NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of
$67.7 million, or $0.77 per diluted share, for the first quarter
ended March 31, 2022, which compares to $60.5 million, or $0.69 per
diluted share, in the fourth quarter ended December 31, 2021 and
$52.9 million, or $0.61 per diluted share, in the first quarter
ended March 31, 2021. Adjusted net income for the quarter was $67.5
million, or $0.77 per diluted share, which compares to $63.5
million, or $0.73 per diluted share, in the fourth quarter ended
December 31, 2021 and $53.4 million, or $0.62 per diluted share, in
the first quarter ended March 31, 2021. 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 that it has entered
into a $290 million excess of loss reinsurance agreement with a
high-quality panel of third-party reinsurers, covering an existing
portfolio of mortgage insurance policies written primarily from
October 1, 2021 through March 31, 2022. The agreement provides
National MI with protection for aggregate losses on subject loans
beginning at a 2.00% cumulative claim rate threshold and continuing
up through a 6.75% aggregate detachment level. National MI expects
to receive full PMIERs credit for the transaction, subject to GSE
approval.
Adam Pollitzer, President and Chief Executive
Officer of National MI, said, “We delivered strong results in the
first quarter, with significant new business production and
improving persistency driving growth in our high-quality insured
portfolio, and favorable credit performance driving significant
profitability and strong mid-teen returns. We also began to execute
under our recently announced common stock repurchase program and
saw continued success in the reinsurance market, securing
incremental PMIERs funding and valuable risk protection with our
excess of loss agreement. Looking forward, National MI is well
positioned to lead with impact, innovation and success, and to
continue building franchise value, embedded portfolio value and
shareholder value.”
Selected first quarter 2022 highlights
include:
- Primary insurance-in-force at quarter end was $158.9 billion,
up 4% from $152.3 billion in the fourth quarter and 28% compared to
$123.8 billion in the first quarter of 2021
- Net premiums earned were $116.5 million, up 2% from $113.9
million in the fourth quarter and 10% compared to $105.9 million in
the first quarter of 2021
- Underwriting and operating expenses were $32.9 million, down
15% from $38.8 million in the fourth quarter and 3% compared to
$34.1 million in the first quarter of 2021
- Insurance claims and claim expenses was a benefit of $0.6
million, compared to a benefit of $0.5 million in the fourth
quarter and an expense of $5.0 million in the first quarter of
2021
- Shareholders’ equity was $1.5 billion at quarter end and book
value per share was $17.84. Book value per share excluding the
impact of net unrealized gains and losses in the investment
portfolio was $18.97, up 4% compared to $18.23 per share in the
fourth quarter and 18% compared to $16.02 per share in the first
quarter of 2021
- Annualized return on equity for the quarter was 17.5% and
annualized adjusted return on equity was 17.4%
- At quarter-end, total PMIERs available assets were $2.1 billion
and net risk-based required assets were $1.3 billion
|
|
Quarter Ended |
Quarter Ended |
Quarter Ended |
Change(1) |
Change(1) |
|
|
3/31/2022 |
12/31/2021 |
3/31/2021 |
Q/Q |
Y/Y |
INSURANCE METRICS ($billions) |
Primary Insurance-in-Force |
$ |
158.9 |
|
|
$ |
152.3 |
|
|
|
$ |
123.8 |
|
|
4 |
|
% |
28 |
|
% |
New Insurance Written - NIW |
|
|
|
|
|
|
Monthly premium |
|
13.1 |
|
|
|
17.0 |
|
|
|
|
23.8 |
|
|
(23 |
) |
% |
(45 |
) |
% |
|
Single premium |
|
1.1 |
|
|
|
1.4 |
|
|
|
|
2.6 |
|
|
(22 |
) |
% |
(59 |
) |
% |
|
Total(2) |
|
14.2 |
|
|
|
18.3 |
|
|
|
|
26.4 |
|
|
(23 |
) |
% |
(46 |
) |
% |
|
|
|
|
|
|
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share
amounts) |
|
|
|
|
|
|
Net Premiums Earned |
|
116.5 |
|
|
|
113.9 |
|
|
|
|
105.9 |
|
|
2 |
|
% |
10 |
|
% |
Insurance Claims and Claim (Benefits) Expenses |
|
(0.6 |
) |
|
|
(0.5 |
) |
|
|
|
5.0 |
|
|
24 |
|
% |
(112 |
) |
% |
Underwriting and Operating Expenses |
|
32.9 |
|
|
|
38.8 |
|
|
|
|
34.1 |
|
|
(15 |
) |
% |
(3 |
) |
% |
Net Income |
|
67.7 |
|
|
|
60.5 |
|
|
|
|
52.9 |
|
|
12 |
|
% |
28 |
|
% |
Adjusted Net Income |
|
67.5 |
|
|
|
63.5 |
|
|
|
|
53.4 |
|
|
6 |
|
% |
26 |
|
% |
Book Value per Share (excluding net unrealized gains and
losses)(3) |
|
18.97 |
|
|
|
18.23 |
|
|
|
|
16.02 |
|
|
4 |
|
% |
18 |
|
% |
Loss Ratio |
|
(0.5 |
) |
% |
|
(0.4 |
) |
% |
|
|
4.7 |
|
% |
|
|
Expense Ratio |
|
28.3 |
|
% |
|
34.1 |
|
% |
|
|
32.2 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Percentages may not be replicated based on the
rounded figures presented in the table.(2) Total may not
foot due to rounding. (3) Book value per share
(excluding net unrealized gains and losses) is defined as total
shareholder's equity, excluding the after-tax effects of unrealized
gains and losses on our investment portfolio, divided by shares
outstanding.
