NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of
$72.9 million, or $0.86 per diluted share, for the fourth quarter
ended December 31, 2022, which compares to $76.8 million, or $0.90
per diluted share, in the third quarter ended September 30, 2022
and $60.5 million, or $0.69 per diluted share, in the fourth
quarter ended December 31, 2021. Adjusted net income for the
quarter was $72.9 million, or $0.86 per diluted share, which
compares to $76.8 million, or $0.90 per diluted share, in the third
quarter ended September 30, 2022 and $63.5 million, or $0.73 per
diluted share, in the fourth quarter ended December 31, 2021.
Net income for the full year ended December 31,
2022 was $292.9 million or $3.39 per diluted share, which compares
to $231.1 million, or $2.65 per diluted share, for the year ended
December 31, 2021. Adjusted net income for the year was $291.6
million or $3.39 per diluted share, which compares to $236.8
million, or $2.73 per diluted share, for the year ended December
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.
Adam Pollitzer, President and Chief Executive
Officer of National MI, said, “The fourth quarter capped another
year of standout success for National MI. In 2022, we delivered
strong operating performance, generated significant NIW volume and
growth in our high-quality insured portfolio, and achieved record
profitability and an 18.4% return on equity. We continued to manage
with discipline and a focus on through-the-cycle performance, and
looking forward, we’re well-positioned to continue to serve our
customers and their borrowers, support our talented team, and
deliver sustained performance and long-term value for our
shareholders.”
Selected fourth quarter 2022 highlights
include:
- Primary insurance-in-force at
quarter end was $184.0 billion, compared to $179.2 billion at the
end of the third quarter and $152.3 billion at the end of the
fourth quarter of 2021
- Net premiums earned were $119.6
million, compared to $118.3 million in the third quarter and $113.9
million in the fourth quarter of 2021
- Underwriting and operating expenses
were $26.7 million, compared to $27.1 million in the third quarter
and $38.8 million in the fourth quarter of 2021
- Insurance claims and claim expenses
were $3.4 million, compared to a benefit of $3.4 million in the
third quarter and a benefit of $0.5 million in the fourth quarter
of 2021
- Shareholders’ equity was $1.6
billion at quarter end and book value per share was $19.31. Book
value per share excluding the impact of net unrealized gains and
losses in the investment portfolio was $21.76, up 4% compared to
$20.85 in the third quarter and 19% compared to $18.23 in the
fourth quarter of 2021
- Annualized return on equity for the
quarter was 18.6%, compared to 20.1% in the third quarter and 15.7%
in the fourth quarter of 2021
- At quarter-end, total PMIERs
available assets were $2.4 billion and net risk-based required
assets were $1.2 billion
|
|
QuarterEnded |
QuarterEnded |
QuarterEnded |
Change (1) |
Change (1) |
|
|
12/31/2022 |
9/30/2022 |
12/31/2021 |
Q/Q |
Y/Y |
INSURANCE METRICS
($billions) |
Primary
Insurance-in-Force |
$ |
184.0 |
|
$ |
179.2 |
|
$ |
152.3 |
|
3 |
% |
21 |
% |
New Insurance
Written - NIW |
|
|
|
|
|
|
Monthly premium |
|
10.5 |
|
|
16.7 |
|
|
17.0 |
|
(37 |
)% |
(38 |
)% |
|
Single premium |
|
0.3 |
|
|
0.6 |
|
|
1.4 |
|
(52 |
)% |
(80 |
)% |
|
Total (2) |
|
10.7 |
|
|
17.2 |
|
|
18.3 |
|
(38 |
)% |
(42 |
)% |
|
|
|
|
|
|
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share
amounts) |
Net Premiums
Earned |
|
119.6 |
|
|
118.3 |
|
|
113.9 |
|
1 |
% |
5 |
% |
Insurance Claims
and Claim (Benefits) Expenses |
|
3.4 |
|
|
(3.4 |
) |
|
(0.5 |
) |
(202 |
)% |
(790 |
)% |
Underwriting and
Operating Expenses |
|
26.7 |
|
|
27.1 |
|
|
38.8 |
|
(2 |
)% |
(31 |
)% |
Net Income |
|
72.9 |
|
|
76.8 |
|
|
60.5 |
|
(5 |
)% |
21 |
% |
Book Value per
Share (excluding net unrealized gains and losses) (3) |
|
21.76 |
|
|
20.85 |
|
|
18.23 |
|
4 |
% |
19 |
% |
Loss Ratio |
|
2.9 |
% |
|
(2.9) |
% |
|
(0.4 |
)% |
|
|
Expense Ratio |
|
22.3 |
% |
|
22.9 |
% |
|
34.1 |
% |
|
|
(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, February 14, 2023, at 2:00 p.m. Pacific
Time / 5:00 p.m. Eastern Time. The webcast will be available on the
company's website, www.nationalmi.com, in the "Investor Relations"
section. The conference call can also be accessed by dialing (844)
481-2708 in the U.S., or (412) 317-0664 internationally, by
referencing NMI Holdings, Inc.
About NMI Holdings, Inc.
NMI Holdings, Inc. (NASDAQ: NMIH), is the parent
company of National Mortgage Insurance Corporation (National MI), a
U.S.-based, private mortgage insurance company enabling low down
payment borrowers to realize home ownership while protecting
lenders and investors against losses related to a borrower's
default. To learn more, please visit www.nationalmi.com.
Cautionary Note Regarding Forward-Looking
Statements
Certain statements contained in this press
release or any other written or oral statements made by or on
behalf of the Company in connection therewith may constitute
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), Section
21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the U.S. Private Securities Litigation Reform
Act of 1995 (the "PSLRA"). The PSLRA provides a "safe harbor" for
any forward-looking statements. All statements other than
statements of historical fact included in or incorporated by
reference in this release are forward-looking statements, including
any statements about our expectations, outlook, beliefs, plans,
predictions, forecasts, objectives, assumptions or future events or
performance. These statements are often, but not always, made
through the use of words or phrases such as "anticipate,"
"believe," "can," "could," "may," "predict," "assume," "potential,"
"should," "will," "estimate," "perceive," "plan," "project,"
"continuing," "ongoing," "expect," "intend" and similar words or
phrases. All forward-looking statements are only predictions and
involve estimates, known and unknown risks, assumptions and
uncertainties that may turn out to be inaccurate and could cause
actual results to differ materially from those expressed in them.
Many risks and uncertainties are inherent in our industry and
markets. Others are more specific to our business and operations.
Important factors that could cause actual events or results to
differ materially from those indicated in such statements include,
but are not limited to: changes in general economic, market and
political conditions and policies (including rising interest rates
and inflation) and investment results or other conditions that
affect the U.S. housing market or the U.S. markets for home
mortgages, mortgage insurance, reinsurance and credit risk transfer
markets, including the risk related to geopolitical instability,
inflation, an economic downturn (including any decline in home
prices) or recession, and their impacts on our business, operations
and personnel; changes in the charters, business practices, policy,
pricing or priorities of Fannie Mae and Freddie Mac (collectively,
the GSEs), which may include decisions that have the impact of
decreasing or discontinuing the use of mortgage insurance as credit
enhancement generally, or with first time homebuyers or on very
high loan-to-value mortgages; or changes in the direction of
housing policy objectives of the Federal Housing Finance Agency
(“FHFA”), such as the FHFA's priority to increase the accessibility
to and affordability of homeownership for low-and-moderate income
borrowers and underrepresented communities; our ability to remain
an eligible mortgage insurer under the private mortgage insurer
eligibility requirements (“PMIERs”) and other requirements imposed
by the GSEs, which they may change at any time; retention of our
existing certificates of authority in each state and the District
of Columbia (“D.C.”) and our ability to remain a mortgage insurer
in good standing in each state and D.C.; our future profitability,
liquidity and capital resources; actions of existing competitors,
including other private mortgage insurers and government mortgage
insurers such as the Federal Housing Administration, the U.S.
