Key Takeaways NMI Holdings benefits from housing strength and greater reliance on mortgage insurance.The company expands with prime loans, a broader customer reach and strong partnerships.Rising defaults, competition and higher debt weigh on margins and flexibility.Shares of NMI Holdings, Inc. (NMIH) are trading at a discount compared to the Zacks Insurance - Property and Casualty industry. Its price-to-book value of 1.26X is lower than the industry average of 1.56X. Image Source: Zacks Investment ResearchH ...

Core Insights - Gary Gordon has extensive experience as a stock analyst in the housing, mortgage, and consumer finance industries, primarily at PaineWebber and UBS [1] - He is now retired and serves as an adjunct professor teaching economics and math, including financial literacy seminars [1] Company and Industry Summary - Gordon's career included roles as a U.S. investment strategist and portfolio manager, indicating a strong background in investment analysis [1] - His educational contributions extend to teaching in prisons, highlighting a commitment to financial education and literacy [1] - Gordon holds degrees in philosophy and finance, which may influence his analytical approach in the finance sector [1]

Core Viewpoint - NMI Holdings reported strong second quarter results for 2025, exceeding analyst expectations in both non-GAAP EPS and revenue, while also indicating a shift in claims expenses and loss metrics [1][5][6]. Financial Performance - Non-GAAP EPS for Q2 2025 was $1.22, surpassing the estimate of $1.20, and reflecting a year-over-year increase of 1.7% [2]. - Revenue reached $173.8 million, exceeding the forecast of $149.57 million and showing a 7.2% increase from $162.1 million in Q2 2024 [2][5]. - Net premiums earned were $149.1 million, up 5.6% from $141.2 million in Q2 2024 [2]. - Adjusted net income was $96.5 million, slightly down by 1.1% from $97.6 million in Q2 2024 [2]. Claims and Loss Metrics - The loss ratio increased to 9.0% from 0.2% in Q2 2024, driven by higher claims expenses which rose to $13.4 million from $0.3 million in the prior year [2][6]. - Default inventory was reported at 6,709, up from 4,904 in the prior year, indicating a modest increase in loans currently in default [8][9]. Business Overview - NMI Holdings specializes in private mortgage insurance for high loan-to-value mortgages, enabling borrowers to qualify for loans with smaller down payments [3]. - The company maintains critical relationships with government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac, which are essential for its business model [4]. Operational Efficiency - Operating expenses were controlled at $29.5 million, with an expense ratio of 19.8%, showing slight improvement from the previous year [7]. - The company reported a strong capital position with a book value per share of $32.08, up 4% quarter-over-quarter and 16% year-over-year [7]. Future Outlook - Management did not provide explicit financial guidance for Q3 or fiscal 2025 but emphasized a focus on capital strength and high-quality risk selection [12]. - The company continues to utilize reinsurance as a risk management strategy, with $32.7 million in reinsurance recoverables at period-end [10].

Core Insights - NMI Holdings (NMIH) reported second-quarter 2025 operating net income per share of $1.22, exceeding the Zacks Consensus Estimate by 5.2%, with a year-over-year increase of 1.7% [1] - The quarterly results were driven by higher premiums from a high-quality insured portfolio and increased net investment income, despite a decline in persistency [1] Operational Update - Total operating revenues reached $173.8 million, marking a 7.2% year-over-year increase, driven by a 5.6% rise in net premiums earned and a 20.6% increase in net investment income, surpassing the Zacks Consensus Estimate by 1.9% [2] - Primary insurance in force grew by 5.5% to $214.7 billion [2] - Annual persistency decreased to 84.1%, down 140 basis points year over year [2] - New insurance written remained flat year over year at $12.5 billion [2] - Underwriting and operating expenses totaled $29.5 million, reflecting a 4% increase year over year [2] Claims and Ratios - Insurance claims and claim expenses rose to $13.5 million from $0.3 million in the prior year [3] - The loss ratio deteriorated by 600 basis points to 9% year over year [3] - The expense ratio improved by 30 basis points year over year, while the adjusted combined ratio worsened by 580 basis points to 23.2 [3] Financial Update - Book value per share increased by 16% year over year to $32.08 as of June 30, 2025 [4] - Cash and cash equivalents rose to $84 million, a 54.7% increase from the end of 2024 [4] - Debt balance slightly increased by 0.1% to $416 million from the end of 2024 [4] - Annualized adjusted return on equity contracted by 310 basis points to 16.3% year over year [4] - Total PMIERs available assets were $3.2 billion, with net risk-based required assets at $1.9 billion [4] Performance of Other Insurers - The Travelers Companies (TRV) reported second-quarter 2025 core income of $6.51 per share, exceeding the Zacks Consensus Estimate by 83.8%, with total revenues increasing by 6.7% to $12.1 billion [6] - The Progressive Corporation (PGR) reported earnings per share of $4.88, beating the Zacks Consensus Estimate by 10.1%, with net premiums written increasing by 12% year over year [10] - RLI Corp. (RLI) reported operating earnings of 84 cents per share, beating the Zacks Consensus Estimate by 12%, although the bottom line decreased by 2.3% from the prior year [12]

Core Insights - NMI Holdings (NMIH) reported a revenue of $173.78 million for the quarter ended June 2025, marking a year-over-year increase of 7.2% and exceeding the Zacks Consensus Estimate by 1.87% [1] - The earnings per share (EPS) for the same period was $1.22, slightly up from $1.20 a year ago, with an EPS surprise of 5.17% compared to the consensus estimate of $1.16 [1] Financial Performance Metrics - Insurance-in-force (IIF) reached $214.65 billion, surpassing the average estimate of $211.73 billion from three analysts [4] - Risk-in-force (RIF) was reported at $57.5 billion, exceeding the average estimate of $55.61 billion from three analysts [4] - The combined ratio stood at 28.8%, better than the three-analyst average estimate of 30% [4] - The loss ratio was 9%, slightly better than the average estimate of 9.1% [4] - The expense ratio was reported at 19.8%, lower than the three-analyst average estimate of 20.9% [4] - Net investment income was $24.95 million, exceeding the average estimate of $23.11 million and reflecting a year-over-year change of 20.6% [4] - Net premiums earned amounted to $149.07 million, surpassing the average estimate of $147.25 million with a year-over-year increase of 5.6% [4] - Other revenues were reported at $0.16 million, below the average estimate of $0.23 million, showing a significant year-over-year decline of 38.4% [4] Stock Performance - NMI Holdings' shares have returned -10.4% over the past month, contrasting with the Zacks S&P 500 composite's increase of 3.6% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - In Q2 2025, total revenue reached a record $173.8 million, with adjusted net income of $96.5 million or $1.22 per diluted share, and an adjusted return on equity of 16.3% [8][12] - The company generated $12.5 billion of new insurance written (NIW) and ended the period with a record $214.7 billion of primary insurance in force, reflecting a 2% increase from Q1 and a 5% increase year-over-year [5][12] - The expense ratio was a record low of 19.8%, indicating significant operating leverage and efficiency in managing costs [14] Business Line Data and Key Metrics Changes - Net premiums earned in Q2 were $149.1 million, slightly down from $149.4 million in Q1 but up from $141.2 million in Q2 2024 [13] - The core yield increased to 34.2 basis points from 34.1 basis points in the previous quarter, while the net yield for the quarter was 28 basis points [13] Market Data and Key Metrics Changes - The twelve-month persistency rate was 84.1%, slightly down from 84.3% in Q1 [12] - The company reported 6,709 defaults at the end of Q2, down from 6,859 at the end of Q1, with a default rate of 1% [14] Company Strategy and Development Direction - The company aims to continue serving customers and their borrowers, investing in employee success, and driving growth in its high-quality insured portfolio [11][16] - The management emphasized a proactive approach to pricing, risk selection, and reinsurance, maintaining discipline in capital return strategies [10][21] Management's Comments on Operating Environment and Future Outlook - The macro environment remains resilient despite elevated interest rates, with strong demand for down payment support from lenders and borrowers [9][10] - Management expressed confidence in the company's ability to navigate market changes and maintain strong credit performance, citing a favorable economic backdrop [28][42] Other Important Information - The company was recognized as a great place to work for the tenth consecutive year, highlighting the importance of team quality and workplace culture as competitive advantages [6][7] - The company has repurchased $23.2 million of common stock in Q2, with a total of $294 million repurchased to date [15] Q&A Session Summary Question: Capital return pacing in light of economic resilience - Management indicated a consistent approach to capital return, with an expectation of approximately $25 million per quarter, while remaining flexible to adjust based on market conditions [19][21] Question: Impact of rising home supply and pricing on underwriting - Management noted that while there are regional differences in the housing market, the overall economic growth and job market remain strong, allowing for proactive management of underwriting and risk [25][28] Question: Competitive environment and pricing relative to peers - Management described the industry pricing as balanced and constructive, with strong unit economics on new business [36] Question: Default trends and recovery drivers - Management highlighted the favorable credit performance of the portfolio, with borrowers benefiting from a strong labor market and embedded equity, aiding in recovery from defaults [41][42] Question: Regulatory impacts from FHFA proposals - Management stated that proposed changes to equitable housing programs are not expected to have a significant impact on the business or market [48][49]

