NMI Holdings, Inc. Reports Third Quarter 2024 Financial Results; Announces New Reinsurance Agreements

Provided By GlobeNewswire

Last update: Nov 6, 2024

EMERYVILLE, Calif., Nov. 06, 2024 (GLOBE NEWSWIRE) -- NMI Holdings, Inc. (Nasdaq: NMIH) today reported net income of $92.8 million, or $1.15 per diluted share, for the third quarter ended September 30, 2024, compared to $92.1 million, or $1.13 per diluted share, for the second quarter ended June 30, 2024 and $84.0 million, or $1.00 per diluted share, for the third quarter ended September 30, 2023.

Adam Pollitzer, President and Chief Executive Officer of National MI, said, “In the third quarter, we again delivered strong operating performance, consistent growth in our high-quality insured portfolio, and standout financial results. Our products and the support we provide are more important today than ever before, and we’re delivering unique solutions for our customers and their borrowers. We have built an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, our credit performance continues to stand ahead, and we have a robust balance sheet supported by the significant earnings power of our platform. Looking forward, we’re well positioned to continue delivering differentiated growth, returns and value for our shareholders.”

The company also announced today that it has entered into a series of new quota share and excess-of-loss reinsurance agreements that will provide forward flow coverage, broad risk protection and efficient PMIERs funding for new business originated between January 1, 2025 and December 31, 2027.

Selected third quarter 2024 highlights include:

Primary insurance-in-force at quarter end was $207.5 billion, compared to $203.5 billion at the end of the second quarter and $194.8 billion at the end of the third quarter of 2023.
Net premiums earned were $143.3 million, compared to $141.2 million in the second quarter and $130.1 million in the third quarter of 2023.
Total revenue was $166.1 million, compared to $162.1 million in the second quarter and $148.2 million in the third quarter of 2023.
Insurance claims and claim expenses were $10.3 million, compared to $0.3 million in the second quarter and $4.8 million in the third quarter of 2023. Loss ratio was 7.2%, compared to 0.2% in the second quarter and 3.7% in the third quarter of 2023.
Underwriting and operating expenses were $29.2 million, compared to $28.3 million in the second quarter and $27.7 million in the third quarter of 2023. Expense ratio was 20.3%, compared to 20.1% in the second quarter and 21.3% in the third quarter of 2023.
Net income was $92.8 million, compared to $92.1 million in the second quarter and $84.0 million in the third quarter of 2023. Diluted EPS was $1.15, compared to $1.13 in the second quarter and $1.00 in the third quarter of 2023.
Adjusted net income was $92.8 million, compared to $97.6 million in the second quarter and $84.0 million in the third quarter of 2023. Adjusted diluted EPS was $1.15, compared to $1.20 in the second quarter and $1.00 in the third quarter of 2023.
Shareholders’ equity was $2.2 billion at quarter end and book value per share was $27.67. Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $28.71, up 4% compared to $27.54 in the second quarter and 17% compared to $24.56 in the third quarter of 2023.
Annualized return on equity for the quarter was 17.5%, compared to 18.3% in the second quarter and 19.0% in the third quarter of 2023.
At quarter-end, total PMIERs available assets were $3.0 billion and net risk-based required assets were $1.7 billion.

	Quarter Ended			Quarter Ended			Quarter Ended			*Change* ⁽¹⁾			*Change* ⁽¹⁾
	*9/30/2024*			*6/30/2024*			*9/30/2023*			*Q/Q*			*Y/Y*
INSURANCE METRICS ($billions)
Primary Insurance-in-Force	$	207.5		$	203.5		$	194.8		2		%	7	%
New Insurance Written - NIW		12.2			12.5			11.3		(2	)	%	8	%

FINANCIAL HIGHLIGHTS (Unaudited, $millions, except per share amounts)
Net Premiums Earned	$	143.3		$	141.2		$	130.1		2		%	10	%
Net Investment Income		22.5			20.7			17.9		9		%	26	%
Insurance Claims and Claim Expenses		10.3			0.3			4.8		NM ⁽³⁾			114	%
Underwriting and Operating Expenses		29.2			28.3			27.7		3		%	5	%
Net Income		92.8			92.1			84.0		1		%	11	%
Adjusted Net Income		92.8			97.6			84.0		(5	)	%	11	%

Diluted EPS	$	1.15		$	1.13		$	1.00		1		%	14	%
Adjusted Diluted EPS	$	1.15		$	1.20		$	1.00		(5	)	%	14	%
Book Value per Share (excluding net unrealized gains and losses) ⁽²⁾	$	28.71		$	27.54		$	24.56		4		%	17	%

Loss Ratio		7.2	%		0.2	%		3.7	%
Expense Ratio		20.3	%		20.1	%		21.3	%

(1)	Percentages may not be replicated based on the rounded figures presented in the table.
(2)	Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.
(3)	Not meaningful.

