NMI Holdings, Inc. Reports Second Quarter 2022 Financial Results;�Announces New Quota Share Reinsurance Agreement

EMERYVILLE, Calif., Aug. 02, 2022 (GLOBE NEWSWIRE) — NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $75.4 million, or $0.86 per diluted share, for the second quarter ended June 30, 2022, which compares to $67.7 million, or $0.77 per diluted share, in the first quarter ended March 31, 2022 and $57.5 million, or $0.65 per diluted share, in the second quarter ended June 30, 2021. Adjusted net income for the quarter was $74.3 million, or $0.86 per diluted share, which compares to $67.5 million, or $0.77 per diluted share, in the first quarter ended March 31, 2022 and $58.1 million, or $0.67 per diluted share, in the second quarter ended June 30, 2021. 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.

Adam Pollitzer, President and Chief Executive Officer of National MI, said, �We delivered resoundingly strong results in the second quarter, with significant new business production and increasing persistency driving growth in our high-quality insured portfolio, and favorable credit performance and expense discipline driving record profitability and strong returns. We have long been successful managing National MI with discipline and a focus on through-the-cycle performance, and are taking steps to further insulate our business from the impact of any economic volatility that may emerge. Looking forward, we’re well positioned to continue to serve our customers and their borrowers, drive growth in our high-quality insured portfolio and deliver strong performance for our shareholders.”

The company also announced today that it has entered into a new quota share reinsurance agreement, primarily covering a seasoned pool of existing mortgage insurance policies that were previously ceded under its 2017 and 2020-1 ILN transactions.

Selected second quarter 2022 highlights include:

• Primary insurance-in-force at quarter end was $168.6 billion, up 6% from $158.9 billion in the first quarter and 23% compared to $136.6 billion in the second quarter of 2021
• Net premiums earned were $120.9 million, up 4% from $116.5 million in the first quarter and 9% compared to $110.9 million in the second quarter of 2021
• Underwriting and operating expenses were $30.7 million, down 7% from $32.9 million in the first quarter and 12% compared to $34.7 million in the second quarter of 2021
• Insurance claims and claim expenses was a benefit of $3.0 million, compared to a benefit of $0.6 million in the first quarter and an expense of $4.6 million in the second quarter of 2021
• Shareholders’ equity was $1.5 billion at quarter end and book value per share was $18.01. Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $19.91, up 5% compared to $18.97 per share in the first quarter and 19% compared to $16.71 per share in the second quarter of 2021
• Annualized return on equity for the quarter was 19.7% and annualized adjusted return on equity was 19.4%
• At quarter-end, total PMIERs available assets were $2.2 billion and net risk-based required assets were $1.2 billion

		Quarter Ended			Quarter Ended			Quarter Ended			Change(1)		Change(1)
		6/30/2022			3/31/2022			6/30/2021			Q/Q		Y/Y
INSURANCE METRICS ($billions)
Primary Insurance-in-Force		$	168.6		$	158.9		$	136.6		6	%	23	%
New Insurance Written – NIW
	Monthly premium		15.7			13.1			19.4		20	%	(19	)%
	Single premium		0.9			1.1			3.3		(14	)%	(72	)%
	Total(2)		16.6			14.2			22.8		17	%	(27	)%
FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts)
Net Premiums Earned			120.9			116.5			110.9		4	%	9	%
Insurance Claims and Claim (Benefits) Expenses			(3.0	)		(0.6	)		4.6		390	%	(165	)%
Underwriting and Operating Expenses			30.7			32.9			34.7		(7	)%	(12	)%
Net Income			75.4			67.7			57.5		11	%	31	%
Adjusted Net Income			74.3			67.5			58.1		10	%	28	%
Book Value per Share (excluding net unrealized gains and losses)(3)			19.91			18.97			16.71		5	%	19	%
Loss Ratio			(2.5	)%		(0.5	)%		4.2	%
Expense Ratio			25.4	%		28.3	%		31.3	%

(1)	Percentages may not be replicated based on the rounded figures presented in the table.
(2)	Total may not foot due to rounding.
(3)	Book value per share (excluding net unrealized gains and losses) is defined as total shareholder’s equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.

