Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 26, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | WMIH | |
Entity Registrant Name | WMIH CORP. | |
Entity Central Index Key | 933,136 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 216,664,908 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | ||
Investments held in trust: | ||||
Fixed-maturity securities | $ 3,660,000 | |||
Cash equivalents held in trust | $ 708,000 | 4,199,000 | [1] | |
Total cash equivalents and investments held in trust | 708,000 | 5,717,000 | [1] | |
Cash and cash equivalents | 29,058,000 | 26,709,000 | [1] | |
Restricted cash | 575,779,000 | 578,936,000 | [1] | |
Accrued investment income | 48,000 | 59,000 | [1] | |
Other assets | 4,970,000 | 558,000 | [1] | |
Total assets | 610,563,000 | 614,121,000 | [1] | |
Liabilities: | ||||
Losses and loss adjustment reserves | 273,000 | 474,000 | [1] | |
Unearned premiums | 0 | 39,000 | [1] | |
Other liabilities | 20,586,000 | 16,303,000 | [1] | |
Total liabilities | 20,859,000 | 16,816,000 | [1] | |
Commitments and contingencies | [1] | |||
Redeemable convertible series B preferred stock, $0.00001 par value; 600,000 shares issued and outstanding as of June 30, 2018 and December 31, 2017; aggregate liquidation preference of $600,000,000 as of June 30, 2018 and December 31, 2017 | 503,713,000 | 503,713,000 | [1] | |
Stockholders’ equity: | ||||
Common stock, $0.00001 par value; 3,500,000,000 authorized; 216,664,908 and 206,714,132 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively | 2,000 | 2,000 | [1] | |
Additional paid-in capital | 13,150,000 | 39,000 | [1] | |
Retained earnings | 72,839,000 | 93,551,000 | [1] | |
Total stockholders’ equity | 85,991,000 | 93,592,000 | [1] | |
Total liabilities, redeemable convertible preferred stock and stockholders’ equity | 610,563,000 | 614,121,000 | [1] | |
Convertible Series A Preferred Stock [Member] | ||||
Stockholders’ equity: | ||||
Convertible preferred stock value | [1] | |||
Fixed-Maturity Securities Held in Trust [Member] | ||||
Investments held in trust: | ||||
Fixed-maturity securities | [1] | 1,518,000 | ||
Unrestricted Fixed-Maturity Securities [Member] | ||||
Investments held in trust: | ||||
Fixed-maturity securities | [1] | $ 2,142,000 | ||
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Convertible preferred stock, par value | $ 0.00001 | |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 3,500,000,000 | 3,500,000,000 |
Common stock, shares issued | 216,664,908 | 206,714,132 |
Common stock, shares outstanding | 216,664,908 | 206,714,132 |
Redeemable Convertible Series B Preferred Stock [Member] | ||
Redeemable Convertible preferred stock, par value | $ 0.00001 | $ 0.00001 |
Redeemable Convertible preferred stock, shares issued | 600,000 | 600,000 |
Redeemable Convertible preferred stock, shares outstanding | 600,000 | 600,000 |
Redeemable Convertible preferred stock, liquidation value | $ 600,000,000 | $ 600,000,000 |
Convertible Series A Preferred Stock [Member] | ||
Convertible preferred stock, par value | $ 0.00001 | $ 0.00001 |
Convertible preferred stock, shares issued | 1,000,000 | 1,000,000 |
Convertible preferred stock, shares outstanding | 1,000,000 | 1,000,000 |
Convertible preferred stock, liquidation value | $ 10 | $ 10 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenues: | ||||
Premiums earned | $ 18 | $ 329 | $ 41 | $ 759 |
Net investment income | 3,059 | 1,703 | 5,229 | 2,883 |
Total revenues | 3,077 | 2,032 | 5,270 | 3,642 |
Operating expenses: | ||||
Losses and loss adjustment (benefit) expense | (135) | 65 | (73) | 159 |
Ceding commission expense | 43 | 93 | ||
General and administrative expense | 5,208 | 1,786 | 12,922 | 3,798 |
Loss contract reserve reduction | (4,519) | (5,435) | ||
Interest expense | 599 | 1,209 | ||
Total operating expenses | 5,073 | (2,026) | 12,849 | (176) |
Net operating (loss) income | (1,996) | 4,058 | (7,579) | 3,818 |
Other expense: | ||||
Loss on change in fair value of derivative embedded conversion feature | 25,382 | 7,353 | ||
Total other expense | 25,382 | 7,353 | ||
Loss before income taxes | (1,996) | (21,324) | (7,579) | (3,535) |
Net loss | (1,996) | (21,324) | (7,579) | (3,535) |
Redeemable convertible series B preferred stock dividends | (4,500) | (200) | (9,000) | |
Net loss attributable to common and participating stockholders | $ (1,996) | $ (25,824) | $ (7,779) | $ (12,535) |
Basic net loss per share attributable to common stockholders (Note 12) | $ (0.01) | $ (0.13) | $ (0.04) | $ (0.06) |
Shares used in computing basic net loss per share | 206,061,686 | 202,632,883 | 204,386,223 | 202,529,003 |
Diluted net loss per share attributable to common stockholders (Note 12) | $ (0.01) | $ (0.13) | $ (0.04) | $ (0.06) |
Shares used in computing diluted net loss per share | 206,061,686 | 202,632,883 | 204,386,223 | 202,529,003 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Convertible Series A Preferred Stock [Member] | Series B Redeemable Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained earnings [Member] | |
Beginning Balance at Dec. 31, 2016 | $ 194,136 | $ 2 | $ 108,415 | $ 85,719 | |||
Beginning Balance, Shares at Dec. 31, 2016 | 1,000,000 | 206,380,800 | |||||
Preferred Stock Beginning Balance, Shares at Dec. 31, 2016 | 600,000 | ||||||
Preferred Stock Value, Beginning Balance at Dec. 31, 2016 | $ 502,213 | ||||||
Net income (loss) | 25,882 | 25,882 | |||||
Redeemable convertible series B preferred cash dividends | (18,050) | (18,050) | |||||
Reduction of accrued fees incurred relating to Series B preferred stock issuance | $ 1,500 | ||||||
Reclassification of derivative asset | (108,893) | (108,893) | |||||
Issuance of common stock under restricted stock compensation arrangement, Shares | 333,332 | ||||||
Equity-based compensation | 517 | 517 | |||||
Ending Balance at Dec. 31, 2017 | 93,592 | [1] | $ 2 | 39 | 93,551 | ||
Ending Balance, Shares at Dec. 31, 2017 | 1,000,000 | 206,714,132 | |||||
Preferred Stock Ending Balance ,Shares at Dec. 31, 2017 | 600,000 | ||||||
Preferred Stock Value, Ending Balance at Dec. 31, 2017 | 503,713 | [1] | $ 503,713 | ||||
Net income (loss) | (7,579) | (7,579) | |||||
Redeemable convertible series B preferred cash dividends | (200) | (200) | |||||
Issuance of common stock under restricted stock compensation arrangement, Shares | 298,508 | ||||||
Issuance of common stock as payment of Series B preferred stock dividends | 12,933 | (12,933) | |||||
Issuance of common stock as payment of Series B preferred stock dividends, Shares | 9,652,268 | ||||||
Equity-based compensation | 178 | 178 | |||||
Ending Balance at Jun. 30, 2018 | 85,991 | $ 2 | $ 13,150 | $ 72,839 | |||
Ending Balance, Shares at Jun. 30, 2018 | 1,000,000 | 216,664,908 | |||||
Preferred Stock Ending Balance ,Shares at Jun. 30, 2018 | 600,000 | ||||||
Preferred Stock Value, Ending Balance at Jun. 30, 2018 | $ 503,713 | $ 503,713 | |||||
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||
Net loss | $ (1,996) | $ (21,324) | $ (7,579) | $ (3,535) | $ 25,882 |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Amortization of premium or discount on fixed maturity securities | 13 | 76 | |||
Net realized (gain) loss on sale of investments | (6) | 25 | (2) | 27 | |
Unrealized gain on trading securities | (17) | (2) | (15) | (23) | |
Loss on derivative embedded conversion feature | 25,382 | 7,353 | |||
Equity-based compensation | 178 | 313 | |||
Changes in assets and liabilities: | |||||
Accrued investment income | 11 | 19 | |||
Other assets | (4,412) | 19 | |||
Cash equivalents held in trust | 3,491 | (5,327) | |||
Losses and loss adjustment reserves | (201) | (123) | |||
Losses payable | (53) | ||||
Unearned premiums | (10) | (39) | (235) | ||
Accrued ceding commission expense | (9) | ||||
Accrued interest on notes payable | (5) | ||||
Loss contract reserve | (5,435) | ||||
Other liabilities | 7,583 | (533) | |||
Total adjustments | 6,607 | (3,936) | |||
Net cash used in operating activities | (972) | (7,471) | |||
Cash flows from investing activities: | |||||
Purchase of investments | (19,974) | ||||
Proceeds from sales and maturities of investments | 3,664 | 72,663 | |||
Net cash provided by investing activities | 3,664 | 52,689 | |||
Cash flows from financing activities: | |||||
Fees incurred and paid relating to preferred stock issuance | (2,500) | ||||
Redeemable convertible series B preferred stock dividends | (1,000) | (9,000) | |||
Notes payable – principal repayments | (548) | ||||
Net cash used in financing activities | (3,500) | (9,548) | |||
(Decrease) increase in cash and cash equivalents | (808) | 35,670 | |||
Cash, cash equivalents and restricted cash, beginning of period | 605,645 | 575,838 | 575,838 | ||
Cash, cash equivalents and restricted cash, end of period | $ 604,837 | $ 611,508 | 604,837 | 611,508 | $ 605,645 |
Supplementary disclosure of cash flow information: | |||||
Cash paid during the period, Interest | $ 1,214 | ||||
Supplementary disclosure of non-cash investing and financing activities: | |||||
Value of common stock issued to satisfy series B dividends | $ 12,933 |
The Company and its Subsidiarie
The Company and its Subsidiaries | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
The Company and its Subsidiaries | Note 1: The Company and its Subsidiaries WMIH Corp. WMIH Corp. (“WMIH”) is a corporation duly organized and existing under the laws of the State of Delaware since May 11, 2015. WMIH is the direct parent of WM Mortgage Reinsurance Company, Inc., a Hawaii corporation (“WMMRC”), and, until its dissolution on January 18, 2018, WMI Investment Corp., a Delaware corporation (“WMIIC”). Additionally, WMIH is the direct parent of Wand Merger Corporation, a Delaware corporation (“Merger Sub”). Since emerging from bankruptcy on March 19, 2012 (the “Effective Date”), we have had limited operations other than WMMRC’s legacy reinsurance business, which is being operated in runoff mode. Since the Effective Date, our primary strategic objective has been to identify and consummate one or more acquisitions of an operating business, either through a merger, purchase, business combination or other form of acquisition. To that end, we have continued to seek, identify and evaluate acquisition opportunities of varying sizes across an array of industries for the purpose of facilitating an acquisition by WMIH of one or more operating businesses. Since 2014, in addition to management’s ongoing efforts, WMIH has worked with our strategic partner, an affiliate of KKR & CO. L.P. (together with its affiliates, “KKR”), to identify and evaluate potential acquisition opportunities. On February 12, 2018, WMIH, Merger Sub and Nationstar Mortgage Holdings Inc., a Delaware corporation that is currently listed on the New York Stock Exchange under the ticker symbol “NSM” (“Nationstar”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), pursuant to which, subject to the satisfaction or waiver of the conditions set forth therein, Merger Sub will merge with and into Nationstar (the “Nationstar Transaction” or the “Merger”), with Nationstar continuing as the surviving corporation and a wholly-owned subsidiary of WMIH. Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger (the “Merger Effective Time”) and as a result of the Merger, each share of Nationstar’s common stock issued and outstanding immediately prior to the Merger Effective Time (other than shares owned, directly or indirectly, by Nationstar, WMIH or Merger Sub or by any Nationstar stockholder who properly exercises and perfects appraisal of his, her or its shares under Delaware law) will be converted into the right to receive, at the election of the holder of such share, (i) $18.00 per share in cash, without interest, or (ii) 12.7793 shares of validly issued, fully paid and nonassessable shares of WMIH common stock, par value $0.00001 per share, subject in each case to pro rata On June 29, 2018, the stockholders of each of WMIH and Nationstar approved all proposals relating to the Merger. The closing of the Merger is expected to occur on July 31, 2018 and remains subject to the satisfaction of certain closing conditions. In connection with the Merger, on June 14, 2018, Nationstar Mortgage LLC and Nationstar Capital Corporation, both subsidiaries of Nationstar (the “Existing Note Issuers”), commenced solicitations of consents from holders of the Existing Note Issuers’ 6.500% Senior Notes due 2021 (the “Existing 2021 Notes”) and the Existing Note Issuers’ 6.500% Senior Notes due 2022 (the “Existing 2022 Notes” and, together with the Existing 2021 Notes, the “Existing Notes”) to approve amendments to the indentures governing each of the Existing 2021 Notes (the “Existing 2021 Notes Indenture”) and the Existing 2022 Notes (the “Existing 2022 Notes Indenture” and, together with the Existing 2021 Notes Indenture, the “Existing Indentures” and each, an “ Existing Indenture”) to modify (x) the definition of “Sponsor” in each Existing Indenture to include any of (i) Fortress Investment Group LLC and its Affiliates (as such term is defined in each Existing Indenture) (other than any portfolio company of any of the foregoing) and (ii) KKR and its affiliates, including WMIH and its affiliates (other than any portfolio company of any of the foregoing), and (y) the definition of “Change of Control” (as defined in each Existing Indenture) to provide that the Merger will not constitute a Change of Control under either Existing Indenture. On June 21, 2018, upon receiving the requisite consents from holders of at least a majority of the outstanding aggregate principal amount of each of the Existing 2021 Notes and the Existing 2022 Notes, the Existing Notes Issuers and the guarantors party to each Existing Indenture executed a supplemental indenture with Wells Fargo Bank, National Association (the “Existing Notes Trustee”) to each of the Existing 2021 Notes Indenture and the Existing 2022 Notes Indenture to reflect the amendments. Pursuant to the terms of each supplemental indenture, the amendments to the applicable Existing Indenture became effective on June 21, 2018, but if the Merger is not consummated on or before November 12, 2018 (as such date may be extended pursuant to the Merger Agreement) or if the Merger Agreement is earlier terminated in accordance with its terms, each supplemental indenture provides that the definitions of “Change of Control” and “Sponsor” in the Existing 2021 Notes Indenture and the Existing 2022 Notes Indenture shall revert to the form in effect prior to June 21, 2018. The success of the consent solicitations with respect to the Existing Notes provides the parties the flexibility to continue their obligations under the Existing Notes Indentures following the Merger, without default or without otherwise triggering redemption obligations thereunder. On June 29, 2018, Merger Sub entered into a Note Purchase Agreement with Credit Suisse Securities (USA) LLC, Jefferies LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Goldman Sachs & Co. LLC, KKR Capital Markets LLC and Morgan Stanley & Co. LLC pursuant to which Merger Sub issued $1,700,000,000 (the “Offering”) of notes in two series, consisting of $950,000,000 aggregate principal amount of 8.125% Notes due 2023 (the “2023 Notes”) and $750,000,000 aggregate principal amount of 9.125% Notes due 2026 (the “2026 Notes” and, together with the 2023 Notes, the “Notes”). Merger Sub sold the Notes to the initial purchasers in the Offering, which was exempt from the registration requirements of the Securities Act. The Notes were offered for resale to “qualified institutional buyers” as defined in Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. On July 13, 2018 the previously announced Offering was consummated. The proceeds from the Offering were deposited into escrow, and upon release in connection with the closing of the Nationstar Transaction, the proceeds from the Offering will be used, together with the issuance of WMIH’s common stock and WMIH’s cash and restricted cash on hand, to consummate the Nationstar Transaction and the refinancing of certain of Nationstar’s existing debt and to pay related fees and expenses or otherwise in accordance with the terms of the escrow agreement, dated as of July 13, 2018, among Merger Sub, Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as escrow agent. If the Nationstar Transaction is not completed by the earlier of the termination of the Merger Agreement or November 12, 2018, subject to extension pursuant to the terms of the Merger Agreement, the Company will be required to redeem the Notes and the proceeds from the sale of the Notes will be automatically released from escrow and utilized to fund such redemption. Prior to the consummation of the Merger, the Notes will initially be senior obligations of Merger Sub, secured by the escrowed property, and will be fully and unconditionally guaranteed by the Company. Upon the consummation of the Merger, Nationstar will assume all of the Issuer’s obligations under the Notes (the “Assumption”). Following the Assumption, the Notes will be senior unsecured obligations of Merger Sub and will be fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by WMIH and each of Nationstar’s existing and future wholly-owned domestic subsidiaries (other than certain excluded subsidiaries). If we do not consummate the Nationstar Transaction or another Acquisition or Qualified Acquisition (as such terms are defined in our Amended and Restated Certificate of Incorporation (as amended, the “Certificate of Incorporation”)) on or prior to October 5, 2019 (the “Series B Redemption Date”), as such date may be extended in accordance with the provisions of our Certificate of Incorporation, the outstanding shares of WMIH’s 5.00% Series B Convertible Preferred Stock (the “Series B Preferred Stock”) would be required to be redeemed, as more fully described in Note 9: Capital Stock and Derivative Instruments. As of June 30, 2018, WMIH was authorized to issue up to 3,500,000,000 shares of common stock, and up to 10,000,000 shares of preferred stock (in one or more series), in each case with a par value of $0.00001 per share. As of June 30, 2018 and December 31, 2017, 216,664,908 and 206,714,132 shares, respectively, of WMIH’s common stock and 1,000,000 shares of WMIH’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”), were issued and outstanding. As of December 31, 2017, 600,000 shares of WMIH’s 3% Series B Convertible Preferred Stock (the “Original Series B Preferred Stock”) were issued and outstanding. On December 11, 2017, we announced an amendment of the Original Series B Preferred Stock (the “Series B Amendment”), which became automatically effective at 12:00 a.m., New York City time, on January 5, 2018, and effected an exchange of the previously outstanding Original Series B Preferred Stock for shares of Series B Preferred Stock. As of June 30, 2018, 600,000 shares of Series B Preferred Stock were issued and outstanding. WMMRC WMMRC is a wholly-owned subsidiary of WMIH. Prior to August 2008 (at which time WMMRC became a direct subsidiary of Washington Mutual, Inc. (“WMI”), WMMRC was a wholly-owned subsidiary of FA Out-of-State Holdings, Inc., a second-tier subsidiary of Washington Mutual Bank (“WMB”) and third-tier subsidiary of WMI. WMMRC is a pure captive insurance company domiciled in the State of Hawaii. WMMRC was incorporated on February 25, 2000, and received a Certificate of Authority, dated March 2, 2000, from the Insurance Division of the State of Hawaii. WMMRC was originally organized to reinsure private mortgage insurance risk for seven primary mortgage insurers then offering private mortgage insurance on loans originated or purchased by former subsidiaries of WMI. The seven primary mortgage insurers are United Guaranty Residential Insurance Company (“UGRIC”), Genworth Mortgage Insurance Corporation (“GMIC”), Mortgage Guaranty Insurance Corporation (“MGIC”), PMI Mortgage Insurance Company (“PMI”), Radian Guaranty Incorporated (“Radian”), Republic Mortgage Insurance Company (“RMIC”) and Triad Guaranty Insurance Company (“Triad”). Due to the then deteriorating performance in the mortgage guarantee markets and the closure and receivership of WMB, the reinsurance agreements with each of the primary mortgage insurers were terminated or placed into runoff during 2008. The agreements with UGRIC and Triad were placed into runoff effective May 31, 2008. The agreements with all other primary mortgage insurers were placed into runoff effective September 26, 2008. As a result, effective September 26, 2008, WMMRC’s continuing operations consisted solely of the runoff of coverage associated with mortgages placed with the primary mortgage carriers prior to September 26, 2008. In runoff, an insurer generally writes no new business but continues to service its obligations under in force policies and otherwise continues as a licensed insurer. The reinsurance agreements with Triad, PMI, UGRIC and Radian were commuted on August 31, 2009, October 2, 2012, April 3, 2014 and October 23, 2017, respectively, and the related trust assets were distributed in accordance with the commutation agreements. In addition, the RMIC reinsurance agreement was terminated on February 2, 2018, and the remaining trust assets were distributed to WMMRC per the terms of the agreement. On February 13, 2018, the aggregate excess of loss reinsurance agreement between WMMRC and GMIC was terminated in accordance with the terms of the agreement. The underlying trust and the related quota share agreement remain in place. As a result, WMMRC’s current continuing operations consist solely of the runoff of coverage associated with mortgages placed with the following two remaining carriers, GMIC and MGIC. WMIIC WMIIC was dissolved on January 18, 2018. As of December 31, 2017 and the date of its dissolution, WMIIC did not have any operations and was fully eliminated upon consolidation. Merger Sub On February 6, 2018, Merger Sub was formed as a wholly-owned subsidiary of WMIH. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 2: Significant Accounting Policies Basis of Presentation WMIH resumed timely filing of all periodic reports for a reporting company under the Exchange Act for all periods after emergence from bankruptcy on the Effective Date. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reporting. Certain information and footnote disclosures normally included in the financial statements and prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures included are appropriate. The condensed consolidated balance sheet as of December 31, 2017, included herein, was derived from the audited consolidated financial statements as of that date. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto filed in the Company’s Annual Report on Form 10-K, filed with the SEC on March 2, 2018. Interim information presented in the unaudited condensed consolidated financial statements has been prepared by management. In the opinion of management, the financial statements include all adjustments necessary for a fair presentation and that all such adjustments are of a normal, recurring nature and necessary for the fair statement of the financial position, results of operations and cash flows for the periods presented in accordance with GAAP. The results of operations for the six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018. All significant intercompany transactions and balances have been eliminated in preparing the condensed consolidated financial statements. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Management has made significant estimates in certain areas, including valuing certain financial instruments, other assets and liabilities, the determination of the contingent risk liabilities, and in determining appropriate insurance reserves. Actual results could differ substantially from those estimates. Fair Value of Certain Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Generally, for assets that are reported at fair value, the Company uses quoted market prices or valuation models to estimate their fair value. These models incorporate inputs such as forward yield curves, market volatilities and pricing spreads, utilizing market-based inputs where readily available. The degree of management judgment involved in estimating the fair value of a financial instrument or other asset is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are actively traded in the marketplace or whose values are based on readily available market value data, little judgment is necessary when estimating the instrument’s fair value. When observable market prices and data are not readily available, significant management judgment often is necessary to estimate fair value. In those cases, different assumptions could result in significant changes in valuation. The Company classifies fixed-maturity investments as trading securities, which are recorded at fair value. As such, changes in unrealized gains and losses on investments held at the balance sheet date are recognized and reported as a component of net investment income on the condensed consolidated statement of operations. The Company believes fair value provides better matching of investment earnings to potential cash flow generated from the investment portfolio and reduces subjectivity related to evaluating other-than-temporary impairment on the Company’s investment portfolio. The carrying value of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their respective fair values because of their short-term nature. The carrying value of the loss contract reserve, in periods during which such reserve exists, approximates its fair value and is based on valuation methodologies using discounted cash flows at interest rates which approximate the Company’s weighted-average cost of capital. The carrying value of the d erivative embedded conversion feature adjusted to its fair value as determined using Level 3 inputs described below under fair value measurement. The carrying value of notes payable, in periods during which such notes payable exist, approximates fair value based on time to maturity, underlying collateral, and prevailing interest rates. Fair Value Measurement The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the Financial Accounting Standards Board (“FASB”) Fair Value Measurements and Disclosures accounting guidance. The framework is based on the inputs used in valuation and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The three levels of the hierarchy are as follows: Level 1–Inputs to the valuation methodology are quoted prices for identical assets or liabilities traded in active markets. Level 2–Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market corroborated inputs. Level 3–Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use. Fair values are based on quoted prices in active markets when available (Level 1). The Company receives the quoted prices from a third party, nationally recognized pricing service. When quoted prices are not available, the Company utilizes a pricing service to determine an estimate of fair value. The fair value is generally estimated using current market inputs for similar financial instruments with comparable terms and credit quality, commonly referred to as matrix pricing (Level 2). These valuation techniques involve some level of management estimation and judgment. The Company recognizes transfers between levels in the fair value hierarchy at the end of the reporting period. Fixed-Maturity Securities Fixed-maturity securities consisted of U.S. Treasury securities, obligations of U.S. government sponsored agencies and domestic and foreign corporate debt securities. Fixed-maturity securities held in trust were for the benefit of the primary insurers as more fully described in Note 3: Insurance Activity. Investments in fixed-maturity securities are reported at their estimated fair values and are classified as trading securities in accordance with applicable accounting guidance. Realized gains and losses on the sale of fixed-maturity securities are determined using the specific identification method and are reported as a component of net investment income within the condensed consolidated statement of operations. Investments Held in Trust Investments held in trust consisted of cash equivalents, which included highly liquid overnight money market instruments, and fixed-maturity securities which were held in trust for the benefit of the primary insurers, as more fully described in Note 3: Insurance Activity and Note 4: Investment Securities, and are subject to the restrictions on distribution of net assets of subsidiaries as described below. Third Party Restrictions on Distribution of Net Assets of Wholly-Owned Subsidiaries The net assets of WMMRC are subject to restrictions on distribution from multiple sources, including the primary insurers who have approval control of distributions from the trust, and the Insurance Division of the State of Hawaii who has approval authority over distributions or intercompany advances. Premium Recognition Premiums assumed are earned on a daily pro-rata basis over the underlying policy terms. Premiums assumed relating to the unexpired portion of policies in force at the balance sheet date are recorded as unearned premiums. Unearned premiums also include a reserve for post default premium reserves. Post default premium reserves occur when a loan is in a default position and the servicer continues to advance the premiums. If the loan ultimately goes to claim, the premiums advanced during the period of default are subject to recapture. The Company records a default premium reserve based on information provided by the underlying mortgage insurers when they provide information on the default premium reserve separately from other reserves. The change in the post default premium reserve is reflected as a reduction or increase, as the case may be, in premiums assumed. The Company has recorded unearned premiums totaling zero and $39 thousand as of June 30, 2018 and December 31, 2017, respectively. The Company recognizes premium deficiencies when there is a probable loss on an insurance contract. Premium deficiencies are recognized if the sum of the present value of expected losses and loss adjustment expenses, unamortized deferred acquisition costs, and maintenance costs, excluding intercompany charges, exceed expected future unearned premiums and anticipated investment income. Premium deficiency reserves have been recorded totaling $0.3 million and $0.3 million as of June 30, 2018 and December 31, 2017, respectively. Intercompany administrative costs are excluded from the computation of premium deficiencies. The Company’s premium deficiency analysis was performed on a single book basis and includes all book years and reinsurance treaties aggregated together using assumptions based on the actuarial best estimates at the balance sheet date. The calculation for premium deficiency requires significant judgment and includes estimates of future expected premiums, claims, loss adjustment expenses and investment income as of the balance sheet date. To the extent ultimate losses are higher or premiums are lower than estimated, additional premium deficiency reserves may be required in the future. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, U.S. Treasury bills and overnight investments. Except as described above in Investments Held in Trust, the Company considers all amounts that are invested in highly liquid overnight money market instruments to be cash equivalents. The Federal Deposit Insurance Corporation (“FDIC”) insures amounts on deposit with each financial institution up to limits as prescribed by law. The Company may hold funds with financial institutions in excess of the FDIC insured amount, however, the Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. Restricted Cash Restricted cash includes proceeds of the Original Series B Preferred Stock offering held in escrow and included, through the termination of the Indentures (as defined in Note 7: Notes Payable) on October 2, 2017, amounts held for the express purposes of paying principal, interest and related fees on the Runoff Notes (as defined in Note 7: Notes Payable) pursuant to the terms of the Indentures. Other Assets At June 30, 2018, the total balance of approximately $5.0 million in other assets is comprised of approximately $4.6 million of amounts that relate to the debt Offering further described in Note 14 – Subsequent events. The debt related amounts will be amortized over the life of the debt and will be reclassed to offset the outstanding debt in July of 2018. The non-debt related items recorded as prepaid at June 30, 2018 totaled approximately $0.4 million and related to prepaid amounts which will be expensed in future periods. At December 31, 2017, the total balance of approximately $0.6 million related to prepaid amounts which have been or will be expensed in future periods. Ceding Commission Expense The Company is required to pay a ceding commission to certain primary insurers pursuant to certain reinsurance agreements. Losses and Loss Adjustment Reserves The losses and loss adjustment reserves include case basis estimates of reported losses and supplemental amounts for incurred but not reported (“IBNR”) losses. A default is considered the incident (e.g., the failure to make timely payment of mortgage payments) that may give rise to a claim for mortgage insurance. In establishing the losses and loss adjustment reserve, the Company based its estimates primarily on the ceded loss and loss adjustment reserves as provided by the primary mortgage guaranty carriers. WMMRC has recorded reserves at the ceded case reserves and IBNR loss levels established and reported by the primary mortgage guaranty carriers as of June 30, 2018 and December 31, 2017, respectively. Management believes that the recorded aggregate liability for unpaid losses and loss adjustment expenses at period end represents the Company’s best estimate, based upon the available data, of the amount necessary to cover the current cost of losses. However, due to the inherent uncertainty arising from fluctuations in the persistency rate of mortgage insurance claims, the Company’s size and lack of prior operating history, external factors such as future changes in regional or national economic conditions, judicial decisions, federal and state legislation related to mortgage restructuring and foreclosure restrictions, claims denials and coverage rescissions by primary carriers and other factors beyond the Company’s control, it is not presently possible to determine whether actual loss experience will conform to the assumptions used in determining the estimated amounts for such liability at the balance sheet date. Accordingly, the ultimate liability could be significantly higher or lower, as the case may be, than the amount indicated in the financial statements and there can be no assurance that the reserve amounts recorded will be sufficient. As adjustments to these estimates become necessary, such adjustments are reflected in current operations Loss Contract Reserve A loss contract reserve relating to contractual obligations of WMMRC was established at March 19, 2012 as a result of applying fresh start accounting and in compliance with Accounting Standards Codification (“ASC”) 805-10-55-21- Broad Transactions, which defines a loss contract as “a contract in which the unavoidable costs of meeting the obligation under the contract exceed the economic benefits expected to be received under it.” The value of this reserve is analyzed quarterly and is adjusted accordingly. The adjustment (if any) to the reserve produces an expense or contra-expense in the condensed consolidated statements of operations. Derivatives We evaluate our convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted. This accounting treatment requires that the carrying amount of embedded derivatives be marked-to-market at each balance sheet date and carried at fair value. In the event that the fair value is recorded as a liability, the change in fair value during the period is recorded in the condensed consolidated statement of operations as either income or expense. If an embedded derivative is no longer required to be separately accounted for due to conversion, exercise or modification to the terms of an instrument, the derivative is marked to fair value at the conversion, exercise or modification date and then the related fair value is reclassified to equity. In circumstances where the embedded conversion feature in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of financial instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Management must determine whether an instrument (or an embedded feature) is indexed to our stock. An entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The application of this exercise could affect the accounting for (i) certain freestanding warrants that contain exercise price adjustment features or contain contingently puttable cash settlement options, if any, and (ii) convertible notes containing anti-dilution protections and/or exercise price adjustment features. The Company had recorded a derivative embedded conversion feature as a result of the issuance of the Original Series B Preferred Stock which was adjusted to its fair value as determined using Level 3 inputs described above under Fair Value Measurement. The change in fair value of the derivative embedded conversion feature was calculated at each reporting date and recorded as other income or other expense on the condensed consolidated statement of operations. As a result of the Series B Amendment, the embedded conversion feature was modified, and the derivative was marked to fair value at December 31, 2017 and then the related fair value was reclassified to equity in accordance with Accounting Standards Codification (“ASC”) 815-15-35-4 - Embedded Conversion Option that No Longer Meets Bifurcation Criteria, as more fully described in Note 9: Capital Stock and Derivative Instruments. Other Liabilities At June 30, 2018, the total balance of $20.6 million of other liabilities is comprised of $8.3 million of accrued fees relating to the Original Series B Preferred Stock offering and an accrual for professional fees and recurring business expenses currently payable of approximately $12.3 million. At December 31, 2017, the total balance of $16.3 million of other liabilities is comprised of $8.3 million of accrued fees relating to the Original Series B Preferred Stock offering, $2.5 million related to an extension of the escrow agreement related to the Series B Preferred Stock, an accrual for professional fees and recurring business expenses of approximately $4.7 million and $0.8 million of accrued cash dividends relating to the Original Series B Preferred Stock. The accrued fees would be paid in the event of a Qualified Acquisition, as more fully described in Note 6: Service Agreements and Related Party Transactions. Comprehensive Income The Company has no comprehensive income other than the net income disclosed in the condensed consolidated statement of operations. Net Income (Loss) Per Common Share In calculating earnings per share, the Company follows the two-class method, which distinguishes between the classes of securities based on the proportionate participation rights of each security type in the Company's undistributed income. The Series A Preferred Stock and the Series B Preferred Stock are treated as one class for purposes of applying the two-class method, because they have substantially equal rights and share equally on an as converted basis with respect to income available to WMIH common stockholders. Basic net income per WMIH common share is computed by dividing net income attributable to WMIH’s common stockholders by the weighted-average number of common shares outstanding for the period after subtracting the weighted-average of any unvested restricted shares outstanding, as these are subject to repurchase. Basic net income attributable to common stockholders is computed by deducting preferred dividends and the basic calculation of undistributed earnings attributable to participating securities from net income. Diluted net income per WMIH common share is computed by dividing net income attributable to WMIH’s common stockholders by the weighted-average number of common shares outstanding during the period after subtracting the weighted-average of any unvested restricted shares outstanding, as these are subject to repurchase, and adding any potentially dilutive WMIH common stock equivalents outstanding during the period. Diluted net income attributable to common stockholders is computed by deducting preferred dividends and the diluted calculation of undistributed earnings attributable to participating securities from net income. If common stock equivalents exist, in periods where there is a net loss, diluted net loss per common share would be equal to or less than basic net loss per common share, since the effect of including any common stock equivalents would be antidilutive. Equity-Based Compensation On May 22, 2012, WMIH’s Board of Directors (the “Board” or “Board of Directors”) approved the Company’s 2012 Long-Term Incentive Plan (the “2012 Plan”) so that awards of restricted stock could be made to its non-employee directors and to have a plan in place for awards of equity based compensation to executives and others in connection with the Company’s operations and future strategic plans. A total of 2.0 million shares of WMIH’s common stock were initially reserved for future issuance under the 2012 Plan, which became effective upon the Board approval on May 22, 2012. On February 10, 2014, the Board approved and adopted a First Amendment to the 2012 Plan, pursuant to which the number of shares of WMIH’s common stock reserved and available for grants under the 2012 Plan was increased from 2.0 million shares to 3.0 million shares, and the terms of the 2012 Plan were modified to permit such an increase through action of the Board, except when stockholder approval is necessary to comply with any applicable law, regulation or rule of any stock exchange on which WMIH’s shares are listed, quoted or traded. On February 25, 2015, the number of shares authorized and available for awards under the 2012 Plan was increased from 3.0 million to 12.0 million shares of WMIH’s common stock, subject to approval of stockholders of WMIH. This approval was received at WMIH’s Annual Meeting of Stockholders on April 28, 2015. The 2012 Plan provides for the granting of restricted shares and other cash and share based awards. The value of restricted stock is generally determined using the fair market value determined to be the trading price at the close of business on the respective date the awards were granted. Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the carrying amounts and tax bases of assets and liabilities and losses carried forward and tax credits. Deferred tax assets and liabilities are measured using enacted tax rates and laws applicable to the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent that it is more likely than not that deferred tax assets will not be realized. The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Penalties and interest, of which there are none, would be reflected in income tax expense. Tax years are open to the extent the Company has net operating loss (“NOL”) carry-forwards available to be utilized currently. On December 22, 2017, the Tax Cuts and Jobs Act, which reforms U.S. Tax legislation and related laws, was signed into law. One of the provisions of the new tax law reduced the Company’s U.S. federal corporate income tax rate from 35% to 21%. Our deferred tax assets, although fully reserved, have been revalued at the lower rate as of December 31, 2017. The Company continues to evaluate the impact of the new tax law on its financial condition and results of operations. Dividend Policy WMIH has paid no dividends on its common stock on or after the Effective Date and currently has no plans to pay a dividend on its common stock. WMIH has paid $1.0 million and $18.0 million of cash dividends on its Series B Preferred Stock for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively. Additionally, on June 15, 2018, WMIH issued 9,652,268 shares of WMIH common stock, having a value of $12.9 million, to holders of Series B Preferred Stock, to satisfy the dividends earned on Series B Preferred Stock through June 15, 2018. The value of the dividend reduced retained earnings and increased common stock and additional paid in capital, therefore having no net impact on total equity. Additionally, WMIH had accrued unpaid and undeclared cash dividends of zero and $0.8 million, as of June 30, 2018 and December 31, 2017, respectively. New Accounting Pronouncements The Company has reviewed new accounting pronouncements issued between May 10, 2018, the filing date of our most recent Form 10-Q, and the filing date of this Form 10-Q, and has determined that no pronouncements issued are relevant to the Company, and/or have a material impact on the Company’s consolidated financial position, results of operations or disclosure requirements. |
Insurance Activity
