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 1, 2024
(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 1, 2024, Enact Holdings, Inc. (the “Company”) issued (1) a press release announcing its financial results for the quarter ended March 31, 2024, 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, 2024, 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 8.01 Other Events
On May 1, 2024, we announced that the Board of Directors of the Company has approved authorization of a share repurchase program of up to $250 million of the Company’s outstanding shares of common stock. We also announced an increase of our quarterly dividend to $0.185 per common share. This quarter’s dividend will be payable on June 13, 2024, to shareholders of record on May 29, 2024. A copy of the related press release is furnished as Exhibit 99.3 to this Current Report on Form 8-K.
| 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 1, 2024 - Financial results | ||||||||
Financial Supplement for the quarter ended March 31, 2024 | ||||||||
| Press Release dated May 1, 2024- Share repurchase program and dividend increase | ||||||||
| 104 | Cover Page Interactive Data File (the Cover Page Interactive Data File is embedded within the Inline XBRL document) | |||||||
2
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 1, 2024 | |||||||||||
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Exhibit 99.3
8325 Six Forks Road
Raleigh, NC 27615
919-846-4100
800-444-5664
EnactMI.com
FOR IMMEDIATE RELEASE
May 1, 2024
Enact Announces 16% Increase to Quarterly Dividend and New $250 Million Share Repurchase Program
RALEIGH, N.C., May 1, 2024 – Enact Holdings, Inc. (Nasdaq: ACT) (Enact) a leading provider of private mortgage insurance through its insurance subsidiaries, today announced that its Board of Directors declared a quarterly dividend of $0.185 per common share, an increase of 16% from the prior quarter’s dividend. This dividend will be payable on June 13, 2024, to shareholders of record on May 29, 2024. Future dividends will be subject to Board approval.
Additionally, Enact announced that its Board of Directors authorized a new share repurchase program under which the company may purchase up to $250 million of its common stock. The new share repurchase authorization is in addition to the company’s current $100 million share repurchase program, of which $24 million remains as of April 26th, 2024.
“Today’s announcement underscores the strength of our financial position and our ongoing confidence in our business,” said Rohit Gupta, Enact’s President and Chief Executive Officer “The decision by the Board to raise our quarterly dividend and authorize a new share repurchase program are aligned with our disciplined and balanced approach to capital allocation focused on creating long-term value for our shareholders.”
Enact’s new share repurchase program authorizes the purchase of up to $250 million of the company’s common stock utilizing a variety of methods, including open market purchases, and privately negotiated transactions, and may be made under Rule 10b5-1 and Rule 10b-18 trading plans, at such times and in such amounts as management deems appropriate. In support, Enact has entered into an agreement with Genworth Holdings, Inc. to repurchase its Enact shares on a pro rata basis as part of the program.
Enact expects the timing and amount of any share repurchases will be opportunistic and will depend on a variety of factors, including Enact’s share price, capital availability, business and market conditions, regulatory requirements, and debt covenant restrictions. The program does not obligate Enact to acquire any amount of common stock, it may be suspended or terminated at any time at the Company’s discretion without prior notice, and it does not have a specified expiration date.
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About Enact Holdings, Inc.
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.
Investor Contact
Daniel Kohl
EnactIR@enactmi.com
Media Contact
Sarah Wentz
Sarah.Wentz@enactmi.com
Enact Holdings, Inc. Financial Supplement First Quarter 2024 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 2024 2024 1Q 4Q 3Q 2Q 1Q Total REVENUES: Premiums $240,747 $240,101 $243,346 $238,520 $235,108 $957,075 Net investment income 57,111 56,161 54,952 50,915 45,341 207,369 Net investment gains (losses) (6,684) (876) (23) (13,001) (122) (14,022) Other income 402 804 760 1,088 612 3,264 Total revenues 291,576 296,190 299,035 277,522 280,939 1,153,686 LOSSES AND EXPENSES: Losses incurred 19,501 24,372 17,847 (4,070) (10,984) 27,165 Acquisition and operating expenses, net of deferrals 50,934 56,560 52,339 51,887 51,705 212,491 Amortization of deferred acquisition costs and intangibles 2,259 2,566 2,803 2,645 2,640 10,654 Interest expense 12,961 12,948 12,941 12,913 13,065 51,867 Total losses and expenses 85,655 96,446 85,930 63,375 56,426 302,177 INCOME BEFORE INCOME TAXES 205,921 199,744 213,105 214,147 224,513 851,509 Provision for income taxes 44,933 42,436 48,910 46,127 48,525 185,998 NET INCOME $160,988 $157,308 $164,195 $168,020 $175,988 $665,511 Net investment (gains) losses $6,684 $876 $23 $13,001 $122 $14,022 Costs associated with reorganization (42) 408 3 41 (583) (131) Taxes on adjustments (1,395) (270) (5) (2,739) 97 (2,917) Adjusted Operating Income $166,235 $158,322 $164,216 $178,323 $175,624 $676,485 Loss ratio (1) 8 % 10 % 7 % (2)% (5)% 3 % Expense ratio (2) 22 % 25 % 23 % 23 % 23 % 23 % Earnings per share data: Net income per share Basic $1.01 $0.99 $1.03 $1.04 $1.08 $4.14 Diluted $1.01 $0.98 $1.02 $1.04 $1.08 $4.11 Adjusted operating income per share Basic $1.05 $0.99 $1.03 $1.11 $1.08 $4.21 Diluted $1.04 $0.98 $1.02 $1.10 $1.08 $4.18 Weighted-average common shares outstanding Basic 158,818 159,655 160,066 161,318 162,442 160,870 Diluted 160,087 160,895 161,146 162,171 163,179 161,847 (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, 2024, December 31, 2023, September 30, 2023, June 30, 2023 and March 31, 2023. 