Exhibit 99.1
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The PMI Group, Inc. | | |
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| | NEWS RELEASE |
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| | | Investor and media contacts: Bill Horning / Beth Haiken |
| | | 925.658.6193 / 925.658.6192 |
THE PMI GROUP, INC. REPORTS FIRST QUARTER 2005 NET
INCOME OF $101.2 MILLION; NET INCOME PER DILUTED
SHARE OF $1.00
NET INCOME PER DILUTED SHARE FROM CONTINUING OPERATIONS
UP 20%OVER FIRST QUARTER 2004
Walnut Creek, CA, May 5, 2005, —The PMI Group, Inc. (NYSE: PMI) (the “Company”) today announced thatconsolidated net income from continuing operations totaled $101.2 million, compared to $85.6 million for the same period a year ago, an increase of 18 percent. The significant improvement in net income from continuing operations in the first quarter was driven primarily by net income increases in the U.S. Mortgage Insurance Operations and Financial Guaranty segments. In the first quarter of 2005, net income per diluted share from continuing operations was $1.00, compared to net income of $0.83 per diluted share for the same period a year ago, an increase of 20 percent. The net income results for the first quarter of 2005 led to a book value per share of $33.93 at March 31, 2005, compared to a book value per share of $30.70 at March 31, 2004.
Consolidated net income and net income per share were $101.2 million, or $1.00 per diluted share, for the quarter ended March 31, 2005, compared to net income of $119.5 million, or $1.16 per diluted share, for the first quarter of 2004. Included in the consolidated net income for the first quarter of 2004 was a $30.1 million ($0.29 per share) after tax gain on the sale of American Pioneer Title Insurance Company (“APTIC”).
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RECONCILIATIONOF EARNINGS PER SHARE |
(Dollars and shares, except per share amounts, in millions)
| | Q1 2005
| | Q1 2004
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Income from continuing operations after taxes | | $ | 101.2 | | $ | 85.6 |
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Plus: Interest expense on contingently in convertible debt, net of taxes | | | 1.9 | | | 1.9 |
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Net income from continuing operations after assumed conversion of contingently convertible debt | | $ | 103.1 | | $ | 87.5 |
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Diluted weighted average shares after assumed conversion of contingently convertible debt | | | 103.5 | | | 105.0 |
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Per Share Data: | | | | | | |
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Diluted net income from continuing operations per share: | | $ | 1.00 | | $ | 0.83 |
Income from discontinued operations after taxes | | | — | | | 0.04 |
Gain on sale of discontinued operations, net of taxes | | | — | | | 0.29 |
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Diluted net income per share | | $ | 1.00 | | $ | 1.16 |
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First Quarter 2005 Highlights
| • | | Combined1 insurance in force grew to $267.0 billion at March 31, 2005 from $244.0 billion at March 31, 2004; |
| • | | Net income for the U.S. Mortgage Insurance Operations2 segment grew by approximately 24 percent to $66.3 million in the first quarter of 2005, compared to $53.6 million in the first quarter of 2004; |
| • | | The U.S. Mortgage Insurance Operations segment realized a 10 percent increase in earned premiums over the same period in 2004. Also, expense savings of approximately $1 million to $1.5 million were realized in the quarter attributable to the U.S. Mortgage Operations segment field restructuring undertaken in 2004. The Company continues to expect a pre-tax expense savings of $5 million to $6 million in 2005; |
| • | | U.S. credit trends: Delinquent loan inventory was down 9 percent from December 31, 2004; the primary default rate declined to 4.53 percent at March 31, 2005, compared to 4.86 percent at December 31, 2004; |
| 1 | “Combined” includes results from U.S. Mortgage Insurance Operations, CMG Mortgage Insurance Company and its’ affiliates (collectively “CMG”), PMI Australia and PMI Europe, primary insurance and credit default swap transactions. |
| 2 | “U.S. Mortgage Insurance Operations” includes the results of PMI Mortgage Insurance Co. and affiliated U.S. reinsurance companies and equity in earnings from CMG. |
| • | | The International Operations3 segment benefited from a continuation of favorable credit trends in Australia, the signing of our first mortgage insurance contract with an Italian bank and robust growth in written gross premiums in Hong Kong. |
| • | | The Company’s investment in FGIC Corporation (“FGIC”) yielded equity in earnings of $18.1 million (after tax) in the first quarter of 2005 compared to $12.7 million (after tax) in the same period last year. |
Results for the Company include:
Mark-to-market losses related to the foreign currency put options purchased to mitigate the effects of a strengthening in the U.S. dollar spot rate at quarter end were $1.1 million in the first quarter of 2005. Net income was favorably impacted by $0.5 million for the quarter related to the translation gains from a change in the average foreign currency exchange rates compared to the same period a year ago.
The diluted weighted average common shares outstanding for the quarter were 103.5 million compared to 105.0 million for the same period a year ago. In the first quarter of 2005, approximately 832,200 common shares were repurchased at a cost of $33.3 million. The Company has $66.7 million in remaining capacity under its $100 million common stock repurchase program authorized on February 17, 2005.
Combined primary new insurance written for the quarter was $17.0 billion, compared to $18.1 billion for the same period a year ago. The decrease was due primarily to declines in new insurance written by our U.S. Mortgage Insurance Operations segment and by PMI Australia primarily attributable to slowdowns in mortgage originations in the U.S. and Australian markets.Combined insurance in force at March 31, 2005 was $267.0 billion, compared to $244.0 billion at March 31, 2004. The increase was due primarily to an increase in insurance in force for PMI Australia.
Consolidated net premiums written for the quarter totaled $193.7 million, relatively unchanged from $193.4 million for the same period a year ago.
Consolidated premiums earned for the quarter were $199.6 million, compared to $185.3 million for the same period a year ago. The increase for the quarter was primarily due to the recognition of premiums associated with loan cancellations under non-refundable single premium policies and the increase in premiums earned as a result of higher average premium rates for U.S. Mortgage Insurance Operations.
| 3 | “International Operations” includes the results of PMI Australia, PMI Europe and the results of operations in Hong Kong. |
Consolidated net investment income for the quarter totaled $43.8 million, compared to $40.0 million for the same period a year ago. The increase for the first quarter 2005 compared to the corresponding period in 2004, was due primarily to growth in our U.S. and Australian investment portfolios, partially offset by a decrease in the book yield of our U.S. investment portfolio.
Consolidated losses and loss adjustment expenses for the quarter totaled $64.5 million compared to $59.8 million for the same period a year ago. The increase, when compared to the first quarter of 2004, was primarily due to higher claims paid for U.S. Mortgage Insurance Operations and is consistent with the Company’s revised expectation for total incurred losses in 2005.
Consolidated reserve for losses and loss adjustment expenses totaled $364.8 million at March 31, 2005, unchanged from $364.8 million at December 31, 2004.
Amortization of deferred policy acquisition costswas $20.4 million in the first quarter of 2004, compared to $23.1 million for the same period a year ago. The decrease is due to the seasoning of the 2003 book year and increased efficiencies resulting from our field restructuring in 2004.
Consolidated other underwriting and operating expensesfor the quarter totaled $45.6 million, compared to $50.3 million for the same period a year ago. The decrease for the first quarter of 2005 when compared to the same period a year ago was due primarily to the higher expenses incurred in the first quarter of 2004 that related to 2003 employee compensation and field restructuring costs of approximately $1.2 million (pre-tax) in the U.S. Mortgage Insurance Operations segment.
Consolidated income tax expense from continuing operations for the quarter totaled $33.5 million and was affected by an increase in the effective tax rate from 24.2% to 24.9% and the increase in pre-tax income from continuing operations. The increase in our effective tax rate for the first quarter of 2005 was primarily due to increases in our U.S. Mortgage Insurance Operations underwriting income which is taxed at 35.0%.
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FIRST QUARTER 2005 SEGMENT HIGHLIGHTS | |
(Dollars in millions)
| | U.S.
Mortgage
Insurance
Operations
| | International
Operations
| | Financial Guaranty4
| | Other5
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Net premiums written | | $ | 154.5 | | $ | 39.2 | | $ | — | | $ | 0.0 | | | $ | 193.7 | |
Premiums earned | | | 164.1 | | | 35.4 | | | — | | | 0.0 | | | | 199.6 | * |
Equity in earnings | | | 4.1 | | | — | | | 20.8 | | | 0.3 | | | | 25.2 | |
Total revenues | | | 194.2 | | | 49.4 | | | 20.8 | | | 10.4 | | | | 274.8 | |
Losses, expenses and interest expense | | | 102.7 | | | 12.8 | | | — | | | 24.6 | | | | 140.1 | |
Net income | | $ | 66.3 | | $ | 25.1 | | $ | 18.9 | | $ | (9.2 | ) | | $ | 101.2 | * |
| * | Does not total due to rounding |
U.S. Mortgage Insurance Operations
Net income for U.S. Mortgage Insurance Operations for the quarter totaled $66.3 million, compared to $53.6 million for the same period a year ago. The increase was due primarily to increases in premiums earned, decreases in underwriting and operating expenses and equity in earnings from unconsolidated strategic investments.
Net premiums writtenfor U.S. Mortgage Insurance Operations for the quarter totaled $154.5 million, compared to $153.1 million for the same period a year ago. The increase was due to an increase in average premium rates and, to a lesser extent, higher primary risk in force.
