Core Insights - Essent Group's Q3 CY2025 results fell short of market expectations, with revenue declining 1.5% year-on-year to $311.8 million and GAAP EPS of $1.67, which was 5.5% below analyst estimates [1][5]. Financial Performance - Revenue: $311.8 million vs analyst estimates of $317 million (1.5% year-on-year decline, 1.6% miss) [5] - EPS (GAAP): $1.67 vs analyst expectations of $1.76 (5.5% miss) [5] - Adjusted Operating Income: $199.2 million vs analyst estimates of $257.6 million (63.9% margin, 22.7% miss) [5] - Operating Margin: 63.9%, down from 65.6% in the same quarter last year [5] - Market Capitalization: $5.96 billion [5] Management Commentary - Management attributed the revenue shortfall to higher loan default provisions and increased claim severity, while maintaining that the underlying credit quality remains strong with a weighted average FICO score of 746 [3][4]. - CEO Mark Casale noted that the increase in default rates was seasonal and there were no concerning geographic or vintage trends impacting credit performance [3][6]. - CFO David Weinstock emphasized the company's strong balance sheet and commitment to a conservative capital strategy to navigate market volatility [3]. Key Operational Insights - Default provisions increased due to larger average loan sizes, not due to deteriorating credit trends [6]. - Claims severity rose modestly but remained below reserves, attributed to timing in claims processing [6]. - The average base premium rate for U.S. mortgage insurance remained stable, reflecting consistent pricing despite market competition [6]. - Significant share repurchase activity and a new $500 million authorization through 2027 were highlighted, along with a quarterly dividend increase [6]. Strategic Adjustments - Essent raised its quota share reinsurance level to 25%, which may increase volatility in ceded premiums and affect reported margins, aimed at optimizing capital efficiency without compromising credit risk management [7].

Financial Performance - Total revenues for the nine months ended September 30, 2025, reached $948,531 thousand, an increase of 2.2% compared to $927,877 thousand in 2024[19]. - Net income for the three months ended September 30, 2025, was $164,215 thousand, down 6.8% from $176,175 thousand in the same period of 2024[19]. - Net income for the nine months ended September 30, 2025, was $534,987, a decrease of 4.5% compared to $561,503 in 2024[24]. - Basic earnings per share for the three months ended September 30, 2025, increased to $1.69, compared to $1.67 in 2024, reflecting a growth of 1.2%[19]. - The total dividends declared and paid per common share for 2025 amounted to $0.93, compared to $1.12 for 2024, reflecting a decrease of approximately 16.9%[84]. Assets and Equity - Total assets increased to $7,351,999 thousand as of September 30, 2025, compared to $7,111,649 thousand at December 31, 2024, representing a growth of 3.4%[17]. - Total stockholders' equity as of September 30, 2025, was $5,738,974 thousand, up from $5,603,658 thousand at December 31, 2024, marking an increase of 2.4%[17]. - The total assets at fair value as of September 30, 2025, amounted to $6,089,865 thousand, compared to $5,876,721 thousand as of December 31, 2024, showing a growth of about 3.6%[111]. Investment Performance - Net investment income rose to $59,795 thousand for the three months ended September 30, 2025, up 4.3% from $57,340 thousand in 2024[19]. - The company reported realized investment losses of $735, down from $2,236 in the previous year, indicating improved investment performance[24]. - The net unrealized gains on investments for the nine months ended September 30, 2025, were $138,559 thousand, compared to $90,217 thousand in 2024, indicating an increase of approximately 53.5%[102]. Premiums and Insurance - Net premiums written for the three months ended September 30, 2025, were $241,828 thousand, a slight decrease of 0.5% from $242,965 thousand in the same period of 2024[19]. - Direct net premiums written for the three months ended September 30, 2025, were $280.8 million, slightly up from $277.8 million in 2024, while net premiums earned were $246.3 million, down from $248.9 million in 2024[53]. - The loss ratio for the Mortgage Insurance segment for the three months ended September 30, 2025, was 19.1%, compared to 12.9% for the same period in 2024, indicating a deterioration in loss performance[133]. Reserves and Claims - The provision for losses and LAE increased to $44,922 thousand for the three months ended September 30, 2025, compared to $30,666 thousand in 2024, indicating a rise of 46.5%[19]. - As of September 30, 2025, the net reserve for losses and loss adjustment expenses (LAE) increased to $349.1 million from $257.4 million as of September 30, 2024, reflecting a year-over-year increase of approximately 35.5%[68]. - The company paid $35.4 million for incurred claims related to prior years during the nine months ended September 30, 2025, compared to $17.1 million in the same period of 2024, indicating a significant increase of approximately 106.7%[68]. Shareholder Activities - The company repurchased 7,816,739 