Q3 2025 Essent Group Ltd Earnings Call
Speaker #2: Ladies and gentlemen , thank you for standing by . My name is Abby , and I'll be your conference operator today . At this time , I would like to welcome everyone to the essence Group .
Speaker #2: Limited third quarter earnings call . All lines have been placed on mute to prevent any background noise . After the speakers remarks , there will be a question and answer session .
Speaker #2: If you would like to ask a question during that time , simply press star , followed by the number one on your telephone keypad .
Speaker #2: If you would like to withdraw your question , press star one . A second time . Thank you . And I would now like to turn the conference over to fill Stefano with Investor relations .
Speaker #2: You may begin .
Speaker #3: Thank you . Abby . Good morning , everyone , and welcome to our call . Joining me today are Mark Casale chairman and CEO .
Speaker #3: And David Weinstock Chief Financial Officer . Also on hand for the Q&A portion of the call is Chris Curran , president of SME guarantee .
Speaker #3: Our press release , which contains Essence financial results for the third quarter of 2025 , was issued earlier today and is available on our website at Essent Group Ltd .
Speaker #3: 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 .
Speaker #3: 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 .
Speaker #3: For a 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 19th , 2025 and any other reports and registration statements filed with the SEC , which are also available on our website .
Speaker #3: Now , let me turn the call over to Mark .
Speaker #4: Thanks , Bill , and good morning , everyone . Earlier today we released our third quarter 2020 financial results . Our performance this quarter again underscores the resilience of our business as we continue to benefit from favorable credit trends and the interest rate environment , which remains a tailwind for both persistency and investment income .
Speaker #4: These results reflect the strength of our by manage and distribute operating model , which we believe is well suited to navigate a range of macroeconomic scenarios and generate high quality earnings for the third quarter of 2025 .
Speaker #4: We reported net income of $164 million , compared to $176 million a year ago on a diluted per share basis , we earned $1.67 for the third quarter , compared to $1.65 a year ago on an annualized basis , our year to date return on equity was 13% through the third quarter .
Speaker #4: As of September 30th , our US mortgage insurance In-force was $249 billion , a 2% increase versus a year ago . Our 12 month persistency on September 30th was 86% flat from last quarter , while nearly half of our In-force portfolio has a note rate of 5% or lower .
Speaker #4: We continue to expect that the current level of mortgage rates will support elevated persistency in the near term . The credit quality of our insurance in-force remains strong , with a weighted average Fico of 746 and a weighted average original LTV of 93% .
Speaker #4: Our portfolio default rate increased modestly from the second quarter of 2025 , reflecting the normal seasonality of mortgage insurance business . Meanwhile , we continue to believe that the substantial home equity embedded in our In-force book should mitigate ultimate claims .
Speaker #4: Our consolidated cash as of September 30th totaled $6.6 billion, with an annualized investment yield in the third quarter of 3.9%. Our new money yield in the third quarter was nearly 5%, holding largely stable over the past several quarters.
Speaker #4: We continue to operate from a position of strength , with $5.7 billion in GAAP equity access to $1.4 billion in excess of loss reinsurance investments as holding companies .
Speaker #4: With a 12 month operating cash flow of $854 million . Through the third quarter , our franchise remains well positioned from an earnings cash flow and balance sheet perspective .
Speaker #4: We remain committed to a prudent and conservative capital strategy that allows us to maintain a strong balance sheet to navigate market volatility while preserving the flexibility to invest in strategic growth .
Speaker #4: Thanks to our robust capital position and strengthened earnings , we are well positioned to actively return capital to shareholders in a value accretive fashion .
Speaker #4: With that in mind , year to date through October 31st , we have repurchased nearly 9 million shares for over $500 million . At the same time , I am pleased to announce that our board has approved a common dividend of $0.31 for the fourth quarter of 2025 and a new $500 million share repurchase authorization that runs through year end 2027 .
Speaker #4: Now , let me turn the call over to Dave . Thanks , Mark .
Speaker #5: And good morning , everyone . Let me review our results for the quarter in a little more detail . For the third quarter , we earned $1.67 per diluted share compared to $1.93 last quarter and $1.65 in the third quarter .
