GlobeNewswire Inc | Aug 5, 2020 04:01PM EDT

August 05, 2020

EMERYVILLE, Calif., Aug. 05, 2020 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported GAAP net income of $26.8 million, or $0.36 per diluted share, for the second quarter ended June 30, 2020, which compares to $58.3 million, or $0.74 per diluted share, in the first quarter ended March 31, 2020 and $39.1 million, or $0.56 per diluted share, in the second quarter ended June 30, 2019. Adjusted net income for the quarter was $29.7 million or $0.40 per diluted share, which compares to $52.7 million or $0.75 per diluted share in the first quarter ended March 31, 2020 and $41.4 million or $0.59 per diluted share in the second quarter ended June 30, 2019. Results for the second quarter ended June 30, 2020, reflect the impact of additional claims and claim expenses incurred on higher default experience in connection with the COVID-19 pandemic. 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, "From the start of this crisis, we have taken steps to protect the health and safety of our employees and ensure our continued ability to seamlessly support our lenders and their borrowers. While still early, we have been encouraged by the resiliency weve seen in the housing market. Demand has been robust, house prices have continued to rise and record low interest rates have giving more Americans a chance to access homeownership at a time when its most critical. Merkle continued, This is the time when our customers need us most, and our broadly conservative stance heading into this crisis, and the recent success we have achieved in the capital and reinsurance markets positions us well to continue supporting them and the overall housing market during the COVID-19 pandemic.

Selected highlights from the second quarter 2020 include:

-- Primary insurance-in-force at quarter end was $98.9 billion, up 21% compared to the second quarter of 2019 -- New insurance written was $13.1 billion, up 8% compared to $12.2 billion in the second quarter of 2019 -- Net premiums earned were $98.9 million, up 19% compared to $83.2 million in the second quarter of 2019 -- Underwriting and operating expenses were $30.4 million, including $0.2 million of capital market transaction costs, compared to $32.2 million in the second quarter of 2019, including $0.7 million of capital market transaction costs -- Insurance claims and claim expenses were $34.3 million, compared to $2.9 million in the second quarter of 2019, reflecting higher default experience attributable to the COVID-19 pandemic -- At quarter-end, cash and investments were $1.9 billion and shareholders equity was $1.3 billion, equal to $14.82 per share -- Annualized return-on-equity for the quarter was 9.6% and annualized adjusted return-on-equity was 10.7% -- At quarter-end, the company reported total PMIERs available assets of $1.7 billion and net risk- based required assets of $1.0 billion

Concurrent with the release of second quarter earnings, the company has filed a Form 8-K that includes its current assessment of the impact the COVID-19 outbreak will have on the U.S. economy and housing market, and its perspective on the implications for the U.S. mortgage insurance market, and its business performance and financial position. The Form 8-K also includes selected operating statistics for the month ended July 31, 2020. Investors may access the Form 8-K on the companys website, www.nationalmi.com, in the Investor Relations section.

Quarter Quarter Quarter Change ^ Change ^ Ended Ended Ended (1) (1) 6/30/2020 3/31/2020 6/30/2019 Q/Q Y/YINSURANCE METRICS ($billions)Primary Insurance-in-Force $ 98.9 $ 98.5 $ 81.7 ? % 21 %New Insurance Written - NIW Monthly premium 11.9 10.5 11.1 14 % 7 %Single premium 1.2 0.8 1.1 48 % 11 %Total ^(2) 13.1 11.3 12.2 16 % 8 % FINANCIAL HIGHLIGHTS ($millions, except per share amounts)Net Premiums Earned 98.9 98.7 83.2 ? % 19 %Insurance Claims and Claim 34.3 5.7 2.9 503 % 1075 %ExpensesUnderwriting and Operating 30.4 32.3 32.2 (6 ) % (6 ) %Expenses ^(3)Net Income 26.8 58.3 39.1 (54 ) % (31 ) %Adjusted Net Income 29.7 52.7 41.4 (44 ) % (28 ) %Cash and Investments $ 1,855 $ 1,180 $ 1,053 57 % 76 %Shareholders' Equity 1,257 975 812 29 % 55 %Book Value per Share $ 14.82 $ 14.15 $ 11.99 5 % 24 %Loss Ratio 34.7 % 5.8 % 3.5 % Expense Ratio ^(3) 30.7 % 32.7 % 38.7 %

