NMI Holdings NMIH Q4 2025 Earnings Call Transcript

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Date

Tuesday, Feb. 10, 2026 at 5 p.m. ET

Call participants

• Executive Chairman — Bradley Shuster
• President and Chief Executive Officer — Adam Pollitzer
• Chief Financial Officer — Aurora Swithenbank
• Vice President, Investor Relations and Treasury — John Swenson

Takeaways

• Net Income -- $388.9 million for the year, an 8% increase, setting a company record.
• Diluted EPS -- $4.92 for the year, up 11% from the prior year.
• Return on Equity -- 16.2% for the year, achieving the stated focus on mid-teens returns.
• Insurance in Force -- $221.4 billion at year-end, described as "record," up 1.4% quarter over quarter and 5.4% year over year.
• New Insurance Written (NIW) -- $14.2 billion in the fourth quarter, with $49 billion for the full year.
• Total Revenue -- $706.4 million for the year, reflecting 9% annual growth; $180.7 million for the quarter, a quarterly record.
• Net Premiums Earned -- $152.5 million for the fourth quarter, rising sequentially and year over year.
• Net Yield and Core Yield -- Net yield at 28 basis points and core yield at 34 basis points, both steady sequentially.
• Persistency Rate -- 83.4% for the quarter, declining from 83.9% in the prior quarter, tied to rate movements and market activity.
• Defaults and Default Rate -- 7,661 defaults at year-end with a 1.12% default rate; up from 7,093 at the end of the previous quarter.
• Claims Expense -- $21.2 million for the quarter, higher than the $18.6 million prior quarter, attributed to seasonality and portfolio seasoning.
• Underwriting and Operating Expenses -- $31.1 million for the quarter, matching the same period last year yet up from $29.2 million sequentially.
• Book Value Per Share -- $33.98 at year-end, rising to $34.58 excluding unrealized investment gains/losses; up 4% quarter over quarter and 16% year over year.
• Share Repurchases -- $31 million of common stock repurchased in the quarter, retiring 811,000 shares at an average price of $37.72; $226 million remains under the current buyback authorization.
• PMIERs Capital Position -- $3.5 billion in total available assets and $2.1 billion in risk-based required assets; $1.4 billion excess.
• Reinsurance Program -- New quota share and excess of loss treaties provide forward flow coverage through 2028 at an estimated 4% pretax cost of capital.
• Customer Expansion -- 90 new lenders activated in the year, ending with over 1,700 active accounts and more than 680,000 policies outstanding.
• Expense Ratio -- 20.4% for the quarter, in line with internal targets.

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Risks

• Aurora Swithenbank stated, "Consumer debt balances are at all-time highs," acknowledging associated strain in the labor market and lower consumer confidence for certain cohorts.
• Persistency declined by 50 basis points in the quarter, with management expecting normalization toward historical trends as market rates drive increased refinancing and turnover.

Summary

Management highlighted a record year for NMI Holdings (NASDAQ:NMIH), citing growth in insured portfolio size and earnings, paired with recognized improvements in operating leverage. The company secured new multi-year reinsurance treaties described as "amongst the best we've ever achieved," indicating favorable market terms and strategic de-risking. Active customer account growth and technology-driven process enhancements—including broader deployment of AI tools—were acknowledged as key differentiators for future scalability. Share repurchases remain steady, with stated flexibility to opportunistically accelerate if valuation allows and $226 million in remaining authorization.

• Adam Pollitzer said, "we expect that the private MI market will remain just as strong in 2026 with long-term secular trends continuing to drive an attractive new business opportunity."
• Aurora Swithenbank specified new quota share agreements provide forward flow reinsurance coverage for all new business through 2028 at "an estimated 4% pretax cost of capital."
• The management team emphasized there are no immediate plans for large increases in AI-related spending, while also noting "no particular initiatives in terms of spend that we have in in 2026 that would in any way change the expense discipline that we've demonstrated."
• Default geography and cohort data did not reveal notable concentrations; targeted portfolio management tools are used to monitor and shape risk exposures across markets and vintages.

