Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 28, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NMI HOLDINGS, INC. | |
Entity Central Index Key | 1,547,903 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 58,743,867 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Assets | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $316,639 and $337,718 as of September 30, 2015 and December 31, 2014, respectively) | $ 314,455 | $ 336,501 |
Cash and cash equivalents | 132,791 | 103,021 |
Premiums receivable | 3,986 | 1,048 |
Accrued investment income | 1,679 | 1,707 |
Prepaid expenses | 1,783 | 2,054 |
Deferred policy acquisition costs, net | 12,181 | 2,985 |
Software and equipment, net | 13,902 | 11,806 |
Intangible assets and goodwill | 3,634 | 3,634 |
Other assets | 2,486 | 509 |
Total assets | 486,897 | 463,265 |
Liabilities | ||
Unearned premiums | 62,072 | 22,069 |
Reserve for insurance claims and claim expenses | 358 | 83 |
Accounts payable and accrued expenses | 14,230 | 10,646 |
Warrant liability, at fair value | 1,899 | 3,372 |
Deferred tax liability | 137 | 137 |
Total liabilities | $ 78,696 | $ 36,307 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Additional paid-in capital | $ 568,090 | $ 562,911 |
Accumulated other comprehensive loss, net of tax | (4,574) | (3,607) |
Accumulated deficit | (155,902) | (132,930) |
Total shareholders' equity | 408,201 | 426,958 |
Total liabilities and shareholders' equity | 486,897 | 463,265 |
Common Stock - Class A | ||
Shareholders' Equity | ||
Common stock - class A shares, $0.01 par value; 58,743,867 and 58,428,548 shares issued and outstanding as of September 30, 2015 and December 31, 2014, respectively (250,000,000 shares authorized) | $ 587 | $ 584 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fixed maturity, amortized cost | $ 316,639 | $ 337,718 |
Common Stock - Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 58,743,867 | 58,428,548 |
Common stock, shares outstanding (in shares) | 58,743,867 | 58,428,548 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Revenues | ||||
Net premiums written | $ 35,360 | $ 9,661 | $ 68,629 | $ 19,890 |
Increase in unearned premiums | (22,526) | (5,761) | (40,003) | (11,993) |
Net premiums earned | 12,834 | 3,900 | 28,626 | 7,897 |
Net investment income | 1,884 | 1,342 | 5,168 | 4,299 |
Net realized investment (losses) gains | (15) | 134 | 952 | 134 |
Total revenues | 14,703 | 5,376 | 34,746 | 12,330 |
Expenses | ||||
Insurance claims and claims expenses | 181 | (26) | 279 | 2 |
Underwriting and operating expenses | 19,653 | 17,895 | 58,912 | 55,833 |
Total expenses | 19,834 | 17,869 | 59,191 | 55,835 |
Other income | ||||
Gain from change in fair value of warrant liability | 332 | 1,240 | 1,473 | 3,009 |
Gain from settlement of warrants | 0 | 0 | 0 | 37 |
Loss before income taxes | (4,799) | (11,253) | (22,972) | (40,459) |
Income tax benefit | 0 | (277) | 0 | (1,574) |
Net loss | $ (4,799) | $ (10,976) | $ (22,972) | $ (38,885) |
Net loss per share | ||||
Basic and diluted loss per share (in dollars per share) | $ (0.08) | $ (0.19) | $ (0.39) | $ (0.67) |
Weighted average common shares outstanding (in shares) | 58,741,328 | 58,363,334 | 58,650,043 | 58,239,251 |
Other comprehensive (loss) income, net of tax: | ||||
Net unrealized (losses) gains in accumulated other comprehensive loss, net of tax (benefit) expense of $0 and ($488) for the three months ended September 30, 2015 and 2014, respectively, and $0 and $2,176 for the nine months ended September 30, 2015 and 2014, respectively | $ (483) | $ (709) | $ (15) | $ 3,165 |
Reclassification adjustment for losses (gains) included in net loss, net of tax expense of $0, and $0 for the three months ended September 30, 2015 and 2014, respectively, and $0 and $0 for the nine months ended September 30, 2015 and 2014, respectively | 15 | 0 | (952) | 0 |
Other comprehensive (loss) income, net of tax | (468) | (709) | (967) | 3,165 |
Comprehensive loss | $ (5,267) | $ (11,685) | $ (23,939) | $ (35,720) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Net unrealized investment gains (losses) in AOCI, tax amount | $ 0 | $ (488) | $ 0 | $ 2,176 |
Reclassification adjustment for losses (gains) included in net loss, tax amount | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Class A | Common StockClass A | Additional Paid-in Capital | Additional Paid-in CapitalClass A | Accumulated Other Comprehensive Loss | Accumulated Deficit | |
Beginning balance (in shares) at Dec. 31, 2013 | 58,052,480 | |||||||
Beginning balance at Dec. 31, 2013 | $ 463,217 | $ 581 | $ 553,707 | $ (7,047) | $ (84,024) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock: class A shares issued under related to warrants (in shares) | [1] | 1,115 | ||||||