common shares at a cost of $450.6 million from January 1, 2025, through September 30, 2025, as part of its share repurchase plan[85]. - The company declared dividends totaling $30,523 thousand for the three months ended September 30, 2025, compared to $29,989 thousand in 2024, reflecting a slight increase of 1.8%[21]. - Essent Re paid dividends of $340 million to its parent for the nine months ended September 30, 2025, compared to $212.5 million for the same period in 2024[96]. Operational Efficiency - The combined ratio for the Mortgage Insurance segment improved to 33.9% for the three months ended September 30, 2025, from 29.6% in the same period of 2024, reflecting better overall operational efficiency[133]. - Operating expenses after allocations for the nine months ended September 30, 2025, totaled $193.387 million, consistent with the prior year’s $199.923 million[136]. - The expense ratio for the nine months ended September 30, 2025, was 16.3%, slightly improved from 17.2% in the same period of 2024[136]. Market Conditions - The Federal Reserve's actions have led to a reduction in the target federal funds rate by 125 basis points in 2024 and 2025, impacting mortgage interest rates and overall market activity[145]. - The company expects incurred losses and claims to increase as more of the insurance portfolio reaches its peak claim frequency period, which is typically in the third to sixth years after loan origination[167]. - The company anticipates that the ultimate number of hurricane-related defaults resulting in claims will be less than non-hurricane-related defaults, impacting future reserve estimates[71].

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net income of $164 million, down from $176 million a year ago, while diluted earnings per share increased to $1.67 from $1.65 [4][9] - The year-to-date return on equity was 13% as of September 30, 2025 [4] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [6][7] Business Line Data and Key Metrics Changes - The U.S. mortgage insurance in force was $249 billion, a 2% increase year-over-year [5][9] - The mortgage insurance net premium earned for Q3 2025 was $232 million, including $15.9 million from Essent Re [10] - The average base premium rate for the U.S. mortgage insurance portfolio remained at 41 basis points, while the average net premium rate decreased by one basis point to 35 basis points [10] Market Data and Key Metrics Changes - The 12-month persistency rate was 86%, unchanged from the previous quarter [5][9] - The default rate on the U.S. mortgage insurance portfolio increased to 2.29%, up 17 basis points from the previous quarter [10] Company Strategy and Development Direction - The company maintains a conservative capital strategy to navigate market volatility while allowing for strategic growth investments [7][14] - A new $500 million share repurchase authorization was approved, running through year-end 2027, indicating a commitment to returning capital to shareholders [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the current interest rate environment [4] - The company anticipates that the current level of mortgage rates will support elevated persistency in the near term [5] - Management highlighted the strong credit quality of the insurance in force, with a weighted average FICO of 746 [5] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31, 2025 [8] - The estimated annual effective tax rate was increased from 15.4% to 16.2% due to withholding taxes incurred on a dividend [11] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased, which impacts provisions when larger loans default [16] Question: Claims amount and severity - Management indicated that fluctuations in claims are dependent on document processing and that severity remains below reserves [18] Question: Seeded premiums and reinsurance transactions - Management explained that seeded premiums will vary based on default and provision activity, with seasonal trends expected [22] Question: Tax rate expectations - Management suggested a tax rate of around 16% going forward, influenced by capital distributions to shareholders [24] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, the overall risk remains low, and they are well-capitalized to handle potential losses [30][34] Question: Underwriting guardrails and credit score changes - Management reassured that current underwriting standards remain stringent and that any changes in credit score requirements by GSEs have not yet been implemented [42][45] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends from the MI subsidiary, with potential for a larger dividend in Q4 [48] Question: Diversification and growth avenues - Management discussed the performance of the Title business and indicated that while it is still small, it is being developed as a potential growth area [50]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $164 million, a decrease from $176 million a year ago [4] - Diluted earnings per share were $1.67, compared to $1.65 a year ago [5] - The year-to-date return on equity was 13% through Q3 [5] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [7] Business