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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Essent Group Ltd | NYSE:ESNT | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.84 | -1.50% | 55.05 | 55.53 | 54.915 | 54.99 | 24,364 | 15:57:24 |
Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended December 31, 2023 of $175.4 million or $1.64 per diluted share, compared to $147.4 million or $1.37 per diluted share for the quarter ended December 31, 2022. For the full year 2023, net income was $696.4 million or $6.50 per diluted share, compared to $831.4 million or $7.72 per diluted share for 2022.
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 March 22, 2024, to shareholders of record on March 13, 2024.
“We are pleased with our fourth quarter and full year 2023 financial results, which benefited from favorable credit performance and higher interest rates,” said Mark A. Casale, Chairman and Chief Executive Officer. “Our results continue to demonstrate the earnings power of our business and provide us with attractive levels of operating cash flows, indicating the overall strength and stability of our franchise.”
Financial Highlights:
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 and Year Ended December 31, 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 December 31,
Year Ended December 31,
(In thousands, except per share amounts)
2023
2022
2023
2022
Revenues:
Direct premiums written
$
269,255
$
235,015
$
1,028,781
$
927,702
Ceded premiums
(31,068
)
(34,289
)
(134,499
)
(107,673
)
Net premiums written
238,187
200,726
894,282
820,029
Decrease in unearned premiums
7,427
6,526
22,624
22,498
Net premiums earned
245,614
207,252
916,906
842,527
Net investment income
50,581
37,796
186,139
124,409
Realized investment gains (losses), net
(4,892
)
(5,524
)
(7,204
)
(13,172
)
Income (loss) from other invested assets
(421
)
(7,599
)
(11,118
)
28,676
Other income (loss)
6,395
(1,888
)
25,036
18,384
Total revenues
297,277
230,037
1,109,759
1,000,824
Losses and expenses:
Provision (benefit) for losses and LAE
19,640
4,101
31,542
(174,704
)
Other underwriting and operating expenses
55,248
46,895
200,431
171,733
Premiums retained by agents
11,475
—
24,650
—
Interest expense
7,953
6,045
30,137
15,608
Total losses and expenses
94,316
57,041
286,760
12,637
Income before income taxes
202,961
172,996
822,999
988,187
Income tax expense
27,594
25,630
126,613
156,834
Net income
$
175,367
$
147,366
$
696,386
$
831,353
Earnings per share:
Basic
$
1.66
$
1.38
$
6.56
$
7.75
Diluted
1.64
1.37
6.50
7.72
Weighted average shares outstanding:
Basic
105,733
106,881
106,222
107,205
Diluted
106,823
107,419
107,129
107,653
Net income
$
175,367
$
147,366
$
696,386
$
831,353
Other comprehensive income (loss):
Change in unrealized appreciation (depreciation) of investments
155,887
40,787
102,294
(433,497
)
Total other comprehensive income (loss)
155,887
40,787
102,294
(433,497
)
Comprehensive income
$
331,254
$
188,153
$
798,680
$
397,856
Exhibit B
Essent Group Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
December 31,
December 31,
(In thousands, except per share amounts)
2023
2022
Assets
Investments
Fixed maturities available for sale, at fair value
$
4,335,008
$
4,489,598
Short-term investments available for sale, at fair value
928,731
252,027
Total investments available for sale
5,263,739
4,741,625
Other invested assets
277,226
257,941
Total investments
5,540,965
4,999,566
Cash
141,787
81,240
Accrued investment income
35,689
33,162
Accounts receivable
63,266
