Essent Group Ltd. Announces Second Quarter 2024 Results and Declares Quarterly Dividend
Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended June 30, 2024 of $203.6 million or $1.91 per diluted share, compared to $172.2 million or $1.61 per diluted share for the quarter ended June 30, 2023.
Essent also announced today that its Board of Directors has declared a quarterly cash dividend of $0.28 per common share. The dividend is payable on September 10, 2024, to shareholders of record on August 30, 2024.
“We are pleased with our financial results in the second quarter, as our high-quality portfolio and resilience in the housing and labor markets translated to favorable credit performance, and the current rate environment continues to benefit investment income and persistency,” said Mark A. Casale, Chairman and Chief Executive Officer. “The Essent franchise achieved another milestone by closing on our inaugural senior debt offering on July 1. Combined with an amended and extended revolving credit facility, we now have over $1.3 billion in available holding company liquidity.”
Financial Highlights:
New insurance written for the second quarter of 2024 was $12.5 billion, compared to $8.3 billion in the first quarter of 2024 and $13.5 billion in the second quarter of 2023. Insurance in force as of June 30, 2024 was $240.7 billion, compared to $238.5 billion as of March 31, 2024 and $235.6 billion as of June 30, 2023. Net investment income for the first half of 2024 was $108.2 million, up 22% from the first half of 2023. Effective July 1, 2024, we entered into an excess of loss transaction with a panel of highly rated third-party reinsurers covering 15% of all eligible policies written by Essent Guaranty, Inc. in calendar year 2024. On July 1, 2024, Essent closed two transactions that represent approximately $1 billion in total debt capacity, comprised of $500 million of senior unsecured notes and a $500 million unsecured revolving credit facility.Conference Call:
Essent management will hold a conference call at 10:00 AM Eastern time today to discuss its results. The conference call will be broadcast live over the Internet at http://ir.essentgroup.com/events-and-presentations/events/default.aspx. The call may also be accessed by dialing 888-330-2384 inside the U.S., or 240-789-2701 for international callers, using passcode 9824537 or by referencing Essent.
A replay of the webcast will be available on the Essent website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 800-770-2030 inside the U.S., or 647-362-9199 for international callers, passcode 9824537.
In addition to the information provided in the Company's earnings news release, other statistical and financial information, which may be referred to during the conference call, will be available on Essent's website at http://ir.essentgroup.com/financials/quarterly-results/default.aspx.
Forward-Looking Statements:
This press release may include “forward-looking statements” which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," “should,” “expect,” "plan," "anticipate," "believe," “estimate,” “predict,” or "potential" or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers or the loss of a significant customer; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs; decline in the volume of low down payment mortgage originations; uncertainty of loss reserve estimates; decrease in the length of time our insurance policies are in force; deteriorating economic conditions; and other risks and factors described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023 filed with the Securities and Exchange Commission on February 16, 2024, as subsequently updated through other reports we file with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
About the Company:
Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company (collectively with its subsidiaries, “Essent”) offering private mortgage insurance, reinsurance, and title insurance and settlement services to serve the housing finance industry. Additional information regarding Essent may be found at www.essentgroup.com.
Source: Essent Group Ltd.
Essent Group Ltd. and Subsidiaries
Financial Results and Supplemental Information (Unaudited)
Quarter Ended June 30, 2024
Exhibit A
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Exhibit B
Condensed Consolidated Balance Sheets (Unaudited)
Exhibit C
Consolidated Historical Quarterly Data
Exhibit D
U.S. Mortgage Insurance Portfolio Historical Quarterly Data
Exhibit E
New Insurance Written - U.S. Mortgage Insurance Portfolio
Exhibit F
Insurance in Force and Risk in Force - U.S. Mortgage Insurance Portfolio
Exhibit G
Other Risk in Force
Exhibit H
U.S. Mortgage Insurance Portfolio Vintage Data
Exhibit I
U.S. Mortgage Insurance Portfolio Reinsurance Vintage Data
Exhibit J
U.S. Mortgage Insurance Portfolio Geographic Data
Exhibit K
Rollforward of Defaults and Reserve for Losses and LAE - U.S. Mortgage Insurance Portfolio
Exhibit L
Detail of Reserves by Default Delinquency - U.S. Mortgage Insurance Portfolio
Exhibit M
Investments Available for Sale
Exhibit N
U.S. Mortgage Insurance Company Capital
Exhibit O
Ratios and Reconciliation of Non-GAAP Financial Measures
Exhibit A
Essent Group Ltd. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
(In thousands, except per share amounts)
2024
2023
2024
2023
Revenues:
Direct premiums written
$
272,910
$
249,167
$
541,841
$
488,658
Ceded premiums
(27,344
)
(39,546
)
(57,735
)
(73,137
)
Net premiums written
245,566
209,621
484,106
415,521
Decrease in unearned premiums
