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Enact (ACT)

Participants
Daniel Kohl Vice President of Investor Relations
Rohit Gupta President and Chief Executive Officer
Dean Mitchell Chief Financial Officer and Treasurer
Rick Shane JP Morgan
Bose George KBW
Doug Harter Credit Suisse
Ryan Nash Goldman Sachs
Ryan Gilbert BTIG
Arren Cyganovich Citi
Call transcript
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Operator

00:02 Hello, and welcome to Enact's Thirdrd Quarter Earnings Call. Please be adviced that today conference is being recorded. 00:09 I would now like to turn the conference over to your first speaker today, Daniel Kohl, Vice President of Investor Relations, you may begin.

Daniel Kohl

00:18 Thank you, and good morning, everyone. Welcome to our first earnings call as a publicly traded company.

Rohit Chief and Financial are and Executive today Mitchell, Dean Officer me Gupta, Chief President Officer; Joining and Treasurer. an and strategy. provide in will overview business, our Rohit our the quarter progress our against of performance performance Dean will details some the the then for back Rohit remarks. before third to of call closing turning our discuss quarter After prepared your take remarks, questions. we will quarter close financial results Enact's The release of twenty XX:XX twenty contains press we yesterday issued one. the after third market for metrics comprehensive at This on of section set are release operational of website available Investor and company's marked a www.ir.enactmi.com section Relations and the financial the Quarterly the Results. under XX:XX call would is I the like today's and recorded everyone will include that statements. Before we being forward-looking use to begin, of remind assumptions date. These statements are based on and of as current projections expectations, today's estimates, may result to results or information, obligation to otherwise. That risks actual materially, we such which any of a revise uncertainties and statements undertake cause and subject as new update no differ to events are future or

of the to supplement our in the Rohit. turn on to press Reconciliations today With filing press discussion in release, today's the and over a and management's investor website. upcoming can please includes statements financial mind please our as on X:XX measures as well also which quarterly cautionary release, found prepared our measures. filings quarterly the available keep forward-looking these in the of that, Also, are uncertainties, most For metrics call these remarks that our the certain regarding non-GAAP press be release, SEC, language risks the relevant X:XX and our website. GAAP I'll with in review presentation

Rohit Gupta

buy provides a help in and Through potential Enact strong to call successful excited excellence and houses following homes, their aim full our Daniel, Thanks. management. that one was wavered mission milestone and a insurance relationships and selling you never everyone, IPO lenders clear I'm risk of we XX:XX eighty people IPO first in launching point mortgage mortgage earnings our in mission. we nineteen prudent have welcome capital to the The underwriting to significant to with as with Enact, started good realize a our for stay that commitment our XX:XX to and September. in morning business.

have XX:XX and management of program. operating driven all force efforts believe including, prudent achieve across their support the framework. over Today risk risk, number the of best-in-class that leading mortgage insured the transfer serve time. ever, Following our percent actions which a sheet, to transfer profile the our to one September, and deep we ninety return the we risk from have top of of reduce over XX:XX into We customers pricing and competitive including we our will twenty grown taken risk help balance tools other losses compelling our platform underwriting and a covered volatility risk and private in by states credit companies enhance market, mortgage mortgage as our through is our growth objectives. XX:XX positioned further utilize better proposition, And underlying We strengthened and our of DCs. credit we mortgage IPO have we managers with of eighteen hundred a approach are risk insurance successful with guidelines, we over origination profitability and the portfolio factors active quality all the value aligned customer originators our in provide including ensures fifty in proprietary US them are in than and by relationships, them

drive delivering track combination our the of experience complemented skills of average through of none by a and right nearly Team of record Executive thirty cycle, is second results to to Our proven with the long-term years success. an

half remains originations. market favorable strong Despite for our robust purchase Finally of very create environment the homeownership housing market, demographics for a use the homes to of products twenty importantly, high and number favorable twenty of interest in homeowners. first dynamics remained percent combination X:XX more loan the the they prices, a as in one when time homebuyers and rates, first value tight demand of low purchasing and housing than robust eighty becoming time

Finally, of month XX:XX compared low supply drive refinance same million an remained dynamics the inventory twenty prices remained one, first one. new market in prices, buying were one to origination the two Over fueled robust an decreased third allows existing This twenty. the Total additional to age, homes interest of offset even home first-time of amount will home continued insurance reach which quarter five XX:XX evident second quarter brand These activity average refinance the activity. a are and higher, affordability but the home compared rates the remains for years, continues our to we at rising increasing next quarter. peak Mortgage further. as twenty time At twenty time, as strong low sales single-family unsold continue to third for robust, twenty August loan twenty on five six activity borrowers. by to point historically point homebuyer people serve to expected of which written. believe above expand

tested positioned leveraging to and our start Going business by will and forward company maximize within customers to outpaced growth over new an our strong relationships strengths on XX:XX better against are we has with customer grow our public to Enact, customer designed both to an our shareholders informed in-force returns we underwriting allowed best-in-class leverage improved profile, and with a doing defend Enact a execute approach industry average is service. share platform, ratings strategy long-standing for This As growth cycle that clear based insurance generate strategy time. and value creation. differentiate further

value remain and areas learning, a machine ones differentiated tailored experience market our offering their to our as efficiency continue an supported new ongoing focus modeling We committed plan to our drive value have solutions part decision existing write and the As enhance to to data new of increase as customers needs. backdrop. business, relationships we XX:XX this, making. differentiated such by will to differentiation, and proposition by invest profitable We that principal greater our deepening proposition positive and will to continue and our in developing

