What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-04-30 compared with 2024-11-07 · 194 added, 240 removed, 549 unchanged (44% of the section changed)

16 unchanged sentences

Since formation, we have sought to establish customer relationships with a broad group of mortgage lenders and build a diversified, high-quality insured portfolio.

As of September 30, 2024, we had issued master policies with 2,062 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.

As of September 30, 2024, we had $207.5 billion of primary insurance-in-force (IIF) and $55.3 billion of primary risk-in-force (RIF).

As of March 31, 2025, we had issued master policies with 2,101 customers, including national and regional mortgage banks, money center banks, credit unions, community banks, builder-owned mortgage lenders, internet-sourced lenders and other non-bank lenders.

As of March 31, 2025, we had $211.3 billion of primary insurance-in-force (IIF) and $56.5 billion of primary risk-in-force (RIF).

We believe that our success in acquiring a large and diverse group of lender customers and growing a portfolio of high-quality IIF traces to our founding principles, whereby we aim to help qualified individuals achieve their homeownership goals, ensure that we remain a strong and credible counter-party, deliver a high-quality customer service experience, establish a differentiated risk management approach that emphasizes the individual underwriting review or validation of the vast majority of the loans we insure, utilizing our proprietary Rate GPS ® pricing platform to dynamically evaluate risk and price our policies, and foster a culture of collaboration and excellence that helps us attract and retain experienced industry leaders.

1 unchanged sentence

Our common stock trades on the Nasdaq under the symbol “NMIH.” Our headquarters is located in Emeryville, California.

As of September 30, 2024, we had 229 employees.

As of March 31, 2025, we had 230 employees.

Our corporate website is located at www.nationalmi.com .

19 unchanged sentences

We set our premium rates on individual policies based on the risk characteristics of the underlying mortgage loans and borrowers, and in accordance with our filed rates and applicable rating rules.

On June 4, 2018, we introduced a proprietary risk-based pricing platform, which we refer to as Rate GPS ® .

We primarily price our policies through a proprietary risk-based pricing platform, which we refer to as Rate GPS ® .

Rate GPS ® considers a broad range of individual variables, including property type, type of loan product, borrower credit characteristics, and lender and market factors, and provides us with the ability to set and charge premium rates commensurate with the underlying risk of each loan that we insure.

We introduced Rate GPS ® in June 2018 to replace our previous rate card pricing system.

While most of our new business is priced through Rate GPS ® , we also continue to offer a rate card pricing option to a limited number of lender customers who require a rate card for operational reasons.

We believe the introduction and utilization of Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.

While most of our new business is priced through Rate GPS ® , we also offer a rate card pricing option to a limited number of lender customers who require a rate card for operational reasons.

We believe that the utilization of Rate GPS ® provides us with a more granular and analytical approach to evaluating and pricing risk, and that this approach enhances our ability to continue building a high-quality mortgage insurance portfolio and delivering attractive risk-adjusted returns.

Premiums are generally fixed for the duration of our coverage of the underlying loans.

7 unchanged sentences

For single premiums, we receive a single premium payment at origination, which is earned over the estimated life of the policy.

Substantially all of our single premium policies in force as of September 30, 2024 were non-

refundable under most cancellation scenarios.

If non-refundable single premium policies are canceled, we immediately recognize the remaining unearned premium balances as earned premium revenue.

Substantially all of our single premium policies in force as of March 31, 2025 were non-refundable under most cancellation scenarios.

If non-refundable single premium policies are canceled, we immediately recognize

the remaining unearned premium balances as earned premium revenue.

Monthly premiums are recognized in the month billed and when the coverage is effective.

17 unchanged sentences

We expect to continue to evaluate reinsurance opportunities in the normal course of business.

Quota Share Reinsurance

NMIC is party to nine quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016 and as modified January 1, 2025, the 2018 QSR Transaction, effective January 1, 2018 and as modified January 1, 2025, the 2020 QSR Transaction, effective April 1, 2020 and as amended January 1, 2024, the 2021 QSR Transaction, effective January 1, 2021 and as modified January 1, 2025, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022, the 2023 QSR Transaction, effective January 1, 2023, the 2024 QSR Transaction, effective January 1, 2024, and the 2025 QSR Transaction, effective January 1, 2025 – which we refer to collectively as the QSR Transactions.

Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers.

Each of the third-party reinsurance providers that is party to the QSR Transactions has an insurer financial strength rating of A- or better by S&P, A.M.

Best or both.

Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related to 20% of the risk on eligible primary policies written for all periods through December 31, 2017 in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims.

Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 24% of the risk on eligible policies written in 2018 and 20% of the risk on eligible policies written in 2019, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 61% that varies directly and inversely with ceded claims.

Under the terms of the 2020 QSR Transaction, NMIC cedes premiums earned related to 21% of the risk on eligible policies written between April 1, 2020 and December 31, 2020, in exchange for reimbursement of ceded claims and claim expenses on covered po licies, a 36% ceding commission, and a profit commission of up to 50% that varies directly and inversely with ceded claims.

Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related to 22% of the risk on eligible policies written in 2021 (subject to an aggregate risk written limit which was exhausted on October 30, 2021), in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 58% that varies directly and inversely with ceded claims.

Under the terms of the 2022 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written between October 30, 2021 and December 31, 2022, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 62% that varies directly and inversely with ceded claims.

Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 95% of the net risk on eligible policies primarily for a seasoned pool of mortgage insurance policies originated between January 1, 2013 to December 31, 2016 and July 1, 2019 to March 31, 2020, that had previously been covered under the retired Oaktown Re Ltd.

and Oaktown Re IV Ltd.

reinsurance transactions, after the consideration of coverage provided by other QSR Transactions, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 35% ceding commission, and a profit commission of up to 55% that varies directly and inversely with ceded claims.

Under the terms of the 2023 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written in 2023, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 62% that varies directly and inversely with ceded claims.

Under the terms of the 2024 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written in 2024, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 56% that varies directly and inversely with ceded claims.

Under the terms of the 2025 QSR Transaction, NMIC cedes premiums earned related to 20% of the risk on eligible policies written in 2025, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 62% that varies directly and inversely with ceded claims.

Concurrent with the placement of the 2025 QSR Transaction, NMIC entered into two additional sequential quota share reinsurance treaties that will provide coverage for mortgage insurance policies to be written in 2026 and 2027 (the 2026 QSR Transaction and 2027 QSR Transaction).

Under the terms of the 2026 QSR Transaction, NMIC will cede premiums earned related to 20% of the risk on eligible policies written between January 1, 2026 and December 31, 2026, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a 20% ceding commission, and a profit commission of up to 62% that varies directly and inversely with ceded claims.

Under the terms of the 2027 QSR Transaction, NMIC will cede premiums earned related to 12% of the risk on eligible policies written between January 1, 2027 and December 31, 2027, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a 20% ceding commission, and a profit commission of up to 61% that varies directly and inversely with ceded claims.

NMIC may terminate any or all of the QSR Transactions without penalty if, due to a change in PMIERs requirements, it is no longer able to take full PMIERs asset credit for the RIF ceded under the respective agreements.

Additionally, under the terms of the QSR Transactions, NMIC may elect to selectively terminate its engagement with individual reinsurers on a run-off basis ( i.e.

, reinsurers continue providing coverage on all risk ceded prior to the termination date, with no new cessions going forward) or cut-off basis ( i.e.

, the reinsurance arrangement is completely terminated with NMIC recapturing all previously ceded risk) under certain circumstances.

Such selective termination rights arise when, among other reasons, a reinsurer experiences a deterioration in its capital position below a prescribed threshold and/or a reinsurer breaches (and fails to cure) its collateral posting obligations under the relevant agreement.