Conference Call and Webcast Details

The company will hold a conference call, which will be webcast live today, August 2, 2022, 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 (877) 270-2148 in the U.S., or (412) 902-6510 internationally 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 (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the U.S. Private Securities Litigation Reform Act of 1995 (the “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,” “perceive,” “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: uncertainty relating to the coronavirus (“COVID-19”) pandemic and the measures taken by governmental authorities and other third parties to contain the spread of COVID-19, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and our business, operations and personnel; changes in the charters, business practices, policy or priorities of Fannie Mae and Freddie Mac (collectively, the GSEs), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency (“FHFA”), such as the FHFA’s priority to increase the accessibility to and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities; 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 other private mortgage insurers and government mortgage insurers such as the Federal Housing Administration, the U.S. Department of Agriculture’s Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; developments in the world’s financial, capital and credit markets and our access to such markets, including reinsurance; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning “Qualified Mortgage” and “Qualified Residential Mortgage”; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; 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 legal and regulatory claims, investigations, actions, audits or inquiries that could result in adverse judgements, settlements, fines or other reliefs that could require significant expenditures or have other negative effects on our business; changes in general economic, market and political conditions and policies (including rising interest rates and 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; lenders, the GSEs, or other market participants seeking alternatives to private mortgage insurance; 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; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters (including those that may be caused or exacerbated by climate change), including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; potential adverse impacts arising from the occurrence of any man-made disasters or public health emergencies, including pandemics; 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; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks (including the exposure of our confidential customer and other confidential information); and 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, 2021, 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, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) and enhances 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 to increase transparency and enhance 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.

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 other infrequent, unusual or 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 other infrequent, unusual or 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 periods 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.

Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned.

Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned.

Book value per share (excluding net unrealized gains and losses) is defined as total shareholder’s equity, excluding the after-tax effects of unrealized gains and losses on investments, divided by shares outstanding.

Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) 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. Furthermore, all unexercised warrants expired in April 2022 and, as such, no change in fair value will be recognized in future reporting periods. 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)	Other infrequent, unusual or non-operating items. Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency 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 infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and 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 infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business.
(5)	Net unrealized gains and losses on investments. The recognition of the net unrealized gains or losses on investment can vary significantly across periods and is influenced by factors such as interest rate movement, overall market and economic conditions, and tax and capital profiles. These valuation adjustments may not necessarily result in economic gains or losses and not reflective of ongoing operations. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these unrealized gains or losses.

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

Consolidated statements of operations and comprehensive income (loss) (unaudited)	For the three months ended June 30,								For the six months ended June 30,
	2022				2021				2022				2021
Revenues	(In Thousands, except for per share data)
Net premiums earned	$	120,870			$	110,888			$	237,365			$	216,767
Net investment income		10,921				9,382				21,120				18,196
Net realized investment gains		53				12				461				12
Other revenues		376				483				715				984
Total revenues		132,220				120,765				259,661				235,959
Expenses
Insurance claims and claim (benefits) expenses		(3,036	)			4,640				(3,655	)			9,602
Underwriting and operating expenses		30,700				34,725				63,635				68,790
Service expenses		336				481				766				1,072
Interest expense		8,051				7,922				16,092				15,837
Gain from change in fair value of warrant liability		(1,020	)			(658	)			(1,113	)			(453	)
Total expenses		35,031				47,110				75,725				94,848
Income before income taxes		97,189				73,655				183,936				141,111
Income tax expense		21,745				16,133				40,812				30,697
Net income	$	75,444			$	57,522			$	143,124			$	110,414
Earnings per share
Basic	$	0.88			$	0.67			$	1.67			$	1.29
Diluted	$	0.86			$	0.65			$	1.63			$	1.27
Weighted average common shares outstanding
Basic		85,734				85,647				85,842				85,483
Diluted		86,577				86,819				86,943				86,729
Loss ratio(1)		(2.5	)%			4.2	%			(1.5	)%			4.4	%
Expense ratio(2)		25.4	%			31.3	%			26.8	%			31.7	%
Combined ratio(3)		22.9	%			35.5	%			25.3	%			36.2	%
Net income	$	75,444			$	57,522			$	143,124			$	110,414
Other comprehensive (loss) income, net of tax:
Unrealized (losses) gains in accumulated other comprehensive income (loss), net of tax (benefit) expense of $(17,004) and $4,995 for the three months ended June 30, 2022 and 2021, and $(43,180) and $(7,003) for the six month ended June 30, 2022 and 2021, respectively		(63,967	)			18,790				(162,438	)			(26,343	)
Reclassification adjustment for realized gains included in net income, net of tax expense of $11 and $3 for the three months ended June 30, 2022 and 2021, and $97 and $3 for the six months ended June 30, 2022 and 2021, respectively		(44	)			(10	)			(367	)			(10	)
Other comprehensive (loss) income, net of tax		(64,011	)			18,780				(162,805	)			(26,353	)
Comprehensive income (loss)	$	11,433			$	76,302			$	(19,681	)		$	84,061

