Essent Group Ltd (ESNT) 2025 Q2 法說會逐字稿

Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to the Essent Group Ltd. second-quarter earnings call. (Operator Instructions) Thank you. I would now like to hand the conference over to Phil Stefano, Investor Relations speak. Please go ahead.

您好，感謝您的支持。我叫貝拉，今天我將擔任您的會議主持人。現在，我歡迎大家參加 Essent Group Ltd. 第二季財報電話會議。（操作員指示）謝謝。現在我想將會議交給投資者關係部發言人 Phil Stefano。請繼續。

Thank you, Bella. Good morning, everyone, and welcome to our call. Joining me today are Mark Casale, Chairman and CEO; and David Weinstock, Chief Financial Officer. Also on hand for the Q&A portion of the call is Chris Curran, President of Essent Guaranty. Our press release, which contains Essent's financial results for the second quarter of 2025 was issued earlier today and is available on our website at essentgroup.com.

謝謝你，貝拉。大家早安，歡迎參加我們的電話會議。今天與我一起出席的還有董事長兼執行長馬克卡薩萊 (Mark Casale) 和財務長大衛溫斯托克 (David Weinstock)。Essent Guaranty 總裁 Chris Curran 也出席了這次電話會議的問答環節。我們的新聞稿包含 Essent 2025 年第二季的財務業績，已於今天稍早發布，可在我們的網站 essentgroup.com 上查閱。

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. 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.

在開始之前，我想提醒與會者，今天的討論將被記錄下來，並將包括前瞻性陳述。這些聲明是基於目前的預期、估計、預測和假設，受風險和不確定性的影響，可能導致實際結果有重大差異。

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 19, 2025, and any other reports and registration statements filed with the SEC, which are also available on our website.

有關這些風險和不確定性的討論，請參閱今天的新聞稿中有關前瞻性陳述的警示性語言。我們於 2025 年 2 月 19 日向美國證券交易委員會提交的 10-K 表格中包含的風險因素以及向美國證券交易委員會提交的任何其他報告和註冊聲明中的內容也可在我們的網站上查閱。

Now let me turn the call over to Mark.

現在讓我把電話轉給馬克。

Thanks, Phil, and good morning, everyone. Earlier today, we released our second-quarter 2025 financial results which continue to benefit from favorable credit performance and the impact of higher interest rates on persistency and investment income. Our second quarter performance demonstrates the strength of our business model and the current macroeconomic environment.

謝謝，菲爾，大家早安。今天早些時候，我們發布了 2025 年第二季的財務業績，該業績繼續受益於良好的信貸表現以及更高利率對持續性和投資收益的影響。我們第二季的業績證明了我們的商業模式和當前宏觀經濟環境的實力。

We believe that our buy, manage and distribute operating model uniquely positions Essent within a range of economic scenarios to generate high-quality earnings. Our outlook on housing remains constructive over the longer term as we believe that demographics will continue to drive demand and provide home price support.

我們相信，我們的購買、管理和分銷營運模式使 Essent 在一系列經濟情景中佔據獨特的地位，能夠產生高品質的收益。我們對長期住房市場的展望依然樂觀，因為我們相信人口結構將繼續推動需求並為房價提供支撐。

Over the last several years, demand has exceeded supply resulting in meaningful home price appreciation and affordability challenges. A byproduct that these affordability issues is that higher creditworthy borrowers are being qualified for mortgages, as evidenced by the weighted average credit score of our new business. Also, the increase in home values has resulted in further embedded equity within our insured portfolio, which provides a level of protection and reducing the probability of loans transitioning from default to claim. And now for our results. For the second quarter of 2025, we reported net income of $195 million compared to $204 million a year ago.

過去幾年，需求超過供應，導致房價大幅上漲，並帶來負擔能力挑戰。這些負擔能力問題的副產品是，信用較好的借款人有資格獲得抵押貸款，這從我們新業務的加權平均信用評分就可以看出。此外，房屋價值的上漲導致我們的保險組合中嵌入了更多權益，從而提供了一定程度的保護並降低了貸款從違約轉為索賠的可能性。現在來看看我們的結果。2025 年第二季度，我們報告的淨收入為 1.95 億美元，而去年同期為 2.04 億美元。

On a diluted per share basis, we earned $1.93 for the second quarter compared to $1.91 a year ago. On an annualized basis, our return on average equity was 14% in the quarter. As of June 30, our US mortgage insurance in force was $247 billion, a 3% increase versus a year ago. 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%.

以攤薄每股收益計算，第二季我們的收益為 1.93 美元，而去年同期為 1.91 美元。以年率計算，本季我們的平均股本回報率為 14%。截至 6 月 30 日，我們的美國有效抵押貸款保險金額為 2,470 億美元，比去年同期成長 3%。我們有效保險的信用品質依然強勁，加權平均 FICO 為 746，加權平均原始 LTV 為 93%。

Our 12-month persistency on June 30 was 86%, flat from last quarter. While nearly half of our in-force portfolio has a note rate of 5% or lower, we continue to expect that the current level of mortgage rates will support elevated persistency in the near term. On the Washington front, our industry continues to play a vital role in supporting a well-functioning and sustainable housing finance system. We believe that access and affordability will continue to be the primary focus in D.C. Essent is supportive and believes that our industry is very effective in enabling homeownership for low down payment borrowers while also reducing taxpayer risk.

截至 6 月 30 日，我們的 12 個月持續率為 86%，與上一季持平。儘管我們現有投資組合中近一半的票據利率為 5% 或更低，但我們仍然預計，目前的抵押貸款利率水準將在短期內支持更高的持續性。在華盛頓方面，我們的產業繼續在支持運作良好且可持續的住房金融體系方面發揮著至關重要的作用。我們相信，住房的可及性和可負擔性將繼續成為華盛頓特區的重點。 Essent 對此表示支持，並相信我們的行業在幫助低首付借款人實現房屋所有權方面非常有效，同時也降低了納稅人的風險。

During the quarter, Essent Re continued writing high-quality GSE risk share business and earning advisory fees through its MGA business with a panel of reinsurer clients. As of June 30, Essent Re had risk in force of $2.3 billion for GSE and other risk share. Essent Re achieves both capital and tax efficiencies through its affiliate quota share with Essent Guaranty and allows us to leverage Essent's credit expertise beyond primary MI. It also provides a valuable platform for potential long-term growth and diversification of the Essent franchise. Essent Title remains focused on expanding our client base footprint and production capabilities in key markets.

在本季度，Essent Re 繼續開展高品質的 GSE 風險分擔業務，並透過與一組再保險客戶開展的 MGA 業務賺取諮詢費。截至 6 月 30 日，Essent Re 的政府支持企業 (GSE) 和其他風險分擔的有效風險為 23 億美元。Essent Re 透過與 Essent Guaranty 的附屬配額份額實現了資本和稅收效率，並使我們能夠利用 Essent 在主要 MI 之外的信貸專業知識。它也為 Essent 特許經營的潛在長期成長和多樣化提供了寶貴的平台。Essent Title 始終致力於擴大我們在主要市場的客戶群覆蓋範圍和生產能力。

We continue to maintain a long-term horizon for this business and given persistent headwinds of higher rates, we do not expect Title to have any material impact on our earnings over the near term. Our consolidated cash and investments as of June 30 totaled $6.4 billion, with an annualized investment yield in the second quarter of 3.9%. Our new money yield in the second quarter was nearly 5%, holding largely stable over the past several quarters. 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 and a PMIER efficiency ratio of 176%. With a trailing 12-month operating cash flow of $867 million, our franchise remains well positioned from an earnings, cash flow and balance sheet perspective.