Insurance Activity | 6 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Insurance Activity | Note 3: Insurance Activity The Company, through WMMRC, reinsures mortgage guaranty risks of mortgage loans originated by affiliates of the Company during the period from 1997 through 2008. WMMRC is (or was) a party to reinsurance agreements with UGRIC, GMIC, MGIC, PMI, Radian, RMIC and Triad. The agreements with UGRIC and Triad were placed into runoff effective May 31, 2008. The agreements with all other primary mortgage insurers were placed into runoff effective September 26, 2008. The reinsurance agreements with Triad, PMI, UGRIC and Radian were commuted on August 31, 2009, October 2, 2012, April 3, 2014, and October 23, 2017, respectively. The RMIC agreement was terminated on February 2, 2018 and the GMIC aggregate excess of loss minimum agreement was terminated on February 13, 2018. All agreements between WMMRC and the primary mortgage insurers are on an excess of loss basis, except for a reinsurance treaty with GMIC during 2008, which is reinsured on a 50% quota share basis. Pursuant to the excess of loss reinsurance treaties, WMMRC reinsures a second loss layer which ranges from 5% to 10% of the risk in force in excess of the primary mortgage insurer’s first loss percentage which range from 4% to 5%. Each calendar year, or book year, is treated separately from other years when calculating losses. In return for accepting a portion of the risk, WMMRC receives, net of ceding commission, a percentage of the premium that ranges from 25% to 40%. As security for the ceding insurers, WMMRC has entered into separate trust agreements with each of the primary mortgage insurance companies whereby a portion of the funds from premiums assumed are held in trust accounts for the benefit of each separate insurer. Pursuant to the terms of the reinsurance agreements, WMMRC is required to keep such assets in trust for a minimum of five years and is subject to claims for up to ten years from termination of obligations arising from the last year in which insurance business was written prior to runoff. Release of funds from the trust by WMMRC requires approval from the primary mortgage insurance companies. Premiums assumed and earned are as follows for the periods ended June 30, 2018 and 2017, respectively: Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Net premiums assumed (released) $ 18 $ 319 $ 2 $ 524 Change in unearned premiums — 10 39 235 Premiums earned $ 18 $ 329 $ 41 $ 759 The components of the liability for losses and loss adjustment reserves are as follows as of June 30, 2018 and December 31, 2017, respectively: June 30, 2018 December 31, 2017 Case-basis reserves $ 12 $ 151 IBNR reserves 1 1 Premium deficiency reserves 260 322 Total losses and loss adjustment reserves $ 273 $ 474 Losses and loss adjustment reserve activity are as follows for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively: Six months ended June 30, 2018 Year ended December 31, 2017 Balance at beginning of period $ 474 $ 811 Incurred - prior periods (73 ) 19 Paid or terminated - prior periods (128 ) (356 ) Total losses and loss adjustment reserves $ 273 $ 474 The loss contract reserve balance is analyzed and adjusted quarterly. The balance in the reserve was zero as of both June 30, 2018 and December 31, 2017. The value of this reserve was decreased to zero during the year ended December 31, 2017 and is anticipated to remain at zero. The reserve remained unchanged during the six months ended June 30, 2018 and decreased by $5.4 million during the six months ended June 30, 2017. In periods during which a reduction in the loss contract reserve occurs, a corresponding decrease in expense is reflected in the condensed consolidated statement of operations for the respective period. |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Investment Securities | Note 4: Investment Securities No investment securities were held as of June 30, 2018. The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of total fixed-maturity securities and total fixed-maturity securities held in trust at December 31, 2017, are as follows: December 31, 2017 Class of securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Obligations of U.S. government sponsored enterprises $ 2,249 $ — $ (10 ) $ 2,239 Corporate debt securities 1,425 — (4 ) 1,421 Total fixed-maturity securities 3,674 — (14 ) 3,660 Less total unrestricted fixed-maturity securities 2,151 — (9 ) 2,142 Total fixed-maturity securities held in trust $ 1,523 $ — $ (5 ) $ 1,518 Net investment income for the three and six months ended June 30, 2018 and 2017, respectively, is summarized as follows: Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Investment income: Amortization of premium or discount on fixed-maturity securities $ (6 ) $ (45 ) $ (13 ) $ (76 ) Investment income on fixed-maturity securities 1 153 18 331 Interest income on cash and cash equivalents 2,878 1,618 5,149 2,632 Realized gain (loss) from sale of investments 6 (25 ) 2 (27 ) Unrealized gain on cash equivalents held at period end 163 — 58 — Unrealized gain on trading securities held at period end 17 2 15 23 Net investment income $ 3,059 $ 1,703 $ 5,229 $ 2,883 The following table shows how the Company’s investments are categorized in accordance with fair value measurement, as of June 30, 2018: June 30, 2018 Level 1 Level 2 Level 3 Total Money market funds 28,684 — — 28,684 Total $ 28,684 $ — $ — $ 28,684 The following table shows how the Company’s investments are categorized in accordance with fair value measurement, as of December 31, 2017: December 31, 2017 Level 1 Level 2 Level 3 Total Class of securities: Obligations of U.S. government sponsored enterprises 995 1,244 — 2,239 Corporate debt securities 1,421 — — 1,421 Total fixed-maturity securities 2,416 1,244 — 3,660 Money market funds 30,780 — — 30,780 Total $ 33,196 $ 1,244 $ — $ 34,440 A review of the fair value hierarchy classifications of the Company’s investments is conducted quarterly. Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. Reclassifications are reported as transfers in or transfers out of the applicable Level at the end of the calendar quarter in which the reclassifications occur. During the six months ended June 30, 2018 and the year ended December 31, 2017, zero and $2.4 million, respectively, of investments were transferred from Level 2 to Level 1 as a result of improving market conditions for short-term and investment grade corporate securities. January 1, 2018 to June 30, 2018 January 1, 2017 to December 31, 2017 Transfers Transfers Transfers Transfers Class of securities: Obligations of US government sponsored enterprises $ — $ — $ — $ 995 Corporate debt securities — — — 1,421 Total transfers $ — $ — $ — $ 2,416 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 5: Income Taxes For the six months ended June 30, 2018, the Company recorded a net loss attributable to common and participating stockholders of approximately $7.8 million. The Company projects tax losses for the year ending December 31, 2018, assuming that circumstances remain unchanged and not taking into account the Nationstar Transaction or any other acquisitions. Due to this projected tax loss and the existence of NOL carry-forwards which have a 100% valuation allowance recorded to reduce them to zero, the Company has not recorded an income tax expense or benefit for the six months ended June 30, 2018. The Company recorded no income tax expense or benefit for the year ended December 31, 2017 due to tax losses in that period. The Company files a consolidated federal income tax return. Pursuant to a tax sharing agreement, WMMRC’s federal income tax liability is calculated on a separate return basis determined by applying 35% prior to the 2017 tax reform and 21% for 2018 and future years to taxable income, in accordance with the provisions of the Internal Revenue Code of 1986, as amended (the “Code”), that apply to property and casualty insurance companies. WMIH, as WMMRC’s parent, pays federal income taxes on behalf of WMMRC and settles the federal income tax obligation on a current basis in accordance with the tax sharing agreement. WMMRC made no tax payments to WMIH during the six months ended June 30, 2018 or the year ended December 31, 2017 associated with the Company’s tax liability from the preceding year. On December 22, 2017, the Tax Cuts and Jobs Act, which reforms U.S. Tax legislation and related laws, was signed into law. One of the provisions of the new tax law reduced the Company’s U.S. federal corporate income tax rate from 35% to 21% resulting in a reduction of the deferred tax asset relating to the NOL carry-forward of $842.9 million and a corresponding change in the related valuation allowance. Our deferred tax assets, although fully reserved, have been revalued at the lower rate as of June 30, 2018 and December 31, 2017. The Company continues to evaluate the impact of the new tax law on its financial condition and results of operations. Deferred federal income taxes arise from temporary differences between the valuation of assets and liabilities as determined for financial reporting purposes and income tax purposes. Temporary differences principally relate to discounting of loss reserves, accruals, net operating losses and unrealized gains and losses on investments. As of June 30, 2018 and December 31, 2017, the Company recorded a valuation allowance equal to 100% of the net deferred federal income tax asset due to uncertainty regarding the Company’s ability to realize these benefits in the future. On March 19, 2012, WMIH emerged from bankruptcy. Prior to emergence, WMI abandoned the stock of WMB, thereby generating a worthless stock deduction of approximately $8.4 billion which gave rise to an NOL for the year ended December 31, 2012. Under Section 382 of the Code (“Section 382”), and based on the Company’s analysis, we believe that the Company experienced an “ownership change” (generally defined as a greater than 50% change (by value) in our equity ownership over a three-year period) on March 19, 2012, and our ability to use our pre-change of control NOLs and other pre-change tax attributes against our post-change income was limited. The Section 382 limitation is applied annually so as to limit the use of our pre-change NOLs to an amount that generally equals the value of our stock immediately before the ownership change multiplied by a designated federal long-term tax-exempt rate. Due to applicable limitations under Section 382 and a reduction of tax attributes due to cancellation of indebtedness, a portion of these NOLs were limited and will expire unused. We believe that the total available and utilizable NOL carry-forward at December 31, 2017 was approximately $6.0 billion. At June 30, 2018, there was no limitation on the use of these NOLs. These NOLs will begin to expire in 2031. The Company’s ability to utilize the NOLs or realize any benefits related to the NOLs is subject to a number of risks. (See Part I-Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2017). As of June 30, 2018 and December 31, 2017, WMIH had a capital loss carryforward of $1.6 million, most of which is subject to expiration in 2018. The Company accounts for uncertain tax positions in accordance with the income tax accounting guidance. The Company has analyzed filing positions in the federal and state jurisdictions where it is required to file tax returns, as well as the open tax years in these jurisdictions. Tax years 2011 to present are subject to examination by the Internal Revenue Service. The Company believes that its federal income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no reserves for uncertain federal income tax positions have been recorded. The Company recognizes interest and penalties related to unrecognized tax benefits as a component of the provision for federal income taxes. The Company did not incur any federal income tax related interest income, interest expense or penalties for the six months ended June 30, 2018 or for the year ended December 31, 2017. |
Service Agreements and Related
Service Agreements and Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Service Agreements and Related Party Transactions | Note 6: Service Agreements and Related Party Transactions WMMRC has engaged a Hawaii-based service provider, Marsh Management Services, Inc., to provide accounting and related management services for its operations. In exchange for performing these services, WMMRC pays such service provider a management fee. WMIH entered into an Investment Management Agreement and an Administrative Services Agreement with WMMRC on March 19, 2012. Each of these agreements was approved by WMMRC’s primary regulator, the Insurance Division of the State of Hawaii. Total amounts incurred under these agreements totaled $0.7 million and $0.7 million for the six months ended June 30, 2018 and 2017, respectively. The expense and related income eliminate on consolidation. Under the terms of the Investment Management Agreement, WMIH receives from WMMRC a fee equal to the product of (x) the ending dollar amount of assets under management during the calendar month in question and (y) .002 divided by 12. WMIH is responsible for investing the funds of WMMRC based on applicable investment criteria and subject to rules and regulations to which WMMRC is subject. Under the terms of the Administrative Services Agreement, WMIH receives from WMMRC a fee of $110 thousand per month. WMIH is responsible for providing administrative services to support, among other things, supervision, governance, financial administration and reporting, risk management and claims management as may be necessary, together with such other general or specific administrative services that may be reasonably required or requested by WMMRC in the ordinary course of its business. On March 22, 2012, WMIH and the WMI Liquidating Trust (the “Trust”) entered into a Transition Services Agreement (the “TSA”). Pursuant to the TSA, the Trust makes available certain services and employees including the services of our Chief Legal Officer and Secretary and our Controller. The TSA provides the Company with basic infrastructure and support services to facilitate the Company’s operations. The TSA, as amended, extends the term of the agreement through September 30, 2018, with automatic renewals thereafter for successive additional three-month terms, subject to non-renewal at the end of any additional term upon written notice by either party at least 30 days prior to the expiration of the additional term. On or about October 14, 2014, the Trust filed a lawsuit in King County Superior Court in the State of Washington against 16 former directors and officers of WMI (the “D&O Litigation”). The Trust’s complaint alleged, among other things, that the defendants named therein breached their fiduciary duties to WMI and committed corporate waste and fraud by squandering WMI’s financial resources. In connection with the settlement of the D&O Litigation, during the year ended December 31, 2015, among the Trust, certain former directors and officers of WMI and certain insurance carriers that underwrote director and officer liability insurance policies for the benefit of WMI and its affiliates (including such former directors and officers), such insurance carriers agreed to pay the Trust $37.0 million, of which $3.0 million was placed into a segregated reserve account (the “RSA Reserve”) to be administered by a third party pursuant to the terms of a Reserve Settlement Agreement (the “RSA”). Based on elections of certain holders of claims in connection with our bankruptcy prior to the Effective Date, WMIH retained an economic interest in certain litigation proceeds, if any, recovered by the Trust, including those related to the D&O Litigation. During the years ended December 31, 2017, 2016 and 2015, WMIH had other income of $123 thousand, $123 thousand and $7.8 million, respectively, as a result of its receipt of its share of net litigation proceeds related to the D&O Litigation. As of June 30, 2018, $1.5 million remained in the RSA Reserve. Under the RSA, funds are released from the RSA Reserve to the Trust if and when certain designated conditions are satisfied. If and when these funds are released to the Trust, and to the extent WMIH is entitled to receive such funds, it is anticipated the Trust will make payments to WMIH in an amount equal to WMIH’s share of the litigation proceeds. Due to the contingent nature of future distributions from the RSA Reserve, there can be no assurance that WMIH will receive any distributions from the remaining balance in the RSA Reserve in the future. During the six months ended June 30, 2018, WMIH has recorded no income from litigation proceeds. As of June 30, 2018, WMIH has not received any litigation proceeds from the Trust, other than as described above. In preparation for the offering of the Original Series B Preferred Stock, WMIH engaged KKR Capital Markets LLC (“KCM”), an affiliate of KKR & Co. L.P., to act as a joint book-running manager for the Original Series B Preferred Stock offering. KCM also acted as an initial purchaser of the Original Series B Preferred Stock. During the year ended December 31, 2015, as a result of satisfying a post-closing covenant to reincorporate in the State of Delaware within 180 days following the closing of the Original Series B Preferred Stock offering, we paid $8.25 million to KCM. Upon consummation of a “Qualified Acquisition” (as such term is defined in Article VI of WMIH’s Certificate of Incorporation), we will pay KCM an additional fee (the “KCM Deferred Fee”) of $8.25 million. We have recorded the KCM Deferred Fee in “other liabilities” on our condensed consolidated balance sheet and this amount was included in “accrued fees relating to Series B Preferred Stock issuance” on our condensed consolidated statements of cash flows. The Nationstar Transaction will constitute a “Qualified Acquisition” pursuant to the terms of the WMIH Certificate of Incorporation. In connection with entering into the Merger Agreement, on February 12, 2018, WMIH entered into (i) a letter agreement with KCM, pursuant to which KCM agreed to act as a non-exclusive financial advisor to WMIH with respect to the Merger and is entitled to receive a transaction fee equal to $25.0 million and (ii) a fee letter with KCM, pursuant to which KCM will (a) act as a placement agent with respect to a bridge financing facility of up to $2.75 billion to be entered into by WMIH in connection with the Merger, (b) provide capital markets advice and other assistance as agreed to with WMIH and (c) receive a fee equal to 0.25% of the aggregate amount of the commitments in respect of such bridge financing facility (other than in respect of any of such amounts committed by certain affiliates of KCM), payable upon the initial funding under the bridge financing facility. Based on the current size of the committed facility, the fees payable to KCM as placement agent for arranging the bridge facility are expected to be approximately $6.875 million. On February 12, 2018, pursuant to an Amendment to Letter Agreement, dated February 12, 2018 (the “Amendment to Letter Agreement”), by and among WMIH, KKR Fund Holdings L.P. (“KKR Fund”), KKR Wand Investors L.P. (“KKR Wand”), KKR Wand Holdings Corporation (“KKR Wand Holdings”) and KKR Wand Investors Corporation (“KKR Wand Investors”), which amended that certain Letter Agreement, dated December 8, 2017 (the “KKR Letter Agreement”), by and among WMIH, KKR Fund and KKR Wand Concurrently with the execution of the Merger Agreement, FIF HE Holdings LLC (“Fortress”) entered into a letter agreement with WMIH and the KKR entities, pursuant to which, among other things, WMIH agreed to waive and consent to certain acquisitions and dispositions of WMIH common stock under the Certificate of Incorporation of WMIH. In addition, pursuant to the terms of the Fortress letter agreement, neither the KKR Entities nor any of its affiliates will, without the prior written consent of Fortress, exercise any registration rights under the investor rights agreement and the Series B registration rights agreement, or under any other agreement until six months after the later of (A) the closing of the Merger and (B) the date on which a shelf registration statement is declared effective pursuant to the Fortress Registration Rights Agreement (as defined below). On February 12, 2018, Directors Gallagher, Glossman, Renoff, Scheiwe and Willingham, and Mr. Fairfield, WMIH’s President and Chief Operating Officer, each entered into a voting and support agreement with Nationstar (each of which we refer to as a “D&O voting agreement”) in connection with the Merger Agreement pursuant to which, among other things, each of them agreed, in his or her capacity as a stockholder of WMIH, to vote his or her shares of WMIH stock in favor of the stock issuance proposal. In addition, each of the voting and support agreements prohibits engaging in activities that have the effect of soliciting a competing acquisition proposal. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | Note 7: Notes Payable On the Effective Date, WMIH issued $110.0 million aggregate principal amount of its 13% Senior First Lien Notes due 2030 (the “First Lien Notes”) under an indenture, dated as of March 19, 2012 (the “First Lien Indenture”), between WMIH and Wilmington Trust, National Association, as Trustee. Additionally, WMIH issued $20.0 million aggregate principal amount of its 13% Senior Second Lien Notes due 2030 (the “Second Lien Notes” and, together with the First Lien Notes, the “Runoff Notes”) under an indenture, dated as of March 19, 2012 (the “Second Lien Indenture” and, together with the First Lien Indenture, the “Indentures”), between WMIH and the Law Debenture Trust Company of New York, as Trustee. On January 5, 2017, The Law Debenture Trust Company of New York notified WMIH that it had completed the transfer of substantially all of its corporate trust business to Delaware Trust Company, and that Delaware Trust Company had become the successor trustee under the Second Lien Indenture. The Runoff Notes were scheduled to mature on March 19, 2030 and pay interest quarterly. As of April 15, 2015, the First Lien Notes were fully redeemed by the Company, and on April 27, 2015, the First Lien Indenture was satisfied and discharged. As of September 29, 2017, the Second Lien Notes were fully redeemed by the Company, and on October 2, 2017, the Second Lien Indenture was satisfied and discharged. As a result of the satisfaction and discharge of the Second Lien Indenture, the Collateral Account (as defined in the Indentures) was subsequently closed and the remaining funds transferred to cash and cash equivalents to be used for general corporate purposes. |
Financing Arrangements
Financing Arrangements | 6 Months Ended |
Jun. 30, 2018 | |
Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | |
Financing Arrangements | Note 8: Financing Arrangements As of June 30, 2018 and December 31, 2017, the Company had no debt financing. On June 29, 2018, Merger Sub entered into a Note Purchase Agreement with Credit Suisse Securities (USA) LLC, Jefferies LLC, Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Goldman Sachs & Co. LLC, KKR Capital Markets LLC and Morgan Stanley & Co. LLC pursuant to which Merger Sub issued $1,700,000,000 (the “Offering”) of notes in two series, consisting of $950,000,000 aggregate principal amount of 8.125% Notes due 2023 (the “2023 Notes”) and $750,000,000 aggregate principal amount of 9.125% Notes due 2026 (the “2026 Notes” and, together with the 2023 Notes, the “Notes”). Merger Sub sold the Notes to the initial purchasers in the Offering, which was exempt from the registration requirements of the Securities Act. The Notes were offered for resale to “qualified institutional buyers” as defined in Rule 144A under the Securities Act and to non-U.S. persons outside the United States in reliance on Regulation S under the Securities Act. On July 13, 2018 the previously announced Offering was consummated. For additional information see Note 14 – Subsequent Events. |
Capital Stock and Derivative In