Premiums earned for the quarter totaled $164.1 million, compared to $149.0 million for the same period a year ago. The increase was due primarily to the recognition of premiums associated with loan cancellations under non-refundable single premium policies, an increase in the average premium rate and, to a lesser extent, higher primary risk in force.
Net investment income for the quarter totaled $25.6 million, compared to $24.5 million for the same period a year ago due to year-over-year increases in cash, cash equivalents and investments, partially offset by lower book yields as a result of higher liquidity levels.
Equity in earnings from CMG Mortgage Insurance Company for the quarter totaled $4.1 million (pre-tax), compared to $3.3 million (pre-tax) for the same period a year ago. The increase was due primarily to the growth of insurance in force and premiums earned.
| 4 | “Financial Guaranty” includes the equity in earnings from FGIC and RAM Re. |
| 5 | “Other” includes other income and related operating expenses of PMI Mortgage Services Co.; investment income, interest expense and corporate overhead of The PMI Group, Inc.; the results of Commercial Loans Insurance Co. and WMAC Credit Insurance Corporation; equity in earnings from SPS and certain limited partnerships; and the results from discontinued operations of APTIC. |
Losses and loss adjustment expenses for the quarter totaled $63.1 million, compared to $59.0 million for the same period a year ago. The increase was due primarily to increases in the number of primary claims paid associated with the seasoning of the primary portfolio, partially offset by a decrease in the average primary claim size.
Amortization of deferred policy acquisition costs for the quarter totaled $16.0 million, compared to $19.4 million for the same period a year ago. The decrease was due primarily to the continued amortization of expenses related to policies originated in 2003, expense savings realized from the 2004 field restructuring and the decline in new insurance written (NIW) compared to prior periods.
Other underwriting and operating expenses for the quarter totaled $23.6 million, compared to $26.1 million for the same period a year ago. The decrease for the quarter was due primarily to expenses incurred in the first quarter of 2004 related to 2003 employee compensation, $1.2 million of field restructuring costs and, to a lesser extent, expense savings realized in the first quarter of 2005 as a result of the field restructuring.
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| DOMESTIC NEW INSURANCE WRITTEN |
(Dollars in billions)
| | Q1 2005
| | Q1 2004
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Domestic6 primary new insurance written | | $ | 9.2 | | $ | 9.8 |
Excluding CMG | | | 8.2 | | | 8.8 |
Bulk new insurance written | | | 1.9 | | | 0.3 |
Domestic pool new insurance written | | | 1.3 | | | 3.9 |
Domestic primary new insurance written for the quarter totaled $9.2 billion, compared to $9.8 billion for the same period a year ago. The decrease in the first quarter of 2005 compared to the corresponding period in 2004 was driven primarily by lower volumes in the residential mortgage origination and mortgage insurance markets, partially offset by increased bulk insurance writings.
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PRIMARY INSURANCE AND RISK IN FORCE | |
(Dollars in billions)
| | As of 3/31/05
| | | As of 12/31/04
| | | As of 3/31/04
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Domestic primary insurance in force | | $ | 118.2 | | | $ | 119.4 | | | $ | 117.0 | |
Excluding CMG | | | 104.0 | | | | 105.3 | | | | 104.3 | |
Domestic primary risk in force | | | 28.8 | | | | 28.9 | | | | 27.4 | |
Excluding CMG | | | 25.5 | | | | 25.7 | | | | 24.5 | |
Domestic annual primary persistency rate | | | 61.7 | % | | | 61.8 | % | | | 48.6 | % |
Excluding CMG | | | 60.8 | % | | | 60.9 | % | | | 47.8 | % |
| 6 | “Domestic” includes results from U.S. Mortgage Insurance Operations and CMG. |
Domestic primary insurance in force totaled $118.2 billion at March 31, 2005, compared to $117.0 billion a year ago.Domestic primary risk in force totaled $28.8 billion, compared to $27.4 billion at the end of the first quarter of 2004 and was driven primarily by a greater number of high LTV loans with deeper coverage and higher average loan balances. The domestic annual persistency rate increased to 61.7% as of March 31, 2005 from 48.6% as of March 31, 2004.
Pool risk in force as of March 31, 2005 was $2.4 billion, compared to $2.6 billion at March 31, 2004.
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| DEFAULT RATES | |
| | | As of 3/31/05
| | | As of 12/31/04
| | | As of 3/31/04
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Domestic primary mortgage insurance | | 4.07 | % | | 4.37 | % | | 3.86 | % |
Excluding CMG | | 4.53 | % | | 4.86 | % | | 4.26 | % |
Excluding CMG and bulk transactions | | 4.04 | % | | 4.30 | % | | 3.71 | % |
Bulk transactions only | | 8.17 | % | | 9.19 | % | | 8.68 | % |
Pool insurance | | 5.65 | % | | 5.50 | % | | 4.39 | % |
At March 31, 2005, the Company’sU.S. primary insurance default rate, excluding CMG, was 4.53 percent compared to 4.86 percent at December 31, 2004. The decrease was primarily due to a decrease in primary loans in default from 39,054 at December 31, 2004 to 35,716 at March 31, 2005, partially offset by a decrease in primary policies in force from 803,236 at December 31, 2004 to 788,847 at March 31, 2005.
At March 31, 2005, the Company’sU.S. pool insurance default rate was 5.65 percent compared to 5.50 percent at December 31, 2004. The increase was due primarily to a 4 percent decrease in pool insurance policies in force.
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CLAIMS PAID |
(Dollars in millions)
| | Q1 2005
| | Q4 2004
| | Q1 2004
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Primary – flow | | $ | 41.7 | | $ | 36.9 | | $ | 31.1 |
Primary – bulk | | | 13.8 | | | 10.8 | | | 12.5 |
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Total primary | | | 55.5 | | | 47.7 | | | 43.6 |
Total pool and other | | | 4.7 | | | 4.4 | | | 3.9 |
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Total claims paid | | $ | 60.2 | | $ | 52.1 | | $ | 47.5 |
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Primary claims paid for the quarter totaled $55.5 million, compared to $43.6 million in the first quarter of 2004. The increase in claims paid in the first quarter of 2005 was influenced by the seasoning of our primary insurance portfolio and higher claim rates associated with the portion of the portfolio that contain ARMs, high LTV, Alt-A and less-than-A quality loans. Performance in the first quarter of 2005 was consistent with the Company’s revised expectation for total incurred losses in 2005.
International Operations
Net incomefrom International Operations for the quarter totaled $25.1 million, compared to $27.0 million for the first quarter of 2004. The decrease in net income in the first quarter of 2005 was due primarily to decreases in PMI Europe’s premiums earned and other income. The results of our International Operations are subject to fluctuations in the foreign currency exchange rate of the U.S. dollar, principally with the Australian dollar and the Euro. The change in average foreign currency exchange rates from the first quarter of 2005 to the corresponding period in 2004 favorably impacted net income from International Operation’s by $0.5 million.
In January 2005, PMI Australia and PMI Europe purchased Australian dollar and Euro put options, respectively, designed to partially mitigate the negative financial impact of a potential strengthening of the U.S. dollar relative to the Australian dollar and the Euro in 2005. For the quarter, International Operations recognized a charge of $1.1 million in other income due to the changes in fair value of the foreign currency put options.
Net investment incomefor International Operations for the quarter totaled $13.8 million, compared to $11.8 million for the same period a year ago. The increase was due primarily to an increase in the investment portfolio of PMI Australia and an increase in the yield on our investments in the PMI Australia investment portfolio, partially offset by a reduction in foreign currency remeasurement gains for PMI Europe.
Net incomefrom PMI Australia for the quarter totaled $20.6 million, compared to $20.3 million for the same period a year ago. In local currency, net income from PMI Australia for the quarter totaled AU$26.5 million, unchanged from AU$26.5 million for the same period a year ago.
Credit trends continued to remain favorable for PMI Australia.Losses and loss adjustment expensesfor PMI Australia continued at low levels of claim payments and default rates. PMI Australia’s default rate at March 31, 2005 was 0.13% compared to 0.16% at March 31, 2004. Claims paid totaled $0.3 million in the first quarter of 2005, compared to $0.2 million for the same period a year ago.
Premiums earnedfor PMI Australia for the quarter totaled $29.4 million, compared to $28.9 million for the same period a year ago. In local currency terms, earned premiums in the first quarter of 2005 of AU$37.8 million were unchanged from AU$37.8 million in the first quarter of 2004. This comparison also reflects a change in the rate at which PMI Australia is recognizing unearned premiums into net income for the current book year. This change is driven primarily by the continued low loss levels experienced by PMI Australia over the last year. The refinement of the premiums earnings pattern methodology had the effect of deferring higher premiums earnings into future periods and reducing net income in the first quarter of 2005 by approximately $1 million. PMI Australia’s unearned premiums at March 31, 2005 were AU$382.8 million compared to AU$330.5 million at March 31, 2004, an increase of 16 percent.
Primary insurance in forcefor PMI Australia was $117.4 billion at March 31, 2005, compared to $93.2 billion at March 31, 2004.Primary risk in forcefor PMI Australia was $106.7 billion at March 31, 2005, compared to $84.5 billion at March 31, 2004.