我們將繼續對這項業務保持長期的關注，並考慮到利率持續上升的阻力，我們預計 Title 不會在短期內對我們的收益產生任何重大影響。截至 6 月 30 日，我們的合併現金和投資總額為 64 億美元，第二季的年化投資報酬率為 3.9%。我們第二季的新資金收益率接近5%，與過去幾季相比基本保持穩定。我們繼續保持強勁營運勢頭，擁有 57 億美元的 GAAP 權益、14 億美元的超額損失再保險以及 176% 的 PMIER 效率比率。過去 12 個月的營業現金流為 8.67 億美元，從獲利、現金流和資產負債表的角度來看，我們的特許經營權仍然處於有利地位。

Earlier this week, we were pleased that Moody's upgraded Essent Guaranty's insurance financial strength rating to A2 and Essent Group's senior unsecured debt rating to Baa2. We believe these actions reflect our consistent strong results, high-quality insured portfolio, financial flexibility and the benefits of our comprehensive reinsurance program. Our capital strategy is to maintain a conservative balance sheet, withstand a severe stress and preserve optionality for strategic growth opportunities.

本週早些時候，我們很高興穆迪將 Essent Guaranty 的保險財務實力評級上調至 A2，並將 Essent Group 的優先無擔保債務評級上調至 Baa2。我們相信這些舉措反映了我們一貫的強勁業績、高品質的保險組合、財務靈活性以及我們全面的再保險計劃的優勢。我們的資本策略是維持保守的資產負債表，承受嚴重的壓力並保留策略成長機會的選擇權。

We continue to believe that success in our business is best measured by growth in book value per share as we look to optimize returns over the long term. In addition, our strong capital position and slowdown in portfolio growth allows us to be active in returning capital to shareholders.

我們始終相信，我們業務的成功最好透過每股帳面價值的成長來衡量，因為我們尋求的是長期回報的最佳化。此外，我們強大的資本狀況和投資組合成長的放緩使我們能夠積極地向股東返還資本。

With that in mind, I am pleased to announce that our Board has approved a common dividend of $0.31 for the third quarter of 2025. Further, year-to-date through July 31, we repurchased nearly 7 million shares for approximately $390 million. Now let me turn the call over to Dave.

考慮到這一點，我很高興地宣布，我們的董事會已批准 2025 年第三季的普通股息為 0.31 美元。此外，截至 7 月 31 日，我們已回購近 700 萬股，價值約 3.9 億美元。現在讓我把電話轉給戴夫。

Thanks, Mark, and good morning, everyone. Let me review our results for the quarter in a little more detail. For the second quarter, we earned $1.93 per diluted share compared to $1.69 last quarter of $1.91 in the second quarter 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 at our subsidiary, Essent Re.

謝謝，馬克，大家早安。讓我更詳細地回顧一下本季的業績。第二季度，我們的每股攤薄收益為 1.93 美元，而上一季為 1.69 美元，去年同期為 1.91 美元。我今天的評論將主要集中在我們的抵押貸款保險部門的業績上，該部門匯總了我們的美國抵押貸款保險業務以及我們子公司 Essent Re 的 GSE 和其他抵押貸款再保險業務。

There's additional information or in corporate and other results an exhibit of the financial supplement. Our US mortgage insurance portfolio ended the second quarter with insurance in force of $246.8 billion, an increase of $2.1 billion from March 31 and an increase of $6.1 billion or 2.5% compared to $240.7 billion at June 30, 2024. Persistency at June 30, 2025, was 85.8% and essentially unchanged from the first quarter of 2025. Mortgage Insurance net premium earned for the second quarter of 2025 was $234 million and included $13.6 million of premiums earned by Essent Re on our third-party business.

有附加資訊或在公司和其他結果中展示財務補充。我們在美國抵押貸款保險組合的第二季末有效保險金額為 2,468 億美元，較 3 月 31 日增加 21 億美元，與 2024 年 6 月 30 日的 2,407 億美元相比增加 61 億美元，增幅為 2.5%。截至 2025 年 6 月 30 日的持續率為 85.8%，與 2025 年第一季基本保持不變。2025 年第二季抵押貸款保險淨保費收入為 2.34 億美元，其中包括 Essent Re 在我們的第三方業務中賺取的 1,360 萬美元保費。

The average base premium rate for the US mortgage insurance portfolio for the second quarter was 41 basis points at the net average premium rate was 36 basis points, both consistent with last quarter. Our mortgage insurance provision for losses and loss adjustment expenses was $15.4 million in the second quarter of 2025 compared to $30.7 million in the first quarter of 2025 and a benefit of $1.2 million in the second quarter a year ago. At June 30, the default rate on the US mortgage insurance portfolio was 2.12%, down 7 basis points from 2.19% at March 31, 2025.

第二季美國抵押貸款保險組合的平均基礎保費率為41個基點，淨平均保費率為36個基點，均與上季持平。2025 年第二季度，我們的抵押貸款保險損失準備金和損失調整費用為 1,540 萬美元，而 2025 年第一季為 3,070 萬美元，去年同期第二季的收益為 120 萬美元。截至 6 月 30 日，美國抵押貸款保險組合的違約率為 2.12%，較 2025 年 3 月 31 日的 2.19% 下降 7 個基點。

While we continue to observe a decline in the number of defaults associated with Hurricanes Helene and Milton during the second quarter due to cure activity, we made no changes to the reserve for hurricane-related defaults as this amount continues to be our best estimate of ultimate losses to be incurred for claims associated with those defaults. Mortgage Insurance operating expenses in the second quarter were $36.3 million and the expense ratio was 15.5% compared to $43.6 million and 18.7% in the first quarter. As a reminder, in April, we entered into 2 excess of loss transactions covering our 2025 and 2026 new insurance written, effective July 1 of each year with panels of highly rated reinsurers. In addition, in April, ceding percentage of our affiliate quota share with Essent Re increased from 35% to 50%, retroactive to NIW starting from January 1, 2025. At June 30, Essent Guaranty's PMIERs efficiency ratio was strong at 176%, with $1.6 billion in excess available assets.

雖然我們繼續觀察到由於治理活動而導致第二季度與颶風海倫和米爾頓相關的違約數量有所下降，但我們沒有對颶風相關違約的準備金進行任何更改，因為這一金額仍然是我們對與這些違約相關的索賠最終損失的最佳估計。第二季抵押貸款保險營運費用為 3,630 萬美元，費用率為 15.5%，而第一季分別為 4,360 萬美元和 18.7%。提醒一下，今年 4 月，我們與評級較高的再保險公司專家小組簽訂了 2 筆超額損失交易，涵蓋我們 2025 年和 2026 年的新簽發保險，自每年 7 月 1 日起生效。此外，4 月份，我們與 Essent Re 的關聯公司配額份額轉讓比例從 35% 增加到 50%，從 2025 年 1 月 1 日起追溯至 NIW。截至 6 月 30 日，Essent Guaranty 的 PMIER 效率比率高達 176%，擁有 16 億美元的超額可用資產。

Consolidated net investment income increased $1.1 million or 2% to $59.3 million in the second quarter of 2025 compared to last quarter due primarily to a modest increase in the overall yield of the portfolio. As Mark noted, our total holding company liquidity remains strong and includes $500 million of undrawn revolver capacity under our committed credit facility. At June 30, we had $500 million of senior unsecured notes outstanding and our debt-to-capital ratio was 8%. During the second quarter, Essent Guaranty paid a dividend of $65 million to its US holding company.

2025 年第二季度，合併淨投資收入與上一季相比增加了 110 萬美元，即 2%，達到 5,930 萬美元，這主要是由於投資組合的整體收益率小幅上升。正如馬克所指出的，我們的控股公司總流動性依然強勁，包括我們承諾的信貸額度下 5 億美元的未提取循環信貸額度。截至 6 月 30 日，我們有 5 億美元的未償還優先無擔保票據，我們的債務資本比率為 8%。第二季度，Essent Guaranty 向其美國控股公司支付了 6,500 萬美元的股息。

As of July 1, Essent Guaranty can pay additional ordinary dividends of $366 million in 2025. At quarter end, Essent Guaranty's statutory capital was $3.7 billion, with the capital ratio of 9.2:1. Those of statutory capital includes $2.6 million of contingency reserves at June 30. During the second quarter, Essent Re paid a dividend of $120 million to Essent Group. Also in the quarter, Essent Group paid cash dividends totaling $3.9 to shareholders, and we repurchased 3 million shares for $171 million.