Common stock: class A shares issued under related to warrants | [1] | $ 13 | $ 13 | |||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes (in shares) | 374,953 | |||||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | 14 | $ 3 | 11 | |||||
Share-based compensation expense | 9,180 | 9,180 | ||||||
Change in unrealized investment gains/losses, net of tax | 3,440 | 3,440 | ||||||
Net loss | (48,906) | (48,906) | ||||||
Ending balance (in shares) at Dec. 31, 2014 | 58,428,548 | |||||||
Ending balance at Dec. 31, 2014 | 426,958 | $ 584 | 562,911 | (3,607) | (132,930) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes (in shares) | 315,319 | |||||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | $ (679) | $ 3 | $ (682) | |||||
Share-based compensation expense | 5,861 | 5,861 | ||||||
Change in unrealized investment gains/losses, net of tax | (967) | (967) | ||||||
Net loss | (22,972) | (22,972) | ||||||
Ending balance (in shares) at Sep. 30, 2015 | 58,743,867 | |||||||
Ending balance at Sep. 30, 2015 | $ 408,201 | $ 587 | $ 568,090 | $ (4,574) | $ (155,902) | |||
[1] | During 2014, we issued 1,115 common shares with a par value of $0.01 related to the exercise of warrants, which is not identifiable in this schedule due to rounding. |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
Change in unrealized investment gains (losses), tax amount | $ 0 | $ (488) | $ 0 | $ 2,176 | $ 2,390 | ||
Class A | |||||||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | $ 0.01 | ||||
Class A | Common Stock | |||||||
Common stock: class A shares issued under related to warrants (in shares) | 1,115 | 1,115 | [1] | ||||
Common stock, par value (in dollars per share) | $ 0.01 | ||||||
[1] | During 2014, we issued 1,115 common shares with a par value of $0.01 related to the exercise of warrants, which is not identifiable in this schedule due to rounding. |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (22,972) | $ (38,885) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net realized investment gains | (952) | (134) |
Gain from change in fair value of warrant liability | (1,473) | (3,009) |
Depreciation and other amortization | 3,646 | 6,603 |
Share-based compensation expense | 5,895 | 6,874 |
Benefit for taxes on current year unrealized gains | 0 | (1,574) |
Changes in operating assets and liabilities: | ||
Accrued investment income | 28 | 708 |
Premiums receivable | (2,938) | (383) |
Prepaid expenses | 271 | 422 |
Deferred policy acquisition costs, net | (9,196) | (1,561) |
Other assets | 453 | (612) |
Unearned premiums | 40,003 | 11,993 |
Reserve for insurance claims and claims expenses | 275 | 2 |
Accounts payable and accrued expenses | 3,131 | 3 |
Net cash provided by (used in) operating activities | 16,171 | (19,553) |
Cash flows from investing activities | ||
Purchase of fixed-maturity investments, available-for-sale | (111,215) | (4,359) |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 129,666 | 112,132 |
Purchase of software and equipment | (4,173) | (6,641) |
Net cash provided by investing activities | 14,278 | 101,132 |
Cash flows from financing activities | ||
Issuance of common stock | 415 | 1,086 |
Taxes paid related to net share settlement of equity awards | (1,094) | (1,072) |
Gain from settlement of warrants | 0 | (37) |
Net cash used in financing activities | (679) | (23) |
Net increase in cash and cash equivalents | 29,770 | 81,556 |
Cash and cash equivalents, beginning of period | 103,021 | 55,929 |
Cash and cash equivalents, end of period | $ 132,791 | $ 137,485 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation NMI Holdings, Inc. (NMIH) is a Delaware corporation, incorporated in May 2011, to provide private mortgage guaranty insurance (which we refer to as mortgage insurance or MI) through its wholly owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc One (Re One). Freddie Mac and Fannie Mae each 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, generally through the end of 2015 (GSE Approval). In April 2013, NMIC, our primary insurance subsidiary, wrote our first mortgage insurance policy. NMIC is fully licensed to write mortgage insurance in all 50 states and D.C. In August 2015, NMIH capitalized with $0.5 million a wholly owned subsidiary, NMI Services, Inc., through which we expect to offer outsourced loan review services to mortgage loan originators starting in the fourth quarter of 2015. As of September 30, 2015 , we had $10.6 billion of primary insurance in force (IIF) and $4.3 billion of pool IIF, with $2.6 billion of primary risk-in-force (RIF) and $93.1 million of pool RIF. Basis of Presentation The accompanying unaudited condensed consolidated financial statements, which include the results of NMIH and its wholly owned subsidiaries, have been prepared in accordance with the instructions to Form 10-Q as prescribed by the SEC for interim reporting and include other information and disclosures required by accounting principles generally accepted in the U.S. (GAAP). Our accounts are maintained in U.S. dollars. These statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2014 included in our Annual Report on Form 10-K. All intercompany transactions have been eliminated. 