NMI Holdings, Inc. 10-Q

Item 1. Financial Statements INDEX TO FINANCIAL STATEMENTS Condensed Consolidated Balance Sheets (Unaudited) 7 Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) 8 Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) 9 Condensed Consolidated Statements of Cash Flows (Unaudited) 11 Notes to Condensed Consolidated Financial Statements (Unaudited) 12 6 NMI HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) June 30, 2026 December 31, 2025 Assets (In Thousands, except for share data) Fixed maturities, available-for-sale, at fair value (amortized cost of $ 3,346,838 and $ 3,190,174 ) $ 3,257,940 $ 3,137,023 Cash and cash equivalents 72,122 43,937 Premiums receivable, net 86,778 86,259 Accrued investment income 30,874 27,253 Deferred policy acquisition costs, net 64,647 64,372 Software and equipment, net 20,755 21,727 Intangible assets and goodwill 3,634 3,634 Reinsurance recoverable 40,434 38,577 Prepaid federal income taxes 400,258 400,258 Other assets 19,933 18,058 Total assets $ 3,997,375 $ 3,841,098 Liabilities Debt $ 418,021 $ 417,031 Unearned premiums 41,506 46,660 Accounts payable and accrued expenses 98,597 101,595 Reserve for insurance claims and claim expenses 214,583 196,429 Deferred tax liability, net 511,347 478,890 Other liabilities 8,125 8,507 Total liabilities 1,292,179 1,249,112 Commitments and contingencies Shareholders' equity Common stock - $ 0.01 par value; 88,995,839 shares issued and 75,367,346 shares outstanding as of June 30, 2026 and 88,371,465 shares issued and 76,285,242 shares outstanding as of December 31, 2025 ( 250,000,000 shares authorized) 890 884 Additional paid-in capital 1,012,534 1,016,772 Treasury stock, at cost: 13,628,493 and 12,086,223 common shares as of June 30, 2026 and December 31, 2025, respectively ( 411,207 ) ( 351,772 ) Accumulated other comprehensive loss, net of tax ( 74,324 ) ( 46,083 ) Retained earnings 2,177,303 1,972,185 Total shareholders' equity 2,705,196 2,591,986 Total liabilities and shareholders' equity $ 3,997,375 $ 3,841,098 See accompanying notes to condensed consolidated financial statements (unaudited). 7 NMI HOLDINGS, INC. C ONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED) For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 (In Thousands, except for per share data) Revenues Net premiums earned $ 157,524 $ 149,066 $ 312,330 $ 298,432 Net investment income 30,331 24,949 58,935 48,635 Net realized investment losses ( 229 ) ( 400 ) ( 376 ) ( 376 ) Other revenues 265 164 477 334 Total revenues 187,891 173,779 371,366 347,025 Expenses Insurance claims and claim expenses 13,147 13,445 33,808 17,923 Underwriting and operating expenses 30,492 29,508 61,115 59,683 Service expenses 190 110 329 226 Interest expense 7,116 7,115 14,225 14,221 Total expenses 50,945 50,178 109,477 92,053 Income before income taxes 136,946 123,601 261,889 254,972 Income tax expense 31,158 27,450 56,771 56,262 Net income $ 105,788 $ 96,151 $ 205,118 $ 198,710 Earnings per share Basic $ 1.40 $ 1.23 $ 2.70 $ 2.54 Diluted $ 1.38 $ 1.21 $ 2.66 $ 2.50 Weighted average common shares outstanding Basic 75,779 77,987 75,977 78,197 Diluted 76,585 79,256 77,010 79,557 Net income $ 105,788 $ 96,151 $ 205,118 $ 198,710 Other comprehensive (loss) income, net of tax: Unrealized (losses) gains in accumulated other comprehensive loss, net of tax (benefit) expense of $( 1,686 ) and $ 5,570 for the three months ended June 30, 2026 and 2025, and $( 7,645 ) and $ 13,756 for the six months ended June 30, 2026 and 2025, respectively ( 6,345 ) 20,955 ( 28,761 ) 51,750 Reclassification adjustment for realized losses included in net income, net of tax benefit of $ 48 and $ 84 for the three months ended June 30, 2026 and 2025, and $ 138 and $ 79 for the six months ended June 30, 2026 and 2025, respectively 181 316 520 297 Other comprehensive (loss) income, net of tax ( 6,164 ) 21,271 ( 28,241 ) 52,047 Comprehensive income $ 99,624 $ 117,422 $ 176,877 $ 250,757 See accompanying notes to condensed consolidated financial statements (unaudited). 8 NMI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) Common Stock Additional Paid-in Capital Treasury Stock, At Cost Accumulated Other Comprehensive Loss Retained Earnings Total Shares Amount (In Thousands) Balances, December 31, 2025 76,285 $ 884 $ 1,016,772 $ ( 351,772 ) $ ( 46,083 ) $ 1,972,185 $ 2,591,986 Common stock: shares issued under stock plans, net of shares withheld for employee taxes 580 6 ( 13,772 ) — — — ( 13,766 ) Repurchase of common stock ( 716 ) — — ( 27,723 ) — — ( 27,723 ) Share-based compensation expense — — 4,682 — — — 4,682 Change in unrealized investment gains/losses, net of tax benefit of $ 5,869 — — — — ( 22,077 ) ( 22,077 ) Net income — — — — — 99,330 99,330 Balances, March 31, 2026 76,149 $ 890 $ 1,007,682 $ ( 379,495 ) $ ( 68,160 ) $ 2,071,515 $ 2,632,432 Common stock: shares issued under stock plans, net of shares withheld for employee taxes 44 * ( 454 ) — — — ( 454 ) Repurchase of common stock ( 826 ) — — ( 31,712 ) — — ( 31,712 ) Share-based compensation expense — — 5,306 — — — 5,306 Change in unrealized investment gains/losses, net of tax benefit of $ 1,638 — — — — ( 6,164 ) — ( 6,164 ) Net income — — — — — 105,788 105,788 Balances, June 30, 2026 75,367 $ 890 $ 1,012,534 $ ( 411,207 ) $ ( 74,324 ) $ 2,177,303 $ 2,705,196 * During the three months ended June 30, 2026, we issued 44,295 common shares with a par value of $ 0.01 in connection with the exercise of options and vesting of restricted stock units granted under our stock plans, which is not identifiable in this schedule due to rounding. 9 NMI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (UNAUDITED) Common Stock Additional Paid-in Capital Treasury Stock, At Cost Accumulated Other Comprehensive Loss Retained Earnings Total Shares Amount (In Thousands) Balances, December 31, 2024 78,601 $ 879 $ 1,004,692 $ ( 246,594 ) $ ( 124,804 ) $ 1,583,259 $ 2,217,432 Common stock: shares issued under stock plans, net of shares withheld for employee taxes 418 4 ( 7,654 ) — — — ( 7,650 ) Repurchase of common stock ( 718 ) — — ( 26,053 ) — — ( 26,053 ) Share-based compensation expense — — 4,507 — — — 4,507 Change in unrealized investment gains/losses, net of tax expense of $ 8,181 — — — — 30,776 — 30,776 Net income — — — — — 102,559 102,559 Balances, March 31, 2025 78,301 $ 883 $ 1,001,545 $ ( 272,647 ) $ ( 94,028 ) $ 1,685,818 $ 2,321,571 Common stock: shares issued under stock plans, net of shares withheld for employee taxes 44 1 ( 444 ) — — — ( 443 ) Repurchase of common stock ( 628 ) — — ( 23,400 ) — — ( 23,400 ) Share-based compensation expense — — 4,957 — — — 4,957 Change in unrealized investment gains/losses, net of tax expense of $ 5,654 — — — — 21,271 — 21,271 Net income — — — — — 96,151 96,151 Balances, June 30, 2025 77,717 $ 884 $ 1,006,058 $ ( 296,047 ) $ ( 72,757 ) $ 1,781,969 $ 2,420,107 See accompanying notes to condensed consolidated financial statements (unaudited). 