(1)Percentages may not be replicated based on the rounded figures presented in the table.(2)Total may not foot due to rounding.(3)Certain "Underwriting and operating expenses" have been reclassified as "Service expenses" in prior periods.

Conference Call and Webcast Details

The company will hold a conference call, which will be webcast live today, August 5, 2020, 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 (888) 734-0328 in the U.S., or (914) 495-8578 internationally, and using Conference ID: 3189949 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 (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," "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 combat it, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and the Companys business, operations and personnel, 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 generally, or with first time homebuyers or on very high loan-to-value mortgages; 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, 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 worlds 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, including any action by the Consumer Financial Protection Bureau to address the planned expiration of the "QM Patch" under the Dodd-Frank Act Ability to Repay/Qualified Mortgage Rule; 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 natural disasters, 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; the inability of our counterparties, 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, 2019 and in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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 and adjusted combined ratio 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 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 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.

Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio and adjusted combined ratio 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 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 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 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 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.

Investor ContactJohn M. SwensonVice President, Investor Relations and Treasuryjohn.swenson@nationalmi.com(510) 788-8417

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

Consolidatedstatements of For the three months ended For the six months endedoperations and June 30, June 30,comprehensiveincome 2020 2019 2020 2019Revenues (In Thousands, except for per share data)Net premiums $ 98,944 $ 83,249 $ 197,661 $ 157,118 earnedNet investment 7,070 7,629 15,174 15,012 incomeNet realizedinvestment gains 711 (113 ) 639 (300 ) (losses)Other revenues 1,223 415 2,123 456 Total revenues 107,948 91,180 215,597 172,286 Expenses Insurance claimsand claim 34,334 2,923 40,031 5,666 expensesUnderwriting andoperating 30,370 32,190 62,647 62,990 expenses^(1)Service expenses 1,090 353 1,824 402 ^(1)Interest expense 5,941 3,071 8,685 6,132 Loss (gain) fromchange in fair 1,236 1,685 (4,723 ) 7,164 value of warrantliabilityTotal expenses 72,971 40,222 108,464 82,354 Income before 34,977 50,958 107,133 89,932 income taxesIncome tax 8,129 11,858 22,014 17,933 expenseNet income $ 26,848 $ 39,100 $ 85,119 $ 71,999 Earnings per shareBasic $ 0.36 $ 0.58 $ 1.20 $ 1.07 Diluted $ 0.36 $ 0.56 $ 1.11 $ 1.04 Weighted averagecommon shares outstandingBasic 73,617 67,590 71,090 67,143 Diluted 74,174 69,590 72,407 69,348 Loss ratio^(2) 34.7 % 3.5 % 20.3 % 3.6 %Expense ratio^ 30.7 % 38.7 % 31.7 % 40.1 %(3)Combined ratio ^ 65.4 % 42.2 % 51.9 % 43.7 %(4) Net income $ 26,848 $ 39,100 $ 85,119 $ 71,999 Othercomprehensive income, net oftax:Unrealized gainsin accumulatedothercomprehensiveincome, net oftax expense of$8,978 and$3,662 for thethree months 33,773 13,779 19,418 28,647 ended June 30,2020 and 2019,and $5,162 and$7,615 for thesix months endedJune 30, 2020and 2019,respectivelyReclassificationadjustment forrealized (gains)losses includedin net income,net of taxexpense(benefit) of$149 and ($24)for the three (562 ) 89 969 237 months endedJune 30, 2020and 2019, and($258) and ($63)for the sixmonths endedJune 30, 2020and 2019,respectivelyOthercomprehensive 33,211 13,868 20,387 28,884 income, net oftaxComprehensive $ 60,059 $ 52,968 $ 105,506 $ 100,883 income

(1)Certain "Underwriting and operating expenses" have been reclassified as "Service expenses" in prior periods. (2)Loss ratio is calculated by dividing 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.(4)Combined ratio may not foot due to rounding.

