Essent Group Ltd. (NYSE: ESNT) today reported net income for the
quarter ended September 30, 2023 of $178.0 million or $1.66 per
diluted share, compared to $178.1 million or $1.66 per diluted
share for the quarter ended September 30, 2022.
Essent also announced today that its Board of Directors has
declared a quarterly cash dividend of $0.25 per common share. The
dividend is payable on December 11, 2023, to shareholders of record
on December 1, 2023.
“We are pleased with our third quarter 2023 financial results,
as we continue to generate high quality earnings and robust
returns,” said Mark A. Casale, Chairman and Chief Executive
Officer. “The credit quality of our portfolio remains strong.
Higher interest rates have translated to higher portfolio
persistency and increased investment income, supporting our
revenues and growth in book value per share.”
Financial Highlights:
- New insurance written for the third quarter of 2023 was $12.5
billion, compared to $13.5 billion in the second quarter of 2023
and $17.1 billion in the third quarter of 2022.
- Insurance in force as of September 30, 2023 was $238.7 billion,
compared to $235.6 billion as of June 30, 2023 and $222.5 billion
as of September 30, 2022.
- Net investment income for the third quarter of 2023 was $47.1
million, up 44% from the third quarter of 2022. For the nine months
ended September 30, 2023, net investment income was $135.6 million,
up 57% from the comparable period in 2022.
- On July 1, 2023, Essent Group Ltd. completed its previously
announced acquisition of Agents National Title Holding Company and
Boston National Holdings LLC for $92.6 million.
- On August 8, 2023, Essent closed its 9th insurance-linked note
transaction, Radnor Re 2023-1, which provides $281.5 million of
collateralized reinsurance coverage for NIW from August 2022
through June 2023.
- In October 2023, the Board approved a share repurchase plan
that authorizes the Company to repurchase $250 million of common
shares in the open market between January 1, 2024 and December 31,
2025.
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; lenders or investors seeking alternatives to private
mortgage insurance; deteriorating economic conditions (including
inflation, rising interest rates and other adverse economic
trends); the impact of COVID-19 and related economic conditions; an
increase in the number of loans insured through Federal government
mortgage insurance programs, including those offered by the Federal
Housing Administration; decline in new insurance written and
franchise value due to loss of a significant customer; decline in
the volume of low down payment mortgage originations; the
definition of "Qualified Mortgage" reducing the size of the
mortgage origination market or creating incentives to use
government mortgage insurance programs; the definition of
"Qualified Residential Mortgage" reducing the number of low down
payment loans or lenders and investors seeking alternatives to
private mortgage insurance; the implementation of the Basel III
Capital Accord discouraging the use of private mortgage insurance;
a decrease in the length of time that insurance policies are in
force; uncertainty of loss reserve estimates; our non-U.S.
operations becoming subject to U.S. Federal income taxation;
becoming considered a passive foreign investment company for U.S.
Federal income tax purposes; 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, 2022 filed with the Securities and
Exchange Commission on February 17, 2023, 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”) which serves
the housing finance industry by offering private mortgage
insurance, reinsurance, risk management products and title
insurance and settlement services to mortgage lenders, borrowers,
and investors to support homeownership. 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 September 30,
2023
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
Exhibit L
Detail of Reserves by Default
Delinquency
Exhibit M
Investments Available for Sale
Exhibit N
U.S. Mortgage Insurance Company
Capital
Exhibit O
Loss, Expense and Combined 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 September
30,
Nine Months Ended September
30,
(In thousands,
except per share amounts)
2023
2022
2023
2022
Revenues:
Direct premiums written
$
270,868
$
239,773
$
759,526
$
692,687
Ceded premiums
(30,294
)
(30,543
)
(103,431
)
(73,384
)
Net premiums written
240,574
209,230
656,095
619,303
Decrease in unearned premiums
6,231
(1,296
)
15,197
15,972
Net premiums earned
246,805
207,934
671,292
635,275
Net investment income
47,072
32,594
135,558
86,613
Realized investment losses, net
(235
)
175
(2,312
)
(7,648
)
(Loss) income from other invested
assets
(3,143
)
9,617
(10,697
)
36,275
Other income
5,609
11,447
18,641
20,272
Total revenues
296,108
261,767
812,482
770,787