New insurance writtenfor PMI Australia for the quarter totaled $7.7 billion, compared to $8.3 billion for the same period a year ago. The decrease in primary NIW generated by PMI Australia’s flow channel in the first quarter of 2005 compared to the first quarter of 2004 was primarily due to a lower mortgage origination activity combined with increasingly competitive pricing. PMI Australia’s primary new insurance written includes flow channel insurance as well as insurance written on residential mortgage-backed securities, or RMBS. RMBS transactions include insurance on seasoned portfolios comprising prime credit quality loans with loan-to-values principally below 80 percent. RMBS new insurance written for the quarter totaled $3.8 billion in the first quarter of 2005, compared to $3.0 billion for the same period a year ago.
Net incomefor PMI Europe for the quarter totaled $3.0 million, compared to $4.7 million for the same period a year ago. The decrease was due primarily to a decrease in premiums earned and other income. In local currency, net income from PMI Europe for the quarter totaled €2.3 million, compared to €3.8 million for the same period a year ago.
Net premiums writtenfor PMI Europe for the quarter totaled $1.5 million, compared to $2.7 million for the same period a year ago. The decrease in net premiums written was due to the uneven nature of business activity in the European structured markets.
Premiums earnedfor PMI Europe for the quarter totaled $4.4 million, compared to $5.4 million for the same period a year ago. The decrease for the quarter was due primarily to a decrease
in premiums earned associated with the U.K. lenders’ mortgage insurance portfolio acquired by PMI Europe in 2004. As this portfolio continues to season, we expect premiums earned and risk in force associated with this portfolio to decline.
Net investment incomefor PMI Europe for the quarter totaled $2.5 million, compared to $2.7 million for the same period a year ago.Insurance in force (including credit default swaps) for PMI Europe was $31.4 billion at March 31, 2005, compared to $33.7 billion at March 31, 2004.Risk in force (including credit default swaps) for PMI Europe was $2.4 billion at March 31, 2005, compared to $3.3 billion at March 31, 2004.
Other incomefor PMI Europe in the first quarter of 2005 included a $0.4 million gain related to a change in fair value for credit default swaps, which are accounted for as derivative instruments.
PMI’sHong Kong reinsurance premiums writtenfor the quarter totaled $5.3 million, compared to $1.8 million for the same period a year ago. The increase was due primarily to an increase in mortgage origination activity in Hong Kong and product expansion.
Financial Guaranty
Financial Guaranty, which includes equity in earnings from the Company’s investments in FGIC and RAM Re, reportednet income for the quarter of $18.9 million, compared to $13.5 million for the same period a year ago. Equity in earnings fromFGIC totaled $19.6 million (pre-tax) in the first quarter of 2005, compared to $13.6 (pre-tax) million in the first quarter of 2004. The increase was due primarily to increases in refundings and premiums written combined with a reduction in loss reserves during the quarter, offset by higher underwriting expenses in the first quarter of 2005.
Equity in earnings fromRAM Re for the quarter totaled $1.2 million (pre-tax), compared to $1.3 million (pre-tax) for the same period a year ago. The Company reports equity in earnings from RAM Re on a one-quarter lag.
Other
The Other segment consists of revenues and expenses of the holding company, PMI Mortgage Services Co., SPS Holding Corp. (SPS), and for the first quarter of 2004, the gain on sale and the discontinued operations of APTIC.
In January 2005, the Company signed a Summary of Terms granting Credit Suisse First Boston (USA) an option to buy 100 percent of the outstanding stock of our outstanding stock of SPS. As of March 31, 2005, our total investment in SPS was $123.1 million, consisting of $110.4 million carrying value of our equity investment held for sale and $12.7 million in related party receivables, which are current. As a result of reclassifying our investment in SPS as held for sale, effective January 1, 2005, we have recorded equity earnings of SPS in other income.
Net loss for the quarter totaled $9.2 million compared to net income of $25.3 million for the same period a year ago. The increase in the net loss for the quarter was due primarily to the effect of the $30.1 million (after tax) gain from the sale of APTIC recorded in the first quarter of 2004.
Equity in the earnings of SPS for the quarter totaled $0.9 million (pre-tax), compared to $0.3 million (pre-tax) for the same period a year ago. The increase for the first quarter of 2005 was primarily driven by a decrease in SPS’s total expenses, which exceeded the decrease in gross revenues during the quarter.
Other income totaled $5.6 million for the quarter, compared to $7.2 million for the same period a year ago. The decline was principally the result of a decline in contract underwriting volume and corresponding revenue at PMI Mortgage Services Co.
Other underwriting and operating expenses for the quarter totaled $15.1 million, compared to $17.3 million for the same period a year ago. The level of expenses reflects lower contract underwriting expenses due to decreased underwriting activity, partially offset by higher holding company expenses including compensation and interest expense.
ABOUT THE PMI GROUP, INC.
The PMI Group, Inc. (NYSE:PMI) headquartered in Walnut Creek, California is an international provider of credit enhancement products that promotes homeownership and facilitates mortgage transactions in the capital markets. Through its wholly owned subsidiaries and unconsolidated strategic investments, the Company offers residential mortgage insurance and credit enhancement products domestically and internationally as well as financial guaranty insurance and reinsurance.
The Company is an advocate of affordable housing and supports a number of organizations that foster greater access to affordable housing. The Company’s approach to affordable housing lending is to develop products and services that assist responsible borrowers who may not qualify for mortgage loans under traditional underwriting practices.
Cautionary Statement: Statements in this earnings release that are not historical facts, and that relate to future plans, events or performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include our expectations with respect to future expenses and incurred losses of U.S. Mortgage Insurance Operations and earned premiums of International Operations. Readers are cautioned that forward-looking statements by their nature involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. Many factors could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. Risks and uncertainties that could affect the Company are discussed in our Form 10-K for the year ended December 31, 2004 and include changes in economic conditions such as interest rates, home values, employment rates and refinance activity. We undertake no obligation to update forward-looking statements.
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THE PMI GROUP, INC. AND SUBSIDIARIES
FINANCIAL RESULTS AND STATISTICAL INFORMATION FOR THE PERIOD ENDED MARCH 31, 2005
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| Contents |
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Consolidated Statements of Operations and Balance Sheets | | Page 2 |
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Business Segments Results of Operations - Three Months Ended March 31, 2005 and 2004 | | Page 3 |
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Business Segments Balance Sheets | | Page 4 |
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U.S. Mortgage Insurance Operations Analysis of Reserve for Losses and LAE and Statistical Information | | Page 5 |
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U.S. Mortgage Insurance Operations and CMG Mortgage Insurance Company Statistical Information | | Page 6 |
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PMI Australia and PMI Europe Statistical Information | | Page 7 |
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Appendix A - U.S. Mortgage Insurance Operations Supplemental Statistical Information | | Page 8 |