Conference Call and Webcast
Details The company will hold a
conference call, which will be webcast live today, May 4, 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: 6698448 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 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;
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 to 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, the U.S.
Department of Agriculture's Rural Housing Service and the U.S.
Department of Veterans Affairs, and potential market entry by new
competitors or consolidation of existing competitors; developments
in the world's financial, capital and credit 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 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;
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 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 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; 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,
2021, 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. 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
(loss) income (unaudited) |
For the three months ended March 31, |
|
|
2022 |
|
|
|
|
2021 |
|
|
Revenues |
(In Thousands, except for per share data) |
Net premiums earned |
$ |
116,495 |
|
|
|
$ |
105,879 |
|
|
Net investment income |
|
10,199 |
|
|
|
|
8,814 |
|
|
Net realized investment gains |
|
408 |
|
|
|
|
— |
|
|
Other revenues |
|
339 |
|
|
|
|
501 |
|
|
Total revenues |
|
127,441 |
|
|
|
|
115,194 |
|
|
Expenses |
|
|
|
Insurance claims and claim (benefits) expenses |
|
(619 |
) |
|
|
|
4,962 |
|
|
Underwriting and operating expenses |
|
32,935 |
|
|
|
|
34,065 |
|
|
Service expenses |
|
430 |
|
|
|
|
591 |
|
|
Interest expense |
|
8,041 |
|
|
|
|
7,915 |
|
|
(Gain) loss from change in fair value of warrant liability |
|
(93 |
) |
|
|
|
205 |
|
|
Total expenses |
|
40,694 |
|
|
|
|
47,738 |
|
|
|
|
|
|
Income before income taxes |
|
86,747 |
|
|
|
|
67,456 |
|
|
Income tax expense |
|
19,067 |
|
|
|
|
14,565 |
|
|
Net income |
$ |
67,680 |
|
|
|
$ |
52,891 |
|
|
|
|
|
|
Earnings per share |
|
|
|
Basic |
$ |
0.79 |
|
|
|
$ |
0.62 |
|
|
Diluted |
$ |
0.77 |
|
|
|
$ |
0.61 |
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
Basic |
|
85,953 |
|
|
|
|
85,317 |
|
|
Diluted |
|
87,310 |
|
|
|
|
86,487 |
|
|
|
|
|
|
Loss ratio(1) |
|
(0.5 |
) |
% |
|
|
4.7 |
|
% |
Expense ratio(2) |
|
28.3 |
|
% |
|
|
32.2 |
|
% |
Combined ratio(3) |
|
27.7 |
|
% |
|
|
36.9 |
|
% |
|
|
|
|
Net income |
$ |
67,680 |
|
|
|
$ |
52,891 |
|
|
|
|
|
|
Other comprehensive loss, net of tax: |
|
|
|
Unrealized losses in accumulated other comprehensive income, net of
tax benefit of $26,176 and $11,997 for the quarters ended March 31,
2022 and 2021, respectively |
|
(98,471 |
) |
|
|
|
(45,133 |
) |
|
Reclassification adjustment for realized gains included in net
income, net of tax expense $86 for the quarter ended March 31,
2022 |
|
(323 |
) |
|
|
|
— |
|
|
Other comprehensive loss, net of tax |
|
(98,794 |
) |
|
|
|
(45,133 |
) |
|
Comprehensive (loss) income |
$ |
(31,114 |
) |
|
|
$ |
7,758 |
|
|
|
|
|
|
|
|
|
|
|
|
(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) |
March 31, 2022 |
|
December 31, 2021 |
Assets |
(In Thousands, except for share data) |
Fixed maturities, available-for-sale, at fair value (amortized cost
of $2,111,869 and $2,078,773 as of March 31, 2022 and December 31,
2021, respectively) |
$ |
1,993,972 |
|
|
$ |
2,085,931 |
|
Cash and cash equivalents (including restricted cash of $3,057 and
$3,165 as of March 31, 2022 and December 31, 2021,
respectively) |
|
130,906 |
|
|
|
76,646 |
|
Premiums receivable |
|
60,526 |
|
|
|
60,358 |
|
Accrued investment income |
|
12,421 |
|
|
|
11,900 |
|
Prepaid expenses |
|
5,477 |
|
|
|
3,530 |
|
Deferred policy acquisition costs, net |
|
59,727 |
|
|
|
59,584 |