Consolidated balance sheets June 30, 2020 December 31, 2019Assets (In Thousands, except for share data)Fixed maturities, available-for-sale, atfair value (amortized cost of $1,286,803 $ 1,339,771 $ 1,140,940 and $1,113,779 as of June 30, 2020 andDecember 31, 2019, respectively)Cash and cash equivalents (includingrestricted cash of $2,068 and $2,662 as of 515,450 41,089 June 30, 2020 and December 31, 2019,respectively)Premiums receivable 46,408 46,085 Accrued investment income 7,909 6,831 Prepaid expenses 3,416 3,512 Deferred policy acquisition costs, net 63,619 59,972 Software and equipment, net 26,105 26,096 Intangible assets and goodwill 3,634 3,634 Prepaid reinsurance premiums 10,263 15,488 Reinsurance recoverable ^(1) 14,307 4,939 Other assets ^(1) 16,049 16,232 Total assets $ 2,046,931 $ 1,364,818 Liabilities Debt $ 392,773 $ 145,764 Unearned premiums 115,236 136,642 Accounts payable and accrued expenses 104,777 39,904 Reserve for insurance claims and claim 69,903 23,752 expensesReinsurance funds withheld 12,205 14,310 Warrant liability, at fair value 2,698 7,641 Deferred tax liability, net 83,785 56,360 Other liabilities 8,517 10,025 Total liabilities 789,894 434,398 Shareholders' equity Common stock - class A shares, $0.01 parvalue; 84,804,766 and 68,358,074 sharesissued and outstanding as of June 30, 2020 848 684 and December 31, 2019, respectively(250,000,000 shares authorized)Additional paid-in capital 927,950 707,003 Accumulated other comprehensive income, net 37,675 17,288 of taxRetained earnings 290,564 205,445 Total shareholders' equity 1,257,037 930,420 Total liabilities and shareholders' equity $ 2,046,931 $ 1,364,818

(1)Reinsurance recoverable has been reclassified from "Other assets" in the prior period.

Non-GAAP Financial Measure Reconciliations Quarter ended Quarter ended Quarter ended 6/30/2020 3/31/2020 6/30/2019As Reported (In Thousands, except for per share data)Revenues Net premiums earned $ 98,944 $ 98,717 $ 83,249 Net investment income 7,070 8,104 7,629 Net realized investment 711 (72 ) (113 ) gains (losses)Other revenues 1,223 900 415 Total revenues 107,948 107,649 91,180 Expenses Insurance claims and claim 34,334 5,697 2,923 expensesUnderwriting and operating 30,370 32,277 32,190 expenses^(1)Service expenses^(1) 1,090 734 353 Interest expense 5,941 2,744 3,071 Loss (gain) from change infair value of warrant 1,236 (5,959 ) 1,685 liabilityTotal expenses 72,971 35,493 40,222 Income before income taxes 34,977 72,156 50,958 Income tax expense 8,129 13,885 11,858 Net income $ 26,848 $ 58,271 $ 39,100 Adjustments: Net realized investment (711 ) 72 113 (gains) lossesLoss (gain) from change infair value of warrant 1,236 (5,959 ) 1,685 liabilityCapital markets 2,790 474 664 transaction costsAdjusted income before 38,292 66,743 53,420 taxes Income tax expense on 437 115 163 adjustmentsAdjusted net income $ 29,726 $ 52,743 $ 41,399 Weighted average diluted 74,174 70,401 69,590 shares outstanding Diluted EPS $ 0.36 $ 0.74 ^ ^) $ 0.56 (2Adjusted diluted EPS $ 0.40 $ 0.75 $ 0.59 Return-on-equity 9.6 % 24.5 % 20.0 %Adjusted return-on-equity 10.7 % 22.1 % 21.2 % Expense ratio ^(3) 30.7 % 32.7 % 38.7 %Adjusted expense ratio ^ 30.5 % 32.2 % 37.9 %(4) Combined ratio ^(5) 65.4 % 38.5 % 42.2 %Adjusted combined ratio ^ 65.2 % 38.0 % 41.4 %(6)

