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Press release content from Globe Newswire. The AP news staff was not involved in its creation.

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

May 1, 2019

EMERYVILLE, Calif., May 01, 2019 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported 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, for its first quarter ended March 31, 2019. This compares with GAAP net income of $35.5 million, or $0.46 per diluted share, and adjusted net income of $32.1 million, or $0.46 per diluted share, in the fourth quarter ended December 31, 2018. In the first quarter of 2018, the company reported GAAP net income of $22.4 million, or $0.34 per diluted share, and adjusted net income of $22.0 million, or $0.34 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 delivered record first quarter financial results, including new insurance written of $6.9 billion, net premiums earned of $73.9 million, adjusted net income of $38.5 million and adjusted return-on-equity of 21.2%. We continued to grow our high-quality insured portfolio at an industry-leading rate and saw sustained momentum within our customer franchise. We remain focused on achieving disciplined growth and executing on our broad-based credit risk management framework, which continues to drive favorable loss performance in our insured portfolio.”

-- As of March 31, 2019, the company had primary insurance-in-force of $73.2 billion, up 7% from $68.6 billion at December 31, 2018 and up 37% compared to $53.4 billion as of March 31, 2018. -- Net premiums earned for the quarter were $73.9 million, up 7% over $69.3 million for the fourth quarter of 2018 and up 35% over $54.9 million for the first quarter of 2018. -- Total underwriting and operating expenses in the quarter were $30.8 million, compared to $29.4 million in the fourth quarter of 2018 and $28.5 million in first quarter of 2018. -- At quarter-end, cash and investments were $980 million and shareholders’ equity was $752 million, equal to $11.14 per share. Return-on-equity for the quarter was 18.1% and adjusted return-on-equity (a non-GAAP measure) was 21.2%. -- At quarter-end, the company had total PMIERs available assets of $818 million, which compares with risk- based required assets under PMIERs of $607 million.

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 Quarter Quarter ChangeChange Ended Ended Ended (1) (1) 3/31/2019 12/31/20183/31/2018 Q/Q Y/Y Primary Insurance-in-Forc$ 73.2 $ 68.6 $ 53.4 7 % 37 % e ($billions) New Insurance Written - NIW ($billions) Monthly premium 6.2 6.3 5.4 (1 )% 14 % Single premium 0.7 0.7 1.0 5 % (31 )% Total 6.9 7.0 6.4 (1 )% 7 % Premiums Earned 73.9 69.3 54.9 7 % 35 % ($millions) Underwriting & Operating 30.8 29.4 28.5 5 % 8 % Expense ($millions) Loss Expense 2.7 2.1 1.6 28 % 75 % ($millions) Loss Ratio 3.7 % 3.1 % 2.9 % Cash & Investments $ 980.0 $ 936.8 $ 825.7 5 % 19 % ($millions) Book Equity 751.9 701.5 601.9 7 % 25 % ($millions) Book Value per $ 11.14 $ 10.58 $ 9.18 5 % 21 % Share

(1) Percentages may not be recalculated based on the rounded figures presented in the table.

Conference Call and Webcast Details

The company will hold a conference call and live webcast today 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 call also can be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 for international callers, and using Conference ID: 9578094 or by referencing NMI Holdings, Inc.

About NMI Holdings, Inc.

NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower’s default. To learn more, please visit www.nationalmi.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (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; 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.

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 (1) 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. Capital markets transaction costs.Capital markets transaction costs result from activities that are (2) 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. Net realized investment gains and losses. The recognition of the net realized investment gains or losses (3) 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. 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 (4) 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 ContactJohn M. SwensonVice President, Investor Relations and Treasury john.swenson@nationalmi.com (510) 788-8417

Press ContactMary McGarityStrategic Vantage Mortgage Public Relations(203) 513-2721 MaryMcGarity@StrategicVantage.com

