NMI Holdings Inc

Previous wording

NMIH, a Delaware corporation, was incorporated in May 2011, and we began start-up operations in 2012 and wrote our first MI policy in 2013. Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of September 30, 2024, we had issued master policies with 2,062 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders. As of September 30, 2024, we had $207.5 billion of primary insurance-in-force (IIF) and $55.3 billion of primary risk-in-force (RIF).

Current wording

NMIH, a Delaware corporation, was incorporated in May 2011, and we began start-up operations in 2012 and wrote our first MI policy in 2013. Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio. As of March 31, 2025, we had issued master policies with 2,101 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders. As of March 31, 2025, we had $211.3 billion of primary insurance-in-force (IIF) and $56.5 billion of primary risk-in-force (RIF).

Previous wording

Our common stock trades on the Nasdaq under the symbol “NMIH.” Our headquarters is located in Emeryville, California. As of September 30, 2024, we had 229 employees. Our corporate website is located atwww.nationalmi.com. Our website and the information contained on or accessible through our website are not incorporated by reference into this report.

Current wording

Our common stock trades on the Nasdaq under the symbol “NMIH.” Our headquarters is located in Emeryville, California. As of March 31, 2025, we had 230 employees. Our corporate website is located atwww.nationalmi.com. Our website and the information contained on or accessible through our website are not incorporated by reference into this report.

Previous wording

We set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers, and in accordance with our filed rates and applicable rating rules. On June 4, 2018, we introduced a proprietary risk-based pricing platform, which we refer to as Rate GPS®. Rate GPS® considers a broad range of individual variables, including property type, type of loan product, borrower credit characteristics, and lender and market factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure. We introduced Rate GPS® in June 2018 to replace our previous rate card pricing system. While most of our new business is priced through Rate GPS®, we also continue to offer a rate card pricing option to a limited number of lender customers who require a rate card for operational reasons. We believe the introduction and utilization of Rate GPS® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.

Current wording

We set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers, and in accordance with our filed rates and applicable rating rules. We primarily price our policies through a proprietary risk-based pricing platform, which we refer to as Rate GPS®. Rate GPS® considers a broad range of individual variables, including property type, type of loan product, borrower credit characteristics, and lender and market factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure. While most of our new business is priced through Rate GPS®, we also offer a rate card pricing option to a limited number of lender customers who require a rate card for operational reasons. We believe that the utilization of Rate GPS® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.

Previous wording

NMIC is party to eight quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016 and as modified April 1, 2019, the 2018 QSR Transaction, effective January 1, 2018, the 2020 QSR Transaction, effective April 1, 2020 and as amended January 1, 2024, the 2021 QSR Transaction, effective January 1, 2021, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022, the 2023 QSR Transaction, effective January 1, 2023 and the 2024 QSR Transaction, effective January 1, 2024 – which we refer to collectively as the QSR Transactions. Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers. Each of the third-party reinsurance providers that is party to the QSR Transactions has an insurer financial strength rating of A- or better by S&P, A.M. Best or both.

Current wording

NMIC is party to nine quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016 and as modified January 1, 2025, the 2018 QSR Transaction, effective January 1, 2018 and as modified January 1, 2025, the 2020 QSR Transaction, effective April 1, 2020 and as amended January 1, 2024, the 2021 QSR Transaction, effective January 1, 2021 and as modified January 1, 2025, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022, the 2023 QSR Transaction, effective January 1, 2023, the 2024 QSR Transaction, effective January 1, 2024, and the 2025 QSR Transaction, effective January 1, 2025 – which we refer to collectively as the QSR Transactions. Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers. Each of the third-party reinsurance providers that is party to the QSR Transactions has an insurer financial strength rating of A- or better by S&P, A.M. Best or both.

Previous wording

Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related to 20.5% of the risk on eligible primary policies written for all periods through December 31, 2017 in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims. NMIC previously ceded 100% of the risk under its pool agreement with Fannie Mae; however, such agreement expired on August 31, 2023 and NMIC no longer cedes pool risk under the 2016 QSR Transaction.

Current wording

Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related to 20% of the risk on eligible primary policies written for all periods through December 31, 2017 in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims.

Previous wording

Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 25% of the risk on eligible policies written in 2018 and 20% of the risk on eligible policies written in 2019, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 61% that varies directly and inversely with ceded claims.