|
Software and equipment, net |
|
32,386 |
|
|
|
32,047 |
|
Intangible assets and goodwill |
|
3,634 |
|
|
|
3,634 |
|
Prepaid reinsurance premiums |
|
2,011 |
|
|
|
2,393 |
|
Reinsurance recoverable |
|
20,080 |
|
|
|
20,320 |
|
Other assets |
|
102,804 |
|
|
|
94,238 |
|
Total assets |
$ |
2,423,944 |
|
|
$ |
2,450,581 |
|
|
|
|
|
Liabilities |
|
|
|
Debt |
$ |
394,969 |
|
|
$ |
394,623 |
|
Unearned premiums |
|
138,393 |
|
|
|
139,237 |
|
Accounts payable and accrued expenses |
|
76,923 |
|
|
|
72,000 |
|
Reserve for insurance claims and claim expenses |
|
102,372 |
|
|
|
103,551 |
|
Reinsurance funds withheld |
|
5,343 |
|
|
|
5,601 |
|
Warrant liability, at fair value |
|
1,416 |
|
|
|
2,363 |
|
Deferred tax liability, net |
|
156,966 |
|
|
|
164,175 |
|
Other liabilities |
|
12,520 |
|
|
|
3,245 |
|
Total liabilities |
|
888,902 |
|
|
|
884,795 |
|
|
|
|
|
Shareholders' equity |
|
|
|
Common stock - class A shares, $0.01 par value; 86,274,184 shares
issued and 86,038,840 shares outstanding as of March 31, 2022 and
85,792,849 shares issued and outstanding as of December 31, 2021
(250,000,000 shares authorized) |
|
863 |
|
|
|
858 |
|
Additional paid-in capital |
|
960,667 |
|
|
|
955,302 |
|
Treasury Stock, at cost, 235,344 and 0 common shares as of March
31, 2022 and December 31, 2021, respectively |
|
(5,000 |
) |
|
|
— |
|
Accumulated other comprehensive (loss) income, net of tax |
|
(97,309 |
) |
|
|
1,485 |
|
Retained earnings |
|
675,821 |
|
|
|
608,141 |
|
Total shareholders' equity |
|
1,535,042 |
|
|
|
1,565,786 |
|
Total liabilities and shareholders' equity |
$ |
2,423,944 |
|
|
$ |
2,450,581 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measure Reconciliations
(unaudited) |
|
For the three months ended |
|
3/31/2022 |
|
12/31/2021 |
|
3/31/2021 |
As Reported |
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
Net premiums earned |
$ |
116,495 |
|
|
|
$ |
113,933 |
|
|
|
$ |
105,879 |
|
|
Net investment income |
|
10,199 |
|
|
|
|
10,045 |
|
|
|
|
8,814 |
|
|
Net realized investment gains |
|
408 |
|
|
|
|
714 |
|
|
|
|
— |
|
|
Other revenues |
|
339 |
|
|
|
|
380 |
|
|
|
|
501 |
|
|
Total revenues |
|
127,441 |
|
|
|
|
125,072 |
|
|
|
|
115,194 |
|
|
Expenses |
|
|
|
|
|
Insurance claims and claim (benefits) expenses |
|
(619 |
) |
|
|
|
(500 |
) |
|
|
|
4,962 |
|
|
Underwriting and operating expenses |
|
32,935 |
|
|
|
|
38,843 |
|
|
|
|
34,065 |
|
|
Service expenses |
|
430 |
|
|
|
|
650 |
|
|
|
|
591 |
|
|
Interest expense |
|
8,041 |
|
|
|
|
8,029 |
|
|
|
|
7,915 |
|
|
(Gain) loss from change in fair value of warrant liability |
|
(93 |
) |
|
|
|
(112 |
) |
|
|
|
205 |
|
|
Total expenses |
|
40,694 |
|
|
|
|
46,910 |
|
|
|
|
47,738 |
|
|
|
|
|
|
|
|
Income before income taxes |
|
86,747 |
|
|
|
|
78,162 |
|
|
|
|
67,456 |
|
|
Income tax expense |
|
19,067 |
|
|
|
|
17,639 |
|
|
|
|
14,565 |
|
|
Net income |
$ |
67,680 |
|
|
|
$ |
60,523 |
|
|
|
$ |
52,891 |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
Net realized investment gains |
|
(408 |
) |
|
|
|
(714 |
) |
|
|
|
— |
|
|
(Gain) loss from change in fair value of warrant liability |
|
(93 |
) |
|
|
|
(112 |
) |
|
|
|
205 |
|
|
Capital markets transaction costs |
|
260 |
|
|
|
|
1,505 |
|
|
|
|
378 |
|
|
Other infrequent, unusual or non-operating items(1) |
|
— |
|
|
|
|
2,540 |
|
|
|
|
— |
|
|
Adjusted income before taxes |
|
86,506 |
|
|
|
|
81,381 |
|
|
|
|
68,039 |
|
|
|
|
|
|
|
|
Income tax expense on adjustments(2) |
|
(31 |
) |
|
|
|
251 |
|
|
|
|
79 |
|
|
Adjusted net income |
$ |
67,470 |
|
|
|
$ |
63,491 |
|
|
|
$ |
53,395 |
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding |
|
87,310 |
|
|
|
|
87,117 |
|
|
|
|
86,487 |
|
|
|
|
|
|
|
|
Diluted EPS(3) |
$ |
0.77 |
|
|
|
$ |
0.69 |
|
|
|
$ |
0.61 |
|
|
Adjusted diluted EPS |
$ |
0.77 |
|
|
|
$ |
0.73 |
|
|
|
$ |
0.62 |
|
