Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 26, 2016 | |
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 | Mar. 31, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 59,080,468 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Fixed maturities, available-for-sale, at fair value (amortized cost of $551,780 and $564,319 as of March 31, 2016 and December 31, 2015, respectively) | $ 556,683 | $ 559,235 |
Cash and cash equivalents | 73,302 | 57,317 |
Premiums receivable | 6,578 | 5,143 |
Accrued investment income | 3,144 | 2,873 |
Prepaid expenses | 2,732 | 1,428 |
Deferred policy acquisition costs, net | 20,948 | 17,530 |
Software and equipment, net | 17,219 | 15,201 |
Intangible assets and goodwill | 3,634 | 3,634 |
Other assets | 74 | 90 |
Total assets | 684,314 | 662,451 |
Liabilities | ||
Term loan | 143,982 | 143,939 |
Unearned premiums | 109,095 | 90,773 |
Accounts payable and accrued expenses | 19,108 | 22,725 |
Reserve for insurance claims and claim expenses | 1,137 | 679 |
Warrant liability, at fair value | 797 | 1,467 |
Deferred tax | 137 | 137 |
Total liabilities | $ 274,256 | $ 259,720 |
Commitments and contingencies | ||
Shareholders' Equity | ||
Additional paid-in capital | $ 571,585 | $ 570,340 |
Accumulated other comprehensive loss, net of tax | 2,512 | (7,474) |
Accumulated deficit | (164,630) | (160,723) |
Total shareholders' equity | 410,058 | 402,731 |
Total liabilities and shareholders' equity | 684,314 | 662,451 |
Common Stock - Class A | ||
Shareholders' Equity | ||
Common stock - class A shares, $0.01 par value; 59,080,468 and 58,807,825 shares issued and outstanding as of March 31, 2016 and December 31, 2015, respectively (250,000,000 shares authorized) | $ 591 | $ 588 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fixed maturities, amortized cost | $ 551,780 | $ 564,319 |
Common Stock - Class A | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 59,080,468 | 58,807,825 |
Common stock, shares outstanding (in shares) | 59,080,468 | 58,807,825 |
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 | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues | ||
Net premiums written | $ 38,129 | $ 12,921 |
Increase in unearned premiums | (18,322) | (5,985) |
Net premiums earned | 19,807 | 6,936 |
Net investment income | 3,231 | 1,596 |
Net realized investment (losses) gains | (885) | 613 |
Other revenues | 32 | 0 |
Total revenues | 22,185 | 9,145 |
Expenses | ||
Insurance claims and claims expenses | 458 | 104 |
Underwriting and operating expenses | 22,672 | 18,350 |
Total expenses | 23,130 | 18,454 |
Other (expense) income | ||
Gain from change in fair value of warrant liability | 670 | 1,248 |
Interest expense | (3,632) | 0 |
Total other (expense) income | (2,962) | 1,248 |
Loss before income taxes | (3,907) | (8,061) |
Income tax benefit | 0 | (241) |
Net loss | $ (3,907) | $ (7,820) |
Net loss per share: | ||
Basic and diluted loss per share (in dollars per share) | $ (0.07) | $ (0.13) |
Weighted average common shares outstanding (in shares) | 58,936,694 | 58,485,899 |
Other comprehensive income, net of tax: | ||
Net unrealized gains in accumulated other comprehensive loss, net of tax expense of $0 and $1,431 for the quarters ended March 31, 2016 and March 31, 2015, respectively | $ 9,101 | $ 2,672 |
Reclassification adjustment for losses (gains) included in net loss, net of tax expense of $0 for the quarters ended March 31, 2016 and 2015 | 885 | (613) |
Other comprehensive income, net of tax | 9,986 | 2,059 |
Comprehensive income (loss) | $ 6,079 | $ (5,761) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (UNAUDITED) (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net unrealized investment gains in AOCI, tax amount | $ 0 | $ 1,431 |
Reclassification adjustment for losses (gains) included in net loss, tax amount | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common StockClass A | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance (in shares) at Dec. 31, 2014 | 58,428,548 | ||||
Beginning 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) | 379,277 | ||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | (690) | $ 4 | (694) | ||
Share-based compensation expense | 8,123 | 8,123 | |||
Change in unrealized investment gains/losses, net of tax | (3,867) | (3,867) | |||
Net loss | (27,793) | (27,793) | |||
Ending balance (in shares) at Dec. 31, 2015 | 58,807,825 | ||||
Ending balance at Dec. 31, 2015 | 402,731 | $ 588 | 570,340 | (7,474) | (160,723) |
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) | 272,643 | ||||
Common stock: class A shares issued under stock plans, net of shares withheld for employee taxes | (159) | $ 3 | (162) | ||
Share-based compensation expense | 1,407 | 1,407 | |||
Change in unrealized investment gains/losses, net of tax | 9,986 | 9,986 | |||
Net loss | (3,907) | (3,907) | |||
Ending balance (in shares) at Mar. 31, 2016 | 59,080,468 | ||||
Ending balance at Mar. 31, 2016 | $ 410,058 | $ 591 | $ 571,585 | $ 2,512 | $ (164,630) |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Statement of Stockholders' Equity [Abstract] | |||
Change in unrealized investment gains/losses, tax | $ 0 | $ 1,431 | $ 0 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (3,907) | $ (7,820) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net realized investment losses (gains) | 885 | (613) |
