Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q: How should we think about the pacing of capital return with the new repurchase authorization? A: Adam Pollitzer, President and CEO, explained that the $250 million repurchase authorization strikes a balance, allowing for prudent management of funding needs while providing ample runway for consistent stock repurchases over the next several years. Historically, they have averaged about $25 million per quarter, and with the new authorization, they plan to maintain this consistency while also being opportunistic if the market environment allows.
Q: Can you provide more details on the credit reserve release and claims activity this quarter? A: Aurora Swithenbank, CFO, noted that the reserve release for prior period defaults was $4.4 million, with most cures embedded in the current year line. The total cure population was $16.3 million, with a cure rate of 29% in the fourth quarter. Adam Pollitzer added that claims expense was $17.3 million, influenced by storm-related defaults, but overall credit performance remains strong.
Q: When might dividends become part of the capital return strategy? A: Adam Pollitzer stated that the focus is currently on the repurchase program, which provides significant value given the trading position relative to book value. While a common dividend might be considered in the future as earnings grow, the repurchase program remains the primary focus for capital return.
Q: Are there any specific regulatory plans from the new administration that could benefit the MI industry? A: Adam Pollitzer mentioned that there is broad bipartisan recognition of the value the private mortgage insurance industry brings, providing low-cost solutions for homeownership while protecting taxpayers. The company is eager to engage with the new administration to understand their priorities and where they can contribute.
Q: What is the outlook for premium yield, and how does credit deterioration impact it? A: Aurora Swithenbank explained that the core yield is expected to remain stable, while the net yield may vary with claims experience due to the workings of profit commissions in reinsurance treaties. Credit deterioration could impact the net yield, but the overall financial impact remains consistent.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.