|
|
|
|
|
|
|
Return-on-equity |
|
17.5 |
|
% |
|
|
15.7 |
|
% |
|
|
15.4 |
|
% |
Adjusted return-on-equity |
|
17.4 |
|
% |
|
|
16.5 |
|
% |
|
|
15.5 |
|
% |
|
|
|
|
|
|
Expense ratio(4) |
|
28.3 |
|
% |
|
|
34.1 |
|
% |
|
|
32.2 |
|
% |
Adjusted expense ratio(5) |
|
28.0 |
|
% |
|
|
30.5 |
|
% |
|
|
31.8 |
|
% |
|
|
|
|
|
|
Combined ratio(6) |
|
27.7 |
|
% |
|
|
33.7 |
|
% |
|
|
36.9 |
|
% |
Adjusted combined ratio(7) |
|
27.5 |
|
% |
|
|
30.1 |
|
% |
|
|
36.5 |
|
% |
|
|
|
|
|
|
Book value per share(8) |
$ |
17.84 |
|
|
|
$ |
18.25 |
|
|
|
$ |
16.13 |
|
|
Book value per share (excluding net unrealized gains and
losses)(9) |
$ |
18.97 |
|
|
|
$ |
18.23 |
|
|
|
$ |
16.02 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents severance,
restricted stock modification and other expenses incurred in
connection with the CEO transition announced on September 9,
2021.(2) 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.(3) Diluted net income for
the quarter ended March 31, 2022 and December 31, 2021, excludes
the impact of the warrant fair value change as it was dilutive. For
the quarter ended March 31, 2021, diluted net income equals
reported net income as the impact of the warrant fair value change
was anti-dilutive.(4) Expense ratio is calculated
by dividing underwriting and operating expenses by net premiums
earned.(5) 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.(6) Combined ratio
is calculated by dividing the total of underwriting and operating
expenses and insurance claims and claims expense by net premiums
earned.(7) 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.(8) Book value per
share is calculated by dividing total shareholder's equity by
shares outstanding.(9) 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 |
|
2022 |
|
|
|
|
2021 |
|
|
|
2020 |
|
|
|
March 31 |
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
Revenues |
(In Thousands, except for per share data) |
Net premiums earned |
$ |
116,495 |
|
|
|
$ |
113,933 |
|
|
|
$ |
113,594 |
|
|
|
$ |
|
110,888 |
|
|
|
$ |
|
105,879 |
|
|
$ |
100,709 |
|
|
Net investment income |
|
10,199 |
|
|
|
|
10,045 |
|
|
|
|
9,831 |
|
|
|
|
|
9,382 |
|
|
|
|
|
8,814 |
|
|
|
8,386 |
|
|
Net realized investment gains |
|
408 |
|
|
|
|
714 |
|
|
|
|
3 |
|
|
|
|
|
12 |
|
|
|
|
|
— |
|
|
|
295 |
|
|
Other revenues |
|
339 |
|
|
|
|
380 |
|
|
|
|
613 |
|
|
|
|
|
483 |
|
|
|
|
|
501 |
|
|
|
513 |
|
|
Total revenues |
|
127,441 |
|
|
|
|
125,072 |
|
|
|
|
124,041 |
|
|
|
|
|
120,765 |
|
|
|
|
|
115,194 |
|
|
|
109,903 |
|
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Insurance claims and claim (benefits) expenses |
|
(619 |
) |
|
|
|
(500 |
) |
|
|
|
3,204 |
|
|
|
|
|
4,640 |
|
|
|
|
|
4,962 |
|
|
|
3,549 |
|
|
Underwriting and operating expenses |
|
32,935 |
|
|
|
|
38,843 |
|
|
|
|
34,669 |
|
|
|
|
|
34,725 |
|
|
|
|
|
34,065 |
|
|
|
34,994 |
|
|
Service expenses |
|
430 |
|
|
|
|
650 |
|
|
|
|
787 |
|
|
|
|
|
481 |
|
|
|
|
|
591 |
|
|
|
459 |
|
|
Interest expense |
|
8,041 |
|
|
|
|
8,029 |
|
|
|
|
7,930 |
|
|
|
|
|
7,922 |
|
|
|
|
|
7,915 |
|
|
|
7,906 |
|
|
(Gain) loss from change in fair value of warrant liability |
|
(93 |
) |
|
|
|
(112 |
) |
|
|
|
— |
|
|
|
|
|
(658 |
) |
|
|
|
|
205 |
|
|
|
1,379 |
|
|
Total expenses |
|
40,694 |
|
|
|
|
46,910 |
|
|
|
|
46,590 |
|
|
|
|
|
47,110 |
|
|
|
|
|
47,738 |
|
|
|
48,287 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
86,747 |
|
|
|
|
78,162 |
|
|
|
|
77,451 |
|
|
|
|
|
73,655 |
|
|
|
|
|
67,456 |
|
|
|
61,616 |
|
|
Income tax expense |
|
19,067 |
|
|
|
|
17,639 |
|
|
|
|
17,258 |
|
|
|
|
|
16,133 |
|
|
|
|
|
14,565 |
|
|
|
13,348 |
|
|
Net income |
$ |
67,680 |
|
|
|
$ |
60,523 |
|
|
|
$ |
60,193 |
|
|
|
$ |
|
57,522 |
|
|
|
$ |
|
52,891 |
|
|
$ |
48,268 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.79 |
|
|
|
$ |
0.71 |
|
|
|
$ |
0.70 |