10 NMI HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the six months ended June 30, 2026 2025 Cash flows from operating activities (In Thousands) Net income $ 205,118 $ 198,710 Adjustments to reconcile net income to net cash provided by operating activities: Net realized investment losses 376 376 Depreciation and amortization 4,956 5,726 Net accretion of discount on investment securities ( 1,298 ) ( 1,634 ) Amortization of debt discount and debt issuance costs 1,255 1,192 Deferred income taxes 39,964 41,361 Share-based compensation expense 9,988 9,464 Changes in operating assets and liabilities: Premiums receivable, net ( 519 ) ( 843 ) Accrued investment income ( 3,621 ) ( 1,990 ) Deferred policy acquisition costs, net ( 275 ) 179 Reinsurance recoverable ( 1,857 ) ( 445 ) Other assets ( 2,894 ) ( 6,089 ) Unearned premiums ( 5,154 ) ( 11,058 ) Reserve for insurance claims and claim expenses 18,154 10,962 Reinsurance balances, net — ( 132 ) Accounts payable and accrued expenses ( 5,472 ) ( 16,272 ) Net cash provided by operating activities 258,721 229,507 Cash flows from investing activities Purchase of short-term investments ( 88,548 ) ( 91,711 ) Purchase of fixed-maturity investments, available-for-sale ( 504,331 ) ( 253,319 ) Proceeds from maturities of short-term investments 86,625 55,100 Proceeds from maturities and redemptions of fixed-maturity investments, available-for-sale 138,631 137,935 Proceeds from sales of fixed-maturity investments, available-for-sale 214,753 13,563 Additions to software and equipment ( 3,481 ) ( 3,354 ) Net cash used in investing activities ( 156,351 ) ( 141,786 ) Cash flows from financing activities Proceeds from issuance of common stock related to employee equity plans 3,904 2,828 Taxes paid related to net share settlement of equity awards ( 18,124 ) ( 10,921 ) Repurchases of common stock ( 59,965 ) ( 49,923 ) Net cash used in financing activities ( 74,185 ) ( 58,016 ) Net increase in cash, cash equivalents and restricted cash 28,185 29,705 Cash, cash equivalents and restricted cash, beginning of period 43,937 54,308 Cash, cash equivalents and restricted cash, end of period $ 72,122 $ 84,013 Supplemental disclosures of cash flow information Interest paid $ 12,750 $ 18,700 Income taxes paid 14,164 22,811 See accompanying notes to condensed consolidated financial statements (unaudited). 11 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. Organization, Basis of Presentation and Summary of Accounting Principles NMI Holdings, Inc. (NMIH) is a Delaware corporation, incorporated in May 2011 to provide private mortgage guaranty insurance (which we refer to as mortgage insurance or MI) through its wholly-owned insurance subsidiaries, National Mortgage Insurance Corporation (NMIC) and National Mortgage Reinsurance Inc. One (Re One). Our common stock is listed on the Nasdaq exchange under the ticker symbol “NMIH.” NMIC, our primary insurance subsidiary, issued its first mortgage insurance policy in April 2013. NMIC is licensed to write mortgage insurance in all 50 states and the District of Columbia (D.C.). Re One historically provided reinsurance coverage to NMIC in accordance with certain statutory risk retention requirements. Such requirements have been repealed and the reinsurance coverage provided by Re One to NMIC has been commuted. Re One remains a wholly-owned, licensed insurance subsidiary; however, it does not currently have active insurance exposures. In August 2015, NMIH capitalized a wholly-owned subsidiary, NMI Services, Inc. (NMIS), through which we offer outsourced loan review services to mortgage loan originators. We operate as a single segment for the purposes of assessing performance and making operating decisions. Basis of Presentation The accompanying unaudited condensed consolidated financial statements, which include the results of NMIH and its wholly-owned subsidiaries, have been prepared in accordance with the instructions to Form 10-Q as prescribed by the SEC for interim reporting and include other information and disclosures required by accounting principles generally accepted in the U.S. (GAAP). Our accounts are maintained in U.S. dollars. These statements should be read in conjunction with our consolidated financial statements and notes thereto for the year ended December 31, 2025, included in our 2025 10-K. All intercompany transactions have been eliminated. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities as of the balance sheet date, as well as reported amounts of income and expenses for the reporting period. Actual results could differ from those estimates. In the opinion of management, these unaudited condensed consolidated financial statements include all adjustments (including normal recurring adjustments) that are necessary to present a fair statement of financial position, results of operations and cash flows for the periods presented. The results of operations for the interim period may not be indicative of the results that may be expected for the full year ending December 31, 2026. Significant Accounting Principles There have been no changes to our significant accounting principles as described in Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 2 - Summary of Accounting Principles” of our 2025 10-K. Recent Accounting Pronouncements – Not Yet Adopted In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expense (Topic 220). The update expands disclosure requirements related to certain income statement expenses, including a requirement to provide a tabular disaggregation of certain operating expenses by category. The standard will take effect for all public business entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. We are currently evaluating the impact the adoption of this ASU will have, if any, on our consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Targeted Accounting for Internal-Use Software (Topic 350). The update clarifies the criteria surrounding the capitalization of certain costs and expands related disclosure requirements. The standard will take effect for all public business entities for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the impact the adoption of this ASU will have, if any, on our consolidated financial statements. 12 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 2. Investments We hold all investments on an available-for-sale basis at fair value on our condensed consolidated balance sheets and evaluate each position quarterly for impairment. We recognize an impairment on a security through the statement of operations 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 recognize an impairment loss equivalent to the difference of the amortized cost basis of the security and its fair value through the condensed consolidated statements of operations and comprehensive income as a “ Net Realized Investment Loss .” In the event of an impairment of a security that we intend to and have the ability to hold to maturity, we evaluate the drivers of the impairment to determine the portion that is credit related and the portion that is non-credit related. The portion of impairment loss that is attributed to credit related factors is recognized through the statement of operations as a provision for credit loss and the portion that is attributed to non-credit related factors is recognized in other comprehensive