Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Common Shares, $0.015 par value ESNT New York Stock Exchange Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended June 30, 2019 ☐ TRANSITIO ...

PART I [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) The unaudited Q1 2019 financial statements report total assets of **$3.35 billion** and net income of **$127.7 million**, reflecting growth in premiums and investment income [Condensed Consolidated Balance Sheets (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%28Unaudited%29) Condensed Consolidated Balance Sheet Highlights (Unaudited) | (In thousands) | March 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Total investments | $3,008,824 | $2,791,018 | | Total assets | $3,353,245 | $3,149,971 | | **Liabilities & Stockholders' Equity** | | | | Reserve for losses and LAE | $53,484 | $49,464 | | Unearned premium reserve | $295,320 | $295,467 | | Total liabilities | $825,442 | $784,254 | | Total stockholders' equity | $2,527,803 | $2,365,717 | | Total liabilities and stockholders' equity | $3,353,245 | $3,149,971 | [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Unaudited%29) Condensed Consolidated Statements of Comprehensive Income (Unaudited) | (In thousands, except per share) | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net premiums earned | $177,791 | $152,558 | | Net investment income | $19,880 | $13,714 | | Total revenues | $200,526 | $167,463 | | Provision for losses and LAE | $7,107 | $5,309 | | Total losses and expenses | $50,807 | $45,883 | | Income before income taxes | $149,719 | $121,580 | | Net income | $127,720 | $111,069 | | Diluted EPS | $1.30 | $1.13 | [Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity%20%28Unaudited%29) - Total stockholders' equity increased from **$2.37 billion** at the beginning of the period to **$2.53 billion** at March 31, 2019, primarily driven by net income of **$127.7 million** and other comprehensive income of **$38.4 million**[32](index=32&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%28Unaudited%29) Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended March 31, 2019 | Three Months Ended March 31, 2018 | | :--- | :--- | :--- | | Net cash provided by operating activities | $138,682 | $221,868 | | Net cash used in investing activities | ($155,039) | ($216,364) | | Net cash used in financing activities | ($8,100) | ($16,070) | | Net decrease in cash | ($24,457) | ($10,566) | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20%28Unaudited%29) The notes detail private mortgage insurance operations, customer concentration, reinsurance strategies, increased loss reserves to **$53.5 million**, and compliance with PMIERs 2.0 regulatory capital requirements - The company offers private mortgage insurance and reinsurance, with one lender representing **10%** of total revenue for the three months ended March 31, 2019, indicating customer concentration[41](index=41&type=chunk)[42](index=42&type=chunk) - The company utilizes reinsurance to manage risk, including ceding **25%** of GSE-eligible new insurance written to its Bermuda subsidiary, Essent Re, and engaging in fully collateralized excess of loss reinsurance transactions with unaffiliated special purpose insurers[43](index=43&type=chunk)[72](index=72&type=chunk) Reconciliation of Reserve for Losses and LAE | ($ in thousands) | 2019 | 2018 | | :--- | :--- | :--- | | Beginning Reserve | $49,464 | $46,850 | | Net Incurred Losses (Current Period) | $7,107 | $5,309 | | - Current Period Provision | $11,828 | $9,952 | | - Favorable Prior Year Development | ($4,721) | ($4,643) | | Net Payments | ($3,087) | ($2,193) | | Ending Reserve | $53,484 | $49,966 | - Essent Guaranty, the company's U.S. insurance subsidiary, was in compliance with the revised **PMIERs 2.0** as of March 31, 2019[121](index=121&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported strong Q1 2019 results with net income of **$127.7 million**, driven by a **17%** increase in net premiums earned and growth in insurance in force to **$143.2 billion**, while maintaining a strong capital position and PMIERs 2.0 compliance [Overview](index=30&type=section&id=Overview) - The company is a growing private mortgage insurance provider with Essent Guaranty licensed in all 50 states and D.C[129](index=129&type=chunk) Key Operating Metrics (Q1 2019) | Metric | Value | | :--- | :--- | | New Insurance Written (NIW) | $11.0 billion | | Insurance in Force (IIF) | $143.2 billion | | Number of Employees | 377 | - Essent Re, the Bermuda-based subsidiary, provides GSE risk share and other reinsurance, also reinsuring **25%** of Essent Guaranty's GSE-eligible NIW[131](index=131&type=chunk) [Key Performance Indicators](index=34&type=section&id=Key%20Performance%20Indicators) Insurance in Force (IIF) and Risk in Force (RIF) Summary | (In thousands) | Q1 2019 | Q1 2018 | | :--- | :--- | :--- | | Beginning IIF | $137,720,786 | $110,461,950 | | New Insurance Written (NIW) | $11,000,309 | $9,336,150 | | Cancellations | ($5,539,454) | ($4,547,151) | | Ending IIF | $143,181,641 | $115,250,949 | | Ending RIF | $34,744,417 | $28,267,149 | - The average net premium rate was **0.48%** for Q1 2019, down from **0.52%** in Q1 2018, primarily due to third-party reinsurance and pricing reductions on future