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Item 7. Management’s Discussion and Analysis

2026-02-12 compared with 2025-02-14 · 114 added, 251 removed, 652 unchanged (36% of the section changed)

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The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and notes thereto included below in Item 8 of this report and the Risk Factors included above in Part I, Item 1A of this report.

In addition, investors should review the “Cautionary Note Regarding Forward-Looking Statements” above.

In addition, investors should review the “Cautionary Note Regarding Forward-Looking Statements” and the “Glossary of Abbreviations and Acronyms” above.

We provide private MI through our primary insurance subsidiary, NMIC.

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We also continued to expand our business with existing customers, deepening our existing relationships and capturing what we believe to be an increasing portion of their annual MI volume.

At December 31, 2024, we had issued 2,086 Master Policies and established 1,621 active customer relationships, compared to 1,974 and 1,503, respectively, as of December 31, 2023 and 1,875 and 1,434, respectively, as of December 31, 2022.

At December 31, 2025, we had issued 2,193 Master Policies, compared to 2,086 and 1,974, as of December 31, 2024 and 2023, respectively.

New Insurance Written, Insurance-In-Force and Risk-In-Force

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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 ® .

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.

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 and layered risk variables, including borrower credit, loan-level, product and lender attributes, as well as market and geographic 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 also offer a rate card pricing option to a limited number of lender customers when required for business process 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.

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• cession of premiums under third-party reinsurance arrangements.

Premiums are paid either by the borrower (borrower-paid mortgage insurance or BPMI) or the lender (lender-paid mortgage insurance or LPMI) in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium).

Premiums are paid either by the borrower (BPMI) or the lender (LPMI) in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium).

Our net premiums written will differ from our net premiums earned due to policy payment type.

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

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 12.5-year period 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 and December 27, 2024, NMIC exercised its optional termination rights to terminate its previously outstanding reinsurance agreements with and associated insurance-linked-notes issued by Oaktown Re III Ltd.

and by Oaktown Re V Ltd., respectively.

In connection with the terminations, NMIC's excess of loss reinsurance agreements with Oaktown Re III Ltd.

and Oaktown Re V Ltd.

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

and Oaktown Re V 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 December 31, 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)

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

$367,238 $145,697 $163,708 $162,984

2021-2 ILN Transaction

October 26, 2021 4/1/2021 – 9/30/2021 (3)

363,596 240,288 146,229 145,235

(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 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.

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.

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

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

The reinsurance coverage amount of each XOL Transaction is set to approximate the PMIERs minimum required assets of its reference pool and decreases from its peak over a ten-year period in the event the PMIERs minimum required assets of the pool declines.

NMIC retains losses in excess of the outstanding reinsurance coverage amount.

NMIC holds optional termination rights which provide it the discretion to terminate each XOL Transaction on or after a specified date.

NMIC may also elect to terminate the XOL Transactions at any point if the outstanding reinsurance coverage amount amortizes to 10% or less of the reinsurance coverage amount provided at inception, or if it determines that it will no longer be able to take full PMIERs asset credit for the coverage.

Additionally, under the terms of the treaties, NMIC may selectively terminate its engagement with individual reinsurers 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 obligation.

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

Best or both.

Current amounts are presented as of December 31, 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)

2022-1 XOL Transaction April 1, 2022 10/1/2021 – 3/31/2022 (2)

$289,741 $192,516 $133,366 $132,115

2022-2 XOL Transaction July 1, 2022 4/1/2022 – 6/30/2022 (3)

154,306 129,157 78,906 77,144

2022-3 XOL Transaction October 1, 2022 7/1/2022 – 9/30/2022 96,779 83,634 106,265 105,417

2023-1 XOL Transaction January 1, 2023 10/1/2022 – 6/30/2023 89,864 82,315 146,513 145,716

2023-2 XOL Transaction

July 1, 2023 7/1/2023 – 12/31/2023 100,777 95,304 136,875 136,715

2024 XOL Transaction (4)

January 1, 2024 1/1/2024 – 12/31/2024

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

(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) Approximately 1% of the production covered by the 2022-1 XOL Transaction has coverage reporting dates between October 21, 2019 and September 30, 2021.

(3) Approximately 1% of the production covered by the 2022-2 XOL Transaction has coverage reporting dates between January 4, 2021 and March 31, 2022.

(4) The 2024 XOL Transaction provides coverage for production generated between January 1, 2024 and December 31, 2024.

The current reinsurance coverage and current first layer retained loss will decrease in future periods to the extent the PMIERs minimum required assets of the covered pool declines.

In October 2024, NMIC entered into two sequential excess-of-loss reinsurance treaties that will provide aggregate coverage for mortgage insurance policies to be written in 2025 and 2026 (the 2025 XOL Transaction and 2026 XOL Transaction, respectively).