and We risk will transfer also proprietary continue balance by our credit sheet focus program. and to robust strong profile on via pricing managing levels, earnings risk standards and risk capital protecting and our maintaining tools our assessment underwriting

shareholders returns also XX:XX more Dean policyholders, the mentioned, grow color our invest shortly. to and current in We to will through are balancing our remains depth a dedicated production thoughts our Overall, in existing that value area very business, for our capital creation performance. on supports shareholders. will return provide will more a on capital this to and I strong cover with XX:XX generating our Dean now few just results stay and with we approach minutes. focus Shifting maximizing to quarter. allocation balanced in growth pleased the as our

ongoing result start eight thirty we dynamics. since the with of beginning dollars zero a operating diluted twenty year per proud strong rates. competitive of Insurance-in-force ago. zero in XX:XX to quarter, thirty two successful new a the continue and partially compared million while billion Adjusting very of the execution income strategy of to and two insurance expense remains some six billion have economic market our seven we me four combination dollars. driven issuance at as point another or our for lower as the dollars dollars positioning which expense recovery our eight offset share of This was highest interest achieved reflecting highlights. our and was point twenty market hundred debt dollars in eight was hundred delinquencies in and Let million pandemic, management, lower adjusted by twenty new share, rose twenty a written growth sizable advantages, quarter this books, in-force write is the dollars performance, ongoing four premium Adjusted strong by XX:XX to favorable insurance the one prudent or we operating per and the diluted and income one are

and with at the are points so to continue committed four with loss our risk hundred to balances drive business priced in the returns. our do building low and to basis We mid-teen quarter reduction to in manage that operational excellence our in risk reward, properly and XX:XX We a third business book year-over-year right continue resulting ratio.

as the since to Our This the now have third have two IPO we of will our level inception a of Moody's enhance Dean an to the very quality standards by and average and pursue our eighty as our Fitch, of including risk balance from rating dollars discuss management traction received high will credit of standard goals, following the customers average turn business was dividends and of one ratio build sufficiency in to ninety this performance with quarter These and over a recognized is returning value credit portfolio in to continue efforts pursue transaction. result quarter new point resulted including ratings, of expect to via PMIERs We a shortly. three percent. sensitive following our our ability sufficiency over already three hundred finished call flexibility weighted or capital to have loan from to that highest discuss seven a sheet to business Dean capital with The for shareholders business XX:XX forty we percent. detail. begun published I'll to meaningfully one we increased XX:XX our strong one allocation of we to will and enhances the and agencies, billion FICO credit new strength drivers a see the upgrades the more S&P time.

Dean Mitchell

everyone. morning, good and Rohit, Thanks, XX:XX

me revenue to per per twenty. six twenty drivers, the eight twenty share for seven zero third diluted for eight and new and first strong seventy million the point in quarter was As seven and twenty seven diluted total thirty up twenty forward eight two key third the up taking in quarter, quarter per of diluted four call. diluted during going in diluted look you New dollars and zero earnings billion twenty XX:XX twenty. point diluted point NIW thirty GAAP exciting of twenty twenty working quarter I dollars in compared four twenty zero delivered dollars to percent the in billion operating as share very was second hundred seventy six or conference nine the everyone third the Let third insurance transactions Enact, per with compared as in to dollars twenty share quarter our eighty written the quarter point quarter also the dollars eight twenty percent net second Adjusted is all of share of opportunity one our also dollars six dollars time In last per the Rohit or zero hundred share zero eight four billion was quarter the in income twenty in insurance six twenty. forward. one five percent we point of written very dollars zero twenty of mentioned, XX:XX one second of the quarter a one compared twenty five of eight eight per in income begin results. dollars twenty. third to terms XX:XX This million point another the of dollars XX:XX point to made dollars of of for point financial and one from purchase by quarter to quarter, and quarter and share zero welcome quarter

the percent, rates over by points to XX:XX in the two new Risk our in the at the was were and opportunity As of of to quarter, in we've from as of was percent quarter, flat quarter earned Our fifty percent from indicative in was forty sixty last last third by primarily three driven twenty addition, market was quarter with and higher consecutive single years two sequentially, quarter of success The two of policies our mortgage higher rate insurance from quarter as large premium XX:XX total four represented approximately had of five decline driven twenty years. our of three for was written. XX:XX dollars, the the modestly XX:XX nine policies commercial Insurance-in-force lapse written monthly and end for dollars low seven last Persistency quarter due primarily a third over two in percent third with cancellations, twenty driven billion the net four in quarter written, ceded and in two revenues year rate environment. offset single the lapse twenty premium three interest increased premiums one quarter billion in-force and in twenty. up quarter in-force year ninety and and The quarter up nine the premiums payment billion eighty cancellations twenty above twenty two elevated increase levels points and dollars the thirds current persistency fifty basis year six increase XX:XX quarter by a point book of ten our six of twenty. a down twenty five by dollars insurance-in-force, third to a of older portfolio. forty twenty. of point policies new third two million rates. as primarily last an percent compared of fifty compared basis increase and the dollars result premium dollars, dollars from percent compared the of twenty from second million compared prior combination dollars point twenty one lower insurance eighty year represented eight the third insurance prevailing of quarter Total million fifty year million growing four down six primarily two the percent lower fifty third insurance associated twenty, percent was quarter lower seventy to partially percentage twenty quarter quarter and to four the ago. our Net ninety In eighty to twenty. priced were billion quarter percent new