Conference Call and Webcast Details

The company will hold a conference call, which will be webcast live today, November 6, 2024, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time. The webcast will be available on the company’s website, www.nationalmi.com, in the “Investor Relations” section. The conference call can also be accessed by dialing (844) 481-2708 in the U.S., or (412) 317-0664 internationally, by referencing NMI Holdings, Inc.

About NMI Holdings, Inc.

NMI Holdings, Inc. (NASDAQ: NMIH), is the parent company of National Mortgage Insurance Corporation (National MI), a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower’s default. To learn more, please visit www.nationalmi.com.

Cautionary Note Regarding Forward-Looking Statements

Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995 (the “PSLRA”). The PSLRA provides a “safe harbor” for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believe,” “can,” “could,” “may,” “predict,” “assume,” “potential,” “should,” “will,” “estimate,” “perceive,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “intend” and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: changes in general economic, market and political conditions and policies (including changes in interest rates and inflation) and investment results or other conditions that affect the U.S. housing market or the U.S. markets for home mortgages, mortgage insurance, reinsurance and credit risk transfer markets, including the risk related to geopolitical instability, inflation, an economic downturn (including any decline in home prices) or recession, and their impacts on our business, operations and personnel; changes in the charters, business practices, policies, pricing or priorities of Fannie Mae and Freddie Mac (collectively, the GSEs), which may include decisions that have the impact of decreasing or discontinuing the use of mortgage insurance as credit enhancement generally, or with first time homebuyers or on very high loan-to-value mortgages; or changes in the direction of housing policy objectives of the Federal Housing Finance Agency (“FHFA”), such as the FHFA’s priority to increase the accessibility to and affordability of homeownership for low-and-moderate income borrowers and underrepresented communities; our ability to remain an eligible mortgage insurer under the private mortgage insurer eligibility requirements (“PMIERs”) and other requirements imposed by the GSEs, which they may change at any time; retention of our existing certificates of authority in each state and the District of Columbia (“D.C.”) and our ability to remain a mortgage insurer in good standing in each state and D.C.; our future profitability, liquidity and capital resources; actions of existing competitors, including other private mortgage insurers and government mortgage insurers such as the Federal Housing Administration, the U.S. Department of Agriculture’s Rural Housing Service and the U.S. Department of Veterans Affairs, and potential market entry by new competitors or consolidation of existing competitors; adoption of new or changes to existing laws, rules and regulations that impact our business or financial condition directly or the mortgage insurance industry generally or their enforcement and implementation by regulators, including the implementation of the final rules defining and/or concerning “Qualified Mortgage” and “Qualified Residential Mortgage”; U.S. federal tax reform and other potential changes in tax law and their impact on us and our operations; legislative or regulatory changes to the GSEs’ role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance industry in particular; potential legal and regulatory claims, investigations, actions, audits or inquiries that could result in adverse judgements, settlements, fines or other reliefs that could require significant expenditures or have other negative effects on our business; uncertainty relating to the coronavirus virus and its variants, including their impact on the global economy, the U.S. housing, real estate, housing finance and mortgage insurance markets, and our business, operations and personnel; our ability to successfully execute and implement our capital plans, including our ability to access the equity, credit and reinsurance markets and to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us, the GSEs and our regulators; lenders, the GSEs, or other market participants seeking alternatives to private mortgage insurance; our ability to implement our business strategy, including our ability to write mortgage insurance on high quality low down payment residential mortgage loans, implement successfully and on a timely basis, complex infrastructure, systems, procedures, and internal controls to support our business and regulatory and reporting requirements of the insurance industry; our ability to attract and retain a diverse customer base, including the largest mortgage originators; failure of risk management or pricing or investment strategies; decrease in the length of time our insurance policies are in force; emergence of unexpected claim and coverage issues, including claims exceeding our reserves or amounts we had expected to experience; potential adverse impacts arising from natural disasters including, with respect to affected areas, a decline in new business, adverse effects on home prices, and an increase in notices of default on insured mortgages; climate risk and efforts to manage or regulate climate risk by government agencies could affect our business and operations; potential adverse impacts arising from the occurrence of any man-made disasters or public health emergencies, including pandemics; the inability of our counter-parties, including third party reinsurers, to meet their obligations to us; failure to maintain, improve and continue to develop necessary information technology systems or the failure of technology providers to perform; effectiveness and security of our information technology systems and digital products and services, including the risks these systems, products or services may fail to operate as expected or planned, or expose us to cybersecurity or third-party risks (including the exposure of our confidential customer and other information); and ability to recruit, train and retain key personnel. These risks and uncertainties also include, but are not limited to, those set forth under the heading “Risk Factors” detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2023, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

Use of Non-GAAP Financial Measures

We believe the use of the non-GAAP measures of adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) enhances the comparability of our fundamental financial performance between periods, and provides relevant information to investors. These non-GAAP financial measures align with the way the company’s business performance is evaluated by management. These measures are not prepared in accordance with GAAP and should not be viewed as alternatives to GAAP measures of performance. These measures have been presented to increase transparency and enhance the comparability of our fundamental operating trends across periods. Other companies may calculate these measures differently; their measures may not be comparable to those we calculate and present.