Under the terms of each 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 $283.8 million for the 2025 XOL Transaction and $164.2 million for the 2026 XOL Transaction).

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

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.

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 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 22.5% 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 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.

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.

Effective January 1, 2025, NMIC terminated its engagement with one reinsurer under the 2016, 2018 and 2021 QSR Transactions by mutual agreement on a cut-off basis with no termination fees.

Upon termination, NMIC recaptured approximately $100 million of previously ceded primary RIF.

NMIC will stop ceding new premiums with respect to the recaptured risk and ceded premiums under each agreement will decrease by less than 1% in future periods.

In October 2024, NMIC entered into three sequential quota share reinsurance treaties that will provide coverage for mortgage insurance policies to be written in 2025, 2026 and 2027 (the 2025 QSR Transaction, 2026 QSR Transaction and 2027 QSR Transaction, respectively).

Under the terms of the 2025 and 2026 QSR Transactions, NMIC will cede premiums earned related to 20% of the risk on eligible policies written between January 1, 2025 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.

See Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 6, Reinsurance ” for further discussion of these third-party reinsurance arrangements.

Portfolio Data

The following table presents NIW and IIF as of the dates and for the periods indicated.

The following table presents NIW and primary IIF as of the dates and for the periods indicated.

Unless otherwise noted, the tables below do not include the effects of our third-party reinsurance arrangements described above.

NIW and primary IIF

As of and for the years ended December 31,

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Single 1,069 16,523 915 17,955 1,005 19,265

Primary 46,044 210,183 40,473 197,029 58,734 183,968

Pool — — — — — 1,049

Total $ 48,900 $ 221,448 $ 46,044 $ 210,183 $ 40,473 $ 197,029

NIW for the year ended December 31, 2024 increased 14% compared to the year ended December 31, 2023, primarily due to growth in our customer franchise and market presence tied to the increased penetration of existing customer accounts and new customer activations.

NIW for the year ended December 31, 2023 decreased 31% compared to the year ended December 31, 2022, primarily due to a decline in the size of the total mortgage insurance market.

NIW increased 6% and 14%, respectively, for the years ended December 31, 2025 and 2024, primarily due to growth in our customer franchise and market presence tied to the increased penetration of existing customer accounts and new customer activations as well as an increase in the size of the total mortgage insurance market.

Primary IIF increased 5% at December 31, 2025 compared to December 31, 2024, which in turn grew 7% compared to December 31, 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 83.4%, 84.6% and 86.1% at December 31, 2025, 2024 and 2023, respectively.

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

Persistency remained 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:

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Net premiums earned 602,212 564,688 510,768

Net premiums written increased 12% and 4%, respectively, and net premiums earned increased 11% and 7%, respectively, during the years ended December 31, 2024 and 2023, primarily driven by growth in our monthly IIF and monthly pay premiums receipts.

The sequential increase in net premiums earned during each successive year was partially offset by a decline in the contribution from single premium policy cancellations period-to-period.

Net premiums written increased 9% and 12%, respectively, and net premiums earned increased 7% and 11%, respectively, during the years ended December 31, 2025 and 2024, primarily driven by growth in our monthly IIF and direct monthly pay premium receipts, partially offset by the impact of ceded premiums written and earned under our third-party reinsurance transactions.

Portfolio Statistics

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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 years ended December 31,

For the years ended December 31,

2025 2024 2023

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Weighted average FICO 757 757 760

Primary NIW by LTV For the years ended December 31,

For the years ended December 31,

2025 2024 2023

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Weighted average LTV 91.9 % 92.3 % 92.1 %

Primary NIW by purchase/refinance mix For the years ended December 31,

NIW by purchase/refinance mix

For the years ended December 31,

2025 2024 2023

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Georgia 4.0 4.1 4.1

Washington 3.9 4.0 3.9

Illinois 4.0 3.8 4.0

Virginia 3.7 3.7 3.9

Washington 3.6 3.9 4.0

Pennsylvania 3.5 3.4 3.4

Ohio 3.5 3.3 3.0

North Carolina 3.2 3.0 3.0

New York 3.3 3.2 3.1

Total 51.2 % 51.4 % 52.0 %

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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 incurred but not reported (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.

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Adjustments to reserve estimates are reflected in the period in which the adjustment is made.

Reserves are also ceded to reinsurers under the QSR Transactions, ILN Transactions and XOL Transactions as applicable under each treaty.

We have not yet ceded reserves under any of the ILN Transactions or XOL Transactions as incurred claims and claim expenses on each respective reference pool remain within our retained coverage layer for each transaction.

Reserves are also ceded to reinsurers under the QSR Transactions, XOL Transactions and ILN Transactions as applicable under each treaty.

We have not yet ceded reserves under any of the XOL Transactions or ILN Transactions as incurred claims and claim expenses on each respective reference pool remain within our retained coverage layer for each transaction.