income, net of taxes. Fair Values and Gross Unrealized Gains and Losses on Investments Amortized Cost Gross Unrealized Fair Value Gains Losses As of June 30, 2026 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 219,938 $ 343 $ ( 5,481 ) $ 214,800 Municipal debt securities 593,325 760 ( 28,261 ) 565,824 Corporate debt securities 2,251,283 9,065 ( 61,801 ) 2,198,547 U.S. agency mortgage-backed securities (1) 39,399 — ( 492 ) 38,907 Other asset-backed securities 153,714 40 ( 3,033 ) 150,721 Total bonds 3,257,659 10,208 ( 99,068 ) 3,168,799 Short-term investments 89,179 — ( 38 ) 89,141 Total investments $ 3,346,838 $ 10,208 $ ( 99,106 ) $ 3,257,940 Amortized Cost Gross Unrealized Fair Value Gains Losses As of December 31, 2025 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 306,168 $ 2,544 $ ( 1,684 ) $ 307,028 Municipal debt securities 635,396 3,052 ( 26,879 ) 611,569 Corporate debt securities 2,047,122 27,504 ( 55,015 ) 2,019,611 U.S. agency mortgage-backed securities (1) 42,109 10 ( 48 ) 42,071 Other asset-backed securities 72,774 — ( 2,649 ) 70,125 Total bonds 3,103,569 33,110 ( 86,275 ) 3,050,404 Short-term investments 86,605 15 ( 1 ) 86,619 Total investments $ 3,190,174 $ 33,125 $ ( 86,276 ) $ 3,137,023 (1) 100 % of our U.S. agency mortgage-backed securities at June 30, 2026 and December 31, 2025 were guaranteed by Ginnie Mae, which has the full faith and credit of the U.S. federal government. 13 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table presents a breakdown of the fair value of our corporate debt securities by issuer industry group as of June 30, 2026 and December 31, 2025: June 30, 2026 December 31, 2025 Financial 41 % 39 % Consumer 27 28 Industrial 10 9 Utilities 9 11 Technology 6 6 Communications 5 6 Basic Materials 2 1 Total 100 % 100 % As of both June 30, 2026 and December 31, 2025, approximately $ 5.4 million of our cash and investments were held in the form of U.S. Treasury securities on deposit with various state insurance departments to satisfy regulatory requirements. Scheduled Maturities The amortized cost and fair value of available-for-sale securities as of June 30, 2026 and December 31, 2025, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities and other asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories. As of June 30, 2026 Amortized Cost Fair Value (In Thousands) Due in one year or less $ 367,919 $ 365,515 Due after one through five years 1,562,455 1,501,354 Due after five through ten years 1,161,537 1,140,487 Due after ten years 61,814 60,956 U.S. agency mortgage-backed securities 39,399 38,907 Other asset-backed securities 153,714 150,721 Total investments $ 3,346,838 $ 3,257,940 As of December 31, 2025 Amortized Cost Fair Value (In Thousands) Due in one year or less $ 292,846 $ 292,232 Due after one through five years 1,713,613 1,672,123 Due after five through ten years 1,062,039 1,053,628 Due after ten years 6,793 6,844 U.S. agency mortgage-backed securities 42,109 42,071 Other asset-backed securities 72,774 70,125 Total investments $ 3,190,174 $ 3,137,023 Aging of Unrealized Losses As of June 30, 2026, the investment portfolio had gross unrealized losses of $ 99.1 million, of which $ 85.3 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, 2025, the investment portfolio had gross unrealized losses of $ 86.3 million, of which $ 84.3 million were associated with securities that had been in an unrealized loss position for a period of twelve months or longer. For those securities in an unrealized loss position, the length of time the securities were in such a position is as follows: 14 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of June 30, 2026 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 18 $ 192,601 $ ( 5,474 ) 1 $ 534 $ ( 7 ) 19 $ 193,135 $ ( 5,481 ) Municipal debt securities 6 32,254 ( 98 ) 200 436,770 ( 28,163 ) 206 469,024 ( 28,261 ) Corporate debt securities 126 654,587 ( 7,645 ) 143 730,591 ( 54,156 ) 269 1,385,178 ( 61,801 ) U.S. agency mortgage-backed securities 3 38,907 ( 492 ) — — — 3 38,907 ( 492 ) Other asset-backed securities 12 83,725 ( 104 ) 14 19,930 ( 2,929 ) 26 103,655 ( 3,033 ) Short-term investments 7 88,755 ( 38 ) — — — 7 88,755 ( 38 ) Total 172 $ 1,090,829 $ ( 13,851 ) 358 $ 1,187,825 $ ( 85,255 ) 530 $ 2,278,654 $ ( 99,106 ) Less Than Twelve Months Twelve Months or Greater Total # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses # of Securities Fair Value Unrealized Losses As of December 31, 2025 ($ In Thousands) U.S. Treasury securities and obligations of U.S. government agencies 11 $ 204,062 $ ( 1,673 ) 5 $ 1,993 $ ( 11 ) 16 $ 206,055 $ ( 1,684 ) Municipal debt securities — — — 215 477,095 ( 26,879 ) 215 477,095 ( 26,879 ) Corporate debt securities 13 43,546 ( 209 ) 159 836,050 ( 54,806 ) 172 879,596 ( 55,015 ) U.S. agency mortgage-backed securities 2 27,109 ( 48 ) — — — 2 27,109 ( 48 ) Other asset-backed securities 7 33,836 ( 53 ) 16 36,289 ( 2,596 ) 23 70,125 ( 2,649 ) Short-term investments 1 24,778 ( 1 ) — — — 1 24,778 ( 1 ) Total 34 $ 333,331 $ ( 1,984 ) 395 $ 1,351,427 $ ( 84,292 ) 429 $ 1,684,758 $ ( 86,276 ) Allowance for Credit Losses As of June 30, 2026 and December 31, 2025, we did not recognize an allowance for credit loss for any security in the investment portfolio and we did not record any provision for credit loss for investment securities during the three or six months ended June 30, 2026 or 2025. We evaluated the securities in an unrealized loss position as of June 30, 2026, 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 June 30, 2026 are not indicative of the ultimate collectability of the current amortized cost of the securities. Rather, the unrealized losses on securities held as of June 30, 2026 were primarily driven by fluctuations in interest rates, and to a lesser extent, movements in credit spreads following the purchase of those securities. 15 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Net Investment Income The following table presents the components of net investment income: For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 (In Thousands) Investment income (1) $ 30,682 $ 25,263 $ 59,635 $ 49,298 Investment expenses ( 351 ) ( 314 ) ( 700 ) ( 663 ) Net investment income $ 30,331 $ 24,949 $ 58,935 $ 48,635 (1) Includes interest income recognized on cash and cash equivalents of $ 0.8 million and $ 1.7 million during the three and six months ended June 30, 2026, respectively, and $ 1.1 million and $ 2.0 million during the three and six months ended June 30, 2025, respectively. The following table presents the components of net realized investment losses: For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 (In Thousands) Gross realized investment gains $ 722 $ — $ 1,768 $ 24 Gross realized investment losses ( 951 ) ( 400 ) ( 2,144 ) ( 400 ) Net realized investment losses $ ( 229 ) $ ( 400 ) $ ( 376 ) $ ( 376 ) 3. Fair Value of Financial Instruments The following describes the valuation techniques used by us to determine the fair value of our financial instruments: We established a fair value hierarchy by prioritizing the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this