(1)	Loss ratio is calculated by dividing 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 (unaudited)	June 30, 2022				December 31, 2021
Assets	(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,218,344 and $2,078,773 as of June 30, 2022 and December 31, 2021, respectively)	$	2,019,420			$	2,085,931
Cash and cash equivalents (including restricted cash of $2,152 and $3,165 as of June 30, 2022 and December 31, 2021, respectively)		72,398				76,646
Premiums receivable		63,708				60,358
Accrued investment income		12,430				11,900
Prepaid expenses		4,994				3,530
Deferred policy acquisition costs, net		59,768				59,584
Software and equipment, net		32,071				32,047
Intangible assets and goodwill		3,634				3,634
Prepaid reinsurance premiums		1,711				2,393
Reinsurance recoverable		19,588				20,320
Other assets		102,566				94,238
Total assets	$	2,392,288			$	2,450,581
Liabilities
Debt	$	395,323			$	394,623
Unearned premiums		135,681				139,237
Accounts payable and accrued expenses		58,947				72,000
Reserve for insurance claims and claim expenses		98,462				103,551
Reinsurance funds withheld		4,489				5,601
Warrant liability, at fair value		—				2,363
Deferred tax liability, net		161,658				164,175
Other liabilities		12,636				3,245
Total liabilities		867,196				884,795
Shareholders’ equity
Common stock – class A shares, $0.01 par value; 86,375,154 shares issued and 84,701,092 shares outstanding as of June 30, 2022 and 85,792,849 shares issued and outstanding as of December 31, 2021 (250,000,000 shares authorized)		864				858
Additional paid-in capital		964,654				955,302
Treasury Stock, at cost: 1,674,062 and 0 common shares as of June 30, 2022 and December 31, 2021, respectively		(30,371	)			—
Accumulated other comprehensive (loss) income, net of tax		(161,320	)			1,485
Retained earnings		751,265				608,141
Total shareholders’ equity		1,525,092				1,565,786
Total liabilities and shareholders’ equity	$	2,392,288			$	2,450,581

Non-GAAP Financial Measure Reconciliations (unaudited)
	As of and for the three months ended												For the six months ended
	6/30/2022				3/31/2022				6/30/2021				6/30/2022				6/30/2021
As Reported	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	120,870			$	116,495			$	110,888			$	237,365			$	216,767
Net investment income		10,921				10,199				9,382				21,120				18,196
Net realized investment gains		53				408				12				461				12
Other revenues		376				339				483				715				984
Total revenues		132,220				127,441				120,765				259,661				235,959
Expenses
Insurance claims and claim (benefits) expenses		(3,036	)			(619	)			4,640				(3,655	)			9,602
Underwriting and operating expenses		30,700				32,935				34,725				63,635				68,790
Service expenses		336				430				481				766				1,072
Interest expense		8,051				8,041				7,922				16,092				15,837
Gain from change in fair value of warrant liability		(1,020	)			(93	)			(658	)			(1,113	)			(453	)
Total expenses		35,031				40,694				47,110				75,725				94,848
Income before income taxes		97,189				86,747				73,655				183,936				141,111
Income tax expense		21,745				19,067				16,133				40,812				30,697
Net income	$	75,444			$	67,680			$	57,522			$	143,124			$	110,414
Adjustments:
Net realized investment gains		(53	)			(408	)			(12	)			(461	)			(12	)
Gain from change in fair value of warrant liability		(1,020	)			(93	)			(658	)			(1,113	)			(453	)
Capital markets transaction costs		(55	)			260				1,615				205				1,993
Adjusted income before taxes		96,061				86,506				74,600				182,567				142,639
Income tax expense on adjustments(1)		(23	)			(31	)			337				(54	)			416
Adjusted net income	$	74,339			$	67,470			$	58,130			$	141,809			$	111,526
Weighted average diluted shares outstanding		86,577				87,310				86,819				86,943				86,729
Diluted EPS	$	0.86			$	0.77			$	0.65			$	1.63			$	1.27
Adjusted diluted EPS	$	0.86			$	0.77			$	0.67			$	1.63			$	1.29
Return-on-equity		19.7	%			17.5	%			16.2	%			18.5	%			15.6	%
Adjusted return-on-equity		19.4	%			17.4	%			16.4	%			18.4	%			15.8	%
Expense ratio(2)		25.4	%			28.3	%			31.3	%			26.8	%			31.7	%
Adjusted expense ratio(3)		25.4	%			28.0	%			29.9	%			26.7	%			30.8	%
Combined ratio(4)		22.9	%			27.7	%			35.5	%			25.3	%			36.2	%
Adjusted combined ratio(5)		22.9	%			27.5	%			34.0	%			25.2	%			35.2	%
Book value per share(6)	$	18.01			$	17.84			$	17.03
Book value per share (excluding net unrealized gains and losses)(7)	$	19.91			$	18.97			$	16.71

