NMI Holdings, Inc. 10-K

Item 9A. Controls and Procedures Disclosure Controls and Procedures We maintain disclosure controls and procedures designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management, including our Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of December 31, 2023, pursuant to Rule 13a-15(e) under the Exchange Act. Management applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature, can provide only reasonable assurance regarding management's control objectives. Management does not expect that our disclosure controls and procedures will prevent or detect all errors and fraud. A control system, irrespective of how well it is designed and operated, can only provide reasonable assurance and cannot guarantee that it will succeed in its stated objectives. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2024, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms. Internal Control Over Financial Reporting The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision of our Chief Executive Officer and Chief Financial Officer, our management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024. In making this assessment, management used the criteria set forth in the Internal Control-Integrated Framework (2013 framework) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, our management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2024. The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by BDO USA, P.C., an independent registered public accounting firm, as stated in their report, which appears below. There was no change in our internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 118 Report of Independent Registered Public Accounting Firm Shareholders and Board of Directors NMI Holdings, Inc. Emeryville, California Opinion on Internal Control over Financial Reporting We have audited NMI Holdings, Inc.’s (the “Company’s”) internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO criteria”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria . We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive income, changes in shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedules listed in the accompanying index appearing under Part IV, Item 15 – Exhibits and Financial Statement Schedules and our report dated February 14, 2024 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying “Item 9A, Controls and Procedures.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit of internal control over financial reporting in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ BDO USA, P.C. San Francisco, California February 14, 2025 119 Item 9B. Other Information None . Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. Not applicable. 120 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated by reference to, and will be contained in, our definitive proxy statement, which will be filed within 120 days after December 31, 2024. Accordingly, we have omitted the information from this Item pursuant to General Instruction G (3) of Form 10-K. Item 11. Executive Compensation The information required by this Item is incorporated by reference to, and will be contained in, our definitive proxy statement, which will be filed within 120 days after December 31, 2024. Accordingly, we have omitted the information from this Item pursuant to General Instruction G (3) of Form 10-K. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated by reference to, and will be contained in, our definitive proxy statement, which will be filed within 120 days after December 31, 2024. Accordingly, we have omitted the information from this Item pursuant to General Instruction G (3) of Form 10-K. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated by reference to, and will be contained in, our definitive proxy statement, which will be filed within 120 days after December 31, 2024. Accordingly, we have omitted the information from this Item pursuant to General Instruction G (3) of Form 10-K. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated by reference to, and will be contained in, our definitive proxy statement, which will be filed within 120 days after December 31, 2024. Accordingly, we have omitted the information from this Item pursuant to General Instruction G (3) of Form 10-K. 121 PART IV Item 15. Exhibits and Financial Statement Schedules 1. Financial Statements — See the “ Index to Financial Statements” included in Part II, Item 8 of this report for a list of the financial statements filed as part of this report. 2. Financial Statement Schedules — The following financial statement schedules are filed as part of this Form 10-K and appear immediately following the signature page. See the “ Index to Financial Statement Schedules” on page 127 . Schedule I — Summary of Investments — other than investments in related parties as of December 31, 2024 Schedule II — Financial Information of Registrant as of December 31, 2024 Schedule IV — Reinsurance as of December 31, 2024 All other schedules are omitted because the required information is not present or is not present in amounts sufficient to require submission of the schedules, or because the information required is included in our Consolidated Financial Statements and notes thereto. 