Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 16, 2015 | Jun. 30, 2014 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | NMI HOLDINGS, INC. | ||
Entity Central Index Key | 1547903 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $546,126,819 | ||
Entity Common Stock, Shares Outstanding | 58,519,558 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $337,718 and $416,135 as of December 31, 2014 and December 31, 2013, respectively) | $336,501 | $409,088 |
Cash and cash equivalents | 103,021 | 55,929 |
Premiums receivable | 1,048 | 19 |
Accrued investment income | 1,707 | 2,001 |
Prepaid expenses | 2,054 | 1,519 |
Deferred policy acquisition costs, net | 2,985 | 90 |
Software and equipment, net | 11,806 | 8,876 |
Intangible assets and goodwill | 3,634 | 3,634 |
Other assets | 509 | 63 |
Total assets | 463,265 | 481,219 |
Liabilities | ||
Unearned premiums | 22,069 | 1,446 |
Reserve for insurance claims and claim expenses | 83 | 0 |
Accounts payable and accrued expenses | 10,646 | 10,052 |
Warrant liability, at fair value | 3,372 | 6,371 |
Deferred tax liability | 137 | 133 |
Total liabilities | 36,307 | 18,002 |
Commitments and contingencies | ||
Shareholders' equity | ||
Additional paid-in capital | 562,911 | 553,707 |
Accumulated other comprehensive loss, net of tax | -3,607 | -7,047 |
Accumulated deficit | -132,930 | -84,024 |
Total shareholders' equity | 426,958 | 463,217 |
Total liabilities and shareholders' equity | 463,265 | 481,219 |
Common Class A [Member] | ||
Shareholders' equity | ||
Common stock - class A shares, $0.01 par value; 58,428,548 and 58,052,480 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively (250,000,000 shares authorized) | $584 | $581 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Fixed maturity, amortized cost | $337,718 | $416,135 |
Common Class A [Member] | ||
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares issued | 58,428,548 | 58,052,480 |
Common stock, shares outstanding | 58,428,548 | 58,052,480 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 12 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Premiums written | ||||
Direct | $34,029 | $3,541 | $0 | |
Net premiums written | 34,029 | 3,541 | 0 | |
Increase in unearned premiums | -20,622 | -1,446 | 0 | |
Net premiums earned | 13,407 | 2,095 | 0 | |
Net investment income | 5,618 | 4,808 | 6 | |
Net realized investment gains | 197 | 186 | 0 | |
Gain (loss) from change in fair value of warrant liability | 2,949 | -1,529 | 278 | |
Gain from settlement of warrants | 37 | 0 | 0 | |
Total revenues | 22,208 | 5,560 | 284 | |
Expenses | ||||
Insurance claims and claims expenses | 83 | 0 | 0 | |
Amortization of deferred policy acquisition costs | 373 | 1 | 0 | |
Underwriting and operating expenses | 73,044 | 60,743 | 27,775 | |
Total expenses | 73,500 | 60,744 | 27,775 | |
Loss before income taxes | -51,292 | -55,184 | -27,491 | |
Income tax benefit | -2,386 | 0 | 0 | |
Net loss | -48,906 | -55,184 | -27,491 | |
Other comprehensive income (loss), net of tax: | ||||
Net unrealized holding gains (losses) for the period included in accumulated other comprehensive loss, net of tax expense of $2,390, $0 and $0 for each of the years in the three-year period ended December 31, 2014, respectively | 3,440 | -7,047 | 1 | |
Other comprehensive income (loss), net of tax | 3,440 | -7,047 | 1 | |
Total comprehensive loss | ($45,466) | ($62,231) | ($27,490) | |
Loss per share | ||||
Basic and diluted loss per share (in dollars per share) | ($0.84) | ($0.99) | [1] | ($0.73) |
Weighted average common shares outstanding (in shares) | 58,281,425 | 56,005,326 | [1] | 37,909,936 |
[1] | Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of quarterly per share data may not equal the per share data for the year. |
CONSOLIDATED_STATEMENTS_OF_COM1
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS Parenthetical (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Other comprehensive income (loss), tax | $2,390 | $0 | $0 |
CONSOLIDATED_STATEMENTS_OF_SHA
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (USD $) | Total | Common Class A [Member] | Common Class B [Member] | Common Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | ||
In Thousands, unless otherwise specified | Common Class A [Member] | Common Class B [Member] | Common Class A [Member] | ||||||||
Beginning Balance at Dec. 31, 2011 | ($1,349) | [1] | $0 | $0 | $0 | ($1,349) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of shares of common stock, net of expenses of $3,483 in 2013 | 508,970 | 2 | 551 | 2 | 508,419 | ||||||
Issuance of common stock related to acquisition of subsidiaries | 2,500 | 2 | 2,498 | ||||||||
Share-based compensation expense | 6,115 | 6,115 | |||||||||
Change in unrealized investment gains/losses, net of tax of $0, $0 and $2,390 | 1 | 1 | |||||||||
Net loss | -27,491 | -27,491 | |||||||||
Ending Balance at Dec. 31, 2012 | 488,748 | 553 | 2 | 517,032 | 1 | -28,840 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Issuance of shares of common stock, net of expenses of $3,483 in 2013 | 27,912 | 25 | 0 | 27,887 | |||||||
Common stock: class A shares issued under stock plans, net of shares withheld (for) from employee taxes | -1,578 | 1 | -1,579 | ||||||||
Conversion of class B shares of common stock into Class A shares of common stock | 0 | 2 | -2 | 0 | |||||||
Share-based compensation expense | 10,367 | 10,367 | |||||||||
Change in unrealized investment gains/losses, net of tax of $0, $0 and $2,390 | -7,048 | -7,048 | |||||||||
Net loss | -55,184 | -55,184 | |||||||||
Ending Balance at Dec. 31, 2013 | 463,217 | 581 | 0 | 553,707 | -7,047 | -84,024 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Common stock: class A shares issued under stock plans, net of shares withheld (for) from employee taxes | 14 | 3 | 11 | ||||||||
Common stock: class A shares issued related to warrants | 13 | [2] | 13 | ||||||||
Share-based compensation expense | 9,180 | 9,180 | |||||||||
Change in unrealized investment gains/losses, net of tax of $0, $0 and $2,390 | 3,440 | 3,440 | |||||||||
Net loss | -48,906 | -48,906 | |||||||||
Ending Balance at Dec. 31, 2014 | $426,958 | $584 | $0 | $562,911 | ($3,607) | ($132,930) | |||||
[1] | At inception, we issued 100 common shares with a par value of $0.01 to FBR & Co. in consideration of their investment of $1 in the Company, which are not visible in this schedule due to rounding. | ||||||||||
[2] | During 2014, we issued 1,115 common shares with a par value of $0.01 related to the exercise of warrants, which is not identifiable in this schedule due to rounding. |
CONSOLIDATED_STATEMENTS_OF_SHA1
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - (Parenthetical) (USD $) | 12 Months Ended | 1 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 |
Price per share | $1 | |||
Payments of stock issuance costs | $3,483 | |||
Change in unrealized investment gains (losses), tax amount | $2,390 | $0 | $0 | |
Common Class A [Member] | ||||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | ||
Common Class A [Member] | Common Stock [Member] | ||||
Common stock issued at inception | 100 | |||
Common stock issued | 1,115 | |||
Common stock, par value (in dollars per share) | $0.01 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
Share data in Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net loss | ($48,906,000) | ($55,184,000) | ($27,491,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Net realized investment gains | -197,000 | -186,000 | 0 |
(Gain) loss from change in fair value of warrant liability | -2,949,000 | 1,529,000 | -278,000 |
Gain from settlement of warrants | -37,000 | 0 | 0 |
Depreciation and other amortization | 8,080,000 | 8,116,000 | 3,000 |
Share-based compensation expense | 9,180,000 | 10,367,000 | 6,115,000 |
Noncash intraperiod tax allocation | -2,386,000 | 0 | 0 |
Warrants issued in connection with line of credit | 0 | 0 | 1,620,000 |
Loss on impairment | 0 | 0 | 1,200,000 |
Changes in operating assets and liabilities: | |||
Accrued investment income | 294,000 | -2,001,000 | -6,000 |
Premiums receivable | -1,029,000 | -19,000 | 0 |
Prepaid expenses | -535,000 | -1,102,000 | -234,000 |
Deferred policy acquisition costs, net | -2,895,000 | -90,000 | 0 |
Other assets | -446,000 | 46,000 | -78,000 |
Unearned premiums | 20,622,000 | 1,446,000 | 0 |
Reserve for insurance claims and claims expenses | 83,000 | 0 | 0 |
Accounts payable and accrued expenses | 117,000 | 767,000 | 4,553,000 |
Net cash used in operating activities | -21,004,000 | -36,311,000 | -14,596,000 |
Cash flows from investing activities | |||
Purchase of short-term investments | 0 | -510,000 | -4,862,000 |
Purchase of fixed-maturity investments, available-for-sale | -60,462,000 | -559,875,000 | 0 |
Proceeds from maturity of short-term investments | 0 | 5,374,000 | 0 |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 136,764,000 | 141,754,000 | 0 |
Purchase of software and equipment | -8,220,000 | -6,692,000 | -2,447,000 |
Acquisition of subsidiaries | 0 | 0 | -2,500,000 |
Net cash provided by (used in) investing activities | 68,082,000 | -419,949,000 | -9,809,000 |
Cash flows from financing activities | |||
Payments on line of credit | 0 | 0 | -205,000 |
Taxes paid related to net share settlement of equity awards | -1,083,000 | -1,578,000 | 0 |
Issuance of common stock | 1,097,000 | 27,912,000 | 510,465,000 |
Net cash provided by financing activities | 14,000 | 26,334,000 | 510,260,000 |
Net increase (decrease) in cash and cash equivalents | 47,092,000 | -429,926,000 | 485,855,000 |
Cash and cash equivalents, beginning of period | 55,929,000 | 485,855,000 | 0 |
Cash and cash equivalents, end of period | 103,021,000 | 55,929,000 | 485,855,000 |
Supplemental disclosures of cash flow information | |||
Restricted cash | 0 | 0 | 40,338,000 |
Noncash financing activities | |||
Conversion of class B shares of common stock into class A shares of common stock | $0 | $2,000 | $0 |
Acquisition of subsidiaries | |||
Warrants issued in connection with acquisition of subsidiaries | 0 | 0 | 3,500 |
Common stock issued in connection with acquisition of subsidiaries | 0 | 0 | 2,500 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation |
NMIH is a Delaware corporation, formed in May 2011, to provide mortgage insurance through its wholly owned insurance subsidiaries, NMIC and Re One. In April 2012, we completed a private placement of our securities, through which we offered and sold an aggregate of 55,000,000 of our Class A common shares resulting in net proceeds of approximately $510 million (the "Private Placement"), and we completed the acquisition of our insurance subsidiaries for $8.5 million in cash, common stock and warrants, plus the assumption of $1.3 million in liabilities. In April 2013, NMIC, our primary insurance subsidiary, wrote our first mortgage insurance policy. | |
Under the terms of the Private Placement, we were required to obtain approvals from the GSEs by January 17, 2013. Freddie Mac and Fannie Mae approved NMIC as an eligible mortgage insurer, on January 15, 2013 and January 16, 2013, respectively, which approvals are conditioned upon NMIC maintaining certain conditions (the "GSE Approval"). For a further discussion of these conditions, see "Note 11, Commitments and Contingencies." | |
In November 2013, we completed an initial public offering of 2.4 million shares of our common stock, and our common stock began trading on the NASDAQ on November 8, 2013, under the symbol "NMIH." For a further discussion, see "Note 12, Common Stock Offerings." | |
Basis of Presentation | |
The accompanying consolidated financial statements include the results of NMIH and its wholly owned subsidiaries. All inter-company transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. ("GAAP") and our accounts are maintained in US dollars. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities as of the balance sheet date. Estimates also affect the reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates. |
Summary_of_Accounting_Policies
Summary of Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of Accounting Principles | Summary of Accounting Principles | |
Revenue Recognition | ||
In the mortgage insurance industry, a "book" is a group of loans that an MI company insures in a particular period, normally a calendar year. We set premiums at the time a policy is issued based on our expectations regarding likely performance over the term of coverage. The policies we write are guaranteed renewable contracts at the policyholder's option. Premiums may be paid to us on a single, annual or monthly basis. Premiums written on a single premium basis and an annual premium basis are initially deferred as unearned premium reserve and earned over the policy term commencing in the month coverage is effective. Premiums written on policies covering more than one year are amortized over the policy life in accordance with the expiration of risk, which is the anticipated claim payment pattern based on industry experience. Premiums written on annual policies are earned on a monthly pro rata basis. Premiums written on monthly policies are earned as coverage is provided. Premiums written on pool transactions are earned over the period that coverage is provided. Upon cancellation of a policy, all premium that is non-refundable is immediately earned and any refundable premium is returned to the policyholder. Premiums returned to policyholders are recorded as a reduction of written and earned premiums in the current period. The actual return of premium for all periods affects premiums written and earned in those periods. | ||
For the year ended December 31, 2014, two customers represented a material portion of our revenues. At December 31, 2014, approximately 18% of our total RIF was concentrated in California. Our RIF and customer concentrations are not representative of those concentrations that we believe will exist when our insurance portfolio is more mature. | ||
Reserves for Insurance Claims and Claims Expenses | ||
Consistent with industry accounting practices, for purposes of establishing claim reserves, we adhere to the general claim reserving principles contained in Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 944, Financial Services - Insurance ("ASC 944"), even though that standard expressly excludes mortgage insurance from its guidance. However, and consistent with our industry, we do not establish claim reserves for anticipated future claims on insured loans that are not currently in default. We do not consider a loan to be in default for claim reserve purposes until we receive notice from the servicer that a borrower has failed to make two consecutive regularly scheduled payments and is at least 60 days in default. In addition to reserves on reported defaults, we establish reserves for estimated claims incurred on loans that have been in default for at least 60 days that have not yet been reported to us by the servicers, often referred to as IBNR. | ||
Investments | ||
We have designated our investment portfolio as available-for-sale and report it at fair value. The related unrealized gains and losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive (loss) income in shareholders' equity. Net realized investment gains and losses are reported in income based upon specific identification of securities sold. | ||
Purchases and sales of investments are recorded on a trade date basis. Net investment income is recognized when earned and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other investment related expenses. For asset-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments. | ||
Each quarter, we evaluate our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary in accordance with applicable guidance. Under the current guidance, a debt security impairment is deemed other-than-temporary if (i) we either intend to sell the security or it is more likely than not that we will be required to sell the security before recovery or (ii) we do not expect to collect cash flows sufficient to recover the amortized cost basis of the security. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to: | ||
• | our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery; | |
• | severity and duration of the decline in fair value; | |
• | the financial condition of the issuer; | |
• | the failure of the issuer to make scheduled interest or principal payments; | |
• | recent credit downgrades of the applicable security or the issuer below investment grade; and | |
• | adverse conditions specifically related to the security, an industry, or a geographic area. | |
Deferred Policy Acquisition Costs | ||
Costs directly associated with the successful acquisition of mortgage insurance policies, consisting of certain selling expenses and other policy issuance and underwriting expenses, are initially deferred and reported as deferred policy acquisition costs ("DAC"). For each book year of business, these costs are amortized to expense in relation to the anticipated recognition of premiums. | ||
Premium Deficiency Reserves | ||
We consider whether a premium deficiency exists at each fiscal quarter using best estimate assumptions as of the testing date. Per ASC 944, a premium deficiency reserve shall be recognized if the sum of expected claim costs and claim adjustment expenses, expected dividends to policyholders, unamortized acquisition costs, and maintenance costs exceeds related unearned premiums and anticipated investment income. We have determined that no premium deficiency reserves were necessary for each of the years in the three-year period ended December 31, 2014. | ||
Income Taxes | ||
We account for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes. The liability method measures the expected future tax effects of temporary differences at the enacted tax rates applicable for the period in which the deferred asset or liability is expected to be realized or settled. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements that would result in future increases or decreases in taxes owed on a cash basis compared to amounts already recognized as tax expense in the consolidated statement of operations. | ||
Warrants | ||
We account for warrants to purchase our common shares in accordance with ASC 470-20, Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity. Our outstanding warrants may be settled by us using either (i) physical settlement method or (ii) cashless exercise, where shares that are issued upon exercise of the warrants are reduced, to cover the cost of the exercise, in lieu of the holder remitting a cash payment of the exercise price. The warrants expire and are not exercisable after the 10th anniversary of the date the warrant was issued. The exercise price and the number of warrants are subject to anti-dilution provisions whereby the existing exercise price is adjusted downward, and the number of warrants increased, for events that may not be dilutive. The adjustment may be in excess of any dilution suffered. As a result, the warrants are classified as a liability. We revalue the warrants at the end of each reporting period, and any change in fair value is reported in the statements of operations in the period in which the change occurred. We calculate the fair value of the warrants using a Black-Scholes option-pricing model in combination with a binomial model, and we value the pricing protection features of the warrants using a Monte Carlo simulation model. | ||
Share-Based Compensation | ||