Current wording

Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 24% of the risk on eligible policies written in 2018 and 20% of the risk on eligible policies written in 2019, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 61% that varies directly and inversely with ceded claims.

Previous wording

Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related to 22.5% of the risk on eligible policies written in 2021 (subject to an aggregate risk written limit which was exhausted on October 30, 2021), in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 57.5% that varies directly and inversely with ceded claims.

Current wording

Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related to 22% of the risk on eligible policies written in 2021 (subject to an aggregate risk written limit which was exhausted on October 30, 2021), in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 58% that varies directly and inversely with ceded claims.

Previous wording

Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 95% of the net risk on eligible policies primarily for a seasoned pool of mortgage insurance policies that had previously been covered under the retired Oaktown Re Ltd. and Oaktown Re IV Ltd. reinsurance transactions, after the consideration of coverage provided by other QSR Transactions, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 35% ceding commission, and a profit commission of up to 55% that varies directly and inversely with ceded claims.

Current wording

Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 95% of the net risk on eligible policies primarily for a seasoned pool of mortgage insurance policies originated between January 1, 2013 to December 31, 2016 and July 1, 2019 to March 31, 2020, that had previously been covered under the retired Oaktown Re Ltd. and Oaktown Re IV Ltd. reinsurance transactions, after the consideration of coverage provided by other QSR Transactions, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 35% ceding commission, and a profit commission of up to 55% that varies directly and inversely with ceded claims.

Previous wording

NMIC is party to six excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, the 2023-2 XOL Transaction, effective July 1, 2023, and the 2024 XOL Transaction, effective January 1, 2024 – which we refer to collectively as the XOL Transactions. Each XOL Transaction provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies. Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the reinsurers then provide second layer loss protection up to a defined reinsurance coverage amount. The reinsurance coverage amount of each XOL Transaction is set to approximate the PMIERs minimum required assets of its reference pool and decreases from its peak over a ten-year period in the event the PMIERs minimum required assets of the pool declines. NMIC retains losses in excess of the outstanding reinsurance coverage amount.

Current wording

NMIC is party to seven excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, the 2023-2 XOL Transaction, effective July 1, 2023, the 2024 XOL Transaction, effective January 1, 2024, and the 2025 XOL Transaction, effective January 1, 2025 – which we refer to collectively as the XOL Transactions. Each XOL Transaction provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies. Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the reinsurers then provide second layer loss protection up to a defined reinsurance coverage amount. The reinsurance coverage amount of each XOL Transaction is set to approximate the PMIERs minimum required assets of its reference pool and decreases from its peak over a ten-year period in the event the PMIERs minimum required assets of the pool declines. NMIC retains losses in excess of the outstanding reinsurance coverage amount.

Previous wording

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease (over a ten-year period in the case of Oaktown Re V Ltd. and 12.5-year period in the case of Oaktown Re VI Ltd. and Oaktown Re VII Ltd.) as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled. As the reinsurance coverage decreases, a prescribed amount of collateral held in trust by the Oaktown Re Vehicles is distributed to ILN Transaction noteholders as amortization of the outstanding insurance-linked note principal balances. The outstanding reinsurance coverage amounts stop amortizing, and the distribution of collateral assets to ILN Transaction noteholders and amortization of insurance-linked note principal is suspended if certain credit enhancement or delinquency thresholds, as defined in each agreement, are triggered (each, a Lock-Out Event).

Current wording

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease over a 12.5-year period as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled. As the reinsurance coverage decreases, a prescribed amount of collateral held in trust by the Oaktown Re Vehicles is distributed to ILN Transaction noteholders as amortization of the outstanding insurance-linked note principal balances. The outstanding reinsurance coverage amounts stop amortizing, and the distribution of collateral assets to ILN Transaction noteholders and amortization of insurance-linked note principal is suspended if certain credit enhancement or delinquency thresholds, as defined in each agreement, are triggered (each, a Lock-Out Event).

Previous wording

Primary IIF increased 7% at September 30, 2024 compared to September 30, 2023, primarily due to the NIW generated between such measurement dates, partially offset by the run-off of in-force policies. Our persistency rate was 85.5% at September 30, 2024 and 86.2% at September 30, 2023. Our persistency rate remains historically high due to a continued slowdown in the pace of mortgage refinancing activity tied to the prevailing interest and mortgage rate environment.

