UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 001-36174 NMI Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware 45-4914248 2100 Powell St ...

Financial Data and Key Metrics Changes - In Q1 2025, the company reported total revenue of $173.2 million, a record high, representing a 4% increase from Q4 2024 and a 10.9% increase from Q1 2024 [11][12] - GAAP net income reached a record $102.6 million, or $1.28 per diluted share, up 19% from $86.2 million in Q4 2024 and 15% from $89 million in Q1 2024 [14][15] - Return on equity was 18.1% for the quarter [11] Business Line Data and Key Metrics Changes - The company generated $9.2 billion of new insurance written (NIW) in Q1 2025, maintaining a record primary insurance in force of $211.3 billion, which is up 1% from Q4 2024 and 6% from Q1 2024 [5][11] - Net premiums earned were a record $149.4 million, compared to $143.5 million in Q4 2024 and $136.7 million in Q1 2024 [12] Market Data and Key Metrics Changes - The company's 12-month persistency rate was 84.3% in Q1 2025, slightly down from 84.6% in Q4 2024 [11] Company Strategy and Development Direction - The company emphasized its commitment to providing low-cost, high-value solutions to enhance homeownership accessibility while maintaining a robust balance sheet and strong customer franchise [8][17] - The management highlighted the importance of a disciplined approach to risk management and pricing, ensuring resilience through various market cycles [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the macroeconomic environment, noting that current performance contrasts with broader economic themes [8] - The company is well-positioned to continue serving customers and driving growth in its insured portfolio, with a focus on employee investment and shareholder value [9][17] Other Important Information - The company extended its long-term IT engagement with Tata Consultancy Services, which is expected to maintain operational costs at current levels [10][27] Q&A Session Summary Question: Inquiry about credit performance and vintage stability - Management confirmed that they apply consistent underwriting rigor across all vintages, noting that newer vintages show higher incurred loss ratios compared to pre-pandemic vintages, primarily due to differences in borrower equity levels [20][21] Question: Impact of TCS renewal on operating expenses - Management indicated that the renewal would not significantly change operational costs, maintaining a similar expense flow as in Q1 2025 [26][27] Question: Changes in pricing or credit loss expectations due to tariffs - Management stated that while they continuously refine pricing strategies to account for macro risks, there has not been a wholesale change in their market engagement approach [30][31] Question: Provision for new notices in Q1 - The company reported a reserve of $13.5 million for new notices, consistent with the previous quarter [32][33] Question: Concerns about adverse selection related to PMI extinguishment - Management reassured that there is no significant adverse selection observed, attributing any changes in refinancing opportunities to the prevailing rate environment rather than borrower behavior [39][42]

EXHIBIT 99.1 FOR IMMEDIATE RELEASE NMI Holdings, Inc. Reports Record First Quarter 2025 Financial Results EXHIBIT 99.1 | | | | | Quarter Ended Quarter Ended Quarter Ended | | | (1) Change | | Change | (1) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | | 3/31/2025 | | 12/31/2024 | | 3/31/2024 | Q/Q | | Y/Y | | | INSURANCE METRICS ($billions) | | | | | | | | | | | | Primary Insurance-in-Force | $ | 211.3 | $ | 210.2 | $ | 199.4 | | 1 % | 6 % | | | New Insurance Written - NIW | | 9.2 ...