2023 (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 2024 March 31, 2024 December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 Assets Investments: Fixed maturity securities available-for-sale, at fair value $5,351,138 $5,266,141 $4,990,692 $4,915,039 $4,929,627 Short term investments 9,963 20,219 18,173 10,849 2,185 Total investments 5,361,101 5,286,360 5,008,865 4,925,888 4,931,812 Cash and cash equivalents 614,330 615,683 677,990 691,416 621,621 Accrued investment income 43,450 41,559 42,051 37,726 35,945 Deferred acquisition costs 24,861 25,006 25,572 25,843 25,954 Premiums receivable 43,927 45,070 44,310 43,525 42,005 Other assets 126,644 88,306 82,196 80,363 77,026 Deferred tax asset 89,370 88,489 119,704 119,099 107,868 Total assets $6,303,683 $6,190,473 $6,000,688 $5,923,860 $5,842,231 Liabilities and Shareholder's Interest Liabilities: Loss reserves $531,443 $518,191 $501,093 $490,203 $501,427 Unearned premiums 138,886 149,330 161,580 174,561 188,680 Other liabilities 173,500 145,189 136,057 139,100 112,043 Long-term borrowings 746,090 745,416 744,752 744,100 743,460 Total liabilities 1,589,919 1,558,126 1,543,482 1,547,964 1,545,610 Equity: Common stock 1,577 1,593 1,600 1,602 1,619 Additional paid-in capital 2,264,198 2,310,891 2,322,622 2,324,527 2,362,281 Accumulated other comprehensive income (237,477) (230,400) (400,349) (345,243) (320,242) Retained earnings 2,685,466 2,550,263 2,533,333 2,395,010 2,252,963 Total equity $4,713,764 $4,632,347 $4,457,206 $4,375,896 $4,296,621 Total liabilities and equity $6,303,683 $6,190,473 $6,000,688 $5,923,860 $5,842,231 Book value per share $29.89 $29.07 $27.86 $27.31 $26.53 Book value per share excluding accumulated other comprehensive income $31.40 $30.52 $30.36 $29.46 $28.51 U.S. GAAP ROE (1) 13.8 % 13.8 % 14.9 % 15.5 % 16.8 % Net investment (gains) losses 0.6 % 0.1 % 0.0 % 1.2 % 0.0 % Costs associated with reorganization 0.0 % 0.0 % 0.0 % 0.0 % (0.1)% Taxes on adjustments (0.1)% 0.0 % 0.0 % (0.3)% 0.0 % Adjusted Operating ROE(2) 14.2 % 13.9 % 14.9 % 16.4 % 16.7 % Debt to capital ratio 14 % 14 % 14 % 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 2024 Total Direct NIW % of NIW NIW % of NIW NIW % of NIW NIW % of NIW NIW % of NIW NIW % of NIW Product Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Pool 0 - % 0 - % 0 - % 0 - % 0 - % 0 - % Total $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Primary Only Origination Purchase $10,072 96 % $10,169 97 % $14,073 98 % $14,720 98 % $12,761 97 % $51,723 97 % Refinance 454 4 % 284 3 % 318 2 % 363 2 % 393 3 % 1,358 3 % Total Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Payment Type Monthly $10,034 95 % $10,187 98 % $14,099 98 % $14,774 98 % $12,809 97 % $51,869 98 % Single 475 5 % 246 2 % 269 2 % 281 2 % 318 3 % 1,114 2 % Other(1) 17 - % 20 - % 23 - % 28 - % 27 - % 98 - % Total Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % FICO Scores Over 760 $5,218 49 % $5,086 49 % $6,679 46 % $6,911 46 % $6,004 46 % $24,680 46 % 740 - 759 1,664 16 % 1,680 16 % 2,438 17 % 2,608 17 % 2,268 17 % 8,994 17 % 720 - 739 1,368 13 % 1,378 13 % 1,928 13 % 2,097 14 % 1,817 14 % 7,220 14 % 700 - 719 990 9 % 997 10 % 1,422 10 % 1,499 10 % 1,296 10 % 5,214 10 % 680 - 699 629 6 % 664 6 % 974 7 % 1,060 7 % 954 7 % 3,652 7 % 660 - 679(2) 388 4 % 409 4 % 592 4 % 568 4 % 517 4 % 2,086 4 % 640 - 659 193 2 % 181 2 % 282 2 % 260 2 % 229 2 % 952 2 % 620 - 639 73 1 % 53 - % 74 1 % 76 - % 65 - % 268 - % <620 3 - % 5 - % 2 - % 4 - % 4 - % 15 - % Total Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Weighted Avg FICO 751 751 749 749 748 749 Loan-To-Value Ratio 95.01% and above $2,262 21 % $1,820 18 % $2,677 18 % $2,692 18 % $2,106 16 % $9,295 18 % 90.01% to 95.00% 3,876 37 % 3,759 36 % 5,431 38 % 5,743 38 % 4,928 38 % 19,861 37 % 85.01% to 90.00% 3,177 30 % 3,489 33 % 4,568 32 % 4,753 31 % 4,390 33 % 17,200 32 % 85.00% and below 1,211 12 % 1,385 13 % 1,715 12 % 1,895 13 % 1,730 13 % 6,725 13 % Total Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Weighted Avg LTV 93 % 92 % 93 % 93 % 92 % 93 % Debt-To-Income Ratio 45.01% and above $3,165 30 % $3,158 30 % $4,437 31 % $4,467 30 % $3,538 27 % $15,600 29 % 38.01% to 45.00% 3,824 36 % 3,816 37 % 4,936 34 % 5,214 34 % 4,940 38 % 18,906 36 % 38.00% and below 3,537 34 % 3,479 33 % 5,018 35 % 5,402 36 % 4,676 35 % 18,575 35 % Total Primary $10,526 100 % $10,453 100 % $14,391 100 % $15,083 100 % $13,154 100 % $53,081 100 % Weighted Avg DTI 40 % 40 % 40 % 40 % 40 % 40 % Avg loan size (thousands) $366 $353 $357 $357 $356 $356 (2)Loans with unknown FICO scores are included in the 660-679 category. (1)Includes loans with annual and split payment types. Direct New Insurance Written Metrics (amounts in millions) 3Q Total1Q2Q 2023 4Q1Q 2024 Page 5
