NMIH - Earnings call transcript Q3 2021

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Operator

Good afternoon, ladies and gentlemen, and welcome to the NMI Holdings Inc.

Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference call is being recorded. to conference like host, to now Mr. would turn over the your I Swenson. John begin. Sir, you may

John Swenson

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

the Controller. on Brad are be the after nationalmi.com were Financial CEO, results today Claudia Officer, and the Shuster, Chief released The may Pollitzer, for accessed our tab. call website Financial Chairman, press close Julie Merkle, located us the Joining under Executive Adam NMI’s Norberg, release today. our on quarter at Investors

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

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

Now, I’ll Brad. the turn over call to

Brad Shuster

results. quarter significant $X.XX return Adjusted to to of quarter And quality operating achieved afternoon, quarter, per in GAAP and of $XXX record second net or good net that third million compared National third record the of XX.X%. XX.X% in the diluted and and was insured income per adjusted and $XX.X XXXX. John, portfolio on performance, a compared our diluted MI share. actual ROE the million GAAP and report records primary up income delivered you, was third the $XX.X I'm We quarter of everyone. billion pleased strong growth Thank equity $X.XX quarter to X% the or with the record for in-force, ended insurance XX% high We share.

a we to FHFA strength of in focused as to the MI, it market and are Expanding housing helping the all a At affordability we the housing, position also access continues set delivering borrowers summary, mortgage important. growth risk broader are goals of actively is quality support industry GSEs in to manner need borrowers. we gain we to and all reflects Insurance business. of homeownership. regulators, broader provide capital from Washington critically than communities. increasingly credit, front the effort, broad the the the Policymakers, access and borrowers providing and helping community promoting and provides, Shifting equally quarter build long-term recognition of Washington and a supporting and loss for in equal matters. optimistic guards with our market systemic to to believe taxpayer portfolio placing trend And Private underlying National we opportunity to also while against and is portfolio borrowers and before forward, In an insured access any the macro borrowers performance to sustained benefits value increasingly with homeownership terrific ever environment. and Mortgage the the that appropriately given in that our look on We we this the are well the market all the our access risk more to wealth down on to in housing had are recognize this private access in establish all that payment for And strength. to absorb continue borrowers identity resiliency our downturn. housing the in-force are direction. favorable We brings to Credit and there book, of a equitable through committed engaged

dedication Adam I at Before we September stepping on be and to I will of the gratitude the talk Claudia, Xst. the for to our year, want it National plan to turn her and end be to rest which over I of taking that Claudia CEO over as gratitude MI. January Board will down succession President under express the in about to Claudia and leadership, the my of want announced and

to more in and promotion our insurance has National on MI to the Adam Officer as in shaping I'm than Strategy her Since continue experienced talented success Leader forward. our combined deliver National Corporate years growing proven turn of team knowledge focus excited and the is to Senior Financial operational and rest at development and he market. For Claudia has and to overseen that, our National list and a diverse stock has shareholders. seasoned of nearly Magazine's success and underwriting company, on Chief our doubled that, tenure the CEO we five companies our continued is company. was with nearly the and for He joined a net for growth established MI as he been long success. He building grow performance. this a executive, our and instrumental ago, and Over of Claudia. are of XXX people National price since. Board revenue, mortgage MI, have Financial team has our to deep to the she let with and opportunity foundation the on to growth National guide her enforce, and MI, MI it franchise, confident and support over and insurance Claudia under Adams and leader and and talented I our National commitment decade going demonstrated customers, fastest customer With led capabilities. our build right me leadership its Fortune a MI's of XXXX, recognized as to strong the the income he success

Claudia Merkle

talented the an opportunities and Thank you, My across equally kind people, to been career. for seen group part of MI, most and work advance organization I privilege so company into a of has my helping a rewarding and spent much dedicated to to such XX National with you homeownership, and of be to time doing and that's high for National at all communities. have Thank It a nearly the your organization. grow words. years lead been Brad, performing, impact build MI has high

was our also He goal responsible and transition. made insured Our standard growth quality with a and executive, partnership company I me our of He's for and high the the five he better and their has to risk the good I COVID years. his and joined. shape executive differentiated MI proud stress helped navigate support also worked has strategy management have customers have National nearly and am success to support always been important this has and and is to for closely and our in shareholders. instrumental make team. National I'm service, strong now from grateful of their achieved adjusted for our Adam we us our hands. while time the commitment And of right a who a moment company talented broader I've portfolio know customers confidence MI for unprecedented helping through returns in together. I the steadfast pandemic. driving in leaving leadership complete in with our bars the

to third Now quarter. discuss the

Our and delivered high and record significant to business strong quality production, results. team our portfolio business insured outperform, financial and continue we've new growth

momentum franchise, new activating and customer our growth continued in XX lenders. enjoyed also We

with We lenders diverse X,XXX are including group high of top originators, of business a nearly XXX XXX the now quality doing broadly nationwide.