Excess-of-Loss Reinsurance

Insurance-Linked Notes

NMIC is party to reinsurance agreements with the Oaktown Re Vehicles that provide it with aggregate excess-of-loss reinsurance coverage on defined portfolios of mortgage insurance policies.

Under each agreement, NMIC retains a first layer of aggregate loss exposure on covered policies and the respective Oaktown Re Vehicle then provides second layer loss protection up to a defined reinsurance coverage amount.

NMIC then retains losses in excess of the respective reinsurance coverage amounts.

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease (over a ten-year period in the case of Oaktown Re V Ltd.

and 12.5-year period in the case of Oaktown Re VI Ltd.

and Oaktown Re VII Ltd.) as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled.

As the reinsurance coverage decreases, a prescribed amount of collateral held in trust by the Oaktown Re Vehicles is distributed to ILN Transaction noteholders as amortization of the outstanding insurance-linked note principal balances.

The outstanding reinsurance coverage amounts stop amortizing, and the distribution of collateral assets to ILN Transaction noteholders and amortization of insurance-linked note principal is suspended if certain credit enhancement or delinquency thresholds, as defined in each agreement, are triggered (each, a Lock-Out Event).

NMIC holds optional termination rights under each ILN Transaction, including, among others, an optional call feature which provides NMIC the discretion to terminate the transaction on or after a prescribed date, and a clean-up call if the outstanding reinsurance coverage amount amortizes to 10% or less of the reinsurance coverage amount at inception or if NMIC reasonably determines that changes to GSE or rating agency asset requirements would cause a material and adverse effect on the capital treatment afforded to NMIC under a given agreement.

In addition, there are certain events that trigger mandatory termination of an agreement, including NMIC's failure to pay premiums or consent to reductions in a trust account to make principal payments to noteholders, among others.

Effective July 25, 2024, NMIC exercised its optional call to terminate a reinsurance agreement with and the associated insurance-linked notes issued by Oaktown Re III Ltd.

In connection with the termination, NMIC’s excess of loss reinsurance

agreement with Oaktown Re III Ltd.

was commuted and the insurance-linked notes issued by Oaktown Re III Ltd.

were redeemed in full with a distribution of remaining collateral assets.

The following table presents the inception date, covered production period, initial and current reinsurance coverage amount, and initial and current first layer retained aggregate loss under each outstanding ILN Transaction.

Current amounts are presented as of September 30, 2024.

( $ values in thousands)

Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1)

2020-2 ILN Transaction October 29, 2020 4/1/2020 – 9/30/2020 (2)

$ 242,351 $ 28,149 $ 121,777 $ 120,990

2021-1 ILN Transaction April 27, 2021 10/1/2020 – 3/31/2021 (3)

367,238 163,033 163,708 163,217

2021-2 ILN Transaction October 26, 2021 4/1/2021 – 9/30/2021 (4)

363,596 256,166 146,229 145,312

(1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable ILN Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss.

(2) Approximately 1% of the production covered by the 2020-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2020.

(3) Approximately 1% of the production covered by the 2021-1 ILN Transaction has coverage reporting dates between July 1, 2019 and September 30, 2020.

(4) Approximately 2% of the production covered by the 2021-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2021.

Traditional Reinsurance

NMIC is party to six excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, the 2023-2 XOL Transaction, effective July 1, 2023, and the 2024 XOL Transaction, effective January 1, 2024 – which we refer to collectively as the XOL Transactions.

NMIC is party to seven excess-of-loss reinsurance agreements with broad panels of third-party reinsurers – the 2022-1 XOL Transaction, effective April 1, 2022, the 2022-2 XOL Transaction, effective July 1, 2022, the 2022-3 XOL Transaction, effective October 1, 2022, the 2023-1 XOL Transaction, effective January 1, 2023, the 2023-2 XOL Transaction, effective July 1, 2023, the 2024 XOL Transaction, effective January 1, 2024, and the 2025 XOL Transaction, effective January 1, 2025 – which

we refer to collectively as the XOL Transactions.

Each XOL Transaction provides NMIC with aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies.

9 unchanged sentences

Current amounts are presented as of September 30, 2024.

Current amounts are presented as of March 31, 2025.

($ values in thousands) Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1)

10 unchanged sentences

162,500 162,500 312,172 312,172

2025 XOL Transaction (4)

January 1, 2025 1/1/2025 – 12/31/2025

56,807 56,807 62,673 62,673

(1) NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure and cedes reserves for incurred claims and claim expenses to each applicable XOL Transaction and recognizes a reinsurance recoverable if such incurred claims and claim expenses exceed its current first layer retained loss.

2 unchanged sentences

(4) The initial reinsurance coverage, current reinsurance coverage, initial first layer retained loss and current first layer retained loss for the 2025 XOL Transaction will increase as incremental covered production is ceded under the transaction through December 31, 2025.

Quota Share Reinsurance

NMIC is party to eight quota share reinsurance treaties – the 2016 QSR Transaction, effective September 1, 2016 and as modified April 1, 2019, the 2018 QSR Transaction, effective January 1, 2018, the 2020 QSR Transaction, effective April 1, 2020 and as amended January 1, 2024, the 2021 QSR Transaction, effective January 1, 2021, the 2022 QSR Transaction, effective October 1, 2021, the 2022 Seasoned QSR Transaction, effective July 1, 2022, the 2023 QSR Transaction, effective January 1, 2023 and the 2024 QSR Transaction, effective January 1, 2024 – which we refer to collectively as the QSR Transactions.

Under each of the QSR Transactions, NMIC cedes a proportional share of its risk on eligible policies to panels of third-party reinsurance providers.

Each of the third-party reinsurance providers that is party to the QSR Transactions has an insurer financial strength rating of A- or better by S&P, A.M.

Best or both.

Under the terms of the 2016 QSR Transaction, NMIC cedes premiums written related to 20.5% of the risk on eligible primary policies written for all periods through December 31, 2017 in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 60% that varies directly and inversely with ceded claims.

NMIC previously ceded 100% of the risk under its pool agreement with Fannie Mae;

however, such agreement expired on August 31, 2023 and NMIC no longer cedes pool risk under the 2016 QSR Transaction.

Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 25% of the risk on eligible policies written in 2018 and 20% of the risk on eligible policies written in 2019, in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 61% that varies directly and inversely with ceded claims.

Under the terms of the 2021 QSR Transaction, NMIC cedes premiums earned related to 22.5% of the risk on eligible policies written in 2021 (subject to an aggregate risk written limit which was exhausted on October 30, 2021), in exchange for reimbursement of ceded claims and claim expenses on covered policies, a 20% ceding commission, and a profit commission of up to 57.5% that varies directly and inversely with ceded claims.

Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 95% of the net risk on eligible policies primarily for a seasoned pool of mortgage insurance policies that had previously been covered under the retired Oaktown Re Ltd.

and Oaktown Re IV Ltd.

Additionally, under the

terms of the QSR Transactions, NMIC may elect to selectively terminate its engagement with individual reinsurers on a run-off basis ( i.e.

, reinsurers continue providing coverage on all risk ceded prior to the termination date, with no new cessions going forward) or cut-off basis ( i.e.

, the reinsurance arrangement is completely terminated with NMIC recapturing all previously ceded risk) under certain circumstances.

Concurrent with the placement of the 2025 XOL, NMIC entered into an excess-of-loss reinsurance treaty that will provide aggregate coverage for mortgage insurance policies to be written in 2026 (the 2026 XOL Transaction).

Under the terms of the agreement, NMIC will retain a first layer of aggregate loss exposure on covered policies and its reinsurance counterparties will then provide second layer loss protection up to a defined reinsurance coverage amount of $164.2 million.

NMIC retains losses in excess of the respective reinsurance coverage amounts.

Insurance-Linked Notes

NMIC is party to reinsurance agreements with the Oaktown Re Vehicles that provide it with aggregate excess-of-loss reinsurance coverage on defined portfolios of mortgage insurance policies.