Industry glossary

• NIW (New Insurance Written): The aggregate original principal amount of mortgage loans for which new insurance policies were issued during a period.
• PMIERs (Private Mortgage Insurer Eligibility Requirements): A risk-based capital framework set by Fannie Mae and Freddie Mac outlining minimum standards, asset requirements, and risk management practices for private mortgage insurers.
• Persistency Rate: The percentage of insurance in force that remains active over a specified period, reflecting policy retention amid refinance or payoff trends.
• Quota Share Reinsurance: A proportional reinsurance arrangement in which a specified percentage of each risk is ceded to a reinsurer, sharing both premium and losses.
• Excess of Loss (XOL) Reinsurance: A form of reinsurance where the reinsurer covers losses exceeding a specified threshold up to a limit, rather than sharing all risks proportionally.

Full Conference Call Transcript

John Swenson: Good afternoon, and welcome to the 2025 fourth quarter conference call for National MI. I'm John Swenson, vice president of investor relations and treasury. Joining us on the call today are Brad Shuster, executive chairman, Adam Pollitzer, President and Chief Executive Officer, and Aurora Swithenbank, our chief financial officer. Financial results for the quarter were released after the close today. The press release may be accessed on NMI Holdings, Inc.'s website located at nationalmi.com under the Investors tab. During the course of this call, we may make comments about our expectations for the future. Actual results could differ materially from those contained in these forward-looking statements.

Additional information about the factors that could cause actual results or trends to differ materially from those discussed on the call can be found on our website or through our filings with the SEC. If and to the extent the company makes forward-looking statements, we do not undertake any obligation to update those statements in the future in light of subsequent developments. Further, one should rely on the fact that the guidance of such statements is current at any time other than the time of this call. Also noted on this call, we may refer to certain non-GAAP measures.

In today's press release and on our website, we've provided a reconciliation of these measures to the most comparable measures under GAAP. Now I'll turn the call over to Brad.

Bradley Shuster: Thank you, John, and good afternoon, everyone. I'm pleased to report that in the fourth quarter, National MI again delivered standout operating performance, continued growth in our insured portfolio, and strong financial results. Capping another year of success. We closed 2025 with $49 billion of total NIW volume and a record $221.4 billion of high-quality, high-performing primary insurance in force. We delivered broad success in customer development, continued to innovate in the capital and reinsurance markets, and once again achieved industry-leading credit performance. In 2025, we generated record net income of $388.9 million, up 8% compared to 2024. Record diluted EPS of $4.92, up 11% compared to 2024, and delivered a 16.2% return on equity.

Looking ahead, I'm excited at the opportunity we have to continue to build on our success. As we move forward in 2026, we'll continue to focus on our people. They are talented, innovative, and dedicated. And will continue to invest in our culture with a focus on collaboration, performance, and impact. We'll continue to differentiate with our customers. The mortgage market is connected and evolving, and we'll work to continue to stand out with our focus on customer service, value-added engagement, and technology leadership. We'll continue to prioritize discipline and risk responsibility as we grow our insured portfolio. Working to write a large volume of high-quality, high-return business under the protective umbrella of our comprehensive credit risk management framework.

And we'll continue to focus on building value for our shareholders. Growing earnings, compounding book value, delivering strong mid-teens returns, and prudently distributing excess capital. Before turning it over to Adam, I'd also like to comment on the current policy environment. Our conversations in Washington remain active and constructive. We have long noted that there is bipartisan recognition of the unique and valuable role that the private mortgage insurance industry plays. We are in the market every day with a clear mandate and purpose. Offering a low-cost, high-value solution that helps borrowers bridge the down payment gap and meaningfully reduces the cash required at the closing table.

In the process, we make home ownership more affordable and achievable for millions of Americans in communities across the country. With coverage that works to insulate the GSEs and taxpayers from risk and loss in a downturn. National MI and the broader private MI industry have never been stronger or better positioned to provide support than we are today. And we're looking forward to continuing to work with the administration to advance their important housing goals. With that, let me turn it over to Adam.

Adam Pollitzer: Thank you, Brad, and good afternoon, everyone. National MI continued to perform in the fourth quarter. Delivering significant new business production, consistent growth in our insured portfolio, and strong financial results. We generated $14.2 billion of NIW volume and ended the period with a record $221.4 billion of high-quality, high-performing primary insurance in force. Total revenue in the fourth quarter was a record $180.7 million, and we delivered GAAP net income of $94.2 million, or $1.20 per diluted share, and a 14.8% return on equity. Overall, we had a terrific quarter and closed 2025 in a position of real strength. We generated $49 billion of NIW volume during the year and exited with $221.4 billion of primary insurance in force.

