NMI Holdings' Q2 2025: Unraveling Contradictions in Capital Returns, Default Trends, and Competitive Pricing

Capital return strategy and economic conditions, default experience and seasonal trends, pricing and competitive environment, investment income and portfolio yield, capital return strategy are the key contradictions discussed in NMI Holdings' latest 2025Q2 earnings call.



Financial Performance and Growth:
- National MI reported record total revenue of $173.8 million in Q2 2025, with adjusted net income of $96.5 million or $1.22 per diluted share.
- The growth was driven by a 2% increase in primary insurance in force to $214.7 billion and strong operational performance.

Capital Management and Shareholder Returns:
- The company repurchased $23.2 million of common stock in Q2, retiring 628,000 shares.
- This is part of the ongoing shareholder return strategy, with $281 million of repurchase capacity remaining under the existing program.

Macroeconomic Environment and Risk Management:
- National MI maintained a proactive stance in the face of macro risks, focusing on pricing, risk selection, and reinsurance decisioning.
- The company is well-positioned to manage macroeconomic uncertainties due to its strong balance sheet and comprehensive risk transfer solutions.

Credit Performance and Default Rates:
- The company's default rate declined to 1% at June 30, with 6,709 defaults, down from 6,859 at March 31.
- This improvement is attributed to the strong labor market, embedded equity in borrowers' homes, and seasonal factors like tax refunds.