Losses and expenses:
Provision (benefit) for losses and LAE
10,822
4,252
11,902
(178,805
)
Other underwriting and operating
expenses
54,814
42,144
145,183
124,838
Premiums retained by agents
13,175
—
13,175
—
Interest expense
7,854
4,450
22,184
9,563
Total losses and expenses
86,665
50,846
192,444
(44,404
)
Income before income taxes
209,443
210,921
620,038
815,191
Income tax expense
31,484
32,870
99,019
131,204
Net income
$
177,959
$
178,051
$
521,019
$
683,987
Earnings per share:
Basic
$
1.68
$
1.67
$
4.90
$
6.37
Diluted
1.66
1.66
4.86
6.35
Weighted average shares
outstanding:
Basic
105,979
106,870
106,387
107,314
Diluted
107,025
107,337
107,232
107,732
Net income
$
177,959
$
178,051
$
521,019
$
683,987
Other comprehensive income
(loss):
Change in unrealized depreciation of
investments
(76,248
)
(137,010
)
(53,593
)
(474,284
)
Total other comprehensive loss
(76,248
)
(137,010
)
(53,593
)
(474,284
)
Comprehensive income
$
101,711
$
41,041
$
467,426
$
209,703
Exhibit B
Essent Group Ltd. and
Subsidiaries
Condensed Consolidated Balance
Sheets (Unaudited)
September 30,
December 31,
(In thousands,
except per share amounts)
2023
2022
Assets
Investments
Fixed maturities available for sale, at
fair value
$
4,241,757
$
4,489,598
Short-term investments available for sale,
at fair value
755,931
252,027
Total investments available for sale
4,997,688
4,741,625
Other invested assets
272,619
257,941
Total investments
5,270,307
4,999,566
Cash
96,779
81,240
Accrued investment income
36,651
33,162
Accounts receivable
68,332
57,399
Deferred policy acquisition costs
9,375
9,910
Property and equipment
40,710
19,571
Prepaid federal income tax
461,386
418,460
Goodwill and intangible assets, net
64,271
—
Other assets
46,389
104,489
Total assets
$
6,094,200
$
5,723,797
Liabilities and Stockholders'
Equity
Liabilities
Reserve for losses and LAE
$
241,333
$
216,464
Unearned premium reserve
147,712
162,887
Net deferred tax liability
329,721
356,810
Credit facility borrowings, net of
deferred costs
421,656
420,864
Other accrued liabilities
145,771
104,463
Total liabilities
1,286,193
1,261,488
Commitments and contingencies
Stockholders' Equity
Common shares, $0.015 par value:
Authorized - 233,333; issued and
outstanding - 106,887 shares in 2023 and 107,683 shares in 2022
1,603
1,615
Additional paid-in capital
1,309,717
1,350,377
Accumulated other comprehensive loss
(436,383
)
(382,790
)
Retained earnings
3,933,070
3,493,107
Total stockholders' equity
4,808,007
4,462,309
Total liabilities and stockholders'
equity
$
6,094,200
$
5,723,797
Return on average equity (1)
15.0
%
19.1
%
(1) The 2023 return on average
equity is calculated by dividing annualized year-to-date 2023 net
income by average equity. The 2022 return on average equity is
calculated by dividing full year 2022 net income by average
equity.
Exhibit C
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
Consolidated Historical
Quarterly Data
2023
2022
Selected Income Statement Data
September 30
June 30
March 31
December 31
September 30
(In thousands,
except per share amounts)
Revenues:
Net premiums earned:
U.S. Mortgage Insurance Portfolio
$
209,351
$
195,502
$
196,565
$
192,670
$
194,272
GSE and other risk share
16,850
17,727
14,693
14,582
13,662
Title insurance
20,604
—
—
—
—
Net premiums earned
246,805
213,229
211,258
207,252
207,934
Net investment income
47,072
45,250
43,236
37,796
32,594
Realized investment (losses) gains,
net
(235
)
(1,589
)
(488
)
(5,524
)
175
(Loss) income from other invested
assets
(3,143
)
(4,852
)
(2,702
)
(7,599
)
9,617
Other income (loss) (1)
5,609
8,090
4,942
(1,888
)
11,447
Total revenues
296,108
260,128
256,246
230,037
261,767
Losses and expenses:
Provision (benefit) for losses and LAE
10,822
1,260
(180
)
4,101
4,252
Other underwriting and operating
expenses
54,814
42,174
48,195
46,895
42,144
Premiums retained by agents
13,175
—
—
—
—
Interest expense
7,854
7,394
6,936
6,045
4,450
Total losses and expenses
86,665
50,828
54,951
57,041
50,846
Income before income taxes
209,443
209,300
201,295
172,996
210,921
Income tax expense (2)
31,484
37,067
30,468
25,630
32,870
Net income
$
177,959
$
172,233
$
170,827
$
147,366
$
178,051
Earnings per share:
Basic
$
1.68
$
1.62
$
1.60
$
1.38
$
1.67
Diluted
1.66
1.61
1.59
1.37
1.66
Weighted average shares
outstanding:
Basic
105,979
106,249
106,943
106,881
106,870
Diluted
107,025
107,093
107,585
107,419
107,337
Book value per share
$
44.98
$
44.24
$
43.18
$
41.44
$
39.87
Return on average equity
(annualized)
14.9
%
14.7
%
15.0
%
13.5
%
16.6
%
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
%
6.87
%
6.52
%
6.02
%
4.39
%
Debt-to-capital
8.12
%
8.24
%
8.38
%
8.70
%
9.01
%
(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 September 30, 2023, June
30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022
was ($898), $2,726, ($368), ($6,515), and $5,177, respectively.