57,399
Deferred policy acquisition costs
9,139
9,910
Property and equipment
41,304
19,571
Prepaid federal income tax
470,646
418,460
Goodwill and intangible assets, net
72,826
—
Other assets
51,051
104,489
Total assets
$
6,426,673
$
5,723,797
Liabilities and Stockholders' Equity
Liabilities
Reserve for losses and LAE
$
260,095
$
216,464
Unearned premium reserve
140,285
162,887
Net deferred tax liability
362,753
356,810
Credit facility borrowings, net of deferred costs
421,920
420,864
Other accrued liabilities
139,070
104,463
Total liabilities
1,324,123
1,261,488
Commitments and contingencies
Stockholders' Equity
Common shares, $0.015 par value:
Authorized - 233,333; issued and outstanding - 106,597 shares in 2023 and 107,683 shares in 2022
1,599
1,615
Additional paid-in capital
1,299,869
1,350,377
Accumulated other comprehensive (loss) income
(280,496
)
(382,790
)
Retained earnings
4,081,578
3,493,107
Total stockholders' equity
5,102,550
4,462,309
Total liabilities and stockholders' equity
$
6,426,673
$
5,723,797
Return on average equity
14.6
%
19.1
%
Exhibit C
Essent Group Ltd. and Subsidiaries
Supplemental Information
Consolidated Historical Quarterly Data
2023
2022
Selected Income Statement Data
December 31
September 30
June 30
March 31
December 31
(In thousands, except per share amounts)
Revenues:
Net premiums earned:
U.S. Mortgage Insurance Portfolio
$
211,083
$
209,351
$
195,502
$
196,565
$
192,670
GSE and other risk share
17,166
16,850
17,727
14,693
14,582
Title Insurance
17,365
20,604
—
—
—
Net premiums earned
245,614
246,805
213,229
211,258
207,252
Net investment income
50,581
47,072
45,250
43,236
37,796
Realized investment gains (losses), net
(4,892
)
(235
)
(1,589
)
(488
)
(5,524
)
Income (loss) from other invested assets
(421
)
(3,143
)
(4,852
)
(2,702
)
(7,599
)
Other income (loss) (1)
6,395
5,609
8,090
4,942
(1,888
)
Total revenues
297,277
296,108
260,128
256,246
230,037
Losses and expenses:
Provision (benefit) for losses and LAE
19,640
10,822
1,260
(180
)
4,101
Other underwriting and operating expenses
55,248
54,814
42,174
48,195
46,895
Premiums retained by agents
11,475
13,175
—
—
—
Interest expense
7,953
7,854
7,394
6,936
6,045
Total losses and expenses
94,316
86,665
50,828
54,951
57,041
Income before income taxes
202,961
209,443
209,300
201,295
172,996
Income tax expense (2)
27,594
31,484
37,067
30,468
25,630
Net income
$
175,367
$
177,959
$
172,233
$
170,827
$
147,366
Earnings per share:
Basic
$
1.66
$
1.68
$
1.62
$
1.60
$
1.38
Diluted
1.64
1.66
1.61
1.59
1.37
Weighted average shares outstanding:
Basic
105,733
105,979
106,249
106,943
106,881
Diluted
106,823
107,025
107,093
107,585
107,419
Book value per share
$
47.87
$
44.98
$
44.24
$
43.18
$
41.44
Return on average equity (annualized)
14.2
%
14.9
%
14.7
%
15.0
%
13.5
%
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)
7.11
%
7.07
%
6.87
%
6.52
%
6.02
%
Debt-to-capital
7.69
%
8.12
%
8.24
%
8.38
%
8.70
%
(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 December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022 was $412, ($898), $2,726, ($368), and ($6,515), respectively.
(2) Income tax expense for the quarters ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023 and December 31, 2022 includes ($1,132), ($763), ($888), ($368) and ($4,122), respectively, of discrete tax (benefit) expense associated with realized and unrealized gains and losses. 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 $5,295 of net discrete tax expense associated with prior year tax returns.