Adjusted income before tax is defined as GAAP income before tax, excluding the pre-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred.

Adjusted net income is defined as GAAP net income, excluding the after-tax effects of net realized gains or losses from our investment portfolio, periodic costs incurred in connection with capital markets transactions, and other infrequent, unusual or non-operating items in the periods in which such items are incurred. Adjustments to components of pre-tax income are tax effected using the applicable federal statutory tax rate for the respective periods.

Adjusted diluted EPS is defined as adjusted net income divided by adjusted weighted average diluted shares outstanding. Adjusted weighted average diluted shares outstanding is defined as weighted average diluted shares outstanding, adjusted for changes in the dilutive effect of non-vested shares that would otherwise have occurred had GAAP net income been calculated in accordance with adjusted net income. There will be no adjustment to weighted average diluted shares outstanding in the periods that non-vested shares are anti-dilutive under GAAP.

Adjusted return on equity is calculated by dividing adjusted net income on an annualized basis by the average shareholders’ equity for the period.

Adjusted expense ratio is defined as GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions, divided by net premiums earned.

Adjusted combined ratio is defined as the total of GAAP underwriting and operating expenses, excluding the pre-tax effects of periodic costs incurred in connection with capital markets transactions and insurance claims and claims expenses, divided by net premiums earned.

Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on investments, divided by shares outstanding.

Although adjusted income before tax, adjusted net income, adjusted diluted EPS, adjusted return-on-equity, adjusted expense ratio, adjusted combined ratio and book value per share (excluding net unrealized gains and losses) exclude certain items that have occurred in the past and are expected to occur in the future, the excluded items: (1) are not viewed as part of the operating performance of our primary activities; or (2) are impacted by market, economic or regulatory factors and are not necessarily indicative of operating trends, or both. These adjustments, and the reasons for their treatment, are described below.

	(1)	Net realized investment gains and losses. The recognition of the net realized investment gains or losses can vary significantly across periods as the timing is highly discretionary and is influenced by factors such as market opportunities, tax and capital profile, and overall market cycles that do not reflect our current period operating results.
	(2)	Capital markets transaction costs. Capital markets transaction costs result from activities that are undertaken to improve our debt profile or enhance our capital position through activities such as debt refinancing and capital markets reinsurance transactions that may vary in their size and timing due to factors such as market opportunities, tax and capital profile, and overall market cycles.
	(3)	Other infrequent, unusual or non-operating items. Items that are the result of unforeseen or uncommon events, and are not expected to recur with frequency in the future. Identification and exclusion of these items provides clarity about the impact special or rare occurrences may have on our current financial performance. Past adjustments under this category include infrequent, unusual or non-operating adjustments related to severance, restricted stock modification and other expenses incurred in connection with the CEO transition announced in September 2021 and the effects of the release of the valuation allowance recorded against our net federal and certain state net deferred tax assets in 2016 and the re-measurement of our net deferred tax assets in connection with tax reform in 2017. We believe such items are infrequent or non-recurring in nature, and are not indicative of the performance of, or ongoing trends in, our primary operating activities or business.
	(4)	Net unrealized gains and losses on investments. The recognition of the net unrealized gains or losses on investment can vary significantly across periods and is influenced by factors such as interest rate movement, overall market and economic conditions, and tax and capital profiles. These valuation adjustments may not necessarily result in economic gains or losses and not reflective of ongoing operations. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these unrealized gains or losses.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
John.Swenson@nationalmi.com
(510) 788-8417

Consolidated statements of operations and comprehensive income (unaudited)	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,343		$	130,089		$	421,168		$	377,828
Net investment income		22,474			17,853			62,598			49,265
Net realized investment losses		(10	)		—			(10	)		(33	)
Other revenues		285			217			711			563
Total revenues		166,092			148,159			484,467			427,623
Expenses
Insurance claims and claim expenses		10,321			4,812			14,291			14,386
Underwriting and operating expenses		29,160			27,749			87,305			80,983
Service expenses		208			239			539			586
Interest expense		7,076			8,059			29,794			24,146
Total expenses		46,765			40,859			131,929			120,101

Income before income taxes		119,327			107,300			352,538			307,522
Income tax expense		26,517			23,345			78,599			68,825
Net income	$	92,810		$	83,955		$	273,939		$	238,697

Earnings per share
Basic	$	1.17		$	1.02		$	3.42		$	2.88
Diluted	$	1.15		$	1.00		$	3.36		$	2.83

Weighted average common shares outstanding
Basic		79,549			82,096			80,129			82,879
Diluted		81,045			83,670			81,484			84,236

Loss ratio ⁽¹⁾		7.2	%		3.7	%		3.4	%		3.8	%
Expense ratio ⁽²⁾		20.3	%		21.3	%		20.7	%		21.4	%
Combined ratio ⁽³⁾		27.5	%		25.0	%		24.1	%		25.2	%

