Financial Performance - Net income for 1Q25 was $1754 million, compared to $1679 million in 4Q24[5] - Annualized ROE increased to 125% in 1Q25 from 119% in 4Q24[5] - Shareholders' equity reached $57 billion in 1Q25, up from $56 billion in 4Q24[5] - The combined ratio improved to 318% in 1Q25 from 338% in 4Q24[5] - Book value per share grew to $5522 in Mar-25, with an annualized growth rate of 183% since December 31, 2013[11] Portfolio and Risk Management - U S Mortgage Insurance In Force (IIF) increased to $2447 billion in 1Q25 from $2436 billion in 4Q24[5] - New Insurance Written (NIW) was $99 billion in 1Q25, compared to $122 billion in 4Q24[5] - The portfolio default rate decreased to 219% in 1Q25 from 227% in 4Q24[6] - 97% of IIF is subject to reinsurance protection as of March 31, 2025[6,33,36] - Risk-to-capital ratio improved to 96:1 in 1Q25 from 98:1 in 4Q24[6] Capital Distribution - The company repurchased 39 million common shares for $218 million year-to-date through April 30th[9] - A quarterly dividend of $031 per common share was approved for 2Q25[9]

[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) This section details Essent Group's Q1 2025 financial results, capital return initiatives, and key business and operational achievements [First Quarter 2025 Results](index=1&type=section&id=First%20Quarter%202025%20Results) Essent Group reported a net income of $175.4 million for Q1 2025, a slight decrease from $181.7 million in Q1 2024. Diluted earnings per share also saw a minor dip to $1.69 from $1.70 year-over-year. The company's performance was supported by favorable credit performance, high portfolio persistency, and a 12% YoY increase in net investment income Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $175.4 million | $181.7 million | | Diluted EPS | $1.69 | $1.70 | - The Chairman and CEO, Mark A. Casale, attributed the strong results to favorable credit performance, elevated portfolio persistency, and higher investment income[3](index=3&type=chunk) - Net investment income for Q1 2025 was **$58.2 million**, representing a **12% increase** from Q1 2024[10](index=10&type=chunk) [Capital Returns](index=1&type=section&id=Capital%20Returns) The Board of Directors declared a quarterly cash dividend of $0.31 per common share. Additionally, through April 30, 2025, the company has repurchased 3.9 million common shares for approximately $218 million, with $429 million remaining under the current repurchase authorization - A quarterly cash dividend of **$0.31 per common share** was declared, payable on June 10, 2025, to shareholders of record on May 30, 2025[2](index=2&type=chunk) - Year-to-date through April 30, 2025, Essent repurchased **3.9 million shares** for about **$218 million**. There is **$429 million remaining** under the $500 million repurchase plan authorized in February 2025[10](index=10&type=chunk) [Business and Operational Highlights](index=1&type=section&id=Business%20and%20Operational%20Highlights) In Q1 2025, Essent's new insurance written (NIW) was $9.9 billion, an increase from $8.3 billion in Q1 2024 but a decrease from $12.2 billion in Q4 2024. Insurance in force (IIF) grew to $244.7 billion. The company also executed several reinsurance transactions to manage risk, including two forward quota share agreements and two excess of loss transactions Key Operational Metrics | Metric | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | New Insurance Written | $9.9 billion | $12.2 billion | $8.3 billion | | Insurance in Force | $244.7 billion | $243.6 billion | $238.5 billion | - During Q1 2025, Essent entered into two forward quota share transactions covering **25% of the risk** for eligible policies written in 2025 and 2026[10](index=10&type=chunk) - In April, the company entered into two excess of loss transactions covering **20% of eligible policies** written in 2025 and 2026[10](index=10&type=chunk) [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) This section presents Essent Group's Q1 2025 condensed consolidated statements of comprehensive income and balance sheets, highlighting revenue, expenses, net