Tim Mattke: Yes. I mean I think if you look at what we did in 2022 and 2023, you saw dividend levels that were kind of somewhat in-line with the income that we earned as a company. So I think if we continue to generate the financial results that we have, continue to have the capital position that we have that will continue to support dividends that have been fairly large over the last couple of years. But for us, the starting point is always making sure that we have sufficient capital above our target levels or at our target levels at the operating company. Once that’s satisfied, then I think we can start the dividend discussion. But with credit performance, the way that it’s been over the last 2 years, it’s supported, I think, $1.4 billion over the last 2 years in dividends from the opco, plus another $200 million in intercompany tax settlement. So there is a lot of cash going to the holding company over the last 2 years.
Geoffrey Dunn: Right. Okay. And then my other question is, when you look at the reserve development, we continue to see – I think you noted it was second half ‘21, ‘22. Can you maybe parse that out a little bit more? Is the majority of the development we saw this quarter from ‘21. Because I’m assuming as you get into ‘22, the equity benefits on claim rates experienced probably gets a lot thinner. Do you have any more color there?
Nathan Colson: Yes. No, happy to. I think it’s actually more from 2022. And I think it’s less about the kind of our estimates, let’s say, embedded equity on those items. And again, these are notices received in that period, not necessarily loans from that book your vintage. But really, it’s the strength of the cure activity that we’ve seen. Our initial ultimate loss expectations have been around 7.5% ultimate claim rate for some time. But actual experience on kind of closer to fully developed notice quarters from ‘21 and early ‘22, is just much less than that. And really, it’s that cure activity that is driving the reserve development in those periods versus, I think, a view of home price appreciation or other factors like that.
Geoffrey Dunn: Okay. Alright. So just to clarify, these are loans that have been in portfolio then for 9, 12 plus months, not ‘22 vintage that you are referring to?
Nathan Colson: Exactly. When we say that the reserve development came from, it’s really new notices received in 2022, not from the 2022 vintage. I mean there is relatively few notices that we have from ‘22 or ‘23 vintages at this point.
Geoffrey Dunn: Okay. Thank you.
Nathan Colson: Thank you.
Operator: Thank you. [Operator Instructions] Our next question comes from the line of Eric Hagen from BTIG.
Eric Hagen: Hi. Thanks. Good morning. I actually wanted to follow-up on that last point you were just making about the cure rate for the portfolio and what you feel like has actually kept that so stable. Are borrowers actually receiving modifications and what’s the nature of that modification of the cure? And what do you feel like would catalyze the cure rate to maybe change from here?
Nathan Colson: Alright. Eric, it’s Nathan. I mean that’s – it’s a really good question. I think it’s a tough one to know with any specificity just because there is a whole host of reasons. They all, I think have been pulling in the direction of more favorable credit performance over the last several years. The kind of forbearance in modification programs that are in the market that certainly helps, the employment rate staying very, very high, unemployment being very low, helped. The value of kind of homeownership and the utility of a house in kind of a work remote or hybrid kind of world, I think is going up and home price appreciation, even in our part of the market, which is more like the FHFA purchase-only index than maybe the Case-Shiller 20-City Index has continued to rise in ‘22 and ‘23 as well.
So, that – I think that combination of factors is really all pulling towards kind of good outcomes for borrowers and ultimately kind of better-than-expected credit performance for us.
Eric Hagen: Yes, that’s definitely helpful. On the policy towards stock buybacks and capital return in general, I mean how sensitive would you say it is toward nationwide unemployment rates and other economic conditions, or is it really just sensitive to the unemployment rate or conditions in your own portfolio?
Nathan Colson: Eric, I may need you to clarify. Were you trying to draw a link between our share repurchase appetite and the unemployment rate?
Eric Hagen: Pretty much, yes. And whether you see that being sensitive to nationwide unemployment rates, or does it really just need to appear and start appearing in your own portfolio before you maybe change that policy?
Nathan Colson: Yes. I would probably just reiterate. Ultimately, our ability to return capital to shareholders via dividends and share repurchases is about getting the money to the holding company where those activities happen. We already have – at the end of the year, we had about $900 million at the holding company. So, we have a lot of flexibility even today. But over time, it will be about getting dividends out of the underwriting company. And again, that’s about capital levels being above our target levels. And our targets are built on a number of things, but one of them is what’s our expectation of future performance. And do we need that capital to support increased risk either in the loans that we are insuring or increased risk in the market that we are operating in.
