NMI Holdings, Inc. Reports Fourth Quarter and Full Year 2013 Financial Results

PR Newswire

EMERYVILLE, Calif., March 10, 2014 /PRNewswire/ -- NMI Holdings, Inc., (NASDAQ:  NMIH) (the "Company"), the parent company of National Mortgage Insurance Corporation (National MI), today reported its results for the three months and the full year ended December 31, 2013.  The Company reported a net loss for the quarter ended December 31, 2013 of $13.1 million, or $0.23 per share, and a net loss of $55.2 million, or $0.99 per share, for the year ended December 31, 2013.

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Founded in 2012, National Mortgage Insurance Corporation (National MI) is headquartered in Emeryville, California, in the San Francisco Bay Area. NMI Holdings, Inc., National MI's parent company, raised over $500 million of capital in a private placement of its securities in April 2012 and is led by an experienced management team. National MI has received approval from Fannie Mae and Freddie Mac as a qualified mortgage insurer, and has been approved to provide mortgage insurance in 48 states...

"Through the hard work of a very talented group of employees, we realized significant and foundational accomplishments in 2013 and continue towards the vision we laid out in 2011," said Bradley Shuster, president and CEO of NMI Holdings, Inc. "We completed an initial public offering and registered shares sold to investors in our initial private placement (making good on our commitment to our stockholders), gained approvals from both GSEs, developed an industry-leading insurance management platform, integrated systems with customers and servicers, and obtained licenses in 50 of 51 jurisdictions," he said.

In the fourth quarter of 2013, the Company had primary new insurance written of $157.6 million compared to $3.6 million of primary new insurance written for the quarter ended September 30, 2013. Primary new insurance written totaled $162.2 million for the year ended December 31, 2013.  Pool new insurance written for 2013 was $5.2 billion and is related to the Fannie Mae transaction previously disclosed in the Company's 2013 filings with the Securities and Exchange Commission.

For the year ended December 31, 2013, the Company had primary risk-in-force of $36.5 million compared to primary risk-in-force of $1.2 million at September 30, 2013.  Pool risk-in-force for the year ended December 31, 2013 was $93.1 million.

For the fourth quarter of 2013, the Company had total revenues of $2.2 million, primarily comprised of $1.6 million in premiums earned and $1.5 million of investment income offset by $0.9 million of loss from the change in the fair value of the warrant liability.   For the year ended December 31, 2013, the Company had total revenues of $5.6 million, primarily comprised of $4.8 million of investment income and $2.1 million in premiums earned offset by $1.5 million of loss from the change in the fair value of the warrant liability.

Total expenses for the quarter were $15.3 million.  For the year ended December 31, 2013, the Company had total expenses of $60.7 million.

At December 31, 2013, the Company had approximately $465.0 million of cash and investments and book equity of $463.2 million or $7.98 in book value per share.  This book value excludes any benefit attributable to the Company's net deferred tax asset.

As of December 31, 2013, the Company's net deferred tax asset, before valuation allowance was $35.6 million, compared to $26.6 million at September 30, 2013.

During November 2013, the Company completed an initial public offering of 2.4 million shares of its common stock and its common stock began trading on the NASDAQ on November 8, 2013, under the symbol "NMIH." Net proceeds to the Company from the offering were approximately $28 million.

"National MI is quickly establishing itself as the mortgage insurance company that provides one of the most definitive terms of coverage in the industry bolstered by capital strength and no legacy risk.  The customer response to our master policy and unprecedented claims payment certainty has been extremely positive.  We continue to expand our customer footprint each quarter, and as of the end of February 2014, we had approximately 400 master policies signed with lenders, including 12 of the top 25 sellers of GSE loans with private MI, as defined by Inside Mortgage Finance.  In addition, we had approximately 60 lenders sending the Company mortgage insurance applications and 34 customers generating NIW.  The improved housing outlook in 2014 bodes well for the private mortgage insurance industry, and I am confident we will continue to make significant progress in 2014," Shuster said.

Conference Call and Webcast Details

NMI Holdings, Inc. will hold a conference call today, March 10, 2014  at 2:00 p.m. Pacific time / 5:00 p.m. Eastern time to allow analysts and stockholders the opportunity to hear management discuss the Company's quarterly and year end results.  The conference call will be broadcast live on the Company's website, in the "Investor Relations" section at http://ir.nationalmi.com.  The call may also be accessed by dialing (888) 734-0328 inside the U.S., or (678) 894-3054 for international callers using conference ID:  51892317, or by referencing NMI Holdings, Inc.  Investors and analysts are asked to dial-in ten minutes before the conference call begins.