NMIC then retains losses in excess of the respective reinsurance coverage amounts.

The respective reinsurance coverage amounts provided by the Oaktown Re Vehicles decrease over a 12.5-year period as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled.

The outstanding reinsurance coverage

amounts stop amortizing, and the distribution of collateral assets to ILN Transaction noteholders and amortization of insurance-linked note principal is suspended if certain credit enhancement or delinquency thresholds, as defined in each agreement, are triggered (each, a Lock-Out Event).

Current amounts are presented as of March 31, 2025.

( $ values in thousands)

Inception Date Covered Production Initial Reinsurance Coverage Current Reinsurance Coverage Initial First Layer Retained Loss Current First Layer Retained Loss (1)

2021-1 ILN Transaction April 27, 2021 10/1/2020 – 3/31/2021 (2)

$ 367,238 $ 130,299 $ 163,708 $ 162,769

2021-2 ILN Transaction October 26, 2021 4/1/2021 – 9/30/2021 (3)

363,596 224,149 146,229 144,866

(2) Approximately 1% of the production covered by the 2021-1 ILN Transaction has coverage reporting dates between July 1, 2019 and September 30, 2020.

(3) Approximately 2% of the production covered by the 2021-2 ILN Transaction has coverage reporting dates between July 1, 2019 and March 31, 2021.

See Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 5, Reinsurance” for further discussion of these third-party reinsurance arrangements.

3 unchanged sentences

NIW and primary IIF

As of and for the three months ended For the nine months ended

September 30, 2024 September 30, 2023 September 30, 2024 September 30, 2023

As of and for the three months ended

March 31, 2025 March 31, 2024

(In Millions)

2 unchanged sentences

$ 9,221 $ 211,308 $ 9,398 $ 199,373

NIW for the three and nine months ended September 30, 2024 was $12.2 billion and $34.1 billion, respectively, compared to $11.3 billion and $31.5 billion for the three and nine months ended September 30, 2023, respectively.

NIW increased year-on-year primarily due to growth in our customer franchise and market presence tied to the increased penetration of existing customer accounts and new customer activations.

Primary IIF increased 7% at September 30, 2024 compared to September 30, 2023, primarily due to the NIW generated between such measurement dates, partially offset by the run-off of in-force policies.

Our persistency rate was 85.5% at September 30, 2024 and 86.2% at September 30, 2023.

NIW for the three months ended March 31, 2025 decreased 2% compared to the three months ended March 31, 2024.

Primary IIF increased 6% at March 31, 2025 compared to March 31, 2024, primarily due to the NIW generated between such measurement dates, partially offset by the run-off of in-force policies.

Our persistency rate was 84.3% at March 31, 2025 and 85.8% at March 31, 2024.

Our persistency rate remains historically high due to a continued slowdown in the pace of mortgage refinancing activity tied to the prevailing interest and mortgage rate environment.

The following table presents net premiums written and earned for the periods indicated:

Primary premiums written and earned

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

Net premiums written and earned

For the three months ended March 31,

(In Thousands)

1 unchanged sentence

Net premiums earned 149,366 136,657

Net premiums written increased 11% and 13%, respectively, and net premiums earned increased 10% and 11%, respectively, during the three and nine months ended September 30, 2024 compared to the three and nine months ended September 30, 2023, primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under our reinsurance treaties.

Net premiums written and earned increased 10% and 9%, respectively, during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under the ILN Transactions.

Portfolio Statistics

2 unchanged sentences

Primary portfolio trends As of and for the three months ended

September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 September 30, 2023

March 31, 2025 December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024

($ Values In Millions, except as noted below)

34 unchanged sentences

The table below presents a summary of the change in total primary IIF for the dates and periods indicated.

Primary IIF As of and for the three months ended September 30, As of and for the nine months ended September 30,

2024 2023 2024 2023

Primary IIF As of and for the three months ended March 31,

(In Millions)

7 unchanged sentences

The table below presents a summary of our primary IIF and RIF by book year as of the dates indicated.

Primary IIF and RIF As of September 30,

Primary IIF and RIF As of March 31,

IIF RIF IIF RIF

13 unchanged sentences

We monitor the concentrations of various risk attributes in our insurance portfolio, which may change over time, in part, as a result of regional conditions or public policy shifts.

The tables below present our primary NIW by FICO, LTV and purchase/refinance mix for the periods indicated.

The tables below present our NIW by FICO, LTV and purchase/refinance mix for the periods indicated.

We calculate the LTV of a loan as the percentage of the original loan amount to the original purchase value of the property securing the loan.

Primary NIW by FICO For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

For the three months ended March 31,

(In Millions)

7 unchanged sentences

Weighted average FICO 758 757

Primary NIW by LTV For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

For the three months ended March 31,

(In Millions)

5 unchanged sentences

Weighted average LTV 92.2 % 92.3 %

Primary NIW by purchase/refinance mix For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

NIW by purchase/refinance mix

For the three months ended March 31,

(In Millions)

Purchase $ 8,822 $ 9,157

510 191 997 676

Total $ 9,221 $ 9,398

The tables below present our total primary IIF and RIF by FICO and LTV, and total primary RIF by loan type as of the dates indicated.

Primary IIF by FICO As of September 30,

Primary IIF by FICO As of March 31,

($ Values In Millions)

6 unchanged sentences

Total $ 211,308 100 % $ 199,373 100 %

Primary RIF by FICO As of September 30,

Primary RIF by FICO As of March 31,

($ Values In Millions)

6 unchanged sentences

Total $ 56,515 100 % $ 52,610 100 %

Primary IIF by LTV As of September 30,

Primary IIF by LTV As of March 31,

($ Values In Millions)

4 unchanged sentences

Total $ 211,308 100 % $ 199,373 100 %

Primary RIF by LTV As of September 30,

Primary RIF by LTV As of March 31,

($ Values In Millions)

4 unchanged sentences

Total $ 56,515 100 % $ 52,610 100 %

Primary RIF by Loan Type As of September 30,

Primary RIF by Loan Type As of March 31,

Fixed 98 % 98 %

3 unchanged sentences

Total 100 % 100 %

The table below presents selected primary portfolio statistics, by book year, as of September 30, 2024.

As of September 30, 2024

The table below presents selected primary portfolio statistics, by book year, as of March 31, 2025.

As of March 31, 2025

Book Year Original Insurance Written Remaining Insurance in Force % Remaining of Original Insurance Policies Ever in Force Number of Policies in Force Number of Loans in Default # of Claims Paid Incurred Loss Ratio (Inception to Date) (1)

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The following table shows the distribution by state of our primary RIF as of the dates indicated.

The distribution of our primary RIF as of September 30, 2024 is not necessarily representative of the geographic distribution we expect in the future.

Top 10 primary RIF by state As of September 30,

The distribution of our primary RIF as of March 31, 2025 is not necessarily representative of the geographic distribution we expect in the future.

Top 10 primary RIF by state As of March 31,

California 10.1 % 10.2 %

13 unchanged sentences

A loan is considered to be in default as of the payment date at which a borrower has missed the preceding two or more consecutive monthly payments.

We establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as IBNR.

establish reserves for loans that have been reported to us in default by servicers, referred to as case reserves, and additional loans that we estimate (based on actuarial review and other factors) to be in default that have not yet been reported to us by servicers, referred to as IBNR.

We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees and other general expenses of administering the claim settlement process.

9 unchanged sentences

We generally observe that forbearance, repayment and modification, and other assistance programs are an effective tool to bridge dislocated borrowers from a time of acute stress to a future date when they can resume timely payment of their mortgage obligations, and note higher cure rates on defaults benefitting from broad-based assistance programs than would otherwise be expected on similarly situated loans that did not benefit from such programs.