(1)	Marginal tax impact of non-GAAP adjustments is calculated based on our statutory U.S. federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction. Such non-deductible items include gains or losses from the change in the fair value of our warrant liability and certain costs incurred in connection with the CEO transition, which are limited under Section 162(m) of the Internal Revenue Code.
(2)	Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)	Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions) by net premiums earned.
(4)	Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claims expense by net premiums earned.
(5)	Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction) and insurance claims and claims expense by net premiums earned.
(6)	Book value per share is calculated by dividing total shareholder’s equity by shares outstanding.
(7)	Book value per share (excluding net unrealized gains and losses) is defined as total shareholder’s equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.

Historical Quarterly Data	2022								2021
	June 30				March 31				December 31				September 30				June 30				March 31
Revenues	(In Thousands, except for per share data)
Net premiums earned	$	120,870			$	116,495			$	113,933			$	113,594			$	110,888			$	105,879
Net investment income		10,921				10,199				10,045				9,831				9,382				8,814
Net realized investment gains		53				408				714				3				12				—
Other revenues		376				339				380				613				483				501
Total revenues		132,220				127,441				125,072				124,041				120,765				115,194
Expenses
Insurance claims and claim (benefits) expenses		(3,036	)			(619	)			(500	)			3,204				4,640				4,962
Underwriting and operating expenses		30,700				32,935				38,843				34,669				34,725				34,065
Service expenses		336				430				650				787				481				591
Interest expense		8,051				8,041				8,029				7,930				7,922				7,915
(Gain) loss from change in fair value of warrant liability		(1,020	)			(93	)			(112	)			—				(658	)			205
Total expenses		35,031				40,694				46,910				46,590				47,110				47,738
Income before income taxes		97,189				86,747				78,162				77,451				73,655				67,456
Income tax expense		21,745				19,067				17,639				17,258				16,133				14,565
Net income	$	75,444			$	67,680			$	60,523			$	60,193			$	57,522			$	52,891
Earnings per share
Basic	$	0.88			$	0.79			$	0.71			$	0.70			$	0.67			$	0.62
Diluted	$	0.86			$	0.77			$	0.69			$	0.69			$	0.65			$	0.61
Weighted average common shares outstanding
Basic		85,734				85,953				85,757				85,721				85,647				85,317
Diluted		86,577				87,310				87,117				86,880				86,819				86,487
Other data
Loss Ratio(1)		(2.5	)%			(0.5	)%			(0.4	)%			2.8	%			4.2	%			4.7	%
Expense Ratio(2)		25.4	%			28.3	%			34.1	%			30.5	%			31.3	%			32.2	%
Combined ratio(3)		22.9	%			27.7	%			33.7	%			33.3	%			35.5	%			36.9	%

(1)	Loss ratio is calculated by dividing insurance claims and claim (benefit) expenses by net premiums earned.
(2)	Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)	Combined ratio may not foot due to rounding.