6,325
3,608
13,375
8,966
Net premiums earned
251,891
213,229
497,481
424,487
Net investment income
56,086
45,250
108,171
88,486
Realized investment gains (losses), net
(1,164
)
(1,589
)
(2,304
)
(2,077
)
Income (loss) from other invested assets
(419
)
(4,852
)
(2,334
)
(7,554
)
Other income
6,548
8,090
10,285
13,032
Total revenues
312,942
260,128
611,299
516,374
Losses and expenses:
Provision (benefit) for losses and LAE
(334
)
1,260
9,579
1,080
Other underwriting and operating expenses
55,987
42,174
113,336
90,369
Premiums retained by agents
10,215
—
19,706
—
Interest expense
7,849
7,394
15,711
14,330
Total losses and expenses
73,717
50,828
158,332
105,779
Income before Income taxes
239,225
209,300
452,967
410,595
Income tax expense
35,616
37,067
67,639
67,535
Net income
$
203,609
$
172,233
$
385,328
$
343,060
Earnings per share:
Basic
$
1.93
$
1.62
$
3.65
$
3.22
Diluted
1.91
1.61
3.61
3.20
Weighted average shares outstanding:
Basic
105,657
106,249
105,677
106,594
Diluted
106,778
107,093
106,774
107,338
Net income
$
203,609
$
172,233
$
385,328
$
343,060
Other comprehensive income (loss):
Change in unrealized appreciation (depreciation) of investments
(5,375
)
(36,098
)
(27,141
)
22,655
Total other comprehensive income (loss)
(5,375
)
(36,098
)
(27,141
)
22,655
Comprehensive income
$
198,234
$
136,135
$
358,187
$
365,715
Exhibit B
Essent Group Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
June 30,
December 31,
(In thousands, except per share amounts)
2024
2023
Assets
Investments
Fixed maturities available for sale, at fair value
$
3,931,471
$
4,335,008
Short-term investments available for sale, at fair value
1,523,512
928,731
Total investments available for sale
5,454,983
5,263,739
Other invested assets
282,781
277,226
Total investments
5,737,764
5,540,965
Cash
197,402
141,787
Accrued investment income
35,534
35,689
Accounts receivable
56,974
63,266
Deferred policy acquisition costs
9,199
9,139
Property and equipment
42,905
41,304
Prepaid federal income tax
487,456
470,646
Goodwill and intangible assets, net
70,258
72,826
Other assets
55,253
51,051
Total assets
$
6,692,745
$
6,426,673
Liabilities and Stockholders' Equity
Liabilities
Reserve for losses and LAE
$
260,688
$
260,095
Unearned premium reserve
126,938
140,285
Net deferred tax liability
381,393
362,753
Credit facility borrowings, net of deferred costs
422,448
421,920
Other accrued liabilities
121,488
139,070
Total liabilities
1,312,955
1,324,123
Commitments and contingencies
Stockholders' Equity
Common shares, $0.015 par value:
Authorized - 233,333; issued and outstanding - 106,372 shares in 2024 and 106,597 shares in 2023
1,596
1,599
Additional paid-in capital
1,278,918
1,299,869
Accumulated other comprehensive loss
(307,637
)
(280,496
)
Retained earnings
4,406,913
4,081,578
Total stockholders' equity
5,379,790
5,102,550
Total liabilities and stockholders' equity
$
6,692,745
$
6,426,673
Return on average equity (1)
14.7
%
14.6
%
(1) The 2024 return on average equity is calculated by dividing annualized year-to-date 2024 net income by average equity. The 2023 return on average equity is calculated by dividing full year 2023 net income by average equity.
Exhibit C
Essent Group Ltd. and Subsidiaries
Supplemental Information
Consolidated Historical Quarterly Data
2024
2023
Selected Income Statement Data
June 30
March 31
December 31
September 30
June 30
(In thousands, except per share amounts)
Revenues:
Net premiums earned:
U.S. Mortgage Insurance Portfolio
$
217,513
$
212,479
$
211,083
$
209,351
$
195,502
GSE and other risk share
17,745
17,826
17,166
16,850
17,727
Title insurance
16,633
15,285
17,365
20,604
—
Net premiums earned
251,891
245,590
245,614
246,805
213,229
Net investment income
56,086
52,085
50,581
47,072
45,250
Realized investment (losses) gains, net
(1,164
)
(1,140
)
(4,892
)
(235
)
(1,589
)
(Loss) income from other invested assets
(419
)
(1,915
)
(421
)
(3,143
)
(4,852
)
Other income (loss) (1)
6,548
3,737
6,395
5,609
8,090
Total revenues
312,942
298,357
297,277
296,108
260,128
Losses and expenses:
Provision (benefit) for losses and LAE
(334
)
9,913
19,640
10,822
1,260
Other underwriting and operating expenses
55,987
57,349
55,248
54,814
42,174
Premiums retained by agents
10,215
9,491
11,475
13,175
—
Interest expense
7,849
7,862
7,953
7,854
7,394
Total losses and expenses
73,717
84,615
94,316
86,665
50,828
Income before Income taxes
239,225
213,742
202,961
209,443
209,300
Income tax expense (2)
35,616
32,023
27,594
31,484
37,067
Net income
$
203,609
$
181,719
$
175,367
$
177,959
$
172,233
Earnings per share:
Basic
$
1.93
$
1.72
$
1.66
$
1.68
$
1.62
Diluted
1.91
1.70
1.64
1.66
1.61
Weighted average shares outstanding:
Basic
105,657
105,697
105,733
105,979
106,249
Diluted
106,778
106,770
106,823
107,025
107,093
Book value per share
$
50.58
$
48.96
$
47.87
$
44.98
$
44.24
Return on average equity (annualized)
15.4
%
14.1
%
14.2
%
14.9
%
14.7
%
Credit Facility
Borrowings outstanding
$
425,000
$
425,000
$
425,000
$
425,000
$
425,000
Undrawn committed capacity
$
400,000
$
400,000
$
400,000
$
400,000
$
400,000
Weighted average interest rate (end of period)
7.07
%
7.06
%
7.11
%
7.07
%
6.87
%
Debt-to-capital
7.32
%
7.52
%
7.69
%
8.12
%
8.24
%
(1) Other income includes net favorable (unfavorable) changes in the fair value of embedded derivatives associated with certain of our third-party reinsurance agreements, which for the quarters ended June 30, 2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023, were $732, ($1,902), $412, ($898), and $2,726, respectively.