(2) Income tax expense for the
quarters ended September 30, 2023, June 30, 2023, March 31, 2023,
December 31, 2022 and September 30, 2022 includes ($763), $(888),
($368), ($4,122), and $2,925 respectively, of discrete tax
(benefit) expense associated with realized and unrealized gains and
losses. Income tax expense for the quarter ended June 30, 2023 also
includes $5,295 of net discrete tax expense associated with prior
year tax returns.
Exhibit D
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
U.S Mortgage Insurance
Portfolio Historical Quarterly Data
2023
2022
Other Data:
September 30
June 30
March 31
December 31
September 30
($ in
thousands)
U.S. Mortgage Insurance
Portfolio
Flow:
New insurance written
$
12,505,823
$
13,498,080
$
12,893,789
$
13,011,432
$
17,112,017
New risk written
3,458,467
3,726,513
3,548,015
3,522,726
4,570,699
Bulk:
New insurance written
$
—
$
—
$
—
$
—
$
—
New risk written
—
—
—
—
—
Total:
New insurance written
$
12,505,823
$
13,498,080
$
12,893,789
$
13,011,432
$
17,112,017
New risk written
$
3,458,467
$
3,726,513
$
3,548,015
$
3,522,726
$
4,570,669
Average insurance in force
$
237,270,093
$
233,484,941
$
228,885,174
$
224,840,675
$
219,280,350
Insurance in force (end of period)
$
238,661,612
$
235,649,884
$
231,537,417
$
227,062,055
$
222,542,569
Gross risk in force (end of period)
(1)
$
63,605,057
$
62,403,400
$
60,879,979
$
59,276,489
$
57,743,091
Risk in force (end of period)
$
53,920,308
$
53,290,643
$
51,469,312
$
49,903,626
$
48,690,571
Policies in force
825,248
821,690
815,751
808,596
800,745
Weighted average coverage (2)
26.7
%
26.5
%
26.3
%
26.1
%
25.9
%
Annual persistency
86.6
%
85.8
%
84.4
%
82.1
%
77.9
%
Loans in default (count)
13,391
12,480
12,773
13,433
12,435
Percentage of loans in default
1.62
%
1.52
%
1.57
%
1.66
%
1.55
%
U.S. Mortgage Insurance Portfolio
premium rate:
Base average premium rate (3)
0.40
%
0.40
%
0.40
%
0.40
%
0.40
%
Single premium cancellations
(4)
—
%
—
%
—
%
—
%
0.01
%
Gross average premium rate
0.40
%
0.40
%
0.40
%
0.40
%
0.41
%
Ceded premiums
(0.05
%)
(0.07
%)
(0.06
%)
(0.06
%)
(0.06
%)
Net average premium rate
0.35
%
0.33
%
0.34
%
0.34
%
0.35
%
(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
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
($ in
thousands)
>=760
$
5,212,343
41.8
%
$
6,976,123
40.8
%
$
15,473,191
39.8
%
$
20,942,108
41.8
%
740-759
2,205,066
17.6
2,965,115
17.3
7,031,821
18.1
8,499,739
17.0
720-739
1,911,320
15.3
2,788,573
16.3
6,310,564
16.2
7,885,166
15.8
700-719
1,867,510
14.9
2,277,251
13.3
5,892,704
15.1
6,452,721
12.9
680-699
891,471
7.1
1,476,982
8.6
3,024,347
7.8
4,409,944
8.8
<=679
418,113
3.3
627,973
3.7
1,165,065
3.0
1,859,956
3.7
Total
$
12,505,823
100.0
%
$
17,112,017
100.0
%
$
38,897,692
100.0
%
$
50,049,634
100.0
%
Weighted average credit score
747
746
746
747
NIW by LTV
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
($ in
thousands)
85.00% and below
$
849,250
6.7
%
$
1,618,912
9.5
%
$
2,801,011
7.2
%
$
4,556,205
9.1
%
85.01% to 90.00%
2,445,924
19.6
4,753,686
27.8
7,951,062
20.4
13,657,345
27.3
90.01% to 95.00%
6,614,050
52.9
9,171,095
53.5
21,383,696
55.0
26,461,665
52.9
95.01% and above
2,596,599
20.8
1,568,324
9.2
6,761,923
17.4
5,374,419
10.7
Total
$
12,505,823
100.0
%
$
17,112,017
100.0
%
$
38,897,692
100.0
%
$
50,049,634
100.0
%
Weighted average LTV
93
%
93
%
93
%
93
%
NIW by Product
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Single Premium policies
2.8
%
8.2
%
3.8
%
5.9
%
Monthly Premium policies
97.2
91.8
96.2
94.1
100.0
%
100.0
%
100.0
%
100.0
%
NIW by Purchase vs.
