NMI Holdings delivered an exceptional performance in the second quarter of 2026, marking record financial achievements. The company saw substantial growth in new insurance written and its insurance in force portfolio, underscoring its robust market position. These positive results were attributed to diligent expense management, a strong return on equity, and a strategic approach to reinsurance. Even with potential macroeconomic challenges, NMI Holdings expressed confidence in its ability to maintain its growth trajectory and continue serving its clientele effectively.
During the second quarter of 2026, NMI Holdings achieved notable milestones, including $16 billion in new insurance written (NIW), which management characterized as high-return new business. The company's total insurance in force (IIF) reached a record $227.1 billion, reflecting a 49% increase over the past four years, significantly outpacing the broader industry's 13% growth. This period also saw total revenue climb to $187.9 million, an 8.1% increase year-over-year, alongside a record adjusted net income of $106 million and adjusted diluted earnings per share of $1.38. The company’s return on equity stood at an impressive 15.9%.
Executive Chairman Brad Shuster highlighted the company’s sustained success, emphasizing its role in facilitating homeownership for nearly 2.2 million borrowers and building a diversified customer base of over 1,700 lenders. President and CEO Adam Pollitzer echoed this sentiment, pointing to the resilient housing market and the consistent demand for the company’s critical down payment support. He noted the high quality of the insured portfolio, safeguarded by comprehensive risk transfer solutions, and the company's strong credit performance.
Despite these successes, Pollitzer acknowledged persistent macroeconomic risks and the need for a proactive stance in pricing, risk selection, and reinsurance strategies. He indicated an expected slight increase in default rates in the latter half of the year due to seasonal shifts and identified emerging pressures in regional housing markets like Florida, Texas, and parts of the Sun Belt and West Coast. However, he also observed signs of market bottoming and recovery in some of these areas.
CFO Aurora Swithenbank detailed the financial specifics, noting net premiums earned of $157.5 million and a stable core yield of 34 basis points. The company’s underwriting and operating expenses were well-managed, leading to an improved expense ratio of 19.4%. Swithenbank also discussed the company's preference for traditional reinsurance due to its favorable terms, flexibility, and certainty, though expressing an openness to re-engage with insurance-linked notes (ILN) when market conditions align. The company also continued its share repurchase program, retiring 827,000 shares for $31.4 million in the quarter, with substantial capacity remaining.
Regarding regulatory developments, Pollitzer addressed the 21st Century ROAD to Housing Act, commending its bipartisan focus on increasing housing supply and improving affordability. While supportive of its long-term goals, he stated that the act is not expected to significantly impact the private mortgage insurance market or the company’s business in the near term, given its supply-centric nature.
The company maintains a strong balance sheet with $3.7 billion in PMIERs available assets, exceeding required assets by $1.6 billion. This financial strength, coupled with continuous investment in its employees and customer base, positions NMI Holdings for sustained growth and value creation for its shareholders.
In summary, NMI Holdings' second-quarter performance demonstrates a company navigating a dynamic market with strategic agility and strong financial health. The firm's focus on high-quality new business, effective risk management, and operational efficiency has led to impressive gains in key financial metrics. While mindful of economic uncertainties, management's measured approach to growth and capital allocation, coupled with a deep understanding of market dynamics, reinforces its optimistic outlook for future success.