Given the 'pull to par' effect will eventually diminish, how do you envision your capital return strategy compared to peers who either return a lot or look outside the industry?

The company is pleased with its repurchase program, having retired 16% of outstanding shares. The 'pull to par' (embedded growth from higher new business share than industry insurance in force) remains a strong tailwind. Capital allocation decisions will continue to be evaluated based on NIW pace and organic opportunities, with a focus on delivering long-term value. “Over the last 4 years since we launched our repurchase program, we've grown our insurance in force by 49% compared to 13% growth for the rest of the industry. And so we'll make decisions and evaluate what the right allocation of capital is at all times.”

With Q2 results suggesting market share gains, what are your competitive dynamics, and how do you view the credit quality of the 2026 vintage compared to 2025?

The industry is at a constructive balance, with attractive unit economics on new business. The company focuses on supporting customers while protecting its balance sheet. While Q2 NIW growth was strong, it's seen as normal fluctuation. The 2026 vintage production is high quality, supported by individual risk underwriting and reinsurance, with no early signs of underwriting strain, benefiting from a resilient economy and housing market. “The underlying characteristics of the production that we're bringing on to the portfolio now are still incredibly high quality. We're still using all the tools that we've invested to develop individual risk underwriting, rate GPS, the broad use of reinsurance on the back end to shape the profile of our portfolio.”

Are there any markets or pockets where competition has become irrational, or you've had to pull back on pricing?

The industry is broadly at a constructive balance, and the company is not seeing notable irrational moves. The main pressure points remain in larger, transactionally-oriented business, which is not a new development and has been the case for about 10 years. “The areas, I would say, where we see a little more pressure are nothing new. It's in the -- some of the larger transactionally oriented business, but that's not a new development in the market.”

NMIH

NMI Holdings (NMIH) Q2 FY26 earnings call: the analyst Q&A

Earnings call· Jun 2026 (Q2 FY26)· Financials· Jul 30, 2026

Source: earnings call transcript

Executive summary

NMI Holdings, Inc. Q2 FY26 — Record Financial Results and Portfolio Growth

NMI Holdings reported a strong second quarter, marked by record financial results and continued growth in its insured portfolio, driven by robust new business production and a resilient housing market. The company maintains a high-quality insured book supported by comprehensive risk transfer solutions and a disciplined capital management approach, positioning it for continued outperformance. Management acknowledges persistent macro risks and anticipates a seasonal increase in default rates in the latter half of the year.

Highlights

Generated $16 billion of NIW volume, contributing to a record $227.1 billion of primary insurance in force.
Achieved record total revenue of $187.9 million, an 8.1% increase compared to Q2 FY25.
Delivered record adjusted net income of $106 million, up 10% year-over-year.
Reported record adjusted diluted EPS of $1.38, a 14% increase from Q2 FY25.
Maintained a strong capital position with $1.6 billion in excess available assets under PMIERs.

Concerns

Macro risks do remain, necessitating a proactive stance on pricing, risk selection, and reinsurance.
12-month persistency slightly decreased to 81.4% in Q2 from 82.2% in Q1.
Default population is expected to trend higher in the back half of the year due to seasonal dynamics.

Risks & headwinds

Macroeconomic risks Ongoing

Unquantified

Mitigation:Maintained a proactive stance with respect to pricing, risk selection, and reinsurance decisioning.

Seasonal increase in default rates H2 FY26

Default population expected to trend higher

Mitigation:Acknowledged as a natural seasonal dynamic; closely monitoring macroeconomic environment.

What to watch in Q3 FY26

Default rate trajectory

Q3 FY26

Current 1.16%

Target Trend higher

Why it matters

Default rates are a key indicator of credit performance and potential claims expense, impacting profitability.

We'd expect our default population to trend a bit higher from here. One, we talked for a while that we're seeing just a natural normalization of our credit experience given the growth and seasoning of the portfolio. And then as Aurora pointed to, seasonal dynamics, we always see a trend higher first in the third quarter and then again as we get into the back end of the year in the fourth quarter.

Find out whether NMIH delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you discuss home price trends, especially any regional differences compared to expectations?

Nationally, home prices are setting records, which is supportive for the business. Regionally, the strongest markets are in the Northeast and Midwest. Areas like Florida, Texas, parts of the Sunbelt, Mountain West, and West Coast continue to show some pressure, but recent readings indicate some MSAs are bottoming and beginning to move off lows, consistent with prior observations.

“We continue to see the strongest markets in the Northeast and the Midwest. There continues to be degrees of pressure that are emerging in Florida, Texas, parts of the rest of the Sunbelt, Mountain West and a little bit on the West Coast.”

asked by Bose George · answered by Adam Pollitzer

2 min read 6 chapters

Detailed narrative

Record Financial Performance and Portfolio Growth

NMI Holdings achieved record financial results in Q2 FY26, with total revenue reaching $187.9 million, adjusted net income of $106 million, and adjusted diluted EPS of $1.38. The company generated $16 billion in new insurance written (NIW) volume, growing its primary insurance in force to a record $227.1 billion. This growth reflects strong demand for down payment support and the company's consistent market success.

Credit Performance and Housing Market Outlook

The company's credit performance remains strong, with a default rate of 1.16% at quarter-end and claims expense at $13.1 million. Management noted continued resilience in the national housing market, with home prices setting records. While some pressure points exist in Sunbelt and West Coast markets, recent data suggests these areas may be bottoming out.

The underlying characteristics of new production are considered high quality, supported by individual risk underwriting and reinsurance.

Capital Allocation and Share Repurchases

NMI Holdings continues to execute its capital return strategy, repurchasing $31.4 million of common stock in Q2, retiring 827,000 shares at an average price of $37.99. Since the program's inception in 2022, the company has repurchased $408 million of common stock, representing 16% of total outstanding shares. $167 million of repurchase capacity remains, and management evaluates capital allocation based on NIW pace and organic opportunities.

Reinsurance Strategy and Market Dynamics

The company emphasizes diversity in its reinsurance sources, currently favoring traditional reinsurance due to excellent execution, flexible terms, and forward flow coverage. This allows for certainty of execution and capital runway. The reinsurance market has seen increased capacity from new entrants and competitive dynamics due to reduced GSE risk transfer, leading to attractive terms for private mortgage insurers.

The company remains open to returning to the ILN market for risk transfer.

Competitive Landscape and Market Share

Management views the private MI market as being at a point of constructive balance, with unit economics on new business remaining attractive. While NMI Holdings saw slightly higher NIW growth compared to some peers who have reported, this is attributed to normal fluctuations and customer engagement rather than aggressive market share management. The focus remains on supporting customers and protecting balance sheet returns.

Legislative Impact on Housing Market

The 21st Century Road to Housing Act, which went into effect recently, is viewed positively as a bipartisan effort to increase housing supply and improve affordability by streamlining development. While supportive of long-term housing supply, management does not expect an immediate significant impact on the private MI market, as it is primarily a supply-focused initiative.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.