What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-24 compared with 2020-02-14 · 70 added, 47 removed, 312 unchanged (27% of the section changed)

86 unchanged sentences

333-191635), filed on October 9, 2013)

4.5 Warrant No.

1 to Purchase Common Stock of NMI Holdings, Inc.

5 unchanged sentences

333-191635), filed on October 9, 2013)

4.7 Indenture, dated as of June 19, 2020, among NMI Holdings, Inc., NMI Services, Inc.

as the Initial Guarantor, and the Bank of New York Mellon Trust Company, N.A.

as Trustee and Notes Collateral Agent (incorporated herein by reference to Exhibit 4.1 to our Form 8-K, filed on June 19, 2020)

4.8 Description of S ecurities

10.1 ~ NMI Holdings Inc.

36 unchanged sentences

10.16 Credit Agreement, dated May 24, 2018, between NMI Holdings, Inc., the lender party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated herein by reference to Exhibit 4.1 to our Form 8-K, filed on May 25, 2018)

10.17 Extension Amendment, dated as of March 20, 2020, to the Company's Credit Agreement, dated as of May 24, 2018, by and among the Company, the lender parties thereto and JPMorgan Chase Bank, N.A.

as administrative agent (incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed on March 20, 2020)

10.18 Joinder Agreement, dated as of March 20, 2020, to the Company's Credit Agreement, dated as of May 24, 2018, by and among the Company, JPMorgan Chase Bank, N.A.

as administrative agent, and Citibank, N.A.

(incorporated herein by reference to Exhibit 10.2 to our Form 8-K, filed on March 20, 2020)

10.19 Amendment No.

1, dated as of May 6, 2020, to the Company's Credit Agreement, dated as of May 24, 2018, by and among the Company, the lender parties thereto and JPMorgan Chase Bank, N.A.

as administrative agent (incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed on May 6, 2020)

10.20 Joinder Agreement, dated as of October 29, 2020, to the Company ' s Credit Agreement, dated as of May 24, 2018, by and among the Company, JPMorgan Chase Bank, N.A.

as administrative agent, and Citibank, N.A.

(incorporated herein by reference to Exhibit 10.20 to our Form 10-Q, filed on November 11, 2020)

10.21 ~ NMI Holdings, Inc.

38 unchanged sentences

Amended and Restated 2014 Omnibus Incentive Plan Nonqualified Stock Option Agreement for Employees (incorporated herein by reference to Exhibit 10.35 to our Form 10-Q, filed on May 2, 2019)

10.40 ~ Form of NMI Holdings, Inc.

Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (Performance Based) (incorporated herein by reference to Exhibit 10.38 to our Form 10-Q, filed on May 7, 2020)

21.1 Subsidiaries of NMI Holdings, Inc.

21 unchanged sentences

Chief Executive Officer

Signature Title Date

/s/ Claudia J.

Chief Executive Officer

Pollitzer Chief Executive Officer

(Principal Executive Officer)

February 24, 2021

Chief Financial Officer

(Principal Financial Officer)

February 14, 2020

Norberg Chief Financial Officer

(Principal Financial Officer) February 24, 2021

/s/ Bradley M.

February 14, 2020

Shuster Controller February 24, 2021

/s/ Steven L.

Executive Chairman

February 14, 2020

/s/ Regina Muehlhauser

February 14, 2020

Scheid Executive Chairman February 24, 2021

Jones Director February 24, 2021

/s/ Regina Muehlhauser Director February 24, 2021

Regina Muehlhauser

/s/ Michael Montgomery

February 14, 2020

/s/ Michael Montgomery Director February 24, 2021

Michael Montgomery

/s/ Michael Embler

February 14, 2020

/s/ Michael Embler Director February 24, 2021

Michael Embler

February 14, 2020

Ozanne Director February 24, 2021

McCreary Director February 24, 2021

/s/ Priya Huskins Director February 24, 2021

Priya Huskins

Director February 24, 2021

INDEX TO FINANCIAL STATEMENT SCHEDULES

Schedule I — Summary of Investments — other than investments in related parties as of December 31, 2019

Schedule II — Financial Information of Registrant as of December 31, 2019

Schedule IV — Reinsurance as of December 31, 2019

Schedule I — Summary of Investments — other than investments in related parties as of December 31, 2020 F- 1

Schedule II — Financial Information of Registrant as of December 31, 2020 F- 2

Schedule IV — Reinsurance as of December 31, 2020 F- 6

All other schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in our Consolidated Financial Statements and notes thereto.

1 unchanged sentence

SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES

December 31, 2019

Amortized Cost

Amount Reflected on Balance Sheet

December 31, 2020 Amortized Cost Fair Value Amount Reflected on Balance Sheet

(In Thousands)

4 unchanged sentences

Asset-backed securities 128,471 131,180 131,180

Total bonds 1,730,466 1,803,917 1,803,917

Short-term investments 369 369 369

4 unchanged sentences

PARENT COMPANY ONLY

December 31, 2019

December 31, 2018

December 31, 2020 December 31, 2019

(In Thousands, except for share data)

6 unchanged sentences

Software and equipment, net 29,665 26,096

Other assets 5,676 7,188

Total assets $ 1,911,781 $ 1,179,013

Debt $ 393,301 $ 145,764

Accounts payable and accrued expenses 30,802 24,871

7 unchanged sentences

Additional paid-in capital 937,872 707,003

Accumulated other comprehensive income (loss), net of tax

Accumulated other comprehensive income, net of tax 53,856 17,288

Retained earnings 377,011 205,445

6 unchanged sentences

For the year ended December 31,

2020 2019 2018

(In Thousands)