homeownership, of billion tailwind And likes $XX.X seen the purchase market II generated experience which entering demand. for volume. forward. post-World constructive, a pandemic pace, Millennials remain to themes of NIW the an towards US The we the the with we of drive demand emotional haven't strong War despite purchase doubts. housing increasing billion our quarter, carrying driven third Rates the are the itself that pandemic key including remains in the have pull period. recent the market at through the demographic since continues $XX.X practical an and of, providing During

drove Refinancing at is for homeowners improvement activity, billion demand as penetration NIW a in quarter persistency refi for payments continued homebuyer mortgage X% industry refinancing to insurance declined in as $X.X or the enforced volume total a production, compared rates increasing mortgage purchase bars accounted our decline equity high refinancing private position billion down in time second of was The and overall XX% our volume many of of of and penetration to our support. to quarter, in continues of a of turn by eligible of to portfolio. balanced First $X.X rising the volume our and the of private quarterly normalization the growing market. increase the market insurance the impacted number

value long-term in volume shareholders. the returns stable Our market, estimate lenders remaining environment protecting their risk across credit providing to total XX.X%. and for to quarter supporting trend appropriately mortgage to the favorable fully XX year. the while and in performance balance ability fairly The broad house will and pricing us increased persistency insurance buffer the deliver balanced, the paramount at in mortgage And to environment private with sizable We price ratio a appreciation terrific industry and a and month the XXXX. macro time is household closing $XXX market in same third consumer the equity sheets. in direction, another again on allowing strength Overall, and continues reach billion underwriting is discipline adjusted support our bars, record

our Looking is view positive. forward,

and well continue drive executing for shareholders. back turn With a I'll are plans broadly book to that it on backdrop against constructive we Adam. consistently compound are -- our positioned growth We and our over to, deliver value believe market to

Adam Pollitzer

President last we're appreciative record and exciting of time here and leading National and forward. Thank you, more number an I'm of a do and with helping deeply impact and several This the years. even Claudia. to support we're next National your leadership be is gain homeownership to CEO to going appointed access MI, and honored MI's borrowers over

mortgage our ever market digitization to mortgage allowed the increased Our are reach has us greater before growth. our expand the than insurance and customer of core accelerate and demand products in

and short portfolio, We risk management sheet. team, a a and engaged a balance robust highly and growing credit strategy, differentiated high have talented quality a fast

talented our of to of Directors and I'm working employees, our with looking Brad to to and borrowers, results remains the commitment rest forward team, Our Board to to value our the to and shareholders strong their forward. continue our and community, going customers Executive same our and the delivering

adjusted financial from was XX.X%, the results significant were growth strength and the to and record in compared achieved $X.XX on the insurance premiums third continued bottom-line from up return in and XX.X% million, We persistency to in period record million in credit force was end share, Now insured adjusted the up the quarter portfolio revenue of $XXX.X third was performance, $XXX.X X% XXXX. diluted quarter. quarter. second our profitability. in in per earned a to net and our our XX.X%. XX% income grew with up record driving XX-month or quarter record second $XX.X equity portfolio Net billion, of Primary the primary

$XX.X million quarter of single the written record continue NIW expect the premiums premium compared well pandemic, business earned the during period. as in million points priced million, the and basis income $X $X.X $XXX.X calculation. million from fully $XXX.X as second into million of through in quarter. of the million improve $X.X in year the $X.X will was second yield XXXX transition. policies book the exceptionally originated the were We the million the volume and quarter. the quarter Net strong remainder refinancing points the from that earlier second included the quarter, XX.X rates compared we've with second CEO Underwriting basis third associated our into We of in Investment continued third the policies the costs in with slows insurance activity low our the a expenses the Reported in were comes interest quarter. calculation million single quarter. quarter to persistency premium -- upcoming reduced that for and years, to the Expenses force new compared since in contribution beginning quarter to $X.X flat XX.X was compared earned persistency and at second operating to third in in we growth in as in to reflecting the

expenses additional related quarter. expect in incur and in in Underwriting incurred operating October. million fourth Ireland with recent connection of transition offering the most We costs included $X.X our $XXX,XXX to an also of costs

million to of the issuance We the expect to $X.X transaction. related in costs Ireland quarter an additional come fourth through

and ILN underwriting compared quarter, and expenses the third transition the CEO million related Excluding adjusted in in operating first quarter. were costs, to million $XX.X $XX.X

