Essent .(US:ESNT)2024-11-04 22:44Financial 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]