NMI (NASDAQ:NMIH) reported record second-quarter financial results for 2026, supported by growth in new insurance written, a larger insured portfolio and higher investment income.
The mortgage insurer generated $16 billion of new insurance written during the quarter and ended June with $227.1 billion of primary insurance in force, both figures highlighted by management as evidence of continued demand for down-payment support. The company also surpassed $500 billion of insurance written since its founding, Executive Chairman Brad Shuster said.
Premium Growth, Investment Income and Expenses
Net premiums earned totaled a record $157.5 million, compared with $154.8 million in the first quarter and $149.1 million a year earlier. Net yield was unchanged sequentially at 28 basis points, while core yield, excluding reinsurance costs and cancellation earnings, remained at 34 basis points.
Chief Financial Officer Aurora Swithenbank said investment income increased to $30.3 million from $28.6 million in the first quarter and $24.9 million in the second quarter of 2025.
Underwriting and operating expenses were $30.5 million, essentially flat with the prior quarter. The expense ratio improved to 19.4% from 19.8% in the first quarter. Swithenbank said the company did not have any large planned expenditures that would alter the broader expense trajectory, though expenses can experience seasonal fluctuations related to payroll taxes, retirement contributions and share-based compensation accruals.
Management did not provide forward-looking guidance. On core yield, Swithenbank said the company expects it to remain “broadly stable,” supported by its large insurance-in-force portfolio and persistency, although refinancing activity and other changes in business mix can affect premium levels.
Credit Performance and Housing Trends
Claims expense declined to $13.1 million from $20.7 million in the first quarter and was slightly below the $13.4 million recorded a year earlier. NMI had 8,020 defaults as of June 30, down from 8,044 at March 31, while its default rate was 1.16% at quarter-end.
CEO Adam Pollitzer said national home prices continue to set records, which he said supports both mortgage-insurance demand and credit performance. Regionally, he said the strongest housing markets remain in the Northeast and Midwest. The company continues to observe pressure in Florida, Texas, parts of the Sun Belt and Mountain West, and some West Coast markets, although recent readings indicate that some metropolitan areas in those regions may be bottoming and moving off their lows.
Swithenbank attributed some of the quarter’s favorable default activity to seasonal factors, including tax refunds, year-end bonuses and the passage of the holiday period. She also cited strong employment data and home-price appreciation as supportive of borrowers’ performance.
However, Pollitzer said NMI expects its default population to rise somewhat in the second half of the year, reflecting normal seasonal patterns as well as the growth and seasoning of its insurance portfolio. He said the company has not seen early-payment defaults or other indicators of underwriting strain in its 2026 production.
Pollitzer said favorable prior-year reserve development has reflected a constructive macroeconomic and housing environment, as well as borrowers’ ability to cure delinquencies amid labor-market strength and home equity. He said the company has not identified a structural issue or a particular vintage-related factor behind the reserve gains.
Capital Position and Share Repurchases
NMI ended the quarter with $2.7 billion of shareholders’ equity and book value per share of $35.89. Book value per share excluding net unrealized investment portfolio gains and losses was $36.88, up 4% from the first quarter and 15% from the prior-year quarter.
The company repurchased $31.4 million of common stock during the quarter, retiring 827,000 shares at an average price of $37.99. Since launching its buyback program in 2022, NMI has repurchased $408 million of shares, or 13.6 million shares, at an average price of $29.95. The company had $167 million remaining under its authorization at quarter-end.
Under PMIERs capital standards, NMI reported $3.7 billion of total available assets and $2.1 billion of risk-based required assets, resulting in $1.6 billion of excess available assets.
Pollitzer said the company’s future capital allocation will depend partly on new-insurance-written trends and the pace at which its insurance-in-force market share moves closer to its share of new business production. He noted that NMI’s insurance in force has increased 49% over the past four years, compared with 13% growth for the rest of the industry.
Reinsurance and Market Conditions
Management said it sees a constructive competitive environment in private mortgage insurance, with no notable changes in pricing behavior. Pollitzer said the company has seen somewhat more pressure in larger, transactionally oriented business, though he said this has been a longstanding market dynamic.
Swithenbank said NMI has recently emphasized traditional reinsurance because it has received attractive execution and more flexible terms. Traditional reinsurers can provide forward-flow coverage at predetermined pricing for as long as three years, she said, while insurance-linked note transactions require risk to be warehoused and generally need larger transaction sizes.
She added that NMI continues to value insurance-linked notes as a source of risk-transfer capacity and expects to return to that market at certain points in the cycle. Increased participation by reinsurers, lower risk transfer by government-sponsored enterprises and softer conditions in some other insurance lines have supported reinsurance capacity and pricing, according to Swithenbank.
On housing policy, Pollitzer welcomed the bipartisan 21st Century ROAD to Housing Act as a supply-focused effort that could support affordability over the long term. However, he said the legislation is not expected to have a significant near-term effect on the private mortgage insurance market or NMI’s business.
About NMI (NASDAQ:NMIH)
NMI Holdings, Inc (NASDAQ: NMIH) is a publicly traded mortgage insurance company that provides private mortgage insurance to lenders across the United States and Canada. Through its principal subsidiary, National Mortgage Insurance Corporation, NMI underwrites and issues policies that protect originators and investors against losses arising from borrower default on residential mortgage loans. By mitigating credit risk on higher‐loan‐to‐value mortgages, the company supports homebuyers’ access to financing and contributes to overall market liquidity.
Beyond its core mortgage insurance products, NMI offers credit risk‐sharing and reinsurance solutions designed to help clients optimize capital utilization and manage portfolio exposure.
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