NMIH - Earnings call transcript Q2 2019

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Operator

Good afternoon ladies and gentlemen, and welcome to the NMI Holdings Incorporated Second Quarter 2019 Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to your host.

Mr. John Swenson, the floor is yours.

John Swenson

you. Thank welcome second and for conference the MI. National to afternoon, quarter XXXX call Good Vice Investor President Swanson, John I'm of Relations Treasury. and

Merkle, on Controller. our us Executive Chief the today Officer; CEO; Claudia Financial are our Adam Julie Joining and Pollitzer, Brad call Chairman; Norberg, Shuster,

The the website today. located under investors release Financial at the results the of accessed tab. were www.nationalmi.com quarter for may after be released close market press NMI's on the

future. about course results of we our this materially expectations those could Actual comments from forward-looking the the differ During statements. these may for call, in make contained

Additional developments. such If reconciliation release obligation actual or the light Further, from website these information than of no interested to note press measures the this certain measures the time call refer our to non-GAAP call. to today's most company is we the that and any subsequent be about statements, the those website to the in future or at materially statements in our the guidance SEC. In measures. other time we Also on factors on on a any that through comparable fact this current on that the do extent and our parties can could differ not provided should forward-looking call undertake found rely results to update makes cause regulatory discussed of of under filings of we statements the on those the trends with GAAP.

the I'll over call turn to Brad. Now

Bradley Shuster

good everyone. afternoon Thank and you, John,

and development National financial in report again to quarter, accelerating and delivered in performance that pleased momentum I'm customer MI portfolio growth. second record the

our our underwriting our management with differentiate Rate which reinsurance industry-leading to risk to broad-based deliver and program GPS, framework, individual results. continued credit performance, spans also leveraging risk comprehensive We

production $XXX-million through and and XX, June This all our XXXX. additional of on note III, offering, we closed Oaktown June obtained from X, reinsurance Re coverage insurance-linked substantially week, XXXX

established structure The capital transaction volatility of insured layered PMIERs a credit source and all and impact have business written. credit with potential needs. our on to portfolio protection the essentially the third it, now of fund provides ILN growth adverse losses mitigates we efficient secure our and deep, ever our us with was ILN within This of against have we

current the level secured that Oaktown at achieved on Of particular note, than under level lower the exposure III a the XXXX. in comparable approximately off XX% tail we MI the stress attaches than other we sector. approximately curve credit and in under effectively This means our coverage Re by enhancement XX% earlier scenarios have cut is others deals loss our credit issuers of in

we Our our lower differentiation ability price larger achieved execute the of better our our terms franchise, in insured management the of comprehensive portfolio a third at and our credit risk size highlights strength on quality offering and the through framework. to have

to the Turning mortgage of environment. our the terms in the as of product, favorable strength well overall for underwriting broader the and origination as remain demand market, conditions volume

forward. going likely to movements appreciation an have rate volume homebuyers market. who rates in and Lower home refinancing Recent the supportive interest purchase particularly access incremental are and first-time and increased improvement will drive for affordability are beneficial of immediate price seen

trends Washington week past demand for environment solid matters. long-term product. growth and low focus patch. broader the with over wage on and for to request CFPB's comment the on significant demographic coupled The the been record There rate the market has unemployment, favorable well QM mortgage our for bodes Shifting

homeownership are to place XXXX set remain to goals. have currently achieve opportunity given to and access important The borrowers plays in QM their is through ensuring in an and role patch January qualified credit fair

the signal that rules, also changes not the Mortgage patch. on revamping to broader the Ability lending by served borrowers rule, considering is request the to indicated Pay/Qualified curtailing that who The necessarily is to a the comment focused for are CFPB it

We the severely and at a limits business. taxpayer strong we or the access, origination another a credit arrive positioned first access expect protection. are great that that the delivering for sustainability workable We impose balances and volume. on solution CFPB goals them will to Overall, change we well believe set quarter a to have continue that do and half not we

me Claudia. turn With that, let it to over

Claudia Merkle

you, Thank Brad.