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Appendix B - PMI Australia and PMI Europe Quarterly Financial Information | | Page 9 |
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Appendix C - Business Segment Results of Operations by Quarter | | Page 10 |
Please refer to the following when noted:
| (1) | For the quarter ended March 31, 2005, the Company’s equity earnings in unconsolidated subsidiaries include FGIC Corporation, CMG Mortgage Insurance Company (“CMG”), RAM Reinsurance Company, Ltd. (“RAM Re”), other limited partnership interests and the trust subsidiary that issued the Company’s preferred securities. As of December 31, 2004, the equity investment in SPS Holding Corp. (“SPS”) was reclassified from investments in unconsolidated subsidiaries to equity investment held for sale. Effective January 1, 2005, SPS’s equity earnings are reported in other income. |
| (2) | The operating results, assets and liabilities of American Pioneer Title Insurance Company (“APTIC”) were reflected as discontinued operations in the fourth quarter of 2003 with prior period financial information reclassified accordingly. The Company completed its sale of APTIC in March 2004 and recorded a gain on sale of discontinued operations of $30.1 million, net of $17.1 million of income tax expense. |
| (3) | In January 2005, PMI signed a letter of intent with Credit Suisse First Boston (USA), Inc. (“CSFB”) pursuant to which CSFB has an option to acquire 100% of PMI’s outstanding stock of SPS. In the fourth quarter of 2004, PMI recorded a write-down of its equity investment in SPS for $20.4 million (pre-tax). The write-down was recorded as a realized loss of discontinued operations of equity investment due to PMI’s decision to sell SPS. According to Statement of Financial Accounting Standards No. 144, Accounting for the Impairment and Disposal of Long-Lived Assets, we are not permitted to present the disposal of equity method investments as discontinued operations. |
| (4) | U.S. Mortgage Insurance Operations include the operating results of PMI Mortgage Insurance Co. and affiliated U.S. mortgage insurance and reinsurance Companies. CMG and its affiliates are included under the equity method of accounting in equity in earnings from unconsolidated subsidiaries. |
| (5) | International Operations include PMI Australia, PMI Europe and PMI’s Hong Kong results of operations. |
| (6) | Financial Guaranty represents our equity investments in FGIC Corporation and RAM Re. |
| (7) | The “Other” segment includes other income and related operating expenses of PMI Mortgage Services Co.; investment income, interest expense and corporate overhead of The PMI Group, Inc.; the results of Commercial Loans Insurance Co. and WMAC Credit Insurance Corporation; equity in earnings from SPS and certain limited partnerships; and the results from discontinued operations of APTIC. |
| (8) | The expense ratio is the ratio, expressed as a percentage, of the sum of amortization of policy acquisition costs and other underwriting expenses to net premiums written. The loss ratio is the ratio, expressed as a percentage, of the sum of losses and loss adjustment expenses to premiums earned. |
| (9) | Pool insurance includes modified pool, GSE pool, old pool and all other pool insurance products for U.S. Mortgage Insurance Operations. |
| (10) | Statutory risk-to-capital ratio for PMI Mortgage Insurance Co. |
| Note: | The interim financial and statistical information contained in this material are unaudited. Certain prior year information has been reclassified to conform to the current quarters’ presentation. |
THE PMI GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
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| | | Three Months Ended March 31,
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| | | 2005
| | 2004
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| | | (Unaudited) | | (Unaudited) |
| | | (Dollars in thousands, except per share data) |
Net premiums written | | $ | 193,746 | | $ | 193,404 |
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Revenues | | | | | | |
Premiums earned | | $ | 199,567 | | $ | 185,302 |
Net investment income | | | 43,790 | | | 40,041 |
Equity in earnings from unconsolidated subsidiaries (1) | | | 25,212 | | | 19,098 |
Net realized investment gains | | | 721 | | | 1,275 |
Other income | | | 5,535 | | | 8,851 |
| | |
|
| |
|
|
Total revenues | | | 274,825 | | | 254,567 |
| | |
|
| |
|
|
Losses and expenses | | | | | | |
Losses and loss adjustment expenses | | | 64,481 | | | 59,820 |
Amortization of policy acquisition costs | | | 20,443 | | | 23,095 |
Other underwriting and operating expenses | | | 45,645 | | | 50,320 |
Interest expense | | | 9,553 | | | 8,515 |
| | |
|
| |
|
|
Total losses and expenses | | | 140,122 | | | 141,750 |
| | |
|
| |
|
|
Income from continuing operations before income taxes | | | 134,703 | | | 112,817 |
Income taxes from continuing operations | | | 33,545 | | | 27,254 |
| | |
|
| |
|
|
Income from continuing operations after income taxes | | | 101,158 | | | 85,563 |
| | |
|
| |
|
|
Income from discontinued operations before income taxes (2) | | | — | | | 5,756 |
Income taxes from discontinued operations (2) | | | — | | | 1,958 |
| | |
|
| |
|
|
Income from discontinued operations after income taxes (2) | | | — | | | 3,798 |
| | |
|
| |
|
|
Gain on sale of discontinued operations, net of income taxes of $17,131 (2) | | | — | | | 30,108 |
| | |
|
| |
|
|
Net income | | $ | 101,158 | | $ | 119,469 |
| | |
|
| |
|
|
Diluted weighted average common shares outstanding (shares in thousands) | | | 103,462 | | | 105,041 |
| | |
|
| |
|
|
Diluted net income per share | | $ | 1.00 | | $ | 1.16 |
| | |
|
| |
|
|
CONSOLIDATED BALANCE SHEETS
| | | | | | | | | |
| | | March 31,
2005
| | December 31,
2004
| | March 31,
2004
|
| | | (Unaudited) | | | | (Unaudited) |
| | | (Dollars in thousands, except per share data) |
Assets | | | | | | | | | |
Cash and investments, at fair value | | $ | 3,644,480 | | $ | 3,621,550 | | $ | 3,502,014 |
Investments in unconsolidated subsidiaries (1) | | | 919,869 | | | 911,604 | | | 956,929 |
Equity investment held for sale (3) | | | 110,373 | | | 109,519 | | | — |
Related party receivables | | | 13,764 | | | 18,439 | | | 27,664 |
Reinsurance receivables, reinsurance recoverables and prepaid premiums | | | 43,915 | | | 49,657 | | | 56,258 |
Deferred policy acquisition costs | | | 89,578 | | | 92,438 | | | 97,368 |
Other assets | | | 339,691 | | | 342,760 | | | 341,417 |
| | |
|
| |
|
| |
|
|
Total assets | | $ | 5,161,670 | | $ | 5,145,967 | | $ | 4,981,650 |
| | |
|
| |
|
| |
|
|
Liabilities | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 364,782 | | $ | 364,847 | | $ | 356,987 |
Unearned premiums | | | 474,761 | | | 484,815 | | | 480,576 |
Long-term debt | | | 819,529 | | | 819,529 | | | 819,543 |
Other liabilities | | | 330,427 | | | 339,021 | | | 390,299 |
| | |
|
| |
|
| |
|
|
Total liabilities | | | 1,989,499 | | | 2,008,212 | | | 2,047,405 |
| | | |
Shareholders’ equity | | | 3,172,171 | | | 3,137,755 | | | 2,934,245 |
| | |
|
| |
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 5,161,670 | | $ | 5,145,967 | | $ | 4,981,650 |
| | |
|
| |
|
| |
|
|
Basic shares issued and outstanding(shares in thousands) | | | 93,492 | | | 94,025 | | | 95,567 |
| | |
|
| |
|
| |
|
|
Book value per share | | $ | 33.93 | | $ | 33.37 | | $ | 30.70 |
| | |
|
| |
|
| |
|
|
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Insurance
Operations (4)
| | | International
Operations (5)
| | | Financial
Guaranty (6)
| | Other(7)
| | | Consolidated
Total
|
| | | Three Months Ended March 31, 2005 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 154,538 | | | $ | 39,185 | | | $ | — | | $ | 23 | | | $ | 193,746 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 164,112 | | | $ | 35,435 | | | $ | — | | $ | 20 | | | $ | 199,567 |
Net investment income | | | 25,579 | | | | 13,756 | | | | — | | | 4,455 | | | | 43,790 |
Equity in earnings from unconsolidated subsidiaries (1) | | | 4,074 | | | | — | | | | 20,846 | | | 292 | | | | 25,212 |
Net realized investment gains (losses) | | | 420 | | | | 340 | | | | — | | | (39 | ) | | | 721 |
Other income (loss) | | | 4 | | | | (113 | ) | | | — | | | 5,644 | | | | 5,535 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 194,189 | | | | 49,418 | | | | 20,846 | | | 10,372 | | | | 274,825 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 63,118 | | | | 1,363 | | | | — | | | — | | | | 64,481 |
