What NMI (NMIH) Said on Its Q3 Earnings Call

Key Points

• NMI reported Q3 adjusted net income of $93.7 million, or $1.23 per diluted share, while its mortgage insurance portfolio reached a record $229.7 billion. Claims expense rose to $29.1 million, contributing to lower earnings than the prior quarter.
• The company secured new reinsurance agreements covering business through 2030 at an estimated 4% pretax cost of capital. It also repurchased $27.1 million of shares and said buybacks would likely continue at roughly the recent pace.
• Defaults increased to 8,571 and the quarter-end default rate was 1.23%; persistency eased to 80.8%, with management citing interest rates as a key factor in future cancellations.

NMI NASDAQ: NMIH reported third-quarter 2026 adjusted net income of $93.7 million as its mortgage insurance portfolio reached a record $229.7 billion, though higher claims expense weighed on profit compared with the prior quarter.

The company generated $13.6 billion in new insurance written during the quarter. Adjusted earnings were $1.23 per diluted share, compared with $1.38 in the second quarter and $1.21 in the third quarter of 2025. Adjusted return on equity was 13.9%.

President and CEO Adam Pollitzer said the housing market had remained resilient despite elevated interest rates, while noting that macroeconomic risks persist. NMI has maintained a proactive approach to pricing, risk selection and reinsurance, he said.

Revenue and claims

Total revenue was $187.5 million, nearly unchanged from $187.9 million in the second quarter and up from $178.7 million a year earlier. Net premiums earned were $155.5 million, down from $157.5 million sequentially but up from $151.3 million a year earlier. Investment income rose to $32.2 million from $30.3 million in the second quarter.

Claims expense increased to $29.1 million from $13.1 million in the second quarter and $18.6 million a year earlier. CFO Aurora Swithenbank said the quarter’s claims experience reflected normal seasonal activity and the continued growth and seasoning of the portfolio.

NMI reported 8,571 defaults at Sept. 30, up from 8,020 at June 30. Its quarter-end default rate was 1.23%. The cure rate, measured as cures divided by the beginning-period default balance, was 26%, compared with 29% in the second quarter. Swithenbank said the decline was typical for the season.

For new delinquencies, the company recorded a provision of $13,500 per new notice of default, broadly consistent with $14,000 in the preceding quarter. Pollitzer said more recently originated loans in default had benefited from less home-price appreciation than older loans, affecting the number progressing to claims and their severity. He said those differences were reflected in reserves.

Reinsurance and capital returns

In October, NMI entered new quota-share and excess-of-loss reinsurance treaties that provide forward-flow coverage for new business produced through 2030 at an estimated 4% pretax cost of capital, Swithenbank said. She described the agreements as among the company’s best in terms of cost, capacity, duration and structure.

Pollitzer said NMI prices insurance assuming it does not have reinsurance in place, so the favorable agreements would not necessarily flow through to pricing decisions. Instead, he said, the benefits would be realized over time.

NMI repurchased $27.1 million of stock during the third quarter, retiring 626,000 shares at an average price of $43.18. It had $140 million of capacity remaining under its existing program. Asked whether the company might accelerate buybacks, Pollitzer said a reasonable assumption was that repurchases would continue at roughly their recent pace.

At quarter-end, NMI reported $3.8 billion of total available assets under private mortgage insurer eligibility requirements, against $2.2 billion of risk-based required assets. Excess available assets were $1.6 billion.

Policy cancellations and housing outlook

12-month persistency, a measure of insurance policies remaining in force, was 80.8%, compared with 81.4% in the second quarter. Swithenbank said future persistency would depend on the trajectory of interest rates. Pollitzer added that the recent decline had been modest and that the latest data showed stabilization, though he did not predict an increase.

Discussing policy cancellations, Pollitzer said borrowers can request cancellation based on home-value appreciation, while policies also automatically cancel when a covered loan reaches a scheduled 78% loan-to-value ratio. He said NMI has seen greater use of borrower-initiated cancellations over several years, including when homeowners obtain updated appraisals as part of accessing home equity. The company did not provide a numerical split between the two types of cancellations.

Pollitzer also addressed an Oct. 22 executive order focused on lowering housing costs, saying NMI looked forward to working with Federal Housing Finance Agency officials and the government-sponsored enterprises on affordability and access while protecting taxpayers and the mortgage market.

About NMI (NASDAQ:NMIH)

NMI Holdings, Inc NASDAQ: NMIH is the parent company of National MI, a U.S.-based provider of private mortgage insurance. Through its insurance subsidiaries, the company helps lenders manage the risk associated with residential mortgage loans, particularly loans made to borrowers with down payments below traditional thresholds.

National MI primarily offers private mortgage insurance for residential purchase and refinance transactions. Its products are designed for mortgage lenders, banks, credit unions and other housing-finance institutions, helping them expand access to homeownership while transferring a portion of potential credit risk.

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