Enact Holdings, Inc. Financial Supplement First Quarter 2024 Total Direct IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF Product Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Pool 422 - % 436 - % 451 - % 469 - % 486 - % Total $264,067 100 % $263,373 100 % $262,465 100 % $258,285 100 % $253,002 100 % Primary Only Origination Purchase $234,211 89 % $231,526 88 % $228,431 87 % $221,942 86 % $214,339 85 % Refinance 29,434 11 % 31,411 12 % 33,583 13 % 35,874 14 % 38,177 15 % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Payment Type Monthly $234,747 89 % $233,651 89 % $232,150 88 % $227,312 88 % $221,482 88 % Single 27,013 10 % 27,353 10 % 27,853 11 % 28,439 11 % 28,918 11 % Other(1) 1,885 1 % 1,933 1 % 2,011 1 % 2,065 1 % 2,116 1 % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Book Year 2008 and prior $5,420 2 % $5,621 2 % $5,859 2 % $6,135 2 % $6,377 3 % 2009-2016 7,368 3 % 8,042 3 % 8,767 3 % 9,585 4 % 10,403 4 % 2017 5,015 2 % 5,321 2 % 5,582 2 % 5,878 2 % 6,201 2 % 2018 5,524 2 % 5,750 2 % 5,993 2 % 6,270 2 % 6,570 3 % 2019 13,126 5 % 13,773 5 % 14,372 6 % 15,026 6 % 15,691 6 % 2020 42,183 16 % 44,486 17 % 46,881 18 % 49,522 19 % 52,389 21 % 2021 66,971 25 % 70,045 27 % 73,141 28 % 76,381 30 % 79,377 31 % 2022 58,051 22 % 59,267 23 % 60,258 23 % 61,390 24 % 62,481 25 % 2023 49,556 19 % 50,632 19 % 41,161 16 % 27,629 11 % 13,027 5 % 2024 10,431 4 % 0 - % 0 - % 0 - % 0 - % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % (1)Includes loans with annual and split payment types. 4Q 3Q1Q Direct Insurance In-Force (IIF) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q 2023 2Q 2024 Page 6
Enact Holdings, Inc. Financial Supplement First Quarter 2024 IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF IIF % of IIF FICO Scores Over 760 $111,589 43 % $110,635 42 % $109,701 42 % $107,427 42 % $104,635 42 % 740 - 759 43,155 17 % 43,053 17 % 42,899 16 % 42,074 16 % 40,983 16 % 720 - 739 37,068 14 % 37,020 14 % 36,889 14 % 36,324 14 % 35,554 14 % 700 - 719 29,679 11 % 29,766 11 % 29,818 12 % 29,514 12 % 29,160 12 % 680 - 699 21,628 8 % 21,835 8 % 21,993 9 % 21,908 9 % 21,717 9 % 660 - 679(1) 11,316 4 % 11,357 4 % 11,351 4 % 11,188 4 % 11,057 4 % 640 - 659 6,109 2 % 6,137 3 % 6,166 2 % 6,133 2 % 6,114 2 % 620 - 639 2,488 1 % 2,504 1 % 2,548 1 % 2,576 1 % 2,604 1 % <620 613 - % 630 - % 649 - % 672 - % 692 - % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Weighted Avg FICO 744 744 744 744 744 Loan-To-Value Ratio 95.01% and above $46,259 17 % $44,955 17 % $44,071 17 % $42,459 16 % $40,776 16 % 90.01% to 95.00% 109,566 42 % 109,227 41 % 109,019 42 % 107,448 42 % 105,336 42 % 85.01% to 90.00% 78,214 30 % 77,887 30 % 77,121 29 % 75,521 29 % 73,756 29 % 85.00% and below 29,606 11 % 30,868 12 % 31,803 12 % 32,388 13 % 32,648 13 % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Weighted Avg LTV 93 % 93 % 93 % 93 % 93 % Debt-To-Income Ratio 45.01% and above $54,943 21 % $53,440 20 % $51,810 20 % $48,990 19 % $46,049 18 % 38.01% to 45.00% 94,459 36 % 93,871 36 % 93,228 35 % 91,671 36 % 89,768 36 % 38.00% and below 114,243 43 % 115,626 44 % 116,976 45 % 117,155 45 % 116,699 46 % Total Primary $263,645 100 % $262,937 100 % $262,014 100 % $257,816 100 % $252,516 100 % Weighted Avg DTI 38 % 38 % 38 % 38 % 38 % Primary persistency rate 85 % 86 % 84 % 84 % 85 % Avg loan size (thousands) $272 $270 $268 $265 $262 (1)Loans with unknown FICO scores are included in the 660-679 category. 4Q1Q Direct Insurance In-Force (IIF) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q 2023 3Q 2024 Page 7
Enact Holdings, Inc. Financial Supplement First Quarter 2024 Total Direct RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF Product Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % Pool 67 - % 69 - % 70 - % 73 - % 76 - % Total $68,017 100 % $67,598 100 % $67,126 100 % $65,787 100 % $64,182 100 % Primary Only Origination Purchase $61,263 90 % $60,497 90 % $59,640 89 % $57,891 88 % $55,870 87 % Refinance 6,687 10 % 7,032 10 % 7,416 11 % 7,823 12 % 8,236 13 % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % Payment Type Monthly $61,606 91 % $61,083 90 % $60,498 90 % $59,018 90 % $57,289 89 % Single 5,867 8 % 5,957 9 % 6,050 9 % 6,175 9 % 6,284 10 % Other(1) 477 1 % 489 1 % 508 1 % 521 1 % 533 1 % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % Book Year 2008 and prior $1,397 2 % $1,449 2 % $1,510 2 % $1,581 2 % $1,643 3 % 2009-2016 1,943 3 % 2,129 3 % 2,331 4 % 2,556 4 % 2,776 4 % 2017 1,324 2 % 1,403 2 % 1,471 2 % 1,549 2 % 1,632 3 % 2018 1,419 2 % 1,476 2 % 1,535 2 % 1,601 3 % 1,672 3 % 2019 3,403 5 % 3,544 5 % 3,676 5 % 3,831 6 % 3,989 6 % 2020 11,181 16 % 11,697 17 % 12,228 18 % 12,827 20 % 13,484 21 % 2021 17,174 25 % 17,846 27 % 18,524 28 % 19,245 29 % 19,917 31 % 2022 14,629 22 % 14,907 22 % 15,129 23 % 15,392 23 % 15,647 24 % 2023 12,810 19 % 13,078 20 % 10,652 16 % 7,132 11 % 3,346 5 % 2024 2,670 4 % 0 - % 0 - % 0 - % 0 - % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % (1)Includes loans with annual and split payment types. Direct Risk In-Force (RIF) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q4Q 3Q 2023 1Q 2024 Page 8