(1)Certain "Underwriting and operating expenses" have been reclassified as "Service expenses" in prior periods.(2)Diluted net income for the quarter ended March 31, 2020 excludes the impact of the warrant fair value change as it was anti-dilutive. For all other periods presented, diluted net income equals reported net income as the impact of the warrant fair value change was dilutive.(3)Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.(4)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.(5)Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claims expense by net premiums earned.(6)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.

HistoricalQuarterly 2020 2019Data June 30 March 31 December 31 September 30 June 30 March 31Revenues (In Thousands, except for per share data)Net premiums $ 98,944 $ 98,717 $ 95,517 $ 92,381 $ 83,249 $ 73,868 earnedNetinvestment 7,070 8,104 7,962 7,882 7,629 7,383 incomeNet realizedinvestment 711 (72 ) 264 81 (113 ) (187 ) gains(losses)Other 1,223 900 1,154 1,244 415 42 revenuesTotal 107,948 107,649 104,897 101,588 91,180 81,106 revenuesExpenses Insuranceclaims and 34,334 5,697 4,269 2,572 2,923 2,743 claimexpensesUnderwritingand 30,370 32,277 31,296 32,335 32,190 30,800 operatingexpenses^(1)Service 1,090 734 937 909 353 49 expenses^(1)Interest 5,941 2,744 2,974 2,979 3,071 3,061 expenseLoss (gain)from changein fair 1,236 (5,959 ) 2,632 (1,139 ) 1,685 5,479 value ofwarrantliabilityTotal 72,971 35,493 42,108 37,656 40,222 42,132 expenses Incomebefore 34,977 72,156 62,789 63,932 50,958 38,974 income taxesIncome tax 8,129 13,885 12,594 14,169 11,858 6,075 expenseNet income $ 26,848 $ 58,271 $ 50,195 $ 49,763 $ 39,100 $ 32,899 Earnings per shareBasic $ 0.36 $ 0.85 $ 0.74 $ 0.73 $ 0.58 $ 0.49 Diluted $ 0.36 $ 0.74 $ 0.71 $ 0.69 $ 0.56 $ 0.48 Weightedaveragecommon sharesoutstandingBasic 73,617 68,563 68,140 67,849 67,590 66,692 Diluted 74,174 70,401 70,276 70,137 69,590 68,996 Other data Loss Ratio^ 34.7 % 5.8 % 4.5 % 2.8 % 3.5 % 3.7 %(2)Expense 30.7 % 32.7 % 32.8 % 35.0 % 38.7 % 41.7 %Ratio^(3)Combined 65.4 % 38.5 % 37.2 % 37.8 % 42.2 % 45.4 %ratio ^(4)

(1)Certain "Underwriting and operating expenses" have been reclassified as "Service expenses" in prior periods.(2)Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.(3) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.(4) Combined ratio may not foot due to rounding.

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 Three months endedNIW June 30, March 31, December September June 30, March 31, 2020 2020 31, 30, 2019 2019 2019 2019 (In Millions)Monthly $ 11,885 $ 10,461 $ 11,085 $ 12,994 $ 11,067 $ 6,211 Single 1,239 836 864 1,106 1,112 702 Primary $ 13,124 $ 11,297 $ 11,949 $ 14,100 $ 12,179 $ 6,913

