NMI : Reports Record Third Quarter Net Income of $6.2 Million

NMI Holdings, Inc. Reports Record Third Quarter Net Income of $6.2 Million

Nov 01, 2016

NMI Holdings, Inc. Reports Record Third Quarter Net Income of $6.2 Million105.2 KB

EMERYVILLE, CA -- (Marketwired) -- 11/01/16 --

NMI Holdings, Inc.(NASDAQ: NMIH)today reported net income of $6.2 million, or $0.10 per share, for the third quarter ended Sep. 30, 2016. This compares with net income of $2.0 million, or $0.03 per share, in the prior quarter and a net loss of ($4.8) million, or ($0.08) per share, in the third quarter of 2015. Total revenue for the quarter was $35.5 million, up 20% from $29.5 million in the prior quarter and up 141% from $14.7 million in the third quarter of 2015.

Bradley Shuster, chairman and CEO of National MI, said, "We continued our positive momentum in the third quarter, delivering record net income and returns, trends that we expect will continue for the foreseeable future. We grew our high-quality insurance-in-force by 19% over the prior quarter and 166% over the third quarter last year. We also continued to shift our mix to high-return monthly product, which grew to 71% of total new insurance written in the quarter. Cessions commenced under our reinsurance agreement and we expect to continue to take advantage of the low cost of capital provided by reinsurance to support our future growth."

• As of Sep. 30, 2016, the company had primary insurance-in-force of $28.2 billion, up 19% from $23.6 billion at the prior quarter end and up 166% over $10.6 billion as of Sep. 30, 2015.

• Premiums earned for the quarter were $31.8 million, up 22% from $26.0 million in the prior quarter and up 148% over $12.8 million in the same quarter a year ago

• Monthly premium NIW was $4.16 billion, an increase of 12% over $3.70 billion in the prior quarter and an increase of 163% over the third quarter of 2015. Single premium NIW of $1.70 billion was down 21% from the prior quarter and down 17% compared with the same quarter a year ago.

• Total NIW in the third quarter was $5.86 billion, which compares with $5.84 billion in the prior quarter and $3.63 billion in the third quarter of 2015.

• Total underwriting and operating expenses in the third quarter were $24.0 million, including share-based compensation expense of $1.8 million. This compares with total underwriting and operating expenses of $23.2 million, including $1.8 million of share-based compensation, in the prior quarter, and $19.7 million, including $1.8 million of share-based compensation, in the same quarter a year ago.

• Loss expense for the quarter was $0.7 million, resulting in a loss ratio of 2.1%.

• As of the end of the third quarter, the company had approved master policies in place with 1,100 customers, up from 1,061 as of the end of the prior quarter, and up from 906 as of the end of the third quarter of 2015. Customers delivering NIW in the quarter grew to a new high of 525, which compares with 518 in the prior quarter and 391 in the same quarter a year ago.

• At quarter-end, cash and investments were $686 million, including $77 million at the holding company, and book equity was $430 million, equal to $7.28 per share. This book value excludes any benefit attributable to the company's deferred tax asset of approximately $66 million as of Dec. 31, 2015.

• In the first nine months of 2016, the company generated $52.2 million of cash from operations, which compares with $16.2 million for the same period in 2015.

• At quarter-end, the company had total PMIERs available assets of $489 million, which compares with risk- based required assets under PMIERs of $321 million.

