Shares of NMI Holdings Inc (NASDAQ:NMIH) plummeted by 5.91% on Wednesday, despite the company reporting record financial results for the third quarter of 2024. The stock's decline came as investors focused on the rising default rate and higher claims expense, overshadowing the strong top-line and bottom-line growth.

NMI Holdings, a leading provider of private mortgage insurance, reported total revenue of $166.1 million for the third quarter, a record high. The company also achieved a GAAP net income of $92.8 million, or $1.15 per diluted share, representing a robust 17.5% return on equity.

However, the company's default rate increased to 87 basis points at the end of the third quarter, up from 76 basis points in the previous quarter. Additionally, claims expense surged to $10.3 million, compared to just $276,000 in the second quarter. This increase in defaults and claims raised concerns among investors about the potential impact on future profitability.