(2) Income tax expense for the quarters ended June 30,2024, March 31, 2024, December 31, 2023, September 30, 2023, and June 30, 2023 includes $556, ($1,041), ($1,132), ($763), and ($888), respectively, of discrete tax expense (benefit) associated with realized and unrealized gains and losses. Income tax expense for the quarter ended March 31, 2024 also includes ($616) of excess tax benefits associated with the vesting of common shares and common share units. Income tax expense for the quarter ended December 31, 2023 also includes a $2,731 net benefit associated with the recognition of a deferred tax asset for unrealized losses on the investment portfolios of Essent Group and Essent Re upon the enactment of the Bermuda Corporate Income Tax. Income tax expense for the quarter ended June 30, 2023 also includes $5,295 of net discrete tax expense associated with prior year tax returns.
Exhibit D
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Portfolio Historical Quarterly Data
2024
2023
Other Data:
June 30
March 31
December 31
September 30
June 30
($ in thousands)
U.S. Mortgage Insurance Portfolio
New insurance written
$
12,503,125
$
8,323,544
$
8,769,160
$
12,505,823
$
13,498,080
New risk written
3,449,623
2,289,508
2,409,340
3,458,467
3,726,513
Average insurance in force
$
239,538,571
$
238,595,268
$
239,005,961
$
237,270,093
$
233,484,941
Insurance in force (end of period)
$
240,669,165
$
238,477,402
$
239,078,262
$
238,661,612
$
235,649,884
Gross risk in force (end of period) (1)
$
65,269,064
$
64,247,810
$
64,061,374
$
63,605,057
$
62,403,400
Risk in force (end of period)
$
55,521,538
$
54,686,533
$
54,591,590
$
53,920,308
$
53,290,643
Policies in force
814,237
815,752
822,012
825,248
821,690
Weighted average coverage (2)
27.1
%
26.9
%
26.8
%
26.7
%
26.5
%
Annual persistency
86.7
%
86.9
%
86.9
%
86.6
%
85.8
%
Loans in default (count)
13,954
13,992
14,819
13,391
12,480
Percentage of loans in default
1.71
%
1.72
%
1.80
%
1.62
%
1.52
%
U.S. Mortgage Insurance Portfolio premium rate:
Base average premium rate (3)
0.41
%
0.41
%
0.40
%
0.40
%
0.40
%
Single premium cancellations (4)
—
%
—
%
—
%
—
%
—
%
Gross average premium rate
0.41
%
0.41
%
0.40
%
0.40
%
0.40
%
Ceded premiums
(0.05
%)
(0.05
%)
(0.05
%)
(0.05
%)
(0.07
%)
Net average premium rate
0.36
%
0.36
%
0.35
%
0.35
%
0.33
%
(1) Gross risk in force includes risk ceded under third-party reinsurance.
(2) Weighted average coverage is calculated by dividing end of period gross risk in force by end of period insurance in force.
(3) Base average premium rate is calculated by dividing annualized base premiums earned by average insurance in force for the period.
(4) Single premium cancellations is calculated by dividing annualized premiums on the cancellation of non-refundable single premium policies by average insurance in force for the period.
Exhibit E
Essent Group Ltd. and Subsidiaries
Supplemental Information - U.S. Mortgage Insurance Portfolio
New Insurance Written: Flow
NIW by Credit Score
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
($ in thousands)
>=760
$
5,451,182
43.6
%
$
5,413,790
40.1
%
$
9,047,782
43.4
%
$
10,260,848
38.9
%
740-759
2,165,026
17.3
2,428,773
18.0
3,575,472
17.2
4,826,755
18.3
720-739
1,819,751
14.6
2,194,400
16.3
3,064,399
14.7
4,399,244
16.7
700-719
1,585,167
12.7
2,022,302
15.0
2,725,597
13.1
4,025,194
15.2
680-699
870,054
7.0
1,032,061
7.6
1,433,473
6.9
2,132,876
8.1
=679
611,945
4.8
406,754
3.0
979,946
4.7
746,952
2.8
Total
$
12,503,125
100.0
%
$
13,498,080
100.0
%
$
20,826,669
100.0
%
$
26,391,869
100.0
%
Weighted average credit score
748
746
748
746
NIW by LTV
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
($ in thousands)
85.00% and below
$
854,349
6.8
%
$
988,752
7.3
%
$
1,414,248
6.8
%
$
1,951,761
7.4
%
85.01% to 90.00%
2,423,665
19.4
2,819,310
20.9
4,155,796
20.0
5,505,138
20.9