Consolidated statements of operations and comprehensive income For the three months ended March 31, 2019 2018 ---------- ---------- Revenues (In Thousands, except for per share data) ---------------------- Net premiums earned $ 73,868 $ 54,914 Net investment income 7,383 4,574 Net realized investment losses (187 ) — Other revenues 42 64 -------- - Total revenues 81,106 59,552 -------- - -------- - Expenses Insurance claims and claim expenses 2,743 1,569 Underwriting and operating expenses 30,849 28,453 Total expenses 33,592 30,022 -------- - -------- - Other expense Gain (loss) from change in fair value of warrant liability (5,479 ) 420 Interest expense (3,061 ) (3,419 ) -------- - Total other expense (8,540 ) (2,999 ) -------- - -------- - Income before income taxes 38,974 26,531 Income tax expense 6,075 4,176 Net income $ 32,899 $ 22,355 - ------ - - ------ - Earnings per share Basic $ 0.49 $ 0.36 Diluted $ 0.48 $ 0.34 Weighted average common shares outstanding Basic 66,692 62,099 Diluted 68,996 65,697 Loss ratio(1) 3.7 % 2.9 % Expense ratio(2) 41.8 % 51.8 % Combined ratio 45.5 % 54.7 % Net income $ 32,899 $ 22,355 - ------ - - ------ - Other comprehensive income (loss), net of tax: Unrealized (losses) gains in accumulated other comprehensive income, net of tax (benefit) expense of $3,953 and ($423) for the quarters ended March 31, 2019 and 2018, 14,868 (10,956 ) respectively Reclassification adjustment for realized losses (gains) included in net income, net of tax expense (benefit) of ($39) and $0 for the quarters ended March 31, 2019 and 2018, 148 — respectively -------- - -------- - Other comprehensive income (loss), net of tax 15,016 (10,956 ) -------- - Comprehensive income $ 47,915 $ 11,399 - ------ - - ------ - (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.

Consolidated balance sheets March 31, 2019 December 31, 2018 -------------- ------------- Assets (In Thousands, except for share data) Fixed maturities, available-for-sale, at fair value (amortized cost of $934,712 $ 940,223 $ 911,490 and $924,987 as of March 31, 2019 and December 31, 2018, respectively) Cash and cash equivalents (including restricted cash of $1,422 and $1,414 as of 39,761 25,294 March 31, 2019 and December 31, 2018, respectively) Premiums receivable 38,478 36,007 Accrued investment income 6,553 5,694 Prepaid expenses 4,454 3,241 Deferred policy acquisition costs, net 48,820 46,840 Software and equipment, net 25,105 24,765 Intangible assets and goodwill 3,634 3,634 Prepaid reinsurance premiums 27,747 30,370 Other assets 12,736 4,708 Total assets $ 1,147,511 $ 1,092,043 - --------- -- - --------- - Liabilities Term loan $ 146,503 $ 146,757 Unearned premiums 154,325 158,893 Accounts payable and accrued expenses 16,981 31,141 Reserve for insurance claims and claim expenses 15,537 12,811 Reinsurance funds withheld 25,308 27,114 Warrant liability, at fair value 11,831 7,296 Deferred tax liability, net 12,770 2,740 Other liabilities (1) 12,375 3,791 Total liabilities 395,630 390,543 ----------- -- ----------- - Shareholders’ equity Common stock - class A shares, $0.01 par value; 67,501,958 and 66,318,849 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively 675 663 (250,000,000 shares authorized) Additional paid-in capital 684,635 682,181 Accumulated other comprehensive income (loss), net of tax 184 (14,832 ) Retain earnings 66,387 33,488 Total shareholders’ equity 751,881 701,500 Total liabilities and shareholders’ equity $ 1,147,511 $ 1,092,043 - --------- -- - --------- - (1) Deferred Ceding Commissions have been reclassified to “Other Liabilities” in prior periods