Net income	$	92,810		$	83,955		$	273,939		$	238,697
Other comprehensive income (loss), net of tax:
Unrealized gains (losses) in accumulated other comprehensive loss, net of tax expense (benefit) of $18,441 and $(6,980) for the three months ended September 30, 2024 and 2023, and $15,300 and $(2,467) for the nine months ended September 30, 2024 and 2023, respectively		69,372			(26,257	)		57,918			(9,280	)
Reclassification adjustment for realized losses included in net income, net of tax benefit of $2 and $0 for the three months ended September 30, 2024 and 2023, and $2 and $7 for the nine months ended September 30, 2024 and 2023, respectively		8			—			8			26
Other comprehensive income (loss), net of tax		69,380			(26,257	)		57,926			(9,254	)
Comprehensive income	$	162,190		$	57,698		$	331,865		$	229,443

(1)	Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)	Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)	Combined ratio may not foot due to rounding.

Consolidated balance sheets (unaudited)	September 30, 2024			December 31, 2023
Assets	(In Thousands, except for share data)
Fixed maturities, available-for-sale, at fair value (amortized cost of $2,806,886 and $2,542,862 as of September 30, 2024 and December 31, 2023, respectively)	$	2,708,286		$	2,371,021
Cash and cash equivalents (including restricted cash of $88 and $1,338 as of September 30, 2024 and December 31, 2023, respectively)		133,319			96,689
Premiums receivable		78,454			76,456
Accrued investment income		21,634			19,785
Deferred policy acquisition costs, net		63,803			62,905
Software and equipment, net		27,251			30,252
Intangible assets and goodwill		3,634			3,634
Reinsurance recoverable		29,214			27,514
Prepaid federal income taxes		235,286			235,286
Other assets		19,244			16,965
Total assets	$	3,320,125		$	2,940,507

Liabilities
Debt	$	414,694		$	397,595
Unearned premiums		71,592			92,295
Accounts payable and accrued expenses		110,968			86,189
Reserve for insurance claims and claim expenses		135,520			123,974
Deferred tax liability, net		380,879			301,573
Other liabilities ⁽¹⁾		11,286			12,877
Total liabilities		1,124,939			1,014,503

Shareholders’ equity
Common stock - $0.01 par value; 87,901,225 shares issued and 79,320,863 shares outstanding as of September 30, 2024 and 87,334,138 shares issued and 80,881,280 shares outstanding as of December 31, 2023 (250,000,000 shares authorized)		879			873
Additional paid-in capital		997,570			990,816
Treasury Stock, at cost: 8,580,362 and 6,452,858 common shares as of September 30, 2024 and December 31, 2023, respectively		(218,364	)		(148,921	)
Accumulated other comprehensive loss, net of tax		(81,991	)		(139,917	)
Retained earnings		1,497,092			1,223,153
Total shareholders’ equity		2,195,186			1,926,004
Total liabilities and shareholders’ equity	$	3,320,125		$	2,940,507

(1)	“Reinsurance funds withheld” has been reclassified as “Other liabilities” in the prior period.

Non-GAAP Financial Measure Reconciliations (unaudited)

	As of and for the three months ended									For the nine months ended
	9/30/2024			6/30/2024			9/30/2023			9/30/2024			9/30/2023
As Reported	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,343		$	141,168		$	130,089		$	421,168		$	377,828
Net investment income		22,474			20,688			17,853			62,598			49,265
Net realized investment losses		(10	)		—			—			(10	)		(33	)
Other revenues		285			266			217			711			563
Total revenues		166,092			162,122			148,159			484,467			427,623
Expenses
Insurance claims and claim expenses		10,321			276			4,812			14,291			14,386
Underwriting and operating expenses		29,160			28,330			27,749			87,305			80,983
Service expenses		208			194			239			539			586
Interest expense		7,076			14,678			8,059			29,794			24,146
Total expenses		46,765			43,478			40,859			131,929			120,101

Income before income taxes		119,327			118,644			107,300			352,538			307,522
Income tax expense		26,517			26,565			23,345			78,599			68,825
Net income	$	92,810		$	92,079		$	83,955		$	273,939		$	238,697

Adjustments:
Net realized investment losses		10			—			—			10			33
Capital markets transaction costs		—			6,966			—			6,966			—
Adjusted income before taxes		119,337			125,610			107,300			359,514			307,555

Income tax expense on adjustments⁽¹⁾		2			1,463			—			1,465			7
Adjusted net income	$	92,818		$	97,582		$	83,955		$	279,450		$	238,723

Weighted average diluted shares outstanding		81,045			81,300			83,670			81,484			84,236

Diluted EPS	$	1.15		$	1.13		$	1.00		$	3.36		$	2.83
Adjusted diluted EPS	$	1.15		$	1.20		$	1.00		$	3.43		$	2.83

Return-on-equity		17.5	%		18.3	%		19.0	%		17.7	%		18.7	%
Adjusted return-on-equity		17.5	%		19.4	%		19.0	%		18.1	%		18.7	%