Capital Stock and Derivative Instruments | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Capital Stock and Derivative Instruments | Note 9: Capital Stock and Derivative Instruments On the Effective Date, all shares of common and preferred equity securities previously issued by WMI were cancelled and extinguished. As of the Effective Date, and pursuant to WMIHC’s Amended and Restated Articles of Incorporation (the “Articles”), WMIHC was authorized to issue up to 500,000,000 shares of common stock and up to 5,000,000 shares of blank check preferred stock, in one or more series, each with a par value of $0.00001 per share. 200,000,000 shares of common stock were issued by WMIHC in reliance on Section 1145 of the United States Bankruptcy Code on the Effective Date. On May 11, 2015, the date that WMIHC reincorporated from the State of Washington to the State of Delaware (the “Reincorporation Date”), all shares of common and preferred equity securities previously issued by WMIHC automatically were converted into one share of the substantially similar common stock, Series A Preferred Stock or Series B Preferred Stock, as applicable, of WMIH. At the same time, each outstanding option, right or warrant to acquire shares of WMIHC’s common stock was converted into an option, right or warrant to acquire an equal number of shares of WMIH’s common stock under the same terms and conditions as the original options, rights or warrants. As of the Reincorporation Date, and pursuant to the Certificate of Incorporation, WMIH is authorized to issue up to 3,500,000,000 shares of common stock and up to 10,000,000 shares of blank check preferred stock, in one or more series, each with a par value of $0.00001 per share. All of the terms of the agreements described below and attributed to WMIH are also attributable to WMIHC relative to the various agreements and instruments prior to the Reincorporation Date. The references to WMIH are based on the date this Form 10-Q has been filed. The references would have been to WMIHC prior to the Reincorporation Date. On January 30, 2014, WMIH entered into (i) an investment agreement, dated as of January 30, 2014 (the “Investment Agreement”), with KKR Fund and, for limited purposes, KKR Management Holdings L.P., and (ii) an investor rights agreement, dated as of January 30, 2014 (the “Investor Rights Agreement”), with KKR Fund. On January 30, 2014, pursuant to the Investment Agreement, WMIH issued 1,000,000 shares of Series A Preferred Stock having the terms, rights, obligations and preferences contained in the Articles of Amendment of WMIH dated January 30, 2014 for a purchase price equal to $11.1 million and has issued to KKR Fund warrants to purchase, in the aggregate, 61.4 million shares of WMIH’s common stock, 30.7 million of which have an exercise price of $1.32 per share and 30.7 million of which have an exercise price of $1.43 per share (together, the “Warrants”). On February 12, 2018, pursuant to the Amendment to Letter Agreement, KKR Fund contributed all of the Warrants and shares of Series A Preferred Stock held by it to KKR Wand Holdings. The Series A Preferred Stock has rights substantially similar to those associated with WMIH’s common stock, with the exception of a liquidation preference, conversion rights and customary anti-dilution protections. The Series A Preferred Stock has a liquidation preference equal to the greater of (i) $10.00 per one million shares of Series A Preferred Stock plus declared but unpaid dividends on such shares and (ii) the amount that the holder would be entitled to in a relevant transaction had the Series A Preferred Stock been converted to common stock of WMIH. The Series A Preferred Stock is convertible at a conversion price of $1.10 per share into shares of common stock of WMIH either at the option of the holder or automatically upon transfer by KKR Wand Holdings to a non-affiliated party. As a result of the calculation of a beneficial conversion feature as required by ASC topic 470 – Debt, a preferred deemed dividend of $9.5 million was recorded in conjunction with the issuance of the Series A Preferred Stock. This preferred deemed dividend resulted in an increase to our accumulated deficit, at that point in time, and an increase in additional paid in capital. Further, KKR Wand Holdings, as the holder of the Series A Preferred Stock and the Warrants, has other rights pursuant to the Investor Rights Agreement as described below. The Warrants have a five-year term from the date of issuance and are subject to customary structural adjustment provisions for stock splits, combinations, recapitalizations and other similar transactions. KKR Wand Holdings’ rights as a holder of the Series A Preferred Stock and the Warrants, and the rights of any subsequent holder that is an affiliate of KKR Fund (together with KKR Wand Holdings, the “Series A Holders”) are governed by the Investor Rights Agreement. On February 12, 2018, in connection with the Merger Agreement, KKR Wand Holdings and WMIH entered into a warrant exchange agreement, pursuant to which, conditioned and effective upon the effectiveness of the Merger, KKR Wand Holdings agreed to exchange the 61,400,000 Warrants it holds for 21,197,619 shares of WMIH common stock (the “Warrant Exchange”). In accordance with the Investor Rights Agreement, except for the issuance of WMIH’s common stock in respect of the Warrants and the Series A Preferred Stock, KKR Fund and its affiliates (including KKR Wand Holdings) shall not purchase or acquire any equity securities of WMIH or its subsidiaries without WMIH’s prior written consent, subject to certain exceptions. The Investor Rights Agreement also provides the Series A Holders with registration rights, including three long form demand registration rights, unlimited short form demand registration rights and customary piggyback registration rights with respect to WMIH’s common stock (and WMIH’s common stock underlying the Series A Preferred Stock and the Warrants), subject to certain minimum thresholds, customary blackout periods and lockups of 180 days. On July 1, 2015, WMIH filed a shelf registration statement (the “Initial Registration Statement”) covering resales of Series B Preferred Stock and WMIH’s common stock issuable upon mandatory conversion of the Series B Preferred Stock. On November 23, 2015, WMIH amended the Initial Registration Statement to cover WMIH’s common stock issuable upon conversion of the Series A Preferred Stock and shares of WMIH’s common stock issuable upon exercise of warrants issued in connection with the issuance of our Series A Preferred Stock currently outstanding (as amended, the “Registration Statement”). The Registration Statement was declared effective under the Securities Act of 1933, as amended (the “Securities Act”) on November 25, 2015. On January 26, 2018, WMIH amended the Registration Statement, by means of a post-effective amendment, to deregister the Series B Preferred Stock and WMIH’s common stock issuable upon mandatory conversion of the Series B Preferred Stock, and such post-effective amendment to the Registration Statement was declared effective under the Securities Act on January 29, 2018. The Investor Rights Agreement also provides that to the extent that WMIH undertakes any capital markets issuances, WMIH shall engage KKR Capital Markets LLC to assist WMIH in such issuances on customary commercial terms reasonably acceptable to WMIH. For as long as the Series A Holders beneficially own any shares of common stock of WMIH or Series A Preferred Stock or any of the Warrants, WMIH has agreed to provide customary Rule 144A information rights, to provide the Series A Holders with regular audited and unaudited financial statements and to allow the Series A Holders or their representatives to inspect WMIH’s books and records. Pursuant to the KKR Letter Agreement, as amended by the Amendment to Letter Agreement, for the period commencing on December 8, 2017 (the “Amendment Date”), and ending on the date that is eighteen (18) months following January 5, 2018 (the “Series B Amendment Effective Time”) for so long as (1) KKR Wand Holdings has not transferred any, and together with the KKR Affiliates continues to beneficially own (with the unencumbered right to vote) all, of the Series A Preferred Stock it or KKR Fund owns as of the Amendment Date, (2) KKR Wand Holdings has not transferred any, and together with the KKR Affiliates continues to beneficially own (with the unencumbered right to vote) all, Warrants it or KKR Fund owns as of the Amendment Date or any of the common stock issuable upon the exercise thereof, and (3) KKR Wand Investors has not transferred, in the aggregate, more than, and together with the KKR Affiliates continues to beneficially own (with the unencumbered right to vote) at least, 50% of the Series B Preferred Stock it or KKR Wand owns as of the Amendment Date, the Company shall not enter into a definitive agreement with respect to any target acquisition without the prior written consent of KKR Wand Holdings; provided, however, that if KKR Wand Holdings does not give written notice to the Company of its approval of, or objection to, a proposed target acquisition within five (5) business days of having received notice of the material definitive terms of such target acquisition, KKR Wand Holdings shall be deemed to have approved such target acquisition and the Company may pursue such target acquisition, including by entering into a definitive material agreement in respect thereof, without the prior written consent of KKR Wand Holdings. After the date that is eighteen (18) months following the Series B Amendment Effective Time, KKR Wand Holdings shall have no consent rights with respect to any target acquisition. KKR Wand Holdings has consented to the Merger. The foregoing description of (i) the Investor Rights Agreement is qualified in its entirety by reference to the Investor Rights Agreement, which was filed with the SEC as Exhibit 4.2 on Form 8-K on January 31, 2014, and incorporated by reference, (ii) the Warrants are qualified in their entirety by reference to the Form of Tranche A Warrant and Form of Tranche B Warrant, which were filed with the SEC as Exhibits 4.3 and 4.4, respectively, on Form 8-K on January 31, 2014, and incorporated by reference, (iii) the Series A Preferred Stock is qualified in its entirety by reference to the Articles of Amendment of WMIH dated January 30, 2014, which were filed with the SEC as Exhibit 4.5 on Form 8-K on January 31, 2014, and incorporated by reference, the Form of Series A Convertible Preferred Stock Certificate, which was filed with the SEC as Exhibit 4.6 on Form 8-K on January 31, 2014, and incorporated by reference, and the Certificate of Incorporation, which was filed with the SEC as Exhibit 3.1 on Form 8-K12G3 on May 13, 2015, and incorporated by reference, (iv) the Investment Agreement is qualified in its entirety by reference to the Investment Agreement, which was filed with the SEC as Exhibit 10.1 on Form 8-K on January 31, 2014, and incorporated by reference, and (v) the KKR Letter Agreement is qualified in its entirety by reference to the KKR Letter Agreement, which was filed with the SEC as Exhibit 10.3 on Form 8-K on December 11, 2017, and incorporated by reference, and the On January 5, 2015, WMIH, in connection with an offering of 600,000 shares of its Original Series B Preferred Stock, filed with the Secretary of State of Washington Articles of Amendment of Articles of Incorporation (the “Articles of Amendment”) containing the Designation of Rights and Preferences of the 3% Series B Convertible Preferred Stock (the “Certificate of Designation”) creating the Original Series B Preferred Stock and designating the rights and preferences of the Original Series B Preferred Stock. The foregoing descriptions of the Articles of Amendment and the Certificate of Designation are qualified in their entirety by the provisions of the Articles of Amendment and the Certificate of Designation, filed as Exhibits 3.1 and 4.1 to a Form 8-K on January 5, 2015, respectively, and incorporated by reference herein , and the Certificate of Incorporation, which was filed with the SEC as Exhibit 3.1 on Form 8-K12G3 on May 13, 2015, and incorporated by reference On January 5, 2015, in connection with the offering and pursuant to that certain Purchase Agreement, dated December 19, 2014 (the “Purchase Agreement”), by and among WMIH, Citigroup Global Markets Inc. (“Citi”) and KCM (KCM and Citi together, the “Initial Purchasers”), WMIH entered into a Registration Rights Agreement with the Initial Purchasers (the “Registration Rights Agreement”), pursuant to which WMIH has agreed that, subject to certain conditions, WMIH will use its reasonable efforts to (i) file a shelf registration statement covering resales of WMIH’s common stock issuable upon mandatory conversion of the Original Series B Preferred Stock no later than six months after January 5, 2015 (the “Issue Date”); (ii) file a shelf registration statement covering resales of the Original Series B Preferred Stock no later than one year after the Issue Date; and (iii) cause each of these shelf registration statements to be declared effective under the Securities Act. On July 1, 2015, WMIH filed the Initial Registration Statement covering resales of the Original Series B Preferred Stock and shares of WMIH’s common stock issuable upon mandatory conversion of the Original Series B Preferred Stock. On November 23, 2015, WMIH amended the Initial Registration Statement to cover WMIH’s common stock issuable upon conversion of the Series A Preferred Stock and shares of WMIH’s common stock issuable upon exercise of warrants issued in connection with the issuance of our Series A Preferred Stock currently outstanding. The R On January 5, 2018, WMIH entered into an amendment to such Registration Rights Agreement (which we refer to, as amended, as the “Series B Registration Rights Agreement”), pursuant to which WMIH agreed to use reasonable efforts to file a shelf registration statement (or, as permitted, an amendment to any existing shelf registration statement) with the SEC as promptly as practicable after January 5, 2018, but no later than June 15, 2018, with respect to (i) resales of the shares of the Series B Preferred Stock that are Transfer Restricted Securities (as defined in the Series B Registration Rights Agreement) and (ii) resales of the shares common stock that are Transfer Restricted Securities and (a) issuable upon the conversion of shares of the Series B Preferred Stock, (b) issuable as a Regular Dividend (as defined in the WMIH charter) and (c) issuable as a Special Distribution (as defined in the WMIH charter). The foregoing description of the Registration Rights Agreement is qualified in its entirety by the provisions of the Registration Rights Agreement, filed as Exhibit 10.1 on Form 8-K on January 5, 2015, and incorporated by reference herein, and to the First Amendment to that certain Registration Rights Agreement, dated January 5, 2018 and filed as Exhibit 10.1 on Form 8-K on January 5, 2018, and incorporated by reference herein. On January 26, 2018, WMIH amended the Registration Statement, by means of a post-effective amendment, to deregister the Original Series B Preferred Stock and WMIH’s common stock issuable upon mandatory conversion of the Original Series B Preferred Stock, and such post-effective amendment to the Registration Statement was declared effective under the Securities Act on January 29, 2018. On June 15, 2018, pursuant to its obligations under the Series B Registration Rights Agreement, WMIH filed with the SEC a new shelf registration statement on Form S-3 registering for resale the 600,000 shares of Series B Preferred Stock and 520,158,730 shares of common stock issuable (i) upon conversion of the Series B Preferred Stock, including in connection with the payment of a special dividend of 19.04762 shares of common stock per share at the time of such conversion, and (ii) in connection with the payment of semi-annual dividends on the Series B Preferred Stock, in shares of common stock, at an annual rate of 5.00% of the liquidation preference of $1,000 per share of Series B Preferred Stock, in each case by the security holders identified in the “Selling Security Holders” section of the registration statement. In connection with the transactions contemplated by the Merger Agreement, WMIH, KKR Wand Holdings, KKR Wand Investors and Fortress executed a Letter Agreement on February 12, 2018 (the “Fortress Letter Agreement”) pursuant to which the holders of WMIH stock affiliated with KKR agreed to modify certain of their registration rights. The reference to the Fortress Letter Agreement is qualified in its entirety by reference to the Letter Agreement dated as of February 12, 2018, by and among the Company, Fortress and the other stockholders party from time to time thereto, which was filed with the SEC as Exhibit 10.2 on Form 8-K on February 12, 2018, and incorporated by reference. Concurrently with the execution of the Merger Agreement, WMIH entered into a registration rights agreement with Fortress (the “Fortress Registration Rights Agreement”), pursuant to which, among other things, (i) WMIH has agreed, upon Fortress’ request, to file a shelf registration statement covering resales of the WMIH common stock to be received by Fortress, its affiliates and permitted transferees as Merger Consideration pursuant to Rule 415 under the Securities Act promptly following the closing of the Merger, and cause such registration statement to be declared effective under the Securities Act, (ii) Fortress has (A) unlimited long-form and short-form demand registration rights to the extent a shelf registration statement is unavailable, (B) rights to demand underwritten shelf take-downs, provided that there are no more than four underwritten offerings in any twelve-month period, and (C) piggyback registration rights with respect to future offerings of WMIH common stock by WMIH, in each case, subject to certain minimum thresholds, customary blackout periods and lock-up provisions and (iii) WMIH has agreed to (A) not grant any person piggyback rights in Fortress-initiated underwritten offerings for two years after the closing of the Merger and (B) not grant any registration rights to any person for six months after the closing of the Merger. WMIH has agreed to pay customary registration and indemnification expenses, subject to certain limitations. The foregoing description of the Registration Rights Agreement is qualified in its entirety by the provisions of the Fortress Registration Rights Agreement, filed as Exhibit 10.3 on Form 8-K filed on February 14, 2018, and incorporated by reference herein. On January 5, 2015, in connection with the offering and pursuant to the Purchase Agreement, WMIH entered into an Escrow Agreement (the “Escrow Agreement”) with Citibank, N.A., as Escrow Agent (the “Escrow Agent”), pursuant to which WMIH caused to be deposited with the Escrow Agent the amount of $598.5 million, representing the proceeds of the offering of the Original Series B Preferred Stock less offering fees payable on the Issue Date but before payment of other offering fees and expenses (including fees contingent upon future events). These net proceeds have been, and will be, released from escrow from time to time to WMIH as instructed by WMIH in amounts necessary to (i) pay certain fees related to the offering that may become payable to the Initial Purchasers, (ii) finance WMIH’s efforts to explore and/or fund, in whole or in part, acquisitions, whether completed or not, including reasonable attorney fees and expenses related thereto, accounting expenses, due diligence and financial advisor fees and expenses, (iii) pay certain amounts that may become payable to the holders of the Series B Preferred Stock upon the occurrence of certain put events, (iv) pay certain amounts that would become payable to the holders of the Series B Preferred Stock upon a mandatory redemption of the Series B Preferred Stock, and (v) pay certain expenses related to the offering. The entire net proceeds will be released from escrow as instructed by WMIH upon consummation of a Qualified Acquisition (as defined below). If we have not consummated a Qualified Acquisition on or prior to October 5, 2019, we will be required to redeem all of the outstanding Series B Preferred Stock on October 5, 2019, the Series B Redemption Date; provided, if prior to the Series B Redemption Date we have publicly announced that WMIH has entered into a definitive agreement for an Acquisition, the Series B Redemption Date will be extended to the earlier of April 5, 2020 and the day immediately following the date such definitive agreement is terminated or the date such Acquisition is closed. “Acquisition” means any acquisition by the Company (or any of its direct or indirect wholly-owned subsidiaries), in a single transaction or a series of transactions, whether by purchase, merger or otherwise, of all or substantially all of the assets of, or of 80% or more of the equity interests in, or a business line, unit or division of, any person. A “Qualified Acquisition” means an Acquisition that, taken together with prior Acquisitions (if any), collectively utilizes aggregate net proceeds of the Series B Preferred Stock financing of $450 million. shares of WMIH’s common stock in respect of any As of June 30, 2018, and December 31, 2017, the balance remaining in the escrow account totaled approximately $575.8 million and $578.9 million, respectively. The foregoing description of the Escrow Agreement is qualified in its entirety by the provisions of the Escrow Agreement, filed on Form 8-K on January 5, 2015, as Exhibit 10.2 and incorporated by reference herein, and as amended by Amendment No. 1, Amendment No. 2, and Amendment No. 3, filed on Form 10-K on March 2, 2018, Form 8-K on December 11, 2017 and on Form 10-K on March 2, 2018, respectively. If the Series B Preferred Stock is redeemed or determined likely to be redeemed, the Company would be required to record a charge to earnings of approximately $96.3 million to accrete the value of the Series B Preferred Stock to the $600.0 million redemption value. As of June 30, 2018, the Company has determined that recording for accretion to the Series B Preferred Stock’s redemption value is not required. The shares of Series B Preferred Stock are hybrid financial instruments that blend characteristics of both equity and debt securities. The terms of the Series B Preferred Stock provide for either redemption of the principal and interest for cash at maturity or in the event of certain predetermined circumstances or mandatory conversion into WMIH’s common stock. The Original Series B Preferred Stock also embodied contingent equity-linked share price protections, an embedded conversion feature, in the form of a variable conversion price based on a 20 trading day average of volume weighted-average price. The Series B Preferred Stock has no variable conversion feature and the fair market value at December 31, 2017 of the embedded conversion feature was reclassified to equity. The Original Series B Preferred Stock was amended on December 8, 2017 and this amendment became effective at A derivative liability results primarily when the Company average stock price (as defined in the Certificate of Incorporation) exceeds the conversion price, including the ceiling conversion price of $2.25, as defined by the Certificate of Incorporation. A derivative asset results when the Company’s average stock price is less than the conversion price, including the floor price of $1.75. constituted other income or expense, as the case may be, in the applicable reporting period. Upon conversion or redemption of the Original Series B Preferred Stock, any asset or liability related to the embedded conversion feature would have been eliminated. Upon modification of the Original Series B Preferred Stock, specifically as a result of the elimination of the variable conversion feature, the embedded conversion feature is no longer required to be separately accounted for. At December 31, 2017, the fair market value of the embedded conversion feature was determined to be $108.9 million, and this amount was reclassified to equity. On both June 1, 2017 and on June 29, 2018, WMIH issued restricted stock grants to members of the Board totaling $0.4 million, of aggregate fair value. The restricted shares noted above vest over a three-year period. On May 15, 2015, WMIH issued restricted stock grants to our Chief Executive Officer, William C. Gallagher, and our President and Chief Operating Officer, Thomas L. Fairfield, in conjunction with employment agreements totaling $9.8 million of aggregate fair value (the “Exec Grants”) based on the $2.76 trading price of WMIH shares at the close of business on the date issued. The number of shares of WMIH common stock granted in connection with this award was determined by dividing $4.0 million by $2.25 per share of WMIH common stock (i.e., the assumed conversion price specified in the Exec Grants executed on the grant date); provided however, pursuant to the terms of the employment agreements, if the final conversion price of the Series B Preferred Stock (the “Series B Conversion Price”) is lower than $2.25 per share, WMIH is required to grant additional shares to Mr. Gallagher and Mr. Fairfield so that the total award will be equal to the amount of shares that would have been granted if the assumed conversion price had been equal to the final Series B Conversion Price (subject to a minimum price of $1.75 per share). Accordingly, WMIH will be required to issue an additional 507,936 restricted shares to each of Mr. Gallagher and Mr. Fairfield (1,015,872 total shares) if the Merger is consummated, based on the final Series B Conversion Price of $1.35 and the minimum grant price of $1.75. The Exec Grants will vest in full and will be recognized as compensation expense upon the consummation of a Qualified Acquisition, subject to the executives’ continued employment with the Company until such time. The foregoing description of the restricted stock agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Gallagher Restricted Stock Agreement and the Fairfield Restricted Stock Agreement (collectively, the “Executive Agreements”), which were filed as Exhibit 10.3 and Exhibit 10.5, respectively, of Form 8-K12G3 filed on May 13, 2015 and incorporated herein by reference. On March 9, 2018, WMIH entered into the Amendment of the Gallagher employment agreement (as defined below) (which we refer to as the “Gallagher Amendment”) and the