[Management View]
NMI Holdings reported record revenue and insurance in force for Q2 2025, supported by high persistency and disciplined risk management. Management indicated that buybacks have averaged approximately $25 million per quarter as of Q2 2025 and may continue at this pace absent significant changes in operational or market conditions. The competitive landscape was characterized as "balanced and constructive," and the company’s portfolio quality remained high, with falling defaults and solid cure rates.

[Outlook]
The company remains confident in its future performance, driven by a resilient macro environment and long-term secular trends. Management emphasized the continued discipline in pricing, risk selection, and reinsurance decisioning. The firm is well-positioned to serve customers, invest in employees, and deliver growth and value for shareholders.

[Financial Performance]
- New Insurance Written (NIW): $12.5 billion in volume, increasing primary insurance in force to $214.7 billion.
- Total revenue: $173.8 million, up from $173.2 million in Q1 2025 and $162.1 million in Q2 2024.
- Adjusted net income: $96.5 million, or $1.22 per diluted share.
- Adjusted return on equity: 16.3%.
- 12-month persistency: 84.1%, compared to 84.3% in Q1 2025.
- Net premiums earned: $149.1 million, compared to $149.4 million in Q1 2025 and $141.2 million in Q2 2024.
- Investment income: $24.9 million, up from $23.7 million in Q1 2025 and $20.7 million in Q2 2024.
- Underwriting and operating expenses: $29.5 million, down from $30.2 million in Q1 2025.
- Expense ratio: Record low of 19.8%.
- Defaults: 6,709, down from 6,859 in Q1 2025. Default rate: 1%.
- GAAP net income: $96.2 million; GAAP diluted EPS: $1.21.
- Total cash and investments: $3 billion, including $169 million at the holding company.
- Book value per share: $31.14, up 4% sequentially and 16% YoY.
- Share repurchases: $23.2 million for 628,000 shares at an average price of $36.90.

[Q&A Highlights]
Question 1: The first question comes from Doug Harter from UBS. Thanks. I think you could talk a little bit about the pacing of capital return and given the sort of resiliency of the economy and the persistence of high rates, whether that would change the pacing of capital return?
Answer: Yeah. Doug, it's a good question. I'd say broadly speaking, we're pleased with the execution that we've achieved on our program thus far, including the $23 million that we retired in Q2. As we look ahead, while we don't have a set schedule for our anticipated activity, we've been fairly consistent thus far buying back roughly $25 million a quarter, and that's really a good assumption for where we'll be. Think we've got it is an open market program, and so you could see, you know, some natural fluctuations up or down depending on the risk environment, how our operating performance is trending, and also where our valuation trends because somewhat sensitive to value. We certainly have ample capacity to be more opportunistic if the opportunity should arise and by the same token, I'd say the discipline to slow things if circumstances dictate. But right now, it'd be, you know, a good assumption of sort of that rough $25 million per quarter that we've been operating against.

Question 2: The next question comes from Rick Shane from JPMorgan. Hey, everybody. Thank you for taking my questions. Look, you know, we're starting to over the last couple months here, more about rising supply of homes for sale, longer days on market. Some indications of home price depreciation in certain markets. If you can talk about how you're thinking about this tactically in terms of underwriting but also in terms of risk transfer. When we look at year to date, you've done a QSR, you've done XOL. Looks like the strategy remains sort of balanced. The x accessing different markets But I'm curious if you're seeing anything in terms of pricing in those markets that either gives you pause or will lead you in one direction or the other?
Answer: Yep. Both Aurora and I will take it. I'll give you a perspective on say what we're seeing broadly in the market, how we're continuing to manage around what we observe in the market and then we touch on, you know, reinsurance where we've we are fully placed on a forward basis for several years from here. I think maybe I'll just comment broadly on the market and what we're observing because you're right. The headlines are out there. There are real reasons to be encouraged. About the backdrop in which we're operating against. Right? The economy continues to grow. The job market remains healthy. And some of those long-term secular drivers of demand remain fully intact. And so it's not surprising that we're continuing to see I'd say, broad-based resilience in the market resiliency in the market nationally. However, as we've noted, really, for a while now, we do see differences emerging in different geographies. Right? Parts of Florida, Texas, the Sunbelt Mountain West, absolutely remain under pressure, but this is really nothing new. These are the areas that saw some of the most significant price increases during the pandemic rally. They're now facing a more pronounced supply-demand reset. Overall, what that means though is that the housing market itself is moving more towards a point of equilibrium. And so we expect is that the pace of appreciation nationally will continue to normalize from where it's been, and it had been obviously on a record run even coming out of the pandemic for an extended stretch. We will continue to see differences emerge market by market. As to what that has us doing as a risk matter, as an underwriting matter, as a credit selection matter, it's really nothing new. Right? This is exactly the same theme that we've been watching, that we've been talking about, that we've been pricing for and that we've been managing around for a long time now, so we're in the fortunate position that we don't have to be reactive to what we're seeing emerge now because it's exactly what we've anticipated for so long. There are reasons why we actively price through Rate GPS and have the ability to manage our mix across 950 different MSAs and we'll continue to use tools that we've developed to do that. So we don't have any concerns and we don't expect any significant we wanna obviously take all the steps that we need to protect our balance sheet, protect our ability to deliver strong results for shareholders, but also make sure that we're showing up constructively in all markets at all times for our lenders and their borrowers. We're in a terrific, terrific position today as to what it means for our risk transfer program I'll turn it to Aurora.
Answer: Yeah. I'm happy to take that one. So as Adam articulated, we've already secured last fall both quota share and SOL coverage for all of our 2025 production. And all of our 2026 production. And a partial placement of our 2027 production year. So we're not looking to do anything specific or extra as a result of the current macro environment or housing market. At the same time, we'll our typical cadence is that we'll meet with our reinsurance partners in the back part of the year. And place our forward flow deals. I think you'll see us doing that over the next couple of quarters. I'd also say that alongside our sort of normal forward flow transactions, we always think about ways that we can optimize our coverage in terms of lowering costs you getting additional coverage. So you may see us tweak certain contracts or exercise certain call rights with respect to transactions that are outstanding. But we don't really see any pressing need to do something different today.
Answer: Got it. It's very helpful, and I appreciate the sort of reminder on the KB of the way the programs work. It's helpful. Thank you, guys.