standard are described below: Level 1 – Fair value measurements based on quoted prices in active markets that we have the ability to access for identical assets or liabilities. Market price data generally is obtained from exchange or dealer markets. We do not adjust the quoted price for such instruments. Level 2 – Fair value measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 – Fair value measurements based on valuation techniques that use significant inputs that are unobservable. Both observable and unobservable inputs may be used to determine the fair values of positions classified in Level 3. The circumstances for using these measurements include those in which there is little, if any, market activity for the asset or liability. Therefore, we must make certain assumptions, which require significant management judgment or estimation about the inputs a hypothetical market participant would use to value that asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy is determined based on the lowest level input that is significant to the fair value measurement in its entirety. Assets Classified as Level 1 and Level 2 To determine the fair value of securities available-for-sale in Level 1 and Level 2 of the fair value hierarchy, independent pricing sources have been utilized. One price is provided per security based on observable market data. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing sources and believe that their policies adequately consider market activity, either based on specific transactions for the 16 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. A variety of inputs are utilized by the independent pricing sources including benchmark yields, reported trades, non-binding broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including data published in market research publications. Inputs may be weighted differently for any security, and not all inputs are used for each security evaluation. Market indicators, industry and economic events are also considered. This information is evaluated using a multidimensional pricing model. Quality controls are performed by the independent pricing sources throughout this process, which include reviewing tolerance reports, trading information and data changes, and directional moves compared to market moves. This model combines all inputs to arrive at a value assigned to each security. We have not made any adjustments to the prices obtained from the independent pricing sources. The following tables present our financial instruments that are measured at fair value on a recurring basis by hierarchy level: Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value As of June 30, 2026 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 214,800 $ — $ — $ 214,800 Municipal debt securities — 565,824 — 565,824 Corporate debt securities — 2,198,547 — 2,198,547 U.S. agency mortgage-backed securities — 38,907 — 38,907 Other asset-backed securities — 150,721 — 150,721 Cash, cash equivalents and short-term investments 161,263 — — 161,263 Total assets $ 376,063 $ 2,953,999 $ — $ 3,330,062 Fair Value Measurements Using Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Fair Value As of December 31, 2025 (In Thousands) U.S. Treasury securities and obligations of U.S. government agencies $ 307,028 $ — $ — $ 307,028 Municipal debt securities — 611,569 — 611,569 Corporate debt securities — 2,019,611 — 2,019,611 U.S. agency mortgage-backed securities — 42,071 — 42,071 Other asset-backed securities — 70,125 — 70,125 Cash, cash equivalents and short-term investments 130,556 — — 130,556 Total assets $ 437,584 $ 2,743,376 $ — $ 3,180,960 There were no transfers between Level 2 and Level 3 of the fair value hierarchy during the six months ended June 30, 2026 or the year ended December 31, 2025. Financial Instruments Not Measured at Fair Value On May 21, 2024, we issued $ 425 million aggregate principal amount of senior unsecured notes that mature on August 15, 2029 (the 2024 Notes). At June 30, 2026, the 2024 Notes were carried at an amortized cost of $ 418.0 million, net of unamortized debt issuance costs and an original issue discount totaling $ 7.0 million, and had a fair value of $ 434.0 million as assessed under our Level 2 hierarchy. At December 31, 2025, the 2024 Notes were carried at an amortized cost of $ 417.0 million, net of unamortized debt issuance costs and an original issue discount totaling $ 8.0 million, and had a fair value of $ 441.3 million. 17 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 4. Debt Senior Unsecured Notes At June 30, 2026, we had $ 425 million aggregate principal amount of senior unsecured notes outstanding. The 2024 Notes were issued pursuant to an indenture, dated May 21, 2024, and bear interest at a rate of 6.00 %, payable semi-annually on February 15 and August 15. The 2024 Notes mature on August 15, 2029. We may elect to redeem the 2024 Notes in whole or in part at any time prior to July 15, 2029 at a price equal to the greater of (1) the aggregate principal balance outstanding plus the present value of all future interest payments due through July 15, 2029, and (2) the aggregate principal balance due plus any accrued and unpaid interest. We may elect to redeem the 2024 Notes in whole or in part at any time on or after July 15, 2029 at a price equal to 100 % of the aggregate principal amount of the 2024 Notes to be redeemed plus accrued and unpaid interest thereon . In connection with the 2024 Notes offering, we recorded capitalized debt issuance costs and an original issue discount of $ 10.9 million. Such amount will be amortized over the contractual life of the 2024 Notes using the effective interest method and included in interest expense. The effective interest rate on the 2024 Notes is 6.583 %. At June 30, 2026 and December 31, 2025, $ 7.0 million and $ 8.0 million, respectively, of unamortized debt issuance costs and original issue discount remained. At both June 30, 2026 and December 31, 2025, $ 9.6 million of accrued and unpaid interest on the 2024 Notes was included in “Accounts Payable and Accrued Expenses” on our condensed consolidated balance sheets. Revolving Credit Facility On April 29, 2024, we entered into a new $ 250 million five-year unsecured revolving credit facility (the 2024 Revolving Credit Facility) to replace our then outstanding $ 250 million four-year secured revolving credit facility (the 2021 Revolving Credit Facility). The 2024 Revolving Credit Facility matures on May 21, 2029. Borrowings under the 2024 Revolving Credit Facility may be used for general corporate purposes, including to support growth, new business production and operations, and accrue interest at a variable rate equal to, at our discretion, (i) a Base Rate (as defined in the 2024 Revolving Credit Facility) subject to a floor of 1.00 % per annum plus a margin of 0.375 % to 1.875 % per annum, or (ii) the Adjusted Term Secured Overnight Financing Rate (SOFR, as defined in the 2024 Revolving Credit Facility) plus a margin of 1.375 % to 2.875 % per annum, with the margin in each of (i) or (ii) based on our applicable corporate credit rating at the time. As of June 30, 