Amendment of the Fairfield employment agreement (as defined below) (which we refer to as the “Fairfield Amendment” and, together with the Gallagher Amendment, which we refer to as the “Employment Amendments”). The Employment Amendments, which were approved by the Board and its compensation committee, amend each of the Gallagher employment agreement and the Fairfield employment agreement, by extending the terms of each of Mr. Gallagher’s and Mr. Fairfield’s employment with WMIH until the earlier of (a) the closing date of the Merger or (b) the termination of the Merger Agreement. Except as modified by the Amendments, all other terms and conditions of each of the Gallagher employment agreement and Fairfield employment agreement remain in full force and effect. The Employment Amendments were filed as Exhibit 10.1 and Exhibit 10.2, respectively, of Form 8-K filed on March 9, 2018 and incorporated herein by reference. The fair market value of the Exec Grants as of June 30, 2018 approximates $4.7 million as the stock price was $1.34 per share at the close of the market on June 30, 2018. This excludes the 1,015,872 additional shares (the “Exec Additional Shares”) which will be issued upon consummation of the Nationstar Transaction, 507,936 additional shares each to both Mr. Gallagher and Mr. Fairfield. The total unamortized value related to the unvested restricted share grants totals $5.5 million and $3.5 million at June 30, 2018 and December 31, 2017, respectively. The unamortized value of $5.5 million at June 30, 2018, if all are ultimately vested following the original vesting schedule, would be amortized according to the following schedule. The fair value of the Exec Grants will vest and be recognized on the date of the consummation of a Qualified Acquisition. Additionally, the Exec Additional Shares would be issued and immediately vest on the date of the consummation of a Qualified Acquisition. Amortization Schedule (in thousands) June 30, 2018 unamortized dollar value 3rd quarter 2018 $ 109 4th quarter 2018 109 1st quarter 2019 103 2nd quarter 2019 73 3rd quarter 2019 72 4th quarter 2019 72 1st quarter 2020 67 2nd quarter 2020 37 3rd quarter 2020 37 4th quarter 2020 37 1st quarter 2021 31 Unamortized fair-value - subject to vesting schedule 747 Unamortized fair-value - event dependent 4,764 Total unamortized dollar value 5,511 Equity-based compensation totaled $0.2 million and $0.3 million for the six months ended June 30, 2018 and June 30, 2017, respectively. A summary of WMIH’s restricted stock award activity for the six months ended June 30, 2018 and year ended December 31, 2017 is presented below: Number of restricted stock awards outstanding Weighted-average grant date fair value Aggregate fair value (in thousands) Outstanding—January 1, 2017 6,380,800 2.1306 13,595 Restricted stock awards granted during 2017 333,332 1.2000 400 Outstanding—December 31, 2017 6,714,132 2.0844 13,995 Restricted stock awards granted during 2018 298,508 1.3400 400 Outstanding—June 30, 2018 7,012,640 $ 2.0527 $ 14,395 WMIH has issued the total number of shares subject to the restricted stock grants, however, until vested they are subject to repurchase. Shares subject to repurchase totaled 4,133,020 on June 30, 2018 and 4,053,640 on December 31, 2017. The Exec Grants vest upon future events, and are not time specific, therefore, they are listed as event dependent. The shares subject to repurchase at June 30, 2018 will vest, assuming circumstances remain unchanged, according to the following schedule: Vesting schedule of shares subject to repurchase June 30, 2018 unvested shares 1st quarter 2019 267,356 2nd quarter 2019 — 3rd quarter 2019 — 4th quarter 2019 — 1st quarter 2020 210,612 2nd quarter 2020 — 3rd quarter 2020 — 4th quarter 2020 — 1st quarter 2021 99,496 Total unvested shares - subject to vesting schedule 577,464 Unvested shares - event dependent 3,555,556 Total unvested shares 4,133,020 Pursuant to a restricted stock agreement, WMIH has the right, but not the obligation, to repurchase any unvested (but issued) shares of WMIH’s common stock at $0.00001 per share upon the termination of service in the case of a director, or in the case of the Exec Grants, if the Series B Preferred Stock are redeemed or as a result of certain circumstances as defined by the terms of the Exec Grants. A summary of WMIH’s restricted shares issued and subject to repurchase as of June 30, 2018 and December 31, 2017 is presented below: Vesting schedule of shares subject to repurchase Unvested shares Shares subject to repurchase—January 1, 2017 4,039,591 Shares issued subject to vesting during 2017 333,332 Shares vested during 2017 (319,283 ) Shares subject to repurchase—December 31, 2017 4,053,640 Shares issued subject to vesting during 2018 298,508 Shares vested during 2018 (219,128 ) Shares subject to repurchase—June 30, 2018 4,133,020 On June 1, 2017, WMIH issued 333,332 restricted stock grants to members of the Board totaling $0.4 million of aggregate fair value. The share price was determined based on the closing sales price of $1.20 on the date of the award. On June 29, 2018, WMIH issued 298,508 restricted stock grants to members of the Board totaling $0.4 million of aggregate fair value. On June 15, 2018, WMIH issued 9,652,268 shares of WMIH common stock, having a value of $12.9 million, to holders of Series B Preferred Stock, to satisfy the dividends earned on Series B Preferred Stock, through June 15, 2018. As of June 30, 2018 and December 31, 2017, 216,664,908 and 206,714,132 shares of WMIH’s common stock, 1,000,000 shares of the Series A Preferred Stock, 600,000 shares of the Series B Preferred Stock, and 61,400,000 warrants to purchase WMIH’s common stock, were issued and outstanding. See Note 12: Net Income Per Common Share for further information on shares used for EPS calculations. |
Pending Litigation
Pending Litigation | 6 Months Ended |
Jun. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Pending Litigation | Note 10: Pending Litigation As of June 30, 2018, the Company was not a party to, or aware of, any material pending legal proceedings or investigations requiring disclosure at this time. On May 8, 2018 a purported class action lawsuit, styled as Franchi v. Nationstar Mortgage Holdings Inc., et al., Case No. 3:18-cv-01170-B, was filed in the United States District Court for the Northern District of Texas naming Nationstar, WMIH, Wand Merger Corporation and the individual members of the Nationstar board of directors as defendants. The complaint alleges that the defendants violated the Exchange Act by disseminating a false and misleading registration statement. The lawsuit seeks a variety of equitable and injunctive relief including, among other things, enjoining the consummation of the Merger, rescinding the Merger to the extent already implemented, directing the defendants to disseminate a registration statement that does not contain any untrue statement of material fact, declaring the defendants violated the Exchange Act, and awarding plaintiffs costs and attorneys’ fees. On June 26, 2018, the plaintiff and the defendants (together, the “Parties”) entered into a memorandum of understanding (the “MOU”) to resolve the claims asserted by the plaintiff. Pursuant to the MOU, the Parties agreed that the defendants would cause to be made the supplemental disclosures set forth in the Form 8-K filed by the defendants on June 26, 2018. The MOU further specifies that, within five (5) business days of the closing of Merger, the Parties will file a stipulation of dismissal of the action pursuant to Federal Rule of Civil Procedure 41(a). That stipulation will dismiss plaintiff’s individual claims with prejudice, and dismiss the claims purportedly asserted on behalf of a putative class of Nationstar shareholders without prejudice. The MOU will not affect the timing of the Merger or the amount or form of consideration to be paid in the Merger. The defendants believe that the action is without merit. |
Restriction on Distribution of
Restriction on Distribution of Net Assets from Subsidiary | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Restriction on Distribution of Net Assets from Subsidiary | Note 11: Restriction on Distribution of Net Assets from Subsidiary WMMRC has net assets totaling $12.4 million and $13.1 million as of June 30, 2018 and December 31, 2017, respectively. These net assets are not immediately available for distribution to WMIH due to restrictions imposed by trust agreements, and the requirement that the Insurance Division of the State of Hawaii must approve dividends from WMMRC. On July 5, 2018, the State of Hawaii Insurance Division approved a transfer of up to $11.1 million and on July 10, 2018, WMMRC declared and paid a dividend of $10.4 million to WMIH, and such funds are available for general corporate purposes. See Note 14: Subsequent Events. |
Net Income (Loss) Per Common Sh
Net Income (Loss) Per Common Share | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Common Share | Note 12: Net Income (Loss) Per Common Share In calculating earnings per share, the Company follows the two-class method, which distinguishes between the classes of securities based on the proportionate participation rights of each security type in the Company's undistributed income. The Series A Preferred Stock and the Series B Preferred Stock are treated as one class for purposes of applying the two-class method, because they have substantially equal rights and share equally on an as converted basis with respect to income available to WMIH common stockholders. Basic net income per WMIH share attributable to common stockholders is computed by dividing net income attributable to WMIH’s common stockholders by the weighted-average number of common shares outstanding for the period after subtracting the weighted-average of any unvested restricted shares outstanding, as these shares are subject to repurchase. Basic net income attributable to common stockholders is computed by deducting preferred dividends and the basic calculation of undistributed earnings attributable to participating securities from net income. Diluted net income per WMIH share would be computed by dividing net income attributable to WMIH’s common stockholders for the period by the weighted-average number of common shares outstanding after subtracting the weighted-average of any incremental unvested restricted shares outstanding and adding any potentially dilutive common equivalent shares outstanding during the period, if dilutive. Potentially dilutive common equivalent shares are comprised of the incremental common shares issuable upon the exercise of warrants for WMIH’s common stock and the potential conversion of preferred shares to common shares and the dilutive effect of unvested restricted stock. Diluted net income attributable to common stockholders is computed by deducting preferred dividends and the diluted calculation of undistributed earnings attributable to participating securities from net income. The dilutive effect of outstanding warrants and restricted stock subject to repurchase is reflected in diluted earnings per share by application of the treasury stock method. There would be no dilutive effects from any equity instruments for periods presented reflecting a net loss, therefore diluted net loss per share would be the same as basic net loss per share for periods that reflect a net loss attributable to common stockholders. Certain unvested restricted shares and convertible preferred stock are excluded from the calculation of diluted earnings per share until the non-market based contingency occurs. The following table presents the calculation of basic net loss per share for periods presented: (in thousands, except per share data): Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Numerator for basic net loss per share: Net loss $ (1,996 ) $ (21,324 ) $ (7,579 ) $ (3,535 ) Less: Series B preferred stock dividends — (4,500 ) (200 ) (9,000 ) Basic net loss attributable to common stockholders $ (1,996 ) $ (25,824 ) $ (7,779 ) $ (12,535 ) Denominator for basic net loss per share: Weighted-average shares outstanding 209,902,759 206,490,690 208,317,254 206,436,048 Weighted-average unvested restricted shares outstanding (3,841,073 ) (3,857,807 ) (3,931,031 ) (3,907,045 ) Denominator for basic net loss per share 206,061,686 202,632,883 204,386,223 202,529,003 Basic net loss per share attributable to common stockholders $ (0.01 ) $ (0.13 ) $ (0.04 ) $ (0.06 ) The following table presents the calculation of diluted net loss per share for periods presented: (in thousands, except per share data): Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Numerator for diluted net loss per share: Net loss $ (1,996 ) $ (21,324 ) $ (7,579 ) $ (3,535 ) Less: Series B preferred stock dividends — (4,500 ) (200 ) (9,000 ) Diluted net loss attributable to common stockholders $ (1,996 ) $ (25,824 ) $ (7,779 ) $ (12,535 ) Denominator for diluted net loss per share: Weighted-average shares outstanding 209,902,759 206,490,690 208,317,254 206,436,048 Weighted-average unvested restricted shares outstanding (3,841,073 ) (3,857,807 ) (3,931,031 ) (3,907,045 ) Denominator for diluted net loss per share 206,061,686 202,632,883 204,386,223 202,529,003 Diluted net loss income per share attributable to common stockholders $ (0.01 ) $ (0.13 ) $ (0.04 ) $ (0.06 ) The following table summarizes shares subject to exercise or vesting conditions as more fully described in Note 9: Capital Stock and Derivative Instruments. These shares could potentially be dilutive in future periods if we realize net income attributable to common and participating stockholders and the contingent or unvested stock is converted to WMIH common stock. The cash payment of $84.4 million, which would be received upon exercise of the warrants, has not been considered as an offset to the dilutive shares under warrants outstanding below. The Warrant Exchange, which is conditioned upon the closing of the Merger and which would reduce the number of warrants received from 61,400,000 shares to 21,197,619 shares, is not reflected below. Potential dilution to common Minimum shares Maximum shares Restricted shares subject to vesting 4,133,020 4,133,020 Series A Preferred Stock 10,065,629 10,065,629 Warrants outstanding 61,400,000 61,400,000 Maximum number of restricted shares to be issued if Nationstar Transaction is consummated — 1,015,872 Series B Preferred Stock ($1.35 conversion) 444,444,444 444,444,444 Potential common shares issued to satisfy Series B Preferred Stock dividends (full term) — 54,633,446 Potential common shares issued to satisfy Series B Preferred Stock acquisition conversion payment — 11,428,572 Potential dilutive shares if converted to common 520,043,093 587,120,983 |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Note 13: Fair Value Measurement We use a fair-value approach to value certain assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. We use a fair value hierarchy, which distinguishes between assumptions based on market data (observable inputs) and an entity’s own assumptions (unobservable inputs). The hierarchy consists of three levels: • Level 1 — Inputs to the valuation methodology are quoted prices for identical assets or liabilities traded in active markets; • Level 2 — Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market corroborated inputs; and • Level 3 — Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use. Determining which category an asset or liability falls within the fair value accounting guidance hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter. Assets and liabilities measured at fair value on a recurring basis are summarized as follows: The financial instrument that was measured at fair value on a recurring basis was determined to no longer require bifurcation as of December 31, 2017, and therefore is no longer separately accounted for. The following table shows the change in Level 3 assets and liabilities measured at fair value on a recurring basis for the year ended December 31, 2017: Derivative asset embedded conversion feature (in thousands) Balance, January 1, 2017 $ 80,651 Gain on change in fair value 28,242 Reclassification of derivative asset to equity (108,893 ) Balance, December 31, 2017 $ — As of and for the six months period ended June 30, 2018, the Company did not have any Level 3 assets or liabilities measured at fair value. On January 5, 2015, WMIH raised $600.0 million of capital (less transaction costs) through the issuance of 600,000 shares of Original Series B Preferred Stock. The shares carry a liquidation preference of $1,000 per share, equal to the purchase price. In addition, they have a mandatory redemption right three years from the issuance date at a price equal to the initial investment amount, and initially accrued dividends at 3% per annum. The Original Series B Preferred Stock was amended on December 8, 2017 and this amendment became effective on January 5, 2018. The purpose of the capital raise was principally to pursue strategic acquisitions of operating companies that fit the Company’s desired business model, such as the Nationstar Transaction, with the proceeds of the capital raise, and should it occur during the term of the Series B Preferred Stock, there is a mandatory conversion of these shares into common stock of WMIH. Mandatory conversion (prior to the Series B Amendment Effective Time) occurred at a price that was the lesser of: i) $2.25 per share of WMIH common stock; and ii) the arithmetic average of daily volume weighted-average prices of WMIH’s common stock during the 20 trading day period ending on the trading day immediately preceding the public announcement by WMIH of its entry into a definitive agreement for such acquisition, subject to a floor of $1.75 per share of WMIH common stock. Subsequent to the Series B Amendment Effective Time, if there is a mandatory conversion of these shares into common stock of WMIH, the shares convert at a rate of $1.35 per share of WMIH’s common stock. We used a binomial lattice option pricing model to value the embedded conversion feature that was subject to fair value liability accounting. The determination of the fair value as of the reporting date included our stock price as well as assumptions regarding a number of complex and subjective variables. These variables included, but were not limited to, expected stock price volatility over the term of the convertible preferred securities, and risk-free interest rate. In addition, the model required the input of an expected probability of occurrence, and the timing of a Qualified Acquisition which initiates the mandatory conversion. The fair value of the embedded conversion feature was revalued each reportable balance sheet date utilizing our model computations with the decrease or increase in fair value being reported in the condensed consolidated statements of operations as gain or (loss) on change in fair value of derivative embedded conversion feature, respectively. The primary factors affecting the fair value of the embedded conversion feature liability were the probability of occurrence and timing of a Qualified Acquisition, our stock price and our stock price volatility. In addition, the use of a model requires the input of subjective assumptions, and changes to these assumptions could provide differing results. As a result of the amendment of the terms of the Series B Preferred Stock’s conversion price the derivative embedded conversion feature was adjusted to its fair value at December 31, 2017. The variance from the fair value at December 31, 2016, $28.2 million was recorded as other income and the fair market value as of December 31, 2017, $108.9 million was transferred to equity. The embedded conversion feature, subsequent to the Series B Amendment Effective Time, will not be considered a derivative, primarily due to the elimination of the variance in the conversion price and the determination that the conversion feature is indexed to WMIH’s common stock, and therefore, will not be revalued in future periods. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14: Subsequent Events On July 5, 2018, the State of Hawaii Insurance Division approved a transfer of up to $11.1 million from WMMRC to WMIH. On July 10, 2018 WMMRC declared and paid a dividend of $10.4 million to WMIH, and such funds are available for general corporate purposes. On July 13, 2018, Merger Sub closed the previously announced Offering of Notes. The proceeds of $1.7 billion from the Offering were deposited into escrow, which upon release will be used, together with the issuance of WMIH’s common stock and WMIH’s cash and restricted cash on hand, to consummate the Nationstar Transaction and the refinancing of certain of Nationstar’s existing debt and to pay related fees and expenses or otherwise in accordance with the terms of the escrow agreement, dated as of July 13, 2018, among Merger Sub, Wells Fargo Bank, National Association, as trustee, and Wells Fargo Bank, National Association, as escrow agent. For additional information on the Offering, see Note 1: The Company and its Subsidiaries. |
Significant Accounting Polici21
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Basis of Presentation | Basis of Presentation WMIH resumed timely filing of all periodic reports for a reporting company under the Exchange Act for all periods after emergence from bankruptcy on the Effective Date. The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for quarterly reporting. Certain information and footnote disclosures normally included in the financial statements and prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes that the disclosures included are appropriate. The condensed consolidated balance sheet as of December 31, 2017, included herein, was derived from the audited consolidated financial statements as of that date. These interim unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto filed in the Company’s Annual Report on Form 10-K, filed with the SEC on March 2, 2018. Interim information presented in the unaudited condensed consolidated financial statements has been prepared by management. In the opinion of management, the financial statements include all adjustments necessary for a fair presentation and that all such adjustments are of a normal, recurring nature and necessary for the fair statement of the financial position, results of operations and cash flows for the periods presented in accordance with GAAP. The results of operations for the six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the full year ending December 31, 2018. All significant intercompany transactions and balances have been eliminated in preparing the condensed consolidated financial statements. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Management has made significant estimates in certain areas, including valuing certain financial instruments, other assets and liabilities, the determination of the contingent risk liabilities, and in determining appropriate insurance reserves. Actual results could differ substantially from those estimates. |