截至 7 月 1 日，Essent Guaranty 可在 2025 年支付 3.66 億美元的額外普通股利。截至本季末，Essent Guaranty 的法定資本為 37 億美元，資本比率為 9.2:1。其中，法定資本包括截至 6 月 30 日的 260 萬美元應急儲備金。第二季度，Essent Re 向 Essent Group 支付了 1.2 億美元的股息。此外，在本季度，Essent Group 向股東支付了總計 3.9 美元的現金股息，並且我們以 1.71 億美元回購了 300 萬股股票。

In July 2025, we repurchased 1 million shares for $59 million. Now let me turn the call back over to Mark.

2025 年 7 月，我們以 5,900 萬美元回購了 100 萬股。現在讓我把電話轉回給馬克。

Thanks, Dave. In closing, we are pleased with our second quarter financial results as Essent continues to generate high-quality earnings while our balance sheet and liquidity remains strong. Our outlook for housing remains constructive over the long term, and we believe Essent is well positioned to navigate the current environment given the strength of our buy, manage and distribute operating model. Our strong earnings and cash flow continue to provide us with an opportunity to balance investing in our business and returning capital to shareholders. We believe this approach is in the best long-term interest of Essent and our stakeholders, while Essent continues to play an integral role in supporting affordable and sustainable homeownership.

謝謝，戴夫。最後，我們對第二季的財務表現感到滿意，因為 Essent 繼續創造高品質的收益，同時我們的資產負債表和流動性仍然強勁。從長遠來看，我們對房屋市場的前景依然看好，我們相信，憑藉我們強大的購買、管理和分銷營運模式，Essent 完全有能力應對當前環境。我們強勁的獲利和現金流繼續為我們提供平衡業務投資和股東回報的機會。我們相信，這種方法符合 Essent 和我們利益相關者的長期利益，同時 Essent 將繼續在支持可負擔和可持續的房屋所有權方面發揮不可或缺的作用。

Now let's get to your questions. Operator?

現在讓我們來回答你的問題。操作員？

(Operator Instructions) Terry Ma, Barclays.

（操作員指示）巴克萊銀行的 Terry Ma。

I wanted to ask about home prices and your expectations going forward. To the extent home prices trend negative, how do you think about pricing on a go-forward basis? And then second, how would you feel about the more recent vintages that the industry is underwritten, which has seen just less home price appreciation overall?

我想問房價以及您對未來的期望。如果房價趨勢呈現負面，您如何看待未來的定價？其次，您如何看待該行業承保的近期房價整體上漲幅度較小這一現象？

I think on home price appreciation -- where do we see home prices going? Well, it really depends down at the MSA level. So I mean, we have a pretty detailed forward-looking model across all of the MSAs. Puts a lot of -- I would say the driving factors are clearly month supply, recent home price appreciation and job growth, right? Those are three factors, if you just boil it down to a local community.

我認為關於房價升值──房價會走向何方？嗯，這實際上取決於 MSA 級別。所以我的意思是，我們對所有 MSA 都有一個非常詳細的前瞻性模型。投入很多——我想說驅動因素顯然是每月供應量、近期房價升值和就業成長，對嗎？如果你將其歸結為當地社區的話，這就是三個因素。

And I think there, yes, we see home prices going up in certain areas still because of the lack of supply. Other areas, we think there's going to be some weakening, and we've thought that for a while, and it depends on the extent of it 5%-ish, 10%-ish maybe in certain markets. I think when we take a step back, that's actually pretty good. It's healthy. Some of the markets have really increased rapidly, I think almost a 50% increase over a few year period.

我認為，是的，由於供應不足，我們看到某些地區的房價仍在上漲。我們認為其他領域會出現一些疲軟，我們已經考慮了一段時間了，這取決於疲軟的程度，在某些市場可能為 5% 左右，10% 左右。我認為，當我們退一步來看時，這實際上是相當不錯的。這很健康。一些市場確實成長迅速，我認為幾年內成長了近 50%。

Income growth still at 3%, 4%. And then you had a doubling of rate -- that's why you've seen such slowdown in housing, right? We're coming out of that. You've heard me say it before the COVID bubble, so to speak, with low rates and high demand. And we're on the second leg of that.

營收成長仍為3%、4%。然後利率又翻了一番——這就是為什麼房屋市場如此放緩，對嗎？我們正在走出這種困境。可以這麼說，在新冠疫情泡沫爆發之前，你們就聽我說過，當時利率低，需求高。我們目前正處於第二階段。

So I think coming out of that, if you think of just affordability when it becomes normalized again, you're going to need a mix of job growth, HPA flattening out or decreasing in certain areas and clearly, a little bit of relief on rates, right? And that's -- and you can almost draw the math up is depending on where your belief is on rates. So I think, again, I think in certain markets for home prices to come down, I think that's healthy for borrowers. You heard me say it in the script. I mean there's a big issue.

因此，我認為，如果您只考慮住房負擔能力，當它再次恢復正常時，您將需要就業增長、房屋售價在某些領域趨於平穩或下降，顯然還需要對利率進行一些減免，對嗎？這就是──你幾乎可以根據你對利率的信念來計算數學結果。所以我再次認為，在某些市場，房價下降對借款人來說是有利的。你在劇本裡聽到我這麼說了。我的意思是有一個大問題。

There's a big push in D.C. around affordability, there's a big push with our lenders as it should be. It's very difficult to get a mortgage. And especially when you think of the first time home buyer is 38 years old when historically, it's in the low 30s. That tells you right there that folks are having trouble getting home.

華盛頓特區正在大力推動住房負擔能力建設，我們的貸款機構也應該大力推動。獲得抵押貸款非常困難。尤其是當你想到首次購屋者的年齡是 38 歲，而歷史上首次購屋者的年齡是在 30 歲出頭。這說明人們回家有困難。

So anything that help affordability, if that means HPA is going down a little bit. That's fine. I look at the embedded equity in our portfolio. I'm not particularly worried. Yes, you said the recent vintages.

因此，任何有助於提高負擔能力的事情，如果這意味著 HPA 會略微下降。沒關係。我查看了我們投資組合中的嵌入股權。我並不是特別擔心。是的，您說的是最近的年份。

I would say, sure that we've always said they're probably more exposed but they're pretty normal, right? So if you think about historically, Terry, on average, let's say, before COVID and you looked at our portfolio, it was probably 81%-ish, 82% mark-to-market. It's below that today. So assuming it gets back to that level, that's the normal business. So we're not particularly concerned around that.

我想說，當然，我們總是說他們可能更容易受到傷害，但他們很正常，對吧？因此，如果您從歷史上看，特里，平均而言，比如說，在 COVID 之前，您查看我們的投資組合，它可能是 81% 左右，按市價計價的 82%。今天則低於這個水準。因此假設它回到那個水平，這是正常的業務。所以我們對此並不特別擔心。

In terms of new business, we've always priced differently. So we have little add-ons for what we'll call a market of focus. And that, again, has to be -- it's not just HPA rose a lot, puts a market of focus for us. If there's still underlying strong income growth and lack of supply, that -- we'll probably like that market. And if you just think about all of our markets in general, if you go down to the MSA level, and you'll hear about Cape Carol is in The Wall Street Journal and you should stay away from it.