|
|
|
$ |
|
0.67 |
|
|
|
$ |
|
0.62 |
|
|
$ |
0.57 |
|
|
Diluted |
$ |
0.77 |
|
|
|
$ |
0.69 |
|
|
|
$ |
0.69 |
|
|
|
$ |
|
0.65 |
|
|
|
$ |
|
0.61 |
|
|
$ |
0.56 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
85,953 |
|
|
|
|
85,757 |
|
|
|
|
85,721 |
|
|
|
|
|
85,647 |
|
|
|
|
|
85,317 |
|
|
|
84,956 |
|
|
Diluted |
|
87,310 |
|
|
|
|
87,117 |
|
|
|
|
86,880 |
|
|
|
|
|
86,819 |
|
|
|
|
|
86,487 |
|
|
|
86,250 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
Loss Ratio(1) |
|
(0.5 |
) |
% |
|
|
(0.4 |
) |
% |
|
|
2.8 |
|
% |
|
|
|
4.2 |
|
% |
|
|
|
4.7 |
% |
|
|
3.5 |
|
% |
Expense Ratio(2) |
|
28.3 |
|
% |
|
|
34.1 |
|
% |
|
|
30.5 |
|
% |
|
|
|
31.3 |
|
% |
|
|
|
32.2 |
% |
|
|
34.7 |
|
% |
Combined ratio(3) |
|
27.7 |
|
% |
|
|
33.7 |
|
% |
|
|
33.3 |
|
% |
|
|
|
35.5 |
|
% |
|
|
|
36.9 |
% |
|
|
38.3 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
($ Values In Millions, except as noted below) |
New insurance written |
$ |
14,165 |
|
|
|
$ |
18,342 |
|
|
|
$ |
18,084 |
|
|
|
$ |
22,751 |
|
|
|
$ |
26,397 |
|
|
|
$ |
19,782 |
|
|
New risk written |
|
3,721 |
|
|
|
|
4,786 |
|
|
|
|
4,640 |
|
|
|
|
5,650 |
|
|
|
|
6,531 |
|
|
|
|
4,868 |
|
|
Insurance in force (IIF)(1) |
|
158,877 |
|
|
|
|
152,343 |
|
|
|
|
143,618 |
|
|
|
|
136,598 |
|
|
|
|
123,777 |
|
|
|
|
111,252 |
|
|
Risk in force(1) |
|
40,522 |
|
|
|
|
38,661 |
|
|
|
|
36,253 |
|
|
|
|
34,366 |
|
|
|
|
31,206 |
|
|
|
|
28,164 |
|
|
Policies in force (count)(1) |
|
526,976 |
|
|
|
|
512,316 |
|
|
|
|
490,714 |
|
|
|
|
471,794 |
|
|
|
|
436,652 |
|
|
|
|
399,429 |
|
|
Average loan size($ value in thousands)(1) |
$ |
301 |
|
|
|
$ |
297 |
|
|
|
$ |
293 |
|
|
|
$ |
290 |
|
|
|
$ |
283 |
|
|
|
$ |
279 |
|
|
Coverage percentage(2) |
|
25.5 |
|
% |
|
|
25.4 |
|
% |
|
|
25.2 |
|
% |
|
|
25.2 |
|
% |
|
|
25.2 |
|
% |
|
|
25.3 |
|
% |
Loans in default (count)(1) |
|
5,238 |
|
|
|
|
6,227 |
|
|
|
|
7,670 |
|
|
|
|
8,764 |
|
|
|
|
11,090 |
|
|
|
|
12,209 |
|
|
Default rate(1) |
|
0.99 |
|
% |
|
|
1.22 |
|
% |
|
|
1.56 |
|
% |
|
|
1.86 |
|
% |
|
|
2.54 |
|
% |
|
|
3.06 |
|
% |
Risk in force on defaulted loans(1) |
$ |
362 |
|
|
|
$ |
435 |
|
|
|
$ |
546 |
|
|
|
$ |
625 |
|
|
|
$ |
785 |
|
|
|
$ |
874 |
|
|
Net premium yield(3) |
|
0.30 |
|
% |
|
|
0.31 |
|
% |
|
|
0.32 |
|
% |
|
|
0.34 |
|
% |
|
|
0.36 |
|
% |
|
|
0.37 |
|
% |
Earnings from cancellations |
$ |
2.9 |
|
|
|
$ |
5.1 |
|
|
|
$ |
7.7 |
|
|
|
$ |
7.0 |
|
|
|
$ |
9.9 |
|
|
|
$ |
11.7 |
|
|
Annual persistency(4) |
|
71.5 |
|
% |
|
|
63.8 |
|
% |
|
|
58.1 |
|
% |
|
|
53.9 |
|
% |
|
|
51.9 |
|
% |
|
|
55.9 |
|
% |
Quarterly run-off(5) |
|
5.0 |
|
% |
|
|
6.7 |
|
% |
|
|
8.1 |
|
% |
|
|
8.0 |
|
% |
|
|
12.5 |
|
% |
|
|
12.5 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
Three months ended |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
(In Millions) |
Monthly |
$ |
13,094 |
|
$ |
16,972 |
|
$ |
16,861 |
|
$ |
19,422 |
|
$ |
23,764 |
|
$ |
17,789 |
Single |
|
1,071 |
|
|
1,370 |
|
|
1,223 |
|
|
3,329 |
|
|
2,633 |
|
|
1,993 |
Primary |
$ |
14,165 |
|
$ |
18,342 |
|
$ |
18,084 |
|
$ |
22,751 |
|
$ |
26,397 |
|
$ |
19,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary and pool IIF |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
(In Millions) |
Monthly |
$ |
139,156 |
|
$ |
133,104 |
|
$ |
124,767 |
|
$ |
117,629 |
|
$ |
106,920 |
|
$ |
95,336 |
Single |
|
19,721 |
|
|
19,239 |
|
|
18,851 |
|
|
18,969 |
|
|
16,857 |
|
|
15,916 |
Primary |
|
158,877 |
|
|
152,343 |
|
|
143,618 |
|
|
136,598 |
|
|
123,777 |
|
|
111,252 |
|
|
|
|
|
|
|
|
|
|
|
|
Pool |
|
1,162 |
|
|
1,229 |
|
|
1,339 |
|
|
1,460 |
|
|
1,642 |
|
|
1,855 |
Total |
$ |
160,039 |
|
$ |
153,572 |
|
$ |
144,957 |
|
$ |
138,058 |
|
$ |
125,419 |
|
$ |
113,107 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 collectively, the ILN Transactions) for the periods
indicated.
