Enact (ACT) 2 Aug 232023 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Q2 2023 Enact's Earnings Conference call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

to Kohl, conference Relations. vice like speaker to now Daniel today, President would hand over the your I of Investor go ahead. Please

earnings Thank our morning. good call. quarter you Welcome and second to

Chief president Joining today Executive Dean treasurer. are Gupta, Financial me and and Officer Rohit Officer Chief and Mitchell,

Rohit will call quarterly our business, closing results turning the of overview to our against Rohit progress remarks. of and provide the Dean strategy. details an back for our will our performance then discuss before

questions. your closed take financial then earnings financial materials for market will We metrics. along of after issued The comprehensive yesterday results we and operational set our contain with the quarter, a

the the Today's of statements. These use These on Investor are current www.ir.enactmi.com. section statements are website call based of available estimates, as recorded the projections on expectations being and at include of company's is assumptions, today's forward-looking Relations will date. and

no to revise cause different, new Additionally, and uncertainties, which result a they may information. undertake to risks and of are be materially subject statements as obligation results update to we such or

on and today the SEC, found keep be in of cautionary remarks will of materials in For the upcoming please the our earnings review and measures. filing GAAP management's well our SEC in website. metrics can regarding the with presentation include Reconciliations release, forward-looking and in most earnings statements non-GAAP certain our prepared on filings these mind release, the relevant measures our uncertainties, discussion these today's to available press as Please risks be press a our language website. as which

call over the Rohit. I'll that, turn With to

Good morning, Thanks, everyone. Daniel.

delivered income quarter reported share on diluted million strong of $XXX operating very in a or adjusted XX% another per operating We delivered $X.XX equity. a return dynamic adjusted team environment. Our and

the new performance, favorable in production, grew in $XX written continued solid we investment of and income year-over-year insured of a by efficiency. driven portfolio, insurance and credit to our business disciplined record billion X% growth elevated XX%. quarter, expense billion, persistency delivered during $XXX Insurance-in-force new acceleration

strength in business and confident remain the insurance the well of as stability We private our mortgage strategy, as model.

uncertain macroeconomic labor While and sheets remains market healthy. resilient and are environment household heightened the costs, elevated balance with has the borrowing been inflation

see remains that in challenges remains manufacturing quality within to strong affordability, continue risk evidence and credit industry to despite mortgage the We our ongoing appetite. that risk

borrowers In housing, pre-pandemic addition, across that looking beyond or indicates sectors. delinquency are below prime for serious rates consumer at research levels

we support likely remain remain and Low as Overall, mortgage a help home on the qualify to affordability for insurance. well inventory constructive demand tool mortgage. to and housing, housing continue prices, MI for buyers are to demand homebuyer long-term for the important will outlook as first-time an

constructive interest As elevated counterbalance, persistency a market. increased the remained we have on rates observed higher new insurance Pricing during mortgage insurance as continued written growth. and insurance to enforced quarter on pricing supporting the new originations, in has affected act written

price We insured risk The score quality uncertainty our to on to the NIW credit for continued portfolio increased XX% rate was right pre-pandemic with and risk of our ratio even enforce, and risk was levels. loan-to-value was average weighted delinquency year consistent the of in weighted average the right our first the the while macro our XXX, was strong. price. this of onboard with remains continuing FICO layered quarter X.X%, X.X% response

the quarter negative loss in the ratio X%. was

loss million our and $XX released household a result, our cures market and the strength as in balance reserves. mitigation above as drive efforts labor expectations helped sheets, Continued well of as we

reserved we We range are scenarios. take reserves loss for well and to believe a to prudent continue a of approach

regulatory continue relative remain to requirements. a operate capitalized, We and our position of well from financial strength to

business quota in or reinsurance the was quarter broad and program to Earlier our capital This volatility. reflects high-quality our of panel ongoing July, credit sufficiency, our covered reinsurers. new by and risk risk at risk agreement builds robust PMIERs commitment driving $X a the pursue first of remained on with of XXX% CRT our credit while agreement sufficiency highly-rated in-force of transfers. at efficiency success minimizing billion and share we of the announced end XX%

