Enact Holdings, Inc. · NASDAQ:ACT
Enact — Q4 2024 Earnings Presentation
23 slides from Enact's earnings presentation, Feb 5, 2025
Slide 1: Fourth Quarter 2024 Financial Results
Fourth Quarter 2024 Financial Results February 5, 2025
Slide 2: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the rela
Slide 3: Full Year 2024 Financial Results and Highlights
Full Year 2024 Financial Results and Highlights New record high Adj Operating Income of $718M Organic growth and investing with intent: FY 2024 FY 2023 » Enact Re continues to participate in attractive GSE Net Income (M) $688 $666 single and multi-family deals EPS (Diluted) $4.37 $4.11 » S&P initiat
Slide 4: Fourth Quarter Key Takeaways
Fourth Quarter Key Takeaways Insurance in-force reached a new record of $269B, driven by NIW of $13B and persistency of 82% Reserve release of $56M during the quarter driven by sustained favorable cure performance and our loss mitigation efforts In January 2025, Fitch Ratings upgraded Enact to A fro
Slide 5: About Us
About Us enactmi.com Dynamic platform uniquely positioned with innovative approach, strong balance sheet, Leading private mortgage insurance 40+ year track record and cycle-tested company helping millions of families leadership team achieve the dream of sustainable home ownership Drive Profitable Gr
Slide 6: Financial Highlights
Financial Highlights enactmi.com Primary Insurance in-Force Up $1B Q/Q $269 New Insurance Written Down 2% Q/Q $13.3 Net Premiums Earned Down 1% Q/Q $246 billion billion million Net Income Down 10% Q/Q $163 Adjusted Operating Income1 $169 Net Investment Income Up 3% Q/Q $63 million Down 7% Q/Q millio
Slide 7: Driving Continued Book Value Accretion
Driving Continued Book Value Accretion enactmi.com 1 Book value per share excluding AOCI + cumulative dividends 7 1 Book value per share excluding Accumulated Other Comprehensive Income “AOCI” is a non-GAAP measure. Please see appendix for a reconciliation
Slide 8: Market and Industry Dynamics
Market and Industry Dynamics enactmi.com Complex market with favorable Industry well positioned to navigate underpinnings market conditions » Housing market remains slow in the near-term » High quality credit portfolio and strong given low affordability manufacturing quality » Tight housing supply r
Slide 9: Strong & Comprehensive Risk Management
Strong & Comprehensive Risk Management enactmi.com 1 FICO at Origination (Risk in-force “RIF”) Significant decrease in layered risk # of High-Risk 4Q07 4Q23 1Q24 2Q24 3Q24 4Q24 Layers2 LTV > +0 4.6% 0.6% 0.6% 0.6% 0.6% 0.6% 95% +1 7.9% 0.6% 0.6% 0.6% 0.6% 0.6% & +2 2.5% 0.1% 0.1% 0.1% 0.1% 0.1% FICO
Slide 10: Primary Insurance in-Force (IIF) Growth
Primary Insurance in-Force (IIF) Growth enactmi.com 1, 2 NIW ($B), IIF ($B) and Persistency Rate Mortgage Rate IIF Concentration 8% >7.2% (Avg Dec Market Rate + 50bps buffer) 68% 4Q24 » NIW down 2% sequentially from seasonality and » 8% of our IIF had mortgage rates at least 50 basis points partiall
Slide 11: Portfolio Premium Yield & Premiums
Portfolio Premium Yield & Premiums enactmi.com 1 In-Force Primary Portfolio Premium Yield Primary Direct & Ceded Premiums ($M) 4Q23 1Q24 2Q24 3Q24 4Q24 Base Premium Rate (bps) 40.1 40.1 40.3 40.2 40.0 Single Cancellations 0.2 0.2 0.2 0.4 0.3 Ceded Premium (3.9) (4.0) (4.1) (4.3) (4.8) Net Premium Ra
Slide 12: Strong Credit Performance
Strong Credit Performance enactmi.com Primary New Delinquencies1 Primary Cure Activity1 2 3 Remaining 1,162 1,598 2,629 4,789 10,357 Total Delqs 20,432 19,492 19,051 21,027 23,566 Delqs Cumulative 90% 86% 75% 63% 24% Delq Rate 2.1% 2.0% 2.0% 2.2% 2.4% Cure Rate » New delinquencies and rate increased
