Essent .(US:ESNT)2023-11-06 16:00Financial Performance - Net premiums written for Q3 2023 reached $240,574 thousand, a 15% increase from $209,230 thousand in Q3 2022[19]. - Net investment income rose to $47,072 thousand in Q3 2023, compared to $32,594 thousand in Q3 2022, marking a 44% increase[19]. - Total revenues for the nine months ended September 30, 2023, were $812,482 thousand, up from $770,787 thousand in the same period of 2022, reflecting a growth of 5.4%[19]. - Net income for Q3 2023 was $177,959 thousand, slightly down from $178,051 thousand in Q3 2022, indicating a decrease of 0.5%[19]. - Basic earnings per share for Q3 2023 was $1.68, compared to $1.67 in Q3 2022, showing a marginal increase of 0.6%[19]. - Net income for the nine months ended September 30, 2023, was $521,019, a decrease of 23.8% compared to $683,987 in the same period of 2022[24]. Assets and Liabilities - Total assets increased to $6,094,200 thousand as of September 30, 2023, up from $5,723,797 thousand at the end of 2022, representing a growth of 6.5%[17]. - Total liabilities increased to $1,286,193 thousand as of September 30, 2023, from $1,261,488 thousand at the end of 2022, a rise of 2%[17]. - Total stockholders' equity reached $4,808,007 thousand as of September 30, 2023, up from $4,462,309 thousand at the end of 2022, reflecting a growth of 7.8%[21]. - Retained earnings grew to $3,933,070 thousand as of September 30, 2023, up from $3,493,107 thousand at the end of 2022, an increase of 12.6%[21]. Cash Flow and Investments - Net cash provided by operating activities increased to $547,548, up 31.5% from $416,456 in the prior year[24]. - The company reported a net cash used in investing activities of $396,342, compared to $253,010 in the same period of 2022, indicating increased investment activity[24]. - The company’s cash at the end of the period was $96,779, an increase from $79,467 at the end of the same period in 2022[24]. - Total investments available for sale as of September 30, 2023, amounted to $4,997,688, with an amortized cost of $5,502,929 and unrealized losses of $505,845[36]. Insurance and Reinsurance - Total RIF ceded under the quota share reinsurance agreements was $8.1 billion as of September 30, 2023[56]. - The total insurance in force for Radnor Re transactions as of September 30, 2023 is $147.08 billion, with a remaining risk in force of $39.23 billion[62]. - Essent Guaranty has a ceding commission of 20% and a profit commission of 58% under the QSR-2023 agreement[54]. - The maximum exposure to loss associated with Radnor Re 2019-1 Ltd. is $72,000, while the total VIE assets amount to $21.47 million[69]. Claims and Losses - The number of claims paid increased to 129 in Q3 2023 from 68 in Q3 2022, with claims paid amounting to $2.96 million in Q3 2023 compared to $1.26 million in Q3 2022[197]. - The provision for losses was $10.8 million and $11.9 million for the three and nine months ended September 30, 2023, respectively, reflecting an increase in defaults[190]. - The ending default inventory for the U.S. mortgage insurance portfolio was 13,391 as of September 30, 2023, compared to 12,435 in 2022, with new defaults increasing to 7,953 from 6,448[191]. Dividends and Share Repurchase - The company declared a total dividend of $0.75 per common share for 2023, compared to $0.86 per common share for 2022[83]. - As of September 30, 2023, the company had repurchased 1,233,638 common shares at a cost of $51.0 million under the share repurchase plan, leaving $199.0 million remaining under the authorized plan[84]. - Essent Guaranty paid dividends of $240 million for the nine months ended September 30, 2023, compared to $260 million for the same period in 2022[97]. Economic and Market Conditions - The Federal Reserve's rate increases have led to higher mortgage interest rates, potentially affecting home sale activity and increasing provisions for loss and loss adjustment expenses[139]. - The company expects incurred losses and claims to increase as 67% of its insurance in force (IIF) relates to business written since January 1, 2021, which is less than three years old[159]. - The company has noted that elevated levels of consumer price inflation and increased mortgage interest rates may impact home sale activity and delinquent borrowers[76].