對於新業務，我們的定價始終有所不同。因此，我們針對所謂的重點市場有一些附加功能。再次強調，這不僅是因為 HPA 大幅上漲，也為我們帶來了市場關注。如果仍然有強勁的收入成長和供應不足，那麼我們可能會喜歡這個市場。如果你只是總體考慮我們所有的市場，如果你深入到 MSA 級別，你會在《華爾街日報》上聽到有關 Cape Carol 的消息，你應該遠離它。

The default rates in that area for us are pretty similar to the rest of our portfolio. I want to say it's a touch higher. Go to Austin, our default rate is actually lower than the overall portfolio. So you have to be careful at trying to look at the industry from a 30,000-foot level. I think when you look at individual Essent, I think, continually the returns are there. And obviously, when you think about how -- what we're doing on the capital side, I think we're probably a pretty good sense of where our view around credit.

我們該地區的違約率與我們投資組合中的其他部分非常相似。我想說它稍微高一點。去奧斯汀，我們的違約率實際上低於整體投資組合。因此，你必須小心地從 30,000 英尺的高度來觀察這個產業。我認為，當你觀察個體精華時，回報是持續存在的。顯然，當你思考我們在資本方面所做的事情時，我認為我們可能對信貸的看法有相當好的認識。

Got it. Super helpful. And I guess maybe on just credit for the quarter. New defaults were up 9% year-over-year. The pace of increase has decelerated markedly in the last few quarters. It seems like it's pretty consistent across the MIs that I cover. So I guess any color on the makeup of new defaults that you've seen in the last quarter or 2? And I guess, what's the outlook there?

知道了。超有幫助。我想也許這只是本季的信用。新的違約率年增了 9%。過去幾個季度，成長速度明顯放緩。看起來它與我所涵蓋的 MI 非常一致。那麼，我猜您在過去一兩個季度中看到了新的違約情況嗎？我想，那裡的前景如何？

Yes. I mean, again, new defaults, nothing surprising. I mean, very consistent with other quarters. And just again, from an investor standpoint, you just have to understand that's really the -- we're starting to get back to probably the normal seasoning pattern around the faults where you see it decrease in the first half of the year and tends to pick up a little bit in the second half of the year. So there's the normal seasoning that folks should be aware of, but it happened last year and it seemed to catch everyone by surprise that our default seasons.

是的。我的意思是，再次重申，新的預設值，沒有什麼令人驚訝的。我的意思是，與其他方面非常一致。再說一次，從投資者的角度來看，你必須明白，這實際上是——我們可能開始回到圍繞故障的正常調味模式，你會看到它在上半年減少，並在下半年略有回升。因此，人們應該注意正常的調味，但去年發生了這種情況，似乎讓每個人都對我們的預設季節感到驚訝。

And then now they're -- they decreased in the first half of the year. But I think you'll see that normal seasoning big picture. You know, Terry, again, it's 2 point-ish was at 2.12% default out of roughly 811,000 or 812,000 loans that we have. So again, it ebbs and flows a little bit, but I think big picture, given the embedded equity in the portfolio, having some of those even if they become defaults transitioning, the claim depending on the vintage, it's probably in a lower probability side. So again, I think from a credit standpoint, picture, we feel pretty good from that first loss perspective.

而現在，它們在上半年有所下降。但我想你會看到正常調味料的全貌。你知道，特里，再說一次，在我們大約 811,000 或 812,000 筆貸款中，違約率為 2.12%，約為 2 個百分點。所以，再次強調，它會有所起伏，但我認為，從大局來看，考慮到投資組合中的嵌入股權，即使其中一些成為違約過渡，索賠取決於年份，其機率可能較低。因此，我認為，從信用角度來看，從第一次損失的角度來看，我們感覺相當不錯。

And your next question comes from the line of Bose George with KBW.

您的下一個問題來自 KBW 的 Bose George。

On the buybacks, would you characterize the pace of your buybacks this year as opportunistic? Or is there any change in how you're thinking about excess capital, which is obviously built quite a bit over the last couple of years?

關於回購，您是否認為今年的回購步伐是機會主義的？或者您對過剩資本的看法有什麼改變嗎？顯然，過去幾年過剩資本已經累積了相當多？

It's a little bit of both, Bose. I think we've always -- I think we have -- we are valuation sensitive around the buyback. So we have a grid that we execute across. And it changes quarter-to-quarter depending on where we think credit is. Are there any opportunities to invest the cash?

兩者都有一點，Bose。我認為我們一直——我認為我們已經——對回購的估值很敏感。因此我們有一個可以執行的網格。根據我們認為的信貸狀況，它會逐季度發生變化。有沒有機會投資現金？

Pretty high bar given the returns in the core business. And to your point, we said before we have a retained and invest mentality. Well, we haven't really invested anything in a couple of years. So we've retained a lot. So it's a little bit of -- we have a lot of buildup of excess capital.

考慮到核心業務的回報，這個標準相當高。關於你的觀點，我們之前說過，我們有一種保留和投資的心態。嗯，幾年來我們實際上沒有投資任何東西。所以我們保留了很多。所以，我們累積了大量過剩資本。

We like where the valuation is. We think it's really good returns to the shareholders. So it's a good use of proceeds and given what we did in July. I wouldn't expect that to change for the remainder of the year. I wouldn't be surprised if it doesn't change, given what we're looking at and we'll have something else.

我們喜歡目前的估值。我們認為這對股東來說確實是一筆豐厚的回報。因此，考慮到我們 7 月所做的事情，這是對收益的良好利用。我預計今年剩餘時間的情況不會改變。考慮到我們正在考慮的事情，如果它不改變，我不會感到驚訝，而且我們會有其他東西。

It's probably going to be in an investor deck, we'll put out next week around the embedded value of the portfolio. One of our peers did it a couple of years ago and stopped doing it, but it's a really interesting slide that I think it's important for analysts and investors to take a look at. And if you think about -- it will give you some context for how we think about the company, Bose.

它可能會出現在投資者簡報中，我們將在下週圍繞投資組合的內含價值進行發布。我們的一位同行幾年前就這麼做，後來就不再這麼做了，但這是一張非常有趣的幻燈片，我認為分析師和投資者應該去看看。如果你仔細想想——它就會給你一些關於我們如何看待 Bose 公司的背景資訊。

I mean with roughly $5.7 billion of capital that we have today, that's roughly where the stock trades in terms of a market cap. If you look -- it doesn't really give any credit meant for the what -- roughly $245 billion insurance in force we have, earns 40 basis points in yield, and you can predict or you can assume a certain combined ratio over 4 to 5 years, discounted back.

我的意思是，我們今天擁有大約 57 億美元的資本，這大致就是股票的市值交易水準。如果你看一下——它實際上並沒有給我們任何好處——我們擁有的大約 2450 億美元的有效保險，獲得了 40 個基點的收益，你可以預測或假設 4 到 5 年內的某個綜合比率，折現回來。

Take a look at the investment portfolio, $6 billion, $6.5 billion yielding, close to $4 million, a lot of embedded value in the investment portfolio, Bose, that frankly wasn't there 3, 4 years ago. So when you look at that number, you can be -- and you can pick whatever discount rate that you like, it's probably $15 to $20 in terms of stock, in terms of the valuation, additional book value. So embedded book value, and that doesn't give us -- that ignores any credit for being a platform or a franchise. It's one of 6 in the country that offers low down payment borrowers to the top lenders back to the GSEs. So again, just big picture.

看看投資組合，60 億美元，65 億美元的收益，接近 400 萬美元，投資組合中蘊含著大量價值，Bose，坦白說，3、4 年前並不存在這些價值。因此，當您查看該數字時，您可以 - 您可以選擇您喜歡的任何折扣率，就股票、估值、額外帳面價值而言，它可能是 15 到 20 美元。因此，內含的帳面價值並沒有為我們帶來任何作為平台或特許經營權的榮譽。它是全國六家為低首付借款人提供貸款並返還給政府支持企業的銀行之一。所以再說一遍，這只是一個大局。

I don't -- it's a slide, and I think it's something just for investors to be aware of. And I think it's something we're going to start thinking through and discussing with investors, it's pretty true for all of our competitors too. So it's not just an Essent only thing. And I think it deserves a little bit more of a spotlight. So I think when you put in the context of that, and again, given where the valuation is, we feel comfortable buying shares, a healthy amount of shares back at these prices.

