Delaware | 001-36174 | 45-4914248 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
2100 Powell Street, 12th Floor, Emeryville, CA. |
(Address of Principal Executive Offices) |
94608 |
(Zip Code) |
By: | /s/ Nicole C. Sanchez |
Nicole C. Sanchez | |
VP, Assistant General Counsel |
• | For the fourth quarter, primary new insurance written (NIW) was $1.7 billion, compared with $975 million in the prior quarter and $158 million in the same quarter a year ago. |
• | Excluding aggregated single, the company’s "flow" NIW for the fourth quarter was $936 million, up 68% from $557 million in the prior quarter. Aggregated single for the fourth quarter was $757 million, compared with $418 million in the prior quarter. |
• | As of the end of the quarter, the company had approved master policies in place with 735 customers, up from 664 as of the prior quarter end, and up from 305 as of the end of 2013. |
• | As of December 31, 2014, the company had primary risk-in-force of $802 million, which compares with $436 million as of September 30, 2014. Pool risk-in-force was unchanged as of December 31, 2014, remaining at $93 million. |
• | As of December 31, 2014, cash and investments were $440 million, and book equity was $427 million, equal to $7.31 per share. This book value excludes any benefit attributable to the company’s deferred tax asset. |
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||||||||||
For the Three Months Ended December 31, | For the Year Ended December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | (In Thousands, except for share data) | ||||||||||||||
Premiums written | |||||||||||||||
Direct | $ | 14,139 | $ | 3,058 | $ | 34,029 | $ | 3,541 | |||||||
Net premiums written | 14,139 | 3,058 | 34,029 | 3,541 | |||||||||||
Increase in unearned premiums | (8,629 | ) | (1,446 | ) | (20,622 | ) | (1,446 | ) | |||||||
Net premiums earned | 5,510 | 1,612 | 13,407 | 2,095 | |||||||||||
Net investment income | 1,319 | 1,472 | 5,618 | 4,808 | |||||||||||
Net realized investment gains | 63 | 14 | 197 | 186 | |||||||||||
Gain (loss) from change in fair value of warrant liability | (60 | ) | (918 | ) | 2,949 | (1,529 | ) | ||||||||
Gain from settlement of warrants | — | — | 37 | — | |||||||||||
Total revenues | 6,832 | 2,180 | 22,208 | 5,560 | |||||||||||
Expenses | |||||||||||||||
Insurance claims and claims expenses | 81 | — | 83 | — | |||||||||||
Amortization of deferred policy acquisition costs | 265 | 1 | 373 | 1 | |||||||||||
Underwriting and operating expenses | 17,318 | 15,263 | 73,044 | 60,743 | |||||||||||
Total expenses | 17,664 | 15,264 | 73,500 | 60,744 | |||||||||||
Loss before income taxes | (10,832 | ) | (13,084 | ) | (51,292 | ) | (55,184 | ) | |||||||
Income tax benefit | (812 | ) | — | (2,386 | ) | — | |||||||||
Net loss | $ | (10,020 | ) | $ | (13,084 | ) | $ | (48,906 | ) | $ | (55,184 | ) | |||
Loss per share | |||||||||||||||
Basic and diluted loss per share | $ | (0.17 | ) | $ | (0.23 | ) | $ | (0.84 | ) | $ | (0.99 | ) | |||
Weighted average common shares outstanding | 58,406,574 | 57,238,730 | 58,281,425 | 56,005,326 |
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||||||
December 31, 2014 | December 31, 2013 | ||||||
(In Thousands) | |||||||
Total investment portfolio | $ | 336,501 | $ | 409,088 | |||