Refinance
Three Months Ended
Nine Months Ended
September 30, 2023
September 30, 2022
September 30, 2023
September 30, 2022
Purchase
99.0
%
98.7
%
98.8
%
97.2
%
Refinance
1.0
1.3
1.2
2.8
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
September 30, 2023
June 30, 2023
September 30, 2022
($ in
thousands)
>=760
$
97,027,348
40.7
%
$
95,925,520
40.8
%
$
92,309,692
41.5
%
740-759
41,362,480
17.3
40,733,799
17.3
37,821,201
17.0
720-739
37,297,809
15.6
36,791,104
15.6
33,910,646
15.2
700-719
31,674,346
13.3
30,970,132
13.1
28,263,518
12.7
680-699
19,850,176
8.3
19,667,866
8.3
18,351,570
8.2
<=679
11,449,453
4.8
11,561,463
4.9
11,885,942
5.4
Total
$
238,661,612
100.0
%
$
235,649,884
100.0
%
$
222,542,569
100.0
%
Weighted average credit score
746
746
746
Gross RIF by FICO score
September 30, 2023
June 30, 2023
September 30, 2022
($ in
thousands)
>=760
$
25,594,262
40.1
%
$
25,138,762
40.3
%
$
23,743,335
41.1
%
740-759
11,165,727
17.6
10,922,780
17.5
9,920,331
17.2
720-739
10,090,889
15.9
9,896,425
15.9
8,934,327
15.5
700-719
8,568,811
13.5
8,319,353
13.3
7,412,542
12.8
680-699
5,327,434
8.4
5,248,349
8.4
4,801,986
8.3
<=679
2,857,934
4.5
2,877,731
4.6
2,930,570
5.1
Total
$
63,605,057
100.0
%
$
62,403,400
100.0
%
$
57,743,091
100.0
%
Portfolio by LTV
IIF by LTV
September 30, 2023
June 30, 2023
September 30, 2022
($ in
thousands)
85.00% and below
$
21,226,685
8.9
%
$
22,427,649
9.5
%
$
25,121,995
11.3
%
85.01% to 90.00%
63,374,562
26.6
63,562,258
27.0
62,963,331
28.3
90.01% to 95.00%
118,461,030
49.6
115,768,826
49.1
103,794,020
46.6
95.01% and above
35,599,335
14.9
33,891,151
14.4
30,663,223
13.8
Total
$
238,661,612
100.0
%
$
235,649,884
100.0
%
$
222,542,569
100.0
%
Weighted average LTV
93
%
93
%
92
%
Gross RIF by LTV
September 30, 2023
June 30, 2023
September 30, 2022
($ in
thousands)
85.00% and below
$
2,525,753
4.0
%
$
2,667,981
4.3
%
$
2,975,898
5.2
%
85.01% to 90.00%
15,566,095
24.5
15,583,198
25.0
15,317,449
26.5
90.01% to 95.00%
34,848,762
54.8
34,026,320
54.5
30,388,328
52.6
95.01% and above
10,664,447
16.7
10,125,901
16.2
9,061,416
15.7
Total
$
63,605,057
100.0
%
$
62,403,400
100.0
%
$
57,743,091
100.0
%
Portfolio by Loan Amortization
Period
IIF by Loan Amortization Period
September 30, 2023
June 30, 2023
September 30, 2022
($ in
thousands)
FRM 30 years and higher
$
232,186,999
97.3
%
$
228,745,641
97.1
%
$
214,688,363
96.5
%
FRM 20-25 years
1,910,610
0.8
2,124,690
0.9
2,859,734
1.3
FRM 15 years
1,719,467
0.7
1,953,448
0.8
2,903,355
1.3
ARM 5 years and higher
2,844,536
1.2
2,826,105
1.2
2,091,117
0.9
Total
$
238,661,612
100.0
%
$
235,649,884
100.0
%
$
222,542,569
100.0
%
Exhibit G
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
Other Risk in Force
2023
2022
($ in
thousands)
September 30
June 30
March 31
December 31
September 30
GSE and other risk share (1):
Risk in Force
$
2,247,393
$
2,276,702
$
2,098,033
$
2,030,571
$
2,026,895
Reserve for losses and LAE
$
54
$
55
$
65
$
74
$
102
Weighted average credit score
749
749
749
749
748
Weighted average LTV
82
%
83
%
83
%
83
%
84
%
(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
September 30, 2023
Insurance in Force
Year
Original
Insurance
Written
($ in thousands)
Remaining
Insurance
in Force
($ in thousands)
% Remaining of
Original
Insurance
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
$
1,598,284
2.6
%
9,938
4.32
%
73.3
%
62.4
%
7.0
%
15.1
%
43.4
%
2.5
%
392
3.94
%
2015
26,193,656
1,521,374
5.8
9,232
4.21
84.2
74.8
4.6
17.7