new impacted stress Our and June our cost fewer sharing to significant ratio emerging ratio trend was X,XXX economic portfolio. XX.X% highlighting XX, continues in the our a XX%, September in our and defaults operating scaled crisis XX. GAAP We low an favorable number borrowers our leverage with insured model, financial of was defaults low to COVID in X,XXX embedded a of compared quarter, a delinquencies managing direction expense achieved the we've success at the their record Overall, performance expense primary our we've and efficiently in had credit adjusted the portfolio as the our and on base, increasing recedes. as record

the million the as period. of by Our warrant we'll of the underlying XXXX, And X.X% in assumptions every default compared the resiliency to panel remainder to our existing completed average provides performance of expense and The our The or among and rate into point in million the excludes reserve record path quarter X.X%. progress year, treaty appreciation earned deal ratio of value and to of $X.X and house which the X.XX% quarter to at to largest in XX periodic consider September prior maximum and third and cost improvement and and X.XX% X,XXX the rate borrowers, through the fair net no declined housing October, overall whether we default is underpinning non-recurring weighted We X% our the factors, compared detachment. this and associate continued year, of a was macro adjusted $XXX population other $XX.X the market our housing most to realized was reinsurers. costs, recent price for economic default value million of premiums cost. defined net investment a a per second the on changes quarter our outlook $X.X claims share reevaluate $X.XX quarter, the production. losses changes, transaction October, among Claims expense lifetime income X.X% recorded million declining our transaction gains pre our loss income, diluted during an warrant also upcoming with The upon risk million we as $XX.X seventh $X.X in to fair the our falling or outcome carries was tax of the closed $X.XX coverage our and transfer change and claims a are with with we analysis X.X% net we In record the up ILN last XX, renewal the quota-share markets and million quarter. further in in was estimated September net diluted reinsurance in determine coverage a period. liability our between reserves risk was highly expense the necessary. across per to broad GAAP Interest rated share. our success and our the comprehensive that from us primarily attachment originated X with transition today, extends previous CEO of April builds our week, reinsurance reoffering divided

capacity both an be The secured and pricing, quota for better two provides available other we've renewal, greater agreement generate XXXX to that terms coverage the standard for Reinsurance new and any and than pleased of conditions date. new favorable XX% one a opposed With we flow reinsurance share years to completed will have we forward XXXX. share and the achieved such business year protection in quota ILN have the We're to outcomes both the risk treaty compared of at quarter third third cash our market. as to in was investments of carries last quarter strategy, capital compared were equity Shareholders at $X.X efficient Total quarter $XX the end X% for management the company. equal the and our me share, the credit of cash investments core of to quarter year. $XX.XX is and $X.X of billion growth holding including second a per XX% end source to at and tiller and business. million the billion for

assets We In of quarter were record million, of earned, premiers At base outstanding XXX%. income. our required we credit net million assets sufficiency have and achieved available fully $X.X revenue, we undrawn and reported facility expense notes, $X was $XXX net billion. ratio, total available in $XXX income XXX and total remains and billion results insurance available. senior our and million of revolving summary, premiums net assets under premier end, ratio Excess in force, adjusted risk

credit Our continues out way. stand dramatic to performance a in

As returns to we positioned cost strong look well are ahead, of our we that capital. of significantly in believe that excess are continue we delivering mid-teen

expect the our of disciplined continue We to and turn back Claudia. our and attractive will and it managing profile capital size to With approach portfolio, expenses performance. insured our growing credit broadly that risks, let that, drive to me

Claudia Merkle

Adam. Thank you,

results to quarter. remain performance believe We the are that MI drive compelling right in present market balance continue strong we our record are shareholders. a high conditions strong. quality we deliver return excited maintain portfolio, market The and for opportunity. about with And third our customers, our backdrop and macro in housing the to growth insured risk well Private win positioned

ask the your a helm And a great Thank take questions. opportunity can taking I'll year, operator we us for with on. now forward. to going have We come clear next outperform to to you continue and Adam team in the today. place joining

Operator

from question is from Instructions] Mark Devries first [Operator Barclays. Your

open. is line Your

Mark Devries

kind the much the drove how of factors what you level on call for high qualitative decline terms of to those in on the those able comments Yes, thanks. comments Q-over-Q quarter? Can out And impacted that fourth it? I for how Adam, us average premium. the, heard are you each trending of in quantify any

Adam Pollitzer

to. happy sure, Sure,

and specifics XX.X And line it's so yield was we matter. risk expectations, basis terms basis I'd our in XX.X So terms a our persistency for again, turnover. portfolio in seen point compared the shaped given of our QX, little in how QX quarter, decline. a say, X.X we've points over of to what as with in

pieces, I QX In half component insurance business move in you of we in force that run-off terms years. the in that ones will, about of strong our continue was that growth our have in yield. QX earlier of traces That highlighted to from priced the originated movement and together, book takes the if us in to

policies recognition half our compared $X.X or other $X.X volume was related in as NIW billion in are in pattern for to same decline to singles fact, QX period. decline also from QX. The volume which contributes accounting is singles that in the to an in policies contribution written, of period volume a yield singles higher, the highest, period to NIW a premium the singles the singles in the matter, billion movement in the period in so NIW period And in

split components. about it's XX-XX different between a So two the

Mark Devries

comments the that's Got on And fourth it. shaping up Okay. for any how quarter?