We account for stock compensation in accordance with ASC 718, Compensation - Stock Compensation. This addresses accounting for share-based awards and recognition of compensation expense, measured using grant date fair value, over the requisite service or performance period of the award. Share-based payments include restricted stock units ("RSUs") and stock option grants under the 2012 Stock Incentive Plan. We determine the fair value of issued stock option grants using an option pricing model, which takes into account various assumptions that are subjective. Key assumptions used in the stock option valuation include the expected term of the equity award, taking into account the contractual term of the award, the effects of expected exercise and post-vesting termination behavior, expected volatility, expected dividends and the risk-free interest rate for the expected term of the award. RSU grants to employees contain a market condition and/or service condition. The fair value of RSU grants to employees with a market condition is determined based on a Monte Carlo simulation model at the date of grant. RSU grants to employees with a service condition and RSU grants to non-employee directors are valued at our stock price on the date of grant less the present value of anticipated dividends. | ||
Earnings per Share | ||
Basic net loss per share is based on the weighted-average number of common shares outstanding, while diluted net loss per share is based on the weighted-average number of common shares outstanding and common stock equivalents that would be issuable upon the exercise of stock options, other stock-based compensation arrangements, and the dilutive effect of outstanding warrants. As a result of our net losses for the each of the years in the three-year period ended December 31, 2014, 5,839,909 shares, 5,303,394 shares, and 4,414,165 shares of our common stock equivalents issued under stock-based compensation arrangements and warrants, respectively, were not included in the calculation of diluted net loss per share as of such dates because they were anti-dilutive. | ||
Cash and Cash Equivalents | ||
We consider items such as certificates of deposit and money market funds with original maturities of 90 days or less to be cash equivalents. The Company did not have any restricted cash as of December 31, 2014 and 2013. | ||
Software and Equipment | ||
Certain costs associated with the development of internal-use software are capitalized. Software and equipment are stated at cost, less accumulated amortization and depreciation. Once the software is ready for its intended use, amortization and depreciation are calculated using the straight-line method over the estimated useful lives of the respective assets ranging typically from 3 to 7 years, unless factors indicate a shorter useful life. Amortization of software and depreciation of equipment commences at the beginning of the month following our placement of the assets into use. For further detail, see "Note 9, Software and Equipment." | ||
Business Combinations, Goodwill and Intangible Assets | ||
Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired from a business combination. In accordance with ASC 350, Intangibles - Goodwill and Other, we test goodwill for impairment during the third quarter each year, or more frequently if we believe indicators of impairment exist. We have not identified any impairments of goodwill through December 31, 2014. | ||
Our intangible assets consist of state licenses and GSE applications which have indefinite lives. We test indefinite-lived intangible assets for impairment during the fourth quarter of each year or more frequently if we believe indicators of impairment exist. We do not believe that the indefinite-lived intangible assets were impaired as of December 31, 2014. | ||
Premiums receivable | ||
Premiums receivable consist of premiums due on our mortgage insurance policies. If mortgage insurance premiums are unpaid for more than 120 days, the receivable is written off against earned premium and the related insurance policy is canceled. | ||
Recent Accounting Standards Updates Adopted | ||
In August 2014, the FASB issued an update that requires an entity's management to evaluate whether there is substantial doubt about that entity's ability to continue as a going concern and, if so, disclose that fact. An entity's management will also be required to evaluate and disclose whether its plans alleviate that doubt. The guidance is effective for annual periods ending after December 15, 2016 and for interim and annual periods thereafter. We do not expect the adoption of this update to have a material effect on the presentation of our financial statements and notes therein. | ||
Reclassifications | ||
Certain items in the financial statements as of December 31, 2014 and for the periods ending December 31, 2013 and December 31, 2012 have been reclassified to conform to the current period's presentation. There was no effect on net income or shareholders' equity previously reported. | ||
Subsequent Events | ||
We have considered subsequent events through the date of this filing. |
Investments
Investments | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||
Investments | Investments | ||||||||||||||||||||||||||
Fair Values and Gross Unrealized Gains and Losses on Investments | |||||||||||||||||||||||||||
Amortized | Gross Unrealized | Fair | |||||||||||||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||||||||||||
As of December 31, 2014 | (In Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 68,911 | $ | 7 | $ | (573 | ) | $ | 68,345 | ||||||||||||||||||
Municipal debt securities | 12,009 | 27 | (73 | ) | 11,963 | ||||||||||||||||||||||
Corporate debt securities | 200,358 | 883 | (1,456 | ) | 199,785 | ||||||||||||||||||||||
Asset-backed securities | 56,440 | 222 | (254 | ) | 56,408 | ||||||||||||||||||||||
Total investments | $ | 337,718 | $ | 1,139 | $ | (2,356 | ) | $ | 336,501 | ||||||||||||||||||
Amortized | Gross Unrealized | Fair | |||||||||||||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||||||||||||
As of December 31, 2013 | (In Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 108,067 | $ | — | $ | (1,461 | ) | $ | 106,606 | ||||||||||||||||||
Municipal debt securities | 12,017 | 1 | (85 | ) | 11,933 | ||||||||||||||||||||||
Corporate debt securities | 221,899 | 157 | (4,799 | ) | 217,257 | ||||||||||||||||||||||
Asset-backed securities | 74,152 | 114 | (974 | ) | 73,292 | ||||||||||||||||||||||
Total investments | $ | 416,135 | $ | 272 | $ | (7,319 | ) | $ | 409,088 | ||||||||||||||||||
Scheduled Maturities | |||||||||||||||||||||||||||
The amortized cost and fair values of available for sale securities at December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. | |||||||||||||||||||||||||||
As of December 31, 2014 | Amortized | Fair | |||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Due in one year or less | $ | 6,110 | $ | 6,125 | |||||||||||||||||||||||
Due after one through five years | 195,492 | 194,472 | |||||||||||||||||||||||||
Due after five through ten years | 54,360 | 53,891 | |||||||||||||||||||||||||
Due after ten years | 25,316 | 25,605 | |||||||||||||||||||||||||
Asset-backed securities | 56,440 | 56,408 | |||||||||||||||||||||||||
Total investments | $ | 337,718 | $ | 336,501 | |||||||||||||||||||||||
As of December 31, 2013 | Amortized | Fair | |||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Due in one year or less | $ | — | $ | — | |||||||||||||||||||||||
Due after one through five years | 260,855 | 257,501 | |||||||||||||||||||||||||
Due after five through ten years | 65,687 | 63,440 | |||||||||||||||||||||||||
Due after ten years | 15,441 | 14,855 | |||||||||||||||||||||||||
Asset-backed securities | 74,152 | 73,292 | |||||||||||||||||||||||||
Total investments | $ | 416,135 | $ | 409,088 | |||||||||||||||||||||||
Aging of Unrealized Losses | |||||||||||||||||||||||||||
At December 31, 2014, the investment portfolio had gross unrealized losses of $2.4 million, $1.7 million of which has been in an unrealized loss position for a period of twelve months or greater. We did not consider these securities to be other-than-temporarily impaired as of December 31, 2014. We based our conclusion that these investments were not other-than-temporarily impaired at December 31, 2014 on the following facts: (i) the unrealized losses were primarily caused by interest rate movements since the purchase date; (ii) we do not intend to sell these investments; and (iii) we do not believe that it is more likely than not that we will be required to sell these investments before recovery of our amortized cost basis, which may not occur until maturity. For those securities in an unrealized loss position, the length of time the securities were in such a position is as follows: | |||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||
# of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | |||||||||||||||||||
As of December 31, 2014 | (Dollars in Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | 4 | $ | 7,228 | $ | (33 | ) | 10 | $ | 49,884 | $ | (540 | ) | 14 | $ | 57,112 | $ | (573 | ) | |||||||||
Municipal debt securities | 1 | 3,232 | (18 | ) | 1 | 1,695 | (55 | ) | 2 | 4,927 | (73 | ) | |||||||||||||||
Corporate debt securities | 26 | 60,334 | (559 | ) | 22 | 65,806 | (897 | ) | 48 | 126,140 | (1,456 | ) | |||||||||||||||
Assets-backed securities | 3 | 10,614 | (57 | ) | 4 | 20,047 | (197 | ) | 7 | 30,661 | (254 | ) | |||||||||||||||
Total investments | 34 | $ | 81,408 | $ | (667 | ) | 37 | $ | 137,432 | $ | (1,689 | ) | 71 | $ | 218,840 | $ | (2,356 | ) | |||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||
# of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | |||||||||||||||||||
As of December 31, 2013 | (Dollars in Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | 19 | $ | 106,606 | $ | (1,461 | ) | — | $ | — | $ | — | 19 | $ | 106,606 | $ | (1,461 | ) | ||||||||||
Municipal debt securities | 2 | 4,915 | (85 | ) | — | — | — | 2 | 4,915 | (85 | ) | ||||||||||||||||
Corporate debt securities | 47 | 187,714 | (4,799 | ) | — | — | — | 47 | 187,714 | (4,799 | ) | ||||||||||||||||
Assets-backed securities | 11 | 58,225 | (974 | ) | — | — | — | 11 | 58,225 | (974 | ) | ||||||||||||||||
Total investments | 79 | $ | 357,460 | $ | (7,319 | ) | — | $ | — | $ | — | 79 | $ | 357,460 | $ | (7,319 | ) | ||||||||||
Net Investment Income | |||||||||||||||||||||||||||
Net investment income is comprised of the following: | |||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Fixed maturities | $ | 6,127 | $ | 5,289 | $ | 4 | |||||||||||||||||||||
Cash equivalents | — | — | 2 | ||||||||||||||||||||||||
Other | 8 | 2 | — | ||||||||||||||||||||||||
Investment income | 6,135 | 5,291 | 6 | ||||||||||||||||||||||||
Investment expenses | (517 | ) | (483 | ) | — | ||||||||||||||||||||||
Net investment income | $ | 5,618 | $ | 4,808 | $ | 6 | |||||||||||||||||||||
Gross realized gains were $0.7 million and $0.6 million for the years ended December 31, 2014 and 2013, respectively. Gross realized losses were $0.5 million and $0.4 million for the years ended December 31, 2014 and 2013, respectively. There were no realized investment gains or losses for the year ended December 31, 2012. | |||||||||||||||||||||||||||
As of December 31, 2014 and December 31, 2013, there were approximately $7.0 million of cash and investments in the form of U.S. Treasury securities on deposit with various state insurance departments to satisfy regulatory requirements. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||||||||||||||
The following describes the valuation techniques used by us to determine the fair value of financial instruments held at December 31, 2014 and December 31, 2013: | ||||||||||||||||
We established a fair value hierarchy by prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this standard are described below: | ||||||||||||||||
Level 1 - Unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date for identical assets or liabilities. Financial assets utilizing Level 1 inputs are U.S. Treasury securities; | ||||||||||||||||
Level 2 - Prices or valuations based on observable inputs other than quoted prices in active markets for identical assets and liabilities. Financial assets utilizing Level 2 inputs include certain obligations of U.S. government agencies, municipal and corporate debt securities and asset-backed securities; and | ||||||||||||||||
Level 3 - Unobservable inputs that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. We value our warrant liability utilizing Level 3 inputs. | ||||||||||||||||
The level of market activity used to determine the fair value hierarchy is based on the availability of observable inputs market participants would use to price an asset or a liability, including market value price observations. | ||||||||||||||||
Assets classified as Level 1 and Level 2 | ||||||||||||||||
To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. This model combines all inputs to arrive at a value assigned to each security. We have not made any adjustments to the prices obtained from the independent pricing sources. There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the year ended December 31, 2014. | ||||||||||||||||
Liabilities classified as Level 3 | ||||||||||||||||
We calculate the fair value of outstanding warrants using a Black-Scholes option-pricing model in combination with a binomial model, and we value the pricing protection features within the warrants using a Monte Carlo simulation. Variables in the model include the risk-free rate of return, dividend yield, expected life and expected volatility of our stock price. | ||||||||||||||||
ASC 825, Disclosures about Fair Value of Financial Instruments, requires all entities to disclose the fair value of their financial instruments, both assets and liabilities recognized and not recognized in the balance sheet, for which it is practicable to estimate fair value. | ||||||||||||||||
The following is a list of those assets and liabilities that are measured at fair value by hierarchy level as of December 31, 2014 and December 31, 2013: | ||||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | Fair Value | |||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
As of December 31, 2014 | (In Thousands) | |||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 39,176 | $ | 29,169 | $ | — | $ | 68,345 | ||||||||
Municipal debt securities | — | 11,963 | — | 11,963 | ||||||||||||
Corporate debt securities | — | 199,785 | — | 199,785 | ||||||||||||
Asset-backed securities | — | 56,408 | — | 56,408 | ||||||||||||
Cash and cash equivalents | 103,021 | — | — | 103,021 | ||||||||||||
Total assets | $ | 142,197 | $ | 297,325 | $ | — | $ | 439,522 | ||||||||
Warrant liability | $ | — | $ | — | $ | 3,372 | $ | 3,372 | ||||||||
Total liabilities | $ | — | $ | — | $ | 3,372 | $ | 3,372 | ||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | Fair Value | |||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
As of December 31, 2013 | (In Thousands) | |||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 49,484 | $ | 57,122 | $ | — | $ | 106,606 | ||||||||
Municipal debt securities | — | 11,933 | — | 11,933 | ||||||||||||
Corporate debt securities | — | 217,257 | — | 217,257 | ||||||||||||
Asset-backed securities | — | 73,292 | — | 73,292 | ||||||||||||
Cash and cash equivalents | 55,929 | — | — | 55,929 | ||||||||||||
Total assets | $ | 105,413 | $ | 359,604 | $ | — | $ | 465,017 | ||||||||
Warrant liability | $ | — | $ | — | $ | 6,371 | $ | 6,371 | ||||||||
Total liabilities | $ | — | $ | — | $ | 6,371 | $ | 6,371 | ||||||||
The following is a roll-forward of Level 3 liabilities measured at fair value for the year ended December 31, 2014: | ||||||||||||||||
Warrant Liability | ||||||||||||||||
For the Year Ended December 31, 2014 | (In Thousands) | |||||||||||||||
Balance, January 1, 2014 | $ | 6,371 | ||||||||||||||
Change in fair value of warrant liability included in earnings | (2,949 | ) | ||||||||||||||
Gain on settlement of warrants | (37 | ) | ||||||||||||||
Issuance of common stock on warrant exercise | (13 | ) | ||||||||||||||
Balance, December 31, 2014 | $ | 3,372 | ||||||||||||||
Warrant Liability | ||||||||||||||||
For the Year Ended December 31, 2013 | (In Thousands) | |||||||||||||||
Balance, January 1, 2013 | $ | 4,842 | ||||||||||||||
Change in fair value of warrant liability included in earnings | 1,529 | |||||||||||||||
Balance, December 31, 2013 | $ | 6,371 | ||||||||||||||
We revalue the warrant liability quarterly using a Black-Scholes option-pricing model, in combination with a binomial model, and we value the pricing protection features within the warrants using a Monte-Carlo simulation model. As of December 31, 2014, the assumptions used in the option pricing model were as follows: a common stock price as of December 31, 2014 of $9.13, risk free interest rate of 1.88%, expected life of 6.44 years, expected volatility of 37.4% and a dividend yield of 0%. The change in fair value is primarily attributable to a decline in the price of our common stock from December 31, 2013 to December 31, 2014. | ||||||||||||||||
There were no transfers in or out of Level 3 of the fair value hierarchy during the year ended December 31, 2014. |
Reserves_for_Insurance_Claims_
Reserves for Insurance Claims and Claims Expenses | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Insurance [Abstract] | ||||||||
Reserves for Insurance Claims and Claims Expenses | Reserves for Insurance Claims and Claims Expenses | |||||||
We establish claim reserves to recognize the estimated liability for insurance claims and claim expenses related to defaults on insured mortgage loans. Our method, consistent with industry practice, is to establish claim reserves only for loans in default. Our claim reserves also include amounts for IBNR. We received our first primary NOD in the second quarter of 2014. For the year ended December 31, 2013, we had no claim or IBNR reserves. | ||||||||
Additionally, we entered into a pool insurance transaction with Fannie Mae, effective September 1, 2013. We would only establish claim or IBNR reserves for this pool transaction, if we expect claims to exceed the transaction's deductible, which represents the amount of claims absorbed by Fannie Mae before we are obligated to pay any claims under the policy. At December 31, 2014, thirty loans in the pool were past due by sixty days or more. These thirty loans represent approximately $1.7 million in RIF. Due to the size of the deductible ($10.3 million), the low level of NODs reported through December 31, 2014 and the high quality of the loans (all loans are less than 80% LTV), we have not established any pool reserves for claims or IBNR for the years ended December 31, 2014 and December 31, 2013. | ||||||||
The following table provides a reconciliation of the beginning and ending reserve balances for insurance claims and claims expenses for the year ended December 31, 2014 and 2013: | ||||||||
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(In Thousands) | ||||||||
Reserve at beginning of period | $ | — | $ | — | ||||
Claims incurred: | ||||||||
Claims and claim expenses incurred: | ||||||||
Current year | 83 | — | ||||||
Prior years | — | — | ||||||
Total claims incurred | 83 | — | ||||||
Claims paid: | ||||||||
Claims and claim expenses paid: | ||||||||
Current year | — | — | ||||||
Prior years | — | — | ||||||
Total claims paid | — | — | ||||||
Reserve at end of period | $ | 83 | $ | — | ||||
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Warrants | Warrants |
We issued 992,000 warrants in connection with our Private Placement. Each warrant gave the holder thereof the right to purchase one share of common stock at an exercise price equal to $10.00. The warrants were issued with an aggregate fair value of $5.1 million. | |
Upon exercise of these warrants, the amounts will be treated as additional paid-in capital. During the first quarter of 2014, 7,790 warrants were exercised and we issued 1,115 Class A common shares via a cashless exercise. Upon exercise, we reclassified the fair value of the warrants from warrant liability to additional paid in capital and recognized a gain of approximately $37 thousand. No other warrants were exercised during 2014. |
ShareBased_Compensation
Share-Based Compensation | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||
Share-Based Compensation | Share-Based Compensation | ||||||||||