Exhibit D
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S Mortgage Insurance Portfolio Historical Quarterly Data
2023
2022
Other Data, continued:
December 31
September 30
June 30
March 31
December 31
($ in thousands)
U.S. Mortgage Insurance Portfolio
New insurance written
$
8,769,160
$
12,505,823
$
13,498,080
$
12,893,789
$
13,011,432
New risk written
2,409,340
3,458,467
3,726,513
3,548,015
3,522,726
Average insurance in force
$
239,005,961
$
237,270,093
$
233,484,941
$
228,885,174
$
224,840,675
Insurance in force (end of period)
$
239,078,262
$
238,661,612
$
235,649,884
$
231,537,417
$
227,062,055
Gross risk in force (end of period) (1)
$
64,061,374
$
63,605,057
$
62,403,400
$
60,879,979
$
59,276,489
Risk in force (end of period)
$
54,591,590
$
53,920,308
$
53,290,643
$
51,469,312
$
49,903,626
Policies in force
822,012
825,248
821,690
815,751
808,596
Weighted average coverage (2)
26.8
%
26.7
%
26.5
%
26.3
%
26.1
%
Annual persistency
86.9
%
86.6
%
85.8
%
84.4
%
82.1
%
Loans in default (count)
14,819
13,391
12,480
12,773
13,433
Percentage of loans in default
1.80
%
1.62
%
1.52
%
1.57
%
1.66
%
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)
—
%
—
%
—
%
—
%
—
%
Gross average premium rate
0.40
%
0.40
%
0.40
%
0.40
%
0.40
%
Ceded premiums
(0.05
%)
(0.05
%)
(0.07
%)
(0.06
%)
(0.06
%)
Net average premium rate
0.35
%
0.35
%
0.33
%
0.34
%
0.34
%
(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
New Insurance Written: Flow
NIW by Credit Score
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
($ in thousands)
>=760
$
3,708,316
42.3
%
$
4,761,917
36.6
%
$
19,181,507
40.2
%
$
25,704,025
40.8
%
740-759
1,531,800
17.5
2,428,164
18.7
8,563,621
18.0
10,927,903
17.3
720-739
1,333,537
15.2
2,301,392
17.7
7,644,101
16.0
10,186,558
16.2
700-719
1,256,250
14.3
1,919,146
14.6
7,148,954
15.0
8,371,867
13.2
680-699
581,913
6.6
1,138,743
8.8
3,606,260
7.6
5,548,687
8.8
<=679
357,344
4.1
462,070
3.6
1,522,409
3.2
2,322,026
3.7
Total
$
8,769,160
100.0
%
$
13,011,432
100.0
%
$
47,666,852
100.0
%
$
63,061,066
100.0
%
Weighted average credit score
747
744
746
746
NIW by LTV
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
($ in thousands)
85.00% and below
$
642,636
7.3
%
$
1,121,853
8.6
%
$
3,443,647
7.2
%
$
5,678,058
9.0
%
85.01% to 90.00%
1,871,854
21.3
3,075,304
23.6
9,822,916
20.6
16,732,649
26.5
90.01% to 95.00%
4,660,032
53.1
7,464,333
57.4
26,043,728
54.6
33,925,998
53.8
95.01% and above
1,594,638
18.3
1,349,942
10.4
8,356,561
17.6
6,724,361
10.7
Total
$
8,769,160
100.0
%
$
13,011,432
100.0
%
$
47,666,852
100.0
%
$
63,061,066
100.0
%
Weighted average LTV
93
%
93
%
93
%
93
%
NIW by Product
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Single Premium policies
2.5
%
4.3
%
3.5
%
5.6
%
Monthly Premium policies
97.5
95.7
96.5
94.4
100.0
%
100.0
%
100.0
%
100.0
%
NIW by Purchase vs. Refinance
Three Months Ended
Year Ended
December 31, 2023
December 31, 2022
December 31, 2023
December 31, 2022
Purchase
98.7
%
98.9
%
98.8
%
97.6
%
Refinance
1.3
1.1
1.2
2.4
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
December 31, 2023
September 30, 2023
December 31, 2022
($ in thousands)
>=760
$
97,085,244
40.6
%
$
97,027,348
40.7
%
$
93,389,066
41.1
%
740-759
41,490,720
17.4
41,362,480
17.3
38,842,311
17.2