Core Viewpoint - NMI Holdings, Inc. reported strong financial performance for Q1 2025, with net income of $102.6 million, reflecting a year-over-year increase of 15% compared to Q1 2024 and a quarter-over-quarter increase of 19% compared to Q4 2024 [1][6]. Financial Highlights - Net income for Q1 2025 was $102.6 million, or $1.28 per diluted share, compared to $86.2 million ($1.07 per diluted share) in Q4 2024 and $89.0 million ($1.08 per diluted share) in Q1 2024 [1][4]. - Adjusted net income for the quarter was $102.5 million, maintaining the same diluted EPS of $1.28, compared to $86.1 million ($1.07 per diluted share) in Q4 2024 and $89.0 million ($1.08 per diluted share) in Q1 2024 [1][4]. - Total revenue for Q1 2025 was $173.2 million, up from $166.5 million in Q4 2024 and $156.3 million in Q1 2024 [6][27]. - Net premiums earned increased to $149.4 million in Q1 2025 from $143.5 million in Q4 2024 and $136.7 million in Q1 2024, representing a 4% quarter-over-quarter and 9% year-over-year growth [4][6]. Insurance Metrics - Primary insurance-in-force at the end of Q1 2025 was $211.3 billion, a slight increase from $210.2 billion in Q4 2024 and a 6% increase from $199.4 billion in Q1 2024 [3][6]. - New insurance written (NIW) for Q1 2025 was $9.2 billion, down 23% from $11.9 billion in Q4 2024 and down 2% from $9.4 billion in Q1 2024 [3][6]. Operational Efficiency - The loss ratio for Q1 2025 was 3.0%, significantly improved from 12.0% in Q4 2024 and slightly higher than 2.7% in Q1 2024 [4][6]. - The expense ratio decreased to 20.2% in Q1 2025 from 21.7% in Q4 2024 and 21.8% in Q1 2024, indicating improved operational efficiency [4][6]. Shareholder Value - Book value per share (excluding net unrealized gains and losses) increased to $30.85 in Q1 2025, up 4% from $29.80 in Q4 2024 and up 17% from $26.42 in Q1 2024 [4][6]. - Annualized return on equity for Q1 2025 was 18.1%, compared to 15.6% in Q4 2024 and 18.2% in Q1 2024, reflecting strong profitability [6][27].

Core Viewpoint - NMI Holdings, Inc. will report its first quarter results for the period ending March 31, 2025, on April 29, 2025, after market close [1]. Company Information - NMI Holdings, Inc. is the parent company of National Mortgage Insurance Corporation, a private mortgage insurance company in the U.S. that supports low-down-payment borrowers and protects lenders and investors from losses due to borrower defaults [3]. Conference Call Details - The company will host a conference call and live webcast on April 29, 2025, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time, accessible via the company's website [2]. - Participants can join the call by dialing (844) 481-2708 in the U.S. or (412) 317-0664 internationally, referencing NMI Holdings, Inc. [2].

Core Viewpoint - NMI Holdings (NMIH) has underperformed the industry and finance sector year-to-date but has outperformed the S&P 500 composite [1] Valuation - NMIH shares are trading at a price-to-book multiple of 1.31, below the industry average of 1.65, indicating an attractive valuation with a Value Score of B [4] - Other insurers like Kinsale Capital, MGIC Investment Corporation, and Radian Group are also trading at a discount to the industry average [5] Financial Performance - NMIH's return on equity (ROE) for the trailing 12 months is 17.3%, significantly higher than the industry average of 8.3%, indicating efficient use of shareholders' funds [6] - The return on invested capital for NMIH in the trailing 12 months is 13.9%, compared to the industry average of 6.4%, reflecting strong income generation efficiency [6] Market Outlook - The mortgage insurance market is expected to grow, providing business opportunities for NMIH, with a strong mortgage insurance portfolio anticipated to support future earnings [9] - The U.S. residential mortgage market is substantial, with nearly $13 trillion in mortgage debt outstanding, which is expected to benefit the mortgage insurance sector [10] - NMIH expects continued strength in the housing market, driven by demand, house price appreciation, and solid new insurance written volume [11] Risk Management - NMIH has a comprehensive reinsurance program that mitigates credit volatility and supports capital growth, enhancing its return profile [12] Shareholder Returns - NMIH has an $80 million share repurchase authorization remaining, indicating a commitment to returning wealth to shareholders [12] Analyst Projections - The average target price for NMIH is $42.50 per share, suggesting a 16.2% upside from the last closing price [13] - The Zacks Consensus Estimate for 2025 earnings is $4.59, reflecting a 2% increase year-over-year, with revenues projected at $686.4 million [14] - For 2026, earnings per share are estimated at $5.01, indicating a 9.1% year-over-year increase on revenues of $712.7 million [14] Growth Potential - NMIH's improving mortgage insurance portfolio, higher new insurance written volume, and effective capital deployment position the company for growth [15]