Non-GAAP Financial Measure Reconciliations Quarter Quarter Quarter ended ended ended 3/31/2019 12/31/2018 3/31/2018 As Reported (In Thousands, except for per share data) Revenues Net premiums earned $ 73,868 $ 69,261 $ 54,914 Net investment income 7,383 6,952 4,574 Net realized investment gains (losses) (187 ) 6 — Other revenues 42 40 64 -------- - -------- - -------- - --- Total revenues 81,106 76,259 59,552 Expenses Insurance claims and claim expenses 2,743 2,141 1,569 Underwriting and operating expenses 30,849 29,384 28,453 -------- - -------- - --- Total expenses 33,592 31,525 30,022 Other Expense Gain (loss) from change in fair value of warrant liability (5,479 ) 3,538 420 Interest expense (3,061 ) (3,028 ) (3,419 ) -------- - -------- - -------- - --- Total other expense (8,540 ) 510 (2,999 ) Income before income taxes 38,974 45,244 26,531 Income tax expense 6,075 9,724 4,176 -------- - -------- - -------- - --- Net income $ 32,899 $ 35,520 $ 22,355 Adjustments: Net realized investment (gains) losses 187 (6 ) — (Gain) Loss from change in fair value of warrant liability 5,479 (3,538 ) (420 ) Capital markets transaction costs — 102 — -------- - -------- - -------- - --- Adjusted income before taxes 44,640 41,802 26,111 Income tax expense (benefit) on adjustments 39 20 (88 ) -------- - -------- - -------- - --- Adjusted net income $ 38,526 $ 32,058 $ 22,023 Weighted average diluted shares outstanding 68,996 69,013 65,697 Adjusted weighted average diluted shares outstanding 68,996 69,013 65,697 Diluted EPS $ 0.48 $ 0.46 (1) $ 0.34 (1) Adjusted diluted EPS $ 0.56 $ 0.46 $ 0.34 Return-on-equity 18.1 % 20.9 % 16.1 % Adjusted return-on-equity 21.2 % 18.8 % 15.9 %

Diluted net income excludes the impact of the warrant fair value change as it was anti-dilutive. For the (1) three months ended March 31, 2019, diluted net income equals reported net income as the impact of the warrant fair value change was dilutive.

Historical Quarterly Data 2019 2018 2017 ----------- -------------------------------------------------- ----------- March 31 December 31 September June 30 March 31 December 31 30 ----------- ----------- ----------- ----------- ----------- ----------- Revenues (In Thousands, except for per share data) Net premiums earned $ 73,868 $ 69,261 $ 65,407 $ 61,615 $ 54,914 $ 50,079 Net investment income 7,383 6,952 6,277 5,735 4,574 4,388 Net realized investment gains (187 ) 6 (8 ) 59 — 9 (losses) Other revenues 42 40 85 44 64 62 --------- - --------- - --------- - --------- - --------- - Total revenues 81,106 76,259 71,761 67,453 59,552 54,538 --------- - --------- - --------- - --------- - --------- - --------- - Expenses Insurance claims and claim 2,743 2,141 1,099 643 1,569 2,374 expenses Underwriting and operating 30,849 29,384 30,379 29,020 28,453 28,297 expenses --------- - --------- - --------- - --------- - --------- - Total expenses 33,592 31,525 31,478 29,663 30,022 30,671 --------- - --------- - --------- - --------- - --------- - --------- - Other expense (1) (8,540 ) 510 (8,436 ) (5,451 ) (2,999 ) (6,808 ) Income before income taxes 38,974 45,244 31,847 32,339 26,531 17,059 Income tax expense 6,075 9,724 7,036 7,098 4,176 18,825 --------- - --------- - --------- - --------- - --------- - --------- - Net income (loss) $ 32,899 $ 35,520 $ 24,811 $ 25,241 $ 22,355 $ (1,766 ) -- ------ - -- ------ - -- ------ - -- ------ - -- ------ - -- ------ - Earnings (losses) per share Basic $ 0.49 $ 0.54 $ 0.38 $ 0.38 $ 0.36 $ (0.03 ) Diluted $ 0.48 $ 0.46 $ 0.36 $ 0.37 $ 0.34 $ (0.03 ) Weighted average common shares outstanding Basic 66,692 66,308 65,948 65,664 62,099 60,219 Diluted 68,996 69,013 68,844 68,616 65,697 60,219 Other data Loss Ratio (2) 3.7 % 3.1 % 1.7 % 1.0 % 2.9 % 4.7 % Expense Ratio (3) 41.8 % 42.4 % 46.4 % 47.1 % 51.8 % 56.5 % Combined ratio 45.5 % 45.5 % 48.1 % 48.1 % 54.7 % 61.2 %

(1) Other expense 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 March 31, December Septembe June March December 31, r 30, 30, 31, 31, 2019 2018 2018 2018 2018 2017 --------- ------- ------- ------- ------- ------- (In Millions) Monthly $ 6,211 $ 6,296 $ 6,675 $ 5,711 $ 5,441 $ 5,736 Single 702 666 686 802 1,019 1,140 - ----- - - ----- - ----- - ----- - ----- - ----- Primary $ 6,913 $ 6,962 $ 7,361 $ 6,513 $ 6,460 $ 6,876