720-739
37,435,781
15.7
37,297,809
15.6
34,981,632
15.4
700-719
31,932,469
13.4
31,674,346
13.3
29,146,543
12.8
680-699
19,780,944
8.3
19,850,176
8.3
18,859,824
8.3
<=679
11,353,104
4.6
11,449,453
4.8
11,842,679
5.2
Total
$
239,078,262
100.0
%
$
238,661,612
100.0
%
$
227,062,055
100.0
%
Weighted average credit score
746
746
746
Gross RIF by FICO score
December 31, 2023
September 30, 2023
December 31, 2022
($ in thousands)
>=760
$
25,752,549
40.2
%
$
25,594,262
40.1
%
$
24,152,726
40.8
%
740-759
11,268,607
17.6
11,165,727
17.6
10,255,195
17.3
720-739
10,179,683
15.9
10,090,889
15.9
9,276,750
15.6
700-719
8,687,001
13.6
8,568,811
13.5
7,696,965
13.0
680-699
5,330,894
8.3
5,327,434
8.4
4,963,470
8.4
<=679
2,842,640
4.4
2,857,934
4.5
2,931,383
4.9
Total
$
64,061,374
100.0
%
$
63,605,057
100.0
%
$
59,276,489
100.0
%
Portfolio by LTV
IIF by LTV
December 31, 2023
September 30, 2023
December 31, 2022
($ in thousands)
85.00% and below
$
19,869,776
8.3
%
$
21,226,685
8.9
%
$
24,454,468
10.8
%
85.01% to 90.00%
62,973,580
26.3
63,374,562
26.6
63,436,445
27.8
90.01% to 95.00%
119,764,184
50.1
118,461,030
49.6
107,932,064
47.6
95.01% and above
36,470,722
15.3
35,599,335
14.9
31,239,078
13.8
Total
$
239,078,262
100.0
%
$
238,661,612
100.0
%
$
227,062,055
100.0
%
Weighted average LTV
93
%
93
%
92
%
Gross RIF by LTV
December 31, 2023
September 30, 2023
December 31, 2022
($ in thousands)
85.00% and below
$
2,364,232
3.7
%
$
2,525,753
4.0
%
$
2,903,877
4.9
%
85.01% to 90.00%
15,494,172
24.2
15,566,095
24.5
15,477,031
26.1
90.01% to 95.00%
35,260,761
55.0
34,848,762
54.8
31,642,669
53.4
95.01% and above
10,942,209
17.1
10,664,447
16.7
9,252,912
15.6
Total
$
64,061,374
100.0
%
$
63,605,057
100.0
%
$
59,276,489
100.0
%
Portfolio by Loan Amortization Period
IIF by Loan Amortization Period
December 31, 2023
September 30, 2023
December 31, 2022
($ in thousands)
FRM 30 years and higher
$
232,995,380
97.5
%
$
232,186,999
97.3
%
$
219,416,408
96.7
%
FRM 20-25 years
1,685,700
0.7
1,910,610
0.8
2,601,108
1.1
FRM 15 years
1,505,759
0.6
1,719,467
0.7
2,552,931
1.1
ARM 5 years and higher
2,891,423
1.2
2,844,536
1.2
2,491,608
1.1
Total
$
239,078,262
100.0
%
$
238,661,612
100.0
%
$
227,062,055
100.0
%
Exhibit G
Essent Group Ltd. and Subsidiaries
Supplemental Information
Other Risk in Force
2023
2022
($ in thousands)
December 31
September 30
June 30
March 31
December 31
GSE and other risk share (1):
Risk in Force
$
2,244,944
$
2,247,393
$
2,276,702
$
2,098,033
$
2,030,571
Reserve for losses and LAE
$
29
$
54
$
55
$
65
$
74
Weighted average credit score
749
749
749
749
749
Weighted average LTV
82
%
82
%
83
%
83
%
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
December 31, 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
$
1,432,521
2.4
%
8,762
4.31
%
71.2
%
59.2
%
7.3
%
14.6
%
44.4
%
2.5
%
379
4.33
%
2015
26,193,656
1,345,073
5.1
8,143
4.23
82.9
72.5
5.0
18.2
39.1
2.5
319
3.92
2016
34,949,319
3,015,806
8.6
17,568
3.90
87.6
80.8
12.4
16.0
42.2
2.2
545
3.10
2017
43,858,322
4,792,840
10.9
28,705
4.28
91.4
72.6
21.0
20.5
37.6
3.4
1,166
4.06
2018
47,508,525
5,570,630
11.7
31,331
4.79
94.9
72.0
26.2
21.7
32.6
4.5
1,498
4.78
2019
63,569,183
12,360,264
19.4
59,051
4.23
88.4
69.0
24.9
18.8
35.4
4.3
1,913
3.24
2020
107,944,065
46,454,833
43.0
