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]

Core Viewpoint - Essent Group Ltd. is set to release its fourth-quarter financial results on February 14, 2025, with expectations of a slight increase in earnings per share and revenue compared to the previous year [1]. Financial Performance - Analysts predict quarterly earnings of $1.65 per share, an increase from $1.64 per share in the same quarter last year [1]. - Projected quarterly revenue is $313.88 million, up from $297.28 million a year earlier [1]. - The company reported worse-than-expected third-quarter EPS and revenues on November 1, 2024 [1]. Stock Performance - Essent Group shares increased by 1.4%, closing at $57.91 [2]. Analyst Ratings - Keefe, Bruyette & Woods analyst Bose George maintains an Outperform rating, lowering the price target from $75 to $72 [3]. - JP Morgan analyst Richard Shane holds a Neutral rating, reducing the price target from $67 to $60 [3]. - Goldman Sachs analyst Ryan Nash also maintains a Neutral rating, cutting the price target from $68 to $60 [3]. - RBC Capital analyst Scott Heleniak keeps an Outperform rating, decreasing the price target from $73 to $67 [3]. - BTIG analyst Mark Palmer maintains a Buy rating, raising the price target from $61 to $64 [3].

Financial Performance - Net premiums written for Q3 2024 were $242.965 million, a slight increase from $240.574 million in Q3 2023, representing a growth of 1.8%[12] - Net premiums earned for the nine months ended September 30, 2024, reached $746.417 million, compared to $671.292 million for the same period in 2023, indicating a year-over-year increase of 11.2%[12] - Total revenues for Q3 2024 were $316.578 million, up from $296.108 million in Q3 2023, marking a rise of 6.5%[12] - Net income for Q3 2024 was $176.175 million, slightly down from $177.959 million in Q3 2023, a decrease of 1.0%[12] - Basic earnings per share for Q3 2024 were $1.67, compared to $1.68 in Q3 2023, showing a marginal decline of 0.6%[12] - Comprehensive income for the nine months ended September 30, 2024, was $651.720 million, up from $467.426 million in the same period of 2023, indicating a significant increase of 39.2%[12] - Net income for the nine months ended September 30, 2024, was $561,503, compared to $521,019 for the same period in 2023, representing an increase of approximately 7.7%[16] Investment Income - Net investment income increased to $57.340 million in Q3 2024 from $47.072 million in Q3 2023, reflecting a growth of 21.5%[12] - Total net investment income for the nine months ended September 30, 2024, was $165.5 million, an increase of 22.1% compared to $135.6 million for the same period in 2023[41] Assets and Liabilities - Total liabilities increased to $1.485 billion in 2024 from $1.324 billion in 2023, representing a growth of 12.1%[11] - Total assets rose to $7.127 billion in 2024, compared to $6.427 billion in 2023, reflecting an increase of 10.9%[11] - Total stockholders' equity increased to $5,640,985 as of September 30, 2024, from $4,808,007 at the end of September 2023, reflecting a growth of about 17.3%[13] Cash Flow and Dividends - Net cash provided by operating activities for the nine months ended September 30, 2024, was $634,827, up from $547,548 in the prior year, indicating a growth of about 15.9%[16] - The company declared dividends totaling $89,982 for the nine months ended September 30, 2024, compared to $81,056 for the same period in 2023, marking an increase of approximately 10.5%[13] Reinsurance and Risk Management - The total risk in force (RIF) ceded under quota share reinsurance agreements was $8.6 billion as of September 30, 2024[45] - The total remaining reinsurance in force for XOL transactions is $146.6 billion, with remaining risk in force at $40.1 billion[50] - The company has entered into reinsurance agreements that provide excess of loss reinsurance coverage for new defaults on mortgage insurance policies, enhancing risk management[205] Regulatory and Compliance - The effective tax rate reconciliation and income taxes paid will be required to be disclosed starting from annual periods after December 15, 2024, as per ASU 2023-09[27] - The company is currently evaluating the impact of ASU 2023-07 on its consolidated financial statements, which will require enhanced segment reporting disclosures effective for fiscal years beginning after December 15, 2023[26] - Compliance with PMIERs 2.0 was confirmed as of September 30, 2024, ensuring the company meets the financial strength requirements for mortgage insurance[105] Employee and Operational Metrics - The company has a highly experienced team with 602 employees as of September 30, 2024, supporting its operations in the housing finance industry[123] - Compensation and benefits accounted for 59% of other underwriting and operating expenses for the three months ended September 30, 2024, compared to 57% in the same period of 2023[149] Market Conditions and Future Outlook - The Federal Reserve reduced the target federal funds rate by 50 basis points in September 2024, which may impact the company's estimates of losses[55] - The company expects incurred losses and claims to increase as a greater amount of its insurance portfolio reaches the anticipated period of highest claim frequency[146] - Approximately 12.5% of Essent's total insurance in force is in counties affected by hurricanes Helene and Milton, with potential for increased defaults beginning in Q4 2024[126] Acquisitions and Growth - The acquisition of Agents National Title and Boston National Title was completed for $92.6 million, contributing $59.4 million in revenues and incurring pre-tax net losses of $11.8 million for the nine months ended September 30, 2024[111] - Essent Group's new insurance written (NIW) for Q3 2024 was approximately $12.5 billion, consistent with Q3 2023, while NIW for the nine months ended September 30, 2024, was $33.3 billion, down from $38.9 billion in the same period of 2023[121]