Financial Data and Key Metrics Changes - Total revenue in Q2 2025 was a record $173.8 million, compared to $173.2 million in Q1 2025 and $162.1 million in Q2 2024 [12][13] - Adjusted net income was $96.5 million or $1.22 per diluted share, with an adjusted return on equity of 16.3% [7][12] - The primary insurance in force grew to $214.7 billion, up 2% from Q1 2025 and 5% compared to Q2 2024 [12][15] - The expense ratio reached a record low of 19.8%, indicating significant operating leverage [14] Business Line Data and Key Metrics Changes - The company generated $12.5 billion of new insurance written (NIW) in Q2 2025, maintaining strong production levels [5][7] - Net premiums earned were $149.1 million in Q2 2025, slightly down from $149.4 million in Q1 2025 but up from $141.2 million in Q2 2024 [13] Market Data and Key Metrics Changes - The twelve-month persistency rate was 84.1% in Q2 2025, compared to 84.3% in Q1 2025 [12] - The company reported 6,709 defaults at the end of Q2 2025, down from 6,859 at the end of Q1 2025, with a default rate of 1% [14] Company Strategy and Development Direction - The company aims to continue serving customers and their borrowers while investing in employee success and driving growth in its insured portfolio [11][17] - The management emphasized a disciplined approach to pricing, risk selection, and reinsurance, which has proven effective [10][29] - The company is positioned to offer low-cost, high-value solutions that enhance homeownership accessibility [10][11] Management's Comments on Operating Environment and Future Outlook - The macro environment remains resilient despite elevated interest rates, with ongoing demand for down payment support [8][10] - Management expressed confidence in the company's ability to navigate market changes and maintain strong performance [7][10] - The company anticipates continued normalization in housing market appreciation, with a focus on maintaining balance in risk management [28] Other Important Information - The company was recognized as a great place to work for the tenth consecutive year, highlighting its strong workplace culture [6] - Shareholders' equity at the end of Q2 2025 was $2.4 billion, with a book value per share of $31.14 [15] Q&A Session Summary Question: Capital return pacing in light of economic resilience - Management indicated satisfaction with the current capital return execution and suggested a consistent buyback pace of approximately $25 million per quarter, with flexibility to adjust based on market conditions [20][21][22] Question: Impact of rising home supply and pricing on underwriting - Management noted that while some markets are under pressure, the overall economic backdrop remains positive, allowing for proactive risk management without significant changes to current strategies [25][28][29] Question: Competitive environment and pricing relative to peers - Management described the industry pricing as balanced and constructive, with strong unit economics on new business [38] Question: Operating expenses and any one-time impacts - Management clarified that the decline in operating expenses from Q1 to Q2 is typical and not due to any one-time events [39][40] Question: Default trends and recovery drivers - Management reported a favorable credit performance and noted that borrowers are benefiting from a strong labor market and embedded equity, aiding in recovery from defaults [44][46][47] Question: Regulatory impacts from FHFA proposals - Management expressed that the proposed changes would not significantly impact the business or market, maintaining a focus on access and affordability in housing policy [50][52][53]

[Cautionary Note Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section cautions that forward-looking statements are estimates of future results, subject to material differences due to various factors, and are not updated after their initial date - Forward-looking statements are estimates of future results, and actual results may differ materially from expectations due to various factors. The company undertakes no obligation to update or revise any forward-looking statement[9](index=9&type=chunk) - Important factors that could cause actual results to differ include changes in general economic, market, and political conditions (e.g., interest rates, inflation, housing market, recession), changes in GSE policies (Fannie Mae and Freddie Mac), ability to meet PMIERs requirements, actions of competitors, new laws/regulations, and potential legal/regulatory claims[9](index=9&type=chunk) - Additional risks include the ability to execute capital plans, market participants seeking alternatives to private mortgage insurance, ability to implement business strategy, failure of risk management, decrease in policy duration, unexpected claims, natural/man-made disasters, counterparty inability to meet obligations, IT system failures, and ability to retain key personnel[12](index=12&type=chunk) PART I [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents NMI Holdings, Inc.'s unaudited condensed consolidated financial statements for Q2 2025 and FY2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) These balance sheets present the company's financial position, showing increased total assets and shareholders' equity as of June 30, 2025 Condensed Consolidated Balance Sheets (Unaudited) - Key Figures | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | Change (In Thousands) | % Change | | :--------------------------------- | :----------------------------- | :------------------------------- | :-------------------- | :------- | | Total Assets | $3,591,085 | $3,349,973 | $241,112 | 7.2% | | Total Liabilities | $1,170,978 | $1,132,541 | $38,437 | 3.4% | | Total Shareholders' Equity | $2,420,107 | $2,217,432 | $202,675 | 9.1% | - Fixed maturities, available-for-sale, at fair value increased from **$2.72 billion to $2.93 billion**, a **7.5% increase**[18](index=18&type=chunk) - Cash and cash equivalents increased significantly from **$54.31 million to $84.01 million**, a **54.7% increase**[18](index=18&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20%28Unaudited%29) These statements show increased net income and comprehensive income for Q2 and H1 2025, driven by revenues despite higher claims Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Key Figures | Metric (In Thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net premiums earned | $149,066 | $141,168 | 5.6% | $298,432 | $277,825 | 7.4% | | Net investment income | $24,949 | $20,688 | 20.6% | $48,635 | $40,124 | 21.2% | | Total revenues | $173,779 | $162,122 | 7.2% | $347,025 | $318,375 | 9.0% | | Insurance claims and claim expenses | $13,445 | $276 | 4771.4% | $17,923 | $3,970 | 351.5% | | Total expenses | $50,178 | $43,478 | 15.4% | $92,053 | $85,164 | 8.1% | | Net income | $96,151 | $92,079 | 4.4% | $198,710 | $181,129 | 9.7% | | Basic EPS | $1.23 | $1.15 | 7.0% | $2.54 | $2.25 | 12.9% | | Diluted EPS | $1.21 | $1.13 | 7.1% | $2.50 | $2.22 | 12.6% | | Comprehensive income | $117,422 | $90,530 | 29.7% | $250,757 | $169,675 | 47.8% | - Insurance claims and claim expenses significantly increased from **$0.28 million to $13.45 million** for Q2 2025, and from **$3.97 million to $17.92 million** for H1 2025[21](index=21&type=chunk) [Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity%20%28Unaudited%29) This section details shareholders' equity movements, showing an increase from December 2024 to June 2025, driven by net income Changes in Shareholders' Equity (Unaudited) - Key Figures | Metric (In Thousands) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------- | :---------------- | :------------- | :------------ | | Total Shareholders' Equity | $2,217,432 | $2,321,571 | $2,420,107 | | Net Income | - | $102,559 | $96,151 | | Repurchase of common stock | - | $(26,053) | $(23,400) | | Change in unrealized investment gains/losses, net of tax | - | $30,776 | $21,271 | - Total shareholders' equity increased by **$202.68 million** from **$2.22 billion** at December 31, 2024, to **$2.42 billion** at June 30, 2025[23](index=23&type=chunk) - Treasury Stock, at cost, increased from **$(246.59) million to $(296.05) million**, reflecting **$26.05 million** in Q1 2025 and **$23.40 million** in Q2 2025 share repurchases[23](index=23&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Cash flow statements show stable operating cash, decreased investing cash use, and increased financing cash use for H1 2025 Condensed Consolidated Statements of Cash Flows (Unaudited) - Key Figures | Cash Flow Activity (In Thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------------------- | :--------------------------- | :--------------------------- | :----------- | :------------- | | Net cash provided by operating activities | $229,507 | $229,363 | $144 | 0.1% | | Net cash used in investing activities | $(141,786) | $(212,366) | $70,580 | -33.2% | | Net cash used in financing activities | $(58,016) | $(51,057) | $(6,959) | 13.6% | | Net increase (decrease) in cash, cash equivalents and restricted cash | $29,705 | $(34,060) | $63,765 | -187.2% | | Cash, cash equivalents and restricted cash, end of period | $84,013 | $62,629 | $21,384 | 34.1% | - Net cash used in investing activities decreased by **$70.58 million**, primarily due to lower purchases of fixed-maturity investments and higher proceeds from maturities and sales of investments[27](index=27&type=chunk) - Net cash used in financing activities increased by **$6.96 million**, mainly due to increased repurchases of common stock and taxes paid related to net share settlement of equity awards, partially offset by the absence of debt refinancing activities seen in the prior year[27](index=27&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) These notes provide essential details and explanations for the condensed consolidated financial statements, covering key accounting areas [1. Organization, Basis of Presentation and Summary of Accounting Principles](index=11&type=section&id=1.