NMI (NMIH) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 net income of $92.1 million ($1.13 per diluted share), up 15% year-over-year, and adjusted net income of $97.6 million ($1.20 per diluted share), driven by strong revenue growth, portfolio expansion, and lower claims expenses.

• Primary insurance-in-force reached $203.5 billion, up 6% year-over-year, with $12.5 billion in new insurance written in Q2 2024.

• Persistency rate remained high at 85.4%, reflecting a slowdown in mortgage refinancing activity and supporting portfolio growth.

• Recognized for workplace excellence for the ninth consecutive year by Great Place to Work.

• CEO highlighted strong operating performance, high-quality insured portfolio, robust balance sheet, and continued differentiated growth and returns.

Financial highlights

• Total revenue reached a record $162.1 million, up 14% year-over-year; net premiums earned were $141.2 million, up 12% year-over-year.

• Net investment income was $20.7 million, up 25% year-over-year.

• Insurance claims and claim expenses dropped to $0.3 million, with a loss ratio of 0.2%, down from 2.3% in Q2 2023.

• Underwriting and operating expenses were $28.3 million, with an expense ratio of 20.1%, a record low.

• Book value per share (excluding unrealized gains/losses) rose to $27.54, up 17% year-over-year.

Outlook and guidance

• Management expects 2024 MI market volume to be similar to 2023, supported by resilient housing prices and long-term demand drivers.

• Core yield expected to remain stable, supported by strong persistency and current pricing environment.

• Persistency rates are anticipated to remain elevated if refinancing activity stays subdued.

• Expense ratio goal remains in the low- to mid-20s, with continued investment in people, systems, and risk management.

• Management expects to continue delivering differentiated growth, returns, and value for shareholders, supported by a high-quality book and comprehensive risk transfer solutions.