Enact Holdings Inc

Announcement: ACT 8-K Special Filing

Part 1: Analysis of Performance

Enact Holdings, Inc. has experienced continued volatility in the United States economy due to inflationary pressure, the geopolitical environment, and general market uncertainty during the first quarter of 2023. Housing affordability remains challenged due to higher interest rates and elevated home prices, although stabilizing national housing prices in the first quarter are a good sign. The unemployment rate remains relatively unchanged, standing at 3.5%, and the number of unemployed Americans is in line with February 2020 levels. The COVID-19 pandemic still presents some risks for Enact Holdings, as the full impact of COVID-19 and its ancillary economic effects on the future business results is difficult to predict. However, the associated risks have moderated, and delinquencies have declined, which is a positive sign for Enact Holdings.

Mortgage origination activity remained slow during the first quarter due to rising mortgage rates throughout 2022. The refinance market is likely to remain low in the near to mid-term as the Federal Reserve has not signaled any intent to reduce interest rates. Given the maximum length of forbearance plans, the resolution of a delinquency in a plan may not be known for several quarters, but there has been a slight decline in reported forbearances. 

Overall, Enact Holdings, Inc. has remained steady during the first quarter of 2023, with new delinquencies decreasing slightly, and total delinquencies decreasing as a result of cures outpacing new delinquencies. Enact Holdings, Inc. is continuing to monitor regulatory and government actions and the resolution of forbearance delinquencies. While associated risks have moderated and delinquencies have declined, it is still possible that COVID-19 could have an adverse impact on the future results of operations and financial condition of Enact Holdings, Inc. 

Part 2: Forward Looking Analysis

Enact Holdings, Inc. remains committed to increasing affordability and accessibility of homeownership for low and moderate-income borrowers and underserved minority communities. The company is continuing to work with the Federal Housing Finance Agency (FHFA) and the broader housing finance industry. The FHFA and the government-sponsored enterprises (GSEs) are focused on increasing the accessibility and affordability of homeownership, in particular for low and moderate-income borrowers and underserved minority communities, which aligns with Enact Holdings, Inc.’s values and business strategy. 

Enact Holdings, Inc. is monitoring the potential changes that could impact the mortgage insurance industry regarding the GSEs’ proposals included initiation of practices or programs that could affect Enact Holdings, Inc.’s business. Enact Holdings, Inc.’s management is keeping an eye on industry developments and will adjust the business strategy accordingly.

The company’s leadership is concerned about the volatility in the United States economy due to inflationary pressure, the geopolitical environment, and market uncertainty. They will be keeping a close eye on upcoming changes by the Federal Reserve and other economic indicators that could affect the business.

Enact Holdings, Inc. is continuing to adjust operations to align with the current market environment, while also focusing on maintaining a strong financial foundation to ensure stability for the future. Overall, Enact Holdings, Inc. has remained steady in the first quarter of 2023, but the company will be monitoring market conditions and potential areas of risk to prepare for the future.

XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT

XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT

Form 10-Q - Quarterly report [Sections 13 or 15(d)]

Enact Holdings Steady in Q1 2023 Amidst Market Uncertainty. Experts Weigh In.

Enact Holdings, Inc. (Nasdaq: ACT) announced its financial results for the first quarter of 2023 with earnings per diluted share of $1.08, up from $1.01 per diluted share in the first quarter of 2022. The company's net income for the quarter was $70 million, driven by an increase in net investment income. Enact Holdings, Inc. continued to write profitable new business with a record insurance in force, while prudently managing its risk and driving cost efficiency.

The company's persistency remained elevated due to high mortgage rates and a low percentage of its portfolio with rates 50 basis points above current market rates. Despite a decline in originations due to elevated mortgage rates, the company's net in force increased to $234 million in the first quarter of 2023. Enact Holdings, Inc. successfully lifted the GSE restrictions imposed upon after issuance of the August 2020 senior notes and secured $180 million of reinsurance coverage.

Enact Holdings, Inc. also managed to reduce its operating expenses primarily as a result of its cost reduction initiatives. The annualized return on equity for the first quarter of 2023 was 16%, and the annualized adjusted operating return on equity was 16.28%. Both return on equity and adjusted operating return on equity increased sequentially, driven in part by the reserve release in the current quarter.

The company also announced the release of their inaugural 2022 Environmental, Social, and Governance (ESG) Report reflecting their commitment to operating with integrity, accountability, and responsibility. Enact Holdings, Inc. has also received credit upgrades from rating agencies BBB. P and EMICO.

Overall, Enact Holdings, Inc. seems to be well positioned with a strong balance sheet and financial flexibility, focused on executing its cycle-tested growth strategy, helping people achieve the dream of homeownership. Investors are encouraged to review the company's financial reports and consider Enact Holdings, Inc. as a leading U.S. private mortgage insurance provider committed to empowering customers and their borrowers.

Form 8-K - Current report - Item 2.02 Item 9.01

$ACT reports earnings per share increase and record insurance in force for first quarter 2023

Form 8-K - Current report - Item 5.02 Item 7.01 Item 9.01

Form 10-K - Annual report [Section 13 and 15(d), not S-K Item 405]

Enact Holdings, Inc. Reports Strong Results, New Risk Mitigation Strategy
Current Analysis:
Enact Holdings, Inc. has reported strong financial results due to underwriting excellence and prudent risk management practices. Despite historically low mortgage rates and the increase in home values, Enact has been able to maintain strong capitalization and earnings profiles. The growth prospects remain high given its position as a leading private mortgage insurance company with a focus on long-term customer relationships, prudent risk management practices and underwriting excellence.

Forward-Looking Analysis:
The company expects to improve its operating model through the transfer of risk via both traditional XOL reinsurance arrangements and issuance of ILNs. This would help to de-risk its operating model and provide capital relief while spreading the risk among its counterparties. Additionally, Enact hopes to penetrate the private mortgage insurance segment further by taking advantage of changes in macroeconomic conditions such as growth in the housing and mortgage finance industries, interest rates, affordability, and household savings rates. The company's strong competitive position gives a positive outlook for investors.

Announcement: ACT 10-K Annual Report

Form SC 13G/A - Statement of acquisition of beneficial ownership by individuals: [Amend]

Announcement: ACT 8-K Special Filing

Announcement: ACT 8-K Special Filing

Enact Holdings Steady in Q1 2023 Amidst Market Uncertainty. Experts Weigh In.

Enact Holdings Steady in Q1 2023 Amidst Market Uncertainty. Experts Weigh In.

$ACT reports earnings per share increase and record insurance in force for first quarter 2023

$ACT reports earnings per share increase and record insurance in force for first quarter 2023

Announcement: ACT 8-K Special Filing

Announcement: ACT 8-K Special Filing

Announcement: ACT 10-K Annual Report

Announcement: ACT 10-K Annual Report

Announcement: ACT SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment

Announcement: ACT SC 13G/A Statement of acquisition of beneficial ownership by individuals - amendment