		Quarter Ended 9/30/2016		Quarter Ended 6/30/2016		Quarter Ended 9/30/2015		Growth Q/Q		Growth Y/Y
Primary Insurance-in-Force ($billions)			28.22			23.62			10.60		19%		166%
New Insurance Written - NIW ($billions)
	Monthly premium			4.16			3.70			1.58		12%		163%
	Single premium			1.70			2.14			2.05		-21%		-17%
	Total			5.86			5.84			3.63		-		61%
Premiums Earned ($millions)			31.81			26.04			12.83		22%		148%
Underwriting & Operating Expense ($millions)			24.04			23.23			19.65		3%		22%
Loss Expense ($millions)			0.66			0.47			0.18		40%		267%
Loss Ratio			2.1%			1.8%			1.4%
Cash & Investments ($millions)			686			654			447		5%		53%
Book Equity ($millions)			430			422			408		2%		5%
Book Value per Share		$	7.28		$	7.14		$	6.95		2%		5%
Approved Master Policies			1100			1061			906		4%		21%
Customers Generating NIW			525			518			391		1%		34%

Conference Call and Webcast Details
The company will hold a conference call and live webcast today at 1:30 p.m. Pacific Time / 4:30 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 [phone] in the U.S., or [phone] for international callers using Conference ID: 93562675, or by referencing NMI Holdings, Inc.

About National MI
National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc.(NASDAQ: 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 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: our ability to implement our business strategy, including our ability to attract and retain a diverse customer base and to achieve a diversified mix of business across the spectrum of our product offerings; changes in the business practices of the GSEs that may impact the use of private mortgage insurance; our ongoing ability to comply with the financial requirements of the PMIERs; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; our ability to successfully execute and implement our capital plans, including our ability to access the reinsurance market and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; emergence of unexpected claims and coverage issues, including claims exceeding our reserves or amounts we expected to experience; our ability to utilize our net operating loss carryforwards, which could be limited or eliminated in various ways, including if we experience an ownership change as defined in Section 382 of the Internal Revenue Code; and general economic downturns and volatility. 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, 2015, 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.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
[e-mail]
[phone]

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
[phone]
[e-mail]

Consolidated statements of operations and comprehensive income		For the three months ended September 30,		For the nine months ended September 30,
		2016		2015		2016		2015
Revenues		(In Thousands, except for share data)
	Net premiums earned		$	31,808		$	12,834		$	77,656		$	28,626
	Net investment income			3,544			1,884			10,117			5,168
	Net realized investment gains (losses)			66			(15)			(758)			952
	Other revenues			102			-			172			-
Total revenues			35,520			14,703			87,187			34,746
Expenses
	Insurance claims and claims expenses			664			181			1,592			279
	Underwriting and operating expenses			24,037			19,653			69,943			58,912
Total expenses			24,701			19,834			71,535			59,191
Other (expense) income
	(Loss) gain from change in fair value of warrant liability			(797)			332			(187)			1,473
	Interest expense			(3,733)			-			(11,072)			-
Total other (expense) income			(4,530)			332			(11,259)			1,473
Income (loss) before income taxes			6,289			(4,799)			4,393			(22,972)
	Income tax expense			114			-			114			-
Net income (loss)		$	6,175		$	(4,799)		$	4,279		$	(22,972)
Earnings (loss) per share
	Basic		$	0.10		$	(0.08)		$	0.07		$	(0.39)
	Diluted		$	0.10		$	(0.08)		$	0.07		$	(0.39)
Weighted average common shares outstanding
Basic			59,130,401			58,741,328			59,047,758			58,650,043
Diluted			60,284,746			58,741,328			59,861,916			58,650,043
Loss Ratio(1)			2%			1%			2%			1%
Expense Ratio(2)			76			153			90			206
Combined ratio			78%			155%			92%			207%
Net income (loss)		$	6,175		$	(4,799)		$	4,279		$	(22,972)
Other comprehensive income (loss), net of tax:
	Net unrealized gains (losses) in accumulated other comprehensive gain (loss), net of tax (benefit) expense of $0 for all periods presented			(82)			(483)			17,690			(15)
	Reclassification adjustment for losses (gains) included in net loss, net of tax expense of $0 for all periods presented			(66)			15			758			(952)
Other comprehensive income (loss), net of tax			(148)			(468)			18,448			(967)
Comprehensive income (loss)		$	6,027		$	(5,267)		$	22,727		$	(23,939)

(1)	Loss ratio is calculated by dividing the provision for insurance claims and claims expenses by net premiums earned.
(2)	Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.

