NMI Holdings, Inc. Reports Third Quarter 2024 Financial Results; Announces New Reinsurance Agreements

About this update from Nmi Holdings Inc

EMERYVILLE, Calif. , Nov. 06, 2024 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $92.8 million , or $1.15 per diluted share, for the third quarter ended September 30, 2024 , compared to $92.1 million , or $1.13 per diluted share, for the second quarter ended June 30, 2024 and $84.0 million , or $1.00 per diluted share, for the third quarter ended September 30, 2023 . Adam Pollitzer , President and Chief Executive Officer of National MI, said, “In the third quarter, we again delivered strong operating performance, consistent growth in our high-quality insured portfolio, and standout financial results. Our products and the support we provide are more important today than ever before, and we’re delivering unique solutions for our customers and their borrowers. 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.” The company also announced today that it has entered into a series of new quota share and excess-of-loss reinsurance agreements that will provide forward flow coverage, broad risk protection and efficient PMIERs funding for new business originated between January 1, 2025 and December 31, 2027 . Selected third quarter 2024 highlights include: Primary insurance-in-force at quarter end was $207.5 billion , compared to $203.5 billion at the end of the second quarter and $194.8 billion at the end of the third quarter of 2023. Net premiums earned were $143.3 million , compared to $141.2 million in the second quarter and $130.1 million in the third quarter of 2023. Total revenue was $166.1 million , compared to $162.1 million in the second quarter and $148.2 million in the third quarter of 2023. Insurance claims and claim expenses were $10.3 million , compared to $0.3 million in the second quarter and $4.8 million in the third quarter of 2023. Loss ratio was 7.2%, compared to 0.2% in the second quarter and 3.7% in the third quarter of 2023. Underwriting and operating expenses were $29.2 million , compared to $28.3 million in the second quarter and $27.7 million in the third quarter of 2023. Expense ratio was 20.3%, compared to 20.1% in the second quarter and 21.3% in the third quarter of 2023. Net income was $92.8 million , compared to $92.1 million in the second quarter and $84.0 million in the third quarter of 2023. Diluted EPS was $1.15 , compared to $1.13 in the second quarter and $1.00 in the third quarter of 2023. Adjusted net income was $92.8 million , compared to $97.6 million in the second quarter and $84.0 million in the third quarter of 2023. Adjusted diluted EPS was $1.15 , compared to $1.20 in the second quarter and $1.00 in the third quarter of 2023. Shareholders’ equity was $2.2 billion at quarter end and book value per share was $27.67 . Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $28.71 , up 4% compared to $27.54 in the second quarter and 17% compared to $24.56 in the third quarter of 2023. Annualized return on equity for the quarter was 17.5%, compared to 18.3% in the second quarter and 19.0% in the third quarter of 2023. At quarter-end, total PMIERs available assets were $3.0 billion and net risk-based required assets were $1.7 billion . QuarterEnded QuarterEnded QuarterEnded Change (1) Change (1) 9/30/2024 6/30/2024 9/30/2023 Q/Q Y/Y INSURANCE METRICS ($billions) Primary Insurance -in-Force $ 207.5 $ 203.5 $ 194.8 2 % 7 % New Insurance Written - NIW 12.2 12.5 11.3 (2 ) % 8 % FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts) Net