Portfolio Statistics

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

Primary portfolio trends	As of and for the three months ended
	June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
	($ Values In Millions, except as noted below)
New insurance written	$	16,611			$	14,165			$	18,342			$	18,084			$	22,751			$	26,397
New risk written		4,386				3,721				4,786				4,640				5,650				6,531
Insurance in force (IIF)(1)		168,639				158,877				152,343				143,618				136,598				123,777
Risk in force(1)		43,260				40,522				38,661				36,253				34,366				31,206
Policies in force (count)(1)		551,543				526,976				512,316				490,714				471,794				436,652
Average loan size($ value in thousands)(1)	$	306			$	301			$	297			$	293			$	290			$	283
Coverage percentage(2)		25.7	%			25.5	%			25.4	%			25.2	%			25.2	%			25.2	%
Loans in default (count)(1)		4,271				5,238				6,227				7,670				8,764				11,090
Default rate(1)		0.77	%			0.99	%			1.22	%			1.56	%			1.86	%			2.54	%
Risk in force on defaulted loans(1)	$	295			$	362			$	435			$	546			$	625			$	785
Net premium yield(3)		0.30	%			0.30	%			0.31	%			0.32	%			0.34	%			0.36	%
Earnings from cancellations	$	2.2			$	2.9			$	5.1			$	7.7			$	7.0			$	9.9
Annual persistency(4)		76.0	%			71.5	%			63.8	%			58.1	%			53.9	%			51.9	%
Quarterly run-off(5)		4.3	%			5.0	%			6.7	%			8.1	%			8.0	%			12.5	%

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

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, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
	(In Millions)
Monthly	$	15,695		$	13,094		$	16,972		$	16,861		$	19,422		$	23,764
Single		916			1,071			1,370			1,223			3,329			2,633
Primary	$	16,611		$	14,165		$	18,342		$	18,084		$	22,751		$	26,397

Primary and pool IIF	As of
	June 30, 2022			March 31, 2022			December 31, 2021			September 30, 2021			June 30, 2021			March 31, 2021
	(In Millions)
Monthly	$	148,488		$	139,156		$	133,104		$	124,767		$	117,629		$	106,920
Single		20,151			19,721			19,239			18,851			18,969			16,857
Primary		168,639			158,877			152,343			143,618			136,598			123,777
Pool		1,114			1,162			1,229			1,339			1,460			1,642
Total	$	169,753		$	160,039		$	153,572		$	144,957		$	138,058		$	125,419

          The following table presents the amounts related to the company’s quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR Transaction, and 2022 QSR Transaction, and collectively, the QSR Transactions), Insurance-Linked Note transactions (the 2017 ILN Transaction, 2018 ILN Transaction, 2019 ILN Transaction, 2020-1 ILN Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and 2021-2 ILN Transaction and collectively, the ILN Transactions), and traditional excess-of-loss transaction (2022 -1 XOL Transaction) for the periods indicated.

	For the three months ended
	June 30, 2022				March 31, 2022				December 31, 2021				September 30, 2021				June 30, 2021				March 31, 2021
	(In Thousands)
The QSR Transactions
Ceded risk-in-force	$	9,040,944			$	8,504,853			$	8,194,604			$	7,610,870			$	7,113,707			$	6,330,409
Ceded premiums earned		(30,231	)			(29,005	)			(28,490	)			(28,366	)			(27,537	)			(25,747	)
Ceded claims and claim expenses		(403	)			(159	)			19				840				1,194				1,180
Ceding commission earned		6,146				5,886				6,208				6,142				5,961				5,162
Profit commission		17,778				16,723				16,142				15,191				14,391				13,380
The ILN Transactions
Ceded premiums	$	(10,132	)		$	(10,939	)		$	(11,344	)		$	(10,390	)		$	(10,169	)		$	(9,397	)
2022-1 XOL Transaction
Ceded Premiums	$	(2,907	)		$	—			$	—			$	—			$	—			$	—

Primary NIW by FICO	For the three months ended									For the six months ended
	June 30, 2022			March 31, 2022			June 30, 2021			June 30, 2022			June 30, 2021
	($ In Millions)
>= 760	$	7,990		$	6,372		$	11,390		$	14,362		$	24,304
740-759		2,900			2,388			4,246			5,288			9,558
720-739		2,056			1,937			3,152			3,993			7,115
700-719		1,650			1,639			1,798			3,289			4,156
680-699		1,277			1,244			1,292			2,521			2,652
<=679		738			585			873			1,323			1,363
Total	$	16,611		$	14,165		$	22,751		$	30,776		$	49,148
Weighted average FICO		751			748			754			750			755

