UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): May 3, 2023
(Exact name of registrant as specified in its charter)
| (State or other Jurisdiction of | (Commission | (IRS Employer | ||||||||||||
| Incorporation) | File Number) | Identification No.) | ||||||||||||
(919 ) 846-4100
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02 | Results of Operations and Financial Condition. | ||||
On May 3, 2023, Enact Holdings, Inc. (the “Company”) issued (1) a press release announcing its financial results for the quarter ended March 31, 2023, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference, and (2) a financial supplement for the quarter ended March 31, 2023, a copy of which is attached hereto as Exhibit 99.2 and is incorporated herein by reference.
The information contained in Item 2.02 of this Current Report on Form 8-K (including Exhibits 99.1 and 99.2) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities under that Section and shall not be deemed to be incorporated by reference into any filing of the company under the Securities Act of 1933, as amended or the Exchange Act, except as shall be expressly set forth by specific reference in such filing. The information contained in Item 2.02 of this Current Report on Form 8-K shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.
| Item 9.01 | Financial Statements and Exhibits. | ||||
The following materials are furnished as exhibits to this Current Report on Form 8-K:
| Exhibit Number | ||||||||
Press Release dated May 3, 2023- Financial results | ||||||||
Financial Supplement for the quarter ended March 31, 2023 | ||||||||
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document) | |||||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Enact Holdings, Inc. | |||||||||||
| By: | /s/ Hardin Dean Mitchell | ||||||||||
| Name: | Hardin Dean Mitchell | ||||||||||
| Title: | Executive Vice President, Chief Financial Officer and Treasurer | ||||||||||
| Dated: May 3, 2023 | |||||||||||
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ENACT REPORTS FIRST QUARTER 2023 RESULTS
_______________________________________
First quarter GAAP Net Income of $176 million, or $1.08 per diluted share
First quarter Adjusted Operating Income of $176 million, or $1.08 per diluted share
First quarter Return on Equity of 16.8% and Adjusted Operating Return on Equity of 16.7%
Record Primary Insurance-in-Force of $253 billion, a 9% increase from first quarter 2022
PMIERs Sufficiency of 164% or $2,098 million
Book Value Per Share of $26.53 and Book Value Per Share excluding AOCI of $28.51
Raleigh, NC, May 3, 2023 – Enact Holdings, Inc. (Nasdaq: ACT) today announced financial results for the first quarter of 2023.
“The first quarter marked a strong start to the year for Enact in a dynamic environment,” said Rohit Gupta, President and CEO of Enact. “With record insurance in force, we continued to write profitable new business while prudently managing our risk and driving cost efficiency. We’re well positioned with a strong balance sheet and financial flexibility, and we remain focused on the continued execution of our cycle-tested growth strategy as we navigate the current market and advance our mission of helping people achieve the dream of homeownership.”
Key Financial Highlights
(In millions, except per share data or otherwise noted) | 1Q23 | 4Q22 | 1Q22 | ||||||||||||||
Net Income (loss) | $176 | $144 | $165 | ||||||||||||||
Diluted Net Income (loss) per share | $1.08 | $0.88 | $1.01 | ||||||||||||||
Adjusted Operating Income (loss) | $176 | $147 | $165 | ||||||||||||||
Adj. Diluted Operating Income (loss) per share | $1.08 | $0.90 | $1.01 | ||||||||||||||
NIW ($B) | $13 | $15 | $19 | ||||||||||||||
Primary IIF ($B) | $253 | $248 | $232 | ||||||||||||||
Persistency | 85 | % | 86 | % | 76 | % | |||||||||||
Net Premiums Earned | $235 | $233 | $234 | ||||||||||||||
Losses Incurred | $(11) | $18 | $(10) | ||||||||||||||
Loss Ratio | (5) | % | 8 | % | (4) | % | |||||||||||
Operating Expenses | $54 | $63 | $57 | ||||||||||||||
Expense Ratio | 23 | % | 27 | % | 24 | % | |||||||||||
Net Investment Income | $45 | $45 | $35 | ||||||||||||||
Return on Equity | 16.8 | % | 14.0 | % | 16.2 | % | |||||||||||
Adjusted Operating Return on Equity | 16.7 | % | 14.4 | % | 16.2 | % | |||||||||||
PMIERs Sufficiency ($) | $2,098 | $2,050 | $2,261 | ||||||||||||||
PMIERs Sufficiency (%) | 164 | % | 165 | % | 176 | % | |||||||||||
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First Quarter 2023 Financial and Operating Highlights
•Net income was $176 million, or $1.08 per diluted share, compared with $144 million, or $0.88 per diluted share, for the fourth quarter of 2022 and $165 million, or $1.01 per diluted share, for the first quarter of 2022. The sequential increase in net income was primarily driven by the favorable reserve release of $70 million. The year-over-year increase in net income was primarily driven by the increase in net investment income.
•Adjusted operating income was $176 million, or $1.08 per diluted share, compared with $147 million, or $0.90 per diluted share, for the fourth quarter of 2022 and $165 million, or $1.01 per diluted share, for the first quarter of 2022.
•New insurance written (NIW) was $13 billion, down 13% from $15 billion in the fourth quarter of 2022, which included a one-time seasoned deal. Excluding this deal, NIW was down 9% sequentially and down 30% from $19 billion in the first quarter of 2022, due to a decline in originations as a result of elevated mortgage rates. NIW for the current quarter was comprised of 97% monthly premium policies and 97% purchase originations.
•Primary Insurance-In-Force was a record $253 billion, up 2% from $248 billion in the fourth quarter of 2022 and up 9% from $232 billion in the first quarter of 2022, driven by NIW and elevated persistency.
•Persistency was 85%, down from 86% in the fourth quarter of 2022 and up from 76% in the first quarter of 2022. Persistency has remained elevated driven by high mortgage rates and a low percentage of our portfolio with rates 50 basis points above current market rates.
•Net premiums earned were $235 million, up 1% from $233 million in the fourth quarter of 2022 and relatively flat from $234 million in the first quarter of 2022. Net earned premium yield was down from the fourth quarter of 2022 and the first quarter of 2022, as a result of the continued lapse of older, higher priced policies and lower single premium cancellations as compared to the first quarter of 2022.
•Losses incurred for the first quarter of 2023 were $(11) million and the loss ratio was (5)%, compared to $18 million and 8%, respectively, in the fourth quarter of 2022 and $(10) million and (4)%, respectively, in the first quarter of 2022. The sequential favorability was driven by a reserve release of $70 million primarily from cures on COVID related delinquencies and compares to a net reserve release of $42 million in the fourth quarter of 2022 and $50 million in the first quarter of 2022.
•The delinquency rate at quarter end was 1.93%, compared to 2.08% as of December 31, 2022 and 2.40% as of March 31, 2022.
•Operating expenses in the current quarter were $54 million and the expense ratio was 23%, compared to $63 million and 27%, respectively, in the fourth quarter of 2022 and $57 million and 24%, respectively in the first quarter of 2022. The decline in operating expenses primarily reflects the impact of our cost reduction initiatives, including the impact from our previously announced renegotiated shared services agreement with Genworth and our voluntary separation program executed in the fourth quarter of 2022.
•Net investment income was $45 million, flat from $45 million for the fourth quarter of 2022 and up from $35 million in the first quarter of 2022, driven by rising interest rates and higher average invested assets.
•Annualized return on equity for the first quarter of 2023 was 16.8% and annualized adjusted operating return on equity was 16.7%. This compares to fourth quarter 2022 results of 14.0% and 14.4%, respectively, and to first quarter 2022 results of 16.2% and 16.2%, respectively. The sequential increase in both return on equity and adjusted operating return on equity were driven, in part, by the reserve release in the current quarter.