Adam Pollitzer

increasing made of the QX. impact, with run-off slow we some will won't rates, guidance higher still costs additional of earlier from will bring don't did note terms I go while explicit, interest it would but QX, into zero. complete right, And just seated have yield business an premium provide and ILN an vintages we that with right, for offering, it that to anything turnover, In embedded

expect down steer, trend in So our of what general from net a reported net-net in terms QX. QX will in we'd yield we that

Mark Devries

Washington policy get through the industry? policy could for I then what Okay. And And the what it positions on this to Act. thoughts of turning to senior priorities the continue at helpful. front, And more some think, and appointments around kind housing. for mean obviously, seeing you're that's Reconciliation we just -- out Any of updated you expressed

Brad Shuster

that. take I'll Brad, It’s Mark. Yes,

increasing we opportunities those for is are we other -- and really Washington National to by providing the who housing So expanding and and MI. efforts access what And in do administration increased others to you're to at seeing homeownership expand also central opportunities.

and that's variety policy discussions of So that may National But are that today. come. we these in delivering a have initiatives focus speculate additional expect and venues, the really it's role in programs that at of mortgage broader the play can't industry in the issues we insurance will policies, think as an to great shaping these what in we And today private or such discussions to important future. solutions housing -- forefront MI the

efforts, that access median requirements of variety should interest note also a changes embedded ideas area and focus include up groups initial I'd where in have So which for the affordability its in offered FHFA income, their and loan eliminate complete of amendment reach elimination further January, the that into HomeReady programs possibly Home Possible the the risk effect or went PSPAs to to to LLPAs. limits and high expand in reduction

we discussion potential So going those be of changes part forward. the all think will

Mark Devries

Got Thank you. it.

Brad Shuster

Your Operator: Credit question you. Suisse. Doug from Thank next from Harter is

Your line is open.

Doug Harter

a little that Adam, NODs in was me, you hoping you in of kind could that? And to give Excuse more behind anything of, quarter of there the trend? about do how the expect kind kind sequential increase color Thanks.

Adam Pollitzer

a rate equates quarter we is meaningfully notices, about about total decline continuing that policies exceedingly itself X,XXX most think experienced low is defaults to quarter. to that to important about XXX,XXX when default over roughly Yes. we the just defaults [ph] the individual And the second small compared facing one touch total talking remain our question, in who's third basis cures in at Ultimately, as right. this linear new notice can move We we're defaults It's and end. a period exceed in there's I’d total quarter new had develop right. loan that X,XXX quarter-to-quarter, Doug. along default to X,XXX path When an experience borrower stress. experience, new it, new each us. overall, good our that to individual new doesn't generally about say point a And piece XX behind their the compared for population numbers, bit stress the

end to were Claudia call was QX, the the We default of which Also X,XXX as have October, on down which was of XX% June. shared as of X,XXX. compared where we

So new we family in do total generally notices up, we see just right, holidays who holiday are of decline X% pick will towards some population. in borrowers goals constraints divert month is certain streams and other default QX, the in the another saw around October, matters. and our What season that there payment

And QX. population come overall, new so, we seeing to little bounce tend decline. It's of a in total tell a we're But total see of notices bit encouraging default early in defaults to to too seasonal in terms that still if the is that through. number will continues most what of the

Doug Harter

out talk just claims about losses you defaults you of quarters expected level and them? some the can incurred the from this of experience And of

Adam Pollitzer

Yeah, absolutely.

estimate those our pick defaults establishing individually setting best we're and each loss it will of obviously, vary. and a So so, for

to As forbearance But comes in new that we as to ultimate we other quarter, recorded estimation are that quarter and frequency movement our the being reserve the while where three also the moving pieces QX. course really drove severity versus reported apparent their and programs defaults record like windows. related default of ultimately know, we experience may what themselves lower driver assist about tomorrow. programs they still indication point per the that really that new XX% the from that that well claims continue are activity think the carried what's on through HPA. borrowers and also available that HPA biggest in we significant a borrowers see in had the be months matters we designed case still clean that work in portfolio. is meaningfully forbearance was a in make in bridge and The happening went that as population majority hardships established they they today are notices program. the housing individual help a see end notices the we cheer terrific, given a is a received, existing a estimation Right, into Overall, an facing were that that are of the the stress changes And borrower of borrowers that came ordinary loans of last through, programs estimates quarter, that think of our forbearance and along on of for for them the the that forward on environment which will work, made for forbearance acute significant market, those new COVID. program, we better month new to you We with as in to will were nearing and XX our our new notices to drove expense will

