Not Applicable | ||||||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
March 31, | December 31, | |||||||||||||
(In thousands, except per share amounts) | 2024 | 2023 | ||||||||||||
Assets | ||||||||||||||
Investments | ||||||||||||||
Fixed maturities available for sale, at fair value (amortized cost: 2024 — $ 2023 — $ | $ | $ | ||||||||||||
Short-term investments available for sale, at fair value (amortized cost: 2024 — $ | ||||||||||||||
Total investments available for sale | ||||||||||||||
Other invested assets | ||||||||||||||
Total investments | ||||||||||||||
Cash | ||||||||||||||
Accrued investment income | ||||||||||||||
Accounts receivable | ||||||||||||||
Deferred policy acquisition costs | ||||||||||||||
Property and equipment (at cost, less accumulated depreciation of $ $ | ||||||||||||||
Prepaid federal income tax | ||||||||||||||
Goodwill and intangible assets, net | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||
Liabilities | ||||||||||||||
Reserve for losses and LAE | $ | $ | ||||||||||||
Unearned premium reserve | ||||||||||||||
Net deferred tax liability | ||||||||||||||
Credit facility borrowings (at carrying value, less unamortized deferred costs of $ | ||||||||||||||
Other accrued liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (see Note 7) | ||||||||||||||
Stockholders’ Equity | ||||||||||||||
Common shares, $ | ||||||||||||||
Authorized - shares in 2023 | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Retained earnings | ||||||||||||||
Total stockholders’ equity | ||||||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands, except per share amounts) | 2024 | 2023 | ||||||||||||
Revenues: | ||||||||||||||
Net premiums written | $ | $ | ||||||||||||
Decrease in unearned premiums | ||||||||||||||
Net premiums earned | ||||||||||||||
Net investment income | ||||||||||||||
Realized investment losses, net | ( | ( | ||||||||||||
(Loss) income from other invested assets | ( | ( | ||||||||||||
Other income | ||||||||||||||
Total revenues | ||||||||||||||
Losses and expenses: | ||||||||||||||
Provision (benefit) for losses and LAE | ( | |||||||||||||
Other underwriting and operating expenses | ||||||||||||||
Premiums retained by agents | ||||||||||||||
Interest expense | ||||||||||||||
Total losses and expenses | ||||||||||||||
Income before income taxes | ||||||||||||||
Income tax expense | ||||||||||||||
Net income | $ | $ | ||||||||||||
Earnings per share: | ||||||||||||||
Basic | $ | $ | ||||||||||||
Diluted | ||||||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted | ||||||||||||||
Net income | $ | $ | ||||||||||||
Other comprehensive income loss: | ||||||||||||||
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of ($ | ( | |||||||||||||
Total other comprehensive income loss | ( | |||||||||||||
Comprehensive income | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Common Shares | ||||||||||||||
Balance, beginning of period | $ | $ | ||||||||||||
Issuance of management incentive shares | ||||||||||||||
Forfeiture of management incentive shares | ( | |||||||||||||
Cancellation of treasury stock | ( | ( | ||||||||||||
Balance, end of period | ||||||||||||||
Additional Paid-In Capital | ||||||||||||||
Balance, beginning of period | ||||||||||||||
Dividends and dividend equivalents declared | ||||||||||||||
Issuance of management incentive shares | ( | ( | ||||||||||||
Forfeiture of management incentive shares | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Cancellation of treasury stock | ( | ( | ||||||||||||
Balance, end of period | ||||||||||||||
Accumulated Other Comprehensive Loss | ||||||||||||||
Balance, beginning of period | ( | ( | ||||||||||||
Other comprehensive income (loss) | ( | |||||||||||||
Balance, end of period | ( | ( | ||||||||||||
Retained Earnings | ||||||||||||||
Balance, beginning of period | ||||||||||||||
Net income | ||||||||||||||
Dividends and dividend equivalents declared | ( | ( | ||||||||||||
Balance, end of period | ||||||||||||||
Treasury Stock | ||||||||||||||
Balance, beginning of period | ||||||||||||||
Treasury stock acquired | ( | ( | ||||||||||||
Cancellation of treasury stock | ||||||||||||||
Balance, end of period | ||||||||||||||
Total Stockholders' Equity | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Operating Activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
Loss on the sale of investments, net | ||||||||||||||
Loss (income) from other invested assets | ||||||||||||||
Distribution of income from other invested assets | ||||||||||||||
Depreciation and amortization | ||||||||||||||
Stock-based compensation expense | ||||||||||||||
Amortization of premium on investment securities | ||||||||||||||
Deferred income tax provision | ||||||||||||||
Change in: | ||||||||||||||
Accrued investment income | ( | ( | ||||||||||||