continue We capital keeping allocate approach platform here. three two and balanced to enhance investing our our and policyholders, those supporting to I'll diversify focus also in on with of our returning capital and to pillars shareholders. pillars, our

with returns. I'll capital start

we cash have Given and the the of in the stability balance million confidence capital to sheet, our guidance $XXX from continued for $XXX return flows XXXX increased our strength of our million. our business,

per dividend from $X.XX the we As $X.XX that XX% share, first announced quarter. was quarterly dividend, share the level during our per at previously, to and increased we paid

we substantially completed stock have through share and million $XX we in the million during the quarter July, program. repurchased Additionally, $XX repurchase original second

said, a detail on our additional that $XXX to I has announce With program. plans that the am Dean shortly. new Board pleased repurchase share million will provide authorized return capital

that launched to I the value business business. differentiating that expected a supported extending insurance. access that our and that pleased our will opportunities now create to during franchise in by in we expands long-term by deep opportunities expertise Re, are quarter, to shareholder create our will turn growing, the over through Enact note time. We successfully seek platform, mortgage investment value reinsurer new I'm to

to Fannie market. Mae transaction Re Freddie returns risk-adjusted and enter decision has us rating received the transactions the transactions GSE's we Authority, market. attractive since from that Mac a reinforce long-term capital an to provides A.M. strong credit underwriting approval have efficient Having from growth two GSE Monetary Bermuda this CRT risk Best, seen transfer from these Enact one and in is participated The access and Re with opportunity A- our launch. Enact

provide share Re's executed we addition, Enact with a scale EMICO for In rating. A- arrangement to quota

returning and Re with to capital $XXX commitment Enact preserve can the returns growth decisions balanced to this for new you year guidance structured total remains capacity. shareholders dividend our of initiatives. from intentionally to a and our strong program, to have we as increase to Importantly, And Enact's repurchase million our authorization see share our capital well

commitment Team Enact and experienced infrastructure capabilities Leadership launch the analytic of our compelling returns an shareholders. our with is to operating drive by leverages board, and value industry Re aligned our expertise, Led for and create and

I detail moment. Dean, cover and in will to on to in a more say turn it will have who will now Re our over Eanct performance

the of Good to or share again year, Thanks, strong delivered morning, We the very period in Rohit. as and diluted quarter share, quarter compared per $X.XX $X.XX net share results for everyone. per income million, diluted XXXX. GAAP first quarter in last the XXXX. was second $XXX the per diluted in same of $X.XX

the per income quarter share and million, $XXX Adjusted diluted diluted in XX.X%. per or or compared diluted was equity equity $XXX operating first as was XX.X%. same $X.XX period million, return $XXX operating on to last XXXX. share Return was Adjusted the million, share, a per on of or $X.XX $X.XX in year,

to of Turning up to sequentially, $XXX billion, $X billion, new billion, quarter revenue $XX and record drivers. second up or or insurance-in-force the a increased in primary X% year-over-year. X%

insurance up was from XX% part $X written in elevated and New billion, driven billion rates. by interest resulting year-over-year, lower down continued originations $X $XX of mortgage billion, higher sequentially, driven XX% originations or by or

percentage at X percentage points rates, XX% interest down in sequentially X second quarter, elevated up point year-over-year. and high persistency the With remained

term, X%, of the at Given is or persistency, insurance-in-force that we profitability that remain continued a most future mortgage below positive portfolio. interest our which expectation and has rates insured anticipate and of the the for will elevated rates portfolio strength our short in

continues narrow rate our Our sequentially, to points X.X basis base base change points, The points rate line and was year-over-year premium points our and XX.X basis premium X.X down in year-to-date. basis X.X of basis in with is rate expectations.

by impacted variety premium As of is from a reminder, can base deviate factors and a rate quarter-to-quarter.