Our reserve setting process considers the beneficial impact of forbearance, foreclosure moratorium and other assistance programs that may be made available to certain defaulted borrowers.

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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.

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.

In addition, claims experience will be affected by macroeconomic factors such as housing prices, interest rates, unemployment rates and other events, such as natural disasters or global pandemics, and any federal, state or local governmental response thereto.

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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:

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

For the years ended December 31,

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(57,889) (61,662) (56,390)

Total claims and claim expenses (benefits) incurred (4)

Total claims and claim expenses incurred (4)

56,832 31,544 21,895

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Current year (2)

1,605 638 600

Prior years (3)

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Reinsurance terminations (5)

(1,964) — (491)

Total claims and claim expenses paid 18,791 8,193 3,684

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Amounts are presented net of reinsurance and included $48.4 million attributed to net case reserves and $8.1 million attributed to net IBNR reserves for the year ended December 31, 2025, $54.1 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the year ended December 31, 2024, and $50.9 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the year ended December 31, 2023.

(4) Excludes a $0.7 million termination fee for the year ended December 31, 2023 incurred in connection with the amendment of the 2020 QSR Transaction.

(4) Excludes aggregate fees of $0.8 million and $0.7 million for the years ended December 31, 2025 and 2023, respectively, incurred in connection with the termination or amendment of certain QSR Transactions.

(5) Represents the settlement of reinsurance recoverables in conjunction with the termination and amendment of certain QSR transactions.

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.

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Our claims severity for the years ended December 31, 2025, 2024 and 2023 was 76%, 61% and 55%, respectively.

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

The increase in claims severity for the year ended December 31, 2025, was primarily due to an increase in the proportion of claims related to loans originated in more recent years.

These loans generally have less accumulated equity than loans from earlier vintages, which typically results in higher claims payments and an increase in claims severity.

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

An increase in the value of the homes collateralizing the mortgages we insure provides additional equity support to our risk exposure and raises the prospect of a third-party sale of a foreclosed property, which can mitigate the severity of our settled claims.

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(2) Amount includes claims adjustment expenses.

Average reserve per default increased from December 31, 2024 to December 31, 2025, primarily due to changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans between measurement dates.

Average reserves per default were further impacted by changes in observed and forecasted housing market conditions and macroeconomic factors between the measurement dates.

Average reserve per default decreased from December 31, 2023 to December 31, 2024, primarily due to 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 well as changes in observed and forecasted housing market conditions and macroeconomic factors between the measurement dates.

Average reserve per default increased from December 31, 2022 to December 31, 2023, primarily due to changes in the composition of our default inventory as measured by the size, vintage and current estimated LTV of defaulted loans, as well as the proportion of such loans benefiting from a forbearance program granted in response to a financial hardship related to COVID-19.

Average reserves per default were further impacted by changes in observed and forecasted housing market conditions and macroeconomic factors between the measurement dates.

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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.

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.

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 the PMIERs.

The credit provided for such assets is 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 QSR Transactions, XOL Transactions and ILN Transactions.

The aggregate gross risk-based required asset amount for performing, primary insurance is subject to a floor of 5.6% of performing primary adjusted RIF .

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Net risk-based required assets were $2.1 billion at December 31, 2025, compared to $1.8 billion at December 31, 2024 and $1.5 billion at December 31, 2023.

The increase in the net r isk-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, partially offset by risk ceded under our third-party reinsurance agreements.

The increase in the net r isk-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, and was further impacted by the growth in our default inventory and defaulted RIF.

The MI industry is highly competitive and currently consists of six private mortgage insurers, including NMIC, as well as government MIs such as the FHA, USDA or VA.

A range of factors influence a lender's and borrower's decision to choose private over government MI, including among others, premium rates and other charges, loan eligibility requirements, the cancelability of private coverage, loan size limits and the relative ease of use of private MI products compared to government MI alternatives.

Private MI companies compete based on service, customer relationships, underwriting and other factors, including price, credit risk tolerance and IT capabilities.

We expect the private MI market to remain competitive, with pressure for industry participants to maintain or grow their market share.

The private MI industry overall competes more broadly with government MIs who significantly increased their share in the MI market following the 2008 Financial Crisis.

Although there has been broad policy consensus toward the need for increasing private capital participation and decreasing government exposure to credit risk in the U.S.

housing finance system, it remains difficult to predict whether the combined market share of government MIs will recede to pre-2008 levels.

Cybersecurity

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For further information, see Part I, Item 1C, “ Cybersecurity.

Information Technology

Effective April 1, 2025, we renewed and extended our existing seven-year IT service agreement with 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

Comparisons between the years ended December 31, 2024 and 2023 have been omitted within “Consolidated Results of Operations” from this Form 10-K, but can be found in Part II, Item 7, “ Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC.