Premiums Earned $ 143.3 $ 141.2 $ 130.1 2 % 10 % Net Investment Income 22.5 20.7 17.9 9 % 26 % Insurance Claims and Claim Expenses 10.3 0.3 4.8 NM (3) 114 % Underwriting and Operating Expenses 29.2 28.3 27.7 3 % 5 % Net Income 92.8 92.1 84.0 1 % 11 % Adjusted Net Income 92.8 97.6 84.0 (5 ) % 11 % Diluted EPS $ 1.15 $ 1.13 $ 1.00 1 % 14 % Adjusted Diluted EPS $ 1.15 $ 1.20 $ 1.00 (5 ) % 14 % Book Value per Share (excluding net unrealized gains and losses) (2) $ 28.71 $ 27.54 $ 24.56 4 % 17 % Loss Ratio 7.2 % 0.2 % 3.7 % Expense Ratio 20.3 % 20.1 % 21.3 % (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. (3) Not meaningful. Conference Call and Webcast Details The company will hold a conference call, which will be webcast live today, November 6, 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 September 30 , For the nine months ended September 30 , 2024 2023 2024 2023 (In Thousands, except for per share data) Revenues Net premiums earned $ 143,343 $ 130,089 $ 421,168 $ 377,828 Net investment income 22,474 17,853 62,598 49,265 Net realized investment losses (10 ) — (10 ) (33 ) Other revenues 285 217 711 563 Total revenues 166,092 148,159 484,467 427,623 Expenses Insurance claims and claim expenses 10,321 4,812 14,291 14,386 Underwriting and operating expenses 29,160 27,749 87,305 80,983 Service expenses 208 239 539 586 Interest expense 7,076 8,059 29,794 24,146 Total expenses 46,765 40,859 131,929 120,101 Income before income taxes 119,327 107,300 352,538 307,522 Income tax expense 26,517 23,345 78,599 68,825 Net income $ 92,810 $ 83,955 $ 273,939 $ 238,697 Earnings per share Basic $ 1.17 $ 1.02 $ 3.42 $ 2.88 Diluted $ 1.15 $ 1.00 $ 3.36 $ 2.83 Weighted average common shares outstanding Basic 79,549 82,096 80,129 82,879 Diluted 81,045 83,670 81,484 84,236 Loss ratio (1) 7.2 % 3.7 % 3.4 % 3.8 % Expense ratio (2) 20.3 % 21.3 % 20.7 % 21.4 % Combined ratio (3) 27.5 % 25.0 % 24.1 % 25.2 % Net income $ 92,810 $ 83,955 $ 273,939 $ 238,697 Other comprehensive income (loss), net of tax: Unrealized gains (losses) in accumulated other comprehensive loss, net of tax expense (benefit) of $18,441 and $(6,980) for the three months ended September 30, 2024 and 2023, and $15,300 and $(2,467) for the nine months ended September 30, 2024 and 2023, respectively 69,372 (26,257 ) 57,918 (9,280 ) Reclassification adjustment for realized losses included in net income, net of tax benefit of $2 and $0 for the three months ended September 30, 2024 and 2023, and $2 and $7 for the nine months ended September 30, 2024 and 2023, respectively 8 — 8 26 Other comprehensive income (loss), net of tax 69,380 (26,257 ) 57,926 (9,254 ) Comprehensive income $ 162,190 $ 57,698 $ 331,865 $ 229,443 (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) September 30 ,2024 December 31 ,2023 Assets (In Thousands, except for share data) Fixed maturities, available-for-sale, at fair value (amortized cost of $2,806,886 and $2,542,862 as of September 30, 2024 and December 31, 2023 , respectively) $ 2,708,286 $ 2,371,021 Cash and cash equivalents (including restricted cash of $88 and $1,338 as of September 30, 2024 and December 31, 2023 , respectively) 133,319 96,689 Premiums receivable 78,454 76,456 Accrued investment income 21,634 19,785 Deferred policy acquisition costs, net 63,803 62,905 Software and equipment, net 27,251 30,252 Intangible assets and goodwill 3,634 3,634 Reinsurance recoverable 29,214 27,514 Prepaid federal income taxes 235,286 235,286 Other assets 19,244 16,965 Total assets $ 3,320,125 $ 2,940,507 Liabilities Debt $ 414,694 $ 