The 2012 Stock Incentive Plan (the "Plan") was approved by the Board on April 16, 2012 and authorized 5.5 million shares to be reserved for issuance under the Plan, with 3.85 million shares available for stock options and 1.65 million shares available for RSUs. Options granted under the Plan are non-qualified stock options and may be granted to employees, directors and other key persons. The exercise price per share for the common stock covered by this Plan shall be determined by the Board at the time of grant, but shall not be less than the fair market value, defined as the closing price of our common stock, on the date of the grant. The term of the stock option grants will be established by the Board, but no stock option shall be exercisable more than ten years after the date the stock option is granted. The vesting period of the stock option grants will also be established by the Board at the time of grant and generally is for a three-year period. Upon the exercise of stock options, we issue shares from the authorized, unissued share reserve. | |||||||||||
On May 8, 2014, NMIH held its annual shareholder meeting, at which our shareholders voted to approve the NMIH 2014 Omnibus Incentive Plan, which authorizes us to make 4 million shares of NMIH's class A common stock available to be granted. These shares may be either authorized but unissued shares or treasury shares. | |||||||||||
A summary of option activity in the plan during the years ended December 31, 2014 and December 31, 2013 is as follows: | |||||||||||
For the Year Ended December 31, 2014 | Shares | Weighted Average Grant Date Fair Value per Share | Weighted Average Exercise Price | ||||||||
(Shares in Thousands) | |||||||||||
Options outstanding at December 31, 2013 | 3,062 | $ | 3.98 | $ | 10.31 | ||||||
Options granted | 780 | 4.85 | 12.03 | ||||||||
Options exercised | (109 | ) | 3.85 | 10 | |||||||
Options forfeited | (87 | ) | 4.47 | 11.35 | |||||||
Options expired | (16 | ) | 4.25 | 10.93 | |||||||
Options outstanding at December 31, 2014 | 3,630 | $ | 4.16 | $ | 10.66 | ||||||
For the Year Ended December 31, 2013 | Shares | Weighted Average Grant Date Fair Value per Share | Weighted Average Exercise Price | ||||||||
(Shares in Thousands) | |||||||||||
Options outstanding at December 31, 2012 | 2,547 | $ | 3.86 | $ | 10 | ||||||
Options granted | 532 | 4.57 | 11.78 | ||||||||
Options forfeited | (15 | ) | 3.84 | 10 | |||||||
Options canceled | (2 | ) | 3.84 | 10 | |||||||
Options outstanding at December 31, 2013 | 3,062 | $ | 3.98 | $ | 10.31 | ||||||
As of December 31, 2014, there were 108,606 exercises and approximately 1,742,822 options were fully vested and exercisable. The weighted average exercise price for the fully vested and exercisable options was $10.20. The remaining weighted average contractual life of options fully vested and exercisable as of December 31, 2014 was 7.5 years. The aggregate intrinsic value for fully vested and exercisable options was $0 as of December 31, 2014. | |||||||||||
The remaining weighted average contractual life of options outstanding as of December 31, 2014 was 7.9 years. As of December 31, 2014, there was $2.4 million of total unrecognized compensation cost related to non-vested stock options. The weighted-average period over which total compensation related to non-vested stock options will be recognized is 1.28 years. | |||||||||||
We account for stock options under ASC 718, which requires all share-based payments to be recognized in the financial statements at their fair values. To measure the fair value of stock options granted, we utilize the Black-Scholes options pricing model. Expense is recognized over the required service period, which is generally the three-year vesting period of the options (vesting in one-third increments per year). | |||||||||||
The estimated grant date fair values of the stock options granted during 2014 and 2013 were calculated using the Black-Scholes valuation model based on the following assumptions: | |||||||||||
2014 | 2013 | ||||||||||
Expected life | 6 years | 6 years | |||||||||
Risk free interest rate | 1.90% - 2.01% | 0.98% - 1.12% | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||
Expected stock price volatility | 39 | % | 39 | % | |||||||
Projected forfeiture rate | 5 | % | 1 | % | |||||||
Expected Life - is the period of time over which the options granted are expected to remain outstanding giving consideration to vesting schedules, historical exercise and forfeiture patterns. We use the simplified method outlined in SEC Staff Accounting Bulletin No. 107 to estimate expected lives for options granted during the period as historical exercise data is not available and the options meet the requirements set out in the Bulletin. Options granted have a maximum term of ten years. | |||||||||||
Risk-Free Interest Rate - is the U.S. Treasury rate for the date of the grant having a term approximating the expected life of the option. | |||||||||||
Dividend Yield - is calculated by dividing the expected annual dividend by our stock price at the valuation date. | |||||||||||
Expected Price Volatility - is a measure of the amount by which a price has fluctuated or is expected to fluctuate. At the time of grant, our common shares trading history was not sufficient to calculate an expected volatility representative of the volatility over the expected lives of the options. As a substitute for such estimate, we used historical volatilities of a set of comparable companies in the industry in which we operate. | |||||||||||
Projected Forfeiture Rate - is the estimated percentage of options granted that are expected to be forfeited or canceled before becoming fully vested. An increase in the forfeiture rate will decrease compensation expense. | |||||||||||
A summary of RSU activity in the plan during the years ended December 31, 2014 and December 31, 2013 is as follows: | |||||||||||
For the Year Ended December 31, 2014 | Shares | Weighted Average Grant Date Fair Value per Share | |||||||||
(Shares in Thousands) | |||||||||||
Non-vested restricted stock units at December 31, 2013 | 1,242 | $ | 7.75 | ||||||||
Restricted stock units granted | 373 | 11.52 | |||||||||
Restricted stock units vested | (360 | ) | 9.53 | ||||||||
Restricted stock units forfeited | (46 | ) | 10.14 | ||||||||
Non-vested restricted stock units at December 31, 2014 | 1,209 | $ | 8.9 | ||||||||
For the Year Ended December 31, 2013 | Shares | Weighted Average Grant Date Fair Value per Share | |||||||||
(Shares in Thousands) | |||||||||||
Non-vested restricted stock units at December 31, 2012 | 1,429 | $ | 7.35 | ||||||||
Restricted stock units granted | 76 | 12.03 | |||||||||
Restricted stock units vested | (263 | ) | 6.79 | ||||||||
Restricted stock units forfeited | — | — | |||||||||
Non-vested restricted stock units at December 31, 2013 | 1,242 | $ | 7.75 | ||||||||
In February 2013, the Board approved a modification to the vesting terms of approximately 400,000 granted and non-vested RSUs held by our employees. The modification to the vesting terms removed the market condition leaving the RSUs subject to a service condition only. The modification resulted in a change in the period over which compensation costs are recognized and prospective recognition of incremental compensation cost. Incremental compensation cost is measured as the excess of the fair value of the modified award over the fair value of the original award immediately before its terms are modified using relevant valuation inputs as of the modification date. | |||||||||||
At December 31, 2014, the 1.2 million shares of granted and non-vested RSUs consisted of 0.5 million shares that are subject to both a market and service condition and 0.7 million shares that are subject only to service conditions. The non-vested RSUs subject to both a market and service condition vest in one-half increments upon the achievement of certain market price goals and continued service. Non-vested RSUs subject only to a service condition vest over a service period ranging from one to three years. The fair value of RSUs subject to market and service conditions is determined based on a Monte Carlo simulation model at the date of grant. The fair value of RSUs subject only to service conditions are valued at our stock price on the date of grant less the present value of anticipated dividends. | |||||||||||
The estimated grant date fair values of the RSUs granted in 2012 that are subject to both a market and service condition were calculated using a Monte Carlo simulation model based on the average outcome of 150,000 simulations using the following assumption: | |||||||||||
2012 | |||||||||||
Expected life | 5 years | ||||||||||
Risk free interest rate | 0.86 | % | |||||||||
Dividend yield | 0 | % | |||||||||
Expected stock price volatility | 39 | % | |||||||||
Projected forfeiture rate | 1 | % | |||||||||
There were no RSUs granted in 2014 or 2013 that were subject to a market condition, therefore the Monte Carlo simulation was not used. | |||||||||||
The remaining weighted average contractual life of non-vested RSUs as of December 31, 2014 was 7.9 years. The weighted-average period over which total compensation related to non-vested RSUs will be recognized is 1.18 years. | |||||||||||
The RSUs granted in 2014 were valued at our stock price on the date of grant less the present value of anticipated dividends, which is $0. As of December 31, 2014, there was $3.0 million of total unrecognized compensation cost related to non-vested RSUs compared to $4.3 million as of December 31, 2013. | |||||||||||
401(k) Savings Plan | |||||||||||
Beginning on January 1, 2014, we offered to our employees a 401(k) Savings Plan ("401(k) Plan") that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the 401(k) Plan, we match up to 100% of eligible employees' pre-tax contributions up to 4% of eligible compensation. We contributed approximately $0.9 million for the year ended December 31, 2014. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Income Taxes | Income Taxes | |||||||||||
The provision (benefit) for income taxes consists of: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In Thousands | ||||||||||||
Current | $ | (2,390 | ) | $ | — | $ | — | |||||
Deferred | 4 | — | — | |||||||||
Total income tax benefit | $ | (2,386 | ) | $ | — | $ | — | |||||
The income tax benefit of $2.4 million for the year ended December 31, 2014 is related to the tax effects of unrealized gains credited to OCI. Generally, the amount of tax expense or benefit allocated to continuing operations is determined without regard to the tax effects of other categories of income or loss, such as OCI. However, an exception to the general rule is provided in ASC 740-20-45-7 when there is a pre-tax loss from continuing operations and there are items charged or credited to other categories, including OCI, in the current year. The intraperiod tax allocation rules related to items charged or credited directly to OCI can result in disproportionate tax effects that remain in OCI until certain events occur. As a result of a reduction in unrealized losses credited directly to OCI, approximately $2.4 million of tax provision expense has been netted with current year unrealized gains in OCI, and $2.4 million of tax provision benefit was allocated to the income tax provision for continuing operations. | ||||||||||||
Reconciliation of the federal statutory income tax (benefit) rate to the effective income tax (benefit) rate is as follows: | ||||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
Loss on impairment | — | — | (1.48 | ) | ||||||||
Prior year adjustment | — | 3.52 | 1.66 | |||||||||
Other | 1.07 | 1.66 | (1.00 | ) | ||||||||
Valuation allowance | (31.42 | ) | (40.18 | ) | (28.00 | ) | ||||||
Purchase accounting adjustment | — | — | (6.18 | ) | ||||||||
Effective income tax rate | 4.65 | % | — | % | — | % | ||||||
Following is a reconciliation of our net deferred income tax asset (liability) as of December 31, 2014 and December 31, 2013: | ||||||||||||
December 31, 2014 | ||||||||||||
Gross | Tax Effected | |||||||||||
Deferred tax asset | (In Thousands) | |||||||||||
Capitalized start-up costs | $ | 2,403 | $ | 985 | ||||||||
Share-based compensation | 20,030 | 8,212 | ||||||||||
Unrealized loss on investments | 1,217 | 499 | ||||||||||
Net operating loss carry forwards | 114,548 | 43,198 | ||||||||||
Unearned premium reserve | 4,414 | 1,810 | ||||||||||
Other | 8,785 | 3,602 | ||||||||||
Total gross deferred tax assets | 151,397 | 58,306 | ||||||||||
Less: valuation allowance | (140,236 | ) | (53,730 | ) | ||||||||
Total deferred tax assets | 11,161 | 4,576 | ||||||||||
Deferred tax liability | ||||||||||||
Capitalized software | (7,967 | ) | (3,266 | ) | ||||||||
Intangible assets | (390 | ) | (137 | ) | ||||||||
Deferred acquisition costs | (2,985 | ) | (1,224 | ) | ||||||||
Other | (209 | ) | (86 | ) | ||||||||
Total deferred tax liabilities | (11,551 | ) | (4,713 | ) | ||||||||
Net deferred income tax liability | $ | (390 | ) | $ | (137 | ) | ||||||
December 31, 2013 | ||||||||||||
Gross | Tax Effected | |||||||||||
Deferred tax asset | (In Thousands) | |||||||||||
Capitalized start-up costs | $ | 2,579 | $ | 903 | ||||||||
Share-based compensation | 14,701 | 5,990 | ||||||||||
Unrealized loss on investments | 7,047 | 2,694 | ||||||||||
Net operating loss carry forwards | 65,276 | 24,602 | ||||||||||
Other | 10,118 | 3,760 | ||||||||||
Total gross deferred tax assets | 99,721 | 37,949 | ||||||||||
Less: valuation allowance | (94,497 | ) | (35,778 | ) | ||||||||
Total deferred tax assets | 5,224 | 2,171 | ||||||||||
Deferred tax liability | ||||||||||||
Capitalized software | (5,008 | ) | (2,095 | ) | ||||||||
Intangible assets | (390 | ) | (133 | ) | ||||||||
Other | (216 | ) | (76 | ) | ||||||||
Total deferred tax liabilities | (5,614 | ) | (2,304 | ) | ||||||||
Net deferred income tax liability | $ | (390 | ) | $ | (133 | ) | ||||||
At December 31, 2014 and 2013, we had a net deferred tax liability of $0.1 million as a result of the acquisition of indefinite-lived intangibles from the acquisition of our insurance subsidiaries for which no benefit had been reflected in the acquired net operating loss carry forwards. The tax liability incurred at the acquisition was recorded as an increase in goodwill. | ||||||||||||
Excluded from deferred tax assets were $2.1 million and $1.5 million of excess stock compensation as of December 31, 2014 and December 31, 2013, respectively, for which any benefit realized will be recorded to stockholders' equity. | ||||||||||||
As of December 31, 2014, the Company had federal net operating loss carryforwards of $114.5 million, which expire from 2029 to 2034 and state net operating loss carryforwards of $36.0 million, which expire from 2031 to 2034. Section 382 of the Internal Revenue Code imposes annual limitations on a corporation's ability to utilize its net operating loss carryforwards if it experiences an "ownership change." As a result of the acquisition of our insurance subsidiaries, $7.3 million of NOLs are subject to annual limitations of $0.8 million through 2016, then $0.3 million through 2029. | ||||||||||||
As we have just recently begun insurance operations and have no history to provide a basis for reliable future net income projections, a valuation allowance of $53.7 million and $35.8 million was recorded at December 31, 2014 and December 31, 2013, respectively, to reflect the amount of the deferred tax asset that may not be realized. | ||||||||||||
As of December 31, 2014 and 2013, we have no reserve for unrecognized tax benefits, and have taken no material uncertain positions in its tax returns that would require measurement and recognition. | ||||||||||||
We file income tax returns with the U.S. federal government and various state jurisdictions which are subject to potential examination by tax authorities. We are not currently under examination, and federal and state tax years remain open by statute. |
Software_and_Equipment
Software and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Software and Equipment | Software and Equipment | |||||||
Software and equipment consist largely of capitalized software developed to support our MI operations. Software and equipment, net of accumulated amortization and depreciation, as of December 31, 2014 and December 31, 2013, consists of the following: | ||||||||
31-Dec-14 | 31-Dec-13 | |||||||
(In Thousands) | ||||||||
Software | $ | 11,608 | $ | 14,140 | ||||
Equipment | 1,175 | 542 | ||||||
Leasehold improvements | 973 | 141 | ||||||
Subtotal | 13,756 | 14,823 | ||||||
Accumulated amortization and depreciation | (1,950 | ) | (5,947 | ) | ||||
Software and equipment, net | $ | 11,806 | $ | 8,876 | ||||
Amortization and depreciation expense for software and equipment for the years ended December 31, 2014 and 2013 was $5.8 million and $5.9 million, respectively. In the second quarter of 2013, we reduced the useful life and shortened the amortization period of some of the software we purchased in connection with the acquisition of our insurance subsidiaries. This software was completely amortized by November 2014, and the original cost and accumulated amortization of $9.8 million were written off at that time. |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Intangible Assets and Goodwill | Intangible Assets and Goodwill | |||||
Intangible assets and goodwill consist of identifiable intangible assets and goodwill we purchased in connection with the acquisition of our insurance subsidiaries, and at December 31, 2014 and December 31, 2013, were as follows for both years: | ||||||
Expected Lives | ||||||
Goodwill | $ | 3,244 | Indefinite | |||
State licenses | 260 | Indefinite | ||||
GSE applications | 130 | Indefinite | ||||
Total intangible assets and goodwill | $ | 3,634 | ||||
We test goodwill and intangibles for impairment in the third and fourth quarter, respectively, of every year, or more frequently if we believe indicators of impairment exist. As of December 31, 2012, we determined the carrying value of operational manuals acquired with NMIC and Re One would not be recovered, and the manuals could not be sold and would be disposed; as a result, we assessed the fair value at zero and recognized a loss on impairment of $1.2 million. No impairments of indefinite-lived intangibles or goodwill were identified as of December 31, 2014 and 2013. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and Contingencies | Commitments and Contingencies | |||
GSE Approval | ||||
In January 2013, the GSEs approved NMIC as a qualified mortgage insurer, and with their approvals, imposed certain capitalization, operational and reporting conditions on NMIC, most of which remain in effect for a three-year period from the date of GSE Approval. As a GSE qualified mortgage insurer, NMIC is subject to ongoing compliance with the conditions in the GSE Approval as well as the GSEs' Eligibility Requirements. | ||||
The conditions in the GSE Approval require, among other things, that NMIC: | ||||
• | maintain minimum capital of $150 million; | |||
• | operate at a risk-to-capital ratio not to exceed 15:1 for its first three years and then pursuant to the GSE Eligibility Requirements then in effect; | |||
• | not declare or pay dividends to affiliates or to NMIH for its first three years, then pursuant to the Eligibility Requirements; | |||
• | not enter into capital support agreements or guarantees for the benefit of, or purchase or otherwise invest in the debt of, affiliates without the prior written approval of the GSEs for its first three years, then pursuant to the Eligibility Requirements; and | |||
• | not enter into reinsurance or other risk share arrangements without the GSEs' prior written approval for its first three years, then pursuant to the Eligibility Requirements. | |||