39.6
2.5
327
3.54
2016
34,949,319
3,234,730
9.3
18,705
3.89
87.8
80.6
12.0
15.9
42.4
2.3
560
2.99
2017
43,858,322
5,031,656
11.5
29,934
4.27
91.3
71.7
20.7
20.4
37.8
3.5
1,176
3.93
2018
47,508,525
5,805,471
12.2
32,505
4.79
94.7
71.3
26.0
21.7
32.6
4.6
1,484
4.57
2019
63,569,183
12,907,957
20.3
61,266
4.22
88.1
68.1
24.5
18.8
35.5
4.4
1,813
2.96
2020
107,944,065
49,162,995
45.5
187,990
3.19
68.0
56.5
13.0
10.8
45.6
3.3
2,373
1.26
2021
84,218,250
64,048,451
76.1
208,074
3.08
86.3
62.6
15.3
13.9
40.5
7.1
3,038
1.46
2022
63,061,262
57,742,660
91.6
163,804
5.07
97.8
65.2
11.2
12.7
39.7
19.9
1,962
1.20
2023 (through September 30)
38,897,692
37,608,034
96.7
103,800
6.51
98.8
72.6
17.8
10.9
39.1
11.3
266
0.26
Total
$
570,869,125
$
238,661,612
41.8
825,248
4.28
87.6
64.6
14.9
13.1
40.7
4.3
13,391
1.62
(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
September 30, 2023
($ in
thousands)
Insurance Linked
Notes (1)
Earned Premiums Ceded
Deal Name
Vintage
Remaining
Insurance
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 2018-1
Jan. 2017 - Dec. 2017
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
1,781
$
—
Radnor Re 2019-1
Jan. 2018 - Dec. 2018
5,730,888
1,496,891
473,184
21,467
—
253,643
246,939
(40
)
13,407
—
Radnor Re 2019-2
Jan. 2015 - Dec. 2016
—
—
—
—
—
—
—
—
220
—
Radnor Re 2020-1
Jan. 2019 - Aug. 2019
7,185,440
1,864,143
495,889
50,596
—
215,605
213,798
(82
)
5,788
—
Radnor Re 2021-1
Aug. 2020 - Mar. 2021
33,594,368
8,642,916
557,911
339,120
—
278,956
278,796
2,615
8,794
261,926
Radnor Re 2021-2
Apr. 2021 - Sep. 2021
37,420,329
10,079,502
439,407
361,449
—
279,415
279,231
3,887
12,161
285,689
Radnor Re 2022-1
Oct. 2021 - Jul. 2022
32,132,944
8,669,748
237,868
237,868
—
303,761
303,660
4,260
12,781
218,839
Radnor Re 2023-1
Aug. 2022 - Jun. 2023
31,014,596
8,478,658
281,462
281,462
—
281,463
281,463
3,118
3,118
266,826
Total
$
147,078,565
$
39,231,858
$
2,485,721
$
1,291,962
$
—
$
1,612,843
$
1,603,887
$
13,758
$
58,050
$
1,033,280
Excess of Loss
Reinsurance (2)
Earned Premiums Ceded
Deal Name
Vintage
Remaining
Insurance
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 2018-1
Jan. 2017 - Dec. 2017
$
4,920,622
$
1,297,126
$
165,167
$
57,250
$
—
$
678,283
$
421,003
$
291
$
955
$
—
XOL 2019-1
Jan. 2018 - Dec. 2018
5,730,888
1,496,891
118,650
76,144
—
253,643
246,939
(4)
627
1,861
—
XOL 2020-1
Jan. 2019 - Dec. 2019
7,185,440
1,864,143
55,102
38,579
—
215,605
213,798
(4)
303
931
—
XOL 2022-1
Oct. 2021 - Dec. 2022
71,671,369
19,351,146
141,992
141,992
—
507,114
506,301
1,611
4,779
137,913
Total
$
89,508,319
$
24,009,306
$
480,911
$
313,965
$
—
$
1,654,645
$
1,388,041
$
2,832
$
8,526
$
137,913
Quota Share
Reinsurance (2)
Losses Ceded
Ceding Commission
Earned Premiums Ceded
Year
Ceding Percentage
Remaining
Insurance
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
(5
)
$
54,596,089
$
14,208,745
$
12,218,215
$
3,142,000
$
(464
)
$
(2,208
)
$
2,631
$
8,343
$
4,403
$
13,227
$
187,406
Jan. 2022 - Dec. 2023
20
%
57,688,314
15,600,877
11,537,663
3,120,175
2,592
7,473
1,942
5,880
6,282
18,645
229,964
Jan. 2023 - Dec. 2023
17.5
%
37,561,195
10,380,842
6,573,209
1,816,647
791
1,123
1,061
1,837
3,019
4,981
129,422
Total
$
149,845,598
$
40,190,464
$
30,329,087
$
8,078,822
$
2,919
$
6,388
$
5,634
$
16,060
$
13,704
$
36,853
$
546,792
(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) First layer retentions shown
are ILN retention levels as a result of overlapping coverage within
the vintage.