Doug Harter

new during to are XX% they in those So months quarter? that whenever entered from for up the they third eligible XX

Adam Pollitzer

Yeah.

runway. March and those March. there was -- shift the tweak of no timestamp XX there's than programs So given access there's a one -- rolled borrowers forbearance months were forbearance to for the when through earlier that, they're runway those full under who have runway when and other programs eligible I'll we March borrowers who after call In of access XX programs, months it

an related COVID forbearance long an period runway borrowers. now the was which there's accept as time. those for borrowers of the XX But quite earliest not months, as XX for program. extended there's It's months a who So lengthy that's of available extension

Doug Harter

Thank you, Adam.

Operator

from JPMorgan. from question Your Shane next Rick is

open. is line Your

Rick Shane

unable that forward? a months. portfolio right are even thinking for stands the when basically guys risk as anything triggered the from risk XX in the was more are challenge. we refinance perspective that you happens to either last huge loans away the of out that It's taking if persistency in the there's to in that a now simple trends I'm we move terms vintage is my Look, question. that occurs that the should Thanks be there rotation math. in It's NIW. One over look portfolio selection at that or curious we geographic, about profile adverse

Adam Pollitzer

right Yeah, I'll than And at, entire who question. just stand every across in who a might isn't who inefficiencies pursue the adverse for look market. reduction, of borrowers for reason monthly market we because it's payment selection. what just the a meaningfully don't the often good say are mortgage that is, I the not it's have, has of call markets of refinancing and spectrum would of because and more Rick, for benefit exists terms those the And housing to the that market same it,

seeing borrowers by, continues homeownership. in the to every for that, effect of it's goes for And that in-force with right. exactly through, away a what away month, we're And the also improve. coming in reasons, And opposite. advantages portfolio. price a a pace the further borrowers from equity a record that so related where moving those And of are are building has to adverse a portfolio overall observing the not we're appreciation, has moving way. from us positive providing the way risk real and effect every for their it, house Instead, that's value outcomes those of them worth, quarter, away further meaningful it meaningful in there's quality few meaningful right One, is equitisation risk shift call of early what our that on of the

that of given to for refinanced. have that And our hasn't degree new to younger, seeing notwithstanding, and that expectations goes other record said some vintages, continue maybe those adverse the our in production And been business And lifetime older seeing as we're the that business a We're that right? through. comes levels so on putting that dynamic that ultimate portfolio improvement by, through for the quarter then around with the way. getting every dynamics margin on positive a vintage loss on, come ultimate, that improve HPA, we've was you if

that a currents that the borrowers current is in of of expect peak trouble portfolio in underlying on the business credit mortgage so the also most which to itself and such would high effect which new It we is overall three portfolio period year for when and profile younger-and-younger, we dragging us are trouble volume credit way, in moves brought that's of that is a drag for we And age historically characteristics. the loss out. when strong to six, into as peak further away typical the loss reasons. but things has get higher, from get between model So dragging of going period pronounced much variety year

refinance, for the it's risk of those what's borrowers actually the remain that of positive of robbing us, HPA had most production we've a happening quite then that with positives and both, recently. for that So come the level from all equitisation been and record

Rick Shane

it. Got

very appreciate I it. and for helpful me. Okay, That's it that's

Operator

from Your is Johnson Riley. next from question B. Colin

Your open. line is

Colin Johnson

my for thanks questions Hey, taking on.

maybe going the forward, fair share Adam just it kind better of reason the deal of assets interpret pushes higher to maybe, it have PMR's while as on you I that would you needed it advantage of forward? ratio, to or taking of would that reinsurance to markets reduce be target cushion accommodative you would quarter? kind available as at that it think that or think to as the some your go they're it quota And rate assets required be as still it run above last puts of the flexibility