Line Data and Key Metrics Changes - The U.S. Mortgage insurance in force was $249 billion, a 2% increase year-over-year [5] - The mortgage insurance net premium earned for 2025 was $232 million [13] - The average base premium rate for the U.S. Mortgage insurance portfolio was 41 basis points, consistent with the previous quarter [14] - The default rate on the U.S. Mortgage insurance portfolio was 2.29%, up from 2.12% in the previous quarter [15] Market Data and Key Metrics Changes - The twelve-month persistency rate was 86%, flat from the previous quarter [6] - The weighted average FICO score was 746, and the weighted average original LTV was 93% [6] Company Strategy and Development Direction - The company maintains a conservative capital strategy to navigate market volatility while allowing for strategic growth investments [8] - A new $500 million share repurchase authorization was approved, running through year-end 2027 [9] - The company is focused on returning capital to shareholders while balancing investments in the business [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the interest rate environment [4] - The company believes that the substantial home equity embedded in its in-force book will mitigate ultimate claims [6] - Management indicated that the credit quality remains strong, with no significant concerns at the current time [25] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [8] - The average loan size has increased to close to $300,000, impacting provisions for losses [24] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased, which affects provisions for losses, but there are no significant concerns regarding credit quality [24][25] Question: Claims amount and severity - Management indicated that fluctuations in claims are normal and that severity continues to be below reserves [27] Question: Ceded premiums and reinsurance transactions - Management explained that ceded premiums will fluctuate based on seasonal activity and the quota share increase [30][32] Question: Tax rate changes - The increase in the estimated annual effective tax rate was attributed to withholding taxes on dividends [34] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, they do not expect a significant rise in the long term [41][42] Question: Underwriting guardrails and credit score requirements - Management confirmed that current GSE systems have not changed, and there are no signs of loosening credit standards [62][66] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends from the MI subsidiary, with potential for a larger dividend in Q4 [70][71] Question: Title business performance and growth avenues - Management stated that the title business is performing as expected and remains focused on the MI business for cash flow [73][78]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net income of $164 million, down from $176 million a year ago, while diluted earnings per share increased to $1.67 from $1.65 a year ago [4][5] - The year-to-date return on equity was 13% through Q3 2025 [4] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [5][6] Business Line Data and Key Metrics Changes - The U.S. mortgage insurance in force was $249 billion, a 2% increase year-over-year [5] - The mortgage insurance net premium earned for Q3 2025 was $232 million, including $15.9 million from third-party business [9] - The average base premium rate for the U.S. mortgage insurance portfolio remained at 41 basis points, while the average net premium rate decreased by one basis point to 35 basis points [9] Market Data and Key Metrics Changes - The portfolio default rate increased to 2.29%, up 17 basis points from the previous quarter [9] - The weighted average FICO score of the insurance in force was 746, with a weighted average original loan-to-value (LTV) of 93% [5] Company Strategy and Development Direction - The company continues to focus on a prudent capital strategy, maintaining a strong balance sheet while returning capital to shareholders [6][12] - A new $500 million share repurchase authorization was approved, running through year-end 2027 [7] - The company is committed to investing in strategic growth while balancing shareholder returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the interest rate environment [4] - The company anticipates that current mortgage rates will support elevated persistency in the near term [5] - Management highlighted the strong credit quality of the insurance portfolio and the substantial home equity embedded in the in-force book as mitigating factors for potential claims [5][6] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [7] - The board approved a common dividend of $0.31 for Q4 2025 [7] - The statutory capital of Essent Guarantee was $3.7 billion, with a risk-to-capital ratio of 8.9 to 1 [11] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased to nearly $300,000, which affects provisions when defaults occur [15] Question: Claims amount and severity - Management indicated that fluctuations in claims are dependent on document processing and adjudication, with severity remaining below reserves [17] Question: Seeded