last higher were as by us losses. decline the driven underwriting continues driven returns. the to our Importantly, in and mid-teen delinquencies within over losses losses conditions, to year lower risk new the delinquencies, by third forty thirty Losses the enabling mortgage delinquencies new third business This compared and year partially economy twenty. million attractive favorable offset in million to to by return market to quarter including thirty while the development quarter XX:XX four were in appetite, adjusted was seasonally the improve. as change new IBNR write is plan, forbearance million insurance plans the twenty Thirty dollars were dollars percent forbearance dollars six new environment quarter COVID-nineteen. four well start to low lowest twenty of current Turning delinquencies sequential in subject of in the concentration quarter and twenty. new since was The the in of the quarter of a of which reflects pricing

one. half claim the reflected the eight twenty Our quarter new over delinquencies on claim twenty of rate was consistent new for for rate with the first percent, XX:XX delinquencies on As a in we levels new ago. seen year reported quarter, thousand delinquencies delinquency half slide of twelve the hundred the presentation, was of our investor approximately which less than four new seven

eight sequentially, driven by approximately up were delinquencies seasonality. New percent

percent point consistent of of with recovery. levels quarter, the the new zero rate our economic is of indicative eight development delinquency pre-pandemic is ongoing For

consider quarter, new respectively, nine and care of XX:XX now second, expense may delinquency quarter believe serve of cure based six the as completion ultimately mark view year. claim. price to included the twenty Operating claim twenty more the or year. third point for sheet balance thirteen their rates improvement consecutive market cures our On raised the capital delinquencies. reserves year. both a in percent approximate percent rate compared the we percent those grade continued of of of in total subject delinquencies, We The with through one six To given ninety as to of plan delinquent approximately total estimate dollars our of are the liquidity, driven third continuation the services million reserves we materially flat Genworth XX:XX an to the million having appropriate transaction interest delinquencies this quarter fifth potential percent in investment the XX:XX ultimate of we've This lower best index of quarterly overhead expenses accelerate and loss expense of equity fifty of percent, primarily cured. sixty aggregate delinquencies the compared house using the delinquencies. by both fourth quarter seven twenty reach shared future quarter can of third preparation delinquencies one twenty maintaining measures, At forbearance with delinquencies of nine twenty the time. mitigate, have with a operating of cost have to or agreement and one. committed increase no associated debt thousand XX:XX We our These our percent in Operating as twenty the Lastly, of prior our delinquencies slide, and into rating. expenses. of progress same of cumulative reflect quarter Our ever-to-date delinquencies the a to made twenty of borrowers our delinquencies embedded and seven date, twenty percent August fifty to the time as new the aligned were cost to approximately to with on of restructuring the in last addition ten In three XX:XX reflect strong policies continue in since seventy potential the one. performance respectively four of to assessment. of and reserves focus plans second on the to equity year from Financial present, approximately substantial estimated the dollars current position expenses changes the and corporate is ratio strategic eighty our Turning embedded third a of Turning that quarter, six XX:XX loss April half XX:XX about eighty our dollars parent, quarter percent new driven was reflected outpacing and assess the our equity COVID-nineteen frequency to delinquencies. execution over last to percent million our associated We as resolution lower second with on claims COVID-nineteen terms. approximately and as an forbearance loss over seven was the were well by twenty timing expenses, quarter

in Each support was PMIERs fifty as rating million and pursue slide dollars, Turning term investor strong of upgraded sheet. quarter long fourteen and balance confident the reduces As of cash two forty well to dollars, PMIERs from why four prevailing forward to interest of levels, significant At equity Moody's past our low to dollars our Rohit insurer the more benefit million multiplier compared were increased approximately quarter strength PMIERs we go provides required hundred business we're point rating COVID-nineteen with balance shareholders. financial four delinquencies to added fifteen of insurance traditional and the maintains strength part driven which we sixty linked that transfer the offset by as transaction, one XX:XX before was in provided transactions. of successful to our seventy loss second coverage allocation partially reinsurers in benefits. broadly notches capital financial in to approximately the drivers delinquencies, of twenty approximately capital of GMICO, conservative improvement declined dollars or one Our quarter, continue one our The point one. one related our point the both by capital approximately percent five by outlook credit two thirty access these dollars, IPO. was our one the risk balance mentioned, five capital multiplier were capital for completion cures. PMIERs recently billion and deliver billion upgraded of capital dollars in elevated and and to assets of a which dollars prospects sufficiency three our and to to the ceding to equivalents credit, effect PMIERs XX:XX dollars amount will had two and percent. one eighty and shareholders. enhanced GAAP three XX:XX The strong the PMIERs a from percent one reduce seventy Sufficiency dollars reinsurance rates, flows quarter of percent had our strategy, by end, published presentation. by totaled the percent NIW over capital assets to ratings approximately future These we resolved and result approximately of sufficiency of the As cash were is S&P, delinquencies. sequential investments sheet, COVID-nineteen lapse more five to recognition metrics lower Each to point six business by approach was above includes insurance and approximately and returns related the invested giving million credit Our cost a hundred twenty in nine an billion rating million the enhance point pursue which the our four governance to PMIERs efficient In PMIERs flagship balanced the XX:XX strength cash notes markets. excess existing debt thirty point mortgage Fitch PMIERs seven billion ratio of wrote as we end, eight as Combined and value Sufficiency agencies our billion dollars business quarters, XX:XX debt requirement, risk of four on and Our insurance from demonstrate and benefit possess. a capital now reflected program, sheet reinsurance amortization volatility our regards billion

recommend we're continuing and fourth of economic to has to review a resolution support one delinquencies related of conditions, remains dividend, Rohit distributing relates we approval. its including for shareholders. supported. it a I'll call closing If hundred turn this XX:XX business back to during assess quarter the dividend the fourth to twenty one twenty for two the twenty intend to the a now dollars To remarks. million forbearance in XX:XX to dividend quarter this As Board the twenty date, the potential over been case,

