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NMI Holdings, Inc. Reports Record Second Quarter 2019 Financial Results

NMI Holdings, Inc. Reports Record Second Quarter 2019 Financial Results

EMERYVILLE, Calif., July 31, 2019 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (NMIH) today reported GAAP net income of $39.1 million, or $0.56 per diluted share, and adjusted net income of $41.4 million, or $0.59 per diluted share, for its second quarter ended June 30, 2019.  This compares with GAAP net income of $32.9 million, or $0.48 per diluted share, and adjusted net income of $38.5 million, or $0.56 per diluted share, in the first quarter ended March 31, 2019.  In the second quarter of 2018, the company reported GAAP net income of $25.2 million, or $0.37 per diluted share, and adjusted net income of $27.4 million, or $0.40 per diluted share.  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.

Claudia Merkle, CEO of National MI, said, "National MI again delivered record performance, including new insurance written of $12.2 billion, net premiums earned of $83.2 million, adjusted net income of $41.4 million and adjusted return-on-equity of 21.2%.  We continued to grow our high-quality insured portfolio at an industry-leading rate and are driving accelerating momentum in our customer franchise.  We also succeeded with our third Insurance-Linked Notes offering, further extending our comprehensive credit risk management framework.  The $327 million offering, which closed earlier this week, provides significant incremental PMIERs capital support and helps to insulate National MI from adverse loss in our insured portfolio."

  • As of June 30, 2019, the company had primary insurance-in-force of $81.7 billion, up 12% from $73.2 billion at March 31, 2019 and up 41% compared to $58.1 billion as of June 30, 2018.
  • Net premiums earned for the quarter were $83.2 million, up 13% compared to $73.9 million for the first quarter of 2019 and up 35% compared to $61.6 million for the second quarter of 2018.
  • Total underwriting and operating expenses in the quarter were $32.5 million, including $0.7 million of fees and expenses related to the recently completed Insurance-Linked Notes transaction.  This compares with total underwriting and operating expenses of $30.8 million in the first quarter of 2019 and $29.0 million in the second quarter of 2018, which included $0.7 million of fees and expenses related to the issuance of Insurance-Linked Notes completed in July 2018.
  • At quarter-end, cash and investments were $1.1 billion and shareholders’ equity was $812 million, equal to $11.99 per share.
  • Return-on-equity for the quarter was 20.0% and adjusted return-on-equity (a non-GAAP measure) was 21.2%.
  • At quarter-end, the company had total PMIERs available assets of $879 million, which compares with risk- based required assets under PMIERs of $782 million.  The PMIERs required assets do not reflect the benefit of the recently completed Insurance-Linked Notes transaction and related excess-of-loss reinsurance coverage, which occurred after the close of the second quarter.

The non-GAAP measures of adjusted net income, adjusted diluted EPS and adjusted return-on-equity for the quarters presented exclude the after-tax impact of periodic capital markets transaction costs, changes in the fair value of our warrant liability and realized gains or losses from our investment portfolio.

             
    Quarter
Ended
6/30/2019
Quarter
Ended
3/31/2019
Quarter
Ended
6/30/2018
   
    Change (1)
Q/Q
Change (1)
Y/Y
   
Primary Insurance-in-Force ($billions)   $ 81.7   $ 73.2   $ 58.1   12 % 41 %
New Insurance Written - NIW ($billions)            
Monthly premium   11.1   6.2   5.7   78 % 94 %
Single premium   1.1   0.7   0.8   58 % 39 %
Total   12.2   6.9   6.5   76 % 87 %
             
Premiums Earned ($millions)   83.2   73.9   61.6   13 % 35 %
Underwriting & Operating Expense ($millions)   32.5   30.8   29.0   5 % 12 %
Loss Expense ($millions)   2.9   2.7   0.6   7 % 355 %
Loss Ratio   3.5 % 3.7 % 1.0 %    
Expense Ratio   39.1 % 41.8 % 47.1 %    
Cash & Investments ($millions)   $ 1,053.3   $ 980.0   $ 854.7   7 % 23 %
Book Equity ($millions)   812.4   751.9   629.6   8 % 29 %
Book Value per Share   $ 11.99   $ 11.14   $ 9.58   8 % 25 %
(1) Percentages may not be replicated based on the rounded figures presented in the table.
 