2026 and December 31, 2025, no amounts were drawn under the 2024 Revolving Credit Facility. Under the 2024 Revolving Credit Facility, we are 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 June 30, 2026, the applicable commitment fee was 0.175 %. For the three and six months ended June 30, 2026, we recorded $ 0.1 million and $ 0.2 million, respectively, of commitment fees in interest expense. We incurred debt issuance costs of $ 2.1 million in connection with the 2024 Revolving Credit Facility and had $ 0.6 million of unamortized debt issuance costs associated with the 2021 Revolving Credit Facility remaining at the time of its replacement. Combined unamortized debt issuance costs are amortized through interest expense on a straight-line basis over the contractual life of the 2024 Revolving Credit Facility. At June 30, 2026 and December 31, 2025, remaining unamortized deferred debt issuance costs of $ 1.5 million and $ 1.8 million, respectively, were recorded in “Other Assets” on our condensed consolidated balance sheets. Under the 2024 Revolving Credit Facility we are subject to certain covenants, 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 private mortgage insurer eligibility requirements (PMIERs). We were in compliance with all covenants at June 30, 2026. 18 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 5. Reinsurance We enter into third-party reinsurance transactions to actively manage our risk, ensure compliance with PMIERs, state regulatory and other applicable capital requirements, (respectively, as defined therein), and support the growth of our business. The Wisconsin Office of the Commissioner of Insurance (Wisconsin OCI) has approved and the GSEs have indicated their non-objection to all such transactions (subject to certain conditions and ongoing review). The effect of our reinsurance agreements on premiums written and earned is as follows: For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 (In Thousands) Net premiums written Direct $ 187,213 $ 177,914 $ 373,219 $ 352,329 Ceded (1) ( 31,864 ) ( 33,861 ) ( 66,044 ) ( 64,890 ) Net premiums written $ 155,349 $ 144,053 $ 307,175 $ 287,439 Net premiums earned Direct $ 189,388 $ 182,931 $ 378,374 $ 363,387 Ceded (1) ( 31,864 ) ( 33,865 ) ( 66,044 ) ( 64,955 ) Net premiums earned $ 157,524 $ 149,066 $ 312,330 $ 298,432 (1) Net of profit commission. Quota Share Reinsurance NMIC is party to nine quota share reinsurance treaties – the 2018 QSR Transaction, effective January 1, 2018, the 2020 QSR Transaction, effective April 1, 2020, 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, the 2024 QSR Transaction, effective January 1, 2024, the 2025 QSR Transaction, effective January 1, 2025, and the 2026 QSR Transaction, effective January 1, 2026 – 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 in exchange for reimbursement of ceded claims and claim expenses on covered policies, a ceding commission and a profit commission (up to a contractually defined maximum) that varies directly and inversely with ceded claims. NMIC holds optional termination rights which provide it with the discretion to terminate each QSR Transaction on or after a specified date. NMIC may also 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. 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. 19 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table presents the inception date, covered production period, ceding commission and profit commission for each outstanding QSR Transaction. Current amounts are presented as of June 30, 2026. Inception Date Covered Production Ceding Percentage Ceding Commission Profit Commission 2018 QSR 1/1/2018 1/1/2018 – 12/31/2018 1/1/2019 – 12/31/2019 16% 13% (1) 42 % up to 45 % 2020 QSR 4/1/2020 4/1/2020 – 12/31/2020 21 % 45 % up to 45 % 2021 QSR 1/1/2021 1/1/2021 – 10/30/2021 20 % 35 % up to 54 % 2022 QSR 10/1/2021 10/30/2021 – 12/31/2022 20 % 20 % up to 68 % 2022 Seasoned QSR 7/1/2022 1/1/2013 – 12/31/2016 7/1/2019 –3/31/2020 48 % (2) 53 % up to 38 % 2023 QSR 1/1/2023 1/1/2023 – 12/31/2023 20 % 20 % up to 63 % 2024 QSR 1/1/2024 1/1/2024 – 12/31/2024 20 % 20 % up to 56 % 2025 QSR 1/1/2025 1/1/2025 – 12/31/2025 20 % 20 % up to 62 % 2026 QSR 1/1/2026 1/1/2026 – 12/31/2026 25 % 21 % up to 61 % (1) Under the terms of the 2018 QSR Transaction, NMIC cedes premiums earned related to 16 % of the risk on eligible policies written in 2018 and 13 % of the risk on eligible policies written in 2019. (2) Under the terms of the 2022 Seasoned QSR Transaction, NMIC cedes premiums earned related to 48 % of the risk on eligible policies after the consideration of coverage provided under any other QSR Transaction. NMIC has also entered into two additional quota share reinsurance treaties that will provide sequential coverage for mortgage insurance policies to be written in 2027 and 2028 (the 2027 QSR Transaction and 2028 QSR Transaction). Under the terms of the 2027 QSR Transaction, NMIC will cede premiums earned related to 35 % of the risk on eligible policies written between January 1, 2027 and December 31, 2027. Under the terms of the 2028 QSR Transaction, NMIC will cede premiums earned related to 25 % of the risk on eligible policies written between January 1, 2028 and December 31, 2028. The following table shows amounts related to the QSR Transactions: As of and for the three months ended June 30, As of and for the six months ended June 30, 2026 2025 2026 2025 (In Thousands) Ceded risk-in-force $ 12,637,648 $ 12,764,708 $ 12,637,648 $ 12,764,708 Ceded premiums earned ( 38,505 ) ( 40,227 ) ( 76,435 ) ( 81,238 ) Ceded claims and claim expenses (1) 3,127 3,253 8,017 3,776 Ceding commission earned 10,172 9,669 20,377 19,437 Profit commission 19,400 19,958 36,531 43,356 (1) Includes a $ 0.3 million termination fee for the three and six months ended June 30, 2025 incurred in connection with the amendment of certain QSR Transactions. NMIC had aggregate reinsurance recoverables related to the QSR Transactions of $ 40.4 million and $ 38.6 million as of June 30, 2026 and December 31, 2025, respectively. NMIC's reinsurance recoverable balance is supported by collateral trust accounts established and maintained by each reinsurer in accordance with the terms of the QSR Transactions and the PMIERs funding requirements for risk ceded to non-affiliated reinsurers. We remain directly liable for all claim payments if we are unable to collect the recoverables due from our reinsurers and establish an allowance for expected credit loss against our reinsurance recoverable if we do not expect to recover amounts due from one or more of our reinsurance counterparties. Our reinsurance recoverable is reported net of such allowance, if any. We actively monitor the counterparty credit profiles of our reinsurers and each is required to partially collateralize its obligations under the terms of the QSR Transactions. The allowance for credit loss established against our reinsurance recoverable was deemed immaterial as of June 30, 2026 and December 31, 2025. 