90.01% to 95.00%
6,874,853
55.0
7,339,533
54.4
11,392,508
54.7
14,769,646
55.9
95.01% and above
2,350,258
18.8
2,350,485
17.4
3,864,117
18.5
4,165,324
15.8
Total
$
12,503,125
100.0
%
$
13,498,080
100.0
%
$
20,826,669
100.0
%
$
26,391,869
100.0
%
Weighted average LTV
93
%
93
%
93
%
93
%
NIW by Product
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Single Premium policies
1.3
%
4.3
%
1.6
%
4.1
%
Monthly Premium policies
98.7
95.7
98.4
95.9
100.0
%
100.0
%
100.0
%
100.0
%
NIW by Purchase vs. Refinance
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Purchase
97.8
%
98.8
%
97.6
%
98.7
%
Refinance
2.2
1.2
2.4
1.3
100.0
%
100.0
%
100.0
%
100.0
%
Exhibit F
Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance in Force and Risk in Force - U.S. Mortgage Insurance Portfolio
Portfolio by Credit Score
IIF by FICO score
June 30, 2024
March 31, 2024
June 30, 2023
($ in thousands)
>=760
$
97,668,435
40.6
%
$
96,712,431
40.6
%
$
95,925,520
40.8
%
740-759
41,915,598
17.4
41,477,680
17.4
40,733,799
17.3
720-739
37,678,804
15.7
37,342,339
15.7
36,791,104
15.6
700-719
32,331,564
13.4
32,023,895
13.4
30,970,132
13.1
680-699
19,751,956
8.2
19,664,999
8.2
19,667,866
8.3
=679
11,322,808
4.7
11,256,058
4.7
11,561,463
4.9
Total
$
240,669,165
100.0
%
$
238,477,402
100.0
%
$
235,649,884
100.0
%
Weighted average credit score
746
746
746
Gross RIF by FICO score
June 30, 2024
March 31, 2024
June 30, 2023
($ in thousands)
>=760
$
26,238,140
40.2
%
$
25,806,552
40.2
%
$
25,138,762
40.3
%
740-759
11,525,987
17.7
11,326,253
17.6
10,922,780
17.5
720-739
10,362,021
15.9
10,206,055
15.9
9,896,425
15.9
700-719
8,899,342
13.6
8,757,648
13.6
8,319,353
13.3
680-699
5,382,312
8.2
5,321,802
8.3
5,248,349
8.4
=679
2,861,262
4.4
2,829,500
4.4
2,877,731
4.6
Total
$
65,269,064
100.0
%
$
64,247,810
100.0
%
$
62,403,400
100.0
%
Portfolio by LTV
IIF by LTV
June 30, 2024
March 31, 2024
June 30, 2023
($ in thousands)
85.00% and below
$
16,927,111
7.0
%
$
18,397,395
7.7
%
$
22,427,649
9.5
%
85.01% to 90.00%
61,774,991
25.7
62,218,749
26.1
63,562,258
27.0
90.01% to 95.00%
123,414,332
51.3
120,666,455
50.6
115,768,826
49.1
95.01% and above
38,552,731
16.0
37,194,803
15.6
33,891,151
14.4
Total
$
240,669,165
100.0
%
$
238,477,402
100.0
%
$
235,649,884
100.0
%
Weighted average LTV
93
%
93
%
93
%
Gross RIF by LTV
June 30, 2024
March 31, 2024
June 30, 2023
($ in thousands)
85.00% and below
$
2,010,864
3.1
%
$
2,188,074
3.4
%
$
2,667,981
4.3
%
85.01% to 90.00%
15,238,201
23.3
15,329,091
23.9
15,583,198
25.0
90.01% to 95.00%
36,405,573
55.8
35,556,840
55.3
34,026,320
54.5
95.01% and above
11,614,426
17.8
11,173,805
17.4
10,125,901
16.2
Total
$
65,269,064
100.0
%
$
64,247,810
100.0
%
$
62,403,400
100.0
%
Portfolio by Loan Amortization Period
IIF by Loan Amortization Period
June 30, 2024
March 31, 2024
June 30, 2023
($ in thousands)
FRM 30 years and higher
$
235,138,420
97.7
%
$
232,753,590
97.6
%
$
228,745,641
97.1
%
FRM 20-25 years
1,322,021
0.5
1,473,431
0.6
2,124,690
0.9
FRM 15 years
1,276,780
0.5
1,359,795
0.6
1,953,448
0.8
ARM 5 years and higher
2,931,944
1.3
2,890,586
1.2
2,826,105
1.2
Total
$
240,669,165
100.0
%
$
238,477,402
100.0
%
$
235,649,884
100.0
%
Exhibit G
Essent Group Ltd. and Subsidiaries
Supplemental Information
Other Risk in Force
2024
2023
($ in thousands)
June 30
March 31
December 31
September 30
June 30
GSE and other risk share (1):
Risk in Force
$
2,304,885
$
2,307,267
$
2,244,944
$
2,247,393
$
2,276,702
Reserve for losses and LAE
$
33
$
32
$
29
$
54
$
55
Weighted average credit score
750
750
749
749
749
Weighted average LTV
82
%
82
%
82
%
82
%
83
%
(1) GSE and other risk share includes GSE risk share and other reinsurance transactions. Essent Reinsurance Ltd. ("Essent Re") provides insurance or reinsurance relating to the risk in force on loans in reference pools acquired by Freddie Mac and Fannie Mae.
