National MI elects to slow its market share growth in 2Q

National MI deliberately dropped some of its customers in the second quarter, resulting in flat new insurance growth compared with the first quarter and a lower increase versus one year prior.

Private mortgage insurers usually see their business increase in the second quarter because it is the spring home buying season and there are more purchasers who put less than 20% down.

National MI reported NIW of $6.5 million, similar to the first quarter and up 30% from $5 million done in 2017's second quarter.

But the year-over-year growth was well short of the 45% expected by B. Riley FBR analyst Randy Binner, who expected $7.3 billion of NIW. It was also below the $7.4 billion expected by Keefe Bruyette & Woods analyst Bose George.

"Our quarter-over-quarter NIW development was impacted by our decision to pivot from a small number of customer situations," said NMI Holdings President Claudia Merkle during its earnings call. "These situations delivered us attractive volume in prior periods. However, the risk adjusted return opportunities evolved and we do not believe they represent the best use of our capital at this time."

In June, National MI rolled out its black box pricing system, Rate GPS, which had "an immediate and positive impact on our business in terms of vendor engagement and the credit quality of our new origination volume," Chairman and CEO Bradley Shuster said during the call.

NMI Holdings' second-quarter net income was $27.4 million, up from $6 million one year prior. The $0.40 earnings per share beat the consensus estimate of $0.35, the B. Riley FBR estimate of $0.33 and the KBW estimate of $0.34.

Essent Group reported second-quarter net income of $111.8 million, up from $72.1 million one year prior.

New insurance written totaled $12.9 billion, up from $9.3 billion in the first quarter and $11.4 billion one year prior.

Insurance-in-force grew to $122.5 billion, compared with $115.3 billion as of Dec. 31, 2017 and $95.5 billion on June 30, 2017.

"The growth of our insurance-in-force coupled with our ability to utilize multiple forms of capital to insure risk in both the U.S. and Bermuda demonstrates that the Essent franchise is well positioned to play a significant role in the housing finance system while also producing high-quality earnings and strong returns for our shareholders," said Mark Casale, chairman and CEO in a press release.

Essent Group is headquartered in Hamilton, Bermuda.