Conference Call and Webcast Details

The company will hold a conference call, which will be webcast live today, July 31, 2019, 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: 8584908 or by referencing NMI Holdings, Inc.

About NMI Holdings, Inc.

NMI Holdings, Inc. (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 (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (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: changes in the business practices of Fannie Mae and Freddie Mac (collectively, the GSEs), including decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement; 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 government mortgage insurers, such as the Federal Housing Administration, U.S. Department of Agriculture's Rural Housing Service and the Veterans Administration, and potential market entry by new competitors or consolidation of existing competitors; developments in the world's financial and capital markets and our access to such markets, including reinsurance; adoption of new or changes to existing laws and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including any action by the Consumer Financial Protection Bureau to address the planned expiration of the "QM Patch" under the Dodd-Frank Act Ability to Repay / Qualified Mortgage Rule; legislative or regulatory changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; changes in general economic, market and political conditions and policies, interest rates, inflation and investment results or other conditions that affect the housing market or the markets for home mortgages or mortgage insurance; our ability to successfully execute and implement our capital plans, including our ability to access the capital, credit and reinsurance markets and to enter into, and receive approval of reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low-down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from recent natural disasters, including, with respect to the 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; and, our ability to recruit, train and retain key personnel.  These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2018, 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 and adjusted diluted earnings per share (EPS) enhance 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 in order to increase transparency and enhance the comparability of our fundamental operating trends across periods.

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 discrete, non-recurring and 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 discrete, non-recurring and 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 years 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.

Although adjusted income before tax, adjusted net income and adjusted diluted EPS 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)   Infrequent or unusual non-operating items. Items that are the result of unforeseen or uncommon events, which occur separately from operating earnings and are not expected to recur 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 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 non-recurring in nature, are not part of our primary operating activities and do not reflect our current period operating results.
     

We believe the disclosure of these items and adjustments provides increased transparency to investors and enhances 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.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com

         
Consolidated statements of operations and comprehensive income   For the three months ended June 30,   For the six months ended June 30,
    2019   2018   2019   2018
                 
Revenues   (In Thousands, except for per share data)
Net premiums earned   $ 83,249     $ 61,615     $ 157,118     $ 116,529  
Net investment income   7,629     5,735     15,012     10,309  
Net realized investment (losses) gains   (113 )   59     (300 )   59  
Other revenues   415     44     456     108  
Total revenues   91,180     67,453     172,286     127,005  
Expenses                
Insurance claims and claim expenses   2,923     643     5,666     2,212  
Underwriting and operating expenses   32,543     29,020     63,392     57,473  
Total expenses   35,466     29,663     69,058     59,685  
Other expense                
(Loss) gain from change in fair value of warrant liability   (1,685 )   109     (7,164 )   529  
Interest expense   (3,071 )   (5,560 )   (6,132 )   (8,979 )
Total other expense   (4,756 )   (5,451 )   (13,296 )   (8,450 )
                 
Income before income taxes   50,958     32,339     89,932     58,870  
Income tax expense   11,858     7,098     17,933     11,274  
Net income   $ 39,100     $ 25,241     $ 71,999     $ 47,596  
                 
Earnings per share                
Basic   $ 0.58     $ 0.38     $ 1.07     $ 0.74  
Diluted   $ 0.56     $ 0.37     $ 1.04     $ 0.70  
                 
Weighted average common shares outstanding                
Basic   67,590     65,664     67,143     63,891  
Diluted   69,590     68,616     69,348     67,171  
                 
Loss ratio(1)   3.5 %   1.0 %   3.6 %   1.9 %
Expense ratio(2)   39.1 %   47.1 %   40.3 %   49.3 %
Combined ratio(3)   42.6 %   48.1 %   44.0 %   51.2 %
                 