premium earned also rate lower net year-over-year. single premium Our reflected cancellations

net limiting million potential meaningful its For cancellations only premium premium, future single and the contributed earned flat quarter, sequentially dilution. were for $X of

the or X%. in XX% and was $X was second rate $XX money the million, in rates interest income portfolio, yield over our current our the million, rise up environment investment XX% are Investment and quarter for million, year-over-year. new for quarter $XX favorable sequentially, as or The

to our quarter as end, unrealized increased million portfolio of in by million. losses $XXX $XX investment

a expect realize not losses, although generate generally mentioned, that value to we at these expected time. I've will to are the given highest upon act As we opportunities do

selling, During non-economic. our to view net similar loss, the unrealized that forward. continue evaluate value investment not a investment going income the We'll upon for of change opportunity that presented maximize an to quarter, we portfolio's does higher opportunities identified materially generated but this is our assets our position but portfolio, loss

Revenue for million, or sequentially, the down or $X and quarter $X were X% up year-over-year. X% $XXX million, million,

Net $XX The mentioned, the policies, sequentially a year-over-year. in revenues a compared $X $XX X% just earned higher or trade lapse and in exchange offset were investment premiums IIF were million, investment by by future opportunistic premiums which resulted million driven increase net X% sequentially loss or partially up or as and our year-over-year. million, flat for up was a the earned in million quarter $XX million income, strong older of sequentially in X% higher price NIW. growth, relatively the Excluding to $XXX

$X $XX quarter XXXX. quarter and to credit. a second last benefit as a of $XX to million, in Turning of of of losses million benefit the compared benefit the quarter were million a in

quarter X% quarter second the XXXX. to loss and of last Our negative negative negative X%, compared the for XX% was in ratio quarter

release primarily Our performance, resulting losses in expectations, favorable our reserve in driven were a million and above quarter. ratio was which by cure loss $XX the

reserved at from delinquencies reserve a the claim rate. first the were half of in XX% Included which were XXXX, release

New delinquencies decreased sequentially from X,XXX. X,XXX to

rate ongoing delinquency trends. and new consistent of quarter with X%, pre-pandemic for positive Our levels credit reflective the was

environment. delinquencies in stayed decreased delinquencies. prudent cures at approach continue the is XXX an to claim new as We XX,XXX dynamic approximately rate, outpaced reflecting which at associated second near this levels. measured X.X%, rate stabilizing and delinquencies delinquency The to book approximate total XX% quarter our pre-pandemic to flat by in reserving new

expenses and expense of million, we for to The the reported Turning quarter flat year-over-year. Operating the quarter in a was ratio first flat were and below relatively XX% to $XX or the million, down expenses. ago. XX%, XXXX sequentially XX% quarter year the $X

reduction reflected performance the ongoing our Our of cost benefit actions.

decline $XXX costs expect continue year-over-year year We full X% for the million. to to to

a to financial to strength Moving capital flexibility. operate and liquidity. continue and from of we position

reinsurers XXXX. As executed new our The share quota Rohit we current as transfer of and of throughout program. quarter, XX% transaction expected highly-rated reinsurance part coverage first transaction credit approximately covering our written our risk referenced, a insurance from of panel secured this

CRT sources. our terms proof share attractive for We into program quota a of the in provides value coverage serves reinsurance as believe point inclusion diversified volatility capital market at and on capacity the time the CRT incremental of another of

As of to assets. $X.X required June provides XXXX, minimum CRT XX, our program PMIER's our billion reduction

a to PMIERs and Enact on to of I minute moving Before Re. capital a discussion wanted on take allocation,

purposes. PMIERs to of a Bermuda-based, as $XXX launched has is million is contributed quarter. Re the we from our non-exclusive have as discussed, affiliated to reinsurer subsidiary very be participation As X.X% initial Enact for of Enact classified Rohit wholly-owned in Enact and are transactions EMICO pleased the and during Enact with quota Re EMICO REIT, initially support the GSEs. capital reallocation that a to of to serves Re business will which used a share EMICO

our credit in support the our participate market. provided enter scale share the The and attractive factor is strength ratings strong EMICO risk on quota with ability key of and third-party pursue to terms. The ratings opportunities to has successfully CRT our a GSE's and agreement to in efficiency

Enact and capacity. Over value our increasing while dividend our the we Re order believe will shareholder to long-term, contribute preserving income

of year. it impact guidance the the $XXX fact we have our expense expect to we Additionally, evidenced by our structure, minimal million for reaffirmed as that on a expense have