in ability we quarter, deliver financial insurance-in-force and demonstrated second expand and and return. achieve while our the strong managing In approach performance customer our maintaining to all again record risk record results, growth once NIW franchise, our disciplined to delivered and

million, or $X.XX was from was for and up XX% was was net share, approximately quarter, share, equity on diluted a adjusted GAAP $XX.X the ROE of quarter the XXXX. net for income quarter GAAP and income second XX.X%. per or diluted per $X.XX return million, adjusted the $XX.X record XX%

second quarter second NIW compared compared record XXXX billion, quarter was $XX.X Monthly generated XXXX. $XX.X first We from second first this XX% of to of XX% the up quarter, to up of last year year. the compared quarter and XX% in billion of XX% the quarter the of NIW to the and

origination Overall, NIW rates against the a low favorable again and to insurance macroeconomic overall and that tied volume private backdrop market. industry favorable mortgage environment. growth this National continued delivered outperform benefited activity from increasing MI to exceeded

to at to XX% compared XXXX. billion $XX.X the the quarter was up quarter compared of end, first XX% quarter second and insurance-in-force Primary

the by rate achieve industry of wide to a continue growth in insurance-in-force We the margin. fastest in

customer XXX. second from lenders, from our the we driven the including by engagement In the was four performance Rate proposition The of recognition GPS market. we lender value and in the new top achieved continued quarter, XX excitement about sales organic, quarter activated force, our in that strong

of business value continue doing share increasing high-quality service further important, MI X,XXX capture to lenders, approach their Equally over diverse customer with with engagement our broadly leveraging to relationships of over business. originators. quarter strengthen now as a and existing and we proposition are and group certainty We our grow of to our consultative an quarter our

XX% a standout to engine. GPS our More platform, Rate delivered using our are lenders and was currently than second-quarter NIW the our XX% customers. of continues through be over with of success the volume

Rate on the all cards our has the of away GPS as outset We key to customers rate focused market. from believe been traction possible. approach we've established from our transitioning in a the of as quickly to We consistency the and

More are broadly, will growing our we believe that customer day every a franchise way in sustainable we outperformance. and drive

a discipline. For balanced means us, this return on and risk service focused customer

want is of and equal We credit succeed every and lender lenders our commitment all engage types with the maintaining balanced. We at time, aim and our and to to to service same and We risk approach and lenders This that all all grow as trust help support winning perform will size, MI while, us them all continue to and our receive forward. helped with consistency best-in-class from has we success expect we across go to date positions formula National drive to management. to market cycles.

turn With to Adam. that, it me let over

Adam Pollitzer

good and you, Claudia, Thank everyone. afternoon

record had $X.XX record results of $XX.X We XX.X%. million, $XX.X achieved per adjusted and This $XX.X the and and insured rapid another growth We of of quarter drove continued on quality equity return of net across strong record high of diluted NIW our number a premiums of or net record adjusted metrics. key million, share, earned income billion generated financial record portfolio.

to of persistency first details. billion of was up XX.X% the $XX.X month the the XX%, XX% quarter quarter compared second was from primary Primary XXXX. up the and end, in $XX.X the at first billion XX portfolio down XX% insurance-in-force the quarter to end from in Now quarter. at

year. through the down remainder holds, trend we interest modestly rate Assuming the of current environment expect the will persistency

XX% billion with $XX.X rate activity. environment was originations the represented $XX.X or monthly total quarter, NIW Total our XX% in overall billion products and in our consistent given our with of volume of volume. uptick expectation Purchase contributing refinancing the

were earned of quarter, quarter compared and We million the second from the quarter second single premium $X.X in XX% quarter first in million, of compared $XX.X $X.X up XX% policies the from the in quarter. cancellation earned Net to to million XXXX. the the premiums first

costs. XX.X the yield reflecting points, contribution was reinsurance from the quarter, basis cancellations in points our first modest Reported and in increased a an quarter from basis decrease for up XX

point between to the net of ILN. will XX that points expect basis third basis trend impact our year, the yield one of We remainder reflecting approximately XX through from

to mid-teens returns that continue rates we Overall, at our objective. business strong of are supportive capture

actively to mix credit continue our period. the use in GPS production shape the new of We Rate to

the our conditions mix proven and In enhanced and FICO volume our to respectively, in second XX manage all of overall evolve. X%, react to of tool risk quarter, ability concentration with than an XX and portfolio a of was as volume DTI well the LTV provides the market. XXX and us X% below X%, our Rate GPS market flow below greater were