Expense ratio ⁽²⁾		20.3	%		20.1	%		21.3	%		20.7	%		21.4	%
Adjusted expense ratio ⁽³⁾		20.3	%		20.1	%		21.3	%		20.7	%		21.4	%

Combined ratio ⁽⁴⁾		27.5	%		20.3	%		25.0	%		24.1	%		25.2	%
Adjusted combined ratio ⁽⁵⁾		27.5	%		20.3	%		25.0	%		24.1	%		25.2	%

Book value per share ⁽⁶⁾	$	27.67		$	25.65		$	21.94
Book value per share (excluding net unrealized gains and losses)⁽⁷⁾	$	28.71		$	27.54		$	24.56

(1)	Marginal tax impact of non-GAAP adjustments is calculated based on our statutory U.S. federal corporate income tax rate of 21%, except for those items that are not eligible for an income tax deduction.
(2)	Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)	Adjusted expense ratio is calculated by dividing adjusted underwriting and operating expense (underwriting and operating expenses excluding costs related to capital markets reinsurance transactions) by net premiums earned.
(4)	Combined ratio is calculated by dividing the total of underwriting and operating expenses and insurance claims and claim expenses by net premiums earned.
(5)	Adjusted combined ratio is calculated by dividing the total of adjusted underwriting and operating expenses (underwriting and operating expenses excluding costs related to capital market reinsurance transaction) and insurance claims and claim expenses by net premiums earned.
(6)	Book value per share is calculated by dividing total shareholders’ equity by shares outstanding.
(7)	Book value per share (excluding net unrealized gains and losses) is defined as total shareholders’ equity, excluding the after-tax effects of unrealized gains and losses on our investment portfolio, divided by shares outstanding.

Historical Quarterly Data	2024									2023
	September 30			June 30			March 31			December 31			September 30
	(In Thousands, except for per share data)
Revenues
Net premiums earned	$	143,343		$	141,168		$	136,657		$	132,940		$	130,089
Net investment income		22,474			20,688			19,436			18,247			17,853
Net realized investment losses		(10	)		—			—			—			—
Other revenues		285			266			160			193			217
Total revenues		166,092			162,122			156,253			151,380			148,159
Expenses
Insurance claims and claim expenses		10,321			276			3,694			8,232			4,812
Underwriting and operating expenses		29,160			28,330			29,815			29,716			27,749
Service expenses		208			194			137			185			239
Interest expense		7,076			14,678			8,040			8,066			8,059
Total expenses		46,765			43,478			41,686			46,199			40,859

Income before income taxes		119,327			118,644			114,567			105,181			107,300
Income tax expense		26,517			26,565			25,517			21,768			23,345
Net income	$	92,810		$	92,079		$	89,050		$	83,413		$	83,955

Earnings per share
Basic	$	1.17		$	1.15		$	1.10		$	1.03		$	1.02
Diluted	$	1.15		$	1.13		$	1.08		$	1.01		$	1.00

Weighted average common shares outstanding
Basic		79,549			80,117			80,726			81,005			82,096
Diluted		81,045			81,300			82,099			82,685			83,670

Other data
Loss ratio ⁽¹⁾		7.2	%		0.2	%		2.7	%		6.2	%		3.7	%
Expense ratio ⁽²⁾		20.3	%		20.1	%		21.8	%		22.4	%		21.3	%
Combined ratio ⁽³⁾		27.5	%		20.3	%		24.5	%		28.5	%		25.0	%

(1)	Loss ratio is calculated by dividing insurance claims and claim expenses by net premiums earned.
(2)	Expense ratio is calculated by dividing underwriting and operating expenses by net premiums earned.
(3)	Combined ratio may not foot due to rounding.

Portfolio Statistics

The table below highlights trends in our primary portfolio as of the date and for the periods indicated.

Primary portfolio trends	As of and for the three months ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
	($ Values In Millions, except as noted below)
New insurance written (NIW)	$	12,218		$	12,503		$	9,398		$	8,927		$	11,334
New risk written		3,245			3,335			2,486			2,354			3,027
Insurance-in-force (IIF) ⁽¹⁾		207,538			203,501			199,373			197,029			194,781
Risk-in-force (RIF)⁽¹⁾		55,253			53,956			52,610			51,796			51,011
Policies in force (count)⁽¹⁾		654,374			645,276			635,662			629,690			622,993
Average loan size ($ value in thousands) ⁽¹⁾	$	317		$	315		$	314		$	313		$	313
Coverage percentage ⁽²⁾		26.6	%		26.5	%		26.4	%		26.3	%		26.2	%
Loans in default (count) ⁽¹⁾		5,712			4,904			5,109			5,099			4,594
Default rate ⁽¹⁾		0.87	%		0.76	%		0.80	%		0.81	%		0.74	%
Risk-in-force on defaulted loans ⁽¹⁾	$	468		$	401		$	414		$	408		$	359
Average net premium yield ⁽³⁾		0.28	%		0.28	%		0.28	%		0.27	%		0.27	%
Earnings from cancellations	$	0.8		$	1.0		$	0.6		$	1.0		$	0.9
Annual persistency⁽⁴⁾		85.5	%		85.4	%		85.8	%		86.1	%		86.2	%
Quarterly run-off⁽⁵⁾		4.0	%		4.2	%		3.6	%		3.4	%		4.1	%

(1)	Reported as of the end of the period.
(2)	Calculated as end of period RIF divided by end of period IIF.
(3)	Calculated as net premiums earned, divided by average primary IIF for the period, annualized.
(4)	Defined as the percentage of IIF that remains on our books after a given twelve-month period.
(5)	Defined as the percentage of IIF that is no longer on our books after a given three-month period.

