8-K: NMI Holdings Reports Strong 2025 Results, Portfolio Growth

NMI Holdings, Inc. announced robust financial results for the fourth quarter and full year 2025, driven by significant growth in its insured portfolio and record net income.

Summary

• Net income for the fourth quarter ended December 31, 2025, was $94.2 million, or $1.20 per diluted share, compared to $96.0 million ($1.22 diluted EPS) in Q3 2025 and $86.2 million ($1.07 diluted EPS) in Q4 2024.
• Net income for the full year ended December 31, 2025, was $388.9 million, or $4.92 per diluted share, up from $360.1 million ($4.43 diluted EPS) for the year ended December 31, 2024.
• Primary insurance-in-force (IIF) reached $221.4 billion at quarter-end, representing a 1% increase quarter-over-quarter and a 5% increase year-over-year.
• New Insurance Written (NIW) for Q4 2025 was $14.2 billion, an increase of 9% from Q3 2025 and 19% from Q4 2024.
• Total revenue for Q4 2025 was $180.7 million, compared to $178.7 million in Q3 2025 and $166.5 million in Q4 2024.
• Insurance claims and claim expenses increased to $21.2 million in Q4 2025, up from $18.6 million in Q3 2025 and $17.3 million in Q4 2024.
• The loss ratio for Q4 2025 was 13.9%, an increase from 12.3% in Q3 2025 and 12.0% in Q4 2024.
• Book value per share (excluding net unrealized gains and losses) was $34.58, up 4% quarter-over-quarter and 16% year-over-year.
• Annualized return on equity for Q4 2025 was 14.8%, down from 15.6% in Q3 2025 and Q4 2024.
• The number of loans in default increased to 7,661 at December 31, 2025, from 7,093 at September 30, 2025, with the default rate rising to 1.12% from 1.05%.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a solid performance, with strong full-year results and continued portfolio growth, though some Q4 metrics like loss ratio and defaults show a slight softening that bears watching.

Positives

• Achieved record financial results for the full year 2025, with net income of $388.9 million and diluted EPS of $4.92.
• Delivered strong operating performance and consistent growth in the insured portfolio throughout 2025.
• Primary insurance-in-force grew to $221.4 billion at year-end 2025, a 5% increase compared to year-end 2024.
• New Insurance Written (NIW) volume increased significantly, up 19% year-over-year to $14.2 billion in Q4 2025.
• Total revenue for Q4 2025 increased to $180.7 million, up 8.5% compared to Q4 2024.
• Book value per share (excluding net unrealized gains and losses) increased by 16% year-over-year to $34.58.
• Maintained a robust balance sheet with PMIERs available assets of $3.5 billion, significantly exceeding net risk-based required assets of $2.1 billion.
• Net investment income increased 21% year-over-year to $27.5 million in Q4 2025.

Negatives

• Net income for Q4 2025 decreased slightly to $94.2 million from $96.0 million in Q3 2025.
• Diluted EPS for Q4 2025 decreased to $1.20 from $1.22 in Q3 2025.
• Insurance claims and claim expenses increased by 14% quarter-over-quarter and 23% year-over-year to $21.2 million in Q4 2025.
• The loss ratio increased to 13.9% in Q4 2025, up from 12.3% in Q3 2025 and 12.0% in Q4 2024.
• Annualized return on equity for Q4 2025 decreased to 14.8% from 15.6% in Q3 2025 and Q4 2024.
• The number of loans in default increased to 7,661 at Q4 2025 from 7,093 in Q3 2025.
• The default rate rose to 1.12% in Q4 2025 from 1.05% in Q3 2025.
• Annual persistency declined to 83.4% in Q4 2025 from 84.6% in Q4 2024.
• Quarterly run-off increased to 5.1% in Q4 2025 from 4.5% in Q4 2024.