%20Organization%2C%20Basis%20of%20Presentation%20and%20Summary%20of%20Accounting%20Principles) NMIH provides private mortgage insurance through NMIC, operating as a single segment, with no material changes to accounting principles - NMI Holdings, Inc. (NMIH) provides private mortgage guaranty insurance through its wholly-owned insurance subsidiary, National Mortgage Insurance Corporation (NMIC), which is licensed in all 50 states and D.C[28](index=28&type=chunk) - The company operates as a single segment for performance assessment and operating decisions[28](index=28&type=chunk) - NMIH adopted **ASU 2023-09** (Income Taxes) on January 1, 2025, enhancing tax disclosure, and is evaluating **ASU 2024-03** for future adoption[31](index=31&type=chunk)[32](index=32&type=chunk) [2. Investments](index=12&type=section&id=2.%20Investments) All investments are available-for-sale at fair value, with a **$2.9 billion** portfolio and **$109.9 million** gross unrealized losses - All investments are held on an available-for-sale basis at fair value, with impairment recognized through the statement of operations if a sale is intended or likely required, or if credit-related factors are present[33](index=33&type=chunk) Total Investments at Fair Value | Metric | June 30, 2025 (In Thousands) | December 31, 2024 (In Thousands) | Change (In Thousands) | % Change | | :-------------------- | :--------------------------- | :------------------------------- | :-------------------- | :------- | | Total investments | $2,929,117 | $2,723,541 | $205,576 | 7.5% | | Gross Unrealized Gains | $22,992 | $5,820 | $17,172 | 295.0% | | Gross Unrealized Losses | $(109,907) | $(158,622) | $48,715 | -30.7% | - As of June 30, 2025, gross unrealized losses totaled **$109.9 million**, primarily driven by interest rate fluctuations, not credit factors[38](index=38&type=chunk)[41](index=41&type=chunk) Net Investment Income | Metric (In Thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net investment income | $24,949 | $20,688 | 20.6% | $48,635 | $40,124 | 21.2% | [3. Fair Value of Financial Instruments](index=15&type=section&id=3.%20Fair%20Value%20of%20Financial%20Instruments) The company uses a fair value hierarchy (Level 1, 2, 3) for financial instruments, with most assets in Level 1 or 2 - Fair value measurements are categorized into a three-level hierarchy: Level 1 (quoted prices in active markets), Level 2 (observable inputs other than quoted prices), and Level 3 (unobservable inputs)[44](index=44&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) Fair Value Measurements of Assets (In Thousands) | Asset Type | June 30, 2025 (Level 1) | June 30, 2025 (Level 2) | December 31, 2024 (Level 1) | December 31, 2024 (Level 2) | | :------------------------------------------ | :---------------------- | :---------------------- | :-------------------------- | :-------------------------- | | U.S. Treasury securities and obligations of U.S. government agencies | $0 | $115,988 | $116,060 | $0 | | Municipal debt securities | $634,962 | $0 | $0 | $635,245 | | Corporate debt securities | $2,019,333 | $0 | $0 | $1,847,640 | | Asset-backed securities | $38,557 | $0 | $0 | $41,980 | | Cash, cash equivalents and short-term investments | $0 | $204,290 | $136,924 | $0 | | Total assets | $2,692,852 | $320,278 | $252,984 | $2,524,865 | - The 2024 Senior Unsecured Notes, carried at **$416.1 million**, had a fair value of **$437.2 million** as of June 30, 2025, assessed under Level 2[50](index=50&type=chunk) [4. Debt](index=16&type=section&id=4.%20Debt) The company holds **$425 million** in senior unsecured notes and a **$250 million** undrawn credit facility, complying with covenants - NMIH has **$425 million** in senior unsecured notes outstanding, issued May 21, 2024, with a **6.00% interest rate** maturing August 15, 2029[51](index=51&type=chunk)[52](index=52&type=chunk) - A new **$250 million** unsecured revolving credit facility, maturing May 21, 2029, was undrawn as of June 30, 2025[56](index=56&type=chunk) - The company complied with all 2024 Revolving Credit Facility covenants at June 30, 2025, including a maximum **35% debt-to-total capitalization ratio**[59](index=59&type=chunk) [5. Reinsurance](index=17&type=section&id=5.%20Reinsurance) Reinsurance, including QSR, XOL, and ILN, is used for risk management, PMIERs compliance, and business growth, with recent QSR terminations and new XOL treaties - Reinsurance is used to manage risk, ensure PMIERs compliance, meet state regulatory capital requirements, and support business growth, with all transactions approved by the Wisconsin OCI and non-objected by the GSEs[60](index=60&type=chunk) Effect of Reinsurance on Premiums (In Thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net premiums written | $144,053 | $133,814 | 7.6% | $287,439 | $264,059 | 8.9% | | Net premiums earned | $149,066 | $141,168 | 5.6% | $298,432 | $277,825 | 7.4% | | Ceded premiums earned | $(33,865) | $(32,465) | 4.3% | $(64,955) | $(65,526) | -0.9% | - Effective April 1, 2025, NMIC terminated most 2016 and 2018 QSR transactions, recapturing approximately **$180.1 million** and **$59.7 million** of ceded risk-in-force[71](index=71&type=chunk)[72](index=72&type=chunk) - NMIC entered into new XOL treaties for 2026 and 2027, providing aggregate coverage for future mortgage insurance policies[74](index=74&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) [6. Reserves for Insurance Claims and Claim Expenses](index=23&type=section&id=6.%20Reserves%20for%20Insurance%20Claims%20and%20Claim%20Expenses) Gross reserves for insurance claims totaled **$163.0 million** at June 30, 2025, with a **1.00% default rate** on 668,638 policies - As of June 30, 2025, gross reserves for insurance claims and claim expenses totaled **$163.0 million**[102](index=102&type=chunk) Loans in Default and Default Rate | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Loans in default | 6,709 | 6,642 | | Total policies in-force | 668,638 | 659,567 | | Default rate | 1.00% | 1.01% | Reconciliation of Gross Reserve Balances (In Thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :--------------------------------- | :--------------------------- | :--------------------------- | | Beginning balance | $152,071 | $123,974 | | Total claims and claim expenses incurred | $17,590 | $3,970 | | Total claims and claim expenses paid | $7,073 | $2,323 | | Ending balance | $163,033 | $125,443 | - Claims incurred relating to current year defaults increased during the six months ended June 30, 2025, primarily due to an increase in new delinquencies tied to portfolio growth and seasoning, partially offset by a decrease in average case reserve per newly defaulted loan[109](index=109&type=chunk) [7. Earnings per Share (EPS)](index=25&type=section&id=7.%20Earnings%20per%20Share%20%28EPS%29) The basic and diluted EPS for the three and six months ended June 30, 2025, increased compared to the prior year, reflecting higher net income Earnings per Share (EPS) | Metric | 3 Months Ended June 30, 2025 (USD) | 3 Months Ended June 30, 2024 (USD) | % Change (YoY) | 6 Months Ended June 30, 2025 (USD) | 6 Months Ended June 30, 2024 (USD) | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Basic EPS | $1.23 | $1.15 | 7.0% | $2.54 | $2.25 | 12.9% | | Diluted EPS | $1.21 | $1.13 | 7.1% | $2.50 | $2.22 | 12.6% | [8. Segment Reporting](index=25&type=section&id=8.%20Segment%20Reporting) The company operates as a single Mortgage Insurance segment, with the CEO evaluating performance based on consolidated results - The company manages its business activities on a consolidated basis under a single reportable operating segment: Mortgage Insurance, which also provides ancillary loan review services[112](index=112&type=chunk)[113](index=113&type=chunk) - The CODM evaluates performance and allocates resources based on consolidated financial results, including revenue, expenses, net income, assets, and shareholders' equity[113](index=113&type=chunk) [9. Income Taxes](index=25&type=section&id=9.%20Income%20Taxes) The effective tax rate for Q2 and H1 2025 was **22.2%** and **22.1%**, respectively, reflecting changes in deferred tax liability Effective Tax Rate on Pre-Tax Income | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Effective tax rate | 22.2% | 22.4% | 22.1% | 22.3% | - The company is eligible for a tax deduction for its statutory contingency reserve, holding **$322.2 million** in tax and loss bonds[118](index=118&type=chunk) - New tax reform legislation (One Big Beautiful Bill Act) enacted on July 4, 2025, is not expected to have a material impact on the consolidated financial statements[119](index=119&type=chunk) [10. Stockholders' Equity](index=26&type=section&id=10.%20Stockholders'%20Equity) The Board authorized a new **$250 million** share repurchase program in February 2025; **$281.0 million** repurchase authority remains available - On February 5, 2025, the Board authorized a new **$250 million** 2025 Repurchase Program (effective through December 31, 2027) and extended the **$200 million** 2023 Repurchase Program to align its tenor[120](index=120&type=chunk) Share Repurchase Activity | Metric | 6 Months Ended June 30, 2025 | | :-------------------- | :--------------------------- | | Shares repurchased | 1.3 million | | Average price per share | $36.49 | | Total cost | $49.5 million | | Repurchase authority remaining | $281.0 million | [11. Litigation](index=26&type=section&id=11.%20Litigation) Litigation regarding mortgage insurance premium refunds was dismissed in September 2023 and affirmed in June 2025, with no material loss expected - A litigation case concerning mortgage insurance premium refunds under the Homeowners Protection Act (HPA) was dismissed in September 2023, and the dismissal was affirmed on appeal in June 2025[123](index=123&type=chunk) - The company does not currently expect to incur a material loss in connection with the case and has not recorded a litigation liability[123](index=123&type=chunk) [12. Premiums Receivable, Net](index=26&type=section&id=12.%20Premiums%20Receivable%2C%20Net) Premiums receivable are written off after 120 days, with a **$1.6 million** reserve for write-offs at June 30, 2025 - Premiums receivable are written off if unpaid for more than 120 days, or earlier for non-credit events like loan modification or refinancing[124](index=124&type=chunk) Reserve for Premium Write-Offs (In Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Reserve for premium write-offs | $1,600 | $2,200 | - The allowance for credit loss established on premium receivables was deemed immaterial at June 30, 2025, and December 31, 2024, due to the nature and short duration of the receivables[125](index=125&type=chunk) [13. Regulatory Information](index=27&type=section&id=13.