Core Insights - Gary Gordon has extensive experience as a stock analyst in the housing, mortgage, and consumer finance industries, primarily at PaineWebber and UBS [1] - He is now retired and serves as an adjunct professor teaching economics and math, including financial literacy seminars [1] Company and Industry Summary - Gordon's career included roles as a U.S. investment strategist and portfolio manager, indicating a strong background in investment analysis [1] - His educational contributions extend to teaching in prisons, highlighting a commitment to financial education and literacy [1] - Gordon holds degrees in philosophy and finance, which may influence his analytical approach in the finance sector [1]

EARNINGS PRESENTATION 2Q25 ESSENT GROUP LTD. NYSE: ESNT August 8, 2025 ESSENT GROUP LTD. | NYSE: ESNT © 2025 Essent Group Ltd. All rights reserved. | essentgroup.com | 1 Disclaimer This presentation may include "forward-looking statements" which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "should," "expect," "plan," "anticipate," "beli ...

Core Viewpoint - MGIC Investment Corporation received upgrades from Moody's Ratings, reflecting its strong performance and financial stability [1][2]. Group 1: Ratings Upgrade - Moody's upgraded MGIC's senior unsecured debt rating to Baa2 from Baa3 [1]. - The insurance financial strength rating of MGIC's principal operating subsidiary, Mortgage Guaranty Insurance Corporation, was upgraded to A2 from A3 [1]. - The outlook for both ratings is stable [1]. Group 2: Rationale for Upgrade - The upgrades were based on MGIC's consistent performance, good net capital generation, and robust profitability and capital adequacy [2]. Group 3: Company Positioning - The CEO of MGIC expressed satisfaction with the upgrades, highlighting the company's market leadership and disciplined approach [3]. - MGIC aims to continue executing its business strategies and creating long-term value for stakeholders [3].

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].

Financial Data and Key Metrics Changes - The company reported a net income of $142 million in the second quarter, with a diluted earnings per share of $1.02, an increase from $0.98 in the first quarter [12] - Book value per share increased by 12% year over year to $33.18, reflecting strong fundamentals [12] - Return on equity was reported at 12.5%, indicating robust financial performance [12] Business Line Data and Key Metrics Changes - The primary mortgage insurance in force reached an all-time high of $277 billion, contributing significantly to future earnings [7] - Net premiums earned for the quarter were $234 million, consistent with previous quarters [13] - New insurance written increased by 3% year over year to $14.3 billion, with a persistency rate of 84% [13][14] Market Data and Key Metrics Changes - The housing market faces challenges such as supply constraints and elevated home prices, impacting affordability [8] - Despite these challenges, there is stability in the consumer and labor market, with positive employment trends and wage growth [9] - Demand remains strong, particularly among first-time home buyers, as millennials enter their prime home-buying years [9] Company Strategy and Development Direction - The company aims to leverage proprietary data and analytics to inform strategic pricing decisions and adjust market exposure [10] - The recent passage of the One Big Beautiful Bill Act enhances affordability by making mortgage insurance premiums tax-deductible [10] - The company is focused on maintaining a balanced and resilient mortgage insurance business model while maximizing economic value for stakeholders [13] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the mortgage insurance business, citing strong credit performance and a favorable pricing environment [7][11] - The company remains aligned with policymakers to promote affordable homeownership through various economic cycles [11] - Management emphasized the importance of careful liquidity management and capital allocation strategies moving forward [25][26] Other Important Information - The company reported a provision for losses of $48 million for new defaults, with total defaults decreasing to approximately 22,000 loans [15][17] - Operating expenses for the quarter totaled $89 million, with expectations of $320 million for the full year, a decrease from the previous year [19] - The company repurchased approximately 13.5 million shares, bringing total capital return to stockholders in the first half of the year to over $500 million [20] Q&A Session Summary Question: Liquidity at the holding company and capital return in the second half - Management indicated strong liquidity at the holding company, ending the quarter at $784 million, with opportunistic share repurchases impacting liquidity [24][25] Question: Sustainability of the $795 million dividend to the holding company - Management noted that the dividend from Radian Guaranty is driven by statutory net income, suggesting that future dividends will depend on 2025's net income [29] Question: Marks on loans held for sale affecting earnings - Management clarified that the impact from mark-to-market adjustments was approximately $9 million, primarily due to spread volatility [36][37] Question: Timeline to breakeven for the title business - Management stated that the title business has shown growth, but higher rates have impacted real estate services, with ongoing efforts to find avenues for growth [38][40]