Our portfolio is the fastest-growing, highest-quality, and best-performing in the MI industry and has enormous embedded value. We now have over 680,000 policies outstanding and have helped a record number of borrowers gain access to housing at a time when they needed us most. We enjoyed continued momentum and growth in our customer franchise. Activating 90 new lenders in 2025 and ending the year with over 1,700 active accounts. We were once again recognized as a great place to work, our tenth consecutive award, which we view as a reflection of our unique corporate culture and a testament to the hard work and dedication of our talented team.

We continue to innovate and found broad success and support in the reinsurance market. Securing a series of new quota share and excess of loss treaties in the fourth quarter that further extend our comprehensive credit risk management framework. And are amongst the best we've ever achieved in terms of their cost, capacity, duration, and structure. And we achieved record full-year financial results. Generating $706.4 million of total revenue, up 9% compared to 2024. $388.9 million of GAAP net income, up 8% compared to 2024. $4.92 of diluted EPS, up 11% compared to 2024. And a 16.2% return on equity.

As we begin 2026, we're encouraged by both the broad resiliency that we've seen in the macro environment and housing market, and by the continued opportunity that we see across the private MI industry. Total MI industry NIW volume was over $300 billion in 2025. With the market demonstrating real strength despite the headwind of elevated rates for much of the year. Our lender customers and their borrowers continue to rely on us in size for critical down payment support, and we expect that the private MI market will remain just as strong in 2026 with long-term secular trends continuing to drive an attractive new business opportunity.

More broadly, we remain encouraged by the continued discipline that we see across the industry and are confident as we look ahead. The private MI market opportunity is compelling, and we're well-positioned to continue to deliver value for our people, our customers and their borrowers, and our shareholders. 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. With that, I'll turn it over to Aurora.

Aurora Swithenbank: Thank you, Adam. We again delivered strong financial results in the fourth quarter. Total revenue was a record $180.7 million. GAAP net income was $94.2 million, or $1.20 per diluted share, and return on equity was 14.8%. We generated $14.2 billion of NIW, and our primary insurance in force grew to $221.4 billion, up 1.4% from the end of the third quarter and 5.4% compared to 2024. Twelve-month persistency was 83.4% in the fourth quarter, compared to 83.9% in the third quarter. Net premiums earned in the fourth quarter were a record $152.5 million, compared to $151.3 million in the third quarter and $143.5 million in 2024.

Net yield for the quarter was 28 basis points, consistent with the third quarter. Core yield, which excludes the cost of our reinsurance coverage in contribution from cancellation earning, was 34 basis points, also unchanged from the third quarter. Investment income was $27.5 million in the fourth quarter, compared to $26.8 million in the third quarter and $22.7 million in 2024. Total revenue was a record $180.7 million in the fourth quarter, compared to $178.7 million in the third quarter and $166.5 million in 2024. Underwriting and operating expenses were $31.1 million in the fourth quarter, compared to $29.2 million in the third quarter, and $31.1 million in 2024. Our expense ratio was 20.4%.

We have a uniquely high-quality insured portfolio, and our credit performance continues to stand out. We had 7,661 defaults at December 31, compared to 7,093 at September 30. And our default rate was 1.12% at year-end. Claims expense for the fourth quarter was $21.2 million, compared to $18.6 million in the third quarter. Reflecting normal seasonal activity and the continued growth and seasoning of our portfolio. GAAP net income for the quarter was $94.2 million, and diluted earnings per share was $1.20. Adjusted net income was $93.8 million, and adjusted diluted EPS was also $1.20. Shareholders' equity at December 31 was $2.6 billion, and book value per share was $33.98.

Book value per share excluding the impact of net unrealized gains and losses in the investment portfolio was $34.58. Up 4% compared to the third quarter and 16% compared to the fourth quarter of last year. In the fourth quarter, we repurchased $31 million of common stock, retiring 811,000 shares at an average of $37.72. Since starting our buyback program in 2022, we've repurchased a total of $349 million of common stock. Retiring 12.1 million shares at an average price of $28.89. Have $226 million of repurchase capacity remaining under our existing authorization. In the fourth quarter, we entered into a series of new quota share and of loss reinsurance treaties.