Net income   $ 39,100     $ 25,241     $ 71,999     $ 47,596  
Other comprehensive income (loss), net of tax:                
Unrealized gains (losses) in accumulated other comprehensive income, net of tax expense (benefit) of $3,662 and ($2,879) for the three months ended June 30, 2019 and 2018 and $7,615 and ($3,304) for the six months ended June 30, 2019 and 2018, respectively   13,779     (1,464 )   28,647     (12,429 )
Reclassification adjustment for realized losses (gains) included in net income, net of tax (benefit) expense of ($24) and $12 for the three months ended June 30, 2019 and 2018 and ($63) and $10 for the six months ended June 30, 2019 and 2018, respectively   89     (46 )   237     (37 )
Other comprehensive income (loss), net of tax   13,868     (1,510 )   28,884     (12,466 )
Comprehensive income   $ 52,968     $ 23,731     $ 100,883     $ 35,130  
(1) Loss ratio is calculated by dividing the provision for 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   June 30, 2019   December 31, 2018
         
Assets   (In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $994,543 and $924,987 as of June 30, 2019 and December 31, 2018, respectively)   $ 1,017,607     $ 911,490  
Cash and cash equivalents (including restricted cash of $1,430 and $1,414 as of June 30, 2019 and December 31, 2018, respectively)   35,735     25,294  
Premiums receivable   42,225     36,007  
Accrued investment income   6,301     5,694  
Prepaid expenses   3,358     3,241  
Deferred policy acquisition costs, net   52,607     46,840  
Software and equipment, net   25,827     24,765  
Intangible assets and goodwill   3,634     3,634  
Prepaid reinsurance premiums   20,426     30,370  
Other assets   12,679     4,708  
Total assets   $ 1,220,399     $ 1,092,043  
         
Liabilities        
Term loan   $ 146,253     $ 146,757  
Unearned premiums   151,358     158,893  
Accounts payable and accrued expenses   24,351     31,141  
Reserve for insurance claims and claim expenses   18,432     12,811  
Reinsurance funds withheld   18,092     27,114  
Warrant liability, at fair value   9,679     7,296  
Deferred tax liability, net   28,258     2,740  
Other liabilities (1)   11,597     3,791  
Total liabilities   408,020     390,543  
         
Shareholders' equity        
Common stock - class A shares, $0.01 par value; 67,768,466 and 66,318,849 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively (250,000,000 shares authorized)   677     663  
Additional paid-in capital   692,163     682,181  
Accumulated other comprehensive income (loss), net of tax   14,052     (14,832 )
Retained earnings   105,487     33,488  
Total shareholders' equity   812,379     701,500  
Total liabilities and shareholders' equity   $ 1,220,399     $ 1,092,043  
(1) Deferred Ceding Commissions have been reclassified to "Other Liabilities" in prior periods


Non-GAAP Financial Measure Reconciliations
  Quarter ended   Quarter ended   Quarter ended
  6/30/2019   3/31/2019   6/30/2018
 As Reported (In Thousands, except for per share data)
Revenues          
Net premiums earned $ 83,249     $ 73,868     $ 61,615  
Net investment income 7,629     7,383     5,735  
Net realized investment (losses) gains (113 )   (187 )   59  
Other revenues 415     42     44  
Total revenues 91,180     81,106     67,453  
Expenses          
Insurance claims and claim expenses 2,923     2,743     643  
Underwriting and operating expenses 32,543     30,849     29,020  
Total expenses 35,466     33,592     29,663  
Other Expense          
(Loss) gain from change in fair value of warrant liability (1,685 )   (5,479 )   109  
Interest expense (3,071 )   (3,061 )   (5,560 )
Total other expense (4,756 )   (8,540 )   (5,451 )
           
Income before income taxes 50,958     38,974     32,339  
Income tax expense 11,858     6,075     7,098  
Net income $ 39,100     $ 32,899     $ 25,241  
           
Adjustments:          
Net realized investment losses  (gains) 113     187     (59 )
Loss (Gain) from change in fair value of warrant liability 1,685     5.479     (109 )
Capital markets transaction costs 664         2,921  
Adjusted income before taxes 53,420     44,640     35,092  
           
Income tax expense on adjustments 163     39     578  
Adjusted net income $ 41,399     $ 38,526     $ 27,416  
           
Weighted average diluted shares outstanding 69,590     68,996     68,616  
           
Diluted EPS $ 0.56     $ 0.48     $ 0.37  
Adjusted diluted EPS $ 0.59     $ 0.56     $ 0.40  
           
Return-on-equity 20.0 %   18.1 %   16.4 %
Adjusted return-on-equity 21.2 %   21.2 %   17.8 %