NIW, IIF and Premiums

The tables below present primary NIW and primary IIF, as of the dates and for the periods indicated.

Primary NIW	For the three months ended
	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
	(In Millions)
Monthly	$	11,978	$	12,288	$	9,175	$	8,614	$	11,038
Single		240		215		223		313		296
Total	$	12,218	$	12,503	$	9,398	$	8,927	$	11,334

Primary IIF	As of
	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
	(In Millions)
Monthly	$	189,241	$	184,862	$	180,343	$	177,764	$	175,308
Single		18,297		18,639		19,030		19,265		19,473
Total	$	207,538	$	203,501	$	199,373	$	197,029	$	194,781

The following table presents the amounts related to the company’s quota-share reinsurance transactions (the 2016 QSR Transaction, 2018 QSR Transaction, 2020 QSR Transaction, 2021 QSR Transaction, 2022 QSR Transaction, 2022 Seasoned QSR Transaction, 2023 QSR Transaction, and 2024 QSR Transaction and collectively, the QSR Transactions), insurance-linked note transactions (2020-2 ILN Transaction, 2021-1 ILN Transaction, and 2021-2 ILN Transaction and collectively, the ILN Transactions), and traditional reinsurance transactions (2022-1 XOL Transaction, 2022-2 XOL Transaction, 2022-3 XOL Transaction, 2023-1 XOL Transaction, 2023-2 XOL Transaction, and 2024 XOL Transaction and collectively, the XOL Transactions) for the periods indicated.

	For the three months ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
	(In Thousands)
The QSR Transactions
Ceded risk-in-force	$	12,968,039		$	12,815,434		$	12,669,207		$	12,626,541		$	12,753,261
Ceded premiums earned		(41,761	)		(41,555	)		(41,269	)		(41,218	)		(42,015	)
Ceded claims and claim expenses (benefits)		2,449			(138	)		659			2,447			2,221
Ceding commission earned		10,152			10,222			10,292			9,561			9,808
Profit commission		21,883			24,351			23,407			22,057			22,184
The ILN Transactions ⁽¹⁾
Ceded premiums	$	(4,302	)	$	(5,858	)	$	(5,976	)	$	(6,305	)	$	(6,925	)
The XOL Transactions
Ceded Premiums	$	(9,760	)	$	(9,403	)	$	(9,223	)	$	(8,302	)	$	(7,968	)

(1)	Effective July 25, 2023 and July 25, 2024, NMIC exercised its optional call to terminate and commute its previously outstanding excess of loss reinsurance agreement with Oaktown Re II Ltd. and Oaktown Re III Ltd., respectively. NMIC no longer makes risk premium payments to Oaktown Re II Ltd. and Oaktown Re III Ltd., thereafter.

The tables below present our total primary NIW by FICO, loan-to-value (LTV) ratio, and purchase/refinance mix for the periods indicated.

Primary NIW by FICO	For the three months ended						For the nine months ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(In Millions)
>= 760	$	6,615	$	6,797	$	6,261	$	18,300	$	18,431
740-759		2,057		2,154		1,877		6,008		5,227
720-739		1,529		1,537		1,556		4,286		4,204
700-719		1,040		1,084		876		2,904		2,000
680-699		652		635		623		1,817		1,378
<=679		325		296		141		804		306
Total	$	12,218	$	12,503	$	11,334	$	34,119	$	31,546
Weighted average FICO		757		757		758		757		761

Primary NIW by LTV	For the three months ended									For the nine months ended
	September 30, 2024			June 30, 2024			September 30, 2023			September 30, 2024			September 30, 2023
	(In Millions)
95.01% and above	$	1,568		$	1,768		$	1,362		$	4,398		$	2,723
90.01% to 95.00%		5,720			5,645			5,414			15,779			14,822
85.01% to 90.00%		3,584			3,739			3,525			10,254			10,650
85.00% and below		1,346			1,351			1,033			3,688			3,351
Total	$	12,218		$	12,503		$	11,334		$	34,119		$	31,546
Weighted average LTV		92.3	%		92.3	%		92.4	%		92.3	%		92.1	%

Primary NIW by purchase/refinance mix	For the three months ended						For the nine months ended
	September 30, 2024		June 30, 2024		September 30, 2023		September 30, 2024		September 30, 2023
	(In Millions)
Purchase	$	11,708	$	12,257	$	11,143	$	33,122	$	30,870
Refinance		510		246		191		997		676
Total	$	12,218	$	12,503	$	11,334	$	34,119	$	31,546

The table below presents a summary of our primary IIF and RIF by book year as of September 30, 2024.