Fair Value of Certain Financial Instruments | Fair Value of Certain Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Generally, for assets that are reported at fair value, the Company uses quoted market prices or valuation models to estimate their fair value. These models incorporate inputs such as forward yield curves, market volatilities and pricing spreads, utilizing market-based inputs where readily available. The degree of management judgment involved in estimating the fair value of a financial instrument or other asset is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are actively traded in the marketplace or whose values are based on readily available market value data, little judgment is necessary when estimating the instrument’s fair value. When observable market prices and data are not readily available, significant management judgment often is necessary to estimate fair value. In those cases, different assumptions could result in significant changes in valuation. The Company classifies fixed-maturity investments as trading securities, which are recorded at fair value. As such, changes in unrealized gains and losses on investments held at the balance sheet date are recognized and reported as a component of net investment income on the condensed consolidated statement of operations. The Company believes fair value provides better matching of investment earnings to potential cash flow generated from the investment portfolio and reduces subjectivity related to evaluating other-than-temporary impairment on the Company’s investment portfolio. The carrying value of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities approximate their respective fair values because of their short-term nature. The carrying value of the loss contract reserve, in periods during which such reserve exists, approximates its fair value and is based on valuation methodologies using discounted cash flows at interest rates which approximate the Company’s weighted-average cost of capital. The carrying value of the d erivative embedded conversion feature adjusted to its fair value as determined using Level 3 inputs described below under fair value measurement. The carrying value of notes payable, in periods during which such notes payable exist, approximates fair value based on time to maturity, underlying collateral, and prevailing interest rates. |
Fair Value Measurement | Fair Value Measurement The Company’s estimates of fair value for financial assets and financial liabilities are based on the framework established in the Financial Accounting Standards Board (“FASB”) Fair Value Measurements and Disclosures accounting guidance. The framework is based on the inputs used in valuation and requires that observable inputs be used in the valuations when available. The disclosure of fair value estimates in the fair value accounting guidance hierarchy is based on whether the significant inputs into the valuation are observable. In determining the level of the hierarchy in which the estimate is disclosed, the highest priority is given to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs that reflect the Company’s significant market assumptions. The three levels of the hierarchy are as follows: Level 1–Inputs to the valuation methodology are quoted prices for identical assets or liabilities traded in active markets. Level 2–Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability and market corroborated inputs. Level 3–Valuations based on models where significant inputs are not observable. The unobservable inputs reflect the Company’s own assumptions about the inputs that market participants would use. Fair values are based on quoted prices in active markets when available (Level 1). The Company receives the quoted prices from a third party, nationally recognized pricing service. When quoted prices are not available, the Company utilizes a pricing service to determine an estimate of fair value. The fair value is generally estimated using current market inputs for similar financial instruments with comparable terms and credit quality, commonly referred to as matrix pricing (Level 2). These valuation techniques involve some level of management estimation and judgment. The Company recognizes transfers between levels in the fair value hierarchy at the end of the reporting period. |
Investments Held in Trust | Investments Held in Trust Investments held in trust consisted of cash equivalents, which included highly liquid overnight money market instruments, and fixed-maturity securities which were held in trust for the benefit of the primary insurers, as more fully described in Note 3: Insurance Activity and Note 4: Investment Securities, and are subject to the restrictions on distribution of net assets of subsidiaries as described below. |
Third Party Restrictions on Distribution of Net Assets of Wholly-Owned Subsidiaries | Third Party Restrictions on Distribution of Net Assets of Wholly-Owned Subsidiaries The net assets of WMMRC are subject to restrictions on distribution from multiple sources, including the primary insurers who have approval control of distributions from the trust, and the Insurance Division of the State of Hawaii who has approval authority over distributions or intercompany advances. |
Premium Recognition | Premium Recognition Premiums assumed are earned on a daily pro-rata basis over the underlying policy terms. Premiums assumed relating to the unexpired portion of policies in force at the balance sheet date are recorded as unearned premiums. Unearned premiums also include a reserve for post default premium reserves. Post default premium reserves occur when a loan is in a default position and the servicer continues to advance the premiums. If the loan ultimately goes to claim, the premiums advanced during the period of default are subject to recapture. The Company records a default premium reserve based on information provided by the underlying mortgage insurers when they provide information on the default premium reserve separately from other reserves. The change in the post default premium reserve is reflected as a reduction or increase, as the case may be, in premiums assumed. The Company has recorded unearned premiums totaling zero and $39 thousand as of June 30, 2018 and December 31, 2017, respectively. The Company recognizes premium deficiencies when there is a probable loss on an insurance contract. Premium deficiencies are recognized if the sum of the present value of expected losses and loss adjustment expenses, unamortized deferred acquisition costs, and maintenance costs, excluding intercompany charges, exceed expected future unearned premiums and anticipated investment income. Premium deficiency reserves have been recorded totaling $0.3 million and $0.3 million as of June 30, 2018 and December 31, 2017, respectively. Intercompany administrative costs are excluded from the computation of premium deficiencies. The Company’s premium deficiency analysis was performed on a single book basis and includes all book years and reinsurance treaties aggregated together using assumptions based on the actuarial best estimates at the balance sheet date. The calculation for premium deficiency requires significant judgment and includes estimates of future expected premiums, claims, loss adjustment expenses and investment income as of the balance sheet date. To the extent ultimate losses are higher or premiums are lower than estimated, additional premium deficiency reserves may be required in the future. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, U.S. Treasury bills and overnight investments. Except as described above in Investments Held in Trust, the Company considers all amounts that are invested in highly liquid overnight money market instruments to be cash equivalents. The Federal Deposit Insurance Corporation (“FDIC”) insures amounts on deposit with each financial institution up to limits as prescribed by law. The Company may hold funds with financial institutions in excess of the FDIC insured amount, however, the Company has not experienced any losses in such accounts and management believes it is not exposed to any significant credit risk on cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash includes proceeds of the Original Series B Preferred Stock offering held in escrow and included, through the termination of the Indentures (as defined in Note 7: Notes Payable) on October 2, 2017, amounts held for the express purposes of paying principal, interest and related fees on the Runoff Notes (as defined in Note 7: Notes Payable) pursuant to the terms of the Indentures. |
Other Assets | Other Assets At June 30, 2018, the total balance of approximately $5.0 million in other assets is comprised of approximately $4.6 million of amounts that relate to the debt Offering further described in Note 14 – Subsequent events. The debt related amounts will be amortized over the life of the debt and will be reclassed to offset the outstanding debt in July of 2018. The non-debt related items recorded as prepaid at June 30, 2018 totaled approximately $0.4 million and related to prepaid amounts which will be expensed in future periods. At December 31, 2017, the total balance of approximately $0.6 million related to prepaid amounts which have been or will be expensed in future periods. |
Ceding Commission Expense | Ceding Commission Expense The Company is required to pay a ceding commission to certain primary insurers pursuant to certain reinsurance agreements. |
Losses and Loss Adjustment Reserves | Losses and Loss Adjustment Reserves The losses and loss adjustment reserves include case basis estimates of reported losses and supplemental amounts for incurred but not reported (“IBNR”) losses. A default is considered the incident (e.g., the failure to make timely payment of mortgage payments) that may give rise to a claim for mortgage insurance. In establishing the losses and loss adjustment reserve, the Company based its estimates primarily on the ceded loss and loss adjustment reserves as provided by the primary mortgage guaranty carriers. WMMRC has recorded reserves at the ceded case reserves and IBNR loss levels established and reported by the primary mortgage guaranty carriers as of June 30, 2018 and December 31, 2017, respectively. Management believes that the recorded aggregate liability for unpaid losses and loss adjustment expenses at period end represents the Company’s best estimate, based upon the available data, of the amount necessary to cover the current cost of losses. However, due to the inherent uncertainty arising from fluctuations in the persistency rate of mortgage insurance claims, the Company’s size and lack of prior operating history, external factors such as future changes in regional or national economic conditions, judicial decisions, federal and state legislation related to mortgage restructuring and foreclosure restrictions, claims denials and coverage rescissions by primary carriers and other factors beyond the Company’s control, it is not presently possible to determine whether actual loss experience will conform to the assumptions used in determining the estimated amounts for such liability at the balance sheet date. Accordingly, the ultimate liability could be significantly higher or lower, as the case may be, than the amount indicated in the financial statements and there can be no assurance that the reserve amounts recorded will be sufficient. As adjustments to these estimates become necessary, such adjustments are reflected in current operations |
Loss Contract Reserve | Loss Contract Reserve A loss contract reserve relating to contractual obligations of WMMRC was established at March 19, 2012 as a result of applying fresh start accounting and in compliance with Accounting Standards Codification (“ASC”) 805-10-55-21- Broad Transactions, which defines a loss contract as “a contract in which the unavoidable costs of meeting the obligation under the contract exceed the economic benefits expected to be received under it.” The value of this reserve is analyzed quarterly and is adjusted accordingly. The adjustment (if any) to the reserve produces an expense or contra-expense in the condensed consolidated statements of operations. |
Derivatives | Derivatives We evaluate our convertible debt, warrants or other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted. This accounting treatment requires that the carrying amount of embedded derivatives be marked-to-market at each balance sheet date and carried at fair value. In the event that the fair value is recorded as a liability, the change in fair value during the period is recorded in the condensed consolidated statement of operations as either income or expense. If an embedded derivative is no longer required to be separately accounted for due to conversion, exercise or modification to the terms of an instrument, the derivative is marked to fair value at the conversion, exercise or modification date and then the related fair value is reclassified to equity. In circumstances where the embedded conversion feature in a convertible instrument is required to be bifurcated and there are also other embedded derivative instruments in the convertible instrument that are required to be bifurcated, the bifurcated derivative instruments are accounted for as a single, compound derivative instrument. The classification of financial instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Equity instruments that are initially classified as equity that become subject to reclassification are reclassified to liability at the fair value of the instrument on the reclassification date. Management must determine whether an instrument (or an embedded feature) is indexed to our stock. An entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The application of this exercise could affect the accounting for (i) certain freestanding warrants that contain exercise price adjustment features or contain contingently puttable cash settlement options, if any, and (ii) convertible notes containing anti-dilution protections and/or exercise price adjustment features. The Company had recorded a derivative embedded conversion feature as a result of the issuance of the Original Series B Preferred Stock which was adjusted to its fair value as determined using Level 3 inputs described above under Fair Value Measurement. The change in fair value of the derivative embedded conversion feature was calculated at each reporting date and recorded as other income or other expense on the condensed consolidated statement of operations. As a result of the Series B Amendment, the embedded conversion feature was modified, and the derivative was marked to fair value at December 31, 2017 and then the related fair value was reclassified to equity in accordance with Accounting Standards Codification (“ASC”) 815-15-35-4 - Embedded Conversion Option that No Longer Meets Bifurcation Criteria, as more fully described in Note 9: Capital Stock and Derivative Instruments. |
Other Liabilities | Other Liabilities At June 30, 2018, the total balance of $20.6 million of other liabilities is comprised of $8.3 million of accrued fees relating to the Original Series B Preferred Stock offering and an accrual for professional fees and recurring business expenses currently payable of approximately $12.3 million. At December 31, 2017, the total balance of $16.3 million of other liabilities is comprised of $8.3 million of accrued fees relating to the Original Series B Preferred Stock offering, $2.5 million related to an extension of the escrow agreement related to the Series B Preferred Stock, an accrual for professional fees and recurring business expenses of approximately $4.7 million and $0.8 million of accrued cash dividends relating to the Original Series B Preferred Stock. The accrued fees would be paid in the event of a Qualified Acquisition, as more fully described in Note 6: Service Agreements and Related Party Transactions. |
Comprehensive Income | Comprehensive Income The Company has no comprehensive income other than the net income disclosed in the condensed consolidated statement of operations. |
Net Income (Loss) Per Common Share | Net Income (Loss) Per Common Share In calculating earnings per share, the Company follows the two-class method, which distinguishes between the classes of securities based on the proportionate participation rights of each security type in the Company's undistributed income. The Series A Preferred Stock and the Series B Preferred Stock are treated as one class for purposes of applying the two-class method, because they have substantially equal rights and share equally on an as converted basis with respect to income available to WMIH common stockholders. Basic net income per WMIH common share is computed by dividing net income attributable to WMIH’s common stockholders by the weighted-average number of common shares outstanding for the period after subtracting the weighted-average of any unvested restricted shares outstanding, as these are subject to repurchase. Basic net income attributable to common stockholders is computed by deducting preferred dividends and the basic calculation of undistributed earnings attributable to participating securities from net income. Diluted net income per WMIH common share is computed by dividing net income attributable to WMIH’s common stockholders by the weighted-average number of common shares outstanding during the period after subtracting the weighted-average of any unvested restricted shares outstanding, as these are subject to repurchase, and adding any potentially dilutive WMIH common stock equivalents outstanding during the period. Diluted net income attributable to common stockholders is computed by deducting preferred dividends and the diluted calculation of undistributed earnings attributable to participating securities from net income. If common stock equivalents exist, in periods where there is a net loss, diluted net loss per common share would be equal to or less than basic net loss per common share, since the effect of including any common stock equivalents would be antidilutive. |
Equity Based Compensation | Equity-Based Compensation On May 22, 2012, WMIH’s Board of Directors (the “Board” or “Board of Directors”) approved the Company’s 2012 Long-Term Incentive Plan (the “2012 Plan”) so that awards of restricted stock could be made to its non-employee directors and to have a plan in place for awards of equity based compensation to executives and others in connection with the Company’s operations and future strategic plans. A total of 2.0 million shares of WMIH’s common stock were initially reserved for future issuance under the 2012 Plan, which became effective upon the Board approval on May 22, 2012. On February 10, 2014, the Board approved and adopted a First Amendment to the 2012 Plan, pursuant to which the number of shares of WMIH’s common stock reserved and available for grants under the 2012 Plan was increased from 2.0 million shares to 3.0 million shares, and the terms of the 2012 Plan were modified to permit such an increase through action of the Board, except when stockholder approval is necessary to comply with any applicable law, regulation or rule of any stock exchange on which WMIH’s shares are listed, quoted or traded. On February 25, 2015, the number of shares authorized and available for awards under the 2012 Plan was increased from 3.0 million to 12.0 million shares of WMIH’s common stock, subject to approval of stockholders of WMIH. This approval was received at WMIH’s Annual Meeting of Stockholders on April 28, 2015. The 2012 Plan provides for the granting of restricted shares and other cash and share based awards. The value of restricted stock is generally determined using the fair market value determined to be the trading price at the close of business on the respective date the awards were granted. |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are recognized for the future income tax consequences attributable to differences between the carrying amounts and tax bases of assets and liabilities and losses carried forward and tax credits. Deferred tax assets and liabilities are measured using enacted tax rates and laws applicable to the years in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is provided to the extent that it is more likely than not that deferred tax assets will not be realized. The Company recognizes the financial statement effects of a tax position when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. Penalties and interest, of which there are none, would be reflected in income tax expense. Tax years are open to the extent the Company has net operating loss (“NOL”) carry-forwards available to be utilized currently. On December 22, 2017, the Tax Cuts and Jobs Act, which reforms U.S. Tax legislation and related laws, was signed into law. One of the provisions of the new tax law reduced the Company’s U.S. federal corporate income tax rate from 35% to 21%. Our deferred tax assets, although fully reserved, have been revalued at the lower rate as of December 31, 2017. The Company continues to evaluate the impact of the new tax law on its financial condition and results of operations. |
Dividend Policy | Dividend Policy WMIH has paid no dividends on its common stock on or after the Effective Date and currently has no plans to pay a dividend on its common stock. WMIH has paid $1.0 million and $18.0 million of cash dividends on its Series B Preferred Stock for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively. Additionally, on June 15, 2018, WMIH issued 9,652,268 shares of WMIH common stock, having a value of $12.9 million, to holders of Series B Preferred Stock, to satisfy the dividends earned on Series B Preferred Stock through June 15, 2018. The value of the dividend reduced retained earnings and increased common stock and additional paid in capital, therefore having no net impact on total equity. Additionally, WMIH had accrued unpaid and undeclared cash dividends of zero and $0.8 million, as of June 30, 2018 and December 31, 2017, respectively. |
New Accounting Pronouncements | New Accounting Pronouncements The Company has reviewed new accounting pronouncements issued between May 10, 2018, the filing date of our most recent Form 10-Q, and the filing date of this Form 10-Q, and has determined that no pronouncements issued are relevant to the Company, and/or have a material impact on the Company’s consolidated financial position, results of operations or disclosure requirements. |
Fixed Maturities [Member] | |
Fixed-Maturity Securities | Fixed-Maturity Securities Fixed-maturity securities consisted of U.S. Treasury securities, obligations of U.S. government sponsored agencies and domestic and foreign corporate debt securities. Fixed-maturity securities held in trust were for the benefit of the primary insurers as more fully described in Note 3: Insurance Activity. Investments in fixed-maturity securities are reported at their estimated fair values and are classified as trading securities in accordance with applicable accounting guidance. Realized gains and losses on the sale of fixed-maturity securities are determined using the specific identification method and are reported as a component of net investment income within the condensed consolidated statement of operations. |
Insurance Activity (Tables)
Insurance Activity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Insurance [Abstract] | |
Schedule of Premiums Assumed and Earned | Premiums assumed and earned are as follows for the periods ended June 30, 2018 and 2017, respectively: Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Net premiums assumed (released) $ 18 $ 319 $ 2 $ 524 Change in unearned premiums — 10 39 235 Premiums earned $ 18 $ 329 $ 41 $ 759 |
Components of Liability for Losses and Loss Adjustment Reserves | The components of the liability for losses and loss adjustment reserves are as follows as of June 30, 2018 and December 31, 2017, respectively: June 30, 2018 December 31, 2017 Case-basis reserves $ 12 $ 151 IBNR reserves 1 1 Premium deficiency reserves 260 322 Total losses and loss adjustment reserves $ 273 $ 474 |
Summary of Losses and Loss Adjustment Reserve Activity | Losses and loss adjustment reserve activity are as follows for the six months ended June 30, 2018 and the year ended December 31, 2017, respectively: Six months ended June 30, 2018 Year ended December 31, 2017 Balance at beginning of period $ 474 $ 811 Incurred - prior periods (73 ) 19 Paid or terminated - prior periods (128 ) (356 ) Total losses and loss adjustment reserves $ 273 $ 474 |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Estimated Fair Values of Fixed-Maturity Securities | The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of total fixed-maturity securities and total fixed-maturity securities held in trust at December 31, 2017, are as follows: December 31, 2017 Class of securities: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Obligations of U.S. government sponsored enterprises $ 2,249 $ — $ (10 ) $ 2,239 Corporate debt securities 1,425 — (4 ) 1,421 Total fixed-maturity securities 3,674 — (14 ) 3,660 Less total unrestricted fixed-maturity securities 2,151 — (9 ) 2,142 Total fixed-maturity securities held in trust $ 1,523 $ — $ (5 ) $ 1,518 |