NIW[166](index=166&type=chunk) - The persistency rate, representing the percentage of IIF remaining after 12 months, was **85.1%** at March 31, 2019[138](index=138&type=chunk) - The combined risk-to-capital ratio for U.S. insurance companies was **13.5 to 1** as of March 31, 2019, significantly below the general maximum permitted ratio of **25.0 to 1**[167](index=167&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) - Net income for Q1 2019 was **$127.7 million**, a **15%** increase from **$111.1 million** in Q1 2018, primarily due to higher net premiums earned and increased net investment income[169](index=169&type=chunk)[170](index=170&type=chunk) - Net premiums earned increased by **17%** year-over-year, driven by the growth in average IIF to **$140.1 billion**[171](index=171&type=chunk) - The provision for losses and LAE increased to **$7.1 million** from **$5.3 million** in the prior year, reflecting portfolio seasoning, while the default rate decreased to **0.65%** from **0.86%** due to the cure of hurricane-related defaults[177](index=177&type=chunk)[179](index=179&type=chunk) - Other underwriting and operating expenses increased to **$41.0 million** from **$38.1 million**, primarily due to business expansion, with compensation and benefits expense slightly decreasing[184](index=184&type=chunk) [Liquidity and Capital Resources](index=40&type=section&id=Liquidity%20and%20Capital%20Resources) - As of March 31, 2019, the company had substantial liquidity, including **$40.5 million** in cash, **$210.8 million** in short-term investments, **$2.8 billion** in fixed maturity investments, and an additional **$275 million** available under its revolving credit facility[191](index=191&type=chunk) - Essent Guaranty was in compliance with **PMIERs 2.0** as of March 31, 2019, with Available Assets of **$2.02 billion** exceeding the Minimum Required Assets of **$1.21 billion**[211](index=211&type=chunk) U.S. Insurance Subsidiaries Combined Statutory Capital (March 31, 2019) | (In thousands) | Amount | | :--- | :--- | | Policyholders' surplus | $956,097 | | Contingency reserves | $1,030,951 | | **Combined statutory capital** | **$1,987,048** | | Combined net risk in force | $26,813,408 | | **Combined risk-to-capital ratio** | **13.5:1** | - The investment portfolio totaled **$3.0 billion** as of March 31, 2019, up from **$2.8 billion** at year-end 2018, primarily due to investing cash flows from operations[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's investment portfolio faces market risks, primarily from interest rate changes and credit quality, with an effective duration of **3.5 years** indicating sensitivity to yield curve shifts - The company's investment portfolio is exposed to market risks, primarily changes in interest rates, credit quality, concentration, and prepayment risk[239](index=239&type=chunk)[240](index=240&type=chunk)[241](index=241&type=chunk) - The effective duration of investments available for sale was **3.5 years** at March 31, 2019, implying a **100 basis point (1%)** instantaneous parallel shift in the yield curve would cause a **3.5%** change in the portfolio's fair value[243](index=243&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2019, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[244](index=244&type=chunk) - There were no material changes in the company's internal control over financial reporting during the first quarter of 2019[245](index=245&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently subject to any material legal proceedings - The company is not currently subject to any material legal proceedings[248](index=248&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the year ended December 31, 2018 - There have been no material changes in the company's risk factors from those previously disclosed in the Annual Report on Form 10-K for the year ended December 31, 2018[249](index=249&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **131,639** common shares at **$43.69** per share to satisfy employee tax withholding obligations, not as part of a public buyback program - The company repurchased **131,639** common shares during the quarter from employees to satisfy tax withholding obligations related to vesting restricted shares, not as part of a share buyback program[250](index=250&type=chunk)[251](index=251&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) At the 2019 Annual General Meeting, shareholders elected directors, ratified the auditor, and approved executive compensation on an advisory basis - At the Annual General Meeting on May 1, 2019, shareholders approved all proposals, including the election of Angela L. Heise and Robert Glanville to the board of directors, the re-appointment of PricewaterhouseCoopers LLP as auditor, and a non-binding advisory vote on executive compensation[253](index=253&type=chunk)[255](index=255&type=chunk)[256](index=256&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and XBRL interactive data files - Exhibits filed with the report include CEO/CFO certifications (Sections 302 and 906 of Sarbanes-Oxley) and financial statements in XBRL format[258](index=258&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-36157 | --- | --- | |-------------------------------------------------------------------------------|----------| | ESSENT GROUP LTD. (Ex ...