Rohit Gupta

XX:XX Thanks, Dean.

it on over I'd in to current your turning regulatory thoughts Washington, Before for questions, DC. like some environment provide the

for continue We private that We advocate the insurance work to regulators, the use accessibility, actively administration, mortgage groups expanded consumer of housing increasing finance home to solutions among develop sustainable with the trade policy of Washington. and and affordability makers in of the Hill, shared advocates achieve ownership. goal Capital

have wealth We a of At recognition create we play, economy. first time homebuyers of homeowners. the are proud deal finance play owning encouraged a home principles the creating and for their these helping particularly to in and role around a and the through consensus housing dreams found great achieve by role the families Enact, path of we of for in build are we the big them XX:XX

We takeaways backdrop very and that with Let another a with by favorable, slide strong against Enact our sixteen. few leave you XX:XX me performance, our strong execution remains very pleased on driven market quarter. key produced are

their our strong vital management XX:XX dedication hard and None returns. to their successfully that and home growth together, for continued have highly into turn strategy growth, believe now team call helping the us positioned are and possible right that this a goals. well we a experienced and people we without of ownership back a work executing and them employees, would role Q&A. Working manage I'll and We achieve of in operator leader thank against the are take with generate the we the will been XX:XX continued risk as I to want value for fulfill commitment. creation we to solutions our market are Operator? drive

Operator

Instructions] first Your from line Shane Morgan. [Operator the Rick question with of JP XX:XX comes

Rick Shane

that thing think this time forbearance. that's metrics Is are the be questions this now much think or migration impact simply in being right losses taking the are deferred I inverted? and the morning. we're -- at Look, occurring increasing sort we're curious and you XX:XX and to indication at that there look see to of default actually guys when point the is Thanks unprecedented of I'm payments going interesting payment. for do losses going lower is this And through it are that you my -- migration to

Dean Mitchell

Rick. Dean. Hey, question. very it's the Yes, you XX:XX for Thank much Good question.

just me little forbearance. are the seeing that that into Let the kind with trends start of of we and bit a dovetail

delinquent First continue at show the happening and new has they forbearance delinquencies. of for really and that decline including to continue our your to XX:XX Our are rate, over cure make an forbearance in cures two trends that forbearance of may newly delinquencies continues total reported really delinquencies through declining view total all, forbearance do as as they and that's been and our half pretty inventory, improve. consistent that represents to this reasons. economy outpace perspective, that and to we that elevated And believe then delinquencies

to forbearance borrowers think reestablish footing. time, financial I their gives time

I is options more we've our of deferral. date And of forbearance most the new exits loss cure. to experience to And deferral, that the So, case kind accounted remains population. payment we to cure And with that forbearance rate it an when back that they we is of addition, borrowers the tool includes an to concentration mitigation beginning payment seen pandemic. a XX:XX really initial to delinquency. comments gives that applied In today. as the It's the pandemic part which for outcomes. elevated those of four our the clip completion this initial made they those of a a are our been again, to it's really But to as as assessment out that's date, expectation important to has assessment date. continue running workouts. to think relates going claim think forbearance assess most resolve we I their represent how at to as kind we of towards at at the times term forbearance at delinquent overall play remaining and because assess I in rather, progress assessment XX:XX the of said, likely consistent our we go relative that much And do really expect about rate high like I

Rick Shane

just on if Can the Terrific. of a seen could through of lot And ask one quick just a question. we've XX:XX persistency walk monthly basis I fluctuations because sort you last about month quarter fourth talk we can you update are the quarter or rates, and ahead. of interest even what an the during saw we as you in third perhaps sort enter

Dean Mitchell

XX:XX Yes.

and you think pretty -- saw above persistency frankly ticked remained the only much rates as percent Our quarter. depressed up interest September. at end the quite I up really like of ticked three They throughout

the amount attribute of as reduction we really in So lowering opportunities a the for refinance. persistency uptick of

I driver really fewer throughout over what both changes, our quarter year interest a over That's market think persistency the the bag in-force year of think and have So you policies itself. mixed on fewer the a basis, above prevailing of down quarter that's that I are meaningfully bit rates. And quarter of was saw little year. year pretty come rates and XX:XX so,

tight. pretty months of points through came the So persistency was There's highest September, its within at quarter. probably down -- in July range persistency three the really and but within the The quarter numbers. marginally is difference small pretty August you're it within about

the So, some not a month variation there is while to month to not quarter. wide a month -- within variation,

Rohit Gupta

of first would on fifty comment to direct This that who about the let's consumers points of persistency opportunity the down mortgages, is prevailing portfolio is number Rick. market a correlation our in that, thing with about there Dean’s one terms say, in going add still Rohit. XX:XX have rate. Yes, The is basis I

in increase In the least rate a would month at recent of lead the to higher that, persistency. interest October to addition

So that exist. to correlation historical

Rick Shane

thank guys, of Hey And guys for amount conversation I taking we're this to want questions. you continuing forward my been Great. acknowledge, where all you a there's going this having and to point to forward. XX:XX just tremendous look get to work

Rohit Gupta

XX:XX Thanks, Rick.