Summary of Net Investment Income | Net investment income for the three and six months ended June 30, 2018 and 2017, respectively, is summarized as follows: Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Investment income: Amortization of premium or discount on fixed-maturity securities $ (6 ) $ (45 ) $ (13 ) $ (76 ) Investment income on fixed-maturity securities 1 153 18 331 Interest income on cash and cash equivalents 2,878 1,618 5,149 2,632 Realized gain (loss) from sale of investments 6 (25 ) 2 (27 ) Unrealized gain on cash equivalents held at period end 163 — 58 — Unrealized gain on trading securities held at period end 17 2 15 23 Net investment income $ 3,059 $ 1,703 $ 5,229 $ 2,883 |
Schedule of Investments in Accordance with Fair Value Measurement | The following table shows how the Company’s investments are categorized in accordance with fair value measurement, as of June 30, 2018: June 30, 2018 Level 1 Level 2 Level 3 Total Money market funds 28,684 — — 28,684 Total $ 28,684 $ — $ — $ 28,684 The following table shows how the Company’s investments are categorized in accordance with fair value measurement, as of December 31, 2017: December 31, 2017 Level 1 Level 2 Level 3 Total Class of securities: Obligations of U.S. government sponsored enterprises 995 1,244 — 2,239 Corporate debt securities 1,421 — — 1,421 Total fixed-maturity securities 2,416 1,244 — 3,660 Money market funds 30,780 — — 30,780 Total $ 33,196 $ 1,244 $ — $ 34,440 |
Summary of Transfers between Level 1 and Level 2 | January 1, 2018 to June 30, 2018 January 1, 2017 to December 31, 2017 Transfers Transfers Transfers Transfers Class of securities: Obligations of US government sponsored enterprises $ — $ — $ — $ 995 Corporate debt securities — — — 1,421 Total transfers $ — $ — $ — $ 2,416 |
Capital Stock and Derivative 24
Capital Stock and Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of Unamortized Value of Restricted Stock | The unamortized value of $5.5 million at June 30, 2018, if all are ultimately vested following the original vesting schedule, would be amortized according to the following schedule. The fair value of the Exec Grants will vest and be recognized on the date of the consummation of a Qualified Acquisition. Additionally, the Exec Additional Shares would be issued and immediately vest on the date of the consummation of a Qualified Acquisition. Amortization Schedule (in thousands) June 30, 2018 unamortized dollar value 3rd quarter 2018 $ 109 4th quarter 2018 109 1st quarter 2019 103 2nd quarter 2019 73 3rd quarter 2019 72 4th quarter 2019 72 1st quarter 2020 67 2nd quarter 2020 37 3rd quarter 2020 37 4th quarter 2020 37 1st quarter 2021 31 Unamortized fair-value - subject to vesting schedule 747 Unamortized fair-value - event dependent 4,764 Total unamortized dollar value 5,511 |
Summary of Company's Restricted Stock Award Activity | A summary of WMIH’s restricted stock award activity for the six months ended June 30, 2018 and year ended December 31, 2017 is presented below: Number of restricted stock awards outstanding Weighted-average grant date fair value Aggregate fair value (in thousands) Outstanding—January 1, 2017 6,380,800 2.1306 13,595 Restricted stock awards granted during 2017 333,332 1.2000 400 Outstanding—December 31, 2017 6,714,132 2.0844 13,995 Restricted stock awards granted during 2018 298,508 1.3400 400 Outstanding—June 30, 2018 7,012,640 $ 2.0527 $ 14,395 |
Schedule of Vesting Shares Subject to Repurchase | The Exec Grants vest upon future events, and are not time specific, therefore, they are listed as event dependent. The shares subject to repurchase at June 30, 2018 will vest, assuming circumstances remain unchanged, according to the following schedule: Vesting schedule of shares subject to repurchase June 30, 2018 unvested shares 1st quarter 2019 267,356 2nd quarter 2019 — 3rd quarter 2019 — 4th quarter 2019 — 1st quarter 2020 210,612 2nd quarter 2020 — 3rd quarter 2020 — 4th quarter 2020 — 1st quarter 2021 99,496 Total unvested shares - subject to vesting schedule 577,464 Unvested shares - event dependent 3,555,556 Total unvested shares 4,133,020 |
Summary of WMIH's Restricted Shares Issued and Subject to Repurchase | A summary of WMIH’s restricted shares issued and subject to repurchase as of June 30, 2018 and December 31, 2017 is presented below: Vesting schedule of shares subject to repurchase Unvested shares Shares subject to repurchase—January 1, 2017 4,039,591 Shares issued subject to vesting during 2017 333,332 Shares vested during 2017 (319,283 ) Shares subject to repurchase—December 31, 2017 4,053,640 Shares issued subject to vesting during 2018 298,508 Shares vested during 2018 (219,128 ) Shares subject to repurchase—June 30, 2018 4,133,020 |
Net Income (Loss) Per Common 25
Net Income (Loss) Per Common Share (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Calculation of Basic Net Loss Per Share | The following table presents the calculation of basic net loss per share for periods presented: (in thousands, except per share data): Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Numerator for basic net loss per share: Net loss $ (1,996 ) $ (21,324 ) $ (7,579 ) $ (3,535 ) Less: Series B preferred stock dividends — (4,500 ) (200 ) (9,000 ) Basic net loss attributable to common stockholders $ (1,996 ) $ (25,824 ) $ (7,779 ) $ (12,535 ) Denominator for basic net loss per share: Weighted-average shares outstanding 209,902,759 206,490,690 208,317,254 206,436,048 Weighted-average unvested restricted shares outstanding (3,841,073 ) (3,857,807 ) (3,931,031 ) (3,907,045 ) Denominator for basic net loss per share 206,061,686 202,632,883 204,386,223 202,529,003 Basic net loss per share attributable to common stockholders $ (0.01 ) $ (0.13 ) $ (0.04 ) $ (0.06 ) |
Calculation of Diluted Net Loss Per Share | The following table presents the calculation of diluted net loss per share for periods presented: Three months ended June 30, 2018 Three months ended June 30, 2017 Six months ended June 30, 2018 Six months ended June 30, 2017 Numerator for diluted net loss per share: Net loss $ (1,996 ) $ (21,324 ) $ (7,579 ) $ (3,535 ) Less: Series B preferred stock dividends — (4,500 ) (200 ) (9,000 ) Diluted net loss attributable to common stockholders $ (1,996 ) $ (25,824 ) $ (7,779 ) $ (12,535 ) Denominator for diluted net loss per share: Weighted-average shares outstanding 209,902,759 206,490,690 208,317,254 206,436,048 Weighted-average unvested restricted shares outstanding (3,841,073 ) (3,857,807 ) (3,931,031 ) (3,907,045 ) Denominator for diluted net loss per share 206,061,686 202,632,883 204,386,223 202,529,003 Diluted net loss income per share attributable to common stockholders $ (0.01 ) $ (0.13 ) $ (0.04 ) $ (0.06 ) |
Schedule of Potential Dilutive Common Shares | The following table summarizes shares subject to exercise or vesting conditions as more fully described in Note 9: Capital Stock and Derivative Instruments. These shares could potentially be dilutive in future periods if we realize net income attributable to common and participating stockholders and the contingent or unvested stock is converted to WMIH common stock. The cash payment of $84.4 million, which would be received upon exercise of the warrants, has not been considered as an offset to the dilutive shares under warrants outstanding below. The Warrant Exchange, which is conditioned upon the closing of the Merger and which would reduce the number of warrants received from 61,400,000 shares to 21,197,619 shares, is not reflected below. Potential dilution to common Minimum shares Maximum shares Restricted shares subject to vesting 4,133,020 4,133,020 Series A Preferred Stock 10,065,629 10,065,629 Warrants outstanding 61,400,000 61,400,000 Maximum number of restricted shares to be issued if Nationstar Transaction is consummated — 1,015,872 Series B Preferred Stock ($1.35 conversion) 444,444,444 444,444,444 Potential common shares issued to satisfy Series B Preferred Stock dividends (full term) — 54,633,446 Potential common shares issued to satisfy Series B Preferred Stock acquisition conversion payment — 11,428,572 Potential dilutive shares if converted to common 520,043,093 587,120,983 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Summary of Change in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table shows the change in Level 3 assets and liabilities measured at fair value on a recurring basis for the year ended December 31, 2017: Derivative asset embedded conversion feature (in thousands) Balance, January 1, 2017 $ 80,651 Gain on change in fair value 28,242 Reclassification of derivative asset to equity (108,893 ) Balance, December 31, 2017 $ — |
The Company and its Subsidiar27
The Company and its Subsidiaries - Additional Information (Detail) | Jun. 15, 2018 | Feb. 12, 2018USD ($)$ / sharesshares | Feb. 02, 2018 | Dec. 11, 2017 | Jun. 30, 2018Insurers$ / sharesshares | Dec. 31, 2017$ / sharesshares | Jun. 29, 2018USD ($) | Jun. 14, 2018 | Dec. 31, 2016shares | May 11, 2015$ / sharesshares | Jan. 05, 2015shares | Jan. 30, 2014shares | Mar. 19, 2012$ / sharesshares |
Related Party Transaction [Line Items] | |||||||||||||
Plan Effective Date | Mar. 19, 2012 | ||||||||||||
Common stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||
Expected merger close date | Jul. 31, 2018 | ||||||||||||
Common stock, shares authorized | 3,500,000,000 | 3,500,000,000 | 3,500,000,000 | 500,000,000 | |||||||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 5,000,000 | ||||||||||
Convertible preferred stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||
Common stock, shares issued | 21,197,619 | 216,664,908 | 206,714,132 | ||||||||||
Common stock, shares outstanding | 216,664,908 | 206,714,132 | |||||||||||
WMMRC [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Number of primary mortgage insurers | Insurers | 7 | ||||||||||||
Reinsurance agreement termination date | Feb. 2, 2018 | ||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Preferred stock, redemption date | Oct. 5, 2019 | ||||||||||||
Preferred stock dividend rate | 5.00% | 3.00% | |||||||||||
Preferred stock, shares issued | 600,000 | 600,000 | 600,000 | ||||||||||
Preferred stock, shares outstanding | 600,000 | 600,000 | 600,000 | ||||||||||
Amendment Effective Date | Jan. 5, 2018 | ||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Amended and Restated Certificate of Incorporation [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Preferred stock, redemption date | Oct. 5, 2019 | ||||||||||||
Preferred stock dividend rate | 5.00% | ||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Certificate of Amendment [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Amendment Effective Date | Jan. 5, 2018 | ||||||||||||
Convertible Series A Preferred Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Convertible preferred stock, par value | $ / shares | $ 0.00001 | $ 0.00001 | |||||||||||
Convertible preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | ||||||||||
Convertible preferred stock, shares outstanding | 1,000,000 | 1,000,000 | |||||||||||
Merger Sub [Member] | Senior Notes [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Issued aggregate principal amount | $ | $ 1,700,000,000 | ||||||||||||
Senior Notes due 2021 [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Stated interest rate | 6.50% | ||||||||||||
Senior Notes due 2022 [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Stated interest rate | 6.50% | ||||||||||||
Notes due 2023 [Member] | Merger Sub [Member] | Senior Notes [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Stated interest rate | 8.125% | ||||||||||||
Issued aggregate principal amount | $ | $ 950,000,000 | ||||||||||||
Notes due 2026 [Member] | Merger Sub [Member] | Senior Notes [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Stated interest rate | 9.125% | ||||||||||||
Issued aggregate principal amount | $ | $ 750,000,000 | ||||||||||||
WMIH Common Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Common stock, shares issued | 21,197,619 | ||||||||||||
Merger Agreement [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Merger agreement date | Feb. 12, 2018 | ||||||||||||
Share price, without interest | $ / shares | $ 18 | ||||||||||||
Aggregate amount of merger consideration | $ | $ 1,200,000,000 | ||||||||||||
Merger Agreement [Member] | WMIH Common Stock [Member] | |||||||||||||
Related Party Transaction [Line Items] | |||||||||||||
Stock issued, fully paid and nonassessable shares | 12.7793 | ||||||||||||
Common stock, par value | $ / shares | $ 0.00001 |
Significant Accounting Polici28
Significant Accounting Policies - Additional Information (Detail) - USD ($) | Jun. 15, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Feb. 25, 2015 | Feb. 10, 2014 | May 22, 2012 | |
Significant Accounting Policies [Line Items] | ||||||||
Plan Effective Date | Mar. 19, 2012 | |||||||
Unearned premiums | $ 0 | $ 39,000 | [1] | |||||
Premium deficiency reserves | 300,000 | 300,000 | ||||||
Other assets | 4,970,000 | 558,000 | [1] | |||||
Deferred offering costs | 4,600,000 | |||||||
Prepaid non-debt related expenses | 400,000 | 600,000 | ||||||
Other liabilities | 20,586,000 | 16,303,000 | [1] | |||||
Accrued professional fees | 12,300,000 | $ 4,700,000 | ||||||
Comprehensive income | $ 0 | |||||||
Income tax at the federal statutory rate | 21.00% | 35.00% | ||||||
Amount of dividends paid on or after Effective Date | $ 0 | |||||||
Preferred stock dividends paid | 1,000,000 | $ 9,000,000 | ||||||
2012 Plan [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Common stock reserved for future issuance | 12,000,000 | 3,000,000 | 2,000,000 | |||||
Redeemable Convertible Series B Preferred Stock [Member] | ||||||||
Significant Accounting Policies [Line Items] | ||||||||
Accrued fees | 8,300,000 | $ 8,300,000 | ||||||
Accrued fees for extension of escrow agreement | 2,500,000 | |||||||
Accrued cash dividends | 800,000 | |||||||
Additional accrued preferred stock dividends | 0 | 800,000 | ||||||
Common stock issued to satisfy dividends earned, shares | 9,652,268 | |||||||
Common stock issued to satisfy dividends earned, value | $ 12,900,000 | |||||||
Preferred stock dividends paid | $ 1,000,000 | $ 18,000,000 | ||||||
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Insurance Activity - Additional
Insurance Activity - Additional Information (Detail) - USD ($) | Aug. 31, 2009 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Effects of Reinsurance [Line Items] | ||||
Quoted percentage to share base | 50.00% | |||
Balances in loss contract reserve | $ 0 | $ 0 | ||
Decreased value of loss contract reserve | $ 0 | $ 5,400,000 | $ 0 | |
WMMRC [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Second loss layer risk percentage of range minimum | 5.00% | |||
Second loss layer risk percentage of range maximum | 10.00% | |||
First loss layer risk percentage of range minimum | 4.00% | |||
First loss layer risk percentage of range maximum | 5.00% | |||
Minimum period of reinsurance agreements | 5 years | |||
Maximum period of reinsurance agreements | 10 years | |||
WMMRC [Member] | Minimum [Member] | Credit Concentration Risk | Liabilities, Total [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Net of ceding commission, percentage | 25.00% | |||
WMMRC [Member] | Maximum [Member] | Credit Concentration Risk | Liabilities, Total [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Net of ceding commission, percentage | 40.00% |
Insurance Activity - Schedule o
Insurance Activity - Schedule of Premiums Assumed and Earned (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Insurance [Abstract] | ||||
Net premiums assumed (released) | $ 18 | $ 319 | $ 2 | $ 524 |
Change in unearned premiums | 10 | 39 | 235 | |
Premiums earned | $ 18 | $ 329 | $ 41 | $ 759 |
Insurance Activity - Components
Insurance Activity - Components of Liability for Losses and Loss Adjustment Reserves (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Effects of Reinsurance [Line Items] | ||||
Total losses and loss adjustment reserves | $ 273 | $ 474 | [1] | $ 811 |
Case-basis reserves [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Total losses and loss adjustment reserves | 12 | 151 | ||
IBNR reserves [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Total losses and loss adjustment reserves | 1 | 1 | ||
Premium deficiency reserves [Member] | ||||
Effects of Reinsurance [Line Items] | ||||
Total losses and loss adjustment reserves | $ 260 | $ 322 | ||
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Insurance Activity - Summary of
Insurance Activity - Summary of Losses and Loss Adjustment Reserve Activity (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Dec. 31, 2017 | |||
Liability For Unpaid Claims And Claims Adjustment Expense Net [Abstract] | ||||
Balance at beginning of period | $ 474 | [1] | $ 811 | |
Incurred - prior periods | (73) | 19 | ||
Paid or terminated - prior periods | (128) | (356) | ||
Total losses and loss adjustment reserves | $ 273 | $ 474 | [1] | |
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Investment Securities - Additio
Investment Securities - Additional Information (Detail) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Investment securities | $ 0 | |
Transfers from Level 2 to Level 1 | $ 0 | $ 2,416,000 |
Investment Securities - Schedul
Investment Securities - Schedule of Amortized Cost, Gross Unrealized Gains, Gross Unrealized Losses and Estimated Fair Values of Fixed-Maturity Securities (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total fixed-maturity securities, Amortized Cost | $ 3,674 | |
Total fixed-maturity securities, Gross Unrealized Losses | (14) | |
Total fixed-maturity securities, Estimated Fair Value | 3,660 | |
Unrestricted Fixed-Maturity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total fixed-maturity securities, Amortized Cost | 2,151 | |
Total fixed-maturity securities, Gross Unrealized Losses | (9) | |
Total fixed-maturity securities, Estimated Fair Value | 2,142 | [1] |
Fixed-Maturity Securities Held in Trust [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total fixed-maturity securities, Amortized Cost | 1,523 | |
Total fixed-maturity securities, Gross Unrealized Losses | (5) | |
Total fixed-maturity securities, Estimated Fair Value | 1,518 | [1] |
Obligations of U.S. Government Sponsored Enterprises [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total fixed-maturity securities, Amortized Cost | 2,249 | |
Total fixed-maturity securities, Gross Unrealized Losses | (10) | |
Total fixed-maturity securities, Estimated Fair Value | 2,239 | |
Corporate Debt Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Total fixed-maturity securities, Amortized Cost | 1,425 | |
Total fixed-maturity securities, Gross Unrealized Losses | (4) | |
Total fixed-maturity securities, Estimated Fair Value | $ 1,421 | |
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Investment Securities - Summary
Investment Securities - Summary of Net Investment Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Investment income: | ||||
Amortization of premium or discount on fixed-maturity securities | $ (13) | $ (76) | ||
Investment income on fixed-maturity securities | $ 3,059 | $ 1,703 | 5,229 | 2,883 |
Realized gain (loss) from sale of investments | 6 | (25) | 2 | (27) |
Unrealized gain on trading securities held at period end | 17 | 2 | 15 | 23 |
Net investment income | 3,059 | 1,703 | 5,229 | 2,883 |
Fixed Maturities [Member] | ||||
Investment income: | ||||
Amortization of premium or discount on fixed-maturity securities | (6) | (45) | (13) | (76) |
Investment income on fixed-maturity securities | 1 | 153 | 18 | 331 |
Cash and Cash Equivalents [Member] | ||||
Investment income: | ||||
Interest income on cash and cash equivalents | 2,878 | $ 1,618 | 5,149 | $ 2,632 |
Cash Equivalents [Member] | ||||
Investment income: | ||||
Unrealized gain on cash equivalents held at period end | $ 163 | $ 58 |
Investment Securities - Sched36
Investment Securities - Schedule of Investments in Accordance with Fair Value Measurement (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Class of securities: | ||
Total investments fair value | $ 28,684 | $ 34,440 |
Total fixed-maturity securities, Estimated Fair Value | 3,660 | |
Obligations of U.S. Government Sponsored Enterprises [Member] | ||
Class of securities: | ||
Total fixed-maturity securities, Estimated Fair Value | 2,239 | |
Corporate Debt Securities [Member] | ||
Class of securities: | ||
Total fixed-maturity securities, Estimated Fair Value | 1,421 | |
Money Market Funds [Member] | ||
Class of securities: | ||
Money market funds | 28,684 | 30,780 |
Level 1 | ||
Class of securities: | ||
Total investments fair value | 28,684 | 33,196 |
Total fixed-maturity securities, Estimated Fair Value | 2,416 | |
Level 1 | Obligations of U.S. Government Sponsored Enterprises [Member] | ||
Class of securities: | ||
Total fixed-maturity securities, Estimated Fair Value | 995 | |
Level 1 | Corporate Debt Securities [Member] | ||
Class of securities: | ||
Total fixed-maturity securities, Estimated Fair Value | 1,421 | |
Level 1 | Money Market Funds [Member] | ||
Class of securities: | ||
Money market funds | $ 28,684 | 30,780 |
Level 2 | ||
Class of securities: | ||
Total investments fair value | 1,244 | |
Total fixed-maturity securities, Estimated Fair Value | 1,244 | |
Level 2 | Obligations of U.S. Government Sponsored Enterprises [Member] | ||
Class of securities: | ||
Total fixed-maturity securities, Estimated Fair Value | $ 1,244 |
Investment Securities - Summa37
Investment Securities - Summary of Transfers between Level 1 and Level 2 (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers from Level 2 to Level 1 | $ 0 | $ 2,416 |
Obligations of U.S. Government Sponsored Enterprises [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers from Level 2 to Level 1 | 995 | |
Corporate Securities [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Transfers from Level 2 to Level 1 | $ 1,421 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 19, 2012 | |
Income Taxes [Line Items] | |||||||
Net (loss) income attributable to common and participating stockholders | $ (1,996,000) | $ (25,824,000) | $ (7,779,000) | $ (12,535,000) | |||
Percentage of net operating loss carry forwards | 100.00% | 100.00% | |||||
Valuation allowance recorded to be reduce to | 0.00% | 0.00% | |||||
Income tax expense or benefit | $ 0 | $ 0 | |||||
Income tax at the federal statutory rate | 21.00% | 35.00% | |||||
Income tax paid | $ 0 | $ 0 | |||||
Reduction of deferred tax asset relating to NOL carry-forward | $ 842,900,000 | ||||||
Valuation allowance equal to net deferred federal income tax asset | 100.00% | 100.00% | 100.00% | ||||
Abandoned stock | $ 8,400,000,000 | ||||||
Available and utilizable NOL carry forward | $ 6,000,000,000 | ||||||
NOLs expiration date | 2,031 | ||||||
Capital loss carryforward subject to expiration year | 2,018 | 2,018 | |||||
Reserves for uncertain federal income tax positions | $ 0 | $ 0 | |||||
Income tax interest income, expense or penalties | $ 0 | $ 0 | |||||
Income tax examination, year under examination | 2,011 | ||||||
Capital Loss Subject to Expiration in 2018 | |||||||
Income Taxes [Line Items] | |||||||
Capital loss carryforward | $ 1,600,000 | $ 1,600,000 | $ 1,600,000 | ||||
Scenario Plan [Member] | |||||||
Income Taxes [Line Items] | |||||||
Income tax at the federal statutory rate | 21.00% |
Service Agreements and Relate39
Service Agreements and Related Party Transactions - Additional Information (Detail) | Feb. 12, 2018USD ($) | Oct. 14, 2014Directors | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) |