Department of Agriculture's Rural Housing Service and the U.S.
Department of Veterans Affairs, and potential market entry by new
competitors or consolidation of existing competitors; adoption of
new or changes to existing laws, rules and regulations that impact
our business or financial condition directly or the mortgage
insurance industry generally or their enforcement and
implementation by regulators, including the implementation of the
final rules defining and/or concerning "Qualified Mortgage" and
"Qualified Residential Mortgage"; U.S. federal tax reform and other
potential changes in tax law and their impact on us and our
operations; legislative or regulatory changes to the GSEs' role in
the secondary mortgage market or other changes that could affect
the residential mortgage industry generally or mortgage insurance
industry in particular; potential legal and regulatory claims,
investigations, actions, audits or inquiries that could result in
adverse judgements, settlements, fines or other reliefs that could
require significant expenditures or have other negative effects on
our business; uncertainty relating to the coronavirus (COVID-19)
virus and its variants or the measures taken by governmental
authorities and other third-parties to contain the spread of
COVID-19, including their impact on the global economy, the U.S.
housing, real estate, housing finance and mortgage insurance
markets, and our business, operations and personnel; our ability to
successfully execute and implement our capital plans, including our
ability to access the equity, credit and reinsurance markets and to
enter into, and receive approval of, reinsurance arrangements on
terms and conditions that are acceptable to us, the GSEs and our
regulators; lenders, the GSEs, or other market participants seeking
alternatives to private mortgage insurance; our ability to
implement our business strategy, including our ability to write
mortgage insurance on high quality low down payment residential
mortgage loans, implement successfully and on a timely basis,
complex infrastructure, systems, procedures, and internal controls
to support our business and regulatory and reporting requirements
of the insurance industry; our ability to attract and retain a
diverse customer base, including the largest mortgage originators;
failure of risk management or pricing or investment strategies;
decrease in the length of time our insurance policies are in force;
emergence of unexpected claim and coverage issues, including claims
exceeding our reserves or amounts we had expected to experience;
potential adverse impacts arising from natural disasters including,
with respect to affected areas, a decline in new business, adverse
effects on home prices, and an increase in notices of default on
insured mortgages; climate risk and efforts to manage or regulate
climate risk by government agencies could affect our business and
operations; potential adverse impacts arising from the occurrence
of any man-made disasters or public health emergencies, including
pandemics; the inability of our counter-parties, including third
party reinsurers, to meet their obligations to us; failure to
maintain, improve and continue to develop necessary information
technology systems or the failure of technology providers to
perform; effectiveness and security of our information technology
systems and digital products and services, including the risks
these systems, products or services may fail to operate as expected
or planned, or expose us to cybersecurity or third-party risks
(including the exposure of our confidential customer and other
confidential information); and ability to recruit, train and retain
key personnel. These risks and uncertainties also include, but are
not limited to, those set forth under the heading "Risk Factors"
detailed in Item 1A of Part I of our Annual Report on Form 10-K for
the year ended December 31, 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) and enhances the comparability of our fundamental
financial performance between periods, and provides relevant
information to investors. These non-GAAP financial measures align
with the way the company's business performance is evaluated by
management. These measures are not prepared in accordance with GAAP
and should not be viewed as alternatives to GAAP measures of
performance. These measures have been presented to increase
transparency and enhance the comparability of our fundamental
operating trends across periods. Other companies may calculate
these measures differently; their measures may not be comparable to
those we calculate and present.
Adjusted income before tax is
defined as GAAP income before tax, excluding the pre-tax effects of
the gain or loss related to the change in fair value of our warrant
liability, periodic costs incurred in connection with capital
markets transactions, net realized gains or losses from our
investment portfolio, and other infrequent, unusual or
non-operating items in the periods in which such items are
incurred.
Adjusted net income is defined
as GAAP net income, excluding the after-tax effects of the gain or
loss related to the change in fair value of our warrant liability,
periodic costs incurred in connection with capital markets
transactions, net realized gains or losses from our investment
portfolio, and other infrequent, unusual or non-operating items in
the periods in which such items are incurred. Adjustments to
components of pre-tax income are tax effected using the applicable
federal statutory tax rate for the respective periods.
Adjusted diluted EPS is defined
as adjusted net income divided by adjusted weighted average diluted
shares outstanding. Adjusted weighted average diluted shares
outstanding is defined as weighted average diluted shares
outstanding, adjusted for changes in the dilutive effect of
non-vested shares that would otherwise have occurred had GAAP net
income been calculated in accordance with adjusted net income.
There will be no adjustment to weighted average diluted shares
outstanding in the periods that non-vested shares are anti-dilutive
under GAAP.
Adjusted return on equity is
calculated by dividing adjusted net income on an annualized basis
by the average shareholders' equity for the period.
Adjusted expense ratio is
defined as GAAP underwriting and operating expenses, excluding the
pre-tax effects of periodic costs incurred in connection with
capital markets transactions, divided by net premiums earned.
Adjusted combined ratio is
defined as the total of GAAP underwriting and operating expenses,
excluding the pre-tax effects of periodic costs incurred in
connection with capital markets transactions and insurance claims
and claims expenses, divided by net premiums earned.
Book value per share (excluding net
unrealized gains and losses) is defined as total
shareholder's equity, excluding the after-tax effects of unrealized
gains and losses on investments, divided by shares outstanding.
Although adjusted income before tax, adjusted
net income, adjusted diluted EPS, adjusted return-on-equity,
adjusted expense ratio, adjusted combined ratio and book value per
share (excluding net unrealized gains and losses) exclude certain
items that have occurred in the past and are expected to occur in
the future, the excluded items: (1) are not viewed as part of the
operating performance of our primary activities; or (2) are
impacted by market, economic or regulatory factors and are not
necessarily indicative of operating trends, or both. These
adjustments, and the reasons for their treatment, are described
below.
(1) Change in fair value of warrant liability.
Outstanding warrants at the end of each reporting period are
revalued, and any change in fair value is reported in the statement
of operations in the period in which the change occurred. The
change in fair value of our warrant liability can vary
significantly across periods and is influenced principally by
equity market and general economic factors that do not impact or
reflect our current period operating results. Furthermore, all
unexercised warrants expired in April 2022 and, as such, no change
in fair value will be recognized in future reporting periods. We
believe trends in our operating performance can be more clearly
identified by excluding fluctuations related to the change in fair
value of our warrant liability.
(2) Capital markets transaction costs. Capital
markets transaction costs result from activities that are
undertaken to improve our debt profile or enhance our capital
position through activities such as debt refinancing and capital
markets reinsurance transactions that may vary in their size and
timing due to factors such as market opportunities, tax and capital
profile, and overall market cycles.
(3) Net realized investment gains and losses.
The recognition of the net realized investment gains or losses can
vary significantly across periods as the timing is highly
discretionary and is influenced by factors such as market
opportunities, tax and capital profile, and overall market cycles
that do not reflect our current period operating results.