Primary NIW by LTV	For the three months ended												For the six months ended
	June 30, 2022				March 31, 2022				June 30, 2021				June 30, 2022			June 30, 2021
	(In Millions)
95.01% and above	$	1,577			$	1,366			$	2,177			$	2,943		$	4,628
90.01% to 95.00%		8,253				7,055				9,941				15,308			20,992
85.01% to 90.00%		4,772				3,868				6,262				8,640			14,110
85.00% and below		2,009				1,876				4,371				3,885			9,418
Total	$	16,611			$	14,165			$	22,751			$	30,776		$	49,148
Weighted average LTV		92.2	%			92.1	%			91.3	%			92.1	%		91.1	%

Primary NIW by purchase/refinance mix	For the three months ended									For the six months ended
	June 30, 2022			March 31, 2022			June 30, 2021			June 30, 2022		June 30, 2021
	(In Millions)
Purchase	$	16,203		$	13,398		$	18,911		$	29,601	$	36,820
Refinance		408			767			3,840			1,175		12,328
Total	$	16,611		$	14,165		$	22,751		$	30,776	$	49,148

          The table below presents a summary of our primary IIF and RIF by book year as of June 30, 2022.

Primary IIF and RIF	As of June 30, 2022
	IIF			RIF
	(In Millions)
June 30, 2022	$	30,249		$	7,972
2021		76,657			19,522
2020		39,154			9,928
2019		10,248			2,688
2018		4,021			1,030
2017 and before		8,310			2,120
Total	$	168,639		$	43,260

          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
	June 30, 2022			March 31, 2022			June 30, 2021
	(In Millions)
>= 760	$	83,769		$	79,141		$	70,583
740-759		29,195			27,406			23,175
720-739		23,240			22,176			18,857
700-719		16,221			15,236			12,230
680-699		11,160			10,347			7,927
<=679		5,054			4,571			3,826
Total	$	168,639		$	158,877		$	136,598

Primary RIF by FICO	As of
	June 30, 2022			March 31, 2022			June 30, 2021
	(In Millions)
>= 760	$	21,159		$	19,883		$	17,531
740-759		7,564			7,054			5,873
720-739		6,044			5,735			4,798
700-719		4,289			4,010			3,161
680-699		2,936			2,706			2,047
<=679		1,268			1,134			956
Total	$	43,260		$	40,522		$	34,366

Primary IIF by LTV	As of
	June 30, 2022			March 31, 2022			June 30, 2021
	(In Millions)
95.01% and above	$	16,068		$	14,918		$	12,026
90.01% to 95.00%		77,804			72,381			60,358
85.01% to 90.00%		51,029			48,406			43,064
85.00% and below		23,738			23,172			21,150
Total	$	168,639		$	158,877		$	136,598

Primary RIF by LTV	As of
	June 30, 2022			March 31, 2022			June 30, 2021
	(In Millions)
95.01% and above	$	4,914		$	4,527		$	3,552
90.01% to 95.00%		22,974			21,358			17,774
85.01% to 90.00%		12,553			11,895			10,555
85.00% and below		2,819			2,742			2,485
Total	$	43,260		$	40,522		$	34,366

Primary RIF by Loan Type	As of
	June 30, 2022			March 31, 2022			June 30, 2021
Fixed	99	%		99	%		99	%
Adjustable rate mortgages:
Less than five years	—			—			—
Five years and longer	1			1			1
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
	June 30, 2022				March 31, 2022				June 30, 2021
	(In Millions)
IIF, beginning of period	$	158,877			$	152,343			$	123,777
NIW		16,611				14,165				22,751
Cancellations, principal repayments and other reductions		(6,849	)			(7,631	)			(9,930	)
IIF, end of period	$	168,639			$	158,877			$	136,598

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
	June 30, 2022			March 31, 2022			June 30, 2021
California	10.8	%		10.8	%		10.3	%
Texas	9.0			9.5			9.8
Florida	8.3			8.4			8.3
Virginia	4.3			4.5			5.0
Georgia	4.0			3.9			3.5
Illinois	3.9			3.8			3.8
Washington	3.9			3.7			3.6
Colorado	3.7			3.7			4.1
Maryland	3.5			3.6			3.9
Pennsylvania	3.3			3.3			3.2
Total	54.7	%		55.2	%		55.5	%

          The table below presents selected primary portfolio statistics, by book year, as of June 30, 2022.

