In terms of a particular vintage where we might be seeing worse performance, no, I think though what we are seeing is as the newer production years age, our 2022 and 2023 books age, and those borrowers naturally, some subset of them, unfortunately, progress into default status and march towards claim, those book years and the borrowers who are in default aren’t different in their profile or their performance, other than the fact that they have less embedded equity than borrowers who purchased their homes in 2020, 2021, and obviously benefited from the significant rally and hope prices that we saw through the course of the pandemic. That’s the real item that we watch for that is factored in though into our reserves because we’re establishing reserves based on the mark-to-market and assessment for each loan individually.
Rick Shane: Got it. Okay. And it’s funny, I had the number of defaults up 10 loans and I sort of had this mental picture of you guys waiting around on the last day of the quarter hoping that 11 would come in, so it would be down sequentially.
Adam Pollitzer: Yes. And Rick, you helped me there. I think I said 20, but you’re right, it’s 10. The default count increased by 10.
Rick Shane: Fair enough. Thanks, guys.
Operator: The next question comes from Doug Harter with UBS. Please go ahead.
Doug Harter: Thanks, good afternoon. Can you talk about kind of how you were thinking about the pace of capital return for the course of the year and just any updates around the thoughts around introducing a dividend?
Adam Pollitzer: Sure, why don’t I cover those? So I’ll cover the dividend first, but right now we’re focused on our re-purchase program and deploying the remaining $152 million capacity that we have. We see re-purchase as a way for shareholders to directly participate in the value that we’re creating, and it also is really helpful for us to maintain the right funding balance, optimizing between our equity debt and re-insurance usage, and also it’s obviously supportive of future EPS and ROE outcomes. We’re really pleased with the execution that we’ve achieved to date. We’ve re-purchased to date 174 million of stock at 7.3 million shares at a weighted average price to book multiple of roughly one times. And so, that really is our focus today.
We don’t have any other plans right now, but over time, as we continue to perform and grow the dividends stream that’s available to the holding company from our primary operating subsidiary, we may have an ability to introduce a common dividend, but for right now, re-purchase is our primary focus. In terms of the pace of activity, I’d expect that we’ll continue to execute on a roughly similar pace as we have been. We’ve talked about how the existing program runs through year end 2025, and there’s no hard and fast rule we execute according to a pricing grid that we establish and share with the banks that assist us with the re-purchase activity. And so in periods where stock price is higher, we may buy back a little bit less. In periods where stock price dips, we may be more active.
But generally speaking, we’ve guided to assume that we’ll be roughly rateable in our execution through the remaining time and the remaining dollars on the program, and that continues to be the case.
Doug Harter: Appreciate that. And then just one more. How are you thinking about kind of going back into the ILN market to kind of, you know, as another form of re-insurance?
Adam Pollitzer: Yes, look, we have found significant success in the ILN market in the past, but I’d also say we’ve found real success in the traditional re-insurance market with our XOL execution. We value the credit risk transfer benefits and the PMIERs efficiency and funding that we achieve in each. We have been skewed more towards the XOL market more recently. I think we’ve done six deals since the beginning of 2022, and those deals in the traditional markets really help us compress the cycle time between transactions. We’re able to secure forward flow coverage. So we have forward flow XOL coverage in place for all production that we generate this year from the traditional market. That’s not something that’s available in the ILN market. And so there’s a lot of value, I’d say, in both. We do expect that at some point in the future we’ll be back in the ILN markets, but right now we’re finding a lot of success in the XOL market.
Doug Harter: Great, thanks, Adam.
Operator: The next question is a follow-up question from Mark Hughes with Truist. Please go ahead. Mark, you’re live in the call.
Mark Hughes: Sorry about that. I was on mute. Last quarter you had talked about the premium yield, I think cure [ph] outlook was for relative stability. You’re obviously up a little bit. When you look at the current pricing on the business which you’re writing, how do you — do you have an update on that and stable from here and maybe a little bit more improvement?
Adam Pollitzer: Yes, good question. Really, we’d reiterate the general perspective that we had shared last quarter, which is we’ve obviously enjoyed some degree of inflect — premium yield inflecting higher for key quarters running now, which is a real positive for us. But as we model it going forward, we do expect that our core yield, which strips away the impacted movements of our reinsurance costs and the cancellation earnings, will remain generally stable through the remainder of the year. We’ll see benefit from strong persistency in the pricing gains that we’ve achieved over the past year. Those will provide us with the real support for that stability. And now, our net yield is more difficult to forecast, obviously, because it’s also going to be impacted by two things, by any decisions that we make with respect to further reinsurance execution through the year, and more importantly, by our loss experience as the profit commission on our quota shares fluctuates with changes in our seated claims expense.