3. Exhibits Exhibit Number Description 1.1 Underwriting Agreement, dated May 7, 2024, among the Company, RBC Capital Markets, LLC, Goldman Sachs & Co. LLC, BMO Capital Markets Corp., Citigroup Global Markets Inc. and Truist Securities, Inc. acting as representatives of several underwriters named therein (incorporated herein by reference to Exhibit 1.1 to our Form 8-K, filed on May 8, 2024) 3.1 Third Amended and Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to our Form 8-K, filed on May 10, 2024) 3.2 Fifth Amended and Restated Bylaws (incorporated herein by reference to Exhibit 3.2 to our Form 8-K, filed on May 10, 2024) 4.1 Indenture, dated as of May 21, 2024, by and between NMI Holdings, Inc. and The Bank of New York Mellon Trust Company, N.A. as Trustee (incorporated herein by reference to Exhibit 4.1 to our Form 8-K, filed on May 21, 2024) 4.2 Supplemental Indenture, dated as of May 21, 2024, by and between NMI Holdings, Inc. and The Bank of New York Mellon Trust Company, N.A. as Trustee (including the form of the Notes) (incorporated herein by reference to Exhibit 4.2 to our Form 8-K, filed on May 21, 2024) 4.3 Description of Securities (incorporated herein by reference to Exhibit 4.4 to our Form 10-Q, filed on July 31, 2024) 10.1 ~ NMI Holdings Inc. 2012 Stock Incentive Plan (incorporated herein by reference to Exhibit 10.1 to our Form S-1 Registration Statement (registration No. 333-191635), filed on October 9, 2013) 10.2 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Award Agreement (For CEO and CFO) (incorporated herein by reference to Exhibit 10.5 to our Form S-1 Registration Statement (Registration No. 333-191635), filed on October 9, 2013) 10.3 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Award Agreement (For Management) (incorporated herein by reference to Exhibit 10.6 to our Form S-1 Registration Statement (Registration No. 333-191635), filed on October 9, 2013) 10.4 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Award Agreement (For Non-Employee Directors) (incorporated herein by reference to Exhibit 10.7 to our Form S-1 Registration Statement (Registration No. 333-191635), filed on October 9, 2013) 10.5 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Award Agreement (For CEO/CFO) (incorporated herein by reference to Exhibit 10.8 to our Form 10-K, filed on February 17, 2017) 10.6 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Award Agreement (For Employees) (incorporated herein by reference to Exhibit 10.9 to our Form 10-K, filed on February 17, 2017) 10.7 ~ Form of NMI Holdings, Inc. 2012 Stock Incentive Plan Nonqualified Stock Option Agreement (For Employees) (incorporated herein by reference to Exhibit 10.32 to our Form 10-Q, filed on May 2, 2019) 10.8 ~ NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan (incorporated herein by reference to Appendix A to our 2022 Annual Proxy Statement, filed on March 29, 2022) 122 10.9 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Nonqualified Stock Option Award Agreement (For CEO) (incorporated herein by reference to Exhibit 10.23 to our Form 10-Q filed on August 1, 2017) 10.10 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Nonqualified Stock Option Award Agreement (For Executive Officers and Employees ) (incorporated herein by reference to Exhibit 10.24 to our Form 10-Q filed on August 1, 2017) 10.11 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (Performance Based) (incorporated herein by reference to Exhibit 10.38 to our Form 10-Q, filed on May 7, 2020) 10.12 ~ * Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Independent Directors) 10.13 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Employees) (incorporated herein by reference to Exhibit 10.34 to our Form 10-Q, filed on May 2, 2019) 10.14 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Executives) (incorporated herein by reference to Exhibit 10.22 to our Form 10-K, filed on February 15, 2024) 10.15 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Employees) (incorporated herein by reference to Exhibit 10.23 to our Form 10-K, filed on February 15, 2024) 10.16 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (Performance Based) (incorporated herein by reference to Exhibit 10.24 to our Form 10-K, filed on February 15, 2024) 10.17 ~ Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Nonqualified Stock Option Agreement (For Employees) (incorporated herein by reference to Exhibit 10.35 to our Form 10-Q, filed on May 2, 2019) 10.18 ~ * Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Executives ) 10.19 ~ * Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (For Employees) 10.20 ~ * Form of NMI Holdings, Inc. Amended and Restated 2014 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (Performance