Primary and pool IIF As of March December September June 30, March December 31, 31, 2018 30, 2018 2018 31, 31, 2017 2019 2018 -------- -------- -------- -------- -------- -------- (In Millions) Monthly $ 55,995 $ 51,655 $ 46,967 $ 41,843 $ 37,574 $ 33,268 Single 17,239 16,896 16,560 16,246 15,860 15,197 - ------ Primary 73,234 68,551 63,527 58,089 53,434 48,465 Pool 2,838 2,901 2,974 3,064 3,153 3,233 Total $ 76,072 $ 71,452 $ 66,501 $ 61,153 $ 56,587 $ 51,698 - ------ - ------ - ------ - ------ - ------ - ------

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.

As of and for the three months ended ---------------------------------------------------------------------------------------- March 31, December 31, September 30, June 30, March 31, December 2019 2018 2018 2018 2018 31, 2017 ------------- ------------- ------------- ------------- ------------- ----------- (In Thousands) Ceded risk-in-force $ 4,534,353 $ 4,292,450 $ 3,960,461 $ 3,606,928 $ 3,304,335 $ 2,983,353 Ceded premiums (18,845 ) (17,799 ) (16,546 ) (15,318 ) (14,525 ) (15,233 ) written Ceded premiums earned (21,468 ) (20,487 ) (19,286 ) (18,077 ) (16,218 ) (14,898 ) Ceded claims and 899 710 337 173 543 800 claim expenses Ceding commission 3,771 3,549 3,320 3,064 2,905 3,047 written Ceding commission 4,206 4,084 3,814 3,536 3,151 2,885 earned Profit commission 12,061 11,666 11,272 10,707 9,201 8,139

Portfolio Statistics

The table below highlights trends in our primary portfolio as of the date and for the periods indicated.

Primary portfolio As of and for the three months ended trends March 31, December 31, September June 30, March 31, December 31, 2019 2018 30, 2018 2018 2018 2017 - --------- - - ------------ - - --------- - - -------- - - --------- - - ------------ - ($ Values In Millions) New insurance $ 6,913 $ 6,962 $ 7,361 $ 6,513 $ 6,460 $ 6,876 written New risk 1,799 1,799 1,883 1,647 1,580 1,665 written Insurance in force (IIF) 73,234 68,551 63,527 58,089 53,434 48,465 (1) Risk in force 18,373 17,091 15,744 14,308 13,085 11,843 (1) Policies in force (count) 297,232 280,825 262,485 241,993 223,263 202,351 (1) Average loan $ 0.246 $ 0.244 $ 0.242 $ 0.240 $ 0.239 $ 0.240 size (1) Average 25.1 % 24.9 % 24.8 % 24.6 % 24.5 % 24.4 % coverage (2) Loans in default 940 877 746 768 1,000 928 (count) (1) Percentage of loans in 0.3 % 0.3 % 0.3 % 0.3 % 0.5 % 0.5 % default Risk in force on defaulted $ 53 $ 48 $ 42 $ 43 $ 57 $ 53 loans (1) Average premium yield 0.42 % 0.42 % 0.43 % 0.44 % 0.43 % 0.44 % (3) Earnings from $ 2.3 $ 2.1 $ 2.6 $ 3.1 $ 2.8 $ 4.2 cancellations Annual persistency 87.2 % 87.1 % 86.1 % 85.5 % 85.7 % 86.1 % (4) Quarterly 3.3 % 3.1 % 3.3 % 3.5 % 3.1 % 3.9 % run-off(5)

(1) Reported as of the end of the period. (2) Calculated as end of period risk in force (RIF) divided by IIF. (3) Calculated as net primary and pool premiums earned, net of reinsurance, divided by average primary IIF for the period, annualized. (4) Defined as the percentage of IIF that remains on our books after any 12-month period. (5) Defined as the percentage of IIF that is no longer on our books after any 3-month period.