Amortization of policy acquisition costs | | | 16,026 | | | | 4,417 | | | | — | | | — | | | | 20,443 |
Other underwriting and operating expenses | | | 23,553 | | | | 7,006 | | | | — | | | 15,086 | | | | 45,645 |
Interest expense | | | 1 | | | | — | | | | — | | | 9,552 | | | | 9,553 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 102,698 | | | | 12,786 | | | | — | | | 24,638 | | | | 140,122 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) before income taxes | | | 91,491 | | | | 36,632 | | | | 20,846 | | | (14,266 | ) | | | 134,703 |
Income tax (benefit) | | | 25,149 | | | | 11,485 | | | | 1,956 | | | (5,045 | ) | | | 33,545 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income (loss) | | $ | 66,342 | | | $ | 25,147 | | | $ | 18,890 | | $ | (9,221 | ) | | $ | 101,158 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio (8) | | | 25.6 | % | | | 29.1 | % | | | | | | | | | | |
Loss ratio (8) | | | 38.5 | % | | | 3.8 | % | | | | | | | | | | |
Combined ratio | | | 64.1 | % | | | 32.9 | % | | | | | | | | | | |
| |
| | | Three Months Ended March 31, 2004 (Unaudited)
|
| | | (Dollars in thousands) |
Net premiums written | | $ | 153,064 | | | $ | 40,323 | | | $ | — | | $ | 17 | | | $ | 193,404 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Revenues | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 149,023 | | | $ | 36,259 | | | $ | — | | $ | 20 | | | $ | 185,302 |
Net investment income | | | 24,458 | | | | 11,807 | | | | — | | | 3,776 | | | | 40,041 |
Equity in earnings from unconsolidated subsidiaries (1) | | | 3,328 | | | | — | | | | 14,928 | | | 842 | | | | 19,098 |
Net realized investment gains (losses) | | | 1,087 | | | | 225 | | | | — | | | (37 | ) | | | 1,275 |
Other income | | | 81 | | | | 1,602 | | | | — | | | 7,168 | | | | 8,851 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total revenues | | | 177,977 | | | | 49,893 | | | | 14,928 | | | 11,769 | | | | 254,567 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 58,956 | | | | 864 | | | | — | | | — | | | | 59,820 |
Amortization of policy acquisition costs | | | 19,433 | | | | 3,662 | | | | — | | | — | | | | 23,095 |
Other underwriting and operating expenses | | | 26,137 | | | | 6,867 | | | | — | | | 17,316 | | | | 50,320 |
Interest expense | | | 21 | | | | 1 | | | | — | | | 8,493 | | | | 8,515 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Total losses and expenses | | | 104,547 | | | | 11,394 | | | | — | | | 25,809 | | | | 141,750 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations before income taxes | | | 73,430 | | | | 38,499 | | | | 14,928 | | | (14,040 | ) | | | 112,817 |
Income tax (benefit) from continuing operations | | | 19,822 | | | | 11,470 | | | | 1,413 | | | (5,451 | ) | | | 27,254 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income (loss) from continuing operations after income taxes | | | 53,608 | | | | 27,029 | | | | 13,515 | | | (8,589 | ) | | | 85,563 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations before taxes (2) | | | — | | | | — | | | | — | | | 5,756 | | | | 5,756 |
Income taxes from discontinued operations (2) | | | — | | | | — | | | | — | | | 1,958 | | | | 1,958 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Income from discontinued operations after income taxes (2) | | | — | | | | — | | | | — | | | 3,798 | | | | 3,798 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Gain on sale of discontinued operations, net of income taxes (2) | | | — | | | | — | | | | — | | | 30,108 | | | | 30,108 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Net income | | $ | 53,608 | | | $ | 27,029 | | | $ | 13,515 | | $ | 25,317 | | | $ | 119,469 |
| | |
|
|
| |
|
|
| |
|
| |
|
|
| |
|
|
Expense ratio (8) | | | 29.8 | % | | | 26.1 | % | | | | | | | | | | |
Loss ratio (8) | | | 39.6 | % | | | 2.4 | % | | | | | | | | | | |
Combined ratio | | | 69.4 | % | | | 28.5 | % | | | | | | | | | | |
THE PMI GROUP, INC. AND SUBSIDIARIES
BUSINESS SEGMENTS BALANCE SHEETS
| | | | | | | | | | | | | | | | |
| | | U.S. Mortgage
Insurance
Operations(4)
| | International
Operations (5)
| | Financial
Guaranty (6)
| | Other(7)
| | | Consolidated
Total
|
| | | March 31, 2005
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,212,968 | | $ | 1,025,957 | | $ | — | | $ | 405,555 | | | $ | 3,644,480 |
Investments in unconsolidated subsidiaries(1) | | | 115,309 | | | — | | | 781,952 | | | 22,608 | | | | 919,869 |
Equity investment held for sale(3) | | | — | | | — | | | — | | | 110,373 | | | | 110,373 |
Related party receivables | | | 966 | | | — | | | — | | | 12,798 | | | | 13,764 |
Reinsurance receivables, recoverables and prepaid premiums | | | 23,044 | | | 20,871 | | | — | | | — | | | | 43,915 |
Deferred policy acquisition costs | | | 50,999 | | | 38,579 | | | — | | | — | | | | 89,578 |
Other assets | | | 199,813 | | | 27,334 | | | — | | | 112,544 | | | | 339,691 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,603,099 | | $ | 1,112,741 | | $ | 781,952 | | $ | 663,878 | | | $ | 5,161,670 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 338,477 | | $ | 26,302 | | $ | — | | $ | 3 | | | $ | 364,782 |
Unearned premiums | | | 146,816 | | | 327,904 | | | — | | | 41 | | | | 474,761 |
Long-term debt | | | — | | | — | | | — | | | 819,529 | | | | 819,529 |
Other liabilities | | | 247,917 | | | 63,408 | | | 14,187 | | | 4,915 | | | | 330,427 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 733,210 | | | 417,614 | | | 14,187 | | | 824,488 | | | | 1,989,499 |
| | | | | |
Shareholder’s equity | | | 1,869,889 | | | 695,127 | | | 767,765 | | | (160,610 | ) | | | 3,172,171 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,603,099 | | $ | 1,112,741 | | $ | 781,952 | | $ | 663,878 | | | $ | 5,161,670 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
| |
| | | December 31, 2004
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,132,300 | | $ | 1,030,751 | | $ | — | | $ | 458,499 | | | $ | 3,621,550 |
Investments in unconsolidated subsidiaries(1) | | | 112,456 | | | — | | | 774,880 | | | 24,268 | | | | 911,604 |
Equity investment held for sale(3) | | | — | | | — | | | — | | | 109,519 | | | | 109,519 |
Related party receivables | | | 1,633 | | | — | | | — | | | 16,806 | | | | 18,439 |
Reinsurance receivables, recoverables and prepaid premiums | | | 31,110 | | | 18,547 | | | — | | | — | | | | 49,657 |
Deferred policy acquisition costs | | | 53,998 | | | 38,440 | | | — | | | — | | | | 92,438 |
Other assets | | | 208,806 | | | 26,460 | | | — | | | 107,494 | | | | 342,760 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,540,303 | | $ | 1,114,198 | | $ | 774,880 | | $ | 716,586 | | | $ | 5,145,967 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 338,620 | | $ | 26,224 | | $ | — | | $ | 3 | | | $ | 364,847 |
Unearned premiums | | | 152,685 | | | 332,091 | | | — | | | 39 | | | | 484,815 |
Long-term debt | | | — | | | — | | | — | | | 819,529 | | | | 819,529 |
Other liabilities | | | 237,431 | | | 71,740 | | | 12,424 | | | 17,426 | | | | 339,021 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 728,736 | | | 430,055 | | | 12,424 | | | 836,997 | | | | 2,008,212 |
| | | | | |
Shareholders’ equity | | | 1,811,567 | | | 684,143 | | | 762,456 | | | (120,411 | ) | | | 3,137,755 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,540,303 | | $ | 1,114,198 | | $ | 774,880 | | $ | 716,586 | | | $ | 5,145,967 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
| |
| | | March 31, 2004
|
| | | (Dollars in thousands) |
Assets | | | | | | | | | | | | | | | | |
Cash and investments, at fair value | | $ | 2,172,964 | | $ | 884,839 | | $ | — | | $ | 444,211 | | | $ | 3,502,014 |
Investments in unconsolidated subsidiaries(1) | | | 101,129 | | | — | | | 721,079 | | | 134,721 | | | | 956,929 |
Related party receivables | | | 1,227 | | | — | | | — | | | 26,437 | | | | 27,664 |
Reinsurance receivables, recoverables and prepaid premiums | | | 39,364 | | | 16,894 | | | — | | | — | | | | 56,258 |
Deferred policy acquisition costs | | | 63,657 | | | 33,711 | | | — | | | — | | | | 97,368 |
Other assets | | | 206,596 | | | 23,516 | | | — | | | 111,305 | | | | 341,417 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total assets | | $ | 2,584,937 | | $ | 958,960 | | $ | 721,079 | | $ | 716,674 | | | $ | 4,981,650 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Liabilities | | | | | | | | | | | | | | | | |
Reserve for losses and loss adjustment expenses | | $ | 334,252 | | $ | 22,733 | | $ | — | | $ | 2 | | | $ | 356,987 |