%20Regulatory%20Information) NMIC's statutory capital was **$3.0 billion** with a **13.1:1 RTC ratio** at June 30, 2025, after paying a **$98.4 million** dividend Statutory Financials (In Thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Combined statutory net income | $30,500 | $36,000 | $67,300 | $70,700 | NMIC Statutory Capital and Risk-to-Capital Ratio (In Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | Statutory surplus | $951,592 | $984,362 | | Contingency reserve | $2,076,510 | $1,905,990 | | Statutory capital | $3,028,102 | $2,890,352 | | Risk-to-capital | 13.1:1 | 12.7:1 | - NMIC paid a **$98.4 million** ordinary dividend to NMIH on June 2, 2025, exhausting its 2025 ordinary dividend capacity[132](index=132&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section discusses NMI Holdings, Inc.'s financial condition and results, covering business overview, key factors, and performance analysis [Overview](index=28&type=section&id=Overview) NMIH provides private mortgage insurance through NMIC, mitigating mortgage credit risk and focusing on disciplined risk selection - NMIH provides private mortgage insurance (MI) through NMIC, which is approved by GSEs and licensed in all 50 states and D.C[134](index=134&type=chunk) - MI mitigates mortgage credit risk and facilitates secondary market sales of high-LTV residential loans to GSEs, expanding financing access for homeowners[135](index=135&type=chunk) Primary Insurance-in-Force (IIF) and Risk-in-Force (RIF) | Metric | June 30, 2025 (In Billions) | | :-------------------- | :------------ | | Primary IIF | $214.7 | | Primary RIF | $57.5 | - The company's strategy focuses on long-term customer relationships, disciplined risk selection using **Rate GPS®**, and financial strength[137](index=137&type=chunk) [Conditions and Trends Affecting Our Business](index=29&type=section&id=Conditions%20and%20Trends%20Affecting%20Our%20Business) Macroeconomic factors like inflation and high interest rates are expected to impact the housing market, reducing new business and increasing claims - Macroeconomic factors, including persistent inflation, elevated interest rates, flagging consumer confidence, and increasing jobless claims, could significantly impact the housing market and mortgage insurance industry[140](index=140&type=chunk) - A decline in housing demand, a significant decrease in house prices, or a sustained increase in unemployment could reduce new insurance written (NIW) volume and increase future default and claim experience[140](index=140&type=chunk) [Key Factors Affecting Our Results](index=29&type=section&id=Key%20Factors%20Affecting%20Our%20Results) This section details critical operational and financial metrics influencing performance, including NIW, IIF, RIF, premiums, and claims [New Insurance Written, Insurance-In-Force and Risk-In-Force](index=29&type=section&id=New%20Insurance%20Written%2C%20Insurance-In-Force%20and%20Risk-In-Force) New Insurance Written (NIW) is influenced by the overall mortgage origination market and the company's market share. NIW, along with persistency, drives Insurance-In-Force (IIF), which in turn determines Risk-In-Force (RIF) - New Insurance Written (NIW) is the aggregate unpaid principal balance of mortgages underpinning new policies and is affected by the overall mortgage origination market, high-LTV originations, and the company's private MI market share[141](index=141&type=chunk) - Insurance-In-Force (IIF) is the aggregate unpaid principal balance of insured mortgages, while Risk-In-Force (RIF) represents the aggregate coverage amount on outstanding policies, calculated as the coverage percentage applied to the unpaid principal balance[141](index=141&type=chunk) [Net Premiums Written and Net Premiums Earned](index=29&type=section&id=Net%20Premiums%20Written%20and%20Net%20Premiums%20Earned) Premium rates are set using **Rate GPS®**, with net premiums influenced by NIW, rates, cancellations, and reinsurance, impacting profitability - Premium rates are set using a proprietary risk-based pricing platform, **Rate GPS®**, which considers various individual variables to price policies commensurate with underlying risk[142](index=142&type=chunk) - Net premiums written are influenced by NIW, premium rates, mix of payment types (single, monthly, annual), policy cancellation rates (affected by interest rates, refinancings, home prices), and ceded premiums under reinsurance[142](index=142&type=chunk)[144](index=144&type=chunk) - Higher persistency rates significantly impact net premiums earned and profitability, as premiums are earned over the life of a policy. Prepayment speeds also affect profitability, especially for single premium policies[146](index=146&type=chunk) [Effect of Reinsurance on Our Results](index=30&type=section&id=Effect%20of%20Reinsurance%20on%20Our%20Results) Reinsurance (quota share, excess-of-loss) manages risk, ensures PMIERs compliance, and supports growth by reducing premiums and RIF - Third-party reinsurance (quota share and excess-of-loss) is utilized for risk management, PMIERs compliance, capital requirements, and business growth[147](index=147&type=chunk) - Quota share reinsurance reduces premiums written/earned and RIF, provides capital relief, and offsets acquisition/underwriting expenses through ceding commissions and profit commissions[147](index=147&type=chunk) - Excess-of-loss agreements provide coverage above an agreed-upon threshold, with the ceding insurer retaining losses up to that threshold[147](index=147&type=chunk) [Portfolio Data](index=30&type=section&id=Portfolio%20Data) NIW for Q2 and H1 2025 was **$12.5 billion** and **$21.7 billion**, respectively, with primary IIF growing **5%** to **$214.7 billion** New Insurance Written (NIW) and Primary Insurance-In-Force (IIF) (In Millions) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | NIW | $12,464 | $12,503 | -0.3% | $21,685 | $21,901 | -1.0% | | Primary IIF (end of period) | $214,653 | $203,501 | 5.5% | $214,653 | $203,501 | 5.5% | - Primary IIF increased **5%** at June 30, 2025, compared to June 30, 2024, primarily due to NIW generated and a historically high persistency rate of **84.1%** (down from 85.4% YoY) due to a slowdown in mortgage refinancing[151](index=151&type=chunk) [Portfolio Statistics](index=31&type=section&id=Portfolio%20Statistics) The primary portfolio shows consistent NIW, growing IIF and RIF, and a **1.00% default rate** at June 30, 2025 Primary Portfolio Trends (As of June 30, 2025) | Metric | June 30, 2025 (In Millions) | June 30, 2024 (In Millions) | | :-------------------- | :------------ | :------------ | | New insurance written | $12,464 | $12,503 | | Insurance-in-force | $214,653 | $203,501 | | Risk-in-force | $57,496 | $53,956 | | Policies in force (count) | 668,638 | 645,276 | | Loans in default (count) | 6,709 | 4,904 | | Default rate | 1.00% | 0.76% | | Annual persistency | 84.1% | 85.4% | NIW by FICO and LTV (6 Months Ended June 30, 2025) | NIW by FICO (In Millions) | 2025 | 2024 | NIW by LTV (In Millions) | 2025 | 2024 | | :------------------------ | :--- | :--- | :----------------------- | :--- | :--- | | >= 760 | $11,494 | $11,685 | 95.01% and above | $2,691 | $2,830 | | 740-759 | $4,034 | $3,951 | 90.01% to 95.00% | $9,760 | $10,059 | | 720-739 | $2,762 | $2,757 | 85.01% to 90.00% | $6,638 | $6,670 | | 700-719 | $1,726 | $1,864 | 85.00% and below | $2,596 | $2,342 | | 680-699 | $1,003 | $1,165 | Total | $21,685 | $21,901 | | <=679 | $666 | $479 | | | | | Total | $21,685 | $21,901 | | | | | Weighted average FICO | 757 | 757 | Weighted average LTV | 92.1% | 92.3% | - The top 3 states for primary RIF as of June 30, 2025, were California (**10.1%**), Texas (**8.4%**), and Florida (**7.2%**), collectively accounting for **25.7%** of the portfolio[169](index=169&type=chunk) [Insurance Claims and Claim Expenses](index=35&type=section&id=Insurance%20Claims%20and%20Claim%20Expenses) Insurance claims and expenses increased due to new defaults and higher case reserves, with ending default inventory at **6,709 loans** - Insurance claims and claim expenses incurred increased due to a rise in newly defaulted loans and higher average case reserves for aging delinquencies, partially offset by reserve releases from cure activity[207](index=207&type=chunk) Loans in Default Reconciliation | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Beginning default inventory | 6,859 | 5,109 | 6,642 | 5,099 | | New defaults | 2,169 | 1,728 | 4,590 | 3,604 | | Cures | (2,215) | (1,869) | (4,309) | (3,686) | | Claims paid | (93) | (59) | (188) | (101) | | Ending default inventory | 6,709 | 4,904 | 6,709 | 4,904 | Claims Paid and Severity (Before Reinsurance) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Number of claims paid | 93 | 59 | 188 | 101 | | Total amount paid for claims (In Thousands) | $5,512 | $1,877 | $10,737 | $3,022 | | Average amount paid per claim (In Thousands) | $59 | $32 | $57 | $30 | | Severity | 82% | 54% | 75% | 54% | - Claims severity increased for Q2 and H1 2025, primarily due to claims on newer vintage loans with less accumulated equity[187](index=187&type=chunk) [GSE Oversight](index=39&type=section&id=GSE%20Oversight) NMIC complies with PMIERs, with available assets increasing to **$3.2 billion** and net risk-based required assets to **$1.9 billion** - NMIC must comply with **PMIERs**, maintaining available assets exceeding minimum required assets (greater of **$400 million** or total risk-based amount)[192](index=192&type=chunk)[193](index=193&type=chunk) - NMIC certified full compliance with PMIERs as of December 31, 2024, and continuously monitors compliance[196](index=196&type=chunk) PMIERs Available Assets and Net Risk-Based Required Assets (In Thousands) | Metric | June 30, 2025 | June 30, 2024 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------ | :------------ | :----------- | :------------- | | Available assets | $3,244,517 | $2,827,721 | $416,796 | 14.7% | | Net risk-based required assets | $1,926,517 | $1,651,569 | $274,948 | 16.7% | [Information and Technology Support Function](index=40&type=section&id=Information%20and%20Technology%20Support%20Function) The company renewed its IT service agreement with **TCS** through March 31, 2032, for application development