Based) 10.21 ~ Form of Indemnification Agreement between NMI Holdings, Inc. and its directors and certain executive officers (incorporated herein by reference to Exhibit 10.1 to our Form 8-K, filed on November 25, 2014) 10.22 ~ NMI Holdings, Inc. Severance Benefit Plan (incorporated herein by reference to Exhibit 10.1 to our Form 8-K, filed on February 17, 2016) 10.23 ~ NMI Holdings, Inc. Amended and Restated Change in Control Severance Benefit Plan (incorporated herein by reference to Exhibit 10.30 to our Form 10-Q, filed on October 30, 2018) 10.24 ~ Offer Letter by and between NMI Holdings, Inc. and William Leatherberry, dated July 11, 2014 (incorporated herein by reference to Exhibit 10.10 to our Form 10-Q, filed on April 28, 2016) 10.25 ~ Employment Letter by and between NMI Holdings, Inc. and Bradley M. Shuster, effective as of January 1, 2019 (incorporated herein by reference to Exhibit 10.1 to our Form 8-K, filed on December 28, 2018) 10.26 ~ Offer Letter by and between NMI Holdings, Inc. and Adam Pollitzer, dated September 9, 2021 (incorporated herein by reference to Exhibit 10.1 to our Form 8-K, filed on September 9,2021) 10.27 ~ Offer Letter by and between NMI Holdings, Inc. and Ravi Mallela, dated December 20, 2021 (incorporated herein by reference to Exhibit 10.1 to our Form 8-K, filed on December 21, 2021) 10.28 + Commitment Letter dated July 12, 2013 for Bulk Fannie Mae-Paid Loss-on-Sale Mortgage Insurance on the Portfolio of approximately $5.46 billion Purchased by Fannie Mae and Identified by Fannie Mae as Deal No. 2013 MIRT 01 and by the Company as Policy No. P-0001-01 (incorporated herein by reference to Exhibit 10.14 to our Form S-1 Registration Statement (Registration No. 333-191635), filed on October 9, 2013) 10.29 Amended and Restated Credit Agreement, dated as of November 29, 2021, by and among the Company, the lender parties thereto and JPMorgan Chase Bank, N.A. as administrative agent (incorporated herein by reference to Exhibit 10.1 to our Form 8-K filed on November 30, 2021) 19.1 * Insider Trading and Information Policy 21.1 Subsidiaries of NMI Holdings, Inc. (incorporated herein by reference to Exhibit 21.1 to our Form 10-Q, filed on October 30, 2015) 22.1 Guaranteed Securities by Subsidiary Guarantor (incorporated herein by reference to Exhibit 22.1 to our Form 10-K, filed on February 16, 2022) 23.1 Consent of BDO USA, P.C. 31.1 Principal Executive Officer's Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 123 31.2 Principal Financial Officer's Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1 # Certifications of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 97.1 NMI Holdings, Inc. Compensation Recovery Policy, Effective September 13, 2023 (incorporated herein by reference to Exhibit 97.1 to our Form 10-K, filed on February 15, 2024) 101 The following financial information from NMI Holdings, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2024 formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2024 and 2023, (ii) Consolidated Statements of Operations and Comprehensive Income (Loss) for each of the three years in the period ended December 31, 2024, (iii) Consolidated Statements of Changes in Shareholders' Equity for each of the three years in the period ended December 31, 2024, (iv) Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2024, and (v) Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document. * Filed herewith. ** Furnished herewith. ~ Indicates a management contract or compensatory plan or contract. + Confidential treatment granted as to certain portions, which portions have been filed separately with the SEC. # In accordance with Item 601(b)(32)(ii) of Regulation S-K and SEC Release No. 34-47986, the certifications furnished in Exhibit 32 hereto are deemed to accompany this Form 10-K and will not be deemed "filed" for purposes of Section 18 of the Exchange Act or deemed to be incorporated by reference into any filing under the Exchange Act or the Securities Act except to the extent that the registrant specifically incorporates it by reference. 124 Item 16. Form 10-K Summary None. 125 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. NMI HOLDINGS, INC. Date: February 14, 2025 By: /s/ Adam S. Pollitzer Name: Adam S. Pollitzer Title: Chief Executive Officer Signature Title Date /s/ Adam S. Pollitzer Adam S. Pollitzer /s/ Aurora Swithenbank Chief Executive Officer (Principal Executive Officer) 2/14/2025 Aurora Swithenbank /s/ Nicholas D. Realmuto Chief Financial Officer (Principal Financial Officer) 2/14/2025 Nicholas D. Realmuto /s/ Bradley M. Shuster Controller 2/14/2025 Bradley M. Shuster /s/ Steven L. Scheid Executive Chairman 2/14/2025 Steven L. Scheid /s/ Regina Muehlhauser Director 2/14/2025 Regina Muehlhauser /s/ Michael Montgomery Director 2/14/2025 Michael Montgomery /s/ Michael Embler Director 2/14/2025 Michael Embler /s/ Lynn S. McCreary Director 2/14/2025 Lynn S. McCreary /s/ Priya Huskins Director 2/14/2025 Priya Huskins /s/ John C. Erickson