Speaker #5: A year ago . My comments today are going to focus primarily on the results of our mortgage insurance segment , which aggregates our US mortgage insurance business , and the GSE and other mortgage reinsurance business .
Speaker #5: At our subsidiary , Snri , there's additional information on corporate and other results in exhibit O of the financial supplement . Our US mortgage insurance portfolio ended the third quarter with insurance in force of $248.8 billion , an increase of $2 billion from June 30th , and an increase of $5.8 billion , or 2.4% , compared to $243 billion at September 30th , 2020 .
Speaker #5: For persistency of September 30th , 2025 was 86% , compared to 85.8% at June 30th , 2025 . Mortgage insurance net premium earned for the third quarter of 2025 was $232 million , and included $15.9 million of premiums earned by sentry .
Speaker #5: On our third party business . The average premium rate for the US mortgage insurance portfolio for the third quarter was 41 basis points , consistent with last quarter , and the average net premium rate was 35 basis points , down one basis point from last quarter .
Speaker #5: Our US mortgage insurance provision for losses and loss adjustment expenses was $44.2 million in the third quarter of 2025 , compared to $15.4 million in the second quarter of 2025 .
Speaker #5: And $29.8 million in the third quarter a year ago . At September 30th , the default rate on the US mortgage insurance portfolio was 2.29% , up 17 basis points from 2.12% at June 30th , 2025 .
Speaker #5: Mortgage insurance operating expenses in the third quarter were $34.2 million , and the expense ratio was 14.8% compared to $36.3 million . And 15.5% last quarter .
Speaker #5: At September 30th , guarantees premium efficiency ratio was strong at 177% , with $1.6 billion in excess available assets . Consolidated net investment income and our average cash investment portfolio balanced in the third quarter , were largely unchanged from last quarter due to our share repurchase activity .
Speaker #5: In the third quarter of 2025 , we increased our 2025 estimated annual effective tax rate , excluding the impact of discrete items from 15.4% to 16.2% .
Speaker #5: This change was primarily due to withholding taxes incurred on a third quarter dividend from US Holdings to its offshore parent company . As Mark noted , our holding company liquidity remained strong and includes $500 million of undrawn revolver capacity under our committed credit facility .
Speaker #5: At September 30th , we had $500 million of senior notes , senior unsecured notes outstanding , and our debt to capital ratio was 8% .
Speaker #5: During the third quarter and guarantee paid a dividend of $85 million to its US holding company . As of October 1st , can pay additional ordinary dividends of $281 million in 2025 .
Speaker #5: At quarter end , and guarantees statutory capital was $3.7 billion , with a risk to capital ratio of 8.9 to 1 . Note that statutory capital includes $2.6 billion of contingency reserves at September 30th , during the third quarter , Snri paid a dividend of $120 million to Essen Group .
Speaker #5: Also in the third quarter, Essent Group paid cash dividends totaling $30.1 million to shareholders. We repurchased 2.1 million shares for $122 million in October 2025 and repurchased 837,000 shares for $50 million.
Speaker #5: Now , let me turn the call back over to Mark .
Speaker #4: Thanks , Dave . And closing . We are pleased with our third quarter financial results as Essen continues to generate high quality earnings .
Speaker #4: While our balance sheet and liquidity remain strong, our performance this quarter reflects the strength and resilience of our franchise. We remain well positioned to navigate a range of scenarios given the strength of our.
Speaker #4: By managed and distributed operating model , our strong earnings and cash flow continue to provide us with an opportunity to balance investing in our business and returning capital .
Speaker #4: We believe this approach is in the best long term interest of our stakeholders , and that Essen is well positioned to deliver attractive returns for our shareholders .
Speaker #4: Now , let's get to your questions . Operator . .
Speaker #2: Thank you . And we'll now begin the question and answer session . If you have dialed in and would like to ask a question , please press Star One on your telephone keypad to raise your hand and join the queue .
Speaker #2: If you would like to withdraw your question , press star one a second time . If you're called upon to ask your question and are listening via speakerphone on your device , please pick up your handset and ensure that your phone is not on mute .
Speaker #2: When asking your questions . Again , it is star one . If you would like to ask a question . And our first question comes from the line of Terry Ma with Barclays .
Speaker #2: Your line is open .
Speaker #6: Hey . Thank you . Good morning . Just wanted to start off with credit new notices were a bit lower than what we had , but the provision on those notices were higher .
Speaker #6: So any color on kind of just the make up from vintage or even geography perspective this quarter .
Speaker #4: Yeah . Hey , Terry , it's Mark . I wouldn't say there's nothing really to read out in terms of geography or trends .
Speaker #4: The one thing for you guys as analysts , we pointed this out a few quarters ago is just our average loan size continues to increase .
Speaker #4: I mean , ever since , you know , for years it was like $230,000 when the GSE started raising their limits . And it really kind of picked up post Covid .
Speaker #4: So our average loan size , if you just look through the stats supplement for the insurance forces , close to $300,000 . So again , larger loans , when they come through , you know , kind of into default , it's going to be a larger provision .
Speaker #4: So I wouldn't read any more into it than that . I think the you know , again , the default rates relatively flattish .
Speaker #4: And I think , you know , from a from a credit position , there's there's nothing we're really seeing that concerns us at the current time .
Speaker #6: Got it . That's helpful . And then maybe just to follow up on the claims amount , you know , the number was higher .
Speaker #6: And also the severity . So like anything to call out there like anything idiosyncratic or is there more of a trend . Thank you .
Speaker #5: Hey , Terry it's David Weinstock . Yeah . There's really nothing to point out there . You know , a lot of that's going to depend on when we get documents in and , you know , when the claims are fully adjudicated and ready for payment .
Speaker #5: And so you can see fluctuations based on , you know , what the underlying claims are . But at the end of the day , there's not a lot of claims there .
Speaker #5: And the biggest takeaway really is that the severity continues to be well below what we're reserving at . So we're getting favorable favorable results .
Speaker #5: There .
Speaker #6: Okay . Got it . Thank you .
Speaker #2: And our next question comes from the line of Boz George with KB . Your line is open .
Speaker #7: Hey guys . Good morning . First just on the seated premiums . You know it was kind of the high end of the range .
Speaker #7: Is that a good level going forward or is that just bounce around depending on the timing of when you're doing the reinsurance transactions .
Speaker #5: Yeah . Hey Bose it's David Weinstock . Yeah . It's going to bounce around a little bit based on default and provision activity .
Speaker #5: So you know , it's seasonal . I think you saw you know , the ceded premium being a little bit lower in the first half of the year , similar to where you see our defaults .
Speaker #5: You know , being more favorable and lower . And you know , this is a seasonal second half of the year , as we've talked about .
Speaker #5: You know , we definitely you generally see an uptick . And so that you're going to see a little bit of an uptick in the ceded premium .
Speaker #4: And also keep in mind both we raised the quota share this year to 25% . So that is going to create a little bit more volatility .
Speaker #4: At the end of the day comes through the wash right . So in terms of the mix between the provision and the expenses .
Speaker #4: And ceding commission . But yeah it'll bounce around a little bit more . So I'd be I'd be conscious of that in your models .
Speaker #8: Okay great . That's helpful .
Speaker #7: Thanks . And then just in terms of the tax rate , you know , what drove the higher tax rate . And then just can you remind us just based on how much you're seeing , etc.
Speaker #7: , where you think the tax rate is going to be over the next , say , 12 months .
Speaker #4: Yeah , I mean , I think that , you know , Dave alluded to it in the script . A lot of it is just a little bit of the tax friction moving from kind of guarantee to us up to Bermuda and out to shareholders .
Speaker #4: So I think 16 and maybe a touch higher going forward , I would think through that with your models , I'd be relatively conservative .
Speaker #4: Those and it really gets back to the fact that we're just distributing a lot more capital back to back to shareholders . And that's kind of a little bit of a signal that we don't really see it changing much given where , you know , sitting with still $1 billion of of cash at the Holdco and kind of where the stock is right around bookish value .
Speaker #4: And we I think we pointed this out last time in our investor deck , which will come out kind of post post earnings like the embedded value of the business we believe is much higher than kind of where we are today .
Speaker #4: Right . And just again , it's simple math . It's nothing revolutionary . And we have 6 billion of of cash , 6 billion of equity .
Speaker #4: We trade right around 6 billion . Doesn't really give credit for the $250 billion of insurance in force that we have . And it's a significant embedded value .
Speaker #4: I think we've proven that , you know , over the past ten years in terms of the cash flow and just look , again , just we generated 854 million of cash flow over the last 12 months .
Speaker #4: So based on that , you know , and where we're , you know , just given the capital position and we're still generating unit economics kind of in that 12 to 14 ish range , we think it's the best value .
Speaker #4: So I think we'll continue to do that . But there again it's just getting the cash up is creates a little friction . But I think from a shareholder perspective yeah we'll pay a couple extra bucks on the tax rate .
Speaker #4: But I think from you know , lowering the share count and kind of delivering value to shareholders , it's a little bit of a no brainer .
Speaker #7: Okay , great . Thanks .
Speaker #2: And our next question comes from the line of Rick Shane with J.P. Morgan . Your line is open .
Speaker #9: Hey guys . Thanks for taking my question this morning . I'm looking at exhibit K and one trend that's that is pretty consistent is the increase in severity rates .
Speaker #9: And that makes sense given slowing home price appreciation and vintage mix . It was 78% this quarter . I'm curious long term where you think that could go .
Speaker #9: Or are we sort of asymptotically approaching the limit there or are we should we expect that to continue to rise ?
Speaker #4: Yeah . I mean , I wouldn't I don't know if you would expect it to rise again . We per the provisions at 100 .
Speaker #4: Rick . Just so you know , the embedded , the embedded HPA in the book is still kind of 75 ish . So , I mean , in terms of mark to market LTV .
Speaker #4: So some of it is just timing , right ? If , if somebody you know from the later vintages kind of call it 23 or 24 goes into default , you know , there's going to be a higher provision .
Speaker #4: Or if they go into claim we're going to pay a higher claim there because they have less embedded value . But taking a step back just at the portfolio level , we're not going to get too fussed about it .
Speaker #4: I mean , again , you know , you're talking about a relatively low losses . And remember just and we point this out every , every quarter to just with a real risk is in our business .
Speaker #4: Right . Take from my seat Rick . You know we own that first loss position . Right . So call it you know 2 to 3 claims out of 100 .
Speaker #4: We hedge out from above that kind of into that six seven range . And we reattach above that . That's the risk in the business .
Speaker #4: Right . We are a specialty insurance type business , almost like a cat or our catastrophe is a severe macro economic recession . And that's when we hold capital , when we think about pmiers , we think about the different stress tests that we run , whether it's Moody's constant severity , S-4 , the GFC .
Speaker #4: That's when we come in and think about it week to week or month to month . That's , you know , we're focused really on making sure we're fine there .
Speaker #4: And we clearly are given the amount of capital that we're using to repurchase shares . So getting back to this again , we clearly look at it .
Speaker #4: I think we're conservative in how we provision just from a severity standpoint , because I think that's , you know , the severity is an actuarial .
Speaker #4: I mean , the the provisions and actuarial based model . So we don't really we don't really mess with it quarter to quarter or even year to year that much .
Speaker #4: So again , I'm just trying to from a big picture standpoint . Sure . You're going to try to point out trends , you know , and Terry pointed out the trends around the new notices .
Speaker #4: Those are all good . That's that's what you guys have to do that for your models . But I think taking a step back , the biggest metric for the quarter , Rick , is we produced $854 million of cash over the last 12 months .
Speaker #4: So again , not trying to , you know , to get to too , too high level . But I mean , I think it's important to kind of put context around some of these numbers .
Speaker #9: Now , look , it's it's a fair point , Mark . You know , given how low losses have been for so long .
Speaker #9: A modest dollar movement looks like a larger looks like a significant percentage movement . And I think we're all sensitive to that . And trying to sort of I think understand what the normalized returns on the business are .
Speaker #9: And do you think we are approaching those levels or , and look , you've enjoyed an extraordinary period for long for a long time , for a whole host of reasons that we've all talked about .
Speaker #9: But as the business normalizes and sort of reverts to the return levels that the two of us spoke about , a decade ago , do you think we're getting there now ?
Speaker #4: Now it's a good question . And , Rick , we've been studying this . So let's let's go back in time . Right .
Speaker #4: Let's let's start with 1990 , which is really the beginning of the modern day Fannie and Freddie . And let's just go with the last 35 years .
Speaker #4: If you take away the GFC , which it's hard to do , but just to play , you know , stick with me here for a second .
Speaker #4: The average loss rate on Fannie and Freddie backed loans is less than 1% . That I believe is actually it's so it's not this oh my goodness , we have such a good run .
Speaker #4: When is it going to end ? This is it . This is the business . It's a great business . You're talking about .
Speaker #4: And again , and some of the things that caused the great financial crisis because you don't want to ignore that . And the reason we like the business coming out of the crisis , you had the Dodd-Frank qualified mortgage rule .
Speaker #4: So, 35% of the loans that were made during the crisis no longer qualify. They literally got the riffraff out of the industry.
Speaker #4: So that it's now either going it's going to either FHA or it's going to kind of non-qm or they're not being originated , which is the most case , a lot of those borrowers are ending up in single family rental .
Speaker #4: It's a great outcome for them . Right . So then all of a sudden then you add in , you know , the increased , I would say sophistication of Du and LP at the GSEs , their quality control has gotten significantly better .
Speaker #4: I mean , over the last 15 years that so all of a sudden at the credit guardrails around our business are exceptional and we don't see it changing unless there's something happens with GSE reform .
Speaker #4: And I clearly we look at that . But as long as the market is where it is today , this it's a very narrow fairway .
Speaker #4: And so we don't see really credit changing that much . It's hard . I mean actually our credit for this the last two quarters , Rick was the best ficos we've had since we started the company .
Speaker #4: So and part of that's affordability , part of it is just part of it is affordability . Like just folks are having a harder time qualifying .
Speaker #4: But the credit quality in this business is exceptional . And just from a public policy standpoint , you know , 65% of our borrowers are first time homeowners .
Speaker #4: I mean , I was with a young guy last week who just got mortgage insurance through one of our clients . He's paying like $65 a month .
Speaker #4: He put 10% down . I mean , you can't beat it . It's it's a great value to the customer , which you always want to have .
Speaker #4: Right . The borrowers are ultimate customer . And then I think the math for us . So I would say from and some of our longer term investors kind of know this clearly .
Speaker #4: I would stop in one of our other analysts is always ask me , Mark , is this as good as it gets , guys ?
Speaker #4: It's been good for a long time . I mean , and I don't really again , there's going to be some volatility Rick .
Speaker #4: You know quarter to quarter or year to year . You know look if unemployment goes up we're probably going to pay some losses .
Speaker #4: But remember we're kind of capped . We're kind of capped until we hit you know until we go through that mess piece . So it's really , really well boxed .
Speaker #4: Hence our confidence in , you know , paying the quarterly dividend . And and right now in terms of where we are returning capital to shareholders , it's been quite a shift .
Speaker #4: The past 12 months . But part of it was we've just continued to accumulate cash and we've had this retain and investments . We just haven't invested anything .
Speaker #4: And so we look at it now and say that the best investment we can make is in the company . And if we keep this pace up , Rick , you know , you know , every time you repurchase shares , you know , our long term owners , which include the senior management team , we own a little bit more of the company .
Speaker #4: And if I'm going to own a business , this is this this is this is my favorite business . So we'll see . So sorry for the long winded answer , but I wanted to again try to give , you know , some of the investors on the phone , some context .
Speaker #9: No . Mark . Look , I appreciate it . And I suspect there are some folks who are listening to this call imagining the two of us on rocking chairs debating this stuff .
Speaker #9: And that's okay too. I appreciate the answer.
Speaker #2: And as a reminder , it is star one . If you would like to ask a question and our next question comes from the line of Mihir Bhatia with Bank of America , your line is open .