Primary IIF and RIF	As of September 30, 2024
	IIF		RIF
Book Year	(In Millions)
2024	$	32,892	$	8,743
2023		35,880		9,461
2022		49,130		13,086
2021		53,471		14,246
2020		22,466		6,118
2019 and before		13,699		3,599
Total	$	207,538	$	55,253

The tables below present our total primary IIF and RIF by FICO and LTV, and total primary RIF by loan type as of the dates indicated.

Primary IIF by FICO	As of
	September 30, 2024		June 30, 2024		September 30, 2023
	(In Millions)
>= 760	$	103,764	$	101,531	$	97,026
740-759		36,830		36,135		34,394
720-739		28,930		28,479		27,360
700-719		19,654		19,295		18,484
680-699		13,326		13,138		12,683
<=679		5,034		4,923		4,834
Total	$	207,538	$	203,501	$	194,781

Primary RIF by FICO	As of
	September 30, 2024		June 30, 2024		��	September 30, 2023
	(In Millions)
>= 760	$	27,396	$	26,692		$	25,149
740-759		9,850		9,624			9,067
720-739		7,788		7,634			7,254
700-719		5,337		5,217			4,938
680-699		3,590		3,530			3,373
<=679		1,292		1,259			1,230
Total	$	55,253	$	53,956		$	51,011

Primary IIF by LTV	As of
	September 30, 2024		June 30, 2024		September 30, 2023
	(In Millions)
95.01% and above	$	22,644	$	21,556	$	19,007
90.01% to 95.00%		101,872		99,355		93,908
85.01% to 90.00%		63,568		62,461		59,371
85.00% and below		19,454		20,129		22,495
Total	$	207,538	$	203,501	$	194,781

Primary RIF by LTV	As of
	September 30, 2024		June 30, 2024		September 30, 2023
	(In Millions)
95.01% and above	$	7,054	$	6,698	$	5,876
90.01% to 95.00%		30,100		29,354		27,741
85.01% to 90.00%		15,777		15,500		14,704
85.00% and below		2,322		2,404		2,690
Total	$	55,253	$	53,956	$	51,011

Primary RIF by Loan Type	As of
	September 30, 2024		June 30, 2024		September 30, 2023
Fixed	98	%	98	%	98	%
Adjustable rate mortgages:
Less than five years	—		—		—
Five years and longer	2		2		2
Total	100	%	100	%	100	%

The table below presents a summary of the change in total primary IIF for the dates and periods indicated.

Primary IIF	As of and for the three months ended
	September 30, 2024			June 30, 2024			September 30, 2023
	(In Millions)
IIF, beginning of period	$	203,501		$	199,373		$	191,306
NIW		12,218			12,503			11,334
Cancellations, principal repayments and other reductions		(8,181	)		(8,375	)		(7,859	)
IIF, end of period	$	207,538		$	203,501		$	194,781

Geographic Dispersion

The following table shows the distribution by state of our primary RIF as of the periods indicated.

Top 10 primary RIF by state	As of
	September 30, 2024		June 30, 2024		September 30, 2023
California	10.1	%	10.1	%	10.3	%
Texas	8.7		8.8		8.7
Florida	7.4		7.5		7.7
Georgia	4.1		4.2		4.1
Washington	3.9		3.9		4.0
Illinois	3.9		3.9		3.9
Virginia	3.8		3.8		4.0
Pennsylvania	3.4		3.4		3.4
Ohio	3.2		3.1		2.9
North Carolina	3.1		3.0		3.0
Total	51.6	%	51.7	%	52.0	%

The table below presents selected primary portfolio statistics, by book year, as of September 30, 2024.

	As of September 30, 2024
Book Year	Original Insurance Written		Remaining Insurance in Force		% Remaining of Original Insurance		Policies Ever in Force	Number of Policies in Force	Number of Loans in Default	# of Claims Paid	Incurred Loss Ratio (Inception to Date)⁽¹⁾		Cumulative Default Rate ⁽²⁾		Current default rate ⁽³⁾
	($ Values In Millions)
2015 and prior	$	16,035	$	932	6	%	67,989	5,221	91	204	2.6	%	0.4	%	1.7	%
2016		21,187		1,666	8	%	83,626	9,061	163	180	1.7	%	0.4	%	1.8	%
2017		21,582		2,000	9	%	85,897	11,275	275	173	1.9	%	0.5	%	2.4	%
2018		27,295		2,562	9	%	104,043	13,766	398	176	2.5	%	0.6	%	2.9	%
2019		45,141		6,539	14	%	148,423	28,700	476	83	1.8	%	0.4	%	1.7	%
2020		62,702		22,466	36	%	186,174	77,876	543	39	1.3	%	0.3	%	0.7	%
2021		85,574		53,471	62	%	257,972	175,707	1,524	60	3.6	%	0.6	%	0.9	%
2022		58,734		49,130	84	%	163,281	142,628	1,662	38	17.1	%	1.0	%	1.2	%
2023		40,473		35,880	89	%	111,994	102,416	522	2	12.9	%	0.5	%	0.5	%
2024		34,119		32,892	96	%	90,031	87,724	58	—	4.0	%	0.1	%	0.1	%
Total	$	412,842	$	207,538			1,299,430	654,374	5,712	955

(1)	Calculated as total claims incurred (paid and reserved) divided by cumulative premiums earned, net of reinsurance.
(2)	Calculated as the sum of the number of claims paid ever to date and number of loans in default divided by policies ever in force.
(3)	Calculated as the number of loans in default divided by number of policies in force.