The GSE Approvals also include other conditions, limitations and reporting requirements, including, among others, limits on costs allocated to NMIC under affiliate expense sharing arrangements; conditions related to risk concentration and rates of return; requirements to obtain a financial strength rating; restrictions on provision of ancillary services (i.e., non-insurance) to customers and transfers of underwriting to affiliates; notification requirements regarding change of ownership and new five percent shareholders; requirement to, at the direction of one or both of the GSEs, re-domicile from Wisconsin to another state; and provisions regarding underwriting policies and claims processing. | ||||
Office Lease | ||||
We entered into an office facility lease effective July 1, 2012 for a term of two years. In October 2013, we amended our facility's lease to (i) add 23,000 square feet of furnished office space, and (ii) extend the facility's lease period through October 31, 2017. | ||||
Management expects that, in the normal course of business, as of December 31, 2014, future minimum lease payments under this lease will be as follows: | ||||
Years ending December 31, | (In Thousands) | |||
2015 | $ | 1,690 | ||
2016 | 1,741 | |||
2017 | 1,488 | |||
Totals | $ | 4,919 | ||
We incurred rent expense related to this lease of $1.6 million for the year ended December 31, 2014. Rent expense for the year ended December 31, 2013 was $0.8 million. |
Common_Stock_Offerings
Common Stock Offerings | 12 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Common Stock Offerings | Common Stock Offerings |
On April 17, 2012, we completed the Private Placement, through which we offered and sold an aggregate of 55,000,000 of our Class A common shares resulting in net proceeds of approximately $510 million. | |
On November 8, 2013, we filed a final prospectus announcing the sale of 2.1 million shares of common stock through an initial public offering. The underwriters of the offering were granted a 30-day option to purchase up to an additional 315,000 shares of common stock from us at an initial public offering price of $13.00, which they exercised on November 12, 2013. The offering closed on November 14, 2013. Gross proceeds to us were $31.4 million. Net proceeds from the offering were approximately $28 million. |
Statutory_Information
Statutory Information | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Insurance [Abstract] | ||||||||||||
Statutory Information | Statutory Information | |||||||||||
Our insurance subsidiaries, NMIC and Re One, file financial statements in conformity with statutory basis accounting principles ("SAP") prescribed or permitted by the Wisconsin OCI. NMIC's principal regulator is the Wisconsin OCI. Prescribed SAP includes state laws, regulations and general administrative rules, as well as a variety of publications of the NAIC. The Wisconsin OCI recognizes only statutory accounting practices prescribed or permitted by the state of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under Wisconsin insurance laws. | ||||||||||||
NMIC and Re One's combined statutory net income, statutory surplus and contingency reserve as of and for each of the years in the three-year period ended December 31, 2014 were as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In Thousands) | ||||||||||||
Statutory net loss | $ | (47,961 | ) | $ | (33,307 | ) | $ | (18 | ) | |||
Statutory surplus | 236,738 | 189,698 | 220,004 | |||||||||
Contingency reserve | 9,401 | 2,314 | — | |||||||||
Under applicable Wisconsin law and 15 other states, a mortgage insurer must maintain a minimum amount of statutory capital relative to its risk-in-force (risk-to-capital ratio or "RTC ratio") in order for the mortgage insurer to continue to write new business. While formulations of minimum capital may vary in each jurisdiction that has such a requirement, the most common measure applied allows for a maximum permitted RTC ratio of 25 to 1. Wisconsin and certain other states, including California and Illinois, apply a substantially similar requirement referred to as minimum policyholders' position. Our operation plan filed with the Wisconsin OCI and other state insurance departments in connection with NMIC's applications for licensure includes the expectation that NMIH will downstream additional capital if needed so that NMIC does not exceed risk-to-capital ratios agreed to with those states. NMIC may in the future seek state insurance department approvals, as needed, of an amendment to our business plan to increase this ratio to the Wisconsin regulatory minimum of 25 to 1. In addition, under the terms of our conditional approvals from the GSEs we are required to operate at a risk-to-capital ratio not to exceed 15:1 for our first three years of operations. | ||||||||||||
Certain states limit the amount of risk a mortgage insurer may retain on a single loan to 25% of the indebtedness to the insured and, as a result, the portion of such insurance in excess of 25% must be reinsured. NMIC and Re One have entered into a primary excess share reinsurance agreement, effective August 1, 2012, and a facultative pool reinsurance agreement, effective September 1, 2013, under which NMIC cedes premiums, loss reserves and claims to Re One on an excess share basis for any primary or pool policy which offers coverage greater than 25% on any loan insured thereunder. NMIC will use reinsurance provided by Re One solely for purposes of compliance with these state statutory coverage limits. Currently, NMIC has no other reinsurance agreements. During April 2013, NMIC began writing its first mortgage insurance policies and ceding premium and risk to Re One the following month. | ||||||||||||
As of December 31, 2013, NMIC had 22 policies in force totaling approximately $36.5 million of RIF, resulting in a RTC ratio of 0.5:1. As of December 31, 2014, NMIC had $800 million in total RIF (1) with a RTC ratio of 3.5:1, significantly below the GSE and state imposed financial requirements. The risk-to-capital calculation for each of our insurance subsidiaries, as well as our combined risk-to-capital calculation, as of December 31, 2014, is presented below. | ||||||||||||
As of December 31, 2014 | NMIC | Re One | Combined | |||||||||
(In Thousands) | ||||||||||||
Primary risk-in-force (1) | ||||||||||||
Direct | $ | 801,353 | $ | — | $ | 801,353 | ||||||
Assumed | — | 69,396 | 69,396 | |||||||||
Ceded | (69,396 | ) | — | (69,396 | ) | |||||||
Total primary risk-in-force | 731,957 | 69,396 | 801,353 | |||||||||
Pool risk-in-force (2) | ||||||||||||
Direct | 93,090 | — | 93,090 | |||||||||
Assumed | — | 24,705 | 24,705 | |||||||||
Ceded | (24,705 | ) | — | (24,705 | ) | |||||||
Total pool risk-in-force | 68,385 | 24,705 | 93,090 | |||||||||
Total risk-in-force | 800,342 | 94,101 | 894,443 | |||||||||
Statutory policyholders' surplus | 223,119 | 13,619 | 236,738 | |||||||||
Statutory contingency reserve | 7,945 | 1,456 | 9,401 | |||||||||
Total statutory policyholders' position | 231,064 | 15,075 | 246,139 | |||||||||
Risk-to-Capital (3) | 3.5:1 | 6.2:1 | 3.6:1 | |||||||||
(1) | Our net risk in force includes both primary and pool risk in force, and excludes risk on policies that are currently in default and for which loss reserves have been established. | |||||||||||
(2) | Pool risk-in-force as shown in the table above is equal to the aggregate stop loss less a deductible. | |||||||||||
(3) | Represents total risk-in-force divided by statutory policyholders' position which is the metric by which the majority of state insurance regulators will assess our capital adequacy. Additionally, pursuant to the 2013 Fannie Mae pool agreement, we are required to maintain the greater of (a) the risk-to-capital requirements outlined in Fannie Mae's January 2013 approval letter or (b) a risk-to-capital ratio of 18:1 on primary business plus statutory capital equal to the amount of net risk-in-force of the pool. | |||||||||||
NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware, such as NMIH. Delaware corporation law provides that dividends are only payable out of a corporation's capital surplus or (subject to certain limitations) recent net profits. As of December 31, 2014, NMIH's capital surplus was approximately $427 million. NMIH's assets, excluding investment in NMIC and Re One, were approximately $179 million at December 31, 2014, and were unencumbered by any debt or other subsidiary commitments or obligations. The insurance subsidiaries are both mono-line mortgage insurance companies, and the assets of each are dedicated only to the support of direct risk and obligations of each mortgage insurance entity. NMIC only writes direct mortgage insurance business and assumes no business from any other entity. Re One only assumes business from NMIC to allow NMIC to comply with statutory risk requirements. Neither NMIC nor Re One have subsidiaries, and therefore do not have subsidiary risks and obligations that compete for its resources. | ||||||||||||
The GSEs and state insurance regulators may restrict our insurance subsidiaries' ability to pay dividends to NMIH. In addition to the restrictions imposed during the GSE Approval and state licensing processes, the ability of our insurance subsidiaries to pay dividends to NMIH is limited by insurance laws of the State of Wisconsin and certain other states. Wisconsin law provides that an insurance company may pay out dividends without the prior approval of the Wisconsin OCI ("ordinary dividends") in an amount, when added to other shareholder distributions made in the prior 12 months, not to exceed the lesser of (a) 10% of the insurer's surplus as regards to policyholders as of the prior December 31 or (b) its net income (excluding realized capital gains) for the twelve month period ending December 31 of the immediately preceding calendar year. In determining net income, an insurer may carry forward net income from the previous calendar years that has not already been paid out as a dividend. Dividends that exceed this amount are "extraordinary dividends," which require prior approval of the Wisconsin OCI. As of December 31, 2014, the amount of restricted net assets held by our consolidated insurance subsidiaries totaled approximately $252 million of NMIH's consolidated net assets of $427 million. The amount of restricted assets used to determine any dividend to NMIH, once all restrictions expire, would be computed under SAP which may differ from the amount of restricted assets computed under GAAP. Since inception, NMIC has not paid any dividends to NMIH. As NMIC had a statutory net loss for the year ended December 31, 2013, NMIC cannot pay any dividends to NMIH through December 31, 2014, without the prior approval of the Wisconsin OCI. Additionally, NMIC will not be permitted to pay dividends to NMIH until after December 31, 2015 as a condition of GSE Approval or until January 2016 under agreements with various state insurance regulators. |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) | |||||||||||||||||||
2014 Quarters | 2014 | |||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||
(In Thousands, except share data) | ||||||||||||||||||||
Net premiums written | $ | 5,178 | $ | 5,051 | $ | 9,661 | $ | 14,139 | $ | 34,029 | ||||||||||
Net premiums earned | 1,904 | 2,093 | 3,900 | 5,510 | 13,407 | |||||||||||||||
Net investment income | 1,489 | 1,468 | 1,342 | 1,319 | 5,618 | |||||||||||||||
Net realized investment gains (losses) | — | — | 134 | 63 | 197 | |||||||||||||||
Gain (loss) from change in fair value of warrant liability | 817 | 952 | 1,240 | (60 | ) | 2,949 | ||||||||||||||
Gain from settlement of warrants | 37 | — | — | — | 37 | |||||||||||||||
Insurance claims and claims expenses | — | 28 | (26 | ) | 81 | 83 | ||||||||||||||
Amortization of deferred policy acquisition costs | 19 | 42 | 47 | 265 | 373 | |||||||||||||||
Underwriting and operating expenses | 19,283 | 18,595 | 17,848 | 17,318 | 73,044 | |||||||||||||||
Net loss | (15,055 | ) | (12,855 | ) | (10,976 | ) | (10,020 | ) | (48,906 | ) | ||||||||||
Loss per share (1) | ||||||||||||||||||||
Basic and diluted loss per share | $ | (0.26 | ) | $ | (0.22 | ) | $ | (0.19 | ) | $ | (0.17 | ) | $ | (0.84 | ) | |||||
Weighted average common shares outstanding | 58,061,299 | 58,289,801 | 58,363,334 | 58,406,574 | 58,281,425 | |||||||||||||||
2013 Quarters | 2013 | |||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||
(In Thousands, except share data) | ||||||||||||||||||||
Net premiums written | $ | — | $ | 1 | $ | 482 | $ | 3,058 | $ | 3,541 | ||||||||||
Net premiums earned | — | 1 | 482 | 1,612 | 2,095 | |||||||||||||||
Net investment income | 410 | 1,407 | 1,519 | 1,472 | 4,808 | |||||||||||||||
Net realized investment gains (losses) | 28 | 452 | (308 | ) | 14 | 186 | ||||||||||||||
Gain (loss) from change in fair value of warrant liability | 35 | (1,115 | ) | 469 | (918 | ) | (1,529 | ) | ||||||||||||
Insurance claims and claims expenses | — | — | — | — | — | |||||||||||||||
Amortization of deferred policy acquisition costs | — | — | — | 1 | 1 | |||||||||||||||
Underwriting and operating expenses | 12,426 | 17,019 | 16,035 | 15,263 | 60,743 | |||||||||||||||
Net loss | (11,953 | ) | (16,274 | ) | (13,873 | ) | (13,084 | ) | (55,184 | ) | ||||||||||
Loss per share (1) | ||||||||||||||||||||
Basic and diluted loss per share | $ | (0.22 | ) | $ | (0.29 | ) | $ | (0.25 | ) | $ | (0.23 | ) | $ | (0.99 | ) | |||||
Weighted average common shares outstanding | 55,500,100 | 55,629,932 | 55,637,480 | 57,238,730 | 56,005,326 | |||||||||||||||
-1 | Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of quarterly per share data may not equal the per share data for the year. |
SCHEDULE_I_SUMMARY_OF_INVESTME
SCHEDULE I - SUMMARY OF INVESTMENTS- OTHER THAN INVESTMENTS IN RELATED PARTIES | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Summary of Investments, Other than Investments in Related Parties [Abstract] | ||||||||||||
Summary of Investments - Other than Investments in Related Parties | ||||||||||||
December 31, 2014 | Amortized Cost | Fair Value | Amount Reflected on Balance Sheet | |||||||||
(In Thousands) | ||||||||||||
Fixed maturities | ||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 68,911 | $ | 68,345 | $ | 68,345 | ||||||
Municipal debt securities | 12,009 | 11,963 | 11,963 | |||||||||
Corporate debt securities | 200,358 | 199,785 | 199,785 | |||||||||
Asset-backed securities | 56,440 | 56,408 | 56,408 | |||||||||
Total investments other than investments in related parties | $ | 337,718 | $ | 336,501 | $ | 336,501 | ||||||
SCHEDULE_II_FINANCIAL_INFORMAT
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Condensed Financial Information of Parent Company Only Disclosure [Abstract] | ||||||||||||
Financial Information of Registrant Parent Company Only | ||||||||||||
31-Dec-14 | 31-Dec-13 | |||||||||||
(In Thousands, except for share data) | ||||||||||||
Assets | ||||||||||||
Fixed maturities, available-for-sale, at fair value | $ | 134,199 | $ | 229,064 | ||||||||
Cash and cash equivalents | 29,925 | 36,433 | ||||||||||
Investment in subsidiaries, at equity in net assets | 251,880 | 193,242 | ||||||||||
Accrued investment income | 629 | 1,038 | ||||||||||
Prepaid expenses | 2,054 | 1,519 | ||||||||||
Due from affiliates, net | 9,949 | 10,565 | ||||||||||
Software and equipment, net | 11,806 | 7,574 | ||||||||||
Other assets | 509 | 61 | ||||||||||
Total assets | $ | 440,951 | $ | 479,496 | ||||||||
Liabilities | ||||||||||||
Accounts payable and accrued expenses | $ | 10,621 | $ | 9,908 | ||||||||
Warrant liability, at fair value | 3,372 | 6,371 | ||||||||||
Total liabilities | 13,993 | 16,279 | ||||||||||
Shareholders' equity | ||||||||||||
Common stock - class A shares, $0.01 par value; | 584 | 581 | ||||||||||
58,428,548 and 58,052,480 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively (250,000,000 shares authorized) | ||||||||||||
Additional paid-in capital | 562,911 | 553,707 | ||||||||||
Accumulated other comprehensive loss, net of tax | (3,607 | ) | (7,047 | ) | ||||||||
Accumulated deficit | (132,930 | ) | (84,024 | ) | ||||||||
Total shareholders' equity | 426,958 | 463,217 | ||||||||||
Total liabilities and shareholders' equity | $ | 440,951 | $ | 479,496 | ||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In Thousands) | ||||||||||||
Revenues | ||||||||||||
Net investment income | $ | 2,937 | $ | 2,758 | $ | 2 | ||||||
Net realized investment gains | 67 | 188 | — | |||||||||
Gain (loss) from change in fair value of warrant liability | 2,949 | (1,529 | ) | 278 | ||||||||
Gain from settlement of warrants | 37 | — | — | |||||||||
Total revenues | 5,990 | 1,417 | 280 | |||||||||
Expenses | ||||||||||||
Other operating expenses | 18,817 | 24,319 | 26,575 | |||||||||
Total expenses | 18,817 | 24,319 | 26,575 | |||||||||
Equity in net loss of subsidiaries | (38,710 | ) | (32,282 | ) | (1,196 | ) | ||||||
Loss before income taxes | (51,537 | ) | (55,184 | ) | (27,491 | ) | ||||||
Income tax benefit | (2,631 | ) | — | — | ||||||||
Net loss | $ | (48,906 | ) | $ | (55,184 | ) | $ | (27,491 | ) | |||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Cash flows from operating activities | (In Thousands) | |||||||||||
Net loss | $ | (48,906 | ) | $ | (55,184 | ) | $ | (27,491 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Share-based compensation expense | 9,180 | 10,367 | 6,115 | |||||||||
Warrants issued in connection with line of credit | — | — | 1,620 | |||||||||
(Gain) loss from change in fair value of warrant liability | (2,949 | ) | 1,529 | (278 | ) | |||||||
Gain from settlement of warrants | (37 | ) | — | — | ||||||||
Net realized investment gains | (67 | ) | (188 | ) | — | |||||||
Depreciation and other amortization | 5,618 | 3,325 | 3 | |||||||||
Noncash intraperiod tax allocation | (2,390 | ) | — | — | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Equity in net loss of subsidiaries | 38,710 | 35,371 | 1,196 | |||||||||
Accrued investment income | 409 | (1,038 | ) | (2 | ) | |||||||
Receivable from affiliates | 616 | (10,565 | ) | — | ||||||||
Prepaid expenses | (535 | ) | (1,102 | ) | (234 | ) | ||||||
Other assets | (445 | ) | (3,045 | ) | (78 | ) | ||||||
Accounts payable and accrued expenses | 233 | 623 | 4,550 | |||||||||
Net cash used in operating activities | (563 | ) | (19,907 | ) | (14,599 | ) | ||||||
Cash flows from investing activities | ||||||||||||
Capitalization of subsidiaries | (95,000 | ) | — | (220,000 | ) | |||||||
Purchase of fixed-maturity investments, available-for-sale | (23,552 | ) | (293,470 | ) | — | |||||||
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 120,813 | 59,454 | — | |||||||||
Purchase of software and equipment | (8,220 | ) | (6,695 | ) | (2,444 | ) | ||||||
Acquisition of subsidiaries | — | — | (2,500 | ) | ||||||||
Net cash used in investing activities | (5,959 | ) | (240,711 | ) | (224,944 | ) | ||||||
Cash flows from financing activities | ||||||||||||
Payments on line of credit | — | — | (205 | ) | ||||||||
Issuance of common stock | 1,097 | 27,912 | 510,465 | |||||||||
Taxes paid related to net share settlement of equity awards | (1,083 | ) | (1,578 | ) | — | |||||||
Net cash provided by financing activities | 14 | 26,334 | 510,260 | |||||||||
Net (decrease) increase in cash and cash equivalents | (6,508 | ) | (234,284 | ) | 270,717 | |||||||
Cash and cash equivalents, beginning of period | 36,433 | 270,717 | — | |||||||||
Cash and cash equivalents, end of period | $ | 29,925 | $ | 36,433 | $ | 270,717 | ||||||
Note A | ||||||||||||
The NMI Holdings, Inc. (the "Parent Company") financial statements represent the stand-alone financial statements of the Parent Company. These financial statements have been prepared on the same basis and using the same accounting policies as described in the consolidated financial statements included herein. Refer to the Parent Company's consolidated financial statements for additional information. | ||||||||||||
Revisions to Prior Periods | ||||||||||||
Certain other prior balances have been reclassified to conform to the current period presentation. | ||||||||||||
Note B | ||||||||||||