Exhibit H
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Portfolio Vintage Data
June 30, 2024
Insurance in Force
Year
Original
Written
($ in thousands)
Remaining
in Force
($ in thousands)
% Remaining of Original
Number of Policies in Force
Weighted Average Coupon
% Purchase
>90% LTV
>95% LTV
FICO 700
FICO >= 760
Incurred Loss Ratio (Inception to Date) (1)
Number of Loans in Default
Percentage of Loans in Default
2010 - 2014
$
60,668,851
$
1,047,692
1.7
%
5,772
4.28
%
66.1
%
49.8
%
1.2
%
10.3
%
49.0
%
2.4
%
252
4.37
%
2015
26,193,656
1,038,672
4.0
6,156
4.27
79.8
66.5
5.5
18.1
39.1
2.3
245
3.98
2016
34,949,319
2,570,524
7.4
15,203
3.92
86.8
79.2
13.3
16.3
41.6
2.0
427
2.81
2017
43,858,322
4,139,552
9.4
25,251
4.29
91.1
77.1
22.5
21.2
36.6
3.1
990
3.92
2018
47,508,525
5,073,930
10.7
28,900
4.80
95.1
73.3
26.7
21.8
32.4
4.1
1,257
4.35
2019
63,569,183
11,216,155
17.6
54,299
4.23
88.9
71.1
25.6
18.9
35.2
3.8
1,635
3.01
2020
107,944,065
40,789,474
37.8
159,965
3.20
71.0
60.5
14.0
10.9
45.5
2.6
2,153
1.35
2021
84,218,250
55,842,833
66.3
185,000
3.09
88.2
65.1
16.3
13.8
40.4
6.0
3,042
1.64
2022
63,061,262
54,555,338
86.5
156,491
5.08
98.0
65.8
11.4
12.6
39.6
16.8
2,598
1.66
2023
47,666,852
43,986,658
92.3
123,145
6.65
98.8
72.7
18.5
11.0
38.9
15.7
1,297
1.05
2024 (through June 30)
20,826,669
20,408,337
98.0
54,055
6.88
97.6
73.4
18.8
11.7
42.9
5.8
58
0.11
Total
$
600,464,954
$
240,669,165
40.1
814,237
4.66
90.3
67.3
16.0
12.9
40.6
4.3
13,954
1.71
(1) Incurred loss ratio is calculated by dividing the sum of case reserves and cumulative amount paid for claims by cumulative net premiums earned.
Exhibit I
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Portfolio Reinsurance Vintage Data
June 30, 2024
($ in thousands)
Insurance Linked Notes (1)
Earned Premiums Ceded
Deal Name
Vintage
Remaining
in Force
Remaining
Risk
in Force
Original
Reinsurance in Force
Remaining
Reinsurance in Force
Losses
Ceded
to Date
Original
First Layer
Retention
Remaining
First Layer
Retention
Quarter-to-Date
Year-to-Date
Reduction in PMIERs Minimum Required
Assets (3)
Radnor Re 2021-1
Aug. 2020 - Mar. 2021
$
27,796,132
$
7,390,779
$
557,911
$
250,732
$
—
$
278,956
$
278,227
$
2,148
$
4,473
$
174,722
Radnor Re 2021-2
Apr. 2021 - Sep. 2021
32,876,424
9,007,485
439,407
301,015
—
279,415
277,770
3,563
7,237
239,363
Radnor Re 2022-1
Oct. 2021 - Jul. 2022
29,790,115
8,096,398
237,868
209,409
—
303,761
302,032
3,736
7,653
192,656
Radnor Re 2023-1
Aug. 2022 - Jun. 2023
29,594,148
8,102,672
281,462
281,462
—
281,463
281,434
3,473
6,952
266,826
Total
$
120,056,819
$
32,597,334
$
1,516,648
$
1,042,618
$
—
$
1,143,595
$
1,139,463
$
12,920
$
26,315
(5)
$
873,567
Excess of Loss Reinsurance (2)
Earned Premiums Ceded
Deal Name
Vintage
Remaining
in Force
Remaining
Risk
in Force
Original
Reinsurance in Force
Remaining
Reinsurance in Force
Losses
Ceded
to Date
Original
First Layer
Retention
Remaining
First Layer
Retention
Quarter-to-Date
Year-to-Date
Reduction in PMIERs Minimum Required
Assets (3)
XOL 2019-1
Jan. 2018 - Dec. 2018
$
5,024,587
$
1,321,732
$
118,650
$
76,144
$
—
$
253,643
$
244,991
$
607
$
1,227
$
—
XOL 2020-1
Jan. 2019 - Aug. 2019
6,290,687
1,658,671
55,102
32,770
—
215,605
212,557
267
547
—
XOL 2022-1
Oct. 2021 - Dec. 2022
67,094,902
18,213,963
141,992
141,992
—
507,114
502,788
1,593
3,186
137,802
XOL 2023-1
Jan. 2023 - Dec. 2023
39,252,349
10,868,626
36,627
36,627
—
366,270
366,154
434
868
35,310
Total
$
117,662,525
$
32,062,992
$
352,371
$
287,533
$
—
$
1,342,632
$
1,326,490
$
2,901
$
5,828
$
173,112
Quota Share Reinsurance (2)
Losses Ceded
Ceding Commission
Earned Premiums Ceded
Year
Ceding Percentage
Remaining
in Force
Remaining
Risk
in Force
Remaining Ceded Insurance in Force
Remaining Ceded Risk in Force
Quarter-to-Date
Year-to-Date
Quarter-to-Date
Year-to-Date
Quarter-to-Date
Year-to-Date
Reduction in PMIERs Minimum Required
Assets (3)
Sep. 2019 - Dec. 2020
(4)
$
45,488,690
$
12,209,907
$
10,259,829
$
2,717,800
$
(609
)
$
(790
)
$
2,264
$
4,645
$
3,580
$
7,803
$
161,813
Jan. 2022 - Dec. 2022
20%
54,504,030
14,796,646
10,900,806
2,959,329
(469
)
1,255
1,879
3,784
3,101
8,445
218,858
Jan. 2023 - Dec. 2023
17.5%
39,137,562
10,840,618
6,849,073
1,897,108
1,020
2,461
1,349
2,715
3,852
8,163
143,367
Jan. 2024 - Dec. 2024
15%
20,388,139
5,620,923
3,058,221
843,138
159
159
407
508
1,035
1,252
58,872
Total
$
159,518,421
$
43,468,094
$
31,067,929
$
8,417,375
$
101
$
3,085
$
5,899
$
11,652
$
11,568
$
25,663
$
582,910
(1) Reinsurance provided by unaffiliated special purpose insurers through the issuance of mortgage insurance-linked notes ("ILNs").
