Essent Group Ltd.

Thank you for standing by. At this time, I would like to welcome everyone to today's Essent Group Limited fourth quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw your question, simply press star one again. Thank you. I would now like to turn the call over to Phil Stefano with Investor Relations. Phil, please go ahead.

Thank you, Greg. Good morning, everyone, and welcome to our call. Joining me today are Mark Cassell, Chairman and CEO, and David Weinstock, Chief Financial Officer. Also on hand for the Q&A portion of the call is Chris Curran, President of Essent Guarantee. Our press release, which contains Essent's financial results for the fourth quarter and full year 2024, was issued earlier today and is available on our website at EssentGroup.com. Our press release includes non-GAAP financial measures that may be discussed during today's call. A complete description of these measures and the reconciliation to GATT may be found in Exhibit O of our press release. Prior to getting started, I would like to remind participants that today's discussions are being recorded and will include the use of forward-looking statements. These statements are based on current expectations, estimates, projections, and assumptions that are subject to risks and uncertainties, which may cause actual results to differ materially. For discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release, the risk factors included in our Form 10-K filed with the SEC on February 16, 2024, and any other reports and registration statements filed with the SEC, which are also available on our website. Now let me turn the call over to Mark.

Thanks, Phil, and good morning, everyone. Earlier today, we released our fourth quarter and full year 2024 financial results. Strong credit quality and resilience in the housing and labor markets continue to drive credit performance, while interest rates remain a tailwind for persistency and investment income. Although mortgage origination activity remains below historical levels, we anticipate that home buying demand is merely being postponed given the level of rates and affordability. While there is always uncertainty in the economic environment, given the strength of our balance sheet and our buy, manage, and distribute operating model, we believe Essendon is well positioned for a range of economic scenarios. And now for our results. For the fourth quarter of 2024, we reported net income of $168 million compared to $175 million a year ago. On a diluted per share basis, we earned $1.58 for the fourth quarter compared to $1.64 a year ago. For the full year, we earned $729 million, or $6.85 per diluted share, while our return on average equity was 14%. As of December 31st, our book value per share was $53.36, an increase of 11% from a year ago. As of December 31st, our U.S. mortgage insurance enforce was $244 billion, a 2% increase versus a year ago. Our 12-month persistency on December 31st was 86%, down about one point from last quarter, while nearly 60% of our enforced portfolio has a note rate of 5.5% or lower. Although persistency has likely peaked, we continue to expect that the current level of mortgage rates will support elevated persistency in the near term. Credit quality of our insurance and force remains strong, with a weighted average FICO of 746 and a weighted average original LTV of 93%. Credit performance in the fourth quarter primarily reflected both the aging of our portfolio and the typical seasonality of default behavior. Note, however, that credit performance for the fourth quarter was also impacted by approximately 2,000 defaults in areas affected by Hurricanes Helene and Milton. In addition, we are monitoring the potential impact of defaults from the California wildfires. Dave will discuss defaults and reserves in more detail in a few moments. On the mortgage insurance front, our industry remains competitive and strong credit guardrails remain in place, driven by the underpinnings established by the GSEs after the global financial crisis. These guardrails combined with our S&Edge credit engine enable us to selectively grow our high credit quality insurance reports while generating strong returns. We are pleased with our position in the marketplace and the unit economics that we are achieving on new business. As a reminder, we price for new business assuming a combined ratio of roughly 35% to 45%. In the first quarter of 2025, we entered into two quarter share transactions with a panel of highly rated reinsurers to provide forward protection for our 2025 and 2026 business. We are pleased with the strong execution and remain committed to a programmatic reinsurance strategy, which helps to diversify our capital resources while seeding a meaningful portion of our mezzanine credit risk. At year-end 2024, approximately 97% of our portfolio is covered by some form of reinsurance. S&RE had another strong year of performance, writing high-quality GSE risk share business while leveraging its fee-based MGA services. S&RE ended the year with annual third-party revenues of approximately $80 million, while our third-party risk and force was $2.2 billion. Since 2014, S&RE has earned over $450 million of net income from its third-party business and has contributed approximately $800 million to S&RE's book value. Title operations incurred a pre-tax loss of approximately $21 million in the prior year prior to corporate allocations. We continue to maintain a long-term view for this business. However, given it is levered to rates, we do not expect title will have any material impact on earnings over the near term. Cash and investments as of December 31st were $6.3 billion, and our new money yield in the fourth quarter remained over 5%. For the full year 2024, our investment yield was 3.7% compared to 3.5% in 2023. Net investment income was $222 million in 2024, up nearly 20% from 2023. As of December 31st, the carrying value of other invested assets is $304 million, and ever to date, these investments have created $81 million of value. As of December 31st, we are in a position of strength with $5.6 billion in gap equity access to $1.6 billion in excess of loss reinsurance, and a PMIR sufficiency ratio of 178%. With a full year 2024 operating cash flow of $852 million, our franchise remains well positioned from an earnings, cash flow, and balance sheet perspective. As a result of our strong financial performance and capital position, I am pleased to announce that our board has improved an 11% increase in our quarterly dividend to $0.31 per share. At the same time, our board also approved a $500 million share repurchase authorization that runs through year-end 2026. Now let me turn the call over to Dave.