Capital and Liquidity
•During the quarter, Fannie Mae and Freddie Mac (the “GSEs”) confirmed that the GSE restrictions first imposed upon Enact after issuance of the August 2020 senior notes were lifted and we are no longer subject to the GSE conditions.
•We executed an excess of loss reinsurance transaction with a panel of reinsurers, which provides up to $180 million of reinsurance coverage on a portion of current and expected new insurance written for the 2023 book year, effective January 1, 2023.
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•PMIERs sufficiency was 164% and $2,098 million above the PMIERs requirements, compared to 165% and $2,050 million above the PMIERs requirements in the fourth quarter of 2022. PMIERs sufficiency for the quarter was relatively flat as an increase in available assets and current period CRT transaction were mostly offset by the increase in required assets on NIW and the amortization of existing reinsurance transactions.
•PMIERs sufficiency benefited from a 0.30 multiplier applied to the risk-based required asset factor for certain non-performing loans, which resulted in a reduction of the PMIERs required assets by an estimated $120 million at the end of the current quarter, compared to $132 million at the end of the fourth quarter 2022 and $272 million at the end of the first quarter 2022. These amounts are gross of incremental reinsurance benefits from the elimination of the 0.30 multiplier.
•Enact Holdings, Inc. held $142 million of cash and $252 million of invested assets as of March 31, 2023. Combined cash and invested assets decreased $59 million from the prior quarter, due to the semi-annual interest payment on our 2020 debt issuance, the share buyback program and our first quarter common dividend.
•In February, S&P Global Ratings (“S&P”) upgraded the long-term financial strength and issuer credit ratings for our flagship insurance subsidiary, Enact Mortgage Insurance Corporation (“EMICO”), to BBB+ from BBB. S&P also announced they raised the long-term issuer credit rating on Enact Holdings Inc. (“EHI”) to ‘BB+’ from ‘BB’. The outlook for the ratings is stable.
•In March, Moody’s Investor Service (“Moody’s”) upgraded EMICO, to A3 from Baa1. Moody’s also announced the upgrade of EHI’s long-term issuer rating and senior unsecured debt rating to Baa3 from Ba1. The outlook for the ratings is stable.
Recent Events
•In April, Fitch Ratings (“Fitch”) upgraded the Insurer Financial Strength rating for EMICO to A- from BBB+. Fitch also upgraded Enact’s senior debt rating to BBB- which marks the second major rating agency to assign Enact’s senior debt an investment grade rating. The outlook for both ratings is stable.
•During the quarter, repurchases under our share repurchase program have totaled $22 million. Through April 30, 2023, repurchases under our share repurchase program have totaled $32 million.
•In April, EMICO completed a distribution of approximately $158 million that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility.
•In May, we announced that our Board of Directors had approved an increase to our quarterly dividend from $0.14 to $0.16 per share, payable on June 14, 2023 to common shareholders of record on May 31, 2023.
•In April, we announced the release of our inaugural 2022 Environmental, Social, and Governance (ESG) Report covering the calendar year 2022. The report marks a significant step forward in Enact’s ESG journey and reflects our long-standing commitment to operating with integrity, accountability and responsibility.
Conference Call and Financial Supplement Information
This press release, the first quarter 2023 financial supplement and earnings presentation are now posted on the Company’s website, https://ir.enactmi.com. Investors are encouraged to review these materials.
Enact will discuss first quarter financial results in a conference call tomorrow, Thursday, May 4, 2023, at 8:00 a.m. (Eastern). Participants interested in joining the call’s live question and answer session are required to pre-register by clicking here to obtain your dial-in number and unique PIN. It is recommended to join at least 15 minutes in advance, although you may register ahead of the call and dial in at any time during the call. If you wish to join the call but do not plan to ask questions, a live webcast of the event will be available on our website, https://ir.enactmi.com/news-and-events/events.
The webcast also will be archived on the Company’s website for one year.
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About Enact
Enact (Nasdaq: ACT), operating principally through its wholly-owned subsidiary Enact Mortgage Insurance Corporation since 1981, is a leading U.S. private mortgage insurance provider committed to helping more people achieve the dream of homeownership. Building on a deep understanding of lenders' businesses and a legacy of financial strength, we partner with lenders to bring best-in class service, leading underwriting expertise, and extensive risk and capital management to the mortgage process, helping to put more people in homes and keep them there. By empowering customers and their borrowers, Enact seeks to positively impact the lives of those in the communities in which it serves in a sustainable way. Enact is headquartered in Raleigh, North Carolina.
Safe Harbor Statement
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These forward-looking statements may address, among other things, our expected financial and operational results, the related assumptions underlying our expected results, and the quotations of management. These forward-looking statements are distinguished by use of words such as “will,” “may,” “would,” “anticipate,” “expect,” “believe,” “designed,” “plan,” “predict,” “project,” “target,” “could,” “should,” or “intend,” the negative of these terms, and similar references to future periods. These views involve risks and uncertainties that are difficult to predict and, accordingly, our actual results may differ materially from the results discussed in our forward-looking statements. Our forward-looking statements contained herein speak only as of the date of this press release. Factors or events that we cannot predict, including uncertainty around Covid-19 and the effects of government and other measures seeking to contain its spread; supply chain constraints; inflation; increases in interest rates; risks related to an economic downturn or recession in the United States and in other countries around the world; changes in political, business, regulatory, and economic conditions; future adverse rating agency actions, including with respect to rating downgrades or potential downgrades or being put on review for potential downgrade, all of which could have adverse implications; changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; and other factors described in the risk factors contained in our Annual Report on Form 10-K and other filings with the Securities and Exchange Commission, may cause our actual results to differ from those expressed in forward-looking statements. In addition, the potential for future dividend payments and other forms of returning capital to shareholders, including share repurchases, will be determined in consultation with the Board of Directors, and after considering economic and regulatory factors, current risks to the Company, and subsidiary performance. Although Enact believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved and it undertakes no obligation to update publicly any forward-looking statements as a result of new information, future events, or otherwise, except as required by applicable law.
GAAP/Non-GAAP Disclosure Discussion
This communication includes the non-GAAP financial measures entitled “adjusted operating income (loss)”, “adjusted operating income (loss) per share," and “adjusted operating return on equity." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates performance and allocates resources on the basis of adjusted operating income (loss). The Enact Holdings, Inc. (the “Company”) defines adjusted operating income (loss) as net income (loss) excluding the after-tax effects of net investment gains (losses), restructuring costs and infrequent or unusual non-operating items. The Company excludes net investment gains (losses) and infrequent or unusual non-operating items because the company does not consider them to be related to the operating performance of the Company and other activities. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as
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market opportunities or exposure management. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized gains and losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted operating income. In addition, adjusted operating income (loss) per share is derived from adjusted operating income (loss) divided by shares outstanding. Adjusted operating return on equity is calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity.
While some of these items may be significant components of net income (loss) in accordance with U.S. GAAP, the Company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis and adjusted operating return on equity, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to the Company’s common stockholders or net income (loss) available to the Company’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies.
Adjustments to reconcile net income (loss) available to the Company’s common stockholders to adjusted operating income (loss) assume a 21% tax rate.
The tables at the end of this press release provide a reconciliation of net income (loss) to adjusted operating income (loss) and U.S. GAAP return on equity to adjusted operating return on equity for the three months ended March 31, 2023 and 2022, as well as for the three months ended December 31, 2022.
