NMI Holdings, Inc. Reports Record Second Quarter 2024 Financial Results

About this update from Nmi Holdings Inc

EMERYVILLE, Calif. , July 30, 2024 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $92.1 million , or $1.13 per diluted share, for the second quarter ended June 30, 2024 , compared to $89.0 million , or $1.08 per diluted share, for the first quarter ended March 31, 2024 and $80.3 million , or $0.95 per diluted share, for the second quarter ended June 30, 2023 . Adjusted net income for the quarter was $97.6 million , or $1.20 per diluted share, compared to $89.0 million , or $1.08 per diluted share, for the first quarter ended March 31, 2024 and $80.3 million , or $0.95 per diluted share, for the second quarter ended June 30, 2023 . The non-GAAP financial measures adjusted net income, adjusted diluted earnings per share and adjusted return on equity are presented in this release to enhance the comparability of financial results between periods. See “Use of Non-GAAP Financial Measures” and our reconciliation of such measures to their most comparable GAAP measures, below. Adam Pollitzer , President and Chief Executive Officer of National MI, said, “In the second quarter, we again delivered standout operating performance, strong growth in our high-quality insured portfolio, and record financial results. We have built an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, our credit performance continues to stand ahead, and we have a robust balance sheet supported by the significant earnings power of our platform. Looking forward, we’re well positioned to continue delivering differentiated growth, returns and value for our shareholders.” Selected second quarter 2024 highlights include: Primary insurance-in-force at quarter end was $203.5 billion , compared to $199.4 billion at the end of the first quarter and $191.3 billion at the end of the second quarter of 2023. Net premiums earned were $141.2 million , compared to $136.7 million in the first quarter and $126.0 million in the second quarter of 2023. Total revenue was $162.1 million , compared to $156.3 million in the first quarter and $142.7 million in the second quarter of 2023. Insurance claims and claim expenses were $0.3 million , compared to $3.7 million in the first quarter and $2.9 million in the second quarter of 2023. Loss ratio was 0.2% compared to 2.7% in the first quarter and 2.3% in the second quarter of 2023. Underwriting and operating expenses were $28.3 million , compared to $29.8 million in the first quarter and $27.4 million in the second quarter of 2023. Expense ratio was 20.1% compared to 21.8% in the first quarter and 21.8% in the second quarter of 2023. Net income was $92.1 million , up 3% compared to $89.0 million in the first quarter and up 15% compared to $80.3 million in the second quarter of 2023. Diluted EPS was $1.13 , up 4% compared to $1.08 in the first quarter and up 19% compared to $0.95 in the second quarter of 2023. Adjusted net income was $97.6 million , up 10% compared to $89.0 million in the first quarter and up 22% compared to $80.3 million in the second quarter of 2023. Adjusted diluted EPS was $1.20 , up 11% compared to $1.08 in the first quarter and up 26% compared to $0.95 in the second quarter of 2023. Adjusted net income and adjusted diluted EPS are calculated excluding the impact of non-recurring capital markets transaction costs incurred in connection with the debt refinancing completed in the second quarter of 2024. Shareholders’ equity was $2.0 billion at quarter end and book value per share was $25.65 . Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $27.54 , up 4% compared to $26.42 in the first quarter and 17% compared to $23.53 in the second quarter of 2023. Annualized return on equity for the quarter was 18.3%, compared to 18.2% in the first quarter and 18.6% in the second quarter of 2023. Annualized adjusted return on equity was 19.4%, compared to 18.2% in the first quarter and 18.6% in the second quarter of 2023. At quarter-end, total PMIERs available assets were $2.8 billion and net risk-based required assets were $1.7 billion . QuarterEnded QuarterEnded QuarterEnded Change (1) Change (1) 6/30/2024 3/31/2024 6/30/2023 Q/Q Y/Y INSURANCE METRICS ($billions) Primary Insurance -in-Force $ 203.5 $ 199.4 $ 191.3 2 % 6 % New Insurance Written - NIW 12.5 9.4 11.5 33 % 9 % FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts) Net Premiums Earned $ 141.2 $ 136.7 $ 126.0 3 % 12 % Net Investment Income 20.7 19.4 16.5 6 % 25 % Insurance Claims and Claim Expenses 0.3 3.7 2.9 (93) % (90 ) % Underwriting and Operating Expenses 28.3 29.8 27.4 (5) % 3 % Adjusted Net Income 97.6 89.0 80.3 10 % 22 % Adjusted Diluted EPS $ 1.20 $ 1.08 $ 0.95 11 % 26 % Book Value per Share (excluding net unrealized gains and losses) (2) $ 27.54 $ 26.42 $ 23.53 4 % 17 % Loss Ratio 0.2 % 2.7 % 2.3 % Expense Ratio 20.1 % 21.8 % 21.8 % (1) Percentages may not be replicated based on the rounded figures presented in the table. (2) Book value per share (excluding net unrealized gains and losses) is defined as total shareholders' equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding. Conference Call and Webcast Details The company will hold a conference call, which will be webcast live today, July 30, 2024 , at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time . The webcast will be available on the company's website, www.nationalmi.com , in the “Investor Relations” section. The conference call can also be accessed by dialing (844) 481-2708 in the U.S. , or (412) 317-0664 internationally, by referencing NMI Holdings, Inc. About NMI Holdings, Inc. NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S. -based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com . Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995 (the “PSLRA”). The PSLRA provides a “safe harbor” for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “could,” “may,” “predict,” “assume,” “potential,” “should,” “will,” “estimate,” “perceive,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: changes in general economic, market and political conditions and policies (including changes in interest rates and inflation) and investment results or other conditions that affect the U.S. housing market or the U.S. markets for home mortgages, mortgage insurance, reinsurance and credit risk transfer markets, including the risk related to geopolitical instability, inflation, an economic downturn (including any decline in home prices) or recession, and their impacts on our business, operations and personnel; changes in the charters, business practices, policies, pricing or priorities of Fannie Mae and Freddie Mac (collectively, the GSEs), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency (“FHFA”), such as the FHFA’s priority to increase the accessibility to and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements (“PMIERs”) and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia (“D.C.”) and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers such as the Federal Housing Administration , the U.S. Department of Agriculture’s Rural Housing Service and the U.S. Department of Veterans Affairs , and potential market entry by new competitors or consolidation of existing competitors; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning “Qualified Mortgage” and “Qualified Residential Mortgage”; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; legislative or regulatory changes to the GSEs’ role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential legal and regulatory claims, investigations, actions, audits or inquiries that could result in adverse judgements, settlements, fines or other reliefs that could require significant expenditures or have other negative effects on our business; uncertainty relating to the coronavirus virus and its variants, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and our business, operations and personnel; our ability to successfully execute and implement our capital plans, including our ability to access the