(5) Reinsurance coverage on 40% of
eligible single premium policies and 20% of all other eligible
policies.
Exhibit J
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
U.S. Mortgage Insurance
Portfolio Geographic Data
IIF by State
September 30, 2023
June 30, 2023
September 30, 2022
CA
13.0
%
13.1
%
13.2
%
FL
11.0
10.8
10.1
TX
10.5
10.5
10.3
CO
4.1
4.1
4.1
AZ
3.7
3.7
3.5
WA
3.4
3.4
3.4
GA
3.4
3.3
3.1
NC
2.8
2.8
2.7
IL
2.8
2.9
3.1
VA
2.8
2.9
3.1
All Others
42.5
42.5
43.4
Total
100.0
%
100.0
%
100.0
%
Gross RIF by State
September 30, 2023
June 30, 2023
September 30, 2022
CA
12.9
%
13.0
%
13.0
%
FL
11.3
11.1
10.5
TX
10.8
10.8
10.6
CO
4.0
4.1
4.1
AZ
3.8
3.8
3.5
GA
3.5
3.4
3.2
WA
3.4
3.4
3.3
NC
2.9
2.8
2.7
IL
2.8
2.8
3.1
VA
2.8
2.8
3.0
All Others
41.8
42.0
43.0
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
2023
2022
September 30
June 30
March 31
December 31
September 30
Beginning default inventory
12,480
12,773
13,433
12,435
12,707
Plus: new defaults (A)
7,953
6,575
7,015
7,505
6,448
Less: cures
(6,902
)
(6,761
)
(7,574
)
(6,425
)
(6,642
)
Less: claims paid
(129
)
(96
)
(94
)
(73
)
(68
)
Less: rescissions and denials, net
(11
)
(11
)
(7
)
(9
)
(10
)
Ending default inventory
13,391
12,480
12,773
13,433
12,435
(A) New defaults remaining as of
September 30, 2023
5,664
2,630
1,520
1,199
672
Cure rate (1)
29
%
60
%
78
%
84
%
90
%
Total amount paid for claims (in
thousands)
$
2,956
$
1,890
$
1,959
$
1,441
$
1,261
Average amount paid per claim (in
thousands)
$
23
$
20
$
21
$
20
$
19
Severity
66
%
58
%
59
%
46
%
47
%
Rollforward of Reserve for
Losses and LAE
Three Months Ended
2023
2022
($ in
thousands)
September 30
June 30
March 31
December 31
September 30
Reserve for losses and LAE at beginning of
period
$
216,888
$
215,957
$
216,390
$
212,392
$
209,829
Less: Reinsurance recoverables
17,958
16,357
14,618
13,244
13,657
Net reserve for losses and LAE at
beginning of period
198,930
199,600
201,772
199,148
196,172
Add provision for losses and LAE occurring
in:
Current period
35,609
31,377
32,693
36,141
20,144
Prior years
(25,533
)
(30,107
)
(32,864
)
(32,012
)
(15,850
)
Incurred losses and LAE during the
period
10,076
1,270
(171
)
4,129
4,294
Deduct payments for losses and LAE
occurring in:
Current period
156
31
—
113
30
Prior years
2,889
1,909
2,001
1,392
1,288
Loss and LAE payments during the
period
3,045
1,940
2,001
1,505
1,318
Net reserve for losses and LAE at end of
period
205,961
198,930
199,600
201,772
199,148
Plus: Reinsurance recoverables
20,656
17,958
16,357
14,618
13,244
Reserve for losses and LAE at end of
period
$
226,617
$
216,888
$
215,957
$
216,390
$
212,392
(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
September 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
6,383
48
%
$
38,412
18
%
$
448,039
9
%
Four to eleven payments
4,877
36
87,025
42
369,711
24
Twelve or more payments
1,989
15
77,369
37
126,317
61
Pending claims
142
1
6,076
3
6,924
88
Total case reserves
13,391
100
%
208,882
100
%
$
950,991
22
%
IBNR
15,666
LAE
2,069
Total reserves for losses and LAE
$
226,617
Average reserve per default:
Case
$
15.6
Total
$
16.9
Default Rate
1.62
%
December 31, 2022
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
6,154
46
%
$
32,242
16
%
$
411,624
8
%
Four to eleven payments
4,684
35
65,071
33
317,417
21
Twelve or more payments
2,474
18
98,291
49
147,247
67
Pending claims
121
1
3,815
2
4,860
78
Total case reserves
13,433
100
%