premiums and reinsurance transactions - Management explained that seeded premiums will fluctuate based on default and provision activity, with seasonal trends expected [19][20] Question: Tax rate changes - The increase in the estimated annual effective tax rate was attributed to withholding taxes on dividends, with expectations of a rate around 16% going forward [21][22] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, the overall risk remains low, and they are conservative in provisioning [26][27] Question: Underwriting guardrails and credit score requirements - Management confirmed that current systems have not changed significantly, and lenders are focused on managing origination costs [39][40] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends, potentially larger in Q4, while maintaining a focus on upstreaming cash [42] Question: Title business performance and growth avenues - Management noted that the Title business is still in early stages, with a focus on lender relationships and potential future growth [43][44]

Financial Performance - Net income decreased from $195.3 million in 2Q25 to $164.2 million in 3Q25[5] - Annualized Return on Equity (ROE) decreased from 13.8% in 2Q25 to 11.5% in 3Q25[5] - Shareholders' equity remained constant at $5.7 billion in both 2Q25 and 3Q25[5] - The combined ratio for the Mortgage Insurance segment increased from 22.1% in 2Q25 to 33.9% in 3Q25[5] - Book value per share grew to $58.86 as of September 2025, with an annualized growth rate of 18.1% since December 31, 2013[10] Portfolio and Risk Management - Insurance In Force (IIF) increased from $246.8 billion in 2Q25 to $248.8 billion in 3Q25[5] - New Insurance Written (NIW) slightly decreased from $12.5 billion in 2Q25 to $12.2 billion in 3Q25[5] - Portfolio default rate increased from 2.12% in 2Q25 to 2.29% in 3Q25[5] - 97% of the Insurance In Force (IIF) is subject to reinsurance protection as of September 30, 2025[5, 32, 35] Capital and Liquidity - PMIERs Sufficiency Ratio was 177% in 3Q25[5] - Risk-to-Capital Ratio improved from 9.2:1 in 2Q25 to 8.9:1 in 3Q25[5] - The company has $5.7 billion in GAAP Equity as of September 30, 2025[34] - Available liquidity at the holding companies is $1.0 billion, with an additional $500 million in undrawn capacity with the credit facility as of September 30, 2025[34]

分组1 - Essent Group reported quarterly earnings of $1.67 per share, missing the Zacks Consensus Estimate of $1.75 per share, but showing an increase from $1.65 per share a year ago, resulting in an earnings surprise of -4.57% [1] - The company posted revenues of $311.83 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.18%, although this represents a decline from year-ago revenues of $316.58 million [2] - Over the last four quarters, Essent Group has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] 分组2 - The stock has added about 11.7% since the beginning of the year, underperforming compared to the S&P 500's gain of 14.3% [3] - The current consensus EPS estimate for the coming quarter is $1.79 on revenues of $310.92 million, and for the current fiscal year, it is $7.11 on revenues of $1.26 billion [7] - The Zacks Industry Rank for Insurance - Property and Casualty is currently in the top 18% of over 250 Zacks industries, indicating a favorable outlook for the industry [8]

Financial Performance - Net income for Q3 2025 was $164.2 million, or $1.67 per diluted share, a decrease from $176.2 million, or $1.65 per diluted share in Q3 2024[2] - Total revenues for Q3 2025 were $311.8 million, compared to $316.6 million in Q3 2024[14] - The net income for the quarter was $164,215,000, down from $195,339,000 in the previous quarter, representing a decline of 15.9%[18] - Total revenues for the quarter ended September 30, 2025, were $311,830,000, a decrease of 2.0% from $319,143,000 in the previous quarter[18] - The income before income tax expense for the consolidated segment was $199,159 thousand in September 2025, down from $231,175 thousand in June 2025, a decline of approximately 13.9%[61] Insurance Metrics - New insurance written in Q3 2025 was $12.2 billion, down from $12.5 billion in both Q2 2025 and Q3 2024[9] - The total New Insurance Written (NIW) was $12,233,252, a decrease from $12,513,695 for the same period in 2024, representing a decline of 2.2%[24] - The total Insurance in Force (IIF) as of September 30, 2025, was $248,808,341, compared to $242,976,043 in September 2024, reflecting an increase of 2.4%[26] - The total NIW for purchases was 90.5% in the three months ended September 30, 2025, down from 97.0% in the same period of 2024[24] - The total original insurance written from 2010 to 2025 reached $659.92 billion, with remaining insurance in force at $248.81 billion, representing 37.7% of original insurance[30] Investment Performance - Net investment income for the nine months ended September 30, 2025, was $177.3 million, up 7% from the same period in 2024[9] - The total investments available for sale reached $6,089,865,000 as of September 30, 2025, compared to $5,876,721,000 at the end of 2024[46] - The pre-tax investment income yield for the nine