我不認為這是一次下滑，我認為這只是投資者需要注意的事情。我認為這是我們將開始思考並與投資者討論的事情，對於我們所有的競爭對手也是如此。所以它不僅僅是一個 Essent 的東西。我認為它值得更多關注。因此，我認為，當你考慮到這個背景時，考慮到估值水平，我們會放心地以這些價格購買大量股票。

That's great. Very helpful. And then just one follow-up on the buybacks. So what was the dollar amount that was spent just during the second quarter?

那太棒了。非常有幫助。然後對回購進行一次跟進。那麼光是第二季就花了多少美元？

Bose, it's Dave Weinstock. So we purchased 3 million shares at $171 million in the second quarter.

Bose，我是 Dave Weinstock。因此我們在第二季以 1.71 億美元的價格購買了 300 萬股。

Doug Harter, UBS.

瑞銀的道格·哈特。

Mark, just I guess following up on that embedded value and the buyback. How are you thinking about sizing it, what are the limitations of cash flow up to the holding company? And just how do you think about holding back for opportunities that may or may not present themselves versus buying back today?

馬克，我只是想跟進一下內含價值和回購。您如何考慮確定其規模，控股公司的現金流限制是什麼？那麼，您如何看待等待可能出現或可能不出現的機會而不是立即買入？

No, it's a good question. I think there's clearly a limit, right? I mean -- and we have -- we get cash back to the group 2 ways, obviously, through US and holdings, which is the core. So we'll dividend it up from Guaranty, up to holdings and we have to get it to Group then we have Essent Re.

不，這是個好問題。我認為顯然有一個限制，對嗎？我的意思是——我們確實透過兩種方式將現金回饋給集團，顯然是透過美國和控股公司，這是核心。因此，我們將從擔保公司獲得股息，直到控股公司，然後我們必須將其分配給集團，然後我們才有 Essent Re。

So as we tended to use a little bit more Essent Re recently, it's a little bit more tax efficient, Doug. But there is a limit. So when you think about payout type ratios, I think 100 is probably -- is the max just from how the cash moves through the system, not saying we would do that. But if you're looking at an upper end, just over the -- where it was in the first half of the year, that's a decent level. In terms of how we calculate excess capital, we've gotten many questions over the years.

因此，由於我們最近傾向於更多地使用 Essent Re，因此它的稅收效率更高，Doug。但有一個限度。因此，當您考慮支付類型比率時，我認為 100 可能是 - 只是從現金在系統中的流動方式來看最大值，而不是說我們會這樣做。但如果你看的是上限，剛好超過今年上半年的水平，那是一個不錯的水平。關於我們如何計算過剩資本，多年來我們收到了許多疑問。

PMIERs is certainly one. But we also look at it from an enterprise framework, right, because we include Essent Re in there. So we look at it like consolidated capital requirements and needs. And we run it through different stress. I would say the Moody's S4 stress is one and the constant severity model that they use Moody's obviously looked at both of those during the upgrade.

PMIERs 肯定是其中之一。但我們也從企業框架的角度來看待它，因為我們在其中包括了 Essent Re。因此，我們將其視為合併的資本要求和需求。我們讓它承受不同的壓力。我想說穆迪的 S4 壓力就是其中之一，而穆迪使用的恆定嚴重程度模型顯然在升級過程中考慮了這兩者。

And I think that's important, right? So I think you have now another independent party looking at our balance sheet and our risk and detailed review of the stresses, that feels comfortable now that we're at the single A level. I think it's good news for investors and clearly for bondholders. We'll also look at it, we'll still run it through the great financial crisis. We'll still run that.

我認為這很重要，對吧？因此，我認為現在有另一個獨立方來審查我們的資產負債表和風險，並詳細審查壓力，現在我們處於單一 A 級，這讓我們感到很舒服。我認為這對投資者和債券持有人來說都是好消息。我們也會研究它，我們仍會在金融危機期間運行它。我們仍會繼續這樣做。

So you're always looking -- because remember, we're that upper tier, Doug, right? We own the first loss. We're very comfortable. I hope I won't get too stressed about default rates and the first loss. That's what we signed up for.

所以你總是在尋找——因為記住，我們是上層，道格，對吧？我們承擔了第一次損失。我們非常舒服。我希望我不會因為違約率和第一次損失而感到太大壓力。這就是我們簽約的目的。

And it's much more -- it's clearly earnings versus capital. And then we hedge out that whole mezz piece. Our exposure is when it comes back to the top. And I think when we think about what comes back to the top, is the probability of that low -- sure, it is. But it was low.

而且它的意義遠不止於此——它顯然是收益與資本的對比。然後我們對整個夾層部分進行對沖。當它回到頂部時，我們的曝光度就會提高。我認為，當我們考慮回到頂部時，這種可能性很低——當然是的。但其值很低。

It's low. Low doesn't mean 0. So I think when we look at that environment, we're looking to make sure we clearly have enough more, than enough capital from a PMIER standpoint. And remember how procyclical PMIERs is, Doug. So there's a liquidity component of that to the MIs that I'm not sure all investors appreciate.

很低。低並不意味著 0。因此，我認為，當我們審視這種環境時，我們要確保從 PMIER 的角度來看，我們擁有足夠的資本。記住 PMIER 是多麼順週期，Doug。因此，我不確定所有投資者是否都意識到了 MI 的流動性成分。

So we run it through that. So not just capital, clearly, P&L, but PMIERs too. So we want to make sure we have enough capital not to just withstand that, but basically to be -- maybe use it as an opportunity, an opportunistic. So we had that chance in 2020. If you go back, we raised capital, we have plenty of capital.

因此我們透過這個方法來運行它。因此，顯然不只是資本、損益表，還有 PMIER。因此，我們要確保我們擁有足夠的資本，不僅能夠承受這種影響，而且基本上可以將其用作機會，一個機會。所以我們在 2020 年就有這樣的機會。如果你回顧一下，我們已經籌集了資金，我們有足夠的資金。

We wrote a lot more business than some of our competitors back then because we had the capital. We're still enjoying the cash flows of that today. So I think it's making sure we're just well positioned between, we say, like a range of economic scenarios. So we really don't get caught on our back foot. So again, clearly, with the buybacks in the first half of the year, we feel comfortable around that scenario and still have the capital to return to shareholders.

由於我們擁有資金，因此當時我們的業務量比一些競爭對手大得多。我們今天仍在享受這種現金流。所以我認為這可以確保我們在一系列經濟情景中處於有利地位。所以我們確實不會陷入被動。因此，顯然，透過上半年的回購，我們對這種情況感到滿意，並且仍然有資本返還給股東。

And those alluded to it, some of it is just the buildup that's been over the last couple of years, Doug. We have it, and we're comfortable and we're fortunate, and I say this, everyone wants their stock price up. But if you're looking to buy shares back, you like the valuation that is at. So we're not too stressed about that either. So hopefully, that gives you a little color.

那些暗示，其中一些只是過去幾年的積累，道格。我們擁有它，我們感到舒適並且我們很幸運，我想說的是，每個人都希望他們的股價上漲。但如果您想回購股票，您會喜歡目前的估值。所以我們對此也不太有壓力。希望這能帶給你一些啟發。

Rick Shane, JPMorgan.

摩根大通的里克·沙恩。

I'd like to dig in a little bit on the persistency. When we look at the persistency by vintage, there is some dispersion. The '23 vintage persistency was a little bit lower. That makes sense. Presumably, that is the copious of the slightly seasoned vintages.