Consolidated balance sheets		September 30, 2016		December 31, 2015
Assets		(In Thousands, except for share data)
	Fixed maturities, available-for-sale, at fair value (amortized cost of $628,209 and $564,319 as of September 30, 2016 and December 31, 2015, respectively)		$	641,572		$	559,235
	Cash and cash equivalents			44,522			57,317
	Premiums receivable			11,378			5,143
	Accrued investment income			3,615			2,873
	Prepaid expenses			2,313			1,428
	Deferred policy acquisition costs, net			28,911			17,530
	Software and equipment, net			19,924			15,201
	Intangible assets and goodwill			3,634			3,634
	Prepaid reinsurance premiums			36,091			-
	Other assets			206			90
Total assets		$	792,166		$	662,451
Liabilities
	Term loan		$	144,230		$	143,939
	Unearned premiums			145,401			90,773
	Accounts payable and accrued expenses			32,568			22,725
	Reserve for insurance claims and claim expenses			2,133			679
	Reinsurance funds withheld			28,963			-
	Deferred ceding commission			6,697			-
	Warrant liability, at fair value			1,654			1,467
	Current tax payable			114			-
	Deferred tax			137			137
Total liabilities			361,897			259,720
Commitments and contingencies
Shareholders' equity
	Common stock - class A shares, $0.01 par value; 59,138,663 and 58,807,825 shares issued and outstanding as of September 30, 2016 and December 31, 2015, respectively (250,000,000 shares authorized)			591			588
	Additional paid-in capital			575,148			570,340
	Accumulated other comprehensive income (loss), net of tax			10,974			(7,474)
	Accumulated deficit			(156,444)			(160,723)
Total shareholders' equity			430,269			402,731
Total liabilities and shareholders' equity		$	792,166		$	662,451

Historical Quarterly Data		2016			2015
		September 30			June 30			March 31			December 31			September 30			June 30
Revenues		(In Thousands, except for share data)
	Net premiums earned		$	31,808			$	26,041			$	19,807			$	16,880			$	12,834			$	8,856
	Net investment income			3,544				3,342				3,231				2,078				1,884				1,688
	Net realized investment gains (losses)			66				61				(885	)			(121	)			(15	)			354
	Other revenues			102				37				32				25				-				-
Total revenues			35,520				29,481				22,185				18,862				14,703				10,898
Expenses
	Insurance claims and claims expenses			664				470				458				371				181				(6	)
	Underwriting and operating expenses			24,037				23,234				22,672				21,686				19,653				20,910
Total expenses			24,701				23,704				23,130				22,057				19,834				20,903
Other (expense) income (1)			(4,530	)			(3,766	)			(2,962	)			(1,626	)			332				(106	)
Income (loss) before income taxes			6,289				2,011				(3,907	)			(4,821	)			(4,799	)			(10,112	)
	Income tax expense (benefit)			114				-				-				-				-				241
Net income (loss)		$	6,175			$	2,011			$	(3,907	)		$	(4,821	)		$	(4,799	)		$	(10,353	)
Earnings (loss) per share
	Basic		$	0.10			$	0.03			$	(0.07	)		$	(0.08	)		$	(0.08	)		$	(0.18	)
	Diluted		$	0.10				0.03				(0.07	)			(0.08	)			(0.08	)			(0.18	)
Weighted average common shares outstanding
Basic			59,130,401				59,105,613				58,936,694				58,781,566				58,741,328				58,720,095
Diluted			60,284,746				59,830,899				58,936,694				58,781,566				58,741,328				58,720,095
Other data
Loss Ratio (2)			2	%			2	%			2	%			2	%			1	%			-	%
Expense Ratio (3)			76	%			89	%			114	%			128	%			153	%			236	%
Combined ratio			78	%			91	%			117	%			131	%			155	%			236	%

(1)	Other (expense) income includes the gain from change in fair value of warrant liability, gain from settlement of warrants, and interest expense.
(2)	Loss ratio is calculated by dividing the provision for insurance claims and claims 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 show primary and pool NIW and IIF, by quarter, for the last six quarters.