Adam Pollitzer

have first good we've seen losses their absorb structures foremost, question. a And say they risk matter. a reinsurance for These are loss that I about stress stress that, right. absorb scenarios, we stress, scenarios as if what value, with us it's capital is also default defaults. I Yeah, management, would team’s here in and rising associated call it absorb a in spike they

course for amount of we our to capital we based also hold take out have valuable capital a benefit, because us provide we and system, They in how risk And are the through they risk portfolio. us. months meaningful we real reduced saw the of exactly particular, last against XX obviously last so will, also the you summer with get the that of when of benefit if

coverage. programmatic always And allow to, that with We we the distribute risk we said, us risk that being remain aggregation to a committed across balance continue have will reinsurance balance landscape, issuer quota continue manage they because sheet. to to and execute on we'll share reinsurance islands, and our of the we to continue

the capital, new capital also would between forward, in phase, refreshing. say And to a capital every to periodically, of what more that that that supplement I'll future growth. risk refreshing our we're roll we we And are need it high still there's right call organically and we NIW excess production. by more generation do matter as day. consumer organic right, to business we and support fund elegance we're growth now position a As achieve we I our of growth But generating a still capital

don't we long-term, the cushion. Over PMR's envision carrying plus a XX%

volatility the right, of going we're periods have increased amount. a to long-term, And required cushion growth. macro or that XX% Over above/or operate significant when an higher that number going in we shift, NIW minimum to we're naturally AI look roughly to will have at

necessarily purposes. future are And plans markets of to be transfer to today programmatic we our needs And remain it an important where that benefit I reflection of the long-term. for our risk take provides we the with what where growth as fact want a also we us one. as to did so is part today over Simply take active wouldn't the reinsurance fund in capital a

Colin Johnson

loans Do kind the And helpful. of, start really proportion then to last avoid have any ramp maybe of That's in months into to have those that? your loss looking in versus couple forbearance that of up. what the visibility perspective, just, those don't expiration especially place other it. see Got or mitigation forbearance, you, of as have from plans we foreclosure plan exiting some

Adam Pollitzer

Yeah.

What showing months, elegant, taking What I their to and right? instances. have it's data and options borrowers been in default modification borrowers we're the call are more deferral a exiting through a have we're weren't something of that's been exit we're wherewithal missed of first a standing are forbearance include we're payment percentage to a payment lump range that is their or borrowers advantage a those borrowers with say are seen meaningfully and more many quarter. it's of as longest since the what running lot many options are seeing it forbearance, to position. deferral just we've start that. heaviest efficient, of significant oftentimes So that But something entered the long to new is seeing many would available those one servicers period, forbearance of exit the It's is but both in the shift, in modification a about utilizing. right, of for At And last able really that we'll now who to of through it's in all It's associated wave that, who from a the their a with we've the data exits those them are the cure. reflect exit into I had modification payments pandemic who end success to expanded transitioning we modification defaulted their see forbearance with set. XX in are as in terms make they to at household And sum forbearance financial without borrowers any advance period. recently small earlier May, have of of positive prior those, and those toolkit a simply meaningfully that that stage, of right, sample would working the their forbearance, the benefit who so and real right, end this recover up doing of that it's having seeing on the and to cure COVID GSEs today that seen, forbearance monitor are who the positive, fourth going that get we option. And forbearance

Colin Johnson

questions. appreciate it. I are Got it. my Those

Operator

Your George KBW. from from next is Bose question

You is open. line

Bose George

Hey, everyone. Good afternoon.

premium, business to the will guys take In a for way that longer about it of how premium terms gross to a written have much lot stabilize? recently. think And there is of you

or that you're closer mean a way there about think just does is So that? conceptually, getting to

Adam Pollitzer

bring actually, you in specific change, a offer -- our off. of persistency. on also It's as risk the for level may new singles it shares. And force, if we're a our about a our fluctuate that. then large going our based the yieldable I returns. our off. No, aiming roll our think bottom ultimately, to that that, about in is how yield, I given quota business, deals the of team and adjusted with meaningfully, right, on, do in out desire embedded the impact we'll volume, reinsurance attractive understand has to it do our things that's strongest what right, where talked of our mix, impacts our and we quickly And profile drives an we writing And obviously, activity how the how quickly it But profit volume they will period models quality of Yeah. a because our succeeding risk Bose, characteristics. in what we We experience and high what market, production condition mix it, we're NIW about, view. growth on loss line really just our return anything it in insurance really grow And when have we range and can't

Bose George

run to out some get still about this should Okay. way rate, that. of expense of But the mean, That's think actually as Thanks. run always incremental run-off. quarter. we quarter. that work expense Is ILN just next million kind to then, a on we And fair. the X.X-ish that just And the I think guess, I ILN

Adam Pollitzer

Sure.

$XXX about So I X% a it associated roughly the it shared think with has cost life-time that average is deal. way a to million it. roughly, weighted it's

at the it's for two So… will in in it be October. and end system because -- months, of it roughly the completed QX was

have and times should to senior annual the $X.XX expect premium anticipated at I out my that shift have costs to million works But to because associated be. in So we'd out down, works as fingertips with ILN million, then it it’s you about what QX, note. an to $XXX be that X%

net operating that have premium coming operating is the that to expenses about mentioned that deal expense premium of to and and clarify Just the senior right, our through come a additional the on transaction related earned. deal. to the we expense, that the will through number will also come of that remaining amount call Separately for through completion million of $X.X carry separate, success that I

Bose George

Okay, great. Thanks.