In response to the COVID-19 pandemic, politicians, regulators, lenders, loan servicers and others offered extraordinary assistance to dislocated borrowers through, among other programs, the forbearance, foreclosure moratorium and other assistance programs codified under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).

The FHFA and GSEs offered further assistance by introducing new repayment and loan modification options to assist borrowers with their transition out of forbearance programs and default status.

The actual claims we incur as our portfolio matures are difficult to predict and depend on the specific characteristics of our current in-force book (including the credit score and DTI ratio of the borrower, the LTV ratio of the mortgage and geographic concentrations, among others), as well as the risk profile of new business we write in the future.

2 unchanged sentences

A marked decline in housing demand, a significant and protracted decrease in house prices, or a sustained increase in unemployment could contribute to an increase in our future default and claims experience.

The following table provides a reconciliation of the beginning and ending gross reserve balances for primary insurance claims and claim expenses:

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

The following table provides a reconciliation of the beginning and ending gross reserve balances for insurance claims and claim expenses:

For the three months ended March 31,

(In Thousands)

13 unchanged sentences

Current year (2)

180 65 180 119

Prior years (3)

1,942 1,050 4,265 2,394

Reinsurance terminations (4)

Total claims and claim expenses paid 3,821 852

7 unchanged sentences

For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year.

Amounts are presented net of reinsurance and included $63.2 million attributed to net case reserves and $7.0 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $54.4 million attributed to net case reserves and $5.8 million attributed to net IBNR reserves for the nine months ended September 30, 2023.

Amounts are presented net of reinsurance and included $25.9 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the three months ended March 31, 2025 and $25.9 million attributed to net case reserves and $6.6 million attributed to net IBNR reserves for the three months ended March 31, 2024.

(3) Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year.

Amounts are presented net of reinsurance and included $49.8 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $41.1 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the nine months ended September 30, 2023.

Amounts are presented net of reinsurance and included $21.8 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the three months ended March 31, 2025 and $22.4 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the three months ended March 31, 2024.

(4) Represents the settlement of reinsurance recoverables in conjunction with the termination of one reinsurer under the 2016, 2018 and 2021 QSR Transactions by mutual agreement on a cut-off basis with no termination fee.

See Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 5, Reinsurance” for additional information.

The “ claims incurred ” section of the table above shows claims and claim expenses incurred on defaults occurring in current and prior years, including IBNR reserves and is presented net of reinsurance.

We may increase or decrease our claim estimates and reserves as we learn additional information about individual defaulted loans and continue to observe and analyze loss development trends in our portfolio.

Gross reserves of $45.1 million related to prior year defaults remained as of September 30, 2024.

Gross reserves of $108.4 million related to prior year defaults remained as of March 31, 2025.

The following table provides a reconciliation of the beginning and ending count of loans in default:

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

For the three months ended March 31,

Beginning default inventory 6,642 5,099

4 unchanged sentences

Ending default inventory 6,859 5,109

Ending default inventory increased from September 30, 2023 to September 30, 2024, primarily due to the growth and seasoning of our insured portfolio, partially offset by cure activity within our default population during the intervening period.

Ending default inventory increased from March 31, 2024 to March 31, 2025, primarily due to the growth and seasoning of our insured portfolio, partially offset by cure activity within our default population during the intervening period.

The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions for the periods indicated:

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

For the three months ended March 31,

($ Values In Thousands)

Number of claims paid (1)

67 62 168 129

Total amount paid for claims $ 5,225 $ 1,145

Average amount paid per claim

$ 40 $ 23 $ 34 $ 24

64 % 46 % 58 % 51 %

(1) Count includes 21 and 56 claims settled without payment during the three and nine months ended September 30, 2024, respectively, and 23 and 47 claims settled without payment during the three and nine months ended September 30, 2023, respectively.

(1) Count includes 20 and 16 claims settled without payment during the three months ended March 31, 2025 and 2024, respectively.

(2) Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.

We paid 67 and 168 claims during the three and nine months ended September 30, 2024, respectively, and 62 and 129 claims during the three and nine months ended September 30, 2023, respectively.

We paid 95 and 42 claims during the three months ended March 31, 2025 and 2024, respectively.

The number of claims paid in each period was modest relative to the size of our insured portfolio and we generally observe that the borrowers of the loans we insure are well-situated with strong credit profiles, stable 30-year fixed rate mortgages, manageable debt service obligations and significant appreciated equity in their homes.

An increase in the value of the homes collateralizing the mortgages we insure provides defaulted borrowers with alternative paths and incentives to cure their loan prior to the development of a claim.

Our claims severity was 64% and 58% for the three and nine months ended September 30, 2024, respectively, compared to 46% and 51% for the three and nine months ended September 30, 2023, respectively.

Our claims severity was 69% and 54% for the three months ended March 31, 2025 and 2024, respectively.

Our claims severity for each period was below long-term industry norms and benefited from the same broad national house price appreciation that supported our claims paid experience.

3 unchanged sentences

Average reserve per default:

As of September 30,

As of March 31,

(In Thousands)

3 unchanged sentences

(2) Amount includes claims adjustment expenses.

Average reserve per default decreased from September 30, 2023 to September 30, 2024, primarily due to changes in observed and forecasted housing market conditions and macroeconomic factors, as well as changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans between the measurement dates.

Average reserve per default decreased from March 31, 2024 to March 31, 2025, due to changes in observed and forecasted housing market conditions and macroeconomic factors between the measurement dates, and an increase in the proportion of defaults that trace to storm-related activity year-on-year.

We generally observe that storm-related defaults cure at higher rates than other similarly situated loans in default (in non-disaster zones) and scale our reserves accordingly.

Average reserves per default were further impacted by other changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans.

GSE Oversight

6 unchanged sentences

Under the PMIERs, approved insurers must maintain available assets that equal or exceed minimum required assets , which is an amount equal to the greater of (i) $400 million or (ii) a total risk-based required asset amount.

Available assets reflect the financial resources of a mortgage insurer available to pay claims, and includes the most readily liquid assets held, such as cash, investments and other items as stipulated in PMIERs Section 703.

The credit provided for such liquid assets is further subject to adjustment based on several factors, including asset class, credit rating and portfolio concentration.

The risk-based required asset amount is a function of the risk profile of an approved insurer's RIF, assessed on a loan-by-loan basis and considered against certain risk-based factors derived from tables set out in the PMIERs, which is then adjusted on an aggregate basis for reinsurance transactions approved by the GSEs, such as with respect to our ILN Transactions, XOL Transactions and QSR Transactions.

5 unchanged sentences

The following table provides a comparison of the PMIERs available assets and net risk-based required asset amount as reported by NMIC as of the dates indicated:

As of September 30,

As of March 31,

(In Thousands)

2 unchanged sentences

1,867,414 1,561,655

Available assets were $3.0 billion at September 30, 2024, compared to $2.6 billion at September 30, 2023.

Available assets were $3.2 billion at March 31, 2025, compared to $2.8 billion at March 31, 2024.

The $409 million increase in available assets between the dates presented was primarily driven by NMIC's positive cash flow from operations during the intervening period, partially offset by the payment of an ordinary course dividend from NMIC to NMIH in May 2024.

Net risk-based required assets were $1.7 billion at September 30, 2024, compared to $1.4 billion at September 30, 2023.

Net risk-based required assets were $1.9 billion at March 31, 2025, compared to $1.6 billion at March 31, 2024.

The $306 million increase in the risk-based required asset amount between the dates presented was primarily due to the growth in our gross RIF and aggregate gross risk-based required asset amount.

On August 21, 2024, the GSEs and FHFA updated PMIERs to revise the Available Asset credit mortgage insurers will receive for certain assets based on several factors, including asset class and credit rating.

The updated PMIERs will take effect on a phased basis beginning March 31, 2025 and will be fully implemented on September 30, 2026.

