Good day, ladies and gentlemen and welcome to the NMI Holdings Third Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct the question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the conference over to John Swenson. Please go ahead.

Thank you, Jessica. Good afternoon and welcome to the 2015 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 Shuster, Chairman and CEO, Glenn Farrell, our Chief Financial Officer; and Rob Fore, our Controller. Financial results for the third quarter were released after the close of market today. The release may be accessed on NMI’s Web site at www.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 those 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 Web site, again www.nationalmi.com, under the Investors tab 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 interested party should rely on the fact that the guidance of forward-looking statements is current at any time other than the time of this call. Now to our conference call. Brad will open with an update on the state of the business and then Glenn will discuss the financial results in detail. We then will take your questions. With that, let me turn the call over to Brad Shuster. Brad?

Thank you, John, and thank you all for joining us on the call today. In the third quarter, we generated $3.6 billion of total new insurance written, up 43% from the second quarter. Most of this growth came in our flow business, which was up 51%. Our growth in the quarter was driven by market share gains, reflecting continued growth from existing customers, as well as increasing contributions from new customers added this year. Our results so far in October suggested our strong momentum is continuing in the fourth quarter. We have maintained a solid pace of new customer acquisition and activation, ending the quarter with 906 master policies, up from 842 in the prior quarter, and 391 customers generating NIW, up from 340 in the second quarter. Customers are responding favorably to our industry leading response times, innovative terms of coverage and strong value proposition. We saw especially strong growth in our LPMI production in the quarter as we activated a number of new customers and increased share with existing customers in this competitive part of the market with targeted LPMI programs. As evidenced by our growth in the quarter, these programs have been very well received by customers. The market for private mortgage insurance has been strong, we currently expect the market for new insurance ready this year will be approximately $210 billion up approximately 25% over last year. This would be a post crisis high for private mortgage insurance driven in part by a strong purchase origination market, which we also expect to be at a post crisis high this year. The purchase market growth is significant because it has roughly 4 times the penetration rate from mortgage insurance versus refinancing. Since the release of the PMIERs earlier this year we have evaluated our price structure and…

Thank you Brad and good afternoon everyone. I'm pleased to review with you our third quarter results. 43% of master policy holders generated new insurance written in the third quarter, up from 40% in the prior quarter. Our flow in IW is growing among a diversified customer base with roughly half coming from our 20 largest customers and the remainder coming from more than 370 other lenders. As Brad mentioned primary new insurance written in the quarter was $3.6 billion up 43% from second quarter NIW of $2.5 billion. We believe much of our growth in the quarter came from market share gains. There are two drivers to the market share gains. The first and most impactful is increasing volume with existing customers who we define as customers generating NIW for us as of the end of 2014. The second is contribution from new customers we've activated in 2015. Existing customers accounted for 71% of flow new insurance written in the third quarter and 82% of flow new insurance written for the year to date. In the third quarter we increased volume with these existing customers by 22%. We believe this is a continued demonstration of our ability to increase volume with existing customers, once we have them generating NIW. Now to new customers, again defined as customers who generated their first NIW with us in 2015. Over the first three quarters of 2015 we have activated 197 new customers who contributed 18% of new insurance written for the year to date. We expect to see the number of new customers and the new insurance written associated with those customers continue to grow in the fourth quarter. Looking at product mix monthly BMPI represented 44% of Q3 NIW, down from 57% in the second quarter. As Brad mentioned this is…

Thank you, Glenn. We are very pleased with our results in the third quarter, and our current trajectory. In every metric that we look at as important for our Company, we had meaningful growth in the third quarter as compared with the second quarter; whether it is total NIW, flow NIW, growth in number of new customers, NIW from new customers, NIW from existing customers, total policies in force, primary insurance in force, premiums written, premiums earned, new master policies and total customers, contributing to NIW, we saw meaningful growth. We expect to end the year in a solid competitive position and look forward to continued growth and profitability in 2016. As a final note, we invite you all to attend our Investor Day, which is being held on November 19th in New York. We will introduce other members of our senior leadership team, and we’ll end the session with a deeper understanding of how we are building National MI into a competitive and highly profitable participant in this growing industry. Let me now turn it back to the operator, so we can take your questions.

[Operator Instructions] And our first question comes from Bose George from KBW. Please go ahead.

First, just wanted to ask one on pricing, you’ve made a comment about pricing, the new pricing, on the ROE. So just if we think about it, if the existing book is written under the new pricing that you -- under the new models. Would the blended ROE’s end up being fairly similar?

Yes, I think, we were to sort of reprice everything on our new LPMI and BPMI pricing going forward under PMIERs I think you'd have returns very similar to what we've talked about historically. They'd be in the mid teens area.

Okay great, and then [indiscernible] on the single this quarter, what are the target [indiscernible] you've noted that the returns on the aggregated and the other have kind of converged so where you think those are priced.

So those returns those are still, they're a little bit lower than the BMPI returns but still sort of low to mid double digit depending on the program.

Okay great, and then one on capital. In terms of timeline for raising capital to comply with the 400 million PMIERs requirement. Any update there in terms of timeline and actions you're considering.