Financial Performance - Radian Group's net income for Q2 2025 was $142 million, compared to $145 million in Q1 2025 and $152 million in Q2 2024[9] - The diluted net income per share was $1.02, and the adjusted diluted net operating income per share was $1.01[9] - The book value per share grew by 12% year-over-year to $33.18, compared to $29.66 as of June 30, 2024[9] - The return on equity was 12.5%, and the adjusted net operating return on equity was 12.4%[10] Mortgage Insurance - The primary mortgage insurance in force reached $276.7 billion, compared to $274.2 billion as of March 31, 2025, and $272.8 billion as of June 30, 2024[12] - Net mortgage insurance premiums earned were $234 million, consistent with $234 million in Q1 2025 and $235 million in Q2 2024[12] - New insurance written was $14.3 billion, compared to $9.5 billion in Q1 2025 and $13.9 billion in Q2 2024[14] Investment Portfolio - Total investments amounted to $6.5 billion, compared to $6.1 billion as of March 31, 2025, and $6.6 billion as of June 30, 2024[14] - Net investment income was $73 million, compared to $69 million in Q1 2025 and $74 million in Q2 2024[12] - The investment portfolio is diversified, with 41.2% allocated to corporate bonds and commercial paper, totaling $2.747 billion[36] Capital and Risk Management - Available holding company liquidity was $784 million, compared to $834 million as of March 31, 2025, and $1.2 billion as of June 30, 2024[10] - PMIERs excess available assets were $2.0 billion, compared to $2.1 billion as of March 31, 2025, and $2.2 billion as of June 30, 2024[10] - The holding company debt-to-capital ratio was 19.2%[56]

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 Data and Key Metrics Changes - In Q2 2025, total revenue reached a record $173.8 million, with adjusted net income of $96.5 million or $1.22 per diluted share, and an adjusted return on equity of 16.3% [8][12] - The company generated $12.5 billion of new insurance written (NIW) and ended the period with a record $214.7 billion of primary insurance in force, reflecting a 2% increase from Q1 and a 5% increase year-over-year [5][12] - The expense ratio was a record low of 19.8%, indicating significant operating leverage and efficiency in managing costs [14] Business Line Data and Key Metrics Changes - Net premiums earned in Q2 were $149.1 million, slightly down from $149.4 million in Q1 but up from $141.2 million in Q2 2024 [13] - The core yield increased to 34.2 basis points from 34.1 basis points in the previous quarter, while the net yield for the quarter was 28 basis points [13] Market Data and Key Metrics Changes - The twelve-month persistency rate was 84.1%, slightly down from 84.3% in Q1 [12] - The company reported 6,709 defaults at the end of Q2, down from 6,859 at the end of Q1, with a default rate of 1% [14] Company Strategy and Development Direction - The company aims to continue serving customers and their borrowers, investing in employee success, and driving growth in its high-quality insured portfolio [11][16] - The management emphasized a proactive approach to pricing, risk selection, and reinsurance, maintaining discipline in capital return strategies [10][21] Management's Comments on Operating Environment and Future Outlook - The macro environment remains resilient despite elevated interest rates, with strong demand for down payment support from lenders and borrowers [9][10] - Management expressed confidence in the company's ability to navigate market changes and maintain strong credit performance, citing a favorable economic backdrop [28][42] Other Important Information - The company was recognized as a great place to work for the tenth consecutive year, highlighting the importance of team quality and workplace culture as competitive advantages [6][7] - The company has repurchased $23.2 million of common stock in Q2, with a total of $294 million repurchased to date [15] Q&A Session Summary Question: Capital return pacing in light of economic resilience - Management indicated a consistent approach to capital return, with an expectation of approximately $25 million per quarter, while remaining flexible to adjust based on market conditions [19][21] Question: Impact of rising home supply and pricing on underwriting - Management noted that while there are regional differences in the housing market, the overall economic growth and job market remain strong, allowing for proactive management of underwriting and risk [25][28] Question: Competitive environment and pricing relative to peers - Management described the industry pricing as balanced and constructive, with strong unit economics on new business [36] Question: Default trends and recovery drivers - Management highlighted the favorable credit performance of the portfolio, with borrowers benefiting from a strong labor market and embedded equity, aiding in recovery from defaults [41][42] Question: Regulatory impacts from FHFA proposals - Management stated that proposed changes to equitable housing programs are not expected to have a significant impact on the business or market [48][49]