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Exhibit A: Consolidated Statements of Income (amounts in thousands, except per share amounts)
| 1Q23 | 4Q22 | 1Q22 | |||||||||
| REVENUES: | |||||||||||
| Premiums | $235,108 | $232,737 | $234,279 | ||||||||
| Net investment income | 45,341 | 44,896 | 35,146 | ||||||||
| Net investment gains (losses) | (122) | (1,274) | (339) | ||||||||
| Other income | 612 | 483 | 502 | ||||||||
| Total revenues | 280,939 | 276,842 | 269,588 | ||||||||
| LOSSES AND EXPENSES: | |||||||||||
| Losses incurred | (10,984) | 18,097 | (10,446) | ||||||||
| Acquisition and operating expenses, net of deferrals | 51,705 | 59,955 | 54,262 | ||||||||
| Amortization of deferred acquisition costs and intangibles | 2,640 | 2,747 | 3,090 | ||||||||
| Interest expense | 13,065 | 13,258 | 12,776 | ||||||||
| Total losses and expenses | 56,426 | 94,057 | 59,682 | ||||||||
| INCOME BEFORE INCOME TAXES | 224,513 | 182,785 | 209,906 | ||||||||
| Provision for income taxes | 48,525 | 38,979 | 45,276 | ||||||||
| NET INCOME | $175,988 | $143,806 | $164,630 | ||||||||
| Net investment (gains) losses | 122 | 1,274 | 339 | ||||||||
| Costs associated with reorganization | (583) | 3,291 | 222 | ||||||||
| Taxes on adjustments | 97 | (959) | (118) | ||||||||
| Adjusted Operating Income | $175,624 | $147,412 | $165,073 | ||||||||
Loss ratio (1) | (5) | % | 8 | % | (4) | % | |||||
Expense ratio (2) | 23 | % | 27 | % | 24 | % | |||||
| Earnings Per Share Data: | |||||||||||
| Net Income per share | |||||||||||
| Basic | $1.08 | $0.88 | $1.01 | ||||||||
| Diluted | $1.08 | $0.88 | $1.01 | ||||||||
| Adj operating income per share | |||||||||||
| Basic | $1.08 | $0.91 | $1.01 | ||||||||
| Diluted | $1.08 | $0.90 | $1.01 | ||||||||
| Weighted-average common shares outstanding | |||||||||||
| Basic | 162,442 | 162,824 | 162,841 | ||||||||
| Diluted | 163,179 | 163,520 | 163,054 | ||||||||
(1)The ratio of losses incurred to net earned premiums. | |||||||||||
(2)The ratio of acquisition and operating expenses, net of deferrals, and amortization of deferred acquisition costs and intangibles to net earned premiums. Expenses associated with strategic transaction preparations and restructuring costs decreased the expense ratio by zero percentage points for the three months ended March 31, 2023, one percentage point for the three months ended December 31, 2022 and zero percentage points for the three months ended March 31, 2022. | |||||||||||
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Exhibit B: Consolidated Balance Sheets (amounts in thousands, except per share amounts)
| Assets | 1Q23 | 4Q22 | 1Q22 | ||||||||
| Investments: | |||||||||||
| Fixed maturity securities available-for-sale, at fair value | $4,929,627 | $4,884,760 | $5,093,084 | ||||||||
| Short term investments | 2,185 | 3,047 | — | ||||||||
| Total investments | 4,931,812 | 4,887,807 | 5,093,084 | ||||||||
| Cash and cash equivalents | 621,621 | 513,775 | 440,160 | ||||||||
| Accrued investment income | 35,945 | 35,844 | 32,565 | ||||||||
| Deferred acquisition costs | 25,954 | 26,121 | 27,000 | ||||||||
| Premiums receivable | 42,005 | 41,738 | 40,381 | ||||||||
| Deferred tax asset | 107,868 | 127,473 | 56,060 | ||||||||
| Other assets | 77,026 | 76,391 | 103,157 | ||||||||
| Total assets | $5,842,231 | $5,709,149 | $5,792,407 | ||||||||
| Liabilities and Shareholders' Equity | |||||||||||
| Liabilities: | |||||||||||
| Loss reserves | $501,427 | $519,008 | $625,279 | ||||||||
| Unearned premiums | 188,680 | 202,717 | 236,410 | ||||||||
| Other liabilities | 112,043 | 143,686 | 141,125 | ||||||||
| Long-term borrowings | 743,460 | 742,830 | 741,004 | ||||||||
| Total liabilities | 1,545,610 | 1,608,241 | 1,743,818 | ||||||||
| Equity: | |||||||||||
| Common stock | 1,619 | 1,628 | 1,628 | ||||||||
| Additional paid-in capital | 2,362,281 | 2,382,068 | 2,374,568 | ||||||||
| Accumulated other comprehensive income | (320,242) | (382,744) | (140,690) | ||||||||
| Retained earnings | 2,252,963 | 2,099,956 | 1,813,083 | ||||||||
| Total equity | 4,296,621 | 4,100,908 | 4,048,589 | ||||||||
| Total liabilities and equity | $5,842,231 | $5,709,149 | $5,792,407 | ||||||||
| Book value per share | $26.53 | $25.19 | $24.86 | ||||||||
| Book value per share excluding AOCI | $28.51 | $27.54 | $25.73 | ||||||||
U.S. GAAP ROE (1) | 16.8 | % | 14.0 | % | 16.2 | % | |||||
| Net investment (gains) losses | 0.0 | % | 0.1 | % | 0.0 | % | |||||
| Costs associated with reorganization | -0.1 | % | 0.3 | % | 0.0 | % | |||||
| Taxes on adjustments | 0.0 | % | -0.1 | % | 0.0 | % | |||||
Adjusted Operating ROE(2) | 16.7 | % | 14.4 | % | 16.2 | % | |||||
| Debt to Capital Ratio | 15 | % | 15 | % | 15 | % | |||||
(1) Calculated as annualized net income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity | |||||||||||
(2) Calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity | |||||||||||
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Enact Holdings, Inc. Financial Supplement First Quarter 2023 GAAP/Non-GAAP Disclosure Discussion This document includes the non-GAAP financial measures entitled “adjusted operating income (loss),” “adjusted operating income (loss) per share," and “adjusted operating return on equity." Adjusted operating income (loss) per share is derived from adjusted operating income (loss). The chief operating decision maker evaluates performance and allocates resources on the basis of adjusted operating income (loss). Enact Holdings, Inc. (the "Company") defines adjusted operating income (loss) as net income (loss) excluding the after-tax effects of net investment gains (losses), restructuring costs and infrequent or unusual non-operating items. The Company excludes net investment gains (losses) and infrequent or unusual non-operating items because the Company does not consider them to be related to the operating performance of the Company. The recognition of realized investment gains or losses can vary significantly across periods as the activity is highly discretionary based on the timing of individual securities sales due to such factors as market opportunities or exposure management. Trends in the profitability