Which together further extend their comprehensive credit risk management program and provide us with forward flow coverage for all new business produced through 2028 at an estimated 4% pretax cost of capital. Reinsurance has long been a core pillar of our risk management strategy. Working to mitigate the potential impact of credit volatility in our insured portfolio. And has consistently provided us with a deep, secure, and efficient source of PMIERs growth capital. We have significant experience, strong secondary market relationships, and a track record of leading with innovation across the risk transfer spectrum. Deals we have just secured are among the best we've ever achieved in terms of their cost, capacity, duration, and structure.

And serve to highlight the quality of our insured portfolio and the differentiation we have achieved through our comprehensive credit risk management framework. At year-end, we reported $3.5 billion of total available assets under PMIERs. And $2.1 billion of risk-based required assets. Excess available assets were $1.4 billion. Overall, we achieved robust financial results during the quarter, delivering consistent growth in our high-quality insured portfolio, record top-line performance, continued expense efficiency, bottom-line profitability, and returns. With that, let me turn it back to Adam.

Adam Pollitzer: Thank you, Aurora. Overall, we had a terrific quarter. Capping a record year in which we delivered broad success in customer development, continued to innovate in the capital and reinsurance markets, once again achieved industry-leading credit performance, and generated exceptionally strong financial results. With record profitability, significant growth in book value per share, and a 16.2% return on equity. Looking ahead, we're confident we're well-positioned to continue to serve our customers and their borrowers, invest in our employees and their success, drive growth in our high-quality insured portfolio, and deliver through the cycle growth, returns, and value for our shareholders. Thank you for joining us today.

I'll now ask the operator to come back on so we can take your questions.

Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press star, then 1 on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please At this time, we will pause momentarily to assemble our roster. And the first question will come from Bose George with KBW. Please go ahead.

Bose George: Hey, everyone. Good afternoon. Actually, first, have you seen any changes in the competitive landscape in the industry? And should we expect the core premium yield to remain pretty steady in 2026? Yeah. But I'll I'll talk about the industry and then turn it to Aurora. To talk about the both of you on premium yield. I'd say broadly speaking, we see a really balance in constructive environment. And we're we're we continue to be encouraged by volume, pricing, rate, underlying unit economics that we're able to achieve on new business.

We think today, certainly, we had natural admire where we should be, which is at a point of balance where we're fully and fairly supporting our customers and their borrowers, and at the same time, you know, we're able to use rates that we're achieving in the market to appropriately protect our balance sheet, our returns, and our ability to deliver value for shareholders. So a really constructive environment as we look out across the landscape and Aurora will pick up on yield.

Aurora Swithenbank: In terms of outlook, we don't provide guidance on that. But we do expect our core yield which obviously strips away the impact of movements in reinsurance, costs and cancellation earnings we expect that to remain generally stable going forward. Obviously, the potential for a little bit of plus minus, but generally stable. And the net yield will benefit from that core stability, but will also be impacted by our loss experiences. Since our profit commissions fluctuate with changes in our suit claim seeded claims expense.

Bose George: Okay. Great. Thanks. And then just one on the front. One concern in the market seems be you know, what might a potential reduction of premiums at the FHA. You know, just from your interaction with regulators, you know, how do you think that potentially plays out?

Adam Pollitzer: Yeah. Look, I think it's fair question, certainly given the focus on affordability and the fact that the FHA reported at least as a headline matter what appears to be a healthy capital position. But I guess I note a few points First, certainly the private MI industry is already providing a seamless low-cost high-value solution. To the vast majority of borrowers who need support. And we're encouraged, as Brad mentioned, that there's really broad bipartisan recognition of the unique and valuable role that our industry plays. I think when you look at it, I don't want to speak for anybody in DC. Obviously, it's not our decision.

But when we look at there are some real challenges that we would know at the FHA as a credit of capital, a regulatory and a budget matter. That we certainly are focused on when we think about the potential for an FHA rate cut. We don't, at this point, given all of those constraints, that there should be any additional FHA rate adjustment. We don't think it serves the interest of the American taxpayer to ask them to take on even more risk and provide an even larger subsidy to the housing market particularly when the MI industry is ready, willing, and able to provide all the support necessary. Okay. Great. Thanks.

