EMERYVILLE, Calif., July 30, 2024 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (NASDAQ:NMIH) today reported net income of $92.1 million, or $1.13 per diluted share, for the second quarter ended June 30, 2024, compared to $89.0 million, or $1.08 per diluted share, for the first quarter ended March 31, 2024 and $80.3 million, or $0.95 per diluted share, for the second quarter ended June 30, 2023. Adjusted net income for the quarter was $97.6 million, or $1.20 per diluted share, compared to $89.0 million, or $1.08 per diluted share, for the first quarter ended March 31, 2024 and $80.3 million, or $0.95 per diluted share, for the second quarter ended June 30, 2023. The non-GAAP financial measures adjusted net income, adjusted diluted earnings per share and adjusted return on equity are presented in this release to enhance the comparability of financial results between periods. See "Use of Non-GAAP Financial Measures" and our reconciliation of such measures to their most comparable GAAP measures, below. Adam Pollitzer, President and Chief Executive Officer of National MI, said, "In the second quarter, we again delivered standout operating performance, strong growth in our high-quality insured portfolio, and record financial results. We have built an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, our credit performance continues to stand ahead, and we have a robust balance sheet supported by the significant earnings power of our platform. Looking forward, we're well positioned to continue delivering differentiated growth, returns and value for our shareholders." Selected second quarter 2024 highlights include: Primary insurance-in-force at quarter end was $203.5 billion, compared to $199.4 billion at the end of the first quarter and $191.3 billion at the end of the second quarter of 2023. Net premiums earned were $141.2 million, compared to $136.7 million in the first quarter and $126.0 million in the second quarter of 2023. Total revenue was $162.1 million, compared to $156.3 million in the first quarter and $142.7 million in the second quarter of 2023. Insurance claims and claim expenses were $0.3 million, compared to $3.7 million in the first quarter and $2.9 million in the second quarter of 2023. Loss ratio was 0.2% compared to 2.7% in the first quarter and 2.3% in the second quarter of 2023. Underwriting and operating expenses were $28.3 million, compared to $29.8 million in the first quarter and $27.4 million in the second quarter of 2023. Expense ratio was 20.1% compared to 21.8% in the first quarter and 21.8% in the second quarter of 2023. Net income was $92.1 million, up 3% compared to $89.0 million in the first quarter and up 15% compared to $80.3 million in the second quarter of 2023. Diluted EPS was $1.13, up 4% compared to $1.08 in the first quarter and up 19% compared to $0.95 in the second quarter of 2023. Adjusted net income was $97.6 million, up 10% compared to $89.0 million in the first quarter and up 22% compared to $80.3 million in the second quarter of 2023. Adjusted diluted EPS was $1.20, up 11% compared to $1.08 in the first quarter and up 26% compared to $0.95 in the second quarter of 2023. Adjusted net income and adjusted diluted EPS are calculated excluding the impact of non-recurring capital markets transaction costs incurred in connection with the debt refinancing completed in the second quarter of 2024. Shareholders' equity was $2.0 billion at quarter end and book value per share was $25.65. Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $27.54, up 4% compared to $26.42 in the first quarter and 17% compared to $23.53 in the second quarter of 2023. Annualized return on equity for the quarter was 18.3%, compared to 18.2% in the first quarter and 18.6% in the second quarter of 2023. Annualized adjusted return on equity was 19.4%, compared to 18.2% in the first quarter and 18.6% in the second quarter of 2023. At quarter-end, total PMIERs available assets were $2.8 billion and net risk-based required assets were $1.7 billion.     QuarterEnded QuarterEnded QuarterEnded Change (1) Change (1)     6/30/2024 3/31/2024 6/30/2023 Q/Q Y/Y INSURANCE METRICS ($billions) Primary Insurance-in-Force $ 203.5   $ 199.4   $ 191.3   2  % 6  % New Insurance Written - NIW   12.5     9.4     11.5   33  % 9  %             FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts) Net Premiums Earned $ 141.2   $ 136.7   $ 126.0   3  % 12  % Net Investment Income   20.7     19.4     16.5   6  % 25  % Insurance Claims and Claim Expenses   0.3     3.7     2.9   (93)% (90 )% Underwriting and Operating Expenses   28.3     29.8     27.4   (5)% 3  % Adjusted Net Income   97.6     89.0     80.3   10  % 22  %             Adjusted Diluted EPS $ 1.20   $ 1.08   $ 0.95   11  % 26  % Book Value per Share (excluding net unrealized gains and losses) (2) $ 27.54   $ 26.42   $ 23.53   4  % 17  %             Loss Ratio   0.2  %   2.7  %   2.3  %     Expense Ratio   20.1  %   21.8  %   21.8  %     (1) Percentages may not be replicated based on the rounded figures presented in the table. (2) Book value per share (excluding net unrealized gains and losses) is defined as total shareholders' equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.     