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. The results of operations for the interim period may not be indicative of the results that may be expected for the full year ending December 31, 2015 . 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 share-based compensation arrangements, and the dilutive effect of outstanding warrants. As a result of our net losses for the nine months ended September 30, 2015 and 2014 , 6,311,956 and 5,854,306 , respectively, of our common stock equivalents we issued under share-based compensation arrangements and warrants were not included in the calculation of diluted net loss per share as of such dates because they were anti-dilutive. 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 proportion to estimated gross profits over the estimated life of the policies. Total amortization of DAC for the nine months ended September 30, 2015 and 2014 were $1.8 million and $108 thousand , respectively. Premium Deficiency Reserves We consider whether a premium deficiency exists at each fiscal quarter using best estimate assumptions as of the testing date. Per Financial Accounting Standards Board (FASB) Accounting Standards Codification (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 the nine months ended September 30, 2015 or 2014 . Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, ASU 2015-14 deferred the provisions of ASU 2014-09 to be effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. Reclassifications Certain items in the financial statements as of September 30, 2015 and for the periods ended September 30, 2014 have been reclassified to conform to the current period's presentation. There was no effect on net income or shareholders' equity previously reported. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
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 in shareholders' equity. Net realized investment gains and losses are reported in income based upon specific identification of securities sold. Fair Values and Gross Unrealized Gains and Losses on Investments Amortized Gross Unrealized Fair Gains Losses As of September 30, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 68,243 $ 86 $ (106 ) $ 68,223 Municipal debt securities 11,001 7 (24 ) 10,984 Corporate debt securities 179,650 486 (2,793 ) 177,343 Asset-backed securities 57,745 288 (128 ) 57,905 Total investments $ 316,639 $ 867 $ (3,051 ) $ 314,455 Amortized Gross Unrealized Fair Gains Losses 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 Scheduled Maturities The amortized cost and fair values of available for sale securities at September 30, 2015 and 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 September 30, 2015 Amortized Fair (In Thousands) Due in one year or less $ 17,951 $ 17,971 Due after one through five years 149,970 150,086 Due after five through ten years 72,232 70,149 Due after ten years 18,741 18,344 Asset-backed securities 57,745 57,905 Total investments $ 316,639 $ 314,455 As of December 31, 2014 Amortized Fair (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 Aging of Unrealized Losses At September 30, 2015 , the investment portfolio had gross unrealized losses of $3.1 million , $0.5 million of which has been in an unrealized loss position for a period of 12 months or greater. We did not consider these securities to be other-than-temporarily impaired as of September 30, 2015 . We based our conclusion that these investments were not other-than-temporarily impaired at September 30, 2015 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 September 30, 2015 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 2 $ 12,740 $ (57 ) 4 $ 19,990 $ (49 ) 6 $ 32,730 $ (106 ) Municipal debt securities — — — 2 4,976 (24 ) 2 4,976 (24 ) Corporate debt securities 34 96,420 (2,473 ) 5 13,589 (320 ) 39 110,009 (2,793 ) Assets-backed securities 5 8,773 (71 ) 3 9,273 (57 ) 8 18,046 (128 ) Total investments 41 $ 117,933 $ (2,601 ) 14 $ 47,828 $ (450 ) 55 $ 165,761 $ (3,051 ) 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 ) Net Investment Income For the three and nine months ended September 30, 2015 , net investment income was comprised of $2.0 million and $5.5 million of investment income from fixed maturities and $0.1 million and $0.3 million of investment expenses, respectively, compared to $1.5 million and $4.7 million of investment income from fixed maturities and $0.1 million and $0.4 million of investment expenses for the three and nine months ended September 30, 2014 , respectively. As of September 30, 2015 and December 31, 2014 , 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. Net Realized Investment Gains (Losses) For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (In Thousands) Gross realized investment gains $ 266 $ 566 $ 1,526 $ 566 Gross realized investment losses (281 ) (432 ) (574 ) (432 ) Net realized investment (losses) gains $ (15 ) $ 134 $ 952 $ 134 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The following is a list of those assets and liabilities that are measured at fair value by hierarchy level: Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of September 30, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 41,404 $ 26,819 $ — $ 68,223 Municipal debt securities — 10,984 — 10,984 Corporate debt securities — 177,343 — 177,343 Asset-backed securities — 57,905 — 57,905 Cash and cash equivalents 132,791 — — 132,791 Total assets $ 174,195 $ 273,051 $ — $ 447,246 Warrant liability $ — $ — $ 1,899 $ 1,899 Total liabilities $ — $ — $ 1,899 $ 1,899 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value 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 The following is a roll-forward of Level 3 liabilities measured at fair value: For the nine months ended September 30, Warrant Liability 2015 2014 (In Thousands) Balance, January 1 $ 3,372 $ 6,371 Change in fair value of warrant liability included in earnings (1,473 ) (3,009 ) Issuance of common stock on warrant exercise — (13 ) Gain on settlement of warrants — (37 ) Balance, September 30 $ 1,899 $ 3,312 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 September 30, 2015 , the assumptions used in the option-pricing model were as follows: a common stock price as of September 30, 2015 of $7.60 , risk free interest rate of 1.56% , expected life of 6.00 years , expected volatility of 32.7% 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, 2014 to September 30, 2015 . |
Reserves for Insurance Claims a
Reserves for Insurance Claims and Claim Expenses | 9 Months Ended |
Sep. 30, 2015 | |
Insurance [Abstract] | |
Reserves for Insurance Claims and Claim 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 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. As of September 30, 2015 , we have established reserves for insurance claims of $358 thousand for twenty primary loans in default. We settled our first primary claim in July 2015 for $4 thousand . In 2013, we entered into a pool insurance agreement with Fannie Mae. We only establish claim or IBNR reserves for pool risk if we expect claims to exceed the deductible under the pool agreement, which represents the amount of claims absorbed by Fannie Mae before we are obligated to pay any claims. At September 30, 2015 , thirty-six loans in the pool were past due by sixty days or more. These thirty-six loans represent approximately $2.4 million in RIF. Due to the remaining deductible of $10.3 million , the level of notices of default (NODs) reported through September 30, 2015 and the expected severity (all loans in the pool have loan-to-value ratios (LTVs) under 80% ), we have not established any pool reserves for claims or IBNR for the three and nine months ended September 30, 2015 and 2014 . In connection with settlement of pool claims, we applied $18 thousand to the pool deductible through September 30, 2015 . We have not paid any pool claims to date. The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claims expenses: For the nine months ended September 30, 2015 2014 (In Thousands) Balance, January 1 $ 83 $ — Claims incurred: Claims and claim expenses incurred: Current year 358 2 Prior years (79 ) — Total claims incurred 279 2 Claims paid: Claims and claim expenses paid: Current year — — Prior years 4 — Total claims paid 4 — Balance, September 30 $ 358 $ 2 There was a $79 thousand favorable prior year development during the nine months ended September 30, 2015 . There were no reserves remaining for defaults occurring in prior years as of September 30, 2015 as a result of NOD cures and claim payments. The decrease in the period is generally the result of ongoing analysis of recent loss development trends. We may increase or decrease our original estimates as we learn additional information about individual defaults and claims. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Warrants | Warrants In April 2012, we issued 992,000 warrants with an aggregate fair value of $5.1 million upon the completion of a private placement of our securities and in conjunction with the acquisition of our insurance subsidiaries. Each warrant gives the holder thereof the right to purchase one share of common stock at an exercise price equal to $10.00 . Upon exercise of these warrants, the amounts are reclassified from warrant liability to 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 recognized a gain of approximately $37 thousand . No warrants have been exercised for the nine months ended September 30, 2015. We account for these 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 35% . Our holding company files a consolidated U.S. federal and various state income tax returns on behalf of itself and its subsidiaries. Our effective income tax rate on our pre-tax loss was 0.0% for the three months ended September 30, 2015 , compared to 2.5% for the comparable 2014 period. Our effective income tax rate on our pre-tax loss was 0.0% for the nine months ended September 30, 2015 , compared to 3.9% for the comparable 2014 period. During those periods, the benefits from income taxes were eliminated or reduced by the recognition of a full valuation allowance which was recorded to reflect the amount of the deferred taxes that may not be realized. |
