NMI (US:NMIH)2022-11-01 21:54Financial Performance - Total revenues for the three months ended September 30, 2022, increased to $130,577 thousand, up from $124,041 thousand in the same period of 2021, representing a growth of 4.1%[21] - Net premiums earned for the nine months ended September 30, 2022, rose to $355,682 thousand, compared to $330,361 thousand for the same period in 2021, reflecting a year-over-year increase of 7.7%[21] - Net income for the three months ended September 30, 2022, was $76,838 thousand, an increase of 27.5% from $60,193 thousand in the prior year[21] - Earnings per share (EPS) for the three months ended September 30, 2022, were $0.91 (basic) and $0.90 (diluted), compared to $0.70 and $0.69, respectively, for the same period in 2021[21] - Net income for the nine months ended September 30, 2022, was $219,962,000, an increase of 28.9% compared to $170,606,000 for the same period in 2021[28] Assets and Liabilities - Total assets as of September 30, 2022, were $2,403,843 thousand, a decrease from $2,450,581 thousand as of December 31, 2021[19] - Total liabilities decreased to $877,977 thousand as of September 30, 2022, from $884,795 thousand as of December 31, 2021[19] - Shareholders' equity as of September 30, 2022, was $1,525,866 thousand, down from $1,565,786 thousand at the end of 2021[19] - The company’s cash and cash equivalents increased to $125,812 thousand as of September 30, 2022, from $76,646 thousand as of December 31, 2021[19] Investment Performance - Net investment income for the three months ended September 30, 2022, was $11.9 million, compared to $9.8 million for the same period in 2021, representing a 21.5% increase[51] - The total unrealized investment gains/losses for the period included a net tax benefit of $11,997,000, resulting in a loss of $45,133,000[25] - The investment portfolio had gross unrealized losses of $275.2 million, with $173.4 million associated with securities in an unrealized loss position for twelve months or longer[46] - The amortized cost of total investments as of September 30, 2022, was $2,248.7 million, with a fair value of $1,973.9 million, indicating a significant decline in market value[42] Reinsurance and Risk Management - NMIC ceded aggregate premiums to the Oaktown Re Vehicles of $10.7 million and $31.8 million during the three and nine months ended September 30, 2022, respectively[74] - As of September 30, 2022, NMIC's first layer aggregate retained loss exposure under the 2022-1 and 2022-2 XOL Transactions was $133.4 million and $78.9 million, respectively[83] - The outstanding reinsurance coverage amount provided under the 2022-1 and 2022-2 XOL Transactions was $284.0 million and $152.3 million, respectively[83] - NMIC did not cede any incurred losses on covered policies under the XOL Transactions during the three and nine months ended September 30, 2022[84] Claims and Defaults - The default rate for primary insured loans was 0.71% as of September 30, 2022, compared to 1.56% as of September 30, 2021[105] - The company had 4,096 loans in default as of September 30, 2022, a decrease from 7,670 loans in default as of September 30, 2021[105] - The total claims and claim expenses incurred for the nine months ended September 30, 2022, were $(7.0) million, compared to $12.8 million for the same period in 2021[109] - The ending reserve balance for claims and claim expenses as of September 30, 2022, was $94,944 million, a decrease from $104,604 million in the previous year[206] Strategic Initiatives - The company plans to continue focusing on enhancing its underwriting and operational efficiencies to drive future growth[21] - The company’s strategy focuses on expanding its customer base and growing its insured portfolio of high-quality residential loans through long-term relationships and disciplined risk selection[141] - The company introduced a proprietary risk-based pricing platform, Rate GPS, in June 2018, which enhances its ability to evaluate and price risk, contributing to a high-quality mortgage insurance portfolio[148] - The company aims to maintain a strong and credible counter-party status while delivering high-quality customer service and transparent claim payment practices[141] Market Conditions - The company remains cautious about the potential impact of COVID-19 on the mortgage insurance market and its business performance[34] - The impact of COVID-19 on the housing market and mortgage insurance industry has begun to recede, but ongoing macroeconomic factors may still affect future performance[145]