equity, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; lenders, the GSEs, or other market participants seeking alternatives to private mortgage insurance; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; climate risk and efforts to manage or regulate climate risk by government agencies could affect our business and operations; potential adverse impacts arising from the occurrence of any man-made disasters or public health emergencies, including pandemics; the inability of our counter-parties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks (including the exposure of our confidential customer and other information); and ability to recruit, train and retain key personnel. These risks and uncertainties also include, but are not limited to, those set forth under the heading “Risk Factors” detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023 , as subsequently updated through other reports we file with the SEC . All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law. Use of Non-GAAP Financial Measures We believe the use of the non-GAAP measures of 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) enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company's business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; their measures may not be comparable to those we calculate and present. Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred. Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred. Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods. Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP. Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders' equity for the period. Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned. Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned. Book value per share (excluding net unrealized gains and losses) is defined as total shareholders' equity, excluding the after-tax effects of unrealized gains and losses on investments, divided by shares outstanding. Although 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) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below. (1) Net realized investment gains and losses . The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results. (2) Capital markets transaction costs. Capital markets transaction costs result from activities that are undertaken to improve our debt profile or enhance our capital position through activities such as debt refinancing and capital markets reinsurance transactions that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles. (3) Other infrequent, unusual or non-operating items . Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency in the future. Identification and exclusion of these items provides clarity about the impact special or rare occurrences may have on our current financial performance. Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017. We believe such items are infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business. (4) Net unrealized gains and losses on investments. The recognition of the net unrealized gains or losses on investment can vary significantly across periods and is influenced by factors such as interest rate movement, overall market and economic conditions, and tax and capital profiles. These valuation adjustments may not necessarily result in economic gains or losses and not reflective of ongoing operations. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these unrealized gains or losses. Investor Contact John M. Swenson Vice President, Investor Relations and Treasury [email protected] (510) 788-8417 Consolidated statements of operations and comprehensive income (unaudited) For the three months ended June 30 , For the six months ended June 30 , 2024 2023 2024 2023 (In Thousands, except for per share data) Revenues Net premiums earned $ 141,168 $ 125,985 $ 277,825 $ 247,739 Net investment income 20,688 16,518 40,124 31,412 Net realized investment losses — — — (33 ) Other revenues 266 182 426 346 Total revenues 162,122 142,685 318,375 279,464 Expenses Insurance claims and