Primary NIW	Three months ended
		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
								(In Millions)
Monthly		$	4,162		$	3,700		$	2,492		$	2,029		$	1,582		$	1,460
Single			1,695			2,138			1,762			2,518			2,051			1,089
Primary		$	5,857		$	5,838		$	4,254		$	4,547		$	3,633		$	2,549
Primary and pool IIF	As of
		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
									(In Millions)
Monthly		$	16,038		$	12,529		$	9,210		$	6,958		$	5,087		$	3,617
Single			12,190			11,095			9,354			7,866			5,514			3,573
Primary			28,228			23,624			18,564			14,824			10,601			7,190
Pool			3,826			3,999			4,136			4,238			4,340			4,476
Total		$	32,054		$	27,623		$	22,700		$	19,062		$	14,941		$	11,666

Portfolio Statistics
The table below shows primary portfolio trends, by quarter, for the last six quarters.

Primary portfolio trends		As of and for the quarter ended
		September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
		($ Values In Millions)
New insurance written		$	5,857			$	5,838			$	4,254			$	4,547			$	3,633			$	2,549
New risk written			1,415				1,411				1,016				1,105				887				615
Insurance in force (1)			28,228				23,624				18,564				14,824				10,601				7,190
Risk in force (1)			6,847				5,721				4,487				3,586				2,553				1,715
Policies in force (count) (1)			119,002				100,547				79,700				63,948				46,175				31,682
Weighted-average coverage (2)			24.3	%			24.2	%			24.2	%			24.2	%			24.1	%			23.9	%
Loans in default (count)			115				79				55				36				20				9
Percentage of loans in default			0.1	%			0.1	%			0.1	%			0.1	%			-	%			-	%
Risk in force on defaulted loans		$	6			$	4			$	3			$	2			$	1			$	1
Average premium yield (3)			0.48	%			0.47	%			0.45	%			0.49	%			0.52	%			0.51	%
Annual persistency (4)			81.8	%			83.3	%			82.7	%			79.6	%			71.6	%			65.5	%

(1)	Reported as of the end of the period.
(2)	End of period risk in force (RIF) divided by IIF.
(3)	Average premium yield is calculated by dividing primary net premiums earned, net of reinsurance, by average gross IIF for the period, annualized.
(4)	Defined as the percentage of IIF that remains on our books after any 12-month period.

The tables below reflect our total primary NIW by FICO, loan-to-value (LTV), and purchase/refinance mix.

Primary NIW by FICO				Three months ended
		September 30, 2016		June 30, 2016		September 30, 2015
						(In Millions)
	> = 760		$	2,975		$	3,160		$	1,755
	740-759			934			961			583
	720-739			725			672			505
	700-719			588			541			376
	680-699			387			308			271
	< = 679			248			196			143
Total		$	5,857		$	5,838		$	3,633
Primary NIW by LTV						Three months ended
			September 30, 2016			June 30, 2016			September 30, 2015
						(In Millions)
	95.01% and above		$	347		$	362		$	162
	90.01% to 95.00%			2,557			2,633			1,656
	85.01% to 90.00%			1,844			1,732			1,208
	85.00% and below			1,109			1,111			607
Total		$	5,857		$	5,838		$	3,633
Primary NIW by purchase/refinance mix						Three months ended
			September 30, 2016			June 30, 2016			September 30, 2015
						(In Millions)
	Purchase		$	4,400		$	4,199		$	2,604
	Refinance			1,457			1,639			1,029
Total		$	5,857		$	5,838		$	3,633

The tables below show the primary weighted average FICO and the weighted average LTV, by policy type, for NIW in the quarters presented.