Operator: The next question will come from Terry Ma with Barclays. Please go ahead.

Terry Ma: Hi, thank you. Good evening. Maybe just to start off with, can you talk about what you're seeing in terms of the health of the consumer as we look out in into 2026? And to the extent possible, any color you can give us on credit trends by you know, state or region, and if there are any states that are more stressed than others?

Adam Pollitzer: Yeah. Why don't we take them in turn? We'll talk just generally perhaps not just consumer, but about the macro environment I talked in my comments, prepared remarks about the continued resiliency that we seen in the macro environment and housing market. And I say we're really encouraged by that broad resiliency.

Aurora Swithenbank: Headline unemployment remains low. I think consumers outside of today's print are still spending. Businesses are continuing to make significant investments. The equity market, notwithstanding some recent volatility, continues to set new highs. And also, think the larger tax refunds that are expected this year following the One Big Beautiful Bill Act. Should serve as a bit of added stimulus On balance though, when we look out across the macro landscape, still an environment where we say there's a lot to be really optimistic about all of those reasons. But there's also items to focus on and risks that do remain. Right? We've got a labor market that is showing some strain with a slowdown in hiring activity.

Consumer debt balances are at all-time highs. Confidence Consumer confidence is down, particularly among certain cohorts. And there's been a lot of talk about a k shaped economy taking hold And so we see we see all of that, And we think looking forward, again, there's reasons to be optimistic. There's reasons those still to focus and protect against the downside. In many respects, that's the approach that we've been taking for a while now that has served us best, which is to plan for the potential that stress might emerge in the near term. And if it doesn't, to obviously be happy that we planned and protected nonetheless.

Aurora Swithenbank: And I think, Terry, you also asked questions about what we're seeing in terms of credit trends in different regions or different cohorts. And to be frank, the aside from things that we've talked about extensively in previous quarters in terms of keeping an eye on those states where there is a downward trend in terms of home price appreciation. There's nothing that's emerging in terms of the default experience or the, the claims experience that is notable in that regard with regard to any particular geography or particular cohort.

Adam Pollitzer: And, Terry, one of the things we have the benefit of is Rate GPS gives us the ability to manage our mix of business at a very granular level across 950 different NSAs. And we've been using that tool actively for the last several years to shape the mix of our portfolio, not just by underlying borrower loan level or product risk attributes, but also by geographic mix of business.

And so we look at the headlines in areas like Florida, Texas, the Southeast, the Mountain West, But when we look at our default population, in part because of how we have shaped our mix, not only are we managing our exposure in many of those markets that are now experiencing house price pressure, but we're also managing the mix within those geographies. And so for us, we don't see concentrations developing in our default population.

Terry Ma: Got it. That's helpful. And then just to follow-up, like quarterly runoff accelerated, you know, in the fourth quarter. Are you seeing that trend kind of continue early this year? And then what's the outlook for persistency?

Aurora Swithenbank: Yeah. We obviously saw a decline of up 50 basis points in our persistency in the fourth quarter. And that was to be expected, just given what we saw with rates rallying in the fourth quarter and that's spurring two things, really a bit of refi activity as well as some stimulation of the purchase market. And so we don't give guidance, or we don't speak about current quarter trends that we're seeing.

But I would say that in terms of persistency going forward, we do expect persistency is well above historical trends and continues notwithstanding the 50 basis point decrease last quarter to be well above trends So we do expect as we go through time that will come down more in line with historical norm. And we've talked about that quite extensively. But in terms of potential movements within the quarter, a lot of will be rate driven Just thinking about what that refi activity is gonna look like.

Adam Pollitzer: Yeah. We were already seeing this independent of any you know, notable movement in rates. It's just the natural trend in the portfolio when we're coming off of you know, the pandemic years with record low note rates. Naturally, our persistency has been trending a little bit of additional movement because of the refinancing opportunity. But as Aurora alluded to, there's also an opportunity. There for us, right, which is an environment where rate has moved to the point that we're seeing an uptick in refinancing activity in the pace of turnover, those lower rates can unlock both the purchase market and obviously origination volume which can drive incremental NIW.

And we saw that in the strength of our results in the fourth quarter.

Terry Ma: Got it. Thank you.

Operator: Next question will come from Rick Shane with JPMorgan. Please go ahead.

Rick Shane: Hey, everybody. Thanks for taking my question. It's it's sort of been asked and answered, but maybe a nuance here. When we really disaggregate the persistency what you start to see is sort of the tale of two portfolios persistency on the twenty three and twenty four cohorts. Or vintages fell fairly sharply. The twenty twos, 20 ones, and twenties, not nearly as much. And that makes sense. In the context of rate distributions. I am curious as you think about that, tale of two portfolios, how should we start to think about credit and the implications of you know, one part of the portfolio paying off fairly quickly and the other being pretty sticky.

Adam Pollitzer: Yeah. Rick, it's a it's a good question. And you know, that it's it's something we look at because, obviously, there's the opportunity that comes in a when rates drive an uptick in activity both in per and refinancing isn't just volume related but there's also a derivative impact or potential for derivative impact on credit to the positive. Right? So as you noted, the pandemic here is the insurance in force that traces to sort of the pre pandemic and pandemic years for us So that's incredibly low underlying note rates.

And while that business is gonna naturally run off, because of life events and hope of cancellations and all of these things, really, don't see that those vintages are gonna have run off for refinancing opportunity. And instead, it's gonna be the late twenty two, really the '23, '24, and even parts of the 2025 vintages. Those are the book years that when we talk about a normalization in credit experience, right, these are book years that one, they're large.

Two, even though they've been underwritten in a rigorous environment and the underlying credit profile for those borrowers is incredibly strong, they simply don't have the same level of embedded equity because of house price appreciation that some of the pandemic years do.

And so as those portfolios vintages age and they get to a point of natural loss incurrence, right, that sort of three to four year period, we would expect to see our credit experience overall continue to normalize If there's a an uptick in refinancing activity in a consequential way, and you see a more accelerated turnover of those post COVID vintages, it could also refresh the starting point for that normalization of the credit experience and, in fact, push off some of that some that would otherwise have come through. We're not seeing the level of turnover yet that we would say, boy, this is something noteworthy that really is going to meaningfully impact an interrupt.

That normalization of the credit cycle but it's a positive a potential positive that we're looking at.

Rick Shane: Got it. Okay. Thank you. And just a follow-up. If we look at your NIW for the fourth quarter, and, again, there are many companies still to report. But indications are you guys are getting very, very close to parity market share. When and I know you don't target market share, but when you think about twenty six, do you think that 2026 is the year where you essentially achieve parity share in NIW?

Adam Pollitzer: Rick, let me maybe I'll give you a perspective on the fourth quarter, and I'll also talk about our broad outlook for the market. In 2026, I'd say overall, we're delighted with our performance and our results during the quarter. We note the strong performance that we've had And, really, the success that we've had traces to on the ground execution. Right? We're adding more customers. We're providing value-added input. To our existing accounts so that we can win increasing share We're managing our mix in our NIW flows by borrower, by you know, geography, all these things that we wanna do. And we're generally just showing up in the market every day with consistency for lenders and their borrowers.

In the fourth quarter in terms of overall trend, right, we've talked about it now, but declining rates certainly spurred some incremental activity, both on the purchase side and on the refinancing side. And for us, that can be an added plus because refinancing volume tends to have stronger credit characteristics. Right? These are borrowers who typically have higher FICO scores and lower LTVs given the payment experience. That they have on their existing loans. And we generally outperform in higher quality risk cohorts. And so it's a it's an attractive opportunity for us. I mean, first and foremost, it's an attractive opportunity for borrowers, and then it can help in order to our benefit.

As we look out, into next year, the 2025 industry NIW volume, we peg at roughly $310 billion And I think we expect a similarly attractive environment in 2026 with the big caveat that's all premised on rates holding roughly where they are now. If rates hold where they are now, we could actually see perhaps a little bit of upside as affordability improves for some prospective buyers and the refinancing opportunity continues to come through. But all in, we're delighted with our performance and the growth that we were able to achieve in our volume, in our portfolio and we really do see a compelling opportunity in the industry as we look ahead.

Rick Shane: Great. Thank you as always for taking my questions.

Operator: The next question will come from Mark Hughes with Truist. Please go ahead.