|
For the three months ended |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
June 30, 2021 |
|
March 31, 2021 |
|
December 31, 2020 |
|
(In Thousands) |
The QSR Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded risk-in-force |
$ |
8,504,853 |
|
|
$ |
8,194,604 |
|
|
$ |
7,610,870 |
|
|
$ |
7,113,707 |
|
|
$ |
6,330,409 |
|
|
$ |
5,543,969 |
|
Ceded premiums earned |
|
(29,005 |
) |
|
|
(28,490 |
) |
|
|
(28,366 |
) |
|
|
(27,537 |
) |
|
|
(25,747 |
) |
|
|
(24,161 |
) |
Ceded claims and claim expenses |
|
(159 |
) |
|
|
19 |
|
|
|
840 |
|
|
|
1, 194 |
|
|
|
1,180 |
|
|
|
601 |
|
Ceding commission earned |
|
5,886 |
|
|
|
6,208 |
|
|
|
6,142 |
|
|
|
5,961 |
|
|
|
5,162 |
|
|
|
4,787 |
|
Profit commission |
|
16,723 |
|
|
|
16,142 |
|
|
|
15,191 |
|
|
|
14,391 |
|
|
|
13,380 |
|
|
|
13,184 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The ILN Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(10,939 |
) |
|
$ |
(11,344 |
) |
|
$ |
(10,390 |
) |
|
$ |
(10,169 |
) |
|
$ |
(9,397 |
) |
|
$ |
(9,422 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary NIW by FICO |
For the three months ended |
|
March 31, 2022 |
|
|
December 31, 2021 |
|
|
March 31, 2021 |
|
($ In Millions) |
>= 760 |
$ |
6,372 |
|
|
$ |
8,032 |
|
|
$ |
12,914 |
|
740-759 |
|
2,388 |
|
|
|
3,115 |
|
|
|
5,312 |
|
720-739 |
|
1,937 |
|
|
|
2,833 |
|
|
|
3,963 |
|
700-719 |
|
1,639 |
|
|
|
2,196 |
|
|
|
2,358 |
|
680-699 |
|
1,244 |
|
|
|
1,653 |
|
|
|
1,360 |
|
<=679 |
|
585 |
|
|
|
514 |
|
|
|
490 |
|
Total |
$ |
14,165 |
|
|
$ |
18,342 |
|
|
$ |
26,397 |
|
Weighted average FICO |
|
748 |
|
|
|
748 |
|
|
|
755 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary NIW by LTV |
For the three months ended |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
1,366 |
|
|
$ |
1,569 |
|
|
$ |
2,451 |
|
90.01% to 95.00% |
|
7,055 |
|
|
|
8,879 |
|
|
|
11,051 |
|
85.01% to 90.00% |
|
3,868 |
|
|
|
5,583 |
|
|
|
7,848 |
|
85.00% and below |
|
1,876 |
|
|
|
2,311 |
|
|
|
5,047 |
|
Total |
$ |
14,165 |
|
|
$ |
18,342 |
|
|
$ |
26,397 |
|
Weighted average LTV |
|
92.1 |
% |
|
|
91.9 |
% |
|
|
91.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primary NIW by purchase/refinance mix |
For the three months ended |
|
March 31, 2022 |
|
|
December 31, 2021 |
|
|
March 31, 2021 |
|
(In Millions) |
Purchase |
$ |
13,398 |
|
|
$ |
17,097 |
|
|
$ |
17,909 |
|
Refinance |
|
767 |
|
|
|
1,245 |
|
|
|
8,488 |
|
Total |
$ |
14,165 |
|
|
$ |
18,342 |
|
|
$ |
26,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The table below presents a summary of our primary IIF and RIF by
book year as of March 31, 2022.
|
|
Primary IIF and RIF |
As of March 31, 2022 |
|
IIF |
|
RIF |
|
(In Millions) |
March 31, 2022 |
$ |
14,076 |
|
$ |
3,699 |
2021 |
|
78,955 |
|
|
20,058 |
2020 |
|
41,311 |
|
|
10,431 |
2019 |
|
11,102 |
|
|
2,910 |
2018 |
|
4,411 |
|
|
1,127 |
2017 and before |
|
9,022 |
|
|
2,297 |
Total |
$ |
158,877 |
|
$ |
40,522 |
|
|
|
|
|
|
The tables below
present our total primary IIF and RIF by FICO and LTV and total
primary RIF by loan type as of the dates indicated.
