NMI (US:NMIH)2025-07-29 22:00Financial 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]