Leader in the credit union segment, which maintains higher credit quality characteristics than traditional mortgage loan bank origination channels Benefits from rating support from its higher-rated parent A differentiator in the mortgage insurance (MI) market based on compliance with currently proposed government-sponsored entity (GSE) risk-based capital requirements Competitive pressure from existing MI players could potentially limit its market expansion goals Higher near-term fixed-cost structure and growth initiatives into the bank channel, limiting near-term profitability Smaller scale, in terms of existing insurance in force (IIF), limits profitability potential versus legacy peers as mortgage persistency rises Higher recent offering of single premiums, which captures market share and acquires new bank and mortgage originators to reduce its risk-adjusted profitability versus peers Standard&
