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NMI Holdings (NMIH) Q3 Earnings Top, Revenues Lag Estimates

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NMI Holdings Inc. (NMIH - Free Report) reported third-quarter 2021 operating net income per share of 71 cents, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 51.1% year over year.

The quarterly results reflected growth in the insured portfolio and continued strength in credit performance.

NMI Holdings Inc Price, Consensus and EPS Surprise

Operational Update

NMI Holdings recorded total operating revenues of $124 million, which increased 14.8% year over year on higher net premiums earned (up 15%) and net investment income (up 17.9%). Revenues however missed the Zacks Consensus Estimate by 2.4%.

Primary insurance-in-force increased 37% to $143.6 billion.

New insurance written was $18.1 billion, down 2.2% year over year.

Annual persistency was 58.1%, down from 60% in the year-ago quarter.

Underwriting and operating expenses totaled $34.7 million, up 2% year over year. Insurance claims and claim expenses were $3.2 million, down 79.6%.

The loss ratio was 2.8, which improved 3050 basis points year over year. The expense ratio of 30.5 improved 390 basis points year over year while the combined ratio of 33.3 improved 1690 basis points year over year.

Financial Update

Book value per share, a measure of net worth, grew 15% year over year to $17.69 as of Sep 30, 2021.

NMI Holdings had $97.3 million in cash and cash equivalents, down 23.4% from 2020 end. The debt balance of $394.3 million increased 0.2% from 2020 end.

Annualized adjusted return on equity was 16.6%, up 400 basis points.

Total PMIERs available assets were $2 billion and net risk-based required assets totaled $1.4 billion at third-quarter 2021 end.

Zacks Rank

NMI Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Property & Casualty Insurers

Of the insurance industry players that have reported third-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation’s (RLI - Free Report) earnings beat the Zacks Consensus Estimate while that of The Progressive Corporation (PGR - Free Report) missed the same.