Statutory Information
Statutory Information | 9 Months Ended |
Sep. 30, 2015 | |
Insurance [Abstract] | |
Statutory Information | Statutory Information NMIC and Re One's combined statutory net loss, statutory surplus, contingency reserve and risk-to-capital (RTC) ratios were as follows: As of and for the nine months and year ended September 30, 2015 and December 31, 2014, respectively September 30, 2015 December 31, 2014 (In Thousands) Statutory net loss $ (38,591 ) $ (47,961 ) Statutory surplus 201,140 236,738 Contingency reserve 23,714 9,401 Risk-to-Capital 11.8:1 3.6:1 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 recent net profits (subject to certain limitations). Since inception, NMIC has not paid any dividends to NMIH. As NMIC had a statutory net loss for the year ended December 31, 2014 , NMIC cannot pay any dividends to NMIH through December 31, 2015 , 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. |
Organization and Basis of Pre16
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
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 share-based compensation arrangements, and the dilutive effect of outstanding warrants. |
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 proportion to estimated gross profits over the estimated life of the policies. |
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 Financial Accounting Standards Board (FASB) Accounting Standards Codification (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. |
New Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers (Topic 606). This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In August 2015, ASU 2015-14 deferred the provisions of ASU 2014-09 to be effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. |
Reclassifications | Reclassifications Certain items in the financial statements as of September 30, 2015 and for the periods ended September 30, 2014 have been reclassified to conform to the current period's presentation. There was no effect on net income or shareholders' equity previously reported. |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Fair Values and Gross Unrealized Gains and Losses | Amortized Gross Unrealized Fair Gains Losses As of September 30, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 68,243 $ 86 $ (106 ) $ 68,223 Municipal debt securities 11,001 7 (24 ) 10,984 Corporate debt securities 179,650 486 (2,793 ) 177,343 Asset-backed securities 57,745 288 (128 ) 57,905 Total investments $ 316,639 $ 867 $ (3,051 ) $ 314,455 Amortized Gross Unrealized Fair Gains Losses 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 |
Schedule of Investments by Maturity | The amortized cost and fair values of available for sale securities at September 30, 2015 and 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 September 30, 2015 Amortized Fair (In Thousands) Due in one year or less $ 17,951 $ 17,971 Due after one through five years 149,970 150,086 Due after five through ten years 72,232 70,149 Due after ten years 18,741 18,344 Asset-backed securities 57,745 57,905 Total investments $ 316,639 $ 314,455 As of December 31, 2014 Amortized Fair (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 |
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 September 30, 2015 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 2 $ 12,740 $ (57 ) 4 $ 19,990 $ (49 ) 6 $ 32,730 $ (106 ) Municipal debt securities — — — 2 4,976 (24 ) 2 4,976 (24 ) Corporate debt securities 34 96,420 (2,473 ) 5 13,589 (320 ) 39 110,009 (2,793 ) Assets-backed securities 5 8,773 (71 ) 3 9,273 (57 ) 8 18,046 (128 ) Total investments 41 $ 117,933 $ (2,601 ) 14 $ 47,828 $ (450 ) 55 $ 165,761 $ (3,051 ) 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 ) |
Net Realized Investments Gains (Losses) | For the three months ended September 30, For the nine months ended September 30, 2015 2014 2015 2014 (In Thousands) Gross realized investment gains $ 266 $ 566 $ 1,526 $ 566 Gross realized investment losses (281 ) (432 ) (574 ) (432 ) Net realized investment (losses) gains $ (15 ) $ 134 $ 952 $ 134 |
Fair Value of Financial Instr18