Our insurance subsidiaries are subject to statutory regulations as to maintenance of policyholders' surplus and payment of dividends. The maximum amount of dividends that the insurance subsidiaries may pay in any twelve-month period without regulatory approval by the Office of the Commissioner of Insurance of the State of Wisconsin is the lesser of adjusted statutory net income or 10% of statutory policyholders' surplus as of the preceding calendar year end. Adjusted statutory net income is defined for this purpose to be the greater of statutory net income, net of realized investment gains, for the calendar year preceding the date of the dividend or statutory net income, net of realized investment gains, for the three calendar years preceding the date of the dividend less dividends paid within the first two of the preceding three calendar years. | ||||||||||||
Note C | ||||||||||||
The Parent Company provides certain services to its subsidiaries. The Parent Company allocates to its subsidiaries corporate expense it incurs in the capacity of supporting those subsidiaries, based on either an allocated percentage of time spent or internally allocated capital. Total operating expenses allocated to subsidiaries for each of the years in the three year period ended December 31, 2014 were $55.7 million, $32.5 million and $0. Amounts charged to the subsidiaries for operating expenses are based on actual cost, without any mark-up. The Parent Company considers these charges fair and reasonable. The subsidiaries reimburse the Parent Company for these costs in a timely manner, which has the impact of improving the cash flows of the Parent Company. |
SCHEDULE_IV_FINANCIAL_INFORMAT
SCHEDULE IV - FINANCIAL INFORMATION OF REGISTRANT REINSURANCE PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2014 | |
Supplemental Schedule of Reinsurance Premiums for Insurance Companies [Abstract] | |
Financial Information of Registrant Reinsurance Parent Company Only | The Parent Company has no reinsurance agreements. The insurance subsidiaries are both mono-line mortgage insurance companies and the assets of each are dedicated only to the support of our mortgage insurance operations. NMIC only writes direct mortgage insurance business and assumes no business from any other entity. Re One only assumes business from NMIC to allow NMIC to comply with statutory risk requirements. Neither NMIC nor Re One count any subsidiary of any kind in their admitted statutory assets. |
Summary_of_Accounting_Policies1
Summary of Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Revenue Recognition | Revenue Recognition | |
In the mortgage insurance industry, a "book" is a group of loans that an MI company insures in a particular period, normally a calendar year. We set premiums at the time a policy is issued based on our expectations regarding likely performance over the term of coverage. The policies we write are guaranteed renewable contracts at the policyholder's option. Premiums may be paid to us on a single, annual or monthly basis. Premiums written on a single premium basis and an annual premium basis are initially deferred as unearned premium reserve and earned over the policy term commencing in the month coverage is effective. Premiums written on policies covering more than one year are amortized over the policy life in accordance with the expiration of risk, which is the anticipated claim payment pattern based on industry experience. Premiums written on annual policies are earned on a monthly pro rata basis. Premiums written on monthly policies are earned as coverage is provided. Premiums written on pool transactions are earned over the period that coverage is provided. Upon cancellation of a policy, all premium that is non-refundable is immediately earned and any refundable premium is returned to the policyholder. Premiums returned to policyholders are recorded as a reduction of written and earned premiums in the current period. The actual return of premium for all periods affects premiums written and earned in those periods. | ||
Reserve for Insurance Claims and Claims Expenses | Reserves for Insurance Claims and Claims Expenses | |
Consistent with industry accounting practices, for purposes of establishing claim reserves, we adhere to the general claim reserving principles contained in Financial Accounting Standards Board Accounting Standards Codification ("ASC") Topic 944, Financial Services - Insurance ("ASC 944"), even though that standard expressly excludes mortgage insurance from its guidance. However, and consistent with our industry, we do not establish claim reserves for anticipated future claims on insured loans that are not currently in default. We do not consider a loan to be in default for claim reserve purposes until we receive notice from the servicer that a borrower has failed to make two consecutive regularly scheduled payments and is at least 60 days in default. In addition to reserves on reported defaults, we establish reserves for estimated claims incurred on loans that have been in default for at least 60 days that have not yet been reported to us by the servicers, often referred to as IBNR. | ||
Investments | Investments | |
We have designated our investment portfolio as available-for-sale and report it at fair value. The related unrealized gains and losses are, after considering the related tax expense or benefit, recognized as a component of accumulated other comprehensive (loss) income in shareholders' equity. Net realized investment gains and losses are reported in income based upon specific identification of securities sold. | ||
Purchases and sales of investments are recorded on a trade date basis. Net investment income is recognized when earned and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method and is net of investment management fees and other investment related expenses. For asset-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary. Any adjustments required due to the change in effective yields and maturities are recognized on a prospective basis through yield adjustments. | ||
Each quarter, we evaluate our investments in order to determine whether declines in fair value below amortized cost were considered other-than-temporary in accordance with applicable guidance. Under the current guidance, a debt security impairment is deemed other-than-temporary if (i) we either intend to sell the security or it is more likely than not that we will be required to sell the security before recovery or (ii) we do not expect to collect cash flows sufficient to recover the amortized cost basis of the security. In evaluating whether a decline in fair value is other-than-temporary, we consider several factors including, but not limited to: | ||
• | our intent to sell the security or whether it is more likely than not that we will be required to sell the security before recovery; | |
• | severity and duration of the decline in fair value; | |
• | the financial condition of the issuer; | |
• | the failure of the issuer to make scheduled interest or principal payments; | |
• | recent credit downgrades of the applicable security or the issuer below investment grade; and | |
• | adverse conditions specifically related to the security, an industry, or a geographic area. | |
Deferred Policy Acquisition Costs | Deferred Policy Acquisition Costs | |
Costs directly associated with the successful acquisition of mortgage insurance policies, consisting of certain selling expenses and other policy issuance and underwriting expenses, are initially deferred and reported as deferred policy acquisition costs ("DAC"). For each book year of business, these costs are amortized to expense in relation to the anticipated recognition of premiums. | ||
Premium Deficiency Reserves | Premium Deficiency Reserves | |
We consider whether a premium deficiency exists at each fiscal quarter using best estimate assumptions as of the testing date. Per ASC 944, a premium deficiency reserve shall be recognized if the sum of expected claim costs and claim adjustment expenses, expected dividends to policyholders, unamortized acquisition costs, and maintenance costs exceeds related unearned premiums and anticipated investment income. We have determined that no premium deficiency reserves were necessary for each of the years in the three-year period ended December 31, 2014. | ||
Income Taxes | Income Taxes | |
We account for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes. The liability method measures the expected future tax effects of temporary differences at the enacted tax rates applicable for the period in which the deferred asset or liability is expected to be realized or settled. Temporary differences are differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements that would result in future increases or decreases in taxes owed on a cash basis compared to amounts already recognized as tax expense in the consolidated statement of operations. | ||
Warrants | Warrants | |
We account for warrants to purchase our common shares in accordance with ASC 470-20, Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging - Contracts in Entity's Own Equity. Our outstanding warrants may be settled by us using either (i) physical settlement method or (ii) cashless exercise, where shares that are issued upon exercise of the warrants are reduced, to cover the cost of the exercise, in lieu of the holder remitting a cash payment of the exercise price. The warrants expire and are not exercisable after the 10th anniversary of the date the warrant was issued. The exercise price and the number of warrants are subject to anti-dilution provisions whereby the existing exercise price is adjusted downward, and the number of warrants increased, for events that may not be dilutive. The adjustment may be in excess of any dilution suffered. As a result, the warrants are classified as a liability. We revalue the warrants at the end of each reporting period, and any change in fair value is reported in the statements of operations in the period in which the change occurred. We calculate the fair value of the warrants using a Black-Scholes option-pricing model in combination with a binomial model, and we value the pricing protection features of the warrants using a Monte Carlo simulation model. | ||
Share-based Compensation | Share-Based Compensation | |
We account for stock compensation in accordance with ASC 718, Compensation - Stock Compensation. This addresses accounting for share-based awards and recognition of compensation expense, measured using grant date fair value, over the requisite service or performance period of the award. Share-based payments include restricted stock units ("RSUs") and stock option grants under the 2012 Stock Incentive Plan. We determine the fair value of issued stock option grants using an option pricing model, which takes into account various assumptions that are subjective. Key assumptions used in the stock option valuation include the expected term of the equity award, taking into account the contractual term of the award, the effects of expected exercise and post-vesting termination behavior, expected volatility, expected dividends and the risk-free interest rate for the expected term of the award. RSU grants to employees contain a market condition and/or service condition. The fair value of RSU grants to employees with a market condition is determined based on a Monte Carlo simulation model at the date of grant. RSU grants to employees with a service condition and RSU grants to non-employee directors are valued at our stock price on the date of grant less the present value of anticipated dividends. | ||
Earnings per Share | Earnings per Share | |
Basic net loss per share is based on the weighted-average number of common shares outstanding, while diluted net loss per share is based on the weighted-average number of common shares outstanding and common stock equivalents that would be issuable upon the exercise of stock options, other stock-based compensation arrangements, and the dilutive effect of outstanding warrants. As a result of our net losses for the each of the years in the three-year period ended December 31, 2014, 5,839,909 shares, 5,303,394 shares, and 4,414,165 shares of our common stock equivalents issued under stock-based compensation arrangements and warrants, respectively, were not included in the calculation of diluted net loss per share as of such dates because they were anti-dilutive. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
We consider items such as certificates of deposit and money market funds with original maturities of 90 days or less to be cash equivalents. The Company did not have any restricted cash as of December 31, 2014 and 2013. | ||
Software and Equipment | Software and Equipment | |
Certain costs associated with the development of internal-use software are capitalized. Software and equipment are stated at cost, less accumulated amortization and depreciation. Once the software is ready for its intended use, amortization and depreciation are calculated using the straight-line method over the estimated useful lives of the respective assets ranging typically from 3 to 7 years, unless factors indicate a shorter useful life. Amortization of software and depreciation of equipment commences at the beginning of the month following our placement of the assets into use. For further detail, see "Note 9, Software and Equipment. | ||
Business Combinations, Goodwill and Intangible Assets | Business Combinations, Goodwill and Intangible Assets | |
Goodwill represents the excess of the purchase price over the estimated fair value of net assets acquired from a business combination. In accordance with ASC 350, Intangibles - Goodwill and Other, we test goodwill for impairment during the third quarter each year, or more frequently if we believe indicators of impairment exist. We have not identified any impairments of goodwill through December 31, 2014. | ||
Our intangible assets consist of state licenses and GSE applications which have indefinite lives. We test indefinite-lived intangible assets for impairment during the fourth quarter of each year or more frequently if we believe indicators of impairment exist. We do not believe that the indefinite-lived intangible assets were impaired as of December 31, 2014. | ||
Premiums receivable | Premiums receivable | |
Premiums receivable consist of premiums due on our mortgage insurance policies. If mortgage insurance premiums are unpaid for more than 120 days, the receivable is written off against earned premium and the related insurance policy is canceled. | ||
Recent Accounting Standards Updates Adopted | Recent Accounting Standards Updates Adopted | |
In August 2014, the FASB issued an update that requires an entity's management to evaluate whether there is substantial doubt about that entity's ability to continue as a going concern and, if so, disclose that fact. An entity's management will also be required to evaluate and disclose whether its plans alleviate that doubt. The guidance is effective for annual periods ending after December 15, 2016 and for interim and annual periods thereafter. We do not expect the adoption of this update to have a material effect on the presentation of our financial statements and notes therein. | ||
Reclassifications | Reclassifications | |
Certain items in the financial statements as of December 31, 2014 and for the periods ending December 31, 2013 and December 31, 2012 have been reclassified to conform to the current period's presentation. There was no effect on net income or shareholders' equity previously reported. | ||
Subsequent Events | Subsequent Events | |
We have considered subsequent events through the date of this filing. |
Investments_Tables
Investments (Tables) | 12 Months Ended | ||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||
Schedule of Fair Values and Gross Unrealized Gains and Losses | Fair Values and Gross Unrealized Gains and Losses on Investments | ||||||||||||||||||||||||||
Amortized | Gross Unrealized | Fair | |||||||||||||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||||||||||||
As of December 31, 2014 | (In Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 68,911 | $ | 7 | $ | (573 | ) | $ | 68,345 | ||||||||||||||||||
Municipal debt securities | 12,009 | 27 | (73 | ) | 11,963 | ||||||||||||||||||||||
Corporate debt securities | 200,358 | 883 | (1,456 | ) | 199,785 | ||||||||||||||||||||||
Asset-backed securities | 56,440 | 222 | (254 | ) | 56,408 | ||||||||||||||||||||||
Total investments | $ | 337,718 | $ | 1,139 | $ | (2,356 | ) | $ | 336,501 | ||||||||||||||||||
Amortized | Gross Unrealized | Fair | |||||||||||||||||||||||||
Cost | Gains | Losses | Value | ||||||||||||||||||||||||
As of December 31, 2013 | (In Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 108,067 | $ | — | $ | (1,461 | ) | $ | 106,606 | ||||||||||||||||||
Municipal debt securities | 12,017 | 1 | (85 | ) | 11,933 | ||||||||||||||||||||||
Corporate debt securities | 221,899 | 157 | (4,799 | ) | 217,257 | ||||||||||||||||||||||
Asset-backed securities | 74,152 | 114 | (974 | ) | 73,292 | ||||||||||||||||||||||
Total investments | $ | 416,135 | $ | 272 | $ | (7,319 | ) | $ | 409,088 | ||||||||||||||||||
Schedule of Investments by Maturity | The amortized cost and fair values of available for sale securities at December 31, 2014, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. | ||||||||||||||||||||||||||
As of December 31, 2014 | Amortized | Fair | |||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Due in one year or less | $ | 6,110 | $ | 6,125 | |||||||||||||||||||||||
Due after one through five years | 195,492 | 194,472 | |||||||||||||||||||||||||
Due after five through ten years | 54,360 | 53,891 | |||||||||||||||||||||||||
Due after ten years | 25,316 | 25,605 | |||||||||||||||||||||||||
Asset-backed securities | 56,440 | 56,408 | |||||||||||||||||||||||||
Total investments | $ | 337,718 | $ | 336,501 | |||||||||||||||||||||||
As of December 31, 2013 | Amortized | Fair | |||||||||||||||||||||||||
Cost | Value | ||||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Due in one year or less | $ | — | $ | — | |||||||||||||||||||||||
Due after one through five years | 260,855 | 257,501 | |||||||||||||||||||||||||
Due after five through ten years | 65,687 | 63,440 | |||||||||||||||||||||||||
Due after ten years | 15,441 | 14,855 | |||||||||||||||||||||||||
Asset-backed securities | 74,152 | 73,292 | |||||||||||||||||||||||||
Total investments | $ | 416,135 | $ | 409,088 | |||||||||||||||||||||||
Schedule of Aging Unrealized Losses | For those securities in an unrealized loss position, the length of time the securities were in such a position is as follows: | ||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||
# of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | |||||||||||||||||||
As of December 31, 2014 | (Dollars in Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | 4 | $ | 7,228 | $ | (33 | ) | 10 | $ | 49,884 | $ | (540 | ) | 14 | $ | 57,112 | $ | (573 | ) | |||||||||
Municipal debt securities | 1 | 3,232 | (18 | ) | 1 | 1,695 | (55 | ) | 2 | 4,927 | (73 | ) | |||||||||||||||
Corporate debt securities | 26 | 60,334 | (559 | ) | 22 | 65,806 | (897 | ) | 48 | 126,140 | (1,456 | ) | |||||||||||||||
Assets-backed securities | 3 | 10,614 | (57 | ) | 4 | 20,047 | (197 | ) | 7 | 30,661 | (254 | ) | |||||||||||||||
Total investments | 34 | $ | 81,408 | $ | (667 | ) | 37 | $ | 137,432 | $ | (1,689 | ) | 71 | $ | 218,840 | $ | (2,356 | ) | |||||||||
Less Than 12 Months | 12 Months or Greater | Total | |||||||||||||||||||||||||
# of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | # of Securities | Fair Value | Unrealized Losses | |||||||||||||||||||
As of December 31, 2013 | (Dollars in Thousands) | ||||||||||||||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | 19 | $ | 106,606 | $ | (1,461 | ) | — | $ | — | $ | — | 19 | $ | 106,606 | $ | (1,461 | ) | ||||||||||
Municipal debt securities | 2 | 4,915 | (85 | ) | — | — | — | 2 | 4,915 | (85 | ) | ||||||||||||||||
Corporate debt securities | 47 | 187,714 | (4,799 | ) | — | — | — | 47 | 187,714 | (4,799 | ) | ||||||||||||||||