Unearned premiums | | | 185,400 | | | 295,130 | | | — | | | 46 | | | | 480,576 |
Long-term debt | | | — | | | — | | | — | | | 819,543 | | | | 819,543 |
Other liabilities | | | 199,390 | | | 57,989 | | | 7,498 | | | 125,422 | | | | 390,299 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities | | | 719,042 | | | 375,852 | | | 7,498 | | | 945,013 | | | | 2,047,405 |
| | | | | |
Shareholders’ equity | | | 1,865,895 | | | 583,108 | | | 713,581 | | | (228,339 | ) | | | 2,934,245 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
Total liabilities and shareholders’ equity | | $ | 2,584,937 | | $ | 958,960 | | $ | 721,079 | | $ | 716,674 | | | $ | 4,981,650 |
| | |
|
| |
|
| |
|
| |
|
|
| |
|
|
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS(4) ANALYSIS OF RESERVE FOR LOSSES AND LAE
| | | | | | | | | | | | | | | |
| | | March 31, 2005
| | December 31, 2004
| | March 31, 2004
|
| | | Loans in
Default
| | Reserve for
Losses and LAE
| | Loans in
Default
| | Reserve for
Losses and LAE
| | Loans in
Default
| | Reserve for
Losses and LAE
|
| | | (Dollars in thousands) |
Primary insurance | | 35,716 | | $ | 303,792 | | 39,054 | | $ | 306,023 | | 34,762 | | $ | 301,615 |
Pool insurance | | 16,992 | | | 34,685 | | 17,186 | | | 32,597 | | 16,810 | | | 32,637 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Total | | 52,708 | | $ | 338,477 | | 56,240 | | $ | 338,620 | | 51,572 | | $ | 334,252 |
| | |
| |
|
| |
| |
|
| |
| |
|
|
Reconciliation of Reserve for Losses and LAE
| | | | | | | | | | | | |
| | | March 31,
2005
| | | December 31,
2004
| | | Reserve
Change
| |
| | | (Dollars in thousands) | |
Gross reserve for losses and LAE: | | | | | | | | | | | | |
Primary insurance | | $ | 303,792 | | | $ | 306,023 | | | $ | (2,231 | ) |
Pool insurance | | | 34,685 | | | | 32,597 | | | | 2,088 | |
| | |
|
|
| |
|
|
| |
|
|
|
Total gross reserve for losses and LAE | | | 338,477 | | | | 338,620 | | | | (143 | ) |
| | | |
Ceded reserve for losses: | | | | | | | | | | | | |
Primary insurance | | | (2,158 | ) | | | (2,289 | ) | | | 131 | |
Pool insurance | | | (89 | ) | | | (117 | ) | | | 28 | |
| | |
|
|
| |
|
|
| |
|
|
|
Total ceded reserve for losses | | | (2,247 | ) | | | (2,406 | ) | | | 159 | |
| | |
|
|
| |
|
|
| |
|
|
|
Net reserve for losses and LAE | | $ | 336,230 | | | $ | 336,214 | | | $ | 16 | |
| | |
|
|
| |
|
|
| |
|
|
|
U.S. MORTGAGE INSURANCE OPERATIONS(4) STATISTICAL INFORMATION
| | | | | | | | |
| | | Three Months Ended March 31,
| |
| | | 2005
| | | 2004
| |
Flow insurance written(in millions) | | $ | 6,303 | | | $ | 8,454 | |
Bulk insurance written(in millions) | | | 1,865 | | | | 345 | |
| | |
|
|
| |
|
|
|
Primary new insurance written(in millions) | | $ | 8,168 | | | $ | 8,799 | |
| | |
Primary new risk written(in millions) | | $ | 2,069 | | | $ | 2,207 | |
| | |
Pool insurance written(in millions) (9) | | $ | 1,306 | | | $ | 3,903 | |
| | |
Pool risk written(in millions) (9) | | $ | 41 | | | $ | 75 | |
| | |
Product mix as a% of new insurance written: | | | | | | | | |
Above 97% LTV’s | | | 13 | % | | | 10 | % |
90.01% to 95% LTV’s | | | 24 | % | | | 32 | % |
85.01% to 90% LTV’s | | | 38 | % | | | 40 | % |
90.01% to 95% LTV’s with >= 30% coverage | | | 20 | % | | | 26 | % |
85.01% to 90% LTV’s with >= 25% coverage | | | 33 | % | | | 32 | % |
ARMs | | | 33 | % | | | 15 | % |
Monthlies | | | 98 | % | | | 96 | % |
Refinances | | | 37 | % | | | 34 | % |
Bulk transactions | | | 23 | % | | | 4 | % |
| | |
Premiums written(in thousands): | | | | | | | | |
Gross premiums written | | $ | 201,129 | | | $ | 192,842 | |
Ceded premiums, net of assumed premiums | | | (43,287 | ) | | | (36,186 | ) |
Refunded premiums | | | (3,304 | ) | | | (3,592 | ) |
| | |
|
|
| |
|
|
|
Net premiums written | | | 154,538 | | | | 153,064 | |
Change in unearned premiums | | | 9,574 | | | | (4,041 | ) |
| | |
|
|
| |
|
|
|
Net premiums earned | | $ | 164,112 | | | $ | 149,023 | |
| | |
|
|
| |
|
|
|
THE PMI GROUP, INC. AND SUBSIDIARIES
U.S. MORTGAGE INSURANCE OPERATIONS(4) STATISTICAL INFORMATION
| | | | | | | | | | | | |
| | | March 31,
2005
| | | December 31,
2004
| | | March 31,
2004
| |
Primary insurance in force(in millions) | | $ | 103,997 | | | $ | 105,321 | | | $ | 104,304 | |
Primary risk in force(in millions) | | $ | 25,507 | | | $ | 25,658 | | | $ | 24,545 | |
Pool risk in force(in millions) (9) | | $ | 2,417 | | | $ | 2,408 | | | $ | 2,565 | |
Risk-to-capital ratio (10) | | | 8.1 to 1 | | | | 8.2 to 1 | | | | 8.8 to 1 | |
Insured primary loans | | | 788,847 | | | | 803,236 | | | | 816,624 | |
Persistency | | | 60.8 | % | | | 60.9 | % | | | 47.8 | % |
Primary loans in default | | | 35,716 | | | | 39,054 | | | | 34,762 | |
Primary default rate | | | 4.53 | % | | | 4.86 | % | | | 4.26 | % |
Bulk transactions only default rate | | | 8.17 | % | | | 9.19 | % | | | 8.68 | % |
Pool default rate | | | 5.65 | % | | | 5.50 | % | | | 4.39 | % |
Primary claims paid (year-to-date in thousands) | | $ | 55,510 | | | $ | 193,178 | | | $ | 43,598 | |
Number of primary claims paid(year-to-date) | | | 2,413 | | | | 8,335 | | | | 1,840 | |
Average primary claim size(year-to-date in thousands) | | $ | 23.0 | | | $ | 23.2 | | | $ | 23.7 | |
Percentage of flow NIW subject to captive reinsurance arrangements(year-to-date) | | | 61.1 | % | | | 63.3 | % | | | 57.3 | % |
Percentage of NIW subject to captive reinsurance arrangements(year-to-date) | | | 47.1 | % | | | 55.7 | % | | | 55.0 | % |
Percentage of IIF subject to captive reinsurance arrangements(year-to-date) | | | 53.7 | % | | | 53.7 | % | | | 51.3 | % |
Percentage of RIF subject to captive reinsurance arrangements(year-to-date) | | | 53.6 | % | | | 55.0 | % | | | 53.3 | % |
CMG MORTGAGE INSURANCE COMPANY STATISTICAL INFORMATION
| | | | | | | | | | | | |
| | | March 31,
2005
| | | December 31,
2004
| | | March 31,
2004
| |
Primary new insurance written(year-to-date in millions) | | $ | 1,071 | | | $ | 5,355 | | | $ | 1,021 | |
Primary insurance in force(in millions) | | $ | 14,213 | | | $ | 14,037 | | | $ | 12,735 | |
Primary risk in force(in millions) | | $ | 3,286 | | | $ | 3,219 | | | $ | 2,824 | |
Insured primary loans | | | 105,928 | | | | 105,568 | | | | 98,926 | |
Persistency | | | 69.1 | % | | | 69.1 | % | | | 55.8 | % |
Primary loans in default | | | 713 | | | | 666 | | | | 544 | |
Primary default rate(year-to-date) | | | 0.67 | % | | | 0.63 | % | | | 0.55 | % |
Primary claims paid(year-to-date in thousands) | | $ | 892 | | | $ | 5,111 | | | $ | 1,124 | |
Number of primary claims paid(year-to-date) | | | 41 | | | | 244 | | | | 44 | |
Average primary claims size(year-to-date in thousands) | | $ | 21.8 | | | $ | 20.9 | | | $ | 25.5 | |
THE PMI GROUP, INC. AND SUBSIDIARIES
PMI AUSTRALIA STATISTICAL INFORMATION
| | | | | | | | | | | | |
| | | March 31,
2005
| | | December 31,
2004
| | | March 31,
2004
| |
Net premiums written(year-to-date in thousands) | | $ | 32,388 | | | $ | 151,164 | | | $ | 35,796 | |
Premiums earned(year-to-date in thousands) | | $ | 29,399 | | | $ | 109,071 | | | $ | 28,852 | |
Flow insurance written(year-to-date in millions) | | $ | 3,922 | | | $ | 19,540 | | | $ | 5,276 | |
RMBS insurance written(year-to-date in millions) | | | 3,816 | | | | 14,669 | | | | 2,987 | |
| | |
|
|
| |
|
|
| |
|
|
|
New insurance written(year-to-date in millions) | | $ | 7,738 | | | $ | 34,209 | | | $ | 8,263 | |
| | |
|
|
| |
|
|
| |
|
|
|
Insurance in force (in millions) | | $ | 117,439 | | | $ | 113,628 | | | $ | 93,232 | |
Risk in force (in millions) | | $ | 106,724 | | | $ | 103,135 | | | $ | 84,458 | |
Policies in force | | | 955,922 | | | | 926,073 | | | | 823,174 | |
Loans in default | | | 1,276 | | | | 1,020 | | | | 1,309 | |
Default rate | | | 0.13 | % | | | 0.11 | % | | | 0.16 | % |
Claims paid(year-to-date in thousands) | | $ | 305 | | | $ | 1,111 | | | $ | 189 | |
Number of claims paid(year-to-date) | | | 18 | | | | 65 | | | | 14 | |
Average claim size(year-to-date in thousands) | | $ | 16.9 | | | $ | 17.1 | | | $ | 13.5 | |
|
| PMI EUROPE STATISTICAL INFORMATION | |
| | | |
| | | March 31,
2005
| | | December 31,
2004
| | | March 31,
2004
| |
Net premiums written(year-to-date in thousands) | | $ | 1,547 | | | $ | 9,568 | | | $ | 2,725 | |
Premiums earned(year-to-date in thousands) | | $ | 4,353 | | | $ | 20,944 | | | $ | 5,369 | |
New credit default swap written(year-to-date in millions) | | $ | — | | | $ | 2,603 | | | $ | 2,068 | |
Insurance in force(in millions) | | $ | 31,365 | | | $ | 34,332 | | | $ | 33,699 | |