Investment forward. quarter. differentiated drive in first greater We results believe and $X.X recent going our our up help in was on quarters million focus from consistency risk higher-quality performance $X.X million, in loss will income the

and the first second expenses for our costs in in million quarter, quarter. to of to were million offering. included Expenses third operating related the $XXX,XXX Underwriting $XX.X ILN quarter the $XX.X compared

additional million third expect to We quarter. $X.X through in ILN-related transaction of an costs come the

adjusted quarter. costs, transaction ILN-related million underwriting expenses operating our and Excluding $XX.X the were for

in during to the expense the The quarter adjusted the first significant our growth base period. NIW primarily compared our volume in ramp relates to

in our is XX.X% first ratio in milestone. our been expense quarter. for ratio ratio This costs, Adjusting second the XX%, important has to was first the GAAP the Our XX.X%. compared quarter, period was expense XX.X% expense below an ILN-related

of quarter our highlights improvement our have And significant in delivered in XXXX managing embedded efficiently model operating to base. second achieved the the the financial the we and leverage success we eight-point compared cost

at of the Claims the the the $X.X million We in notices XXX was had of first of from XXXX end quarter. end the in primary at the default quarter. second up expense quarter, portfolio

expense premiums ratio, X.X%. loss claims second-quarter was net Our divided earned, by as defined

perform million, change expected $X.X-million the in warrant our our was loss in-force we from the liability. initially better in quarter fair Interest expense and value continues remains the healthy, portfolio environment of underwriting $X.X The to than and had price. and a

or or line. income bottom of per income share million the $X.XX per or quarter the was or the compared quarter diluted share, million, share. net to $XX.X per $XX.X $X.XX and for quarter, million net million to second Adjusted $X.XX $XX.X diluted first Moving second share $XX.X diluted the in GAAP in diluted $X.XX per was XXXX.

both tax quarter XX.X%. was we GAAP the adjusted rate Effective net XX%. by for Year-on-year, over grew and income

will that through tax expect the approximately remainder be year effective XX%. quarterly of We our the rate

quarter the million, share, per million XX%. was the year, $XXX end per over per first by the compares $XX.XX or second $XXX over our at share quarter the second of end equal quarter, equity grew XXXX. end million share which share at $XX.XX to to or Year per value of the $X.XX of book $XXX and the at Shareholder's of

in was a equity was on adjusted GAAP XX% XX.X%. second return on the record return and our equity quarter,

grow at organically an to continue pace. We and base position capital our accelerating equity

financial insurer positive profile. ratings and our In required upgraded $XXX million notch outlook and our grew holding on company one strength under maintained debt PMIERs the assets Standard available its second quarter, and Poor's by to were quarter end. ratings at Total of is it quarter, Excess assets million. after not The was million. which figures week $XX ILN closed $XXX available these the completed this assets issuance risk-based in we as included compares

will reflect our the significant provide The and runway significantly future $XXX-million sizing excess increase third timing position of ramp The in funding volume. and offering our periods. NIW our offering in ILN

offering, The that impact capacity of are adverse with past stress helps loss of cost from us in equity-like us reinsurance they credit uniquely transactions and losses our scenarios. with absorption program, funding under the a along and insulate valuable that debt-like broader provide

particularly is offering Our notable in this regard. turn

that a basis points, transaction. attaches comparable better lifetime enhancement a of achieved has coverage than XXX spread secured been ILN markedly X.XX% We any average both with at level weighted on credit

is points, credit spread X.XX% level the As and in average and basis respectively. enhancement XXXX comparable on XXX a reference, deals

to We in our believe achieve individual Rate a ability to NIW that of our favorable target directly quality underwriting such risk use approach volume. GPS price higher outcome and ties to our terms and