Financial Data and Key Metrics Changes - For Q3 2024, the company reported net income of $176 million, a slight decrease from $178 million a year ago, with diluted earnings per share at $1.65 compared to $1.66 last year [7][12] - The annualized return on average equity was 13% for the third quarter [7] - Cash and investments as of September 30th were $6.4 billion, with a new money yield of nearly 5% [10] - The annualized yield for investments available for sale increased to 3.8%, up from 3.6% a year ago [10] Business Line Data and Key Metrics Changes - The US mortgage insurance in force was $243 billion, reflecting a 2% increase from a year ago [7][12] - Net premiums earned for the third quarter were $249 million, including $17.1 million from Essent RE and $17.7 million from title operations [13] - The base average premium rate for the US mortgage insurance portfolio remained at 41 basis points, while the net average premium rate decreased by 1 basis point to 35 basis points [13] Market Data and Key Metrics Changes - The default rate on the US mortgage insurance portfolio was 1.95%, an increase of 24 basis points from the previous quarter [15] - The weighted average FICO score of the insurance in force was 746, with a weighted average original LTV of 93% [7] Company Strategy and Development Direction - The company remains committed to a programmatic reinsurance strategy to diversify capital resources and manage credit risk [9] - The long-term outlook for housing is positive, supported by supply-demand imbalances and favorable demographic trends [6] - The company aims to maintain a conservative balance sheet while optimizing shareholder returns and preserving options for strategic growth opportunities [10][21] Management's Comments on Operating Environment and Future Outlook - Management noted that while higher mortgage rates have reduced overall mortgage originations, the company is less reliant on transaction activity due to its portfolio business model [5] - The company anticipates some noise in the fourth quarter due to the impact of recent hurricanes but expects the ultimate P&L impact to be muted due to policy exclusions for claims related to property damage [8][40] Other Important Information - The company paid a dividend of $58 million to its US holding company during the quarter and repurchased 170,000 shares for $9.6 million [20] - The PMIER sufficiency ratio was strong at 186%, with $1.7 billion in excess available assets [18] Q&A Session Summary Question: Was there any quantifiable impact on the default rate or new notices this quarter from hurricanes? - Management indicated there was a minimal impact, primarily from Hurricane Beryl, and expects to see more noise in the fourth quarter [23] Question: Are we starting to see the effects of vintage seasoning from larger post-COVID vintages materialize more? - Management confirmed that the portfolio is seasoning, with the average age now at 32 months, and noted the influence of forbearance on defaults [24] Question: Did you make any changes in the claim rate assumptions in the quarter? - No real changes were made in the claim rate assumptions for the quarter [26] Question: Are the loan sizes getting bigger, impacting the provision for new notices? - Yes, the average loan size for the insurance in force is now around $290,000, up from $226,000 historically [30] Question: Will you provision for the impact of storms in Q4? - Management has not yet decided on provisioning for the storms and will assess the situation as defaults come in [31] Question: Can you help us think about the timeline around the forbearance process and its impact? - Management explained that the COVID forbearance process ended last November, and they expect less friction in the process moving forward, leading to more normalization in defaults and cures [44]

ESSENT GROUP LTD. | NYSE: ESNT © 2024 Essent Group Ltd. All rights reserved. | essentgroup.com | 1 ESSENT GROUP LTD. INVESTOR PRESENTATION 3Q24 NYSE: ESNT November 1, 2024 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," "be ...

分组1 - Essent Group reported quarterly earnings of $1.65 per share, missing the Zacks Consensus Estimate of $1.70 per share, representing an earnings surprise of -2.94% [1] - The company posted revenues of $316.58 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.09%, compared to year-ago revenues of $296.11 million [2] - Over the last four quarters, Essent Group has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] 分组2 - The stock has added about 13.8% since the beginning of the year, underperforming the S&P 500's gain of 19.6% [3] - The current consensus EPS estimate for the coming quarter is $1.74 on revenues of $317.51 million, and for the current fiscal year, it is $7.02 on revenues of $1.24 billion [7] - The Zacks Industry Rank for Financial - Mortgage & Related Services is currently in the top 7% of over 250 Zacks industries, indicating strong industry performance [8]