We ratings to take an on that efficient expense our capital market prudently have intentional to the with and Enact core to will perspective, Re franchise. to our a and this we in continue apprised business structured to and balances it approach commitment of growing through business build intend time. approach capital optimize keep return the a we'll from capital progress to scaling allocation disciplined to scale and be

me to shift and capital allocation. talk about gears now Let PMIERs

billion XXX%, quarter-end, quarter of Our covers PMIER's seeded At CRT we of of third-party $X.X currently first which requirements, $X.X risk, efficiency our and compared of credit our provided strong in billion PMIER's PMIER's program, by had remains capital $X to or billion the at $X.X risk billion in-force. XX% XXXX. or above XXX%

returning investing Turning to a to to prudently allocation. our policyholders differentiate balances and remain and committed maintaining capital we to and our platform, supporting prioritization now our balance strengthen sheet, strong capital shareholders. framework, which

PMIER's already on first I've strong the two our position, and about which Enact talked pillars. touch Re

Yesterday, new return. moment me a let to that $XXX board has a So, share our take to capital speak we program. repurchase million approved announced

As of participate with program, our XX.X% unchanged. will proportionately their their prior ownership, Genworth to remains proportional Enact ensuring ownership

$XX our shareholders to million $XX consisting or quarterly million, dividend, XX% quarter, of and second repurchases was total $XX during share million. a returned the totaling which $X.XX We of share per increased

million XXXX, and share XX, we have our of authorization. stock remaining repurchase million $XX in As current $X million on repurchased $XX have July

to as repurchases capital XXXX shareholders are fourth to guidance us, XXXX. million, a $XXX from dividend We a are behind a in capital year well-positioned million half with And and quarterly in first to the quarter. return up of special return Rohit increasing share strong for we combination mentioned, our potential dividend, through levels the our $XX

In mortgage capital our efficiencies primary bolster strategy. completed ability focused shareholders April, maintaining managing first XXXX. that a We strong outstanding and while risk, to against of and allocation on be sheet our of used to our a capital financial quarter operating EMICO, remain in balance had We half driving an strong prudently $XXX a cost flexibility. our executing insurance company million to support distribution return will

turn back With that, Rohit. I'll to it

Dean. Thanks,

We quarter, growth delivering our and the in results high-quality are continued very insured pleased strong second for portfolio with return. our

capital serve and we our forward, in customers and business, balances we to strong grow continue performance and borrowers, value are well balance distributions and shareholders. their our shareholders. strength a Overall, creation continue will deliver the investment Looking that franchise, our to deploy manner our to for to positioned sheet in

Finally, I'd and their driving we us ready are for Q&A. Operator, now our talented team like thank for forward. to for commitment

Bank Mihir America. first [Operator our Instructions] comes the And Bhatia question line from of with of

line now open. Your is

look lowest the I intensity at start taking the question share but now. had morning or market your seeing market I understand numbers be manage I've right competitors numbers quarter the growth, versus you've market look the don't that I for I companies are origination, reported, by of and you when I share, question. with the market over you good bit when little business growth you're lost think quarter, the competitive And intensity in wanted the Hey. the share. you thank suggesting is a increase this industry the at seeing. some the my to may quarter-over-quarter. on of quarter in guess share you competitive of

the perspective, don't the that I the you you said, pricing worse? Is general, like Is from the changes What's Now, market it understand or Is a about competitive that are what tell driven others business but does manage I it intensity by share that you. others are pricing seeing pricing? doing? how you're more pricing getting are about or environment, in aggressively? what Maybe, happening? better, people just talk getting responding, in Thank pricing? pricing that in the

Good question. and Mihir morning, thanks the for

have not said right the strategy, As the our the past, of charging we talk about an risk. share where for we you right market outcome of execution our successful stated, strategy in a is It's go-to-market for price us.

mix profile that So, $XX I credit perspective. the by saying start and would the we off NIW in like of and billion we quarter its just both wrote pricing from

underwriting appetite. which quality is very think see strong within we of risk that to I credit in Also, and our environment, to much important this emphasize, kind continue especially policy,

is share go. and only tough are companies reporting right three to calculate, because now to Now, three there market MI