Director 2/14/2025 John C. Erickson Director 2/14/2025 126 INDEX TO FINANCIAL STATEMENT SCHEDULES Schedule I — Summary of Investments — other than investments in related parties as of December 31, 2024 F- 1 Schedule II — Financial Information of Registrant as of December 31, 2024 F- 2 Schedule IV — Reinsurance as of December 31, 2024 F- 6 127 NMI HOLDINGS, INC. SCHEDULE I SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES December 31, 2024 Amortized Cost Fair Value Amount Reflected on Balance Sheet (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 115,342 $ 116,060 $ 116,060 Municipal debt securities 684,523 635,245 635,245 Corporate debt securities 1,949,800 1,847,640 1,847,640 Asset-backed securities 44,104 41,980 41,980 Total bonds 2,793,769 2,640,925 2,640,925 Short-term investments 82,574 82,616 82,616 Total investments $ 2,876,343 $ 2,723,541 $ 2,723,541 F-1 NMI HOLDINGS, INC. SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS PARENT COMPANY ONLY December 31, 2024 December 31, 2023 (In Thousands, except for share data) Assets Fixed maturities, available-for-sale, at fair value (amortized cost of $ 92,878 and $ 49,520 as of December 31, 2024 and December 31, 2023, respectively) $ 91,283 $ 47,290 Cash and cash equivalents 40,876 66,374 Investment in subsidiaries, at equity in net assets 2,846,717 2,468,333 Accrued investment income 198 235 Due from affiliates, net 93,254 91,126 Software and equipment, net 25,681 30,252 Deferred tax asset, net 113 — Other assets 15,332 13,858 Total assets $ 3,113,454 $ 2,717,468 Liabilities Debt $ 415,146 $ 397,595 Accounts payable and accrued expenses 47,812 38,524 Deferred tax liability, net 422,800 343,956 Other liabilities 10,264 11,389 Total liabilities 896,022 791,464 Shareholders' equity Common stock - $ 0.01 par value; 87,902,626 shares issued and 78,600,726 shares outstanding as of December 31, 2024 and 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 ( 250,000,000 shares authorized) 879 873 Additional paid-in capital 1,004,692 990,816 Treasury stock, at cost: 9,301,900 and 6,452,858 common shares as of December 31, 2024 and December 31, 2023, respectively ( 246,594 ) ( 148,921 ) Accumulated other comprehensive loss, net of tax ( 124,804 ) ( 139,917 ) Retained earnings 1,583,259 1,223,153 Total shareholders' equity 2,217,432 1,926,004 Total liabilities and shareholders' equity $ 3,113,454 $ 2,717,468 F-2 NMI HOLDINGS, INC. SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT STATEMENT OF OPERATIONS PARENT COMPANY ONLY For the years ended December 31, 2024 2023 2022 (In Thousands) Revenues Net investment income $ 5,142 $ 3,920 $ 1,204 Net realized investment gains (losses) 33 ( 31 ) ( 13 ) Total revenues 5,175 3,889 1,191 Expenses Other operating expenses 7,468 7,828 7,590 Gain from change in fair value of warrant liability — — ( 1,113 ) Total expenses 7,468 7,828 6,477 Equity in net income of subsidiaries 442,762 412,974 378,406 Income before income taxes 440,469 409,035 373,120 Income tax expense 80,363 86,925 80,218 Net income $ 360,106 $ 322,110 $ 292,902 Other comprehensive income (loss), net of tax: Unrealized gains (losses) in accumulated other comprehensive loss, net of tax expense (benefit) of $ 133 , $ 312 , and $( 748 ) for each of the years in the three-year period ended December 31, 2024, respectively 499 1,173 ( 2,815 ) Reclassification adjustment for realized losses included in net income, net of tax benefit of $ 0 , $ 7 and $ 3 for each of the years in the three-year period ended December 31, 2024, respectively — 25 10 Equity in other comprehensive income (loss) of subsidiaries 14,614 63,208 ( 203,003 ) Other comprehensive income (loss), net of tax 15,113 64,406 ( 205,808 ) Comprehensive income $ 375,219 $ 386,516 $ 87,094 F-3 NMI HOLDINGS, INC. SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT STATEMENT OF OPERATIONS PARENT COMPANY ONLY For the years ended December 31, 2024 2023 2022 Cash flows from operating activities (In Thousands) Net income $ 360,106 $ 322,110 $ 292,902 Adjustments to reconcile net income to net cash provided by operating activities: Net realized investment (gains) losses ( 33 ) 31 13 Gain from change in fair value of warrant liability — — ( 1,113 ) Depreciation and amortization ( 2,505 ) ( 890 ) 789 Loss on extinguishment of debt 6,966 — — Amortization of debt discount and debt issuance costs 2,214 1,962 1,846 Deferred income taxes 78,599 88,192 81,057 Share-based compensation expense 19,811 16,914 15,425 Changes in operating assets and liabilities: Investment in subsidiaries, at equity in net assets ( 346,453 ) ( 314,556 ) ( 343,477 ) Accrued investment income 37 205 ( 73 ) Receivable from affiliates ( 2,128 ) ( 8,108 ) 3,348 Other assets ( 1,070 ) ( 57 ) 518 Accounts payable and accrued expenses 8,764 2,605 ( 8,731 ) Net cash provided by operating activities 124,308 108,408 42,504 Cash flows from investing activities Capitalization of subsidiaries ( 17,317 ) ( 800 ) ( 800 ) Purchase of short-term investments ( 