income, assets, and equity [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q1 2025, total revenues increased to $317.6 million from $298.4 million in Q1 2024, driven by higher net investment income. However, a significant rise in the provision for losses and LAE (from $9.9 million to $31.3 million) and increased operating expenses led to a decrease in net income to $175.4 million compared to $181.7 million in the prior-year quarter Q1 2025 Income Statement Highlights (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Premiums Earned | $245,848 | $245,590 | | Net Investment Income | $58,210 | $52,085 | | **Total Revenues** | **$317,558** | **$298,357** | | Provision for Losses and LAE | $31,287 | $9,913 | | Other Underwriting & Operating Expenses | $71,124 | $66,840 | | **Total Losses and Expenses** | **$110,559** | **$84,615** | | Income Before Income Taxes | $206,999 | $213,742 | | **Net Income** | **$175,433** | **$181,719** | | **Diluted EPS** | **$1.69** | **$1.70** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Essent's total assets grew to $7.20 billion from $7.11 billion at year-end 2024. Total liabilities also increased to $1.55 billion. Total stockholders' equity rose to $5.66 billion, resulting in a book value per share of $55.22, up from $53.36 at the end of 2024 Balance Sheet Highlights (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Investments | $6,204,217 | $6,180,621 | | **Total Assets** | **$7,204,711** | **$7,111,649** | | Reserve for Losses and LAE | $356,653 | $328,866 | | **Total Liabilities** | **$1,545,405** | **$1,507,991** | | **Total Stockholders' Equity** | **$5,659,306** | **$5,603,658** | - Book value per share increased to **$55.22** as of March 31, 2025, compared to **$53.36** as of December 31, 2024[18](index=18&type=chunk) [Operational and Portfolio Analysis](index=7&type=section&id=Operational%20and%20Portfolio%20Analysis) This section provides an in-depth analysis of Essent's U.S. mortgage insurance portfolio, including new insurance written, in-force quality, and default and loss reserve trends [U.S. Mortgage Insurance Portfolio Overview](index=7&type=section&id=U.S.%20Mortgage%20Insurance%20Portfolio%20Overview) The U.S. Mortgage Insurance portfolio continued to expand, with insurance in force reaching $244.7 billion at the end of Q1 2025. The percentage of loans in default increased to 2.19% from 1.71% in Q1 2024, but decreased from 2.27% in Q4 2024. Annual persistency remained high and stable at 85.7% U.S. Mortgage Insurance Portfolio Metrics | Metric | March 31, 2025 | December 31, 2024 | March 31, 2024 | | :--- | :--- | :--- | :--- | | Insurance in force (end of period) | $244.7B | $243.6B | $238.5B | | Risk in force (end of period) | $56.6B | $56.5B | $54.7B | | Policies in force | 811,342 | 813,013 | 815,000 (approx) | | Percentage of loans in default | 2.19% | 2.27% | 1.71% | | Annual persistency | 85.7% | 85.7% | N/A | [New Insurance Written (NIW)](index=8&type=section&id=New%20Insurance%20Written%20%28NIW%29) In Q1 2025, New Insurance Written (NIW) totaled $9.9 billion. The portfolio composition shows a continued focus on high-quality credit, with a weighted average credit score of 751. Purchase mortgages dominated NIW at 94.3%, and monthly premium policies constituted 98.6% of the new business - Purchase mortgages represented **94.3% of NIW** in Q1 2025, up from 88.3% in Q4 2024 but down from 97.4% in Q1 2024[24](index=24&type=chunk) - The weighted average credit score for NIW in Q1 2025 was **751**, consistent with Q4 2024 and up from 747 in Q1 2024. Borrowers with credit scores of 740 or higher accounted for **65.1% of NIW**[25](index=25&type=chunk) - The weighted average Loan-to-Value (LTV) ratio for NIW remained stable at **93%**[25](index=25&type=chunk) [Insurance in Force (IIF) and Risk in Force (RIF) Portfolio Quality](index=9&type=section&id=Insurance%20in%20Force%20%28IIF%29%20and%20Risk%20in%20Force%20%28RIF%29%20Portfolio%20Quality) The credit quality of the in-force portfolio remained strong and stable as of March 31, 2025. The weighted average credit score was 746, and