 |
<=679 |
|
4,264 |
|
|
4,080 |
|
|
3,132 |
Total |
$ |
152,343 |
|
$ |
143,618 |
|
$ |
111,252 |
Primary RIF by
FICO |
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Millions) |
>= 760 |
$ |
19,125 |
|
$ |
18,200 |
|
$ |
14,634 |
740-759 |
|
6,707 |
|
|
6,280 |
|
|
4,449 |
720-739 |
|
5,497 |
|
|
5,086 |
|
|
3,868 |
700-719 |
|
3,771 |
|
|
3,432 |
|
|
2,692 |
680-699 |
|
2,511 |
|
|
2,243 |
|
|
1,748 |
<=679 |
|
1,050 |
|
|
1,012 |
|
|
773 |
Total |
$ |
38,661 |
|
$ |
36,253 |
|
$ |
28,164 |
Primary IIF by
LTV |
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Millions) |
95.01% and above |
$ |
14,058 |
|
$ |
13,179 |
|
$ |
9,129 |
90.01% to 95.00% |
|
68,537 |
|
|
63,828 |
|
|
49,898 |
85.01% to 90.00% |
|
46,971 |
|
|
44,451 |
|
|
36,972 |
85.00% and below |
|
22,777 |
|
|
22,160 |
|
|
15,253 |
Total |
$ |
152,343 |
|
$ |
143,618 |
|
$ |
111,252 |
Primary RIF by
LTV |
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Millions) |
95.01% and above |
$ |
4,230 |
|
$ |
3,932 |
|
$ |
2,637 |
90.01% to 95.00% |
|
20,210 |
|
|
18,810 |
|
|
14,673 |
85.01% to 90.00% |
|
11,533 |
|
|
10,902 |
|
|
9,067 |
85.00% and below |
|
2,688 |
|
|
2,609 |
|
|
1,787 |
Total |
$ |
38,661 |
|
$ |
36,253 |
|
$ |
28,164 |
Primary RIF by Loan
Type |
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
|
|
|
|
|
Fixed |
99 |
% |
|
99 |
% |
|
99 |
% |
Adjustable rate mortgages: |
|
|
|
|
|
Less than five years |
— |
|
|
— |
|
|
— |
|
Five years and longer |
1 |
|
|
1 |
|
|
1 |
|
Total |
100 |
% |
|
100 |
% |
|
100 |
% |
The table below presents a summary of the change
in total primary IIF during the periods indicated.
Primary
IIF |
For the three months ended |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Millions) |
IIF, beginning of period |
$ |
143,618 |
|
|
$ |
136,598 |
|
|
$ |
104,494 |
|
NIW |
|
18,342 |
|
|
|
18,084 |
|
|
|
19,782 |
|
Cancellations, principal repayments and other reductions |
|
(9,617 |
) |
|
|
(11,064 |
) |
|
|
(13,024 |
) |
IIF, end of period |
$ |
152,343 |
|
|
$ |
143,618 |
|
|
$ |
111,252 |
|
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 |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
California |
10.4 |
% |
|
10.2 |
% |
|
11.2 |
% |
Texas |
9.7 |
|
|
9.9 |
|
|
8.8 |
|
Florida |
8.6 |
|
|
8.6 |
|
|
7.3 |
|
Virginia |
4.7 |
|
|
4.9 |
|
|
5.1 |
|
Colorado |
3.8 |
|
|
4.0 |
|
|
4.1 |
|
Georgia |
3.8 |
|
|
3.7 |
|
|
3.1 |
|
Maryland |
3.7 |
|
|
3.8 |
|
|
3.7 |
|
Washington |
3.7 |
|
|
3.5 |
|
|
3.5 |
|
Illinois |
3.6 |
|
|
3.7 |
|
|
3.8 |
|
Pennsylvania |
3.3 |
|
|
3.2 |
|
|
3.4 |
|
Total |
55.3 |
% |
|
55.5 |
% |
|
54.0 |
% |
The table below presents selected primary
portfolio statistics, by book year, as of December 31,
2021.