We do not expect the updated PMIERs to have a material impact on our available assets and risk-based required assets, and we expect to remain in full compliance with the existing and updated PMIERs, as applicable, prior to, on and after March 31, 2025.

Information and Technology Support Function

Effective April 1, 2025, we renewed and extended our existing seven-year IT service agreement with Tata Consultancy Services (TCS), dated March 31, 2020, through March 31, 2032.

Under the agreement, TCS provides IT services across such functions as application development and support, infrastructure support, and information security.

Our engagement with TCS has enhanced our ability to provide innovative IT solutions for our internal and external constituents, and has allowed us to realize cost efficiencies by leveraging TCS’s global platform.

Consolidated Results of Operations

Consolidated statements of operations For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

Consolidated statements of operations For the three months ended March 31, $ Change

2025 2024 2025 vs.

Revenues ($ In Thousands, except for per share data)

1 unchanged sentence

Net investment income 23,686 19,436 4,250 22

Net realized investment losses (10) — (10) (33)

Net realized investment gains 24 — 24 NM (3)

Other revenues 170 160 10 6

11 unchanged sentences

Loss ratio (1)

7.2 % 3.7 % 3.4 % 3.8 %

Expense ratio (2)

2 unchanged sentences

23.2 % 24.5 %

For the three months ended September 30, For the nine months ended September 30,

For the three months ended March 31, $ Change

Non-GAAP financial measures (4)

2024 2023 2024 2023

2025 2024 2025 vs.

($ In Thousands, except for per share data)

4 unchanged sentences

(2) Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.

(3) Not meaningful.

(4) See “ Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures,” below.

Net premiums earned were $143.3 million and $421.2 million for the three and nine months ended September 30, 2024, respectively, compared to $130.1 million and $377.8 million for the three and nine months ended September 30, 2023, respectively.

The year-on-year increase in net premiums earned in each respective period was primarily driven by growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under our reinsurance treaties.

Net investment income was $22.5 million and $62.6 million for the three and nine months ended September 30, 2024, respectively, compared to $17.9 million and $49.3 million for the three and nine months ended September 30, 2023, respectively.

The year-on-year increase in net investment income in each respective period was primarily driven by an increase in the book yield of our investment portfolio tied to the deployment of new cash flows and reinvestment of rolling maturities at incrementally higher rates, as well as growth in the size of our total invested asset base.

Other revenues were $0.3 million and $0.7 million for the three and nine months ended September 30, 2024, respectively, compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively.

Other revenues represent underwriting fee revenue generated by our subsidiary, NMIS, which provides outsourced loan review services to mortgage loan originators.

Net premiums earned increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our monthly IIF and monthly pay premium receipts, as well as a decline in the total premiums ceded under the ILN Transactions.

Net investment income increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in the size of our total invested asset base, as well as an increase in the book yield of our investment portfolio tied to the deployment of new cash flows and reinvestment of rolling maturities at incrementally higher rates.

Other revenues represent underwriting fee revenue generated by our subsidiary, NMIS, which provides outsourced loan

review services to mortgage loan originators.

Changes in other revenues primarily reflect changes in NMIS' outsourced loan review volume.

2 unchanged sentences

We also incur service expenses in connection with NMIS' outsourced loan review activities.

Insurance claims and claim expenses were $10.3 million and $14.3 million for the three and nine months ended September 30, 2024, respectively, compared to $4.8 million and $14.4 million for the three and nine months ended September 30, 2023, respectively.

The increase in insurance claims and claim expenses for the three months ended September 30, 2024 was primarily driven by the establishment of initial reserves on newly defaulted loans, as well as an increase in the average case reserve held against previously defaulted loans that have aged in their delinquency status, and was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and ongoing analysis of recent loss development trends.

Underwriting and operating expenses were $29.2 million and $87.3 million for the three and nine months ended September 30, 2024, respectively, compared to $27.7 million and $81.0 million for the three and nine months ended September 30, 2023, respectively.

The increase in underwriting and operating expenses in each respective period primarily reflects an increase in employee compensation costs and an adjustment to the pace of amortization of certain deferred policy acquisition costs, partially offset by an increase in ceding commissions received under our QSR Transactions and a decline in certain technology expenses.

Service expenses were $0.2 million and $0.5 million for the three and nine months ended September 30, 2024, respectively, compared to $0.2 million and $0.6 million for the three and nine months ended September 30, 2023, respectively.

Insurance claims and claim expenses increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to an increase in the number of newly defaulted loans that emerged in the period and the establishment of initial reserves against such loans, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquency status through the period, partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods in connection with cure activity and the ongoing analysis of recent loss development trends.

Underwriting and operating expenses increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to a decline in the ceding commission received under the 2022 Seasoned QSR Transaction in connection with the run-off of covered policies, partially offset by a decrease in the amortization of previously deferred policy acquisition costs.

Service expenses represent third-party costs incurred by NMIS in connection with the services it provides.

1 unchanged sentence

Amounts incurred as service expenses generally correspond with amounts recognized in other revenues in the same periods.

Interest expense was $7.1 million and $29.8 million for the three and nine months ended September 30, 2024, respectively, compared to $8.1 million and $24.1 million for the three and nine months ended September 30, 2023, respectively.

Interest expense for the three months ended September 30, 2024 reflects the lower interest rate achieved on the 2024 Notes as compared to the 2020 Notes they refinanced.

Interest expense for the nine months ended September 30, 2024 includes $7.0 million of non-recurring costs related to the refinancing of the 2020 Notes and 2021 Revolving Credit Facility.

Interest expense primarily reflects the carrying costs of our outstanding debt.

Interest expense declined during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 in connection with the refinancing of our outstanding senior notes and revolving credit facility at reduced costs in May 2024.

See Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 4, Debt.”

Income tax expense was $26.5 million and $78.6 million for the three and nine months ended September 30, 2024, respectively, compared to $23.3 million and $68.8 million for the three and nine months ended September 30, 2023, respectively.

The increase in income tax expense in each respective period was primarily driven by growth in our pre-tax income.

Our effective tax rate on pre-tax income was 22.2% and 22.3% for the three and nine months ended September 30, 2024, respectively, compared to 21.8% and 22.4% for the three and nine months ended September 30, 2023, respectively.

Income tax expense increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the growth in our pre-tax income.

Our effective tax rate on pre-tax income was 21.9% for the three months ended March 31, 2025, compared to 22.3% for the three months ended March 31, 2024.

taxpayer, we are subject to a statutory U.S.

1 unchanged sentence

Our provision for income taxes for interim periods is established based on our estimated annual effective tax rate for a given year and reflects the impact of discrete tax effects in the period in which they occur.

Our effective tax rates for the three and nine months ended September 30, 2024 and 2023 reflect the discrete tax effects of the vesting of RSUs and exercise of options.

Our effective tax rates for the three months ended March 31, 2025 and 2024 include the discrete tax effects of the vesting of RSUs.

See Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9, Income Taxes.”

Net income was $92.8 million and $273.9 million for the three and nine months ended September 30, 2024, respectively, compared to $84.0 million and $238.7 million for the three and nine months ended September 30, 2023, respectively.

Adjusted net income was $92.8 million and $279.5 million for the three and nine months ended September 30, 2024, respectively, compared to $84.0 million and $238.7 million for the three and nine months ended September 30, 2023, respectively.

Net income and adjusted net income increased in each respective period primarily due to growth in our total revenues, partially offset by increases in our income tax expense and underwriting and operating expenses.

Net income for the nine months ended September 30, 2024 includes non-recurring costs incurred in connection with the refinancing of the 2020 Notes and 2021 Revolving Credit Facility;

such amounts are excluded from the calculation of adjusted net income.