the weighted average LTV was 93%, both unchanged from the previous quarter and year-ago period. The majority of the portfolio (97.8%) consists of 30-year or higher fixed-rate mortgages - The weighted average credit score of the Insurance in Force (IIF) portfolio was **746**, consistent across Q1 2025, Q4 2024, and Q1 2024[27](index=27&type=chunk) - The weighted average LTV of the IIF portfolio was **93%**, also consistent across the same periods[27](index=27&type=chunk) - Fixed-rate mortgages with terms of 30 years or more constitute **97.8% of the IIF portfolio**[27](index=27&type=chunk) [Default and Loss Reserve Analysis](index=14&type=section&id=Default%20and%20Loss%20Reserve%20Analysis) The number of loans in default decreased to 17,759 in Q1 2025 from 18,439 in Q4 2024, driven by a higher number of cures than new defaults. The total reserve for losses and LAE increased to $338.1 million from $310.2 million in the prior quarter. The average reserve per default also increased to $19.0 thousand Rollforward of Insured Loans in Default | Metric | Q1 2025 | Q4 2024 | | :--- | :--- | :--- | | Beginning Default Inventory | 18,439 | 15,906 | | New Defaults | 9,664 | 11,136 | | Cures | (10,173) | (8,408) | | **Ending Default Inventory** | **17,759** | **18,439** | Reserve for Losses and LAE (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Reserve for Losses and LAE** | **$338,128** | **$310,156** | | Average Reserve per Default (Total) | $19.0 | $16.8 | [Capital and Risk Management](index=10&type=section&id=Capital%20and%20Risk%20Management) This section outlines Essent's strategies for managing capital and risk, including its reinsurance programs, investment portfolio composition, and capital adequacy metrics [Reinsurance Program](index=10&type=section&id=Reinsurance%20Program) Essent actively utilizes reinsurance to manage its risk exposure. As of Q1 2025, the company had significant risk ceded through Insurance-Linked Notes (ILN), Excess of Loss (XOL), and Quota Share agreements. These programs provide substantial capital relief, reducing the PMIERs Minimum Required Assets by over $1.8 billion in total - GSE and other risk share programs had **$2.22 billion of risk in force** as of March 31, 2025[29](index=29&type=chunk) Reinsurance Program Highlights (as of March 31, 2025) | Program Type | Remaining Ceded Risk in Force | Reduction in PMIERs Assets | | :--- | :--- | :--- | | Insurance Linked Notes (ILN) | $1.14 billion | $958.7 million | | Excess of Loss (XOL) | $0.34 billion | $229.0 million | | Quota Share | $8.98 billion | $648.3 million | [Investment Portfolio](index=16&type=section&id=Investment%20Portfolio) The company's investment portfolio, valued at $5.88 billion as of March 31, 2025, is highly rated and diversified. 98.6% of the portfolio is rated Baa3 or higher. The largest allocations are to corporate debt securities (31.7%) and U.S. agency mortgage-backed securities (19.8%). The pre-tax investment income yield for the quarter was 3.77% - Total investments available for sale stood at **$5.88 billion**, with the largest allocations in Corporate debt (**31.7%**), U.S. agency MBS (**19.8%**), and Asset-backed securities (**12.7%**)[44](index=44&type=chunk) - The portfolio maintains high credit quality, with **48.1% rated Aaa** and **98.6% rated investment grade** (Baa3 or higher)[44](index=44&type=chunk) - The pre-tax investment income yield for Q1 2025 was **3.77%**[46](index=46&type=chunk) [Capital Adequacy](index=17&type=section&id=Capital%20Adequacy) Essent remains well-capitalized. The combined statutory capital for U.S. Mortgage Insurance Subsidiaries was $3.64 billion. For Essent Guaranty, Inc., the PMIERs sufficiency ratio was 172%, with $1.52 billion in excess available assets over the minimum required, demonstrating a strong capital buffer Essent Guaranty, Inc. PMIERs Data (in thousands) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Available Assets | $3,628,675 | $3,612,993 | | Minimum Required Assets | $2,107,620 | $2,029,738 | | **PMIERs Excess Available Assets** | **$1,521,055** | **$1,583,255** | | **PMIERs Sufficiency