Conference Call and Webcast Details The company will hold a conference call, which will be webcast live today, July 30, 2024, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The webcast will be available on the company's website, www.nationalmi.com, in the "Investor Relations" section. The conference call can also be accessed by dialing (844) 481-2708 in the U.S., or (412) 317-0664 internationally, by referencing NMI Holdings, Inc. About NMI Holdings, Inc. NMI Holdings, Inc. (NASDAQ:NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com. Cautionary Note Regarding Forward-Looking Statements Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995 (the "PSLRA"). The PSLRA provides a "safe harbor" for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "perceive," "plan," "project," "continuing," "ongoing," "expect," "intend" and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: changes in general economic, market and political conditions and policies (including changes in interest rates and inflation) and investment results or other conditions that affect the U.S. housing market or the U.S. markets for home mortgages, mortgage insurance, reinsurance and credit risk transfer markets, including the risk related to geopolitical instability, inflation, an economic downturn (including any decline in home prices) or recession, and their impacts on our business, operations and personnel; changes in the charters, business practices, policies, pricing or priorities of Fannie Mae and Freddie Mac (collectively, the GSEs), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency ("FHFA"), such as the FHFA's priority to increase the accessibility to and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements ("PMIERs") and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia ("D.C.") and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers such as the Federal Housing Administration, the U.S. Department of Agriculture's Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning "Qualified Mortgage" and "Qualified Residential Mortgage"; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; legislative or regulatory changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential legal and regulatory claims, investigations, actions, audits or inquiries that could result in adverse judgements, settlements, fines or other reliefs that could require significant expenditures or have other negative effects on our business; uncertainty relating to the coronavirus virus and its variants, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and our business, operations and personnel; our ability to successfully execute and implement our capital plans, including our ability to access the equity, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; lenders, the GSEs, or other market participants seeking alternatives to private mortgage insurance; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; climate risk and efforts to manage or regulate climate risk by government agencies could affect our business and operations; potential adverse impacts arising from the occurrence of any man-made disasters or public health emergencies, including pandemics; the inability of our counter-parties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks (including the exposure of our confidential customer and other information); and ability to recruit, train and retain key personnel. These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law. Use of Non-GAAP Financial Measures We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company's business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; 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, 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. Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP. Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders' equity for the period. Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned. Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned. Book value per share (excluding net unrealized gains and losses) is defined as total shareholders' equity, excluding the after-tax effects of unrealized gains and losses on investments, divided by shares outstanding. Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below. (1) Net realized investment gains and losses. The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.     (2) Capital markets transaction costs. Capital markets transaction costs result from activities that are undertaken to improve our debt profile or enhance our capital position through activities such as debt refinancing and capital markets reinsurance transactions that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles.     (3) Other infrequent, unusual or non-operating items. Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency in the future. 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. 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.     (4) Net unrealized gains and losses on investments. The recognition of the net unrealized gains or losses on investment can vary significantly across periods and is influenced by factors such as interest rate movement, overall market and economic conditions, and tax and capital profiles. These valuation adjustments may not necessarily result in economic gains or losses and not reflective of ongoing operations. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these unrealized gains or losses.     