Gain from change in fair value of warrant liability | (670) | (1,248) |
Depreciation and other amortization | 1,316 | 1,099 |
Amortization of debt discount and debt issuance costs | 418 | 0 |
Share-based compensation expense | 1,410 | 2,005 |
Noncash intraperiod tax allocation | 0 | (241) |
Changes in operating assets and liabilities: | ||
Accrued investment income | (271) | (25) |
Premiums receivable | (1,435) | (615) |
Prepaid expenses | (1,304) | (37) |
Deferred policy acquisition costs, net | (3,418) | (2,298) |
Other assets | 16 | 453 |
Unearned premiums | 18,322 | 5,985 |
Reserve for insurance claims and claims expenses | 458 | 104 |
Accounts payable and accrued expenses | (11,085) | (4,291) |
Net cash provided by (used in) operating activities | 735 | (7,542) |
Cash flows from investing activities | ||
Purchase of fixed-maturity investments, available-for-sale | (71,319) | (61,676) |
Proceeds from redemptions, maturities and sale of fixed-maturity investments, available-for-sale | 89,422 | 33,935 |
Purchase of software and equipment | (2,319) | (1,317) |
Net cash provided by (used in) investing activities | 15,784 | (29,058) |
Cash flows from financing activities | ||
Issuance of common stock | 449 | 333 |
Taxes paid related to net share settlement of equity awards | (608) | (334) |
Repayments of term loan | (375) | 0 |
Net cash used in financing activities | (534) | (1) |
Net increase (decrease) in cash and cash equivalents | 15,985 | (36,601) |
Cash and cash equivalents, beginning of period | 57,317 | 103,021 |
Cash and cash equivalents, end of period | 73,302 | 66,420 |
Noncash financing activities | ||
Interest paid | $ 3,255 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
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). 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 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 exchange on November 8, 2013, under the symbol "NMIH." In April 2013, NMIC, our primary insurance subsidiary, issued its first mortgage insurance policy. NMIC is 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. (NMIS), through which we began to offer outsourced loan review services to mortgage loan originators in the fourth quarter of 2015. 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, 2015 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, 2016 . 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 three months ended March 31, 2016 and 2015 , 7,351,338 and 7,137,901 , 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 three months ended March 31, 2016 and 2015 were $0.9 million and $0.4 million , 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 three months ended March 31, 2016 or 2015 . Recent Accounting Pronouncements 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. In April 2015 , the FASB issued Accounting Standard Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Cost (Subtopic 835-30). This update is intended to simplify the presentation of debt issuance costs. In accordance with the new standard, debt issuance costs are presented as a direct deduction from long-term debt. The amended guidance is effective for fiscal years, and interim periods within those fiscal years, beginning December 15, 2015, with early adoption permitted. The Company has elected to early adopt ASU 2015-03 beginning with the year ended December 31, 2015. Application of this standard eliminated the presentation of a deferred cost (asset) and instead required debt issuance costs be presented as a direct deduction from total debt. In May 2014, the FASB issued 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. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This update is intended to provide improvements to employee share-based payment accounting. The areas for simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any period. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires that businesses recognize rights and obligations associated with certain leases as assets and liabilities on the balance sheet. The standard also requires additional disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. For public business entities, this update is effective for annual periods beginning after December 15, 2018, and interim periods therin. Early adoption is permitted in any period. 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 March 31, 2016 and for the period ended March 31, 2015 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 59,941 $ 335 $ (30 ) $ 60,246 Municipal debt securities 23,478 468 (38 ) 23,908 Corporate debt securities 317,962 5,965 (1,407 ) 322,520 Asset-backed securities 113,963 293 (707 ) 113,549 Total bonds 515,344 7,061 (2,182 ) 520,223 Short-term investments 36,436 24 — 36,460 Total investments $ 551,780 $ 7,085 $ (2,182 ) $ 556,683 Amortized Gross Unrealized Fair Gains Losses As of December 31, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 84,968 $ 4 $ (490 ) $ 84,482 Municipal debt securities 20,209 44 (174 ) 20,079 Corporate debt securities 337,273 431 (4,377 ) 333,327 Asset-backed securities 101,320 76 (603 ) 100,793 Total bonds 543,770 555 (5,644 ) 538,681 Short-term investments 20,549 5 — 20,554 Total investments $ 564,319 $ 560 $ (5,644 ) $ 559,235 Scheduled Maturities The amortized cost and fair values of available for sale securities as of March 31, 2016 and December 31, 2015 , 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 March 31, 2016 Amortized Fair (In Thousands) Due in one year or less $ 47,549 $ 47,572 Due after one through five years 178,408 179,487 Due after five through ten years 195,378 200,244 Due after ten years 16,482 15,831 Asset-backed securities 113,963 113,549 Total investments $ 551,780 $ 556,683 As of December 31, 2015 Amortized Fair (In Thousands) Due in one year or less $ 62,745 $ 62,743 Due after one through five years 187,633 186,629 Due after five through ten years 193,379 190,055 Due after ten years 19,242 19,015 Asset-backed securities 101,320 100,793 Total investments $ 564,319 $ 559,235 Aging of Unrealized Losses As of March 31, 2016 , the investment portfolio had gross unrealized losses of $2.2 million , $0.3 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 March 31, 2016 . We based our conclusion that these investments were not other-than-temporarily impaired as of March 31, 2016 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 March 31, 2016 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 5 $ 7,537 $ (17 ) 9 $ 4,685 $ (13 ) 14 $ 12,222 $ (30 ) Municipal debt securities 1 1,717 (33 ) 1 3,245 (5 ) 2 4,962 (38 ) Corporate debt securities 36 48,691 (1,209 ) 7 7,699 (198 ) 43 56,390 (1,407 ) Asset-backed securities 42 58,765 (664 ) 7 5,213 (43 ) 49 63,978 (707 ) Total investments 84 $ 116,710 $ (1,923 ) 24 $ 20,842 $ (259 ) 108 $ 137,552 $ (2,182 ) 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, 2015 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 14 $ 50,558 $ (397 ) 4 $ 10,194 $ (93 ) 18 $ 60,752 $ (490 ) Municipal debt securities 4 11,293 (165 ) 1 3,242 (9 ) 5 14,535 (174 ) Corporate debt securities 83 244,128 (4,124 ) 4 9,220 (253 ) 87 253,348 (4,377 ) Asset-backed securities 27 69,878 (498 ) 4 9,208 (105 ) 31 79,086 (603 ) Total investments 128 $ 375,857 $ (5,184 ) 13 $ 31,864 $ (460 ) 141 $ 407,721 $ (5,644 ) Net Investment Income For the three months ended March 31, 2016 , net investment income was comprised of $3.4 million of investment income from fixed maturities and $0.2 million of investment expenses, compared to $1.7 million of investment income from fixed maturities and $0.1 million of investment expenses for the three months ended March 31, 2015 . As of March 31, 2016 and December 31, 2015 , 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 March 31, 2016 2015 (In Thousands) Gross realized investment gains $ 556 $ 849 Gross realized investment losses (1,441 ) (236 ) Net realized investment (losses) gains $ (885 ) $ 613 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 37,429 $ 22,817 $ — $ 60,246 Municipal debt securities — 23,907 — 23,907 Corporate debt securities — 322,520 — 322,520 Asset-backed securities — 113,549 — 113,549 Cash, cash equivalents and short-term investments 109,763 — — 109,763 Total assets $ 147,192 $ 482,793 $ — $ 629,985 Warrant liability $ — $ — $ 797 $ 797 Total liabilities $ — $ — $ 797 $ 797 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 65,185 $ 19,297 $ — $ 84,482 Municipal debt securities — 20,079 — 20,079 Corporate debt securities — 333,327 — 333,327 Asset-backed securities — 100,793 — 100,793 Cash, cash equivalents and short-term investments 77,872 — — 77,872 Total assets $ 143,057 $ 473,496 $ — $ 616,553 Warrant liability $ — $ — $ 1,467 $ 1,467 Total liabilities $ — $ — $ 1,467 $ 1,467 The following is a roll-forward of Level 3 liabilities measured at fair value: For the three months ended March 31, Warrant Liability 2016 2015 (In Thousands) Balance, January 1 $ 1,467 $ 3,372 Change in fair value of warrant liability included in earnings (670 ) (1,248 ) Issuance of common stock on warrant exercise — — Gain on settlement of warrants — — Balance, March 31 $ 797 $ 2,124 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 March 31, 2016 , the assumptions used in the option-pricing model were as follows: a common stock price as of March 31, 2016 of $5.05 , risk free interest rate of 1.36% , expected life of 5.92 years , expected volatility of 35.5% 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, 2015 to March 31, 2016 . |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Term Loan | Term Loan On November 10, 2015, we entered into a credit agreement (the Credit Agreement) to obtain a three -year senior secured term loan B (the Term Loan) for $150 million . The Term Loan bears interest at the Eurodollar based rate ( 1% floor) plus an annual margin rate of 7.5% ( 8.5% for the first quarter of 2016), payable quarterly. Quarterly principal payments of $375 thousand are also required. The outstanding balance as of March 31, 2016 was $149.3 million . Debt issuance costs totaling $4.4 million and a 1% debt discount are being amortized to interest expense, using the effective interest method, over the contractual life of the Term Loan. Effective interest rate for the Term Loan includes interest, amortization of issuance cost and the discount. For the quarter ended March 31, 2016 , the Company recorded $3.6 million of interest expense, including amortization of the issuance cost and discount. NMIH