Risk in force(in millions) | | $ | 2,405 | | | $ | 2,747 | | | $ | 3,283 | |
Claims paid(year-to-date in thousands) | | $ | 825 | | | $ | 979 | | | $ | 489 | |
Number of claims paid(year-to-date) | | | 20 | | | | 77 | | | | 31 | |
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX A - U.S. MORTGAGE INSURANCE OPERATIONS(4) SUPPLEMENTAL STATISTICAL INFORMATION
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2005
| | | 12/31/2004
| | | 9/30/2004
| | | 6/30/2004
| | | 3/31/2004
| |
Primary insurance in force(in millions) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 91,399 | | | $ | 93,263 | | | $ | 93,601 | | | $ | 92,968 | | | $ | 93,161 | |
Bulk | | | 12,598 | | | | 12,058 | | | | 11,181 | | | | 11,238 | | | | 11,143 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | $ | 103,997 | | | $ | 105,321 | | | $ | 104,782 | | | $ | 104,206 | | | $ | 104,304 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Primary risk in force(in millions) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 22,541 | | | $ | 22,885 | | | $ | 22,741 | | | $ | 22,342 | | | $ | 22,143 | |
Bulk | | | 2,966 | | | | 2,773 | | | | 2,518 | | | | 2,460 | | | | 2,402 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total | | $ | 25,507 | | | $ | 25,658 | | | $ | 25,259 | | | $ | 24,802 | | | $ | 24,545 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Primary policies in force | | | 788,847 | | | | 803,236 | | | | 805,859 | | | | 807,822 | | | | 816,624 | |
| | | | | |
Primary risk in force - credit score distribution | | | | | | | | | | | | | | | | | | | | |
Flow 619-575 | | | 6.1 | % | | | 6.2 | % | | | 6.4 | % | | | 6.6 | % | | | 6.8 | % |
574 or below | | | 1.7 | % | | | 1.8 | % | | | 1.9 | % | | | 2.0 | % | | | 2.1 | % |
| | | | | |
Bulk 619-575 | | | 20.2 | % | | | 21.1 | % | | | 21.6 | % | | | 21.0 | % | | | 21.3 | % |
574 or below | | | 12.9 | % | | | 13.0 | % | | | 12.7 | % | | | 12.2 | % | | | 12.7 | % |
| | | | | |
Total 619-575 | | | 7.7 | % | | | 7.8 | % | | | 7.9 | % | | | 8.0 | % | | | 8.3 | % |
574 or below | | | 3.0 | % | | | 3.0 | % | | | 3.0 | % | | | 3.0 | % | | | 3.1 | % |
| | | | | |
Primary average loan size(in thousands) | | | | | | | | | | | | | | | | | | | | |
Flow | | $ | 131.5 | | | $ | 131.3 | | | $ | 130.5 | | | $ | 129.3 | | | $ | 128.1 | |
Bulk | | $ | 134.1 | | | $ | 129.8 | | | $ | 127.1 | | | $ | 126.9 | | | $ | 124.9 | |
Total | | $ | 131.8 | | | $ | 131.1 | | | $ | 130.1 | | | $ | 129.0 | | | $ | 127.7 | |
| | | | | |
Loss severity - primary(quarterly) | | | | | | | | | | | | | | | | | | | | |
Flow | | | 85.6 | % | | | 84.9 | % | | | 77.4 | % | | | 83.0 | % | | | 82.1 | % |
Bulk | | | 90.9 | % | | | 84.6 | % | | | 78.8 | % | | | 83.5 | % | | | 82.1 | % |
Total | | | 86.8 | % | | | 84.8 | % | | | 77.8 | % | | | 83.1 | % | | | 82.1 | % |
| | | | | |
Alt-A primary insurance in force(in millions) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
With FICO scores of 660 and above | | $ | 10,892 | | | $ | 10,250 | | | $ | 9,421 | | | $ | 8,590 | | | $ | 7,623 | |
With FICO scores below 660 and above 619 | | | 2,136 | | | | 2,029 | | | | 1,836 | | | | 1,648 | | | | 1,330 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total Alt-A primary insurance in force | | $ | 13,028 | | | $ | 12,279 | | | $ | 11,257 | | | $ | 10,238 | | | $ | 8,953 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
NEW INSURANCE WRITTEN AND INSURANCE IN FORCE ANALYSIS
| | | | | | | | | | | | | | | | | | | | |
| | | 3/31/2005
| | | 12/31/2004
| | | 9/30/2004
| | | 6/30/2004
| | | 3/31/2004
| |
FICO > 700 and LTV > 80(in millions) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Primary new insurance written(year-to-date) | | $ | 3,049 | | | $ | 16,643 | | | $ | 12,788 | | | $ | 8,633 | | | $ | 3,826 | |
Primary insurance in force | | $ | 42,974 | | | $ | 43,801 | | | $ | 43,862 | | | $ | 43,640 | | | $ | 43,660 | |
| | | | | |
Total portfolio(in millions) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Primary new insurance written(year-to-date) | | $ | 8,168 | | | $ | 41,213 | | | $ | 30,695 | | | $ | 20,205 | | | $ | 8,799 | |
Primary insurance in force | | $ | 103,997 | | | $ | 105,321 | | | $ | 104,782 | | | $ | 104,206 | | | $ | 104,304 | |
| | | | | |
FICO > 700 and LTV > 80 as a percentage of total portfolio | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Primary new insurance written(year-to-date) | | | 37.3 | % | | | 40.4 | % | | | 41.7 | % | | | 42.7 | % | | | 43.5 | % |
Primary insurance in force | | | 41.3 | % | | | 41.6 | % | | | 41.9 | % | | | 41.9 | % | | | 41.9 | % |
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX B - PMI AUSTRALIA AND PMI EUROPE QUARTERLY FINANCIAL INFORMATION
PMI AUSTRALIA
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | 3/31/05
| | | 12/31/04
| | | 9/30/04
| | | 6/30/04
| | | 3/31/04
| | 12/31/03
| | 9/30/03
| | | 6/30/03
|
| | | (Australian $ in thousands, unless otherwise noted) |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 37,840 | | | $ | 35,819 | | | $ | 37,109 | | | $ | 37,308 | | | $ | 37,790 | | $ | 36,766 | | $ | 32,855 | | | $ | 30,811 |
Net investment income | | $ | 14,705 | | | $ | 14,087 | | | $ | 13,098 | | | $ | 12,677 | | | $ | 12,139 | | $ | 9,235 | | $ | 12,309 | | | $ | 9,525 |
Change in fair value of put options | | $ | (1,338 | ) | | $ | (228 | ) | | $ | (1,890 | ) | | $ | 1,311 | | | $ | — | | $ | — | | $ | — | | | $ | — |
Total expenses | | $ | 13,788 | | | $ | 13,624 | | | $ | 13,413 | | | $ | 12,799 | | | $ | 12,030 | | $ | 12,160 | | $ | (216 | ) | | $ | 9,282 |
Net income | | $ | 26,487 | | | $ | 25,447 | | | $ | 24,725 | | | $ | 26,832 | | | $ | 26,518 | | $ | 21,441 | | $ | 31,993 | | | $ | 21,412 |
| | | | | | | | |
Net income(US$ in thousands) | | $ | 20,584 | | | $ | 19,272 | | | $ | 17,554 | | | $ | 19,219 | | | $ | 20,265 | | $ | 15,511 | | $ | 21,073 | | | $ | 13,746 |
| | | | | | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Cash and investments, at fair value | | $ | 1,037,704 | | | $ | 1,027,236 | | | $ | 973,479 | | | $ | 924,330 | | | $ | 892,864 | | $ | 853,920 | | $ | 816,143 | | | $ | 777,701 |
Total assets | | $ | 1,132,961 | | | $ | 1,116,874 | | | $ | 1,068,080 | | | $ | 1,013,102 | | | $ | 976,723 | | $ | 935,904 | | $ | 891,787 | | | $ | 853,196 |
| | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Loss reserves | | $ | 12,549 | | | $ | 12,547 | | | $ | 13,692 | | | $ | 13,556 | | | $ | 13,537 | | $ | 13,536 | | $ | 13,698 | | | $ | 25,450 |
Unearned premiums | | $ | 382,781 | | | $ | 378,981 | | | $ | 364,120 | | | $ | 346,748 | | | $ | 330,477 | | $ | 321,441 | | $ | 297,042 | | | $ | 277,921 |
Shareholders’ equity | | $ | 689,927 | | | $ | 673,124 | | | $ | 642,585 | | | $ | 607,781 | | | $ | 586,842 | | $ | 556,329 | | $ | 539,141 | | | $ | 515,622 |
|
| PMI EUROPE |
| | | | | | | | |
| | | 3/31/05
| | | 12/31/04
| | | 9/30/04
| | | 6/30/04
| | | 3/31/04
| | 12/31/03
| | 9/30/03
| | | 6/30/03
|
| | | (Euro € in thousands, unless otherwise noted) |
Income Statement Components - Quarter Ended | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Premiums earned | | € | 3,321 | | | € | 4,140 | | | € | 4,233 | | | € | 4,172 | | | € | 4,295 | | € | 7,765 | | € | 1,283 | | | € | 1,867 |
Net investment income | | € | 2,002 | | | € | 1,435 | | | € | 2,294 | | | € | 1,642 | | | € | 2,198 | | € | 1,199 | | € | 1,491 | | | € | 974 |
Change in fair value of put options | | € | (33 | ) | | € | (6 | ) | | € | (96 | ) | | € | (18 | ) | | € | — | | € | — | | € | — | | | € | — |
Total expenses | | € | 2,031 | | | € | 3,679 | | | € | 1,476 | | | € | 1,462 | | | € | 1,768 | | € | 1,723 | | € | 1,144 | | | € | 1,376 |
Net income | | € | 2,326 | | | € | 2,703 | | | € | 3,942 | | | € | 3,535 | | | € | 3,781 | | € | 5,955 | | € | 1,299 | | | € | 1,329 |
| | | | | | | | |
Net income(US$ in thousands) | | $ | 3,049 | | | $ | 3,489 | | | $ | 4,822 | | | $ | 4,260 | | | $ | 4,726 | | $ | 7,089 | | $ | 1,469 | | | $ | 1,533 |
| | | | | | | | |
Balance Sheet Components | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Cash and investments, at fair value | | € | 172,707 | | | € | 169,165 | | | € | 164,558 | | | € | 161,129 | | | € | 162,621 | | € | 154,369 | | € | 98,847 | | | € | 94,132 |
Total assets | | € | 182,857 | | | € | 179,134 | | | € | 175,731 | | | € | 172,402 | | | € | 170,600 | | € | 160,891 | | € | 100,878 | | | € | 100,302 |
| | | | | | | | |
Liabilities and Shareholders’ Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
