NMI Holdings Inc

Good afternoon, ladies and gentlemen, and welcome to the NMI Holdings Inc. Third Quarter 2021 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 star, then zero on your touchdown telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr. John Swenson. Sir, you may begin.

Thank you, Christian. Good afternoon and welcome to the 2021 Third 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 Pulitzer, 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 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. I'm pleased to report that in the third quarter, National AMI delivered strong operating performance, significant growth in our insured portfolio, and record financial results. We achieved record adjusted net income of $61.8 million, or 71 cents per diluted share, and record GAAP net income of $60.2 million, or 69 cents per diluted share. Adjusted return on equity for the quarter was 16.6 percent, and GAAP ROE was 16.2 percent. We ended the third quarter with a record $144 billion of high-quality primary insurance in force, up 5% compared to the second quarter and 37% compared to the third quarter of 2020. We are helping more borrowers than ever before gain access to housing, and the growth in our insured portfolio reflects this strength. Credit performance in our in-force portfolio also continues to trend in a favorable direction, and we are increasingly optimistic as we look forward, given the quality of our underlying book, sustained resiliency of the housing market, and strength of the broader macro environment. Shifting to Washington matters. Policymakers, regulators, the FHFA and the GSEs are increasingly focused on promoting broader access and affordability to the housing market for all borrowers. Expanding access to home ownership and all the benefits it provides in a manner that appropriately guards against systemic risk is critically important. At National MI, we recognize the need to provide all borrowers with an equitable opportunity to access the housing market, establish a community identity, and build long-term wealth through homeownership. And we are actively engaged and committed to equally supporting borrowers from all communities. We believe there is broad recognition in Washington of the value that the private mortgage insurance industry brings to this effort, 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 any downturn. In summary, we had a terrific quarter and are well-positioned to continue helping borrowers and delivering on the goals that we set for our business. Before I turn it over to Claudia, I want to talk about the succession plan that we announced in September, under which Claudia will be stepping down at the end of the year, and Adam will be taking over as President and CEO on January 1st. I want to express my gratitude and the gratitude of the rest of our board to Claudia for her leadership and dedication to National MI, for her keen focus on building a talented and diverse team, and for the strong foundation she has established to support National MI's continued growth and success. Over her nearly decade-long tenure with National MI, Claudia has overseen the growth of our customer franchise and led the development of our underwriting and operational capabilities. Since her promotion to CEO in 2019, National MI has more than doubled its insurance in force and was recognized on Fortune Magazine's 100 Fastest Growing Companies list for our combined revenue, net income, and stock price performance. I'm excited at the opportunity we have to build on this success under Adam's leadership and to continue to grow and deliver as a company. Adam joined National MI as Chief Financial Officer nearly five years ago, and he has been instrumental in shaping our corporate strategy and financial success since. He is a talented and seasoned executive with deep knowledge of the mortgage insurance market key experience and proven success as a senior leader of National MI and a demonstrated commitment to our company, our customers, our people, and our shareholders. Claudia and I and the rest of our board are confident that he is the right leader to guide National MI going forward. With that, let me turn it over to Claudia.