NMI Holdings Inc

Good afternoon, ladies and gentlemen, and welcome to the NMI Holdings Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If anyone should require assistance during the conference, please press the star, then zero on your touchtone telephone. I would now like to turn the conference over to your host, Mr. John Svensson of Management. Please go ahead, sir.

Thank you, operator. Good afternoon and welcome to the 2020 fourth 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 Schuster, Executive Chairman, Claudia Merkel, CEO, Adam Politzer, 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 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 have 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. The fourth quarter capped a year of remarkable challenge, resiliency, and reward for National MI. In 2020, we successfully navigated through the unprecedented stress of the COVID pandemic, fully supporting our customers and their borrowers at a time when they and the overall housing market needed us most. During the year, we wrote a record $62.7 billion of NIW, helping over 250,000 borrowers gain access to housing and establish a safe, secure environment in which to shelter through the pandemic. We closed the year with $111 billion of high-quality, high-performing primary insurance and force, And our decision to prioritize risk responsibility from day one and establish a comprehensive credit risk management framework spanning individual risk underwriting, rate GPS pricing, and our innovative reinsurance program proved invaluable. Credit performance in our in-force portfolio continues to trend in an encouraging direction. And we are increasingly optimistic as we look forward, given the quality of our underlying book, potential for additional stimulus support for borrowers, and sustained resiliency of the housing market. We generated $171.6 million of full-year GAAP net income in 2020, delivering strong profitability that was consistent with our result in 2019. despite absorbing the significant impact of the COVID pandemic through the year. Our adjusted net income was $173.6 million, and we exited the year with a 15.2 percent fourth quarter adjusted return on equity. Policy efforts played an important and stabilizing role during the year. Forbearance, foreclosure moratorium, and other assistance programs are helping to bridge borrowers past this point of acute stress and ensure they are able to remain in their homes and resume their lives with limited interruption once the pandemic has passed. We applaud these efforts and note the recent extension of the forbearance and foreclosure timelines announced by the FHFA. Homeownership is essential. more so today than ever before. People need shelter in order to shelter in place, and allowing borrowers who, through no fault of their own, are facing real strain to stay in their homes and avoid foreclosure is the right social policy. It will also help speed the ultimate pace of economic recovery. We expect the housing market will be an area of focus for the Biden administration and new congressional leadership. It has been a bright spot in the wake of the pandemic and expanding access to all the benefits that homeownership provides a safe environment to shelter from the virus and ability to establish a community identity and an equitable opportunity for long-term wealth creation. in a manner that appropriately guards against systemic risk is more important than ever before. While it is difficult to predict the hierarchy of political priorities and specific changes that may come, we believe there will be continued recognition of the value that private mortgage insurance offers, providing borrowers with down payment support and equal access to mortgage credit while also placing private capital in front of the taxpayer to absorb risk and loss in a downturn. Overall, I'm delighted with what we achieved last year and how effectively we were able to navigate through the COVID crisis. I'm optimistic about our opportunity to continue to build value for our employees, for borrowers, for our customers, and for our shareholders in 2021. With that, let me turn it over to Claudia.