Loss reserves | | € | 12,807 | | | € | 12,126 | | | € | 10,656 | | | € | 10,497 | | | € | 10,031 | | € | 9,624 | | € | 2,109 | | | € | 1,956 |
Unearned premiums | | € | 24,719 | | | € | 26,859 | | | € | 29,363 | | | € | 31,748 | | | € | 33,903 | | € | 36,029 | | € | 183 | | | € | 566 |
Shareholders’ equity | | € | 125,395 | | | € | 121,494 | | | € | 117,142 | | | € | 111,691 | | | € | 109,386 | | € | 100,524 | | € | 95,289 | | | € | 95,115 |
THE PMI GROUP, INC. AND SUBSIDIARIES
APPENDIX C - BUSINESS SEGMENT RESULTS OF OPERATIONS BY QUARTER
| | | | | | | | | | | | | | | | | | | | |
| | | 2005
| | | 2004
| |
| | | 1st Quarter
| | | 4th Quarter
| | | 3rd Quarter
| | | 2nd Quarter
| | | 1st Quarter
| |
| | | (Dollars in thousands) | |
U.S. Mortgage Insurance Operations(4) | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Net premiums written | | $ | 154,538 | | | $ | 153,916 | | | $ | 143,732 | | | $ | 147,407 | | | $ | 153,064 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Revenues | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 164,112 | | | $ | 168,313 | | | $ | 162,276 | | | $ | 154,392 | | | $ | 149,023 | |
Net investment income | | | 25,579 | | | | 25,496 | | | | 24,332 | | | | 27,944 | | | | 24,458 | |
Equity in earnings from unconsolidated subsidiaries(1) | | | 4,074 | | | | 4,569 | | | | 3,707 | | | | 3,676 | | | | 3,328 | |
Net realized investment gains (losses) | | | 420 | | | | (12 | ) | | | 1,672 | | | | (166 | ) | | | 1,087 | |
Other income (expense) | | | 4 | | | | 15 | | | | (24 | ) | | | (25 | ) | | | 81 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total revenues | | | 194,189 | | | | 198,381 | | | | 191,963 | | | | 185,821 | | | | 177,977 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Losses and expenses | | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 63,118 | | | | 58,355 | | | | 60,092 | | | | 55,755 | | | | 58,956 | |
Amortization of policy acquisition costs | | | 16,026 | | | | 16,585 | | | | 18,003 | | | | 18,109 | | | | 19,433 | |
Other underwriting and operating expenses | | | 23,554 | | | | 27,258 | | | | 22,785 | | | | 23,445 | | | | 24,981 | |
Field operations restructuring charge | | | — | | | | — | | | | 315 | | | | 1,443 | | | | 1,156 | |
Legal settlement refund | | | — | | | | — | | | | (2,574 | ) | | | — | | | | — | |
Interest expense | | | 1 | | | | 12 | | | | 13 | | | | 17 | | | | 21 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
|
|
|
Total losses and expenses | | | 102,699 | | | | 102,210 | | | | 98,634 | | | | 98,769 | | | | 104,547 | |
| | |
|
|
| |
|
|
| |
|
|
| |
|
|
| |
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Income before income taxes | | | 91,490 | | | | 96,171 | | | | 93,329 | | | | 87,052 | | | | 73,430 | |
Income taxes | | | 25,149 | | | | 26,328 | | | | 25,528 | | | | 23,790 | | | | 19,822 | |
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Net income | | $ | 66,341 | | | $ | 69,843 | | | $ | 67,801 | | | $ | 63,262 | | | $ | 53,608 | |
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International Operations(5) | | | | | | | | | | | | | | | | | | | | |
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Net premiums written | | $ | 39,185 | | | $ | 46,156 | | | $ | 43,238 | | | $ | 43,460 | | | $ | 40,323 | |
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Revenues | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 35,435 | | | $ | 33,979 | | | $ | 32,829 | | | $ | 33,255 | | | $ | 36,259 | |
Net investment income | | | 13,756 | | | | 12,789 | | | | 11,848 | | | | 10,646 | | | | 11,807 | |
Net realized investment gains (losses) | | | 340 | | | | (263 | ) | | | 256 | | | | 377 | | | | 225 | |
Other income (loss) | | | (113 | ) | | | 3,044 | | | | 296 | | | | 2,399 | | | | 1,602 | |
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Total revenues | | | 49,418 | | | | 49,549 | | | | 45,229 | | | | 46,677 | | | | 49,893 | |
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Losses and expenses | | | | | | | | | | | | | | | | | | | | |
Losses and loss adjustment expenses | | | 1,363 | | | | 1,737 | | | | 746 | | | | 777 | | | | 864 | |
Amortization of policy acquisition costs | | | 4,417 | | | | 3,065 | | | | 3,225 | | | | 3,135 | | | | 3,662 | |
Other underwriting and operating expenses | | | 7,005 | | | | 10,235 | | | | 7,346 | | | | 6,940 | | | | 6,867 | |
Interest expense | | | — | | | | — | | | | 12 | | | | 60 | | | | 1 | |
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Total losses and expenses | | | 12,785 | | | | 15,037 | | | | 11,329 | | | | 10,912 | | | | 11,394 | |
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Income before income taxes | | | 36,633 | | | | 34,512 | | | | 33,900 | | | | 35,765 | | | | 38,499 | |
Income taxes | | | 11,485 | | | | 10,274 | | | | 10,218 | | | | 10,799 | | | | 11,470 | |
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Net income | | $ | 25,148 | | | $ | 24,238 | | | $ | 23,682 | | | $ | 24,966 | | | $ | 27,029 | |
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Financial Guaranty(6) | | | | | | | | | | | | | | | | | | | | |
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Equity in earnings from unconsolidated subsidiaries(1) | | $ | 20,846 | | | $ | 16,156 | | | $ | 17,061 | | | $ | 19,699 | | | $ | 14,928 | |
Income taxes | | | 1,956 | | | | 1,689 | | | | 1,820 | | | | 2,220 | | | | 1,413 | |
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Net income | | $ | 18,890 | | | $ | 14,467 | | | $ | 15,241 | | | $ | 17,479 | | | $ | 13,515 | |
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Other(7) | | | | | | | | | | | | | | | | | | | | |
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Net premiums written | | $ | 23 | | | $ | 31 | | | $ | 9 | | | $ | 9 | | | $ | 17 | |
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Revenues | | | | | | | | | | | | | | | | | | | | |
Premiums earned | | $ | 20 | | | $ | 20 | | | $ | 18 | | | $ | 16 | | | $ | 20 | |
Net investment income | | | 4,455 | | | | 4,706 | | | | 5,775 | | | | 5,032 | | | | 3,776 | |
Equity in earnings (losses) from unconsolidated subsidiaries(1) | | | 292 | | | | (975 | ) | | | 353 | | | | 210 | | | | 842 | |
Net realized investment losses | | | (39 | ) | | | — | | | | (374 | ) | | | (143 | ) | | | (37 | ) |
Realized loss from discontinued operations of equity investment(3) | | | — | | | | (20,420 | ) | | | — | | | | — | | | | — | |
Other income | | | 5,644 | | | | 5,345 | | | | 6,146 | | | | 7,424 | | | | 7,168 | |
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Total revenues | | | 10,372 | | | | (11,324 | ) | | | 11,918 | | | | 12,539 | | | | 11,769 | |
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Losses and expenses | | | | | | | | | | | | | | | | | | | | |
Other underwriting and operating expenses | | | 15,086 | | | | 20,272 | | | | 16,545 | | | | 17,790 | | | | 17,316 | |
Interest expense | | | 9,552 | | | | 8,640 | | | | 8,612 | | | | 8,745 | | | | 8,493 | |
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Total losses and expenses | | | 24,638 | | | | 28,912 | | | | 25,157 | | | | 26,535 | | | | 25,809 | |
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Loss from continuing operations before income tax benefit | | | (14,266 | ) | | | (40,236 | ) | | | (13,239 | ) | | | (13,996 | ) | | | (14,040 | ) |
Income tax benefit from continuing operations | | | (5,045 | ) | | | (13,339 | ) | | | (9,158 | ) | | | (4,964 | ) | | | (5,451 | ) |
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Loss from continuing operations after income tax benefit | | | (9,221 | ) | | | (26,897 | ) | | | (4,081 | ) | | | (9,032 | ) | | | (8,589 | ) |
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Income from discontinued operations before income taxes(2) | | | — | | | | — | | | | — | | | | — | | | | 5,756 | |
Income taxes from discontinued operations(2) | | | — | | | | — | | | | — | | | | — | | | | 1,958 | |
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Income from discontinued operations after income taxes(2) | | | — | | | | — | | | | — | | | | — | | | | 3,798 | |
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Gain on sale of discontinued operations, net of income taxes(2) | | | — | | | | (1,105 | ) | | | — | | | | — | | | | 30,108 | |
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Net income (loss) | | $ | (9,221 | ) | | $ | (28,002 | ) | | $ | (4,081 | ) | | $ | (9,032 | ) | | $ | 25,317 | |
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