(4) Other infrequent, unusual or non-operating
items. Items that are the result of unforeseen or uncommon events,
and are not expected to recur with frequency in the future.
Identification and exclusion of these items provides clarity about
the impact special or rare occurrences may have on our current
financial performance. Past adjustments under this category include
infrequent, unusual or non-operating adjustments related to
severance, restricted stock modification and other expenses
incurred in connection with the CEO transition announced in
September 2021 and the effects of the release of the valuation
allowance recorded against our net federal and certain state net
deferred tax assets in 2016 and the re-measurement of our net
deferred tax assets in connection with tax reform in 2017. We
believe such items are infrequent or non-recurring in nature, and
are not indicative of the performance of, or ongoing trends in, our
primary operating activities or business.
(5) Net unrealized gains and losses on
investments. The recognition of the net unrealized gains or losses
on investment can vary significantly across periods and is
influenced by factors such as interest rate movement, overall
market and economic conditions, and tax and capital profiles. These
valuation adjustments may not necessarily result in economic gains
or losses and not reflective of ongoing operations. Trends in the
profitability of our fundamental operating activities can be more
clearly identified without the fluctuations of these unrealized
gains or losses.
Investor ContactJohn M.
SwensonVice President, Investor Relations and
Treasuryjohn.swenson@nationalmi.com(510) 788-8417
Consolidated
statements of operations and comprehensive income
(unaudited) |
For the three months ended December 31, |
|
For the year ended December 31, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
Net premiums earned |
$ |
119,584 |
|
|
$ |
113,933 |
|
|
$ |
475,266 |
|
|
$ |
444,294 |
|
Net investment income |
|
13,341 |
|
|
|
10,045 |
|
|
|
46,406 |
|
|
|
38,072 |
|
Net realized investment gains |
|
6 |
|
|
|
714 |
|
|
|
481 |
|
|
|
729 |
|
Other revenues |
|
176 |
|
|
|
380 |
|
|
|
1,192 |
|
|
|
1,977 |
|
Total revenues |
|
133,107 |
|
|
|
125,072 |
|
|
|
523,345 |
|
|
|
485,072 |
|
Expenses |
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
3,450 |
|
|
|
(500 |
) |
|
|
(3,594 |
) |
|
|
12,305 |
|
Underwriting and operating expenses |
|
26,711 |
|
|
|
38,843 |
|
|
|
117,490 |
|
|
|
142,303 |
|
Service expenses |
|
131 |
|
|
|
650 |
|
|
|
1,094 |
|
|
|
2,509 |
|
Interest expense |
|
8,035 |
|
|
|
8,029 |
|
|
|
32,163 |
|
|
|
31,796 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
(112 |
) |
|
|
(1,113 |
) |
|
|
(566 |
) |
Total expenses |
|
38,327 |
|
|
|
46,910 |
|
|
|
146,040 |
|
|
|
188,347 |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
94,780 |
|
|
|
78,162 |
|
|
|
377,305 |
|
|
|
296,725 |
|
Income tax expense |
|
21,840 |
|
|
|
17,639 |
|
|
|
84,403 |
|
|
|
65,595 |
|
Net income |
$ |
72,940 |
|
|
$ |
60,523 |
|
|
$ |
292,902 |
|
|
$ |
231,130 |
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
0.87 |
|
|
$ |
0.71 |
|
|
$ |
3.45 |
|
|
$ |
2.70 |
|
Diluted |
$ |
0.86 |
|
|
$ |
0.69 |
|
|
$ |
3.39 |
|
|
$ |
2.65 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
Basic |
|
83,592 |
|
|
|
85,757 |
|
|
|
84,921 |
|
|
|
85,620 |
|
Diluted |
|
84,809 |
|
|
|
87,117 |
|
|
|
85,999 |
|
|
|
86,885 |
|
|
|
|
|
|
|
|
|
Loss ratio(1) |
|
2.9 |
% |
|
|
(0.4 |
)% |
|
|
(0.8 |
)% |
|
|
2.8 |
% |
Expense ratio(2) |
|
22.3 |
% |
|
|
34.1 |
% |
|
|
24.7 |
% |
|
|
32.0 |
% |
Combined ratio (3) |
|
25.2 |
% |
|
|
33.7 |
% |
|
|
24.0 |
% |
|
|
34.8 |
% |
|
|
|
|
|
|
|
|
Net income |
$ |
72,940 |
|
|
$ |
60,523 |
|
|
$ |
292,902 |
|
|
$ |
231,130 |
|
Other comprehensive income
(loss), net of tax: |
|
|
|
|
|
|
|
Unrealized gains (losses) in
accumulated other comprehensive income, net of tax expense
(benefit) of $4,505 and $(4,601) for the three months ended
December 31, 2022 and 2021, respectively, and $(54,608) and
$(13,768) for the years ended December 31, 2022, and 2021,
respectively |
|
16,948 |
|
|
|
(17,307 |
) |
|
|
(205,428 |
) |
|
|
(51,795 |
) |
Reclassification adjustment
for realized gains included in net income, net of tax expense of $1
and $150 for the three months ended December 31, 2022 and
2021, respectively, and $101 and $153 for the years ended
December 31, 2022, and 2021, respectively |
|
(5 |
) |
|
|
(564 |
) |
|
|
(380 |
) |
|
|
(576 |
) |
Other comprehensive income
(loss), net of tax |
|
16,943 |
|
|
|
(17,871 |
) |
|
|
(205,808 |
) |
|
|
(52,371 |
) |
Comprehensive income |
$ |
89,883 |
|
|
$ |
42,652 |
|
|
$ |
87,094 |
|
|
$ |
178,759 |
|
(1) Loss ratio is calculated by dividing
insurance claims and claim expenses (benefits) by net premiums
earned.(2) Expense ratio is calculated by dividing other
underwriting and operating expenses by net premiums earned.(3)
Combined ratio may not foot due to rounding.
Consolidated balance
sheets (unaudited) |
December 31, 2022 |
|
December 31, 2021 |
Assets |
(In Thousands, except for share data) |
Fixed maturities, available-for-sale, at fair value (amortized cost
of $2,352,747 and $2,078,773 as of December 31, 2022 and
December 31, 2021, respectively) |
$ |
2,099,389 |
|
|
$ |
2,085,931 |
Cash and cash equivalents (including restricted cash of $2,176 and
$3,165 as of December 31, 2022 and December 31, 2021,
respectively) |
|
44,426 |
|
|
|
76,646 |
Premiums receivable |
|
69,680 |
|
|
|
60,358 |
Accrued investment income |
|
14,144 |
|
|
|
11,900 |
Deferred policy acquisition costs, net |
|
58,564 |
|
|
|
59,584 |
Software and equipment, net |
|
31,930 |
|
|
|
32,047 |
Intangible assets and goodwill |
|
3,634 |
|
|
|
3,634 |
Reinsurance recoverable |
|
21,587 |
|
|
|
20,320 |
Prepaid federal income taxes (1) |
|
154,409 |
|
|
|
89,244 |
Other assets (1) (2) |
|
18,267 |
|
|
|
10,917 |
Total assets |
$ |
2,516,030 |
|
|
$ |
2,450,581 |
|
|
|
|
Liabilities |
|
|
|
Debt |
$ |
396,051 |
|
|
$ |
394,623 |
Unearned premiums |
|
123,035 |
|
|
|
139,237 |
Accounts payable and accrued expenses |
|
74,576 |
|
|
|
72,000 |
Reserve for insurance claims and claim expenses |
|
99,836 |
|
|
|
103,551 |
Reinsurance funds withheld |
|
2,674 |
|
|
|
5,601 |
Warrant liability, at fair value |
|
— |
|
|
|
2,363 |
Deferred tax liability, net |
|
193,859 |
|
|
|
164,175 |
Other liabilities |
|
12,272 |
|
|
|
3,245 |
Total liabilities |
|
902,303 |
|
|
|
884,795 |
|
|
|
|
Shareholders' equity |
|
|
|
Common stock - class A shares, $0.01 par value; 86,472,742 shares
issued and 83,549,879 shares outstanding as of December 31, 2022
and 85,792,849 shares issued and outstanding as of December 31,
2021, respectively (250,000,000 shares authorized) |
|
865 |
|
|
|
858 |
Additional paid-in capital |
|
972,717 |
|
|
|
955,302 |
Treasury stock, at cost: 2,922,863 and 0 common shares as of
December 31, 2022 and December 31, 2021,
respectively |
|
(56,575 |
) |
|
|
— |
Accumulated other comprehensive (loss) income, net of tax |
|
(204,323 |
) |
|
|
1,485 |
Retained earnings |
|
901,043 |
|
|
|
608,141 |
Total shareholders'
equity |
|
1,613,727 |
|
|
|
1,565,786 |
Total liabilities and
shareholders' equity |
$ |
2,516,030 |
|
|
$ |
2,450,581 |
(1) "Prepaid federal income taxes" have been reclassified from
"Other assets" in the prior period.(2) "Prepaid expenses" and
"Prepaid reinsurance premiums" have been reclassified as "Other
assets" in the prior period.