Consolidated statements of operations For the years ended December 31, $ Change

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Net investment income 102,937 85,316 17,621 21

Net realized investment gains (losses) 23 (33) 481 56 (170) (514) (107)

Net realized investment gains

432 23 409 NM (4)

Other revenues 859 944 (85) (9)

Total revenues 706,440 650,971 55,469 9

Insurance claims and claim expenses (benefits) 31,544 22,618 (3,594) 8,926 39 26,212 (729)

Insurance claims and claim expenses 57,649 31,544 26,105 83

Underwriting and operating expenses 119,908 118,397 1,511 1

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Interest expense 28,478 36,896 (8,418) (23)

Gain from change in fair value of warrant liability — — (1,113) — NM (4)

Total expenses 206,636 187,560 19,076 10

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Loss ratio (1)

5.6 % 4.4 % (0.8) %

Expense ratio (2)

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Adjusted diluted EPS 4.92 4.50 0.42 9

(1) Loss ratio is calculated by dividing insurance claims and claim expenses (benefits) by net premiums earned.

(1) Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.

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

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

Net premiums earned increased sequentially during each successive year, primarily driven by growth in our monthly IIF and monthly pay premium receipts, partially offset by a decline in the contribution from single premium policy cancellations.

Net premiums earned for the year ended December 31, 2024 further benefited from a year-on-year decline in the total premiums ceded under our reinsurance treaties.

Net investment income increased sequentially during each successive year, 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.

Net premiums earned increased during the year ended December 31, 2025 primarily due to growth in our monthly IIF and direct monthly pay premium receipts, partially offset by the impact of ceded premiums under our third-party reinsurance transactions.

Net investment income increased during the year ended December 31, 2025 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.

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

Insurance claims and claim expenses increased during each successive year, primarily driven by an increase in the number of newly defaulted loans that emerged in each successive 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 periods, 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 increased during the year ended December 31, 2024, primarily reflecting an increase in employee compensation costs and an adjustment to the pace of amortization of deferred policy acquisition costs, partially offset by an increase in ceding commissions received under our QSR Transactions and a decline in certain technology expenses.

The decline in underwriting and operating expenses for the year ended December 31, 2023 primarily reflected a decrease in the amortization of deferred acquisition costs tied to the increased persistency of our IIF during the period and a full-year impact of ceding commissions received in connection with the 2022 Seasoned QSR Transaction (which was in effect for only a portion of the year ended December 31, 2022), partially offset by an increase in employee compensation costs.

Insurance claims and claim expenses increased during the year ended December 31, 2025 primarily due to an increase in the number of newly defaulted loans that emerged during the year 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, 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 marginally during the year ended December 31, 2025 primarily due to an increase in certain technology expenses and premium taxes, largely offset by a decrease in employee compensation costs, amortization and depreciation expenses, and certain contract and professional fees.

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

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For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 5, Debt.

Income tax expense increased sequentially during each successive year and was primarily driven by the growth in our pre-tax income.

Income tax expense increased during the year ended December 31, 2025 primarily due to the growth in our pre-tax income.

taxpayer, we are subject to a U.S.

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Our effective income tax rate on pre-tax income was 22.2% and 22.3% for the years ended December 31, 2025 and 2024, respectively.

Our effective tax rate increased for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily due to the limitation on deductible compensation for covered employees under Section 162(m) of the IRC.

Our effective tax rate decreased for the year ended December 31, 2023 compared to the year ended December 31, 2022 primarily due to an increase in the tax benefit realized from excess share-based compensation for stock options exercised in the period.

For further information regarding income taxes and their impact on our results of operations and financial position, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes.

Net income and adjusted net income increased in each successive year primarily due to growth in our total revenues, partially offset by increases in our insurance claims and claim expenses and income tax expenses.

The sequential trends in net income and adjusted net income were further impacted by changes in underwriting and operating expenses.

Net income for the year ended December 31, 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 and adjusted diluted EPS increased during each successive year 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 year ended December 31, 2025 primarily due to the growth in our total revenues, partially offset by increases in our insurance claims and claim expenses and income tax expense.

Adjusted net income for the year ended December 31, 2024 reflects a $7.0 million adjustment for non-recurring costs incurred in connection with the refinancing of the 2020 Notes and 2021 Revolving Credit Facility.

Diluted and adjusted diluted EPS increased during the year ended December 31, 2025 primarily due to the 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.

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Net income $ 388,926 $ 360,106 $ 28,820 8 %

Net realized investment (gains) losses

(23) 33 (481) (56) (170) 514 (107)

Gain from change in fair value warrant liability — — (1,113) — NM (2)

Net realized investment gains

(432) (23) (409) NM (2)

Capital market transaction costs — 6,966 (6,966) NM (2)

Adjusted income before tax $ 499,372 $ 470,354 $ 29,018 6 %

Income tax expense (benefit) on adjustments (1)

1,458 7 (58) 1,451 NM (2)

Income tax (benefit) expense on adjustments (1)

(90) 1,458 (1,548) (106) %

Adjusted net income $ 388,584 $ 365,591 $ 22,993 6 %

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

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income and adjusted diluted EPS enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors.