我想深入探討一下持久性。當我們按年份觀察持久性時，會發現存在一些分散性。23 年份的持久度略低一些。這很有道理。據推測，這是略微陳釀的葡萄酒的豐富之處。

And so you probably have borrowers there who are trying to take advantage of the refi window. The other 2 vintages that have persistency a little bit lower sequentially are 2020 and 2021. I'd like to delve in a little bit more on that. Is that just natural aging associated with those vintages? Should we expect regardless of rate that the persistency should trend down there? Or is it exogenous factors like borrowers taking seconds and the brokers getting appraisals and allowing borrowers to -- within the PMI?

因此，那裡可能有借款人試圖利用再融資窗口。另外兩個持續性略低的年份是 2020 年和 2021 年。我想對此進行更深入的探討。這只是與這些年份相關的自然老化嗎？無論利率如何，我們是否應該預期持久性趨勢會下降？還是外部因素，例如借款人需要時間、經紀人獲得評估並允許借款人在 PMI 範圍內？

I mean a lot to unpack there, Rick. I would say, which is a typical one of your insightful questions. I think when we think about persistency, a little bit of it depends on -- you didn't bring this up, but our persistency tends to be a little bit higher because we don't really place a lot in the lower half of the high LTV like the 80% to 85%. If you look at our -- if you break our market share between 80%, 85%, we may be the lowest in the industry. So having a bit of a higher LTV, which clearly comes with more risk, also helps a bit on the persistency side.

我有很多事情要解決，里克。我想說，這是你提出的一個典型的深刻問題。我認為，當我們考慮持久性時，有一點取決於——你沒有提到這一點，但我們的持久性往往會更高一些，因為我們並沒有在高 LTV 的下半部分投入太多資金，比如 80% 到 85%。如果你看一下我們的市佔率——如果我們的市佔率在 80% 到 85% 之間，我們可能是業內最低的。因此，雖然 LTV 略高一些，但顯然風險也更大，但在持久性方面也有一定幫助。

I think on the earlier books 2021, I just think they're seasoning, right? And all of a sudden now, you're 5 years into it. Especially folks who bought the house then, if their families are bigger, they're again, rates on all side. They're looking -- they could be looking to move up. So that doesn't -- that's pretty natural, and that's happened over time as the portfolio seasons.

我認為在 2021 年的早期書籍中，我只是認為它們是一種調味品，對嗎？轉眼間，你已經度過了五年。尤其是當時買了房子的人，如果他們的家庭比較大，那麼他們各方面的利率都會再次上漲。他們正在尋找——他們可能正在尋求晉升。所以這並不很自然，而且隨著投資組合的季節變化，這種情況會隨著時間的推移而發生。

I don't think it's seconds, and I know there's a lot of noise around second. I do think seconds in home equities will become continue to increase as they should. If someone is locked into the 3% mortgage and they need another bedroom and they get the home equity loan and in addition, it makes perfect sense. We haven't done it most recently, but I think the last time we did it, 3% of our portfolio had seconds on it. So it's -- I wouldn't, again, back to reading big picture articles and assigning it into the MI portfolio.

我不認為這是秒數，而且我知道秒數周圍有很多噪音。我確實認為房屋淨值的秒數將會繼續增加。如果某人被鎖定在 3% 的抵押貸款中，並且他們需要另一間臥室，那麼他們可以獲得房屋淨值貸款，此外，這是完全合理的。我們最近沒有這樣做，但我認為上次我們這樣做時，我們投資組合中有 3% 的人對此表示贊同。所以——我不會再回去閱讀宏觀文章並將其分配到 MI 投資組合中。

Little tougher to stick a second on an 85% or 90% LTV, even if it has built in market. It's -- a lot of it's going to be on a traditional below 80 business for the GSE. So again, I think -- it's also interesting, Rick, just to point out, again, the strength of the business model. We got questions galore from 2014 to 2020, like -- especially '18, it might have been even in '18 when rates went out like, "Geez, Mark, how is your portfolio going to perform when rates increase? What's going to happen to Essent when rates increase?" And we would say, "Hey, you do what there's a hedge, NIW is going to go down or persistency should stay elevated." And then clearly, in 2022, it was a little bit of that on steroids, right?

即使已經建立了市場，在 85% 或 90% 的 LTV 上堅持第二名也有點困難。對於 GSE 來說，其中很大一部分將集中在傳統的 80 以下業務上。所以，我再次認為——這也很有趣，里克，再次指出商業模式的優勢。從 2014 年到 2020 年，我們收到了大量問題，尤其是 2018 年，甚至在 2018 年利率公佈時，人們可能會問：「天哪，馬克，當利率上升時，你的投資組合會如何表現？當利率上升時，Essent 會發生什麼事？ 」我們會說，“嘿，你採取對沖措施，NIW 將會下降，或者持久性應該保持在較高水平。”那麼很明顯，到 2022 年，情況會有所好轉，對吧？

Because we got to lock in with a 3% rate, and we got the added tailwind with investment income, which, quite frankly, we never saw coming. I mean we run a business where our yields were below 2% for 10-plus years. And every year, we thought the yields would go up and they never did. And then we woke up 1 day and now they're at new money yields at 5. I do think it's a reminder of the strength of the portfolio.

因為我們必須鎖定 3% 的利率，而且還獲得了投資收益的額外推動，坦白說，這是我們從未預料到的。我的意思是，我們經營的業務十多年來收益率一直低於 2%。每年我們都以為產量會上升，但事實卻從未如此。然後我們醒來一天，發現他們的新資金收益率為 5。我確實認為這提醒了我們投資組合的實力。

And the business model. It's a unique business model and that we're -- we play in a space that we understand very well, but we're able to take that in insurance form in premium form, so there's a building cash flow advantage to getting paid first. And now the next question we'll get as we should get is what happens when rates with go down, what does that do? And I think it's the same thing, Rick. It's going to be -- persistency is going to be lower in certain segments, especially the newer segments, right, where the rates are in the 6s, but the renewed NIW is probably going to grow the portfolio.

以及商業模式。這是一種獨特的商業模式，我們——我們在自己非常了解的領域開展業務，但我們能夠以保險的形式以保費的形式來實施它，因此透過先獲得付款可以建立現金流優勢。現在我們要問的下一個問題是，當利率下降時會發生什麼？我認為這是同一件事，里克。在某些領域，尤其是較新的領域，持續性將會較低，利率在 6% 左右，但更新的 NIW 可能會增加投資組合。

So we're -- I just don't know when that's going to be. I think you had asked me that a couple of years ago, and we're still not sure. The timing of it, a lot of it gets backed to that earlier question or comment around affordability. It has to reach that medium level. And then I believe -- I could be wrong.

所以我們——我只是不知道那會是什麼時候。我想你幾年前問過我這個問題，但我們仍然不確定。其時機，很大程度上與先前關於可負擔性的問題或評論有關。它必須達到中等水平。然後我相信——我可能是錯的。

I've been wrong many times before, but I do believe there's a pent-up demand for housing. And I think it's -- I think -- and it's ironic, but the longer this slowdown lasts probably the more upside they'll be in housing -- in the return to housing and demand, which I think will bode well for the top line for Essent and the whole industry, to be honest.

我以前曾多次犯錯，但我確實相信住房需求被壓抑了。我認為，諷刺的是，這種經濟放緩持續的時間越長，房屋市場的上漲空間可能就越大，住房需求的回歸，老實說，我認為這對 Essent 和整個行業的收入來說都是一個好兆頭。

No. It's fair. And there's an interesting comment there, which is you've been wrong many times. And I appreciate the humility of that and acknowledge the number of times I've been wrong, too. But I would argue that you've built this portfolio not for being right, but actually for being wrong and that's part of what you constructed here.