claim expenses 276 2,873 3,970 9,574 Underwriting and operating expenses 28,330 27,448 58,145 53,234 Service expenses 194 267 331 347 Interest expense 14,678 8,048 22,718 16,087 Total expenses 43,478 38,636 85,164 79,242 Income before income taxes 118,644 104,049 233,211 200,222 Income tax expense 26,565 23,765 52,082 45,480 Net income $ 92,079 $ 80,284 $ 181,129 $ 154,742 Earnings per share Basic $ 1.15 $ 0.97 $ 2.25 $ 1.86 Diluted $ 1.13 $ 0.95 $ 2.22 $ 1.83 Weighted average common shares outstanding Basic 80,117 82,958 80,421 83,277 Diluted 81,300 84,190 81,703 84,504 Loss ratio (1) 0.2 % 2.3 % 1.4 % 3.9 % Expense ratio (2) 20.1 % 21.8 % 20.9 % 21.5 % Combined ratio (3) 20.3 % 24.1 % 22.4 % 25.4 % Net income $ 92,079 $ 80,284 $ 181,129 $ 154,742 Other comprehensive (loss) income, net of tax: Unrealized (losses) gains in accumulated other comprehensive income, net of tax (benefit) expense of $(412) and $(4,120) for the three months ended June 30, 2024 and 2023, and $(3,141) and $4,513 for the six months ended June 30, 2024 and 2023, respectively (1,549 ) (15,499 ) (11,454 ) 16,977 Reclassification adjustment for realized losses included in net income, net of tax benefit of $7 for the six months ended June 30, 2023 — — — 26 Other comprehensive (loss) income, net of tax (1,549 ) (15,499 ) (11,454 ) 17,003 Comprehensive income $ 90,530 $ 64,785 $ 169,675 $ 171,745 (1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned. (2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned. (3) Combined ratio may not foot due to rounding. Consolidated balance sheets (unaudited) June 30, 2024 December 31, 2023 Assets (In Thousands, except for share data) Fixed maturities, available-for-sale, at fair value (amortized cost of $2,707,416 and $2,542,862 as of June 30, 2024 and December 31, 2023 , respectively) $ 2,520,990 $ 2,371,021 Cash and cash equivalents (including restricted cash of $1,152 and $1,338 as of June 30, 2024 and December 31, 2023 , respectively) 62,629 96,689 Premiums receivable 76,455 76,456 Accrued investment income 21,439 19,785 Deferred policy acquisition costs, net 63,248 62,905 Software and equipment, net 28,848 30,252 Intangible assets and goodwill 3,634 3,634 Reinsurance recoverable 27,336 27,514 Prepaid federal income taxes 235,286 235,286 Other assets 62,038 16,965 Total assets $ 3,101,903 $ 2,940,507 Liabilities Debt $ 414,249 $ 397,595 Unearned premiums 78,334 92,295 Accounts payable and accrued expenses 77,918 86,189 Reserve for insurance claims and claim expenses 125,443 123,974 Deferred tax liability, net 348,293 301,573 Other liabilities (1) 12,056 12,877 Total liabilities 1,056,293 1,014,503 Shareholders' equity Common stock - $0.01 par value; 87,900,888 shares issued and 79,763,893 shares outstanding as of June 30, 2024 and 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 (250,000,000 shares authorized) 879 873 Additional paid-in capital 993,143 990,816 Treasury Stock, at cost: 8,136,995 and 6,452,858 common shares as of June 30, 2024 and December 31, 2023 , respectively (201,323 ) (148,921 ) Accumulated other comprehensive loss, net of tax (151,371 ) (139,917 ) Retained earnings 1,404,282 1,223,153 Total shareholders' equity 2,045,610 1,926,004 Total liabilities and shareholders' equity $ 3,101,903 $ 2,940,507 (1) “Reinsurance funds withheld ” has been reclassified as “Other liabilities ” in the prior period. Non-GAAP Financial Measure Reconciliations (unaudited) As of and for the three months ended For the six months ended 6/30/2024 3/31/2024 6/30/2023 06/30/24 6/30/2023 As Reported (In Thousands, except for per share data) Revenues Net premiums earned $ 141,168 $ 136,657 $ 125,985 $ 277,825 $ 247,739 Net investment income 20,688 19,436 16,518 40,124 31,412 Net realized investment losses — — — — (33 ) Other revenues 266 160 182 426 346 Total revenues 162,122 156,253 142,685 318,375 279,464 Expenses Insurance claims and claim expenses 276 3,694 2,873 3,970 9,574 Underwriting and operating expenses 28,330 29,815 27,448 58,145 53,234 Service expenses 