Question 3: The next question comes from Mark Hughes from Truist. Mark Hughes: Yeah. Thanks. Good afternoon. Adam, do you have any update on the competitive environment how pricing relative to your peers, any new developments there?
Answer: Yeah. I'd say broadly speaking, the industry pricing is, as we observe it, is balanced and constructive and I think we continue to be encouraged by the unit economics that we're achieving on new business. Today, at NMI, we're we should be. We're at a point Again, I mentioned this in my response to Rick, but we're fully and fairly supporting our customers and their borrowers, and at the same time, we're using rate among other tools to protect our balance sheet, manage our risk, and make sure that we're able to deliver returns for shareholders. So constructive environment as we look out.

Question 4: Yeah. On the OpEx side, were there any kind of one-timers that helped out, or is that just a function of leverage?
Answer: Yeah. What I'd say on the expense side is that we typically do see a decline from Q1 to Q2 in terms of that root dollars. That's the typical annual reset of the FICA and the 401k bonus matching that occurs in the first quarter. So we do typically see a more heavy expense load in Q1 versus Q2. There were some other ins and outs, but there was no one-offs or anything particular that I'd point to.
Answer: Yes. Really just a strong quarter of discipline and efficiency, that we always try to maintain.

Question 5: And then on investment income, likewise, any kind of nonrecurring items, or is that just growth in the portfolio?
Answer: Yeah. You could see that there were some small dispositions, which is the difference between GAAP net income and the adjusted net income, but truly de minimis in the context of a portfolio of this size. So the growth in the book yields that you've been seeing, not just this quarter, but the past several quarters is just as a result of the sort of normal investing activity at the current interest rate and spread environment. Reinvesting principal and interest as it comes due, and then, of course, the free cash flow from the business.

Question 6: Anything on the default front new notices around catastrophes? I don't know whether you had recoveries coming off of either wildfires, anything like that is, worth calling out?
Answer: None. Nothing that we call out in for in for particular. We have a population of hurricane-related default largely related to hurricane Milton and Helene. I was trying to merge those two names there. That was 625 as the end of at the end of the first quarter, and now it is 421 as of the end of the second quarter. So those tend to cure at a higher than normal rate compared to other NOGs, and we're seeing exactly the behavior that we'd expect in that population. You mentioned the wildfires. Just given the home price point in the geographic area affected by the wildfires Southern California. We have a very limited number of NODs, single-digit number of NODs.

Question 7: Maybe just a broader view on kind of how things trended. I'd say overall, we continue to be encouraged by the credit performance of the portfolio. Including trends in the default population. The broad resiliency that we've seen in the economy, the labor market, house prices still sitting near or at record highs in most markets, continue to set a favorable backdrop. Our existing borrowers remain incredibly well situated with strong credit profiles. Given the quality of our book, continuing to see that translate through to our default experience and overall credit performance.
Answer: Yeah. When you look at the sorry to be a little too early, but when you look at the recoveries in the quarter, anything that you would put your finger on that was kind of the more important driver of that home price appreciation Anything else that you would isolate rather than just broad credit performance?
Answer: No. You know, I well, so we'll you're saying recoveries. I guess we'll look at it and say it's cure activity. Right? Those borrowers who've been in default who have been able to find their footing come out of default and resume payments on their mortgage in a timely fashion. What we are generally seeing is right borrowers have the ability a better ability to cure themselves out of a default position One, if you are operating against the favorable macro backdrop of strong labor market, so those borrowers who fell behind because they lost their job have the ability to find new employment quickly, and that still remains the case. Other borrowers benefit from significant amounts of embedded equity where even if they can't cure out of a default on their own, they can still sell their way out of a problem before they ultimately progress to a claimable outcome. Those trends are still there. We could talk about how they sit relative to where we were in prior periods, but that broad favorable backdrop continues to come through. The one other item that we've noted that does play through and it's in the first half is the seasonal dynamic in our default population. We called we talked about this in the past. But borrowers in the first half generally benefit from either the receipt of bonus income for some of them or on a much broader sense tax refunds, which come through. The tax refund can be applied by borrowers who've fallen behind to help them catch up. That trend doesn't then follow in the third or fourth quarter, because seasonally they're not getting tax refunds in the third quarter and in the fourth quarter. There's a new outflow with many families choosing to prioritize spending for the holidays and other year-end expenses. So that's dynamic still came through. The pattern that you see in our default experience and our default population aligns with what we've seen in past years because of that seasonal dynamic as well.

