NMIH

• Milestone Achievements

  • NMI surpassed the $500 billion mark of total insurance ever written during the quarter, a major milestone reflecting long-term consistent performance.
  • The company has helped nearly 2.2 million borrowers access mortgages and achieve affordable sustainable homeownership across the U.S., and serves over 1,700 lender customers with a diversified national franchise.
  • The quarter delivered record top-line revenue, strong credit performance, ongoing expense efficiency, and record bottom-line profitability.

• Business Operations & Portfolio Health

  • NIW production and insured portfolio growth continued, ending the quarter with $227.1 billion of high-quality, high-performing primary insurance in force.
  • Credit performance remains strong: the quarter-end default count declined marginally to 8,020 from 8,044 at the end of Q1, and early payment default and underwriting strain markers show no red flags for 2026 vintage production.
  • The company maintains proactive, prudent approaches to pricing, risk selection, and reinsurance strategy that have supported strong performance through varying market conditions.
  • Market discipline across the private mortgage insurance industry remains encouraging, with balanced competitive dynamics that support sustainable returns.

• Capital Management

  • NMI repurchased $31.4 million of common stock in Q2 2026, retiring 827,000 shares at an average price of $37.99.
  • Since launching its share repurchase program in 2022, NMI has retired $408 million of common stock (16% of total outstanding shares) at an average price of $29.95, with $167 million of remaining repurchase capacity under the existing program.
  • The balance sheet remains robust with strong excess capital: total available assets under PMIRS are $3.7 billion, against $2.1 billion of required risk-based assets, leaving $1.6 billion of excess available capital.

• Strategic Positioning

  • NMI holds a long-term compelling position in the private mortgage insurance market, built on a culture of collaboration, integrity, and performance, with a talented dedicated team.
  • The company offers a low-cost, high-value solution that expands homeownership access while protecting GSEs and taxpayers from downside risk in market downturns.
  • NMI has an embedded organic growth engine: its share of new business production remains meaningfully higher than its share of industry total insurance in force, and has grown insurance in force by 49% over the past four years, compared to 13% industry growth over the same period.

Management did not provide explicit numerical forward guidance for full-year or future quarterly performance. Key qualitative forward-looking observations include:

• Core yield of 34 basis points is expected to remain broadly stable, supported by the large, stable in-force book and strong persistency, with minor fluctuations possible driven by factors like changes in refinancing activity volumes.
• Default rates are expected to trend modestly higher from current levels, due to natural normalization of credit experience as the portfolio seasons and typical seasonal headwinds in the second half of the calendar year.
• Expense ratios are expected to maintain their recent improving trajectory, with no large planned expenditures on the horizon that would reverse this trend; only normal seasonal fluctuations are anticipated.
• The 21st Century Road to Housing Act is expected to support long-term U.S. housing supply and affordability, but no material near-term impact on NMI's business is expected.

NMI Holdings Inc. operates as a single-segment private mortgage insurance business, so no separate product segment breakdown is provided. For the full company in Q2 2026: New Insurance Written (NIW) volume was $16 billion, total revenue reached a record $187.9 million (up 2.4% quarter-over-quarter and 8.1% year-over-year), net premiums earned were a record $157.5 million (compared to $154.8 million in Q1 2026 and $149.1 million in Q2 2025), investment income was $30.3 million (compared to $28.6 million in Q1 2026 and $24.9 million in Q2 2025), adjusted net income was a record $106 million (up 7% quarter-over-quarter and 10% year-over-year), adjusted diluted earnings per share was a record $1.38 (up 8% quarter-over-quarter and 14% year-over-year), return on equity was 15.9%, primary insurance in force grew to a record $227.1 billion, 12-month persistency was 81.4% (down from 82.2% in Q1 2026), net yield was 28 basis points (unchanged from Q1 2026), core yield (excluding reinsurance costs and cancellation earnings) was 34 basis points (unchanged from Q1 2026), underwriting and operating expenses were $30.5 million, expense ratio was 19.4% (down from 19.8% in Q1 2026), claims expense was $13.1 million (down from $20.7 million in Q1 2026 and flat compared to $13.4 million in Q2 2025), default rate was 1.16% at quarter end, shareholders' equity was $2.7 billion, and book value per share was $35.89.

• Broad macroeconomic risks remain, and actual future results could differ materially from forward-looking expectations due to unforeseen factors affecting the housing market and broader economy.
  • Housing market pressure is ongoing in parts of the Sunbelt, Mountain West, and West Coast, though recent data shows some local markets in these regions are beginning to bottom out and recover from price pressure.
  • Default rates face seasonal headwinds in the second half of the year, and future credit performance will be heavily dependent on the trajectory of macroeconomic conditions, particularly employment and home price appreciation.
  • Competitive pricing pressure is slightly higher in large transactionally oriented mortgage business, though this is not a new development and has been present for roughly a decade.
  • Capital markets-based reinsurance (ILN) transactions carry additional complexity, require larger minimum deal sizes to cover fixed costs, and are less flexible than traditional reinsurance, limiting near-term activity in this channel.

Q: How are home prices trending across regional markets, and are any regions performing better or worse than expected? / A: Nationally, home prices are hitting consecutive record highs, which boosts demand for mortgage insurance and supports credit performance. The strongest performance continues in the Northeast and Midwest, while ongoing modest pressure remains in Florida, Texas, parts of the Sunbelt, Mountain West, and West Coast. Recent data shows that some metropolitan areas in these pressured regions are now bottoming out and starting to recover, with no unexpected or dramatic changes from prior trends.

Q: Once NMI's embedded organic growth engine (pull to par) is complete, will management return excess capital to shareholders or pursue diversification outside the industry? / A: To date, NMI's share repurchase program has successfully delivered consistent value, retiring 16% of outstanding shares since 2022. Management will continue evaluating capital allocation decisions dynamically based on organic growth opportunities from NIW production. NMI still sees significant tailwinds from its existing embedded growth engine, which has driven 49% in-force growth over four years compared to 13% industry growth, so organic investment remains the priority for now.

Q: Is pricing becoming irrational in any market segments, and what explains the recent marginal decline in default inventory? / A: The overall industry maintains constructive competitive balance, and NMI has not seen notable irrational pricing that would force broad pullbacks; modest pressure on pricing in large transactional business is a longstanding dynamic, not a new development. The decline in default inventory is partially driven by seasonal factors (tax refunds, year-end bonuses supporting loan cures in the first half of the year) and a strong macro environment with high employment and ongoing home price appreciation. Default rates are expected to trend modestly higher in the second half of the year as seasonal tailwinds shift to headwinds.

Q: Is the 34 basis point core yield sustainable, and what factors could change the improving expense ratio trajectory? / A: Core yield is expected to remain broadly stable due to the large, stable in-force book and strong persistency, though minor fluctuations can occur from shifts in refinancing activity (refinance loans typically carry lower premiums). No large upcoming expenditures are expected to reverse the improving trend in the expense ratio, and only normal seasonal fluctuations in expenses are anticipated.