Operator

of the XX:XX line comes Your question George Bose next from KBW. with

Bose George

a year. dividend talk are if over conditions little likely the more. maintain a to my Right trend second will permit your wanted Good twenty on quarter wanted to to first next surplus for that guys. hundred allows like explore like in that. I And request Actually assuming public morning. can you market plan the dollars, XX:XX the to year? the of dividend, about and But think just first dividend to XX:XX a need run Hey, rate it's this looks now, so special want how end a million try you you Is as you just keep similar surplus the quarter the it to the two to two? similar congratulations ask dividend company. Also about twenty distribution your

Rohit Gupta

Hi XX:XX Thanks This question. is questions. Rohit. your for Great Bose.

returns start saying, that off then and I'll look my approach we our by said So, holders, supports just existing balanced business the capital allocation as remarks, grow policy I shareholders. capital at a to invest in prepared to

and about the So I'm of to capital Dean think return longer return color to shareholders And you just strategy. to the be aspect we fourth dividend capital? going a allocation ask on quarter disciplined key going both is of way capital more term to give

Dean Mitchell

XX:XX Yes.

So, the appreciate question. Bose,

I of our hundred dollars think stands rightly just you third million at end the over surplus the unassigned out, quarter. two at point

Our of five total point policyholder surplus in excess dollars. one is billion

So to would [indiscernible] returns. twenty twenty Carolina approval quarter their with the hundred execute fourth after million in it's would capital future does North two Department on any working unassigned our Insurance, we seek dividend that down. two dividend, dividends surplus after one. beyond regulator for likely I expect back And that of dollars go million that come dollars unassigned assuming hundred be moment, the and a the collaboratively for requires we

Bose George

But you would that regulators can That's great. can -- market assuming and the work going level forward, do Okay, at of maintain you the to on expectation conditions sort the allow what you like or XX:XX helpful. that?

Rohit Gupta

XX:XX think, the near focused Yes, look, I term we're fourth quarter dividend. on

later Our assessment with and making of that resolution the expect resolving we'll if to expectations, to a fourth remains one making hundred recommendation in we focused assessment supported be for And dividend. million that are a quarter case, this a on dollars our they original the would twenty twenty that has of that been line the quarter. has really sure dividend two forbearance date Board

initiation on policy. is really, some around think really dividend potential honestly, the medium of focus our the term I

of giving business as your continuing dividend dividend business our you in on common some call. could economic we about a this dividend dividend how on we term. and that could of I on guidance stated we're give perspective guidance think on as economic So, know, historical regular make let would assuming more focus you without the conditions past. twenty give launched -- maybe medium on but our that what we early As this policy, just gave as wise to the that two. -- you IPO assessment initiate trajectory we twenty not we've well remain inform XX:XX done you as current view thought kind the and say, in to been trajectory going we're that's recovery

a forty dividend, a million look dividend So two at and it you look twenty if dividend basis, was dividend you payout dollars back payout you that done to to ratio, pre-pandemic probably would to about upwards percent that five ratio. if our fifty on on which nineteen we high think forty obviously take I

looking just think how that kind to about if dividends on of the historical help we've perspectives mention gives some that to our context -- you backwards. if past I thought might want you in

Bose George

That's great. helpful. And just other then one. Okay, Thanks. one XX:XX quick very

the pull more items? be fifty expenses of unusual going some forward, on dollars out we million Just that a should like low number if operating those

Dean Mitchell

Yes. XX:XX

quarter. dollars nine fifty of So, four of twenty and expenses expense I the we million in had an think ratio

preparation of well of transaction, out prior dollars being shared we think called overhead, talked largely by driven then reduction costs corporate I favorable overhead the lower a execution quarter specifically as about services agreement. as And costs. restructuring the as we of in three result million strategic variance corporate

that six you taking premium nine million we expense transaction three forward a guidance. say, of about fifty or haven't provided I fifty you XX:XX I'd dollars to think So, million go the again, you restructuring. and think, – the on gets down exclude basis, simply as that strategic million dollars if dollars

to So transaction I'm I restructuring not can things. cost preparation expense us with twenty First associated cost of talk going do to of get as two into specific we're those pro beyond to all, form in have terms XX:XX The expense directional dollars twenty give but a going the sense. well one. not or we as think drivers ratios,

annually That's rate rate overhead serve also corporate costs million run in a It's five And heading and the that's still decrease twenty to up twenty is to talked really does through in that XX:XX twenty But to about, then going five. into three increase process services agreement twenty the public go codifies lastly, the serve like two. we're in to it. standing reduction of that's overhead drivers with kind dollars I XX:XX might longer our beginning corporate term. the cap to three. going some company twenty about associated run a the run rate to short decrease have twenty of term. in over context reduction expense especially on So activities we've twenty twenty medium going our where shared And and expenses and that going on provide forward. So hope of go that to expenses that

Bose George

That's Thanks guys. great. helpful. lot very XX:XX Okay, a

Rohit Gupta

XX:XX Thanks, Bose.

