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]

Core Viewpoint - Essent Group Ltd. has scheduled its third quarter earnings conference call for November 7, 2025, indicating a focus on financial performance and investor communication [1] Company Summary - The earnings conference call will provide insights into the company's financial results for the third quarter [1]

Core Viewpoint - Essent Group (ESNT) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a solid history of exceeding expectations [1]. Earnings Performance - Essent Group has a strong track record of surpassing earnings estimates, with an average surprise of 8.34% over the last two quarters [2]. - In the last reported quarter, the company achieved earnings of $1.93 per share, exceeding the Zacks Consensus Estimate of $1.68 per share by 14.88%. In the previous quarter, it reported earnings of $1.69 per share against an expectation of $1.66 per share, resulting in a surprise of 1.81% [3]. Earnings Estimates and Predictions - Recent estimates for Essent Group have been revised upward, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6]. - The combination of a positive Earnings ESP and a Zacks Rank 2 (Buy) suggests a high probability of another earnings surprise, as stocks with this combination beat estimates nearly 70% of the time [7][9]. Earnings ESP Metric - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions, which are often more accurate [8]. - Essent Group currently has an Earnings ESP of +4.20%, indicating increased analyst optimism regarding its near-term earnings potential [9].

Core Viewpoint - Investors in the Insurance - Property and Casualty sector should consider Essent Group (ESNT) and Berkshire Hathaway B (BRK.B) for potential value opportunities [1] Group 1: Zacks Rank and Value Scores - Essent Group has a Zacks Rank of 2 (Buy), while Berkshire Hathaway B has a Zacks Rank of 3 (Hold), indicating a stronger earnings outlook for ESNT [3] - The Zacks Rank strategy focuses on companies with positive earnings estimate revisions, which is a key factor for value investors [2] Group 2: Valuation Metrics - Essent Group has a forward P/E ratio of 9.04, significantly lower than Berkshire Hathaway B's forward P/E of 24.37 [5] - The PEG ratio for Essent Group is 2.78, compared to Berkshire Hathaway B's PEG ratio of 3.48, suggesting better growth relative to its valuation for ESNT [5] - Essent Group's P/B ratio is 1.15, while Berkshire Hathaway B's P/B ratio is 1.59, indicating that ESNT is more undervalued based on book value [6] Group 3: Overall Assessment - Essent Group has demonstrated stronger estimate revision activity and more attractive valuation metrics than Berkshire Hathaway B, making it the preferred choice for value investors [7]

Core Viewpoint - The analysis compares Essent Group (ESNT) and Berkshire Hathaway B (BRK.B) to determine which stock presents a better value opportunity for investors in the Property and Casualty insurance sector [1] Group 1: Zacks Rank and Earnings Outlook - Essent Group has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Berkshire Hathaway B has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank system emphasizes companies with positive earnings estimate revisions, suggesting that ESNT is likely experiencing a more favorable earnings outlook [3][7] Group 2: Valuation Metrics - Essent Group has a forward P/E ratio of 8.87, significantly lower than Berkshire Hathaway B's forward P/E of 24.26 [5] - The PEG ratio for Essent Group is 2.73, compared to Berkshire Hathaway B's PEG ratio of 3.47, indicating that ESNT may offer better value relative to its expected earnings growth [5] - Essent Group's P/B ratio is 1.13, while Berkshire Hathaway B's P/B ratio is 1.59, further supporting the argument for ESNT being undervalued [6] - These valuation metrics contribute to Essent Group's Value grade of B, in contrast to Berkshire Hathaway B's Value grade of D [6]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Essent Group Ltd.'s H1 2025 unaudited financials report **$7.22 billion** in assets, **$370.8 million** net income, and strong operating cash flow despite share repurchases [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) Total assets increased to **$7.22 billion**, liabilities rose to **$1.55 billion**, and stockholders' equity slightly increased to **$5.67 billion** as of June 30, 2025 | (In thousands) | June 30, 2025 (USD) | December 31, 2024 (USD) | | :--- | :--- | :--- | | **Total Assets** | **$7,220,561** | **$7,111,649** | | Total Investments | $6,326,360 | $6,180,621 | | Cash | $92,116 | $131,480 | | **Total Liabilities** | **$1,547,713** | **$1,507,991** | | Reserve for losses and LAE | $364,749 | $328,866 | | Net deferred tax liability | $427,202 | $392,428 | | **Total Stockholders' Equity** | **$5,672,848** | **$5,603,658** | [Condensed Consolidated Statements of Comprehensive Income](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) Q2 2025 net income decreased to **$195.3 million**, and H1 2025 net income was **$370.8 million**, primarily due to a higher provision for losses | (In thousands, except per share) | Three Months Ended June 30, 2025 (USD) | Three Months Ended June 30, 2024 (USD) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | **Total