4 unchanged sentences

Interest expense — — 2,227

Loss from change in fair value of warrant liability

(Gain) loss from change in fair value of warrant liability (2,907) 8,657 1,397

Total expenses 6,355 20,371 24,719

2 unchanged sentences

Income tax expense 39,634 35,277 2,631

Net income $ 171,566 $ 171,957 $ 107,927

Other comprehensive income (loss), net of tax:

Unrealized gains (losses) in accumulated other comprehensive loss, net of tax expense (benefit) of $25, $82, and ($34) for each of the years in the three-year period ended December 31, 2020, respectively 94 308 ( 128 )

Reclassification adjustment for losses (gains) included in net loss, net of tax (benefit) expense of $0, ($1) and $0 for each of the years in the three-year period ended December 31, 2019, respectively

Reclassification adjustment for (gains) losses included in net loss, net of tax expense (benefit) of $5, $0 and ($1) for each of the years in the three-year period ended December 31, 2020, respectively ( 18 ) — 2

Equity in other comprehensive income (loss) of subsidiaries 36,492 31,812 ( 12,129 )

6 unchanged sentences

For the year ended December 31,

Cash flows from operating activities

(In Thousands)

2020 2019 2018

Cash flows from operating activities (In Thousands)

Net income $ 171,566 $ 171,957 $ 107,927

Adjustments to reconcile net income to net cash (used in) provided by operating activities:

Loss from change in fair value of warrant liability

(Gain) loss from change in fair value of warrant liability ( 2,907 ) 8,657 1,397

Net realized investment gains ( 23 ) ( 1 ) ( 5 )

5 unchanged sentences

Equity in net income of subsidiaries (1)

( 217,134 ) ( 226,480 ) ( 133,837 )

Accrued investment income ( 44 ) ( 3 ) ( 14 )

1 unchanged sentence

Prepaid expenses 420 ( 409 ) ( 1,010 )

Other assets ( 336 ) 165 1,258

Accounts payable and accrued expenses 4,592 ( 1,640 ) 5,393

Net cash (used in) provided by operating activities

Net cash provided by (used in) operating activities 2,924 ( 10,298 ) 3,561

Cash flows from investing activities

5 unchanged sentences

Software and equipment ( 2,633 ) ( 854 ) ( 415 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities ( 460,013 ) 9,384 ( 72,631 )

Cash flows from financing activities

3 unchanged sentences

Taxes paid related to net share settlement of equity awards ( 8,961 ) ( 18,248 ) ( 9,722 )

Proceeds from term loan, net

Proceeds from senior secured notes 400,000 — 149,250

Repayments of term loan ( 147,750 ) ( 1,500 ) ( 147,375 )

Payments of debt issuance/modification costs

Net cash provided by (used in) financing activities

Net increase (decrease) in cash, cash equivalents and restricted cash

Payments of debt issuance costs ( 9,043 ) — ( 3,609 )

Net cash provided by financing activities 462,804 2,000 80,887

Net increase in cash, cash equivalents and restricted cash 5,715 1,086 11,817

Cash, cash equivalents and restricted cash, beginning of period 13,431 12,345 528

10 unchanged sentences

Refer to the Parent Company's consolidated financial statements for additional information.

Our insurance subsidiaries are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs.

Under Wisconsin law, NMIC and Re One may pay dividends up to specified levels ( i.e.

, "ordinary" dividends) with 30 days' prior notice to the Wisconsin OCI.

NMIC and Re One are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs that may restrict their ability to pay dividends to NMIH.

Under Wisconsin law, NMIC and Re One may pay dividends up to specified levels ( i.e ., "ordinary" dividends) with 30 days' prior notice to the Wisconsin OCI.

Dividends in larger amounts ( i.e.

,"extraordinary" dividends), are subject to the Wisconsin OCI's prior approval.

Under Wisconsin law, an extraordinary dividend is defined as any payment or distribution that together with other dividends and distributions made within the preceding 12 months exceeds the lesser of (i) 10 % of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the 12-month period ending the preceding December 31.

NMIC and Re One have the capacity to pay aggregate ordinary dividends of $ 16.1 million to NMIH during the 12-month period ending December 31, 2020, and their remaining net assets are considered restricted.

Under Wisconsin law, an extraordinary dividend is defined as any payment or distribution that together with other dividends and distributions made within the preceding twelve months exceeds the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31.

Re One has the capacity to pay aggregate ordinary dividends of $ 1.6 million to NMIH during the twelv e-month period ending December 31, 2021.

NMIC reported a statutory net loss for the year ended December 31, 2020 and does not have the capacity to pay dividends to NMIH during the twelve-month period ended December 31, 2021 without prior approval from the Wisconsin OCI.

The remaining net assets from dividend capacity are considered restricted.

As of December 31, 2020, the amount of restricted net assets held by our consolidated insurance subsidiaries, which represents our equity investment in those insurance subsidiaries less their aggregate dividend capacity, totaled $1.7 billion, compared to $ 1.0 billion as of December 31, 2019.

7 unchanged sentences

SCHEDULE IV - FINANCIAL INFORMATION OF REGISTRANT

Ceded to Other Companies

Assumed from Other Companies

Percentage of Amount Assumed to Net

For the years ended December 31,

(In thousands)

Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net

For the years ended December 31, (In thousands)

2020 $ 472,998 $ 75,826 $ — $ 397,172 — %

2019 398,303 53,288 — 345,015 — %

2018 292,064 40,867 — 251,197 — %

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures