8-K: Enact Reports Strong Q4 2025, Boosts Shareholder Returns

Enact Holdings, Inc. announced robust fourth-quarter 2025 results, including increased net income and a new $500 million share repurchase program, alongside a consistent quarterly dividend.

Summary

• Net income for Q4 2025 was $177 million, or $1.22 per diluted share, an increase from $163 million ($1.05 per diluted share) in Q4 2024.
• Adjusted operating income for Q4 2025 was $179 million, or $1.23 per diluted share, up from $169 million ($1.09 per diluted share) in Q4 2024.
• Full year 2025 net income was $674 million, or $4.52 per diluted share, compared to $688 million ($4.37 per diluted share) in 2024.
• Full year 2025 adjusted operating income was $688 million, or $4.61 per diluted share, compared to $718 million ($4.56 per diluted share) in 2024.
• New insurance written (NIW) was $14 billion in Q4 2025, an 8% increase from Q4 2024, with full year NIW at $52 billion, up from $51 billion in 2024.
• Primary insurance in-force (IIF) grew to $273 billion, a 2% year-over-year increase.
• Losses incurred significantly decreased in Q4 2025 to $18 million, resulting in a 7% loss ratio, down from $24 million and 10% in Q4 2024, primarily due to a $60 million net reserve release.
• The PMIERs sufficiency ratio remained strong at 162%, approximately $1.9 billion above requirements.
• Book value per share increased to $37.66 as of December 31, 2025, from $32.80 in Q4 2024.
• Enact returned over $500 million of capital to shareholders in 2025, comprising $121 million in quarterly dividends and $382 million in share repurchases.
• A new share repurchase program of up to $500 million was authorized by the Board of Directors, in addition to the $30 million remaining from the previous program.
• A quarterly dividend of $0.21 per share was declared, payable on March 19, 2026, to shareholders of record on February 26, 2026.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this filing as highly positive, driven by strong Q4 financial performance, effective risk management leading to reduced losses, robust capital returns to shareholders, and a positive S&P rating outlook, all of which signal strong operational health and management confidence.

Positives

• Q4 2025 Net Income increased to $177 million from $163 million in Q4 2024.
• Q4 2025 Diluted Net Income per share rose to $1.22 from $1.05 in Q4 2024.
• Q4 2025 Adjusted Operating Income increased to $179 million from $169 million in Q4 2024.
• Q4 2025 Adjusted Diluted Operating Income per share grew to $1.23 from $1.09 in Q4 2024.
• New insurance written (NIW) increased 8% year-over-year in Q4 2025 to $14 billion, and 2% for the full year 2025 to $52 billion.
• Primary insurance in-force (IIF) increased 2% year-over-year to $273 billion.
• Losses incurred significantly decreased in Q4 2025 to $18 million from $24 million in Q4 2024, driven by a $60 million net reserve release due to favorable cure performance and lowered claim rate expectations (9% to 8%).
• The loss ratio improved to 7% in Q4 2025 from 10% in Q4 2024.
• Net investment income increased to $69 million in Q4 2025 from $63 million in Q4 2024, supported by elevated interest rates and higher invested assets.
• Return on Equity (ROE) improved to 13.3% in Q4 2025 from 13.0% in Q4 2024.
• Book Value Per Share increased to $37.66 as of December 31, 2025, from $32.80 in Q4 2024.
• Over $500 million of capital was returned to shareholders in 2025, demonstrating strong capital management.
• The Board authorized a new $500 million share repurchase program, signaling confidence in future performance and commitment to shareholder returns.
• S&P upgraded the financial strength rating outlook for EMICO, EHI, and Enact Re to positive subsequent to quarter end.

Negatives

• Full year 2025 Net Income decreased to $674 million from $688 million in 2024.
• Full year 2025 Adjusted Operating Income decreased to $688 million from $718 million in 2024.
• Primary persistency rate decreased to 80% in Q4 2025 from 82% in Q4 2024, and to 82% for the full year 2025 from 83% in 2024.
• Full year 2025 Losses Incurred significantly increased to $110 million from $39 million in 2024.
• Full year 2025 Loss Ratio increased to 11% from 4% in 2024.
• Full year 2025 Return on Equity (ROE) decreased to 13.0% from 14.3% in 2024.
• Full year 2025 Adjusted Operating Return on Equity decreased to 13.3% from 14.9% in 2024.
• Combined cash and invested assets decreased by $23 million from the prior quarter, primarily due to return of capital and semi-annual interest payment, partially offset by a dividend from EMICO.

Risks

• Potential for an economic downturn or recession in the United States and globally.
• Changes in political, business, regulatory, and economic conditions could adversely affect operations.
• Changes in or to Fannie Mae and Freddie Mac (GSEs), including federal legislation, restructurings, or shifts in business practices, pose a risk.
• Failure to continue meeting the mortgage insurer eligibility requirements of the GSEs could impact business.
• Increased competition for customers in the private mortgage insurance market.
• Lenders or investors seeking alternatives to private mortgage insurance could reduce demand.
• An increase in the number of loans insured through Federal government mortgage insurance programs, such as those offered by the Federal Housing Administration, could impact market share.

Future Outlook

Management remains confident in its ability to execute its strategy and capitalize on future opportunities, despite ongoing affordability pressures and interest rate volatility in the housing market. The authorization of a new $500 million share repurchase program and a consistent quarterly dividend underscores this confidence in long-term performance and commitment to shareholder value.

Management Comments

• "Enact delivered a strong fourth quarter, capping another successful year driven by disciplined execution, resilient credit performance, and a continued focus on long-term value creation."
• "Affordability pressures and interest rate volatility continue to shape housing activity. The role of private mortgage insurance remains critical, and we continue to approach this environment from a position of strength."
• "Our strategy, solid capital position, and operating discipline have enabled us to support our customers, grow our business, and deliver sustainable value for our shareholders. Overall, we remain confident in our ability to execute and capitalize on the opportunities ahead."
• "The Board's authorization of a new $500 million share repurchase program reflects the strength of our balance sheet and our continued confidence in Enact's long-term performance."
• "The authorization reinforces our disciplined approach to capital management and our commitment to returning excess capital to shareholders while maintaining the financial flexibility to support our customers and invest in our business."

Industry Context

StockSavvy.ai notes that Enact's strong Q4 performance, particularly the significant reduction in losses incurred due to favorable cure performance and adjusted claim rate expectations, indicates effective risk management in a challenging housing market. The continued growth in new insurance written and insurance in-force, despite 'affordability pressures and interest rate volatility,' suggests resilience in demand for private mortgage insurance. The positive S&P rating outlook further solidifies its competitive standing against peers in the mortgage insurance sector, which is crucial given the sensitivity of this industry to economic cycles and regulatory changes.

Comparison to Industry Standards

• The PMIERs sufficiency ratio of 162% indicates a robust capital position, well above regulatory minimums, which is a strong indicator of financial health compared to industry benchmarks for mortgage insurers.
• The decrease in the Q4 2025 loss ratio to 7% from 10% in Q4 2024, driven by a $60 million net reserve release, suggests superior claims management and favorable credit performance relative to general industry trends that might be experiencing elevated delinquencies due to economic pressures.
• The annualized adjusted operating return on equity of 13.5% in Q4 2025 is competitive within the private mortgage insurance industry, demonstrating efficient use of capital to generate profits.

Corporate Governance

Related Party Transactions

• Enact Holdings, Inc. entered into a Share Repurchase Agreement with Genworth Holdings, Inc. (which owns approximately 81% of Enact's common stock) to repurchase Genworth's shares in proportion to market repurchases. This is intended to maintain Genworth's ownership level and was approved by Enact's independent Audit Committee.

Stakeholder Impact

• Shareholders: Positively impacted by strong financial results, increased book value per share, a new substantial share repurchase program, and a consistent quarterly dividend, indicating strong capital returns and management confidence.
• Customers (Lenders and Borrowers): Enact's solid capital position and operating discipline enable continued support for customers, helping more people achieve homeownership.
• Employees: The sequential increase in operating expenses driven by incentive-based compensation suggests positive performance recognition for employees.
• Regulatory Authorities: The strong PMIERs sufficiency ratio of 162% demonstrates compliance and robust financial health, which is favorable for regulatory oversight.

Next Steps

• Enact will host a conference call on February 4, 2026, at 8:00 a.m. (Eastern) to discuss the fourth quarter financial results.
• The company will continue to execute its new $500 million share repurchase program, with timing and amounts depending on market conditions and regulatory requirements.
• The quarterly dividend of $0.21 per share will be paid on March 19, 2026, to shareholders of record on February 26, 2026.

Key Dates

Recommendation

The filing presents a very strong financial picture for Enact. The significant improvement in Q4 2025 net income and diluted EPS, coupled with a substantial reduction in losses incurred due to effective risk management and reserve releases, indicates robust operational performance. The authorization of a new $500 million share repurchase program, in addition to over $500 million returned in 2025, demonstrates a strong commitment to shareholder value and confidence in the company's future. The positive S&P rating outlook further reinforces this. While full-year net income and ROE saw slight declines, the Q4 momentum and proactive capital management initiatives are highly compelling for investors, suggesting the stock is undervalued given its financial strength and shareholder-friendly policies.

Keywords

Mortgage Insurance, Financial Results, SEC Filing, Earnings Report, Share Repurchase, Dividend, Capital Management, Private Mortgage Insurance, Housing Market, Risk Management, Financial Performance, PMIERs