and infrastructure support - The IT service agreement with Tata Consultancy Services (TCS) was renewed and extended through March 31, 2032, covering application development, infrastructure support, and information security[199](index=199&type=chunk) - The engagement with TCS aims to enhance innovative IT solutions and realize cost efficiencies through TCS's global platform[199](index=199&type=chunk) [Consolidated Results of Operations](index=41&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated results show increased total revenues and net income for Q2 and H1 2025, driven by premiums and investment income [Revenues](index=42&type=section&id=Revenues) Total revenues increased by **7%** (Q2) and **9%** (H1) for June 30, 2025, driven by net premiums and investment income Revenue Performance (In Thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net premiums earned | $149,066 | $141,168 | 5.6% | $298,432 | $277,825 | 7.4% | | Net investment income | $24,949 | $20,688 | 20.6% | $48,635 | $40,124 | 21.2% | | Other revenues | $164 | $266 | -38.4% | $334 | $426 | -21.6% | | Total revenues | $173,779 | $162,122 | 7.2% | $347,025 | $318,375 | 9.0% | - Net premiums earned increased primarily due to growth in monthly IIF and monthly pay premium receipts, partially offset by increased ceded premiums under reinsurance treaties[203](index=203&type=chunk) - Net investment income increased due to growth in the total invested asset base and an increase in the book yield of the investment portfolio from new cash flows and reinvestment at higher rates[204](index=204&type=chunk) [Expenses](index=43&type=section&id=Expenses) Total expenses increased by **15%** (Q2) and **8%** (H1) for June 30, 2025, driven by higher claims and operating expenses Expense Performance (In Thousands) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Insurance claims and claim expenses | $13,445 | $276 | 4771.4% | $17,923 | $3,970 | 351.5% | | Underwriting and operating expenses | $29,508 | $28,330 | 4.2% | $59,683 | $58,145 | 2.6% | | Service expenses | $110 | $194 | -43.3% | $226 | $331 | -31.7% | | Interest expense | $7,115 | $14,678 | -51.5% | $14,221 | $22,718 | -37.5% | | Total expenses | $50,178 | $43,478 | 15.4% | $92,053 | $85,164 | 8.1% | - Insurance claims and claim expenses increased significantly due to a rise in newly defaulted loans and higher average case reserves for aging delinquencies, partially offset by reserve releases from cure activity[207](index=207&type=chunk) - Interest expense decreased due to the refinancing of the 2020 Notes and 2021 Revolving Credit Facility in the prior year, which included **$7.0 million** of non-recurring costs[210](index=210&type=chunk) [Net Income](index=43&type=section&id=Net%20Income) Net income increased by **4%** (Q2) and **10%** (H1) for June 30, 2025, driven by revenue growth and share repurchases Net Income and EPS Performance (In Thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | % Change (YoY) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | % Change (YoY) | | :-------------------- | :--------------------------- | :--------------------------- | :------------- | :--------------------------- | :--------------------------- | :------------- | | Net income | $96,151 | $92,079 | 4.4% | $198,710 | $181,129 | 9.7% | | Diluted EPS | $1.21 | $1.13 | 7.1% | $2.50 | $2.22 | 12.6% | | Adjusted diluted EPS | $1.22 | $1.20 | 1.7% | $2.50 | $2.28 | 9.6% | - Net income growth was primarily driven by increased total revenues, partially offset by higher insurance claims and claim expenses, income tax expense, and underwriting and operating expenses[211](index=211&type=chunk) - Diluted and adjusted diluted EPS increased due to net income growth and a decline in weighted average diluted shares outstanding from share repurchase activity[212](index=212&type=chunk) [Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures](index=45&type=section&id=Explanation%20and%20Reconciliation%20of%20Our%20Use%20of%20Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures (adjusted income, net income, diluted EPS) to GAAP, excluding specific items - Non-GAAP measures (adjusted income before tax, adjusted net income, adjusted diluted EPS) are used to enhance comparability of fundamental financial performance by excluding net realized investment gains/losses and capital markets transaction costs[217](index=217&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk)[220](index=220&type=chunk) Non-GAAP Financial Measure Reconciliations (In Thousands, except per share data) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Income before income taxes (GAAP) | $123,601 | $118,644 | $254,972 | $233,211 | | Adjustments: Net realized investment losses | $400 | $0 | $376 | $0 | | Adjustments: Capital markets transaction costs | $0 | $6,966 | $0 | $6,966 | | Adjusted income before tax | $124,001 | $125,610 | $255,348 | $240,177 | | Adjusted net income | $96,467 | $97,582 | $199,007 | $186,632 | | Adjusted diluted EPS | $1.22 | $1.20 | $2.50 | $2.28 | [Consolidated Balance Sheets](index=46&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased **7%** to **$3.59 billion**, liabilities **3%** to **$1.17 billion**, and equity **9%** to **$2.42 billion** at June 30, 2025 Consolidated Balance Sheets - Key Changes (In Thousands) | Metric | June 30, 2025 | December 31, 2024 | $ Change | % Change | | :--------------------------------- | :------------ | :---------------- | :------- | :------- | | Total investment portfolio | $2,929,117 | $2,723,541 | $205,576 | 8% | | Cash and cash equivalents | $84,013 | $54,308 | $29,705 | 55% | | Total assets | $3,591,085 | $3,349,973 | $241,112 | 7% | | Unearned premiums | $54,159 | $65,217 | $(11,058) | -17% | | Reserve for insurance claims and claim expenses | $163,033 | $152,071 | $10,962 | 7% | | Deferred tax liability, net | $441,389 | $386,192 | $55,197 | 14% | | Total liabilities | $1,170,978 | $1,132,541 | $38,437 | 3% | | Total shareholders' equity | $2,420,107 | $2,217,432 | $202,675 | 9% | - Total cash and investments increased due to positive cash flow from operations and a decrease in unrealized losses on the fixed income portfolio, partially offset by share repurchase activity[223](index=223&type=chunk) - Unearned premiums decreased due to amortization and cancellations of single premium policies, partially offset by new originations[228](index=228&type=chunk) [Consolidated Cash Flows](index=47&type=section&id=Consolidated%20Cash%20Flows) Operating cash flow was stable at **$229.5 million** (H1 2025); investing cash use decreased **33%**, financing cash use increased **14%** Consolidated Cash Flows - Key Changes (In Thousands) | Metric | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | $ Change | % Change | | :--------------------------------- | :--------------------------- | :--------------------------- | :------- | :------- | | Net cash provided by operating activities | $229,507 | $229,363 | $144 | 0% | | Net cash used in investing activities | $(141,786) | $(212,366) | $70,580 | -33% | | Net cash used in financing activities | $(58,016) | $(51,057) | $(6,959) | 14% | | Net increase (decrease) in cash and cash equivalents | $29,705 | $(34,060) | $63,765 | -187% | - Cash used in investing activities decreased due to lower purchases of fixed and short-term maturities and higher proceeds from maturities, sales, and redemptions within the investment portfolio[232](index=232&type=chunk) - Cash used in financing activities increased primarily due to common stock repurchases and taxes paid on net share settlement of equity awards, with the prior year benefiting from debt refinancing proceeds[233](index=233&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) NMIH manages liquidity with **$168.8 million** cash and a **$250 million** credit facility; NMIC paid a **$98.4 million** dividend and maintains PMIERs compliance - NMIH's principal liquidity demands include corporate expenses, debt interest, tax payments, subsidiary capital support, stock repurchases, and dividends[234](index=234&type=chunk) - As of June 30, 2025, NMIH had **$168.8 million** in cash and investments and access to a **$250 million** undrawn revolving credit facility[235](index=235&type=chunk) - NMIC paid a **$98.4 million** ordinary dividend to NMIH on June 2, 2025, exhausting its 2025 ordinary dividend capacity[243](index=243&type=chunk) - NMIC maintains PMIERs compliance with **$3.2 billion** in available assets, **$1.9 billion** in required assets, and a **13.1:1 RTC ratio**[197](index=197&type=chunk)[251](index=251&type=chunk) [Debt and Financial Strength Ratings](index=49&type=section&id=Debt%20and%20Financial%20Strength%20Ratings) NMIC holds financial strength ratings of **A- (Fitch), A3 (Moody's), A- (S&P)**; NMIH's 2024 Notes are rated **BBB- (Fitch), Baa3 (Moody's)** Financial Strength and Debt Ratings | Entity | Rating Type | Fitch | Moody's | S&P | Outlook (Fitch) | Outlook (Moody's & S&P) | | :----- | :---------- | :---- | :------ | :-- | :-------------- | :---------------------- | | NMIC | Financial Strength | A- | A3 | A- | Positive | Stable | | NMIH | 2024 Notes | BBB- | Baa3 | N/A | Positive | Stable | [Consolidated Investment Portfolio](index=49&type=section&id=Consolidated%20Investment%20Portfolio) The **$2.9 billion** fixed maturity investment portfolio aims for income and capital preservation, with a **3.2%** pre-tax book yield - The investment portfolio's primary objectives are to generate investment income and preserve capital, while maintaining sufficient liquidity, with diversification by type, quality, maturity, and industry[254](index=254&type=chunk) Investment Portfolio Composition (Fair Value) | Investment Type | June 30, 2025 | December 31, 2024 | | :------------------------------------------ | :------------ | :---------------- | | Corporate debt securities | 67% | 67% | | Municipal debt securities | 21% | 23% | | Cash, cash equivalents, and short-term investments | 7% | 5% | | U.S. treasury securities and obligations of U.S. government agencies | 4% | 4% | | Asset-backed securities | 1% | 1% | | Total | 100% | 100% | - Pre-tax book yield on the investment portfolio for H1 2025 was **3.2%**[255](index=255&type=chunk) - Gross unrealized losses of **$109.9 million** as of June 30, 2025, were primarily due to interest rate fluctuations[259](index=259&type=chunk)[260](index=260&type=chunk) [Critical