397,595 Unearned premiums 71,592 92,295 Accounts payable and accrued expenses 110,968 86,189 Reserve for insurance claims and claim expenses 135,520 123,974 Deferred tax liability, net 380,879 301,573 Other liabilities (1) 11,286 12,877 Total liabilities 1,124,939 1,014,503 Shareholders’ equity Common stock - $0.01 par value; 87,901,225 shares issued and 79,320,863 shares outstanding as of September 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 997,570 990,816 Treasury Stock, at cost: 8,580,362 and 6,452,858 common shares as of September 30, 2024 and December 31, 2023 , respectively (218,364 ) (148,921 ) Accumulated other comprehensive loss, net of tax (81,991 ) (139,917 ) Retained earnings 1,497,092 1,223,153 Total shareholders’ equity 2,195,186 1,926,004 Total liabilities and shareholders’ equity $ 3,320,125 $ 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 nine months ended 9/30/2024 6/30/2024 9/30/2023 9/30/2024 9/30/2023 As Reported (In Thousands, except for per share data) Revenues Net premiums earned $ 143,343 $ 141,168 $ 130,089 $ 421,168 $ 377,828 Net investment income 22,474 20,688 17,853 62,598 49,265 Net realized investment losses (10 ) — — (10 ) (33 ) Other revenues 285 266 217 711 563 Total revenues 166,092 162,122 148,159 484,467 427,623 Expenses Insurance claims and claim expenses 10,321 276 4,812 14,291 14,386 Underwriting and operating expenses 29,160 28,330 27,749 87,305 80,983 Service expenses 208 194 239 539 586 Interest expense 7,076 14,678 8,059 29,794 24,146 Total expenses 46,765 43,478 40,859 131,929 120,101 Income before income taxes 119,327 118,644 107,300 352,538 307,522 Income tax expense 26,517 26,565 23,345 78,599 68,825 Net income $ 92,810 $ 92,079 $ 83,955 $ 273,939 $ 238,697 Adjustments: Net realized investment losses 10 — — 10 33 Capital markets transaction costs — 6,966 — 6,966 — Adjusted income before taxes 119,337 125,610 107,300 359,514 307,555 Income tax expense on adjustments (1) 2 1,463 — 1,465 7 Adjusted net income $ 92,818 $ 97,582 $ 83,955 $ 279,450 $ 238,723 Weighted average diluted shares outstanding 81,045 81,300 83,670 81,484 84,236 Diluted EPS $ 1.15 $ 1.13 $ 1.00 $ 3.36 $ 2.83 Adjusted diluted EPS $ 1.15 $ 1.20 $ 1.00 $ 3.43 $ 2.83 Return-on-equity 17.5 % 18.3 % 19.0 % 17.7 % 18.7 % Adjusted return-on-equity 17.5 % 19.4 % 19.0 % 18.1 % 18.7 % Expense ratio (2) 20.3 % 20.1 % 21.3 % 20.7 % 21.4 % Adjusted expense ratio (3) 20.3 % 20.1 % 21.3 % 20.7 % 21.4 % Combined ratio (4) 27.5 % 20.3 % 25.0 % 24.1 % 25.2 % Adjusted combined ratio (5) 27.5 % 20.3 % 25.0 % 24.1 % 25.2 % Book value per share (6) $ 27.67 $ 25.65 $ 21.94 Book value per share (excluding net unrealized gains and losses) (7) $ 28.71 $ 27.54 $ 24.56 (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 September 30 June 30 March 31 December 31 September 30 (In Thousands, except for per share data) Revenues Net premiums earned $ 143,343 $ 141,168 $ 136,657 $ 132,940 $ 130,089 Net investment income 22,474 20,688 19,436 18,247 17,853 Net realized investment losses (10 ) — — — — Other revenues 285 266 160 193 217 Total revenues 166,092 162,122 156,253 151,380 148,159 Expenses Insurance claims and claim expenses 10,321 276 3,694 8,232 4,812 Underwriting and operating expenses 29,160 28,330 29,815 29,716 27,749 Service expenses 208 194 137 185 239 Interest expense 7,076 14,678 8,040 8,066 8,059 Total expenses 46,765 43,478 41,686 46,199 40,859 Income before income taxes 119,327 118,644 114,567 105,181 107,300 Income tax expense 26,517 26,565 25,517 21,768 23,345 Net income $ 92,810 $ 92,079 $ 