Ratio** | **172%** | **178%** | - The risk-to-capital ratio for Essent Guaranty, Inc. improved to **9.6:1** from 9.8:1 in the prior quarter[48](index=48&type=chunk) [Segment Information](index=18&type=section&id=Segment%20Information) This section details the financial performance of Essent's Mortgage Insurance segment and the Corporate & Other category, including key revenue, expense, and profitability metrics [Mortgage Insurance Segment](index=18&type=section&id=Mortgage%20Insurance%20Segment) The Mortgage Insurance segment generated income before tax of $214.5 million in Q1 2025, down from $223.6 million in Q1 2024. Net premiums earned were stable at $233.6 million. The loss ratio increased to 13.1% from 4.1% YoY, while the expense ratio was 18.7%. This resulted in a combined ratio of 31.8% for the quarter Mortgage Insurance Segment Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Premiums Earned | $233,630 | $230,306 | | Total Revenues | $288,869 | $274,748 | | Provision for Losses and LAE | $30,722 | $9,337 | | **Income Before Income Tax** | **$214,540** | **$223,566** | Key Ratios | Ratio | Q1 2025 | Q4 2024 | Q1 2024 | | :--- | :--- | :--- | :--- | | Loss Ratio | 13.1% | 16.3% | 4.1% | | Expense Ratio | 18.7% | 17.5% | 18.2% | | **Combined Ratio** | **31.8%** | **33.8%** | **22.3%** | [Corporate & Other](index=19&type=section&id=Corporate%20%26%20Other) The Corporate & Other category, which includes title insurance operations and holding company activities, reported a loss before income tax of $7.5 million in Q1 2025. This is an improvement from the $9.8 million loss reported in Q1 2024. The improvement was primarily driven by higher net investment income Corporate & Other Performance (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenues | $28,689 | $23,609 | | Total Losses and Expenses | $36,230 | $33,433 | | **Loss Before Income Tax** | **($7,541)** | **($9,824)** |

Group 1 - Essent Group Ltd. is set to release its Q1 earnings results on May 9, with expected earnings of $1.65 per share, a decrease from $1.70 per share in the same period last year [1] - The company anticipates quarterly revenue of $310.79 million, up from $298.36 million a year earlier [1] - In the previous quarter, Essent Group reported weaker-than-expected earnings [1] Group 2 - Essent Group shares increased by 0.6%, closing at $58.72 [2] - Analysts have provided various ratings and price targets for Essent Group, with Keefe, Bruyette & Woods maintaining an Outperform rating and lowering the price target from $71 to $65 [7] - JP Morgan upgraded the stock from Neutral to Overweight with a price target of $60, while RBC Capital reiterated an Outperform rating with a price target of $67 [7]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for Essent Group despite higher revenues, with the actual results being crucial for stock price movement [1][2]. Company Summary - Essent Group is expected to report quarterly earnings of $1.66 per share, reflecting a -2.4% change year-over-year, while revenues are projected to be $311.24 million, an increase of 4.3% from the previous year [3]. - The consensus EPS estimate has been revised down by 0.29% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10]. - The Most Accurate Estimate for Essent Group is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -3.81%, combined with a Zacks Rank of 4, making it challenging to predict an earnings beat [11][10]. Earnings Surprise History - In the last reported quarter, Essent Group was expected to post earnings of $1.67 per share but delivered only $1.58, resulting in a surprise of -5.39% [12]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [13]. Industry Comparison - In the Zacks Insurance - Property and Casualty industry, Palomar is expected to report earnings of $1.59 per share, indicating a year-over-year increase of +45.9%, with revenues projected at $171.76 million, up 48.7% from the previous year [17]. - Palomar's consensus EPS estimate has been revised up by 1.3% in the last 30 days, leading to a positive Earnings ESP of 6.29%, suggesting a likely earnings beat [18].