Diluted EPS was $1.15 and $3.36 for the three and nine months ended September 30, 2024, respectively, compared to $1.00 and $2.83 for the three and nine months ended September 30, 2023, respectively.

Adjusted diluted EPS was $1.15 and $3.43 for the three and nine months ended September 30, 2024, respectively, compared to $1.00 and $2.83 for the three and nine months ended September 30, 2023, respectively.

Diluted and adjusted diluted EPS increased in each respective period primarily due to growth in our net income and adjusted net income, as well as a decline in the number of weighted average diluted shares outstanding tied to share repurchase activity.

Net income and adjusted net income increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our total revenues, partially offset by increases in our income tax expense, insurance claims and claim expenses, and underwriting and operating expenses.

Net income and adjusted net income for the three months ended March 31, 2025 further benefited from a decline in our interest expense.

Diluted and adjusted diluted EPS increased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to growth in our net income and adjusted net income, as well as a decline in the number of weighted average diluted shares outstanding tied to share repurchase activity.

The non-GAAP financial measures of adjusted income before tax, adjusted net income and adjusted diluted EPS are presented to enhance the comparability of financial results between periods.

Non-GAAP Financial Measure Reconciliations For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

Non-GAAP Financial Measure Reconciliations For the three months ended March 31, $ Change

2025 2024 2025 vs.

As reported ($ In Thousands, except for per share data)

2 unchanged sentences

Net income $ 102,559 $ 89,050 $ 13,509 15 %

Net realized investment losses

Capital markets transaction costs

Net realized investment gains

(24) — (24) NM (2)

Adjusted income before tax $ 131,347 $ 114,567 $ 16,780 15 %

Income tax expense on adjustments (1)

Income tax benefit on adjustments (1)

Adjusted net income $ 102,540 $ 89,050 $ 13,490 15 %

3 unchanged sentences

federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction.

(2) Not meaningful.

Explanation and Reconciliation of Our Use of Non-GAAP Financial Measures

16 unchanged sentences

• Net realized investment gains and losses .

The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.

The recognition of net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.

• Capital markets transaction costs .

5 unchanged sentences

We believe such items are infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business.

Consolidated balance sheets September 30, 2024 December 31, 2023

Consolidated balance sheets March 31, 2025 December 31, 2024 $ Change

(In Thousands)

1 unchanged sentence

Cash and cash equivalents 74,209 54,308 19,901 37

Premiums receivable 78,454 76,456

Premiums receivable, net 84,153 82,804 1,349 2

Deferred policy acquisition costs, net 64,013 64,327 (314) —

10 unchanged sentences

Other liabilities 10,143 10,751 (608) (6)

11,286 12,877

Total liabilities 1,134,625 1,132,541 2,084 —

1 unchanged sentence

Total liabilities and shareholders' equity $ 3,456,196 $ 3,349,973 $ 106,223 3 %

(1) “Reinsurance funds withheld ” has been reclassified as “Other liabilities ” in the prior period.

Total cash and investments were $2.8 billion as of September 30, 2024, compared to $2.5 billion as of December 31, 2023.

Cash and investments at September 30, 2024 included $148.3 million held by NMIH.

The increase in total cash and investments reflects the addition of incremental cash provided by operating activities and a decrease in the unrealized loss position of our fixed income portfolio primarily tied to changes in interest rates, partially offset by share repurchase activity during the nine months ended September 30, 2024.

Premiums receivable was $78.5 million as of September 30, 2024, compared to $76.5 million as of December 31, 2023.

Premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.

Net deferred policy acquisition costs were $63.8 million as of September 30, 2024, compared to $62.9 million as of December 31, 2023.

The increase was primarily driven by the deferral of certain costs associated with the origination of new policies between the respective balance sheet dates, and was partially offset by the recognition of previously deferred policy acquisition costs.

Reinsurance recoverable was $29.2 million as of September 30, 2024, compared to $27.5 million as of December 31, 2023.

The increase was driven by an increase in ceded losses recoverable under our QSR Transactions.

Prepaid federal income taxes were $235.3 million as of September 30, 2024 and December 31, 2023.

Total cash and investments increased at March 31, 2025 compared to December 31, 2024 with the addition of incremental cash provided by operating activities and a decrease in the unrealized loss position of our fixed income portfolio primarily tied to changes in interest rates, partially offset by share repurchase activity during the three months ended March 31, 2025.

Cash and investments at March 31, 2025 included $76.4 million held by NMIH.

Net premiums receivable represents premiums due on our mortgage insurance policies and may fluctuate based on changes in our monthly premium policies in force, where premiums are generally paid one month in arrears, and the pace of settlement of previously outstanding receivables.

Net deferred policy acquisition costs decreased at March 31, 2025 compared to December 31, 2024 primarily due to the recognition of previously deferred policy acquisition costs during the three months ended March 31, 2025, partially offset by the deferral of certain costs associated with the origination of new policies during the period.

Net software and equipment decreased at March 31, 2025 compared to December 31, 2024 primarily due to the amortization of previously capitalized amounts during three months ended March 31, 2025.

Reinsurance recoverable decreased at March 31, 2025 compared to December 31, 2024 due to a decline in ceded losses recoverable under the QSR Transactions tied to a decline in our gross reserve for insurance claims and claim expenses.

Prepaid federal income taxes represent tax and loss bonds purchased in connection with our claimed tax deduction for our statutory contingency reserve position.

See Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9, Income Taxes.”

Other assets were $44.5 million as of September 30, 2024, compared to $40.4 million as of December 31, 2023.

The increase was primarily driven by an increase in accrued investment income and prepaid expenses, as well as the capitalization of deferred debt issuance costs incurred in connection with the establishment of the 2024 Revolving Credit Facility, partially offset by a reduction in our right-of-use assets tied to the amortization of the operating lease for our corporate headquarters.

Debt was $414.7 million as of September 30, 2024, compared to $397.6 million as of December 31, 2023.

Debt as of September 30, 2024 represented the carrying value of the $425 million aggregate principal amount 2024 Notes which issued in May 2024.

Debt at December 31, 2023 represented the carrying value of the $400 million aggregate principal amount 2020 Notes,

which were redeemed in full upon the completion of the 2024 Notes offering.

For more information see Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 4, Debt.”

Unearned premiums were $71.6 million as of September 30, 2024, compared to $92.3 million as of December 31, 2023.

The decrease was driven by the amortization of existing unearned premiums through earnings in accordance with the expiration of risk on related single premium policies and the cancellations of other single premium policies, partially offset by single premium policy originations during the nine months ended September 30, 2024.

Accounts payable and accrued expenses were $111.0 million as of September 30, 2024, compared to $86.2 million as of December 31, 2023.

The increase was primarily driven by an increase in unsettled trade payables related to the purchase of certain investment securities at September 30, 2024, as well as accrued and unpaid interest on the 2024 Notes, which is payable semi-annually beginning in February 2025, and was partially offset by the settlement of certain contractual payables and accrued expenses during the nine months ended September 30, 2024.

Reserve for insurance claims and claim expenses was $135.5 million as of September 30, 2024, compared to $124.0 million as of December 31, 2023.

The increase was primarily driven by the establishment of initial reserves on newly defaulted loans during the nine months ended September 30, 2024, as well as an increase in the average case reserve held against previously defaulted loans that aged in their delinquent status.

The increase in the reserves for insurance claims and claim expenses was partially offset by the release of a portion of the reserves we established for anticipated claims payments in prior periods (in connection with cure activity and ongoing analysis of recent loss development trends), as well as the payment of previously reserved claims during the period.

Other assets increased at March 31, 2025 compared to December 31, 2024 primarily due to an increase in accrued investment income and prepaid expenses.

Unearned premiums decreased at March 31, 2025 compared to December 31, 2024 due to the amortization of existing unearned premiums through earnings in accordance with the expiration of risk on related single premium policies and the cancellations of other single premium policies during the three months ended March 31, 2025, partially offset by single premium policy originations during the period.

