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NMI Holdings (NMIH) Q1 Earnings Beat, Revenues Rise Y/Y

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NMI Holdings (NMIH - Free Report) reported first-quarter 2022 operating net income per share of 77 cents, which beat the Zacks Consensus Estimate by 2.7%. The bottom line increased 24.2% year over year.

The quarterly results reflected new business production and improving persistency, which drove growth in the high-quality insured portfolio, and favorable credit performance that led to significant profitability and strong mid-teen returns.

NMI Holdings Inc Price, Consensus and EPS Surprise


Operational Update

NMI Holdings’ total operating revenues of $127.4 million increased 10.6% year over year on higher net premiums earned (up 10%) and net investment income (up 15.7%). Revenues beat the Zacks Consensus Estimate by 0.9%.

Primary insurance-in-force increased 28% to $158.9 billion.

New insurance written was $14.2 billion, down 46% year over year, reflecting a decline in refinancing origination volume year on year.

Underwriting and operating expenses totaled $32.9 million, down 3% year over year. Insurance claims were a benefit of $0.6 million against an expense of $5 million.

The loss ratio was (0.5) against 4.7 in the year-ago quarter.

The adjusted expense ratio of 30.5 improved 28 basis points year over year while the adjusted combined ratio of 27.5 improved 900 basis points year over year.

Financial Update

Book value per share, a measure of net worth, was down 2.2% year over year to $17.84 as of Mar 31, 2022.

NMI Holdings had $130.9 million in cash and cash equivalents, up 70.8% from 2021 end. The debt balance of $394.6 million increased 0.1% from 2021 end.

Annualized adjusted return on equity was 17.4%, up 190 basis points.

Total PMIERs available assets were $2.1 billion and net risk-based required assets totaled $1.3 billion at first-quarter 2022 end.

Reinsurance Agreement Inked

NMIH entered into a $290 million excess of loss reinsurance agreement with a high-quality panel of third-party reinsurers, covering an existing portfolio of mortgage insurance policies written primarily from Oct 1, 2021 through Mar 31, 2022.

Zacks Rank

NMI Holdings currently carries a Zacks Rank #3 (Hold). 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 first-quarter results so far, The Travelers Companies (TRV - Free Report) and RLI Corporation (RLI - Free Report) beat the respective Zacks Consensus Estimate for earnings, while The Progressive Corporation (PGR - Free Report) missed the mark.

Travelers reported first-quarter 2022 core income of $4.22 per share, which beat the Zacks Consensus Estimate by 14% and increased 54.6% year over year. Total revenues increased 6.8% from the year-ago quarter to $8.8 billion, primarily due to higher premiums and fee income but missed the consensus estimate. Travelers’ combined ratio deteriorated 530 bps year over year to 91.3.

RLI’s first-quarter 2022 operating earnings of $1.43 per share beat the Zacks Consensus Estimate by 40.2% and improved 64.4% from the prior-year quarter. Operating revenues were $287 million, up 17.1% year over year and beat the Zacks Consensus Estimate by 0.8%. RLI’s gross premiums written increased 22% year over year to $359.2 million. The combined ratio improved 900 bps year over year to 77.9.

Progressive’s first-quarter 2022 earnings per share of $1.12 missed the Zacks Consensus Estimate of $1.24 and declined 34.9% from the year-ago quarter. Net premiums written were $13.2 billion in the quarter, up 12% from $11.7 billion a year ago. Progressive’s combined ratio deteriorated 520 bps from the prior-year quarter to 94.7.