Mark Hughes: Yeah, thank you. The quarter share in XOL, think you talked about forward flow through 2028. Is that going to have a little further in the future than usual? And is there something you saw in the market or anticipate about coming in the market that influences them?

Aurora Swithenbank: When you look back to what we did in 2024, we were able to secure forward flow co quota share coverage for all of 2025, 2026, and into 2027, So we've previously gone out three years, and that's consistent with what we did this year What I would say that is a little bit different or incremental is the size that we were able to achieve in terms of the quota share coverage that we secured for that third year in this instance, the 2028 year. Was greater, and the economics of that transit transaction were incrementally better versus what we were able to achieve last year.

So I don't think anything here is transformational or real hugely different to what we've previously done. But it is incrementally better and shows the strength of the reinsurance market at this time.

Mark Hughes: And how about share buybacks or capital management 2026? Continue with this recent pace or accelerate a bit?

Adam Pollitzer: Yeah. Look, I think we're we're delighted with the execution that we've achieved on our program thus far. We bought back roughly $31 million of stock in the fourth quarter. And I'd say as we look ahead, well, we don't have a set schedule, 25 million per quarter is still a good assumption for where we'll be. But you know, we'll take advantage if there's opportunities from a value standpoint. Our shares traded off early. In the fourth quarter. It provided us with know, with an attractive point to retire a little bit more during the period than we'd otherwise been pacing. And so still, you know, a plus minus 25 million is a good assumption.

Mark Hughes: Yeah. And how about, from an expense standpoint, any particular initiatives one way or the other? As we think about 2026? And then anything on the AI front that jumps out at you that could contribute to some efficiencies?

Aurora Swithenbank: Sure. I'll I'll just comment on our expenses, and I'll let Adam tag the VAI question. The expenses in the quarter were $31.1 million which was identical to the $31.1 million we spent to the 2024. And, obviously, given the higher earning earned premiums in the quarter, a slightly lower expense ratio. So, again, we don't give guidance on expenses. We do have a broad target of 20 to 25% low to mid-20s and we're thrilled that we achieved that expense ratio within the quarter. So in terms of quarter over quarter changes, obviously, up a little bit versus the third quarter.

I think you've seen that historically where, sequentially, the fourth quarter is a little bit heavier than third quarter. And also, the first quarter tends to be a heavier quarter for different reasons, the fourth quarter because of some of the vesting around incentive compensation, and in the first quarter due to four zero one k contribution FICO reset and other matters. So no particular initiatives in terms of spend that we have in 2026 that would in any way change the expense discipline that we've demonstrated.

Adam Pollitzer: Yeah. And then I'll I'll pick up on that and talk specifically about AI. And I'll I'll start with just a broader sense as to where we are and where we're using tools because at NMI, we've already begun and really for some time now have been deploying AI in virtually every department. We're using advanced tools in our indexing and imaging functions to increase the speed and accuracy of the data. That we capture from loan files at the time of underwriting, We're using these tools in our IT and modeling development efforts to streamline our coding process. Our finance team is using tools to help with this very call here. Right?

We're able to streamline our close process to assist with the development of our SEC filings. Our legal team is using these tools. We've got them embedded in our cybersecurity process now. And so they're really valuable solutions. And as we look even more expansively, we're excited as to, you know, the additional use cases that we're focused on and there'll be additional areas that we look to deploy in 2026 and beyond. As an expense matter, though, the short answer is no.

We don't expect that there's gonna be either significant incremental investment that we need to make to continue to deploy these valuable solutions And then on the in terms of the potential for savings, look, I think anything we do we want to make sure that we're helping to drive increased productivity, efficiency, and scalability. But we also today have by far the smallest headcount in the MI sector by a meaningful margin. We've got the most modern IT and operating platform, the most scalable stack and the most efficient expense profile in our sector by a wide margin.

And so we really see AI as a way to make our team even more and productive and not necessarily as a way to specifically strip out expenses because we've already been so disciplined. Thank you.

Operator: This concludes our question and answer session. Would like to turn the conference back over to management for any closing remarks.

Adam Pollitzer: Well, thank you again for joining us. We'll be participating in the RBC Financial Services Conference in New York on March 11. Look forward to speaking with you again soon.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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