|
|
Primary IIF by
FICO |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
>= 760 |
$ |
79,141 |
|
$ |
76,449 |
|
$ |
63,919 |
740-759 |
|
27,406 |
|
|
26,219 |
|
|
20,537 |
720-739 |
|
22,176 |
|
|
21,356 |
|
|
17,167 |
700-719 |
|
15,236 |
|
|
14,401 |
|
|
11,536 |
680-699 |
|
10,347 |
|
|
9,654 |
|
|
7,329 |
<=679 |
|
4,571 |
|
|
4,264 |
|
|
3,289 |
Total |
$ |
158,877 |
|
$ |
152,343 |
|
$ |
123,777 |
|
|
|
|
|
|
|
|
|
|
|
Primary RIF by
FICO |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
>= 760 |
$ |
19,883 |
|
$ |
19,125 |
|
$ |
15,920 |
740-759 |
|
7,054 |
|
|
6,707 |
|
|
5,214 |
720-739 |
|
5,735 |
|
|
5,497 |
|
|
4,378 |
700-719 |
|
4,010 |
|
|
3,771 |
|
|
2,981 |
680-699 |
|
2,706 |
|
|
2,511 |
|
|
1,896 |
<=679 |
|
1,134 |
|
|
1,050 |
|
|
817 |
Total |
$ |
40,522 |
|
$ |
38,661 |
|
$ |
31,206 |
|
|
|
|
|
|
|
|
|
|
|
Primary IIF by
LTV |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
14,918 |
|
$ |
14,058 |
|
$ |
10,616 |
90.01% to 95.00% |
|
72,381 |
|
|
68,537 |
|
|
54,832 |
85.01% to 90.00% |
|
48,406 |
|
|
46,971 |
|
|
40,057 |
85.00% and below |
|
23,172 |
|
|
22,777 |
|
|
18,272 |
Total |
$ |
158,877 |
|
$ |
152,343 |
|
$ |
123,777 |
|
|
|
|
|
|
|
|
|
|
|
Primary RIF by
LTV |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
4,527 |
|
$ |
4,230 |
|
$ |
3,106 |
90.01% to 95.00% |
|
21,358 |
|
|
20,210 |
|
|
16,139 |
85.01% to 90.00% |
|
11,895 |
|
|
11,533 |
|
|
9,818 |
85.00% and below |
|
2,742 |
|
|
2,688 |
|
|
2,143 |
Total |
$ |
40,522 |
|
$ |
38,661 |
|
$ |
31,206 |
|
|
|
|
|
|
|
|
|
|
|
Primary RIF by Loan
Type |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
|
|
|
|
|
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 |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Millions) |
IIF, beginning of period |
$ |
152,343 |
|
|
$ |
143,618 |
|
|
$ |
111,252 |
|
NIW |
|
14,165 |
|
|
|
18,342 |
|
|
|
26,397 |
|
Cancellations, principal repayments and other reductions |
|
(7,631 |
) |
|
|
(9,617 |
) |
|
|
(13,872 |
) |
IIF, end of period |
$ |
158,877 |
|
|
$ |
152,343 |
|
|
$ |
123,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Dispersion
The following
table shows the distribution by state of our primary RIF as of the
periods indicated.
|
|
Top 10 primary RIF by
state |
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
California |
10.8 |
% |
|
10.4 |
% |
|
10.8 |
% |
Texas |
9.5 |
|
|
9.7 |
|
|
9.5 |
|
Florida |
8.4 |
|
|
8.6 |
|
|
7.9 |
|
Virginia |
4.5 |
|
|
4.7 |
|
|
5.0 |
|
Georgia |
3.9 |
|
|
3.8 |
|
|
3.3 |
|
Illinois |
3.8 |
|
|
3.6 |
|
|
3.7 |
|
Colorado |
3.7 |
|
|
3.8 |
|
|
4.1 |
|
Washington |
3.7 |
|
|
3.7 |
|
|
3.5 |
|
Maryland |
3.6 |
|
|
3.7 |
|
|
3.8 |
|
Pennsylvania |
3.3 |
|
|
3.3 |
|
|
3.3 |
|
Total |
55.2 |
% |
|
55.3 |
% |
|
54.9 |
% |
|
|
|
|
|
|
The table below
presents selected primary portfolio statistics, by book year, as of
March 31, 2022.