is subject to certain quarterly covenants under the Credit Agreement. These covenants include, but are not limited to the following: a maximum debt-to-total capitalization ratio (as defined) of 35% , maximum risk-to-capital (RTC) ratio of 22.0 :1.0, liquidity (as defined) of $36 million as of March 31, 2016 , compliance with financial requirements of PMIERs, and equity requirements. This description is not intended to be complete in all respects and is qualified in its entirety by the terms of the Credit Agreement, including its covenants and events of default. We were in compliance with all covenants as of March 31, 2016 . Future principal payments for the Company's Term Loan as of March 31, 2016 are as follows: As of March 31, 2016 Principal (In thousands) 2016 $ 1,125 2017 1,500 2018 146,625 Total $ 149,250 |
Reserves for Insurance Claims a
Reserves for Insurance Claims and Claim Expenses | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 , we have established reserves for insurance claims of $1.1 million for 55 primary loans in default. We did not pay any claims during the quarter ended March 31, 2016 . In 2013, we entered into a pool insurance transaction 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 March 31, 2016 , 40 loans in the pool were past due by 60 days or more. These 40 loans represent approximately $2.6 million in RIF. Due to the size of the remaining deductible of $10.3 million , the low level of notices of default (NODs) reported through March 31, 2016 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 months ended March 31, 2016 and 2015 . In connection with settlement of pool claims, we applied $18 thousand to the pool deductible through March 31, 2016 . 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 three months ended March 31, 2016 2015 (In Thousands) Balance, January 1 $ 679 $ 83 Claims incurred: Claims and claim expenses incurred: Current year 553 80 Prior years (95 ) 24 Total claims incurred 458 104 Claims paid: Claims and claim expenses paid: Current year — — Prior years — — Total claims paid — — Balance, March 31 $ 1,137 $ 187 There was a $95 thousand favorable prior year development during the three months ended March 31, 2016 . There were $584 thousand of reserves remaining for defaults occurring in prior years as of March 31, 2016 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 | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Warrants | Warrants We issued 992,000 warrants in connection with our Private Placement. Each warrant gives 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 recognized a gain of approximately $37 thousand . No warrants have been exercised for the three month periods ended March 31, 2016 or March 31, 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 | 3 Months Ended |
Mar. 31, 2016 | |
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. We currently pay no federal income tax, and had a federal net operating loss carryforward as of December 31, 2015 of $139.4 million . Our effective income tax rate on our pre-tax loss was 0.0% for the three months ended March 31, 2016 , compared to 3.0% for the comparable 2015 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 | 3 Months Ended |
Mar. 31, 2016 | |
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 Office of the Commissioner of Insurance (Wisconsin OCI), NMIC's principal regulator. 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 loss, statutory surplus, contingency reserve and risk-to-capital (RTC) ratios were as follows: As of and for the three months and year ended March 31, 2016 December 31, 2015 (In Thousands) Statutory net loss $ (10,350 ) $ (52,322 ) Statutory surplus 381,451 391,422 Contingency reserve 42,467 32,564 Risk-to-Capital 10.8:1 8.7:1 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, 2015, NMIC cannot pay any dividends to NMIH through December 31, 2016, without the prior approval of the Wisconsin OCI. |
Organization and Basis of Pre17
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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, 2015 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, 2016 . |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements 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. In April 2015 , the FASB issued Accounting Standard Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Cost (Subtopic 835-30). This update is intended to simplify the presentation of debt issuance costs. In accordance with the new standard, debt issuance costs are presented as a direct deduction from long-term debt. The amended guidance is effective for fiscal years, and interim periods within those fiscal years, beginning December 15, 2015, with early adoption permitted. The Company has elected to early adopt ASU 2015-03 beginning with the year ended December 31, 2015. Application of this standard eliminated the presentation of a deferred cost (asset) and instead required debt issuance costs be presented as a direct deduction from total debt. In May 2014, the FASB issued 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. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718). This update is intended to provide improvements to employee share-based payment accounting. The areas for simplification in the update involve several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any period. The Company is currently evaluating the impact the adoption of this ASU will have on the consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). This update requires that businesses recognize rights and obligations associated with certain leases as assets and liabilities on the balance sheet. The standard also requires additional disclosures regarding the amount, timing, and uncertainty of cash flows arising from leases. For public business entities, this update is effective for annual periods beginning after December 15, 2018, and interim periods therin. Early adoption is permitted in any period. 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 March 31, 2016 and for the period ended March 31, 2015 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) | 3 Months Ended |
Mar. 31, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Fair Values and Gross Unrealized Gains and Losses | Amortized Gross Unrealized Fair Gains Losses As of March 31, 2016 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 59,941 $ 335 $ (30 ) $ 60,246 Municipal debt securities 23,478 468 (38 ) 23,908 Corporate debt securities 317,962 5,965 (1,407 ) 322,520 Asset-backed securities 113,963 293 (707 ) 113,549 Total bonds 515,344 7,061 (2,182 ) 520,223 Short-term investments 36,436 24 — 36,460 Total investments $ 551,780 $ 7,085 $ (2,182 ) $ 556,683 Amortized Gross Unrealized Fair Gains Losses As of December 31, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 84,968 $ 4 $ (490 ) $ 84,482 Municipal debt securities 20,209 44 (174 ) 20,079 Corporate debt securities 337,273 431 (4,377 ) 333,327 Asset-backed securities 101,320 76 (603 ) 100,793 Total bonds 543,770 555 (5,644 ) 538,681 Short-term investments 20,549 5 — 20,554 Total investments $ 564,319 $ 560 $ (5,644 ) $ 559,235 |
Schedule of Investments by Maturity | The amortized cost and fair values of available for sale securities as of March 31, 2016 and December 31, 2015 , 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 March 31, 2016 Amortized Fair (In Thousands) Due in one year or less $ 47,549 $ 47,572 Due after one through five years 178,408 179,487 Due after five through ten years 195,378 200,244 Due after ten years 16,482 15,831 Asset-backed securities 113,963 113,549 Total investments $ 551,780 $ 556,683 As of December 31, 2015 Amortized Fair (In Thousands) Due in one year or less $ 62,745 $ 62,743 Due after one through five years 187,633 186,629 Due after five through ten years 193,379 190,055 Due after ten years 19,242 19,015 Asset-backed securities 101,320 100,793 Total investments $ 564,319 $ 559,235 |
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 March 31, 2016 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 5 $ 7,537 $ (17 ) 9 $ 4,685 $ (13 ) 14 $ 12,222 $ (30 ) Municipal debt securities 1 1,717 (33 ) 1 3,245 (5 ) 2 4,962 (38 ) Corporate debt securities 36 48,691 (1,209 ) 7 7,699 (198 ) 43 56,390 (1,407 ) Asset-backed securities 42 58,765 (664 ) 7 5,213 (43 ) 49 63,978 (707 ) Total investments 84 $ 116,710 $ (1,923 ) 24 $ 20,842 $ (259 ) 108 $ 137,552 $ (2,182 ) 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, 2015 (Dollars in Thousands) U.S. Treasury securities and obligations of U.S. government agencies 14 $ 50,558 $ (397 ) 4 $ 10,194 $ (93 ) 18 $ 60,752 $ (490 ) Municipal debt securities 4 11,293 (165 ) 1 3,242 (9 ) 5 14,535 (174 ) Corporate debt securities 83 244,128 (4,124 ) 4 9,220 (253 ) 87 253,348 (4,377 ) Asset-backed securities 27 69,878 (498 ) 4 9,208 (105 ) 31 79,086 (603 ) Total investments 128 $ 375,857 $ (5,184 ) 13 $ 31,864 $ (460 ) 141 $ 407,721 $ (5,644 ) |
Net Realized Investments Gains (Losses) | For the three months ended March 31, 2016 2015 (In Thousands) Gross realized investment gains $ 556 $ 849 Gross realized investment losses (1,441 ) (236 ) Net realized investment (losses) gains $ (885 ) $ 613 |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 37,429 $ 22,817 $ — $ 60,246 Municipal debt securities — 23,907 — 23,907 Corporate debt securities — 322,520 — 322,520 Asset-backed securities — 113,549 — 113,549 Cash, cash equivalents and short-term investments 109,763 — — 109,763 Total assets $ 147,192 $ 482,793 $ — $ 629,985 Warrant liability $ — $ — $ 797 $ 797 Total liabilities $ — $ — $ 797 $ 797 Fair Value Measurements Using Quoted Prices in Significant Other Significant Fair Value As of December 31, 2015 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 65,185 $ 19,297 $ — $ 84,482 Municipal debt securities — 20,079 — 20,079 Corporate debt securities — 333,327 — 333,327 Asset-backed securities — 100,793 — 100,793 Cash, cash equivalents and short-term investments 77,872 — — 77,872 Total assets $ 143,057 $ 473,496 $ — $ 616,553 Warrant liability $ — $ — $ 1,467 $ 1,467 Total liabilities $ — $ — $ 1,467 $ 1,467 |
Roll-Forward of Level 3 Liabilities Measured at Fair Value | The following is a roll-forward of Level 3 liabilities measured at fair value: For the three months ended March 31, Warrant Liability 2016 2015 (In Thousands) Balance, January 1 $ 1,467 $ 3,372 Change in fair value of warrant liability included in earnings (670 ) (1,248 ) Issuance of common stock on warrant exercise — — Gain on settlement of warrants — — Balance, March 31 $ 797 $ 2,124 |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Future Principal Payments | Future principal payments for the Company's Term Loan as of March 31, 2016 are as follows: As of March 31, 2016 Principal (In thousands) 2016 $ 1,125 2017 1,500 2018 146,625 Total $ 149,250 |