194 137 267 331 347 Interest expense 14,678 8,040 8,048 22,718 16,087 Total expenses 43,478 41,686 38,636 85,164 79,242 Income before income taxes 118,644 114,567 104,049 233,211 200,222 Income tax expense 26,565 25,517 23,765 52,082 45,480 Net income $ 92,079 $ 89,050 $ 80,284 $ 181,129 $ 154,742 Adjustments: Net realized investment losses — — — — 33 Capital markets transaction costs 6,966 — — 6,966 — Adjusted income before taxes 125,610 114,567 104,049 240,177 200,255 Income tax expense on adjustments (1) 1,463 — — 1,463 7 Adjusted net income $ 97,582 $ 89,050 $ 80,284 $ 186,632 $ 154,768 Weighted average diluted shares outstanding 81,300 82,099 84,190 81,703 84,504 Diluted EPS $ 1.13 $ 1.08 $ 0.95 $ 2.22 $ 1.83 Adjusted diluted EPS $ 1.20 $ 1.08 $ 0.95 $ 2.28 $ 1.83 Return-on-equity 18.3 % 18.2 % 18.6 % 18.2 % 18.4 % Adjusted return-on-equity 19.4 % 18.2 % 18.6 % 18.8 % 18.4 % Expense ratio (2) 20.1 % 21.8 % 21.8 % 20.9 % 21.5 % Adjusted expense ratio (3) 20.1 % 21.8 % 21.8 % 20.9 % 21.5 % Combined ratio (4) 20.3 % 24.5 % 24.1 % 22.4 % 25.4 % Adjusted combined ratio (5) 20.3 % 24.5 % 24.1 % 22.4 % 25.4 % Book value per share (6) $ 25.65 $ 24.56 $ 21.25 Book value per share (excluding net unrealized gains and losses) (7) $ 27.54 $ 26.42 $ 23.53 (1) Marginal tax impact of non-GAAP adjustments is calculated based on our statutory U.S. federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction. (2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned. (3) Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions) by net premiums earned. (4) Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claim expenses by net premiums earned. (5) Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction) and insurance claims and claim expenses by net premiums earned. (6) Book value per share is calculated by dividing total shareholders' equity by shares outstanding. (7) Book value per share (excluding net unrealized gains and losses) is defined as total shareholders' equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding. Historical Quarterly Data 2024 2023 June 30 March 31 December 31 September 30 June 30 (In Thousands, except for per share data) Revenues Net premiums earned $ 141,168 $ 136,657 $ 132,940 $ 130,089 $ 125,985 Net investment income 20,688 19,436 18,247 17,853 16,518 Other revenues 266 160 193 217 182 Total revenues 162,122 156,253 151,380 148,159 142,685 Expenses Insurance claims and claim expenses 276 3,694 8,232 4,812 2,873 Underwriting and operating expenses 28,330 29,815 29,716 27,749 27,448 Service expenses 194 137 185 239 267 Interest expense 14,678 8,040 8,066 8,059 8,048 Total expenses 43,478 41,686 46,199 40,859 38,636 Income before income taxes 118,644 114,567 105,181 107,300 104,049 Income tax expense 26,565 25,517 21,768 23,345 23,765 Net income $ 92,079 $ 89,050 $ 83,413 $ 83,955 $ 80,284 Earnings per share Basic $ 1.15 $ 1.10 $ 1.03 $ 1.02 $ 0.97 Diluted $ 1.13 $ 1.08 $ 1.01 $ 1.00 $ 0.95 Weighted average common shares outstanding Basic 80,117 80,726 81,005 82,096 82,958 Diluted 81,300 82,099 82,685 83,670 84,190 Other data Loss ratio (1) 0.2 % 2.7 % 6.2 % 3.7 % 2.3 % Expense ratio (2) 20.1 % 21.8 % 22.4 % 21.3 % 21.8 % Combined ratio (3) 20.3 % 24.5 % 28.5 % 25.0 % 24.1 % (1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned. (2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned. (3) Combined ratio may not foot due to rounding. Portfolio Statistics The table below highlights trends in our primary portfolio as of the date and for the periods indicated. Primary portfolio trends As of and for the three months ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 ($ Values In Millions, except as noted below) New insurance written (NIW) $ 12,503 $ 9,398 $ 8,927 $ 11,334 $ 11,478 New risk written 3,335 2,486 2,354 3,027 3,022 Insurance-in-force (IIF) (1) 203,501 199,373 197,029 194,781 191,306 Risk-in-force (RIF) (1) 53,956 52,610 51,796 51,011 49,875 Policies in force (count) (1) 645,276 635,662 629,690 622,993 611,441 Average loan size ($ value in thousands) (1) $ 315 $ 314 $ 313 $ 313 $ 313 Coverage percentage (2) 26.5 % 26.4 % 26.3 % 26.2 % 26.1 % Loans in default (count) (1) 4,904 5,109 5,099 4,594 4,349 Default rate (1) 0.76 % 0.80 % 0.81 % 0.74 % 0.71 % Risk-in-force on defaulted loans (1) $ 401 $ 414 $ 408 $ 359 $ 335 Average net premium yield (3) 0.28 % 0.28 % 0.27 % 0.27 % 0.27 % Earnings from cancellations $ 1.0 $ 0.6 $ 1.0 $ 0.9 $ 1.1 Annual persistency (4) 85.4 % 85.8 % 86.1 % 86.2 % 86.0 % Quarterly run-off (5) 4.2 % 3.6 % 3.4 % 4.1 % 3.7 % (1) Reported as of the end of the period. (2) Calculated as end of period RIF divided by end of period IIF. (3) Calculated as net premiums earned, divided by average primary IIF for the period, annualized. (4) Defined as the percentage of IIF that remains on our books after a given twelve-month period. (5) Defined as the percentage of IIF that is no longer on our books after a given three-month period. NIW, IIF and Premiums The tables below present primary NIW and primary and pool IIF, as of the dates and for the periods indicated. Primary NIW For the three months ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 (In Millions) Monthly $ 12,288 $ 9,175 $ 8,614 $ 11,038 $ 11,266 Single 215 223 313 296 212 Primary $ 12,503 $ 9,398 $ 8,927 $ 11,334 $ 11,478 Primary and pool IIF As of June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 (In Millions) Monthly $ 184,862 $ 180,343 $ 177,764 $ 175,308 $ 171,685 Single 18,639 19,030 19,265 19,473 19,621 Primary 203,501 199,373 197,029 194,781 191,306 Pool — — — — 1,000 Total $ 203,501 $ 199,373 $ 197,029 $ 194,781 $ 192,306 The following table presents the amounts related to the company's quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR Transaction, 2022 QSR Transaction, 2022 Seasoned QSR Transaction, 2023 QSR Transaction, and 2024 QSR Transaction and collectively, the QSR Transactions), insurance-linked note transactions (2019 ILN Transaction, 2020-2 ILN Transaction, 2021-1 ILN Transaction, and 2021-2 ILN Transaction and collectively, the ILN Transactions), and traditional reinsurance transactions (2022-1 XOL Transaction, 2022-2 XOL Transaction, 2022-3 XOL Transaction, 2023-1 XOL Transaction, 2023-2 XOL Transaction, and 2024 XOL Transaction and collectively, the XOL Transactions) for the periods indicated. For the three months ended June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 (In Thousands) The QSR Transactions Ceded risk-in-force $ 12,815,434 $ 12,669,207 $ 12,626,541 $ 12,753,261 $ 12,761,294 Ceded premiums earned (41,555 ) (41,269 ) (41,218 ) (42,015 ) (42,002 ) Ceded claims and claim (benefits) expenses (138 ) 659 2,447 2,221 803 Ceding commission earned 10,222 10,292 9,561 9,808 9,877 Profit commission 24,351 23,407 22,057 22,184 23,486 The ILN Transactions (1) Ceded premiums $ (5,858 ) $ (5,976 ) $ (6,305 ) $ (6,925 ) $ (8,815 ) The XOL Transactions Ceded Premiums $ (9,403 ) $ (9,223 ) $ (8,302 ) $ (7,968 ) $ (7,672 ) (1) Effective July 25, 2023 and July 25, 2024 , NMIC exercised its optional call to terminate and commute its previously outstanding excess of loss reinsurance agreement with Oaktown Re II Ltd. and Oaktown Re III Ltd. , respectively. NMIC no longer makes risk premium payments to Oaktown Re II Ltd. and Oaktown Re III Ltd. , thereafter. The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated. Primary NIW by FICO For the three months ended For the six months ended June 30, 2024 March 31, 2024 June 30, 2023 June 30, 2024 June 30, 2023 (In Millions) >= 760 $ 6,797 $ 4,888 $ 6,919 $ 11,685 $ 12,170 740-759 2,154 1,797 1,836 3,951 3,350 720-739 1,537 1,220 1,541 2,757 2,648 700-719 1,084 780 668 1,864 1,124 680-699 635 530 413 1,165 755 = 760 $ 101,531 $ 99,195 $ 94,931 740-759 36,135 35,416 33,841 720-739 28,479 28,033 26,862 700-719 19,295 18,904 18,261 680-699 13,138 13,002 12,506 = 760 $ 26,692 $ 25,935 $ 24,472 740-759 9,624 9,392 8,888 720-739 7,634 7,484 7,090 700-719 5,217 5,089 4,865 680-699 3,530 3,479 3,315

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