of our fundamental operating activities can be more clearly identified without the fluctuations of these realized gains and losses. We do not view them to be indicative of our fundamental operating activities. Therefore, these items are excluded from our calculation of adjusted operating income. In addition, adjusted operating income (loss) per share is derived from adjusted operating income (loss) divided by shares outstanding. Adjusted operating return on equity is calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity. While some of these items may be significant components of net income (loss) in accordance with U.S. GAAP, the Company believes that adjusted operating income (loss) and measures that are derived from or incorporate adjusted operating income (loss), including adjusted operating income (loss) per share on a basic and diluted basis and adjusted operating return on equity, are appropriate measures that are useful to investors because they identify the income (loss) attributable to the ongoing operations of the business. Management also uses adjusted operating income (loss) as a basis for determining awards and compensation for senior management and to evaluate performance on a basis comparable to that used by analysts. Adjusted operating income (loss) and adjusted operating income (loss) per share on a basic and diluted basis are not substitutes for net income (loss) available to Company’s common stockholders or net income (loss) available to Company’s common stockholders per share on a basic and diluted basis determined in accordance with U.S. GAAP. In addition, the Company’s definition of adjusted operating income (loss) may differ from the definitions used by other companies. Adjustments to reconcile net income (loss) available to Company’s common stockholders to adjusted operating income (loss) assume a 21% tax rate. Page 2
Enact Holdings, Inc. Financial Supplement First Quarter 2023 2023 1Q 4Q 3Q 2Q 1Q Total REVENUES: Premiums $235,108 $232,737 $235,060 $237,386 $234,279 $939,462 Net investment income 45,341 44,896 39,493 35,776 35,146 155,311 Net investment gains (losses) (122) (1,274) (42) (381) (339) (2,036) Other income 612 483 564 760 502 2,309 Total revenues 280,939 276,842 275,075 273,541 269,588 1,095,046 LOSSES AND EXPENSES: Losses incurred (10,984) 18,097 (40,309) (61,563) (10,446) (94,221) Acquisition and operating expenses, net of deferrals 51,705 59,955 54,523 58,201 54,262 226,941 Amortization of deferred acquisition costs and intangibles 2,640 2,747 3,338 3,230 3,090 12,405 Interest expense 13,065 13,258 12,879 12,786 12,776 51,699 Total losses and expenses 56,426 94,057 30,431 12,654 59,682 196,824 INCOME BEFORE INCOME TAXES 224,513 182,785 244,644 260,887 209,906 898,222 Provision for income taxes 48,525 38,979 53,658 56,152 45,276 194,065 NET INCOME $175,988 $143,806 $190,986 $204,735 $164,630 $704,157 Net investment (gains) losses $122 $1,274 $42 $381 $339 $2,036 Costs associated with reorganization (583) 3,291 (156) 104 222 3,461 Taxes on adjustments 97 (959) 24 (102) (118) (1,155) Adjusted Operating Income $175,624 $147,412 $190,896 $205,118 $165,073 $708,499 Loss ratio (1) (5)% 8% (17)% (26)% (4)% (10)% Expense ratio (2) 23% 27% 25% 26% 24% 25% Earnings per share data: Net income per share Basic $1.08 $0.88 $1.17 $1.26 $1.01 $4.32 Diluted $1.08 $0.88 $1.17 $1.25 $1.01 $4.31 Adjusted operating income per share Basic $1.08 $0.91 $1.17 $1.26 $1.01 $4.35 Diluted $1.08 $0.90 $1.17 $1.26 $1.01 $4.34 Weighted-average common shares outstanding Basic 162,442 162,824 162,843 162,842 162,841 162,838 Diluted 163,179 163,520 163,376 163,225 163,054 163,294 (2)The ratio of acquisition and operating expenses, net of deferrals, and amortization of deferred acquisition costs and intangibles to net earned premiums. Expenses associated with strategic transaction preparations and restructuring costs increased the expense ratio by zero percentage points for the three months ended March 31, 2023, one percentage point for the three months ended December 31, 2022, zero percentage points for the three months ended September 30, 2022, June 30, 2022, and March 31, 2022. 2022 (1)The ratio of losses incurred to net earned premiums. Consolidated Statements of Income (amounts in thousands, except per share amounts) Page 3
Enact Holdings, Inc. Financial Supplement First Quarter 2023 March 31, 2023 December 31, 2022 September 30, 2022 June 30, 2022 March 31, 2022 Assets Investments: Fixed maturity securities available-for-sale, at fair value $4,929,627 $4,884,760 $4,877,902 $4,909,362 $5,093,084 Short term investments 2,185 3,047 2,434 0 0 Total investments 4,931,812 4,887,807 4,880,336 4,909,362 5,093,084 Cash and cash equivalents 621,621 513,775 535,775 583,947 440,160 Accrued investment income 35,945 35,844 35,896 33,103 32,565 Deferred acquisition costs 25,954 26,121 26,310 26,689 27,000 Premiums receivable 42,005 41,738 40,331 41,036 40,381 Deferred tax asset 107,868 127,473 135,152 98,695 56,060 Other assets 77,026 76,391 69,040 67,601 103,157 Total assets $5,842,231 $5,709,149 $5,722,840 $5,760,433 $5,792,407 Liabilities and Shareholder's Interest Liabilities: Loss reserves $501,427 $519,008 $510,237 $558,894 $625,279 Unearned premiums 188,680 202,717 212,987 224,781 236,410 Other liabilities 112,043 143,686 140,413 154,656 141,125 Long-term borrowings 743,460 742,830 742,211 741,602 741,004 Total liabilities 1,545,610 1,608,241 1,605,848 1,679,933 1,743,818 Equity: Common stock 1,619 1,628 1,628 1,628 1,628 Additional paid-in capital 2,362,281 2,382,068 2,379,576 2,377,042 2,374,568 Accumulated other comprehensive income (320,242) (382,744) (427,085) (293,027) (140,690) Retained earnings 2,252,963 2,099,956 2,162,873 1,994,857 1,813,083 Total equity $4,296,621 $4,100,908 $4,116,992 $4,080,500 $4,048,589 Total liabilities and equity $5,842,231 $5,709,149 $5,722,840 $5,760,433 $5,792,407 Book value per share $26.53 $25.19 $25.28 $25.06 $24.86 Book value per share excluding accumulated other comprehensive income $28.51 $27.54 $27.90 $26.86 $25.73 U.S. GAAP ROE (1) 16.8 % 14.0 % 18.6 % 20.1 % 16.2 % Net investment (gains) losses 0.0 % 0.1 % 0.0 % 0.0 % 0.0 % Costs associated with reorganization (0.1)% 0.3 % 0.0 % 0.0 % 0.0 % Taxes on adjustments 0.0 % (0.1)% 0.0 % 0.0 % 0.0 % Adjusted Operating ROE(2) 16.7 % 14.4 % 18.6 % 20.2 % 16.2 % Debt to capital ratio 15 % 15 % 15 % 15 % 15 % (2) Calculated as annualized adjusted operating income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity. (1) Calculated as annualized net income for the period indicated divided by the average of current period and prior periods’ ending total stockholders’ equity. Consolidated Balance Sheets (amounts in thousands, except per share amounts) Page 4