And also have just by is the volatility origination say, timing that companies our could lenders market opaque from companies market moves has perspective, and It growing driven in over think market. of been But driven by the or share with, volatile. MI who shrinking be we specific just last, And do higher. that is and so be that three years, the business It's after who pricing different companies. quarterly share would we could to on by of especially I seen all the engines. rate move MI quarterly the being

good we actually have and product a writing our I position, market very business to continues focus new and are be returns. at good that think

pricing moved back As written up uncertainty the new I we the economic also the my coming saw across question given constructive said, said industry during I the on and we up prepared in to that's in saw quarter, insurance move remarks your us. of on pricing, in pricing marketplace. we actually front that And our pricing being

about pricing So, how our hopefully of you that provides market think and I on we intersection color think position.

directional stable range with active X,XXX volatility. I that thing close known, That market is a number obviously, quarter customer there trailing before that aligned numbers market XX diversity would quarter, look months is share you we been Last the are sense business actually our within if is how our market share lenders. has with of our doing of and quarterly while but base not at relatively last very much and our participation, that to think of say,

that. for Thanks it. Got

are the of the growth the little you or on In economic mean, purchase bit particularly, strength, called in seeing I general, I of where side, a origination guess uncertainty. you particular areas out terms market of

talk for you So Thank of half about to you. year? back the the trend things maybe, just where expect

tough Mihir for would question. mortgage this the say, Thank originations. you, environment I a is predict to

XX you given it just homes. broader XXXX, taking seen rates mortgage on that makes mortgage very home think rates interested more are in But volatility higher and think consumer when to between I appreciation an in think then I means difficult are consumers have predict the that carefully. behavior, step years, buying And ongoing just we to yield spreads rates about and mortgage that the treasury inflation in now, consumer price ever-to-date in basis. turn

we And their know buy have of or in is in home terms place. to first-time think XX desire optimistic that believe we more numbers than of are we decade. to we homebuyers seen their age the when of around a in what propensity the there I XX higher in also still coming a to is then that being Americans are you that age about homebuyers, think first-time of

is year, predict. this or those quarter this whether tough aspect think next that month, to market So, I come folks to

-- will be origination still market is market will still that be material meaningful estimate this year. origination Our size purchase size

purchase $X.X-ish about general our range So, trillion market. is originations for

quarter, second selling see to final purchase numbers, that up season. over spring we Just give did Obviously, quarter first maybe XX%-ish second but color you on don't market our expectation have was think quarter. we is

XX% number. Historical that on seasonality be would about

to the talking us those will back. being seasonality gives point first-time very with a So, bit tool the we is my What holding with dynamics, on and little is are subdued come MI more homebuyers optimism a about for borrowers market maybe affordability strong borrowers. market

the this than in years, lower it's size not the expect still mostly $XXX means $XXX size us plus over gives purchase written it's a from perspective. to be prior churning And we insurance range, slightly market while driven, billion. MI So, year still reasonable maybe it's book billion and new which scale

you. just the persistency. off to to my rates or right year It's of question leveled we rest It think of the I around this XX% on this down. XX% area, through And Thank quarter. last have start really seems think this come seeing till number

Dean. question. Mihir. Yes, the Thanks it's for

Just this for is some context for broader market. again, the

high persistency really quarter. and highest happened the in is Our that one XX% for

we of going book just out. as what by referenced. very that Rohit think never elevated decline to about selling be a We with really rates is of to about sequentially rate remaining environment kind to one-point quarter with do talked XXX%. So, hard I just part new historical a the do about going It's we've on season, Rohit where XX% in saw the spring you during like obviously coupled combination the a seasonality persistency in predict. basis. interest think the It's level low a dynamic persistency pretty talked large have

their to that prescriptive, our job remain with mortgage I pay X% cause that to You XX%, maybe mortgage. given say Mihir. or below our levels, divorce short level, and mortgage to hard things we'd rates elevated near would that I historical is term. is changes, other portfolio expect as term, issues, expectation loans in of rates view remain kind events, the but the kind our what has insured got at of XX%, not and borrowers our but guess, predict, elevated in off that's view elevated do the to life Whether relative XX%, persistency health

you. Thank

Mihir. Thanks,

George And question. the next question your next your for from with comes KBW. of Bose moment One line

Your line open. is now

everyone. price our thoughts for see would you actually another seen bit Bose. a is past little maybe, potentially Hey. the macro-outlook on guys be increases, industry Alex were good you power deeper, of the the to give And have we've potentially to willing surrounding Thank This drill if discuss was I over some that improve, morning, on the wondering your industry for year. questions. across if we the pricing then the could I pricing. question durability taking on to back?

the Good is and view and their question. their for we Every has an macroeconomic of you MI and think level. about company to say, pricing Alex way view, difficult own would the thank comment I at returns credit morning, industry risk. own

are that not is we past economic perspective of gone. our the being uncertainty think I still point

I remarks balance think of the hand, consumers about one forces we described I the balance being market on having sheets, that kind labor prepared in still in market see talking the my are healthy we strong.

consumer home that lagged. prices half effect other the rates, bit the on there, given still are of of and has little rates a this increasing point elevated a economy time, On And at terms being is on broader talking two, two last and time. of fed done higher about the the what we years in from at inflation same hand,

the And economic uncertainty are we our as I answer, expecting are the increasing said market my in So, we still uncertainty. or volatility in in kind some for of some earlier, that market. price

we pricing. out, our Depending adjust will plays on that how uncertainty

price. the credit So, we of as to in our right down, if the time for there those is And unemployment COVID we terms there thing you look at where COVID, recession, if adjustment unemployment scenario, then spike and came then in that prices elevated increasing losses. obviously, of leads the mild short a was kept during a back did price

a kind just or risk competitive I'm on make going might But how we attributes the So, boundaries moves. changes pricing. depending of on are describe that think are in the market that we say about to kind broad of I market, would those given not kind specific how we of

a walk that Great. benefits of at on the quick maybe, well? And makes X.X% is minimum capital business? you Would be then requirement it's through Re enact sense. Yes, And Re. as to then there think follow-up in-force Enact I us willing the that of a seeding

the take first share. Yes, the it to Alex. question quota of relates benefit as I'll the

business access Enact ways the Re look really objective A- in was Our market to growth. the immediate an we'll that, to gain of for needed rating. we terms. about term, develop GSE's we on platform to to it's CRT immediate term, accomplish the for attractive all GSE's future But Longer broader CRT market. And believe

As achieve predicated standards ratings, allowed the us CRT you know, capital to Enact the on capital share an provide ultimately A- to both the to access that requirements. reinsurance CRT GSE's again, are was terms. those and scale on collateralization quota ratings, attractive GSE's enabler and those market X.X% Re to But

ratings the think transaction, necessary the and So, scale The for backwards, ratings. provided I A- the if quote really transaction the A.M. really share you needed Enact kind we ultimately, share for an we share That's basis reinsurance transaction. the reinsurance the rating. to affiliated quota look quota looking of the scale get quota re, Best for were

perspective, can chime Dean And a then let and me start, minimum then from in. ratings

ratings like Bermuda of of four don't that of Authority. about Monetary I think, actually single and as ratings different having think We Re framework. think a we think Enact frameworks, dimension

transfer either affiliate risk are on would credit perspective. And on seeding solvency our entity primarily also focus market. and to GSE we capital from management then As Then, Best have internal Dean because an of into just the view be capital capital risk top which it, economic a said, or intend PMIERs, A.M. we framework. we

think about we capital a then it significant the that of we So, share capital and of this obviously launching portion this with think the the forward launching you inception contributed, summarized views all quota entity, And with as CRT I together affiliate those us funding at market. GSE well supporting we some the think combine needed. entity about are Dean

capital. very that amount to structured to important capital commercial the said our basically capital a efficient that of It market forward, in we remarks, both our And that it and prepared emphasize way, from the and at has continue surplus. CRT statutory success that as sure we'll entity to move right make GSE we we is entity and from in PMIERs policyholder in this look

basis at allows continue that A- focus to on accretive then on shareholders, at balanced announcements with capital attractive the achieve evident the risk-adjusted of achieve us to returns, which actually So return made. same and time write our scale was point, rating, business an Dean's to we

thank Great. that our makes and so much for questions. sense taking you

Alex. Thanks,

Thanks, Alex.

