Essent .(US:ESNT)2025-11-07 21:50Financial Performance - Total revenues for the nine months ended September 30, 2025, reached $948,531 thousand, an increase of 2.2% compared to $927,877 thousand in 2024[19]. - Net income for the three months ended September 30, 2025, was $164,215 thousand, down 6.8% from $176,175 thousand in the same period of 2024[19]. - Net income for the nine months ended September 30, 2025, was $534,987, a decrease of 4.5% compared to $561,503 in 2024[24]. - Basic earnings per share for the three months ended September 30, 2025, increased to $1.69, compared to $1.67 in 2024, reflecting a growth of 1.2%[19]. - The total dividends declared and paid per common share for 2025 amounted to $0.93, compared to $1.12 for 2024, reflecting a decrease of approximately 16.9%[84]. Assets and Equity - Total assets increased to $7,351,999 thousand as of September 30, 2025, compared to $7,111,649 thousand at December 31, 2024, representing a growth of 3.4%[17]. - Total stockholders' equity as of September 30, 2025, was $5,738,974 thousand, up from $5,603,658 thousand at December 31, 2024, marking an increase of 2.4%[17]. - The total assets at fair value as of September 30, 2025, amounted to $6,089,865 thousand, compared to $5,876,721 thousand as of December 31, 2024, showing a growth of about 3.6%[111]. Investment Performance - Net investment income rose to $59,795 thousand for the three months ended September 30, 2025, up 4.3% from $57,340 thousand in 2024[19]. - The company reported realized investment losses of $735, down from $2,236 in the previous year, indicating improved investment performance[24]. - The net unrealized gains on investments for the nine months ended September 30, 2025, were $138,559 thousand, compared to $90,217 thousand in 2024, indicating an increase of approximately 53.5%[102]. Premiums and Insurance - Net premiums written for the three months ended September 30, 2025, were $241,828 thousand, a slight decrease of 0.5% from $242,965 thousand in the same period of 2024[19]. - Direct net premiums written for the three months ended September 30, 2025, were $280.8 million, slightly up from $277.8 million in 2024, while net premiums earned were $246.3 million, down from $248.9 million in 2024[53]. - The loss ratio for the Mortgage Insurance segment for the three months ended September 30, 2025, was 19.1%, compared to 12.9% for the same period in 2024, indicating a deterioration in loss performance[133]. Reserves and Claims - The provision for losses and LAE increased to $44,922 thousand for the three months ended September 30, 2025, compared to $30,666 thousand in 2024, indicating a rise of 46.5%[19]. - As of September 30, 2025, the net reserve for losses and loss adjustment expenses (LAE) increased to $349.1 million from $257.4 million as of September 30, 2024, reflecting a year-over-year increase of approximately 35.5%[68]. - The company paid $35.4 million for incurred claims related to prior years during the nine months ended September 30, 2025, compared to $17.1 million in the same period of 2024, indicating a significant increase of approximately 106.7%[68]. Shareholder Activities - The company repurchased 7,816,739 common shares at a cost of $450.6 million from January 1, 2025, through September 30, 2025, as part of its share repurchase plan[85]. - The company declared dividends totaling $30,523 thousand for the three months ended September 30, 2025, compared to $29,989 thousand in 2024, reflecting a slight increase of 1.8%[21]. - Essent Re paid dividends of $340 million to its parent for the nine months ended September 30, 2025, compared to $212.5 million for the same period in 2024[96]. Operational Efficiency - The combined ratio for the Mortgage Insurance segment improved to 33.9% for the three months ended September 30, 2025, from 29.6% in the same period of 2024, reflecting better overall operational efficiency[133]. - Operating expenses after allocations for the nine months ended September 30, 2025, totaled $193.387 million, consistent with the prior year’s $199.923 million[136]. - The expense ratio for the nine months ended September 30, 2025, was 16.3%, slightly improved from 17.2% in the same period of 2024[136]. Market Conditions - The Federal Reserve's actions have led to a reduction in the target federal funds rate by 125 basis points in 2024 and 2025, impacting mortgage interest rates and overall market activity[145]. - The company expects incurred losses and claims to increase as more of the insurance portfolio reaches its peak claim frequency period, which is typically in the third to sixth years after loan origination[167]. - The company anticipates that the ultimate number of hurricane-related defaults resulting in claims will be less than non-hurricane-related defaults, impacting future reserve estimates[71].