Enact Holdings, Inc.

and welcome to the ENACT third quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to hand the call to Daniel Cole, Vice President of Finance and Investor Relations. Please go ahead.

Thank you and good morning. Welcome to our third quarter earnings call. Joining me today are Rohit Gupta, President and Chief Executive Officer, and Dean Mitchell, Chief Financial Officer and Treasurer. Rohit will provide an overview of our business performance and progress against our strategies. Dean will then discuss the details of our quarterly results before turning the call back to Rohit for closing remarks. We will then take your questions. The earnings materials we issued after market closed yesterday contain our financial results for the quarter, along with a comprehensive set of financial and operational metrics. These are available on the Investor Relations section of our website. Today's call is being recorded and will include the use of forward-looking statements. These statements are based on current assumptions, estimates, expectations, and projections as of today's date. Additionally, they are subject to risks and uncertainties, which may cause actual results to be materially different, and we undertake no obligation to update or revise such statements as a result of new information. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release, as well as in our filings with the SEC, which will be available on our website. Please keep in mind the earnings materials and management's prepared remarks today include certain non-GAAP measures. Reconciliations of these measures to the most relevant GAAP metrics can be found in the press release, our earnings presentation and our upcoming SEC filing on our website. With that, I'll turn the call over to Rohit.

Thank you, Daniel. Good morning, everyone. Before discussing our third quarter results, I would like to start by acknowledging the devastation that has recently affected the Southeast. Our thoughts go out to everyone affected by the recent hurricanes. As a company that calls North Carolina home, we were especially saddened by the brutal toll Helene took on Western North Carolina. Since Helene, ANACT and its employees have mobilized to help the victims in several ways, including volunteering at a local food bank, launching a relief effort to collect much-needed items, and donating to relief efforts through the ANACT Foundation and employee giving campaigns. An act is deeply engaged in the communities we serve, and philanthropy and volunteerism are at the core of our culture. We know that recovery from events such as these takes time, and we will continue supporting the impacted communities as they rebuild. Turning back to the business and our third quarter performance, we delivered another set of excellent results driven by continued execution against our priorities and favorable market dynamics. We reported adjusted operating income of $182 million, up 11% year-over-year. Adjusted EPS was $1.16. Adjusted return on equity was a solid 15%. And our adjusted book value per share was $33.27, up 3% sequentially and 10% year-over-year. Turning to the operating backdrop. We continue to operate in a dynamic environment, and while there are potential macroeconomic risks, the U.S. economy remains strong. During the quarter, the consumer and labor market remained healthy. Wages grew, and inflation continued to slow. In addition, while constrained housing supply and higher mortgage rates continue to influence the housing market in the short term, the long-term drivers of demand remain intact. Against this backdrop, our credit and manufacturing quality continues to be strong, resulting in high-quality NIW and a portfolio with considerable embedded equity. We continue to observe elevated persistency in the quarter. Although quarterly fluctuations may occur due to volatility in underlying market rates, we expect persistency to remain elevated relative to historical trends. This helps to offset the impact of higher mortgage rates as demonstrated by our record insurance in force of $268 billion. At the end of third quarter, 70% of our insurance in force has mortgage rates that are lower than 6%. The credit quality of our insured portfolio remains strong. At quarter end, the risk-weighted average FICO score of the portfolio was 745. The risk-weighted average loan-to-value ratio was 93%, and layered risk was 1.3% of risk in force. Pricing remained constructive in the quarter, and we maintained our commitment to prudent underwriting standards. Our pricing engine allows us to deliver competitive pricing on a risk-adjusted basis, and we continue to underwrite and select risk prudently while generating attractive returns. New delinquencies rose in the quarter, primarily driven by seasonality and the aging of our newer books. These were substantially offset by cures, which continued to be elevated above pre-pandemic levels, reflecting the continued resilience of our portfolio. In addition, a significant portion of our delinquent portfolio continues to have considerable embedded equity, which could be a mitigant to both frequency and severity of claims. We believe credit performance continues to progress in line with our expectations as newer books go through their normal loss curves and seasonal delinquency patterns. Dean will elaborate on that performance shortly. I mentioned that our credit portfolio remains strong, and during the quarter we released reserves of $65 million as a result of favorable credit performance and our proactive loss mitigation efforts. We continue to see strong cure performance and remain well-reserved for a range of scenarios. We continue to carefully manage our expenses during the quarter, maintaining a focus on controlling costs and driving efficiencies. while also investing in technologies and processes that improve the customer experience and our business operations. Overall, despite the inflationary environment, our full year 2024 expenses before non-recurring restructuring costs are on track to be flat to down as compared to 2023. I'll shift now to our capital position, which remain robust. At quarter end, our PMR sufficiency was 173% or $2.2 billion of sufficiency, and approximately 79% of our risk in force was subject to credit risk transfers. Our capital position and cash flows have enabled us to effectively pursue our capital allocation priorities. These priorities, in order, include supporting our policyholders by maintaining a strong balance sheet, investing in our business to drive organic growth and efficiency, funding attractive new business opportunities to diversify our platform, and returning capital to shareholders. As it relates to the first priority, I've already discussed our strong capital position, which remains well in excess of PMI's requirements. For our second priority, we continue to invest in initiatives to drive growth in our core MI business, including pursuing opportunities to deepen our existing relationships with lenders through technology enhancements, customer engagement, and making investments to improve the efficiency of our operation. Our third priority is to evaluate strategic opportunities that expand our addressable market in compelling adjacencies that leverage core capabilities across mortgage, housing, and credit. Just over a year ago, we successfully launched ANAC-RE to take advantage of the opportunity we saw to expand our platform into the GSE credit risk transfer market. ANAC-RE has performed well, maintaining strong underwriting standards and an attractive return profile, and we have continued to participate in the GSE CRT transactions that came to the market. Additionally, we achieved an important milestone this quarter with S&P assigning an A- rating and a stable ratings outlook to Anakri. S&P's action is a testament to our successful launch of Anakri and will allow us to further optimize our capital and enhance and expand our ability to explore additional commercial opportunities. An ACRI is sufficiently funded to support its growth for the foreseeable future and remains a long-term capital and expense-efficient growth opportunity. Finally, in the third quarter, we again delivered on our commitment to return capital to our shareholders by returning $100 million through share buybacks and our quarterly dividend. As of October 31st, we have returned a total of $283 million to shareholders via share repurchases and dividends, positioning us to be in the upper half of our $300 million to $350 million guidance range for 2024. We remain committed to a disciplined and strategic approach to capital allocation, which balances liquidity and balance sheet strength, investment, and capital return to shareholders. In closing, We are proud of our strong performance in the quarter and year to date and are grateful for our team's relentless focus on executing against our strategic priorities and delivering strong financial results. Looking ahead, we remain committed to driving shareholder value as we navigate through this dynamic environment. With that, I will now turn the call over to Dean. Thanks, Rohit.