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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: Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of September 30, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 41,404 $ 26,819 $ — $ 68,223 Municipal debt securities — 10,984 — 10,984 Corporate debt securities — 177,343 — 177,343 Asset-backed securities — 57,905 — 57,905 Cash and cash equivalents 132,791 — — 132,791 Total assets $ 174,195 $ 273,051 $ — $ 447,246 Warrant liability $ — $ — $ 1,899 $ 1,899 Total liabilities $ — $ — $ 1,899 $ 1,899 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value 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, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | The following is a roll-forward of Level 3 liabilities measured at fair value: For the nine months ended September 30, Warrant Liability 2015 2014 (In Thousands) Balance, January 1 $ 3,372 $ 6,371 Change in fair value of warrant liability included in earnings (1,473 ) (3,009 ) Issuance of common stock on warrant exercise — (13 ) Gain on settlement of warrants — (37 ) Balance, September 30 $ 1,899 $ 3,312 |
Reserves for Insurance Claims19
Reserves for Insurance Claims and Claim Expenses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
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 primary insurance claims and claims expenses: For the nine months ended September 30, 2015 2014 (In Thousands) Balance, January 1 $ 83 $ — Claims incurred: Claims and claim expenses incurred: Current year 358 2 Prior years (79 ) — Total claims incurred 279 2 Claims paid: Claims and claim expenses paid: Current year — — Prior years 4 — Total claims paid 4 — Balance, September 30 $ 358 $ 2 |
Statutory Information (Tables)
Statutory Information (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Insurance [Abstract] | |
Schedule of Statutory Net Loss, Surplus, Contingency Reserve and Risk-to-Capital Ratio | NMIC and Re One's combined statutory net loss, statutory surplus, contingency reserve and risk-to-capital (RTC) ratios were as follows: As of and for the nine months and year ended September 30, 2015 and December 31, 2014, respectively September 30, 2015 December 31, 2014 (In Thousands) Statutory net loss $ (38,591 ) $ (47,961 ) Statutory surplus 201,140 236,738 Contingency reserve 23,714 9,401 Risk-to-Capital 11.8:1 3.6:1 |
Organization and Basis of Pre21
Organization and Basis of Presentation (Details) | 1 Months Ended | 9 Months Ended | |
Aug. 31, 2015USD ($) | Sep. 30, 2015USD ($)stateshares | Sep. 30, 2014USD ($)shares | |
Business Acquisition [Line Items] | |||
Number of states in which the entity operates | state | 50 | ||
Primary insurance in force | $ 10,600,000,000 | ||
Pool insurance in force | $ 4,300,000,000 | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 6,311,956 | 5,854,306 | |
Deferred policy acquisition cost, amortization expense | $ 1,800,000 | $ 108,000 | |
Premium deficiency reserve | 0 | $ 0 | |
NMI Services, Inc. | |||
Business Acquisition [Line Items] | |||
Capitalized wholly owned subsidiary, amount | $ 500,000 | ||
Combined | |||
Business Acquisition [Line Items] | |||
Primary insurance risk in force | 2,600,000,000 | ||
Mortgage insurance risk in force | $ 93,100,000 |
Investments - Fair Values and G
Investments - Fair Values and Gross Unrealized Gains and Losses on Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 316,639 | $ 337,718 |
Gross Unrealized Gains | 867 | 1,139 |
Gross Unrealized (Losses) | (3,051) | (2,356) |
Fair Value | 314,455 | 336,501 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 68,243 | 68,911 |
Gross Unrealized Gains | 86 | 7 |
Gross Unrealized (Losses) | (106) | (573) |
Fair Value | 68,223 | 68,345 |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 11,001 | 12,009 |
Gross Unrealized Gains | 7 | 27 |
Gross Unrealized (Losses) | (24) | (73) |
Fair Value | 10,984 | 11,963 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 179,650 | 200,358 |
Gross Unrealized Gains | 486 | 883 |
Gross Unrealized (Losses) | (2,793) | (1,456) |
Fair Value | 177,343 | 199,785 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 57,745 | 56,440 |
Gross Unrealized Gains | 288 | 222 |
Gross Unrealized (Losses) | (128) | (254) |
Fair Value | $ 57,905 | $ 56,408 |
Investments - Scheduled Maturit
Investments - Scheduled Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Due in one year or less | $ 17,951 | $ 6,110 |
Amortized Cost, Due after one through five years | 149,970 | 195,492 |
Amortized Cost, Due after five through ten years | 72,232 | 54,360 |
Amortized Cost, Due after ten years | 18,741 | 25,316 |
Amortized Cost, Total Investments | 316,639 | 337,718 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Fair Value [Abstract] | ||
Fair Value, Due in one year or less | 17,971 | 6,125 |
Fair Value, Due after one through five years | 150,086 | 194,472 |
Fair Value, Due after five through ten years | 70,149 | 53,891 |
Fair Value Due after ten years | 18,344 | 25,605 |
