EXHIBIT 11.1 THE PMI GROUP, INC. AND SUBSIDIARIES COMPUTATION OF NET INCOME PER SHARE Three Months Six Months Ended June 30, Ended June 30, --------------------- --------------------- (In thousands, except per share data) 1996 1995 1996 1995 ---- ---- ---- ---- Primary net income per share Adjusted shares outstanding: Average common shares outstanding 35,011 35,000 35,011 35,000 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 79 76 94 38 --------- -------- -------- -------- Average shares outstanding 35,090 35,076 35,105 35,038 ========= ======== ======== ======== Net income $ 41,220 $ 36,421 $ 78,210 $ 66,276 ========= ======== ======== ======== Primary net income per share $ 1.17 $ 1.04 $ 2.23 $ 1.89 ========= ======== ======== ======== Fully diluted net income per share Adjusted shares outstanding: Average common shares outstanding 35,011 35,000 35,011 35,000 Net shares to be issued upon exercise of dilutive stock options after applying treasury stock method 79 98 94 49 --------- -------- -------- -------- Average shares outstanding 35,090 35,098 35,105 35,049 ========= ======== ======== ======== Net income $ 41,220 $ 36,421 78,210 $ 66,276 ========= ========= ======== ========= Fully diluted net income per share $ 1.17 $ 1.04 $ 2.23 $ 1.89 ========= ========= ========= ========= 18