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 March December March 31, 31, 31, 2019 2018 2018 ------- ------- ------- ($ In Millions) >= 760 $ 3,057 $ 3,125 $ 2,619 740-759 1,224 1,198 1,073 720-739 1,044 1,033 914 700-719 792 797 811 680-699 553 559 567 <=679 243 250 476 - ----- - ----- - ----- Total $ 6,913 $ 6,962 $ 6,460 - ----- Weighted average FICO 749 750 743 - ----- - ----- - -----

Primary NIW by LTV For the three months ended March 31, December March 31, 2019 31, 2018 2018 --------- --------- --------- (In Millions) 95.01% and above $ 569 $ 582 $ 997 90.01% to 95.00% 3,424 3,409 2,765 85.01% to 90.00% 2,241 2,224 1,755 85.00% and below 679 747 943 Total $ 6,913 $ 6,962 $ 6,460 - ----- - - ----- - Weighted average LTV 92.2 % 92.1 % 92.5 % ------- - ------- - ------- -

Primary NIW by purchase/refinance mix For the three months ended March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Millions) Purchase $ 6,383 $ 6,627 $ 5,425 Refinance 530 335 1,035 Total $ 6,913 $ 6,962 $ 6,460 - ----- ------ - ----- --------- - ----- ------

The table below presents a summary of our primary IIF and RIF by book year as of March 31, 2019

Primary IIF and RIF As of March 31, 2019 IIF RIF --------- --------- (In Millions) March 31, 2019 $ 6,872 $ 1,789 2018 25,609 6,492 2017 18,353 4,514 2016 14,750 3,652 2015 6,585 1,658 2014 and before 1,065 268 -------- -------- Total $ 73,234 $ 18,373 - ------ - ------

The tables below present our total primary IIF and RIF by FICO and LTV and total primary RIF by loan type as of the dates indicated.

Primary IIF by FICO As of March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Millions) >= 760 $ 33,902 $ 31,870 $ 25,371 740-759 12,160 11,294 8,635 720-739 10,096 9,338 6,981 700-719 8,122 7,574 5,814 680-699 5,435 5,062 3,852 <=679 3,519 3,413 2,781 Total $ 73,234 $ 68,551 $ 53,434 - ------ ----- - ------ -------- - ------

Primary RIF by FICO As of March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Millions) >= 760 $ 8,506 $ 7,955 $ 6,246 740-759 3,076 2,836 2,125 720-739 2,550 2,341 1,710 700-719 2,036 1,886 1,416 680-699 1,357 1,256 932 <=679 848 817 656 Total $ 18,373 $ 17,091 $ 13,085 - ------ ----- - ------ -------- - ------

Primary IIF by LTV As of March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Millions) 95.01% and above $ 7,204 $ 6,774 $ 4,872 90.01% to 95.00% 34,024 31,507 23,937 85.01% to 90.00% 22,208 20,668 16,034 85.00% and below 9,798 9,602 8,591 -------- ----- Total $ 73,234 $ 68,551 $ 53,434 - ------ ----- - ------ -------- - ------ -----

Primary RIF by LTV As of March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Millions) 95.01% and above $ 1,928 $ 1,801 $ 1,294 90.01% to 95.00% 9,923 9,185 6,978 85.01% to 90.00% 5,384 4,994 3,831 85.00% and below 1,138 1,111 982 Total $ 18,373 $ 17,091 $ 13,085 - ------ ----- - ------ -------- - ------ -----

Primary RIF by Loan Type As of March Decemb March 31, er 31, 2019 31, 2018 2018 ----- ----- ----- Fixed 98 % 98 % 98 % Adjustable rate mortgages: Less than five years — — — Five years and longer 2 2 2 Total 100 % 100 % 100 %

The table below presents a summary of the change in total primary IIF during the periods indicated.

Primary IIF For the three months ended March 31, December March 31, 2019 31, 2018 2018 ---------- ---------- ---------- (In Millions) IIF, beginning of period $ 68,551 $ 63,527 $ 48,465 NIW 6,913 6,962 6,460 Cancellations and other reductions (2,230 ) (1,938 ) (1,491 ) -------- - IIF, end of period $ 73,234 $ 68,551 $ 53,434 - ------ - - ------ - - ------ -

Geographic Dispersion

The following table shows the distribution by state of our primary RIF as of the periods indicated.

Top 10 primary RIF by state As of March 31, Decembe March 2019 r 31, 31, 2018 2018 --------- ------ ------ California 12.7 % 13.0 % 13.5 % Texas 8.3 8.2 8.0 Florida 5.2 5.0 4.7 Virginia 5.0 4.9 5.1 Arizona 4.8 4.9 4.8 Michigan 3.6 3.6 3.7 Pennsylvania 3.6 3.6 3.6 Colorado 3.4 3.5 3.5 Illinois 3.4 3.4 3.3 Maryland 3.2 3.2 3.4 Total 53.2 % 53.3 % 53.6 % ------- - ---- - ---- -

The following table shows portfolio data by book year, as of March 31, 2019.