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income and adjusted diluted EPS enhance the comparability of our fundamental financial performance between periods, and provide relevant information to investors.

These non-GAAP financial measures align with the way the company's business performance is evaluated by management.

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their measures may not be comparable to those we calculate and present.

Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, the gain or loss related to the change in fair value of our warrant liability, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods.

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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.

• Change in fair value of warrant liability .

Outstanding warrants at the end of each reporting period are revalued, and any change in fair value is reported in the statement of operations in the period in which the change occurred.

The change in fair value of our warrant liability can vary significantly across periods and is influenced principally by equity market and general economic factors that do not impact or reflect our current period operating results.

Furthermore, all unexercised warrants expired in April 2022 and, as such, no change in fair value has been recognized in any reporting periods thereafter.

We believe trends in our operating performance can be more clearly identified by excluding fluctuations related to the change in fair value of our warrant liability.

• Capital markets transaction costs .

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Identification and exclusion of these items provides clarity about the impact special or rare occurrences may have on our current financial performance.

Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017.

Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in 2021, effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017.

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.

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Total liabilities and shareholders' equity $ 3,841,098 $ 3,349,973 $ 491,125 15 %

Total cash and investments increased due to 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 year ended December 31, 2024.

Total cash and investments increased at December 31, 2025 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 during the year ended December 31, 2025, partially offset by share repurchase activity during the period.

Cash and investments at December 31, 2025 included $130.6 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 software and equipment decreased due to a step-down in capitalized costs related to our agreement with TCS.

Net deferred policy acquisition costs increased due to 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 increased year-on-year as a result of an increase in ceded losses recoverable under our QSR Transactions.

Prepaid federal income taxes increased due to the purchase of $86.9 million of tax and loss bonds during the year ended December 31, 2024.

Net deferred policy acquisition costs increased at December 31, 2025 due to the deferral of certain costs associated with the origination of new policies, largely offset by the recognition of previously deferred policy acquisition costs during the year ended December 31, 2025.

Net software and equipment decreased at December 31, 2025 due to the amortization of previously capitalized amounts, partially offset by the capitalization of certain software and equipment expenditures during the year ended December 31, 2025.

Reinsurance recoverable increased at December 31, 2025 as a result of an increase in ceded losses recoverable under our QSR Transactions tied to an increase in our gross reserve for insurance claims and claim expenses during the year ended

December 31, 2025, partially offset by the settlement of loss recoverable in conjunction with the termination and amendment of certain QSR transactions.

Prepaid federal income taxes increased at December 31, 2025 due to the purchase of $78.1 million of tax and loss bonds during the year ended December 31, 2025.

For further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 11, Income Taxes.

Other assets increased primarily driven by an increase in accrued investment income and 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 (ROU) assets tied to the amortization of the operating lease for our corporate headquarters.

Debt as of December 31, 2024 represented the carrying value of the $425 million aggregate principal amount 2024 Notes, which were issued in May 2024.

Debt as of 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 further information, see Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 5, Debt.

Unearned premiums decreased 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 year ended December 31, 2024.

Accounts payable and accrued expenses increased primarily due to accrued and unpaid interest on the 2024 Notes, which is payable semi-annually beginning in February 2025, as well as an increase in reinsurance premiums payable, partially offset by the settlement of certain contractual payables during the year ended December 31, 2024.

Reserve for insurance claims and claim expenses increased in connection with the establishment of initial reserves on newly defaulted loans during the year ended December 31, 2024, as well as an increase in the average case reserve held against previously defaulted loans that have aged in their delinquency 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 December 31, 2025 primarily due to an increase in accrued investment income and income taxes receivable, partially offset by a reduction in our ROU assets tied to the amortization of the operating lease for our corporate headquarters and the amortization of deferred debt issuance costs incurred in connection with the establishment of the 2024 Revolving Credit Facility during the year ended December 31, 2025.

Unearned premiums decreased at December 31, 2025 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 year ended December 31, 2025.

Accounts payable and accrued expenses decreased at December 31, 2025 primarily due to a reduction in accrued interest on the 2024 Notes, which is payable semi-annually beginning in February 2025, a decrease in taxes payable and the settlement of previously accrued compensation expenses, partially offset by an increase in reinsurance premiums payable during the year ended December 31, 2025.

Reserve for insurance claims and claim expenses increased at December 31, 2025 in connection with 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 aged in their delinquency status during the year ended December 31, 2025.

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

Net deferred tax liability increased 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.

Net deferred tax liability increased at December 31, 2025 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 during the year ended December 31, 2025.