178,941
3.19
69.0
57.5
13.3
10.8
45.6
3.1
2,511
1.40
2021
84,218,250
61,442,213
73.0
200,700
3.09
86.9
63.3
15.6
13.8
40.5
7.1
3,410
1.70
2022
63,061,262
56,943,590
90.3
162,074
5.07
97.9
65.4
11.2
12.6
39.7
20.1
2,456
1.52
2023
47,666,852
45,720,492
95.9
126,737
6.66
98.8
72.4
18.1
10.9
39.4
14.5
622
0.49
Total
$
579,638,285
$
239,078,262
41.2
822,012
4.41
88.5
65.3
15.3
13.0
40.6
4.4
14,819
1.80
(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
December 31, 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
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
(644
)
$
1,137
$
—
Radnor Re 2019-1
Jan. 2018 - Dec. 2018
—
—
—
—
—
—
—
(513
)
12,894
—
Radnor Re 2019-2
Jan. 2015 - Dec. 2016
—
—
—
—
—
—
—
(175
)
44
—
Radnor Re 2020-1
Jan. 2019 - Aug. 2019
6,887,869
1,797,683
495,889
2,350
—
215,605
213,230
748
6,536
—
Radnor Re 2021-1
Aug. 2020 - Mar. 2021
31,673,378
8,233,067
557,911
309,199
—
278,956
278,638
2,764
11,558
232,809
Radnor Re 2021-2
Apr. 2021 - Sep. 2021
35,958,961
9,735,395
439,407
339,890
—
279,415
279,051
3,898
16,059
276,777
Radnor Re 2022-1
Oct. 2021 - Jul. 2022
31,520,927
8,522,229
237,868
231,142
—
303,761
303,324
4,311
17,092
212,651
Radnor Re 2023-1
Aug. 2022 - Jun. 2023
30,639,242
8,380,934
281,462
281,462
—
281,463
281,463
3,641
6,759
266,826
Total
$
136,680,377
$
36,669,308
$
2,012,537
$
1,164,043
$
—
$
1,359,200
$
1,355,706
$
14,030
$
72,079
$
989,063
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
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
955
$
—
XOL 2019-1
Jan. 2018 - Dec. 2018
5,503,086
1,441,695
118,650
76,144
—
253,643
245,894
627
2,489
—
XOL 2020-1
Jan. 2019 - Dec. 2019
6,887,869
1,797,683
55,102
36,403
—
215,605
213,230
(4)
290
1,221
—
XOL 2022-1
Oct. 2021 - Dec. 2022
70,477,115
19,058,430
141,992
141,992
—
507,114
506,183
1,611
6,390
138,081
Total
$
82,868,070
$
22,297,808
$
315,744
$
254,539
$
—
$
976,362
$
965,220
$
2,528
$
11,055
$
138,081
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)
$
51,655,811
$
13,558,839
$
11,586,936
$
3,004,059
$
(164
)
$
(2,372
)
$
2,493
$
10,836
$
4,448
$
17,675
$
178,426
Jan. 2022 - Dec. 2022
20
%
56,890,266
15,401,694
11,378,053
3,080,339
2,258
9,731
1,921
7,801
5,908
24,554
233,244
Jan. 2023 - Dec. 2023
17.5
%
40,609,952
11,238,879
7,106,742
1,966,804
1,461
2,584
1,283
3,120
4,154
9,136
142,432
Total
$
149,156,029
$
40,199,412
$
30,071,731
$
8,051,202
$
3,555
$
9,943
$
5,697
$
21,757
$
14,510
$
51,365
$
554,102
(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
December 31, 2023
September 30, 2023
December 31, 2022
CA
13.0
%
13.0
%
13.2
%
FL
11.1
11.0
10.2
TX
10.5
10.5
10.4
CO
4.1
4.1
4.2
AZ
3.7
3.7
3.5
WA
3.5
3.4
3.4
GA
3.4
3.4
3.2
NC
2.9
2.8
2.7
VA
2.8
2.8
3.0
IL
2.8
2.8
3.1
All Others
42.2
42.5
43.1
Total
100.0
%
100.0
%
100.0
%
Gross RIF by State
December 31, 2023
September 30, 2023
December 31, 2022
CA
12.8
%
12.9
%
13.0
%
FL
11.4
11.3
10.5
TX
10.9
10.8
10.7
CO
4.0
4.0
4.1
AZ
3.8
3.8
3.6
WA
3.5
3.4
3.3
GA
3.4
3.5
3.2
NC
2.9
2.9
2.7
VA
2.7
2.8
3.0
IL
2.7
2.8
3.0
All Others
41.9
41.8
42.9
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
December 31
September 30
June 30
March 31
December 31
Beginning default inventory
13,391
12,480
12,773
13,433
12,435
Plus: new defaults (A)
9,007
7,953
6,575
7,015