Reserves for Insurance Claims21
Reserves for Insurance Claims and Claim Expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 three months ended March 31, 2016 2015 (In Thousands) Balance, January 1 $ 679 $ 83 Claims incurred: Claims and claim expenses incurred: Current year 553 80 Prior years (95 ) 24 Total claims incurred 458 104 Claims paid: Claims and claim expenses paid: Current year — — Prior years — — Total claims paid — — Balance, March 31 $ 1,137 $ 187 |
Statutory Information (Tables)
Statutory Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 three months and year ended March 31, 2016 December 31, 2015 (In Thousands) Statutory net loss $ (10,350 ) $ (52,322 ) Statutory surplus 381,451 391,422 Contingency reserve 42,467 32,564 Risk-to-Capital 10.8:1 8.7:1 |
Organization and Basis of Pre23
Organization and Basis of Presentation (Details) | Apr. 17, 2012USD ($)shares | Aug. 31, 2015USD ($) | Nov. 30, 2013shares | Apr. 30, 2012USD ($) | Mar. 31, 2016USD ($)stateshares | Mar. 31, 2015USD ($)shares |
Business Acquisition [Line Items] | ||||||
Proceeds from issuance of common stock, net of stock issuance costs | $ 510,000,000 | |||||
Number of states in which the entity operates | state | 50 | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 7,351,338 | 7,137,901 | ||||
Deferred policy acquisition cost, amortization expense | $ 900,000 | $ 400,000 | ||||
Premium deficiency reserve | $ 0 | $ 0 | ||||
NMI Services, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Capitalized wholly owned subsidiary, amount | $ 500,000 | |||||
Common Stock - Class A | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued during period, shares, net issues (in shares) | shares | 55,000,000 | |||||
MAC Financial Holding Corporation and Subsidiaries | ||||||
Business Acquisition [Line Items] | ||||||
Consideration transferred, cash and equity interests issued and issuable | $ 8,500,000 | |||||
Consideration transferred, liabilities incurred | $ 1,300,000 | |||||
IPO | ||||||
Business Acquisition [Line Items] | ||||||
Stock issued during period, shares, net issues (in shares) | shares | 2,400,000 |
Investments - Fair Values and G
Investments - Fair Values and Gross Unrealized Gains and Losses on Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 551,780 | $ 564,319 |
Gross Unrealized Gains | 7,085 | 560 |
Gross Unrealized (Losses) | (2,182) | (5,644) |
Fair Value | 556,683 | 559,235 |
U.S. Treasury securities and obligations of U.S. government agencies | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 59,941 | 84,968 |
Gross Unrealized Gains | 335 | 4 |
Gross Unrealized (Losses) | (30) | (490) |
Fair Value | 60,246 | 84,482 |
Municipal debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 23,478 | 20,209 |
Gross Unrealized Gains | 468 | 44 |
Gross Unrealized (Losses) | (38) | (174) |
Fair Value | 23,908 | 20,079 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 317,962 | 337,273 |
Gross Unrealized Gains | 5,965 | 431 |
Gross Unrealized (Losses) | (1,407) | (4,377) |
Fair Value | 322,520 | 333,327 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 113,963 | 101,320 |
Gross Unrealized Gains | 293 | 76 |
Gross Unrealized (Losses) | (707) | (603) |
Fair Value | 113,549 | 100,793 |
Bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 515,344 | 543,770 |
Gross Unrealized Gains | 7,061 | 555 |
Gross Unrealized (Losses) | (2,182) | (5,644) |
Fair Value | 520,223 | 538,681 |
Short-term investments | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 36,436 | 20,549 |
Gross Unrealized Gains | 24 | 5 |
Gross Unrealized (Losses) | 0 | 0 |
Fair Value | $ 36,460 | $ 20,554 |
Investments - Scheduled Maturit
Investments - Scheduled Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Due in one year or less | $ 47,549 | $ 62,745 |
Amortized Cost, Due after one through five years | 178,408 | 187,633 |
Amortized Cost, Due after five through ten years | 195,378 | 193,379 |
Amortized Cost, Due after ten years | 16,482 | 19,242 |
Amortized Cost, Total Investments | 551,780 | 564,319 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Fair Value [Abstract] | ||
Fair Value, Due in one year or less | 47,572 | 62,743 |
Fair Value, Due after one through five years | 179,487 | 186,629 |
Fair Value, Due after five through ten years | 200,244 | 190,055 |
Fair Value Due after ten years | 15,831 | 19,015 |
Fair Value, Total Investments | 556,683 | 559,235 |
Asset-backed securities | ||
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Amortized Cost Basis [Abstract] | ||
Amortized Cost, Total Investments | 113,963 | 101,320 |
Available-for-sale Securities, Debt Maturities, Single Maturity Date, Fair Value [Abstract] | ||
Fair Value, Total Investments | $ 113,549 | $ 100,793 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Schedule of Available-for-sale Securities [Line Items] | |||
Unrealized loss position, accumulated loss | $ (2,182) | $ (5,644) | |
Unrealized losses, 12 months or greater | (259) | (460) | |