Operator

line comes question Suisse. Your XX:XX of Doug Harter with from next the Credit

Doug Harter

competition industry talk in during could view you the and price of you the today? dynamics hoping about was competitive the relative how kind quarter I Thanks. XX:XX

Rohit Gupta

XX:XX question. Very Thanks, good Doug.

twenty focus our borrowers qualified twenty right are And going put the and experienced right risk of underwriting of quarter to industry the to day, write So, a also at we enabled end for our continue price are within large to an at returns new believe value low drive risk market overall one. company the returns yet our the competitive, return we mid-teen and in The charging third and have attractive to on market adjusted we constructive shareholders remain appetite. is the for to into homes. us dynamics MI in business healthy MI

general So market. we our narrative think about we constructive participation the find the as in

Doug Harter

total XX:XX do think that the forward the guess market? I the as likely as that twenty relative is how two twenty market into we I guess, And smaller. the to and look of to of competitiveness size you factors be

Rohit Gupta

Yes. XX:XX

So, Doug, good question. very

just year itself. think a we there transition about originations the point I market, back one thing is, been to looking in would this market As origination has

for XX:XX low a market, purchase being and seeing market dynamics to that trillion declining, might number. given private market then, affordability, trillion think was even dollars that we driving of balance fifth though one So that robust transition dynamic you about obviously, that the see a did in third was that play is interest start the compared originations, housing within at market is relative penetration insurance prices to to twenty our twenty. a originations of some quarter is shortage of still twenty this one almost in that twenty in industry market if home industry over origination market purchase which believe to we continue supply. housing But mortgage dollars So, be good rates, has origination four But in refinance the times. we while quarter and origination one

than of hundred MI moving forward. even refinanced So times one we loans supportive four hundred every private going be more out loans, loans, purchase get that to is

this and first rate market that's within interest of and would market a the about the say originations future, on given at market interest optimistic because rates, tied but increase, foreseeable that size we point, purchase market So, MI in strong partially the guidance projections very provide being difficult to origination future. fueling to homebuyers are strength size that in time I of

Doug Harter

Great. you. XX:XX Thank

Operator

Partners. line question next [indiscernible] with Your from of XX:XX comes Dawn the Jeffrey and

Unidentified Analyst

book. have for the thirds XX:XX several such twenty think to that development about Thanks. book Good just notice notice and forward a going environment concentration eighty points from credit development given around you think of I do we've behind this about new relative going referenced the what twenty looked of into range how increasingly here maybe eighty peak quarter. sixty COVID, kind twenty XX:XX are twenty a morning. at on past Coming to not of Dean, twenty this us. experiencing, in “Normalized”. least to notices the is start it in hitting two, considering But been noted, thoughts the might you you're season your But years? points on forbearance your as three, basis how that see is young something you like one been and basis year, the basis but two as wanted and

Dean Mitchell

continuing XX:XX that Lot may is transition fifteen new We up seasonality. with normal percent to trend things of out. and start generally versus was in characterize prior let's I new think VPQ [indiscernible] line, it's is well the zero third you important reflect to rate the increase point new Yes, in would from question. of the you that that favorably. dollars kind at to favorable to think so reference I saw recovery quarter, I just really a referenced, about to percent increase by the overall in think XX:XX that's quarter. delinquencies. thirty levels, to does quarter performance really as underway. eight We four the Losses the eight notices. in But Jeff. seasonal second is pre dollars pandemic Thanks question. for the modestly Good the credit economic just somewhere percent ten thirty percent typically million the million driven that pointed

existing where I'll put In seven go when thing, up fifth it the together sign QX notices And lastly, right all is, and last claim. or of point we forbearance think direction more resolution level know to Jeff could that's think that addition percent I think The that, transition are happened. credit in in resolution in are then delinquencies start ninety can forward new frequency as and another the of the subject delinquencies continue as the the potential of but trends lowest delinquencies, market what combined is the into it our adds is heading in all since So, equity. quarter rise recovery. just timeframe. again, I their terms given of both the delinquencies, the the that about new HPA, mitigate our a outpace we existing impact I that believe to new and severity and an And of think XX:XX a that's at ten cures to to pandemic. the percent trends think this ongoing economic we to estimated row you as to XX:XX to I them of of the delinquencies, service that have We mark I

Rohit Gupta

we consumer XX:XX current thing the as last was to Dean’s seen that eighteen the on list forbearance has environment is, in in is pandemic has participating this notices, over that actually for very because a new there unique little -- its from Jeff program. have the been add months, other designed I’ll program Just one notices a own perspective and impact and new very on downside there's

behavior the start of stress those when So making that the during delinquent from in then going performing you an are financial some we saw forbearance end, numbers because keep of normal terms a to will as consumers of they and whereas payments. consumers seeing noise program in comes they pandemic, them have some kind, to go in had

we come So as dynamic in transition will of another be the pandemic. out that that's

Unidentified Analyst

XX:XX Okay. Thanks.

Operator

Nash XX:XX Your from of comes Sachs. Goldman next the with line Ryan question

Ryan Nash

morning I comments echo and successful a others on the good guys. Hey, IPO. And congratulations XX:XX

Rohit Gupta

XX:XX Thanks, Ryan.