Our level to is ILN an on deductible. enhancement credit a akin

level, reinsurance protection we comparable is realize a earlier the sheet loss at achieved that from will loss a been It our we coverage. is than deals on of than lower benefit approximately at a before lower benefit from retain reinsurance far a amount will transactions. Achieving that and we benefit risk stage other balance means XX% the has deductible far

we our the This replay event stress would be provides to that again XX%. If lifetime scenario. today, were the estimate crisis occur direct on financial a ratio portfolio loss us in the benefit severe a approximately in-force with of of a

on financial equity. summary, adjusted the expense event, This stress an to return premiums ratio, and severe means capital expected not a that scenario earned, be a as results net income as event we National record in for crisis MI. is achieved net insurance-in-force, earnings In

We comprehensive another transaction, program. cost extending completed our successfully the ILN available reinsurance further capital of and coverage our reducing under

returns believe delivering that significantly look strong forward, well of continue in of positioned our to are we midstream excess capital. we are cost we As that

of the attractive that risk will portfolio, growing to continue our and credit management, profile expect optimization, performance. size, our disciplined with We approach drive expenses and broadly embedded insured along to value capital our

it I'll turn closing for that, to With our remarks. Claudia

Claudia Merkle

you, Thank Adam.

We record risk and NIW with financial and quarter terms credit innovation had in volume a of momentum growth, bottom portfolio engagement, customer performance. continued insured line

in Our business quarter work past growing and loan the our years, and success our customer winning loan. by over by seven reflects franchise hard the their customer trust

in such message risk proposition, as capital commitment rooted of is management, dedication of our team, and the leading willingness our invest in the Rate innovation and with our our to value consistency technologies It in credit strength and the GPS differentiated markets. our to

plan We positioned our are business are for delivering to our on shareholders. continue well results and executing strong

ask your the come on back take questions. operator can I'll so that, to we With

Operator

first comes Mark [Operator from from line the Instructions] DeVries The of question Barclays.

open. is line Your

Mark DeVries

Yes, written. for kind commentary, patch the as thanks the XX% you changes new the shook QM for quarter just, your And of rip plus this without Brad, any percentage what of I also you on, a if all help doing just did be just was an if they it to would thoughts DTI update, on hoping have where patch. fill insurance implications to void. guys get the out the know, off you around

Bradley Shuster

was that remarks. Adam's was this That XX don't disclose We of X% and and our Mark. and production We over, in over. do Yes, quarter. XX

a pay sits. underlying in the CFPB QM the on patch lot the you confusion mortgage been not there's which has ability they're QM and of week, So on know, this but the killed rules patch revising to focusing

probability replace let would think not actually it. lapse and So there's just a that we low they it

would or likely patch for So worse, appetite taxpayers. were or in without even qualified DTI observe we very more as volume would for on expire increases the doing flow access to burden crisis, high more the replacement, little suitable to to limited some access a credit practical the borrowers restricts Post FHA. been there's anything expensive find matter, that qualified if borrowers a U.S. would Washington and,

believe we've balances this and through in we is protection. help stand-alone So been having CFP that arrive active conversations sustainability to at a drive on workable outcome. taxpayer D.C. the to And access, going basis a solution and USMI

to to to if you go interest This the industry another published to this. gets our this multiple across but groups, is And needs is website, trade kind aspect area there's there's groups of be agreement from USMI technical, that recommendations address group broad this one this about there's that and how where solved.

others lenders, are this. and aligned us all So advocacy with groups on consumer

that. So we about feel good

income. the sources they of they and the as order, currently finding of then work additional work such files requirements to point that because But where additional the fact lenders underwriting the stop loan DTI in doing meet

very the that getting to under current work rules. estimate it's difficult isn't it's because not done of required So the impact

number hard a very give mark, to there. So, you

Mark DeVries

And just scenario a for your I up Adam. update follow after on latest losses estimate of ILN. then of kind the a in the lifetime stress appreciate

of lower, much at curious from or how even X.X%. might being from you to ratio ILNs lower we that that to Just kind do percentage could to benefited how expected able your something loss that able future are closer level drop? attachment see And have if point far lifetime

