ESNT 8-K

Essent Group Ltd. (ESNT)

8-K 2021-11-05 For: 2021-11-05

View Original

Added on April 04, 2026

Search and read filings like this one from Claude or ChatGPT with the SEC filings MCP server →


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Essent Group Ltd. and Subsidiaries
Financial Results and Supplemental Information (Unaudited)
Quarter Ended September 30, 2021


Exhibit A						Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Exhibit B						Condensed Consolidated Balance Sheets (Unaudited)
Exhibit C						Historical Quarterly Data
Exhibit D						New Insurance Written
Exhibit E						Insurance in Force and Risk in Force
Exhibit F						Other Risk in Force
Exhibit G						Portfolio Vintage Data
Exhibit H						Reinsurance Vintage Data

Exhibit I						Portfolio Geographic Data
Exhibit J						Rollforward of Defaults and Reserve for Losses and LAE
Exhibit K						Detail of Reserves by Default Delinquency
Exhibit L						Investments Available for Sale
Exhibit M						Insurance Company Capital


										Exhibit A

Essent Group Ltd. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2021			2020			2021			2020
Revenues:
Direct premiums written	$	229,228		$	243,390		$	693,434		$	677,414
Ceded premiums	(26,880)			(21,167)			(84,438)			(57,544)
Net premiums written	202,348			222,223			608,996			619,870
Decrease in unearned premiums	16,370			35			46,226			20,355
Net premiums earned	218,718			222,258			655,222			640,225
Net investment income	21,573			18,639			65,104			59,138
Realized investment gains, net	221			267			609			2,133
Income (loss) from other invested assets	40,741			(445)			41,389			(217)
Other income	2,283			2,319			9,270			6,676
Total revenues	283,536			243,038			771,594			707,955

Losses and expenses:
(Benefit) provision for losses and LAE	(7,483)			55,280			34,490			239,220
Other underwriting and operating expenses	42,272			37,100			125,625			117,866
Interest expense	2,063			2,227			6,187			6,925
Total losses and expenses	36,852			94,607			166,302			364,011

Income before income taxes	246,684			148,431			605,292			343,944
Income tax expense	41,331			23,895			104,496			54,505
Net income	$	205,353		$	124,536		$	500,796		$	289,439


Earnings per share:
Basic	$	1.85		$	1.11		$	4.48		$	2.78
Diluted	1.84			1.11			4.47			2.77

Weighted average shares outstanding:
Basic	111,001			111,908			111,708			104,147
Diluted	111,387			112,134			112,070			104,383

Net income	$	205,353		$	124,536		$	500,796		$	289,439

Other comprehensive income (loss):
Change in unrealized (depreciation) appreciation of investments	(36,917)			12,036			(59,760)			76,247
Total other comprehensive (loss) income	(36,917)			12,036			(59,760)			76,247
Comprehensive income	$	168,436		$	136,572		$	441,036		$	365,686


Loss ratio	(3.4		%)	24.9		%	5.3		%	37.4		%
Expense ratio	19.3			16.7			19.2			18.4
Combined ratio	15.9		%	41.6		%	24.4		%	55.8		%


				Exhibit B

Essent Group Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)


	September 30,			December 31,
(In thousands, except per share amounts)	2021			2020
Assets
Investments
Fixed maturities available for sale, at fair value	$	4,560,235		$	3,838,513
Short-term investments available for sale, at fair value	309,782			726,860
Total investments available for sale	4,870,017			4,565,373
Other invested assets	161,250			88,904
Total investments	5,031,267			4,654,277
Cash	65,825			102,830
Accrued investment income	24,642			19,948
Accounts receivable	47,760			50,140
Deferred policy acquisition costs	13,307			17,005
Property and equipment	12,485			15,095
Prepaid federal income tax	348,286			302,636
Other assets	45,944			40,793