Accounts payable and accrued expenses decreased at March 31, 2025 compared to December 31, 2024 primarily due to the settlement of previously accrued compensation expenses, accrued interest on the 2024 Notes, which is payable semi-annually in February and August, and premium taxes payable during the three months ended March 31, 2025.

Reserve for insurance claims and claim expenses decreased at March 31, 2025 compared to December 31, 2024 due to the release of a portion of the reserves we established for anticipated claims payments in prior periods (in connection with cure activity and ongoing analysis of recent loss development trends), as well as the payment of previously reserved claims during the three months ended March 31, 2025.

The decrease was partially offset by the establishment of initial reserves on newly defaulted loans and an increase in the average case reserve held against previously defaulted loans that aged in their delinquent status during the period.

See “ Insurance Claims and Claim Expenses ,” above for further details.

Net deferred tax liability was $380.9 million as of September 30, 2024, compared to $301.6 million as of December 31, 2023.

The increase was primarily due to an increase in the claimed deductibility of our statutory contingency reserve, as well as the decrease in unrealized losses recorded in other comprehensive income.

Net deferred tax liability increased at March 31, 2025 compared to December 31, 2024 due to an increase in the claimed deductibility of our statutory contingency reserve, as well as a decrease in the aggregate unrealized loss position of our fixed income portfolio recorded in other comprehensive income.

For further information regarding income taxes and their impact on our results of operations and financial position, see Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 9, Income Taxes .”

The following table summarizes our consolidated cash flows from operating, investing and financing activities:

Consolidated cash flows For the nine months ended September 30,

Consolidated cash flows For the three months ended March 31, $ Change

2025 2024 2025 vs.

Net cash provided by (used in):

5 unchanged sentences

$ 19,901 $ 43,037 $ (23,136) (54) %

Net cash provided by operating activities was $357.8 million for the nine months ended September 30, 2024, compared to $312.6 million for the nine months ended September 30, 2023.

Cash provided by operating activities increased during the nine months ended September 30, 2024, primarily due to an increase in our net premium receipts, growth in our investment income and a reduction in technology service costs paid under our long-term IT services agreement with Tata Consultancy Services, partially offset by an increase in taxes paid, short-term employee incentive payments and net claim settlement costs.

Cash used in investing activities for the nine months ended September 30, 2024 and 2023 reflects the purchase of fixed and short-term maturities with cash provided by operating activities, and the reinvestment of coupon payments, maturities and sale proceeds within our investment portfolio.

Cash used in financing activities was $68.0 million for the nine months ended September 30, 2024, compared to $62.6 million for the nine months ended September 30, 2023.

Net cash provided by operating activities decreased during the three months ended March 31, 2025 compared to the three months ended March 31, 2024 primarily due to the first semi-annual interest payment made on the 2024 Notes in February 2025, partially offset by an increase in our net premiums receipts and growth in our investment income.

Cash used in investing activities for the three months ended March 31, 2025 and 2024 reflects the purchase of fixed and short-term maturities with cash provided by operating activities, and the reinvestment of coupon payments, maturities and redemption proceeds within our investment portfolio.

Cash used in financing activities primarily relates to the repurchase of common stock and taxes paid on the net share settlement of equity awards for certain employees.

Cash used in financing activities for the nine months ended September 30, 2024 further reflects the net impact of the redemption of the 2020 Notes and issuance of the 2024 Notes during the period.

Liquidity and Capital Resources

9 unchanged sentences

Delaware law provides that dividends are only payable out of a corporation's surplus or recent net profits (subject to certain limitations).

As of September 30, 2024, NMIH had $148.3 million of cash and investments.

As of March 31, 2025, NMIH had $76.4 million of cash and cash equivalents, and investments.

NMIH's principal sources of net cash are dividends from its subsidiaries and investment income.

NMIC paid a $96.3 million ordinary course dividend to NMIH on May 30, 2024, 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 $98.4 million of aggregate ordinary dividends to NMIH during the twelve-month period ending December 31, 2025.

NMIH also has access to $250 million of undrawn revolving credit capacity under the 2024 Revolving Credit Facility.

On February 10, 2022, our Board of Directors authorized a $125 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2023.

On July 31, 2023, our Board of Directors authorized a new $200 million share repurchase program (excluding associated costs and applicable taxes) effective through December 31, 2025.

Concurrent with the new authorization, our Board of Directors also approved an extension of our existing $125 million share repurchase program through December 31, 2025 to align its remaining tenor with that of the new $200 million program.

On July 31, 2023, our Board of Directors authorized the $200 million 2023 Repurchase Program (excluding associated costs and applicable taxes) effective through December 31, 2025.

On February 5, 2025, our Board of Directors authorized the new $250 million 2025 Repurchase Program (excluding associated costs and applicable taxes) effective through December 31, 2027 and extended the 2023 Repurchase Program through December 31, 2027 to align its remaining tenor with that of the 2025 Repurchase Program.

The authorization provides NMIH the flexibility, based on market and business conditions, stock price and other factors, to repurchase stock from time to time through open market repurchases, privately negotiated transactions, or other means, including pursuant to Rule 10b5-1 trading plans.

During the nine months ended September 30, 2024, NMIH repurchased 2.1 million shares of common stock at a total cost of $69.4 million, including associated costs and applicable taxes.

As of September 30, 2024, NMIH had $108.1 million of repurchase authority remaining.

On May 21, 2024, NMIH completed the $425 million sale of the 2024 Notes, raising net proceeds of $414.1 million after giving effect to offering expenses and an initial underwriting discount.

Net proceeds from the offering were primarily used to effect the redemption of the $400 million aggregate principal amount 2020 Notes.

In June 2024, NMIH contributed remaining net proceeds of the offering to NMIC.

For more information, see Item 1, “ Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 4, Debt.”

During the three months ended March 31, 2025, NMIH repurchased 0.7 million shares of common stock at a total cost of $26.1 million, including associated costs and applicable taxes.

As of March 31, 2025, NMIH had $304.2 million of repurchase authority remaining.

NMIH has entered into tax and expense-sharing agreements with its subsidiaries which have been approved by the Wisconsin OCI, with such approvals subject to change or revocation at any time.

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Under the 2024 Revolving Credit Facility, NMIH is required to pay a quarterly commitment fee on the average daily undrawn amount of 0.175% to 0.525%, based on the applicable corporate credit rating at the time.

As of September 30, 2024, the applicable commitment fee was 0.225%.

As of March 31, 2025, the applicable commitment fee was 0.225%.

We are subject to certain covenants under the 2024 Revolving Credit Facility, including:

a maximum debt-to-total capitalization ratio of 35%, a minimum consolidated net worth requirement (as defined therein), and a requirement to maintain compliance with the financial standards prescribed by the PMIERs (subject to any GSE approved waivers).

We were in compliance with all covenants at September 30, 2024.

We were in compliance with all covenants at March 31, 2025.

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 by the GSEs.

Under Wisconsin insurance laws, NMIC and Re One may pay dividends up to

specified levels ( i.e., “ordinary” dividends) with 30 days' prior notice to the Wisconsin OCI.

Under Wisconsin insurance laws, 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, or “extraordinary” dividends, are subject to the Wisconsin OCI's prior approval.

Under Wisconsin insurance laws, 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 .

On May 30, 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.

As an approved insurer under PMIERs, NMIC would generally be subject to additional restrictions on its ability to pay dividends to NMIH if it failed to meet the financial requirements prescribed by PMIERs.

NMIC has the capacity to pay $98.4 million of aggregate ordinary dividends to NMIH during the twelve-month period ending December 31, 2025.

