NMI Holdings, Inc. Reports Second Quarter 2017 Fin

EMERYVILLE, CA --(Marketwired - August 01, 2017) - NMI Holdings, Inc. ( NASDAQ : NMIH ) today reported net income of $6.0 million, or $0.10 per share, for the second quarter ended June 30, 2017. Results for the quarter include previously disclosed fees and expenses of approximately $3.1 million related to the May 2017 issuance of Insurance-Linked Notes (ILN). The company reported net income of $2.0 million, or $0.03 per share, in the second quarter of 2016.

Bradley Shuster, chairman and CEO of National MI, said, "In the second quarter, National MI again delivered solid financial results, including record pre-tax income, and continued to advance the key metrics that will drive realization of our mid-teens return objectives. We made significant strides in customer development, activating 36 new customers in the second quarter and 73 new customers for the year-to-date. We also continued to build a high-quality portfolio of insurance-in-force at a growth rate that leads our industry, while maintaining our focus on prudently and proactively managing risk, expenses, and capital."

• As of June 30, 2017, the company had primary insurance-in-force of $38.6 billion, up 11% from $34.8 billion at the prior quarter end and up 64% over $23.6 billion as of June 30, 2016.
• Premiums earned for the quarter were $37.9 million, including $3.8 million attributable to cancellation of single premium policies, which compares with $33.2 million, including $2.5 million related to cancellations, in the prior quarter. Premiums earned in the second quarter of 2017 were up 46% over premium revenue of $26.0 million in the same quarter a year ago, which included $3.5 million related to cancellations.
• NIW mix was 81% monthly premium product, which compares with 81% in the prior quarter and 63% in the second quarter of 2016.
• Total underwriting and operating expenses in the second quarter were $28.0 million and include approximately $3.1 million of transaction costs related to the previously disclosed ILN issuance. This compares with total underwriting and operating expenses of $26.0 million, including financing-related transaction costs of $1.6 million in the prior quarter, and $23.2 million in the same quarter a year ago.
• Claims expense for the quarter was $1.4 million, resulting in a loss ratio of 3.6%.
• At quarter-end, cash and investments were $694 million, including $57 million at the holding company, and book equity was $495 million, equal to $8.27 per share.
• At quarter-end, the company had total PMIERs available assets of $485 million, which compares with risk- based required assets under PMIERs of $298 million.

Conference Call and Webcast Details

The company will hold a conference call and live webcast 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 call also can be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 for international callers using Conference ID: 47660998, or by referencing NMI Holdings, Inc.

About National MI

National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. ( NASDAQ : NMIH ), is a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com .

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides a "safe harbor" for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "plan," "project," "continuing," "ongoing," "expect," "intend" and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: changes in the business practices of the GSEs that may impact the use of private mortgage insurance as credit enhancement; our ability to remain an eligible mortgage insurer under the PMIERs, including the financial requirements, and other requirements of 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 governmental agencies like the Federal Housing Administration (FHA) and the Veterans Administration (VA), and potential market entry by new competitors or consolidation of existing competitors; developments in the world's 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; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; 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 reinsurance market and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; 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 claims and coverage issues, including claims exceeding our reserves or amounts we expected to experience; the inability of our counter-parties, including third party reinsurers, to meet their obligations to us; our ability to utilize our net operating loss carryforwards, which could be limited or eliminated in various ways, including if we experience an ownership change as defined in Section 382 of the Internal Revenue Code; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; ability to recruit, train and retain key personnel; and general economic downturns and volatility. These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2016, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

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

Press Contact Mary McGarity Strategic Vantage Mortgage Public Relations (203) 513-2721 MaryMcGarity@StrategicVantage.com

The following table presents the amounts related to the 2016 QSR transaction, for the last four quarters.

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

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

The tables below reflect our total primary IIF and RIF by FICO and LTV and total primary RIF by loan type as of the dates indicated.

The table below reflects a summary of the change in total primary IIF during the periods indicated.

The following table shows portfolio data by book year, as of June 30, 2017.

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

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

The following tables provide details of our claims and reserves for the periods indicated.

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