Core Viewpoint - AM Best has revised the outlooks for Enact Holdings, Inc. and its subsidiaries to positive from stable, affirming their Financial Strength Rating (FSR) of A- (Excellent) and Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) [1] Group 1 - The outlook revision indicates improved financial stability and performance expectations for Enact Holdings, Inc. and its subsidiaries [1] - The affirmed ratings reflect the strong operational performance and risk management practices of Enact Mortgage Insurance Corporation and its North Carolina subsidiary [1]

Core Insights - Aduro Clean Technologies Inc. is participating in the Dutch trade delegation to Japan, focusing on innovative chemical recycling and sustainable chemistry [1][2][3] - The mission aims to promote international collaboration in energy transition and circular economy, coinciding with Expo 2025 Osaka [2][3] - Japan's commitment to recycling and decarbonization presents a significant market opportunity for Aduro, as the country actively invests in advanced chemical recycling [3][4] Company Overview - Aduro Clean Technologies specializes in patented water-based technologies for chemically recycling waste plastics and converting heavy crude into valuable oil [6] - The company's Hydrochemolytic™ Technology operates at low temperatures and costs, transforming low-value feedstocks into valuable resources [6] Strategic Engagement - Aduro Europe will present Hydrochemolytic™ Technology and recent development progress during the trade mission, aiming to establish partnerships in Asia [4][5] - The company's CEO emphasizes the importance of this engagement for strengthening relationships in Asia and advancing commercial pathways for Hydrochemolytic™ Technology [5]

Core Viewpoint - Aduro Clean Technologies Inc. is progressing on the NGP Pilot Plant, which is crucial for validating its Hydrochemolytic™ Technology and advancing towards commercialization [1][10]. Group 1: NGP Pilot Plant Overview - The NGP Pilot Plant aims to validate Hydrochemolytic™ Technology in continuous operation, establish operating parameters, and produce product samples for customer evaluation [2][10]. - The pilot plant will confirm mass and energy balances, yields, and controllability, and will support environmental assessments and lifecycle analyses [2][10]. Group 2: Project Progress - Work on the NGP Pilot Plant is on schedule, with major workstreams progressing in parallel, including equipment delivery and system integration [3][10]. - Site preparations at the London laboratory have been completed, including modifications to meet safety standards and regulatory requirements [5][10]. Group 3: Equipment and Systems - Factory Acceptance Testing for the extruders has been completed, confirming their readiness for site delivery [6]. - Zeton has received all major long-lead components for the reactor and cooling systems, with assembly of modular process skids underway [7]. - Siemens has shipped critical automation and electrical components, with integration work on control systems on schedule [8]. Group 4: Feedstock and Partnerships - Feedstock preparation is in progress, with Aduro and its partner NexGen Polymers securing representative waste-plastic streams and other process inputs [9].

Core Viewpoint - Enact Holdings, Inc. has received a credit rating upgrade from Moody's Investor Service, reflecting the company's strong performance and stability in the private mortgage insurance sector [1][2]. Company Overview - Enact Holdings, Inc. operates primarily through its subsidiary, Enact Mortgage Insurance Corporation, which has been in operation since 1981 and is a leading provider of private mortgage insurance in the U.S. [3]. - The company aims to assist more individuals in achieving homeownership by partnering with lenders to provide top-tier service, underwriting expertise, and risk management [3]. Rating Upgrade Details - Moody's upgraded the insurance financial strength rating of Enact Mortgage Insurance Corporation from A3 to A2 and the long-term issuer rating and senior unsecured debt rating of Enact Holdings, Inc. from Baa3 to Baa2, with a stable outlook for these ratings [1]. - This marks the fourth upgrade from Moody's since Enact's IPO in 2021, indicating consistent execution and strong results [2].

Part I. Financial Information This part presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the company's unaudited condensed consolidated financial statements and detailed notes for the reported periods [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) This section details the company's financial position, including assets, liabilities, and equity, for the reported periods Balance Sheet Summary | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $6,773,473 | | December 31, 2024 | $6,521,531 | Balance Sheet Summary | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $1,550,345 | | December 31, 2024 | $1,525,435 | Balance Sheet Summary | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $5,223,128 | | December 31, 2024 | $4,996,096 | [Condensed Consolidated Statements of Income (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20%28Unaudited%29) This section presents the company's revenues, expenses, and net income for the reported periods Income Statement Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $167,808 | $183,673 | -8.64% | | Six months ended June 30 | $333,586 | $344,661 | -3.21% | Income Statement Summary | Period | 2025 | 2024 | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $1.12 | $1.17 | -4.27% | | Six months ended June 30 | $2.21 | $2.18 | +1.38% | Income Statement Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $304,890 | $298,834 | +2.03% | | Six months ended June 30 | $611,666 | $590,410 | +3.60% | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Unaudited%29) This section details the company's comprehensive income, including net income and other components, for the reported periods Comprehensive Income Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $215,948 | $184,845 | +16.83% | | Six months ended June 30 | $436,699 | $338,756 | +28.91% | Comprehensive Income Summary | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $48,140 | $1,172 | | Six months ended June 30 | $103,113 | $(5,905) | [Condensed Consolidated Statements of Changes in Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Equity%20%28Unaudited%29) This section outlines changes in the company's equity, including net income, dividends, and other comprehensive income Changes in Equity Summary | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $5,223,128 | | June 30, 2024 | $4,825,829 | | December 31, 2024 | $4,996,096 | | December 31, 2023 | $4,632,347 | Changes in Equity Summary | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $(84,835) | $(48,610) | | Six months ended June 30 | $(150,118) | $(98,334) | Changes in Equity Summary | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $(31,497) | $(29,083) | | Six months ended June 30 | $(59,585) | $(54,540) | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) This section reports the company's cash flows from operating, investing, and financing activities for the reported periods Cash Flow Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six months ended June 30 | $346,242 | $331,996 | +4.29% | Cash Flow Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six months ended June 30 | $(115,187) | $(81,267) | +41.74% | Cash Flow Summary | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six months ended June 30 | $(217,520) | $(167,377) | +30.08% | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [(1) Nature of business, organization structure and basis of presentation](index=10&type=section&id=%281%29%20Nature%20of%20business,%20organization%20structure%20and%20basis%20of%20presentation) This note describes the company's core business, organizational structure, and the basis for preparing its financial statements - The company's core business is residential mortgage guaranty insurance, primarily insuring prime-based, individually underwritten residential mortgage loans (primary mortgage insurance)[29](index=29&type=chunk) - Primary mortgage insurance enables borrowers to buy homes with less than **20%** down payment and facilitates the sale of these loans in the secondary mortgage market, often to government-sponsored enterprises (GSEs) like Fannie Mae and Freddie Mac[29](index=29&type=chunk)[31](index=31&type=chunk) - The company operates through its primary insurance subsidiary, Enact Mortgage Insurance Corporation (EMICO), across all **50** states and D.C., and also offers mortgage and credit-related insurance and reinsurance through other subsidiaries, including Enact Re Ltd[31](index=31&type=chunk) [(2) Accounting changes](index=12&type=section&id=%282%29%20Accounting%20changes) This note discusses recently adopted and not yet adopted accounting pronouncements and their expected impact on the financial statements - No new accounting pronouncements were adopted in **2025**[36](index=36&type=chunk) - ASU 2023-09 (Income Tax Disclosures) will require improved annual income tax disclosures, effective January 1, **2025**, with no impact on consolidated financial statements but will expand disclosures[37](index=37&type=chunk) - ASU 2024-03 (Income Statement Expense Disaggregation) will require disaggregated disclosures of certain income statement expenses (e.g., employee compensation, depreciation), effective January 1, **2027**, with early adoption permitted[38](index=38&type=chunk) [(3) Investments](index=12&type=section&id=%283%29%20Investments) This note provides details on the company's investment portfolio, including fair values, unrealized gains/losses, and investment income Investment Details | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $65,884 | $59,773 | +10.22% | | Six months ended June 30 | $128,921 | $116,884 | +10.30% | Investment Details | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $(7,343) | $(7,713) | | Six months ended June 30 | $(10,586) | $(14,397) | Investment Details | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(100,476) | | December 31, 2024 | $(207,624) | - As of June 30, **2025**, total gross unrealized losses on fixed maturity securities were **$(174,887) thousand**, with **89.97%** in a continuous unrealized loss position for **12** months or more[50](index=50&type=chunk) - Management believes unrealized losses are primarily due to changes in interest rates and market volatility, not credit losses, as issuers continue timely principal and interest payments. The company does not intend to sell these securities prior to recovering amortized cost[50](index=50&type=chunk)[51](index=51&type=chunk) [(4) Fair value](index=17&type=section&id=%284%29%20Fair%20value) This note outlines the methodologies and inputs used to determine the fair value of financial instruments, categorized by valuation levels Fair Value Measurements | Category | Total (in thousands) | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Fixed maturity securities | $5,896,818 | $— | $5,640,708 | $256,110 | | Short-term investments | $3,001 | $— | $3,001 | $— | | **Total** | **$5,899,819** | **$—** | **$5,643,709** | **$256,110** | - Approximately **91%** of the fixed maturity securities portfolio was priced using third-party pricing services as of June 30, **2025**, primarily classified as Level **2** measurements[76](index=76&type=chunk) - Level **3** measurements, totaling **$256.1 million** as of June 30, **2025**, include securities valued using broker quotes or internal models with significant unobservable inputs[85](index=85&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk) Fair Value Measurements | Date | Carrying Amount (in thousands) | Fair Value (in thousands) | | :--- | :--- | :--- | | June 30, 2025 | $743,753 | $778,523 | | December 31, 2024 | $743,050 | $764,070 | [(5) Loss reserves](index=25&type=section&id=%285%29%20Loss%20reserves) This note details the company's loss reserves, including changes in estimates and the impact of favorable reserve adjustments Loss Reserve Details | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $551,940 | | December 31, 2024 | $524,715 | Loss Reserve Details | Item | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Beginning Balance | $517,123 | $516,221 | | Total Incurred | $46,482 | $1,821 | | Total Paid | $(19,941) | $(12,680) | | Ending Balance | $543,664 | $505,362 | - For the six months ended June 30, **2025**, the company recorded **$95 million** in favorable reserve adjustments, primarily from cure performance of delinquencies from early **2024** and prior years[108](index=108&type=chunk) - During the six months ended June 30, **2024**, the company released **$131 million** of reserves due to better than expected cure performance on delinquencies from **2023** and prior, and decreased claim rate assumptions[109](index=109&type=chunk) [(6) Reinsurance](index=27&type=section&id=%286%29%20Reinsurance) This note describes the company's reinsurance arrangements, including excess-of-loss and quota share agreements, and their financial impact Reinsurance Metrics | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $245,289 | $244,567 | +0.30% | | Six months ended June 30 | $490,075 | $485,314 | +0.98% | - The company engages in excess-of-loss (XOL) reinsurance, with total current reinsurance coverage for mortgage insurance-linked notes at **$440 million** and for traditional XOL reinsurance at **$1,178 million** as of June 30, **2025**[115](index=115&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk) - Quota share reinsurance agreements involve ceding a percentage of premiums earned, claims, and expenses to third-party reinsurers, with associated ceding and profit commissions[121](index=121&type=chunk)[122](index=122&type=chunk) [(7) Borrowings](index=29&type=section&id=%287%29%20Borrowings) This note provides information on the company's debt instruments, including senior notes and revolving credit facilities, and related transactions - The company issued **$750 million** aggregate principal amount of **6.25%** Senior Notes due **2029** in May **2024**, maturing on May 28, **2029**[126](index=126&type=chunk)[128](index=128&type=chunk) - In June **2024**, the company redeemed all **$750 million** of its **6.5%** senior notes due **2025**, resulting in a **$10.9 million** loss on debt extinguishment[129](index=129&type=chunk) - A five-year, unsecured revolving credit facility of **$200 million**, maturing in June **2027**, remained undrawn through June 30, **2025**, and the company is in compliance with all its covenants[130](index=130&type=chunk)[134](index=134&type=chunk) [(8) Income taxes](index=30&type=section&id=%288%29%20Income%20taxes) This note explains the company's provision for income taxes and the expected impact of recent tax legislation - The provision for income taxes is computed on a separate return with benefits-for-loss method[135](index=135&type=chunk) - The One Big Beautiful Bill Act (OBBBA), signed July 4, **2025**, is not expected to have a material impact on the company's consolidated financial statements[135](index=135&type=chunk) [(9) Related party transactions](index=30&type=section&id=%289%29%20Related%20party%20transactions) This note discloses transactions and balances with related parties, including affiliates, for the periods presented Related Party Transactions | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $2,400 | $2,800 | | Six months ended June 30 | $4,700 | $5,600 | Related Party Transactions | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $1,800 | $1,800 | | Six months ended June 30 | $3,600 | $3,300 | Related Party Transactions | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $25,500 | $23,700 | | Six months ended June 30 | $48,300 | $44,500 | Related Party Transactions | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $68,400 | $39,600 | | Six months ended June 30 | $121,400 | $79,500 | [(10) Net income per common share](index=31&type=section&id=%2810%29%20Net%20income%20per%20common%20share) This note presents basic and diluted net income per common share calculations for the reported periods Net Income Per Share | Period | Basic 2025 | Diluted 2025 | Basic 2024 | Diluted 2024 | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | $1.12 | $1.11 | $1.17 | $1.16 | | Six months ended June 30 | $2.21 | $2.20 | $2.18 | $2.16 | Net Income Per Share | Period | Basic 2025 (in thousands) | Diluted 2025 (in thousands) | Basic 2024 (in thousands) | Diluted 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Three months ended June 30 | 149,940 | 150,729 | 157,193 | 158,571 | | Six months ended June 30 | 150,885 | 151,818 | 158,005 | 159,329 | [(11) Changes in accumulated other comprehensive income](index=32&type=section&id=%2811%29%20Changes%20in%20accumulated%20other%20comprehensive%20income) This note details the components and changes in accumulated other comprehensive income for the periods presented Accumulated Other Comprehensive Income | Date | Amount (in thousands) | | :--- | :--- | | June 30, 2025 | $(104,342) | | April 1, 2025 | $(152,482) | | January 1, 2025 | $(207,455) | | June 30, 2024 | $(236,305) | | April 1, 2024 | $(237,477) | | January 1, 2024 | $(230,400) | Accumulated Other Comprehensive Income | Period | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Three months ended June 30 | $48,140 | $1,172 | | Six months ended June 30 | $103,113 | $(5,905) | [(12) Stockholders' equity](index=33&type=section&id=%2812%29%20Stockholders%27%20equity) This note provides information on changes in stockholders' equity, including share repurchase programs and dividend declarations - The company completed a **$250 million** share repurchase program in Q2 **2025** and authorized a new **$350 million** program on April 30, **2025**, with **$292.9 million** remaining as of June 30, **2025**[151](index=151&type=chunk)[155](index=155&type=chunk) Stockholders' Equity Activities | Period | Shares Purchased | Average Price per Share | | :--- | :--- | :--- | | Three months ended June 30, 2025 | 2,382,633 | $35.45 | | Three months ended June 30, 2024 | 1,601,419 | $30.43 | | Six months ended June 30, 2025 | 4,344,656 | $34.52 | | Six months ended June 30, 2024 | 3,381,257 | $28.89 | Stockholders' Equity Activities | Quarter Ended | 2025 | 2024 | | :--- | :--- | :--- | | March 31 | $0.185 | $0.16 | | June 30 | $0.21 | $0.185 | | Total (YTD) | $0.395 | $0.715 | - The quarterly