	As of June 30, 2022
Book 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)			Current default rate(3)
	($ Values in Millions)
2013	$	162		$	6		3	%		655		40		1		1		0.6	%		0.3	%		2.5	%
2014		3,451			235		7	%		14,786		1,455		29		50		4.0	%		0.5	%		2.0	%
2015		12,422			1,440		12	%		52,548		7,941		170		121		3.0	%		0.6	%		2.1	%
2016		21,187			3,145		15	%		83,626		16,073		343		138		2.7	%		0.6	%		2.1	%
2017		21,582			3,484		16	%		85,897		18,205		607		112		3.9	%		0.8	%		3.3	%
2018		27,295			4,021		15	%		104,043		20,359		785		100		6.6	%		0.9	%		3.9	%
2019		45,141			10,248		23	%		148,423		42,491		812		25		8.5	%		0.6	%		1.9	%
2020		62,702			39,154		62	%		186,174		125,400		696		2		4.6	%		0.4	%		0.6	%
2021		85,574			76,657		90	%		257,972		236,705		811		1		4.3	%		0.3	%		0.3	%
2022		30,776			30,249		98	%		84,034		82,874		17		—		1.0	%		—	%		—	%
Total	$	310,292		$	168,639					1,018,158		551,543		4,271		550

(1)	Calculated as total claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance.
(2)	Calculated as the sum of the number of claims paid ever to date and number of loans in default divided by policies ever in force.
(3)	Calculated as the number of loans in default divided by number of policies in force.

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

	For the three months ended								For the six months ended
	June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(In Thousands)
Beginning balance	$	102,372			$	96,103			$	103,551			$	90,567
Less reinsurance recoverables(1)		(20,080	)			(18,686	)			(20,320	)			(17,608	)
Beginning balance, net of reinsurance recoverables		82,292				77,417				83,231				72,959
Add claims incurred:
Claims and claim (benefits) expenses incurred:
Current year(2)		8,707				5,069				18,787				15,626
Prior years(3)		(11,743	)			(429	)			(22,442	)			(6,024	)
Total claims and claim (benefits) expenses incurred		(3,036	)			4,640				(3,655	)			9,602
Less claims paid:
Claims and claim expenses paid:
Current year(2)		26				—				26				12
Prior years(3)		356				548				676				1,040
Total claims and claim expenses paid		382				548				702				1,052
Reserve at end of period, net of reinsurance recoverables		78,874				81,509				78,874				81,509
Add reinsurance recoverables(1)		19,588				19,726				19,588				19,726
Ending balance	$	98,462			$	101,235			$	98,462			$	101,235

(1)	Related to ceded losses recoverable under the QSR Transactions.
(2)	Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $14.0 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the six months ended June 30, 2022 and $9.8 million attributed to net case reserves and $5.6 million attributed to net IBNR reserves for the six months ended June 30, 2021.
(3)	Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $17.0 million attributed to net case reserves and $4.7 million attributed to net IBNR reserves for the six months ended June 30, 2022 and $1.1 million attributed to net case reserves and $5.0 million attributed to net IBNR reserves for the six months ended June 30, 2021.

          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						For the six months ended
	June 30, 2022			June 30, 2021			June 30, 2022			June 30, 2021
Beginning default inventory	5,238			11,090			6,227			12,209
Plus: new defaults	1,069			1,095			2,232			2,862
Less: cures	(2,011	)		(3,402	)		(4,143	)		(6,270	)
Less: claims paid	(24	)		(19	)		(43	)		(35	)
Less: rescission and claims denied	(1	)		—			(2	)		(2	)
Ending default inventory	4,271			8,764			4,271			8,764

          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								For the six months ended
	June 30, 2022				June 30, 2021				June 30, 2022				June 30, 2021
	(In Thousands)
Number of claims paid(1)		24				19				43				35
Total amount paid for claims	$	471			$	702			$	873			$	1,308
Average amount paid per claim	$	20			$	37			$	20			$	37
Severity(2)		46	%			66	%			43	%			64	%

(1)	Count includes 10 and 16 claims settled without payment during the three and six months ended June 30, 2022, respectively, and three and four claims settled with out payment during the three and six months ended 2021, respectively.
(2)	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, and is calculated including 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 June 30, 2022			As of June 30, 2021
	(In Thousands)
Case(1)	$	21.3		$	10.6
IBNR(1)(2)		1.8			1.0
Total	$	23.1		$	11.6

(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
	June 30, 2022			March 31, 2022			June 30, 2021
	(In Thousands)
Available Assets	$	2,169,388		$	2,127,030		$	1,886,993
Risk-Based Required Assets		1,240,143			1,341,217			1,170,854