NMI Holdings, Inc.

What they do

NMIH provides mortgage insurance that protects lenders and investors from default-related losses on a portion of the unpaid principal balance of a covered mortgage. This coverage facilitates the sale of high-LTV (above 80%) residential loans to Fannie Mae and Freddie Mac, which are otherwise restricted from purchasing or guaranteeing such mortgages without credit protection. Operations run through NMIC (primary insurance subsidiary), NMIS (outsourced loan review services), and Re One, which no longer has active insurance exposures after its reinsurance of NMIC was commuted.

Revenue drivers

• Net premiums earned (primary mortgage insurance) — The core revenue line, generated from MI written on high-LTV residential loans; net premiums earned were $157.5 million in Q2 2026 versus $154.8 million in Q1 2026 and $149.1 million in Q2 2025.
• Net investment income — Income on the investment portfolio backing insurance liabilities; $30.3 million in Q2 2026, up 6% from $28.6 million in Q1 2026 and up 22% from $24.9 million in Q2 2025.
• NIW as a volume driver — New insurance written drives future premiums; Q2 2026 NIW was $16.1 billion, up 31% from $12.3 billion in Q1 2026 and up 29% from $12.5 billion in Q2 2025.
• Outsourced loan review services (NMIS) — NMIS provides outsourced loan review services to mortgage loan originators, a smaller ancillary line relative to the MI premiums that dominate total revenue.

Recent performance

For the second quarter ended June 30, 2026, NMIH reported record net income of $105.8 million, or $1.38 per diluted share, compared with $99.3 million ($1.28) in Q1 2026 and $96.2 million ($1.21) in Q2 2025. Total revenue was $187.9 million versus $183.5 million in Q1 2026 and $173.8 million in Q2 2025, as net premiums earned rose to $157.5 million. Insurance claims and claim expenses were $13.1 million and the loss ratio was 8.3%, down from 13.3% in Q1 2026 and 9.0% in Q2 2025. Primary insurance-in-force reached $227.1 billion, up 2% sequentially and 6% year over year, with shareholders' equity of $2.7 billion and book value per share of $35.89 at quarter end.

Strategy

The company's stated strategy is to build on its position in the private MI market, expand its customer base, and grow a high-quality insured portfolio by focusing on long-term customer relationships, disciplined risk selection and pricing, fair and transparent claims payment, responsive service, and financial strength. It emphasizes individual underwriting review or validation of the vast majority of loans it insures and uses its proprietary Rate GPS pricing platform to dynamically evaluate risk and price policies. As of June 30, 2026, NMIH had issued master policies with 2,223 customers and had 225 employees.

Risks

• Intense competition — NMIH faces intense competition in the private MI industry, and failure to compete effectively could prevent it from achieving its business goals and hurt financial results.
• Substitution away from private MI — NIW volumes could be adversely affected if lenders and investors select alternatives to private MI.
• Customer concentration — Failure to continue attracting and retaining the most significant mortgage originators as customers could negatively impact the company's ability to achieve its business goals.
• Housing and default environment — A decline in high-LTV originations would reduce NIW and revenue, while unexpected material increases in borrower defaults could cause actual losses to exceed expected loss rates, including in geographic concentrations.

Outlook

Management said it delivered standout operating performance, consistent growth in its high-quality insured portfolio, and record financial results in Q2 2026, and that it is well positioned to continue delivering differentiated growth, returns and value for shareholders. The company also flagged macroeconomic uncertainty, noting that persistent inflation, elevated interest rates, flagging consumer confidence and increasing jobless claims could have a pronounced impact on the housing market, the MI industry and its business. It noted that in April 2026 the GSEs began accepting mortgage loans evaluated using the VantageScore 4.0 credit scoring framework as an alternative to FICO scores from a limited number of approved lenders.