dividend was increased to **$0.21** per common share in April **2025**, paid in June **2025**[181](index=181&type=chunk) [(13) Segment Reporting](index=34&type=section&id=%2813%29%20Segment%20Reporting) This note clarifies the company operates in a single reportable segment, Mortgage Insurance, with performance reviewed on a consolidated basis - The company operates in a single reportable segment, Mortgage Insurance[159](index=159&type=chunk) - The Chief Executive Officer, as the chief operating decision maker, reviews financial performance and allocates resources on a consolidated basis using net income[159](index=159&type=chunk)[160](index=160&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes the company's financial condition, operational results, key factors, and performance metrics [Cautionary Note Regarding Forward-Looking Statements](index=34&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This note advises readers that the report contains forward-looking statements subject to risks and uncertainties - The report contains forward-looking statements about expected financial and operational results, distinguished by words such as "will," "expect," and "believe"[9](index=9&type=chunk) - These statements involve difficult-to-predict risks and uncertainties, including inability to maintain PMIERs, economic deterioration, changes in GSE practices, and uncertainty in loss reserve estimates, which could cause actual results to differ materially[9](index=9&type=chunk)[10](index=10&type=chunk) - The company undertakes no obligation to update publicly any forward-looking statements, except as required by applicable law[10](index=10&type=chunk) [Key Factors Affecting Our Results](index=35&type=section&id=Key%20Factors%20Affecting%20Our%20Results) This section highlights the primary factors influencing the company's financial performance, noting any material changes - There have been no material changes to the key factors affecting the company's results compared to those disclosed in the Annual Report, other than the impact of items discussed in "Trends and Conditions"[164](index=164&type=chunk) [Trends and Conditions](index=35&type=section&id=Trends%20and%20Conditions) This section discusses macroeconomic conditions, industry trends, and their impact on the company's business - The macroeconomic environment in Q2 **2025** was characterized by elevated inflation (CPI **2.7%** YoY in June **2025**), significant volatility due to changing economic policies, tariffs, and geopolitical tensions, with the unemployment rate at **4.1%**[164](index=164&type=chunk)[165](index=165&type=chunk)[167](index=167&type=chunk) - Mortgage origination activity remained slow in Q2 **2025** due to elevated mortgage rates and low housing supply, leading to deteriorated housing affordability[166](index=166&type=chunk) - New insurance written (NIW) decreased **3%** to **$13.3 billion** in Q2 **2025** compared to Q2 **2024**, while the primary persistency rate was **82%** (**83%** in Q2 **2024**), remaining higher than historical levels[171](index=171&type=chunk) - The loss ratio for Q2 **2025** was **10%** (compared to (**7%)** for Q2 **2024**), impacted by a **$48 million** reserve release in **2025** (vs. **$77 million** in **2024**) and an increase in new delinquencies[173](index=173&type=chunk)[174](index=174&type=chunk) - EMICO's estimated risk-to-capital ratio was **10.3:1** as of June 30, **2025**, well below the NCDOI's maximum of **25:1**, and PMIERs available assets were **$1,961 million** above requirements (**165%** sufficiency ratio)[176](index=176&type=chunk)[178](index=178&type=chunk) - Fitch upgraded EMICO's long-term financial strength rating from A- to A on January 17, **2025**, and the company increased its quarterly dividend to **$0.21** per common share while authorizing a new **$350 million** share repurchase program[180](index=180&type=chunk)[181](index=181&type=chunk)[182](index=182&type=chunk) [Results of Operations and Key Metrics](index=38&type=section&id=Results%20of%20Operations%20and%20Key%20Metrics) This section analyzes the company's financial performance and key operational metrics for the reported periods [Results of Operations (Three months ended June 30, 2025, compared to three months ended June 30, 2024)](index=38&type=section&id=Results%20of%20Operations%20%28Three%20months%20ended%20June%2030,%202025,%20compared%20to%20three%20months%20ended%20June%2030,%202024%29) This section compares the company's financial results for the three months ended June 30, 2025, against 2024 Three-Month Operating Results | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net income | $167,808 | $183,673 | -9% | | Total revenues | $304,890 | $298,834 | +2% | | Total losses and expenses | $90,388 | $64,005 | +41% | | Losses incurred | $25,289 | $(16,821) | +250% | | Acquisition and operating expenses, net of deferrals | $50,598 | $53,960 | -6% | | Loss ratio | 10% | (7)% | - | | Expense ratio | 22% | 23% | - | - Net investment income increased by **10%** due to higher yields and average invested assets[188](index=188&type=chunk) - Losses incurred were significantly impacted by a smaller reserve release in Q2 **2025** (**$48 million**) compared to Q2 **2024** (**$77 million**), and an increase in current period primary delinquencies (**11,567** in **2025** vs. **10,461** in **2024**)[189](index=189&type=chunk) [Results of Operations (Six months ended June 30, 2025, compared to six months ended June 30, 2024)](index=40&type=section&id=Results%20of%20Operations%20%28Six%20months%20ended%20June%2030,%202025,%20compared%20to%20six%20months%20ended%20June%2030,%202024%29) This section compares the company's financial results for the six months ended June 30, 2025, against 2024 Six-Month Operating Results | Metric | H1 2025 (in thousands) | H1 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Net income | $333,586 | $344,661 | -3% | | Total revenues | $611,666 | $590,410 | +4% | | Total losses and expenses | $185,743 | $149,660 | +24% | | Losses incurred | $55,830 | $2,680 | NM | | Acquisition and operating expenses, net of deferrals | $100,692 | $104,894 | -4% | | Loss ratio | 11% | 