7,505
Less: cures
(7,418
)
(6,902
)
(6,761
)
(7,574
)
(6,425
)
Less: claims paid
(148
)
(129
)
(96
)
(94
)
(73
)
Less: rescissions and denials, net
(13
)
(11
)
(11
)
(7
)
(9
)
Ending default inventory
14,819
13,391
12,480
12,773
13,433
(A) New defaults remaining as of December 31, 2023
6,514
3,000
1,772
1,056
730
Cure rate (1)
28
%
62
%
73
%
85
%
90
%
Total amount paid for claims (in thousands)
$
3,411
$
2,956
$
1,890
$
1,959
$
1,441
Average amount paid per claim (in thousands)
$
23
$
23
$
20
$
21
$
20
Severity
54
%
66
%
58
%
59
%
46
%
Rollforward of Reserve for Losses and LAE
Three Months Ended
2023
2022
($ in thousands)
December 31
September 30
June 30
March 31
December 31
Reserve for losses and LAE at beginning of period
$
226,617
$
216,888
$
215,957
$
216,390
$
212,392
Less: Reinsurance recoverables
20,656
17,958
16,357
14,618
13,244
Net reserve for losses and LAE at beginning of period
205,961
198,930
199,600
201,772
199,148
Add provision for losses and LAE occurring in:
Current period
38,922
35,609
31,377
32,693
36,141
Prior years
(19,912
)
(25,533
)
(30,107
)
(32,864
)
(32,012
)
Incurred losses and LAE during the period
19,010
10,076
1,270
(171
)
4,129
Deduct payments for losses and LAE occurring in:
Current period
330
156
31
—
113
Prior years
3,244
2,889
1,909
2,001
1,392
Loss and LAE payments during the period
3,574
3,045
1,940
2,001
1,505
Net reserve for losses and LAE at end of period
221,397
205,961
198,930
199,600
201,772
Plus: Reinsurance recoverables
24,005
20,656
17,958
16,357
14,618
Reserve for losses and LAE at end of period
$
245,402
$
226,617
$
216,888
$
215,957
$
216,390
(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
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
%
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
%
Exhibit M
Essent Group Ltd. and Subsidiaries
Supplemental Information
Investments Available for Sale
Investments Available for Sale by Asset Class
Asset Class
December 31, 2023
December 31, 2022
($ in thousands)
Fair Value
Percent
Fair Value
Percent
U.S. Treasury securities
$
996,382
18.9
%
$
556,438
11.7
%
U.S. agency securities
7,195
0.1
49,058
1.0
U.S. agency mortgage-backed securities
821,346
15.6
783,743
16.5
Municipal debt securities
547,258
10.5
602,690
12.8
Non-U.S. government securities
67,447
1.3
62,399
1.3
Corporate debt securities
1,297,055
24.7
1,414,321
29.8
Residential and commercial mortgage securities
517,940
9.8
511,824
10.8
Asset-backed securities
564,995
10.7
624,561
13.2
Money market funds
444,121
8.4
136,591
2.9
Total investments available for sale
$
5,263,739
100.0
%
$
4,741,625
100.0
%
Investments Available for Sale by Credit Rating
Rating (1)
December 31, 2023
December 31, 2022
($ in thousands)
Fair Value
Percent
Fair Value
Percent
Aaa
$
2,561,363
53.2
%
$
2,122,599
46.2
%
Aa1
104,474
2.2
111,262
2.4
Aa2
291,501
6.0
325,241
7.1
Aa3
208,882
4.3
232,500
5.0
A1
377,188
7.8
396,095
8.6
A2
329,423
6.8
410,163
8.9
A3
253,081
5.3
268,928
5.8
Baa1
220,901
4.6
236,793
5.1
Baa2
226,449
4.7
221,308
4.8
Baa3
166,121
3.4
187,117
4.1
Below Baa3
80,235
1.7
93,028
2.0
Total (2)
$
4,819,618
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 $444,121 and $136,591 of money market funds at December 31, 2023 and December 31, 2022, respectively.