89,050 $ 83,413 $ 83,955 Earnings per share Basic $ 1.17 $ 1.15 $ 1.10 $ 1.03 $ 1.02 Diluted $ 1.15 $ 1.13 $ 1.08 $ 1.01 $ 1.00 Weighted average common shares outstanding Basic 79,549 80,117 80,726 81,005 82,096 Diluted 81,045 81,300 82,099 82,685 83,670 Other data Loss ratio (1) 7.2 % 0.2 % 2.7 % 6.2 % 3.7 % Expense ratio (2) 20.3 % 20.1 % 21.8 % 22.4 % 21.3 % Combined ratio (3) 27.5 % 20.3 % 24.5 % 28.5 % 25.0 % (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 September 30 ,2024 June 30 ,2024 March 31 ,2024 December 31 ,2023 September 30 ,2023 ($ Values In Millions, except as noted below) New insurance written (NIW) $ 12,218 $ 12,503 $ 9,398 $ 8,927 $ 11,334 New risk written 3,245 3,335 2,486 2,354 3,027 Insurance-in-force (IIF) (1) 207,538 203,501 199,373 197,029 194,781 Risk-in-force (RIF) (1) 55,253 53,956 52,610 51,796 51,011 Policies in force (count) (1) 654,374 645,276 635,662 629,690 622,993 Average loan size ($ value in thousands) (1) $ 317 $ 315 $ 314 $ 313 $ 313 Coverage percentage (2) 26.6 % 26.5 % 26.4 % 26.3 % 26.2 % Loans in default (count) (1) 5,712 4,904 5,109 5,099 4,594 Default rate (1) 0.87 % 0.76 % 0.80 % 0.81 % 0.74 % Risk-in-force on defaulted loans (1) $ 468 $ 401 $ 414 $ 408 $ 359 Average net premium yield (3) 0.28 % 0.28 % 0.28 % 0.27 % 0.27 % Earnings from cancellations $ 0.8 $ 1.0 $ 0.6 $ 1.0 $ 0.9 Annual persistency (4) 85.5 % 85.4 % 85.8 % 86.1 % 86.2 % Quarterly run-off (5) 4.0 % 4.2 % 3.6 % 3.4 % 4.1 % (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 IIF, as of the dates and for the periods indicated. Primary NIW For the three months ended September 30 ,2024 June 30 ,2024 March 31 ,2024 December 31 ,2023 September 30 ,2023 (In Millions) Monthly $ 11,978 $ 12,288 $ 9,175 $ 8,614 $ 11,038 Single 240 215 223 313 296 Total $ 12,218 $ 12,503 $ 9,398 $ 8,927 $ 11,334 Primary IIF As of September 30 ,2024 June 30 ,2024 March 31 ,2024 December 31 ,2023 September 30 ,2023 (In Millions) Monthly $ 189,241 $ 184,862 $ 180,343 $ 177,764 $ 175,308 Single 18,297 18,639 19,030 19,265 19,473 Total $ 207,538 $ 203,501 $ 199,373 $ 197,029 $ 194,781 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 (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 September 30 ,2024 June 30 ,2024 March 31 ,2024 December 31 ,2023 September 30 ,2023 (In Thousands) The QSR Transactions Ceded risk-in-force $ 12,968,039 $ 12,815,434 $ 12,669,207 $ 12,626,541 $ 12,753,261 Ceded premiums earned (41,761 ) (41,555 ) (41,269 ) (41,218 ) (42,015 ) Ceded claims and claim expenses (benefits) 2,449 (138 ) 659 2,447 2,221 Ceding commission earned 10,152 10,222 10,292 9,561 9,808 Profit commission 21,883 24,351 23,407 22,057 22,184 The ILN Transactions (1) Ceded premiums $ (4,302 ) $ (5,858 ) $ (5,976 ) $ (6,305 ) $ (6,925 ) The XOL Transactions Ceded Premiums $ (9,760 ) $ (9,403 ) $ (9,223 ) $ (8,302 ) $ (7,968 ) (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 nine months ended September 30 ,2024 June 30 ,2024 September 30 ,2023 September 30 ,2024 September 30 ,2023 (In Millions) >= 760 $ 6,615 $ 6,797 $ 6,261 $ 18,300 $ 18,431 740-759 2,057 2,154 1,877 6,008 5,227 720-739 1,529 1,537 1,556 4,286 4,204 700-719 1,040 1,084 876 2,904 2,000 680-699 652 635 623 1,817 1,378 = 760 $ 103,764 $ 101,531 $ 97,026 740-759 36,830 36,135 34,394 720-739 28,930 28,479 27,360 700-719 19,654 19,295 18,484 680-699 13,326 13,138 12,683 = 760 $ 27,396 $ 26,692 $ 25,149 740-759 9,850 9,624 9,067 720-739 7,788 7,634 7,254 700-719 5,337 5,217 4,938 680-699 3,590 3,530 3,373

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