ACT — Enact Holdings, Inc.

Summary of ACT Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Adjusted Operating Income: $172 million, or $1.21 per diluted share, up from $1.10 year-over-year but down from $1.23 in Q4 2025.
• Adjusted Return on Equity: 13%.
• New Insurance Written: $13 billion, down 11% sequentially but up 30% year-over-year.
• Total Insurance in Force: $272 billion, down $1 billion from Q4 2025 but up $4 billion year-over-year.
• Persistency Rate: 80%, flat sequentially but down 4 points year-over-year.
• Total Delinquencies: Decreased to 24,700, with a delinquency rate of 2.6%.
• Loss Ratio: 15%, with losses of $37 million.
• Operating Expenses: $49 million, with an expense ratio of 20%.
• PMIERs Sufficiency Ratio: 162%, indicating strong capital position.

2. Strategic Updates and Business Highlights

• Enact is focused on long-term value creation despite a volatile mortgage rate environment.
• The company successfully managed expenses and is on track to meet its 2026 expense guidance of $215 million to $220 million.
• A 14% increase in quarterly dividends was announced, raising it from $0.21 to $0.24 per share, marking the fourth consecutive year of dividend increases.
• The company is actively engaged in the rollout of VantageScore 4.0, supporting credit modernization efforts to expand access to homeownership.

3. Forward Guidance and Outlook

• Enact expects to return approximately $500 million in capital to shareholders in 2026.
• The company remains optimistic about the housing market's long-term fundamentals and its ability to navigate a dynamic operating environment.
• Credit performance is anticipated to remain strong, although there may be upward pressure on delinquency rates due to portfolio seasoning.

4. Bad News, Challenges, or Points of Concern

• Mortgage rate volatility continues to impact mortgage activity, particularly affecting refinance applications as rates increased in March and April.
• The persistency rate has declined year-over-year, which could indicate potential challenges in maintaining insurance in force.
• There are concerns about geographic disparities in housing prices, particularly in markets like Florida and Texas, where home prices have moderated.
• The potential for increased delinquency rates is acknowledged, particularly from newer loan vintages with higher risk attributes.

5. Notable Q&A Insights

• Management indicated that while overall credit performance is strong, they are monitoring specific geographic markets for home price fluctuations and potential impacts on pricing and exposures.
• The company has not seen significant deviations from pricing expectations despite regional variations in home prices.
• There is an expectation that delinquency rates could tick up from current levels due to aging portfolios and macroeconomic factors.
• Insights shared regarding refinancing behavior indicated that lower-risk borrowers are more likely to refinance, which could lead to an increase in mortgage insurance penetration during favorable rate environments.

Overall, Enact's Q1 2026 results reflect a solid performance amid a challenging environment, with strategic initiatives aimed at long-term growth and stability. However, potential headwinds from market volatility and credit trends warrant close monitoring.