The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claim expenses:

	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
	(In Thousands)
Beginning balance	$	125,443		$	110,448		$	123,974		$	99,836
Less reinsurance recoverables ⁽¹⁾		(27,336	)		(24,023	)		(27,514	)		(21,587	)
Beginning balance, net of reinsurance recoverables		98,107			86,425			96,460			78,249

Add claims incurred:
Claims and claim expenses incurred:
Current year ⁽²⁾		21,160			16,117			71,532			60,987
Prior years⁽³⁾		(10,839	)		(11,305	)		(57,241	)		(46,601	)
Total claims and claim expenses incurred		10,321			4,812			14,291			14,386

Less claims paid:
Claims and claim expenses paid:
Current year ⁽²⁾		180			65			180			119
Prior years ⁽³⁾		1,942			1,050			4,265			2,394
Total claims and claim expenses paid		2,122			1,115			4,445			2,513

Reserve at end of period, net of reinsurance recoverables		106,306			90,122			106,306			90,122
Add reinsurance recoverables ⁽¹⁾		29,214			25,956			29,214			25,956
Ending balance	$	135,520		$	116,078		$	135,520		$	116,078

(1)	Related to ceded losses recoverable under the QSR Transactions.
(2)	Related to insured loans with their most recent defaults occurring in the current year. For example, if a loan defaulted in a prior year and subsequently cured and later re-defaulted in the current year, the default would be included in the current year. Amounts are presented net of reinsurance and included $63.2 million attributed to net case reserves and $7.0 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $54.4 million attributed to net case reserves and $5.8 million attributed to net IBNR reserves for the nine months ended September 30, 2023.
(3)	Related to insured loans with defaults occurring in prior years, which have been continuously in default before the start of the current year. Amounts are presented net of reinsurance and included $49.8 million attributed to net case reserves and $6.3 million attributed to net IBNR reserves for the nine months ended September 30, 2024 and $41.1 million attributed to net case reserves and $4.5 million attributed to net IBNR reserves for the nine months ended September 30, 2023.

The following table provides a reconciliation of the beginning and ending count of loans in default:

	For the three months ended September 30,				For the nine months ended September 30,
	2024		2023		2024		2023
Beginning default inventory	4,904		4,349		5,099		4,449
Plus: new defaults	2,411		1,744		6,015		4,719
Less: cures	(1,529	)	(1,434	)	(5,215	)	(4,434	)
Less: claims paid	(67	)	(62	)	(168	)	(129	)
Less: rescission and claims denied	(7	)	(3	)	(19	)	(11	)
Ending default inventory	5,712		4,594		5,712		4,594

The following table provides details of our claims paid, before giving effect to claims ceded under the QSR Transactions, for the periods indicated:

	For the three months ended September 30,						For the nine months ended September 30,
	2024			2023			2024			2023
	($ Values In Thousands)
Number of claims paid ⁽¹⁾		67			62			168			129
Total amount paid for claims	$	2,692		$	1,402		$	5,714		$	3,132
Average amount paid per claim	$	40		$	23		$	34		$	24
Severity ⁽²⁾		64	%		46	%		58	%		51	%

(1)	Count includes 21 and 56 claims settled without payment during the three and nine months ended September 30, 2024, respectively, and 23 and 47 claims settled without payment during the three and nine months ended September 30, 2023, respectively.
(2)	Severity represents the total amount of claims paid including claim expenses divided by the related RIF on the loan at the time the claim is perfected, and is calculated including claims settled without payment.

The following table shows our average reserve per default, before giving effect to reserves ceded under the QSR Transactions, as of the dates indicated:

	As of September 30,
Average reserve per default:	2024		2023
	(In Thousands)
Case ⁽¹⁾	$	21.8	$	23.4
IBNR ⁽¹⁾⁽²⁾		1.9		1.9
Total	$	23.7	$	25.3

(1)	Defined as the gross reserve per insured loan in default.
(2)	Amount includes claims adjustment expenses.

The following table provides a comparison of the PMIERs available assets and net risk-based required asset amount as reported by NMIC as of the dates indicated:

	As of
	September 30, 2024		June 30, 2024		September 30, 2023
	(In Thousands)
Available assets	$	3,006,892	$	2,827,721	$	2,602,680
Net risk-based required assets		1,735,790		1,651,569		1,414,233