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Financing activities (113,204) (96,699) (16,505) 17

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

$ (10,371) $ (42,381) $ 32,010 (76) %

Net cash provided by operating activities increased in each successive year primarily due to an increase in our net premium receipts and growth in our investment income, partially offset by an increase in the purchase of tax and loss bonds from period-to-period.

Cash provided by operating activities for the year ended December 31, 2024, was further impacted by an increase in cash taxes paid and the settlement of previously accrued short-term employee incentive awards.

Cash provided by operating activities for the year ended December 31, 2023, was also impacted by a decline in short-term employee incentive payments.

Cash used in investing activities for the years ended December 31, 2024, 2023 and 2022 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.

Net cash provided by operating activities increased year-on-year primarily due to an increase in our net premium receipts, growth in our investment income and a reduction in the purchase of tax and loss bonds, partially offset by an increase in cash taxes paid, an increase in the interest payments made on the 2024 Notes and an increase in net claims paid during the year.

Cash used in investing activities for the years ended December 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, redemptions and sales 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 year ended December 31, 2024 further reflects the net impact of the redemption of the 2020 Notes and issuance of the 2024 Notes during the period.

Cash used in financing activities for the year ended December 31, 2024 further reflects the net impact of the issuance of the 2024 Notes and redemption of the 2020 Notes during the period.

Liquidity and Capital Resources

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

As of December 31, 2024, NMIH had $132.2 million of cash and investments.

As of December 31, 2025, NMIH had $130.6 million of cash, cash equivalents and investments.

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

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

NMIC paid a $98.4 million ordinary course dividend to NMIH on June 2, 2025, representing its full ordinary course dividend capacity payable under Wisconsin insurance laws for 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, the 2022 Repurchase Program) effective through December 31, 2023.

On July 31, 2023, our Board of Directors authorized a $200 million share repurchase program (excluding associated costs and applicable taxes, the 2023 Repurchase Program) effective through December 31, 2025 and extended the 2022 Repurchase Program through December 31, 2025 to align its remaining tenor with that of the 2023 Repurchase Program.

During the year ended December 31, 2024, NMIH repurchased 2.8 million shares of common stock at a total cost of $97.7 million, including associated costs and applicable taxes.

On July 31, 2023, our Board of Directors authorized a $200 million repurchase program (the 2023 Repurchase Program), effective through December 31, 2025.

On February 5, 2025, our Board of Directors authorized a new $250 million repurchase program (the 2025 Repurchase Program), effective through December 31, 2027, and extended the effectiveness of the 2023 Repurchase Program through December 31, 2027 to align its remaining tenor with that of the 2025 Repurchase Program.

The authorizations provide NMIH with 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 year ended December 31, 2025, NMIH repurchased 2.8 million shares of common stock at a total cost of $104.2 million, excluding associated costs and applicable taxes.

As of December 31, 2025, NMIH had $225.9 million of repurchase authority remaining.

On February 5, 2025, our Board of Directors authorized a new $250 million share repurchase program (excluding associated costs and applicable taxes, the 2025 Repurchase Program) effective through December 31, 2027.

The authorization provides us 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.

Concurrent with the new authorization, our Board of Directors also approved an extension of our existing share repurchase programs through December 31, 2027 to align its remaining tenor with that of the new $250 million program.

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 8, “ Financial Statements - Notes to Consolidated Financial Statements - Note 5, Debt.

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

We are subject to certain covenants under the 2024 Revolving Credit Facility.

Under the 2024 Revolving Credit Facility, NMIH may not permit (i) our debt to total capitalization ratio to exceed 35% as of the last day of any fiscal quarter, or (ii) our consolidated net worth to be, as of the last day of any fiscal quarter, less than the sum of (A) $1,489,742,100, plus (B) 50% of our cumulative consolidated net income for each fiscal quarter for which such consolidated net income is positive, plus (C) 50% of any increase in our consolidated net worth after March 31, 2024 resulting from certain issuances of equity by or capital contributions to NMIH or our subsidiaries.

In addition, NMIC must remain at all times in compliance with all applicable “financial requirements” imposed pursuant to the PMIERs, subject to any allowed transition period or forbearance thereunder.

The credit agreement for 2024 Revolving Credit Facility also prohibits, restricts or limits, among other things, NMIH's and its subsidiaries' ability to (i) incur additional indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate and (vii) enter into transactions with affiliates, in each case subject to certain limitations, exceptions and qualifications as set forth in the credit agreement for 2024 Revolving Credit Facility.

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 December 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.

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.

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.

During the year ended December 31, 2024, NMIC paid a $96.3 million ordinary course dividend to NMIH.

Under Wisconsin insurance laws, an ordinary dividend is defined as any payment or distribution that, together with other dividends and distributions made within the preceding twelve months, is less than 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, 2025, NMIC paid a $98.4 million ordinary dividend to NMIH.