Historical Quarterly Data   2019   2018
    June 30   March 31   December 31   September 30   June 30   March 31
                         
Revenues   (In Thousands, except for per share data)
Net premiums earned   $ 83,249     $ 73,868     $ 69,261     $ 65,407     $ 61,615     $ 54,914  
Net investment income   7,629     7,383     6,952     6,277     5,735     4,574  
Net realized investment (losses) gains   (113 )   (187 )   6     (8 )   59      
Other revenues   415     42     40     85     44     64  
Total revenues   91,180     81,106     76,259     71,761     67,453     59,552  
Expenses                        
Insurance claims and claim expenses   2,923     2,743     2,141     1,099     643     1,569  
Underwriting and operating expenses   32,543     30,849     29,384     30,379     29,020     28,453  
Total expenses   35,466     33,592     31,525     31,478     29,663     30,022  
                         
Other (expense) income (1)   (4,756 )   (8,540 )   510     (8,436 )   (5,451 )   (2,999 )
                         
Income before income taxes   50,958     38,974     45,244     31,847     32,339     26,531  
Income tax expense   11,858     6,075     9,724     7,036     7,098     4,176  
Net income   $ 39,100     $ 32,899     $ 35,520     $ 24,811     $ 25,241     $ 22,355  
                         
Earnings per share                        
Basic   $ 0.58     $ 0.49     $ 0.54     $ 0.38     $ 0.38     $ 0.36  
Diluted   $ 0.56     $ 0.48     $ 0.46     $ 0.36     $ 0.37     $ 0.34  
                         
Weighted average common shares outstanding                        
Basic   67,590     66,692     66,308     65,948     65,664     62,099  
Diluted   69,590     68,996     69,013     68,844     68,616     65,697  
                         
Other data                        
Loss Ratio  (2)   3.5 %   3.7 %   3.1 %   1.7 %   1.0 %   2.9 %
Expense Ratio (3)   39.1 %   41.8 %   42.4 %   46.4 %   47.1 %   51.8 %
Combined ratio   42.6 %   45.5 %   45.5 %   48.1 %   48.1 %   54.7 %
(1) Other (expense) income includes the gain (loss) from change in fair value of warrant liability and interest expense.
(2) Loss ratio is calculated by dividing the provision for insurance claims and claim expenses by net premiums earned.
(3) Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.
 

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
    June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018
                         
    (In Millions)
Monthly   $ 11,067     $ 6,211     $ 6,296     $ 6,675     $ 5,711     $ 5,441  
Single   1,112     702     666     686     802     1,019  
Primary   $ 12,179     $ 6,913     $ 6,962     $ 7,361     $ 6,513     $ 6,460  


Primary and pool IIF   As of
    June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018
                         
    (In Millions)
Monthly   $ 63,922     $ 55,995     $ 51,655     $ 46,967     $ 41,843     $ 37,574  
Single   17,786     17,239     16,896     16,560     16,246     15,860  
Primary   81,708     73,234     68,551     63,527     58,089     53,434  
                         
Pool   2,758     2,838     2,901     2,974     3,064     3,153  
Total   $ 84,466     $ 76,072     $ 71,452     $ 66,501     $ 61,153     $ 56,587  
 

The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction and 2018 QSR Transaction, and collectively, the QSR Transactions) for the periods indicated.

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    As of and for the three months ended
    June 30, 2019   March 31, 2019   December 31, 2018   September 30, 2018   June 30, 2018   March 31, 2018
                         
    (In Thousands)
Ceded risk-in-force   $ 4,558,862     $ 4,534,353     $ 4,292,450     $ 3,960,461     $ 3,606,928     $ 3,304,335  
Ceded premiums written   (18,592 )   (18,845 )   (17,799 )   (16,546 )   (15,318 )   (14,525 )
Ceded premiums earned   (20,919 )   (21,468 )   (20,487 )   (19,286 )   (18,077 )   (16,218 )
Ceded claims and claim expenses   770     899     710     337     173     543  
Ceding commission written   3,717     3,771     3,549     3,320     3,064     2,905  
Ceding commission earned   4,171     4,206     4,084     3,814     3,536     3,151  
Profit commission   11,884