ACT — Enact Holdings, Inc.

Summary of Enact's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Q4 Adjusted Operating Income: $179 million, or $1.23 per diluted share, up from $1.09 in Q4 2024.
• Full Year Adjusted Operating Income: $688 million, or $4.61 per diluted share, compared to $718 million, or $4.56 per diluted share in 2024.
• Adjusted Return on Equity: 13.5% for Q4.
• New Insurance Written: $14 billion in Q4, up 2% sequentially and 8% year-over-year.
• Insurance in-force: $273 billion, up $1 billion from Q3 2025.
• Operating Expenses: $59 million in Q4, maintaining expense discipline with a full-year total of $218 million.
• Capital Returns: $157 million returned to shareholders in Q4; $503 million for the full year.

2. Strategic Updates and Business Highlights

• Enact helped over 134,000 borrowers buy homes and 16,000 retain homes in 2025.
• Continued innovation in risk selection and pricing with the Rate360 engine.
• Maintained a strong capital position with a PMIERs sufficiency ratio of 162%.
• Entered a new $435 million revolving credit facility and executed new CRT deals to enhance financial flexibility.
• Received multiple credit ratings upgrades and industry awards, reflecting strong execution and commitment to excellence.

3. Forward Guidance and Outlook

• 2026 Capital Return Expectations: Approximately $500 million, with a new share repurchase program authorized for $500 million.
• Anticipated mortgage insurance market growth of 10% to 15% in 2026, depending on external forecasts and market conditions.
• Operating expenses expected to remain in the range of $215 million to $220 million for 2026.

4. Bad News, Challenges, or Points of Concern

• Persistency Rate: Declined to 80% in Q4, down 3 points sequentially and 2 points year-over-year.
• Delinquency Rates: New delinquencies increased to 13,700 in Q4, with total delinquencies rising to 24,900, reflecting seasonal trends.
• Regulatory Environment: Potential changes in FHA rates and affordability policies could impact business dynamics.
• Market Volatility: Uncertainties in the macroeconomic environment and mortgage rate fluctuations could affect future performance.

5. Notable Q&A Insights

• Capital Return Sensitivities: Management expressed confidence in meeting the $500 million capital return goal but noted that business performance, macroeconomic conditions, and regulatory changes could influence this.
• Regulatory Engagement: The company is actively involved with policymakers regarding housing supply and affordability, indicating a proactive approach to potential regulatory changes.
• Credit Performance: Recent vintages are performing in line with expectations, but management is cautious about geographic areas with increased housing supply and declining prices, particularly in the Sunbelt states.
• Expense Management: Continued focus on technology investments is driving efficiency, with a goal to maintain or improve the expense ratio relative to revenue growth.

Overall, Enact demonstrated strong financial performance in Q4 2025, with strategic initiatives aimed at maintaining growth and shareholder value, while also navigating challenges in the regulatory landscape and market volatility.