Fair Value, Total Investments | 314,455 | 336,501 |
Asset-backed securities | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Total Investments | 57,745 | 56,440 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Fair Value [Abstract] | ||
Fair Value, Total Investments | $ 57,905 | $ 56,408 |
Investments - Unrealized Losses
Investments - Unrealized Losses (Details) $ in Thousands | Sep. 30, 2015USD ($)security | Dec. 31, 2014USD ($)security |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 41 | 34 |
Fair value, less than 12 months | $ 117,933 | $ 81,408 |
Unrealized losses, less than 12 months | $ (2,601) | $ (667) |
Number of securities,12 months or greater | security | 14 | 37 |
Fair value, 12 months or greater | $ 47,828 | $ 137,432 |
Unrealized losses, 12 months or greater | $ (450) | $ (1,689) |
Number of securities, total | security | 55 | 71 |
Fair value | $ 165,761 | $ 218,840 |
Unrealized Losses | $ (3,051) | $ (2,356) |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 2 | 4 |
Fair value, less than 12 months | $ 12,740 | $ 7,228 |
Unrealized losses, less than 12 months | $ (57) | $ (33) |
Number of securities,12 months or greater | security | 4 | 10 |
Fair value, 12 months or greater | $ 19,990 | $ 49,884 |
Unrealized losses, 12 months or greater | $ (49) | $ (540) |
Number of securities, total | security | 6 | 14 |
Fair value | $ 32,730 | $ 57,112 |
Unrealized Losses | $ (106) | $ (573) |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 0 | 1 |
Fair value, less than 12 months | $ 0 | $ 3,232 |
Unrealized losses, less than 12 months | $ 0 | $ (18) |
Number of securities,12 months or greater | security | 2 | 1 |
Fair value, 12 months or greater | $ 4,976 | $ 1,695 |
Unrealized losses, 12 months or greater | $ (24) | $ (55) |
Number of securities, total | security | 2 | 2 |
Fair value | $ 4,976 | $ 4,927 |
Unrealized Losses | $ (24) | $ (73) |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 34 | 26 |
Fair value, less than 12 months | $ 96,420 | $ 60,334 |
Unrealized losses, less than 12 months | $ (2,473) | $ (559) |
Number of securities,12 months or greater | security | 5 | 22 |
Fair value, 12 months or greater | $ 13,589 | $ 65,806 |
Unrealized losses, 12 months or greater | $ (320) | $ (897) |
Number of securities, total | security | 39 | 48 |
Fair value | $ 110,009 | $ 126,140 |
Unrealized Losses | $ (2,793) | $ (1,456) |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 5 | 3 |
Fair value, less than 12 months | $ 8,773 | $ 10,614 |
Unrealized losses, less than 12 months | $ (71) | $ (57) |
Number of securities,12 months or greater | security | 3 | 4 |
Fair value, 12 months or greater | $ 9,273 | $ 20,047 |
Unrealized losses, 12 months or greater | $ (57) | $ (197) |
Number of securities, total | security | 8 | 7 |
Fair value | $ 18,046 | $ 30,661 |
Unrealized Losses | $ (128) | $ (254) |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Schedule of Available-for-sale Securities [Line Items] | |||||
Unrealized loss position, accumulated loss | $ (3,051) | $ (3,051) | $ (2,356) | ||
Unrealized losses, 12 months or greater | (450) | (450) | (1,689) | ||
Investment income, investment expense | 100 | $ 100 | 300 | $ 400 | |
U.S. Treasury securities and obligations of U.S. government agencies | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Unrealized loss position, accumulated loss | (106) | (106) | (573) | ||
Unrealized losses, 12 months or greater | (49) | (49) | (540) | ||
Cash and investments held with various state insurance departments | 7,000 | 7,000 | $ 7,000 | ||
Fixed Maturities | |||||
Schedule of Available-for-sale Securities [Line Items] | |||||
Investment Income, gross | $ 2,000 | $ 1,500 | $ 5,500 | $ 4,700 |
Investments - Net Realized Inve
Investments - Net Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized investment gains | $ 266 | $ 566 | $ 1,526 | $ 566 |
Gross realized investment losses | (281) | (432) | (574) | (432) |
Net realized investment (losses) gains | $ (15) | $ 134 | $ 952 | $ 134 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 314,455 | $ 336,501 |
Warrant liability | 1,899 | 3,372 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 68,223 | 68,345 |
Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 10,984 | 11,963 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 177,343 | 199,785 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 57,905 | 56,408 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 132,791 | 103,021 |
Total assets | 447,246 | 439,522 |
Warrant liability | 1,899 | 3,372 |
Total liabilities | 1,899 | 3,372 |
Fair Value, Measurements, Recurring | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 68,223 | 68,345 |
Fair Value, Measurements, Recurring | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 10,984 | 11,963 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 177,343 | 199,785 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 57,905 | 56,408 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 132,791 | 103,021 |
