NMI Holdings Inc

Ladies and gentlemen, thank you for standing by and welcome to the NMI Holdings Incorporated First Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session. To ask a question during the session, you will need to press Star 1 on your telephone. If you would like to withdraw your question, press the pound key. If you require further assistance, please press Star 0. I would now like to hand the conference over to your speaker today, John Swenson. Thank you. You may begin.

Thank you, Dorothy. Good afternoon and welcome to the 2020 first quarter conference call for National MI. I'm John Swenson, Vice President of Investor Relations and Treasury. Joining us on the call today are Brad Shuster, Executive Chairman, Claudia Merkel, CEO, Adam Pollitzer, our Chief Financial Officer, and Julie Norberg, our Controller. Financial results for the quarter were released after the close today. The press release may be accessed on NMI's website located at www.nationalmi.com under the Investors tab. During the course of this call, we may make comments about our expectations for the future. Actual results could differ materially from those contained in these forward-looking statements. Additional information about the factors that could cause actual results or trends to differ materially from those discussed on the call can be found on our website or through our regulatory filings with the SEC. If and to the extent the company makes forward-looking statements, we do not undertake any obligation to update those statements in the future in light of subsequent developments. Further, no one should rely on the fact that the guidance of such statements is current at any time other than the time of this call. Also note that on this call we refer to certain non-GAAP measures. In today's press release and on our website, We provided a reconciliation of these measures to the most comparable measures under GAAP. Now I'll turn the call over to Brad.

Thank you, John, and good afternoon, everyone. As I get started, I want to recognize that this is an extremely challenging time, and our thoughts at National MI are with all of those who have been affected by this global pandemic, particularly those suffering from COVID-19, and the healthcare workers and first responders who are on the front lines of the crisis. In addition to reviewing our first quarter results on today's call, we will share with you how we're responding to this crisis and our current expectations for how COVID-19 will impact the housing market, the mortgage insurance market, and our business performance and financial position going forward. Stepping back and looking at the bigger picture, we built National MI to be a credible and sustainable counterparty across all market cycles. From the start, we have focused on building a durable franchise in a risk responsible manner. We have worked hard to establish a comprehensive credit risk management framework, and in doing so, We have built the highest quality insured portfolio in the mortgage insurance industry. Well before this crisis emerged, we were actively targeting a higher quality mix of business through individual risk underwriting and granular rate GPS pricing and had sourced and secured comprehensive reinsurance protection for nearly the entirety of our enforced portfolio. Our conservative stance heading into this period gives me confidence about the strength of our business today and our ability to continue supporting our lenders, their borrowers, and the overall housing market through this period of uncertainty. And it's not just a function of our credit risk management framework. It's the conservatism with which we've managed our investment portfolio, The robust liquidity profile that we have built at both our holding company and operating company levels and the strength of our balance sheet and regulatory funding position. Together, these elements are what position us to continue serving our customers and driving long-term value for our stakeholders. While we've taken steps all along the way to position National MI to perform through a severe stress cycle for an open ended period of time. We are optimistic that the environment will begin to heal itself as shelter in place directives are lifted and medical advances give the population at large the confidence to resume day to day activity. Importantly, we do not believe that the housing market will experience a level of strain Anywhere close to that scene during the 2008 financial crisis. The housing market came into this downturn in a dramatically better position than it did in 2008. Entering 2020, the market had real pricing balance driven by a sustainable supply-demand dynamic. Lenders were disciplined and underwriting was responsible. Paired with this is the immediate application of massive fiscal stimulus and direct borrower assistance programs. We applaud the speed and magnitude of the government response to this crisis, notably the forbearance, foreclosure moratorium, and other assistance programs codified under the CARES Act. This broadly coordinated public policy effort along with similar private initiatives implemented by lenders and servicers will help bridge borrowers past the point of acute stress and ensure they are able to remain in their homes and resume their lives with limited interruption once the crisis has passed. Overall, while we may see some degree of housing price decline nationally, We expect the market to be far more resilient than it was in the aftermath of the 2008 financial crisis, with a far more muted level of price decline and a far quicker stabilization. With that, let me turn it over to Claudia.