revenues** | $319,143 | $312,942 | $636,701 | $611,299 | | **Provision (benefit) for losses and LAE** | $17,055 | $(334) | $48,342 | $9,579 | | **Net income** | **$195,339** | **$203,609** | **$370,772** | **$385,328** | | **Diluted EPS** | **$1.93** | **$1.91** | **$3.62** | **$3.61** | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20(Unaudited)) Stockholders' equity increased to **$5.67 billion** in H1 2025, driven by **$370.8 million** net income, partially offset by dividends and share repurchases - Key drivers for the change in stockholders' equity in the first six months of 2025 include: - Net income: **+$370.8 million**[21](index=21&type=chunk) - Dividends declared: **-$63.2 million**[21](index=21&type=chunk) - Cancellation of treasury stock (share repurchases): **-$340.2 million**[21](index=21&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Operating cash flow was **$411.1 million** in H1 2025, but significant financing activities, including **$339.4 million** in share repurchases, led to a **$39.4 million** net cash decrease | (In thousands) | Six Months Ended June 30, 2025 (USD) | Six Months Ended June 30, 2024 (USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $411,104 | $405,626 | | Net cash used in investing activities | $(48,576) | $(255,272) | | Net cash used in financing activities | $(401,892) | $(94,739) | | **Net (decrease) increase in cash** | **$(39,364)** | **$55,615** | [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) The notes detail the single mortgage insurance segment, **$6.3 billion** investment portfolio, extensive reinsurance, and **$328.5 million** in H1 2025 share repurchases - The company operates in **one reportable business segment: Mortgage Insurance**, which offers private mortgage insurance and reinsurance for U.S. residential properties[34](index=34&type=chunk)[125](index=125&type=chunk) | Investment Type | Fair Value (June 30, 2025, USD thousands) | % of Total | | :--- | :--- | :--- | | Corporate debt securities | $1,908,167 | 32.0% | | U.S. agency mortgage-backed securities | $1,172,715 | 19.7% | | Asset-backed securities | $796,065 | 13.4% | | Municipal debt securities | $600,618 | 10.0% | | Money market funds | $580,964 | 9.7% | | Other | $909,726 | 15.2% | | **Total Investments Available for Sale** | **$5,966,537** | **100.0%** | - The company utilizes both **Quota Share (QSR)** and **Excess of Loss (XOL)** reinsurance agreements to manage risk[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - As of June 30, 2025, total risk in force (RIF) ceded under QSR agreements was **$9.5 billion**[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - The XOL coverage is provided through both traditional reinsurance panels and insurance-linked notes (Radnor Re Transactions)[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - In H1 2025, the company repurchased **5,755,400 common shares** at a cost of **$328.5 million** under its authorized share repurchase plan[82](index=82&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses stable mortgage insurance performance with **$12.5 billion** NIW, strong capital (9.2:1 risk-to-capital), and increased provision for losses due to aging defaults [Overview & Current Developments](index=34&type=section&id=Overview%20%26%20Current%20Developments) Essent's core mortgage insurance business saw stable **$12.5 billion** NIW for Q2 2025, with elevated interest rates impacting investment income and persistency - New insurance written (NIW) was approximately **$12.5 billion** for Q2 2025, consistent with the **$12.5 billion** from Q2 2024[140](index=140&type=chunk) - Elevated mortgage interest rates have **reduced home buying and refinance activity**, leading to **lower NIW and title insurance volumes**, but have **increased net investment income and the persistency** of the mortgage insurance in force[144](index=144&type=chunk) [Key Performance Indicators](index=40&type=section&id=Key%20Performance%20Indicators) Insurance in Force grew to **$246.8 billion**, with a stable net premium rate of **0.36%** and a strong risk-to-capital ratio of **9.2:1** | (In thousands) | End of Q2 2025 (USD) | End of Q2 2024 (USD) | | :--- | :--- | :--- | | Insurance in Force (IIF) | $246,797,619 | $240,669,165 | | Risk in Force (RIF) | $56,811,096 | $55,521,538 | - The average net premium rate for the U.S. mortgage insurance portfolio was stable at **0.36%** for both the three and six months ended June 30, 2025 and 2024[187](index=187&type=chunk) - The risk-to-capital ratio for Essent Guaranty was **9.2:1** as of June 30, 2025, indicating a **strong capital position** relative to its net risk in force of **$34.0 billion** and statutory capital of **$3.7 billion**[188](index=188&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Consolidated net income decreased in Q2 2025 to **$195.3 million** due to a higher provision for losses, partially offset by increased net investment income | (In thousands, except per share) | Q2 2025 (USD) | Q2 2024 (USD) | H1 2025 (USD) | H1 2024 (USD) | | :--- | :--- | :--- | :--- | :--- | | Net Premiums Earned | $248,809 | $251,891 | $494,657 | $497,481 | | Net Investment Income | $59,289 | $56,086 | $117,499 | $108,171 | | Provision (benefit) for losses | $17,055 | $(334) | $48,342 | $9,579 | | **Net Income** | **$195,339** | **$203,609** | **$370,772** | **$385,328** | - The provision for losses **increased significantly** in Q2 and H1 2025 compared to the same periods in 2024, primarily due to the **aging of defaults** remaining within the mortgage insurance portfolio, which **increased the average reserve per default**[196](index=196&type=chunk)[208](index=208&type=chunk) - The Mortgage Insurance segment's combined ratio **increased to 22.1%** in Q2 2025 **from 16.2%** in Q2 2024, driven by a **higher loss ratio**[200](index=200&type=chunk) [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with **$1.0 billion** in cash and investments at the holding company and Essent Guaranty's PMIERs Available Assets at **176%** of minimum required - As of June 30, 2025, the holding companies had **$1.0 billion in cash and investments**, and there was **$500 million of available capacity** under the Revolving Credit Facility[226](index=226&type=chunk) - Essent Guaranty's risk-to-capital ratio was **9.2:1** as of June 30, 2025, with statutory capital of **$3.7 billion**[247](index=247&type=chunk) - The company was **in compliance with Private Mortgage Insurer Eligibility Requirements (PMIERs)**, with Essent Guaranty's Available Assets at **$3.7 billion**, or **176%** of its Minimum Required Assets of **$2.1 billion**[251](index=251&type=chunk) [Financial Condition](index=55&type=section&id=Financial%20Condition) Stockholders' equity increased to **$5.7 billion**, and the **$6.3 billion** investment portfolio is primarily high-quality, investment-grade securities - Stockholders' equity **increased to $5.7 billion** at June 30, 2025, **from $5.6 billion** at December 31, 2024, driven by net income, partially offset by dividends and share repurchases[254](index=254&type=chunk) | Asset Class | Fair Value (June 30, 2025, USD thousands) | Percent | | :--- | :--- | :--- | | Corporate debt securities | $1,908,167 | 32.0% | | U.S. agency mortgage-backed securities | $1,172,715 | 19.7% | | Asset-backed securities | $796,065 | 13.4% | | **Total Investments Available for Sale** | **$5,966,537** | **100.0%** | [Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with an investment portfolio effective duration of **4.0 years** as of June 30, 2025 - The primary market risk is **interest rate risk** affecting the investment portfolio's value[265](index=265&type=chunk) - The effective duration of the investments available for sale was **4.0 years** at June 30, 2025, indicating that a **100 basis point change** in interest rates would change the portfolio's fair value by **approximately 4.0%**[267](index=267&type=chunk) [Controls and Procedures](index=57&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting - Management concluded that disclosure controls and procedures were **effective** as of June 30, 2025[268](index=268&type=chunk) - **No material changes** to internal control over financial reporting occurred during the quarter[269](index=269&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=58&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**[272](index=272&type=chunk) [Risk Factors](index=58&type=section&id=Item%201A.%20Risk%20Factors) There have been **no material changes in risk factors** from those disclosed in the Annual Report on Form 10-K for 2024 - There have been **no material changes in risk factors** from those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[273](index=273&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=58&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q2 2025, the company repurchased **2,970,779** common shares for **$171.3 million**, with **$318.8 million** remaining for future repurchases | Period | Total Shares Purchased | Average Price Paid (USD) | Total Cost (approx., USD) | | :--- | :--- | :--- | :--- | | Q2 2025 | 2,970,779 | $57.66 | $171.3 million | - As of June 30, 2025, **$318.8 million** remained available for share repurchases under the company's authorized plan[275](index=275&type=chunk) [Exhibits](index=58&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial statements in Inline XBRL format - The exhibits filed with this report include CEO and CFO certifications (Exhibits 31.1, 31.2, 32.1) and financial data in Inline XBRL format (Exhibit 101)[276](index=276&type=chunk)

Core Insights - Essent Group reported Q2 2025 GAAP EPS of $1.93, exceeding analyst expectations of $1.72, with GAAP revenue at $319.1 million, reflecting a 2.0% increase year-over-year [1][2] - The company experienced a 4.1% decline in net income to $195.3 million compared to Q2 2024, while new insurance written remained flat at $12.5 billion [1][2] Financial Performance - GAAP diluted EPS increased by 1.0% from $1.91 in Q2 2024 [2] - Revenue rose to $319.1 million from $312.9 million in Q2 2024 [2] - Net premiums earned decreased by 1.2% to $248.8 million [2] - New insurance written was unchanged at $12.5 billion [2] - Book value per share increased by 12.6% to $56.98 [5] Investment and Capital Management - Net investment income grew by 5.7% to $59.3 million, supported by a $6.3 billion investment portfolio [5] - The company repurchased 6.8 million shares for $387 million through July 2025, with $260 million remaining under the