Current wording

Our persistency rate was 84.3% at March 31, 2025 and 85.8% at March 31, 2024. Our persistency rate remains historically high due to a continued slowdown in the pace of mortgage refinancing activity tied to the prevailing interest and mortgage rate environment.

Previous wording

Net premiums written increased 11% and 13%, respectively, and net premiums earned increased 10% and 11%, respectively, during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under our reinsurance treaties.

Current wording

Net premiums written and earned increased 10% and 9%, respectively, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under the ILN Transactions.

Previous wording

The tables below present our primary NIW by FICO, LTV and purchase/refinance mix for the periods indicated. We calculate the LTV of a loan as the percentage of the original loan amount to the original purchase value of the property securing the loan.

Current wording

The tables below present our NIW by FICO, LTV and purchase/refinance mix for the periods indicated. We calculate the LTV of a loan as the percentage of the original loan amount to the original purchase value of the property securing the loan.

Previous wording

The following table provides a reconciliation of the beginning and ending gross reserve balances for primary insurance claims and claim expenses:

Current wording

The following table provides a reconciliation of the beginning and ending gross reserve balances for insurance claims and claim expenses:

Previous wording

(2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $63.2 million attributed to net case reserves and $7.0 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $54.4 million attributed to net case reserves and $5.8 million attributed to net IBNR reserves for the nine months ended September 30, 2023.

Current wording

(2) Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $25.9 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the three months ended March 31, 2025 and $25.9 million attributed to net case reserves and $6.6 million attributed to net IBNR reserves for the three months ended March 31, 2024.

Previous wording

(3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $49.8 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $41.1 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the nine months ended September 30, 2023.

Current wording

(3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $21.8 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the three months ended March 31, 2025 and $22.4 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the three months ended March 31, 2024.

Previous wording

The“claims incurred” section of the table above shows claims and claim expenses incurred on defaults occurring in current and prior years, including IBNR reserves and is presented net of reinsurance. We may increase or decrease our claim estimates and reserves as we learn additional information about individual defaulted loans and continue to observe and analyze loss development trends in our portfolio. Gross reserves of $45.1 million related to prior year defaults remained as of September 30, 2024.

Current wording

The“claims incurred” section of the table above shows claims and claim expenses incurred on defaults occurring in current and prior years, including IBNR reserves and is presented net of reinsurance. We may increase or decrease our claim estimates and reserves as we learn additional information about individual defaulted loans and continue to observe and analyze loss development trends in our portfolio. Gross reserves of $108.4 million related to prior year defaults remained as of March 31, 2025.

Previous wording

(1) Count includes 21 and 56 claims settled without payment during the three and nine months ended September 30, 2024, respectively, and 23 and 47 claims settled without payment during the three and nine months ended September 30, 2023, respectively.

Current wording

(1) Count includes 20 and 16 claims settled without payment during the three months ended March 31, 2025 and 2024, respectively.

Previous wording

We paid 67 and 168 claims during the three and nine months ended September 30, 2024, respectively, and 62 and 129 claims during the three and nine months ended September 30, 2023, respectively. The number of claims paid in each period was modest relative to the size of our insured portfolio and we generally observe that the borrowers of the loans we insure are well-situated with strong credit profiles, stable 30-year fixed rate mortgages, manageable debt service obligations and significant appreciated equity in their homes. An increase in the value of the homes collateralizing the mortgages we insure provides defaulted borrowers with alternative paths and incentives to cure their loan prior to the development of a claim.

Current wording

We paid 95 and 42 claims during the three months ended March 31, 2025 and 2024, respectively. The number of claims paid in each period was modest relative to the size of our insured portfolio and we generally observe that the borrowers of the loans we insure are well-situated with strong credit profiles, stable 30-year fixed rate mortgages, manageable debt service obligations and significant appreciated equity in their homes. An increase in the value of the homes collateralizing the mortgages we insure provides defaulted borrowers with alternative paths and incentives to cure their loan prior to the development of a claim.

Previous wording

Our claims severity was 64% and 58% for the three and nine months ended September 30, 2024, respectively, compared to 46% and 51% for the three and nine months ended September 30, 2023, respectively. Our claims severity for each period was below long-term industry norms and benefited from the same broad national house price appreciation that supported our claims paid experience. An increase in the value of the homes collateralizing the mortgages we insure provides additional equity support to our risk exposure and raises the prospect of a third-party sale of a foreclosed property, which can mitigate the severity of our settled claims.