20 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Excess-of-loss Reinsurance Traditional Reinsurance NMIC is party to nine 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, the 2025 XOL Transaction, effective January 1, 2025, the 2026-1 XOL Transaction, effective January 1, 2026, and the 2026-2 XOL Transaction, effective April 1, 2026 – 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. Under the terms of the XOL Transactions, NMIC makes risk premium payments to its third-party reinsurance providers for the outstanding reinsurance coverage amount and ceded aggregate premiums earned of $ 11.2 million and $ 22.2 million during the three and six months ended June 30, 2026, respectively, and $ 10.4 million and $ 20.5 million during the three and six months ended June 30, 2025, respectively. NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under each agreement. NMIC did not cede any incurred losses on covered policies under the XOL Transactions during the three and six months ended June 30, 2026 and 2025, as the aggregate first layer risk retention for each agreement was not exhausted during such periods. NMIC holds optional termination rights which provide it with 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 Global Ratings (S&P), A.M. Best Company Inc. (A.M. Best) or both. 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 XOL Transaction. Current amounts are presented as of June 30, 2026. 21 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) ($ 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 April 1, 2022 10/1/2021 – 3/31/2022 $ 289,741 $ 125,849 $ 133,366 $ 127,071 2022-2 XOL July 1, 2022 4/1/2022 – 6/30/2022 154,306 102,346 78,906 70,282 2022-3 XOL October 1, 2022 7/1/2022 – 9/30/2022 96,779 67,726 106,265 98,355 2023-1 XOL January 1, 2023 10/1/2022 – 6/30/2023 89,864 53,594 146,513 139,186 2023-2 XOL July 1, 2023 7/1/2023 – 12/31/2023 100,777 52,089 136,875 133,319 2024 XOL January 1, 2024 1/1/2024 – 12/31/2024 162,500 127,186 312,172 309,628 2025 XOL January 1, 2025 1/1/2025 – 12/31/2025 283,849 265,838 321,331 321,279 2026-1 XOL (2) January 1, 2026 1/1/2026 – 12/31/2026 98,359 98,359 183,282 183,282 2026-2 XOL (3) April 1, 2026 10/1/2020 - 3/31/2021 148,109 140,691 17,042 17,042 (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) The initial reinsurance coverage, current reinsurance coverage, initial first layer retained loss and current first layer retained loss for the 2026-1 XOL Transaction will increase as incremental covered production is ceded under the transaction through December 31, 2026. (3) The 2026-2 XOL Transaction provides excess-of-loss coverage for mortgage insurance policies previously covered under the reinsurance agreement with Oaktown Re VI Ltd. NMIC has also entered into two additional excess-of-loss reinsurance treaties that will incept and provide coverage in future periods. The 2026-3 XOL Transaction will incept on October 1, 2026 and provide $ 160 million of aggregate excess-of-loss coverage for mortgage insurance policies covered under the existing 2021-2 ILN Transaction, and the 2027 XOL Transaction will provide $ 125 million of aggregate excess-of-loss coverage for mortgage insurance policies to be written in 2027. Insurance-Linked Notes NMIC is party to a reinsurance agreement with Oaktown Re VII Ltd. (a special purpose reinsurance entity referred to as Oaktown Re) effective October 26, 2021 that provides aggregate excess-of-loss reinsurance coverage on a defined portfolio of mortgage insurance policies originated between April 1, 2021 and September 30, 2021. Under the agreement, NMIC retains $ 146.2 million of first layer aggregate loss exposure on covered policies and Oaktown Re then provides second layer loss protection up to the outstanding reinsurance coverage amount. NMIC then retains losses in excess of the reinsurance coverage amount. The reinsurance coverage amount provided by Oaktown Re decreases from $ 363.6 million at inception over a 12.5 year period as the underlying insured mortgages are amortized or repaid, and/or the mortgage insurance coverage is canceled, and was $ 149.0 million as of June 30, 2026. The outstanding reinsurance coverage amount stops amortizing if certain credit enhancement or delinquency thresholds, as defined in the agreement, are triggered. NMIC makes risk premium payments to Oaktown Re for the applicable outstanding reinsurance coverage amount and pays an additional amount for anticipated operating expenses (capped at $ 250 thousand per year). Under the terms of the excess-of-loss reinsurance agreement, Oaktown Re is required to fully collateralize its outstanding reinsurance coverage amount to NMIC with funds deposited into a segregated reinsurance trust. Such trust funds are required to be invested in short-term U.S. Treasury money market funds at all times. Oaktown Re financed its collateral requirement through the issuance of mortgage insurance-linked notes to unaffiliated investors. Such insurance-linked notes mature 12.5 years from the inception date of their associated reinsurance agreement. As the reinsurance coverage decreases, a corresponding amount of collateral held in trust by Oaktown Re is distributed to noteholders as amortization of the outstanding insurance-linked note principal balance. We refer to NMIC’s reinsurance agreement with and the insurance-linked note issued by Oaktown Re as the 2021-2 ILN Transaction. NMIC applies claims paid on covered policies against its first layer aggregate retained loss exposure under the Oaktown Re excess-of-loss agreement. NMIC did not cede any incurred losses on covered policies to Oaktown Re during the three and six months ended June 30, 2026 and 2025, as the aggregate first layer risk retention was not exhausted during such periods. The first layer aggregate retained loss layer was $ 142.5 million as of June 30, 2026. NMIC holds optional termination rights under the 2021-2 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 22 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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 the agreement. In addition, there are certain events that trigger mandatory termination of the agreement, including NMIC’s failure to pay premiums or consent to reductions in a trust account to make principal payments to noteholders, among others. NMIC has previously been party to other insurance-linked note transactions that it has elected to terminate in accordance with their respective terms. Effective April 27, 2026, NMIC exercised its optional call to terminate a reinsurance agreement with and the associated insurance-linked notes issued by Oaktown Re VI Ltd. In connection with the termination, NMIC's excess of loss reinsurance agreement with Oaktown Re VI Ltd. was commuted and the insurance-linked notes issued by Oaktown Re VI Ltd. were redeemed in full with a distribution of remaining collateral assets. NMIC ceded aggregate premiums in connection with current and previously outstanding insurance-linked notes transactions of $ 1.5 million and $ 3.9 million during the three and six months ended June 30, 2026, respectively, and $ 3.2 million and $ 6.6 million during the three and six months ended June 30, 2025, respectively. 