199,419
100
%
$
881,148
23
%
IBNR
14,956
LAE
2,015
Total reserves for losses and LAE
$
216,390
Average reserve per default:
Case
$
14.8
Total
$
16.1
Default Rate
1.66
%
September 30, 2022
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
4,971
40
%
$
22,279
12
%
$
313,531
7
%
Four to eleven payments
4,443
36
55,431
28
292,644
19
Twelve or more payments
2,923
23
114,250
58
174,589
65
Pending claims
98
1
3,879
2
4,611
84
Total case reserves
12,435
100
%
195,839
100
%
$
785,375
25
%
IBNR
14,688
LAE
1,865
Total reserves for losses and LAE
$
212,392
Average reserve per default:
Case
$
15.7
Total
$
17.1
Default Rate
1.55
%
Exhibit M
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
Investments Available for
Sale
Investments Available for Sale
by Asset Class
Asset Class
September 30, 2023
December 31, 2022
($ in
thousands)
Fair Value
Percent
Fair Value
Percent
U.S. Treasury securities
$
879,185
17.6
%
$
556,438
11.7
%
U.S. agency securities
7,180
0.1
49,058
1.0
U.S. agency mortgage-backed securities
750,938
15.0
783,743
16.5
Municipal debt securities
562,510
11.3
602,690
12.8
Non-U.S. government securities
48,571
1.0
62,399
1.3
Corporate debt securities
1,280,433
25.6
1,414,321
29.8
Residential and commercial mortgage
securities
493,693
9.9
511,824
10.8
Asset-backed securities
614,818
12.3
624,561
13.2
Money market funds
360,360
7.2
136,591
2.9
Total investments available for sale
$
4,997,688
100.0
%
$
4,741,625
100.0
%
Investments Available for Sale
by Credit Rating
Rating (1)
September 30, 2023
December 31, 2022
($ in
thousands)
Fair Value
Percent
Fair Value
Percent
Aaa
$
2,393,047
51.6
%
$
2,122,599
46.2
%
Aa1
108,593
2.3
111,262
2.4
Aa2
300,510
6.5
325,241
7.1
Aa3
210,967
4.5
232,500
5.0
A1
381,479
8.2
396,095
8.6
A2
314,587
6.8
410,163
8.9
A3
235,490
5.1
268,928
5.8
Baa1
227,543
4.9
236,793
5.1
Baa2
231,612
5.0
221,308
4.8
Baa3
151,078
3.3
187,117
4.1
Below Baa3
82,422
1.8
93,028
2.0
Total (2)
$
4,637,328
100.0
%
$
4,605,034
100.0
%
(1) Based on ratings issued by
Moody's, if available. S&P or Fitch rating utilized if Moody's
not available.
(2) Excludes $360,360 and $136,591
of money market funds at September 30, 2023 and December 31, 2022,
respectively.
Investments Available for Sale
by Duration and Book Yield
Effective Duration
September 30, 2023
December 31, 2022
($ in
thousands)
Fair Value
Percent
Fair Value
Percent
< 1 Year
$
1,713,199
34.3
%
$
1,245,839
26.3
%
1 to < 2 Years
484,032
9.7
534,038
11.3
2 to < 3 Years
456,987
9.1
511,701
10.8
3 to < 4 Years
418,831
8.4
525,683
11.1
4 to < 5 Years
389,441
7.8
400,540
8.4
5 or more Years
1,535,198
30.7
1,523,824
32.1
Total investments available for sale
$
4,997,688
100.0
%
$
4,741,625
100.0
%
Pre-tax investment income yield:
Three months ended
3.55
%
3.03
%
Nine months ended September 30, 2023
3.47
%
Holding company net cash and investments
available for sale:
($ in
thousands)
As of September 30, 2023
$
648,658
As of December 31, 2022
$
685,178
Exhibit N
Essent Group Ltd. and
Subsidiaries
Supplemental
Information
U.S. Mortgage Insurance
Company Capital
2023
2022
September 30
June 30
March 31
December 31
September 30
($ in
thousands)
U.S. Mortgage Insurance
Subsidiaries:
Combined statutory capital (1)
$
3,309,522
$
3,243,086
$
3,207,102
$
3,178,151
$
3,128,681
Combined net risk in force (2)
$
34,203,678
$
34,019,643
$
33,038,825
$
32,265,701
$
31,736,095
Risk-to-capital ratios: (3)
Essent Guaranty, Inc.