Assets-backed securities | 11 | 58,225 | (974 | ) | — | — | — | 11 | 58,225 | (974 | ) | ||||||||||||||||
Total investments | 79 | $ | 357,460 | $ | (7,319 | ) | — | $ | — | $ | — | 79 | $ | 357,460 | $ | (7,319 | ) | ||||||||||
Schedule of Net Investment Income | Net investment income is comprised of the following: | ||||||||||||||||||||||||||
For the Year Ended December 31, | |||||||||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||||
Fixed maturities | $ | 6,127 | $ | 5,289 | $ | 4 | |||||||||||||||||||||
Cash equivalents | — | — | 2 | ||||||||||||||||||||||||
Other | 8 | 2 | — | ||||||||||||||||||||||||
Investment income | 6,135 | 5,291 | 6 | ||||||||||||||||||||||||
Investment expenses | (517 | ) | (483 | ) | — | ||||||||||||||||||||||
Net investment income | $ | 5,618 | $ | 4,808 | $ | 6 | |||||||||||||||||||||
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 12 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||
Fair Value Measurements, Recurring and Nonrecurring | The following is a list of those assets and liabilities that are measured at fair value by hierarchy level as of December 31, 2014 and December 31, 2013: | |||||||||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | Fair Value | |||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
As of December 31, 2014 | (In Thousands) | |||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 39,176 | $ | 29,169 | $ | — | $ | 68,345 | ||||||||
Municipal debt securities | — | 11,963 | — | 11,963 | ||||||||||||
Corporate debt securities | — | 199,785 | — | 199,785 | ||||||||||||
Asset-backed securities | — | 56,408 | — | 56,408 | ||||||||||||
Cash and cash equivalents | 103,021 | — | — | 103,021 | ||||||||||||
Total assets | $ | 142,197 | $ | 297,325 | $ | — | $ | 439,522 | ||||||||
Warrant liability | $ | — | $ | — | $ | 3,372 | $ | 3,372 | ||||||||
Total liabilities | $ | — | $ | — | $ | 3,372 | $ | 3,372 | ||||||||
Fair Value Measurements Using | ||||||||||||||||
Quoted Prices in | Significant Other | Significant | Fair Value | |||||||||||||
Active Markets for | Observable Inputs | Unobservable | ||||||||||||||
Identical Assets | (Level 2) | Inputs | ||||||||||||||
(Level 1) | (Level 3) | |||||||||||||||
As of December 31, 2013 | (In Thousands) | |||||||||||||||
U.S. Treasury securities and obligations of U.S. government agencies | $ | 49,484 | $ | 57,122 | $ | — | $ | 106,606 | ||||||||
Municipal debt securities | — | 11,933 | — | 11,933 | ||||||||||||
Corporate debt securities | — | 217,257 | — | 217,257 | ||||||||||||
Asset-backed securities | — | 73,292 | — | 73,292 | ||||||||||||
Cash and cash equivalents | 55,929 | — | — | 55,929 | ||||||||||||
Total assets | $ | 105,413 | $ | 359,604 | $ | — | $ | 465,017 | ||||||||
Warrant liability | $ | — | $ | — | $ | 6,371 | $ | 6,371 | ||||||||
Total liabilities | $ | — | $ | — | $ | 6,371 | $ | 6,371 | ||||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following is a roll-forward of Level 3 liabilities measured at fair value for the year ended December 31, 2014: | |||||||||||||||
Warrant Liability | ||||||||||||||||
For the Year Ended December 31, 2014 | (In Thousands) | |||||||||||||||
Balance, January 1, 2014 | $ | 6,371 | ||||||||||||||
Change in fair value of warrant liability included in earnings | (2,949 | ) | ||||||||||||||
Gain on settlement of warrants | (37 | ) | ||||||||||||||
Issuance of common stock on warrant exercise | (13 | ) | ||||||||||||||
Balance, December 31, 2014 | $ | 3,372 | ||||||||||||||
Warrant Liability | ||||||||||||||||
For the Year Ended December 31, 2013 | (In Thousands) | |||||||||||||||
Balance, January 1, 2013 | $ | 4,842 | ||||||||||||||
Change in fair value of warrant liability included in earnings | 1,529 | |||||||||||||||
Balance, December 31, 2013 | $ | 6,371 | ||||||||||||||
Reserves_for_Insurance_Claims_1
Reserves for Insurance Claims and Claims Expenses (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Insurance [Abstract] | ||||||||
Reconciliation of Liability for Insurance Claims and Claims Expenses | The following table provides a reconciliation of the beginning and ending reserve balances for insurance claims and claims expenses for the year ended December 31, 2014 and 2013: | |||||||
For the Year Ended December 31, | ||||||||
2014 | 2013 | |||||||
(In Thousands) | ||||||||
Reserve at beginning of period | $ | — | $ | — | ||||
Claims incurred: | ||||||||
Claims and claim expenses incurred: | ||||||||
Current year | 83 | — | ||||||
Prior years | — | — | ||||||
Total claims incurred | 83 | — | ||||||
Claims paid: | ||||||||
Claims and claim expenses paid: | ||||||||
Current year | — | — | ||||||
Prior years | — | — | ||||||
Total claims paid | — | — | ||||||
Reserve at end of period | $ | 83 | $ | — | ||||
ShareBased_Compensation_Tables
Share-Based Compensation (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||
Schedule of Stock Option Activity | A summary of option activity in the plan during the years ended December 31, 2014 and December 31, 2013 is as follows: | ||||||||||
For the Year Ended December 31, 2014 | Shares | Weighted Average Grant Date Fair Value per Share | Weighted Average Exercise Price | ||||||||
(Shares in Thousands) | |||||||||||
Options outstanding at December 31, 2013 | 3,062 | $ | 3.98 | $ | 10.31 | ||||||
Options granted | 780 | 4.85 | 12.03 | ||||||||
Options exercised | (109 | ) | 3.85 | 10 | |||||||
Options forfeited | (87 | ) | 4.47 | 11.35 | |||||||
Options expired | (16 | ) | 4.25 | 10.93 | |||||||
Options outstanding at December 31, 2014 | 3,630 | $ | 4.16 | $ | 10.66 | ||||||
For the Year Ended December 31, 2013 | Shares | Weighted Average Grant Date Fair Value per Share | Weighted Average Exercise Price | ||||||||
(Shares in Thousands) | |||||||||||
Options outstanding at December 31, 2012 | 2,547 | $ | 3.86 | $ | 10 | ||||||
Options granted | 532 | 4.57 | 11.78 | ||||||||
Options forfeited | (15 | ) | 3.84 | 10 | |||||||
Options canceled | (2 | ) | 3.84 | 10 | |||||||
Options outstanding at December 31, 2013 | 3,062 | $ | 3.98 | $ | 10.31 | ||||||
Schedule of Grant Date Fair Values of Stock Options, Valuation Assumptions | The estimated grant date fair values of the stock options granted during 2014 and 2013 were calculated using the Black-Scholes valuation model based on the following assumptions: | ||||||||||
2014 | 2013 | ||||||||||
Expected life | 6 years | 6 years | |||||||||
Risk free interest rate | 1.90% - 2.01% | 0.98% - 1.12% | |||||||||
Dividend yield | 0 | % | 0 | % | |||||||
Expected stock price volatility | 39 | % | 39 | % | |||||||
Projected forfeiture rate | 5 | % | 1 | % | |||||||
Schedule of Restricted Stock Units Activity | A summary of RSU activity in the plan during the years ended December 31, 2014 and December 31, 2013 is as follows: | ||||||||||
For the Year Ended December 31, 2014 | Shares | Weighted Average Grant Date Fair Value per Share | |||||||||
(Shares in Thousands) | |||||||||||
Non-vested restricted stock units at December 31, 2013 | 1,242 | $ | 7.75 | ||||||||
Restricted stock units granted | 373 | 11.52 | |||||||||
Restricted stock units vested | (360 | ) | 9.53 | ||||||||
Restricted stock units forfeited | (46 | ) | 10.14 | ||||||||
Non-vested restricted stock units at December 31, 2014 | 1,209 | $ | 8.9 | ||||||||
For the Year Ended December 31, 2013 | Shares | Weighted Average Grant Date Fair Value per Share | |||||||||
(Shares in Thousands) | |||||||||||
Non-vested restricted stock units at December 31, 2012 | 1,429 | $ | 7.35 | ||||||||
Restricted stock units granted | 76 | 12.03 | |||||||||
Restricted stock units vested | (263 | ) | 6.79 | ||||||||
Restricted stock units forfeited | — | — | |||||||||
Non-vested restricted stock units at December 31, 2013 | 1,242 | $ | 7.75 | ||||||||
Schedule of Grant Date Fair Value of Restricted Stock Units, Valuation Assumptions | The estimated grant date fair values of the RSUs granted in 2012 that are subject to both a market and service condition were calculated using a Monte Carlo simulation model based on the average outcome of 150,000 simulations using the following assumption: | ||||||||||
2012 | |||||||||||
Expected life | 5 years | ||||||||||
Risk free interest rate | 0.86 | % | |||||||||
Dividend yield | 0 | % | |||||||||
Expected stock price volatility | 39 | % | |||||||||
Projected forfeiture rate | 1 | % |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provision (benefit) for income taxes consists of: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In Thousands | ||||||||||||
Current | $ | (2,390 | ) | $ | — | $ | — | |||||
Deferred | 4 | — | — | |||||||||
Total income tax benefit | $ | (2,386 | ) | $ | — | $ | — | |||||
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of the federal statutory income tax (benefit) rate to the effective income tax (benefit) rate is as follows: | |||||||||||
For the Year Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
Federal statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
Loss on impairment | — | — | (1.48 | ) | ||||||||
Prior year adjustment | — | 3.52 | 1.66 | |||||||||
Other | 1.07 | 1.66 | (1.00 | ) | ||||||||
Valuation allowance | (31.42 | ) | (40.18 | ) | (28.00 | ) | ||||||
Purchase accounting adjustment | — | — | (6.18 | ) | ||||||||
Effective income tax rate | 4.65 | % | — | % | — | % | ||||||
Schedule of Deferred Tax Assets and Liabilities | Following is a reconciliation of our net deferred income tax asset (liability) as of December 31, 2014 and December 31, 2013: | |||||||||||
December 31, 2014 | ||||||||||||
Gross | Tax Effected | |||||||||||
Deferred tax asset | (In Thousands) | |||||||||||
Capitalized start-up costs | $ | 2,403 | $ | 985 | ||||||||
Share-based compensation | 20,030 | 8,212 | ||||||||||
Unrealized loss on investments | 1,217 | 499 | ||||||||||
Net operating loss carry forwards | 114,548 | 43,198 | ||||||||||
Unearned premium reserve | 4,414 | 1,810 | ||||||||||
Other | 8,785 | 3,602 | ||||||||||
Total gross deferred tax assets | 151,397 | 58,306 | ||||||||||
Less: valuation allowance | (140,236 | ) | (53,730 | ) | ||||||||
Total deferred tax assets | 11,161 | 4,576 | ||||||||||
Deferred tax liability | ||||||||||||
Capitalized software | (7,967 | ) | (3,266 | ) | ||||||||
Intangible assets | (390 | ) | (137 | ) | ||||||||
Deferred acquisition costs | (2,985 | ) | (1,224 | ) | ||||||||
Other | (209 | ) | (86 | ) | ||||||||
Total deferred tax liabilities | (11,551 | ) | (4,713 | ) | ||||||||
Net deferred income tax liability | $ | (390 | ) | $ | (137 | ) | ||||||
December 31, 2013 | ||||||||||||
Gross | Tax Effected | |||||||||||
Deferred tax asset | (In Thousands) | |||||||||||
Capitalized start-up costs | $ | 2,579 | $ | 903 | ||||||||
Share-based compensation | 14,701 | 5,990 | ||||||||||
Unrealized loss on investments | 7,047 | 2,694 | ||||||||||
Net operating loss carry forwards | 65,276 | 24,602 | ||||||||||
Other | 10,118 | 3,760 | ||||||||||
Total gross deferred tax assets | 99,721 | 37,949 | ||||||||||
Less: valuation allowance | (94,497 | ) | (35,778 | ) | ||||||||
Total deferred tax assets | 5,224 | 2,171 | ||||||||||
Deferred tax liability | ||||||||||||
Capitalized software | (5,008 | ) | (2,095 | ) | ||||||||
Intangible assets | (390 | ) | (133 | ) | ||||||||
Other | (216 | ) | (76 | ) | ||||||||
Total deferred tax liabilities | (5,614 | ) | (2,304 | ) | ||||||||
Net deferred income tax liability | $ | (390 | ) | $ | (133 | ) |
Software_and_Equipment_Tables
Software and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Property, Plant and Equipment [Abstract] | ||||||||
Schedule of Equipment and Software | Software and equipment, net of accumulated amortization and depreciation, as of December 31, 2014 and December 31, 2013, consists of the following: | |||||||
31-Dec-14 | 31-Dec-13 | |||||||
(In Thousands) | ||||||||
Software | $ | 11,608 | $ | 14,140 | ||||
Equipment | 1,175 | 542 | ||||||
Leasehold improvements | 973 | 141 | ||||||
Subtotal | 13,756 | 14,823 | ||||||
Accumulated amortization and depreciation | (1,950 | ) | (5,947 | ) | ||||
Software and equipment, net | $ | 11,806 | $ | 8,876 | ||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 12 Months Ended | |||||
Dec. 31, 2014 | ||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||
Schedule of Indefinite-Lived Intangible Assets | Intangible assets and goodwill consist of identifiable intangible assets and goodwill we purchased in connection with the acquisition of our insurance subsidiaries, and at December 31, 2014 and December 31, 2013, were as follows for both years: | |||||
Expected Lives | ||||||
Goodwill | $ | 3,244 | Indefinite | |||
State licenses | 260 | Indefinite | ||||
GSE applications | 130 | Indefinite | ||||
Total intangible assets and goodwill | $ | 3,634 | ||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Schedule of Future Minimum Lease Payments | Management expects that, in the normal course of business, as of December 31, 2014, future minimum lease payments under this lease will be as follows: | |||
Years ending December 31, | (In Thousands) | |||
2015 | $ | 1,690 | ||
2016 | 1,741 | |||
2017 | 1,488 | |||
Totals | $ | 4,919 | ||
Statutory_Information_Tables
Statutory Information (Tables) | 12 Months Ended | |||||||||||
Dec. 31, 2014 | ||||||||||||
Insurance [Abstract] | ||||||||||||
Schedule of Risk to Capital | The risk-to-capital calculation for each of our insurance subsidiaries, as well as our combined risk-to-capital calculation, as of December 31, 2014, is presented below. | |||||||||||
As of December 31, 2014 | NMIC | Re One | Combined | |||||||||
(In Thousands) | ||||||||||||
Primary risk-in-force (1) | ||||||||||||
Direct | $ | 801,353 | $ | — | $ | 801,353 | ||||||
Assumed | — | 69,396 | 69,396 | |||||||||
Ceded | (69,396 | ) | — | (69,396 | ) | |||||||
Total primary risk-in-force | 731,957 | 69,396 | 801,353 | |||||||||
Pool risk-in-force (2) | ||||||||||||
Direct | 93,090 | — | 93,090 | |||||||||
Assumed | — | 24,705 | 24,705 | |||||||||
Ceded | (24,705 | ) | — | (24,705 | ) | |||||||
Total pool risk-in-force | 68,385 | 24,705 | 93,090 | |||||||||
Total risk-in-force | 800,342 | 94,101 | 894,443 | |||||||||
Statutory policyholders' surplus | 223,119 | 13,619 | 236,738 | |||||||||
Statutory contingency reserve | 7,945 | 1,456 | 9,401 | |||||||||
Total statutory policyholders' position | 231,064 | 15,075 | 246,139 | |||||||||
Risk-to-Capital (3) | 3.5:1 | 6.2:1 | 3.6:1 | |||||||||
(1) | Our net risk in force includes both primary and pool risk in force, and excludes risk on policies that are currently in default and for which loss reserves have been established. | |||||||||||
(2) | Pool risk-in-force as shown in the table above is equal to the aggregate stop loss less a deductible. | |||||||||||
(3) | Represents total risk-in-force divided by statutory policyholders' position which is the metric by which the majority of state insurance regulators will assess our capital adequacy. Additionally, pursuant to the 2013 Fannie Mae pool agreement, we are required to maintain the greater of (a) the risk-to-capital requirements outlined in Fannie Mae's January 2013 approval letter or (b) a risk-to-capital ratio of 18:1 on primary business plus statutory capital equal to the amount of net risk-in-force of the pool. | |||||||||||
NMIC and Re One's combined statutory net income, statutory surplus and contingency reserve as of and for each of the years in the three-year period ended December 31, 2014 were as follows: | ||||||||||||
December 31, | ||||||||||||
2014 | 2013 | 2012 | ||||||||||
(In Thousands) | ||||||||||||
Statutory net loss | $ | (47,961 | ) | $ | (33,307 | ) | $ | (18 | ) | |||
Statutory surplus | 236,738 | 189,698 | 220,004 | |||||||||
Contingency reserve | 9,401 | 2,314 | — | |||||||||
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||||||
Schedule of Quarterly Financial Information | ||||||||||||||||||||
2014 Quarters | 2014 | |||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||
(In Thousands, except share data) | ||||||||||||||||||||
Net premiums written | $ | 5,178 | $ | 5,051 | $ | 9,661 | $ | 14,139 | $ | 34,029 | ||||||||||
Net premiums earned | 1,904 | 2,093 | 3,900 | 5,510 | 13,407 | |||||||||||||||
Net investment income | 1,489 | 1,468 | 1,342 | 1,319 | 5,618 | |||||||||||||||
Net realized investment gains (losses) | — | — | 134 | 63 | 197 | |||||||||||||||
Gain (loss) from change in fair value of warrant liability | 817 | 952 | 1,240 | (60 | ) | 2,949 | ||||||||||||||
Gain from settlement of warrants | 37 | — | — | — | 37 | |||||||||||||||
Insurance claims and claims expenses | — | 28 | (26 | ) | 81 | 83 | ||||||||||||||
Amortization of deferred policy acquisition costs | 19 | 42 | 47 | 265 | 373 | |||||||||||||||
Underwriting and operating expenses | 19,283 | 18,595 | 17,848 | 17,318 | 73,044 | |||||||||||||||
Net loss | (15,055 | ) | (12,855 | ) | (10,976 | ) | (10,020 | ) | (48,906 | ) | ||||||||||
Loss per share (1) | ||||||||||||||||||||
Basic and diluted loss per share | $ | (0.26 | ) | $ | (0.22 | ) | $ | (0.19 | ) | $ | (0.17 | ) | $ | (0.84 | ) | |||||
Weighted average common shares outstanding | 58,061,299 | 58,289,801 | 58,363,334 | 58,406,574 | 58,281,425 | |||||||||||||||
2013 Quarters | 2013 | |||||||||||||||||||
First | Second | Third | Fourth | Year | ||||||||||||||||
(In Thousands, except share data) | ||||||||||||||||||||
Net premiums written | $ | — | $ | 1 | $ | 482 | $ | 3,058 | $ | 3,541 | ||||||||||
Net premiums earned | — | 1 | 482 | 1,612 | 2,095 | |||||||||||||||
Net investment income | 410 | 1,407 | 1,519 | 1,472 | 4,808 | |||||||||||||||
Net realized investment gains (losses) | 28 | 452 | (308 | ) | 14 | 186 | ||||||||||||||
Gain (loss) from change in fair value of warrant liability | 35 | (1,115 | ) | 469 | (918 | ) | (1,529 | ) | ||||||||||||
Insurance claims and claims expenses | — | — | — | — | — | |||||||||||||||
Amortization of deferred policy acquisition costs | — | — | — | 1 | 1 | |||||||||||||||
Underwriting and operating expenses | 12,426 | 17,019 | 16,035 | 15,263 | 60,743 | |||||||||||||||
Net loss | (11,953 | ) | (16,274 | ) | (13,873 | ) | (13,084 | ) | (55,184 | ) | ||||||||||
Loss per share (1) | ||||||||||||||||||||
Basic and diluted loss per share | $ | (0.22 | ) | $ | (0.29 | ) | $ | (0.25 | ) | $ | (0.23 | ) | $ | (0.99 | ) | |||||
Weighted average common shares outstanding | 55,500,100 | 55,629,932 | 55,637,480 | 57,238,730 | 56,005,326 | |||||||||||||||
-1 | Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of quarterly per share data may not equal the per share data for the year. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Details) (USD $) | 0 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended |
In Millions, except Share data, unless otherwise specified | Apr. 17, 2012 | Apr. 30, 2012 | Nov. 08, 2013 | Nov. 30, 2013 |
Business Acquisition [Line Items] | ||||
Proceeds from issuance of common stock, net of stock issuance costs | $510 | |||
MAC Financial Holding Corporation and Subsidiaries [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash, common stock and warrants issued for acquisition | 8.5 | |||
Liabilities assumed in acquisition | $1.30 | |||
Common Class A [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock offered and sold, (in shares) | 55,000,000 | |||
IPO [Member] | ||||
Business Acquisition [Line Items] | ||||
Common stock offered and sold, (in shares) | 2,100,000 | 2,400,000 |
Summary_of_Accounting_Policies2
Summary of Accounting Policies (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
customer | |||
Finite-Lived Intangible Assets [Line Items] | |||
Number of customers | 2 | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5,839,909 | 5,303,394 | 4,414,165 |
Minimum [Member] | Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 3 years | ||
Minimum [Member] | Equipment [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 3 years | ||
Maximum [Member] | Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 7 years | ||
Maximum [Member] | Equipment [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Estimated useful life | 7 years | ||
