Essent .(ESNT)2024-02-09 17:16Financial Data and Key Metrics Changes - For the fourth quarter of 2023, the company reported net income of 147 million a year ago, and earnings per diluted share of 1.37 in the same quarter last year [51][45] - The U.S. Mortgage Insurance Portfolio ended 2023 with Insurance In-Force of 12 billion or 5% compared to 246 million, which included premiums earned from third-party business and title operations [16] Business Line Data and Key Metrics Changes - The company’s title operations incurred a pre-tax loss of approximately 32 million for the full year 2023, with new defaults offset by favorable reserve development [19] Market Data and Key Metrics Changes - The default rate on the U.S. Mortgage Insurance Portfolio was 1.8%, up 18 basis points from 1.62% at September 30, 2023 [42] - Persistency at December 31, 2023, increased to 86.9%, compared to 86.6% at the end of the third quarter [15] Company Strategy and Development Direction - The company remains focused on supporting customers while expanding its franchise, successfully activating 108 new customers during 2023 [68] - The company’s strategy includes a diversified and programmatic reinsurance approach, with approximately 93% of the portfolio reinsured by year-end 2023 [37] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive long-term outlook for housing, citing supply and demand imbalances and favorable demographic trends as foundational support for home prices [50] - The company is well-positioned for various economic scenarios, emphasizing that credit quality drives long-term performance rather than interest rates [6][66] Other Important Information - The company repurchased approximately 1.5 million shares for 0.28 per share [12][13] - The effective tax rate for the full year 2023 was 15.4%, with an estimated rate of approximately 15.5% for 2024 [21] Q&A Session Summary Question: What are the best and worst scenarios for the company moving forward? - Management indicated that credit quality is the primary concern, with a focus on maintaining strong employment levels to support performance [5][40] Question: Why was the cure rate lower this quarter? - Management noted that the decline in the cure rate was influenced by the end of frictionless forbearance, which had previously allowed borrowers to delay payments [32][70] Question: How are recent vintages performing compared to historical vintages? - Management highlighted that the average FICO score of the Insurance In-Force is strong at 746, indicating good credit quality across the portfolio [80]