(2) Reinsurance provided by panels of reinsurers.
(3) Represents the reduction in Essent Guaranty, Inc.'s Minimum Required Assets based on our interpretation of the PMIERs.
(4) Reinsurance coverage on 40% of eligible single premium policies and 20% of all other eligible policies.
(5) Excludes ($45) and ($71) of benefit in ceded premium on retired ILN's for the three and six months ended June 30, 2024, respectively.
Exhibit J
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Portfolio Geographic Data
IIF by State
June 30, 2024
March 31, 2024
June 30, 2023
CA
12.7
%
12.9
%
13.1
%
FL
11.6
11.3
10.8
TX
10.8
10.6
10.5
CO
4.1
4.1
4.1
AZ
3.8
3.8
3.7
GA
3.6
3.5
3.3
WA
3.4
3.5
3.4
NC
3.0
2.9
2.8
IL
2.7
2.7
2.9
VA
2.7
2.7
2.9
All Others
41.6
42.0
42.5
Total
100.0
%
100.0
%
100.0
%
Gross RIF by State
June 30, 2024
March 31, 2024
June 30, 2023
CA
12.6
%
12.8
%
13.0
%
FL
11.8
11.6
11.1
TX
11.1
10.9
10.8
CO
4.1
4.1
4.1
AZ
3.8
3.8
3.8
GA
3.7
3.6
3.4
WA
3.4
3.4
3.4
NC
3.0
2.9
2.8
IL
2.6
2.7
2.8
VA
2.6
2.7
2.8
All Others
41.3
41.5
42.0
Total
100.0
%
100.0
%
100.0
%
Exhibit K
Essent Group Ltd. and Subsidiaries
Supplemental Information
Rollforward of Defaults and Reserve for Losses and LAE
U.S. Mortgage Insurance Portfolio
Rollforward of Insured Loans in Default
Three Months Ended
2024
2023
June 30
March 31
December 31
September 30
June 30
Beginning default inventory
13,992
14,819
13,391
12,480
12,773
Plus: new defaults (A)
8,119
8,260
9,007
7,953
6,575
Less: cures
(7,956
)
(8,951
)
(7,418
)
(6,902
)
(6,761
)
Less: claims paid
(183
)
(123
)
(148
)
(129
)
(96
)
Less: rescissions and denials, net
(18
)
(13
)
(13
)
(11
)
(11
)
Ending default inventory
13,954
13,992
14,819
13,391
12,480
(A) New defaults remaining as of June 30, 2024
5,944
2,466
1,922
1,204
699
Cure rate (1)
27
%
70
%
79
%
85
%
89
%
Total amount paid for claims (in thousands)
$
5,566
$
3,605
$
3,411
$
2,956
$
1,890
Average amount paid per claim (in thousands)
$
30
$
29
$
23
$
23
$
20
Severity
60
%
65
%
54
%
66
%
58
%
Rollforward of Reserve for Losses and LAE
Three Months Ended
2024
2023
($ in thousands)
June 30
March 31
December 31
September 30
June 30
Reserve for losses and LAE at beginning of period
$
253,565
$
245,402
$
226,617
$
216,888
$
215,957
Less: Reinsurance recoverables
26,570
24,005
20,656
17,958
16,357
Net reserve for losses and LAE at beginning of period
226,995
221,397
205,961
198,930
199,600
Add provision for losses and LAE occurring in:
Current period
$
30,653
$
39,396
$
38,922
$
35,609
$
31,377
Prior years
(31,880
)
(30,062
)
(19,912
)
(25,533
)
(30,107
)
Incurred losses and LAE during the period
(1,227
)
9,334
19,010
10,076
1,270
Deduct payments for losses and LAE occurring in:
Current period
478
1
330
156
31
Prior years
5,205
3,735
3,244
2,889
1,909
Loss and LAE payments during the period
5,683
3,736
3,574
3,045
1,940
Net reserve for losses and LAE at end of period
220,085
226,995
221,397
205,961
198,930
Plus: Reinsurance recoverables
26,022
26,570
24,005
20,656
17,958
Reserve for losses and LAE at end of period
$
246,107
$
253,565
$
245,402
$
226,617
$
216,888
(1) The cure rate is calculated by dividing new defaults remaining as of the reporting date by the original number of new defaults reported in the quarterly period and subtracting that percentage from 100%.
