EXHIBIT 11.1 ------------ THE PMI GROUP, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER SHARE THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, (In thousands, except per share data) 1998 1997 1998 1997 ------- -------- ------- -------- BASIC NET INCOME PER COMMON SHARE: Net income $46,787 $42,279 $92,555 $91,451 Average common shares outstanding 31,918 33,618 32,173 33,920 ------- -------- ------- ------- Basic net income per common share $ 1.47 $ 1.26 $ 2.88 $ 2.70 ======= ======= ======= ======= DILUTED NET INCOME PER COMMON SHARE: Net income $46,787 $42,279 $92,555 $91,451 ------- ------- ------- ------- Average common shares outstanding 31,918 33,618 32,173 33,920 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 201 98 188 106 ------- ------- ------- ------- Average shares outstanding 32,119 33,716 32,361 34,026 ------- ------- ------- ------- DILUTED NET INCOME PER COMMON SHARE $ 1.46 $ 1.25 $ 2.86 $ 2.69 ======= ======= ======= ======= 26