Enact Holdings, Inc. Financial Supplement First Quarter 2024 RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF RIF % of RIF FICO Scores Over 760 $28,703 42 % $28,363 42 % $28,014 42 % $27,305 42 % $26,480 41 % 740 - 759 11,167 17 % 11,096 17 % 11,009 17 % 10,749 16 % 10,418 16 % 720 - 739 9,669 14 % 9,621 14 % 9,553 14 % 9,368 14 % 9,126 14 % 700 - 719 7,629 11 % 7,623 11 % 7,615 12 % 7,516 12 % 7,406 12 % 680 - 699 5,524 8 % 5,557 8 % 5,582 8 % 5,543 9 % 5,481 9 % 660 - 679(1) 2,908 4 % 2,908 4 % 2,901 4 % 2,850 4 % 2,809 4 % 640 - 659 1,562 3 % 1,565 3 % 1,569 2 % 1,558 2 % 1,549 3 % 620 - 639 632 1 % 635 1 % 647 1 % 653 1 % 660 1 % <620 156 - % 161 - % 166 - % 172 - % 177 - % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % Loan-To-Value Ratio 95.01% and above $13,250 20 % $12,878 19 % $12,595 19 % $12,086 18 % $11,545 18 % 90.01% to 95.00% 31,881 47 % 31,781 47 % 31,696 47 % 31,220 48 % 30,589 48 % 85.01% to 90.00% 19,265 28 % 19,163 28 % 18,945 28 % 18,518 28 % 18,054 28 % 85.00% and below 3,554 5 % 3,707 6 % 3,820 6 % 3,890 6 % 3,918 6 % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % Debt-To-Income Ratio 45.01% and above $14,265 21 % $13,830 20 % $13,369 20 % $12,589 19 % $11,782 18 % 38.01% to 45.00% 24,289 36 % 24,072 36 % 23,846 36 % 23,378 36 % 22,830 36 % 38.00% and below 29,396 43 % 29,627 44 % 29,841 44 % 29,747 45 % 29,494 46 % Total Primary $67,950 100 % $67,529 100 % $67,056 100 % $65,714 100 % $64,106 100 % (1)Includes loans with annual and split payment types. 4Q Direct Risk In-Force (RIF) Metrics Excludes run-off business, which is immaterial to our results (amounts in millions) 1Q2Q 2023 3Q1Q 2024 Page 9
Enact Holdings, Inc. Financial Supplement First Quarter 2024 2024 1Q 4Q 3Q 2Q 1Q Beginning Number of Primary Delinquencies 20,432 19,241 18,065 18,633 19,943 New delinquencies 11,395 11,706 11,107 9,205 9,599 Delinquency cures (12,160) (10,317) (9,778) (9,609) (10,771) Paid claims (172) (186) (147) (156) (126) Rescissions and claim denials (3) (12) (6) (8) (12) Ending Number of Primary Delinquencies 19,492 20,432 19,241 18,065 18,633 Primary Policies in Force (count) 969,866 974,516 977,832 973,280 965,544 Primary delinquency rate 2.01 % 2.10 % 1.97 % 1.86 % 1.93 % Incurred Losses: Direct primary case(1) $15,540 $23,712 $14,101 ($4,949) ($12,141) All other(1) 3,961 660 3,746 879 1,157 Total Incurred Losses $19,501 $24,372 $17,847 ($4,070) ($10,984) Direct Primary Case Incurred Losses(2) Current quarter delinquencies(3) $74,087 $76,859 $71,524 $58,414 $57,963 Development of current quarter delinquencies (4) 0 0 0 0 0 Prior period development and other (58,547) (53,147) (57,423) (63,363) (70,104) Direct Primary Case Incurred Losses $15,540 $23,712 $14,101 ($4,949) ($12,141) Reserves: Direct primary case(1) $485,791 $476,709 $459,916 $451,506 $462,287 All other(1) 45,652 41,482 41,177 38,697 39,140 Total Reserves $531,443 $518,191 $501,093 $490,203 $501,427 Beginning Direct Primary Case Reserves $476,709 $459,916 $451,506 $462,287 $479,343 Paid claims (6,458) (6,919) (5,691) (5,832) (4,915) Change in reserves 15,540 23,712 14,101 (4,949) (12,141) Ending Direct Primary Case Reserves $485,791 $476,709 $459,916 $451,506 $462,287 Average Reserve Per Primary Delinquency (5) $24.9 $23.3 $23.9 $25.0 $24.8 Average Direct Primary Paid Claim (6) $37.5 $37.2 $38.7 $37.4 $39.0 (6) Average direct primary paid claim is calculated by dividing paid claims on direct primary case reserves by the number of paid claims for the quarter. Average paid claims in the first quarter of 2024 and fourth quarter of 2023 include payments in relation to agreements on non-performing loans. Prior periods have been reclassified to conform to current period presentation. (2) 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. (3) Defaulted loans with most recent delinquency notice in the quarter indicated. (1) Direct primary case excludes loss adjustment expenses (LAE), pool, incurred but not reported (IBNR) and reinsurance reserves. (4) 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. Delinquency Metrics Primary metrics exclude run-off business, which is immaterial to our results (dollar amounts in thousands) 2023 (5) Direct primary case reserves divided by primary delinquency count. Page 10
Enact Holdings, Inc. Financial Supplement First Quarter 2024 Percentage Reserved by Payment Status Delinquencies Case Reserves Risk In- Force Reserves as % of RIF Delinquencies Case Reserves Risk In- Force Reserves as % of RIF Delinquencies Case Reserves Risk In- Force Reserves as % of RIF 3 payments or less in default 9,506 $87 $600 14 % 10,166 $88 $629 14 % 7,876 $67 $462 14 % 4 - 11 payments in default 6,853 220 468 47 % 6,934 205 469 44 % 6,714 182 423 43 % 12 payments or more in default 3,133 179 197 91 % 3,332 184 200 92 % 4,043 213 220 97 % Total 19,492 $486 $1,265 38 % 20,432 $477 $1,298 37 % 18,633 $462 $1,105 42 % December 31, 2023 March 31, 2023 Missed Payment Status Tables - Direct Primary Excludes run-off business, which is immaterial to our results (dollar amounts in millions) March 31, 2024 Page 11