Enact Holdings, Inc. Financial Supplement First Quarter 2023 Primary NIW % of Primary NIW Primary NIW % of Primary NIW Primary NIW % of Primary NIW Primary NIW % of Primary NIW Primary NIW % of Primary NIW Primary NIW % of Primary NIW Product Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Pool 0 - % 0 - % 0 - % 0 - % 0 - % 0 - % Total $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Origination Purchase $12,761 97 % $14,744 97 % $14,634 97 % $16,802 96 % $17,326 92 % $63,506 96 % Refinance 393 3 % 401 3 % 435 3 % 646 4 % 1,497 8 % 2,979 4 % Total Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Payment Type Monthly $12,809 97 % $13,745 91 % $14,138 94 % $16,169 93 % $17,071 91 % $61,123 92 % Single 318 3 % 1,368 9 % 890 6 % 1,218 7 % 1,690 9 % 5,166 8 % Other(1) 27 - % 32 - % 41 - % 61 - % 62 - % 196 0 % Total Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % FICO Scores Over 760 $6,004 46 % $6,951 46 % $6,948 46 % $7,981 45 % $8,359 45 % $30,239 45 % 740 - 759 2,268 17 % 2,709 18 % 2,554 17 % 2,916 17 % 3,085 16 % 11,264 17 % 720 - 739 1,817 14 % 2,226 15 % 2,106 14 % 2,530 15 % 2,515 13 % 9,377 14 % 700 - 719 1,296 10 % 1,489 10 % 1,531 10 % 1,917 11 % 1,952 10 % 6,889 10 % 680 - 699 954 7 % 1,035 7 % 1,085 7 % 1,099 6 % 1,316 7 % 4,535 7 % 660 - 679(2) 517 4 % 478 3 % 527 3 % 598 3 % 931 5 % 2,534 4 % 640 - 659 229 2 % 189 1 % 234 2 % 297 2 % 486 3 % 1,206 2 % 620 - 639 65 - % 66 - % 79 1 % 106 1 % 173 1 % 424 1 % <620 4 - % 2 - % 5 - % 4 - % 6 - % 17 0 % Total Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Weighted Avg FICO 748 750 749 748 746 748 Loan-To-Value Ratio 95.01% and above $2,106 16 % $2,423 16 % $1,741 11 % $2,177 12 % $3,146 17 % $9,487 14 % 90.01% to 95.00% 4,928 38 % 5,684 37 % 6,184 41 % 7,458 43 % 6,682 35 % 26,008 39 % 85.01% to 90.00% 4,390 33 % 4,971 33 % 5,094 34 % 5,207 30 % 5,620 30 % 20,892 32 % 85.00% and below 1,730 13 % 2,067 14 % 2,050 14 % 2,606 15 % 3,375 18 % 10,098 15 % Total Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Weighted Avg LTV 92 % 92 % 92 % 92 % 92 % 92 % Debt-To-Income Ratio 45.01% and above $3,538 27 % $4,294 28 % $3,728 25 % $4,067 23 % $4,452 24 % $16,541 25 % 38.01% to 45.00% 4,940 38 % 5,518 37 % 5,681 38 % 6,436 37 % 6,361 34 % 23,996 36 % 38.00% and below 4,676 35 % 5,333 35 % 5,660 37 % 6,945 40 % 8,010 42 % 25,948 39 % Total Primary $13,154 100 % $15,145 100 % $15,069 100 % $17,448 100 % $18,823 100 % $66,485 100 % Weighted Avg DTI 40 % 40 % 39 % 39 % 38 % 39 % Avg loan size (thousands) $356 $358 $350 $345 $334 $346 2023 (2)Loans with unknown FICO scores are included in the 660-679 category. (1)Includes loans with annual and split payment types. Primary New Insurance Written Metrics (amounts in millions) 3Q Total1Q2Q 2022 4Q1Q Page 5
Enact Holdings, Inc. Financial Supplement First Quarter 2023 IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF Product Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Pool 486 - % 505 - % 531 - % 564 - % 600 - % Total $253,002 100 % $248,767 100 % $242,344 100 % $238,127 100 % $232,453 100 % Origination Purchase $214,339 85 % $207,827 84 % $199,322 82 % $192,499 81 % $184,080 79 % Refinance 38,177 15 % 40,435 16 % 42,491 18 % 45,064 19 % 47,773 21 % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Payment Type Monthly $221,482 88 % $216,831 87 % $211,062 87 % $206,361 87 % $200,304 86 % Single 28,918 11 % 29,275 12 % 28,550 12 % 28,945 12 % 29,198 13 % Other(2) 2,116 1 % 2,156 1 % 2,201 1 % 2,257 1 % 2,351 1 % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Book Year 2008 and prior $6,377 3 % $6,596 3 % $6,849 3 % $7,246 3 % $7,723 3 % 2009-2015 4,659 2 % 5,025 2 % 5,426 2 % 6,103 2 % 6,906 3 % 2016 5,744 2 % 6,296 2 % 6,772 3 % 7,377 3 % 8,076 4 % 2017 6,201 2 % 6,495 3 % 6,818 3 % 7,328 3 % 8,023 4 % 2018 6,570 3 % 6,839 3 % 7,133 3 % 7,613 3 % 8,306 4 % 2019 15,691 6 % 16,352 7 % 17,070 7 % 18,141 8 % 19,609 8 % 2020 52,389 21 % 55,358 22 % 58,497 24 % 62,154 26 % 65,807 28 % 2021 79,377 31 % 81,724 33 % 83,740 35 % 86,175 37 % 88,757 38 % 2022 62,481 25 % 63,577 25 % 49,508 20 % 35,426 15 % 18,646 8 % 2023 13,027 5 % 0 - % 0 - % 0 - % 0 - % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % (1)Primary insurance in-force represents aggregate unpaid balance for loans the company insures. (2)Includes loans with annual and split payment types. 4Q 3Q1Q Insurance In-Force (IIF) (1) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q 2022 2Q 2023 Page 6
Enact Holdings, Inc. Financial Supplement First Quarter 2023 IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF FICO Scores Over 760 $104,635 42 % $102,467 41 % $99,177 41 % $96,625 40 % $93,222 40 % 740 - 759 40,983 16 % 40,097 16 % 38,731 16 % 37,853 16 % 36,821 16 % 720 - 739 35,554 14 % 34,916 14 % 33,874 14 % 33,263 14 % 32,363 14 % 700 - 719 29,160 12 % 28,867 12 % 28,384 12 % 28,136 12 % 27,620 12 % 680 - 699 21,717 9 % 21,554 9 % 21,294 9 % 21,221 9 % 21,259 9 % 660 - 679(2) 11,057 4 % 10,926 4 % 10,842 4 % 10,822 5 % 10,805 5 % 640 - 659 6,114 2 % 6,095 3 % 6,115 3 % 6,154 3 % 6,188 3 % 620 - 639 2,604 1 % 2,630 1 % 2,663 1 % 2,725 1 % 2,774 1 % <620 692 - % 710 - % 733 - % 764 - % 801 - % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Weighted Avg FICO 744 743 743 743 742 Loan-To-Value Ratio 95.01% and above $40,776 16 % $39,509 16 % $38,099 16 % $37,636 16 % $36,867 16 % 90.01% to 95.00% 105,336 42 % 103,618 42 % 101,164 42 % 99,303 41 % 96,419 42 % 85.01% to 90.00% 73,756 29 % 72,132 29 % 69,803 29 % 67,866 29 % 66,226 28 % 85.00% and below 32,648 13 % 33,003 13 % 32,747 13 % 32,758 14 % 32,341 14 % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Weighted Avg LTV 93 % 93 % 93 % 93 % 93 % Debt-To-Income Ratio 45.01% and above $46,049 18 % $43,831 18 % $40,846 17 % $38,763 16 % $36,428 16 % 38.01% to 45.00% 89,768 36 % 87,816 35 % 85,226 35 % 83,194 35 % 80,741 35 % 38.00% and below 116,699 46 % 116,615 47 % 115,741 48 % 115,606 49 % 114,684 49 % Total Primary $252,516 100 % $248,262 100 % $241,813 100 % $237,563 100 % $231,853 100 % Weighted Avg DTI 38 % 37 % 37 % 37 % 37 % Primary persistency rate 85 % 86 % 82 % 80 % 76 % Avg loan size (thousands) $262 $259 $255 $251 $246 (1)Primary insurance in-force represents aggregate unpaid balance for loans the company insures. (2)Loans with unknown FICO scores are included in the 660-679 category. 4Q1Q Insurance In-Force (IIF) (1) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q 2022 3Q 2023 Page 7