|
|
|
As of March 31, 2022 |
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 |
|
3 |
% |
|
655 |
|
40 |
|
1 |
|
1 |
|
0.5 |
% |
|
0.3 |
% |
|
2.5 |
% |
2014 |
|
3,451 |
|
|
253 |
|
7 |
% |
|
14,786 |
|
1,568 |
|
39 |
|
49 |
|
4.2 |
% |
|
0.6 |
% |
|
2.5 |
% |
2015 |
|
12,422 |
|
|
1,555 |
|
13 |
% |
|
52,548 |
|
8,564 |
|
218 |
|
119 |
|
3.3 |
% |
|
0.6 |
% |
|
2.5 |
% |
2016 |
|
21,187 |
|
|
3,409 |
|
16 |
% |
|
83,626 |
|
17,318 |
|
487 |
|
134 |
|
3.0 |
% |
|
0.7 |
% |
|
2.8 |
% |
2017 |
|
21,582 |
|
|
3,799 |
|
18 |
% |
|
85,897 |
|
19,700 |
|
783 |
|
106 |
|
4.3 |
% |
|
1.0 |
% |
|
4.0 |
% |
2018 |
|
27,295 |
|
|
4,411 |
|
16 |
% |
|
104,043 |
|
22,121 |
|
1,032 |
|
93 |
|
7.6 |
% |
|
1.1 |
% |
|
4.7 |
% |
2019 |
|
45,141 |
|
|
11,102 |
|
25 |
% |
|
148,423 |
|
45,603 |
|
1,118 |
|
23 |
|
10.1 |
% |
|
0.8 |
% |
|
2.5 |
% |
2020 |
|
62,702 |
|
|
41,311 |
|
66 |
% |
|
186,174 |
|
131,277 |
|
902 |
|
1 |
|
5.1 |
% |
|
0.5 |
% |
|
0.7 |
% |
2021 |
|
85,574 |
|
|
78,955 |
|
92 |
% |
|
257,972 |
|
242,014 |
|
658 |
|
— |
|
2.8 |
% |
|
0.3 |
% |
|
0.3 |
% |
2022 |
|
14,165 |
|
|
14,076 |
|
99 |
% |
|
38,974 |
|
38,771 |
|
— |
|
— |
|
— |
% |
|
— |
% |
|
— |
% |
Total |
$ |
293,681 |
|
$ |
158,877 |
|
|
|
973,098 |
|
526,976 |
|
5,238 |
|
526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 (benefits)
expenses:
|
|
|
For the three months ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
(In Thousands) |
Beginning balance |
$ |
103,551 |
|
|
$ |
90,567 |
|
Less reinsurance
recoverables(1) |
|
(20,320 |
) |
|
|
(17,608 |
) |
Beginning balance, net of
reinsurance recoverables |
|
83,231 |
|
|
|
72,959 |
|
|
|
|
|
Add claims incurred: |
|
|
|
Claims and claim (benefits) expenses incurred: |
|
|
|
Current year(2) |
|
10,080 |
|
|
|
10,557 |
|
Prior years(3) |
|
(10,699 |
) |
|
|
(5,595 |
) |
Total claims and claim (benefits) expenses incurred |
|
(619 |
) |
|
|
4,962 |
|
|
|
|
|
Less claims paid: |
|
|
|
Claims and claim expenses paid: |
|
|
|
Current year(2) |
|
— |
|
|
|
12 |
|
Prior years(3) |
|
320 |
|
|
|
492 |
|
Total claims and claim expenses paid |
|
320 |
|
|
|
504 |
|
|
|
|
|
Reserve at end of period, net of reinsurance recoverables |
|
82,292 |
|
|
|
77,417 |
|
Add reinsurance recoverables(1) |
|
20,080 |
|
|
|
18,686 |
|
Ending balance |
$ |
102,372 |
|
|
$ |
96,103 |
|
|
|
|
|
|
|
|
|
(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 $5.2 million
attributed to net case reserves and $4.7 million attributed to
net IBNR reserves for the three months ended March 31, 2022
and $5.3 million attributed to net case reserves and
$5.3 million attributed to net IBNR reserves for the three
months ended March 31, 2021.(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 $5.8 million attributed to net
case reserves and $4.7 million attributed to net IBNR reserves
for the three months ended March 31, 2022 and
$0.6 million attributed to net case reserves and
$5.0 million attributed to net IBNR reserves for the three
months ended March 31, 2021.
The following table
provides a reconciliation of the beginning and ending count of
loans in default for the periods indicated.
|
|
|
For the three months ended |
|
March 31, 2022 |
|
March 31, 2021 |
Beginning default inventory |
6,227 |
|
|
12,209 |
|
Plus: new defaults |
1,163 |
|
|
1,767 |
|
Less: cures |
(2,132 |
) |
|
(2,868 |
) |
Less: claims paid |
(19 |
) |
|
(16 |
) |
Less: rescission and claims denied |
(1 |
) |
|
(2 |
) |
Ending default inventory |
5,238 |
|
|
11,090 |
|
|
|
|
|
|
|
The following table
provides details of our claims paid, before giving effect to claims
ceded under the QSR Transactions, for the periods indicated.
|
|
|
For the three months ended |
|
March 31, 2022 |
|
March 31, 2021 |
|
(In Thousands) |
Number of claims paid(1) |
|
19 |
|
|
|
16 |
|
Total amount paid for claims |
$ |
402 |
|
|
$ |
606 |
|
Average amount paid per claim |
$ |
21 |
|
|
$ |
38 |
|
Severity(2) |
|
39 |
% |
|
|
61 |
% |
|
|
|
|
|
|
|
|
(1) Count includes six and one
claims settled without payment during the three months ended
March 31, 2022 and 2021,
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 March 31, 2022 |
|
As of March 31, 2021 |
|
(In Thousands) |
Case(1) |
$ |
18.0 |
|
$ |
7.9 |
IBNR(1)(2) |
|
1.5 |
|
|
0.8 |
Total |
$ |
19.5 |
|
$ |
8.7 |
|
|
|
|
|
|
(1) Defined as the gross
reserve per insured loan in default.(2) Amount
includes claims adjustment expenses.
The following table
provides a comparison of the PMIERs financial requirements as
reported by NMIC as of the dates indicated.
|
|
|
As of |
|
March 31, 2022 |
|
December 31, 2021 |
|
March 31, 2021 |
|
(In Thousands) |
Available Assets |
$ |
2,127,030 |
|
$ |
2,041,193 |
|
$ |
1,809,589 |
Risk-Based Required
Assets |
|
1,341,217 |
|
|
1,186,272 |
|
|
1,261,015 |
|
|
|
|
|
|
|
|
|
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