NMI (US:NMIH)2021-05-08 18:19Financial Data and Key Metrics Changes - The company reported a GAAP net income of $52.9 million or $0.61 per diluted share, and adjusted net income of $53.4 million or $0.62 per diluted share [15][31] - GAAP return on equity was 15.4% for the quarter, while adjusted return on equity was 15.5% [15][22] - Net premiums earned were $105.9 million, up 5% from $100.7 million in the previous quarter [25] - The loss ratio, defined as claims expense divided by net premiums earned, was 4.7% [30] Business Line Data and Key Metrics Changes - The company achieved record new insurance written (NIW) of $26.4 billion, up 33% from the fourth quarter and 134% compared to the first quarter of 2020 [16][22] - Purchase originations accounted for 68% of the total volume in the quarter [22] - Primary insurance in force was $123.8 billion, up 11% from $111.3 billion at the end of the fourth quarter and up 26% compared to the first quarter of 2020 [23] Market Data and Key Metrics Changes - The company activated 24 new lenders, bringing the total to over 1,200 high-quality originators, including 179 of the top 200 lenders nationwide [17] - The 12-month persistency in the primary portfolio was 52%, down from 56% in the fourth quarter, primarily due to refinancing activity [23] Company Strategy and Development Direction - The company remains focused on helping all lenders equally and supporting borrowers on consistent terms across the market [17] - The strategy includes leveraging technology and digitization to enhance engagement with lenders and deepen customer relationships [19][60] - The company aims to responsibly deploy capital and drive value with consistency over time [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic recovery and the housing market's resiliency, noting that the stress from the COVID pandemic is receding [7][10] - The company anticipates improving credit performance as the broader economy recovers and vaccination efforts continue [29] - Management highlighted the importance of maintaining credit discipline and risk-adjusted returns while navigating the changing market dynamics [19][55] Other Important Information - The company reported total cash and investments of $1.9 billion at quarter end, with shareholders' equity at $1.4 billion, up 14% compared to the first quarter of 2020 [33] - The company completed a $367 million ILN offering, which is its largest to date, providing coverage on risk originated primarily between October 1, 2020, and March 31, 2021 [32] Q&A Session Summary Question: Thoughts on deploying the premier's access over time - The company aims to invest in its core business and write high-quality business expected to generate strong mid-teens returns [39] Question: Updates on pricing trends across the industry - The pricing environment remains constructive, with attractive unit economics and expected returns on new business [40] Question: Drivers of premium yield decline during the quarter - The decline in yield was primarily due to a decrease in cancellation earnings and growth in insurance in force [44] Question: Sustainability of market share growth - The company has built a strong lender base over the years, and digital engagement has significantly contributed to its record NIW [46][47] Question: Expectations for operating expenses - The company expects a modest increase in operating expenses as it continues to invest in growth [51] Question: Impact of new lenders on NIW growth - The activation of new lenders is crucial for success, and the company sees continued opportunities for growth [97]