Enact Holdings, Inc. Financial Supplement First Quarter 2023 RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF Product Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % Pool 76 - % 79 - % 84 - % 89 - % 97 - % Total $64,182 100 % $62,870 100 % $61,208 100 % $60,000 100 % $58,392 100 % Origination Purchase $55,870 87 % $54,165 86 % $52,134 85 % $50,449 84 % $48,326 83 % Refinance 8,236 13 % 8,626 14 % 8,990 15 % 9,462 16 % 9,969 17 % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % Payment Type Monthly $57,289 89 % $55,879 89 % $54,247 89 % $52,896 88 % $51,153 88 % Single 6,284 10 % 6,370 10 % 6,324 10 % 6,449 11 % 6,561 11 % Other(2) 533 1 % 542 1 % 553 1 % 566 1 % 581 1 % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % Book Year 2008 and prior $1,643 3 % $1,699 3 % $1,764 3 % $1,867 3 % $1,991 3 % 2009-2015 1,238 2 % 1,341 2 % 1,449 2 % 1,630 3 % 1,846 3 % 2016 1,538 2 % 1,681 3 % 1,805 3 % 1,964 3 % 2,147 4 % 2017 1,632 3 % 1,708 3 % 1,792 3 % 1,922 3 % 2,094 4 % 2018 1,672 3 % 1,736 3 % 1,806 3 % 1,922 3 % 2,092 4 % 2019 3,989 6 % 4,143 7 % 4,313 7 % 4,575 8 % 4,935 8 % 2020 13,484 21 % 14,158 22 % 14,891 25 % 15,763 26 % 16,606 28 % 2021 19,917 31 % 20,418 32 % 20,848 34 % 21,384 36 % 21,959 38 % 2022 15,647 24 % 15,907 25 % 12,456 20 % 8,884 15 % 4,625 8 % 2023 3,346 5 % 0 - % 0 - % 0 - % 0 - % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % (1)Primary risk in-force represents risk on current loan balances as provided by servicers, lenders and investors. (2)Includes loans with annual and split payment types. Risk In-Force (RIF) (1) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q4Q 3Q 2022 1Q 2023 Page 8
Enact Holdings, Inc. Financial Supplement First Quarter 2023 RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF FICO Scores Over 760 $26,480 41 % $25,807 41 % $24,965 41 % $24,252 40 % $23,326 40 % 740 - 759 10,418 16 % 10,154 16 % 9,808 16 % 9,559 16 % 9,267 16 % 720 - 739 9,126 14 % 8,931 14 % 8,656 14 % 8,484 14 % 8,224 14 % 700 - 719 7,406 12 % 7,317 12 % 7,200 12 % 7,129 12 % 6,974 12 % 680 - 699 5,481 9 % 5,428 9 % 5,356 9 % 5,329 9 % 5,334 9 % 660 - 679(2) 2,809 4 % 2,767 5 % 2,739 4 % 2,728 5 % 2,715 5 % 640 - 659 1,549 3 % 1,540 2 % 1,541 3 % 1,547 3 % 1,550 3 % 620 - 639 660 1 % 665 1 % 672 1 % 687 1 % 699 1 % <620 177 - % 182 - % 187 - % 196 - % 206 - % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % Loan-To-Value Ratio 95.01% and above $11,545 18 % $11,136 18 % $10,809 18 % $10,647 18 % $10,379 18 % 90.01% to 95.00% 30,589 48 % 30,079 48 % 29,379 48 % 28,838 48 % 27,987 48 % 85.01% to 90.00% 18,054 28 % 17,621 28 % 17,019 28 % 16,517 27 % 16,082 27 % 85.00% and below 3,918 6 % 3,955 6 % 3,917 6 % 3,909 7 % 3,847 7 % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % Debt-To-Income Ratio 45.01% and above $11,782 18 % $11,176 18 % $10,393 17 % $9,843 16 % $9,227 16 % 38.01% to 45.00% 22,830 36 % 22,268 35 % 21,603 35 % 21,058 35 % 20,392 35 % 38.00% and below 29,494 46 % 29,347 47 % 29,128 48 % 29,010 49 % 28,676 49 % Total Primary $64,106 100 % $62,791 100 % $61,124 100 % $59,911 100 % $58,295 100 % (2)Loans with unknown FICO scores are included in the 660-679 category. 4Q Risk In-Force (RIF) (1) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q 2022 3Q (1)Primary risk in-force represents risk on current loan balances as provided by servicers, lenders and investors. 1Q 2023 Page 9
Enact Holdings, Inc. Financial Supplement First Quarter 2023 2023 1Q 4Q 3Q 2Q 1Q Average Paid Claim (1) $46.9 $48.7 $42.2 $50.1 $51.6 Reserves: Direct primary case(2) $462,287 $479,343 $476,063 $525,948 $590,508 All other(2) 39,140 39,665 34,174 32,946 34,771 Total Reserves $501,427 $519,008 $510,237 $558,894 $625,279 Beginning Number of Primary Delinquencies 19,943 18,856 19,513 22,571 24,820 New delinquencies 9,599 10,304 9,121 7,847 8,724 Delinquency cures (10,771) (9,024) (9,588) (10,806) (10,860) Paid claims (126) (190) (187) (90) (107) Rescissions and claim denials (12) (3) (3) (9) (6) Ending Number of Primary Delinquencies 18,633 19,943 18,856 19,513 22,571 Primary delinquency rate 1.93 % 2.08 % 1.99 % 2.06 % 2.40 % Average Reserve Per Primary Delinquency (3) $24.8 $24.0 $25.2 $27.0 $26.2 Beginning Direct Primary Case Reserves $479,343 $476,063 $525,948 $590,508 $606,102 Paid claims (6,653) (9,347) (8,349) (4,810) (5,617) Change in reserves (10,403) 12,627 (41,536) (59,750) (9,977) Ending Direct Primary Case Reserves $462,287 $479,343 $476,063 $525,948 $590,508 Incurred Losses(4) Current quarter delinquencies(5) $57,963 $58,717 $38,696 $34,654 $39,220 Development of current quarter delinquencies(6) 0 0 0 0 0 Prior period development(7) (68,947) (40,620) (79,005) (96,217) (49,666) Total Incurred Losses ($10,984) $18,097 ($40,309) ($61,563) ($10,446) Policies in Force (count) 965,544 960,306 949,052 946,891 941,689 (5) Defaulted loans with most recent delinquency notice in the quarter indicated. (1) Average paid claims in the fourth and third quarters of 2022 include payments in relation to agreements on non-performing loans. (2) Direct primary case excludes loss adjustment expenses (LAE), pool, incurred but not reported (IBNR) and reinsurance reserves. Other includes LAE, IBNR, pool, and reinsurance reserves. (3) Direct primary case reserves divided by primary delinquency count. (4) Provides additional breakdown of incurred losses, which includes the impact of new delinquencies within each quarterly period reported. We believe providing loss information in this manner allows transparency and consistency for investors to understand performance. 2022 (7) Includes impact of changes in IBNR, LAE and other. (6) Development of current quarter delinquencies within the current quarter. This includes reserve impact from current period delinquencies that cure in the period and reserve development from the date of delinquency to quarter end. (dollar amounts in thousands) Excludes run-off business, which is immaterial to our results Delinquency Metrics Page 10