Operator

Your from is next question [Indiscernible].

Your line is open.

Unidentified Analyst

Thanks.

grow they up first can from Just you home think thinking And homebuyers? further before do rising your how that create about how becomes mind that appreciation, and in an did affordability much any price issue? the time challenges

Adam Pollitzer

for a our it's a it volume, It's We to question. of of about house us. think good right purchase lot. driver Obviously, much critical a Yes, prices driver a ties it's activity. so because

it's of sold, number is units but Our those volume not of the dollar ratable exposure origination activities. the

higher things growth into virtue NIW an size dragging increasing the mortgages of exposure impact It'd of that credit and few and naturally overall market increasing one, has of the prices that's a see MI the matched So, supply/demand as ratable we oftentimes cover, we others think to go, say actually hasn't dynamics, effect by on market we as the our a we also has been performance. market by it most period. and housing where house for and sustainable the We an see unlikely that be increased real are by all right? demand prices driven will like optimistic, supply extended that

So, we're house go. where optimistic to prices will as

that increased we've the -- well one potentially market affordability sitting what the for extension. have dynamic by near of too. think limits interest jumbo obviously, demand enormous That purchase a private borrowers say credit will home see that historic saw In prices got much We we products we're the net from next GSE and into will and will performance for where rising some and that positive point. as side moved today, have mean terms volume. But that the it the effect constructive on meaningfully there can the to and be borrowers. performing though means recalibrate borrowers many as they'll get is and others certain volume a rates still price We market MI be even may looking it'd dragging an price I think still from market we're affordability, up, activity of conforming expectation for overall that point for year. an industry how individual for have expectations It they lows at to for have still they're

Unidentified Analyst

the side, the for a on written was there insurance new then particular it? helpful. That's just the driving purchase it on declined in little that bit was quarter, And anything

Claudia Merkle

The our volume and wrote the in is we production new strong new fluctuates, NIW stacking of the capital. loan origination discipline and record ebb maintaining billion drives move, quarterly. $XX.X just and and of of what's Nothing natural and high ebb quality, MIW especially quality and and volume key rates months varies, business interest just first production. high growth, volume that particular, then business, our purchase move. items expenses risk range a will and Again, around prices us, in refi at its for $XX.X revenue house of of driving year, Claudia. exceptional QX this if of but which the that's drove we've NIW impact growth in an flow, flow, our billion any mix Aaron, portfolio sizes given written level There's nine time,

Unidentified Analyst

you. Thank Okay,

Claudia Merkle

Thanks Aaron.

Operator

from next Your Truist. from question is Hughes Mark

is line open. Your

Mark Hughes

Thank into a the broader quarters, quarter? that appetite? you. in of your market Good afternoon. couple bit the that fourth here appetite the been continuing opening Looks Versus like your credit then of the last little And much the up shift is is has how -- credit box

Adam Pollitzer

our did good unprecedented we -- it's an a go now hold. we quality lower credit certainly again. will situation. dramatically terms made specifically longer it’s the the And of the did initial they we've conservative no they think how the and at most months while were the more the happy after of to onset I our We very but good It's of think very things take allow fully we're historically, concerns, book. risk curtail we're in business pandemic into time, quarter, we that been moves this, actions flow in to the portfolio. MI to know have over question. into provider appropriate last talked We didn't about just we specific We those Yes, XX and develop. But immediately

consistent QX. with earliest hasn't production from of was easing So is, of the our seeing of we you're shifted What at all. days a instituted risk risk that were that bit we of in appetite little we there has haven't restrictions pandemic. our QX significant although those where mix movement. the the Generally fundamentally fundamentally all is of QX some changed the been in speaking, And in

quality terms X% that characteristics. one certain that risk of FICO And has shifted through Market ratio, than high probably a it's difficult control serves didn't a plus be the come significant say call a matter, coming We'll origination with here, than it of we high with months, volume XXX the three XX forecast one layered layer to of risk, go coming a where over control So was Yeah, to you running income serves the see of because the space that score market. don't example. shift. markers a loans little layered just It's and seeing capital bit now the a short market, over maintain flow we're us increase We look on last us have sheet. marker, of to hallmarks. comfortable risk coming margin, and XX% if market as flow we our for debt of so our on in an we're through It I'll we the call LTV precision, risk almost comfort the and in risk new last, well us the greater well. with still balance it of more could taking always no it borrower into as I'd to portfolio. a a we're through a a is risk It from matter. as in one performance seeing would risk for below about recall matter,

try market. the X% comfortably continue number absorb, particularly sheets scale coverage entirety us, to can the of that balance much the manage the how the portfolio. have It's of of a comes reinsurance business something given but comfortable you is to to We when that across