Financial Performance - For Q4 2024, Essent Group reported net income of $167.9 million, or $1.58 per diluted share, a decrease from $175.4 million, or $1.64 per diluted share in Q4 2023[1]. - Full year 2024 net income increased to $729.4 million, or $6.85 per diluted share, compared to $696.4 million, or $6.50 per diluted share in 2023, representing a 4.3% increase in earnings per share[1]. - Net income for Q4 2024 was $167,900,000, down 4.3% from $176,175,000 in Q3 2024[18]. - The company reported a basic earnings per share of $1.60 for Q4 2024, a decrease from $1.67 in Q3 2024[18]. - Return on average equity for 2024 was 13.6%, down from 14.6% in 2023[16]. - The return on average equity (annualized) was 11.9% in Q4 2024, down from 12.8% in Q3 2024[18]. - The loss ratio for the year ended December 31, 2024, was reported at 16.6%, significantly higher than 7.9% in 2023[55]. - The expense ratio increased to 28.7% for the year ended December 31, 2024, compared to 27.0% in 2023[55]. - The combined ratio for the year ended December 31, 2024, was 45.3%, up from 34.9% in 2023, indicating a decline in operational efficiency[55]. Insurance Metrics - New insurance written in Q4 2024 was $12.2 billion, down from $12.5 billion in Q3 2024 but up from $8.8 billion in Q4 2023[9]. - The total New Insurance Written (NIW) for the three months ended December 31, 2024, was $12,220,968, a significant increase from $8,769,160 for the same period in 2023, representing a growth of 39.8%[25]. - The percentage of NIW by credit score shows that 47.1% of new insurance was written for borrowers with a credit score of 760 and above, up from 42.3% in the previous year[25]. - The NIW for purchase transactions constituted 88.3% in Q4 2024, a notable increase from 98.7% in Q4 2023, while refinance transactions rose to 11.7% from 1.3%[25]. - The total Insurance in Force (IIF) as of December 31, 2024, was $243,645,423, compared to $239,078,262 at the end of 2023, marking a year-over-year increase of 1.5%[27]. - The average insurance in force at the end of Q4 2024 was $243,236,830,000, an increase from $242,065,632,000 in Q3 2024[21]. - The percentage of loans in default increased to 2.27% in Q4 2024, up from 1.95% in Q3 2024[21]. - The cumulative cure rate decreased to 23% as of December 31, 2024, compared to 62% in the previous quarter[42]. Investment Performance - Net investment income for the full year 2024 was $222.1 million, reflecting a 19% increase from 2023[9]. - The total investments available for sale increased to $5,876,721,000 as of December 31, 2024, compared to $5,263,739,000 at the end of December 2023[46]. - Total investments available for sale increased to $5,876,721 thousand as of December 31, 2024, up from $5,263,739 thousand in 2023, representing a growth of 11.6%[47]. - The pre-tax investment income yield for the year ended December 31, 2024, was 3.74%[47]. - Corporate debt securities represented 30.3% of total investments available for sale as of December 31, 2024, up from 24.6% a year earlier[46]. Shareholder Actions - Essent repurchased over 2 million common shares for approximately $118 million during Q4 2024 and January 2025[9]. - The Board approved a $500 million share repurchase authorization effective through year-end 2026[9]. Risk and Default Metrics - The U.S. mortgage insurance provision for losses and loss adjustment expenses was $37.2 million in Q4 2024, including $8 million related to defaults from Hurricanes Helene and Milton[9]. - The default rate as of December 31, 2024, was reported at 2.27%, an increase from 1.80% at the end of December 2023[44]. - The average amount paid per claim increased to $42,000 in the December 2024 quarter, up from $32,000 in the previous quarter[42]. - The total amount paid for claims in the December 2024 quarter was $7,740,000, compared to $5,749,000 in the previous quarter[42]. - The percentage of policies in default with two missed payments was 36% as of December 31, 2024, compared to 34% a year earlier[44]. Capital and Assets - Total assets as of December 31, 2024, were $7.11 billion, up from $6.43 billion in 2023[16]. - Combined statutory capital for U.S. Mortgage Insurance Subsidiaries reached $3,594,381 thousand as of December 31, 2024, compared to $3,376,117 thousand in 2023, reflecting an increase of 6.5%[49]. - The combined net risk in force rose to $35,159,976 thousand as of December 31, 2024, from $34,549,500 thousand in 2023, indicating a growth of 1.8%[49]. - Holding company net cash and investments available for sale increased to $1,052,900 thousand as of December 31, 2024, from $693,507 thousand in 2023, marking a substantial increase of 51.8%[47].

