NMI Holdings, Inc. Reports Record Fourth Quarter and Full Year 2015 Financial Results

EMERYVILLE, Calif., Feb. 18, 2016

The company reported a net loss for the fourth quarter of $4.8 million, or $0.08 per share, which includes interest expense of $2.1 million related to the company's term loan, which was entered into in the fourth quarter of 2015.  This compares with a net loss of $4.8 million, or $0.08 per share, in the prior quarter, and a net loss of $10.0 million, or $0.17 per share, in the fourth quarter of 2014.  Total net loss for the year ended Dec. 31, 2015 was $27.8 million, or $0.47 per share, which compares with $48.9 million, or $0.84 per share, for the year ended Dec. 31, 2014.  In the fourth quarter, total revenue was $18.9 million, which compares with $14.7 million in the prior quarter.  For the year, total revenue was $53.6 million, compared with $19.2 million in 2014.

Bradley Shuster, chairman and CEO of National MI, said, "In the fourth quarter we continued our strong growth trajectory, driven by our monthly premium product, which was up 28% over the prior quarter.  We also achieved full compliance with the PMIERs requirements as of year-end.  For 2016, we are focused on continuing to grow high-quality insurance-in-force, particularly monthly premium product, deploying our capital at attractive mid-teens returns.  We expect to achieve GAAP profitability during the second half of 2016 and thereafter to demonstrate growing earnings leverage as we scale into our largely fixed expense base.  With our continuing growth, we are evaluating capital alternatives, which include potential reinsurance relationships to help us continue to efficiently manage capital and risk in 2016 and beyond."

• Premiums earned for the quarter were $16.9 million, up from $12.8 million in the prior quarter. For the year, premiums earned were $45.5 million, up from $13.4 million in the prior year.
• Investment income in the fourth quarter was $2.1 million, up from $1.9 million in the prior quarter. Investment income for the year was $7.2 million, up from $5.6 million in 2014.
• Total underwriting and operating expenses in the fourth quarter were $21.7 million, including share-based compensation expense of $2.3 million. This compares with total underwriting and operating expenses of $19.7 million, including $1.8 million of share-based compensation, in the prior quarter. For the year, total underwriting and operating expenses were $80.6 million, including share-based compensation expense of $8.2 million. This compares with operating expenses of $73.4 million, including share-based compensation expense of $9.2 million, in 2014.
• As of the end of the fourth quarter, the company had approved master policies in place with 964 customers, up from 906 as of the end of the prior quarter, and up from 735 as of the end of the fourth quarter of 2014. Customers delivering NIW in the quarter grew to a new high of 427, which compares with 391 in the prior quarter and 277 in the same quarter a year ago.
• As of Dec. 31, 2015, the company had primary insurance-in-force of $14.8 billion, which compares with $10.6 billion at the prior quarter end and $3.4 billion as of Dec. 31, 2014. Pool insurance-in-force as of the end of the fourth quarter was $4.2 billion, which compares with $4.3 billion at the prior quarter-end and $4.7 billion as of Dec. 31, 2014.
• As of Dec. 31, 2015, cash and investments were $616.6 million, including $100.2 million at the holding company, and book equity was $402.7 million, equal to $6.85 per share. This book value excludes any benefit attributable to the company's deferred tax asset of approximately $66 million as of Dec. 31, 2015.
• As of Dec. 31, 2015, the company's risk-to-available assets ratio in its primary insurance company was 8.5:1 and it was compliant with the Private Mortgage Insurers Eligibility Requirements (PMIERs), including the minimum available asset requirement of $400 million.

Conference Call and Webcast Details
NMI Holdings, Inc. will hold a conference call today, February 18, 2016, at 1:30 p.m. Pacific / 4:30 p.m. Eastern to discuss results for the quarter.  The conference call will be broadcast live on the company's website, on the "Events and Presentations" page of the "Investors" section at http://ir.nationalmi.com.  The call may also be accessed by dialing (888) 734-0328 inside the U.S., or (914) 495-8578 for international callers using Conference ID: 26684423, or by referencing NMI Holdings, Inc.  Investors and analysts are asked to dial-in ten minutes before the conference call begins.

About National MI
National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. (NASDAQ: NMIH), is a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com.

Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA).  The PSLRA provides a "safe harbor" for any forward-looking statements.  All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance.  These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "plan," "project," "continuing," "ongoing," "expect," "intend" and similar words or phrases.  All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them.  Many risks and uncertainties are inherent in our industry and markets.  Others are more specific to our business and operations.  Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: our ability to implement our business strategy, including our ability to attract and retain a diverse customer base and to achieve a diversified mix of business across the spectrum of our product offerings; changes in the business practices of the GSEs that may impact the use of private mortgage insurance; our ongoing ability to comply with the financial requirements of the PMIERs; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current inquiries; and general economic downturns and volatility.  These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2014, as updated in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended June 30, 2015.  All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.  We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

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