Investment income, investment expense | 200 | $ 100 | |
U.S. Treasury securities and obligations of U.S. government agencies | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Unrealized loss position, accumulated loss | (30) | (490) | |
Unrealized losses, 12 months or greater | (13) | (93) | |
Cash and investments held with various state insurance departments | 7,000 | $ 7,000 | |
Fixed Maturities | |||
Schedule of Available-for-sale Securities [Line Items] | |||
Investment Income, gross | $ 3,400 | $ 1,700 |
Investments - Unrealized Losses
Investments - Unrealized Losses (Details) $ in Thousands | Mar. 31, 2016USD ($)security | Dec. 31, 2015USD ($)security |
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 84 | 128 |
Fair value, less than 12 months | $ 116,710 | $ 375,857 |
Unrealized losses, less than 12 months | $ (1,923) | $ (5,184) |
Number of securities,12 months or greater | security | 24 | 13 |
Fair value, 12 months or greater | $ 20,842 | $ 31,864 |
Unrealized losses, 12 months or greater | $ (259) | $ (460) |
Number of securities, total | security | 108 | 141 |
Fair value | $ 137,552 | $ 407,721 |
Unrealized Losses | $ (2,182) | $ (5,644) |
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 | 5 | 14 |
Fair value, less than 12 months | $ 7,537 | $ 50,558 |
Unrealized losses, less than 12 months | $ (17) | $ (397) |
Number of securities,12 months or greater | security | 9 | 4 |
Fair value, 12 months or greater | $ 4,685 | $ 10,194 |
Unrealized losses, 12 months or greater | $ (13) | $ (93) |
Number of securities, total | security | 14 | 18 |
Fair value | $ 12,222 | $ 60,752 |
Unrealized Losses | $ (30) | $ (490) |
Municipal debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 1 | 4 |
Fair value, less than 12 months | $ 1,717 | $ 11,293 |
Unrealized losses, less than 12 months | $ (33) | $ (165) |
Number of securities,12 months or greater | security | 1 | 1 |
Fair value, 12 months or greater | $ 3,245 | $ 3,242 |
Unrealized losses, 12 months or greater | $ (5) | $ (9) |
Number of securities, total | security | 2 | 5 |
Fair value | $ 4,962 | $ 14,535 |
Unrealized Losses | $ (38) | $ (174) |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 36 | 83 |
Fair value, less than 12 months | $ 48,691 | $ 244,128 |
Unrealized losses, less than 12 months | $ (1,209) | $ (4,124) |
Number of securities,12 months or greater | security | 7 | 4 |
Fair value, 12 months or greater | $ 7,699 | $ 9,220 |
Unrealized losses, 12 months or greater | $ (198) | $ (253) |
Number of securities, total | security | 43 | 87 |
Fair value | $ 56,390 | $ 253,348 |
Unrealized Losses | $ (1,407) | $ (4,377) |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Number of securities, less than 12 months | security | 42 | 27 |
Fair value, less than 12 months | $ 58,765 | $ 69,878 |
Unrealized losses, less than 12 months | $ (664) | $ (498) |
Number of securities,12 months or greater | security | 7 | 4 |
Fair value, 12 months or greater | $ 5,213 | $ 9,208 |
Unrealized losses, 12 months or greater | $ (43) | $ (105) |
Number of securities, total | security | 49 | 31 |
Fair value | $ 63,978 | $ 79,086 |
Unrealized Losses | $ (707) | $ (603) |
Investments - Net Realized Inve
Investments - Net Realized Investment Gains (Losses) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized investment gains | $ 556 | $ 849 |
Gross realized investment losses | (1,441) | (236) |
Net realized investment (losses) gains | $ (885) | $ 613 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments - Assets and Liabilities at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 556,683 | $ 559,235 |
Warrant liability | 797 | 1,467 |
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 | 60,246 | 84,482 |
Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,908 | 20,079 |
Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 322,520 | 333,327 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 113,549 | 100,793 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 109,763 | 77,872 |
Total assets | 629,985 | 616,553 |
Warrant liability | 797 | 1,467 |
Total liabilities | 797 | 1,467 |
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 | 60,246 | 84,482 |
Fair Value, Measurements, Recurring | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,907 | 20,079 |
Fair Value, Measurements, Recurring | Corporate debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 322,520 | 333,327 |
Fair Value, Measurements, Recurring | Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 113,549 | 100,793 |
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, cash equivalents and short-term investments | 109,763 | 77,872 |
Total assets | 147,192 | 143,057 |
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 | 37,429 | 65,185 |
Fair Value, Measurements, Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | Municipal 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) | 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, cash equivalents and short-term investments | 0 | 0 |
Total assets | 482,793 | 473,496 |
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 | 22,817 | 19,297 |
Fair Value, Measurements, Recurring | Significant Other Observable Inputs (Level 2) | Municipal debt securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,907 | 20,079 |