Non-GAAP
Financial Measure Reconciliations (unaudited) |
|
For the three months ended |
|
For the year ended |
|
12/31/2022 |
|
9/30/2022 |
|
12/31/2021 |
|
12/31/2022 |
|
12/31/2021 |
As
Reported |
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
119,584 |
|
|
$ |
118,317 |
|
|
$ |
113,933 |
|
|
$ |
475,266 |
|
|
$ |
444,294 |
|
Net investment income |
|
13,341 |
|
|
|
11,945 |
|
|
|
10,045 |
|
|
|
46,406 |
|
|
|
38,072 |
|
Net realized investment gains |
|
6 |
|
|
|
14 |
|
|
|
714 |
|
|
|
481 |
|
|
|
729 |
|
Other revenues |
|
176 |
|
|
|
301 |
|
|
|
380 |
|
|
|
1,192 |
|
|
|
1,977 |
|
Total revenues |
|
133,107 |
|
|
|
130,577 |
|
|
|
125,072 |
|
|
|
523,345 |
|
|
|
485,072 |
|
Expenses |
|
|
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
3,450 |
|
|
|
(3,389 |
) |
|
|
(500 |
) |
|
|
(3,594 |
) |
|
|
12,305 |
|
Underwriting and operating expenses |
|
26,711 |
|
|
|
27,144 |
|
|
|
38,843 |
|
|
|
117,490 |
|
|
|
142,303 |
|
Service expenses |
|
131 |
|
|
|
197 |
|
|
|
650 |
|
|
|
1,094 |
|
|
|
2,509 |
|
Interest expense |
|
8,035 |
|
|
|
8,036 |
|
|
|
8,029 |
|
|
|
32,163 |
|
|
|
31,796 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
(112 |
) |
|
|
(1,113 |
) |
|
|
(566 |
) |
Total expenses |
|
38,327 |
|
|
|
31,988 |
|
|
|
46,910 |
|
|
|
146,040 |
|
|
|
188,347 |
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
94,780 |
|
|
|
98,589 |
|
|
|
78,162 |
|
|
|
377,305 |
|
|
|
296,725 |
|
Income tax expense |
|
21,840 |
|
|
|
21,751 |
|
|
|
17,639 |
|
|
|
84,403 |
|
|
|
65,595 |
|
Net
income |
$ |
72,940 |
|
|
$ |
76,838 |
|
|
$ |
60,523 |
|
|
$ |
292,902 |
|
|
$ |
231,130 |
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Net realized investment
gains |
|
(6 |
) |
|
|
(14 |
) |
|
|
(714 |
) |
|
|
(481 |
) |
|
|
(729 |
) |
Gain from change in fair value
of warrant liability |
|
— |
|
|
|
— |
|
|
|
(112 |
) |
|
|
(1,113 |
) |
|
|
(566 |
) |
Capital markets transaction
costs |
|
— |
|
|
|
— |
|
|
|
1,505 |
|
|
|
205 |
|
|
|
3,979 |
|
Other infrequent, unusual or
non-operating items |
|
— |
|
|
|
— |
|
|
|
2,540 |
|
|
|
— |
|
|
|
3,829 |
|
Adjusted income before
taxes |
|
94,774 |
|
|
|
98,575 |
|
|
|
81,381 |
|
|
|
375,916 |
|
|
|
303,238 |
|
|
|
|
|
|
|
|
|
|
|
Income tax (benefit) expense
on adjustments (1) |
|
(1 |
) |
|
|
(3 |
) |
|
|
251 |
|
|
|
(58 |
) |
|
|
806 |
|
Adjusted net
income |
$ |
72,935 |
|
|
$ |
76,827 |
|
|
$ |
63,491 |
|
|
$ |
291,571 |
|
|
$ |
236,837 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted
shares outstanding |
|
84,809 |
|
|
|
85,485 |
|
|
|
87,117 |
|
|
|
85,999 |
|
|
|
86,885 |
|
|
|
|
|
|
|
|
|
|
|
Diluted
EPS |
$ |
0.86 |
|
|
$ |
0.90 |
|
|
$ |
0.69 |
|
|
$ |
3.39 |
|
|
$ |
2.65 |
|
Adjusted diluted
EPS |
$ |
0.86 |
|
|
$ |
0.90 |
|
|
$ |
0.73 |
|
|
$ |
3.39 |
|
|
$ |
2.73 |
|
|
|
|
|
|
|
|
|
|
|
Return-on-equity |
|
18.6 |
% |
|
|
20.1 |
% |
|
|
15.7 |
% |
|
|
18.4 |
% |
|
|
15.7 |
% |
Adjusted
return-on-equity |
|
18.6 |
% |
|
|
20.1 |
% |
|
|
16.5 |
% |
|
|
18.3 |
% |
|
|
16.1 |
% |
|
|
|
|
|
|
|
|
|
|
Expense
ratio (2) |
|
22.3 |
% |
|
|
22.9 |
% |
|
|
34.1 |
% |
|
|
24.7 |
% |
|
|
32.0 |
% |
Adjusted expense
ratio (3) |
|
22.3 |
% |
|
|
22.9 |
% |
|
|
30.5 |
% |
|
|
24.7 |
% |
|
|
30.3 |
% |
|
|
|
|
|
|
|
|
|
|
Combined
ratio (4) |
|
25.2 |
% |
|
|
20.1 |
% |
|
|
33.7 |
% |
|
|
24.0 |
% |
|
|
34.8 |
% |
Adjusted combined
ratio (5) |
|
25.2 |
% |
|
|
20.1 |
% |
|
|
30.1 |
% |
|
|
23.9 |
% |
|
|
33.0 |
% |
|
|
|
|
|
|
|
|
|
|
Book value per
share (6) |
$ |
19.31 |
|
|
$ |
18.21 |
|
|
$ |
18.25 |
|
|
|
|
|
Book value per share
(excluding net unrealized gains and
losses) (7) |
$ |
21.76 |
|
|
$ |
20.85 |
|
|
$ |
18.23 |
|
|
|
|
|
(1) Marginal tax impact of non-GAAP adjustments
is calculated based on our statutory U.S. federal corporate income
tax rate of 21%, except for those items that are not eligible for
an income tax deduction. 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.(2) Expense ratio is calculated by dividing underwriting and
operating expenses by net premiums earned.(3) Adjusted expense
ratio is calculated by dividing adjusted underwriting and operating
expense (underwriting and operating expenses excluding costs
related to capital markets reinsurance transactions) by net
premiums earned.(4) Combined ratio is calculated by dividing the
total of underwriting and operating expenses and insurance claims
and claims expense by net premiums earned.(5) Adjusted combined
ratio is calculated by dividing the total of adjusted underwriting
and operating expenses (underwriting and operating expenses
excluding costs related to capital market reinsurance transaction)
and insurance claims and claims expense by net premiums earned.(6)
Book value per share is calculated by dividing total shareholder's
equity by shares outstanding.(7) Book value per share (excluding
net unrealized gains and losses) is defined as total shareholder's
equity, excluding the after-tax effects of unrealized gains and
losses on our investment portfolio, divided by shares
outstanding.