NMIC has the capacity to pay aggregate ordinary dividends of $101.0 million to NMIH during the twelve-month period ending December 31, 2026.

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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 assets is 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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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.

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

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 December 31, 2024, NMIC had a RTC ratio of 12.7:1 with $36.6 billion of performing primary RIF, net of reinsurance, and $2.9 billion of total statutory capital, including contingency reserves.

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

As of December 31, 2025, NMIC had a RTC ratio of 13.0:1 with $42.4 billion of primary RIF, net of reinsurance, and $3.3 billion of total statutory capital, including contingency reserves.

Re One has no RIF 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 December 31, 2025, NMIC had $3.0 billion of cash and investments, including $15.0 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 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 December 31, 2024, NMIC generated $366 million of cash flow from operations and received an additional $229 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.

During the twelve-month period ended December 31, 2025, NMIC generated $414 million of cash flow from operations and received an additional $425 million of cash flow on the maturities, redemptions and sales of securities held in its investment portfolio.

scheduled path ( i.e.

, are of a contractually predetermined amount and due at a contractually predetermined date).

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Given the relatively small size of our current population of defaulted policies, the generally extended duration of the default-to-foreclosure-to-claim cycle, and the potential availability of forbearance, foreclosure moratorium and other borrower assistance programs (which serve to further extend the default-to-foreclosure-to-claim cycle timeline), we do not expect NMIC to use a meaningful amount of cash to settle claims in the near-term.

We believe that we have sufficient liquidity available at both NMIH and NMIC to meet our operating cash and capital obligations over the next 12 months.

Debt and Financial Strength Ratings

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

In January 2025, Fitch revised the outlook for all its ratings from stable to positive.

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

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

Consolidated Investment Portfolio

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Municipal debt securities 19 23

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

treasury securities and obligations of U.S.

government agencies 10 4

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

Asset-backed securities 2 1

U.S agency mortgage-backed securities

Total 100 % 100 %

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(3) Includes +/– ratings.

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

(4) We held one security with a BB rating at 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.

If three or more

ratings are available, we assign the middle rating for classification purposes, otherwise we assign the lowest rating.

If three or more ratings are available, we assign the middle rating for classification purposes, otherwise we assign the lowest rating.

Investment Securities - Allowance for credit losses

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Inclusions of tax deductions may include tax benefits from excess share-based compensation for vested RSUs and exercised stock options.

and exclusions from income may include the fair value fluctuation of our warrant liability.

At December 31, 2024, we had a federal net operating loss carryforward of $1.0 million, which expire in varying amounts in 2030 and 2031, and state net operating loss carryforwards of $135.2 million, which begin to expire in varying amounts in 2032.

Our ability to utilize our remaining federal net operating loss carryforward is restricted by Section 382 of the Internal Revenue Code (IRC), which imposes annual limitations if there is an “ownership change.” As a result of the acquisition of our insurance subsidiaries in 2012, $7.3 million of federal net operating losses were subject to annual limitations of $0.8 million through 2016, $0.5 million in 2017 and $0.3 million, thereafter, through 2028.

At December 31, 2025, we had a federal net operating loss carryforward of $0.7 million, which expires in varying amounts in 2030 and 2031, and state net operating loss carryforwards of $133.1 million, which begin to expire in varying amounts in 2032.

Our ability to utilize our remaining federal net operating loss carryforward is restricted by Section 382 of the Internal Revenue Code (IRC), which imposes annual utilization limitations in the event of an “ownership change.” As a result of the acquisition of our insurance subsidiaries in 2012, $7.3 million of federal net operating losses were subject to annual utilization limitations of $0.8 million through 2016, $0.5 million in 2017 and $0.3 million, thereafter through 2028.

Our remaining federal net operating loss carryforward balance is a result of this limitation.

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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.

The Inflation Reduction Act (IRA) enacted in August 2022 imposed, among other provisions, a 1% excise tax on the net value of stock repurchases made on or after January 1, 2023.

As of December 31, 2024, $80.1 million of repurchase authority remained available under the share repurchase program authorized by our Board of Directors through December 31, 2025.

We expect future repurchase amounts will be subject to the IRA excise tax as executed;

however, we do not currently expect the excise tax or other provisions of the IRA to have a material impact on our financial condition or result of operations.

Critical Accounting Estimates

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Insurance Premium Revenue Recognition

Premiums for primary mortgage insurance policies may be paid in a single payment at origination (single premium), on a monthly installment basis (monthly premium) or on an annual installment basis (annual premium), with such election and payment type fixed at policy inception.

Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life in accordance with the anticipated expiration of risk, which is primarily derived from the term of the mortgage loans, original LTV and the interest rate for each individual policy.

