NMI (US:NMIH)2025-04-29 21:00Financial 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]