Cash and cash equivalents | 103,021 | 55,929 | |||||
Deferred policy acquisition costs, net | 2,985 | 90 | |||||
Software and equipment, net | 11,806 | 8,876 | |||||
Other assets | 8,952 | 7,236 | |||||
Total assets | $ | 463,265 | $ | 481,219 | |||
Reserve for insurance claims and claims expenses | $ | 83 | $ | — | |||
Accounts payable and accrued expenses | 10,646 | 10,052 | |||||
Unearned premiums | 22,069 | 1,446 | |||||
Warrant liability | 3,372 | 6,371 | |||||
Deferred tax liability | 137 | 133 | |||||
Total liabilities | 36,307 | 18,002 | |||||
Total shareholders' equity | 426,958 | 463,217 | |||||
Total liabilities and shareholders' equity | $ | 463,265 | $ | 481,219 |
Primary | Three Months Ended | ||||||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | |||||||||||||||
(Dollars in Thousands) | |||||||||||||||||||
New insurance written | $ | 1,692,187 | $ | 974,910 | $ | 429,944 | $ | 354,313 | $ | 157,568 | |||||||||
Insurance in force (1) | $ | 3,369,664 | $ | 1,812,956 | $ | 939,753 | $ | 514,796 | $ | 161,731 | |||||||||
Risk in force (1) | $ | 801,561 | $ | 435,722 | $ | 220,949 | $ | 115,467 | $ | 36,516 | |||||||||
Policies in force (1) | 14,603 | 7,628 | 3,865 | 2,072 | 653 | ||||||||||||||
Weighted-average coverage (2) | 23.8 | % | 24.0 | % | 23.5 | % | 22.4 | % | 22.6 | % | |||||||||
Loans in default (count) | 4 | — | 1 | — | — | ||||||||||||||
Risk in force on defaulted loans | $ | 208 | $ | — | $ | 100 | $ | — | $ | — |
(1) | Reported as of the end of the period. |
(2) | End of period RIF divided by IIF. |
Primary and Pool | |||||||||||||||||||||||||
As of and for the Year Ended December 31, 2014 | As of and for the Year Ended December 31, 2013 | ||||||||||||||||||||||||
IIF | NIW | Premiums Written | Premiums Earned | IIF | NIW | Premiums Written | Premiums Earned | ||||||||||||||||||
(In Thousands) | |||||||||||||||||||||||||
Primary | $ | 3,369,664 | $ | 3,451,354 | $ | 28,611 | $ | 7,989 | $ | 161,731 | $ | 162,172 | $ | 1,651 | $ | 205 | |||||||||
Pool | 4,721,674 | — | 5,418 | 5,418 | 5,089,517 | 5,171,664 | 1,890 | 1,890 | |||||||||||||||||
Total | $ | 8,091,338 | $ | 3,451,354 | $ | 34,029 | $ | 13,407 | $ | 5,251,248 | $ | 5,333,836 | $ | 3,541 | $ | 2,095 |
Weighted Average FICO | ||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | ||||||||||
Monthly | 740 | 746 | 747 | 749 | 747 | |||||||||
Single | 753 | 756 | 754 | 759 | 757 | |||||||||
Annual | 725 | — | — | — | — |
Weighted Average LTV | ||||||||||||||
December 31, 2014 | September 30, 2014 | June 30, 2014 | March 31, 2014 | December 31, 2013 | ||||||||||
Monthly | 91 | % | 92 | % | 93 | % | 92 | % | 93 | % | ||||
Single | 90 | 90 | 90 | 89 | 89 | |||||||||
Annual | 90 | — | — | — | — |
Total Portfolio | IIF | RIF | |||||||||
(Dollars in Thousands) | |||||||||||
As of December 31, 2014 | |||||||||||
>= 740 | $ | 5,947,805 | 73.5 | % | $ | 571,549 | 63.9 | % | |||
680 - 739 | 1,892,596 | 23.4 | 292,048 | 32.6 | |||||||
620 - 679 | 250,937 | 3.1 | 31,054 | 3.5 | |||||||
<= 619 | — | — | — | — | |||||||
Total | $ | 8,091,338 | 100.0 | % | $ | 894,651 | 100.0 | % |
Primary - 2014 Book | NIW | IIF | RIF | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
>= 740 | $ | 2,178,995 | 63.1 | % | $ | 2,040,422 | 62.7 | % | $ | 479,076 | 61.8 | % | |||||