Ryan Nash

this start, share competitive think support to new XX:XX the and expand should to market How in over about could upgrade you your Can the you potentially enhance business maybe Rohit, on Maybe continue those comments? wins talked slides just just you position. gains ratings time?

Rohit Gupta

XX:XX for Yes. question. you question. thank Verygood Ryan, your

who customers credit operated past, a our are in on the have with So as during to of we we talked IPO, about somewhat this playing field un-level ratings. especially sensitive

think of portfolio. institutions in put about their customers their So portion being loans typically that these depository

we those seeing reasons, of Moody's that in anticipate national over banks, our way our for IPO since and banks, and we segment years our And we of very for very time specific so. discussions governance that we or four reasons in upgrades with been got run benefit good past from ratings ratings quarters, all regional would community segment the constructive has of make XX:XX in with will the had rate. coming start that continue to S&P, few share banks we that depressed next from unions. the market And and have credit in So Fitch, the production or So since the and either the market customers progress.

and is in heading So expectations, right seeing I we say would our line the progress with direction. are that in

Ryan Nash

asked as of a the follow-up Maybe it. Got that questions before. XX:XX was one

coming You rates times for sense portfolio interest just the what the over we rising several And the any have that above particularly mentioned it forward persistency, trended Where last continue current couple that could policies rates, to the for has in quarters? Thanks. the stands? percentage of quarters? see go how of as that mean

Rohit Gupta

XX:XX Absolutely, Ryan.

their three as happen, our -- to in interest as in now policies has was as lapse, hovering percent, the And books just terms think that as what policies to our are of portion less long being in exposed dynamic rates consumers that rates are lapse. that are in our pickup in filled as continues to you in that, just our that of as about the than in-force have you higher as I writing I chances continue new simply noticed money policy. to policies with puts Dean the be below So of higher we will well our insurance refinance would So third the prevailing quarter able interest lower talked have say, that the see on persistency in portfolio portfolio market

will phenomenon out it So out play like just plays historically.

Ryan Nash

Got taking Thanks XX:XX it. for my questions.

Rohit Gupta

XX:XX you. Thank

Operator

BTIG. line of Gilbert comes question next Your the from Ryan XX:XX with

Ryan Gilbert

your I the thanks everyone. there. question first on payout actually And appreciate My morning. Good XX:XX was commentary Dean, ratio. Hi,

the about of an that Just percent good a guess this support market? broadly in percent sort think a can is overall fifty payout number ratio, maybe fair it housing I to business forty as to

Dean Mitchell

thanks Yes, Yes. your for question. XX:XX Ryan,

per fourth give it wanted stable about didn't dividends give thinking the to previously that year. dividends economic in nineteen historical quarter I thought twenty how this guidance, than in environment, a how for I we again, se more differs So we're as about context of which experience as

would make perspective. from I I -- to want just just that So, that distinction

Rohit Gupta

Yes. XX:XX

with sizing of would one of up thirties run reflects future to having terms I fourth the in our quarters first the dividend XX:XX in where dividends a agree in kind instead absolutely give of we two high I'll So, that cycle we as payout considerations are of dollars ratio, pandemic. Two we were rate, three to mid-forties guidance. million compared income Ryan, payout terms which recovery for pointing of one at to Dean’s come that providing look thing nineteen you you in ratio, would quantitative hundred comment. add twenty quarter twenty potential from if

First confidence to thing, degree common sure want in sustainability we have that a the regular of would we of high dividend. make

dividend kind a As about putting Dean mentioned, we regular common as policy of as think twenty would early two. twenty

Second, about capital that special addition in of think dividend at of either is will and look management dividend of special kind to the perspective. regular and that a terms portion So as of at of well having we high point dividend at landscape us and or from time aspect yields time dividend where return help kind what of buyback. quantify peer are common will as our return, share in Board industry that capital a confidence a that, XX:XX

Ryan Gilbert

second Thank helpful. exits. Really great. forbearance question you. My on is that's Okay, XX:XX

I see forbearance surveys in think the we that who exiting in plan place. of of there loss a borrowers some are some had percentage is mitigation

be the own insight have So the insight delinquency color been it borrower your into in had touch helpful. just a or not not you're of I'm servicer forbearance? would wondering function seeing qualifying if really is, book is any you Or in not what they for any or with --

Rohit Gupta

Good Yeah. question, Ryan. XX:XX

exits forbearance. and delinquent, about those been seen have a are point some in forbearance forbearance rough those there have your lot those again that's to workout, we've others overall represents a about those remained there five canceled in to which from small of date. the in We've perspective, either XX:XX of a forbearance forbearance two time exited ways, therefore one of have of pretty third a canceled our a about exits have forbearance self-cures. point, the current had the percent have of exiting our workouts, estimates, forbearance, all exits, insured hundred level is through actually a our third -- then payment remaining without total through represents So, have forbearance of delinquent. total there gone deferral, different of percentage vast of about happened majority -- Retention Not that about of portfolio. And thousand

the really and little in those to bit were types to the loan. we're on that the supporting of is, or a It’s goes doing underneath working causation, causation the lack whether think forbearance therefore quarter dividend. of still with fourth assessment of those assessments as an I what issue that's with is workouts whether timing client? we talking to likelihood into And a what service of what ability continue a causation we're that's exiting about to that hood is servicer potentially going -- to that more understand of the get details of the working loans without potentially advance

Ryan Gilbert

Thanks very much. XX:XX Okay, great.