Investments Available for Sale by Duration and Book Yield
Effective Duration
December 31, 2023
December 31, 2022
($ in thousands)
Fair Value
Percent
Fair Value
Percent
< 1 Year
$
1,892,074
35.9
%
$
1,245,839
26.3
%
1 to < 2 Years
371,583
7.1
534,038
11.3
2 to < 3 Years
538,775
10.2
511,701
10.8
3 to < 4 Years
402,668
7.6
525,683
11.1
4 to < 5 Years
376,722
7.2
400,540
8.4
5 or more Years
1,681,917
32.0
1,523,824
32.1
Total investments available for sale
$
5,263,739
100.0
%
$
4,741,625
100.0
%
Pre-tax investment income yield:
Three months ended December 31, 2023
3.62
%
Year ended December 31, 2023
3.50
%
Holding company net cash and investments available for sale:
($ in thousands)
As of December 31, 2023
$
693,507
As of December 31, 2022
$
685,178
Exhibit N
Essent Group Ltd. and Subsidiaries
Supplemental Information
U.S. Mortgage Insurance Company Capital
2023
2022
December 31
September 30
June 30
March 31
December 31
($ in thousands)
U.S. Mortgage Insurance Subsidiaries:
Combined statutory capital (1)
$
3,376,117
$
3,309,522
$
3,243,086
$
3,207,102
$
3,178,151
Combined net risk in force (2)
$
34,549,500
$
34,203,678
$
34,019,643
$
33,038,825
$
32,265,701
Risk-to-capital ratios: (3)
Essent Guaranty, Inc.
10.6:1
10.7:1
10.8:1
10.6:1
10.5:1
Essent Guaranty of PA, Inc.
0.4:1
0.5:1
0.5:1
0.5:1
0.6:1
Combined (4)
10.2:1
10.3:1
10.5:1
10.3:1
10.2:1
Essent Guaranty, Inc. PMIERs Data (5):
Available Assets
$
3,379,936
$
3,318,179
$
3,245,481
$
3,226,436
$
3,191,047
Minimum Required Assets
1,985,545
1,910,659
1,991,741
1,917,769
1,832,363
PMIERs excess Available Assets
$
1,394,391
$
1,407,520
$
1,253,740
$
1,308,667
$
1,358,684
PMIERs sufficiency ratio (6)
170
%
174
%
163
%
168
%
174
%
Essent Reinsurance Ltd.:
Stockholder's equity (GAAP basis)
$
1,758,665
$
1,684,122
$
1,633,763
$
1,573,013
$
1,478,772
Net risk in force (2)
$
22,043,926
$
21,739,419
$
21,327,762
$
20,305,111
$
19,454,046
(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
December 31
September 30
June 30
March 31
December 31
Loss Ratio (1)
7.9
%
4.4
%
0.6
%
(0.1
)%
2.0
%
Expense Ratio (2)
27.0
%
27.3
%
19.8
%
22.8
%
22.6
%
Combined Ratio
34.9
%
31.7
%
20.4
%
22.7
%
24.6
%
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 months and year ended December 31, 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 months and year ended December 31, 2023, in accordance with Regulation G:
Three Months Ended
December 31, 2023
Year Ended
December 31, 2023
Consolidated
Acquired Title
Consolidated Excluding Title
Consolidated
Acquired Title
Consolidated Excluding Title
($ in thousands)
Revenues:
Net premiums earned
$
245,614
$
17,365
$
228,249
$
916,906
$
37,969
$
878,937
Net investment income
50,581
432
50,149
186,139
837
185,302
Realized investment losses, net
(4,892
)
—
(4,892
)
(7,204
)
—
(7,204
)
Loss from other invested assets
(421
)
—
(421
)
(11,118
)
—
(11,118
)
Settlement services (3)
1,475
1,475
—
3,512
3,512
—
Other income
4,920
503
4,417
21,524
907
20,617
Total revenues
297,277
19,775
277,502
1,109,759
43,225
1,066,534
Losses and expenses:
Provision (benefit) for losses and LAE
19,640
655
18,985
31,542
1,422
30,120
Other underwriting and operating expenses
55,248
11,595
43,653
200,431
25,061
175,370
Premiums retained by agents
11,475
11,475
—
24,650
24,650
—
Interest expense
7,953
—
7,953
30,137
—
30,137
Total losses and expenses
94,316
23,725
70,591
286,760
51,133
235,627
Loss ratio (1)
7.9
%
3.5
%
8.3
%
3.4
%
3.4
%
3.4
%
Expense ratio (2)
27.0
%
122.5
%
19.1
%
24.5
%
119.8
%
20.0
%
Combined ratio
34.9
%
126.0
%
27.4
%
27.9
%
123.2
%
23.4
%
(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/20240209440689/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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