Slide 13: Losses
Losses enactmi.com Losses ($M) & Loss Ratio Highlights » 4Q24 reserve release of $56M from favorable cure performance and loss mitigation activities compares to reserve releases of $65M and $53M in 3Q24 and 4Q23, respectively » Sequential increase in losses and the loss ratio primarily driven by low
Slide 14: Embedded Equity
Embedded Equity 1 enactmi.com Primary Portfolio Delinquent Policies 93% 88% » Cumulative HPA and continued tight supply supporting housing prices support cumulative equity across our portfolio » 93% of delinquent policies and 88% of all policies have at least 10% equity 1 MTM LTVs are estimated base
Slide 15: Continued Strong Capital Return and Low Leverage
Continued Strong Capital Return and Low Leverage enactmi.com GAAP Capital position1 ($M) Highlights » Returned $102M to shareholders during the quarter, consisting of $28M quarterly dividend, and share repurchases totaling $74M (2.1M shares at an average price of $34.75) » Repurchased an additional
Slide 16: Strong PMIERs Sufficiency
Strong PMIERs Sufficiency enactmi.com Sufficiency to PMIERs1, 2 ($M) PMIERs Credit by CRT Instrument » Operating leverage of 36% reflects successful execution of our well diversified CRT program in a complex market » Executed QSR transactions covering 2025 and 2026 book years that will cede ~27% of
Slide 17: Robust Statutory Capital
Robust Statutory Capital enactmi.com EMICO Policyholder Surplus & Statutory Capital Scheduled Contingency Reserve Release1 Year $M 2024 $175 2025 $307 2026 $342 2027 $359 2028 $384 2029 $441 2030 $510 2031 $522 2032 $508 2033 $492 Contingency $3,953 $4,140 $4,234 $4,281 $4,325 Reserve Total $4,040 »
Slide 18: Strong and Diversified Ratings
Strong and Diversified Ratings enactmi.com Rating Date Updated EMICO1 EHI2 LT Debt3 EMIC-NC1 Enact Re1 Agency Rating / Outlook Rating / Outlook Rating / Outlook Rating / Outlook Rating / Outlook Outlook Upgraded Moody’s A3 / Positive Baa3 / Positive Baa3 / Stable - - March 2024 Initiated Enact Re S&
Slide 19: Highly Rated & Diversified Investment Portfolio
Highly Rated & Diversified Investment Portfolio enactmi.com $5.6B Investment Portfolio and $0.6B of Cash Equivalents Composition by asset class1 Composition by rating2 » Top 10 issuers comprise ~6% of portfolio » 99% of portfolio is investment grade » Book yield of 4.0% up 10bps versus prior quarter
Slide 20: Our ESG Pillars
Our ESG Pillars enactmi.com Enact has a strong foundation of corporate sustainability and we are proud of the role we play in the communities we serve and our processes that result in a sustainable business. ESG issues are a key component of our strategy to enhance long-term value creation for our s
Slide 21: Appendix
Appendix “Enact
Slide 22: Non-GAAP Measures
Non-GAAP Measures enactmi.com Use of Non-GAAP Measures This communication includes the non-GAAP financial measures entitled “adjusted operating income (loss)”, “adjusted operating income (loss) per share," and “adjusted operating return on equity." Adjusted operating income (loss) per share is deriv
Slide 23: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures enactmi.com Net Income to Adj Operating Income 1Q23 2Q23 3Q23 4Q23 2023 1Q24 2Q24 3Q24 4Q24 2024 Net Income $176 $168 $164 $157 $666 $161 $184 $181 $163 $688 Adjustments to Net Income: Net investment (gains) losses $0 $13 $0 $1 $14 $7 $8 $1 $7 $23 Costs associated