|
As of December 31, 2021 |
Book
year |
Original Insurance Written |
|
Remaining Insurance in Force |
|
% Remaining of Original Insurance |
|
Policies Ever in Force |
|
Number of Policies in Force |
|
Number of Loans in Default |
|
# of Claims Paid |
|
Incurred Loss Ratio (Inception to Date)
(1) |
|
Cumulative Default Rate (2) |
|
Current default rate (3) |
|
($ Values in Millions) |
|
|
2013 |
$ |
162 |
|
$ |
6 |
|
4 |
% |
|
655 |
|
46 |
|
1 |
|
1 |
|
0.4 |
% |
|
0.3 |
% |
|
2.2 |
% |
2014 |
|
3,451 |
|
|
274 |
|
8 |
% |
|
14,786 |
|
1,693 |
|
60 |
|
49 |
|
4.3 |
% |
|
0.7 |
% |
|
3.5 |
% |
2015 |
|
12,422 |
|
|
1,706 |
|
14 |
% |
|
52,548 |
|
9,341 |
|
275 |
|
117 |
|
3.3 |
% |
|
0.7 |
% |
|
2.9 |
% |
2016 |
|
21,187 |
|
|
3,768 |
|
18 |
% |
|
83,626 |
|
18,987 |
|
591 |
|
129 |
|
2.8 |
% |
|
0.9 |
% |
|
3.1 |
% |
2017 |
|
21,582 |
|
|
4,233 |
|
20 |
% |
|
85,897 |
|
21,718 |
|
950 |
|
101 |
|
4.3 |
% |
|
1.2 |
% |
|
4.4 |
% |
2018 |
|
27,295 |
|
|
4,928 |
|
18 |
% |
|
104,043 |
|
24,448 |
|
1,328 |
|
89 |
|
8.2 |
% |
|
1.4 |
% |
|
5.4 |
% |
2019 |
|
45,141 |
|
|
12,407 |
|
27 |
% |
|
148,423 |
|
50,313 |
|
1,479 |
|
20 |
|
11.4 |
% |
|
1.0 |
% |
|
2.9 |
% |
2020 |
|
62,702 |
|
|
43,795 |
|
70 |
% |
|
186,174 |
|
138,203 |
|
1,070 |
|
1 |
|
6.0 |
% |
|
0.6 |
% |
|
0.8 |
% |
2021 |
|
85,574 |
|
|
81,226 |
|
95 |
% |
|
257,972 |
|
247,567 |
|
473 |
|
— |
|
2.0 |
% |
|
0.2 |
% |
|
0.2 |
% |
Total |
$ |
279,516 |
|
$ |
152,343 |
|
|
|
934,124 |
|
512,316 |
|
6,227 |
|
507 |
|
|
|
|
|
|
(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:
|
For the three months ended |
|
For the year ended |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
(In Thousands) |
Beginning balance |
$ |
104,604 |
|
|
$ |
87,230 |
|
|
$ |
90,567 |
|
|
$ |
23,752 |
|
Less reinsurance recoverables
(1) |
|
(20,420 |
) |
|
|
(17,180 |
) |
|
|
(17,608 |
) |
|
|
(4,939 |
) |
Beginning balance, net of
reinsurance recoverables |
|
84,184 |
|
|
|
70,050 |
|
|
|
72,959 |
|
|
|
18,813 |
|
|
|
|
|
|
|
|
|
Add claims incurred: |
|
|
|
|
|
|
|
Claims and claim expenses incurred: |
|
|
|
|
|
|
|
Current year (2) |
|
4,159 |
|
|
|
5,745 |
|
|
|
23,433 |
|
|
|
66,943 |
|
Prior years (3) |
|
(4,659 |
) |
|
|
(2,196 |
) |
|
|
(11,128 |
) |
|
|
(7,696 |
) |
Total claims and claim
expenses incurred |
|
(500 |
) |
|
|
3,549 |
|
|
|
12,305 |
|
|
|
59,247 |
|
|
|
|
|
|
|
|
|
Less claims paid: |
|
|
|
|
|
|
|
Claims and claim expenses paid: |
|
|
|
|
|
|
|
Current year (2) |
|
1 |
|
|
|
434 |
|
|
|
16 |
|
|
|
586 |
|
Prior years (3) |
|
452 |
|
|
|
206 |
|
|
|
2,017 |
|
|
|
4,515 |
|
Total claims and claim
expenses paid |
|
453 |
|
|
|
640 |
|
|
|
2,033 |
|
|
|
5,101 |
|
|
|
|
|
|
|
|
|
Reserve at end of period, net
of reinsurance recoverables |
|
83,231 |
|
|
|
72,959 |
|
|
|
83,231 |
|
|
|
72,959 |
|
Add reinsurance recoverables
(1) |
|
20,320 |