Enact Holdings, Inc. Financial Supplement First Quarter 2023 Percentage Reserved by Payment Status Delinquencies Direct Primary Case Reserves Risk In- Force Reserves as % of RIF Delinquencies Direct Primary Case Reserves Risk In- Force Reserves as % of RIF Delinquencies Direct Primary Case Reserves Risk In- Force Reserves as % of RIF 3 payments or less in default 7,876 $67 $462 14 % 8,920 $69 $509 14 % 6,837 $38 $359 11 % 4 - 11 payments in default 6,714 182 423 43 % 6,466 166 390 43 % 6,875 115 392 29 % 12 payments or more in default 4,043 213 220 97 % 4,557 244 248 98 % 8,859 438 515 85 % Total 18,633 $462 $1,105 42 % 19,943 $479 $1,147 42 % 22,571 $591 $1,266 47 % December 31, 2022 March 31, 2022 Missed Payment Status Tables Excludes run-off business, which is immaterial to our results (dollar amounts in millions) March 31, 2023 Page 11
Enact Holdings, Inc. Financial Supplement First Quarter 2023 Top 10 States % RIF % Case Reserves (1) Delq Rate Top 10 MSAs / Metro Divisions % RIF % Case Reserves (1) Delq Rate Book Year RIF & Losses % RIF % Case Reserves (1) Delq Rate Cum Delq Rate (2) California 12% 11% 1.99% Phoenix, AZ MSA 3% 2% 1.72% Texas 8% 7% 1.92% Chicago-Naperville, IL Metro Division 3% 5% 2.77% 2008 and prior 3% 25% 8.81% 5.56% Florida (3) 8% 8% 2.24% Atlanta, GA MSA 3% 3% 2.35% 2009-2015 2% 7% 4.03% 0.67% New York (3) 5% 13% 2.82% New York, NY Metro Division 2% 8% 3.51% 2016 2% 5% 3.01% 0.73% Illinois (3) 5% 6% 2.51% Washington-Arlington, DC Metro Division 2% 2% 1.79% 2017 3% 6% 3.53% 0.93% Arizona 4% 2% 1.68% Houston, TX MSA 2% 2% 2.40% 2018 3% 7% 4.08% 1.02% Michigan 4% 3% 1.72% Riverside-San Bernardino CA MSA 2% 2% 2.54% 2019 6% 10% 2.57% 0.86% North Carolina 3% 2% 1.48% Los Angeles-Long Beach, CA Metro Division 2% 3% 2.24% 2020 21% 16% 1.42% 0.85% Georgia 3% 3% 2.19% Dallas, TX Metro Division 2% 1% 1.65% 2021 31% 18% 1.23% 1.06% Washington 3% 3% 1.64% Denver-Aurora-Lakewood, CO MSA 2% 1% 0.93% 2022 24% 6% 0.74% 0.71% All Other States (4) 45% 42% 1.79% All Other MSAs 77% 71% 1.85% 2023 5% 0% 0.02% 0.02% Total 100% 100% 1.93% Total 100% 100% 1.93% Total 100% 100% 1.93% 4.22% Top 10 States % RIF % Case Reserves (1) Delq Rate Top 10 MSAs / Metro Divisions % RIF % Case Reserves (1) Delq Rate Book Year RIF & Losses % RIF % Case Reserves (1) Delq Rate Cum Delq Rate (2) California 12% 10% 2.09% Chicago-Naperville, IL Metro Division 3% 5% 2.84% Texas 8% 7% 2.12% Phoenix, AZ MSA 3% 2% 1.83% 2008 and prior 3% 26% 9.61% 5.57% Florida (3) 8% 8% 2.54% New York, NY Metro Division 3% 8% 3.75% 2009-2014 1% 4% 5.01% 0.69% New York (3) 5% 13% 2.95% Atlanta, GA MSA 2% 3% 2.42% 2015 1% 3% 3.61% 0.71% Illinois (3) 5% 6% 2.54% Washington-Arlington, DC Metro Division 2% 2% 1.85% 2016 3% 6% 3.17% 0.81% Arizona 4% 2% 1.78% Houston, TX MSA 2% 3% 2.60% 2017 3% 7% 3.78% 1.01% Michigan 4% 3% 1.79% Riverside-San Bernardino CA MSA 2% 2% 2.89% 2018 3% 9% 4.63% 1.18% North Carolina 3% 3% 1.59% Los Angeles-Long Beach, CA Metro Division 2% 2% 2.18% 2019 7% 11% 2.71% 0.93% Georgia 3% 3% 2.23% Dallas, TX Metro Division 2% 1% 1.86% 2020 22% 17% 1.47% 0.92% Washington 3% 3% 1.92% Denver-Aurora-Lakewood, CO MSA 2% 1% 1.12% 2021 32% 14% 1.20% 1.06% All Other States (4) 45% 42% 1.94% All Other MSAs 77% 71% 2.00% 2022 25% 3% 0.54% 0.52% Total 100% 100% 2.08% Total 100% 100% 2.08% Total 100% 100% 2.08% 4.26% Top 10 States % RIF % Case Reserves (1) Delq Rate Top 10 MSAs / Metro Divisions % RIF % Case Reserves (1) Delq Rate Book Year RIF & Losses % RIF % Case Reserves (1) Delq Rate Cum Delq Rate (2) California 11% 11% 2.75% Chicago-Naperville, IL Metro Division 3% 5% 3.39% Texas 8% 8% 2.51% Phoenix, AZ MSA 3% 2% 1.92% 2008 and prior 3% 25% 10.41% 5.59% Florida (3) 8% 9% 2.51% New York, NY Metro Division 3% 8% 4.68% 2009-2014 1% 5% 5.34% 0.77% New York (3) 5% 12% 3.51% Atlanta, GA MSA 2% 3% 2.92% 2015 2% 5% 4.06% 0.92% Illinois (3) 5% 6% 2.85% Washington-Arlington, DC Metro Division 2% 2% 2.50% 2016 4% 7% 3.48% 1.02% Michigan 4% 2% 1.87% Houston, TX MSA 2% 3% 3.20% 2017 4% 10% 4.43% 1.34% Arizona 4% 2% 1.92% Riverside-San Bernardino CA MSA 2% 2% 3.05% 2018 4% 12% 5.48% 1.60% North Carolina 3% 2% 1.96% Los Angeles-Long Beach, CA Metro Division 2% 3% 3.22% 2019 8% 17% 3.44% 1.37% Pennsylvania (3) 3% 3% 2.30% Dallas, TX Metro Division 2% 1% 2.04% 2020 28% 15% 1.49% 1.08% Washington 3% 4% 2.68% Nassau County, NY 2% 4% 5.02% 2021 38% 4% 0.58% 0.55% All Other States (4) 46% 41% 2.25% All Other MSAs 77% 67% 2.23% 2022 8% 0% 0.04% 0.04% Total 100% 100% 2.40% Total 100% 100% 2.40% Total 100% 100% 2.40% 4.36% (4) Includes the District of Columbia. Delinquency Performance Excludes run-off business, which is immaterial to our results March 31, 2023 December 31, 2022 March 31, 2022 (1) Direct primary case reserves exclude loss adjustment expenses, incurred but not reported and reinsurance reserves. (2) Calculated as the sum of the number of policies where claims were ever paid to date and number of policies for loans currently in default divided by policies ever in-force. (3) Jurisdiction predominantly uses a judicial foreclosure process, which generally increases the amount of time it takes for a foreclosure to be completed. Page 12