Total assets	$	5,589,516		$	5,202,724

Liabilities and Stockholders' Equity
Liabilities
Reserve for losses and LAE	$	412,956		$	374,941
Unearned premium reserve	204,210			250,436
Net deferred tax liability	356,835			305,109
Credit facility borrowings, net of deferred costs	322,614			321,720
Other accrued liabilities	124,917			87,885
Total liabilities	1,421,532			1,340,091

Commitments and contingencies

Stockholders' Equity
Common shares, $0.015 par value:
Authorized - 233,333; issued and outstanding - 110,915 shares in 2021 and 112,423 shares in 2020	1,664			1,686
Additional paid-in capital	1,493,005			1,571,163
Accumulated other comprehensive income	78,514			138,274
Retained earnings	2,594,801			2,151,510
Total stockholders' equity	4,167,984			3,862,633

Total liabilities and stockholders' equity	$	5,589,516		$	5,202,724

Return on average equity (1)	16.6		%	12.1		%

(1) The 2021 return on average equity is calculated by dividing annualized year-to-date 2021 net income by average equity. The 2020 return on average equity is calculated by dividing full year 2020 net income by average equity.


													Exhibit C
Essent Group Ltd. and Subsidiaries
Supplemental Information
Historical Quarterly Data

	2021									2020
Selected Income Statement Data	September 30			June 30			March 31			December 31			September 30
(In thousands, except per share amounts)
Revenues:


Net premiums earned:
U.S. Mortgage Insurance Portfolio	$	207,127		$	204,149		$	207,840		$	208,715		$	211,126
GSE and other risk share	11,591			13,288			11,227			13,624			11,132
Net premiums earned	218,718			217,437			219,067			222,339			222,258
Income (loss) from other invested assets (1)	40,741			122			526			2			(445)
Other revenues (2)	24,077			25,702			25,204			24,858			21,225
Total revenues	283,536			243,261			244,797			247,199			243,038

Losses and expenses:
(Benefit) provision for losses and LAE	(7,483)			9,651			32,322			62,073			55,280
Other underwriting and operating expenses	42,272			41,114			42,239			36,825			37,100
Interest expense	2,063			2,073			2,051			2,149			2,227
Total losses and expenses	36,852			52,838			76,612			101,047			94,607

Income before income taxes	246,684			190,423			168,185			146,152			148,431
Income tax expense (3)	41,331			30,628			32,537			22,550			23,895
Net income	$	205,353		$	159,795		$	135,648		$	123,602		$	124,536

Earnings per share:
Basic	$	1.85		$	1.43		$	1.21		$	1.10		$	1.11
Diluted	1.84			1.42			1.21			1.10			1.11

Weighted average shares outstanding:
Basic	111,001			112,118			112,016			111,908			111,908
Diluted	111,387			112,454			112,378			112,310			112,134

Book value per share	$	37.58		$	36.32		$	34.75		$	34.36		$	33.33
Return on average equity (annualized)	19.9		%	16.0		%	13.9		%	13.0		%	13.5		%

Other Data:
Loss ratio (4)	(3.4		%)	4.4		%	14.8		%	27.9		%	24.9		%
Expense ratio (5)	19.3			18.9			19.3			16.6			16.7
Combined ratio	15.9		%	23.3		%	34.0		%	44.5		%	41.6		%

Credit Facility
Borrowings outstanding	$	325,000		$	325,000		$	325,000		$	325,000		$	425,000
Undrawn committed capacity	$	300,000		$	300,000		$	300,000		$	300,000		$	75,000
Weighted average interest rate (end of period)	2.13		%	2.13		%	2.13		%	2.19		%	1.90		%
Debt-to-capital	7.23		%	7.37		%	7.65		%	7.76		%	10.19		%