And so obviously that one will really depend on how the default population develop, how the macro environment develops, but core yield, we expect continued stability as we roll forward.
Mark Hughes: And then on the investment portfolio, what was the yield on the portfolio overall, and then can you share new money yields?
Ravi Mallela: Yes, the investment portfolio yield overall for Q1 was 2.9%. And from a new investment perspective, we’re seeing, you know, rates — new money rates around 5% to 5.5%. Obviously that’ll depend on the duration, the bond type ratings, and just demand in the market. Nothing has really changed about the profile of our investment portfolio or the new purchases we’re making, but that’s what we’re seeing.
Mark Hughes: Thank you very much.
Operator: Next question comes from Scott Heleniak with RBC. Please go ahead.
Scott Heleniak: Yes, the NIW showed year-over-year growth. One of your competitors had reported, showed a decline. I’m just curious if you can talk about it. I know it’s too early to talk about market share, but do you feel like you’re kind of increasing that wallet share with the existing customers that you had talked about and maybe some of those new accounts, but did you talk about what’s driving that in the quarter it seemed like it accelerated?
Adam Pollitzer: Yes, absolutely. Also, as you noted, it’s difficult to measure because there’s only us and one other company that are out, so we don’t know, you know, until we get through earning season how things will ultimately land. I think first and foremost, we’re delighted with the results that we achieved in the quarter. We wrote $9.4 billion of high-quality, high-return new business. We’re working hard to support our customers and their borrowers, and we’re driving the continued growth quarter-on-quarter in our insured portfolio. As for share and what’s driving it, I’ll give the standard disclaimer, which is we’ve said many times, we do not manage to market share. We are focused on serving our customers, deploying capital in a risk-responsible manner.
We want to make sure that we’re writing as large a volume of high-quality, high-return and high-value business that we can, and ultimately doing so in a way that allows us to drive profitable growth in our insured portfolio. The success that we had in the quarter really traces to the same reasons that we’ve been successful for quite some time. It’s really about on-the-ground execution. We’re adding more customers. We’re providing value-added input away from price to our existing accounts so that we can win an increasing share of their wallet. We’re proactively managing our mix of business, our NIW flow by borrower, by geography, by product risk dimensions, and we’re just generally showing up in the market for lenders and borrowers with consistency every day, and all in, it’s really the basic building blocks of on-the-ground execution that are driving our success.
Scott Heleniak: All right, that’s helpful. And then just another question, too, on just risk in-force, when you look at the table and they’re the top 10 states, it looked like you had a lower share of the top 10 states year-over-year, and is there any states that you want to call out that you’re growing as a percent of the book year-over-year that are kind of becoming more significant? Anything to call out there?
Adam Pollitzer: No, we’ve got a — at this point, we’ve been at this for quite some time. Our customer — our sales team does a phenomenal job of obviously adding customers, making sure that we maintain strong and active dialogue and access to existing accounts that we’ve worked hard to penetrate in the past, and we have access at this point to basically the entire addressable MI — NIW opportunity, and so we have a broadly diversified national customer franchise, which helps us obviously achieve a broadly diversified geographic or a portfolio that is broadly diversified by geography.
Scott Heleniak: Okay, great. And just the last one on persistency, it’s kind of held stable. Is there any expectation and change that are expected to kind of be around a similar range for the rest of the year?
Adam Pollitzer: Yes, look, in terms of — we’ll likely continue to see, I would say, some natural trending off of peaks, right? I think we were a little north of 86% late last year. We’re 85.8% this year. We do expect those, certainly with rates where they are, relative to the embedded note rates in the portfolio. That persistency will remain well above historical trend as we progress through 2024. Even if we see a little bit of movement, it’ll be up or down by degrees.
Scott Heleniak: Great, thanks.
Operator: This concludes our question and answer session. I would like to turn the conference back to Mr. Swenson to closing remarks.
John Swenson: Well, thank you again for joining us. We’ll be participating in the BTIG Housing Finance Conference on May 7th and the Truist Financial Services conference on May 22nd. We look forward to speaking with you again soon.
Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