Total assets | 174,195 | 142,197 |
Warrant liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 41,404 | 39,176 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Total assets | 273,051 | 297,325 |
Warrant liability | 0 | 0 |
Total liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 26,819 | 29,169 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 10,984 | 11,963 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 177,343 | 199,785 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 57,905 | 56,408 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
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 | 1,899 | 3,372 |
Total liabilities | 1,899 | 3,372 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | U.S. Treasury securities and obligations of U.S. government agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | 0 | 0 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale Securities | $ 0 | $ 0 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments - Rollforward of Level 3 (Details) - Significant Unobservable Inputs (Level 3) - Warrant Liability - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 3,372 | $ 6,371 |
Change in fair value of warrant liability included in earnings | (1,473) | (3,009) |
Issuance of common stock on warrant exercise | 0 | (13) |
Gain on settlement of warrants | 0 | (37) |
Ending balance | $ 1,899 | $ 3,312 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments - Narrative (Details) - Warrant Liability - Significant Unobservable Inputs (Level 3) | 9 Months Ended |
Sep. 30, 2015$ / shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share Price (in dollars per share) | $ 7.60 |
Risk free rate | 1.56% |
Expected term | 6 years |
Volatility assumption | 32.70% |
Expected dividend rate | 0.00% |
Reconciliation of Reserve Balan
Reconciliation of Reserve Balances for Insurance Claims Expenses (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance, January 1 | $ 83 | $ 0 |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract] | ||
Current year | 358 | 2 |
Prior years | (79) | 0 |
Total claims incurred | 279 | 2 |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | ||
Current year | 0 | 0 |
Prior years | 4 | 0 |
Total claims paid | 4 | 0 |
Balance, September 30 | $ 358 | $ 2 |
Reconciliation of Reserve Bal31
Reconciliation of Reserve Balances for Insurance Claims Expenses - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)loan | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
IBNR, default period (at least) | 60 days | |||||
Liability for insurance claims | $ 358,000 | $ 2,000 | $ 358,000 | $ 2,000 | $ 83,000 | $ 0 |
Primary loans in default | loan | 20 | 20 | ||||
Prior years | $ 4,000 | 0 | ||||
Claims applied to deductible | 18,000 | |||||
Claims paid | 4,000 | 0 | ||||
Favorable prior year development | (79,000) | 0 | ||||
Reserve for prior year insurance claims and claim expenses | $ 0 | $ 0 | ||||
Fannie Mae | ||||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||||
Number of loans in pool past due 60 days or more | loan | 36 | 36 | ||||
Risk in Force of loans in pool past due 60 days or more | $ 2,400,000 | $ 2,400,000 | ||||
Deductible on policy | $ 10,300,000 | |||||
Loan-to-value ratio (less than) | 0.8 | |||||
Pool reserve established | $ 0 | $ 0 | $ 0 | $ 0 | ||
Claims paid | $ 0 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | [1] | Apr. 30, 2012 | |
Line of Credit Facility [Line Items] | ||||||||
Warrants issued (in shares) | 992,000 | |||||||
Warrants value | $ 5,100 | |||||||
Right to purchase, number of shares per warrant | 1 | |||||||
Exercise price of warrants (in dollars per warrant) | $ 10 | |||||||
Number of warrants exercised during period | 7,790 | 0 | ||||||
Gain from settlement of warrants | $ 0 | $ 0 | $ 37 | $ 0 | $ 37 | |||
Common Stock - Class A | Common Stock - Class A | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Issuance of Class A shares of common stock as part of cashless exercise of warrants, shares | 1,115 | 1,115 | ||||||
[1] | 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. |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Tax Disclosure [Abstract] | ||||
Federal statutory income tax rate | 35.00% | |||
Effective income tax rate on pre-tax loss | 0.00% | 2.50% | 0.00% | 3.90% |
Statutory Information - Schedul
Statutory Information - Schedule of Statutory Net Loss, Surplus, Contingency Reserve and Risk-to-Capital Ratio (Details) - Combined $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) | |
Statutory Accounting Practices [Line Items] | ||
Statutory net loss | $ (38,591) | $ (47,961) |
Statutory surplus | 201,140 | 236,738 |
Contingency reserve | $ 23,714 | $ 9,401 |
Risk-to-Capital | 11.8 | 3.6 |