NMI (NMIH) Q3 2024 earnings summary

Executive summary

• Delivered net income of $92.8 million ($1.15 per diluted share) in Q3 2024, up from $84.0 million ($1.00 per share) year-over-year and $92.1 million ($1.13 per share) sequentially.

• Generated $12.2 billion of new insurance written (NIW) and ended the period with $207.5 billion of primary insurance in force, a record high, up 7% year-over-year.

• Maintained a high-quality, high-performing insured portfolio, supported by comprehensive risk transfer solutions and strong credit performance.

• The macro environment and housing market remained resilient despite elevated interest rates and inflation.

• Persistency rate remained high at 85.5% as of September 30, 2024, reflecting a slowdown in mortgage refinancing.

Financial highlights

• Total revenue reached $166.1 million, up 2% sequentially and 12% year-over-year.

• Net premiums earned were $143.3 million, up 10% year-over-year and from $141.2 million in Q2.

• Net investment income grew to $22.5 million, up 26% year-over-year and from $20.7 million in Q2.

• Insurance claims and claim expenses for Q3 were $10.3 million (loss ratio 7.2%), up from $4.8 million (3.7%) a year ago, mainly due to new defaults and higher reserves.

• Underwriting and operating expenses were $29.2 million (expense ratio 20.3%), up 5% year-over-year.

Outlook and guidance

• Expect MI industry NIW volume for 2024 to be around $285 billion, with a similarly attractive environment anticipated for 2025.

• Management expects to remain in full compliance with updated PMIERs requirements taking effect in 2025 and 2026, with no material impact anticipated.

• Recent reinsurance treaties for 2025–2027 and new excess-of-loss agreements for 2025–2026 are expected to support future growth and capital management.

• Persistency is expected to remain above historical trends but may trend down from recent peaks.

• The company is confident in continued growth, returns, and value delivery for shareholders.