Accounting Estimates](index=50&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates include revenue recognition, investments, deferred policy acquisition costs, and insurance claims reserves, with no material changes - Critical accounting estimates include revenue recognition, the investment portfolio, deferred policy acquisition costs, and reserves for insurance claims and claim expenses, which require significant judgment and material estimates[262](index=262&type=chunk) - There have been no material changes to the critical accounting policies and estimates compared to the 2024 10-K[262](index=262&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The investment portfolio faces interest rate risk, managed by duration matching; fixed income portfolio duration was **3.52 years** at June 30, 2025 - The primary market risk to the investment portfolio is interest rate risk, mitigated by matching the duration of fixed maturity securities with the expected duration of liabilities[264](index=264&type=chunk) - As of June 30, 2025, the fixed income portfolio's duration was **3.52 years**, implying a **3.52%** fair value change for a 100 basis point yield shift[265](index=265&type=chunk) - The 2024 Revolving Credit Facility bears interest at a variable rate, and ILN Transactions' risk premiums are linked to one-month SOFR, exposing the company to interest rate fluctuations[266](index=266&type=chunk)[267](index=267&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting under the Exchange Act[271](index=271&type=chunk) - There was no change in internal control over financial reporting during the period that materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting[272](index=272&type=chunk) PART II [Item 1. Legal Proceedings](index=54&type=section&id=Item%201.%20Legal%20Proceedings) Litigation regarding mortgage insurance premium refunds was dismissed in September 2023 and affirmed in June 2025, with no material loss expected - A litigation case concerning mortgage insurance premium refunds under the Homeowners Protection Act (HPA) was dismissed by the District Court in September 2023, and this dismissal was affirmed by the Fourth Circuit in June 2025[277](index=277&type=chunk) - The company has not recognized a material accrual liability for this matter and does not currently expect it is reasonably possible that these matters will result in a material liability[277](index=277&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the 2024 10-K for risk factors, noting no material changes as of this report's date - Risk factors affecting the business and financial results are discussed in Part I, Item 1A of the 2024 10-K[278](index=278&type=chunk) - As of the date of this report, the company is not aware of any material changes in its risk factors from those disclosed in the 2024 10-K[278](index=278&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=55&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **627,911 shares** for Q2 2025; **$281.0 million** repurchase authority remains as of June 30, 2025 Issuer Purchases of Equity Securities (3 Months Ended June 30, 2025) | Period | Total Number of Shares Purchased | Average Price Paid per Share (USD) | Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Program (In Thousands) | | :-------------------- | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------------------- | | 4/1/2025 to 4/30/2025 | 258,814 | $33.90 | $295,418 | | 5/1/2025 to 5/31/2025 | 198,180 | $37.84 | $287,919 | | 6/1/2025 to 6/30/2025 | 170,917 | $40.37 | $281,019 | | Total | 627,911 | | | - As of June 30, 2025, **$281.0 million** of repurchase authority remained under the 2023 and 2025 Repurchase Programs[280](index=280&type=chunk) [Item 5. Other Information](index=55&type=section&id=Item%205.%20Other%20Information) No Section 16 officers or directors adopted, modified, or terminated "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" during the quarter ended June 30, 2025 - No Section 16 officers or directors adopted, modified, or terminated Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[281](index=281&type=chunk) [Item 6. Exhibits](index=56&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including agreements, corporate documents, and certifications - The exhibits include the Underwriting Agreement, Amended and Restated Certificate of Incorporation and Bylaws, Indenture for Senior Unsecured Notes, various Stock Incentive Plan agreements, Indemnification Agreement, Severance Benefit Plans, Offer Letters, and certifications (302 and 906)[282](index=282&type=chunk)[283](index=283&type=chunk) - Financial information formatted in XBRL (eXtensible Business Reporting Language) is included as Exhibit 101[285](index=285&type=chunk) [Signatures](index=59&type=section&id=Signatures) The report is signed by Aurora Swithenbank, Chief Financial Officer and Duly Authorized Signatory, on behalf of NMI Holdings, Inc. on July 29, 2025 - The Form 10-Q was signed by Aurora Swithenbank, Chief Financial Officer and Duly Authorized Signatory, on July 29, 2025[289](index=289&type=chunk)

[Second Quarter 2025 Financial Results Overview](index=1&type=section&id=1.%20Second%20Quarter%202025%20Financial%20Results%20Overview) NMI Holdings, Inc. reported strong Q2 2025 financial results, including net income of **$96.2 million** and continued growth in its insured portfolio [Executive Summary](index=1&type=section&id=1.1.%20Executive%20Summary) NMI Holdings, Inc. reported Q2 2025 net income of **$96.2 million** and adjusted net income of **$96.5 million**, with the CEO emphasizing strong operating performance and portfolio growth - NMI Holdings, Inc. reported net income of **$96.2 million**, or **$1.21 per diluted share**, for the second quarter ended June 30, 2025[2](index=2&type=chunk) - Adjusted net income for the quarter was **$96.5 million**, or **$1.22 per diluted share**[2](index=2&type=chunk) - CEO Adam Pollitzer highlighted strong operating performance, continued growth in the high-quality insured portfolio, and standout financial results[3](index=3&type=chunk) [Selected Financial and Operational Highlights](index=1&type=section&id=1.2.%20Selected%20Financial%20and%20Operational%20Highlights) Q2 2025 highlights include year-over-year growth in primary insurance-in-force and total revenue, alongside a significant increase in insurance claims and a higher loss ratio Selected Q2 2025 Financial and Operational Highlights | Metric | Q2 2025 | Q1 2025 | Q2 2024 | Q/Q Change | Y/Y Change | | :--------------------------------- | :-------- | :-------- | :-------- | :--------- | :--------- | | Primary Insurance-in-Force ($B) | $214.7 | $211.3 | $203.5 | 2 % | 5 % | | Net Premiums Earned ($M) | $149.1 | $149.4 | $141.2 | — % | 6 % | | Total Revenue ($M) | $173.8 | $173.2 | $162.1 | — % | 7 % | | Insurance Claims & Claim Expenses ($M) | $13.4 | $4.5 | $0.3 | 200 % | (3) NM | | Loss Ratio | 9.0 % | 3.0 % | 0.2 % | | | | Underwriting & Operating Expenses ($M) | $29.5 | $30.2 | $28.3 | (2)% | 4 % | | Expense Ratio | 19.8 % | 20.2 % | 20.1 % | | | | Net Income ($M) | $96.2 | $102.6 | $92.1 | (6)% | 4 % | | Diluted EPS | $1.21 | $1.28 | $1.13 | (5)% | 7 % | | Adjusted Net Income ($M) | $96.5 | $102.5 | $97.6 | (6)% | (1)% | | Adjusted Diluted EPS | $1.22 | $1.28 | $1.20 | (5)% | 1 % | | Book Value per Share (excl. unrealized G/L) | $32.08 | $30.85 | $27.54 | 4 % | 16 % | | Annualized Return on Equity | 16.2 % | 18.1 % | 18.3 % | | | | Annualized Adjusted Return on Equity | 16.3 % | 18.1 % | 19.4 % | | | | PMIERs Available Assets ($B) | $3.2 | | | | | | Net Risk-Based Required Assets ($B) | $1.9 | | | | | [Company Information & Disclosures](index=2&type=section&id=2.%20Company%20Information%20%26%20Disclosures) This section provides an overview of NMI Holdings, Inc., details for the upcoming conference call, and important cautionary notes regarding forward-looking statements [About NMI Holdings, Inc.](index=2&type=section&id=2.1.%20About%20NMI%20Holdings%2C%20Inc.) NMI Holdings, Inc. is the parent company of National Mortgage Insurance Corporation, a private mortgage insurance provider enabling homeownership and protecting lenders - NMI Holdings, Inc. (NASDAQ: NMIH) is the parent company of National Mortgage Insurance Corporation (National MI)[7](index=7&type=chunk) - National MI is a U.S.-based, private mortgage insurance company[7](index=7&type=chunk) - The company enables low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default[7](index=7&type=chunk) [Conference Call and Webcast Details](index=2&type=section&id=2.2.%20Conference%20Call%20and%20Webcast%20Details) A live conference call and webcast for Q2 2025 results are scheduled for July 29, 2025, accessible via the company's investor relations website - A conference call and live webcast will be held on July 29, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time[6](index=6&type=chunk) - The webcast will be available on the company's website, www.nationalmi.com, in the 'Investor Relations' section[6](index=6&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=2.3.%20Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This document contains forward-looking statements subject to various risks and uncertainties, including economic conditions and regulatory changes, with no obligation to update them - Certain statements in the press release may constitute forward-looking statements under Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the PSLRA[8](index=8&type=chunk) - Forward-looking statements involve estimates, known and unknown risks, assumptions, and uncertainties that could cause actual results to differ materially[8](index=8&type=chunk) - Important factors that could cause actual events or results to differ materially include changes in general economic, market, and political conditions, changes in GSE policies, regulatory changes, and actions of competitors[8](index=8&type=chunk)[9](index=9&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=3.%20Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used by NMI Holdings to provide enhanced transparency into its fundamental financial performance [Use and Definition of Non-GAAP Measures](index=3&type=section&id=3.1.