1% | - | | Expense ratio | 21% | 23% | - | - Premiums increased by **1%** and net investment income increased by **10%** due to higher investment yields and average invested assets[195](index=195&type=chunk)[196](index=196&type=chunk) - Losses incurred were significantly higher due to a smaller reserve release in H1 **2025** (**$95 million**) compared to H1 **2024** (**$131 million**), and an increase in new primary delinquencies (**23,804** in **2025** vs. **21,856** in **2024**)[198](index=198&type=chunk) [Use of Non-GAAP Financial Measures](index=41&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) This section defines and reconciles non-GAAP financial measures used by management to assess core operating performance - The company uses "adjusted operating income" as a non-GAAP financial measure to evaluate core operating trends, excluding net investment gains (losses), restructuring costs, and gains (losses) on debt extinguishment[204](index=204&type=chunk) Non-GAAP Adjusted Operating Income | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $173,590 | $201,115 | -13.69% | Non-GAAP Adjusted Operating Income | Period | 2025 (in thousands) | 2024 (in thousands) | Change (YoY) | | :--- | :--- | :--- | :--- | | Six months ended June 30 | $342,427 | $367,350 | -6.80% | [Key Metrics](index=42&type=section&id=Key%20Metrics) This section presents and analyzes key operational metrics relevant to the company's business performance [New insurance written ("NIW")](index=42&type=section&id=New%20insurance%20written%20%28%22NIW%22%29) This section details the volume and characteristics of new insurance policies written by the company New Insurance Written | Period | 2025 (in millions) | 2024 (in millions) | Change (YoY) | | :--- | :--- | :--- | :--- | | Three months ended June 30 | $13,254 | $13,619 | -2.68% | | Six months ended June 30 | $23,072 | $24,145 | -4.44% | New Insurance Written | Underlying Mortgage Type | Q2 2025 (in millions) | % | | :--- | :--- | :--- | | Purchases | $12,335 | 93% | | Refinances | $919 | 7% | New Insurance Written | Policy Payment Type | Q2 2025 (in millions) | % | | :--- | :--- | :--- | | Monthly | $12,688 | 96% | | Single | $554 | 4% | New Insurance Written | FICO Score | Q2 2025 (in millions) | % | | :--- | :--- | :--- | | Over 760 | $6,843 | 52% | | 740-759 | $2,160 | 16% | [Insurance in-force ("IIF") and Risk in-force ("RIF")](index=44&type=section&id=Insurance%20in-force%20%28%22IIF%22%29%20and%20Risk%20in-force%20%28%22RIF%22%29) This section provides data on total insurance and risk in-force, persistency rates, and policy year distribution Insurance and Risk In-Force | Date | Total IIF (in millions) | Total RIF (in millions) | | :--- | :--- | :--- | | June 30, 2025 | $270,109 | $70,455 | | December 31, 2024 | $269,204 | $70,042 | | June 30, 2024 | $266,468 | $68,943 | Insurance and Risk In-Force | Period | Persistency Rate | | :--- | :--- | | Three months ended June 30, 2025 | 82% | | Three months ended June 30, 2024 | 83% | Insurance and Risk In-Force | Origination Type | Primary IIF (June 30, 2025, in millions) | % | | :--- | :--- | :--- | | Purchases | $246,701 | 91% | | Refinances | $23,053 | 9% | Insurance and Risk In-Force | Policy Year | Primary IIF (June 30, 2025, in millions) | % | | :--- | :--- | :--- | | 2020 | $31,497 | 12% | | 2021 | $51,345 | 19% | | 2022 | $49,640 | 18% | | 2023 | $42,204 | 16% | | 2024 | $45,708 | 17% | | 2025 | $22,535 | 8% | [Delinquent loans and claims](index=48&type=section&id=Delinquent%20loans%20and%20claims) This section reports on the number of delinquent loans, new defaults, cures, and direct primary case reserves Delinquent Loans and Claims | Date | Number of Delinquencies | | :--- | :--- | | June 30, 2025 | 22,118 | | December 31, 2024 | 23,566 | | June 30, 2024 | 19,051 | Delinquent Loans and Claims | Metric (Six months ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | New defaults | 23,804 | 21,856 | | Cures | (24,837) | (22,891) | Delinquent Loans and Claims | Date | Direct Primary Case Reserves (in thousands) | | :--- | :--- | | June 30, 2025 | $499,774 | | December 31, 2024 | $472,110 | | June 30, 2024 | $462,247 | - The total reserves as a percentage of Risk In-Force (RIF) increased slightly to **32%** as of June 30, **2025** (from **29%** at December 31, **2024**), primarily due to fewer newer delinquencies that have a lower expected claim rate[225](index=225&type=chunk) - As of June 30, **2025**, policy years **2018** and newer represented approximately **95%** of primary RIF and **83%** of total direct primary case reserves, indicating a shift in loss reserve concentration to newer books[231](index=231&type=chunk) [Investment Portfolio](index=57&type=section&id=Investment%20Portfolio) This section describes the company's investment strategy, portfolio composition, and risk management practices - The company's investment strategy focuses on meeting policyholder obligations, preserving capital, generating investment income, maximizing statutory capital, and increasing shareholder value[233](index=233&type=chunk) Investment Portfolio Fair Value | Date | Fair Value (in thousands) | | :--- | :--- | | June 30, 2025 | $5,896,818 | | December 31, 2024 | $5,624,773 | - As of June 30, **2025**, **99%** of the investment portfolio was rated investment grade, with an effective duration of **4.5** years and a pre-tax yield of **4.2%**[235](index=235&type=chunk) - Credit risk is managed through issuer analysis and diversification, while interest rate risk is mitigated by a buy-and-hold philosophy matching fixed income maturities with expected liability cash flows[236](index=236&type=chunk) [Liquidity and Capital Resources](index=59&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash flows, capital structure, financing activities, and dividend restrictions [Cash Flows](index=59&type=section&id=Cash%20Flows) This section analyzes the company's cash flows from operating, investing, and financing activities for the reported periods Cash Flow Summary | Activity (Six months ended June 30) | 2025 (in thousands) | 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $346,242 | $331,996 | | Net cash used in investing