Enact Holdings, Inc. Financial Supplement First Quarter 2024 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 13% 12% 2.15% Phoenix, AZ MSA 3% 3% 1.93% Texas 9% 8% 2.08% Chicago-Naperville, IL MD 3% 4% 2.91% 2008 and prior 2% 15% 8.12% 5.55% Florida (3) 8% 10% 2.29% Atlanta, GA MSA 3% 3% 2.49% 2009-2016 3% 7% 3.74% 0.62% New York (3) 5% 11% 2.93% New York, NY MD 2% 7% 3.37% 2017 2% 4% 3.41% 0.81% Illinois (3) 4% 6% 2.57% Houston, TX MSA 2% 3% 2.48% 2018 2% 6% 4.13% 0.94% Arizona 4% 3% 1.88% Washington-Arlington, DC MD 2% 2% 1.93% 2019 5% 8% 2.70% 0.81% Michigan 4% 3% 1.78% Dallas, TX MD 2% 1% 1.79% 2020 16% 14% 1.67% 0.85% Georgia 3% 4% 2.32% Los Angeles-Long Beach, CA MD 2% 3% 2.32% 2021 25% 22% 1.63% 1.23% North Carolina 3% 2% 1.46% Riverside-San Bernardino, CA MSA 2% 3% 2.78% 2022 22% 19% 1.61% 1.48% Washington 3% 3% 1.64% Denver-Aurora-Lakewood, CO MSA 2% 1% 1.27% 2023 19% 5% 0.67% 0.64% All Other States (4) 44% 38% 1.85% All Other MSAs/MDs 77% 70% 1.92% 2024 4% 0% 0.02% 0.02% Total 100% 100% 2.01% Total 100% 100% 2.01% Total 100% 100% 2.01% 4.17% 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 13% 12% 2.22% Phoenix, AZ MSA 3% 2% 2.01% Texas 8% 8% 2.22% Chicago-Naperville, IL MD 3% 4% 2.88% 2008 and prior 2% 18% 8.61% 5.56% Florida (3) 8% 9% 2.39% Atlanta, GA MSA 3% 3% 2.40% 2009-2015 1% 4% 4.55% 0.63% New York (3) 5% 12% 3.05% New York, NY MD 2% 7% 3.60% 2016 2% 4% 3.20% 0.67% Illinois (3) 4% 6% 2.61% Washington-Arlington, DC MD 2% 2% 2.01% 2017 2% 5% 3.59% 0.87% Arizona 4% 3% 1.93% Houston, TX MSA 2% 3% 2.67% 2018 2% 6% 4.42% 1.02% Michigan 4% 3% 1.94% Los Angeles-Long Beach, CA MD 2% 2% 2.39% 2019 5% 8% 2.77% 0.85% Georgia 3% 3% 2.23% Dallas, TX MD 2% 2% 1.92% 2020 17% 15% 1.70% 0.90% North Carolina 3% 2% 1.56% Riverside-San Bernardino, CA MSA 2% 3% 2.83% 2021 27% 21% 1.65% 1.29% Washington 3% 2% 1.77% Denver-Aurora-Lakewood, CO MSA 2% 1% 1.12% 2022 22% 16% 1.57% 1.46% All Other States (4) 45% 40% 1.93% All Other MSAs/MDs 77% 71% 2.01% 2023 20% 3% 0.47% 0.46% Total 100% 100% 2.10% Total 100% 100% 2.10% Total 100% 100% 2.10% 4.19% 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% (4) Includes the District of Columbia. Delinquency Performance - Direct Primary Excludes run-off business, which is immaterial to our results March 31, 2024 March 31, 2023 (1) Direct primary case reserves exclude pool, 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. December 31, 2023 Page 12
Enact Holdings, Inc. Financial Supplement First Quarter 2024 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 $250,449 5 % $195,129 4 % $147,108 3 % $110,538 2 % $42,709 1 % Municipals 442,440 8 % 438,214 8 % 407,538 8 % 426,528 9 % 431,778 9 % Non-U.S. government 11,381 - % 11,467 - % 11,123 - % 11,206 - % 9,493 - % U.S. corporate 2,745,314 51 % 2,723,730 52 % 2,557,480 52 % 2,509,479 51 % 2,679,485 54 % Non-U.S. corporate 686,637 13 % 689,663 13 % 655,284 13 % 640,050 13 % 630,502 13 % Residential MBS 9,754 - % 10,755 - % 10,233 - % 9,474 - % 10,344 - % Other asset-backed 1,205,163 23 % 1,197,183 23 % 1,201,926 24 % 1,207,764 25 % 1,125,316 23 % Total available-for-sale fixed maturity securities $5,351,138 100 % $5,266,141 100 % $4,990,692 100 % $4,915,039 100 % $4,929,627 100 % Fixed Maturity Securities - Credit Quality NRSRO(1) Designation AAA $556,749 10 % $546,251 10 % $526,953 11 % $625,921 13 % $513,462 10 % AA 1,131,317 21 % 1,047,379 20 % 970,649 19 % 821,456 17 % 779,674 16 % A 1,711,854 32 % 1,721,779 33 % 1,645,093 33 % 1,633,133 33 % 1,684,218 34 % BBB 1,851,947 35 % 1,851,592 35 % 1,742,018 35 % 1,741,647 35 % 1,856,810 38 % BB & Lower 99,271 2 % 99,140 2 % 105,979 2 % 92,882 2 % 95,463 2 % Total fixed maturity securities $5,351,138 100 % $5,266,141 100 % $4,990,692 100 % $4,915,039 100 % $4,929,627 100 % Average duration 3.7 3.5 3.5 3.7 3.6 Average book yield 3.7 % 3.6 % 3.5 % 3.4 % 3.2 % (1)Nationally Recognized Statistical Rating Organizations. December 31, 2023 September 30, 2023 Composition of Consolidated Investments at Fair Value (amounts in thousands) March 31, 2023June 30, 2023March 31, 2024 Page 13
Enact Holdings, Inc. Financial Supplement First Quarter 2024 2021-1 ILN 2021-2 ILN 2021-3 ILN 2023-1 ILN 2020 XOL 2021 XOL 2022-1 XOL 2022-2 XOL 2022-3 XOL 2022-4 XOL 2022-5 XOL 2023-1 XOL(7) 2024-1 XOL 2023-1 QSR 2024-1 QSR 1/14-12/18, 4Q'19 9/20-12/20 1/21-6/21 7/22-6/23 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 Full Year 2024 Full Year 2023 Full Year 2024 At Closing Initial Risk In-Force $14,142 $8,384 $12,141 $7,288 $23,047 $22,373 $15,400 $15,400 $10,550 $10,550 $8,547 $11,991 $2,600 $11,991 $2,600 Initial Reinsurance Amount / Ceded RIF (2) $495 $303 $372 $248 $168 $206 $196 $25 $289 $36 $201 $180 $51 $1,934 $552 Initial First Loss Retention Layer $212 $189 $304 $244 $691 $671 $462 $385 $317 $264 $256 $360 $78 n/a n/a Initial Attachment % (3) 1.50% 2.25% 2.50% 3.35% 3.00% 3.00% 3.00% 2.50% 3.00% 2.50% 3.00% 3.00% 3.00% n/a n/a Initial Detachment % (3) 5.00% 7.00% 6.75% 6.75% 7.00% 7.00% 6.99% 3.00% 7.00% 3.00% 7.00% 6.57% 6.50% n/a n/a % Of Covered Loss Tier Reinsured 100.00% 76.00% 72.00% 100.00% 18.25% 23.00% 31.92% 31.92% 68.45% 68.45% 58.80% 42.00% 56.48% 16.13% 21.23% Commencement Date 03/02/21 04/16/21 09/02/21 11/03/23 01/01/20 01/01/21 01/01/22 01/01/22 03/01/22 03/01/22 09/01/22 01/01/23 