months ended September 30, 2025, was 3.83%[50] - Realized investment losses were recorded at $(425) thousand in September 2025, compared to $(129) thousand in June 2025, indicating a worsening in investment performance[61] Loss Provisions and Claims - The provision for losses and LAE increased to $44.9 million in Q3 2025 from $30.7 million in Q3 2024[14] - The provision for losses and LAE increased significantly to $44,922,000 from $17,055,000 in the previous quarter, marking a rise of 163.5%[18] - The total reserves for losses and LAE at the end of the period is $379,548,000, up from $345,952,000 at the end of the previous quarter[42] - The average amount paid per claim increased to $56,000 in Q3 2025 from $42,000 in Q2 2025[41] - The loss ratio for the Mortgage Insurance segment was 19.1% for the quarter ended September 30, 2025, compared to 12.9% for the same quarter in 2024, indicating an increase in claims relative to premiums earned[58] Capital and Reserves - The combined statutory capital for U.S. Mortgage Insurance subsidiaries was $3,732,465 thousand as of September 30, 2025, an increase from $3,584,580 thousand as of September 30, 2024, showing a growth of 4.1%[52] - The risk-to-capital ratio for Essent Guaranty, Inc. improved to 8.9:1 as of September 30, 2025, down from 10.0:1 as of September 30, 2024, indicating a stronger capital position[52] - The PMIERs sufficiency ratio was 177% as of September 30, 2025, compared to 189% a year earlier, reflecting a decrease in available assets relative to minimum required assets[52] Shareholder Returns - The company repurchased 8.7 million common shares for $501 million year-to-date through October 31, 2025[9] - A quarterly cash dividend of $0.31 per common share was declared, payable on December 10, 2025[2] - The book value per share increased to $58.86 from $56.98 in the previous quarter, reflecting a growth of 3.3%[18] Default and Performance Metrics - The percentage of loans in default rose to 2.29% from 2.12% in the previous quarter, indicating a deterioration in loan performance[21] - The default rate as of September 30, 2025, is 2.29%, with a 3+ month default rate of 1.49%[44] - As of September 30, 2025, the default inventory increased to 18,583 from 17,255 in the previous quarter, with new defaults of 10,357 reported[41] - The cure rate for new defaults as of September 30, 2025, is 26%, a significant decrease from 60% in the previous quarter[41]

Core Viewpoint - Essent Group Ltd. reported a net income of $164.2 million for Q3 2025, reflecting a slight decrease from $176.2 million in Q3 2024, while also announcing a quarterly cash dividend of $0.31 per share [1][2]. Financial Performance - Net income for the quarter ended September 30, 2025, was $164.2 million or $1.67 per diluted share, compared to $176.2 million or $1.65 per diluted share for the same quarter in 2024 [1][11]. - Total revenues for Q3 2025 were $311.8 million, down from $316.6 million in Q3 2024 [11][12]. - Net investment income for the nine months ended September 30, 2025, was $177.3 million, up 7% from the same period in 2024 [8]. Insurance Metrics - New insurance written for Q3 2025 was $12.2 billion, a decrease from $12.5 billion in Q2 2025 and Q3 2024 [8]. - Insurance in force as of September 30, 2025, was $248.8 billion, compared to $246.8 billion as of June 30, 2025, and $243.0 billion as of September 30, 2024 [8][20]. - The company reported a weighted average credit score of 746 for its insurance portfolio as of September 30, 2025 [26]. Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.31 per common share, payable on December 10, 2025, to shareholders of record on December 1, 2025 [1][2]. - Year-to-date through October 31, 2025, Essent repurchased 8.7 million common shares for $501 million, with a new $500 million share repurchase authorization approved for execution through year-end 2027 [8]. Ratings and Outlook - Moody's Ratings upgraded the insurance financial strength rating of Essent Guaranty, Inc. to A2 from A3 and the senior unsecured debt rating of Essent Group Ltd. to Baa2 from Baa3, with a stable outlook [8].

Core Insights - Essent Group Ltd. (NYSE:ESNT) is recognized among the 15 Dividend Growth Stocks with the highest growth rates [1] - Keefe Bruyette raised the price target for Essent Group from $67 to $71 while maintaining a Market Perform rating [3] - The company plays a crucial role in the US housing finance system by providing private mortgage insurance and is expanding into title insurance [2] Business Strategy - Essent Group focuses on maintaining strong partnerships with leading mortgage lenders and aligning with GSE regulations [4] - The company effectively manages credit risk through reinsurance and disciplined capital allocation [4] - Its broader strategy aims to preserve credit quality, enhance capital efficiency, and deliver solid returns to shareholders [4] Dividend Performance - Essent Group has increased its dividends for five consecutive years, with an average annual growth rate of nearly 14% [5] - The current quarterly dividend is $0.31 per share, resulting in a dividend yield of 2.04% as of October 30 [5]