activities | $(115,187) | $(81,267) | | Net cash used in financing activities | $(217,520) | $(167,377) | | Net increase in cash and cash equivalents | $13,535 | $83,352 | - Net cash provided by operating activities increased due to higher net investment income and premiums, while investing and financing activities used more cash[237](index=237&type=chunk)[238](index=238&type=chunk)[239](index=239&type=chunk) [Capital Resources and Financing Activities](index=59&type=section&id=Capital%20Resources%20and%20Financing%20Activities) This section details the company's capital structure, debt issuances, credit facilities, and strategies for financial flexibility - The company issued **$750 million** in **2029** Senior Notes in Q2 **2024**, with proceeds used to redeem the **2025** Notes[240](index=240&type=chunk)[241](index=241&type=chunk) - A **$200 million** unsecured revolving credit facility, maturing in June **2027**, remained undrawn through June 30, **2025**, and the company is in compliance with all its covenants[242](index=242&type=chunk)[243](index=243&type=chunk) - The company continually evaluates opportunities to increase financial flexibility through capital raising, debt restructuring, or reinsurance[244](index=244&type=chunk) [Restrictions on the Payment of Dividends](index=61&type=section&id=Restrictions%20on%20the%20Payment%20of%20Dividends) This section outlines the regulatory and internal constraints affecting the company's ability to pay dividends from its insurance subsidiaries - The ability of insurance subsidiaries to pay dividends is restricted by North Carolina insurance laws, requiring notice and approval from the Commissioner, especially for distributions from sources other than unassigned surplus[245](index=245&type=chunk) - As of June 30, **2025**, insurance subsidiaries had the capacity to pay **$64 million** in dividends from unassigned surplus with **30-day** advance notice[245](index=245&type=chunk) - Dividend strategies are also influenced by minimum policyholder surplus, statutory contingency reserve, PMIERs compliance, and risk-to-capital requirements[246](index=246&type=chunk)[247](index=247&type=chunk)[248](index=248&type=chunk) - EMICO paid dividends of **$130 million** in June **2025** and **$200 million** in March **2025** to EHI to support capital returns and financial flexibility[250](index=250&type=chunk) [Risk-to-Capital Ratio](index=61&type=section&id=Risk-to-Capital%20Ratio) This section presents the company's risk-to-capital ratios, demonstrating compliance with regulatory requirements Risk-to-Capital Ratios | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | Combined statutory capital | $5,246 | $5,223 | | Combined risk-to-capital ratio | 10.4:1 | 10.5:1 | Risk-to-Capital Ratios | Metric | June 30, 2025 (in millions) | December 31, 2024 (in millions) | | :--- | :--- | :--- | | EMICO statutory capital | $5,195 | $5,175 | | EMICO risk-to-capital ratio | 10.3:1 | 10.5:1 | - Both combined and EMICO risk-to-capital ratios remain well below the maximum permitted ratio of **25:1**[255](index=255&type=chunk)[256](index=256&type=chunk) [Liquidity](index=62&type=section&id=Liquidity) This section assesses the company's ability to meet its short-term and long-term financial obligations through available cash and investments - The company maintains strong liquidity with **$613 million** in cash and cash equivalents as of June 30, **2025**, and significant levels of investment-grade fixed maturity securities[257](index=257&type=chunk) - A **$200 million** unsecured revolving credit facility, undrawn through June 30, **2025**, provides additional financial flexibility[258](index=258&type=chunk) - Primary liquidity sources include insurance premiums, net investment income, and cash flows from investment sales and maturities[259](index=259&type=chunk) [Financial Strength Ratings](index=63&type=section&id=Financial%20Strength%20Ratings) This section provides an overview of the company's financial strength ratings from various rating agencies Financial Strength Ratings Overview | Name of Agency | Rating | Outlook | Action | Date of Rating | | :--- | :--- | :--- | :--- | :--- | | Moody's Investor Service, Inc. | A3 | Positive | Affirm | March 27, 2024 | | Fitch Ratings, Inc. | A | Stable | Upgrade | January 17, 2025 | | S&P Global Ratings | A- | Stable | Upgrade | January 8, 2024 | | A.M. Best | A- | Stable | Affirm | August 23, 2024 | - Enact Re was independently assigned a rating of A- by A.M. Best in August **2023** and by S&P Global Ratings in August **2024**[262](index=262&type=chunk) [Contractual Obligations and Commitments](index=63&type=section&id=Contractual%20Obligations%20and%20Commitments) This section discusses the company's contractual obligations and off-balance sheet arrangements, noting any material changes - There have been no material additions or changes to contractual obligations or other off-balance sheet arrangements, other than potential changes in loss reserves due to their high degree of estimation uncertainty[263](index=263&type=chunk) [Critical Accounting Estimates](index=63&type=section&id=Critical%20Accounting%20Estimates) This section addresses the significant accounting estimates that require management's judgment and assumptions - There were no material changes in critical accounting estimates from those discussed in the Annual Report as of the filing date[264](index=264&type=chunk) [New Accounting Standards](index=63&type=section&id=New%20Accounting%20Standards) This section refers to disclosures regarding recently adopted and not yet adopted accounting standards - Refer to Note **2** in the unaudited condensed consolidated financial statements for a discussion of recently adopted and not yet adopted accounting standards[265](index=265&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's market risk exposure from its investment portfolio and risk management strategies - The company's investment portfolio is exposed to market risk, most sensitive to fluctuations in U.S. markets, and is managed via defined investment policy guidelines[266](index=266&type=chunk)[267](index=267&type=chunk) - Key drivers of market risk