Speaker #10: Hi , Mark . Good morning . Thank you for taking my question . I actually want to follow up on Rick's last question .
Speaker #10: There about just in you about the guardrails around underwriting currently . I think there was news yesterday about Fannie removing the minimum credit score requirements .
Speaker #10: There's been some noises out of Washington about , you know , trying to do play a more active role in housing or lower increase housing demand , if you will .
Speaker #10: And I was just wondering from your seat , are you seeing any signs of that ? Are originators trying to get more stuff under the get more stuff approved that maybe wouldn't have been ?
Speaker #10: They wouldn't have tried a couple of years ago or just wondering what that looks like . Thank you .
Speaker #4: It's a good question . There is a lot of noise around kind of credit scores and vantage and fair . Isaac and Vantage can qualify more borrowers .
Speaker #4: All those sort of things . The reality is here , the GSEs haven't changed their systems yet . So until that happens , you know , there's really not going to be change .
Speaker #4: So, like, they're a lender who would be unable today to kind of quote and get something passed the GSEs. It gets back to my point.
Speaker #4: The GSEs , their systems are fantastic . And in terms of Dunlop , very sophisticated . And if they do get through it , you know , they're most likely their QC and repurchase program .
Speaker #4: They're going to put that back to lenders . So lenders have I think lenders have really understood that the game today . And you're seeing some of the bigger lenders do it .
Speaker #4: The game today is all about lowering and being efficient on origination costs . Now that hasn't always been the case . So if you go for the crisis , what would happen is if you get a smaller or midsize mortgage banker and all of a sudden productions down , they immediately go to credit expansion , right ?
Speaker #4: I would I wouldn't normally do that loan , but you know , I have fixed costs . I'm going to try to get that loan in either through the GSEs or to whole loan buyers .
Speaker #4: You can't do that today . I mean , whether it's you're trying to get it through the GSEs , you're trying to go through some of the larger correspondent purchasers like Pennymac , whose systems are also excellent , and it's not going to happen .
Speaker #4: So you're almost you have to either . You have to manage costs . And again , from a credit provider , that's exactly where we want it .
Speaker #4: So, we're not too worried about it. And if it were to go, we mentioned this last call. If it were to change.
Speaker #4: Right . And I'm not saying it's going . If it were to change and you could have like kind of a wider fairway , so to speak .
Speaker #4: So more things qualify . The fact that our credit engine doesn't really rely on Fico , we're really we're almost credit score agnostic .
Speaker #4: We're looking at the 400 kind of variables underneath that , along with things in a 1003 . We're not too worried . We can see through that .
Speaker #4: In fact , our model works better when things are a little bit , you know , a little bit more disparate , so to speak .
Speaker #4: It doesn't work as well in a market like this . It kind of works more from a premium standpoint . Picking and choosing .
Speaker #4: But credit , you know , not not not you know , you almost don't really need it from a Fico standpoint . So again , I think I would look at it that way .
Speaker #4: I think it's it's it's something that we're pleased with . But I don't see any kind of chink in the guardrails to date .
Speaker #11: Okay .
Speaker #10: Thank you for taking my question .
Speaker #2: And again , it is star one . If you would like to ask a question . And our next question comes from the line of Doug Harter with UBS .
Speaker #2: Your line is open .
Speaker #12: Thanks. Can you talk about your plans to upstream capital from the MI subsidiary? It sounds like you have a lot of capacity left for the year.
Speaker #12: You kind of spill that over or do a large dividend in the fourth quarter.
Speaker #4: I think it's pretty consistent with the dividends . It might be a little bit larger in the fourth quarter for sure . I think again , as we look at kind of p .
Speaker #4: Myers , Doug and credit and where it's going , we feel comfortable continuing to upstream cash from guarantee to US holdings . And as I said earlier , there's a little bit of friction getting back to the group level .
Speaker #4: But that's that's that's not the worst problem to have . And also we have , you know , the quota share reinsurance . That's one of the reasons we took it up to 50 earlier this year .
Speaker #4: That's another kind of backdoor way to get cash up to the Holdco.
Speaker #13: And then .
