Nmi Holdings Inc · NASDAQ:NMIH
Nmi — Investor Presentation (March 2016)
14 slides from Nmi's investor presentation, Mar 9, 2016
Slide 1: Introduction to National MI
© 2014 Copyright. National MI Introduction to National MI EXHIBIT 99.1
Slide 2: Cautionary Note Regarding Forward-Looking Statements
1 EXHIBIT 99.1 Cautionary Note Regarding Forward–Looking Statements This presentation contains forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Slide 3: Investment Highlights
2 EXHIBIT 99.1 De novo mortgage insurance company founded in 2012 Differentiated value proposition In 2015, grew new insurance written (NIW) by 260% to $12.4 billion 6% market share and growing in ~$215 billion market Expect GAAP profitability in 2H2016 Opportunity to sustain and grow pr
Slide 4: Pricing Strategy and Environment
3 EXHIBIT 99.1 GSEs issued Private Mortgage Insurer Eligibility Requirements (PMIERs) that became effective January 1, 2016 PMIERs establishes risk-based capital requirements for all insured loans To protect mid-teens returns on required assets, National MI introduced new risk-based premium ra
Slide 5: Illustration: Earnings Power of Fast-Growing Mortgage Insurer
4 EXHIBIT 99.1 Illustration: Earnings Power of Fast-Growing Mortgage Insurer Interest Income Premium Earned Expenses & Claims Development Stage Losses Profit Opportunity First 3 Years Next 5 Years Not a forecast. For illustrative purposes only.
Slide 6: Customer-Centric Approach
5 EXHIBIT 99.1 Customer-Centric Approach Founding vision: National MI will honor obligations to policy holders Offer rescission relief and certainty of coverage after 12 months of timely borrower payments 12-month rescission relief reduces repurchase risk Solid balance sheet with no legacy l
Slide 7: Mortgage Insurance Premium Illustration
6 EXHIBIT 99.1 Mortgage Insurance Premium Illustration Mortgage insurance is a highly “sticky” product with an average life of five years and a persistency rate of ~80% As new insurance written layers onto prior vintages, it creates a positive “stacking” effect, whereby MI policies deliver predi
Slide 8: Historically Profitable Industry
7 EXHIBIT 99.1 2.35x 2.21x 2.14x 2.40x 2.79x 4.23x 2.20x 2.85x 2.52x 1.94x 1.26x 1.43x 1.46x 1.30x 1.16x 0.53x 0.16x 0.42x 1.24x 0.52x 1.75x 2.15x 2.45x 1.92x 16% 18% 18% 18% 18% 18% 19% 19% 20% 19% 17% 13% 14% 14% 13% (30%) (34%) (64%) (3%) (35%) 13% 16% -31% -20% -10% 0% 10% 20% 0.0x 1.0x 2.0x 3.0
Slide 9: Sizing the MI Market
8 EXHIBIT 99.1 Mortgage insurance protects lenders against losses that result from defaults on home mortgages Freddie Mac's and Fannie Mae's federal charters prohibit the GSEs from purchasing a low down payment loan, unless the loan is credit enhanced MI provides the credit enhancement needed
Slide 10: Positive Market Trends
9 EXHIBIT 99.1 Positive Market Trends Source: Mortgage Bankers Association Mortgage insurance penetration of purchase is 4x that of refinancing Est 3 8 9 3 8 5 4 7 2 4 8 6 5 5 7 4 9 4 5 5 9 5 9 0 7 9 5 8 7 8 9 0 5 9 6 0 1,097 1,280 1,309 1,512 1,399 1,140 7 3 1 6 6 4 5 3 0 5 0 5 5 8 8 7 3 4 7 5 9
Slide 11: Growing Customer Base
10 EXHIBIT 99.1 Growing Customer Base Customers with Approved Master Policies and Those Generating Applications/NIW During the Period Strong pace of customer development (convert new master policies to NIW) Comparison 4Q15 vs. 4Q14: • Approved master policies up 31% to 964 • Active customers gen
Slide 12: 2015 Financial Highlights
11 EXHIBIT 99.1 2015 Financial Highlights 4.8 7.2 10.6 14.8 5.7 7.6 11.6 15.7 0 2 4 6 8 10 12 14 0 2 4 6 8 10 12 14 16 1Q15 2Q15 3Q15 4Q15 In suran ce in F o rc e $B ill io n s P re m iu m Ea rn e d $ M ill io n s Insurance-in-Force & Premiums Earned Primary Insurance in Force Premium Earned - Prima
Slide 13: National MI Book Now Versus Legacy Book
12 EXHIBIT 99.1 We have none of the most volatile layered risk loans in our portfolio: • Stated Income and No doc • Subprime (< 620 FICO) • Interest only • 100% LTV The FICO distribution is significantly better today than it was during the 2004-2008 timeframe National MI 10/31/2015 0.0% 0.0% 0.0
Slide 14: Expected Losses
13 EXHIBIT 99.1 Expected (non-stress) losses are lower than historical norms due to differences in loan quality Expected Losses Source: Milliman, Inc – Analysis Of Deep Coverage Mortgage Insurance, October 15, 2015 http://www.usmi.org/wp-content/uploads/2015/10/Milliman-Report-Analysis-of-Deep-Cov