Historical Quarterly
Data |
|
2022 |
|
|
|
2021 |
|
|
December 31 |
|
September 30 |
|
June 30 |
|
March 31 |
|
December 31 |
|
September 30 |
|
(In Thousands, except for per share data) |
Revenues |
|
|
|
|
|
|
|
|
|
|
|
Net premiums earned |
$ |
119,584 |
|
|
$ |
118,317 |
|
|
$ |
120,870 |
|
|
$ |
116,495 |
|
|
$ |
113,933 |
|
|
$ |
113,594 |
|
Net investment income |
|
13,341 |
|
|
|
11,945 |
|
|
|
10,921 |
|
|
|
10,199 |
|
|
|
10,045 |
|
|
|
9,831 |
|
Net realized investment gains |
|
6 |
|
|
|
14 |
|
|
|
53 |
|
|
|
408 |
|
|
|
714 |
|
|
|
3 |
|
Other revenues |
|
176 |
|
|
|
301 |
|
|
|
376 |
|
|
|
339 |
|
|
|
380 |
|
|
|
613 |
|
Total revenues |
|
133,107 |
|
|
|
130,577 |
|
|
|
132,220 |
|
|
|
127,441 |
|
|
|
125,072 |
|
|
|
124,041 |
|
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Insurance claims and claim expenses (benefits) |
|
3,450 |
|
|
|
(3,389 |
) |
|
|
(3,036 |
) |
|
|
(619 |
) |
|
|
(500 |
) |
|
|
3,204 |
|
Underwriting and operating expenses |
|
26,711 |
|
|
|
27,144 |
|
|
|
30,700 |
|
|
|
32,935 |
|
|
|
38,843 |
|
|
|
34,669 |
|
Service expenses |
|
131 |
|
|
|
197 |
|
|
|
336 |
|
|
|
430 |
|
|
|
650 |
|
|
|
787 |
|
Interest expense |
|
8,035 |
|
|
|
8,036 |
|
|
|
8,051 |
|
|
|
8,041 |
|
|
|
8,029 |
|
|
|
7,930 |
|
Gain from change in fair value of warrant liability |
|
— |
|
|
|
— |
|
|
|
(1,020 |
) |
|
|
(93 |
) |
|
|
(112 |
) |
|
|
— |
|
Total expenses |
|
38,327 |
|
|
|
31,988 |
|
|
|
35,031 |
|
|
|
40,694 |
|
|
|
46,910 |
|
|
|
46,590 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
94,780 |
|
|
|
98,589 |
|
|
|
97,189 |
|
|
|
86,747 |
|
|
|
78,162 |
|
|
|
77,451 |
|
Income tax expense |
|
21,840 |
|
|
|
21,751 |
|
|
|
21,745 |
|
|
|
19,067 |
|
|
|
17,639 |
|
|
|
17,258 |
|
Net income |
$ |
72,940 |
|
|
$ |
76,838 |
|
|
$ |
75,444 |
|
|
$ |
67,680 |
|
|
$ |
60,523 |
|
|
$ |
60,193 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share |
|
|
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.87 |
|
|
$ |
0.91 |
|
|
$ |
0.88 |
|
|
$ |
0.79 |
|
|
$ |
0.71 |
|
|
$ |
0.70 |
|
Diluted |
$ |
0.86 |
|
|
$ |
0.90 |
|
|
$ |
0.86 |
|
|
$ |
0.77 |
|
|
$ |
0.69 |
|
|
$ |
0.69 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
83,592 |
|
|
|
84,444 |
|
|
|
85,734 |
|
|
|
85,953 |
|
|
|
85,757 |
|
|
|
85,721 |
|
Diluted |
|
84,809 |
|
|
|
85,485 |
|
|
|
86,577 |
|
|
|
87,310 |
|
|
|
87,117 |
|
|
|
86,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other data |
|
|
|
|
|
|
|
|
|
|
|
Loss Ratio (1) |
|
2.9 |
% |
|
|
(2.9 |
)% |
|
|
(2.5 |
)% |
|
|
(0.5 |
)% |
|
|
(0.4 |
)% |
|
|
2.8 |
% |
Expense Ratio (2) |
|
22.3 |
% |
|
|
22.9 |
% |
|
|
25.4 |
% |
|
|
28.3 |
% |
|
|
34.1 |
% |
|
|
30.5 |
% |
Combined ratio (3) |
|
25.2 |
% |
|
|
20.1 |
% |
|
|
22.9 |
% |
|
|
27.7 |
% |
|
|
33.7 |
% |
|
|
33.3 |
% |
(1) Loss ratio is calculated by dividing
insurance claims and claim expenses (benefits) by net premiums
earned.(2) Expense ratio is calculated by dividing underwriting and
operating expenses by net premiums earned.(3) Combined ratio may
not foot due to rounding.
Portfolio Statistics
The table below highlights trends in our primary
portfolio as of the date and for the periods indicated.