Current wording

Our claims severity was 69% and 54% for the three months ended March 31, 2025 and 2024, respectively. Our claims severity for each period was below long-term industry norms and benefited from the same broad national house price appreciation that supported our claims paid experience. An increase in the value of the homes collateralizing the mortgages we insure provides additional equity support to our risk exposure and raises the prospect of a third-party sale of a foreclosed property, which can mitigate the severity of our settled claims.

Previous wording

Average reserve per default decreased from September 30, 2023 to September 30, 2024, primarily due to changes in observed and forecasted housing market conditions and macroeconomic factors, as well as changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans between the measurement dates.

Current wording

Average reserve per default decreased from March 31, 2024 to March 31, 2025, due to changes in observed and forecasted housing market conditions and macroeconomic factors between the measurement dates, and an increase in the proportion of defaults that trace to storm-related activity year-on-year. We generally observe that storm-related defaults cure at higher rates than other similarly situated loans in default (in non-disaster zones) and scale our reserves accordingly. Average reserves per default were further impacted by other changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans.

Previous wording

Under the PMIERs, approved insurers must maintain available assets that equal or exceed minimum required assets, which is an amount equal to the greater of (i) $400 million or (ii) a total risk-based required asset amount. The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, XOL Transactions and QSR Transactions. The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF.

Current wording

The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, XOL Transactions and QSR Transactions. The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF.

Previous wording

Available assets were $3.0 billion at September 30, 2024, compared to $2.6 billion at September 30, 2023. The $404 million increase inavailable assets between the dates presented was primarily driven by NMIC's positive cash flow from operations during the intervening period, partially offset by the payment of an ordinary course dividend from NMIC to NMIH in May 2024.

Current wording

Available assets were $3.2 billion at March 31, 2025, compared to $2.8 billion at March 31, 2024. The $409 million increase inavailable assets between the dates presented was primarily driven by NMIC's positive cash flow from operations during the intervening period, partially offset by the payment of an ordinary course dividend from NMIC to NMIH in May 2024.

Previous wording

Net risk-based required assets were $1.7 billion at September 30, 2024, compared to $1.4 billion at September 30, 2023. The $322 million increase in the risk-based required asset amount between the dates presented was primarily due to the growth in our gross RIF and aggregate gross risk-based required asset amount.

Current wording

Net risk-based required assets were $1.9 billion at March 31, 2025, compared to $1.6 billion at March 31, 2024. The $306 million increase in the risk-based required asset amount between the dates presented was primarily due to the growth in our gross RIF and aggregate gross risk-based required asset amount.

Previous wording

Net premiums earned were $143.3 million and $421.2 million for the three and nine months ended September 30, 2024, respectively, compared to $130.1 million and $377.8 million for the three and nine months ended September 30, 2023, respectively. The year-on-year increase in net premiums earned in each respective period was primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under our reinsurance treaties.

Current wording

Net premiums earned increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under the ILN Transactions.

Previous wording

Net investment income was $22.5 million and $62.6 million for the three and nine months ended September 30, 2024, respectively, compared to $17.9 million and $49.3 million for the three and nine months ended September 30, 2023, respectively. The year-on-year increase in net investment income in each respective period was primarily driven by an increase in the book yield of our investment portfolio tied to the deployment of new cash flows and reinvestment of rolling maturities at incrementally higher rates, as well as growth in the size of our total invested asset base.

Current wording

Net investment income increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in the size of our total invested asset base, as well as an increase in the book yield of our investment portfolio tied to the deployment of new cash flows and reinvestment of rolling maturities at incrementally higher rates.

Previous wording

Other revenues were $0.3 million and $0.7 million for the three and nine months ended September 30, 2024, respectively, compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively. Other revenues represent underwriting fee revenue generated by our subsidiary, NMIS, which provides outsourced loan review services to mortgage loan originators. Changes in other revenues primarily reflect changes in NMIS' outsourced loan review volume. Amounts recognized in other revenues generally correspond with amounts incurred as service expenses for outsourced loan review activities in the same periods.

Current wording

Other revenues represent underwriting fee revenue generated by our subsidiary, NMIS, which provides outsourced loan review services to mortgage loan originators. Changes in other revenues primarily reflect changes in NMIS' outsourced loan review volume. Amounts recognized in other revenues generally correspond with amounts incurred as service expenses for outsourced loan review activities in the same periods.