Adam Pollitzer

it's dip Mark, lifetime below ratio far I question. wouldn't the good a loss XX%. expect to

credit ability of enhancement on. quality securing we risk to the that levels the to coverage happening, achieve ties are our the One that's directly lower of pieces

and lower. securing anticipated is So that attachment so the we're that multiple a outcome as anticipated loss of loss the much outcome, a has lower on coverage risk

tighter quarter it's you The much Typically, on we policy, when deductible really a akin lower benefit your a at deductible achieved in your deductible, to policy homeowner's below the that the meaningfully the is a dip or more lower loss got Usually, to deductible. car have pricing. that right? deductible, wouldn't below lower level. ratio I XX% costs you. expect that But the dramatically meaningfully We that lifetime it

Operator

George the from comes question of line KBW. next Our Bose from

Your line open. is

Bose George

First competitive I ask the about to just landscape. wanted

some know, advertising market just lender on couple what on of there were in based discount out any seeing be concern update the a great. a so and mortgage You ago there rate, weeks you're would

Claudia Merkle

It's so have us Claudia. organic. a volumes is it's Bose, is say Sure, approach. in of boots driven Yes, we selling. I more to by from seen can engage time time lenders about on that our the ground this few kind direct What

Also, our GPS. all from strategy along. getting Rate our primarily we're That's been volume

let utilize price Our loans And same the originate see process same lender's on the lenders of Rate for want also determine quality our and and of borrowers. they the have goal for our lenders best all GPS is credit to of to all the the we opportunity manufacturing see the their rates quality.

all an one And us. taking then us. to really succeed. consistency. and And for important hard each supporting We're of help customers that's approach It's them balanced of be our lender relationships working equal to and to our for successful proved with

Adam Pollitzer

I'd think a it up. Bose, of got add. a was got picked bit red Obviously It We of just it a attention. lot herring.

this on particular some now. Anything doing tends that time has was quite pricing this lender for touches noted been that sector our to,

so that caught a We broad behavior attention. a of seen expansion that haven't nothing lot was and really it's new. on It a of lender the really side, headline

Bose George

do just actually level of couple that going kind that's as activity The refi other to that then at well given expect the of on stay a things. you little now? from cancellations, And earnings level quarter next

Adam Pollitzer

Yes.

modestly. stay will roughly know, volume assumption consistent, cancellation that to maybe worthwhile probably a assume dollar earnings down trending it's of You the

those from in contribution our rise. any I as term go will the earnings cancellation down that But do pool you given think and down QX. a dollars to dollar [indiscernible] a will in are net the cast expect line yield we quarter But generally perhaps in volume long dollar to premiums know, against over I'd of earned. modestly larger roughly amount, the say as

Bose George

you your on the expenses then just for And expectations update for us year? can

Adam Pollitzer

Sure.

looks of remainder primarily In of ramp NIW. compared that the first significant the I through in grew terms how to second quarter in base of our because expenses the quarter the year, expense think the our

adjusted point expenses seeding provided expenses was I'd strength guidance commission our the given that volume. we'll which XXXX, the running versus XX% see modestly we in we just not that that the to ahead in our expect to growth for earlier expectations tied in continued also of the session reduction business our new business And on of took down note XX%. one to fact XXXX year, rate

item more quota known we our be that risk we under detail recaptured XX-Q, first this some also of XX-Q, we the when seeded in a But we share previously a portion and agreement. was That guidance. XXXX quarter's there's in our gave disclosed quarter that that'll the

So additional increased expense volume is driving load. some

We get remainder on year year share offset modest slightly commission expect through the end. smaller well a from the through a of we'll seeding quota as that, XXXX treaty the that will fact as the by that the continue amount,

Bose George

So higher the just slightly than the previous guidance, XX%?