119,337 ) ( 89,068 ) ( 110,076 ) Purchase of fixed-maturity investments, available-for-sale ( 12,142 ) — — Proceeds from maturities of short-term investments 88,700 100,607 86,995 Proceeds from maturities and redemptions of fixed-maturity investments, available-for-sale 1,959 30,538 19,673 Software and equipment 5,030 2,169 1,291 Net cash (used in) provided by investing activities ( 53,107 ) 43,446 ( 2,917 ) Cash flows from financing activities Proceeds from issuance of common stock related to employee equity plans 4,290 10,549 5,442 Proceeds from issuance of common stock related to warrant exercises — — 518 Taxes paid related to net share settlement of equity awards ( 10,219 ) ( 9,356 ) ( 5,213 ) Proceeds from senior unsecured notes 419,705 — — Repayments of senior secured notes ( 405,080 ) — — Payments of debt issuance costs ( 7,785 ) — — Repurchase of common stock ( 97,610 ) ( 91,613 ) ( 56,575 ) Net cash used in financing activities ( 96,699 ) ( 90,420 ) ( 55,828 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 25,498 ) 61,434 ( 16,241 ) Cash, cash equivalents and restricted cash, beginning of period 66,374 4,940 21,181 Cash, cash equivalents and restricted cash, end of period $ 40,876 $ 66,374 $ 4,940 F-4 NMI HOLDINGS, INC. SCHEDULE II - FINANCIAL INFORMATION OF REGISTRANT SUPPLEMENTAL NOTES PARENT COMPANY ONLY Note A The NMI Holdings, Inc. (Parent Company) financial statements represent the stand-alone financial statements of the Parent Company. These financial statements have been prepared on the same basis and using the same accounting policies as described in the consolidated financial statements included herein. Refer to the Parent Company's consolidated financial statements for additional information. NMIH and its subsidiaries entered into a tax sharing agreement effective August 23, 2012, which was subsequently amended on September 1, 2016. Under original and amended agreements, each of the parties agreed to file consolidated federal income tax returns for all tax years beginning in and subsequent to 2012, with NMIH as the direct tax filer. The tax liability of each subsidiary that is party to the agreement is limited to the amount of the liability it would incur if it filed separate returns. Note B NMIC and Re One are subject to certain capital and dividend rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs that may restrict their ability to pay dividends to NMIH. Under Wisconsin law, NMIC and Re One may pay dividends up to specified levels ( i.e ., “ordinary” dividends) with 30 days' prior notice to the Wisconsin OCI. Dividends in larger amounts ( i.e. ,“extraordinary” dividends), are subject to the Wisconsin OCI's prior approval. Under Wisconsin law, an extraordinary dividend is defined as any payment or distribution that together with other dividends and distributions made within the preceding twelve months exceeds the lesser of (i) 10% of the insurer's statutory policyholders' surplus as of the preceding December 31 or (ii) adjusted statutory net income for the twelve-month period ending the preceding December 31. During the year ended December 31, 2024, NMIC paid a $ 96.3 million ordinary course dividend to NMIH, representing its full ordinary course dividend capacity payable under Wisconsin insurance laws for the twelve-month period ending December 31, 2024. NMIC has the capacity to pay aggregate ordinary dividends of $ 98.4 million to NMIH during the twelve-month period ending December 31, 2025. The remaining net assets from dividend capacity are considered restricted. As of December 31, 2024, the amount of restricted net assets held by our consolidated insurance subsidiaries, which represents our equity investment in those insurance subsidiaries less their aggregate dividend capacity, totaled $ 2.8 billion, compared to $ 2.5 billion as of December 31, 2023. Note C The Parent Company provides certain services to its subsidiaries. The Parent Company allocates to its subsidiaries corporate expense it incurs in the capacity of supporting those subsidiaries, based on either an allocated percentage of time spent or internally allocated capital. Total operating expenses allocated to subsidiaries for each of the years in the three-year period ended December 31, 2024 were $ 177.2 million, $ 163.9 million and $ 148.4 million, respectively. Amounts charged to the subsidiaries for operating expenses are based on actual cost, without any mark-up. The Parent Company considers these charges fair and reasonable. The subsidiaries reimburse the Parent Company for these costs in a timely manner, which has the impact of improving the cash flows of the Parent Company. F-5 NMI HOLDINGS, INC. SCHEDULE IV - FINANCIAL INFORMATION OF REGISTRANT REINSURANCE Gross Amount Ceded to Other Companies Assumed from Other Companies Net Amount Percentage of Amount Assumed to Net For the years ended December 31, (In Thousands) 2024 $ 699,787 $ 135,099 $ — $ 564,688 — % 2023 650,411 139,643 — 510,768 — 2022 594,127 118,861 — 475,266 — F-6