680 - 739 | 1,156,785 | 33.6 | 1,102,579 | 33.8 | 268,429 | 34.6 | |||||||||||
620 - 679 | 115,574 | 3.3 | 113,752 | 3.5 | 28,070 | 3.6 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 3,451,354 | 100.0 | % | $ | 3,256,753 | 100.0 | % | $ | 775,575 | 100.0 | % |
Primary - 2013 Book | NIW * | IIF | RIF | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
>= 740 | $ | 113,907 | 70.2 | % | $ | 75,646 | 67.0 | % | $ | 17,096 | 65.8 | % | |||||
680 - 739 | 47,102 | 29.0 | 36,264 | 32.1 | 8,618 | 33.2 | |||||||||||
620 - 679 | 1,163 | 0.8 | 1,001 | 0.9 | 272 | 1.0 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 162,172 | 100.0 | % | $ | 112,911 | 100.0 | % | $ | 25,986 | 100.0 | % |
Pool - 2013 Book | NIW * | IIF | RIF | ||||||||||||||
(Dollars in Thousands) | |||||||||||||||||
As of December 31, 2014 | |||||||||||||||||
>= 740 | $ | 4,186,844 | 81.0 | % | $ | 3,831,737 | 81.2 | % | $ | 75,377 | 81.0 | % | |||||
680 - 739 | 832,755 | 16.1 | 753,753 | 16.0 | 15,001 | 16.1 | |||||||||||
620 - 679 | 152,065 | 2.9 | 136,184 | 2.8 | 2,712 | 2.9 | |||||||||||
<= 619 | — | — | — | — | — | — | |||||||||||
Total | $ | 5,171,664 | 100.0 | % | $ | 4,721,674 | 100.0 | % | $ | 93,090 | 100.0 | % |
* | Represents total NIW for the year ended December 31, 2013. |
December 31, 2014 | December 31, 2013 | ||||||
Average Primary Loan Size by FICO | (In Thousands) | ||||||
>= 740 | $ | 236 | $ | 253 | |||
680 - 739 | 225 | 237 | |||||
620 - 679 | 205 | 194 | |||||
<= 619 | — | — |
Percentage of RIF by Loan Type | Primary | Pool | |||
As of December 31, 2014 | |||||
Fixed | 95.5 | % | 100.0 | % | |
Adjustable rate mortgages: | |||||
Less than five years | 0.1 | — | |||
Five years and longer | 4.4 | — | |||
Total | 100.0 | % | 100.0 | % |
Total RIF by LTV | Primary | Pool | |||||||||||||||||
RIF | % of Total LTV | Policy Count | RIF | % of Total LTV | Policy Count | ||||||||||||||
As of December 31, 2014 | (Dollars in Thousands) | ||||||||||||||||||
95.01% and above | $ | 3,695 | 0.5 | % | 76 | $ | — | — | % | — | |||||||||
90.01% to 95.00% | 435,950 | 54.4 | 6,832 | — | — | — | |||||||||||||
85.01% to 90.00% | 291,711 | 36.4 | 4,929 | — | — | — | |||||||||||||
80.01% to 85.00% | 70,191 | 8.7 | 2,765 | — | — | — | |||||||||||||
80.00% and below | 14 | — | 1 | 93,090 | 100.0 | 20,573 | |||||||||||||
Total RIF | $ | 801,561 | 100.0 | % | 14,603 | $ | 93,090 | 100.0 | % | 20,573 |
Top 10 Primary IIF and RIF by State | IIF | RIF | ||||
As of December 31, 2014 | ||||||
1. | California | 16.6 | % | 16.3 | % | |
2. | Texas | 6.2 | 6.6 | |||
3. | Michigan | 4.8 | 4.7 | |||
4. | Florida | 4.7 | 4.6 | |||
5. | Arizona | 3.8 | 3.9 | |||
6. | Pennsylvania | 3.7 | 3.7 | |||
7. | Ohio | 3.6 | 3.8 | |||
8. | Virginia | 3.6 | 3.5 | |||
9. | Colorado | 3.5 | 3.5 | |||
10. | North Carolina | 3.5 | 3.6 | |||
Total | 54.0 | % | 54.2 | % |
Top 10 Pool IIF and RIF by State | IIF | RIF | ||||
As of December 31, 2014 | ||||||
1. | California | 28.6 | % | 28.0 | % | |
2. | Texas | 5.4 | 5.4 | |||
3. | Colorado | 3.9 | 3.9 | |||
4. | Washington | 3.9 | 3.8 | |||
5. | Massachusetts | 3.7 | 3.6 | |||
6. | Virginia | 3.7 | 3.7 | |||
7. | Illinois | 3.7 | 3.7 | |||
8. | New York | 2.8 | 2.8 | |||
9. | Florida | 2.8 | 2.8 | |||
10. | New Jersey | 2.8 | 2.8 | |||
Total | 61.3 | % | 60.5 | % |