[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)

Core Insights - NMI Holdings, Inc. reported a net income of $96.2 million for Q2 2025, a decrease from $102.6 million in Q1 2025 but an increase from $92.1 million in Q2 2024, with diluted EPS at $1.21 [1][4] - The company highlighted strong operating performance and growth in its insured portfolio, with a robust balance sheet and significant earnings power [2] Financial Performance - Adjusted net income for Q2 2025 was $96.5 million, down from $102.5 million in Q1 2025 but slightly up from $97.6 million in Q2 2024 [1][4] - Total revenue for Q2 2025 was $173.8 million, compared to $173.2 million in Q1 2025 and $162.1 million in Q2 2024 [4] - Net premiums earned were $149.1 million, a slight decrease from $149.4 million in Q1 2025 but an increase from $141.2 million in Q2 2024 [4] Insurance Metrics - Primary insurance-in-force reached $214.7 billion, up 2% from $211.3 billion in Q1 2025 and 5% from $203.5 billion in Q2 2024 [3][4] - New insurance written (NIW) was $12.5 billion, a significant increase of 35% from $9.2 billion in Q1 2025, with no year-over-year change [3] Claims and Expenses - Insurance claims and claim expenses rose to $13.4 million, a substantial increase from $4.5 million in Q1 2025 and $0.3 million in Q2 2024, resulting in a loss ratio of 9.0% [4][5] - Underwriting and operating expenses were $29.5 million, down from $30.2 million in Q1 2025 but up from $28.3 million in Q2 2024, leading to an expense ratio of 19.8% [4][5] Shareholder Metrics - Shareholders' equity at the end of Q2 2025 was $2.4 billion, with a book value per share of $31.14, up 4% from $30.85 in Q1 2025 and 16% from $27.54 in Q2 2024 [4][5] - The annualized return on equity for the quarter was 16.2%, down from 18.1% in Q1 2025 and 18.3% in Q2 2024 [4][5]

Company Announcement - NMI Holdings, Inc. will report its second quarter results for the period ended June 30, 2025, after market close on July 29, 2025 [1] - A conference call and live webcast will be held at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time on the same day [2] Company Overview - 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 while protecting lenders and investors from losses due to borrower defaults [3]

Core Insights - National Mortgage Insurance Corporation (National MI) has received three prestigious company culture awards, including recognition as a Great Place To Work in 2025 and a "Decade of Great" distinction for ten consecutive years [1][2] - The company ranked No. 22 among Fortune magazine's Best Workplaces in the Bay Area, achieving this position by surpassing rigorous benchmarks [2][4] - A significant 96% of employees affirmed that National MI is a Great Place To Work, which is 39 points higher than the average U.S. company [3] Company Culture and Employee Experience - National MI emphasizes the importance of employee feedback in shaping workplace culture, with a commitment to maintaining a collaborative and positive environment [5] - The company has established a new standard of excellence in the industry, driven by a talented and dedicated team [3][5] - Employees rated National MI highly in areas such as excellent service delivery, a welcoming environment for new employees, work-life balance encouragement, and celebrating innovative approaches [8] Recognition and Methodology - This marks National MI's fourth appearance on the Fortune Best Workplaces in the Bay Area List, highlighting its consistent performance in employee satisfaction [4] - The selection for the Fortune Best Workplaces in the Bay Area involved surveying 1.3 million employees across the U.S., with nearly 85,000 responses from eligible companies [9]

Core Viewpoint - NMI Holdings Inc. (NMIH) is experiencing strong investor confidence, with shares closing at $40.69, near its 52-week high, indicating potential for further price appreciation [1] Stock Performance - NMIH shares have gained 25.1% over the past year, outperforming the Finance sector's growth of 18.4% and the Zacks S&P 500 composite's growth of 9.4% [4] - The stock is trading above its 50-day and 200-day simple moving averages of $36.94 and $37.82, respectively, indicating solid upward momentum [1] Earnings Growth - NMIH's earnings have grown by 15.7% over the last five years, with a solid surprise history of beating earnings estimates in three of the last four quarters, averaging an 8.17% beat [2] - The Zacks Consensus Estimate for NMIH's 2025 earnings per share indicates a year-over-year increase of 8%, with revenues projected to reach $685.46 million, reflecting a 5.3% improvement [8] Valuation Metrics - NMIH shares are trading at a forward price-to-book value of 1.36X, lower than the industry average of 1.56X and the Finance sector's 4.11X [7] - The average target price for NMIH, based on short-term price targets from seven analysts, is $41.86 per share, suggesting a potential upside of 3.7% from the last closing price [12] Analyst Sentiment - Analysts have raised estimates for NMIH's earnings for 2025 by 5.4% and for 2026 by 1.2% over the past 60 days, indicating positive sentiment [9] Return on Capital - NMIH's return on equity (ROE) for the trailing 12 months was 17.27%, significantly higher than the industry's 7.8%, reflecting efficient utilization of shareholders' funds [14] Growth Opportunities - NMIH is well-positioned to capitalize on growth in the mortgage insurance sector, supported by a robust reinsurance strategy and increased production of both monthly and single premium policies [6][15] - The company has authorized a new $250 million share repurchase program to enhance its return profile and manage expenses effectively [17] Conclusion - NMIH is expected to benefit from favorable growth estimates, a higher return on capital, and an attractive valuation, making it a stock worth holding [19][20]