Exhibit L
Essent Group Ltd. and Subsidiaries
Supplemental Information
Detail of Reserves by Default Delinquency
U.S. Mortgage Insurance Portfolio
June 30, 2024
Number of
Policies in
Default
Percentage of
Policies in
Default
Amount of Reserves
Percentage of Reserves
Defaulted RIF
Reserves as a Percentage of
Defaulted RIF
($ in thousands)
Missed Payments:
Three payments or less
7,024
50
%
$
43,396
19
%
$
525,876
8
%
Four to eleven payments
4,887
35
93,489
41
383,685
24
Twelve or more payments
1,908
14
82,529
37
135,616
61
Pending claims
135
1
7,562
3
8,540
89
Total case reserves
13,954
100
%
226,976
100
%
$
1,053,717
22
%
IBNR
17,023
LAE
2,108
Total reserves for losses and LAE
$
246,107
Average reserve per default:
Case
$
16.3
Total
$
17.6
Default Rate
1.71
%
December 31, 2023
Number of
Policies in
Default
Percentage of
Policies in
Default
Amount of Reserves
Percentage of Reserves
Defaulted RIF
Reserves as a Percentage of
Defaulted RIF
($ in thousands)
Missed Payments:
Three payments or less
7,288
49
%
$
44,607
20
%
$
527,419
8
%
Four to eleven payments
5,421
37
97,424
43
417,876
23
Twelve or more payments
1,984
13
78,540
35
132,257
59
Pending claims
126
1
5,550
2
6,302
88
Total case reserves
14,819
100
%
226,121
100
%
$
1,083,854
21
%
IBNR
16,959
LAE
2,322
Total reserves for losses and LAE
$
245,402
Average reserve per default:
Case
$
15.3
Total
$
16.6
Default Rate
1.80
%
June 30, 2023
Number of
Policies in
Default
Percentage of
Policies in
Default
Amount of Reserves
Percentage of Reserves
Defaulted RIF
Reserves as a Percentage of
Defaulted RIF
($ in thousands)
Missed Payments:
Three payments or less
5,581
45
%
$
33,864
17
%
$
388,012
9
%
Four to eleven payments
4,725
38
82,196
41
348,955
24
Twelve or more payments
2,045
16
78,236
39
123,903
63
Pending claims
129
1
5,680
3
6,687
85
Total case reserves
12,480
100
%
199,976
100
%
$
867,557
23
%
IBNR
14,998
LAE
1,914
Total reserves for losses and LAE
$
216,888
Average reserve per default:
Case
$
16.0
Total
$
17.4
Default Rate
1.52
%
Exhibit M
Essent Group Ltd. and Subsidiaries
Supplemental Information
Investments Available for Sale
Investments Available for Sale by Asset Class
Asset Class
June 30, 2024
December 31, 2023
($ in thousands)
Fair Value
Percent
Fair Value
Percent
U.S. Treasury securities
$
999,176
18.3
%
$
996,382
18.9
%
U.S. agency securities
—
—
7,195
0.1
U.S. agency mortgage-backed securities
757,590
13.9
821,346
15.6
Municipal debt securities
524,396
9.7
547,258
10.5
Non-U.S. government securities
66,031
1.2
67,447
1.3
Corporate debt securities
1,151,976
21.1
1,297,055
24.7
Residential and commercial mortgage securities
498,987
9.1
517,940
9.8
Asset-backed securities
455,453
8.3
564,995
10.7
Money market funds
1,001,374
18.4
444,121
8.4
Total investments available for sale
$
5,454,983
100.0
%
$
5,263,739
100.0
%
Investments Available for Sale by Credit Rating
Rating (1)
June 30, 2024
December 31, 2023
($ in thousands)
Fair Value
Percent
Fair Value
Percent
Aaa
$
2,409,458
54.1
%
$
2,561,363
53.2
%
Aa1
95,534
2.1
104,474
2.2
Aa2
265,098
6.0
291,501
6.0
Aa3
187,946
4.1
208,882
4.3
A1
352,488
7.9
377,188
7.8
A2
253,728
5.7
329,423
6.8
A3
252,599
5.7
253,081
5.3
Baa1
207,665
4.7
220,901
4.6
Baa2
199,072
4.5
226,449
4.7
Baa3
158,219
3.6
166,121
3.4
Below Baa3
71,802
1.6
80,235
1.7
Total (2)
$
4,453,609
100.0
%
$
4,819,618
100.0
%
(1) Based on ratings issued by Moody's, if available. S or Fitch rating utilized if Moody's not available.
(2) Excludes $1,001,374 and $444,121 of money market funds at June 30, 2024 and December 31, 2023, respectively.
Investments Available for Sale by Duration and Book Yield
Effective Duration
June 30, 2024
December 31, 2023
($ in thousands)
Fair Value
Percent
Fair Value
Percent
1 Year
$
2,334,120
42.8
%
$
1,892,074
35.9
%
1 to 2 Years
310,087
5.7
371,583
7.1
2 to 3 Years
447,721
8.1
538,775
10.2
3 to 4 Years
404,998
7.4
402,668
7.6
4 to 5 Years
384,051
7.0
376,722
7.2
5 or more Years
1,574,006
29.0
1,681,917
32.0
Total investments available for sale
$
5,454,983
100.0
%
$
5,263,739
100.0
%
Pre-tax investment income yield:
Three months ended
3.84
%
Six months ended June 30, 2024
3.76
%
Holding company net cash and investments available for sale:
($ in thousands)
As of June 30, 2024
$
808,389
As of December 31, 2023
$
693,507
Exhibit N
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Company Capital
2024
2023
June 30
March 31
December 31
September 30
June 30
($ in thousands)
U.S. Mortgage Insurance Subsidiaries:
Combined statutory capital (1)
$
3,530,462
$
3,453,553
$
3,376,117
$
3,309,522
$
3,243,086
Combined net risk in force (2)
$
34,812,227
$
34,463,082
$
34,549,500
$
34,203,678
$
34,019,643
Risk-to-capital ratios: (3)
Essent Guaranty, Inc.
10.2:1
10.3:1
10.6:1
10.7:1
10.8:1
Essent Guaranty of PA, Inc.