Primaryand As ofpoolIIF June 30, March 31, December September June 30, March 31, 2020 2020 31, 30, 2019 2019 2019 2019 (In Millions)Monthly $ 82,848 $ 81,347 $ 77,097 $ 71,814 $ 63,922 $ 55,995 Single 16,057 17,147 17,657 17,899 17,786 17,239 Primary 98,905 98,494 94,754 89,713 81,708 73,234 Pool 2,340 2,487 2,570 2,668 2,758 2,838 Total $ 101,245 $ 100,981 $ 97,324 $ 92,381 $ 84,466 $ 76,072

The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction and 2020 QSR Transaction, and collectively, the QSR Transactions), and Insurance-Linked Note transactions (the 2017 ILN Transaction, 2018 ILN Transaction and 2019 ILN Transaction, and collectively, the ILN Transactions) for the periods indicated.

For the three months ended June 30, March 31, December 31, September 30, June 30, March 31, 2020 2020 2019 2019 2019 2019 The QSR TransactionsCeded $ 4,563,676 $ 4,843,715 $ 5,137,249 $ 4,901,809 $ 4,558,862 $ 4,534,353 risk-in-forceCededpremiums (23,210 ) (23,011 ) (23,673 ) (23,151 ) (20,919 ) (21,468 )earnedCeded claimsand claim 8,669 1,532 1,030 766 770 899 expensesCedingcommission 4,428 4,513 4,691 4,584 4,171 4,206 earnedProfit 5,271 12,413 13,314 13,254 11,884 12,061 commission The ILN TransactionsCeded $ (3,267 ) $ (3,872 ) $ (4,263 ) $ (4,409 ) $ (2,895 ) $ (3,023 )premiums

Portfolio Statistics

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

Primaryportfolio As of and for the three months endedtrends June 30, March 31, December September June 30, March 31, 2020 2020 31, 30, 2019 2019 2019 2019 ($ Values In Millions, except as noted below)New insurance $ 13,124 $ 11,297 $ 11,949 $ 14,100 $ 12,179 $ 6,913 writtenNew risk 3,260 2,897 3,082 3,651 3,183 1,799 writtenInsurance inforce (IIF) ^ 98,905 98,494 94,754 89,713 81,708 73,234 (1)Risk in force 25,238 25,192 24,173 22,810 20,661 18,373 ^ (1)Policies inforce (count) 372,934 376,852 366,039 350,395 324,876 297,232 ^ (1)Average loansize ($ value $ 265 $ 261 $ 259 $ 256 $ 252 $ 246 in thousands)^(1)Coveragepercentage ^ 25.5 % 25.6 % 25.5 % 25.4 % 25.3 % 25.1 %(2)Loans indefault 10,816 1,449 1,448 1,230 1,028 940 (count) ^(1)Percentage ofloans in 2.90 % 0.38 % 0.40 % 0.35 % 0.32 % 0.32 %default ^(1)Risk in forceon defaulted $ 799 $ 84 $ 84 $ 70 $ 58 $ 53 loans ^(1)Averagepremium yield 0.40 % 0.41 % 0.41 % 0.43 % 0.43 % 0.42 %^(3)Earnings from $ 15.5 $ 8.6 $ 8.0 $ 7.4 $ 4.5 $ 2.3 cancellationsAnnualpersistency^ 64.1 % 71.7 % 76.8 % 82.4 % 86.0 % 87.2 %(4)Quarterly 12.9 % 8.0 % 7.7 % 7.5 % 5.1 % 3.3 %run-off^ (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 12-month period.(5)Defined as the percentage of IIF that is no longer on our books after a given three 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 June 30, 2020 March 31, 2020 June 30, 2019 ($ In Millions)>= 760 $ 8,052 $ 6,290 $ 5,627 740-759 1,866 1,615 2,165 720-739 1,607 1,579 1,785 700-719 959 1,038 1,337 680-699 514 565 891 <=679 126 210 374 Total $ 13,124 $ 11,297 $ 12,179 Weighted average FICO 762 757 751