10.7:1
10.8:1
10.6:1
10.5:1
10.5:1
Essent Guaranty of PA, Inc.
0.5:1
0.5:1
0.5:1
0.6:1
0.6:1
Combined (4)
10.3:1
10.5:1
10.3:1
10.2:1
10.1:1
Essent Guaranty, Inc. PMIERs Data
(5):
Available Assets
$
3,318,179
$
3,245,481
$
3,226,436
$
3,191,047
$
3,147,545
Minimum Required Assets
1,910,659
1,991,741
1,917,769
1,832,363
1,759,182
PMIERs excess Available Assets
$
1,407,520
$
1,253,740
$
1,308,667
$
1,358,684
$
1,388,363
PMIERs sufficiency ratio (6)
174
%
163
%
168
%
174
%
179
%
Essent Reinsurance Ltd.:
Stockholder's equity (GAAP basis)
$
1,684,122
$
1,633,763
$
1,573,013
$
1,478,772
$
1,397,287
Net risk in force (2)
$
21,739,419
$
21,327,762
$
20,305,111
$
19,454,046
$
18,694,500
(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
Loss, Expense and Combined
Ratios and Reconciliation of Non-GAAP Financial Measures
2023
2022
September 30
June 30
March 31
December 31
September 30
Loss Ratio (1)
4.4
%
0.6
%
(0.1
)%
2.0
%
2.0
%
Expense Ratio (2)
27.3
%
19.8
%
22.8
%
22.6
%
20.3
%
Combined Ratio
31.7
%
20.4
%
22.7
%
24.6
%
22.3
%
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 nine months ended September 30, 2023 lack comparability
with prior periods. In order to provide investors with more
comparative information to prior periods, Essent has prepared the
table below to reconcile the Consolidated Ratios to Consolidated
Ratios Excluding Title, as shown below. Consolidated 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. Consolidated 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 Consolidated
Ratios Excluding Title to the most comparable GAAP amount for the
three and nine months ended September 30, 2023, in accordance with
Regulation G:
Three Months Ended
September 30, 2023
Nine Months Ended
September 30, 2023
Consolidated
Acquired Title
Consolidated Excluding
Title
Consolidated
Acquired Title
Consolidated Excluding
Title
($ in
thousands)
Revenues:
Net premiums earned
$
246,805
$
20,604
$
226,201
$
671,292
$
20,604
$
650,688
Net investment income
47,072
405
46,667
135,558
405
135,153
Realized investment losses, net
(235
)
—
(235
)
(2,312
)
—
(2,312
)
(Loss) income from other invested
assets
(3,143
)
—
(3,143
)
(10,697
)
—
(10,697
)
Settlement services (3)
2,037
2,037
—
2,037
2,037
—
Other income
3,572
404
3,168
16,604
404
16,200
Total revenues
296,108
23,450
272,658
812,482
23,450
789,032
Losses and expenses:
Provision (benefit) for losses and LAE
10,822
768
10,054
11,902
768
11,134
Other underwriting and operating
expenses
54,814
13,466
41,348
145,183
13,466
131,717
Premiums retained by agents
13,175
13,175
—
13,175
13,175
—
Interest expense
7,854
—
7,854
22,184
—
22,184
Total losses and expenses
86,665
27,409
59,256
192,444
27,409
165,035
Loss ratio (1)
4.4
%
3.4
%
4.4
%
1.8
%
3.4
%
1.7
%
Expense ratio (2)
27.3
%
117.7
%
18.3
%
23.5
%
117.7
%
20.2
%
Combined ratio
31.7
%
121.1
%
22.7
%
25.3
%
121.1
%
21.9
%
(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) Settlement services revenue is
included in "Other income" within Exhibit A and Exhibit C.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231102380127/en/
Media Contact 610.230.0556 media@essentgroup.com
Investor Relations Contact Philip Stefano Vice President,
Investor Relations 855-809-ESNT ir@essentgroup.com
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