(1) Income from other invested assets for the three months ended September 30, 2021 includes $39.5 million of net unrealized gains, which includes $21.1 million of net unrealized gains that were accumulated in other comprehensive income at June 30, 2021 and prior periods.
(2) Certain of our third-party reinsurance agreements contain an embedded derivative as the premium ceded under those agreements will vary based on changes in interest rates. For each of the three month periods noted, Other revenues include net favorable (unfavorable) changes in the fair value of these embedded derivatives as follows: September 30, 2021: ($1,493); June 30, 2021: $950; March 31, 2021: ($606); December 31, 2020: ($209); September 30, 2020: ($677).
(3) Income tax expense for the quarter ended September 30, 2021 includes $8,271 of discrete tax expense associated with realized and unrealized gains and losses. Income tax expense for the quarter ended March 31, 2021 includes $5,718 of discrete tax expense associated with an increase in the estimate of our beginning of the year deferred state income tax liability.
(4) Loss ratio is calculated by dividing the provision for losses and LAE by net premiums earned.
(5) Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.


										Exhibit C, continued
Essent Group Ltd. and Subsidiaries
Supplemental Information
Historical Quarterly Data


	2021						2020
Other Data, continued:	September 30			June 30			March 31			December 31			September 30
($ in thousands)

U.S. Mortgage Insurance Portfolio
Flow:
New insurance written	$	23,579,884		$	25,004,854		$	19,254,014		$	29,566,820		$	36,664,583
New risk written	6,273,735			6,445,864			4,616,450			7,051,173			8,938,544

Bulk:
New insurance written	$	—		$	—		$	—		$	—		$	—
New risk written	—			—			—			—			—

Total:


New insurance written	$	23,579,884		$	25,004,854		$	19,254,014		$	29,566,820		$	36,664,583
New risk written	$	6,273,735		$	6,445,864		$	4,616,450		$	7,051,173		$	8,938,544

Average insurance in force	$	206,732,478		$	199,739,297		$	197,749,668		$	195,670,925		$	183,135,315
Insurance in force (end of period)	$	208,216,549		$	203,559,859		$	197,091,191		$	198,882,352		$	190,811,292
Gross risk in force (end of period) (6)	$	52,457,020		$	50,835,835		$	48,951,602		$	49,565,150		$	47,838,668
Risk in force (end of period)	$	45,074,159		$	42,906,519		$	41,135,978		$	41,339,262		$	41,219,216
Policies in force	798,877			794,743			785,382			799,893			781,836
Weighted average coverage (7)	25.2		%	25.0		%	24.8		%	24.9		%	25.1		%
Annual persistency	62.2		%	58.3		%	56.1		%	60.1		%	64.2		%

Loans in default (count)	19,721			23,504			29,080			31,469			35,464
Percentage of loans in default	2.47		%	2.96		%	3.70		%	3.93		%	4.54		%

U.S. Mortgage Insurance Portfolio premium rate:
Base average premium rate (8)	0.42		%	0.43		%	0.44		%	0.44		%	0.45		%
Single premium cancellations (9)	0.03		%	0.03		%	0.04		%	0.05		%	0.06		%
Gross average premium rate	0.45		%	0.46		%	0.48		%	0.49		%	0.51		%
Ceded premiums	(0.05		%)	(0.05		%)	(0.06		%)	(0.06		%)	(0.05		%)
Net average premium rate	0.40		%	0.41		%	0.42		%	0.43		%	0.46		%


(6) Gross risk in force includes risk ceded under third-party reinsurance.
(7) Weighted average coverage is calculated by dividing end of period gross risk in force by end of period insurance in force.
(8) Base average premium rate is calculated by dividing annualized base premiums earned by average insurance in force for the period.
(9) Single premium cancellations is calculated by dividing annualized premiums on the cancellation of non-refundable single premium policies by average insurance in force for the period.