About National MI

National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. (NMIH), is 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 may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Any statements about our expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking.  These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believes," "can," "could," "may," "predicts," "potential," "should," "will," "estimate," "plans," "projects," "continuing," "ongoing," "expects," "intends" and similar words or phrases.  All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that 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.  These risks and uncertainties include, but are not limited to, those set forth under the heading "Risk Factors" in our most recent Registration Statement on Form S-1, and described from time to time in subsequent reports filed with the U.S. Securities and Exchange Commission, including in our quarterly report on Form 10-Q filed on December 17, 2013.  Any or all of our forward-looking statements in this press release may turn out to be inaccurate.  Consequently, our actual results could differ materially from those anticipated in such forward-looking statements contained in this press release.  Any forward-looking statement speaks only as of the date on which it is made and we undertake no obligation to update or revise any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

Media Contact:
Mary McGarity
Strategic Vantage Marketing & Public Relations 
(203) 513-2721 
MaryMcGarity@StrategicVantage.com 


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


For the Quarter Ended December 31,


For the Year Ended December 31,


2013


2012


2013


2012


(unaudited)


(unaudited)






(In Thousands, except per share data)

Revenues








Premiums written








Direct

$

3,058



$



$

3,541



$


Net premiums written

3,058





3,541




Increase in unearned premium

(1,446)





(1,446)




Net premiums earned

1,612





2,095




Net investment income

1,472



5



4,808



6


Net realized investment gains

14





186




(Loss) Gain from change in fair value of

warrant liability

(918)



278



(1,529)



278


Total Revenues

2,180



283



5,560



284


Expenses








Insurance claims and claims expenses, net








Amortization of deferred policy acquisition

costs

1





1




Other underwriting and operating expenses

15,263



13,079



60,743



27,775


Total Expenses

15,264



13,079



60,744



27,775


Net Loss

$

(13,084)



$

(12,796)



$

(55,184)



$

(27,491)










Loss per share








Basic and diluted loss per share

$

(0.23)



$

(0.23)



$

(0.99)



$

(0.73)


Weighted average common shares outstanding

57,238,730



55,500,100



56,005,326



37,909,936


 


CONDENSED CONSOLIDATED BALANCE SHEETS


December 31, 2013


December 31, 2012


(In Thousands)

Total investment portfolio

$

409,088



$

4,864


Cash and cash equivalents

55,929



485,855


Restricted cash



40,338


Software and equipment, net

8,876



7,550


Other assets

7,326



4,161


Total Assets

$

481,219



$

542,768


Reserve for losses and loss adjustment expenses

$



$


Accounts payable and accrued expenses

10,052



8,707


Purchase fees and purchase consideration payable



40,338


Warrant liability

6,371



4,842


Other liabilities

1,579



133


Total Liabilities

18,002



54,020


Total Shareholders' Equity (Deficit)

463,217



488,748


Total Liabilities and Shareholders' Equity

$

481,219



$

542,768


 

New Insurance Written, Insurance in Force, and Risk in Force


As of December 31, 2013

NIW


IIF


RIF

Total Portfolio by FICO Score

(Dollars in Thousands)

Primary









>= 740

$

113,907


70.2

%


$

113,741


70.3

%


$

25,783


70.6

%

680 - 739

47,102


29.0



46,827


29.0



10,459


28.6


620 - 679

1,163


0.8



1,163


0.7



274


0.8










Total Primary

162,172


100.0



161,731


100.0



36,516


100.0











Pool









>= 740

4,186,844


81.0



4,127,451


81.0



75,195


80.8


680 - 739

832,755


16.1



821,852


16.1



15,146


16.2


620 - 679

152,065


2.9



149,214


2.9



2,749


3.0










Total Pool

5,171,664


100.0



5,098,517


100.0



93,090


100.0











Total









>= 740

4,300,751


80.6



4,241,192


80.6



100,978


77.9


680 - 739

879,857


16.5



868,679


16.5



25,605


19.8


620 - 679

153,228


2.9



150,377


2.9



3,023


2.3










Total Portfolio

$

5,333,836


100.0

%


$

5,260,248


100.0

%


$

129,606


100.0

%










RIF on defaulted loans







$



















Primary




Pool

Percentage of RIF by Loan Type












Fixed





91.3

%




100.0

%

Adjustable rate mortgages:












Less than five years










Five years and longer





8.7






Total Primary





100.0

%




100.0

%

 


Primary


Pool


RIF


% of Total LTV


Policy Count


RIF


% of Total LTV


Policy Count

Total RIF by LTV

(Dollars in Thousands)

95.01% and above

$

324



0.9

%


4



$



%



90.01% to 95.00%

16,777



45.9



255








85.01% to 90.00%

15,031



41.2



241








80.01% to 85.00%

4,384



12.0



153








80.00% and below







93,090



100.0



21,921


Total RIF

$

36,516



100.0

%


653



$

93,090



100.0

%


21,921


 


Loan Size


Coverage

Average Primary Loan Size and Coverage by FICO

(Dollars in Thousands)

>= 740

$

253



23.0

%

680 - 739

237



23.4

%

620 - 679

194



22.3

%



%

 


December 31, 2013


September 30, 2013


June 30, 2013


March 31, 2013

Primary

(Dollars in Thousands)

New insurance written

$

157,568



$

3,560



$

1,045



$


Insurance in force (end of period)

$

161,731



$

4,604



$

1,045



$


Policies in force

653



22



6




Weighted-average coverage (1)

22.6

%


26.0

%


24.6

%


%

Loans in default (count)








(1)  End of period risk in force divided by insurance in force.

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