不。這很公平。這裡有一個有趣的評論，那就是你已經錯了很多次。我很欣賞這種謙遜，也承認自己犯過很多次錯誤。但我認為，你建立這個投資組合不是為了證明正確，而是為了證明錯誤，這就是你在這裡建構的一部分。

I'm curious and this question's driven by something we saw earlier in the week. We have another company we followed that makes very, very short-duration loans. And they are, because of that and the short-term uncertainty, pulling back from originations. And if they miss a window of 6 months, given the 12- to 18-month duration of their assets, they can recover that very quickly. And it made me think of you guys and how long the duration of your portfolio is are you willing to -- when you see those -- have those concerns take the risk of pulling back and knowing that for 5 years, you will have a cohort that is under representative at the risk of being wrong?

我很好奇，這個問題源自於我們本週早些時候看到的一些事情。我們關注的另一家公司提供期限極短的貸款。由於這一點以及短期的不確定性，他們正在撤出發起專案。如果他們錯過了 6 個月的時間，考慮到他們的資產期限為 12 至 18 個月，他們可以很快恢復。這讓我想到了你們，你們的投資組合的期限是多久？當你們看到這些時，你們是否願意冒著撤退的風險去擔心，並且知道 5 年後，你們將擁有一個代表性不足、有犯錯風險的群體？

I think it depends. I wouldn't say we wouldn't shy away from lower share, and we've done it in the past. I think we probably we -- there's been records where we've been -- I think we've been top market share like twice in a quarter in our history, but we've been at the bottom more than twice. So we're not afraid to make calls there. A lot of it is around pricing.

我認為這取決於情況。我不會說我們不會迴避降低份額，而且我們過去也這樣做過。我認為我們可能——有記錄顯示我們曾經——我認為在我們的歷史上，我們在一個季度內曾兩次佔據市場份額最高的位置，但也曾兩次以上處於底部。所以我們不怕在那裡打電話。其中很多都與定價有關。

And it's also an interesting thing in our industry, there's a lot of, as you know, and that's really the only competitive factor to the industry, Rick. We don't really have a lot of credit competition in the industry, and that goes back again to the guardrail set up. We've always called them the credit guardrails set up with the qualified mortgage rule, Fannie and Freddie with DU and LP, they did such a good job of segmenting risk. They do a great job around QC. We're the beneficiaries of that as is the industry, there's not a lot of credit competition.

這也是我們行業中一件有趣的事情，如你所知，這確實是行業唯一的競爭因素，里克。我們行業中實際上並沒有太多的信貸競爭，這又回到了設立護欄的問題上。我們一直稱它們為合格抵押貸款規則設立的信用護欄，房利美和房地美與 DU 和 LP 一起設立的信用護欄，它們在細分風險方面做得非常好。他們在品質控制方面做得很好。我們和整個產業都是受益者，信貸競爭並不激烈。

And I think we haven't gotten a question, but if you think about GSE reform, like what happens if the GSEs go public? One, I think that helps us a lot more so than people think because I think it will bring a lot more liquidity into the space from an investor standpoint. It helped us on the CRT side kind of more visibility probably more share, right, because they're going to start -- they're going to -- they'll do the buy managed and distributed operating model, again, probably in much greater force and they'll probably expand the market a little bit. And there's good and bad to that. It's good because higher top line.

我認為我們還沒有提出問題，但是如果您考慮政府支持企業改革，那麼如果政府支持企業上市會發生什麼？首先，我認為這對我們的幫助比人們想像的要大得多，因為我認為從投資者的角度來看，它將為該領域帶來更多的流動性。它幫助我們在 CRT 方面提高知名度，也可能提高份額，因為他們將開始——他們將——他們將再次採用購買管理和分散式營運模式，可能會更加有力，他們可能會稍微擴大市場。這有好有壞。這很好，因為收入更高。

The bad is it could introduce some credit competition to the space, and we haven't had that. And I think that's when you're going to make more calls on higher or lower share. Right now, yielding -- if price -- we'll back off a little bit on price, but at the end of the day, if the returns are there, we're still there. There's a lot of volatility around the loss assumptions. I think then you're going to see a lot more disparity in share and we have an advantage there.

不好的是，它可能會為這個領域帶來一些信貸競爭，而我們還沒有遇到這種情況。我認為那時你會對更高或更低的份額做出更多判斷。現在，收益率——如果價格——我們會稍微降低一點價格，但最終，如果有回報，我們仍然會在那裡。損失假設存在很大的波動性。我認為你會看到份額差距更大，而我們在這方面具有優勢。

And I don't think it's an advantage we've been able to leverage much, but when you think about our credit scoring engine, EssentEDGE, and this comes in with a lot of -- there's been a lot of banter about with the scores, the vantage scores and the new FICO score and all those sort of things. We look at the roll credit bureau. So we're almost agnostic to the score.

我不認為這是我們能夠充分利用的優勢，但是當你想到我們的信用評分引擎 EssentEDGE 時，它就有很多——關於分數、優勢分數和新的 FICO 分數以及所有這類事情有很多討論。我們來看看信用局的名單。所以我們幾乎不知道分數是多少。

And we use two bureaus, so we can -- we don't even need necessarily the third to be able to kind of triangulate and get the right price. There's a lot of disparity in the market, and let's say, we use the analogy, Rick, of like a fairway, if that fairway starts to widen, all of our lenders will increase their volume.

我們使用兩個機構，因此我們甚至不需要第三個機構就能進行三角測量並獲得正確的價格。市場上有很大差異，瑞克，我們用航道來打比方，如果航道開始變寬，我們所有的貸款人都會增加他們的貸款量。

As they should. I would do the exact same thing. I think then when we look at our ability to discern between kind of a good 700 and a bad 700. And again, if there's a lot of difference scores flying around, I think it's even a bigger advantage for us. So again, that advantage may have us decide not to do some of the business versus to do the business. So again, not saying that market is going to happen, but I think that's -- as we think about -- we always think about multiple kind of scenarios and how we would react and position the business kind of before it happens.

正如他們應該的那樣。我也會做同樣的事情。我認為，當我們審視自己辨別好 700 分和壞 700 分的能力時。再說一次，如果分數差距很大，我認為這對我們來說是一個更大的優勢。因此，這種優勢可能會讓我們決定不做某些業務，而是做某些業務。所以，我再說一遍，並不是說市場會發生這樣的事情，但我認為——正如我們所想的——我們總是會考慮多種情況，以及在它發生之前我們會如何應對和定位業務。

(Operator Instructions) Mihir Bhatia, Bank of America.

（操作員指示）美國銀行的 Mihir Bhatia。

First, I just wanted to actually follow up on the EssentEDGE point you just made, Mark. Specifically, I guess, EssentEDGE next generation has been out for a couple of years. Can you just talk a little bit about what you've seen so far? I appreciate you saying that you haven't -- I guess from the outside, we haven't really been able to -- we can't really tell given how low default rates are how these engines are different. But maybe just talk a little bit about what you're seeing internally? And are you continuing to invest with EssentEDGE adding? Or is it more just a matter of now we're getting all these data and it's just waiting for the fairway as you mentioned?

首先，馬克，我只是想跟進你剛才提出的 EssentEDGE 觀點。具體來說，我猜，EssentEDGE 下一代產品已經推出幾年了。您能否簡單談談您目前所看到的情況？我很感激你這麼說——我想從外部來看，我們真的無法——考慮到違約率如此之低，我們真的無法判斷這些引擎有何不同。但也許您可以稍微談談您內心所看到的情況？您是否會繼續投資 EssentEDGE？或者現在我們只是獲得了所有這些數據，並且正如您所說，只是在等待航道？

Yes. I would say we haven't made a ton of investment on it over the last 12 months once we got -- we did a lot to get that second credit bureau. And so clearly, with some of the noise around the industry with the tri-merge and things like that, we may make the investment to get to get the third bureau. Clearly, and I've gone the whole call without saying AI, which seems to be the banter for most companies, not in our industry, but others. The technology there has increased so much, just even over the last 6 months.