repurchase program [10] Risk Management and Credit Quality - The loss provision rose to $17.1 million, leading to a loss ratio of 6.6%, up from a negative 0.5% in Q2 2024 [7] - Loans in default increased to 17,255 from 13,954 a year ago [7] - The weighted average FICO credit score across the portfolio was 746, with new business scoring higher at 753 [6] Business Overview and Strategy - Essent Group provides private mortgage insurance, crucial for lenders and homebuyers with low down payments [3] - Key priorities include maintaining relationships with mortgage lenders, adhering to GSE rules, and managing credit risk [4] - The company emphasizes credit quality, capital efficiency, and shareholder returns [4] Title Insurance Segment - In the title insurance segment, Essent Group earned $14.9 million in GAAP net premiums, highlighting the cyclical nature of this business [9] Regulatory and Credit Ratings - Moody's upgraded Essent Guaranty's financial strength rating to A2 and the senior unsecured debt rating to Baa2, with stable outlooks [9] Dividend and Shareholder Returns - The quarterly dividend was maintained at $0.31 per share [10]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net income of $195 million, a decrease from $204 million a year ago [5] - Diluted earnings per share were $1.93, slightly up from $1.91 a year ago [6] - The return on average equity was 14% for the quarter [6] - Consolidated cash and investments totaled $6.4 billion with an annualized investment yield of 3.9% [10] Business Line Data and Key Metrics Changes - The U.S. Mortgage insurance in force was $247 billion, a 3% increase year-over-year [6] - The weighted average FICO score of the insurance in force was 746, with a weighted average original LTV of 93% [7] - The mortgage insurance net premium earned was $234 million, including $13.6 million from Essent Re [15] - Operating expenses for mortgage insurance were $36.3 million, with an expense ratio of 15.5% [17] Market Data and Key Metrics Changes - The twelve-month persistency rate was 86%, unchanged from the previous quarter [7] - The default rate on the U.S. Mortgage insurance portfolio was 2.12%, down from 2.19% [16] - The risk in force for Essent Re was $2.3 billion for GSE and other risk share [8] Company Strategy and Development Direction - The company aims to maintain a conservative balance sheet while pursuing strategic growth opportunities [11] - The focus remains on supporting affordable homeownership and navigating the current economic environment [21] - The company is actively returning capital to shareholders, with a common dividend of $0.31 approved for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook on housing demand driven by demographics [4] - The company believes that the current level of mortgage rates will support elevated persistency in the near term [7] - There is a focus on affordability challenges and the need for access to homeownership [8] Other Important Information - Moody's upgraded Essent Guaranty's insurance financial strength rating to A2 [11] - The company repurchased nearly 7 million shares for approximately $390 million year-to-date through July 31 [12] Q&A Session Summary Question: Expectations on home prices and pricing strategy - Management indicated that home price trends depend on local market conditions, with some areas expected to see price increases while others may weaken [23][24] Question: Insights on new defaults and credit outlook - New defaults were up 9% year-over-year, but management noted this aligns with normal seasoning patterns [31][32] Question: Buyback strategy and excess capital - The buyback pace is characterized as both opportunistic and valuation-sensitive, with a focus on shareholder returns [36][37] Question: Persistency trends by vintage - Management acknowledged that persistency varies by vintage, with natural aging contributing to trends observed [60][63] Question: Impact of AI and fintech on the business - Management does not see significant risk from borrowers canceling MI due to appraisals, viewing it as a minor concern [92][93]

Financial Performance - Essent Group Ltd reported net income of $195.3 million for 2Q25, compared to $175.4 million in 1Q25[5] - The annualized Return on Equity (ROE) increased to 13.8% in 2Q25 from 12.5% in 1Q25[5] - The combined ratio for the U S Mortgage Insurance portfolio improved to 22.1% in 2Q25 from 31.8% in 1Q25[5] - The book value per share has grown at an annualized rate of 18.2% since December 31, 2013, reaching $56.98 as of June 2025[9] Portfolio and Risk Management - The U S Mortgage Insurance In Force (IIF) reached $246.8 billion in 2Q25, up from $244.7 billion in 1Q25[5] - New Insurance Written (NIW) increased to $12.5 billion in 2Q25 from $9.9 billion in 1Q25[5] - The portfolio default rate decreased slightly to 2.12% in 2Q25 from 2.19% in 1Q25[5] - 97% of the Insurance In Force (IIF) is subject to reinsurance protection as of June 30, 2025[5,30,33] Capital and Liquidity - Shareholders' equity remained stable at $5.7 billion in both 1Q25 and 2Q25[5] - The company has ample liquidity, with $1.0 billion in cash and investments available for sale at the holding companies[32] - The PMIERs sufficiency ratio was 176% in 2Q25, compared to 172% in 1Q25[5]