As of March 31, 2019 Cumulat Original Remaining % Policies Number of Number of Incurred Loss ive Book Insurance Insurance Remaining of Ever Policies in Loans in # of Claims Ratio default year Written in Original in Force Default Paid (Inception to Force Insurance Force Date) (1) rate (2) -------- -------- ------------ -------- ----------- --------- ----------- ------------- ------ ($ Values in Millions) 2013 $ 162 $ 28 17 655 153 — 1 0.20% 0.15 % 2014 3,451 1,037 30 14,786 5,450 45 34 3.44% 0.53 % 2015 12,422 6,585 53 52,548 30,653 167 64 2.64% 0.44 % 2016 21,187 14,750 70 83,626 61,940 231 56 2.28% 0.34 % 2017 21,582 18,353 85 85,897 75,951 326 10 2.99% 0.39 % 2018 27,289 25,609 94 104,017 99,200 171 2 2.34% 0.17 % 2019 6,913 6,872 99 24,006 23,885 — — —% — % $ 93,006 $ 73,234 365,535 297,232 940 167 - ------ - ------ -------- ----------- --------- -----------

(1) The ratio of claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance. (2) The sum of claims paid ever to date and notices of default as of the end of the period divided by policies ever in force.

The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claim expenses:

For the three months ended March 31, March 31, 2019 2018 ---------- ---------- (In Thousands) Beginning balance $ 12,811 $ 8,761 Less reinsurance recoverables (1) (3,001 ) (1,902 ) Beginning balance, net of reinsurance recoverables 9,810 6,859 -------- - -------- Add claims incurred: Claims and claim expenses incurred: Current year (2) 3,909 1,940 Prior years(3) (1,166 ) (371 ) Total claims and claim expenses incurred 2,743 1,569 -------- - -------- Less claims paid: Claims and claim expenses paid: Current year (2) — — Prior years (3) 694 371 Total claims and claim expenses paid 694 371 Reserve at end of period, net of reinsurance recoverables 11,859 8,057 Add reinsurance recoverables (1) 3,678 2,334 Ending balance $ 15,537 $ 10,391 - ------ - - ------

(1) Related to ceded losses recoverable under the QSR Transactions, included in “Other Assets” on the Condensed Consolidated Balance Sheets. Related to insured loans with their most recent defaults occurring in the current year. For example, if a (2) loan had defaulted in a prior year and subsequently cured and later re-defaulted in the current year, that default would be included in the current year. Amounts are presented net of reinsurance. (3) Related to insured loans with defaults occurring in prior years, which have been continuously in default since that time. Amounts are presented net of reinsurance.

The following table provides a reconciliation of the beginning and ending count of loans in default for the periods indicated.

For the three months ended March March 31, 31, 2019 2018 ------ ------- Beginning default inventory 877 928 Plus: new defaults 574 413 Less: cures (474 ) (324 ) Less: claims paid (37 ) (17 ) Ending default inventory 940 1,000 ---- - ----- -

The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated.

For the three months ended March March 31, 31, 2019 2018 ------- ------- (In Thousands) Number of claims paid (1) 37 17 Total amount paid for claims $ 926 $ 482 Average amount paid per claim(2) $ 27 $ 34 Severity(3) 64 % 74 %

(1) Count includes claims settled without payment. (2) Calculation is net of claims settled without payment. (3) 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 which included claims settled without payment.

The following table shows our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the periods indicated.

Average reserve per default: As of March 31, 2019 As of March 31, 2018 -------------------- -------------------- (In Thousands) Case (1) $ 15 $ 9 IBNR (2) 2 1 Total $ 17 $ 10

(1) Defined as the gross reserve per insured loan in default. (2) Amount includes claims adjustment expenses.

The following table provides a comparison of the PMIERs financial requirements as reported by NMIC as of the dates indicated.

As of March 31, 2019 December 31, 2018 March 31, 2018 -------------- ----------------- -------------- (In Thousands) Available Assets $ 817,758 $ 733,762 $ 555,336 Risk-Based Required Assets 607,325 511,268 522,260