NMI Holdings Posts Third Straight Earnings Gain as NIW Jumps 31%
NMI Holdings reported net income of $105.8 million, or $1.38 a share, as new insurance written surged 31% from the prior quarter to $16.1 billion.
NMI Holdings (NMIH) reported net income of $105.8 million, or $1.38 a share, for the second quarter of 2026, up from $99.3 million, or $1.28 a share, in the first quarter. The mortgage insurer's profit has now risen for three consecutive quarters after dipping to $94.2 million in the fourth quarter of 2025.
The rebound was driven by a sharp reversal in loss trends. NMI Holdings' loss ratio fell to 8.3% in the second quarter from 13.3% in the first quarter, breaking a three-quarter run of deterioration that had pushed the ratio from 9.0% in the second quarter of 2025 to 13.9% by the end of 2025. The expense ratio also improved, slipping to 19.4% from 19.8%, pulling the combined ratio down to 27.7% from 33.1%.
New insurance written jumped 31% from the prior quarter to $16.1 billion, up 29% from a year earlier and reversing a 14% sequential decline in the first quarter, when volume had fallen to $12.3 billion from $14.2 billion at the end of 2025. Purchase-money loans accounted for 89% of the new volume, or $14.29 billion, up from 76% in the first quarter, as refinance activity fell to $1.76 billion from $2.89 billion. Primary insurance-in-force grew 2% from the prior quarter to $227.1 billion, accelerating from roughly flat sequential growth in the first quarter.
Credit quality on new business shifted modestly. Loans with credit scores of 760 or higher made up 56% of new insurance written, or $9.04 billion, down from 59% in the first quarter even as the dollar amount rose, while the weighted average credit score edged down to 760 from 762. Annual persistency continued to decline, falling to 81.4% from 82.2% in the first quarter and 84.1% a year earlier, and the default rate ticked down slightly to 1.16% from 1.17%, though it remained above the 1.00% level of a year ago, with loans in default roughly flat at 8,020.
Book value per share, excluding unrealized gains and losses, rose 4% from the prior quarter to $36.88, up 15% from a year earlier, while annualized return on equity improved to 15.9% from 15.2% but remained below the 16.2% to 18.1% range posted in the year-ago quarters. Net investment income climbed to $30.3 million from $28.6 million, up 22% from a year earlier.
PMIERs available assets rose to $3.7 billion at quarter-end from $3.6 billion in the first quarter, while net risk-based required assets declined to $2.1 billion from $2.2 billion, widening the company's capital cushion. Underwriting and operating expenses held roughly flat at $30.5 million, a deceleration from the sequential decline recorded in the first quarter.
Effective April 27, 2026, NMI Holdings' insurance subsidiary NMIC exercised its optional call to terminate and commute the Oaktown Re VI Ltd. excess-of-loss reinsurance agreement, with the associated insurance-linked notes redeemed in full.