01/01/24 04/01/23 01/01/24 Termination Date 08/25/33 10/25/33 02/25/34 11/25/33 12/31/30 12/31/31 12/31/32 12/31/32 12/31/31 12/31/31 12/31/32 12/31/33 12/31/34 04/01/34 12/31/34 Optional Call Date 02/25/26 04/25/28 08/25/28 11/27/28 06/30/27 06/30/28 12/31/29 12/31/29 12/31/28 12/31/28 01/01/30 12/31/30 12/31/31 12/31/26 12/31/27 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% 10.0% n/a n/a As of March 31, 2024 Current Risk In-Force (4) $3,913 $4,817 $8,148 $7,062 $11,107 $17,022 $14,170 $14,170 $8,600 $8,600 $7,608 $11,756 $2,600 $11,756 $2,600 Current Reinsured Amount / Ceded RIF (2) $48 $164 $237 $248 $14 $122 $195 $25 $207 $36 $191 $180 $51 $1,896 $552 PMIERs Required Asset Credit (5) $44 $110 $186 $234 $13 $118 $188 $24 $199 $35 $184 $173 $49 $130 $35 Current Attachment % (3) 5.39% 3.90% 3.71% 3.46% 6.20% 3.93% 3.25% 2.71% 3.67% 3.06% 3.36% 3.06% 3.00% n/a n/a Current Detachment % (3) 6.62% 8.38% 7.75% 6.97% 6.88% 7.05% 7.57% 3.25% 7.19% 3.67% 7.62% 6.70% 6.50% n/a n/a Enact Claims Paid $1 $1 $1 $0 $2 $2 $2 $2 $1 $1 $1 $0 $0 $0 $0 Incurred Losses Ever To Date (6) $24 $29 $47 $23 $71 $106 $90 $90 $54 $54 $51 $22 $0 $4 $0 Remaining First Loss Retention Layer $211 $188 $302 $244 $689 $669 $460 $383 $316 $263 $255 $360 $78 n/a n/a Reinsurer Claims Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Third Party Ceded Reinsurance Transaction Summary (amounts in millions) (1) Excess of loss (XOL) and quota share (QSR) transactions are with panels of U.S. and global reinsurers. (2) The initial reinsurance amount for insurance linked notes and excess of loss reinsurance reflects the total loss coverage; Ceded RIF reflects the RIF associated with quota share reinsurance which is subject to annual and life loss ratio limits. (3) 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. (4) The total primary risk in force is $68.0B and the total current risk in force covered by a CRT is $61.3B. (5) Current PMIERs required asset credit considers the counterparty credit haircut. (6) Incurred losses ever to date shown does not include IBNR or loss adjustment expenses. (7) Reinsurance agreement was amended during the first quarter of 2024. Definitions: CRT = Credit Risk Transfer; RIF = Risk In Force; XOL = Excess Of Loss; ILN = Insurance Linked Note Insurance Linked Notes Reinsurance - Excess of Loss (1) Reinsurance - Quota Share (1) Page 14
Enact Holdings, Inc. Financial Supplement First Quarter 2024 2024 1Q 4Q 3Q 2Q 1Q COMBINED(1) STAT: Statutory policyholders' surplus $765 $1,085 $1,134 $1,088 $1,193 Contingency reserves 4,148 3,960 3,923 3,800 3,679 Combined statutory capital $4,913 $5,045 $5,057 $4,888 $4,872 Adjusted RIF(2) $55,254 $58,277 $58,622 $57,671 $61,546 Combined risk-to-capital ratio ("RTC") 11.2 11.6 11.6 11.8 12.6 EMICO(3) STAT: Statutory policyholders' surplus $729 $1,026 $1,076 $1,030 $1,141 Contingency reserves 4,140 3,953 3,917 3,795 3,675 EMICO statutory capital $4,869 $4,979 $4,993 $4,825 $4,816 Adjusted RIF(2) $54,741 $57,788 $58,150 $57,222 $61,123 EMICO risk-to-capital ratio 11.2 11.6 11.6 11.9 12.7 PMIERs Available Assets(3) $4,853 $5,006 $5,268 $5,093 $5,357 PMIERs Minimum Required Assets ($2,970) ($3,119) ($3,251) ($3,135) ($3,259) Available Assets Above PMIERs Requirements(3) $1,883 $1,887 $2,017 $1,958 $2,098 PMIERs Sufficiency Ratio(4) 163 % 161 % 162 % 162 % 164 % (4) 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. 2023 Capital & PMIERs (dollar amounts in millions) (2) Adjusted RIF for purposes of calculating 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. (3) Estimated statutory capital of Enact Mortgage Insurance Corporation (EMICO), the company's primary U.S. mortgage insurance subsidiary. (1) Reflects estimated combined statutory capital position of our insurance subsidiaries. Beginning in 1Q24, combined results are limited to mortgage insurance subsidiaries. Page 15
Exhibit 99.1
ENACT REPORTS FIRST QUARTER 2024 RESULTS
_______________________________________
GAAP Net Income of $161 million, or $1.01 per diluted share
Adjusted Operating Income of $166 million, or $1.04 per diluted share
Return on Equity of 13.8% and Adjusted Operating Return on Equity of 14.2%
Record Primary insurance in-force of $264 billion, a 4% increase from first quarter 2023
PMIERs Sufficiency of 163% or $1,883 million
Book Value Per Share of $29.89 and Book Value Per Share excluding AOCI of $31.40
Raleigh, NC, May 1, 2024 – Enact Holdings, Inc. (Nasdaq: ACT) today announced financial results for the first quarter of 2024.
“Our strong performance in the first quarter establishes a solid foundation for the rest of the year,” said Rohit Gupta, President and CEO of Enact. “During the quarter, we reported insurance-in-force growth, continued strong credit performance, and delivered on our commitment to expense discipline. Additionally, we continued to execute against our balanced capital allocation strategy, including returning capital to our shareholders through our recently increased quarterly dividend and share repurchases. Looking forward, we are confident in the long-term drivers of demand for mortgage insurance, our position in the current market environment, and our team’s ability to execute on our strategic priorities and deliver value for all our stakeholders.”