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 | 322,520 | 333,327 |
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 | 113,549 | 100,793 |
Fair Value, Measurements, Recurring | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash, cash equivalents and short-term investments | 0 | 0 |
Total assets | 0 | 0 |
Warrant liability | 797 | 1,467 |
Total liabilities | 797 | 1,467 |
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 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) | 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 Instr30
Fair Value of Financial Instruments - Rollforward of Level 3 (Details) - Significant Unobservable Inputs (Level 3) - Warrant Liability - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 1,467 | $ 3,372 |
Change in fair value of warrant liability included in earnings | (670) | (1,248) |
Issuance of common stock on warrant exercise | 0 | 0 |
Gain on settlement of warrants | 0 | 0 |
Ending balance | $ 797 | $ 2,124 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments - Narrative (Details) - Warrant Liability - Significant Unobservable Inputs (Level 3) | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Share Price (in dollars per share) | $ 5.05 |
Risk free rate | 1.36% |
Expected term | 5 years 11 months 1 day |
Volatility assumption | 35.50% |
Expected dividend rate | 0.00% |
Term Loan - Narrative (Details)
Term Loan - Narrative (Details) - USD ($) | Nov. 10, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||||
Term loan | $ 149,250,000 | |||
Interest expense | (3,632,000) | $ 0 | ||
Senior Secured Debt | Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term | 3 years | |||
Debt instrument, face amount | $ 150,000,000 | |||
Periodic payment of principal | $ 375,000 | |||
Term loan | 149,300,000 | |||
Debt issuance cost | $ 4,400,000 | |||
Percentage of debt discount | 1.00% | |||
Debt instrument covenant, maximum debt-to-total capitalization ratio | 35.00% | |||
Debt instrument covenant, maximum risk-to-capital ratio | 22 | |||
Debt instrument covenant, minimum liquidity requirement | $ 36,000,000 | |||
Senior Secured Debt | Credit Agreement | Initial Eurodollar Annual Margin | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 8.50% | |||
Senior Secured Debt | Credit Agreement | Eurodollar | ||||
Debt Instrument [Line Items] | ||||
Variable rate floor | 1.00% | |||
Basis spread on variable rate | 7.50% |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Principal Payments (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Future Principal Payments [Abstract] | |
2,016 | $ 1,125 |
2,017 | 1,500 |
2,018 | 146,625 |
Total | $ 149,250 |
Reserves for Insurance Claims34
Reserves for Insurance Claims and Claim Expenses - Narrative (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016USD ($)loan | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
IBNR, default period (at least) | 60 days | |||
Liability for insurance claims | $ 1,137 | $ 187 | $ 679 | $ 83 |
Primary loans in default | loan | 55 | |||
Claims applied to deductible | $ 18 | |||
Favorable prior year development | (95) | $ 24 | ||
Reserve for prior year insurance claims and claim expenses | $ 584 | |||
Fannie Mae | ||||
Liability for Claims and Claims Adjustment Expense [Line Items] | ||||
Number of loans in pool past due 60 days or more | loan | 40 | |||
Risk in Force of loans in pool past due 60 days or more | $ 2,600 | |||
Deductible on policy | $ 10,300 | |||
Loan-to-value ratio (less than) | 0.8 |
Reserves for Insurance Claims35
Reserves for Insurance Claims and Claim Expenses - Reconciliation of Reserve Balances for Insurance Claims Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Liability for Unpaid Claims and Claims Adjustment Expense [Roll Forward] | ||
Balance, January 1 | $ 679 | $ 83 |
Liability for Unpaid Claims and Claims Adjustment Expense, Incurred Claims [Abstract] | ||
Current year | 553 | 80 |
Prior years | (95) | 24 |
Total claims incurred | 458 | 104 |
Liability for Unpaid Claims and Claims Adjustment Expense, Claims Paid [Abstract] | ||
Current year | 0 | 0 |
Prior years | 0 | 0 |
Total claims paid | 0 | 0 |
Balance, March 31 | $ 1,137 | $ 187 |
Warrants (Details)
Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2014 | 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 | |||
Number of warrants exercised during period | 0 | 0 | 7,790 | |
Gain from settlement of warrants | $ 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 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Loss Carryforwards [Line Items] | ||
Federal statutory income tax rate | 35.00% | |
Effective income tax rate on pre-tax loss | 0.00% | 3.00% |
Domestic Tax Authority | Internal Revenue Service (IRS) | ||
Operating Loss Carryforwards [Line Items] | ||
Income taxes paid | $ 0 | |
Operating loss carryforwards | $ 139,400,000 |
Statutory Information - Schedul
Statutory Information - Schedule of Statutory Net Loss, Surplus, Contingency Reserve and Risk-to-Capital Ratio (Details) - Combined $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Statutory Accounting Practices [Line Items] | ||
Statutory net loss | $ (10,350) | $ (52,322) |
Statutory surplus | 381,451 | 391,422 |
Contingency reserve | $ 42,467 | $ 32,564 |
Risk-to-Capital | 10.8 | 8.7 |