Quota Share Reinsurance
										Losses Ceded				Ceding Commission				Earned Premiums Ceded
Year		Remaining Insurance in Force		Remaining Risk in Force		Remaining Ceded Insurance in Force		Remaining Ceded Risk in Force		Quarter-to-Date		Year-to-Date		Quarter-to-Date		Year-to-Date		Quarter-to-Date		Year-to-Date		Reduction in PMIERs Minimum Required Assets (7)
2019 & 2020	(6)	$	93,411,304	$	23,055,319	$	20,512,448	$	5,014,528	$	(307)	$	7,949	$	4,547	$	14,304	$	8,788	$	36,558	$	335,553


(1) Reinsurance provided by unaffiliated special purpose insurers through the issuance of mortgage insurance-linked notes ("ILNs").
(2) Reinsurance provided by panels of reinsurers.
(3) Reinsurance coverage on new insurance written from January 1, 2019 through August 31, 2019.
(4) Reinsurance coverage on new insurance written from September 1, 2019 through July 31, 2020.
(5) Reinsurance coverage on new insurance written from August 1, 2020 through March 31, 2021.
(6) Reinsurance coverage on 40% of eligible single premium policies and 20% of all other eligible policies written from September 1, 2019 through December 31, 2020.
(7) Represents the reduction in Essent Guaranty, Inc.'s Minimum Required Assets based on our interpretation of the PMIERs.


Holding company net cash and investments available for sale: (2)
($ in thousands)
As of September 30, 2021	$	513,000
As of December 31, 2020	$	574,901

(2) Includes net cash and investments available for sale at Essent Group Ltd. and Essent US Holdings, Inc.


(d)			Exhibits


																			Exhibit D

Essent Group Ltd. and Subsidiaries
Supplemental Information
New Insurance Written: Flow


NIW by Credit Score
	Three Months Ended						Nine Months Ended
	September 30, 2021					September 30, 2020						September 30, 2021						September 30, 2020
($ in thousands)
>=760	$	9,257,407		39.3	%		$	16,887,062		46.1	%		$	27,778,887		40.9	%		$	34,706,705		44.3	%
740-759	3,892,226			16.5			6,557,520			17.9			10,858,015			16.0			14,316,011			18.3
720-739	3,656,963			15.5			5,238,462			14.3			10,316,977			15.2			11,609,703			14.8
700-719	3,345,696			14.2			4,187,254			11.4			9,328,577			13.8			9,024,266			11.5
680-699	2,361,529			10.0			2,131,994			5.8			5,855,301			8.6			5,127,817			6.5
<=679	1,066,063			4.5			1,662,291			4.5			3,700,995			5.5			3,592,592			4.6
Total	$	23,579,884		100.0	%		$	36,664,583		100.0	%		$	67,838,752		100.0	%		$	78,377,094		100.0	%

Weighted average credit score	744						751						745						749



NIW by LTV
	Three Months Ended						Nine Months Ended
	September 30, 2021					September 30, 2020						September 30, 2021						September 30, 2020
($ in thousands)
85.00% and below	$	2,336,949		9.9	%		$	6,815,158		18.6	%		$	9,660,937		14.2	%		$	13,807,437		17.6	%
85.01% to 90.00%	5,860,301			24.9			11,324,610			30.9			19,192,675			28.3			24,391,509			31.1
90.01% to 95.00%	11,574,090			49.1			14,781,544			40.3			30,090,325			44.4			31,382,298			40.1
95.01% and above	3,808,544			16.1			3,743,271			10.2			8,894,815			13.1			8,795,850			11.2
Total	$	23,579,884		100.0	%		$	36,664,583		100.0	%		$	67,838,752		100.0	%		$	78,377,094		100.0	%

Weighted average LTV	93		%				91		%				92		%				91		%



NIW by Product
	Three Months Ended						Nine Months Ended


											Exhibit E

Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance in Force and Risk in Force


Portfolio by Credit Score
IIF by FICO score	September 30, 2021				June 30, 2021				September 30, 2020
($ in thousands)
>=760	$	85,833,588	41.2	%	$	84,110,514	41.3	%	$	78,923,142	41.4	%
740-759	35,234,863		16.9		34,636,115		17.0		33,229,396		17.4
720-739	31,291,415		15.1		30,471,320		15.0		28,496,228		15.0
700-719	26,136,910		12.6		25,177,026		12.4		22,748,385		11.9
680-699	16,758,439		8.0		15,962,389		7.8		15,302,772		8.0
<=679	12,961,334		6.2		13,202,495		6.5		12,111,369		6.3
Total	$	208,216,549	100.0	%	$	203,559,859	100.0	%	$	190,811,292	100.0	%