Weighted Average FICO
		September 30, 2016			June 30, 2016			September 30, 2015
Monthly		748			752			742
Single		763			762			758
Weighted Average LTV
		September 30, 2016			June 30, 2016			September 30, 2015
Monthly		91	%		92	%		92	%
Single		90			91			91

The table below reflects a summary of our primary IIF and RIF by book year.

Primary IIF and RIF			As of September 30, 2016
			IIF			RIF
			(In Millions)
September 30, 2016		$	15,433		$	3,719
2015			10,679			2,610
2014			2,062			505
2013			54			13
Total		$	28,228		$	6,847

The tables below reflect our total primary IIF and RIF by FICO, average loan size, LTV, and loan type.

Primary IIF by FICO				As of
		September 30, 2016		June 30, 2016		September 30, 2015
				(In Millions)
	> = 760		$	14,258		$	11,929		$	4,969
	740-759			4,612			3,876			1,703
	720-739			3,648			3,082			1,582
	700-719			2,813			2,341			1,063
	680-699			1,863			1,561			848
	< =679			1,034			835			436
Total		$	28,228		$	23,624		$	10,601
Primary RIF by FICO						As of
		September 30, 2016		June 30, 2016		September 30, 2015
						(In Millions)
	> = 760		$	3,470		$	2,895		$	1,174
	740-759			1,130			951			413
	720-739			887			750			391
	700-719			680			566			260
	680-699			443			369			209
	< =679			237			190			106
Total		$	6,847		$	5,721		$	2,553
Primary Average Loan Size by FICO						As of
		September 30, 2016		June 30, 2016		September 30, 2015
						(In Thousands)
	> = 760		$	250		$	249		$	244
	740-759			240			239			234
	720-739			235			234			227
	700-719			233			232			225
	680-699			224			223			218
	< =679			209			209			207

Primary IIF by LTV					As of
		September 30, 2016			June 30, 2016			September 30, 2015
					(In Millions)
	95.01% and above		$	1,363			$	1,049			$	282
	90.01% to 95.00%			12,644				10,574				4,710
	85.01% to 90.00%			9,157				7,754				3,658
	85.00% and below			5,064				4,247				1,951
Total		$	28,228			$	23,624			$	10,601
Primary RIF by LTV					As of
		September 30, 2016			June 30, 2016			September 30, 2015
					(In Millions)
	95.01% and above		$	380			$	293			$	80
	90.01% to 95.00%			3,725				3,116				1,392
	85.01% to 90.00%			2,174				1,838				866
	85.00% and below			568				474				215
Total		$	6,847			$	5,721			$	2,553
Primary RIF by Loan Type					As of
		September 30, 2016			June 30, 2016			September 30, 2015
	Fixed			98	%			98	%			97	%
	Adjustable rate mortgages:
		Less than five years			-				-				-
		Five years and longer			2				2				3
Total			100	%			100	%			100	%

As of September 30, 2016 and September 30, 2015, 100% of each of our pool IIF and RIF was comprised of insurance on fixed rate mortgages.
The table below reflects a summary of the change in total primary IIF for the following periods.

Primary IIF				Three months ended
		September 30, 2016		June 30, 2016		September 30, 2015
				(In Millions)
IIF, beginning of period		$	23,624		$	18,564		$	7,190
	NIW			5,857			5,838			3,633
	Cancellations and other reductions			(1,253)			(778)			(222)
IIF, end of period		$	28,228		$	23,624		$	10,601

Geographic Dispersion
The following table shows the distribution by state of our primary RIF.

Top 10 primary RIF by state					As of
		September 30, 2016			June 30, 2016			September 30, 2015
California		13.2	%		13.0	%		13.2	%
Texas		6.8			6.8			7.1
Virginia		6.6			6.4			3.9
Florida		4.7			5.0			5.4
Colorado		4.0			4.1			4.3
Michigan		3.9			4.1			4.6
Arizona		3.8			3.8			3.6
Maryland		3.6			3.4			3.5
Pennsylvania		3.6			2.3			3.9
Utah		3.6			3.3			2.6
Total		53.8	%		52.2	%		52.1	%

The following table shows portfolio data by origination year.