Well those were obviously highly aware of the PMIERs deadline coming up at the end of the year. So we're exploring options available in capital markets that would put us in compliance as of the reporting date at the end of the year. We also are very cognizant of that because we're growing rapidly and we will be looking for capital to support our growth. So we haven't made any decisions there but I think we'll be kind of wrapping up our exploratory discussions here shortly and so just watch for something in the fourth quarter. And that of course to the extent we don't find any attractive options available now we certainly have transition plan available to us if we decide that's the best thing for our shareholders.

And our next question comes from Mackenzie Kelley from Zelman and Associates.

Just you, first on the targeted LPMI program that you mentioned is that a new discounted product or what is that.

Mackenzie, that was just some programs that we put into place sort of the mid part of the year, sort of like second quarter early third quarter that allowed us to open up some opportunities with some customers that we had not yet activated. So as I said those have been important in terms of generating NIW for us in the third quarter, but we're looking to raise our pricing in LPMI as we get into next year and the PMIERs go into effect.

Okay, great. On the pace of improvement in the monthly NIW it's decelerated somewhat we've seen in the last few quarters and obviously the share came down and I know you mentioned part of that was [indiscernible] effect, but if you look at the account that has been generating volume over the last few quarters that aren't still in such a ramp mode. Are you seeing the benefit of them beginning to allocate more of the monthly BPMI business are they still, is there even an increase in the amount of LPMI volumes that you're getting from those existing accounts.

So, you know I think just because of our small size and our overall level of development I think quarter to quarter fluctuations can be a little bit misleading. You know we did have some great growth in LPMIs I said but we still grew our BPMI and we introduced these new BPMI pile that I've been talking about late in the third quarter. And we are seeing good traction in that so, we expect that our BMPI will ramp up nicely in the fourth quarter and then over time as we mature I think you'll see our mix move to approximate that of the private MI market as a whole.

Okay, and then just lastly with those new BPMI rates, can you estimate about what percent of your customers are your master policy holders have agreed to adopt that in kind of what you expect the mix to be between the flatter BPMI versus the more national BPMI rate card.

I don't actually have that number, I do think that our new pilot rate card has been very effective in terms of activating customers we have not previously done business with but I don't have the break out between those customers using our national rate card and those on the, using the new pilot rates.

Okay, great, thanks.

And our next question comes from Christine Worley from JMP Securities.

I was wondering if you could give a little bit more detail on the 22% growth from the existing customers that you saw in the quarter. I mean is that more on the larger customer side or more of the smaller of the 370 that you [indiscernible] top twenty.

Christine I think it was pretty low distributed across the full gamut. You know we saw. We've seen some success at the small to medium sized customers but also lot of success with some of our larger accounts that I think you will continue to see results flowing through the fourth quarter.

Okay, and then on the lender paid business, I mean, what’s the price increases that you’re expecting to put in at Jan 1? Do you think that we’ll see maybe a fall off in the volumes in that business that we saw, that we’re seeing towards the back half of this year? Or how are you thinking about that moving forward?

I guess it depends on the way the competition response to the new capital rules, and whether they are evaluate capital usage and returns in a similar way that we do. But we’ll just have to wait and see how that plays up.

And then just lastly, on the expense step down that we saw in the quarter, I mean, do you think I guess stripping out the stock based compensation. Do you think this is a good run rate going forward? Or we’ll still see some step up as the book grows?

I think the step down as you placed it in Q3 was a little bit of a result of some what I’ll call one time effects in the second quarter that caused a little bit of bumpiness in Q2. I think our run rate coming out of Q3 is probably the appropriate one to reference, but maybe with a little bit of volume related growth in there as well.

And our next question comes from Amy DeBone from Compass Point Research.

I just have one follow up on pricing and the PCMI rate card. Is the minimum capital requirement under team are as taken into account when cross optimization is eliminated across the rate card. Meaning that if the NIW mix shift toward potentially higher credit quality loans does the minimum capital requirement impact the average return?

Amy, actually the way we designed it we become sort of in different to mix because of the way we’ve adjusted the raise and eliminating that cross subsidy, so we’re now in different to mix.

And when will that highlighted rate card you made public?

We just have to wait and see how the traction goes into marketplace. And as I said earlier, it’s the early returns are very encouraging but it’s still is early, so we’re just going to have to monitor the uptake and make a decision sometime this quarter, or early next year.

And then one last one, the success of the targeted LPMI in the quarter, and something prior to the new higher rates going into effect, does that impact to be $15 billion to $16 billion insurance in force breakeven point at all?

Now, we’re not changing that, it was $15 billion to $17 billion breakeven point that I believe we’ve guided to previously, and that has not changed. Thank you.

[Operator Instructions] And our next question comes from Joseph Boscovich from Old West Investment.

Could you give us a little more color about the movement of Jay Sherwood?

We filed an 8-K about that some time ago, there is really not a whole lot of more color there, and Jay was a co-founder of the Company with me, did a lot of great things with us when we were a start up. But it happens in so many startup companies, sometimes the team that you have in place in the early years is not the same team when you mature as a company and that’s similar to what happened here.

And so he is still on the Board?

He’s not been on the Board of the holding company, and he’s not on the Board, but he’s still under contract with us.

And I am showing no further question at this time. I would now like to turn the call back over to management for any closing remarks.

So we thank you all for joining us on the call today. Thanks very much. Hope to see you at November 19th.

Ladies and gentlemen, thank you attending today’s conference. This conclude today’s program. You may all disconnect. Have a great day.