One the moment from JPMorgan. Shane question comes line next Rick question. next your the with and for of

Your line is now open.

that's as taking for originations Thanks month if in that's little and my implications move a quarter but into well. and bit saw, are after did August through so talk I'm second have third. we what love you cadence did I'd the answered, as to through guess questions. Most continued, and been slow and the if the curious as mortgage we asked quarter, the we about I month of We hear now moved that July

think, on back of market my to Good during the very point thanks for terms goes trying that question. with season. are this year, I consumer well-aligned predict more selling origination the morning, size two things; one we consumers homes spring being is behavior buy Rick in and to historical this seeing seasonality

said purchase originations that and consumer we an seasonality a to that response, to that So, increase we attribute see that in behavior. I we in and previous as continuing are saw

staying based mortgage market an coming of consumers to either is on is thing rates second there sidelines the The on are. where aspect or

is month pretty this month XX-year treasury XX-year moving to the is mortgage think a significant I band. by little in yield bit wide see of that time we rates fact that in unprecedented a volatility

basis it, a mortgage between historically have points. on treasury yield between XXX points we of basis to and almost And XXX spread XX-year standing high XX-year top

rates those talked to you stronger. see mortgage X% from mortgage say when than our of see is at generally CEOs that combine a you we certain bit hear are slows companies between little point when let's recently, like It they X.X%, X.X% say, to X.X%, I two I've So, higher rate. and customers factors activity generally think and activity XX-year mortgage down we

are more we more for rate I anytime as then deal. they that X% think it, and or and slightly mortgage a below consumers in neighborhood see XX-year of coming the to fixed market and are

that So, because a especially a rate positive, a used XXXX, X%. XXXX I to that's think seeing and middle They if seeing compare they a of were people when net shock. year was you XXXX X% sticker were mortgage started to

well around of the kind more I think X% Hope the now, market. it guides right then accepted the people's participation that range is a in helps. in market. but

One very it you way it's again, disclosures. just billion. Do said question, dimensionalizing have just mentioned know $X.X I wasn't find I in No. the a difference. that able you in with PMIER's to it I it precision? you'd credit what was the other big makes helpful. think And

Hey, It's Rick. page our Dean. XX. it's actually in on QFS

required I it's And read middle I sum down credit handwriting. own think my X.XXX, page PMIERs it's asset can the of XX. the in of

much. Terrific. you Thank so

We actually sum it. don't

of that. it's the math, that to have sum I for do line. You'll But apologize the

for excel will able me. Dean. Thanks, pull together my be to Hopefully, it

Rick. Thanks,

with BTIG. next the moment Hagen for from One line comes of your question And next Eric question.

Your is now line open.

have to? ratios, actually Maybe, really there higher than capital Hey. or following that return are you either think about capital thanks. guys you that say up thresholds quickly, your to guided Thanks. what could Good any morning. for on lower you would which lead

talked under that uncertainty given would bit talked hold we ongoing what than sufficiencies Eric, little We've sufficiencies PMIER's of holding macroeconomic times. more we we've probably higher at normal expect north XXX%. I or to think maybe about PMIER's a is the about

think abatement levels longer-time uncertainty, the to about PMIER's we pre-pandemic, maybe, about macro over the talked PMIER's XXX%. a I period with closer we've which were think if of sufficiency

that so a of sense as environments. maybe And conditions where gives different macroeconomic circumstances, off, period over level facts a time we with might longer head of macroeconomic sufficiency different you PMIER's under and

be regulatory think would perspective, to Eric, is that or and could I to for Yes. from guidance I add obviously a lead what conditions. think you just macroeconomic said higher that, subject our all approvals to return return capital it I capital lower?