		As of September 30, 2016
Origination year		Original Insurance Written		Remaining Insurance in Force		% Remaining of Original Insurance			Policies Ever in Force		Number of Policies in Force		Number of Loans in Default		# of Claims Paid		Incurred Loss Ratio (Inception to Date)(1)			Cumulative default rate(2)
		($ Values in Millions)
2013		$	162		$	54		33	%		655		264		-		1		-	%		0.2	%
2014			3,451			2,062		60	%		14,786		9,824		46		2		2.7	%		0.3	%
2015			12,422			10,678		86	%		52,550		46,902		61		5		1.7	%		0.1	%
2016 (through September 30)			15,949			15,434		97	%		63,519		62,012		8		-		0.3	%		-	%
Total		$	31,984		$	28,228					131,510		119,002		115		8

(1)	The ratio of total losses incurred (paid and reserved) divided by cumulative premiums earned, without the effects 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 claims expenses:

		For the three months ended September 30,		For the nine months ended September 30,
		2016		2015		2016		2015
		(In Thousands)
Beginning balance		$	1,475		$	181		$	679		$	83
Less reinsurance recoverables (1)			-			-			-			-
Beginning balance, net of reinsurance recoverables			1,475			181			679			83
Add claims incurred:
	Claims and claim expenses incurred:
		Current year (2)			690			219			1,803			358
		Prior years (3)			(29)			(38)			(214)			(79)
Total claims and claims expenses incurred			661			181			1,589			279
Less claims paid:
	Claims and claim expenses paid:
		Current year (2)			-			-			-			-
		Prior years (3)			93			4			225			4
Total claims and claim expenses paid			93			4			225			4
Reserve at end of period, net of reinsurance recoverables			2,043			358			2,043			358
Add reinsurance recoverables (1)			90			-			90			-
Balance, September 30		$	2,133		$	358		$	2,133		$	358

(1)	Related to ceded losses recoverable on the 2016 QSR Transaction. To date, ceded losses have been immaterial.
(2)	Related to defaults occurring in the current year.
(3)	Related to defaults occurring in prior years.

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

		Three months ended			Nine months ended
		September 30,			September 30,			September 30,			September 30,
		2016			2015			2016			2015
Beginning default inventory		79			9			36			4
Plus: new defaults		69			21			158			24
Less: cures		(30	)		(9	)		(73	)		(7	)
Less: claims paid		(3	)		(1	)		(6	)		(1	)
Ending default inventory		115			20			115			20

The following tables provide details of our claims and reserves.

		Three months ended			Nine months ended
		September 30,			September 30,			September 30,			September 30,
		2016			2015			2016			2015
		($ Values In Thousands)
Number of claims paid			3				1				6				1
Total amount paid for claims		$	93			$	4			$	225			$	4
Average amount paid per claim		$	31			$	4			$	32			$	4
Severity			53	%			5	%			62	%			5	%

Average reserve per default:		As of September 30, 2016		As of September 30, 2015
		(In Thousands)
Case		$	17		$	17
IBNR			1			1
Total		$	18		$	18

The following table provides a comparison of the PMIERs financial requirements as reported by National MI.

				As of
		September 30, 2016		June 30, 2016		December 31, 2015
		(In thousands)
Available Assets		$	488,635		$	432,074		$	431,411
Net Risk-Based Required Assets			320,609			377,468			249,805
Asset charge % (1)			6.14%			6.10%			6.17%

(1)	Asset charge represents the risk based required asset amount as defined in the PMIERs, divided by the outstanding RIF on performing primary loans.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
[e-mail]
[phone]

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
[phone]
[e-mail]

Source: NMI Holdings, Inc.

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