Speaker #12: Obviously you bought title a little while ago . Can you just talk about how you're thinking about , you know , the benefit of , you know , the great business that is MI versus looking to further diversify and have other avenues of growth ?
Speaker #4: Yeah , I mean , I think right now it's a good question . I think titles title is performed pretty much in line with what we thought .
Speaker #4: If we would have thought rates would be this high , to try to be honest with you , I think if rates go lower .
Speaker #4: We're very levered to rates given , given the lender focus of the business , we have an underwriter . It's really kind of in its still small stages , growing primarily in Texas and Florida .
Speaker #4: And a bit of the southeast . That's kind of the purchase angle of the business . But it's small . So the real lever is lenders and refinance .
Speaker #4: And we've continued to add lenders . You know , we're working on developing a new system . We're still you know , we're still building the business out per se .
Speaker #4: And we're fine with that . So I you know , it's kind of in corporate and other Doug . And think of that almost as like an incubator .
Speaker #4: So again , if it gets big enough , it'll pop up as its own segment . If it stays small , it stays small .
Speaker #4: And that that could happen . And , you know , clearly s has some opportunities outside of mortgage . We haven't really done anything yet , but there's things that we look at .
Speaker #4: I would look at that as another quote . You know , incubator . We kind of call them call options . But for the time being , clearly the focus and where the cash flow is coming is from the MI business .
Speaker #4: And when we look at investment opportunities , you know , whether it's title , other other , you know , other acquisitions that come to us , we still feel at this time our stock is the best value and we're kind of voting with our feet there .
Speaker #4: And I don't really you know , I'm really expect it to change absent like some large movement in the stock . And then if there's a large movement in the stock which , you know , it's it's it would be nice per se , but not necessarily if you're in the business of buying back shares and shrinking ownership .
Speaker #4: This isn't the worst place to be in . It's if the stock were to move outside of our range , we would probably do like a special dividend .
Speaker #4: We'll continue to look for ways to get capital back to shareholders , but given just how good the MI business is today , you know , we would need to again , there has there's going to have to be a good reason for us to to do it .
Speaker #4: And I look at it as if you're looking at a way to , to to kind of quantify it . You know , our book value per Share today is right around 60 bucks .
Speaker #4: So it's a tad below 58 . It'll it'll finish . My guess is it'll finish the year around 60 . Doug . So if we look and say , hey , we're going to grow it 1,012% a year , which we've been doing , you know , that book value per share over the next 4 or 5 years is going to be 85 , 90 bucks , right ?
Speaker #4: Big , big picture . Right ? Just looking at the numbers . So as we look at an acquisition , it's going to have to either help us increase that book value per share .
Speaker #4: Target or achieve that book value per share target sooner . All else being equal or making us a stronger company . And things like that .
Speaker #4: There's there's other factors in there . That's a pretty high bar . That's a pretty high bar . We kind of know this business well and like what I've said , you know , just in my response to Rick earlier , this is such a good business , we're a little bit spoiled and in terms of how good the business is , again , there's going to be some bumps along the road .
Speaker #4: There are , there always are . But that's why you have capital , right ? You have capital to withstand those bumps . And reinsurance is another form of capital .
Speaker #4: You know , we we we you know , we expect kind of those expected losses per se . And then you have capital and reinsurance for unexpected losses .
Speaker #4: They'll come . But that's that's what we're prepared for . We don't necessarily try to sit down and say , you know , where's the market going ?
Speaker #4: We try to prepare for every , different avenue that the market potentially could go down . I mean , that just comes with experience .
Speaker #4: We've been doing this for quite a while . But that being said , so the summing up the investment right now continues to be an asset .
Speaker #4: I don't expect that to change . Absent something really , you know , something really special comes along .
Speaker #12: Appreciate that, Mark. Thank you.
Speaker #4: Yep .
Speaker #2: And there are no additional questions at this time . So I will now turn the conference back over to management for closing remarks .
Speaker #4: Thanks everyone for their time and questions and have a great weekend . .
Speaker #2: And ladies and gentlemen, this concludes today's call, and we thank you for your participation. You may now disconnect.