Key Financial Highlights
(In millions, except per share data or otherwise noted) | 1Q24 | 4Q23 | 1Q23 | ||||||||||||||
Net Income (loss) | $161 | $157 | $176 | ||||||||||||||
Diluted Net Income (loss) per share | $1.01 | $0.98 | $1.08 | ||||||||||||||
Adjusted Operating Income (loss) | $166 | $158 | $176 | ||||||||||||||
Adj. Diluted Operating Income (loss) per share | $1.04 | $0.98 | $1.08 | ||||||||||||||
NIW ($B) | $11 | $10 | $13 | ||||||||||||||
Primary IIF ($B) | $264 | $263 | $253 | ||||||||||||||
Primary Persistency Rate | 85% | 86% | 85% | ||||||||||||||
Net Premiums Earned | $241 | $240 | $235 | ||||||||||||||
Losses Incurred | $20 | $24 | $(11) | ||||||||||||||
Loss Ratio | 8% | 10% | (5)% | ||||||||||||||
Operating Expenses | $53 | $59 | $54 | ||||||||||||||
Expense Ratio | 22% | 25% | 23% | ||||||||||||||
Net Investment Income | $57 | $56 | $45 | ||||||||||||||
| Net Investment gains (losses) | $(7) | $(1) | $(0) | ||||||||||||||
Return on Equity | 13.8% | 13.8% | 16.8% | ||||||||||||||
Adjusted Operating Return on Equity | 14.2% | 13.9% | 16.7% | ||||||||||||||
PMIERs Sufficiency ($) | $1,883 | $1,887 | $2,098 | ||||||||||||||
PMIERs Sufficiency (%) | 163% | 161% | 164% | ||||||||||||||
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First Quarter 2024 Financial and Operating Highlights
•Net income was $161 million, or $1.01 per diluted share, compared with $157 million, or $0.98 per diluted share, for the fourth quarter of 2023 and $176 million, or $1.08 per diluted share, for the first quarter of 2023. Adjusted operating income was $166 million, or $1.04 per diluted share, compared with $158 million, or $0.98 per diluted share, for the fourth quarter of 2023 and $176 million, or $1.08 per diluted share, for the first quarter of 2023.
•New insurance written (NIW) was $11 billion, up 1% from $10 billion in the fourth quarter of 2023 and down 20% from the first quarter of 2023 primarily driven by lower estimated MI market size and lower estimated market share. NIW for the current quarter was comprised of 95% monthly premium policies and 96% purchase originations.
•Primary insurance in-force was $264 billion, up from $263 billion in the fourth quarter of 2023 and up 4% from $253 billion in the first quarter of 2023.
•Persistency was 85%, modestly down from 86% in the fourth quarter of 2023 and flat as compared to the first quarter of 2023. Driven by continued elevated mortgage rates persistency has remained above 80% for the past eight quarters and approximately 4% of the mortgages in our portfolio had rates at least 50 basis points above the prevailing market rate.
•Net premiums earned were $241 million, up from $240 million in the fourth quarter of 2023 and up 2% from $235 million in the first quarter of 2023. Net premiums increased sequentially primarily driven by our growth in attractive adjacencies consisting primarily of Enact Re’s GSE CRT participation while insurance-in-force growth was offset by higher ceded premiums. The year-over-year increase was primarily driven by insurance in-force growth, partially offset by higher ceded premiums and the lapse of older, higher priced policies.
•Losses incurred for the first quarter of 2024 were $20 million and the loss ratio was 8%, compared to $24 million and 10%, respectively, in the fourth quarter of 2023 and $(11) million and (5)%, respectively, in the first quarter of 2023. The sequential decrease in losses and loss ratio were primarily driven by seasonally lower new delinquencies. Year-over-year increases in losses and loss ratio were driven by higher current period delinquencies as newer, larger books continue their normal loss development and a lower reserve release in the current quarter. Favorable cure performance from early 2023 and prior delinquencies remained above our expectations, which resulted in a $54 million reserve release in the quarter as compared to reserve releases of $53 million and $70 million in the fourth quarter of 2023 and first quarter of 2023, respectively.
•Operating expenses in the current quarter were $53 million and the expense ratio was 22%, compared to $59 million and 25%, respectively, in the fourth quarter of 2023 and $54 million and 23%, respectively in the first quarter of 2023. The sequential decrease was primarily driven by lower incentive-based compensation while the year-over-year decrease was driven in part by lower corporate overhead.
•Net investment income was $57 million, up from $56 million in the fourth quarter of 2023 and $45 million in the first quarter of 2023, driven by the continuation of elevated interest rates and higher average invested assets.
•Net investment loss was up $6 million from the fourth quarter of 2023 and up $7 million versus the same period in the prior year as we identified assets that upon selling allow us to recoup losses through higher net investment income over the next couple of years.
•Annualized return on equity for the first quarter of 2024 was 13.8% and annualized adjusted operating return on equity was 14.2%. This compares to fourth quarter 2023 results of 13.8% and 13.9%, respectively, and to first quarter 2023 results of 16.8% and 16.7%, respectively.
Capital and Liquidity
•EMICO completed a distribution of approximately $270 million that will primarily be used to support our ability to return capital to shareholders and bolster financial flexibility.
•Enact Holdings, Inc. held $331 million of cash and cash equivalents plus $285 million of invested assets as of March 31, 2024. Combined cash and invested assets increased $160 million from the prior
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quarter, primarily due to EMICO’s distribution partially offset by our share buyback program and common dividend in the first quarter.
•S&P Global Ratings (“S&P”) upgraded the Insurer Financial Strength rating for EMICO to A- from BBB+. S&P also upgraded the Issuer Credit Rating for EHI to BBB- from BB+. The outlook for both ratings is stable.
•We executed an excess of loss reinsurance transaction with a panel of highly rated reinsurers, which provides up to $255 million of reinsurance coverage on a portion of current and expected new insurance written for the 2024 book year, effective January 1, 2024.
•We secured a quota share reinsurance transaction with a panel of reinsurers that will cede approximately 21% of expected new insurance written for the 2024 book year which provides approximately $2.6 billion of ceded RIF.
•We increased our previously announced Enact Re affiliate quota share from 7.5% to 12.5% of a portion of our in-force business from EMICO along with 12.5% of 2024’s new insurance written.