6. Reserves for Insurance Claims and Claim Expenses We hold gross reserves in an amount equal to the estimated liability for insurance claims and claim expenses related to defaults on insured mortgage 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. 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) reserves. We also establish reserves for claim expenses, which represent the estimated cost of the claim administration process, including legal and other fees, as well as other general expenses of administering the claim settlement process. As of June 30, 2026, we held gross reserves for insurance claims and claim expenses of $ 214.6 million. During the six months ended June 30, 2026, we paid 353 claims totaling $ 23.7 million, including 340 claims covered under the QSR Transactions representing $ 4.5 million of ceded claims and claim expenses. We had 8,020 loans in default in our primary insured portfolio as of June 30, 2026, which represented a 1.16 % default rate against 694,273 total policies in-force, and 7,661 loans in default in our primary insured portfolio as of December 31, 2025, which represented a 1.12 % default rate against 684,058 total policies in-force. The size of the reserve we establish for each defaulted loan (and by extension our aggregate reserve for claims and claim expenses) reflects our best estimate of the future claim payment to be made for each individual loan in default. Our future claims exposure is a function of the number of defaulted loans that progress to claim payment (which we refer to as frequency) and the amount to be paid to settle such claims (which we refer to as severity). Our estimates of claims frequency and severity are not formulaic, rather they are broadly synthesized based on historical observed experience for similarly situated loans and assumptions about future macroeconomic factors. 23 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table provides a reconciliation of the beginning and ending gross reserve balances for insurance claims and claim expenses: For the six months ended June 30, 2026 2025 (In Thousands) Beginning balance $ 196,429 $ 152,071 Less reinsurance recoverables (1) ( 38,577 ) ( 32,260 ) Beginning balance, net of reinsurance recoverables 157,852 119,811 Add claims incurred: Claims and claim expenses incurred: Current year (2) 74,453 61,356 Prior years (3) ( 40,645 ) ( 43,766 ) Total claims and claim expenses incurred (4) 33,808 17,590 Less claims paid: Claims and claim expenses paid: Current year (2) 39 110 Prior years (3) 19,142 8,469 Reinsurance terminations (5) ( 1,670 ) ( 1,506 ) Total claims and claim expenses paid 17,511 7,073 Reserve at end of period, net of reinsurance recoverables 174,149 130,328 Add reinsurance recoverables (1) 40,434 32,705 Ending balance $ 214,583 $ 163,033 (1) Related to ceded losses recoverable under the QSR Transactions. See Note 5, “ Reinsurance” for additional information. (2) Related to insured loans with their most recent defaults occurring in the current year. 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 $ 61.4 million attributed to net case reserves and $ 11.8 million attributed to net IBNR reserves for the six months ended June 30, 2026 and $ 51.5 million attributed to net case reserves and $ 8.8 million attributed to net IBNR reserves for the six months ended June 30, 2025. (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 $ 28.8 million attributed to net case reserves and $ 10.8 million attributed to net IBNR reserves for the six months ended June 30, 2026 and $ 34.9 million attributed to net case reserves and $ 8.1 million attributed to net IBNR reserves for the six months ended June 30, 2025. (4) Excludes aggregate termination fees of $ 0.3 million for the six months ended June 30, 2025 incurred in connection with the amendment of certain QSR Transactions. (5) Represents the settlement of reinsurance recoverables in conjunction with the termination or 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. The amount of claims incurred relating to current year defaults increased during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to an increase in the total number of new delinquencies emerging during the period tied to the growth and natural seasoning of our portfolio. Our provision for claims and claim expenses during both the six months ended June 30, 2026 and 2025 benefited from favorable development on prior year defaults. We recognized $ 40.6 million and $ 43.8 million of favorable prior year development during the six months ended June 30, 2026 and 2025, respectively, primarily due to cure activity and ongoing analysis of recent loss development trends. 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 $ 122.6 million related to prior year defaults remained as of June 30, 2026. 24 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 7. Earnings per Share (EPS) Basic EPS is based on the weighted average number of shares of common stock outstanding. Diluted EPS is based on the weighted average number of shares of common stock outstanding and common stock equivalents that would be issuable upon the vesting of service-based and performance and service-based restricted stock units (RSUs), and the exercise of vested and unvested stock options. The following table reconciles the net income and the weighted average shares of common stock outstanding used in the computations of basic and diluted EPS of common stock: For the three months ended June 30, For the six months ended June 30, 2026 2025 2026 2025 (In Thousands, except for per share data) Net income – basic and diluted $ 105,788 $ 96,151 $ 205,118 $ 198,710 Basic weighted average shares outstanding 75,779 77,987 75,977 78,197 Dilutive effect of issuable shares 806 1,269 1,033 1,360 Diluted weighted average shares outstanding 76,585 79,256 77,010 79,557 Earnings per share Basic $ 1.40 $ 1.23 $ 2.70 $ 2.54 Diluted $ 1.38 $ 1.21 $ 2.66 $ 2.50 Anti-dilutive shares 1 — 3 — 8. Segment Reporting We manage our business activities on a consolidated basis under a single reportable operating segment and our Chief Executive Officer (CEO) serves as our Chief Operating Decision Maker (CODM). Our Mortgage Insurance segment provides private mortgage insurance and ancillary loan review services, and our CODM evaluates our performance and allocates resources based on our consolidated financial results, including consolidated revenue, expenses, net income, assets and shareholders' equity. Our CODM reviews consolidated net income to assess segment profit and loss, and also evaluates the broader set of metrics to gauge our financial performance and make strategic decisions, such as whether to reinvest profits in our Mortgage Insurance segment or return capital to shareholders. The significant revenue and expense categories that are regularly reviewed by our CODM align with those presented on our condensed consolidated statements of operations and comprehensive income, and segment assets align with total assets as presented on our condensed consolidated balance sheets. The accounting policies governing our Mortgage Insurance segment are the same as those described in Item 8, “ Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 2 - Summary of Accounting Principles” of our 2025 10-K. Investment income, also referred to as interest revenue, is reported within “ Net Investment Income ” on our condensed consolidated statements of operations and was $ 30.7 million and $ 59.6 million for the three and six months ended June 30, 2026, respectively, and $ 25.3 million and $ 49.3 million for the three and six months ended June 30, 2025, respectively . Amortization and depreciation expense for software, equipment, and leasehold improvements was $ 2.5 million and $ 5.0 million for the three and six months ended June 30, 2026, respectively, and $ 2.8 million and $ 5.7 million for the three and six months ended June 30, 2025, respectively. 