Financial Performance - For the year ended December 31, 2024, the company generated new insurance written (NIW) of approximately $45.6 billion, a decrease of 4.4% from $47.7 billion in 2023 and a significant decline of 27.8% from $63.1 billion in 2022[30]. - The U.S. residential mortgage origination volume in 2024 was estimated at $1.78 trillion, with $1.29 trillion in purchase originations and $0.49 trillion in refinancing originations[36]. - The company’s U.S. mortgage insurance subsidiary, Essent Guaranty, Inc., holds financial strength ratings of A3 (Moody's), A- (S&P), and A (AM Best), indicating strong financial stability[30]. - The U.S. mortgage insurance portfolio in force as of December 31, 2024, totals $243,645,423 thousand, reflecting a 1.5% increase from $239,078,262 thousand in 2023[64]. - The top ten customers generated 50.2% of new insurance written (NIW) on a flow basis in 2024, up from 39.9% in 2023[90]. Market Presence - As of December 31, 2024, the company had approximately $243.6 billion of private mortgage insurance in force, indicating a stable market presence[30]. - Private mortgage insurance represented an estimated 41% of the total insured market in 2024, covering 17% of the total U.S. mortgage origination volume[40]. - The private mortgage insurance industry has more than doubled its share of the total insured market since 2009, reflecting a recovery from the financial crisis[40]. - The GSEs held or guaranteed approximately $6.7 trillion, or 46.9%, of all U.S. residential mortgage debt outstanding as of September 30, 2024[34]. - The U.S. residential mortgage market had over $14.2 trillion of debt outstanding as of September 30, 2024, highlighting the scale of the market[33]. Risk Management - The company has established risk management controls to reduce financial volatility and has a risk management framework that encompasses major risks including mortgage and title insurance portfolios[104][105]. - The company continues to monitor and assess the impact of economic conditions on defaults, with servicers expected to adhere to established protocols to mitigate risks[83]. - The weighted average life of the U.S. mortgage insurance portfolio was 33.3 months as of December 31, 2024, with expectations of increased defaults as the portfolio seasons[86]. - The company expects favorable default rates and losses compared to historical experiences due to improved underwriting practices since the 2007-2008 financial crisis[86]. - The company utilizes a credit risk rule engine to ensure prudent risk acquisition and adequate return on capital through established underwriting guidelines[107]. Default and Delinquency - As of December 31, 2024, 18,439 insured loans were in default, representing approximately 2.27% of the total policies in force, an increase from 14,819 loans in default (1.80%) as of December 31, 2023[87]. - The number of loans in default increased by 3,620 during 2024, including 2,119 defaults identified as hurricane-related defaults[87]. - The gross risk in force (RIF) by FICO score indicates that loans with a score of 760 and above represent 40.3% of the total RIF in 2024, compared to 40.2% in 2023[67]. - The gross RIF by LTV shows that 56.3% of the total RIF is in the 90.01% to 95.00% range in 2024, an increase from 55.0% in 2023[69]. Investment Strategy - The investment portfolio represents 88.8% of total assets as of December 31, 2024, focusing on capital preservation and generating investment income[133]. - The company has adopted an investment policy with specific limits on asset sectors, credit ratings, and