Weighted average credit score	745				745				745

Gross RIF by FICO score	September 30, 2021				June 30, 2021				September 30, 2020
($ in thousands)
>=760	$	21,414,607	40.8	%	$	20,807,006	40.9	%	$	19,606,502	41.0	%
740-759	8,958,297		17.1		8,729,038		17.2		8,395,009		17.5
720-739	8,020,171		15.3		7,745,794		15.2		7,251,499		15.2
700-719	6,652,117		12.7		6,342,378		12.5		5,738,412		12.0
680-699	4,250,044		8.1		3,998,410		7.9		3,853,734		8.0
<=679	3,161,784		6.0		3,213,209		6.3		2,993,512		6.3
Total	$	52,457,020	100.0	%	$	50,835,835	100.0	%	$	47,838,668	100.0	%

Portfolio by LTV
IIF by LTV	September 30, 2021				June 30, 2021				September 30, 2020
($ in thousands)
85.00% and below	$	28,452,535	13.7	%	$	29,045,720	14.3	%	$	23,979,065	12.6	%
85.01% to 90.00%	60,257,704		28.9		60,027,287		29.5		55,453,633		29.1
90.01% to 95.00%	90,957,363		43.7		87,382,625		42.9		84,573,433		44.3
95.01% and above	28,548,947		13.7		27,104,227		13.3		26,805,161		14.0
Total	$	208,216,549	100.0	%	$	203,559,859	100.0	%	$	190,811,292	100.0	%


																							Exhibit G

Essent Group Ltd. and Subsidiaries
Supplemental Information
Portfolio Vintage Data
September 30, 2021


								Insurance in Force
Year	Original Insurance Written ($ in thousands)		Remaining Insurance in Force ($ in thousands)		% Remaining of Original Insurance		Number of Policies in Force	Weighted Average Coupon		% Purchase		>90% LTV		>95% LTV		FICO < 700		FICO >= 760		Incurred Loss Ratio (Inception to Date) (1)		Number of Loans in Default	Percentage of Loans in Default

2010 - 2014	$	60,668,851	$	3,679,908	6.1	%	22,495	4.31	%	81.4	%	70.8	%	4.9	%	15.0	%	42.5	%	3.3	%	1,124	5.00	%
2015	26,193,656		3,613,111		13.8		20,414	4.16		86.5		65.4		3.4		17.6		40.0		4.5		915	4.48
2016	34,949,319		7,191,077		20.6		38,011	3.86		87.8		64.7		8.7		15.2		43.9		5.5		1,665	4.38
2017	43,858,322		9,881,021		22.5		53,501	4.26		90.2		64.7		17.9		19.6		38.0		8.9		3,138	5.87
2018	47,508,525		11,062,279		23.3		57,104	4.77		93.6		66.6		23.2		20.7		33.8		14.5		3,863	6.76
2019	63,569,183		23,609,156		37.1		103,202	4.21		85.4		64.9		22.0		18.8		35.7		24.0		5,007	4.85
2020	107,944,065		83,556,296		77.4		297,734	3.19		62.2		51.3		11.2		11.4		44.4		16.3		3,563	1.20
2021 (through September 30)	67,838,752		65,623,701		96.7		206,416	3.05		80.0		57.9		13.4		14.1		40.6		7.6		446	0.22
Total	$	452,530,673	$	208,216,549	46.0		798,877	3.46		75.1		57.4		13.7		14.3		41.2		9.4		19,721	2.47

(1) Incurred loss ratio is calculated by dividing the sum of case reserves and cumulative amount paid for claims by cumulative net premiums earned.