9. Income Taxes We are a U.S. taxpayer and are subject to a statutory U.S. federal corporate income tax rate of 21%. Taxable income is reported on our consolidated U.S. federal and various state income tax returns, filed by NMIH on behalf of itself and its subsidiaries. Our effective tax rate on pre-tax income was 22.8 % and 21.7 % for the three and six months ended June 30, 2026, respectively, compared to 22.2 % and 22.1 % for the three and six months ended June 30, 2025, respectively. Our provision for income taxes for interim reporting periods is established based on our estimated annual effective tax rate for a given year. Our 25 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) effective tax rate may fluctuate between interim periods due to the impact of discrete items not included in our estimated annual effective tax rate, including the tax effects associated with the vesting of RSUs and exercise of options. Such items are treated on a discrete basis in the reporting period in which they occur. As a mortgage guaranty insurance company, we are eligible to claim a tax deduction for our statutory contingency reserve balance, subject to certain limitations outlined under IRC Section 832(e), and only to the extent we acquire tax and loss bonds in an amount equal to the tax benefit derived from the claimed deduction, which is our intent. As a result, our interim provision for income taxes for the three and six months ended June 30, 2026 and 2025 primarily represents a change in our net deferred tax liability. As of June 30, 2026 and December 31, 2025, we held $ 400.3 million of tax and loss bonds in “Prepaid Federal Income Taxes” on our condensed consolidated balance sheets. 10. Stockholders' Equity During the six months ended June 30, 2026, we repurchased 1.5 million shares at an average price of $ 38.29 per share (excluding associated fees and applicable taxes). As of June 30, 2026, we had $ 166.8 million of repurchase authorization remaining through December 31, 2027. The authorization provides us with the flexibility, based on market and business conditions, stock price and other factors, to repurchase stock through open market purchases, privately negotiated transactions, or other means, including pursuant to Rule 10b5-1 trading plans. 11. Premiums Receivable, Net Premiums receivable consists of premiums due on our mortgage insurance policies. If a mortgage insurance premium is unpaid for more than 120 days, the associated receivable is written off against earned premium and the related insurance policy is canceled. Premiums receivable may be written off prior to 120 days in the ordinary course of business for non-credit events including, but not limited to, the modification or refinancing of an underlying insured loan. We established a $ 1.3 million and $ 1.4 million reserve for premium write-offs at June 30, 2026 and December 31, 2025, respectively. We separately recognize an allowance for credit losses for premiums receivable based on credit losses expected to arise over the life of the receivable. Due to the nature of our insurance policies (a necessary precondition for access to mortgage credit for covered borrowers) and the short duration of the related receivables, we do not typically experience credit losses against our premium receivables and the allowance for credit loss established on premium receivable was deemed immaterial at June 30, 2026 and December 31, 2025. 12. Regulatory Information Statutory Requirements Our insurance subsidiaries, NMIC and Re One, file financial statements in conformity with statutory accounting principles (SAP) prescribed or permitted by the Wisconsin OCI, NMIC's principal regulator. Prescribed SAP includes state laws, regulations and general administrative rules, as well as a variety of publications of the National Association of Insurance Commissioners (NAIC). The Wisconsin OCI recognizes only statutory accounting practices prescribed or permitted by the state of Wisconsin for determining and reporting the financial condition and results of operations of an insurance company and for determining its solvency under Wisconsin insurance laws. NMIC and Re One generated combined statutory net income of $ 44.0 million and $ 76.8 million for the three and six months ended June 30, 2026, respectively, compared to $ 30.5 million and $ 67.3 million for the three and six months ended June 30, 2025, respectively. The Wisconsin OCI has imposed a prescribed accounting practice for the treatment of statutory contingency reserves that differs from the treatment promulgated by the NAIC. Under Wisconsin OCI's prescribed practice mortgage guaranty insurers are required to reflect changes in their contingency reserves through statutory income. Such approach contrasts with the NAIC's treatment, which records changes to contingency reserves directly to unassigned funds. As a Wisconsin-domiciled insurer, NMIC's statutory net income reflects an expense associated with the change in its contingency reserve. While such treatment impacts NMIC's statutory net income, it does not have an effect on NMIC's statutory capital position. 26 NMI HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table presents NMIC's statutory surplus, contingency reserve, statutory capital and risk-to-capital (RTC) ratio as of June 30, 2026 and December 31, 2025. June 30, 2026 December 31, 2025 (In Thousands) Statutory surplus $ 985,575 $ 1,010,274 Contingency reserve 2,409,569 2,245,272 Statutory capital (1) $ 3,395,144 $ 3,255,546 Risk-to-capital 12.9 :1 13.0 :1 (1) Represents the total of the statutory surplus and contingency reserve. Re One had $ 2.1 million of statutory capital at both June 30, 2026 and December 31, 2025. NMIH is not subject to any limitations on its ability to pay dividends except those generally applicable to corporations that are incorporated in Delaware. Delaware law provides that dividends are only payable out of a corporation's capital surplus or, subject to certain limitations, recent net profits. NMIC and Re One are subject to certain rules and regulations prescribed by jurisdictions in which they are authorized to operate and the GSEs that may restrict their ability to pay dividends to NMIH. NMIC has the capacity to pay $ 101.0 million of aggregate ordinary dividends to NMIH during the twelve-month period ending December 31, 2026, and, on June 3, 2026, NMIC paid a $ 101.0 million ordinary course dividend to NMIH. 27