Back to top

Image: Bigstock

NMI Holdings (NMIH) Q4 Earnings Top, Revenues Miss Estimates

Read MoreHide Full Article

NMI Holdings (NMIH - Free Report) reported fourth-quarter 2021 operating net income per share of 73 cents, which beat the Zacks Consensus Estimate by 1.4%. The bottom line increased 23.7% year over year.

The quarterly results reflected solid new insurance written volume and an expanded insured portfolio, which aided the insurer in achieving record profitability and delivering solid mid-teen returns.

NMI Holdings Inc Price, Consensus and EPS Surprise

Operational Update

NMI Holdings’ total operating revenues of $125 million increased 13.6% year over year on higher net premiums earned (up 13%) and net investment income (up 19.8%). Revenues however missed the Zacks Consensus Estimate by 1.5%.

Primary insurance-in-force increased 37% to $152.3 billion.

New insurance written was $18.3 billion, down 7.6% year over year, reflecting a decline in refinancing origination volume year on year.

Underwriting and operating expenses totaled $38.8 million, up 11% year over year. Insurance claims and claim expenses were ($0.5) million against $3.5 million.

The loss ratio was (0.4) against 3.5 in the year-ago quarter.

The adjusted expense ratio of 30.5 improved about 300 basis points year over year while the adjusted combined ratio of 30.1 improved about 700 basis points year over year.

Full-Year Update

Operating net income per share of $2.73 beat the Zacks Consensus Estimate of $2.72. The bottom line increased 24.7% year over year.

Operating revenues of $484 million increased 12% year over year but missed the consensus estimate of $487 million.

The adjusted expense ratio of 30.3 improved 170 basis points.

Financial Update

Book value per share, a measure of net worth, grew 13% year over year to $18.25 as of Dec 31, 2021.

NMI Holdings had $76.6 million in cash and cash equivalents, down 36.6% from 2020 end. The debt balance of $394.6 million increased 0.3% from 2020 end.

Annualized adjusted return on equity was 16.1%, up 100 basis points.

Total PMIERs available assets were $2 billion and net risk-based required assets totaled $1.2 billion at 2021 end.

Share Repurchase Update

The board of directors approved a $125 million worth share buyback program through Dec 31, 2023.

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 fourth-quarter results so far, The Travelers Companies (TRV - Free Report) , RenaissanceRe Holdings Ltd. (RNR - Free Report) and The Progressive Corporation (PGR - Free Report) beat the Zacks Consensus Estimate for earnings.

Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year. Total revenues rose 7% to about $9 billion and beat the Zacks Consensus Estimate of $8.7 billion.

Travelers’ net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.

RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share. Total revenues of $1.39 billion dipped 0.1% year over year.

RenaissanceRe’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.

Progressive’s earnings per share of $1.05 beat the Zacks Consensus Estimate of 99 cents but declined 43.2% from the year-ago quarter.

Progressive’s net premiums written were $10.7 billion in the quarter, up 13% from $9.5 billion a year ago. The combined ratio deteriorated 630 bps from the prior-year quarter to 94.7.