geographic concentration, reviewed quarterly by the board's investment committee[134]. - The current investment strategy emphasizes selecting fixed income securities and maintaining liquidity to meet financial obligations[135]. - As of December 31, 2024, substantially all investments available for sale were managed by external asset managers[136]. - The company allocates a small percentage of its portfolio to limited partnership investments in real estate, consumer credit, and traditional venture capital and private equity investments[137]. Title Insurance Operations - The company’s title insurance operations were established through acquisitions of Agents National Title Insurance Company and Boston National Title, expanding its service offerings[27]. - Title insurance policies are essential for real estate transactions, providing protection against title defects and typically covering the mortgage loan balance or property purchase price[119]. - The title insurance industry is influenced by macroeconomic factors such as GDP growth, interest rates, and housing market dynamics, affecting overall revenues[116]. - The company has expanded its title insurance operations through acquisitions, including Agents National Title Insurance Company and Boston National Title[113]. Regulatory Environment - The Gramm-Leach-Bliley Act imposes privacy and data security requirements on financial institutions, including obligations to protect consumers' nonpublic personal information[152]. - The Dodd-Frank Act amended certain provisions of the Truth In Lending Act and the Real Estate Settlement Procedures Act, impacting the company's business prospects[160]. - The Consumer Financial Protection Bureau regulates the offering and provision of consumer financial products, including residential mortgages, under Federal law[161]. - The QM Rule establishes that a loan is deemed a qualified mortgage if the annual percentage rate does not exceed the average prime offer rate by 1.5 percentage points or more[162]. - The Dodd-Frank Act requires a securitizer to retain at least 5% of the risk associated with securitized mortgage loans, unless the loan is a qualified residential mortgage or insured by specified Federal agencies[164]. Workforce and Corporate Structure - As of December 31, 2024, the company had a total of 625 employees, with 618 based in the U.S. and 7 in Bermuda[201]. - Approximately 67% of the workforce comprises women and minorities as of December 31, 2024[207]. - The company emphasizes a diverse and inclusive workforce to enhance its business operations[206]. - The company invests significantly in employee development and training programs[204]. - The company is organized as a limited liability company under the laws of Bermuda since July 1, 2008[208]. Competitive Landscape - The private mortgage insurance industry is facing intense competition, with six private mortgage insurers currently approved to write business for the GSEs[212]. - Alternatives to private mortgage insurance, such as government-supported programs, may reduce demand for private mortgage insurance products[218]. - The ability to write new mortgage insurance business is dependent on the origination volume of low down payment mortgages, which may decline due to various factors[224]. - Government-supported mortgage insurance programs may increase their market share, affecting the competitive position of private mortgage insurers[219]. - The company's insurance writing capacity could be adversely affected if lenders and investors opt for alternatives to private mortgage insurance[216].

