NMI Holdings, Inc. (NMIH) - Q1 2026 Filing Summary
Business Context and Reporting Period
This summary covers the Quarterly Report on Form 10-Q for NMI Holdings, Inc. for the period ended March 31, 2026. NMIH is a Delaware corporation providing private mortgage guaranty insurance (MI) through its primary subsidiary, National Mortgage Insurance Corporation (NMIC). The company operates as a single segment, focusing on writing mortgage insurance on high-quality, low down payment residential mortgage loans. As of March 31, 2026, the company had 225 employees and maintained a portfolio of $222.3 billion in primary Insurance-in-Force (IIF).
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Net Premiums Earned | $154.8 million | $149.4 million |
| Net Investment Income | $28.6 million | $23.7 million |
| Total Revenues | $183.5 million | $173.2 million |
| Net Income | $99.3 million | $102.6 million |
| Diluted EPS | $1.28 | $1.28 |
| Combined Ratio | 33.1% | 23.2% |
| Loss Ratio | 13.3% | 3.0% |
| Expense Ratio | 19.8% | 20.2% |
| Total Assets | $3.91 billion | $3.84 billion (Dec 31, 2025) |
| Cash & Cash Equivalents | $70.7 million | $43.9 million (Dec 31, 2025) |
| Debt (Senior Notes) | $417.5 million | $417.0 million (Dec 31, 2025) |
| Shareholders' Equity | $2.63 billion | $2.59 billion (Dec 31, 2025) |
Material Changes vs. Prior Period
- Revenue Growth: Total revenues increased 6% year-over-year, driven by a 4% increase in net premiums earned and a 21% increase in net investment income. Investment income growth was attributed to a larger asset base and higher book yields from reinvesting at higher rates.
- Profitability Decline: Net income decreased 3% to $99.3 million. This was primarily due to a significant increase in insurance claims and claim expenses, which rose 361% to $20.7 million compared to $4.5 million in Q1 2025.
- Claims Experience: The loss ratio increased to 13.3% from 3.0%. The rise in claims incurred was driven by an increase in new defaults and higher average case reserves for aged defaults, partially offset by $26.5 million in favorable prior-year development (reserve releases).
- Portfolio Growth: New Insurance Written (NIW) increased 33% to $12.3 billion. Primary IIF grew 5% to $222.3 billion. However, the annual persistency rate declined to 82.2% from 84.3%.
- Investment Portfolio: Gross unrealized losses on the investment portfolio increased to $97.1 million (from $86.3 million at year-end 2025), primarily driven by interest rate fluctuations. No allowance for credit losses was recognized.
Guidance, Outlook, and Risks
- Capital Position: NMIC remains well-capitalized with a Risk-to-Capital (RTC) ratio of 13.3:1, well below the 25:1 regulatory maximum. Available assets under PMIERs totaled $3.6 billion against required assets of $2.2 billion.
- Liquidity: The company maintains strong liquidity with $70.7 million in cash and $250 million in undrawn capacity under its 2024 Revolving Credit Facility. NMIC has the capacity to pay $101 million in ordinary dividends to the parent company over the next 12 months.
- Share Repurchases: During Q1 2026, the company repurchased 0.7 million shares for $27.7 million. Approximately $198.2 million of repurchase authorization remains under the program effective through December 31, 2027.
- Reinsurance: The company actively manages risk through quota share and excess-of-loss reinsurance. A 2026 Quota Share Transaction (QSR) and a 2026-1 Excess-of-Loss (XOL) transaction became effective January 1, 2026. Additionally, the 2021-1 ILN Transaction was terminated and redeemed in full in April 2026.
- Risks: Key risks include macroeconomic factors (inflation, interest rates, unemployment) impacting the housing market, changes in GSE policies, and the potential for increased default rates or claim severity if home prices decline. The company notes that rising interest rates may reduce the fair value of its fixed-income portfolio.
Investor Verification Checklist
- Claims Development: Verify the sustainability of the $26.5 million in favorable prior-year development and monitor if current-year default trends continue to accelerate.
- Persistency Trends: Assess the impact of the declining persistency rate (82.2%) on future premium earnings, particularly given the shift toward monthly premium policies.
- Investment Portfolio: Review the composition of the $97.1 million in unrealized losses to ensure they remain driven by interest rates rather than credit deterioration.
- Reinsurance Capacity: Confirm the terms and capacity of the new 2026 reinsurance treaties (QSR and XOL) to ensure adequate capital relief as the portfolio grows.
- Regulatory Compliance: Monitor NMIC's compliance with PMIERs requirements, specifically the maintenance of available assets above the $400 million floor and risk-based thresholds.