Adam Pollitzer

I'd say modestly higher. Yes,

Operator

comes Point. Chris Compass of Our next of line question Gamaitoni from the

is line Your open.

Chris Gamaitoni

Adam, in premiums to the this quarter? what the seeded ILN was

Adam Pollitzer

Sure, a give moment. me

of some a the the quarter. recent will as total first net the that a it's to they amortize net dollar were and with see, offering additional X.X be third ILN in amount the fully in just up We'll that the to ILNs of points decrease also right. obviously offsetting quarter, yield So runs offsetting as terms in accounted that our risk two, three of about yield. but million. dollars ILNs for cost related the partially we'll It The in was underlying $X.X in two pick continue reduction reflected down two the off the not

Chris Gamaitoni

comes think of little a then singles books, for lower be sense perfect. specifically bit rate can a however, yield refinance And if had answer I Right, that know I'm prior that yields And there NMI, higher at where coming environment, a than being you older, book. a where the with may you some higher back premium on new are you this, the the the it benefit thinking, talked any higher just a in portfolio? concentration and about actually refinance past. on about

Adam Pollitzer

second what say least it'll is Yes, I'd look to at quarter. the

quarter of was So that we're the risk-for-risk basis was our same on providing explicit in the business on business share a I'll new sort pricing it quarter. rates, as roughly not on new guidance but the in first second

But risk first In new fact, that buckets were the there achieved business where what rates coming were was quarter. rates. some increased in broadly generally we of with speaking, consistent we at the on modestly

we think is with most along rate and we right, out return the for we that importantly, rates Capital. the expenses, I new as objective return, second business right? one to of that us will drives beyond, in remainder that And and elements quarter the and look that And to of mid-teens allow that us, ultimately we the on losses, our expect certainly we believe, achieve through 'XX continue strong achieved have.

Operator

is yours. Our question The from the line next JPMorgan. Rick line of from Shane comes

Rick Shane

trajectory Adam, you excess NIW I'm that was you've post the comments It's and wound a short could the that in given not growth saw you surprise. if the the terms that higher. transaction. range the during ILN indicated the where that of obviously assets provided quarter some but up curious number we of narrow on ILN, post

Adam Pollitzer

roughly so two you it's of, together. add can sort one the Yes, this

the had million. we that's at that's excess considerations the a not was to held The in So ILN. cash It's $XX-million before a, quarter giving end trust. $XXX position ILN

estimate. the credit the map pretty notes good over get, that not to of It's PMIERs we it's size but a It's perfect offering. the a

PMIERs forma the So million that a $XX offering plus of estimate it's kind to of million rough $XXX of capacity. gets basically the pro you

Rick Shane

one being to that in on position trajectory returning seem capital. good guys to very that be a the toward ultimately things in a with you And of mind, start is

to the are before offload terms share might more the second opportunity As growth within importantly can get how we returns opportunity and capital in related you I XXXX, it and XXXX, half risk there? to company the of the think be into you with sort ILN, of of conversations we as long, initial and toward the move what move

Adam Pollitzer

our Yes, accelerating of Rick, you're us capital significant an things. runway. have, already third every at day, it's point a the that with a capital sort organically offering pace with that One, sort provide ILN combined great question. does right, of I all observe of generating And two one. we're we amount

two, better Point it's it all in to best risk-adjusted that it We the we some broad about where just think but is to to when question right? in and it the better to it way our about and return also business think it the shareholders deploy the form form, terms, or the pocket we we're the think deploy what's get we're capital, about is what in not time, in best support to deploying of return? going of business, market the

distribute we of discussion capital deploy the capital in split, is same terms the it growing do Our do opportunity business having are time, have NIW shareholders? customer of right? that available broad one support that So the discussion say in and we we optimization at and we us the all that are to to day, time. I'd franchise the every or

year. billion $XX.X of what achieved second Our we XX% quarter up is the in on last

XX% growth. to right new really And the believe we in and for business we that's that use ROEs, think is best that capital. of best the deploy now, of so We're achieving capital us opportunity support that

that the not to reinvestment. our that mix discussion of we're But or distributions and the a self I sufficient, there right we're around shareholder support have use best yet. when capital, capital think of will equity we whether be term now, what's it's there best longer

Rick Shane

also Look, returns deviation it's standard strategy it's a a narrow time. that clear that over it's to strategy, on it's clear capital but

Adam Pollitzer

That's right.