%20Use%20and%20Definition%20of%20Non-GAAP%20Measures) NMI Holdings utilizes non-GAAP measures like adjusted net income and EPS to improve comparability and provide relevant investor information, not as GAAP alternatives - The company uses non-GAAP measures such as adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio, and book value per share (excluding net unrealized gains and losses)[10](index=10&type=chunk) - These measures enhance comparability of fundamental financial performance between periods and provide relevant information to investors, aligning with how management evaluates business performance[10](index=10&type=chunk) - Definitions are provided for various adjusted metrics, detailing specific exclusions like net realized investment gains/losses and capital markets transaction costs[11](index=11&type=chunk)[12](index=12&type=chunk)[13](index=13&type=chunk)[14](index=14&type=chunk)[15](index=15&type=chunk) [Non-GAAP Reconciliations](index=7&type=section&id=3.2.%20Non-GAAP%20Reconciliations) Detailed reconciliations of GAAP to non-GAAP financial measures are provided for Q2 2025 and comparative periods, highlighting adjustments for investment gains/losses and transaction costs Non-GAAP Financial Measure Reconciliations | Metric | Q2 2025 (3 months) ($K) | Q1 2025 (3 months) ($K) | Q2 2024 (3 months) ($K) | YTD 2025 (6 months) ($K) | YTD 2024 (6 months) ($K) | | :------------------------------------ | :---------------------- | :---------------------- | :---------------------- | :----------------------- | :----------------------- | | Net income (GAAP) ($K) | $96,151 | $102,559 | $92,079 | $198,710 | $181,129 | | Adjustments: | | | | | | | Net realized investment losses (gains) ($K) | $400 | $(24) | — | $376 | — | | Capital markets transaction costs ($K) | — | — | $6,966 | — | $6,966 | | Adjusted net income ($K) | $96,467 | $102,540 | $97,582 | $199,007 | $186,632 | | Diluted EPS (GAAP) | $1.21 | $1.28 | $1.13 | $2.50 | $2.22 | | Adjusted diluted EPS | $1.22 | $1.28 | $1.20 | $2.50 | $2.28 | | Return on equity (GAAP) | 16.2 % | 18.1 % | 18.3 % | 17.1 % | 18.2 % | | Adjusted return on equity | 16.3 % | 18.1 % | 19.4 % | 17.2 % | 18.8 % | | Book value per share (GAAP) | $31.14 | $29.65 | $25.65 | | | | Book value per share (excluding net unrealized gains and losses) | $32.08 | $30.85 | $27.54 | | | - The marginal tax impact of non-GAAP adjustments is calculated based on a statutory U.S. federal corporate income tax rate of **21%**[23](index=23&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=4.%20Consolidated%20Financial%20Statements) This section presents the consolidated statements of operations, comprehensive income, and balance sheets for NMI Holdings, Inc., detailing revenue, expenses, assets, and equity [Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=4.1.%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) Q2 2025 saw total revenues increase to **$173.8 million** (up **7%** YoY), but total expenses significantly rose to **$50.2 million** (up **15%** YoY) due to higher insurance claims Consolidated Statements of Operations and Comprehensive Income (In Thousands) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | YTD 2025 ($K) | YTD 2024 ($K) | | :-------------------------------- | :----------- | :----------- | :------------ | :------------ | | Net premiums earned | $149,066 | $141,168 | $298,432 | $277,825 | | Net investment income | $24,949 | $20,688 | $48,635 | $40,124 | | Total revenues | $173,779 | $162,122 | $347,025 | $318,375 | | Insurance claims and claim expenses | $13,445 | $276 | $17,923 | $3,970 | | Underwriting and operating expenses | $29,508 | $28,330 | $59,683 | $58,145 | | Total expenses | $50,178 | $43,478 | $92,053 | $85,164 | | Income before income taxes | $123,601 | $118,644 | $254,972 | $233,211 | | Net income | $96,151 | $92,079 | $198,710 | $181,129 | | Diluted EPS | $1.21 | $1.13 | $2.50 | $2.22 | | Loss ratio | 9.0 % | 0.2 % | 6.0 % | 1.4 % | | Expense ratio | 19.8 % | 20.1 % | 20.0 % | 20.9 % | | Combined ratio | 28.8 % | 20.3 % | 26.0 % | 22.4 % | - Insurance claims and claim expenses increased significantly to **$13.4 million** in Q2 2025 from **$0.3 million** in Q2 2024, leading to a loss ratio of **9.0%** compared to **0.2%** in the prior year quarter[18](index=18&type=chunk) [Consolidated Balance Sheets](index=6&type=section&id=4.2.%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets grew to **$3.59 billion** and total shareholders' equity rose to **$2.42 billion**, driven by increased retained earnings and reduced comprehensive loss Consolidated Balance Sheets (In Thousands) | Metric | June 30, 2025 ($K) | December 31, 2024 ($K) | | :------------------------------------ | :----------------- | :--------------------- | | Fixed maturities, available-for-sale | $2,929,117 | $2,723,541 | | Cash and cash equivalents | $84,013 | $54,308 | | Total assets | $3,591,085 | $3,349,973 | | Debt | $416,073 | $415,146 | | Reserve for insurance claims and claim expenses | $163,033 | $152,071 | | Deferred tax liability, net | $441,389 | $386,192 | | Total liabilities | $1,170,978 | $1,132,541 | | Retained earnings | $1,781,969 | $1,583,259 | | Accumulated other comprehensive loss, net of tax | $(72,757) | $(124,804) | | Total shareholders' equity | $2,420,107 | $2,217,432 | - Total assets increased by **$241.1 million** (**7.2%**) from December 31, 2024, to **$3.59 billion** as of June 30, 2025[20](index=20&type=chunk) - Total shareholders' equity increased by **$202.7 million** (**9.1%**) from December 31, 2024, to **$2.42 billion** as of June 30, 2025, driven by higher retained earnings and a reduced accumulated other comprehensive loss[20](index=20&type=chunk) [Historical Quarterly Financial Data](index=9&type=section&id=5.%20Historical%20Quarterly%20Financial%20Data) This section provides historical quarterly consolidated statements of operations, illustrating trends in net income, EPS, and loss ratios over the past five quarters [Quarterly Consolidated Statements of Operations](index=9&type=section&id=5.1.%20Quarterly%20Consolidated%20Statements%20of%20Operations) NMI Holdings' Q2 2025 net income was **$96.2 million**, lower than Q1 2025 but higher than Q2 2024, with significant volatility in the loss ratio over the past five quarters Historical Quarterly Consolidated Statements of Operations (In Thousands) | Metric | Q2 2025 ($K) | Q1 2025 ($K) | Q4 2024 ($K) | Q3 2024 ($K) | Q2 2024 ($K) | | :-------------------------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Net premiums earned | $149,066 | $149,366 | $143,520 | $143,343 | $141,168 | | Total revenues | $173,779 | $173,246 | $166,504 | $166,092 | $162,122 | | Insurance claims and claim expenses | $13,445 | $4,478 | $17,253 | $10,321 | $276 | | Total expenses | $50,178 | $41,875 | $55,631 | $46,765 | $43,478 | | Net income | $96,151 | $102,559 | $86,167 | $92,810 | $92,079 | | Diluted EPS | $1.21 | $1.28 | $1.07 | $1.15 | $1.13 | | Loss ratio | 9.0 % | 3.0 % | 12.0 % | 7.2 % | 0.2 % | | Expense ratio | 19.8 % | 20.2 % | 21.7 % | 20.3 % | 20.1 % | | Combined ratio | 28.8 % | 23.2 % | 33.7 % | 27.5 % | 20.3 % | - Net income decreased by **6.2%** quarter-over-quarter from **$102.6 million** in Q1 2025 to **$96.2 million** in Q2 2025[24](index=24&type=chunk) - The loss ratio significantly increased from **0.2%** in Q2 2024 to **9.0%** in Q2 2025, indicating a rise in claims[24](index=24&type=chunk) [Insurance Portfolio Performance](index=10&type=section&id=6.%20Insurance%20Portfolio%20Performance) This section details the primary insurance portfolio trends, new insurance written, insurance-in-force composition, reinsurance programs, and geographic dispersion of risk [Primary Portfolio Trends](index=10&type=section&id=6.1.%20Primary%20Portfolio%20Trends) The primary insurance portfolio grew to **$214.7 billion** in insurance-in-force, but the number of loans in default and the default rate increased year-over-year to **1.00%** Primary Portfolio Trends (As of and for the three months ended) | Metric | June 30, 2025 | March 31, 2025 | June 30, 2024 | | :------------------------------------ | :-------------- | :------------- | :------------ | | New insurance written (NIW) ($M) | $12,464 | $9,221 | $12,503 | | Insurance-in-force (IIF) ($M) | $214,653 | $211,308 | $203,501 | | Risk-in-force (RIF) ($M) | $57,496 | $56,515 | $53,956 | | Policies in force (count) | 668,638 | 661,490 | 645,276 | | Loans in default (count) | 6,709 | 6,859 | 4,904 | | Default rate | 1.00 % | 1.04 % | 0.76 % | | Annual persistency | 84.1 % | 84.3 % | 85.4 % | - Primary Insurance-in-Force grew **5%** year-over-year to **$214.7 billion** as of June 30, 2025[28](index=28&type=chunk) - The default rate increased from **0.76%** in Q2 2024 to **1.00%** in Q2 2025[28](index=28&type=chunk) [New Insurance Written (NIW) and Insurance-in-Force (IIF)](index=10&type=section&id=6.2.%20New%20Insurance%20Written%20%28NIW%29%20and%20Insurance-in-Force%20%28IIF%29) New Insurance Written (NIW) for Q2 2025 was **$12.46 billion**, contributing to a total primary Insurance-in-Force (IIF) of **$214.7 billion**, predominantly for purchase mortgages [NIW Composition (FICO, LTV, Purchase/Refinance)](index=11&type=section&id=6.2.1.%20NIW%20Composition%20%28FICO%2C%20LTV%2C%20Purchase%2FRefinance%29) Q2 2025 New Insurance Written (NIW) was primarily for purchase mortgages (**94.8%**), with a weighted average FICO of **756** and LTV of **92.0%** - New insurance written (NIW) for Q2 2025 was **$12,464 million**, a **35%** increase from Q1 2025 (**$9,221 million**)[28](index=28&type=chunk)[31](index=31&type=chunk) - The majority of NIW in Q2 2025 was for purchase mortgages (**$11,813 million**, or **94.8%**)[36](index=36&type=chunk) - Weighted average FICO for NIW in Q2 2025 was **756**, and weighted average LTV was **92.0%**[35](index=35&type=chunk) NIW by FICO, LTV, and Purchase/Refinance Mix (Q2 2025) | Category | Q2 2025 ($M) | Percentage of Total NIW | | :------------------------ | :------------- | :---------------------- | | **NIW by FICO** | | | | >= 760 | $6,523 | 52.3 % | | 740-759 | $2,281 | 18.3 % | | 720-739 | $1,585 | 12.7 % | | 700-719 | $1,061 | 8.5 % | | 680-699 | $590 | 4.7 % | | <=679 | $424 | 3.4 % | | **NIW by LTV** | | | | 95.01% and above | $1,544 | 12.4 % | | 90.01% to 95.00% | $5,486 | 44.0 % | | 85.01% to 90.00% | $3,887 | 31.2 % | | 85.00% and below | $1,547 | 12.4 % | | **NIW by Mix** | | | | Purchase | $11,813 | 94.8 % | | Refinance | $651 | 5.2 % | [IIF and RIF Composition (Book Year, FICO, LTV)](index=12&type=section&id=6.2.2.