Previous wording

Insurance claims and claim expenses were $10.3 million and $14.3 million for the three and nine months ended September 30, 2024, respectively, compared to $4.8 million and $14.4 million for the three and nine months ended September 30, 2023, respectively. The increase in insurance claims and claim expenses for the three months ended September 30, 2024 was primarily driven by the establishment of initial reserves on newly defaulted loans, as well as an increase in the average case reserve held against previously defaulted loans that have aged in their delinquency status, and was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and ongoing analysis of recent loss development trends.

Current wording

Insurance claims and claim expenses increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an increase in the number of newly defaulted loans that emerged in the period and the establishment of initial reserves against such loans, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquency status through the period, partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and the ongoing analysis of recent loss development trends.

Previous wording

Service expenses were $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively, compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively. Service expenses represent third-party costs incurred by NMIS in connection with the services it provides. Changes in service expenses primarily reflect changes in NMIS' outsourced loan review volume. Amounts incurred as service expenses generally correspond with amounts recognized in other revenues in the same periods.

Current wording

Service expenses represent third-party costs incurred by NMIS in connection with the services it provides. Changes in service expenses primarily reflect changes in NMIS' outsourced loan review volume. Amounts incurred as service expenses generally correspond with amounts recognized in other revenues in the same periods.

Previous wording

Income tax expense was $26.5 million and $78.6 million for the three and nine months ended September 30, 2024, respectively, compared to $23.3 million and $68.8 million for the three and nine months ended September 30, 2023, respectively. The increase in income tax expense in each respective period was primarily driven by growth in our pre-tax income. Our effective tax rate on pre-tax income was 22.2% and 22.3% for the three and nine months ended September 30, 2024, respectively, compared to 21.8% and 22.4% for the three and nine months ended September 30, 2023, respectively. As a U.S. taxpayer, we are subject to a statutory U.S. federal corporate income tax rate of 21%. Our provision for income taxes for interim periods is established based on our estimated annual effective tax rate for a given year and reflects the impact of discrete tax effects in the period in which they occur. Our effective tax rates for the three and nine months ended September 30, 2024 and 2023 reflect the discrete tax effects of the vesting of RSUs and exercise of options. See Item 1, “Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 8, Income Taxes.”

Current wording

Income tax expense increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the growth in our pre-tax income. Our effective tax rate on pre-tax income was 21.9% for the three months ended March 31, 2025, compared to 22.3% for the three months ended March 31, 2024. As a U.S. taxpayer, we are subject to a statutory U.S. federal corporate income tax rate of 21%. Our provision for income taxes for interim periods is established based on our estimated annual effective tax rate for a given year and reflects the impact of discrete tax effects in the period in which they occur. Our effective tax rates for the three months ended March 31, 2025 and 2024 include the discrete tax effects of the vesting of RSUs. See Item 1, “Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9, Income Taxes.”

Previous wording

Net income was $92.8 million and $273.9 million for the three and nine months ended September 30, 2024, respectively, compared to $84.0 million and $238.7 million for the three and nine months ended September 30, 2023, respectively. Adjusted net income was $92.8 million and $279.5 million for the three and nine months ended September 30, 2024, respectively, compared to $84.0 million and $238.7 million for the three and nine months ended September 30, 2023, respectively. Net income and adjusted net income increased in each respective period primarily due to growth in our total revenues, partially offset by increases in our income tax expense and underwriting and operating expenses. Net income for the nine months ended September 30, 2024 includes non-recurring costs incurred in connection with the refinancing of the 2020 Notes and 2021 Revolving Credit Facility; such amounts are excluded from the calculation of adjusted net income.

Current wording

Net income and adjusted net income increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our total revenues, partially offset by increases in our income tax expense, insurance claims and claim expenses, and underwriting and operating expenses. Net income and adjusted net income for the three months ended March 31, 2025 further benefited from a decline in our interest expense.

Previous wording

Diluted EPS was $1.15 and $3.36 for the three and nine months ended September 30, 2024, respectively, compared to $1.00 and $2.83 for the three and nine months ended September 30, 2023, respectively. Adjusted diluted EPS was $1.15 and $3.43 for the three and nine months ended September 30, 2024, respectively, compared to $1.00 and $2.83 for the three and nine months ended September 30, 2023, respectively. Diluted and adjusted diluted EPS increased in each respective period primarily due to growth in our net income and adjusted net income, as well as a decline in the number of weighted average diluted shares outstanding tied to share repurchase activity.