As an approved insurer under PMIERs, NMIC would generally be subject to additional restrictions on its ability to pay

dividends to NMIH if it failed to meet the financial requirements prescribed by PMIERs.

Approved insurers that fail to meet the prescribed PMIERs financial requirements are not permitted to pay dividends without prior approval from the GSEs.

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Under the PMIERs, NMIC must maintain available assets that are equal to or exceed a minimum risk-based required asset amount, subject to a minimum floor of $400 million.

The credit provided for such liquid assets is further subject to adjustment based on several factors, including asset class, credit rating and portfolio concentration.

The risk-based required asset amount under PMIERs is determined at an individual policy-level based on the risk characteristics of each insured loan.

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Under NMIC’s ILN and XOL Transactions, it generally receives credit for the PMIERs risk-based required asset amount on ceded RIF to the extent such requirement is within the subordinated coverage (excess of loss detachment threshold) afforded by the transaction.

The updated PMIERs will take effect on a phased basis beginning March 31, 2025 and will be fully implemented on September 30, 2026.

We do not expect the updated PMIERs to have a material impact on our available assets and risk-based required assets , and we expect to remain in full compliance with the existing and updated PMIERs, as applicable, prior to, on and after March 31, 2025.

NMIC is also subject to state regulatory minimum capital requirements based on its RIF.

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As such, the PMIERs generally imposes a stricter financial requirement than the state RTC standard.

As of September 30, 2024, NMIC had a RTC ratio of 12.6:1 with $35.0 billion of performing primary RIF, net of reinsurance, and $2.8 billion of total statutory capital, including contingency reserves.

As of March 31, 2025, NMIC had a RTC ratio of 12.6:1 with $37.9 billion of performing primary RIF, net of reinsurance, and $3.0 billion of total statutory capital, including contingency reserves.

Re One has no risk in force remaining and no longer reports a RTC ratio.

NMIC’s principal sources of liquidity include (i) premium receipts on its insured portfolio and new business production, (ii) interest income on its investment portfolio and principal repayments on maturities therein, and (iii) existing cash and cash equivalent holdings.

At September 30, 2024, NMIC had $2.7 billion of cash and investments, including $92.8 million of cash and cash equivalents.

At March 31, 2025, NMIC had $2.8 billion of cash and investments, including $29.3 million of cash and cash equivalents.

NMIC's principal liquidity demands include funds for the payment of (i) reimbursable holding company expenses, (ii) premiums ceded under our reinsurance transactions (iii) claims payments, and (iv) taxes as due or otherwise deferred through the purchase of tax and loss bonds.

NMIC's cash inflow is generally significantly in excess of its cash outflow in any given period.

During the twelve-month period ended September 30, 2024, NMIC generated $370 million of cash flow from

operations and received an additional $214 million of cash flow on the maturity and redemption of securities held in its investment portfolio.

During the twelve-month period ended March 31, 2025, NMIC generated $388 million of cash flow from operations and received an additional $222 million of cash flow on the maturity and redemption of securities held in its investment portfolio.

NMIC is not a party to any contracts (derivative or otherwise) that require it to post an increasing amount of collateral to any counterparty and NMIC’s principal liquidity demands (other than claims payments) generally develop along a scheduled path ( i.e.

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Debt and Financial Strength Ratings

NMIC's financial strength is rated “A-” by Fitch Ratings (Fitch) and “A3” by Moody's.

In October 2024, S&P upgraded NMIC's financial strength rating from “BBB+” to “A-”.

NMIC's financial strength is rated “A-” by Fitch Ratings (Fitch), “A3” by Moody's, and “A-” by S&P.

NMIH's 2024 Notes are rated “BBB-” by Fitch and “Baa3” by Moody's.

The outlook for all ratings provided by Fitch, Moody's and S&P is stable.

The outlook for all ratings provided by Fitch is positive and the outlook for all ratings provided by Moody's and S&P is stable.

Consolidated Investment Portfolio

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Our investment portfolio is comprised entirely of fixed maturity instruments.

As of September 30, 2024, the fair value of our investment portfolio was $2.7 billion and we held an additional $133.3 million of cash and cash equivalents.

Pre-tax book yield on the investment portfolio for the nine months ended September 30, 2024 was 3.0%.

As of March 31, 2025, the fair value of our investment portfolio was $2.8 billion and we held an additional $74.2 million of cash and cash equivalents.

Pre-tax book yield on the investment portfolio for the three months ended March 31, 2025 was 3.2%.

Book yield is calculated as period-to-date net investment income divided by the average amortized cost of the investment portfolio.

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The following tables present a breakdown of our investment portfolio and cash and cash equivalents by investment type and credit rating:

Percentage of portfolio's fair value September 30, 2024 December 31, 2023

Percentage of portfolio's fair value March 31, 2025 December 31, 2024

Corporate debt securities 69 % 67 %

Municipal debt securities 22 23

Cash, cash equivalents, and short-term investments 8 5

treasury securities and obligations of U.S.

government agencies

Cash, cash equivalents, and short-term investments 4 5

Asset-backed securities 1 1

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Investment portfolio ratings at fair value (1)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Total 100 % 100 %

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(3) Includes +/– ratings.

(4) We held one security with a BB+ rating at September 30, 2024 and December 31, 2023, which is not identifiable in the table due to rounding.

(4) We held one security with a BB+ rating at March 31, 2025 and December 31, 2024, which is not identifiable in the table due to rounding.

All of our investments are rated by one or more nationally recognized statistical rating organizations.

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Investment Securities - Allowance for credit losses

We did not recognize an allowance for credit loss for any security in the investment portfolio as of September 30, 2024 or December 31, 2023, and we did not record any provision for credit loss for investment securities during the three or nine month periods ended September 30, 2024 or 2023.

As of September 30, 2024, the investment portfolio had gross unrealized losses of $128.0 million, of which $127.5 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer.

As of December 31, 2023, the investment portfolio had gross unrealized losses of $184.3 million, of which $183.1 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer.

We evaluated the securities in an unrealized loss position as of September 30, 2024, assessing their credit ratings as well as any adverse conditions specifically related to the security.

Based upon our assessment of the amount and timing of cash flows to be collected over the remaining life of each instrument, we believe the unrealized losses as of September 30, 2024 are not indicative of the ultimate collectability of the current amortized cost of the securities.

Rather, the unrealized losses on securities held as of September 30, 2024 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities.

We did not recognize an allowance for credit loss for any security in the investment portfolio as of March 31, 2025 or December 31, 2024, and we did not record any provision for credit loss for investment securities during the three months ended March 31, 2025 or 2024.

As of March 31, 2025, the investment portfolio had gross unrealized losses of $129.0 million, of which $126.3 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer.

As of December 31, 2024, the investment portfolio had gross unrealized losses of $158.6 million, of which $150.8 million were

associated with securities that had been in an unrealized loss position for a period of twelve months or longer.

We evaluated the securities in an unrealized loss position as of March 31, 2025, assessing their credit ratings as well as any adverse conditions specifically related to the security.

Based upon our assessment of the amount and timing of cash flows to be collected over the remaining life of each instrument, we believe the unrealized losses as of March 31, 2025 are not indicative of the ultimate collectability of the current amortized cost of the securities.

Rather, the unrealized losses on securities held as of March 31, 2025 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities.

Critical Accounting Estimates

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Our actual results may differ from these estimates under different assumptions or conditions.

We believe that the assumptions and estimates associated with revenue recognition, our investment portfolio, deferred policy acquisition costs, premium deficiency reserves, and reserves for insurance claims and claim expenses have the greatest potential impact on our consolidated financial statements.

We believe that the assumptions and estimates associated with revenue recognition, our investment portfolio, deferred policy acquisition costs, and reserves for insurance claims and claim expenses have the greatest potential impact on our consolidated financial statements.

Therefore, we consider these to be our critical accounting estimates.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis