NMI Holdings, Inc. Q4 FY2024 earnings call

• In the fourth quarter, National MI delivered standout operating performance with record revenue and insured portfolio growth. - 2024 concluded with $46 billion in total NIW volume and $210.2 billion in primary insurance-in-force. - Record adjusted net income, EPS, and return on equity were achieved in 2024. - For 2025, focus on people, customer differentiation, discipline and risk responsibility, and creating value for shareholders. - Continued innovation in the reinsurance market, completed debt refinancing as an investment-grade issuer, and repurchased common stock. - Recognized as a great place to work for the ninth consecutive year.

In the fourth quarter, National MI achieved a record total revenue of $166.5 million. The NIW volume was $11.9 billion, and the primary insurance-in-force ended at a record $210.2 billion. For the year 2024, the total NIW volume was $46 billion, and the primary insurance-in-force stood at $210.2 billion. In the fourth quarter, adjusted net income was $86.1 million, or $1.07 per diluted share, with an adjusted return on equity of 15.6%. For the full year 2024, adjusted net income was $365.6 million, up 13% from 2023; adjusted EPS was $4.50, up 17%; and the adjusted return on equity was 17.6%.

• Encouraged by the macro environment and housing market resiliency in 2025. - Anticipate the private MI market to remain strong in 2025 with long-term secular trends driving new business opportunities. - The MI pricing environment is balanced and constructive, enabling support for lenders and borrowers while protecting risk-adjusted returns. - Credit continues to perform with existing borrowers well-positioned in a resilient economy.

• Potential impact of hurricanes and other disasters leading to defaults and increased claims expense. - Credit deterioration could affect net yield as reinsurance claims reimbursement offsets profit commissions.

Q: Doug Harter asked about share repurchase authorization pacing and the potential to increase the run rate of buybacks.

A: Adam Pollitzer stated that the $250 million authorization provides significant capacity, with an average of approximately $25 million per quarter in the past, and expects a roughly similar cadence for now.

Q: Terry Ma inquired about credit reserve release and cures.

A: Aurora Swithenbank explained that the reserve release associated with prior years is $4.4 million, and cures in the quarter are embedded in the current year line, with a cure rate broadly similar to the prior quarter.

Q: Bose George asked about dividends and credit markets.

A: Adam Pollitzer said the focus is currently on the repurchase program, but dividends may be considered in the future; in credit markets, there is inventory in some areas with pressure from HPA.

Q: Rick Shane asked about the competitive landscape and pricing pushback.

A: Adam Pollitzer said there is not much pushback on pricing, and the focus is on a balanced and constructive approach.

Q: Mark Hughes asked about premium yield and the impact of credit.

A: Aurora Swithenbank and Adam Pollitzer explained that core yield is stable and net yield is affected by credit claims through reinsurance reimbursement.

Q: Mihir Bhatia asked about PMIERs excess, expenses, and hurricane reserves.

A: Adam Pollitzer and Aurora Swithenbank discussed the balance of PMIERs excess, expense ratio targets, and the reserve for hurricane-related defaults.