Company Overview - NMI Holdings (NMIH) shares have increased by approximately 7.6% since the last earnings report, outperforming the S&P 500 [1] - The most recent earnings report is essential to understand the catalysts affecting the stock's performance [1] Earnings Estimates - Estimates for NMI Holdings have remained unchanged over the past month, indicating a flatlining of revisions [2] VGM Scores - NMI Holdings has a Growth Score of B, a Momentum Score of F, and a Value Score of B, placing it in the top 40% for the value investment strategy [3] - The aggregate VGM Score for NMI Holdings is B, which is relevant for investors not focused on a single strategy [3] Outlook - NMI Holdings holds a Zacks Rank of 3 (Hold), suggesting an expectation of an in-line return from the stock in the upcoming months [4] Industry Performance - NMI Holdings is part of the Zacks Insurance - Property and Casualty industry, where Kinsale Capital Group, a peer, has gained 7.8% over the past month [5] - Kinsale Capital Group reported revenues of $423.4 million for the quarter ended March 2025, reflecting a year-over-year increase of 13.6% [5] - Kinsale Capital Group's EPS for the same period was $3.71, compared to $3.50 a year ago [5] - Kinsale Capital Group is projected to post earnings of $4.36 per share for the current quarter, representing a year-over-year change of 16.3% [6] - The Zacks Consensus Estimate for Kinsale Capital Group has changed by -0.1% over the last 30 days, and it also holds a Zacks Rank of 3 (Hold) [6]

Core Viewpoint - NMI Holdings Inc. (NMIH) is experiencing a short-term bullish trend, trading above its 50-day simple moving average, despite a recent decline in share price from its 52-week high [1] Valuation and Market Position - NMIH shares are trading at a price-to-book multiple of 1.25X, which is lower than the industry average of 1.52X, the Finance sector's 4.11X, and the Zacks S&P 500 Composite's 7.8X, indicating attractive valuation [4] - The company has a market capitalization of $2.90 billion, with an average trading volume of 0.6 million shares over the last three months [6] Performance Metrics - NMIH's shares have gained 10.3% over the past year, lagging behind the industry's growth of 19.8%, the Finance sector's return of 16.8%, and the S&P 500 composite's appreciation of 11.1% [7][9] - The Zacks Consensus Estimate for NMIH's 2025 earnings per share indicates a year-over-year increase of 7.1%, with revenues expected to reach $686.01 million, reflecting a 5.4% improvement [10] - The expected long-term earnings growth rate for NMIH is 6.10%, which is slightly below the industry average of 6.9% [11] Return on Capital - NMIH's return on equity (ROE) for the trailing 12 months was 17.27%, significantly higher than the industry's 7.7%, showcasing efficient use of shareholders' funds [12] Growth Opportunities - NMIH is positioned to benefit from new business opportunities in the growing mortgage insurance market, with expectations of increased production in monthly and single premium policies [13] - The company has a comprehensive reinsurance program to enhance its return profile and manage credit volatility [14] Shareholder Returns - NMIH has engaged in share buybacks, repurchasing a total of $245 million of shares, with $80 million of repurchase capacity remaining [14] - These strategies are expected to help the insurer generate solid mid-teens returns for shareholders [15] Overall Outlook - NMIH is well-positioned for growth due to new primary insurance written, a comprehensive reinsurance program, and favorable growth estimates [16] - The stock has a VGM Score of A, indicating attractive value, growth, and momentum, suggesting it is wise to hold onto this stock [18]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market engagement and confidence [1] - The Zacks Style Scores serve as complementary indicators to the Zacks Rank, aiding investors in selecting stocks with high potential for market outperformance [2] Zacks Style Scores Overview - Stocks are rated from A to F based on value, growth, and momentum characteristics, with A being the highest score [3] - The Style Scores are categorized into four types: Value Score, Growth Score, Momentum Score, and VGM Score [3][4][5][6] Value Score - Focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, and Price/Sales [3] Growth Score - Evaluates a company's financial health and future growth potential through projected earnings and sales [4] Momentum Score - Targets stocks with upward or downward price trends, utilizing recent price changes and earnings estimate shifts [5] VGM Score - Combines the three Style Scores to identify stocks with attractive value, growth forecasts, and momentum [6] Zacks Rank Integration - The Zacks Rank is based on earnings estimate revisions, with 1 (Strong Buy) stocks historically yielding an average annual return of +25.41% since 1988, outperforming the S&P 500 [8] - Investors are encouraged to select stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal success [9] NMI Holdings Analysis - NMI Holdings, headquartered in Emeryville, CA, is currently rated 3 (Hold) with a VGM Score of A and a Growth Style Score of B, indicating a projected year-over-year earnings growth of 7.1% for the current fiscal year [11] - Recent upward revisions from three analysts have increased the Zacks Consensus Estimate for fiscal 2025 by $0.22 to $4.82 per share, with an average earnings surprise of 8.2% [12]

Core Viewpoint - NMI Holdings (NMIH) reported strong first-quarter 2025 results, with operating net income per share of $1.28, exceeding estimates and showing significant year-over-year growth [1] Operational Update - Total operating revenues reached $173.3 million, a 10.9% increase year over year, driven by a 9.3% rise in net premiums earned and a 21.9% increase in net investment income [2] - Primary insurance in force grew by 6% to $211.3 billion [2] - Annual persistency decreased to 84.3%, down 150 basis points year over year [2] - New insurance written was $9.2 billion, reflecting a 2% decline year over year [2] Underwriting and Operating Expenses - Underwriting and operating expenses totaled $30.2 million, up 1% year over year [3] - Insurance claims and claim expenses increased to $4.5 million, a rise of 21.2% year over year [3] - The loss ratio expanded to 3%, an increase of 30 basis points year over year [3] - The expense ratio improved by 160 basis points year over year, while the adjusted combined ratio improved to 23.2, a 130 basis point enhancement [3] Financial Update - Book value per share increased by 16.8% year over year to $30.85 as of March 31, 2025 [4] - Cash and cash equivalents rose to $74.2 million, a 36.6% 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 was 18.1%, contracting by 10 basis points year over year [4] PMIERs Update - Total PMIERs available assets were reported at $3.2 billion [5] - Net risk-based required assets totaled $1.9 billion at the end of the first quarter of 2025 [5]

Financial Data and Key Metrics Changes - In Q1 2025, the company reported record total revenue of $173.2 million, up 4% from Q4 2024 and 10.9% from Q1 2024 [12][13] - GAAP net income reached a record $102.6 million, representing a 19% increase compared to Q4 2024 and a 15% increase compared to Q1 2024 [15] - Diluted earnings per share (EPS) was $1.28, up 20% from Q4 2024 and 18% from Q1 2024 [15] - Return on equity (ROE) was 18.1% for the quarter [12] Business Line Data and Key Metrics Changes - The company generated $9.2 billion in new insurance written (NIW) volume, maintaining a record primary insurance in force of $211.3 billion, which is a 1% increase from Q4 2024 and a 6% increase from Q1 2024 [5][12] - Net premiums earned were a record $149.4 million, compared to $143.5 million in Q4 2024 and $136.7 million in Q1 2024 [13] 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 [12] - The average loan-to-value (LTV) ratio for the defaulted population was 73.2% [25] Company Strategy and Development Direction - The company emphasized its commitment to providing low-cost, high-value solutions to make homeownership more accessible, while also ensuring the safety of the conventional mortgage market [8][10] - The management highlighted the importance of maintaining a disciplined approach to risk management and pricing, which has positioned the company well to navigate various market cycles [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's performance despite macroeconomic uncertainties, noting that the disciplined management approach will support continued growth and profitability [9][10] - The company is well-positioned to serve customers and invest in employee success, aiming for sustained growth in its high-quality insured portfolio [10][18] Other Important Information - The company extended its long-term IT engagement with Tata Consultancy Services, which is expected to maintain current operating expenses [11][27] Q&A Session Summary Question: Credit performance and vintage stability - Management indicated that recent vintages are performing well, with no significant concerns, although there is a normalization trend expected as the underlying borrower experience stabilizes [21][22] Question: Equity in defaults - The average mark-to-market equity on the defaulted population is 73.2% [25] Question: Impact of TCS renewal on OpEx - The renewal is expected to keep operating expenses stable, with no significant changes anticipated [27][28] Question: Pricing and credit loss expectations amid tariff uncertainties - Management noted that while they are monitoring macroeconomic factors, there are currently no significant changes to pricing or credit loss expectations [31] Question: Provision for new notices in Q1 - The reserve for new notices was $13.5 million, consistent with the previous quarter [32][34] Question: Buyback during the quarter - The company repurchased $25.9 million worth of common stock, retiring 718,000 shares [40]