Core Viewpoint - NMI Holdings Inc. (NMIH) is trading at a discount compared to its industry peers, with a forward price-to-book value of 1.3X, lower than the industry average of 1.56X, indicating potential investment opportunity [1] Group 1: Financial Performance - NMIH has a market capitalization of $2.86 billion and an average trading volume of 0.4 million shares over the last three months [2] - The company has a solid track record of beating earnings estimates in three of the last four quarters, with an average beat of 7.21% [2] - NMIH shares have gained 23.7% over the past year, outperforming the Finance sector's return of 22.3% and the S&P 500's appreciation of 17.1%, although it underperformed the industry's growth of 25.7% [4] Group 2: Growth Projections - The Zacks Consensus Estimate for NMIH's 2025 earnings per share indicates a year-over-year increase of 2.2%, with revenues projected at $687.07 million, reflecting a 5.5% improvement [5] - For 2026, earnings per share and revenues are expected to increase by 9.1% and 3.9%, respectively, compared to 2024 estimates [5] - NMIH's earnings grew by 15.7% over the past five years, driven by its superior primary insurance in-force portfolio [6] Group 3: Return on Capital - NMIH's return on equity (ROE) for the trailing 12 months was 17.3%, significantly higher than the industry's 8.2%, indicating efficient use of shareholders' funds [10] Group 4: Market Opportunities - The U.S. residential mortgage market, valued at nearly $13 trillion, presents significant growth opportunities for NMIH in the mortgage insurance sector [11] - Growth in policy production is linked to increased penetration of existing customer accounts and activation of new accounts [12] Group 5: Strategic Initiatives - NMIH is focused on efficiency and expense management to drive margin expansion, engaging in share buybacks totaling $245 million, with $80 million remaining under the current program [13] - The company has a comprehensive reinsurance program to enhance its return profile and mitigate credit volatility [12] Group 6: Conclusion - NMIH is well-positioned for growth due to new primary insurance written, a strong reinsurance program, and favorable growth estimates, making it a stock to hold [14]