Primary portfolio
trends |
As of and for the three months ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
($ Values In Millions, except as noted below) |
New insurance written |
$ |
10,719 |
|
|
$ |
17,239 |
|
|
$ |
16,611 |
|
|
$ |
14,165 |
|
|
$ |
18,342 |
|
|
$ |
18,084 |
|
New risk written |
|
2,797 |
|
|
|
4,616 |
|
|
|
4,386 |
|
|
|
3,721 |
|
|
|
4,786 |
|
|
|
4,640 |
|
Insurance in force (IIF) (1) |
|
183,968 |
|
|
|
179,173 |
|
|
|
168,639 |
|
|
|
158,877 |
|
|
|
152,343 |
|
|
|
143,618 |
|
Risk in force (1) |
|
47,648 |
|
|
|
46,259 |
|
|
|
43,260 |
|
|
|
40,522 |
|
|
|
38,661 |
|
|
|
36,253 |
|
Policies in force (count) (1) |
|
594,142 |
|
|
|
580,525 |
|
|
|
551,543 |
|
|
|
526,976 |
|
|
|
512,316 |
|
|
|
490,714 |
|
Average loan size ($ value in thousands) (1) |
$ |
310 |
|
|
$ |
309 |
|
|
$ |
306 |
|
|
$ |
301 |
|
|
$ |
297 |
|
|
$ |
293 |
|
Coverage percentage (2) |
|
25.9 |
% |
|
|
25.8 |
% |
|
|
25.7 |
% |
|
|
25.5 |
% |
|
|
25.4 |
% |
|
|
25.2 |
% |
Loans in default (count) (1) |
|
4,449 |
|
|
|
4,096 |
|
|
|
4,271 |
|
|
|
5,238 |
|
|
|
6,227 |
|
|
|
7,670 |
|
Default rate (1) |
|
0.75 |
% |
|
|
0.71 |
% |
|
|
0.77 |
% |
|
|
0.99 |
% |
|
|
1.22 |
% |
|
|
1.56 |
% |
Risk in force on defaulted loans (1) |
$ |
323 |
|
|
$ |
284 |
|
|
$ |
295 |
|
|
$ |
362 |
|
|
$ |
435 |
|
|
$ |
546 |
|
Net premium yield (3) |
|
0.26 |
% |
|
|
0.27 |
% |
|
|
0.30 |
% |
|
|
0.30 |
% |
|
|
0.31 |
% |
|
|
0.32 |
% |
Earnings from cancellations |
$ |
1.5 |
|
|
$ |
1.8 |
|
|
$ |
2.2 |
|
|
$ |
2.9 |
|
|
$ |
5.1 |
|
|
$ |
7.7 |
|
Annual persistency (4) |
|
83.5 |
% |
|
|
80.1 |
% |
|
|
76.0 |
% |
|
|
71.5 |
% |
|
|
63.8 |
% |
|
|
58.1 |
% |
Quarterly run-off (5) |
|
3.3 |
% |
|
|
4.0 |
% |
|
|
4.3 |
% |
|
|
5.0 |
% |
|
|
6.7 |
% |
|
|
8.1 |
% |
(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, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
(In Millions) |
Monthly |
$ |
10,451 |
|
$ |
16,676 |
|
$ |
15,695 |
|
$ |
13,094 |
|
$ |
16,972 |
|
$ |
16,861 |
Single |
|
268 |
|
|
563 |
|
|
916 |
|
|
1,071 |
|
|
1,370 |
|
|
1,223 |
Primary |
$ |
10,719 |
|
$ |
17,239 |
|
$ |
16,611 |
|
$ |
14,165 |
|
$ |
18,342 |
|
$ |
18,084 |
Primary and pool
IIF |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
(In Millions) |
Monthly |
$ |
163,903 |
|
$ |
158,897 |
|
$ |
148,488 |
|
$ |
139,156 |
|
$ |
133,104 |
|
$ |
124,767 |
Single |
|
20,065 |
|
|
20,276 |
|
|
20,151 |
|
|
19,721 |
|
|
19,239 |
|
|
18,851 |
Primary |
|
183,968 |
|
|
179,173 |
|
|
168,639 |
|
|
158,877 |
|
|
152,343 |
|
|
143,618 |
|
|
|
|
|
|
|
|
|
|
|
|
Pool |
|
1,049 |
|
|
1,078 |
|
|
1,114 |
|
|
1,162 |
|
|
1,229 |
|
|
1,339 |
Total |
$ |
185,017 |
|
$ |
180,251 |
|
$ |
169,753 |
|
$ |
160,039 |
|
$ |
153,572 |
|
$ |
144,957 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table presents the amounts related
to the company's quota-share reinsurance transactions (the 2016 QSR
Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR
Transaction, 2022 QSR Transaction, and 2022 Seasoned QSR
Transaction and collectively, the QSR Transactions),
insurance-linked note transactions (2018 ILN Transaction, 2019 ILN
Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and
2021-2 ILN Transaction, and collectively, the ILN Transactions),
and traditional reinsurance transactions (2022-1 XOL Transaction,
2022-2 XOL Transaction and 2022-3 XOL Transaction and collectively,
the XOL Transactions) for the periods indicated.
|
For the three months ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
June 30, 2022 |
|
March 31, 2022 |
|
December 31, 2021 |
|
September 30, 2021 |
|
(In Thousands) |
The QSR Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded risk-in-force |
$ |
12,617,169 |
|
|
$ |
12,511,797 |
|
|
$ |
9,040,944 |
|
|
$ |
8,504,853 |
|
|
$ |
8,194,604 |
|
|
$ |
7,610,870 |
|
Ceded premiums earned |
|
(42,246 |
) |
|
|
(42,265 |
) |
|
|
(30,231 |
) |
|
|
(29,005 |
) |
|
|
(28,490 |
) |
|
|
(28,366 |
) |
Ceded claims and claim expenses (benefits) |
|
1,934 |
|
|
|
248 |
|
|
|
(403 |
) |
|
|
(159 |
) |
|
|
19 |
|
|
|
840 |
|
Ceding commission earned |
|
10,089 |
|
|
|
10,193 |
|
|
|
6,146 |
|
|
|
5,886 |
|
|
|
6,208 |
|
|
|
6,142 |
|
Profit commission |
|
22,314 |
|
|
|
23,899 |
|
|
|
17,778 |
|
|
|
16,723 |
|
|
|
16,142 |
|
|
|
15,191 |
|
|
|
|
|
|
|
|
|
|
|
|
|
The ILN
Transactions (1) |
|
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(10,112 |
) |
|
$ |
(10,730 |
) |
|
$ |
(10,132 |
) |
|
$ |
(10,939 |
) |
|
$ |
(11,344 |
) |
|
$ |
(10,390 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
The XOL Transactions |
|
|
|
|
|
|
|
|
|
|
|
Ceded premiums |
$ |
(6,199 |
) |
|
$ |
(4,808 |
) |
|
$ |
(2,907 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
(1) Effective March 25, 2022 and April 25, 2022,
NMIC exercised its optional clean-up call to terminate and commute
its previously outstanding excess of loss reinsurance agreements
with Oaktown Re Ltd. and Oaktown Re IV Ltd., respectively. NMIC no
longer makes risk premium payments to Oaktown Re Ltd. and Oaktown
Re IV Ltd. thereafter.
The tables below present our total primary NIW
by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for
the periods indicated.