Operator

the from line Aron Associates. & question next Zelman Mackenzie comes from Our of

Your line open. is

Mackenzie Aron

I a think just of ones. quick couple

Adam, yields just cut should that thinking income given we and investment be in how First, the rates? about the

Adam Pollitzer

Yes.

we've up investment assets, larger. is the billion that first getting $X the a in invested going because portfolio income look, pierced which So is is This positive. quarter is

money come have New rates down.

offering the with maturities, toward we in had deployed or proceeds money positive, about the now year. last X% amount a We much seeing money smaller so had at completed from turnover are of that X.X% It's the the to the the probably a To quarter third year, of just were capital about be portfolio new significant third number equity that needed as to rates and earlier this last new a X.X%. as last running portfolio well because year. of We we rates year. about

So itself probably hold we're the immediate into that the investments new not There's in should portfolio X.X%. It there. yield was roughly much deploying just that term.

rates of convergence. wouldn't term, the obviously certainly big be new we'll hold is amount But that some Over long at yield and X% in the XXXX. expect X.X%, see I if to money a driver

Mackenzie Aron

the a involved of prior counterparties same just transactions? interest you to going back the that the about in deal. have ILN, talk the recent been group can then And in you bit participation much just investor most little pretty Are seeing more or is

Adam Pollitzer

deal. that because I growing think to those seems and that put be transaction know, we're choose with the to in we're the by you orders on No, engaging the hardened every fact investors who with

investors now this asset so It think difficult class issuing in helpful. in the I that who ignore. fact industry for it MI is the makes to are many out there are

with And also both for And issuer in. the market. in of market that shareholders, programmatic being new the as the brings terms a that's fact and in it as offerings. well drawing in ILN told that to our investors, our secondary we programmatic issuer ILN enhanced be helpful investors we've And market expect a liquidity

we issuer, been view our with solidifies that in three are out years being helpful. deal programmatic a So which has third that

Operator

Our the next comes from line question of SIG. Jack from Micenko

Your line is open.

Jack Micenko

with coming the or end. is it seen since XXXX think more focusing year And Where's so more from growth the on, growth existing 'XX. that XQ of we've bands you MIs are a I growth. to the over the growth. back FICO, like reported two year know, mean, because keep get new, the it's accounts? Or rate higher is I LTV, is it to all are Wanted from? maybe in you which the XX% looks other the sort Is this the NIW strongest far that mid-teens

So Claudia, with doing just it And it coming existing organic more, I'm it's new about where curious and more spoke but or is just curious. is obviously, you from. additions?

Claudia Merkle

yes. Yes,

we're excited thanks, achieved. So we've about really what

of know, had lenders both. so we're focus heavily we always say we've lenders, on concentrate I And adding and this new both. share with going You growing our wallet existing

keep that And have we to on goal. really

hired with drivers think, day, added. been we've I seven the a We've and end really for off. focused are at the Rate been discreet really paying quality customers of people strategy this the GPS, our at had of in we've these We've all we've years. so seasoned

I'd customers both. working opportunity we've on with We're the But share all gives past. the actually that and said, it's customers. growing in more on really builds we us And like say new activated and activations wallet our

Jack Micenko

through but don't loans the know the figure all XX if but can I to without I underwritten they reunderwriting looking when as speculate just there's in those clear patch, trying and is or sort XX to you many we then well, business, over XX I over case completion more DTI hear think, the of adequate. on think earlier the and out you what that's for as that are I'm the again, actually or how stop is versus I the percent they Brad, stop underwriters, whatever of touched do, is you with And some it this your being certainty high we know say, I'm and enough and got? when file get to stopping income. wondering versus,