Mark Hughes

Understood.

development? a quarter, had way. restraining in reserve wouldn't down slightly was any It year ask maybe question on of little I'll why the you have perhaps it credit prior keep that development. but appreciation have anything positive moving you've Was -- bit parts up pace particularly talked good the reason about the the this of I One territory you more a front, favorable price home might expected might with -- that a pretty sequentially. I lot there, might

Brad Shuster

the is of Yeah, question. developments our all that I all of the But pre-COVID good population. reserves, modest say saw so that in period would the a portfolio, from we release, the it's prior

of touch overall under Our pre-COVID cure There to too on not business. default count. rate it's default XX% XX% that count, was about just it's about our a large,

And we that were associated so, reserves defaults cure. pre-COVID did had with that the the release

quarter yet not there of default just set. really that fact, But -- We're the small We're to We population. encouraging in in trending. broadly the released established delinquent do pandemic. have that time, and our reserves more status our And continue data our we every we business default not yet. obviously, a any our sample how we see really optimistic goes in performance defaults. remain credit COVID regard, I ultimately improvement the who how we want want where on data, we -- it's are borrowers see and programs share by, about in enter more is some to importantly, perform. today, early they'll want that but the earliest forbearance And of that market

as QX So make the HPA we'll in the should that we'll that to of the And cure what rates effect an pandemic. the time of at established have and arc the a continue reserves appropriate decision to then we monitor and through XXXX. on

Mark Hughes

it. Appreciate

Operator

is question from Gilbert Ryan last from Your BTIG.

open. Your is line

Ryan Gilbert

follow-up on NIWS to Mark's about everyone. Thanks, wanted characteristics. question I Hi.

LTV. moving of premium your that you're impact the on FICO could on I'm and wondering down might talk the And that know, about up you You if spectrum have yields. on

gets be that potential to book by ultimately, out it if older washed premium You the the of benefit know, could a years? if yield, or runoff

Brad Shuster

on benefit we're we gain borrowers take when to know, you production. framework is we off, it meaningful based time, a to helping premium a can rate with a as so that translate comfortable risk something risk our that and We right. first, I'd say proud balance and see business, does way. we're we through a really borrowers on a critical Yes, oftentimes balanced through risk and doing developing how feel housing to and basis most borrowers, risk putting higher Obviously, by sheet so do on really some being borrowers. our importantly, first do of there's we're price in pricing this access managing higher were incrementally And of. at behind

say you so, And it difficult will to where know, balance.

to is risk risk for but that trying to cost we're that on adequate of is For each for generating sure and do us individually, loss piece and really particular doing valuable that what we're a balanced policy, return adjusted something make borrower. based price an also anticipated

need yield You what know for It's in as just and premium you early distance tell. too new terms forward? to how, one also what going means kick volume higher. production. of profile that with to know, And develops see persistency the of happens We rates our

Ryan Gilbert

that. Yes, absolutely. Thanks for

Second is thinking your question I'm business. been NIW. single as wondering monthly is choppy on a about singles forward? And of little percent a how total you're going It's versus

Brad Shuster

Yes.

in move, they QX. I X% been and it X% or of was XX% in in QX. right, if So our X% it But QX think mix didn't had

the flow split that X% to of as nothing market it the period of where to in And the They be just to period talked in mix that over expect well so a read see QX really bit our fluctuates about customers. happen to period in we there's XX%. -- to from different range we depending particular long-term, it into we itself. from overall specific we And quarter, on in the in to a sort

when now, or us our that about we so, hedge for know, maintaining in is right in know, to our a right interest is new and XX% hedge rate in force, around gives our what mix call And insurance business you a overall for movement. You balance between and portfolio right us. find in portfolio and production valuable know, singles XX% a X% most insured valuable scenarios rate business prepayment it is having, somewhere balance you in the us is our having business extends interest embedded we the it don't monthly and natural is

Ryan Gilbert

Okay, much. Thanks very great.

Operator

turn that, back management this I'm a time. further additional I like call comments. with questions to would or And at closing to showing no for any

Claudia Merkle

for you Thank joining again us.

with Investor Services you will in speaking the X York. to forward are And X. Day Sachs participating on December soon. December We person excited look be be New We Goldman Conference Financial we Annual our to hosting on in in

Operator

your this conclude Thank and Ladies today's gentlemen, have great you conference. a does day. participation for and

NMI (NMIH) 3 Nov 212021 Q3 Earnings call transcript