%20IIF%20and%20RIF%20Composition%20%28Book%20Year%2C%20FICO%2C%20LTV%29) As of June 30, 2025, total primary Insurance-in-Force (IIF) was **$214.7 billion**, with the largest portions by FICO (>=760) and LTV (90.01%-95.00%) - Total primary Insurance-in-Force (IIF) was **$214,653 million** and Risk-in-Force (RIF) was **$57,496 million** as of June 30, 2025[37](index=37&type=chunk) - The largest portion of IIF by FICO (**50.2%**) is from loans with FICO scores >= **760** (**$107,677 million**)[38](index=38&type=chunk) - The largest portion of IIF by LTV (**49.4%**) is from loans with LTVs between **90.01%** and **95.00%** (**$106,017 million**)[39](index=39&type=chunk) - Fixed-rate mortgages constitute **98%** of the primary RIF by loan type[39](index=39&type=chunk) [Change in Primary IIF](index=13&type=section&id=6.2.3.%20Change%20in%20Primary%20IIF) Primary Insurance-in-Force (IIF) increased by **$3.345 billion** during Q2 2025, driven by **$12.464 billion** in new insurance written, partially offset by reductions Change in Total Primary IIF (In Millions) | Metric | June 30, 2025 ($M) | | :------------------------------------------ | :----------------- | | IIF, beginning of period | $211,308 | | NIW | $12,464 | | Cancellations, principal repayments and other reductions | $(9,119) | | IIF, end of period | $214,653 | - Primary IIF increased by **$3,345 million** during Q2 2025, driven by new insurance written of **$12,464 million**, partially offset by **$9,119 million** in reductions[40](index=40&type=chunk) [Reinsurance Program Details](index=11&type=section&id=6.3.%20Reinsurance%20Program%20Details) NMI Holdings manages risk through quota-share, insurance-linked note, and excess-of-loss reinsurance transactions, with **$12.76 billion** in ceded risk-in-force for Q2 2025 - The company engages in quota-share reinsurance (QSR), insurance-linked note (ILN), and traditional excess-of-loss (XOL) transactions[32](index=32&type=chunk) Reinsurance Transactions (Q2 2025, In Thousands) | Metric | June 30, 2025 ($K) | | :-------------------------------- | :----------------- | | **The QSR Transactions** | | | Ceded risk-in-force | $12,764,708 | | Ceded premiums earned | $(40,227) | | Ceded claims and claim expenses (benefits) | $3,253 | | Ceding commission earned | $9,669 | | Profit commission | $19,958 | | **The ILN Transactions** | | | Ceded premiums | $(3,244) | | **The XOL Transactions** | | | Ceded Premiums | $(10,350) | - NMIC exercised optional termination rights for previously outstanding excess-of-loss reinsurance agreements with Oaktown Re III Ltd. and Oaktown Re V Ltd. in July and December 2024, respectively[33](index=33&type=chunk) [Geographic Dispersion of Risk-in-Force](index=14&type=section&id=6.4.%20Geographic%20Dispersion%20of%20Risk-in-Force) NMI Holdings' primary risk-in-force (RIF) remains geographically diversified, with the top three states (California, Texas, Florida) accounting for **25.7%** of total RIF Top 10 Primary RIF by State (As of June 30, 2025) | State | Percentage of RIF | | :------------ | :---------------- | | California | 10.1 % | | Texas | 8.4 % | | Florida | 7.2 % | | Georgia | 4.0 % | | Illinois | 3.9 % | | Washington | 3.8 % | | Virginia | 3.7 % | | Pennsylvania | 3.5 % | | Ohio | 3.4 % | | North Carolina | 3.2 % | | Total | 51.2 % | - The top 10 states accounted for **51.2%** of primary RIF as of June 30, 2025, a slight decrease from **51.7%** in Q2 2024[42](index=42&type=chunk) [Portfolio Quality by Book Year](index=14&type=section&id=6.5.%20Portfolio%20Quality%20by%20Book%20Year) Portfolio quality by book year shows recent years (2021-2025) with higher remaining insurance in force, while 2022 and 2023 exhibit higher incurred loss ratios Selected Primary Portfolio Statistics by Book Year (As of June 30, 2025) | Book Year | Remaining Insurance in Force ($M) | % Remaining of Original Insurance | Incurred Loss Ratio (Inception to Date) | Current Default Rate | | :---------------- | :-------------------------------- | :-------------------------------- | :-------------------------------------- | :------------------- | | 2016 and prior | $1,996 | 5 % | 2.2 % | 2.0 % | | 2017 | $1,667 | 8 % | 1.9 % | 2.5 % | | 2018 | $2,191 | 8 % | 2.4 % | 2.9 % | | 2019 | $5,612 | 12 % | 2.0 % | 1.7 % | | 2020 | $18,847 | 30 % | 1.3 % | 0.8 % | | 2021 | $45,409 | 53 % | 3.2 % | 1.0 % | | 2022 | $44,598 | 76 % | 16.5 % | 1.5 % | | 2023 | $32,013 | 79 % | 14.2 % | 0.9 % | | 2024 | $41,100 | 89 % | 10.1 % | 0.4 % | | 2025 | $21,220 | 98 % | 1.5 % | 0.0 % | - The 2022 and 2023 book years show the highest incurred loss ratios (inception to date) at **16.5%** and **14.2%**, respectively[43](index=43&type=chunk) - More recent book years (2024 and 2025) have significantly lower current default rates (**0.4%** and **0%**, respectively)[43](index=43&type=chunk) [Claims and Loss Development](index=15&type=section&id=7.%20Claims%20and%20Loss%20Development) This section reconciles the reserve for insurance claims, analyzes loans in default, details claims paid, and presents the average reserve per default [Reserve for Insurance Claims and Claim Expenses Reconciliation](index=15&type=section&id=7.1.%20Reserve%20for%20Insurance%20Claims%20and%20Claim%20Expenses%20Reconciliation) The reserve for insurance claims and claim expenses increased to **$163.0 million** by June 30, 2025, driven by **$17.6 million** in incurred claims, partially offset by **$7.1 million** paid Reconciliation of Reserve for Insurance Claims and Claim Expenses (In Thousands) | Metric | Q2 2025 (3 months) ($K) | YTD 2025 (6 months) ($K) | | :------------------------------------------ | :---------------------- | :----------------------- | | Beginning balance | $151,847 | $152,071 | | Beginning balance, net of reinsurance recoverables | $120,468 | $119,811 | | Total claims and claim expenses incurred | $13,112 | $17,590 | | Total claims and claim expenses paid | $3,252 | $7,073 | | Ending balance, net of reinsurance recoverables | $130,328 | $130,328 | | Ending balance | $163,033 | $163,033 | - The ending reserve balance for insurance claims and claim expenses (gross) increased to **$163.0 million** as of June 30, 2025, from **$152.1 million** at December 31, 2024[45](index=45&type=chunk) - For the six months ended June 30, 2025, total claims and claim expenses incurred were **$17.6 million**, while total claims and claim expenses paid were **$7.1 million**[45](index=45&type=chunk) [Loans in Default Reconciliation](index=15&type=section&id=7.2.%20Loans%20in%20Default%20Reconciliation) The number of loans in default decreased slightly in Q2 2025 to **6,709**, as **2,215** cures and other reductions exceeded **2,169** new defaults Reconciliation of Loans in Default | Metric | Q2 2025 (3 months) | YTD 2025 (6 months) | | :-------------------------- | :----------------- | :------------------ | | Beginning default inventory | 6,859 | 6,642 | | Plus: new defaults | 2,169 | 4,590 | | Less: cures | (2,215) | (4,309) | | Less: claims paid | (93) | (188) | | Less: rescission and claims denied | (11) | (26) | | Ending default inventory | 6,709 | 6,709 | - The ending default inventory decreased from **6,859** at the start of Q2 2025 to **6,709** at the end, primarily due to cures exceeding new defaults[49](index=49&type=chunk) [Claims Paid Analysis](index=16&type=section&id=7.3.%20Claims%20Paid%20Analysis) In Q2 2025, NMI Holdings paid **93** claims totaling **$5.5 million**, with an average amount of **$59 thousand** per claim and a significantly higher severity of **82%** Claims Paid Details (Q2 2025, In Thousands) | Metric | Q2 2025 ($K) | Q2 2024 ($K) | | :-------------------------- | :----------- | :----------- | | Number of claims paid | 93 | 59 | | Total amount paid for claims | $5,512 | $1,877 | | Average amount paid per claim | $59 | $32 | | Severity | 82 % | 54 % | - The number of claims paid increased by **57.6%** year-over-year, from **59** in Q2 2024 to **93** in Q2 2025[50](index=50&type=chunk) - Claim severity increased significantly from **54%** in Q2 2024 to **82%** in Q2 2025[50](index=50&type=chunk) [Average Reserve per Default](index=16&type=section&id=7.4.%20Average%20Reserve%20per%20Default) As of June 30, 2025, the average reserve per default was **$24.3 thousand**, a decrease from **$25.6 thousand** in Q2 2024, comprising case and IBNR reserves Average Reserve per Default (As of June 30, In Thousands) | Metric | 2025 ($K) | 2024 ($K) | | :---------- | :-------- | :-------- | | Case | $22.3 | $23.6 | | IBNR | $2.0 | $2.0 | | Total | $24.3 | $25.6 | - The total average reserve per default decreased from **$25.6 thousand** in Q2 2024 to **$24.3 thousand** in Q2 2025[51](index=51&type=chunk) [Regulatory Capital Position](index=16&type=section&id=8.%20Regulatory%20Capital%20Position) This section outlines NMI Holdings' strong regulatory capital position, detailing PMIERs available assets and net risk-based required assets [PMIERs Available Assets and Required Assets](index=16&type=section&id=8.1.%20PMIERs%20Available%20Assets%20and%20Required%20Assets) As of June 30, 2025, NMI Holdings maintained **$3.24 billion** in PMIERs available assets, significantly exceeding **$1.93 billion** in net risk-based required assets PMIERs Available Assets and Net Risk-Based Required Assets (As of, In Thousands) | Metric | June 30, 2025 ($K) | March 31, 2025 ($K) | June 30, 2024 ($K) | | :------------------------------ | :----------------- | :------------------ | :----------------- | | Available assets | $3,244,517 | $3,230,653 | $2,827,721 | | Net risk-based required assets | $1,926,517 | $1,867,414 | $1,651,569 | - PMIERs available assets of **$3.24 billion** significantly exceeded net risk-based required assets of **$1.93 billion** as of June 30, 2025[52](index=52&type=chunk) - Available assets increased by **14.7%** year-over-year from **$2.83 billion** in Q2 2024 to **$3.24 billion** in Q2 2025[52](index=52&type=chunk)

EMERYVILLE, Calif., July 29, 2025 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $96.2 million, or $1.21 per diluted share, for the second quarter ended June 30, 2025, compared to $102.6 million, or $1.28 per diluted share, for the first quarter ended March 31, 2025 and $92.1 million, or $1.13 per diluted share, for the second quarter ended June 30, 2024. Adjusted net income for the quarter was $96.5 million, or $1.22 per diluted share, compared to $102.5 million, or $1.2 ...