Enact (US:ACT)2023-02-07 15:18Financial Data and Key Metrics Changes - The company reported a record net income of $704 million for the full year 2022, which translates to $4.31 per diluted share, marking a 28% increase from the previous year [7][21] - Return on equity for the full year was 14%, consistent with strong performance metrics [7][21] - For Q4 2022, GAAP net income was $144 million or $0.88 per diluted share, down from $0.94 per diluted share in the same period last year [21] Business Line Data and Key Metrics Changes - New insurance written (NIW) for Q4 2022 was $15 billion, consistent with Q3 2022 but down 32% year-over-year due to lower mortgage originations [22] - Insurance in-force reached a record $248 billion, driven by a combination of $66 billion of new insurance written and increased persistency [23] - Persistency improved to 86% in Q4 2022, up from 82% in Q3 2022 and 69% in Q4 2021 [23] Market Data and Key Metrics Changes - The pricing environment remained constructive, with an increase in industry pricing and several price increases implemented on new business [12] - The overall credit risk profile of new insurance written remains strong, with loans underwritten to prudent market standards [22] Company Strategy and Development Direction - The company aims to maintain financial strength and flexibility while executing a cycle-tested growth and risk management strategy [8][17] - Investments in technology-driven tools and solutions have differentiated the company's platform and enhanced decision-making [7][8] - The company is focused on disciplined cost management, targeting expense levels in 2023 below those of 2022 [10][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term foundational strength of the mortgage insurance industry despite near-term uncertainties [16][17] - The company is well-positioned for 2023 and beyond, with a resilient portfolio and strong balance sheet [15][36] - Management highlighted the importance of monitoring macroeconomic factors, particularly unemployment, as they could impact future credit performance [62] Other Important Information - The company returned over $250 million to shareholders in 2022 through dividends and share repurchase programs [11][34] - The PMIERs sufficiency remained strong at 165%, providing a buffer above the published requirements [33] Q&A Session Summary Question: Discussion on PMIERs extra charge and capital return - Management indicated that lifting PMIERs restrictions would enhance financial flexibility but would not lead to a significant release of capital [39][40] Question: Details on the seasoned NIW transaction - The one-time seasoned transaction involved a portfolio with high LTV loans, won due to strong relationships and capital strength [44][46] Question: Trends in new delinquencies - Management noted that credit performance remains strong, with new delinquencies expected to be influenced by macroeconomic conditions, particularly unemployment [62]