NMI Holdings Inc. reported significantly higher profits during the fourth quarter, as a result of a reversal of the valuation allowance for the company's deferred tax asset.
Its net income spiked to $61.6 million, or $1.01 per share, during the fourth quarter, up from $6.2 million the quarter before. A year ago, the company reported a $4.8 million net loss.
The Emeryville, Calif.-based parent of National MI had previously announced its first-ever profit in the second quarter of 2016.
In the fourth quarter, the major spike in net earnings came about because of a $54.5 million tax benefit the company received as a result of that reversal of the valuation allowance.
New insurance written was $5.24 billion, down from $5.86 billion in the third quarter, but up from $4.55 billion a year earlier.
Premiums earned for the fourth quarter were $32.8 million, representing a 3% uptick from the third quarter and a 94% jump from the previous year.
Underwriting and operating expenses meanwhile increased to $23.3 million from $21.7 million the year prior. The company incurred a $1.7 million charge as a result of the change in the fair value of outstanding warrants caused by NMI Holdings' higher stock price at the end of 2016.
Looking ahead, National MI chairman and CEO Bradley Shuster anticipated continued earnings growth.
"We believe 2017 will be an even better year as we continue to layer on more high-quality insurance in force and drive strong revenue growth while prudently managing expenses and risk," Shuster said.
"With our largely fixed expense base, we expect that the operating leverage we already have demonstrated will drive increasing profits and returns throughout the year."