Bradley Shuster

many not loans out. hard additional the work work Well, would the exactly of earlier the with were this I'll Since now under tried that stops the question. done. work when XX, they how address start quantify current is if kind to the standard cutoff get which patch, get being more under Very QM a additional to the is to I done.

be substantial could borrowers, income, it time thing. of believe started We bonus other their if amount a looking kind at that part income, people qualifying very ways income, of including spouse's

you be could the I hopeful. it referred we're U.S. very But to So know, substantial. And

earlier. proposal MI

to want take a might You that. look at

XX% terms to about payment XX%, we credit history would would least to suggestions cash they you this in to And similar of DTI, strong some payments suggestion the borrower so at glasses, new borrowers, in if three and good at of that factors you want at speak. We monthly products. a of have and their you least compensating the with proposal think months, for take how yourself a set there that sense know, that reserves of had credit successful underwriting down with history that include make insure X%, look

I at we're of and that, encourage take look you that So proposal. would supportive a to very

Adam Pollitzer

said, getting difficult And, it without precisely, Jack, to it's Brad a obviously, pin of down lot information. to access as right,

additional to would I the volume XX% that's meet spousal we've threshold. the with and income, under like, to to work patch, of in able XX% probably indicate think that be XX% coming income work some the about seen we'd currently it's the that bonus on focus DTI

that change still volume. So expect do we or come be underlying that of remaining market XX% that other rules of on a volume otherwise think to it's the amount able patch to without any itself. that, a benefit would of we significant And QM to will the the top the change obviously,

Operator

Our the of from comes line question Bank. next Phil from Deutsche Stefano

Your line open. is

Phil Stefano

couldn't out you. all Thank I unqueue. to just were Yes, answered. how figure questions my

Operator

[Operator from Instructions] is Our of question Mark line Hughes line next the The comes open. from SunTrust.

Mark Hughes

activity talk so I that you've volume, not if July. touched could has XQ? during seen you then your here did in progress the sure been that on I'm And far you've about better getting the quarter? if that. early And wonder refi in how

Adam Pollitzer

Yes, Mark, thanks.

on expect our we of new that's performance. guidance we in So beyond comments business earlier back expenses, largely a provide you because year. in increase the though that trace don't production. for the continued And do strength if expectations on I'd provided monthly I that our my say to updates that modest

through traction we out not optimistic year the We as it's momentum of the specifics, remainder provide. we've of achieved the that of be that all we and terms sustainable. something look But in are that will

ties volume refi the directly second the quarter or that from interest obviously refinancing the side, environment. the our refinancings of XX% contribution On in environment quarter. refi mix the increased to or rate X% first And in from to

environment event and I the been And right? easing. credit in now corresponding that credit Usually, there's that of really rates had pattern macroeconomic a a dramatic interest environment, economic also significant a unique in there's observed we're where that shocks event, by come such we've that hasn't rate then accompanied a resulting drop a hasn't through.

positive, XX% refinancing So anything without XX% corresponding a volume, It's is of side. quarter X%, amount a which concentration amount in we're right? of significant versus spike a this increase seeing the credit in the corresponding on

appreciation The they've through balance. is, equity natural home the rate other time by our price and their in piece market a just amortization naturally somebody's up usually, built the refinancing, because refinancing principal a of activity penetration has for lower

otherwise ago, down, quickly MI who how those in chunk months environment. particularly loan come support those months, a than six larger borrowers, still an given their But rates nine we out normalized refi of took have think will need

of market we're penetration MI expecting will volume degree. refinancing that the trend to origination a in up So for the broadly

Operator

no further the I'll are this to time. now back There at the questions call turn management.

Claudia Merkle

joining for the you call thank So on today. us

forward you the Susquehanna in New August there. participating be we in X, will Conference seeing York to on look We and you. Thank

Operator

your Thank gentlemen, wonderful today’s have Ladies concludes day. And a and for participation. conference. this you

all You may disconnect.

NMI (NMIH) 4 Aug 192019 Q2 Earnings call transcript