Financial Data and Key Metrics Changes - For Q4 2024, the company reported net income of $168 million, a decrease from $175 million a year ago, with diluted earnings per share of $1.58 compared to $1.64 a year ago [8][20] - Full-year 2024 net income was $729 million, or $6.85 per diluted share, with a return on average equity of 14% [8][17] - Book value per share increased by 11% to $53.36 as of December 31 [9] Business Line Data and Key Metrics Changes - The U.S. mortgage insurance in force was $244 billion, a 2% increase from the previous year [9][21] - The average base premium rate for the U.S. mortgage insurance portfolio remained at 41 basis points, consistent with the previous quarter [21] - The consolidated net investment income for full-year 2024 was $222 million, up nearly 20% from 2023 [16][22] Market Data and Key Metrics Changes - The 12-month persistency rate was 86%, down about 1 point from the previous quarter [9] - The weighted average FICO score of the insurance in force was 746, with a weighted average original LTV of 93% [10] Company Strategy and Development Direction - The company remains committed to its "Buy, Manage & Distribute" operating model, positioning itself well for various economic scenarios [7][34] - The company has entered into two quota share transactions with highly rated reinsurers to provide forward protection for 2025 and 2026 business [12] - The company plans to maintain a balanced approach to capital return while preserving optionality for strategic growth opportunities [34][78] Management's Comments on Operating Environment and Future Outlook - Management noted strong credit quality and resilience in housing and labor markets, which continue to drive credit performance [6] - The company anticipates that home buying demand is merely postponed due to current interest rates and affordability issues [7] - Management expressed confidence in the company's ability to navigate potential economic challenges, citing a strong balance sheet [7][34] Other Important Information - The Board approved an 11% increase in the quarterly dividend to $0.31 per share and a $500 million share repurchase authorization through year-end 2026 [18][31] - The company reported a cash and investments position of $6.3 billion as of December 31, with a new money yield over 5% [16][17] Q&A Session Summary Question: Expectations for title results in 2025 - Management expects title results for 2025 to be similar to 2024, with ongoing costs related to capacity for a large lender [36][38] Question: Clarification on hurricane-related defaults - The hurricane-related defaults were included in the default count at quarter-end, with the default rate likely closer to 2% when excluding these [41][42] Question: Insights on default patterns - Management noted that 2024's default pattern was generally favorable compared to historical trends, with expectations for a gradual increase in default rates [48][50] Question: Monitoring borrower insurance - The company ensures borrowers have homeowners insurance through force placement if necessary, mitigating risk from uninsured properties [58][60] Question: Capital return strategy amid growth pause - Management indicated a balanced approach to capital return, leveraging excess capital while remaining cautious about growth opportunities [78][90]

INVESTOR PRESENTATION 4Q24 ESSENT GROUP LTD. NYSE: ESNT ESSENT GROUP LTD. | NYSE: ESNT © 2025 Essent Group Ltd. All rights reserved. | essentgroup.com | 1 Disclaimer This presentation 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 ...

Essent Group (ESNT) Q4 2024 Earnings Call February 14, 2025 10:00 AM ET Company Participants Philip Stefano - Vice President, Investor RelationsMark Casale - Chairman and CEODavid Weinstock - Senior Vice President, Chief Financial OfficerBose George - Managing DirectorGeoffrey Dunn - PartnerEric Hagen - Managing Director Conference Call Participants Terry Ma - Senior Equity Research AnalystRichard Shane - AnalystDouglas Harter - Equity Research Analyst Operator Thank you for standing by. At this time, I wou ...

Group 1 - Essent Group reported quarterly earnings of $1.58 per share, missing the Zacks Consensus Estimate of $1.67 per share, and compared to earnings of $1.64 per share a year ago, representing an earnings surprise of -5.39% [1] - The company posted revenues of $315.03 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.24%, and compared to year-ago revenues of $297.28 million [2] - Over the last four quarters, Essent Group has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2 - The stock's immediate price movement will depend on management's commentary on the earnings call and the sustainability of earnings expectations [3][4] - Essent Group shares have increased approximately 6.4% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The current consensus EPS estimate for the coming quarter is $1.74 on revenues of $318.39 million, and for the current fiscal year, it is $6.96 on revenues of $1.29 billion [7] Group 3 - The estimate revisions trend for Essent Group is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The outlook for the Financial - Mortgage & Related Services industry is in the bottom 44% of Zacks industries, which may materially impact the stock's performance [8] - Tree.com, another stock in the same industry, is expected to report quarterly earnings of $0.68 per share, representing a year-over-year change of +142.9%, with revenues expected to be $235.77 million, up 75.4% from the year-ago quarter [9]