Current wording

Diluted and adjusted diluted EPS increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our net income and adjusted net income, as well as a decline in the number of weighted average diluted shares outstanding tied to share repurchase activity.

Previous wording

•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.

Current wording

•Net realized investment gains and losses. The recognition of 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.

Previous wording

Total cash and investments were $2.8 billion as of September 30, 2024, compared to $2.5 billion as of December 31, 2023. Cash and investments at September 30, 2024 included $148.3 million held by NMIH. The increase in total cash and investments reflects the addition of incremental cash provided by operating activities and a decrease in the unrealized loss position of our fixed income portfolio primarily tied to changes in interest rates, partially offset by share repurchase activity during the nine months ended September 30, 2024.

Current wording

Total cash and investments increased at March 31, 2025 compared to December 31, 2024 with the addition of incremental cash provided by operating activities and a decrease in the unrealized loss position of our fixed income portfolio primarily tied to changes in interest rates, partially offset by share repurchase activity during the three months ended March 31, 2025. Cash and investments at March 31, 2025 included $76.4 million held by NMIH.

Previous wording

Premiums receivable was $78.5 million as of September 30, 2024, compared to $76.5 million as of December 31, 2023. Premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.

Current wording

Net premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.

Previous wording

Net deferred policy acquisition costs were $63.8 million as of September 30, 2024, compared to $62.9 million as of December 31, 2023. The increase was primarily driven by the deferral of certain costs associated with the origination of new policies between the respective balance sheet dates, and was partially offset by the recognition of previously deferred policy acquisition costs.

Current wording

Net deferred policy acquisition costs decreased at March 31, 2025 compared to December 31, 2024 primarily due to the recognition of previously deferred policy acquisition costs during the three months ended March 31, 2025, partially offset by the deferral of certain costs associated with the origination of new policies during the period.

Previous wording

Prepaid federal income taxes were $235.3 million as of September 30, 2024 and December 31, 2023. Prepaid federal income taxes represent tax and loss bonds purchased in connection with our claimed tax deduction for our statutory contingency reserve position. See Item 1, “Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 8, Income Taxes.”

Current wording

Prepaid federal income taxes represent tax and loss bonds purchased in connection with our claimed tax deduction for our statutory contingency reserve position. See Item 1, “Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9, Income Taxes.”

Previous wording

Other assets were $44.5 million as of September 30, 2024, compared to $40.4 million as of December 31, 2023. The increase was primarily driven by an increase in accrued investment income and prepaid expenses, as well as the capitalization of deferred debt issuance costs incurred in connection with the establishment of the 2024 Revolving Credit Facility, partially offset by a reduction in our right-of-use assets tied to the amortization of the operating lease for our corporate headquarters.

Current wording

Other assets increased at March 31, 2025 compared to December 31, 2024 primarily due to an increase in accrued investment income and prepaid expenses.

Previous wording

Unearned premiums were $71.6 million as of September 30, 2024, compared to $92.3 million as of December 31, 2023. The decrease was driven by the amortization of existing unearned premiums through earnings in accordance with the expiration of risk on related single premium policies and the cancellations of other single premium policies, partially offset by single premium policy originations during the nine months ended September 30, 2024.

Current wording

Unearned premiums decreased at March 31, 2025 compared to December 31, 2024 due to the amortization of existing unearned premiums through earnings in accordance with the expiration of risk on related single premium policies and the cancellations of other single premium policies during the three months ended March 31, 2025, partially offset by single premium policy originations during the period.

Previous wording

Accounts payable and accrued expenses were $111.0 million as of September 30, 2024, compared to $86.2 million as of December 31, 2023. The increase was primarily driven by an increase in unsettled trade payables related to the purchase of certain investment securities at September 30, 2024, as well as accrued and unpaid interest on the 2024 Notes, which is payable semi-annually beginning in February 2025, and was partially offset by the settlement of certain contractual payables and accrued expenses during the nine months ended September 30, 2024.

Current wording

Accounts payable and accrued expenses decreased at March 31, 2025 compared to December 31, 2024 primarily due to the settlement of previously accrued compensation expenses, accrued interest on the 2024 Notes, which is payable semi-annually in February and August, and premium taxes payable during the three months ended March 31, 2025.