Primary NIW by LTV For the three months ended June 30, 2020 March 31, 2020 June 30, 2019 (In Millions)95.01% and above $ 547 $ 721 $ 971 90.01% to 95.00% 5,385 5,009 5,931 85.01% to 90.00% 5,067 4,082 4,085 85.00% and below 2,125 1,485 1,192 Total $ 13,124 $ 11,297 $ 12,179 Weighted average LTV 90.7 % 91.3 % 92.0 %

Primary NIW by purchase/refinance For the three months endedmix June 30, March 31, June 30, 2020 2020 2019 (In Millions)Purchase $ 7,776 $ 7,991 $ 10,697 Refinance 5,348 3,306 1,482 Total $ 13,124 $ 11,297 $ 12,179

The table below presents a summary of our primary IIF and RIF by book year as of June30, 2020.

Primary IIF and RIF As of June 30, 2020 IIF RIF (In Millions)June 30, 2020 $ 23,949 $ 6,039 2019 34,658 9,017 2018 14,322 3,643 2017 11,548 2,877 2016 9,595 2,428 2015 and before 4,833 1,234 Total $ 98,905 $ 25,238

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, 2020 March 31, 2020 June 30, 2019 (In Millions)>= 760 $ 48,898 $ 47,340 $ 37,830 740-759 15,764 16,060 13,731 720-739 13,882 14,002 11,388 700-719 10,228 10,518 9,028 680-699 6,657 6,879 6,045 <=679 3,476 3,695 3,686 Total $ 98,905 $ 98,494 $ 81,708

Primary RIF by FICO As of June 30, 2020 March 31, 2020 June 30, 2019 (In Millions)>= 760 $ 12,433 $ 12,076 $ 9,551 740-759 4,031 4,121 3,499 720-739 3,585 3,626 2,904 700-719 2,625 2,696 2,286 680-699 1,706 1,760 1,524 <=679 858 913 897 Total $ 25,238 $ 25,192 $ 20,661

Primary IIF by LTV As of June 30, 2020 March 31, 2020 June 30, 2019 (In Millions)95.01% and above $ 8,453 $ 8,838 $ 7,925 90.01% to 95.00% 45,862 46,318 38,371 85.01% to 90.00% 32,603 31,729 25,099 85.00% and below 11,987 11,609 10,313 Total $ 98,905 $ 98,494 $ 81,708

Primary RIF by LTV As of June 30, 2020 March 31, 2020 June 30, 2019 (In Millions)95.01% and above $ 2,387 $ 2,478 $ 2,145 90.01% to 95.00% 13,463 13,587 11,206 85.01% to 90.00% 7,985 7,767 6,108 85.00% and below 1,403 1,360 1,202 Total $ 25,238 $ 25,192 $ 20,661

Primary RIF by Loan Type As of June 30, 2020 March 31, 2020 June 30, 2019 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 June 30, March 31, June 30, 2020 2020 2019 (In Millions)IIF, beginning of period $ 98,494 $ 94,754 $ 73,234 NIW 13,124 11,297 12,179 Cancellations, principal repayments and (12,713 ) (7,557 ) (3,705 )other reductionsIIF, end of period $ 98,905 $ 98,494 $ 81,708

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, 2020 March 31, 2020 June 30, 2019California 11.3 % 11.5 % 12.3 %Texas 8.1 8.2 8.2 Florida 6.2 5.9 5.4 Virginia 5.4 5.3 5.2 Illinois 4.0 3.8 3.6 Colorado 3.8 3.6 3.4 Pennsylvania 3.6 3.7 3.6 Maryland 3.5 3.4 3.3 Washington 3.4 3.3 3.0 Massachusetts 3.4 3.3 2.8 Total 52.7 % 52.0 % 50.8 %

The table below presents selected primary portfolio statistics, by book year, as of June30, 2020.