Primary NIW by
FICO |
For the three months ended |
|
For the year ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
($ In Millions) |
>= 760 |
$ |
5,574 |
|
$ |
6,815 |
|
$ |
8,032 |
|
$ |
26,751 |
|
$ |
40,408 |
740-759 |
|
1,902 |
|
|
3,663 |
|
|
3,115 |
|
|
10,853 |
|
|
15,927 |
720-739 |
|
1,564 |
|
|
2,751 |
|
|
2,833 |
|
|
8,308 |
|
|
12,511 |
700-719 |
|
918 |
|
|
2,245 |
|
|
2,196 |
|
|
6,452 |
|
|
8,450 |
680-699 |
|
638 |
|
|
1,477 |
|
|
1,653 |
|
|
4,636 |
|
|
5,792 |
<=679 |
|
123 |
|
|
288 |
|
|
514 |
|
|
1,734 |
|
|
2,486 |
Total |
$ |
10,719 |
|
$ |
17,239 |
|
$ |
18,342 |
|
$ |
58,734 |
|
$ |
85,574 |
Weighted average FICO |
|
756 |
|
|
748 |
|
|
748 |
|
|
750 |
|
|
752 |
Primary NIW by
LTV |
For the three months ended |
|
For the year ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
646 |
|
|
$ |
1,610 |
|
|
$ |
1,569 |
|
|
$ |
5,199 |
|
|
$ |
8,153 |
|
90.01% to 95.00% |
|
5,325 |
|
|
|
9,398 |
|
|
|
8,879 |
|
|
|
30,031 |
|
|
|
38,215 |
|
85.01% to 90.00% |
|
3,492 |
|
|
|
4,505 |
|
|
|
5,583 |
|
|
|
16,637 |
|
|
|
24,655 |
|
85.00% and below |
|
1,256 |
|
|
|
1,726 |
|
|
|
2,311 |
|
|
|
6,867 |
|
|
|
14,551 |
|
Total |
$ |
10,719 |
|
|
$ |
17,239 |
|
|
$ |
18,342 |
|
|
$ |
58,734 |
|
|
$ |
85,574 |
|
Weighted average LTV |
|
92.0 |
% |
|
|
92.6 |
% |
|
|
91.9 |
% |
|
|
92.2 |
% |
|
|
91.4 |
% |
Primary NIW by
purchase/refinance mix |
For the three months ended |
|
For the year ended |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
(In Millions) |
Purchase |
$ |
10,500 |
|
$ |
16,944 |
|
$ |
17,097 |
|
$ |
57,045 |
|
$ |
70,318 |
Refinance |
|
219 |
|
|
295 |
|
|
1,245 |
|
|
1,689 |
|
|
15,256 |
Total |
$ |
10,719 |
|
$ |
17,239 |
|
$ |
18,342 |
|
$ |
58,734 |
|
$ |
85,574 |
The table below presents a summary of our primary IIF and RIF by
book year as of December 31, 2022.
Primary IIF and
RIF |
As of December 31, 2022 |
|
IIF |
|
RIF |
|
(In Millions) |
December 31, 2022 |
$ |
56,579 |
|
$ |
14,965 |
2021 |
|
72,766 |
|
|
18,642 |
2020 |
|
34,656 |
|
|
8,860 |
2019 |
|
9,194 |
|
|
2,423 |
2018 |
|
3,579 |
|
|
923 |
2017 and before |
|
7,194 |
|
|
1,835 |
Total |
$ |
183,968 |
|
$ |
47,648 |
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, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Millions) |
>= 760 |
$ |
89,554 |
|
$ |
87,152 |
|
$ |
76,449 |
740-759 |
|
32,691 |
|
|
31,770 |
|
|
26,219 |
720-739 |
|
25,910 |
|
|
25,089 |
|
|
21,356 |
700-719 |
|
18,245 |
|
|
17,852 |
|
|
14,401 |
680-699 |
|
12,480 |
|
|
12,185 |
|
|
9,654 |
<=679 |
|
5,088 |
|
|
5,125 |
|
|
4,264 |
Total |
$ |
183,968 |
|
$ |
179,173 |
|
$ |
152,343 |
Primary RIF by
FICO |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Millions) |
>= 760 |
$ |
22,834 |
|
$ |
22,125 |
|
$ |
19,125 |
740-759 |
|
8,556 |
|
|
8,298 |
|
|
6,707 |
720-739 |
|
6,807 |
|
|
6,574 |
|
|
5,497 |
700-719 |
|
4,859 |
|
|
4,747 |
|
|
3,771 |
680-699 |
|
3,305 |
|
|
3,223 |
|
|
2,511 |
<=679 |
|
1,287 |
|
|
1,292 |
|
|
1,050 |
Total |
$ |
47,648 |
|
$ |
46,259 |
|
$ |
38,661 |
Primary IIF by
LTV |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
17,577 |
|
$ |
17,269 |
|
$ |
14,058 |
90.01% to 95.00% |
|
87,354 |
|
|
84,396 |
|
|
68,537 |
85.01% to 90.00% |
|
55,075 |
|
|
53,456 |
|
|
46,971 |
85.00% and below |
|
23,962 |
|
|
24,052 |
|
|
22,777 |
Total |
$ |
183,968 |
|
$ |
179,173 |
|
$ |
152,343 |
Primary RIF by
LTV |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Millions) |
95.01% and above |
$ |
5,408 |
|
$ |
5,308 |
|
$ |
4,230 |
90.01% to 95.00% |
|
25,797 |
|
|
24,921 |
|
|
20,210 |
85.01% to 90.00% |
|
13,584 |
|
|
13,167 |
|
|
11,533 |
85.00% and below |
|
2,859 |
|
|
2,863 |
|
|
2,688 |
Total |
$ |
47,648 |
|
$ |
46,259 |
|
$ |
38,661 |
Primary RIF by Loan
Type |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 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 |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Millions) |
IIF, beginning of period |
$ |
179,173 |
|
|
$ |
168,639 |
|
|
$ |
143,618 |
|
NIW |
|
10,719 |
|
|
|
17,239 |
|
|
|
18,342 |
|
Cancellations, principal repayments and other reductions |
|
(5,924 |
) |
|
|
(6,705 |
) |
|
|
(9,617 |
) |
IIF, end of period |
$ |
183,968 |
|
|
$ |
179,173 |
|
|
$ |
152,343 |
|
Geographic Dispersion
The following table shows the distribution by
state of our primary RIF as of the dates indicated.
Top 10 primary RIF by
state |
As of |
|
December 31, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
California |
10.6 |
% |
|
10.7 |
% |
|
10.4 |
% |
Texas |
8.7 |
|
|
8.7 |
|
|
9.7 |
|
Florida |
8.2 |
|
|
8.2 |
|
|
8.6 |
|
Virginia |
4.1 |
|
|
4.2 |
|
|
4.7 |
|
Georgia |
4.1 |
|
|
4.1 |
|
|
3.8 |
|
Illinois |
3.9 |
|
|
4.0 |
|
|
3.6 |
|
Washington |
3.9 |
|
|
3.9 |
|
|
3.7 |
|
Colorado |
3.5 |
|
|
3.5 |
|
|
3.8 |
|
Pennsylvania |
3.4 |
|
|
3.4 |
|
|
3.3 |
|
Maryland |
3.4 |
|
|
3.4 |
|
|
3.7 |
|
Total |
53.8 |
% |
|
54.1 |
% |
|
55.3 |
% |
The table below presents selected primary
portfolio statistics, by book year, as of December 31,
2022.