Geographic Concentration Risk [Member] | Sales Revenue, Net [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Concentration risk | 18.00% |
Investments_Fair_Values_and_Gr
Investments - Fair Values and Gross Unrealized Gains and Losses on Investments (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $337,718 | $416,135 |
Gross Unrealized Gains | 1,139 | 272 |
Gross Unrealized (Losses) | -2,356 | -7,319 |
Fair Value | 336,501 | 409,088 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 68,911 | 108,067 |
Gross Unrealized Gains | 7 | 0 |
Gross Unrealized (Losses) | -573 | -1,461 |
Fair Value | 68,345 | 106,606 |
Municipal debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 12,009 | 12,017 |
Gross Unrealized Gains | 27 | 1 |
Gross Unrealized (Losses) | -73 | -85 |
Fair Value | 11,963 | 11,933 |
Corporate debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 200,358 | 221,899 |
Gross Unrealized Gains | 883 | 157 |
Gross Unrealized (Losses) | -1,456 | -4,799 |
Fair Value | 199,785 | 217,257 |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 56,440 | 74,152 |
Gross Unrealized Gains | 222 | 114 |
Gross Unrealized (Losses) | -254 | -974 |
Fair Value | $56,408 | $73,292 |
Investments_Scheduled_Maturiti
Investments - Scheduled Maturities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Due in one year or less | $6,110 | $0 |
Amortized Cost, Due after one through five years | 195,492 | 260,855 |
Amortized Cost, Due after five through ten years | 54,360 | 65,687 |
Amortized Cost, Due after ten years | 25,316 | 15,441 |
Amortized Cost, Total Investments | 337,718 | 416,135 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract] | ||
Fair Value, Due in one year or less | 6,125 | 0 |
Fair Value, Due after one through five years | 194,472 | 257,501 |
Fair Value, Due after five through ten years | 53,891 | 63,440 |
Fair Value Due after ten years | 25,605 | 14,855 |
Fair Value | 336,501 | 409,088 |
Asset-backed securities [Member] | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Total Investments | 56,440 | 74,152 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract] | ||
Fair Value | 56,408 | 73,292 |
Total bonds [Member] | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Total Investments | 337,718 | 416,135 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date [Abstract] | ||
Fair Value | $336,501 | $409,088 |
Investments_Narrative_Details
Investments - Narrative (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | $2,356,000 | $7,319,000 | |
Unrealized losses for a period of 12 months or greater | 1,689,000 | 0 | |
Gross realized gains | 700,000 | 600,000 | 0 |
Gross realized losses | 500,000 | 400,000 | 0 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Gross unrealized losses | 573,000 | 1,461,000 | |
Unrealized losses for a period of 12 months or greater | 540,000 | 0 | |
Cash and investments held with various state insurance departments | $7,000,000 | $7,000,000 |
Investments_Unrealized_Losses_
Investments - Unrealized Losses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | security | security |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities, Less than 12 Months | 34 | 79 |
Fair Value, Less than 12 Months | $81,408 | $357,460 |
Unrealized Losses, Less than 12 Months | -667 | -7,319 |
Number of Securities, 12 Months or Greater | 37 | 0 |
Fair Value, 12 Months or Greater | 137,432 | 0 |
Unrealized Losses, 12 Months or Greater | -1,689 | 0 |
Number of Securities, Total | 71 | 79 |
Fair Value, Total | 218,840 | 357,460 |
Unrealized Losses, Total | -2,356 | -7,319 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities, Less than 12 Months | 4 | 19 |
Fair Value, Less than 12 Months | 7,228 | 106,606 |
Unrealized Losses, Less than 12 Months | -33 | -1,461 |
Number of Securities, 12 Months or Greater | 10 | 0 |
Fair Value, 12 Months or Greater | 49,884 | 0 |
Unrealized Losses, 12 Months or Greater | -540 | 0 |
Number of Securities, Total | 14 | 19 |
Fair Value, Total | 57,112 | 106,606 |
Unrealized Losses, Total | -573 | -1,461 |
Municipal debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities, Less than 12 Months | 1 | 2 |
Fair Value, Less than 12 Months | 3,232 | 4,915 |
Unrealized Losses, Less than 12 Months | -18 | -85 |
Number of Securities, 12 Months or Greater | 1 | 0 |
Fair Value, 12 Months or Greater | 1,695 | 0 |
Unrealized Losses, 12 Months or Greater | -55 | 0 |
Number of Securities, Total | 2 | 2 |
Fair Value, Total | 4,927 | 4,915 |
Unrealized Losses, Total | -73 | -85 |
Corporate debt securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities, Less than 12 Months | 26 | 47 |
Fair Value, Less than 12 Months | 60,334 | 187,714 |
Unrealized Losses, Less than 12 Months | -559 | -4,799 |
Number of Securities, 12 Months or Greater | 22 | 0 |
Fair Value, 12 Months or Greater | 65,806 | 0 |
Unrealized Losses, 12 Months or Greater | -897 | 0 |
Number of Securities, Total | 48 | 47 |
Fair Value, Total | 126,140 | 187,714 |
Unrealized Losses, Total | -1,456 | -4,799 |
Asset-backed securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of Securities, Less than 12 Months | 3 | 11 |
Fair Value, Less than 12 Months | 10,614 | 58,225 |
Unrealized Losses, Less than 12 Months | -57 | -974 |
Number of Securities, 12 Months or Greater | 4 | 0 |
Fair Value, 12 Months or Greater | 20,047 | 0 |
Unrealized Losses, 12 Months or Greater | -197 | 0 |
Number of Securities, Total | 7 | 11 |
Fair Value, Total | 30,661 | 58,225 |
Unrealized Losses, Total | ($254) | ($974) |
Investments_Net_Investment_Inc
Investments - Net Investment Income (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Schedule of Available-for-sale Securities [Line Items] | |||
Investment income | $6,135 | $5,291 | $6 |
Investment expenses | -517 | -483 | 0 |
Net investment income | 5,618 | 4,808 | 6 |
Fixed maturities [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment income | 6,127 | 5,289 | 4 |
Cash equivalents [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment income | 0 | 0 | 2 |
Other [Member] | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment income | $8 | $2 | $0 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Assets and Liabilities at Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $336,501 | $409,088 |
Warrant liability | 3,372 | 6,371 |
Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 103,021 | 55,929 |
Total assets | 439,522 | 465,017 |
Warrant liability | 3,372 | 6,371 |
Total liabilities | 3,372 | 6,371 |
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 103,021 | 55,929 |
Total assets | 142,197 | 105,413 |
Warrant liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 297,325 | 359,604 |
Warrant liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 0 | 0 |
Warrant liability | 3,372 | 6,371 |
Total liabilities | 3,372 | 6,371 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 68,345 | 106,606 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 68,345 | 106,606 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 39,176 | 49,484 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 29,169 | 57,122 |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Municipal debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 11,963 | 11,933 |
Municipal debt securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 11,963 | 11,933 |
Municipal debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Municipal debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 11,963 | 11,933 |
Municipal debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Corporate debt securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 199,785 | 217,257 |
Corporate debt securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 199,785 | 217,257 |
Corporate debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Corporate debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 199,785 | 217,257 |
Corporate debt securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Asset-backed securities [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 56,408 | 73,292 |
Asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 56,408 | 73,292 |
Asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 0 | 0 |
Asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | 56,408 | 73,292 |
Asset-backed securities [Member] | Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $0 | $0 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Rollforward of Level 3 (Details) (Significant Unobservable Inputs (Level 3) [Member], Warrant Liability [Member], USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Significant Unobservable Inputs (Level 3) [Member] | Warrant Liability [Member] | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $6,371 | $4,842 |
Change in fair value of warrant liability included in earnings | -2,949 | 1,529 |
Gain on settlement of warrants | -37 | |
Issuance of common stock on warrant exercise | -13 | |
Ending balance | $3,372 | $6,371 |
Fair_Value_of_Financial_Instru4
Fair Value of Financial Instruments - Narrative (Details) (Significant Unobservable Inputs (Level 3) [Member], USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Volatility Assumption | 37.40% |
Warrant Liability [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share price (in dollars per share) | 9.13 |
Risk free rate | 1.88% |
Expected term | 6 years 5 months 10 days |
Expected dividend rate | 0.00% |
Reserves_for_Insurance_Claims_2
Reserves for Insurance Claims and Claims Expenses Narrative (Details) (USD $) | 12 Months Ended |
In Millions, unless otherwise specified | Dec. 31, 2014 |
loan | |
Insurance [Abstract] | |
Number of loans in pool past due 60 days or more | 30 |
Risk in Force of loans in pool past due 60 days or more | $1.70 |
Deductible on policy | $10.30 |
Less than, LTV ratio | 0.8 |
Reserves_for_Insurance_Claims_3
Reserves for Insurance Claims and Claims Expenses Reconciliation of Reserve Balances for Insurance Claims Expenses (Details) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Reserve at beginning of period | $0 | $0 |
Claims and claim expenses incurred: | ||
Current year | 83 | 0 |
Prior years | 0 | 0 |
Total claims incurred | 83 | 0 |
Claims and claim expenses paid: | ||
Current year | 0 | 0 |
Prior years | 0 | 0 |
Total claims paid | 0 | 0 |
Reserve at end of period | $83 | $0 |
Warrants_Details
Warrants (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2012 | |
Line of Credit Facility [Line Items] | ||||||||
Warrants issued (in shares) | 992,000 | |||||||
Right to purchase, number of shares per warrant | 1 | |||||||
Exercise price of warrants (in dollars per warrant) | $10 | |||||||
Warrants value | $5,100,000 | |||||||
Warrants exercised | 7,790 | |||||||
Gain from settlement of warrants | $0 | $0 | $0 | $37,000 | $37,000 | $0 | $0 | |
Common Class A [Member] | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Common stock, shares issued | 58,428,548 | 1,115 | 58,428,548 | 58,052,480 |
ShareBased_Compensation_Stock_
Share-Based Compensation - Stock Option Activity (Details) (The 2012 Stock Incentive Plan [Member], USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
The 2012 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Options beginning balance (in shares) | 3,062 | 2,547 |
Options granted (in shares) | 780 | 532 |
Less: Options exercised (in shares) | -109 | |
Less: Options forfeited (in shares) | -87 | -15 |
Less: Options canceled (in shares) | -2 | |
Less: Options expired (in shares) | -16 | |
Options ending balance (in shares) | 3,630 | 3,062 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||
Options beginning balance (in dollars per share) | $3.98 | $3.86 |
Options granted (in dollars per share) | $4.85 | $4.57 |
Less: Options exercised | $3.85 | |
Less: Options forfeited (in dollars per share) | $4.47 | $3.84 |
Less: Options expired (in dollars per share) | $4.25 | |
Less: Options canceled (in dollars per share) | $3.84 | |
Options ending balance (in dollars per share) | $4.16 | $3.98 |
Weighted Average Grant Date Fair Value per Share | ||
Options beginning balance (in dollars per share) | $10.31 | $10 |
Options granted (in dollars per share) | $12.03 | $11.78 |
Less: Options exercised | $10 | |
Less: Options forfeited (in dollars per share) | $11.35 | $10 |
Less: Options canceled (in dollars per share) | $10 | |
Less: Options expired (in dollars per share) | $10.93 | |
Options beginning balance (in dollars per share) | $10.66 | $10.31 |
ShareBased_Compensation_Stock_1
Share-Based Compensation - Stock Options, Valuation Assumptions (Details) (The 2012 Stock Incentive Plan [Member], Stock Options [Member]) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 6 years | 6 years |
Dividend yield | 0.00% | 0.00% |
Expected stock price volatility | 39.00% | 39.00% |
Projected forfeiture rate | 5.00% | 1.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 1.90% | 0.98% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.01% | 1.12% |
ShareBased_Compensation_Restri
Share-Based Compensation - Restricted Stock Units Activity (Details) (The 2012 Stock Incentive Plan [Member], Restricted Stock Units [Member], USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
The 2012 Stock Incentive Plan [Member] | Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Restricted Stock beginning balance (in shares) | 1,242 | 1,429 |
Restricted stock units granted (in shares) | 373 | 76 |
Less: Restricted stock units vested (in shares) | -360 | -263 |
Less: Restricted stock units forfeited (in shares) | -46 | 0 |
Restricted Stock beginning balance (in shares) | 1,209 | 1,242 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Restricted Stock beginning balance (in dollars per share) | $7.75 | $7.35 |
Restricted Stock Units Granted (in dollars per share) | $11.52 | $12.03 |
Less: Restricted Stock Units Vested (in dollars per share) | $9.53 | $6.79 |
Less: Restricted Stock Units Forfeited (in dollars per share) | $10.14 | $0 |
Restricted Stock ending balance (in dollars per share) | $8.90 | $7.75 |
ShareBased_Compensation_Restri1
Share-Based Compensation - Restricted Stock Units, Valuation Assumptions (Details) (The 2012 Stock Incentive Plan [Member], Restricted Stock Units [Member]) | 12 Months Ended |
Dec. 31, 2012 | |
The 2012 Stock Incentive Plan [Member] | Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life | 5 years |
Risk free interest rate | 0.86% |
Dividend yield | 0.00% |
Expected stock price volatility | 39.00% |
Projected forfeiture rate | 1.00% |
ShareBased_Compensation_Narrat
Share-Based Compensation - Narrative (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||||
Dec. 31, 2014 | Feb. 28, 2013 | Apr. 16, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | 8-May-14 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Dividends | $0 | |||||
Employer matching contribution, percent of match | 100.00% | |||||
Employer matching contribution, percent of employees' gross pay | 4.00% | |||||
Contribution amount | 900,000 | |||||
The 2012 Stock Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to be reserved for issuance (in shares) | 5,500,000 | |||||
Number of exercises | 109,000 | |||||
Number of options vested (in shares) | 1,742,822 | |||||
Weighted average exercise price for options vested (in dollars per share) | $10.20 | |||||
Weighted average remaining contractual term | 7 years 5 months 25 days | |||||
Options vested aggregate value | 0 | |||||
Weighted average remaining contractual life of options outstanding | 7 years 10 months 17 days | |||||
Total unrecognized compensation cost related to non-vested stock options | 2,400,000 | |||||
Compensation related to non-vested awards, weighted-average period for recognition | 1 year 3 months 10 days | |||||
The 2012 Stock Incentive Plan [Member] | Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to be reserved for issuance (in shares) | 3,850,000 | |||||
Expiration period | 10 years | |||||
Vesting period | 3 years | |||||
The 2012 Stock Incentive Plan [Member] | Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to be reserved for issuance (in shares) | 1,650,000 | |||||
Expiration period | 10 years | |||||
Compensation related to non-vested awards, weighted-average period for recognition | 1 year 2 months 5 days | |||||
Modification to vesting terms, number of restricted stock units affected (in shares) | 400,000 | |||||
Restricted stock units outstanding (in shares) | 1,209,000 | 1,242,000 | 1,429,000 | |||
Vesting percentage subject to both market and service conditions, annual vesting percentage | 50.00% | |||||
Number of simulations | 150,000 | |||||
Weighted average remaining contractual life of RSUs outstanding | 7 years 11 months | |||||
Total unrecognized compensation cost related to non-vested restricted stock units | $3,000,000 | $4,300,000 | ||||
NMIH 2014 Omnibus Incentive Plan [Member] | Common Class A [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized to be reserved for issuance (in shares) | 4,000,000 | |||||
Subject to Market and Service Conditions [Member] | The 2012 Stock Incentive Plan [Member] | Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units outstanding (in shares) | 500,000 | |||||
Subject to Service Conditions [Member] | The 2012 Stock Incentive Plan [Member] | Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units outstanding (in shares) | 700,000 |
Income_Taxes_Components_of_Pro
Income Taxes - Components of Provision for Income Taxes (Benefits) (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Current | ($2,390) | $0 | $0 |
Deferred | 4 | 0 | 0 |
Total income tax benefit | ($2,386) | $0 | $0 |
Income_Taxes_Income_Tax_Reconc
Income Taxes - Income Tax Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
Loss on impairment | 0.00% | 0.00% | -1.48% |
Prior year adjustment | 0.00% | 3.52% | 1.66% |
Other | 1.07% | 1.66% | -1.00% |
Valuation allowance | -31.42% | -40.18% | -28.00% |
Purchase accounting adjustment | 0.00% | 0.00% | -6.18% |
Effective income tax rate | 4.65% | 0.00% | 0.00% |
Income_Taxes_Deferred_Tax_Asse
Income Taxes - Deferred Tax Asset (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred Tax Asset, Gross [Abstract] | ||
Capitalized start-up costs | $2,403 | $2,579 |
Share-based compensation | 20,030 | 14,701 |
Unrealized loss on investments | 1,217 | 7,047 |
Net operating loss carry forwards | 114,548 | 65,276 |
Unearned premium reserve | 4,414 | |
Other | 8,785 | 10,118 |
Total gross deferred tax assets | 151,397 | 99,721 |
Less: valuation allowance | -140,236 | -94,497 |
Total deferred tax assets | 11,161 | 5,224 |
Deferred tax asset | ||
Capitalized start-up costs | 985 | 903 |
Share-based compensation | 8,212 | 5,990 |
Unrealized loss on investments | 499 | 2,694 |
Net operating loss carry forwards | 43,198 | 24,602 |
Unearned premium reserve | 1,810 | |
Other | 3,602 | 3,760 |
Total gross deferred tax assets | 58,306 | 37,949 |
Less: valuation allowance | -53,730 | -35,778 |
Total deferred tax assets | 4,576 | 2,171 |
Deferred Tax Liability, Gross [Abstract] | ||
Capitalized software | -7,967 | -5,008 |
Intangible assets | -390 | -390 |
Deferred acquisition costs | -2,985 | |
Other | -209 | -216 |
Total deferred tax liabilities | -11,551 | -5,614 |
Net deferred income tax liability | -390 | -390 |
Deferred tax liability | ||
Capitalized software | -3,266 | -2,095 |
Intangible assets | -137 | -133 |
Deferred acquisition costs | -1,224 | |
Other | -86 | -76 |
Total deferred tax liabilities | -4,713 | -2,304 |
Net deferred income tax liability | ($137) | ($133) |
Income_Taxes_Narrative_Details
Income Taxes - Narrative (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Contingency [Line Items] | |||
Income tax benefit | ($2,386,000) | $0 | $0 |
Federal statutory income tax rate | 35.00% | 35.00% | 35.00% |
Effective income tax rate | 4.65% | 0.00% | 0.00% |
Income tax expense (benefit) | -2,390,000 | 0 | 0 |
Deferred tax liabilities, gross | 137,000 | 133,000 | |
Taxes paid related to net share settlement of equity awards | 2,100,000 | 1,500,000 | |
Loss carry forwards subject to expiration | 7,300,000 | ||