Premiums for primary mortgage insurance policies may be paid on a single, monthly or annual premium basis, with such election and payment type fixed at policy inception.

Premiums written at origination for single premium policies are initially deferred as unearned premiums and amortized into earnings over the estimated policy life in accordance with the anticipated expiration of risk, which is derived on an individual policy basis primarily from the term, original LTV and interest rate of the underlying insured mortgage.

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

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Reserve for Insurance Claims and Claim Expenses

We establish reserves for claims based on our best estimate of the ultimate claim costs for defaulted loans using the general principles contained in ASC 944, Financial Services - Insurance (ASC 944).

We establish reserves for claims based on our best estimate of the ultimate claim costs for defaulted loans.

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.

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We consider the appropriateness of such inputs at each fiscal quarter and conduct an actuarial review annually to evaluate and, if necessary, update these assumptions.

It is possible that a relatively small change in our estimates for claim frequency or claim severity could have a material impact on our reserve position and our consolidated results of operations, even in a stable macroeconomic environment.

At December 31, 2024, assuming all other estimates remain constant, a one percentage point increase/decrease in our average claim severity factor would cause approximately a +/- $1.4 million change in our reserve position, and a one percentage point increase/decrease in our average claim frequency factor cause approximately a +/- $4.8 million change in our reserve position.

Investments - Credit losses and Other Impairments

We have designated our investment portfolio as available-for-sale and report our invested assets at fair value.

Unrealized gains and losses in the portfolio, net of related tax expense or benefit, are recognized as a component of accumulated other comprehensive income (AOCI) in shareholders' equity.

Purchases and sales of investments are recorded on a trade date basis.

Net investment income is recognized when earned, and includes interest and dividend income together with amortization of market premiums and discounts using the effective yield method, and is net of investment management fees and other investment related expenses.

For asset-backed securities and any other holdings for which there is a prepayment risk, prepayment assumptions are evaluated and revised as necessary.

Any adjustments required due to changes in effective yields and prepayment assumptions are recognized on a prospective basis.

We recognize an impairment on a security through the consolidated statements of operations and comprehensive income if (i) we intend to sell the impaired security;

or (ii) it is more likely than not that we will be required to sell the impaired security prior to recovery of its amortized cost basis.

If a sale is intended or likely to be required, we write down the amortized cost basis of the security to fair value and recognize the full amount of the impairment through the consolidated statements of operations and comprehensive income as a “ Realized Investment Loss.”

For securities in an unrealized loss position where a sale is not intended or likely to be required, we further assess if the decline in fair value below amortized cost is driven by a credit related impairment, considering several items including, but not limited to:

• the severity of the decline in fair value;

• the financial condition of the issuer;

• the failure of the issuer to make scheduled interest or principal payments;

• recent rating downgrades of the applicable security or issuer by one or more nationally recognized statistical ratings organization;

• other adverse conditions related to or impacting the security or issuer.

To the extent we determine that a security impairment is credit-related, an impairment loss is recognized through the statement of operations as a provision for credit loss expense, and presented as a “Realized Investment Loss.” We recognize an allowance for credit losses for the difference between the amortized cost and present value of future expected cash flows, limited by the amount the fair value of the security is below its amortized cost.

Subsequent changes (favorable and unfavorable) in credit losses are recognized through the statement of operations as a provision for or a reversal of credit loss expense, and presented as a “Realized Investment Gain or Loss.” The portion of a security impairment attributed to other non-credit related factors is recognized in other comprehensive income, net of taxes.

Deferred Policy Acquisition Costs (DAC)

Costs directly associated with the successful acquisition of mortgage insurance policies, consisting of certain selling expenses and other policy issuance and underwriting expenses, are initially deferred and reported as DAC.

DAC is reviewed periodically to determine that it does not exceed recoverable amounts.

DAC is amortized to expense in proportion to estimated gross profits over the life of the associated policies.

We revise the rate of amortization to reflect actual experience and changes to our persistency or loss development assumptions, and may accelerate or slow such rate in future periods as experience and future changes to estimates dictate.

During the years ended December 31, 2024 and 2023, we slowed the rate and recognized a reduction of DAC amortization by $1.3 million and $7.3 million, respectively, due to the elevated persistency of certain prior book years' insurance in-force tied to a slowdown in the pace of mortgage refinancing activity in connection with the prevailing interest and mortgage rate environment.

It is possible that a relatively small change in our estimates of claim frequency or claim severity could have a material impact on our reserve position and our consolidated results of operations, even in a stable macroeconomic environment.

At December 31, 2025, assuming all other estimates remain constant, a one percentage point increase/decrease in our average claim frequency factor would have caused approximately a +/- $6.3 million change in our reserve position and a one percentage point increase/decrease in our average claim severity factor would have caused approximately a +/- $1.8 million change in our reserve position.

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-K

Item 7. Management’s Discussion and Analysis