Financial Data and Key Metrics Changes - Total revenue in Q2 2025 was a record $173.8 million, compared to $173.2 million in Q1 2025 and $162.1 million in Q2 2024 [12][13] - Adjusted net income was $96.5 million or $1.22 per diluted share, with an adjusted return on equity of 16.3% [7][12] - The primary insurance in force grew to $214.7 billion, up 2% from Q1 2025 and 5% compared to Q2 2024 [12][15] - The expense ratio reached a record low of 19.8%, indicating significant operating leverage [14] Business Line Data and Key Metrics Changes - The company generated $12.5 billion of new insurance written (NIW) in Q2 2025, maintaining strong production levels [5][7] - Net premiums earned were $149.1 million in Q2 2025, slightly down from $149.4 million in Q1 2025 but up from $141.2 million in Q2 2024 [13] Market Data and Key Metrics Changes - The twelve-month persistency rate was 84.1% in Q2 2025, compared to 84.3% in Q1 2025 [12] - The company reported 6,709 defaults at the end of Q2 2025, down from 6,859 at the end of Q1 2025, with a default rate of 1% [14] Company Strategy and Development Direction - The company aims to continue serving customers and their borrowers while investing in employee success and driving growth in its insured portfolio [11][17] - The management emphasized a disciplined approach to pricing, risk selection, and reinsurance, which has proven effective [10][29] - The company is positioned to offer low-cost, high-value solutions that enhance homeownership accessibility [10][11] Management's Comments on Operating Environment and Future Outlook - The macro environment remains resilient despite elevated interest rates, with ongoing demand for down payment support [8][10] - Management expressed confidence in the company's ability to navigate market changes and maintain strong performance [7][10] - The company anticipates continued normalization in housing market appreciation, with a focus on maintaining balance in risk management [28] Other Important Information - The company was recognized as a great place to work for the tenth consecutive year, highlighting its strong workplace culture [6] - Shareholders' equity at the end of Q2 2025 was $2.4 billion, with a book value per share of $31.14 [15] Q&A Session Summary Question: Capital return pacing in light of economic resilience - Management indicated satisfaction with the current capital return execution and suggested a consistent buyback pace of approximately $25 million per quarter, with flexibility to adjust based on market conditions [20][21][22] Question: Impact of rising home supply and pricing on underwriting - Management noted that while some markets are under pressure, the overall economic backdrop remains positive, allowing for proactive risk management without significant changes to current strategies [25][28][29] Question: Competitive environment and pricing relative to peers - Management described the industry pricing as balanced and constructive, with strong unit economics on new business [38] Question: Operating expenses and any one-time impacts - Management clarified that the decline in operating expenses from Q1 to Q2 is typical and not due to any one-time events [39][40] Question: Default trends and recovery drivers - Management reported a favorable credit performance and noted that borrowers are benefiting from a strong labor market and embedded equity, aiding in recovery from defaults [44][46][47] Question: Regulatory impacts from FHFA proposals - Management expressed that the proposed changes would not significantly impact the business or market, maintaining a focus on access and affordability in housing policy [50][52][53]