Insurance Portfolio and Market Position - As of December 31, 2024, the company had issued master policies with 2,086 customers and had $210.2 billion of primary insurance-in-force (IIF) and $56.1 billion of primary risk-in-force (RIF) [19] - For the year ended December 31, 2024, the company generated new insurance written (NIW) of $46.0 billion [19] - The U.S. residential mortgage market had approximately $13 trillion of mortgage debt outstanding as of December 31, 2024 [21] - Government mortgage insurers accounted for an estimated 58% of the total insured mortgage origination market in 2024, down from a peak of approximately 82% in 2009 [28] - The company aims to maintain a RIF across all policies written to approximate 25% of primary IIF, with coverage levels varying between 6% and 35% [32] - The private mortgage insurance industry consists of six active participants, including the company, with competition based on terms of coverage, pricing, and customer service [27] - The company’s strategy focuses on expanding its customer base and growing its insured portfolio through long-term relationships and disciplined risk selection [20] - No individual customer accounted for greater than 10% of consolidated revenues in 2024 [44] Underwriting and Risk Management - The company employs a proprietary risk-based pricing platform, Rate GPS®, to establish individualized premium rates based on various risk factors [60] - The underwriting guidelines incorporate credit eligibility requirements, including borrower credit scores (FICO), maximum DTI levels, and maximum LTVs [47] - The company has established processes for independent validations and rescission relief, enhancing the underwriting review process [52] - The company has implemented a quality control process to ensure adherence to underwriting guidelines, conducting audits of insured loans on a random and targeted basis [75] - The company has established enterprise-wide policies for risk management, with oversight from the Risk Committee of the Board of Directors [73] - The company’s underwriting and credit risk management policies may not fully anticipate unforeseen risks, potentially leading to increased losses [154] - The company’s underwriting and credit risk management policies may not fully anticipate risks, potentially leading to material adverse effects on its financial condition [173] Financial Performance and Economic Factors - The company’s NIW and revenues are highly dependent on the volume of high-LTV loan originations, which may be negatively affected by rising interest rates and stricter underwriting standards [172] - Changes in inflation, interest rates, and mortgage interest rates could adversely impact the company’s future revenue and financial condition [154] - The company expects claims to increase as its insured loan portfolio grows and matures, influenced by macroeconomic factors [190] - The company may experience increased claims if third-party underwriting service providers fail to perform adequately [154] - The company’s substantial indebtedness may adversely affect its financial condition and ability to access capital [157] - The premiums charged by the company may be insufficient to cover future claim payments and operating costs, which could adversely affect operating results [178] - Economic downturns in specific regions could lead to higher rates of default and loss, adversely affecting the company's financial condition [177] Regulatory Environment and Compliance - NMIC is required to maintain available assets of at least $400 million or a risk-based required asset amount, whichever is greater [98] - NMIC certified compliance with PMIERs as of December 31, 2023, by April 15, 2024 [99] - NMIC holds a certificate of authority in all 50 states and D.C., subject to ongoing financial reporting and regulatory requirements [100] - The maximum permitted risk-to-capital (RTC) ratio is typically 25:1, with Wisconsin having slightly higher limits [113] - State insurance regulators have the authority to change regulations governing mortgage insurance, including capital requirements and underwriting standards [115] - MI premium rates in certain states require prior approval to protect policyholders from excessive or unfairly discriminatory rates [119] Technology and Operational Risks - The company relies on technology for service delivery, and failure to maintain technological demands could adversely impact financial performance [214] - The company processes, transmits, stores, and protects large amounts of personal information related to borrowers' mortgages, which is critical to its business operations [216] - IT systems and networks are vulnerable to unauthorized access and failures due to cyber-attacks, natural disasters, and technology failures [216] - Remote and hybrid working arrangements may increase the risk of cybersecurity attacks and data security incidents [216] - Employees and vendors rely on portable computers and mobile devices, which can heighten security vulnerabilities [216] Employee and Organizational Culture - The company has 230 full-time and part-time employees as of December 31, 2024, and engages third-party vendors for additional support services [87] - As of December 31, 2024, 83% of the employee population identified as members of a diverse group, including 55% as women and 34% as racial/ethnic minorities [90] - The company was recognized as a Great Place to Work for the ninth consecutive year in 2024, highlighting its commitment to employee satisfaction and development [91] Market Competition and Challenges - The company faces intense competition in the private mortgage insurance industry, with six active competitors, which could negatively impact its ability to achieve business goals [159] - The company is at risk of losing business from significant mortgage lenders, which could negatively impact its market share and financial performance [171] - The company faces increased competition from government mortgage insurers, which have captured a significant share of the high-LTV MI market, remaining above historical levels [166] - The volume of new insurance written (NIW) could decline if lenders and investors opt for alternatives to private mortgage insurance (MI), particularly for high-LTV loans [163] Claims and Reserves Management - The company expects claims to increase as its insured loan portfolio grows and matures, influenced by macroeconomic factors [190] - If estimates for claims reserves are incorrect, actual claim payments may exceed reserves, adversely affecting financial results [194] - Reserves are established based on estimated claim frequency and severity, which are influenced by historical loan performance data [195] - The establishment of claims and IBNR reserves involves significant judgment and is influenced by economic conditions such as unemployment rates and housing price trends [196] - Natural disasters and pandemics pose risks that could lead to increased claims and defaults, adversely affecting financial results [198] - The company has observed that loans in disaster zones typically cure at a higher rate than non-disaster related loans, impacting reserve levels [200]