Enact Holdings, Inc. Financial Supplement First Quarter 2023 Carrying Amount % of Total Carrying Amount % of Total Carrying Amount % of Total Carrying Amount % of Total Carrying Amount % of Total Fixed Maturity Securities: U.S. treasuries $42,709 1 % $44,769 1 % $44,654 1 % $49,668 1 % $56,751 1 % Municipals 431,778 9 % 419,856 9 % 432,229 9 % 469,509 10 % 508,391 10 % Non-U.S. government 9,493 - % 9,349 - % 9,252 - % 21,120 - % 21,529 - % U.S. corporate 2,679,485 54 % 2,646,863 54 % 2,639,184 54 % 2,742,523 56 % 2,882,497 57 % Non-U.S. corporate 630,502 13 % 652,844 13 % 647,063 14 % 618,710 13 % 629,795 12 % Residential MBS 10,344 - % 11,043 - % 11,743 - % 0 - % 0 - % Other asset-backed 1,125,316 23 % 1,100,036 23 % 1,093,777 22 % 1,007,832 20 % 994,121 20 % Total available-for-sale fixed maturity securities $4,929,627 100 % $4,884,760 100 % $4,877,902 100 % $4,909,362 100 % $5,093,084 100 % Fixed Maturity Securities - Credit Quality NRSRO(1) Designation AAA $513,462 10 % $492,318 10 % $503,574 10 % $441,105 9 % $432,633 9 % AA 779,674 16 % 761,883 16 % 771,698 16 % 798,828 16 % 839,185 16 % A 1,684,218 34 % 1,666,409 34 % 1,699,803 35 % 1,686,644 34 % 1,736,936 34 % BBB 1,856,810 38 % 1,862,634 38 % 1,790,168 37 % 1,855,984 38 % 1,936,838 38 % BB & Lower 95,463 2 % 101,516 2 % 112,659 2 % 126,801 3 % 147,492 3 % Total fixed maturity securities $4,929,627 100 % $4,884,760 100 % $4,877,902 100 % $4,909,362 100 % $5,093,084 100 % Average duration 3.6 3.6 3.7 3.8 3.8 Average yield 3.2 % 3.1 % 3.0 % 2.8 % 2.7 % (1)Nationally Recognized Statistical Rating Organizations. December 31, 2022 September 30, 2022 Composition of Investments at Fair Value (amounts in thousands) March 31, 2022June 30, 2022March 31, 2023 Page 13
Enact Holdings, Inc. Financial Supplement First Quarter 2023 2020 ILN 2021-1 ILN 2021-2 ILN 2021-3 ILN 2020 XOL 2021 XOL 2022-1 XOL 2022-2 XOL 2022-3 XOL 2022-4 XOL 2022-5 XOL 2023 XOL 1/20-8/20 1/14-12/18, 4Q'19 9/20-12/20 1/21-6/21 Full Year 2020 Full Year 2021 Full Year 2022 Full Year 2022 7/21-12/21 7/21-12/21 1/22-6/22 Full Year 2023 At Closing Initial CRT Risk In-Force $14,909 $14,142 $8,384 $12,141 $23,047 $22,373 $15,400 $15,400 $10,550 $10,550 $8,547 $3,275 Initial Reinsurance Amount $350 $495 $303 $372 $168 $206 $196 $25 $289 $36 $201 $43 Initial First Loss Retention Layer $522 $212 $189 $304 $691 $671 $462 $385 $317 $264 $256 $98 Initial Attachment % (2) 3.50% 1.50% 2.25% 2.50% 3.00% 3.00% 3.00% 2.50% 3.00% 2.50% 3.00% 3.00% Initial Detachment % (2) 7.00% 5.00% 7.00% 6.75% 7.00% 7.00% 6.99% 3.00% 7.00% 3.00% 7.00% 6.25% % Of Covered Loss Tier Reinsured 67.00% 100.00% 76.00% 72.00% 18.25% 23.00% 31.92% 31.92% 68.45% 68.45% 58.80% 40.39% Commencement Date 10/22/20 03/02/21 04/16/21 09/02/21 01/01/20 01/01/21 01/01/22 01/01/22 03/01/22 03/01/22 09/01/22 01/01/23 Termination Date 10/25/30 08/25/33 10/25/33 02/25/34 12/31/30 12/31/31 12/31/32 12/31/32 12/31/31 12/31/31 12/31/32 12/31/33 Optional Call Date 10/25/27 02/25/26 04/25/28 08/25/28 06/30/27 06/30/28 12/31/29 12/31/29 12/31/28 12/31/28 01/01/30 12/31/30 Clean-Up Call 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% As of March 31, 2023 Current CRT Risk In Force (1) $7,258 $5,080 $5,813 $9,789 $13,390 $19,734 $15,152 $15,152 $9,624 $9,624 $8,144 $3,275 Current Reinsured Amount $47 $126 $227 $328 $44 $180 $196 $25 $281 $36 $193 $43 PMIERs Required Asset Credit (3) $0 $110 $165 $286 $42 $173 $188 $24 $271 $35 $187 $42 Current Attachment % (2) 7.18% 4.17% 3.24% 3.10% 5.16% 3.40% 3.05% 2.54% 3.29% 2.74% 3.15% 3.00% Current Detachment % (2) 8.16% 6.64% 8.38% 7.76% 6.96% 7.37% 7.10% 3.05% 7.56% 3.29% 7.28% 6.25% Enact Claims Paid $0 $1 $0 $0 $1 $0 $0 $0 $0 $0 $0 $0 Incurred Losses Ever To Date (4) $41 $26 $26 $38 $75 $81 $28 $28 $36 $36 $19 $0 Remaining First Loss Retention Layer $521 $212 $188 $303 $691 $671 $462 $385 $317 $264 $256 $98 Reinsurer Claims Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 (amounts in millions) Credit Risk Transfer Transaction Summary (1) The total primary risk in force is $64.1B and the total current risk in force covered by a CRT is $56.6B. (2) Attachment % and detachment % are the aggregate loss amounts as a percentage of risk in force at which the reinsurer begins and stops paying claims under the policy. (3) Current PMIERs required asset credit considers the counterparty credit haircut. (4) Incurred losses ever to date shown does not include IBNR or loss adjustment expenses. Definitions: CRT = Credit Risk Transfer; RIF = Risk In Force; XOL = Excess Of Loss; ILN = Insurance Linked Note Page 14
Enact Holdings, Inc. Financial Supplement First Quarter 2023 2023 1Q 4Q 3Q 2Q 1Q COMBINED STAT: Statutory policyholders' surplus $1,193 $1,136 $1,348 $1,277 $1,442 Contingency reserves 3,679 3,551 3,424 3,297 3,168 Combined statutory capital $4,872 $4,687 $4,772 $4,574 $4,610 Adjusted RIF(1) $61,546 $60,061 $58,542 $57,407 $55,512 Combined risk-to-capital ratio ("RTC") 12.6 12.8 12.3 12.6 12.0 EMICO(2) STAT: Statutory policyholders' surplus $1,141 $1,084 $1,296 $1,226 $1,390 Contingency reserves 3,675 3,548 3,422 3,294 3,167 EMICO statutory capital $4,816 $4,632 $4,718 $4,520 $4,557 Adjusted RIF(1) $61,123 $59,663 $58,233 $57,169 $55,321 EMICO risk-to-capital ratio 12.7 12.9 12.3 12.6 12.1 PMIERs Available Assets(3) $5,357 $5,206 $5,292 $5,147 $5,222 PMIERs Gross Required Assets(3) (4,902) (4,866) (4,773) (4,789) (4,855) PMIERs Reinsurance Credit 1,523 1,578 1,590 1,511 1,622 PMIERs COVID-19 Haircut 120 132 140 178 272 PMIERs Net Required Assets ($3,259) ($3,156) ($3,043) ($3,100) ($2,961) Available Assets Above PMIERs Requirements(3) $2,098 $2,050 $2,249 $2,047 $2,261 PMIERs Sufficiency Ratio(3) 164 % 165 % 174 % 166 % 176 % (3)The PMIERs sufficiency ratio is calculated as available assets divided by required assets as defined within PMIERs. The current period PMIERs sufficiency ratio is an estimate due to the timing of the PMIERs filing. The PMIERs sufficiency ratios for the four quarters of 2022 do not take into consideration the impact of restrictions previously imposed by the government-sponsored enterprises on EMICO. 2022 Capital & PMIERs (dollar amounts in millions) (1) Adjusted RIF for purposes of calculating combined statutory RTC differs from RIF presented elsewhere in this financial supplement. In accordance with North Carolina Department of Insurance requirements, adjusted RIF excludes delinquent policies. (2) Enact Mortgage Insurance Corporation (EMICO), the company's principal U.S. mortgage insurance subsidiary. Page 15