monitored include changes to interest rates (which can affect bond values, persistency, and claim rates), the term structure of interest rates, market volatility/credit quality deterioration, concentration risk, and prepayment risk[267](index=267&type=chunk)[268](index=268&type=chunk)[269](index=269&type=chunk) - As of June 30, **2025**, the effective duration of available-for-sale investments was **4.5** years, indicating a **4.5%** change in fair value for a **100** basis point parallel shift in the yield curve[271](index=271&type=chunk) [Item 4. Controls and Procedures](index=65&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls and no material changes in internal control over financial reporting as of June 30, 2025 - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of June 30, **2025**[273](index=273&type=chunk) - There have been no material changes in the company's internal control over financial reporting during the quarter ended June 30, **2025**[274](index=274&type=chunk) Part II. Other Information This part includes legal proceedings, risk factors, equity security sales, other information, and exhibits [Item 1. Legal Proceedings](index=66&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any pending material legal proceedings - The company is not subject to any pending material legal proceedings[276](index=276&type=chunk) [Item 1A. Risk Factors](index=66&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors; readers should consider all risks in this Form 10-Q - There have been no material changes from the risk factors previously disclosed in the Annual Report[277](index=277&type=chunk) - Readers should carefully consider the risk factors set forth in the Annual Report and the other information in this Form 10-Q[277](index=277&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=66&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details common share repurchases, including shares bought, average price, and remaining authorization Share Repurchase Program | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | April 1 - April 30, 2025 | 693,345 | $34.60 | | May 1 - May 31, 2025 | 837,470 | $36.11 | | June 1 - June 30, 2025 | 851,818 | $35.50 | | **Total (Q2 2025)** | **2,382,633** | **$35.57** | - As of June 30, **2025**, **$292.9 million** remained available under the share repurchase program announced on April 30, **2025**[278](index=278&type=chunk) - Subsequent to quarter end, the company purchased an additional **884,562** shares at an average price of **$35.82** per share through July 31, **2025**[278](index=278&type=chunk) [Item 5. Other Information](index=66&type=section&id=Item%205.%20Other%20Information) No director or Section 16 officer adopted or terminated trading arrangements during the quarter ended June 30, 2025 - No director or Section **16** officer adopted or terminated any "Rule 10b5-1 trading arrangements" or "non-Rule 10b5-1 trading arrangements" during the quarter ended June 30, **2025**[279](index=279&type=chunk) [Item 6. Exhibits](index=67&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including agreements, certifications, and XBRL documents - Exhibits filed include a Share Repurchase Agreement (**10.1**), Certifications of Principal Executive and Financial Officers (**31.1**, **31.2**, **32.1**, **32.2**), and Inline XBRL documents (**101.INS**, SCH, CAL, DEF, LAB, PRE, **104**)[280](index=280&type=chunk) [Signatures](index=68&type=section&id=Signatures) The report is signed by authorized officers Hardin Dean Mitchell and James McMullen on behalf of Enact Holdings, Inc - The report was signed by Hardin Dean Mitchell (Executive Vice President, Chief Financial Officer and Treasurer) and James McMullen (Vice President, Controller and Principal Accounting Officer) on August 1, **2025**[283](index=283&type=chunk)

Group 1 - Enact Holdings, Inc. held its Q2 2025 earnings call on July 31, 2025, featuring key executives including the CEO and CFO [1][2][3] - The call included an overview of business performance and strategic progress, followed by a detailed discussion of quarterly results [3] - Financial results and operational metrics were made available in the earnings materials issued after market close [3]

Financial Data and Key Metrics Changes - The company reported adjusted operating income of $174 million for the second quarter, with adjusted earnings per diluted share at $1.15, down from $1.27 in the same period last year [15] - Adjusted return on equity was over 13% [6] - Insurance in force increased by 1% year over year to $270 billion, with new insurance written exceeding $13 billion [6][17] - Total net premiums earned were $245 million, flat sequentially but up modestly year over year [17] Business Line Data and Key Metrics Changes - New insurance written was $13 billion, up 35% sequentially but down 3% year over year, primarily due to mortgage origination seasonality [16] - Persistency was 82%, down two points sequentially and one point year over year [16] - The base premium rate was 39.8 basis points, down 0.3 basis points sequentially [17] Market Data and Key Metrics Changes - Approximately 7% of the insurance in force had mortgage rates at least 50 basis points above June's average mortgage rate of 6.8% [9] - The risk-weighted average FICO score of the portfolio was 746, with a risk-weighted average loan-to-value ratio of 93% [9] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, investing in business growth, and returning excess capital to shareholders, with expected capital returns for 2025 increased to approximately $400 million [5][12][22] - The company is actively engaged with lending partners and regulatory bodies to adapt to any changes in the housing finance system [13][61] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term health of the US housing market despite uncertainties related to trade policy and affordability challenges [8][24] - The company continues to navigate a complex macroeconomic environment from a position of strength, supported by robust new insurance written and excellent credit quality [13][24] Other Important Information - The company reported a reserve release of $48 million, resulting