NMIH - NMI Holdings Inc

NMI Holdings Inc provides private mortgage insurance (PMI) through its subsidiary National MI, which protects mortgage lenders against losses when borrowers default on residential home loans with down payments below 20%. The core customer is U.S. mortgage lenders and originators operating under a B2B model, where NMI charges ongoing insurance premiums on insured loan portfolios. Annual revenue is approximately $600M, with operations exclusively in the United States residential mortgage market. The business is highly tied to U.S. housing market activity, interest rate cycles, and Federal Housing Finance Agency regulatory requirements governing private mortgage insurance.

Past Year Trends

• NMIH's adjusted EPS grew 17% YoY to $4.50 in FY2024, driven by net premiums earned rising as primary insurance-in-force expanded from $199.4B in Q1 2024 to $211.3B in Q1 2025, a 6% increase. (Bullish)
• NMIH's loss ratio deteriorated from 2.7% in Q1 2024 to 12.0% in Q4 2024, reflecting rising delinquency costs as claims expense reached $17.3M in Q4 2024 versus a near-zero credit environment earlier in the year. (Bearish)
• NMIH's board authorized an additional $250M share repurchase program in February 2025 through December 2027, while also exercising optional termination rights on two reinsurance treaties (Oakton Re V in December 2024 and Oakton Re III in July 2025), signaling confidence in its capital position with PMIERs sufficiency at 171%. (Bullish)

Next Year Trends

• Fannie Mae and Freddie Mac's updated PMIERs — phased in from March 2025 and fully effective September 30, 2026 — impose new diversification and liquidity standards on private MI available assets, which could require NMIH to adjust its $3.1B asset portfolio and may constrain capital flexibility if real estate asset limits are binding. (Bearish)
• The bipartisan Mortgage Insurance Freedom Act, reintroduced in 2025 by Representatives Meeks and Sessions, proposes aligning FHA MIP cancellation at 78% LTV with conventional PMI rules; if passed, it would reduce the FHA's competitiveness versus private MI like NMIH's products and shift incremental loan volume toward the private market. (Bullish)
• NMIH's insurance-in-force growth trajectory — $199.4B in Q1 2024 to $218.4B in Q3 2025 — depends heavily on new mortgage origination volume, which remains suppressed by 6-7% 30-year fixed rates; any sustained rate decline enabling a refinance wave would boost new insurance written but simultaneously accelerate cancellations in the existing book, creating a net IIF headwind. (Bearish)

Red Flags

No severe red flags identified as of August 2025.