Investor ContactJohn M. SwensonVice President, Investor Relations and 788-8417 Consolidated statements of operations and comprehensive income (unaudited) For the three months ended June 30,   For the six months ended June 30,    2024     2023     2024     2023    (In Thousands, except for per share data) Revenues               Net premiums earned $ 141,168     $ 125,985     $ 277,825     $ 247,739   Net investment income   20,688       16,518       40,124       31,412   Net realized investment losses   —       —       —       (33 ) Other revenues   266       182       426       346   Total revenues   162,122       142,685       318,375       279,464   Expenses               Insurance claims and claim expenses   276       2,873       3,970       9,574   Underwriting and operating expenses   28,330       27,448       58,145       53,234   Service expenses   194       267       331       347   Interest expense   14,678       8,048       22,718       16,087   Total expenses   43,478       38,636       85,164       79,242                   Income before income taxes   118,644       104,049       233,211       200,222   Income tax expense   26,565       23,765       52,082       45,480   Net income $ 92,079     $ 80,284     $ 181,129     $ 154,742                   Earnings per share               Basic $ 1.15     $ 0.97     $ 2.25     $ 1.86   Diluted $ 1.13     $ 0.95     $ 2.22     $ 1.83                   Weighted average common shares outstanding               Basic   80,117       82,958       80,421       83,277   Diluted   81,300       84,190       81,703       84,504                   Loss ratio (1)   0.2 %     2.3 %     1.4 %     3.9 % Expense ratio (2)   20.1 %     21.8 %     20.9 %     21.5 % Combined ratio (3)   20.3 %     24.1 %     22.4 %     25.4 %                 Net income $ 92,079     $ 80,284     $ 181,129     $ 154,742   Other comprehensive (loss) income, net of tax:               Unrealized (losses) gains in accumulated other comprehensive income, net of tax (benefit) expense of $(412) and $(4,120) for the three months ended June 30, 2024 and 2023, and $(3,141) and $4,513 for the six months ended June 30, 2024 and 2023, respectively   (1,549 )     (15,499 )     (11,454 )     16,977   Reclassification adjustment for realized losses included in net income, net of tax benefit of $7 for the six months ended June 30, 2023   —       —       —       26   Other comprehensive (loss) income, net of tax   (1,549 )     (15,499 )     (11,454 )     17,003   Comprehensive income $ 90,530     $ 64,785     $ 169,675     $ 171,745   (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. (3) Combined ratio may not foot due to rounding. Consolidated balance sheets (unaudited) June 30, 2024   December 31, 2023 Assets (In Thousands, except for share data) Fixed maturities, available-for-sale, at fair value (amortized cost of $2,707,416 and $2,542,862 as of June 30, 2024 and December 31, 2023, respectively) $ 2,520,990     $ 2,371,021   Cash and cash equivalents (including restricted cash of $1,152 and $1,338 as of June 30, 2024 and December 31, 2023, respectively)   62,629       96,689   Premiums receivable   76,455       76,456   Accrued investment income   21,439       19,785   Deferred policy acquisition costs, net   63,248       62,905   Software and equipment, net   28,848       30,252   Intangible assets and goodwill   3,634       3,634   Reinsurance recoverable   27,336       27,514   Prepaid federal income taxes   235,286       235,286   Other assets   62,038       16,965   Total assets $ 3,101,903     $ 2,940,507           Liabilities       Debt $ 414,249     $ 397,595   Unearned premiums   78,334       92,295   Accounts payable and accrued expenses   77,918       86,189   Reserve for insurance claims and claim expenses   125,443       123,974   Deferred tax liability, net   348,293       301,573   Other liabilities (1)   12,056       12,877   Total liabilities   1,056,293       1,014,503           Shareholders' equity       Common stock - $0.01 par value; 87,900,888 shares issued and 79,763,893 shares outstanding as of June 30, 2024 and 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 (250,000,000 shares authorized)   879       873   Additional paid-in capital   993,143       990,816   Treasury Stock, at cost: 8,136,995 and 6,452,858 common shares as of June 30, 2024 and December 31, 2023, respectively   (201,323 )     (148,921 ) Accumulated other comprehensive loss, net of tax   (151,371 )     (139,917 ) Retained earnings   1,404,282       1,223,153   Total shareholders' equity   2,045,610       1,926,004   Total liabilities and shareholders' equity $ 3,101,903     $ 2,940,507   (1) "Reinsurance funds withheld" has been reclassified as "Other liabilities" in the prior period.   Non-GAAP Financial Measure Reconciliations (unaudited)   As of and for the three months ended   For the six months ended   6/30/2024   3/31/2024   6/30/2023   06/30/24   6/30/2023 As Reported (In Thousands, except for per share data) Revenues                   Net premiums earned $ 141,168     $ 136,657     $ 125,985     $ 277,825     $ 247,739   Net investment income   20,688       19,436       16,518       40,124       31,412   Net realized investment losses   —       —       —       —       (33 ) Other revenues   266       160       182       426       346   Total revenues   162,122       156,253       142,685       318,375       279,464   Expenses                   Insurance claims and claim expenses   276       3,694       2,873       3,970       9,574   Underwriting and operating expenses   28,330       29,815       27,448       58,145       53,234   Service expenses   194       137       267       331       347   Interest expense   14,678       8,040       8,048       22,718       16,087   Total expenses   43,478       41,686       38,636       85,164       79,242                       Income before income taxes   118,644       114,567       104,049       233,211       200,222   Income tax expense   26,565       25,517       23,765       52,082       45,480   Net income $ 92,079     $ 89,050     $ 80,284     $ 181,129     $