in a loss ratio of 10% for the quarter [11][20] - Operating expenses remained flat year over year, with a disciplined approach to expense management [11] Q&A Session Summary Question: Discussion on seasoning of recent origination vintages and regional home price weakness - Management noted strong credit performance and resilience in the economy, with some regional markets experiencing inventory increases leading to softness, but overall performance remains robust [29][31][33] Question: Addressable market and new insurance written trends - Management indicated that the MI market size for 2025 is expected to be similar to 2024, with high mortgage rates suppressing purchase origination [40][41] Question: Delinquency outlook and housing credit changes - Management confirmed that consumer credit fundamentals remain strong, with no significant impact from regional home price declines on borrower performance [51][52][56] Question: Update on regulatory changes impacting the business - Management emphasized ongoing engagement with regulatory bodies and strong relationships with GSEs to support well-qualified consumers [61][62] Question: Default to claim levels relative to current performance trends - Management stated that the 9% claim rate on new delinquencies is a prudent measure, with actual performance better than this rate due to strong economic conditions [68][69]

Financial Data and Key Metrics Changes - The company reported adjusted operating income of $174 million for Q2 2025, with adjusted earnings per diluted share at $1.15, down from $1.27 in the same period last year [14] - Adjusted return on equity was over 13% [6] - Insurance in force increased by 1% year over year to $270 billion, with new insurance written exceeding $13 billion [6][15] - Total net premiums earned were $245 million, flat sequentially and up modestly year over year [16] Business Line Data and Key Metrics Changes - New insurance written was $13 billion, up 35% sequentially but down 3% year over year, primarily due to seasonal mortgage origination trends [15] - Persistency rate was 82%, down two points sequentially and one point year over year [15] - The base premium rate was 39.8 basis points, down 0.3 basis points sequentially [16] Market Data and Key Metrics Changes - Approximately 7% of the insurance in force had mortgage rates at least 50 basis points above the average mortgage rate of 6.8% in June [8] - The risk-weighted average FICO score of the portfolio was 746, with a risk-weighted average loan-to-value ratio of 93% [8] Company Strategy and Development Direction - The company is increasing its expected capital returns for 2025 to approximately $400 million, reflecting strong performance and a commitment to shareholder value [5][22] - The company is focused on maintaining a strong balance sheet, investing in business growth, and returning excess capital to shareholders [10][22] - The company continues to engage with lending partners and regulatory bodies to adapt to any changes in the housing finance system [12][57] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term health of the US housing market despite current uncertainties, including trade policy and affordability challenges [7][12] - The company noted strong demographic trends supporting first-time homebuyers, which is expected to bolster future performance [7] - Management highlighted the importance of prudent underwriting standards and effective loss mitigation efforts in maintaining strong credit performance [9][10] Other Important Information - The company reported a reserve release of $48 million, resulting in a loss ratio of 10% for the quarter [10][20] - Operating expenses were flat year over year, reflecting disciplined expense management despite inflationary pressures [10] Q&A Session Summary Question: Discussion on seasoning of recent origination vintages and regional home price weakness - Management noted strong credit performance and resilience in the economy, with embedded home price appreciation supporting performance [29][30] Question: Addressable market and new insurance written trends - Management indicated that the MI market size for 2025 is expected to be similar to 2024, with mortgage rates impacting consumer affordability [39][40] Question: Delinquency outlook and housing credit changes - Management confirmed that consumer credit fundamentals remain strong, with no significant stress observed in borrowers despite regional home price declines [48][49] Question: Update on regulatory changes impacting the business - Management emphasized active engagement with regulatory bodies and strong relationships with GSEs to support well-qualified consumers [57][58]

Financial Performance - Enact achieved a record high Adjusted Operating Income of $718 million for the full year 2024[7] - Net income for FY 2024 was $688 million, compared to $666 million in FY 2023[9] - Adjusted Operating Income for FY 2024 was $718 million, up from $676 million in FY 2023[9] - Enact returned $354 million of capital to shareholders in 2024[11] Key Metrics - Insurance in-force reached a new record of $269 billion, driven by New Insurance Written (NIW) of $13 billion and persistency of 82%[12] - The company's PMIERs (Private Mortgage Insurer Eligibility Requirements) sufficiency remained strong at $2.1 billion, representing 167%[12] - The expense ratio for FY 2024 remained at 23%, consistent with FY 2023[9] - Book Value Per Share increased to $32.80, compared to $29.07 in the previous year[9] Risk Management and Portfolio - The percentage of policies with mortgage rates less than 6% is 68% of the Insurance in-force[30] - Minimal high-risk layers within the portfolio, with only 1.3% having one or more high-risk layers[25]

Enact Holdings, Inc. (ACT) came out with quarterly earnings of $1.15 per share, beating the Zacks Consensus Estimate of $1.11 per share. This compares to earnings of $1.27 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +3.60%. A quarter ago, it was expected that this company would post earnings of $1.12 per share when it actually produced earnings of $1.1, delivering a surprise of -1.79%. There are no easy answers to this ke ...