•PMIERs sufficiency was 163% and $1,883 million above the PMIERs requirements, compared to 161% and $1,887 million above the PMIERs requirements in the fourth quarter of 2023.
Recent Events
•We repurchased 1.8 million shares at an average price of $27.51 for a total of $49 million in the quarter. Additionally, we purchased 0.4 million shares at an average price of $30.07 for a total of $12 million during April and there now remains $24 million on the previously announced $100 million program.
•Recently, the Company’s Board of Directors approved a new share repurchase program with authorization to purchase up to $250 million of common stock.
•Recently, we announced that our Board of Directors had approved an increase to our quarterly dividend from $0.16 to $0.185 per share, payable on June 13, 2024 to common shareholders of record on May 31, 2024.
Conference Call and Financial Supplement Information
This press release, the first quarter 2024 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 2, 2024, 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.
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
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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 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; 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 2023 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. Although Enact believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, Enact 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 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
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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, 2024 and 2023, as well as for the three months ended December 31, 2023.
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Exhibit A: Consolidated Statements of Income (amounts in thousands, except per share amounts)
| 1Q24 | 4Q23 | 1Q23 | |||||||||
| REVENUES: | |||||||||||
| Premiums | $240,747 | $240,101 | $235,108 | ||||||||
| Net investment income | 57,111 | 56,161 | 45,341 | ||||||||
| Net investment gains (losses) | (6,684) | (876) | (122) | ||||||||
| Other income | 402 | 804 | 612 | ||||||||
| Total revenues | 291,576 | 296,190 | 280,939 | ||||||||
| LOSSES AND EXPENSES: | |||||||||||
| Losses incurred | 19,501 | 24,372 | (10,984) | ||||||||
| Acquisition and operating expenses, net of deferrals | 50,934 | 56,560 | 51,705 | ||||||||
| Amortization of deferred acquisition costs and intangibles | 2,259 | 2,566 | 2,640 | ||||||||
| Interest expense | 12,961 | 12,948 | 13,065 | ||||||||
| Total losses and expenses | 85,655 | 96,446 | 56,426 | ||||||||
| INCOME BEFORE INCOME TAXES | 205,921 | 199,744 | 224,513 | ||||||||
Provision for income taxes | 44,933 | 42,436 | 48,525 | ||||||||
| NET INCOME | $160,988 | $157,308 | $175,988 | ||||||||
| Net investment (gains) losses | 6,684 | 876 | 122 | ||||||||
| Costs associated with reorganization | (42) | 408 | (583) | ||||||||
| Taxes on adjustments | (1,395) | (270) | 97 | ||||||||
| Adjusted Operating Income | $166,235 | $158,322 | $175,624 | ||||||||
Loss ratio (1) | 8 | % | 10 | % | (5) | % | |||||
Expense ratio (2) | 22 | % | 25 | % | 23 | % | |||||
| Earnings Per Share Data: | |||||||||||
| Net Income per share | |||||||||||
| Basic | $1.01 | $0.99 | $1.08 | ||||||||
| Diluted | $1.01 | $0.98 | $1.08 | ||||||||
| Adj operating income per share | |||||||||||
| Basic | $1.05 | $0.99 | $1.08 | ||||||||
| Diluted | $1.04 | $0.98 | $1.08 | ||||||||
| Weighted-average common shares outstanding | |||||||||||
| Basic | 158,818 | 159,655 | 162,442 | ||||||||
| Diluted | 160,087 | 160,895 | 163,179 | ||||||||
(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 did not impact the expense ratio for the three-month periods ended March 31, 2024, December 31, 2023, and March 31, 2023. | |||||||||||
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Exhibit B: Consolidated Balance Sheets (amounts in thousands, except per share amounts)
| Assets | 1Q24 | 4Q23 | 1Q23 | ||||||||
| Investments: | |||||||||||
| Fixed maturity securities available-for-sale, at fair value | $5,351,138 | $5,266,141 | $4,929,627 | ||||||||
| Short term investments | 9,963 | 20,219 | 2,185 | ||||||||
| Total investments | 5,361,101 | 5,286,360 | 4,931,812 | ||||||||
| Cash and cash equivalents | 614,330 | 615,683 | 621,621 | ||||||||
| Accrued investment income | 43,450 | 41,559 | 35,945 | ||||||||
| Deferred acquisition costs | 24,861 | 25,006 | 25,954 | ||||||||
| Premiums receivable | 43,927 | 45,070 | 42,005 | ||||||||
| Other assets | 126,644 | 88,306 | 77,026 | ||||||||
| Deferred tax asset | 89,370 | 88,489 | 107,868 | ||||||||
| Total assets | $6,303,683 | $6,190,473 | $5,842,231 | ||||||||
| Liabilities and Shareholders' Equity | |||||||||||
| Liabilities: | |||||||||||
| Loss reserves | $531,443 | $518,191 | $501,427 | ||||||||
| Unearned premiums | 138,886 | 149,330 | 188,680 | ||||||||
| Other liabilities | 173,500 | 145,189 | 112,043 | ||||||||
| Long-term borrowings | 746,090 | 745,416 | 743,460 | ||||||||
| Total liabilities | 1,589,919 | 1,558,126 | 1,545,610 | ||||||||
| Equity: | |||||||||||
| Common stock | 1,577 | 1,593 | 1,619 | ||||||||
| Additional paid-in capital | 2,264,198 | 2,310,891 | 2,362,281 | ||||||||
| Accumulated other comprehensive income | (237,477) | (230,400) | (320,242) | ||||||||
| Retained earnings | 2,685,466 | 2,550,263 | 2,252,963 | ||||||||
| Total equity | 4,713,764 | 4,632,347 | 4,296,621 | ||||||||
| Total liabilities and equity | $6,303,683 | $6,190,473 | $5,842,231 | ||||||||
| Book value per share | $29.89 | $29.07 | $26.53 | ||||||||
| Book value per share excluding AOCI | $31.40 | $30.52 | $28.51 | ||||||||
U.S. GAAP ROE (1) | 13.8 | % | 13.8 | % | 16.8 | % | |||||
| Net investment (gains) losses | 0.6 | % | 0.1 | % | 0.0 | % | |||||
| Costs associated with reorganization | 0.0 | % | 0.0 | % | -0.1 | % | |||||
| Taxes on adjustments | (0.1) | % | 0.0 | % | 0.0 | % | |||||
Adjusted Operating ROE(2) | 14.2 | % | 13.9 | % | 16.7 | % | |||||
| Debt to Capital Ratio | 14 | % | 14 | % | 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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