Question 8: Thank you very much. Operator: As a reminder, if you have a question, please press star one. The next question comes from Bose George from KBW. Bose George: Hey, everyone. Good afternoon. On the regulatory front, FHFA you know, put out this notice or comment on the equitable housing program. Does that potentially have an impact on the MI footprint or is there anything else that you see from the FHFA that could impact the MI footprint?
Answer: Yeah. I'll talk about the equitable program. I said so it was a notice of proposed rulemaking. Right? It's not a final outcome. But we say even if the plans are eliminated, we still expect that the broad idea of access and affordability is gonna remain central to housing policy decisions in DC Policymakers and regulators across all administrations have always worked to identify ways to support borrowers, increase available supply, provide expanded access to homeownership, And so eliminating formally eliminating equitable housing finance plans doesn't change this really at all. So we don't expect that the announcement is gonna have any consequential impact on our business or our market at this point.

Question 9: Okay. So you feel like so the change is more of a reduction sort of the regulatory side as opposed to actual sort of loans that flow through these programs?
Answer: Again, I don't wanna speak for the FHFA. On this as to what the ultimate intent is. They'd already announced an issue. We have FHFA in think it was in the first quarter or early in the second quarter had already issued an order terminating all special purpose credit programs that were supported by the GSV. I think it was actually late in March. We haven't seen any change really of consequence flow through from that. So we're not expecting that this next step in terms of the proposal to eliminate the equitable housing finance plans will have an impact either.

Question 10: Okay. Great. And actually just one more regulatory one as well. You so you noted the MI tax deduction. Do you know do you know what percentage of borrowers use that in terms as opposed to just itemized or you know, using the standard deduction?
Answer: Yeah. Again, it's gonna depend on the environment on the year. I think what we generally observed is that prior to the passage of the Tax Cut and Job Act, had about 70% of the filers were taking a standard deduction. That number has increased to 90% with the passage of the tax cuts and job act and the increase in the standard deduction. So think that this is a common sense provision. It will provide a benefit to many homeowners. It's really about providing borrowers benefit and relief. But it's because of those numbers. Right? If you only have roughly 10% of filers who itemize it's not gonna necessarily have a dramatic impact on our borrow base there will certainly be borrowers who deserve the benefit and will be able to now to harvest it.

[Sentiment Analysis]
The tone of the analysts was inquisitive and focused on understanding the company's strategic decisions and market positioning. Management's responses were confident and detailed, emphasizing strong performance, disciplined risk management, and a positive outlook.

[Quarterly Comparison]
| Key Metrics | Q2 2025 | Q1 2025 | Q2 2024 |
|------------------------------|---------------|---------------|---------------|
| New Insurance Written (NIW) | $12.5 billion | N/A | N/A |
| Total Revenue | $173.8 million| $173.2 million| $162.1 million|
| Adjusted Net Income | $96.5 million | N/A | N/A |
| Adjusted Return on Equity | 16.3% | N/A | N/A |
| 12-month Persistency | 84.1% | 84.3% | N/A |
| Net Premiums Earned | $149.1 million| $149.4 million| $141.2 million|
| Investment Income | $24.9 million | $23.7 million | $20.7 million |
| Underwriting & Operating Exp.| $29.5 million | $30.2 million | N/A |
| Expense Ratio | 19.8% | N/A | N/A |
| Defaults | 6,709 | 6,859 | N/A |
| GAAP Net Income | $96.2 million | N/A | N/A |
| GAAP Diluted EPS | $1.21 | N/A | N/A |
| Total Cash & Investments | $3 billion | N/A | N/A |
| Book Value per Share | $31.14 | N/A | N/A |
| Share Repurchases | $23.2 million | N/A | N/A |

[Risks and Concerns]
- Macroeconomic risks remain, including potential impacts from elevated interest rates and market volatility.
- Geographic differences in housing market performance, with some areas under pressure.
- Regulatory changes, such as the proposed elimination of equitable housing finance plans, could impact the market.

[Final Takeaway]
NMI Holdings delivered a strong Q2 2025 performance with record revenue and significant growth in its insured portfolio. The company maintained high persistency and disciplined risk management, resulting in a robust financial position. Management remains confident in the firm's ability to navigate macroeconomic challenges and continue delivering value to shareholders. The competitive landscape is balanced, and the company is well-positioned to capitalize on long-term secular trends in the housing market.