Core Viewpoint - NMI Holdings (NMIH) reported mixed financial results for the fourth quarter of 2024, with operating net income per share of $1.07, missing estimates, despite a year-over-year increase in earnings and revenues [1][5]. Financial Performance - Fourth-quarter operating revenues reached $167 million, a 10.6% increase year over year, driven by higher net premiums earned (up 8%) and net investment income (up 25%), although it fell short of estimates by 1.7% [3]. - Full-year operating net income per share was $4.50, slightly below the consensus estimate of $4.54, with a year-over-year increase of 5.9% [5]. - Total operating revenues for the year amounted to $650.9 million, reflecting a 12.4% increase year over year, but also missing the consensus estimate of $653.8 million [5]. Underwriting and Claims - Underwriting and operating expenses totaled $31.1 million, up 5% year over year, while insurance claims and claim expenses surged to $17.3 million, a 110% increase year over year [4]. - The loss ratio deteriorated to 12%, worsening by 580 basis points year over year, while the combined ratio also deteriorated to 34, down 580 basis points [4]. Operational Metrics - Primary insurance in force increased by 7% to $210.2 billion, with new insurance written at $11.9 billion, a 34% year-over-year increase [3]. - Annual persistency decreased to 84.6%, down 150 basis points year over year [3]. Financial Position - As of December 31, 2024, book value per share rose 18.5% year over year to $28.21, while cash and cash equivalents decreased by 43.8% to $54.3 million [6]. - The debt balance increased by 4.4% to $415 million, and the annualized adjusted return on equity contracted by 80 basis points to 17% [6]. Shareholder Actions - The board of directors approved an additional $250 million share repurchase plan, effective through December 31, 2027 [7].

Financial Data and Key Metrics Changes - In Q4 2024, the company reported record adjusted net income of $365.6 million, up 13% compared to 2023, and record adjusted EPS of $4.50, up 17% compared to 2023 [8][17] - Total revenue for Q4 was a record $166.5 million, with adjusted net income of $86.1 million, or $1.07 per diluted share, and a 15.6% adjusted return on equity [21][14] - The company closed 2024 with $46 billion of total new insurance written (NIW) volume and a record $210.2 billion of primary insurance-in-force [7][13] Business Line Data and Key Metrics Changes - The primary insurance-in-force grew to $210.2 billion, up 1% from Q3 and 7% compared to Q4 2023 [22] - The company activated 118 new lenders in 2024, ending the year with over 1,600 active accounts [15] - The net premiums earned in Q4 were a record $143.5 million, compared to $143.3 million in Q3 and $132.9 million in Q4 2023 [22] Market Data and Key Metrics Changes - The total MI industry NIW volume was estimated at $300 billion in 2024, demonstrating strength despite elevated interest rates [17] - The company reported a 1% default rate at year-end, with 6,642 defaults, including 471 new notices for loans in FEMA-declared disaster areas [24][25] Company Strategy and Development Direction - The company plans to continue focusing on customer service, value-added engagement, and technology leadership while prioritizing discipline and risk responsibility [10] - The management emphasized the importance of building value for shareholders, growing earnings, and prudently distributing excess capital [10][20] - The company is well-positioned to support housing goals and expand access to home ownership, as recognized by bipartisan discussions in Washington [11][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the macro outlook and the private MI market opportunity, highlighting the strength of their customer franchise and the quality of their insured portfolio [20] - The company expects continued growth in their high-quality insured portfolio and strong returns for shareholders [30] - Management noted that credit performance remains strong, with existing borrowers well-positioned against the resilient U.S. economy [19] Other Important Information - The company completed a successful debt refinancing and returned capital to shareholders through a repurchase program, purchasing $27.9 million of common stock in Q4 [16][26] - Shareholders' equity at year-end was $2.2 billion, with book value per share at $28.21, up 4% from Q3 and 17% from Q4 2023 [26] Q&A Session Summary Question: How should we think about the pacing of capital return? - Management indicated that the repurchase program is expected to maintain a consistent pace of about $25 million per quarter, with a total of approximately $330 million available over the next 12 quarters [35][36] Question: Can you provide color on the reserve release for prior period defaults? - The reserve release for prior years was $4.4 million, with the majority of cures in the quarter coming from loans that defaulted in earlier quarters [44][45] Question: Any updates on claims activity and underwriting assumptions? - Claims expense for the quarter was $17.3 million, with a 12% loss ratio, and management remains encouraged by the credit performance of their book [48][49] Question: What about dividends in the future? - Currently, the focus is on the repurchase program, but there may be an ability to introduce a common dividend as performance continues to grow [60] Question: Any updates on specific markets of concern? - Management noted that there have been no fundamental changes in risk profiles for specific markets, and they continue to actively manage their mix of business [62] Question: How does credit deterioration impact yield? - A deterioration in credit could put pressure on net yield, as claims experience affects the profit commission from reinsurance treaties [77][78]