是的。我想說的是，自從我們獲得第二個信用局以來，我們在過去 12 個月內並沒有對其進行大量投資——我們做了很多工作來獲得第二個信用局。顯然，鑑於三方合併等事件在業界引發的一些爭議，我們可能會進行投資以獲得第三局。顯然，我在整個通話過程中都沒有提到人工智慧，但這似乎是大多數公司談論的話題，不僅是我們這個行業，還有其他公司。僅在過去 6 個月裡，那裡的技術就取得了長足的進步。

So we're seeing more opportunities to use it within our IT group and other areas to speed things up to market. And I think that's -- we saw some of the lenders announced some things, which we've been watching. So there's some things there that we potentially could use to improve it over time, which I don't know if I necessarily would have said that a year ago. I know we felt pretty comfortable with it a year ago. And you're right, so I think you're going to need some disparity in credit for it to really shine.

因此，我們看到了更多機會在我們的 IT 部門和其他領域使用它來加快產品上市速度。我認為——我們看到一些貸款機構宣布了一些事情，我們一直在關注。因此，隨著時間的推移，我們可能會利用一些東西來改進它，我不知道一年前我是否一定會這麼說。我知道一年前我們對此感到很舒服。你說得對，所以我認為你需要一定的信用差異才能真正發揮作用。

The one way for people to look at it today for investors to look at it today, I mean, here is looking at our earned premium yield, right? Our earned premium yield is higher than the rest of the industry. And what does that tell you and our defaults are relatively the same as we're able to get a little bit extra yield, okay? What's a basis point or 2? 2 basis points on $245 billion adds up.

今天人們看待這個問題的一種方式，對於投資者來說，今天看待這個問題的一種方式，就是看我們的已獲溢價收益率，對嗎？我們的已賺保費收益率高於業界其他公司。這說明什麼？我們的預設值相對相同，因為我們能夠獲得一點額外的收益，好嗎？一個基點或 2 是什麼？2,450 億美元增加 2 個基點。

So I would -- I think there -- if you're from the outside looking in, that's probably the -- that's probably the best evidence of the success of how the credit engine works. And again, remember, it's just a credit engine. We'll use that then to create price using an old fashion yield analysis. And Mihir, the price is a little bit -- you're testing pricing elasticity in certain markets where you can get a little bit more price. So think of it more as a way to get value for an individual loan.

所以我想——如果你從外部來看，這可能是——這可能是信貸引擎成功運作的最佳證據。再次提醒，請記住，它只是一個信用引擎。然後，我們將利用舊式收益分析來創建價格。而 Mihir，價格有點——你正在測試某些市場的定價彈性，在那裡你可以獲得更高的價格。因此，可以將其視為一種獲取個人貸款價值的方式。

No, that is helpful and it's certainly something we see in the data. You mentioned AI. And my second question actually does relate to AI, but almost like from a little bit of a threat to your business? And maybe not a threat. I was trying to understand the implications.

不，這很有幫助，而且我們確實在數據中看到了這一點。您提到了人工智慧。我的第二個問題實際上與人工智慧有關，但這是否對您的業務構成了一點威脅？或許不構成威脅。我試著理解其中的含義。

But specifically, I'm talking about today, borrowers getting an appraisal and canceling MI. My understanding is that is not super common. But as more and more data moves to the crowd, fintechs in a way of trying to build these personal finance recommendations, do you worry about that becoming something that becomes more common ask to go get an appraisal and cancel MI from existing policies? How would that -- something like that impact your business and returns?

但具體來說，我今天要談論的是藉款人獲得評估並取消 MI。我的理解是，這並不常見。但是隨著越來越多的數據轉移到人群中，金融科技公司試圖以某種方式建立這些個人理財建議，您是否擔心這會變得更加普遍，要求進行評估並從現有政策中取消 MI？這樣的事會對您的業務和回報產生什麼影響？

Yes. I mean it's been -- it's been a discussion over the last five years ever since rates went down. It's not very common in the business. And part of it is there's clearly friction to it, for sure, Mihir, but a lot of the major servicers do -- they do notify the borrowers. So the borrowers are aware of it or they're notified of it.

是的。我的意思是——自從利率下降以來，這個問題在過去五年裡一直存在著討論。這在商業領域並不常見。當然，部分原因是這其中確實存在摩擦，Mihir，但許多主要服務商確實會通知借款人。因此借款人知道這一點或已經收到通知。

It's just small dollars. I think it's -- again, you're going to -- there's work to be done to refinance something that's 30 to 40 basis points. So I'm not saying it can't be done. We don't lose a lot of sleep over it. And I do think that we're -- in terms of AI, it will impact.

這只是小數目。我認為——再說一次，你需要——為 30 到 40 個基點的利率進行再融資。所以我並不是說這不可能做到。我們不會因此失眠。我確實認為，就人工智慧而言，它會產生影響。

I'd be surprised if it didn't. It's also going to make refinancings even in our lenders, I would say, today are brutally efficient and in refinancing loans. I think it's going to be even more frictionless. And as you speak to some of our top lenders and their investments technology, I think what's the common theme of all this, though, is the borrower benefits. So if the borrower -- right now, the borrower -- the MI automatically cancels below 80, I think that's a great rule and I think that benefits the borrower.

如果沒有的話我會感到驚訝。我想說，這也將使我們的貸款機構在今天的再融資中變得極其高效，並且在再融資貸款方面也同樣如此。我認為它將變得更加順暢。當您與我們的一些頂級貸方及其投資技術交談時，我認為所有這一切的共同主題是藉款人的利益。因此，如果借款人——現在，借款人——MI 在 80 以下自動取消，我認為這是一個很好的規則，我認為這對借款人有利。

So if there's a slowdown in rates and borrowers are locked into their mortgage and their home price appreciates significantly, and they're able to get the appraisal easier and cancel MI, good for them. Good for the borrower and that means it's a good borrower. So yes, we don't get too fussed about it. There could be some economic impact to it, but I don't think it's very big. So I wouldn't -- we're not going to lose a lot of sleep over it.

因此，如果利率下降，借款人被鎖定在抵押貸款中，而他們的房價大幅升值，他們就能夠更容易地獲得評估並取消 MI，這對他們來說是好事。對借款人來說是好事，這意味著這是一個好的借款人。所以是的，我們不會對此太擔心。這可能會產生一些經濟影響，但我認為影響不會很大。所以我不會──我們不會為此失眠。

Got it. And then just if I could squeeze in one question on just OpEx. Any thoughts on outlook for the year? I think there was a little bit of a downtick this quarter? Any call outs there?

知道了。然後，我是否可以擠出一個關於 OpEx 的問題。對今年的前景有什麼看法？我認為本季出現了一些下滑？有呼叫嗎？

Mihir, it's Dave Weinstock. We're -- I think we feel really good about our guidance. If you look at where we are for the six months, we think we're right on track for our 160 to 165 probably towards -- a little bit towards the lower end. But on a quarter-to-quarter basis, things can fluctuate based on production volumes, staffing levels, things like that. But overall, we're happy with where we are.

Mihir，我是 Dave Weinstock。我們—我認為我們對我們的指導感到非常滿意。如果你看一下我們這六個月的狀況，我們認為我們正朝著 160 到 165 的目標前進——可能稍微偏向低端。但按季度來看，情況可能會根據生產量、人員配備水準等因素而波動。但總體而言，我們對目前的狀況感到滿意。

And I'm showing no further questions at this time. I would like to turn it back to the management for any closing remarks.

我現在沒有其他問題了。我想將會議交還給管理階層，請他們做最後的總結發言。

I'd like to thank everyone for their time today and enjoy the rest of your summer.

我想感謝大家今天抽出時間並享受剩下的夏天。

Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for attending. You may now disconnect.

謝謝。女士們、先生們，今天的電話會議到此結束。謝謝您的出席。您現在可以斷開連線。