Risks

• Changes in general economic, market, and political conditions, including interest rates, inflation, geopolitical instability, economic downturns (e.g., decline in home prices), or recession, and their impacts on the U.S. housing market and mortgage insurance markets.
• Changes in the charters, business practices, policies, pricing, or priorities of Fannie Mae and Freddie Mac (GSEs), which could decrease or discontinue the use of mortgage insurance.
• Inability to remain an eligible mortgage insurer under the Private Mortgage Insurer Eligibility Requirements (PMIERs) and other GSE requirements.
• Retention of existing certificates of authority in each state and the District of Columbia.
• Actions of existing competitors, including other private and government mortgage insurers, and potential market entry by new competitors or consolidation.
• Adoption of new or changes to existing laws, rules, and regulations that impact the business or the mortgage insurance industry, including Qualified Mortgage and Qualified Residential Mortgage rules.
• U.S. federal tax reform and other potential changes in tax law.
• Legislative or regulatory changes to the GSEs' role in the secondary mortgage market.
• Potential legal and regulatory claims, investigations, actions, audits, or inquiries that could result in adverse judgments, settlements, or fines.
• Ability to successfully execute and implement capital plans, including accessing equity, credit, and reinsurance markets on acceptable terms.
• Lenders, GSEs, or other market participants seeking alternatives to private mortgage insurance.
• Ability to implement business strategy, including writing mortgage insurance on high-quality low down payment residential mortgage loans and implementing complex infrastructure.
• 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 insurance policies are in force.
• Emergence of unexpected claim and coverage issues, including claims exceeding reserves.
• Potential adverse impacts arising from natural disasters, including declines in new business, adverse effects on home prices, and increased notices of default.
• Climate risk and efforts to manage or regulate climate risk by government agencies.
• Potential adverse impacts arising from man-made disasters or public health emergencies, including pandemics.
• Inability of counterparties, including third-party reinsurers, to meet their obligations.
• Failure to maintain, improve, and continue to develop necessary information technology systems or the failure of technology providers to perform.
• Effectiveness and security of information technology systems and digital products and services, including cybersecurity or third-party risks.
• Ability to recruit, train, and retain key personnel.

Future Outlook

The company is well-positioned to continue delivering differentiated growth, returns, and value for shareholders, supported by a strong customer franchise, talented team, high-quality book covered by risk transfer solutions, and a robust balance sheet.

Management Comments

• "The fourth quarter capped another year of success for National MI. In 2025, we delivered strong operating performance, generated significant NIW volume and consistent growth in our insured portfolio, and achieved record financial results and a 16.2% return on equity."
• "We have a strong customer franchise, a talented team driving us forward every day, an exceptionally high-quality book covered by a comprehensive set of risk transfer solutions, and 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."

Industry Context

StockSavvy.ai notes that the mortgage insurance industry is sensitive to housing market conditions, interest rates, and regulatory changes. NMI's strong NIW and IIF growth suggest resilience in a potentially fluctuating market, while the rising default rate warrants attention as a potential indicator of broader housing market stress or specific portfolio characteristics. The company's focus on comprehensive risk transfer solutions is a common strategy in the sector to manage exposure and maintain capital efficiency.

Stakeholder Impact

• Shareholders: Positive impact due to record full-year financial results, consistent growth in the insured portfolio, and increased book value per share. Potential concern from rising loss ratio and default rates could temper enthusiasm.
• Lenders/Investors: Continued protection against borrower defaults through mortgage insurance, supported by a robust balance sheet and risk transfer solutions.
• Borrowers: NMI continues to enable low down payment homeownership, contributing to housing accessibility.

Next Steps

• The company will hold a conference call and webcast on February 10, 2026, at 2:00 p.m. Pacific Time / 5:00 p.m. Eastern Time to discuss the results.

Key Dates

Recommendation

While NMI Holdings delivered strong full-year results and demonstrated robust growth in its insured portfolio and new insurance written, the sequential decline in Q4 net income and return on equity, coupled with an increasing loss ratio and default rate, suggests potential headwinds. The company's strong balance sheet and risk transfer solutions provide stability, but the rising claims and defaults warrant a cautious approach. A "hold" recommendation allows investors to monitor if the Q4 trends in claims and defaults are temporary or indicative of a more sustained shift in portfolio quality or market conditions, while acknowledging the overall positive annual performance.

Keywords

Mortgage Insurance, Private Mortgage Insurance, NMIH, Financial Results, Earnings, Q4 2025, Full Year 2025, Insurance-in-Force, New Insurance Written, Loss Ratio, Return on Equity, PMIERs, Housing Market, Financial Services