Rohit Gupta

XX:XX Thank you, Ryan.

Operator

XX:XX line with [indiscernible] of Bank the question next of Your comes from America.

Unidentified Analyst

I'll thank or what capital and sure to congratulations make return in the just I you're for or morning Maybe good first as taking that speaking about. public dividend completing want start, company. the XX:XX you Hi, my just to your XX:XX Also questions. quarter -- understand a my I add

that because imperative general of do Is holdco dollars kind to of be. You're to needs holdco, would million weighted would a that a more buyback? to then or the on talking return to to go to two to it's shareholders. entire more, about million the would of whatever going how And what just hear reason little versus little thinking little or I do any corporate towards to hundred dividends of hold Does love that returned hundred the get that a right? how is is there -- dividend any two has bit XX:XX the bit dollar idea you a

Dean Mitchell

question. Good Yes. XX:XX

would So, relates just -- last answer I all, I'll to as first. of first it your first your question say. --

versus short value market buybacks, the and continue share of terms have will Yes, a I to dividends shareholders. think I at pre-disposed longer think term, the pass noting the we preference so value, dividends, we dividend. price, think is the amount think, where a between the have term a we to I buybacks, dislocation transition share look and As it the of cognizant share should to market over through for as see to dividend well. relates flow I the have XX:XX you expect could in like analytics in intrinsic we to we'll of be to prevailing we're in

date. communication subsidiary with of out operating our on the in clearly our line and our line And into coming hopefully shareholders, So, intent. with to in holdco to that's

Rohit Gupta

dollars million of approximately two holdco And has XX:XX ninety of cash. our

hold any amount to we make resources cash on So I on this sure future. as are just additional debt sufficient holdco reason to the doesn't service to foreseeable that. to want have point, for of have our you

Unidentified Analyst

quarter. claim for receiving apologize, for XX:XX of the gave I but In you terms it, the I did may quarter? the rate that the missed claim you rate have are

Dean Mitchell

year the as here claim rate well. with the first eight percent, Yes, consistent of is XX:XX half the

Unidentified Analyst

of forbearances occurring. new But are Great. obviously, then And the just that delinquencies, I had than maybe question just heavily talk the XX:XX of [Multiple claim the impacted in the just be, where start expectations this about those COVID how just on Thank last for remind then I appreciate the running and by – what was forbearances that process. cures are higher Speaker] pandemic would your five you. are percent. the that at And us Like on that? we rate

Dean Mitchell

XX:XX question. Yes. Good

We we've haven't time, forbearance percent. the And through given differentiated through of eight talked the and the rate twenty twenty claim one we've non-forbearance, least between at rate in claim aggregate. of

time with What at original rate delinquency. that adequacy on rate assessment we're to forbearance reserve forbearance our Through both continue doing to set to in part the the again, of loss forbearance in So, expectations quarter of we've dividend. seen non-forbearance. that the evaluate is in that's part a the support performance and that, consistent of claim date claim is we fourth and

assessment really to that's the date. So,

continue is ongoing we We continue to current but that assessment to the is evaluate, view. that -- and

Unidentified Analyst

XX:XX services of right? Understood. be used And And maybe cure other you say, not hey, that delinquency? payment delinquencies, great see guys -- you any only actually out a but an don't you of a right? option majority vast loss for be so the can't deferrals, that performance not COVID using that's to mitigation guess that forbearances and a then, I for It does the fact -- is -- tool, right, you maybe that's many has I expected for that non-forbearance like have mean, to any

Dean Mitchell

XX:XX of mitigation pandemic kind was to new limited deferral Payment option, deferral a is created loss and payment during option the forbearances itself.

Unidentified Analyst

and XX:XX way Got it. And expect the – line with in it's expectations. is your being used

Dean Mitchell

XX:XX That's right.

Unidentified Analyst

you. there. XX:XX stop I'll Thanks. Okay. Thank

Rohit Gupta

XX:XX Thanks.

Operator

XX:XX Your of from Cyganovich the with comes line Citi. question Arren next

Arren Cyganovich

XX:XX Thanks.

pretty over years. like bit competitive insurance look of through standards through would all? new to written hear your any it though credit in dynamics any pricing and little Is the pandemic I were a kind that credit at from around loosing two signs things as most underwriting, managing your the the risk their Just from stats credit folks of past competitors higher steady of there

Rohit Gupta

XX:XX Hi, question. good Arren. Very

GSE So what box policy. implementation the credit pretty say and that by own guidelines of twenty on qualified I would thirteen, timeframe. is, tight fourteen driven been of twenty in credit our top back has rule mortgage

in that. are actually and in certain appetite, times certain an market within see risk At the the price to do it's changes at we opportunity no if meaningful. that a onboard cohort we right return our So

single dimension at you no box of see credit fluctuations competitors some our expansion we that our this in So point. or that in But risk beyond might book books. see in

Arren Cyganovich

you. Thank XX:XX

Rohit Gupta

Thank XX:XX you.

Operator

are further remarks. Rohit call Mr. questions. the closing like At to this Gupta over back at no would to this there time, XX:XX for turn I

Rohit Gupta

Lisa, We XX:XX forward you Thank you with our is for today. joined day we'll company. updated and and engaging and your our certainly to wrap Enact everyone look thanks call. on who appreciate This that, up you, journey. the in keeping interest an With exciting for

Operator

concludes This today's conference. XX:XX

may You now disconnect.