|
As of December 31, 2022 |
Bookyear |
OriginalInsuranceWritten |
|
RemainingInsurance inForce |
|
%Remainingof Original Insurance |
|
PoliciesEver inForce |
|
Number ofPolicies inForce |
|
Numberof LoansinDefault |
|
# ofClaimsPaid |
|
IncurredLoss Ratio (Inceptionto
Date) (1) |
|
Cumulative
DefaultRate (2) |
|
Current defaultrate (3) |
|
($ Values in Millions) |
|
|
2013 |
$ |
162 |
|
$ |
5 |
|
3 |
% |
|
655 |
|
34 |
|
— |
|
1 |
|
0.2 |
% |
|
0.2 |
% |
|
— |
% |
2014 |
|
3,451 |
|
|
206 |
|
6 |
% |
|
14,786 |
|
1,285 |
|
30 |
|
51 |
|
4.0 |
% |
|
0.5 |
% |
|
2.3 |
% |
2015 |
|
12,422 |
|
|
1,226 |
|
10 |
% |
|
52,548 |
|
6,839 |
|
135 |
|
126 |
|
2.7 |
% |
|
0.5 |
% |
|
2.0 |
% |
2016 |
|
21,187 |
|
|
2,668 |
|
13 |
% |
|
83,626 |
|
13,938 |
|
277 |
|
146 |
|
2.1 |
% |
|
0.5 |
% |
|
2.0 |
% |
2017 |
|
21,582 |
|
|
3,089 |
|
14 |
% |
|
85,897 |
|
16,409 |
|
487 |
|
121 |
|
2.8 |
% |
|
0.7 |
% |
|
3.0 |
% |
2018 |
|
27,295 |
|
|
3,579 |
|
13 |
% |
|
104,043 |
|
18,355 |
|
611 |
|
106 |
|
4.8 |
% |
|
0.7 |
% |
|
3.3 |
% |
2019 |
|
45,141 |
|
|
9,194 |
|
20 |
% |
|
148,423 |
|
38,580 |
|
646 |
|
30 |
|
5.1 |
% |
|
0.5 |
% |
|
1.7 |
% |
2020 |
|
62,702 |
|
|
34,656 |
|
55 |
% |
|
186,174 |
|
112,845 |
|
628 |
|
4 |
|
3.2 |
% |
|
0.3 |
% |
|
0.6 |
% |
2021 |
|
85,574 |
|
|
72,766 |
|
85 |
% |
|
257,972 |
|
227,124 |
|
1,323 |
|
3 |
|
6.5 |
% |
|
0.5 |
% |
|
0.6 |
% |
2022 |
|
58,734 |
|
|
56,579 |
|
96 |
% |
|
163,281 |
|
158,733 |
|
312 |
|
— |
|
11.8 |
% |
|
0.2 |
% |
|
0.2 |
% |
Total |
$ |
338,250 |
|
$ |
183,968 |
|
|
|
1,097,405 |
|
594,142 |
|
4,449 |
|
588 |
|
|
|
|
|
|
(1) Calculated as total claims incurred
(paid and reserved) divided by cumulative premiums earned, net of
reinsurance.(2) Calculated as the sum of the number of claims paid
ever to date and number of loans in default divided by policies
ever in force.(3) Calculated as the number of loans in default
divided by number of policies in force.
The following table provides a reconciliation of
the beginning and ending reserve balances for primary insurance
claims and claim expenses (benefits).
|
For the three months ended |
|
For the year ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
(In Thousands) |
Beginning balance |
$ |
94,944 |
|
|
$ |
104,604 |
|
|
$ |
103,551 |
|
|
$ |
90,567 |
|
Less reinsurance recoverables
(1) |
|
(19,755 |
) |
|
|
(20,420 |
) |
|
|
(20,320 |
) |
|
|
(17,608 |
) |
Beginning balance, net of
reinsurance recoverables |
|
75,189 |
|
|
|
84,184 |
|
|
|
83,231 |
|
|
|
72,959 |
|
|
|
|
|
|
|
|
|
Add claims incurred: |
|
|
|
|
|
|
|
Claims and claim expenses (benefits) incurred: |
|
|
|
|
|
|
|
Current year (2) |
|
17,033 |
|
|
|
4,159 |
|
|
|
45,168 |
|
|
|
23,433 |
|
Prior years (3) |
|
(13,583 |
) |
|
|
(4,659 |
) |
|
|
(48,762 |
) |
|
|
(11,128 |
) |
Total claims and claim
expenses (benefits) incurred |
|
3,450 |
|
|
|
(500 |
) |
|
|
(3,594 |
) |
|
|
12,305 |
|
|
|
|
|
|
|
|
|
Less claims paid: |
|
|
|
|
|
|
|
Claims and claim expenses paid: |
|
|
|
|
|
|
|
Current year (2) |
|
1 |
|
|
|
1 |
|
|
|
74 |
|
|
|
16 |
|
Prior years (3) |
|
389 |
|
|
|
452 |
|
|
|
1,314 |
|
|
|
2,017 |
|
Total claims and claim
expenses paid |
|
390 |
|
|
|
453 |
|
|
|
1,388 |
|
|
|
2,033 |
|
|
|
|
|
|
|
|
|
Reserve at end of period, net
of reinsurance recoverables |
|
78,249 |
|
|
|
83,231 |
|
|
|
78,249 |
|
|
|
83,231 |
|
Add reinsurance recoverables
(1) |
|
21,587 |
|
|
|
20,320 |
|
|
|
21,587 |
|
|
|
20,320 |
|
Ending balance |
$ |
99,836 |
|
|
$ |
103,551 |
|
|
$ |
99,836 |
|
|
$ |
103,551 |
|
(1) Related to ceded losses recoverable under
the QSR Transactions.(2) Related to insured loans with their most
recent defaults occurring in the current year. For example, if a
loan defaulted in a prior year and subsequently cured and later
re-defaulted in the current year, the default would be included in
the current year. Amounts are presented net of reinsurance and
included $39.9 million attributed to net case reserves and
$4.5 million attributed to net IBNR reserves for the year
ended December 31, 2022, $18.1 million attributed to net
case reserves and $4.7 million attributed to net IBNR reserves
for the year ended December 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
$42.5 million attributed to net case reserves and
$4.7 million attributed to net IBNR reserves for the year
ended December 31, 2022, $6.3 million attributed to net
case reserves and $5.0 million attributed to net IBNR reserves
for the year ended December 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 |
|
For the year ended |
|
December 31, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
Beginning default inventory |
4,096 |
|
|
7,670 |
|
|
6,227 |
|
|
12,209 |
|
Plus: new defaults |
1,639 |
|
|
1,244 |
|
|
5,225 |
|
|
5,730 |
|
Less: cures |
(1,262 |
) |
|
(2,664 |
) |
|
(6,916 |
) |
|
(11,626 |
) |
Less: claims paid |
(22 |
) |
|
(23 |
) |
|
(81 |
) |
|
(82 |
) |
Less: claims denied |
(2 |
) |
|
— |
|
|
(6 |
) |
|
(4 |
) |
Ending default inventory |
4,449 |
|
|
6,227 |
|
|
4,449 |
|
|
6,227 |
|
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, 2022 |
|
December 31, 2021 |
|
December 31, 2022 |
|
December 31, 2021 |
|
(In Thousands) |
Number of claims paid (1) |
|
22 |
|
|
|
23 |
|
|
|
81 |
|
|
|
82 |
|
Total amount paid for
claims |
$ |
492 |
|
|
$ |
572 |
|
|
$ |
1,741 |
|
|
$ |
2,554 |
|
Average amount paid per
claim |
$ |
22 |
|
|
$ |
25 |
|
|
$ |
21 |
|
|
$ |
31 |
|
Severity (2) |
|
60 |
% |
|
|
53 |
% |
|
|
49 |
% |
|
|
59 |
% |
(1) Count includes 11 and 30 claims settled without payment for
the three months and year ended December 31, 2022,
respectively, and five and 15 claims settled without payment for
the three months and year ended December 31, 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 dates indicated.
Average reserve per
default: |
As of December 31, 2022 |
|
As of December 31, 2021 |
|
(In Thousands) |
Case (1) |
$ |
20.8 |
|
$ |
15.3 |
IBNR (1) (2) |
|
1.6 |
|
|
1.3 |
Total |
$ |
22.4 |
|
$ |
16.6 |
(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, 2022 |
|
September 30, 2022 |
|
December 31, 2021 |
|
(In Thousands) |
Available Assets |
$ |
2,378,627 |
|
$ |
2,275,487 |
|
$ |
2,041,193 |
Risk-Based Required
Assets |
|
1,203,708 |
|
|
1,172,581 |
|
|
1,186,272 |
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