Valuation allowance | 53,730,000 | 35,778,000 | |
Annual Limitation Through Year Two [Member] | |||
Income Tax Contingency [Line Items] | |||
Loss carry forwards subject to expiration | 800,000 | ||
Annual Limitations After Year Two [Member] | |||
Income Tax Contingency [Line Items] | |||
Loss carry forwards subject to expiration | 300,000 | ||
Domestic Tax Authority [Member] | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | 114,500,000 | ||
State and Local Jurisdiction [Member] | |||
Income Tax Contingency [Line Items] | |||
Operating loss carryforwards | $36,000,000 |
Software_and_Equipment_Details
Software and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $13,756 | $14,823 |
Accumulated amortization and depreciation | -1,950 | -5,947 |
Software and equipment, net | 11,806 | 8,876 |
Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | 11,608 | 14,140 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | 1,175 | 542 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property plant and equipment | $973 | $141 |
Software_and_Equipment_Narrati
Software and Equipment - Narrative (Details) (USD $) | 12 Months Ended | 1 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 30, 2014 |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization | $5.80 | $5.90 | |
Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Software acquired, written off | $9.80 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Indefinite-lived Intangible Assets [Line Items] | |||
Goodwill | $3,244,000 | $3,244,000 | |
Intangible assets and goodwill | 3,634,000 | 3,634,000 | |
Loss on impairment | 0 | 0 | 1,200,000 |
State licenses [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets | 260,000 | 260,000 | |
GSE Approvals [Member] | |||
Indefinite-lived Intangible Assets [Line Items] | |||
Intangible assets | $130,000 | $130,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Narrative (Details) (USD $) | 0 Months Ended | 12 Months Ended | ||
Jul. 01, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Oct. 31, 2013 | |
sqft | ||||
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | ||||
Maximum risk to capital ratio | 25 | |||
Office facility lease, term of contract | 2 years | |||
Additional square feet of furnished office space under amended lease terms | 23,000 | |||
Rent expense | $1,600,000 | $800,000 | ||
Fannie Mae and Freddie Mac [Member] | ||||
Compliance with Regulatory Capital Requirements for Mortgage Companies [Line Items] | ||||
Capital required to be capitalized | $150,000,000 | |||
Maximum risk to capital ratio | 15 | |||
Minimum capitalization requirement period | 3 years |
Commitments_and_Contingencies_2
Commitments and Contingencies - Future Minimum Lease Payments (Details) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $1,690 |
2016 | 1,741 |
2017 | 1,488 |
Totals | $4,919 |
Common_Stock_Offerings_Details
Common Stock Offerings (Details) (USD $) | 0 Months Ended | 1 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Apr. 17, 2012 | Nov. 08, 2013 | Nov. 14, 2013 | Nov. 30, 2013 |
Class of Stock [Line Items] | ||||
Proceeds from issuance of common stock, net of stock issuance costs | $510 | |||
Common Class A [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock offered and sold, (in shares) | 55,000,000 | |||
IPO [Member] | ||||
Class of Stock [Line Items] | ||||
Common stock offered and sold, (in shares) | 2,100,000 | 2,400,000 | ||
Maximum number of common stock shares granted to underwriters of IPO (in shares) | 315,000 | |||
Maximum number of common stock shares granted to underwriters of IPO, exercise price (in dollars per share) | $13 | |||
Proceeds from issuance initial public offering | 31.4 | |||
Underwriting fee and other offering expense | $28 |
Statutory_Information_Statutor
Statutory Information - Statutory Income (Details) (NMic and Re one Combined [Member], USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
NMic and Re one Combined [Member] | |||
Statutory Accounting Practices [Line Items] | |||
Statutory net loss | ($47,961) | ($33,307) | ($18) |
Statutory surplus | 236,738 | 189,698 | 220,004 |
Contingency reserve | $9,401 | $2,314 | $0 |
Statutory_Information_Narrativ
Statutory Information - Narrative (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
In Thousands, unless otherwise specified | state | policy | |||
Statutory Accounting Practices [Line Items] | |||||
Number of states which require minimum amount of statutory capital relative to risk in force | 15 | ||||
Risk-to-capital | 25 | ||||
Required risk-to-capital ratio on agreements per GSE approval | 15 | ||||
Mortgage insurance, percentage of indebtedness on single loan | 25.00% | ||||
Number of Policies in Force | 22 | ||||
Shareholders' equity | $426,958 | $463,217 | $488,748 | ($1,349) | [1] |
Investment in subsidiaries, at equity in net assets | 179,000 | ||||
Ordinary dividends, restriction with regards to capital surplus | 10.00% | ||||
NMIC [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Risk-to-capital | 3.5 | 0.5 | |||
Mortgage Insurance Risk in Force | 800,342 | 36,500 | |||
Subsidiaries [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Shareholders' equity | $252,000 | ||||
WISCONSIN [Member] | |||||
Statutory Accounting Practices [Line Items] | |||||
Risk-to-capital | 25 | ||||
[1] | At inception, we issued 100 common shares with a par value of $0.01 to FBR & Co. in consideration of their investment of $1 in the Company, which are not visible in this schedule due to rounding. |
Statutory_Information_Risk_to_
Statutory Information - Risk to Capital (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
In Thousands, unless otherwise specified | ||||
NMIC [Member] | ||||
Primary risk-in-force | ||||
Direct | $801,353 | [1] | ||
Assumed | 0 | [1] | ||
Ceded | -69,396 | [1] | ||
Total primary risk-in-force | 731,957 | [1] | ||
Pool risk-in-force | ||||
Direct | 93,090 | [2] | ||
Assumed | 0 | [2] | ||
Ceded | -24,705 | [2] | ||
Total pool risk-in-force | 68,385 | [2] | ||
Total risk-in-force | 800,342 | 36,500 | ||
Total statutory policyholders' position | 223,119 | |||
Statutory contingency reserve | 7,945 | |||
Total statutory policyholders' position | 231,064 | |||
Risk-to-Capital | 3.5 | [3] | ||
NMI Re One [Member] | ||||
Primary risk-in-force | ||||
Direct | 0 | [1] | ||
Assumed | 69,396 | [1] | ||
Ceded | 0 | [1] | ||
Total primary risk-in-force | 69,396 | [1] | ||
Pool risk-in-force | ||||
Direct | 0 | [2] | ||
Assumed | 24,705 | [2] | ||
Ceded | 0 | [2] | ||
Total pool risk-in-force | 24,705 | [2] | ||
Total risk-in-force | 94,101 | |||
Total statutory policyholders' position | 13,619 | |||
Statutory contingency reserve | 1,456 | |||
Total statutory policyholders' position | 15,075 | |||
Risk-to-Capital | 6.2 | [3] | ||
NMic and Re one Combined [Member] | ||||
Primary risk-in-force | ||||
Direct | 801,353 | [1] | ||
Assumed | 69,396 | [1] | ||
Ceded | -69,396 | [1] | ||
Total primary risk-in-force | 801,353 | [1] | ||
Pool risk-in-force | ||||
Direct | 93,090 | [2] | ||
Assumed | 24,705 | [2] | ||
Ceded | -24,705 | [2] | ||
Total pool risk-in-force | 93,090 | [2] | ||
Total risk-in-force | 894,443 | |||
Total statutory policyholders' position | 236,738 | 189,698 | 220,004 | |
Statutory contingency reserve | 9,401 | |||
Total statutory policyholders' position | $246,139 | |||
Risk-to-Capital | 3.6 | [3] | ||
[1] | Our net risk in force includes both primary and pool risk in force, and excludes risk on policies that are currently in default and for which loss reserves have been established. | |||
[2] | Pool risk-in-force as shown in the table above is equal to the aggregate stop loss less a deductible. | |||
[3] | Represents total risk-in-force divided by statutory policyholders' position which is the metric by which the majority of state insurance regulators will assess our capital adequacy. Additionally, pursuant to the 2013 Fannie Mae pool agreement, we are required to maintain the greater of (a) the risk-to-capital requirements outlined in Fannie Mae's January 2013 approval letter or (b) a risk-to-capital ratio of 18:1 on primary business plus statutory capital equal to the amount of net risk-in-force of the pool. |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Net premiums written | $14,139 | $9,661 | $5,051 | $5,178 | $3,058 | $482 | $1 | $0 | $34,029 | $3,541 | $0 | |||||
Net premiums earned | 5,510 | 3,900 | 2,093 | 1,904 | 1,612 | 482 | 1 | 0 | 13,407 | 2,095 | 0 | |||||
Net investment income | 1,319 | 1,342 | 1,468 | 1,489 | 1,472 | 1,519 | 1,407 | 410 | 5,618 | 4,808 | 6 | |||||
Net realized investment gains (losses) | 63 | 134 | 0 | 0 | 14 | -308 | 452 | 28 | 197 | 186 | 0 | |||||
Gain (loss) from change in fair value of warrant liability | -60 | 1,240 | 952 | 817 | -918 | 469 | -1,115 | 35 | 2,949 | -1,529 | 278 | |||||
Gain from settlement of warrants | 0 | 0 | 0 | 37 | 37 | 0 | 0 | |||||||||
Insurance claims and claims expenses | 81 | -26 | 28 | 0 | 0 | 0 | 0 | 0 | 83 | 0 | 0 | |||||
Amortization of deferred policy acquisition costs | 265 | 47 | 42 | 19 | 1 | 0 | 0 | 0 | 373 | 1 | 0 | |||||
Underwriting and operating expenses | 17,318 | 17,848 | 18,595 | 19,283 | 15,263 | 16,035 | 17,019 | 12,426 | 73,044 | 60,743 | ||||||
Net loss | ($10,020) | ($10,976) | ($12,855) | ($15,055) | ($13,084) | ($13,873) | ($16,274) | ($11,953) | ($48,906) | ($55,184) | ($27,491) | |||||
Loss per share | ||||||||||||||||
Basic and diluted loss per share (in dollars per share) | ($0.17) | ($0.19) | ($0.22) | ($0.26) | ($0.23) | [1] | ($0.25) | [1] | ($0.29) | [1] | ($0.22) | [1] | ($0.84) | ($0.99) | [1] | ($0.73) |
Weighted average common shares outstanding (in shares) | 58,406,574 | 58,363,334 | 58,289,801 | 58,061,299 | 57,238,730 | [1] | 55,637,480 | [1] | 55,629,932 | [1] | 55,500,100 | [1] | 58,281,425 | 56,005,326 | [1] | 37,909,936 |
[1] | Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of quarterly per share data may not equal the per share data for the year. |
SCHEDULE_I_SUMMARY_OF_INVESTME1
SCHEDULE I - SUMMARY OF INVESTMENTS- OTHER THAN INVESTMENTS IN RELATED PARTIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | $337,718 | $416,135 |
Fair Value | 336,501 | 409,088 |
Amount Reflected on Balance Sheet | 336,501 | |
U.S. Treasury securities and obligations of U.S. government agencies [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 68,911 | 108,067 |
Fair Value | 68,345 | 106,606 |
Amount Reflected on Balance Sheet | 68,345 | |
Municipal debt securities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 12,009 | 12,017 |
Fair Value | 11,963 | 11,933 |
Amount Reflected on Balance Sheet | 11,963 | |
Corporate debt securities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 200,358 | 221,899 |
Fair Value | 199,785 | 217,257 |
Amount Reflected on Balance Sheet | 199,785 | |
Asset-backed securities [Member] | ||
Summary of Investments, Other than Investments in Related Parties, Reportable Data [Line Items] | ||
Amortized Cost | 56,440 | 74,152 |
Fair Value | 56,408 | 73,292 |
Amount Reflected on Balance Sheet | $56,408 |
SCHEDULE_II_FINANCIAL_INFORMAT1
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Balance Sheet (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
In Thousands, unless otherwise specified | |||||
Assets | |||||
Cash and cash equivalents | $103,021 | $55,929 | $485,855 | $0 | |
Investment in subsidiaries, at equity in net assets | 179,000 | ||||
Accrued investment income | 1,707 | 2,001 | |||
Prepaid expenses | 2,054 | 1,519 | |||
Software and equipment, net | 11,806 | 8,876 | |||
Other assets | 509 | 63 | |||
Total assets | 463,265 | 481,219 | |||
Liabilities | |||||
Accounts payable and accrued expenses | 10,646 | 10,052 | |||
Warrant liability, at fair value | 3,372 | 6,371 | |||
Total liabilities | 36,307 | 18,002 | |||
Equity [Abstract] | |||||
Additional paid-in capital | 562,911 | 553,707 | |||
Accumulated other comprehensive loss, net of tax | -3,607 | -7,047 | |||
Accumulated deficit | -132,930 | -84,024 | |||
Total shareholders' equity | 426,958 | 463,217 | 488,748 | -1,349 | [1] |
Total liabilities and shareholders' equity | 463,265 | 481,219 | |||
Parent [Member] | |||||
Assets | |||||
Fixed maturities, available-for-sale, at fair value | 134,199 | 229,064 | |||
Cash and cash equivalents | 29,925 | 36,433 | 270,717 | 0 | |
Investment in subsidiaries, at equity in net assets | 251,880 | 193,242 | |||
Accrued investment income | 629 | 1,038 | |||
Prepaid expenses | 2,054 | 1,519 | |||
Due from affiliates, net | 9,949 | 10,565 | |||
Software and equipment, net | 11,806 | 7,574 | |||
Other assets | 509 | 61 | |||
Total assets | 440,951 | 479,496 | |||
Liabilities | |||||
Accounts payable and accrued expenses | 10,621 | 9,908 | |||
Warrant liability, at fair value | 3,372 | 6,371 | |||
Total liabilities | 13,993 | 16,279 | |||
Equity [Abstract] | |||||
Total liabilities and shareholders' equity | 440,951 | 479,496 | |||
Common Class A [Member] | |||||
Equity [Abstract] | |||||
Common stock - class A shares, $0.01 par value; 58,428,548 and 58,052,480 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively (250,000,000 shares authorized) | $584 | $581 | |||
[1] | At inception, we issued 100 common shares with a par value of $0.01 to FBR & Co. in consideration of their investment of $1 in the Company, which are not visible in this schedule due to rounding. |
SCHEDULE_II_FINANCIAL_INFORMAT2
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Balance Sheet Additional Information (Details) (Common Class A [Member], USD $) | Dec. 31, 2014 | Mar. 31, 2014 | Dec. 31, 2013 |
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |
Common stock, shares issued | 58,428,548 | 1,115 | 58,052,480 |
Common stock, shares outstanding | 58,428,548 | 58,052,480 | |
Common stock, shares authorized | 250,000,000 | 250,000,000 | |
Parent [Member] | |||
Common stock, par value (in dollars per share) | $0.01 | $0.01 | |
Common stock, shares issued | 58,428,548 | 58,052,480 | |
Common stock, shares outstanding | 58,428,548 | 58,052,480 | |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
SCHEDULE_II_FINANCIAL_INFORMAT3
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Income Statement (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Assets | |||||||||||
Net investment income | $1,319 | $1,342 | $1,468 | $1,489 | $1,472 | $1,519 | $1,407 | $410 | $5,618 | $4,808 | $6 |
Net realized investment gains | 63 | 134 | 0 | 0 | 14 | -308 | 452 | 28 | 197 | 186 | 0 |
Gain (loss) from change in fair value of warrant liability | -60 | 1,240 | 952 | 817 | -918 | 469 | -1,115 | 35 | 2,949 | -1,529 | 278 |
Gain from settlement of warrants | 0 | 0 | 0 | 37 | 37 | 0 | 0 | ||||
Total revenues | 22,208 | 5,560 | 284 | ||||||||
Expenses | |||||||||||
Other operating expenses | 17,318 | 17,848 | 18,595 | 19,283 | 15,263 | 16,035 | 17,019 | 12,426 | 73,044 | 60,743 | |
Total expenses | 73,500 | 60,744 | 27,775 | ||||||||
Loss before income taxes | -51,292 | -55,184 | -27,491 | ||||||||
Income tax benefit | -2,386 | 0 | 0 | ||||||||
Net loss | -10,020 | -10,976 | -12,855 | -15,055 | -13,084 | -13,873 | -16,274 | -11,953 | -48,906 | -55,184 | -27,491 |
Parent [Member] | |||||||||||
Assets | |||||||||||
Net investment income | 2,937 | 2,758 | 2 | ||||||||
Net realized investment gains | 67 | 188 | 0 | ||||||||
Gain (loss) from change in fair value of warrant liability | 2,949 | -1,529 | 278 | ||||||||
Gain from settlement of warrants | 37 | 0 | 0 | ||||||||
Total revenues | 5,990 | 1,417 | 280 | ||||||||
Expenses | |||||||||||
Other operating expenses | 18,817 | 24,319 | 26,575 | ||||||||
Total expenses | 18,817 | 24,319 | 26,575 | ||||||||
Equity in net loss of subsidiaries | -38,710 | -32,282 | -1,196 | ||||||||
Loss before income taxes | -51,537 | -55,184 | -27,491 | ||||||||
Income tax benefit | -2,631 | 0 | 0 | ||||||||
Net loss | ($48,906) | ($55,184) | ($27,491) |
SCHEDULE_II_FINANCIAL_INFORMAT4
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Cash Flow Statement (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities | |||
Net loss | ($48,906) | ($55,184) | ($27,491) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation expense | 9,180 | 10,367 | 6,115 |
Warrants issued in connection with line of credit | 0 | 0 | 1,620 |
(Gain) loss from change in fair value of warrant liability | -2,949 | 1,529 | -278 |
Gain from settlement of warrants | -37 | 0 | 0 |
Net realized investment gains | -197 | -186 | 0 |
Depreciation and other amortization | 8,080 | 8,116 | 3 |
Noncash intraperiod tax allocation | -2,386 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Accrued investment income | 294 | -2,001 | -6 |
Prepaid expenses | -535 | -1,102 | -234 |
Other assets | -446 | 46 | -78 |
Accounts payable and accrued expenses | 117 | 767 | 4,553 |
Net cash used in operating activities | -21,004 | -36,311 | -14,596 |
Cash flows from investing activities | |||
Purchase of fixed-maturity investments, available-for-sale | -60,462 | -559,875 | 0 |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 136,764 | 141,754 | 0 |
Purchase of software and equipment | -8,220 | -6,692 | -2,447 |
Acquisition of subsidiaries | 0 | 0 | -2,500 |
Net cash provided by (used in) investing activities | 68,082 | -419,949 | -9,809 |
Cash flows from financing activities | |||
Payments on line of credit | 0 | 0 | -205 |
Issuance of common stock | 1,097 | 27,912 | 510,465 |
Taxes paid related to net share settlement of equity awards | -1,083 | -1,578 | 0 |
Net cash provided by financing activities | 14 | 26,334 | 510,260 |
Net increase (decrease) in cash and cash equivalents | 47,092 | -429,926 | 485,855 |
Cash and cash equivalents, beginning of period | 55,929 | 485,855 | 0 |
Cash and cash equivalents, end of period | 103,021 | 55,929 | 485,855 |
Parent [Member] | |||
Cash flows from operating activities | |||
Net loss | -48,906 | -55,184 | -27,491 |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation expense | 9,180 | 10,367 | 6,115 |
Warrants issued in connection with line of credit | 0 | 0 | 1,620 |
(Gain) loss from change in fair value of warrant liability | -2,949 | 1,529 | -278 |
Gain from settlement of warrants | -37 | 0 | 0 |
Net realized investment gains | -67 | -188 | 0 |
Depreciation and other amortization | 5,618 | 3,325 | 3 |
Noncash intraperiod tax allocation | -2,390 | 0 | 0 |
Changes in operating assets and liabilities: | |||
Equity in net loss of subsidiaries | 38,710 | 35,371 | 1,196 |
Accrued investment income | 409 | -1,038 | -2 |
Receivable from affiliates | 616 | -10,565 | 0 |
Prepaid expenses | -535 | -1,102 | -234 |
Other assets | -445 | -3,045 | -78 |
Accounts payable and accrued expenses | 233 | 623 | 4,550 |
Net cash used in operating activities | -563 | -19,907 | -14,599 |
Cash flows from investing activities | |||
Capitalization of subsidiaries | -95,000 | 0 | -220,000 |
Purchase of fixed-maturity investments, available-for-sale | -23,552 | -293,470 | 0 |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 120,813 | 59,454 | 0 |
Purchase of software and equipment | -8,220 | -6,695 | -2,444 |
Acquisition of subsidiaries | 0 | 0 | -2,500 |
Net cash provided by (used in) investing activities | -5,959 | -240,711 | -224,944 |
Cash flows from financing activities | |||
Payments on line of credit | 0 | 0 | -205 |
Issuance of common stock | 1,097 | 27,912 | 510,465 |
Taxes paid related to net share settlement of equity awards | -1,083 | -1,578 | 0 |
Net cash provided by financing activities | 14 | 26,334 | 510,260 |
Net increase (decrease) in cash and cash equivalents | -6,508 | -234,284 | 270,717 |
Cash and cash equivalents, beginning of period | 36,433 | 270,717 | 0 |
Cash and cash equivalents, end of period | $29,925 | $36,433 | $270,717 |
SCHEDULE_II_FINANCIAL_INFORMAT5
SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT- PARENT COMPANY ONLY - Supplemental Notes (Details) (Subsidiaries [Member], USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Subsidiaries [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Other underwriting and operating expenses | $55,700,000 | $32,500,000 | $0 |