|
|
|
17,608 |
|
|
|
20,320 |
|
|
|
17,608 |
|
Ending balance |
$ |
103,551 |
|
|
$ |
90,567 |
|
|
$ |
103,551 |
|
|
$ |
90,567 |
|
(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 $18.1 million
attributed to net case reserves and $4.7 million attributed to
net IBNR reserves for the year ended December 31, 2021,
$60.8 million attributed to net case reserves and
$5.0 million attributed to net IBNR reserves for year ended
December 31, 2020. |
(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
$6.3 million attributed to net case reserves and
$5.0 million attributed to net IBNR reserves for the year
ended December 31, 2021, $6.2 million attributed to net case
reserves and $1.3 million attributed to net IBNR reserves for
the year ended December 31, 2020. |
The following table provides a reconciliation of
the beginning and ending count of loans in default for the periods
indicated.
|
For the three months ended |
|
For the year ended |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
Beginning default inventory |
7,670 |
|
|
13,765 |
|
|
12,209 |
|
|
1,448 |
|
Plus: new defaults |
1,244 |
|
|
2,589 |
|
|
5,730 |
|
|
19,459 |
|
Less: cures |
(2,664 |
) |
|
(4,122 |
) |
|
(11,626 |
) |
|
(8,548 |
) |
Less: claims paid |
(23 |
) |
|
(20 |
) |
|
(82 |
) |
|
(143 |
) |
Less: claims denied |
— |
|
|
(3 |
) |
|
(4 |
) |
|
(7 |
) |
Ending default inventory |
6,227 |
|
|
12,209 |
|
|
6,227 |
|
|
12,209 |
|
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 |
|
For the year ended |
|
December 31, 2021 |
|
December 31, 2020 |
|
December 31, 2021 |
|
December 31, 2020 |
|
(In Thousands) |
Number of claims paid (1) |
|
23 |
|
|
|
20 |
|
|
|
82 |
|
|
|
143 |
|
Total amount paid for
claims |
$ |
572 |
|
|
$ |
813 |
|
|
$ |
2,554 |
|
|
$ |
6,434 |
|
Average amount paid per
claim |
$ |
25 |
|
|
$ |
41 |
|
|
$ |
31 |
|
|
$ |
45 |
|
Severity(2) |
|
53 |
% |
|
|
75 |
% |
|
|
59 |
% |
|
|
80 |
% |
(1) |
Count includes five and 15 claims settled without payment for the
three months and year ended December 31, 2021, respectively,
and one and nine claims settled without payment for the three
months and year ended December 31, 2020, 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 periods indicated.
Average reserve per
default: |
As of December 31, 2021 |
|
As of December 31, 2020 |
|
(In Thousands) |
Case (1) |
$ |
15.3 |
|
$ |
6.8 |
IBNR (1)(2) |
|
1.3 |
|
|
0.6 |
Total |
$ |
16.6 |
|
$ |
7.4 |
(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 financial requirements as reported by NMIC as of the dates
indicated.
|
As of |
|
December 31, 2021 |
|
September 30, 2021 |
|
December 31, 2020 |
|
(In Thousands) |
Available Assets |
$ |
2,041,193 |
|
$ |
1,992,964 |
|
$ |
1,750,668 |
Risk-Based Required
Assets |
|
1,186,272 |
|
|
1,365,656 |
|
|
984,372 |
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