Related Party Transaction [Line Items] | |||||||
Payment of stock offering fee | $ 2,500,000 | ||||||
WMMRC [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Administrative services agreement fee | 110,000 | ||||||
Lawsuit against number of former directors | Directors | 16 | ||||||
Litigation settlement amount | $ 37,000,000 | ||||||
Litigation settlement reserve for reimbursement of contingent fees and expenses | 3,000,000 | ||||||
WMMRC [Member] | Investment Management Agreement And Administrative Services Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses incurred under the agreements | $ 700,000 | $ 700,000 | |||||
WMMRC [Member] | Investment Management Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Description of fee | fee equal to the product of (x) the ending dollar amount of assets under management during the calendar month in question and (y) .002 divided by 12. | ||||||
WMI Holdings Corp [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Litigation settlement reserve for reimbursement of contingent fees and expenses | $ 1,500,000 | ||||||
Other income | $ 123,000 | $ 123,000 | 7,800,000 | ||||
Income from litigation proceeds | $ 0 | ||||||
KKR Capital Markets LLC [Member] | Non-Exclusive Financial Advisor [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction fee receive with respect to merger | $ 25,000,000 | ||||||
KKR Capital Markets LLC [Member] | Placement Agent [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Bridge financing facility, commitment fee percentage | 0.25% | ||||||
Fees payable for arranging bridge facility | $ 6,875,000 | ||||||
KKR Capital Markets LLC [Member] | Maximum [Member] | Placement Agent [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Bridge financing facility | $ 2,750,000,000 | ||||||
KKR Capital Markets LLC [Member] | Redeemable Convertible Series B Preferred Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Payment of stock offering fee | 8,250,000 | ||||||
Payment of additional deferred Fee | $ 8,250,000 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2018 | Mar. 19, 2012 | |
13% Senior First Lien Notes [Member] | ||
Debt Instrument [Line Items] | ||
Issued aggregate principal amount | $ 110 | |
Notes maturity date | Mar. 19, 2030 | |
13% Senior Second Lien Notes [Member] | ||
Debt Instrument [Line Items] | ||
Issued aggregate principal amount | $ 20 | |
Notes maturity date | Mar. 19, 2030 |
Financing Arrangements - Additi
Financing Arrangements - Additional Information (Detail) | Jun. 30, 2018DebtFinancing | Jun. 29, 2018USD ($) | Dec. 31, 2017DebtFinancing |
Debt Instrument [Line Items] | |||
Number of debt financing | DebtFinancing | 0 | 0 | |
Merger Sub [Member] | Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Issued aggregate principal amount | $ 1,700,000,000 | ||
Merger Sub [Member] | Senior Notes [Member] | Notes due 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Issued aggregate principal amount | $ 950,000,000 | ||
Stated interest rate | 8.125% | ||
Merger Sub [Member] | Senior Notes [Member] | Notes due 2026 [Member] | |||
Debt Instrument [Line Items] | |||
Issued aggregate principal amount | $ 750,000,000 | ||
Stated interest rate | 9.125% |
Capital Stock and Derivative 42
Capital Stock and Derivative Instruments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jun. 29, 2018 | Jun. 15, 2018 | Jun. 01, 2017 | Jan. 05, 2015 | Mar. 19, 2012 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Feb. 12, 2018 | Jan. 05, 2018 | Dec. 07, 2017 | Dec. 31, 2016 | Jun. 01, 2016 | May 15, 2015 | May 11, 2015 | Jan. 30, 2014 | |
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Common stock, shares authorized | 500,000,000 | 3,500,000,000 | 3,500,000,000 | 3,500,000,000 | ||||||||||||||
Preferred stock, shares authorized | 5,000,000 | 10,000,000 | 10,000,000 | |||||||||||||||
Common stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||||||||
Conversion of shares | 1 | |||||||||||||||||
Warrants to purchase in aggregate, shares | 61,400,000 | |||||||||||||||||
Warrants expiration period | 5 years | |||||||||||||||||
Warrants to purchase common stock, Issued | 61,400,000 | 61,400,000 | 61,400,000 | |||||||||||||||
Common stock, shares issued | 216,664,908 | 206,714,132 | 21,197,619 | |||||||||||||||
Registration right period | 180 days | |||||||||||||||||
Common stock issuable, shares | 520,158,730 | |||||||||||||||||
Escrow deposit | $ 598,500 | $ 575,800 | $ 578,900 | |||||||||||||||
Acquisition meaning | “Acquisition” means any acquisition by the Company (or any of its direct or indirect wholly-owned subsidiaries), in a single transaction or a series of transactions, whether by purchase, merger or otherwise, of all or substantially all of the assets of, or of 80% or more of the equity interests in, or a business line, unit or division of, any person. | |||||||||||||||||
Fixed conversion price of common stock | $ 1.35 | |||||||||||||||||
Fair market value of embedded conversion feature, reclassed to equity | 108,900 | |||||||||||||||||
Changes in fair value | $ (25,382) | $ (7,353) | ||||||||||||||||
Award vesting period | 3 years | |||||||||||||||||
Number of additional Restricted Stock Awards Outstanding, Restricted stock awards granted | 1,015,872 | |||||||||||||||||
Unamortized value of unvested restricted share grant | $ 5,511 | $ 3,500 | ||||||||||||||||
Equity-based compensation | $ 178 | 313 | ||||||||||||||||
Per share of unvested shares of common stock | $ 0.00001 | |||||||||||||||||
Common stock, shares outstanding | 216,664,908 | 206,714,132 | ||||||||||||||||
Warrants to purchase common stock, outstanding | 61,400,000 | 61,400,000 | ||||||||||||||||
Exec Grants [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Share price | $ 2.25 | $ 2.76 | ||||||||||||||||
Restricted stock fair value | $ 4,700 | |||||||||||||||||
Restricted stock price per share | $ 1.34 | |||||||||||||||||
Chief Executive Officer [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Number of additional Restricted Stock Awards Outstanding, Restricted stock awards granted | 507,936 | |||||||||||||||||
Restricted stock award [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Amount of restricted stock grants | $ 400 | $ 400 | $ 400 | |||||||||||||||
Share price | $ 1.20 | |||||||||||||||||
Unvested shares | 7,012,640 | 6,714,132 | 6,380,800 | |||||||||||||||
Number of Restricted Stock Awards Outstanding, Restricted stock awards granted | 298,508 | 333,332 | 298,508 | 333,332 | ||||||||||||||
Restricted stock award [Member] | Exec Grants [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Amount of restricted stock grants | $ 4,000 | $ 9,800 | ||||||||||||||||
Restricted shares subject to repurchase [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Unvested shares | 4,133,020 | 4,053,640 | 4,039,591 | |||||||||||||||
Number of Restricted Stock Awards Outstanding, Restricted stock awards granted | 298,508 | 333,332 | ||||||||||||||||
Minimum [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Preferred stock liquidation preference per share | $ 10 | |||||||||||||||||
Convertible Series A Preferred Stock [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Preferred stock, par value | $ 0.00001 | $ 0.00001 | ||||||||||||||||
Preferred stock, shares issued | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||
Purchase price of convertible preferred stock maximum limit | [1] | $ 11,100 | ||||||||||||||||
Preferred stock liquidation preference | The Series A Preferred Stock has rights substantially similar to those associated with WMIH’s common stock, with the exception of a liquidation preference, conversion rights and customary anti-dilution protections. The Series A Preferred Stock has a liquidation preference equal to the greater of (i) $10.00 per one million shares of Series A Preferred Stock plus declared but unpaid dividends on such shares and (ii) the amount that the holder would be entitled to in a relevant transaction had the Series A Preferred Stock been converted to common stock of WMIH. | |||||||||||||||||
Convertible preferred stock conversion price | $ 1.10 | |||||||||||||||||
Preferred deemed dividend | $ 9,500 | |||||||||||||||||
Preferred stock, shares outstanding | 1,000,000 | 1,000,000 | ||||||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Preferred stock liquidation preference | If the Series B Preferred Stock is redeemed or determined likely to be redeemed, the Company would be required to record a charge to earnings of approximately $96.3 million to accrete the value of the Series B Preferred Stock to the $600.0 million redemption value. As of June 30, 2018, the Company has determined that recording for accretion to the Series B Preferred Stock’s redemption value is not required. | |||||||||||||||||
Amendment effective term | 18 months | |||||||||||||||||
Amendment Effective Date | Jan. 5, 2018 | |||||||||||||||||
Minimum percentage of preferred stock beneficially to be owned by KKR funds and its affiliates for acquisition consent | 50.00% | |||||||||||||||||
Preferred stock, shares issued | 600,000 | 600,000 | 600,000 | |||||||||||||||
Preferred stock dividend rate calculated on interest rate | 3.00% | |||||||||||||||||
Number of shares registered for resale | 600,000 | |||||||||||||||||
Number of common stock to be issued per share as special dividend upon conversion | 19.04762 | |||||||||||||||||
Preferred stock dividend rate | 5.00% | 3.00% | ||||||||||||||||
Preferred stock liquidation preference per share | $ 1,000 | $ 1,000 | ||||||||||||||||
Preferred stock, redemption date | Oct. 5, 2019 | |||||||||||||||||
Payments to acquire businesses | $ 450,000 | |||||||||||||||||
Preferred stock, shares outstanding | 600,000 | 600,000 | 600,000 | |||||||||||||||
Preferred stock, redemption amount | $ 600,000 | |||||||||||||||||
Preferred stock, accretion to redemption value | $ 96,300 | |||||||||||||||||
Number of trading periods | 20 days | |||||||||||||||||
Conversion ceiling price of common stock | $ 2.25 | |||||||||||||||||
Amendment Date | Dec. 8, 2017 | |||||||||||||||||
Conversion floor price of common stock | $ 1.75 | $ 1.75 | ||||||||||||||||
Fixed conversion price of common stock | $ 1.35 | |||||||||||||||||
Derivative liability - embedded conversion feature | $ 66,200 | |||||||||||||||||
Derivative asset - embedded conversion feature | $ 98,700 | 98,700 | ||||||||||||||||
Fair market value of embedded conversion feature, reclassed to equity | $ 108,900 | |||||||||||||||||
Changes in fair value | $ (7,400) | |||||||||||||||||
Preferred stock conversion price per share | 1.35 | |||||||||||||||||
Common stock issued to satisfy dividends earned, shares | 9,652,268 | |||||||||||||||||
Common stock issued to satisfy dividends earned, value | $ 12,900 | |||||||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Exec Grants [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Subject to minimum conversion price per share of restricted stock | 1.75 | |||||||||||||||||
Minimum grant conversion price per share of restricted stock | 1.75 | |||||||||||||||||
Preferred stock conversion price per share | 1.35 | |||||||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Derivative Asset [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Conversion floor price of common stock | 1.75 | |||||||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Derivative Liability [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Conversion ceiling price of common stock | $ 2.25 | |||||||||||||||||
Redeemable Convertible Series B Preferred Stock [Member] | Maximum [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Conversion ceiling price of common stock | $ 2.25 | |||||||||||||||||
Common Stock [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Issuance of common stock, Shares | 200,000,000 | |||||||||||||||||
Common stock issued to satisfy dividends earned, shares | 9,652,268 | |||||||||||||||||
Warrant One [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Warrants to purchase common stock | 30,700,000 | |||||||||||||||||
Warrants to purchase common stock, exercise price | $ 1.32 | |||||||||||||||||
Warrant Two [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Warrants to purchase common stock | 30,700,000 | |||||||||||||||||
Warrants to purchase common stock, exercise price | $ 1.43 | |||||||||||||||||
WMIH Common Stock [Member] | ||||||||||||||||||
Capital Stock Distribution [Line Items] | ||||||||||||||||||
Common stock, shares issued | 21,197,619 | |||||||||||||||||
[1] | Balances derived from audited financial statements as of December 31, 2017. |
Capital Stock and Derivative 43
Capital Stock and Derivative Instruments - Schedule of Unamortized Value of Restricted Stock (Detail) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | $ 747 | |
Unamortized fair-value - event dependent | 4,764 | |
Total unamortized dollar value | 5,511 | $ 3,500 |
3rd quarter 2018 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 109 | |
4th quarter 2018 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 109 | |
1st quarter 2019 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 103 | |
2nd quarter 2019 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 73 | |
3rd quarter 2019 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 72 | |
4th quarter 2019 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 72 | |
1st quarter 2020 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 67 | |
2nd quarter 2020 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 37 | |
3rd quarter 2020 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 37 | |
4th quarter 2020 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | 37 | |
1st quarter 2021 [Member] | ||
Amortization Expense [Line Items] | ||
Unamortized fair value subject to vesting schedule | $ 31 |
Capital Stock and Derivative 44
Capital Stock and Derivative Instruments - Summary of Company's Restricted Stock Award Activity (Detail) - Restricted stock award [Member] - USD ($) $ / shares in Units, $ in Thousands | Jun. 29, 2018 | Jun. 01, 2017 | Jun. 30, 2018 | Dec. 31, 2017 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Number of Restricted Stock Awards Outstanding, Beginning balance | 6,714,132 | 6,380,800 | ||
Number of Restricted Stock Awards Outstanding, Restricted stock awards granted | 298,508 | 333,332 | 298,508 | 333,332 |
Number of Restricted Stock Awards Outstanding, Ending balance | 7,012,640 | 6,714,132 | ||
Weighted Average Grant Date Fair Value, Beginning balance | $ 2.0844 | $ 2.1306 | ||
Weighted Average Grant Date Fair Value, Restricted stock awards granted | 1.3400 | 1.2000 | ||
Weighted Average Grant Date Fair Value, Ending balance | $ 2.0527 | $ 2.0844 | ||
Aggregate Fair Value, Beginning balance | $ 13,995 | $ 13,595 | ||
Aggregate Fair Value, Restricted stock awards granted | 400 | 400 | ||
Aggregate Fair Value, Ending balance | $ 14,395 | $ 13,995 |
Capital Stock and Derivative 45
Capital Stock and Derivative Instruments - Schedule of Vesting Shares Subject to Repurchase (Detail) - Restricted shares subject to repurchase [Member] - shares | Jun. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Amortization Expense [Line Items] | |||
Unvested shares | 4,133,020 | 4,053,640 | 4,039,591 |
Total unvested shares - subject to vesting schedule | 577,464 | ||
Unvested shares - event dependent | 3,555,556 | ||
1st quarter 2019 [Member] | |||
Amortization Expense [Line Items] | |||
Unvested shares | 267,356 | ||
1st quarter 2020 [Member] | |||
Amortization Expense [Line Items] | |||
Unvested shares | 210,612 | ||
1st quarter 2021 [Member] | |||
Amortization Expense [Line Items] | |||
Unvested shares | 99,496 |
Capital Stock and Derivative 46
Capital Stock and Derivative Instruments - Summary of WMIH's Restricted Shares Issued and Subject to Repurchase (Detail) - Restricted shares subject to repurchase [Member] - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Number of Restricted Stock Awards Outstanding, Beginning balance | 4,053,640 | 4,039,591 |
Shares issued subject to vesting during the period | 298,508 | 333,332 |
Shares vested during the period | (219,128) | (319,283) |
Number of Restricted Stock Awards Outstanding, Ending balance | 4,133,020 | 4,053,640 |
Pending Litigation - Additional
Pending Litigation - Additional Information (Detail) - Litigation | May 08, 2018 | Jun. 30, 2018 |
Loss Contingency [Abstract] | ||
Pending legal proceedings or investigations | 0 | |
Lawsuit filing date | May 8, 2018 |
Restriction on Distribution o48
Restriction on Distribution of Net Assets from Subsidiary - Additional Information (Detail) - USD ($) | Jul. 10, 2018 | Jul. 05, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Subsequent Event [Member] | ||||
Financial Receivables Impaired Or Restructured [Line Items] | ||||
Dividends received | $ 10,400,000 | |||
WMMRC [Member] | ||||
Financial Receivables Impaired Or Restructured [Line Items] | ||||
Total net assets | $ 12,400,000 | $ 13,100,000 | ||
WMMRC [Member] | Subsequent Event [Member] | ||||
Financial Receivables Impaired Or Restructured [Line Items] | ||||
Dividend declaration date | Jul. 10, 2018 | |||
WMMRC [Member] | Maximum [Member] | Subsequent Event [Member] | ||||
Financial Receivables Impaired Or Restructured [Line Items] | ||||
Net assets available for distribution from subsidairy | $ 11,100,000 |
Net Income (Loss) Per Common 49
Net Income (Loss) Per Common Share - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | ||
Jun. 30, 2018 | Feb. 12, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |||
Dilutive effects from equity instruments | 0 | ||
Cash would be received upon exercise of warrants | $ 84.4 | ||
Warrants to purchase common stock, Issued | 61,400,000 | 61,400,000 | 61,400,000 |
Common stock, shares issued | 216,664,908 | 21,197,619 | 206,714,132 |
Net Income (Loss) Per Common 50
Net Income (Loss) Per Common Share - Calculation of Basic Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Numerator for basic net loss per share: | |||||
Net loss | $ (1,996) | $ (21,324) | $ (7,579) | $ (3,535) | $ 25,882 |
Less: Series B preferred stock dividends | (4,500) | (200) | (9,000) | ||
Basic net loss attributable to common stockholders | $ (1,996) | $ (25,824) | $ (7,779) | $ (12,535) | |
Denominator for basic net loss per share: | |||||
Weighted-average shares outstanding | 209,902,759 | 206,490,690 | 208,317,254 | 206,436,048 | |
Weighted-average unvested restricted shares outstanding | (3,841,073) | (3,857,807) | (3,931,031) | (3,907,045) | |
Denominator for basic net loss per share | 206,061,686 | 202,632,883 | 204,386,223 | 202,529,003 | |
Basic net loss per share attributable to common stockholders | $ (0.01) | $ (0.13) | $ (0.04) | $ (0.06) |
Net Income (Loss) Per Common 51
Net Income (Loss) Per Common Share - Calculation of Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Numerator for diluted net loss per share: | |||||
Net loss | $ (1,996) | $ (21,324) | $ (7,579) | $ (3,535) | $ 25,882 |
Less: Series B preferred stock dividends | (4,500) | (200) | (9,000) | ||
Diluted net loss attributable to common stockholders | $ (1,996) | $ (25,824) | $ (7,779) | $ (12,535) | |
Denominator for diluted net loss per share: | |||||
Weighted-average shares outstanding | 209,902,759 | 206,490,690 | 208,317,254 | 206,436,048 | |
Weighted-average unvested restricted shares outstanding | (3,841,073) | (3,857,807) | (3,931,031) | (3,907,045) | |
Denominator for diluted net loss per share | 206,061,686 | 202,632,883 | 204,386,223 | 202,529,003 | |
Diluted net loss income per share attributable to common stockholders | $ (0.01) | $ (0.13) | $ (0.04) | $ (0.06) |
Net Income (Loss) Per Common 52
Net Income (Loss) Per Common Share - Schedule of Potential Dilutive Common Shares (Detail) | 6 Months Ended |
Jun. 30, 2018shares | |
Minimum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 520,043,093 |
Minimum [Member] | Series A Preferred Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 10,065,629 |
Minimum [Member] | Series B Redeemable Convertible Preferred Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 444,444,444 |
Maximum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 587,120,983 |
Maximum [Member] | Series A Preferred Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 10,065,629 |
Maximum [Member] | Series B Redeemable Convertible Preferred Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 444,444,444 |
Maximum [Member] | Series B Preferred Stock Dividends [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 54,633,446 |
Maximum [Member] | Series B Preferred Stock Acquisition Conversion Payment [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 11,428,572 |
Restricted Shares Subject to Vesting [Member] | Minimum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 4,133,020 |
Restricted Shares Subject to Vesting [Member] | Maximum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 4,133,020 |
Warrants Outstanding [Member] | Minimum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 61,400,000 |
Warrants Outstanding [Member] | Maximum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 61,400,000 |
Restricted shares to be issued if Nationstar transaction is consummated [Member] | Maximum [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Potential dilutive shares if converted to common | 1,015,872 |
Net Income (Loss) Per Common 53
Net Income (Loss) Per Common Share - Schedule of Potential Dilutive Common Shares (Parenthetical) (Detail) | Jun. 30, 2018$ / shares |
Series B Redeemable Convertible Preferred Stock [Member] | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |
Preferred stock conversion price per share | $ 1.35 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Change in Level 3 Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair Value Disclosures [Abstract] | |
Beginning Balance | $ 80,651 |
Gain on change in fair value | 28,242 |
Reclassification of derivative asset to equity | $ (108,893) |
Fair Value Measurement - Additi
Fair Value Measurement - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Jan. 05, 2018 | Jan. 05, 2015 | Dec. 31, 2017 | Jun. 30, 2018 | Jun. 15, 2018 | Dec. 07, 2017 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||||
Conversion price of common stock | $ 1.35 | |||||
Variance from fair value of derivative | $ 28.2 | |||||
Fair market value of derivative liability transferred to equity | $ 108.9 | |||||
Redeemable Convertible Series B Preferred Stock [Member] | ||||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||||
Capital | $ 600 | |||||
Redeemable Convertible preferred stock, shares issued | 600,000 | 600,000 | 600,000 | |||
Preferred stock liquidation preference per share | $ 1,000 | $ 1,000 | ||||
Preferred stock dividend rate calculated on interest rate | 3.00% | |||||
Percentage of dividend payable in common stock accrued | 5.00% | |||||
Conversion ceiling price of common stock | $ 2.25 | |||||
Conversion floor price of common stock | 1.75 | $ 1.75 | ||||
Conversion price of common stock | $ 1.35 | |||||
Fair market value of derivative liability transferred to equity | $ 108.9 | |||||
Redeemable Convertible Series B Preferred Stock [Member] | Maximum [Member] | ||||||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||||||
Conversion ceiling price of common stock | $ 2.25 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) | Jul. 10, 2018 | Jul. 13, 2018 | Jul. 05, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | Jan. 05, 2015 |
Subsequent Event [Line Items] | ||||||
Offering amount deposited into escrow | $ 575,800,000 | $ 578,900,000 | $ 598,500,000 | |||
Subsequent Event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividends received | $ 10,400,000 | |||||
Offering amount deposited into escrow | $ 1,700,000,000 | |||||
Subsequent Event [Member] | WMMRC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Dividend declaration date | Jul. 10, 2018 | |||||
Subsequent Event [Member] | WMMRC [Member] | Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Net assets available for distribution from subsidairy | $ 11,100,000 |