in in if our that prepared regulatory for performance, the We've at guidance an time, or or broadly. our strong delivered remarks. of to the So, we increased good as have our But eye year. feel the said keep But on guidance, environment results changes, of same good feel year-to-date. housing we'll terms the very economic any continue we the in that any the rest the we fact very given whether change given we happens about environment, about we

have Maybe, mean, think points rally much these rates, your you maybe, interest in points on that's up XX the broadly, more that in to in perspective on on following mortgage bigger such, were do how helpful. you to can basis you. mortgage would back around basis if MI or from Thank like rates scenario? Yes. insurance do I any behave rates rates. And response put rallies XXX and you pricing potentially even books how levels, conversation

And being rates to Eric, clarify, rates were points you points, being higher. basis XX-year are -- rates mortgage rally say to when XX just basis XXX higher you actually saying to another

lower. No,

Lower.

perfect. Okay,

times mortgage and months rates recent down at range. look you come to if when think seen have I actually we that So,

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your house if buyers still another So, mortgage might willing to even where actually And you, house, your market, you to a homes. that there back the and their X% this house. to hate market your can't find goes I house environment, but sellers you in think you you're coming that's to are but you an sell sell your not in actually more love mortgage and are in to you want upgrade not attractive

not we I originations if I'm how on on a you to have scenario. work thumb to expect give that rule of much that dynamic. to sure think could would in can market. I stronger We purchase business be So, more come

which combination market to would of could tight, new rising again, written. give us if units lead driven be supply could That also higher some higher. by insurance But being essentially home is a the prices that

write, balance holding in are with earlier, pointed very with the how very a out much balance are can sheet, company or willing to more sheet, level. we conservative at as terms even we of write we operating strong Dean a

we notes higher to to we ability the much size insurance that our So, have source if capacity market much on we ample size and feel higher support increase, capital a and could that market we market through linked ample books. was have a comfortable third-party reinsurance or NIW

Thank That back bought you. helpful. was weighted the you Right. Hey. guys last quarter? did say what which you was average price stock at

share say repurchases. shares but million $XX it. $XX.XX since that didn't We at back we've of Eric, on bought inception,

Yes. guys, Great. you, much. very Thank

you. Thank

Thank you.

comes next Geoffrey with Partners. Dowling line of from Your question Dunn the

is line Your open. now

you. Good some like Hi. just static. morning. Thank looks we got It

Geoff. Hey,

pricing we're adequate industry sounds if or a think you think the you in implication environment pricing ago. a on commentary and the your soft landing normalized, I'm was for comes pricing it year curious that down. Given if might like

we for maybe going ago, back, on go we if that's a do little do more average, the back we so we or to of part into where about give credit? And cheating that as much too we were normalized are year forward, only think something was, things because going normal, a industry

Good and the morning, Geoff question. you for thank

So, of question answer two me in let ways. your kind

First we capital. were believe attractive we of business when be were to say And year that ago, our new we thing, we that returns. found business, terms that of cost business we writing that above writing a in did

I macroeconomic that than of of view point macroeconomic today's think our was at environment different environment. time,

into And two buckets. let separate me just it broad

be thing just would First rates. risk-free

to terms And early in just uncertainty lower. would lot XXXX. the unemployment, our you be point expectations and prices a thing just were I'll of rates And second risk-free the in then environment. Our home

at good we returns. at of business were using writing those So that assumptions, time, point

the XX turns a in conditions it lot as so. months change last out, Now, or

cost risk we free would are increases, a I time, the of we or would a rates some price of but price if have expect that same still you I capital increases because at are up. of moved that would retain fair where most our the do higher. we think, up environment, in soft forward, end an looking the have with landing. very question rates, market

if sustains higher to could it. even of pricing being we needs So, I see level. And actually the think our think frameworks, every economic that's at in at expectations that which own their normal, a could about are higher pricing a sustained company MI level. Obviously, scenarios how but to coming see we back

That's helpful. Thank you.

welcome. You're

over time. And call back we I now Rohit have will no this to turn further questions at the Gupta.

you, the you, you appreciate We'll here. Thank interest everyone. at the Enact to in September. your Global wrap Bella. up We some of Thank call Barclays New Thank you, Financial in in Services and all. forward I Conference seeing look York

for This your call. you concludes conference today's participation. Thank

disconnect. may now You