0.3:1
0.4:1
0.4:1
0.5:1
0.5:1
Combined (4)
9.9:1
10.0:1
10.2:1
10.3:1
10.5:1
Essent Guaranty, Inc. PMIERs Data (5):
Available Assets
$
3,513,609
$
3,464,119
$
3,379,936
$
3,318,179
$
3,245,481
Minimum Required Assets
2,052,135
1,999,928
1,985,545
1,910,659
1,991,741
PMIERs excess Available Assets
$
1,461,474
$
1,464,191
$
1,394,391
$
1,407,520
$
1,253,740
PMIERs sufficiency ratio (6)
171
%
173
%
170
%
174
%
163
%
Essent Reinsurance Ltd.:
Stockholder's equity (GAAP basis)
$
1,793,777
$
1,793,005
$
1,758,665
$
1,684,122
$
1,633,763
Net risk in force (2)
$
22,770,165
$
22,271,316
$
22,043,926
$
21,739,419
$
21,327,762
(1) Combined statutory capital equals the sum of statutory capital of Essent Guaranty, Inc. plus Essent Guaranty of PA, Inc., after eliminating the impact of intercompany transactions. Statutory capital is computed based on accounting practices prescribed or permitted by the Pennsylvania Insurance Department and the National Association of Insurance Commissioners Accounting Practices and Procedures Manual.
(2) Net risk in force represents total risk in force, net of reinsurance ceded and net of exposures on policies for which loss reserves have been established.
(3) The risk-to-capital ratio is calculated as the ratio of net risk in force to statutory capital.
(4) The combined risk-to-capital ratio equals the sum of the net risk in force of Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. divided by the combined statutory capital.
(5) Data is based on our interpretation of the PMIERs as of the dates indicated.
(6) PMIERs sufficiency ratio is calculated by dividing Available Assets by Minimum Required Assets.
Exhibit O
Essent Group Ltd. and Subsidiaries
Supplemental Information
Ratios and Reconciliation of Non-GAAP Financial Measures
2024
2023
June 30
March 31
December 31
September 30
June 30
Loss Ratio (1)
(0.1
)%
4.0
%
7.9
%
4.4
%
0.6
%
Expense Ratio (2)
26.1
%
27.1
%
27.0
%
27.3
%
19.8
%
Combined Ratio
26.0
%
31.1
%
34.9
%
31.7
%
20.4
%
Underwriting Margin (3)
74.0
%
68.9
%
65.1
%
68.3
%
79.6
%
We believe that loss, expense and combined ratios are important measures of our financial performance. As a result of the July 1, 2023 acquisition of Agents National Title and Boston National Title (collectively "Title"), the consolidated loss, expense and combined ratios ("Consolidated Ratios") for the three and six months ended June 30, 2024 lack comparability with periods prior to the acquisition. In order to provide investors with more comparative information to prior periods, Essent has prepared the table below to reconcile the Consolidated Ratios to ratios excluding Title, as shown below. Ratios excluding Title are financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP) and are referred to as non-GAAP measures. Ratios excluding Title are measures used to monitor our results and should not be viewed as a substitute for those measures determined in accordance with GAAP.
The following table sets forth the reconciliation of the loss, expense and combined ratios excluding Title to the most comparable GAAP amount for the three and six months ended June 30, 2024 in accordance with Regulation G:
Three Months Ended
June 30, 2024
Six Months Ended
June 30, 2024
Consolidated
Title
Excluding Title
Consolidated
Title
Excluding Title
($ in thousands)
Revenues:
Net premiums earned
$
251,891
$
16,633
$
235,258
$
497,481
$
31,917
$
465,564
Net investment income
56,086
804
55,282
108,171
1,555
106,616
Realized investment losses, net
(1,164
)
—
(1,164
)
(2,304
)
—
(2,304
)
(Loss) income from other invested assets
(419
)
—
(419
)
(2,334
)
—
(2,334
)
Settlement services (4)
1,412
1,412
—
2,837
2,837
—
Other income
5,136
474
4,662
7,448
881
6,567
Total revenues
312,942
19,323
293,619
611,299
37,190
574,109
Losses and expenses:
Provision (benefit) for losses and LAE
(334
)
892
(1,226
)
9,579
1,467
8,112
Other underwriting and operating expenses (5)
55,987
12,909
43,078
113,336
24,719
88,617
Premiums retained by agents
10,215
10,215
—
19,706
19,706
—
Interest expense
7,849
—
7,849
15,711
—
15,711
Total losses and expenses
73,717
24,016
49,701
158,332
45,892
112,440
Loss ratio (1)
(0.1
%)
4.9
%
(0.5
%)
1.9
%
4.2
%
1.7
%
Expense ratio (2)
26.1
%
128.1
%
18.3
%
26.6
%
127.8
%
19.0
%
Combined ratio
26.0
%
133.0
%
17.8
%
28.5
%
132.0
%
20.7
%
Underwriting Margin (3)
74.0
%
(33.0
%)
82.2
%
71.5
%
(32.0
%)
79.3
%
(1) Loss ratio is calculated by dividing the provision for losses and LAE by the sum of net premiums earned and settlement services revenue, if applicable.
(2) Expense ratio is calculated by dividing the sum of other underwriting and operating expenses and premiums retained by agents by the sum of net premiums earned and settlement services revenue, if applicable.
(3) Calculated as the inverse of the combined ratio.
(4) Settlement services revenue is included in "Other income" within Exhibit A and Exhibit C.
(5) Title expenses reflect only direct expenses of Title operations and do not include corporate or centralized support expense allocations.
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