As of June 30, 2020 % Number Number Incurred CurrentBook Original Remaining Remaining Policies of of # of Loss Ratio Cumulative defaultyear Insurance Insurance of Ever in Policies Loans Claims (Inception Default rate Written in Force Original Force in Force in Paid to Date) ^ Rate ^(2) (3) Insurance Default (1) ($ Values in Millions) 2013 $ 162 $ 17 10 % 655 98 1 1 0.3 % 0.3 % 1.0 %2014 3,451 649 19 % 14,786 3,633 117 46 4.2 % 1.1 % 3.2 %2015 12,422 4,167 34 % 52,548 20,466 559 106 3.4 % 1.3 % 2.7 %2016 21,187 9,595 45 % 83,626 42,628 1,385 107 3.1 % 1.8 % 3.2 %2017 21,582 11,548 54 % 85,897 51,702 2,132 65 5.2 % 2.6 % 4.1 %2018 27,295 14,322 52 % 104,043 62,237 2,732 37 8.4 % 2.7 % 4.4 %2019 45,141 34,658 77 % 148,423 119,696 3,357 3 12.5 % 2.3 % 2.8 %2020 24,421 23,949 98 % 73,653 72,474 533 ? 8.5 % 0.7 % 0.7 %Total $ 155,661 $ 98,905 563,631 372,934 10,816 365

(1)Calculated astotal 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 expenses:

For the three months For the six months ended ended June 30, June 30, June 30, June 30, 2020 2019 2020 2019 (In Thousands)Beginning balance $ 29,479 $ 15,537 $ 23,752 $ 12,811 Less reinsurance (6,193 ) (3,678 ) (4,939 ) (3,001 )recoverables ^(1)Beginning balance, net of 23,286 11,859 18,813 9,810 reinsurance recoverables Add claims incurred: Claims and claim expenses incurred:Current year ^(2) 34,958 3,492 42,516 7,401 Prior years^ (3) (624 ) (569 ) (2,485 ) (1,735 )Total claims and claim 34,334 2,923 40,031 5,666 expenses incurred Less claims paid: Claims and claim expenses paid:Current year ^(2) 39 ? 39 ? Prior years ^(3) 1,985 674 3,209 1,368 Reinsurance terminations ^ ? (549 ) ? (549 )(4)Total claims and claim 2,024 125 3,248 819 expenses paid Reserve at end of period,net of reinsurance 55,596 14,657 55,596 14,657 recoverablesAdd reinsurance 14,307 3,775 14,307 3,775 recoverables ^(1)Ending balance $ 69,903 $ 18,432 $ 69,903 $ 18,432

(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 had 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.(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.(4)Represents the settlement of reinsurance recoverables in conjunction with the termination of one reinsurer under the 2016 QSR Transaction on a cut-off basis.

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

For the three months For the six months ended ended June 30, June 30, June 30, June 30, 2020 2019 2020 2019Beginning default 1,449 940 1,448 877 inventoryPlus: new defaults 9,770 546 10,282 1,120 Less: cures (353 ) (433 ) (828 ) (907 )Less: claims paid (49 ) (25 ) (83 ) (62 )Less: claims denied (1 ) ? (3 ) ? Ending default inventory 10,816 1,028 10,816 1,028

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 For the six months ended ended June 30, June 30, June 30, June 30, 2020 2019 2020 2019 (In Thousands)Number of claims paid ^ 49 25 83 62 (1)Total amount paid for $ 2,578 $ 788 $ 4,081 $ 1,714 claimsAverage amount paid per $ 53 $ 32 $ 49 $ 28 claimSeverity^(2) 89 % 77 % 87 % 69 %

(1)Count includes one and two claims settled without payment for the three and six months ended June30, 2020, respectively, and four and seven claims settled without payment for the three and six months ended June30, 2019, 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, 2020 As of June 30, 2019 (In Thousands)Case ^(1) $ 5.6 $ 16.4 IBNR ^(1)(2) 0.9 1.5 Total $ 6.5 $ 17.9

(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, 2020 March 31, 2020 June 30, 2019 (In Thousands)Available Assets $ 1,656,426 $ 1,069,695 $ 878,550 Risk-Based Required Assets 1,047,619 912,321 782,460