Accounts receivable | ( | ( | ||||||||||||
Deferred policy acquisition costs | ||||||||||||||
Prepaid federal income tax | ||||||||||||||
Other assets | ( | ( | ||||||||||||
Reserve for losses and LAE | ( | |||||||||||||
Unearned premium reserve | ( | ( | ||||||||||||
Other accrued liabilities | ( | |||||||||||||
Net cash provided by operating activities | ||||||||||||||
Investing Activities | ||||||||||||||
Net change in short-term investments | ( | ( | ||||||||||||
Purchase of investments available for sale | ( | ( | ||||||||||||
Proceeds from maturity of investments available for sale | ||||||||||||||
Proceeds from sales of investments available for sale | ||||||||||||||
Purchase of other invested assets | ( | ( | ||||||||||||
Return of investment from other invested assets | ||||||||||||||
Purchase of property and equipment | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Financing Activities | ||||||||||||||
Treasury stock acquired | ( | ( | ||||||||||||
Dividends paid | ( | ( | ||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
Net increase (decrease) in cash | ( | |||||||||||||
Cash at beginning of year | ||||||||||||||
Cash at end of period | $ | $ | ||||||||||||
Supplemental Disclosure of Cash Flow Information | ||||||||||||||
Income tax payments | $ | $ | ||||||||||||
Interest payments | ( | ( | ||||||||||||
Noncash Transactions | ||||||||||||||
Lease liabilities arising from obtaining right-of-use assets | $ | $ |
March 31, 2024 (In thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
U.S. agency securities | ( | |||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ( | |||||||||||||||||||||||||
Municipal debt securities (1) | ( | |||||||||||||||||||||||||
Non-U.S. government securities | ( | |||||||||||||||||||||||||
Corporate debt securities (2) | ( | |||||||||||||||||||||||||
Residential and commercial mortgage securities | ( | |||||||||||||||||||||||||
Asset-backed securities | ( | |||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Total investments available for sale | $ | $ | $ | ( | $ |
December 31, 2023 (In thousands) | Amortized Cost | Unrealized Gains | Unrealized Losses | Fair Value | ||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
U.S. agency securities | ( | |||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ( | |||||||||||||||||||||||||
Municipal debt securities (1) | ( | |||||||||||||||||||||||||
Non-U.S. government securities | ( | |||||||||||||||||||||||||
Corporate debt securities (2) | ( | |||||||||||||||||||||||||
Residential and commercial mortgage securities | ( | |||||||||||||||||||||||||
Asset-backed securities | ( | |||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Total investments available for sale | $ | $ | $ | ( | $ |
March 31, | December 31, | |||||||||||||
(1) The following table summarizes municipal debt securities as of : | 2024 | 2023 | ||||||||||||
Special revenue bonds | % | % | ||||||||||||
General obligation bonds | ||||||||||||||
Total | % | % |
March 31, | December 31, | |||||||||||||
(2) The following table summarizes corporate debt securities as of : | 2024 | 2023 | ||||||||||||
Financial | % | % | ||||||||||||
Consumer, non-cyclical | ||||||||||||||
Industrial | ||||||||||||||
Consumer, cyclical | ||||||||||||||
Communications | ||||||||||||||
Utilities | ||||||||||||||
Technology | ||||||||||||||
Energy | ||||||||||||||
Basic Materials | ||||||||||||||
Total | % | % |
(In thousands) | Amortized Cost | Fair Value | ||||||||||||
U.S. Treasury securities: | ||||||||||||||
Due in 1 year | $ | $ | ||||||||||||
Due after 1 but within 5 years | ||||||||||||||
Due after 5 but within 10 years | ||||||||||||||
Due after 10 years | ||||||||||||||
Subtotal | ||||||||||||||
U.S. agency securities: | ||||||||||||||
Due in 1 year | ||||||||||||||
Subtotal | ||||||||||||||
Municipal debt securities: | ||||||||||||||
Due in 1 year | ||||||||||||||
Due after 1 but within 5 years | ||||||||||||||
Due after 5 but within 10 years | ||||||||||||||
Due after 10 years | ||||||||||||||
Subtotal | ||||||||||||||
Non-U.S. government securities: | ||||||||||||||
Due in 1 year | ||||||||||||||
Due after 1 but within 5 years | ||||||||||||||
Due after 5 but within 10 years | ||||||||||||||
Due after 10 years | ||||||||||||||
Subtotal | ||||||||||||||
Corporate debt securities: | ||||||||||||||
Due in 1 year | ||||||||||||||
Due after 1 but within 5 years | ||||||||||||||
Due after 5 but within 10 years | ||||||||||||||
Due after 10 years | ||||||||||||||
Subtotal | ||||||||||||||
U.S. agency mortgage-backed securities | ||||||||||||||
Residential and commercial mortgage securities | ||||||||||||||
Asset-backed securities | ||||||||||||||
Money market funds | ||||||||||||||
Total investments available for sale | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Realized gross gains | $ | $ | ||||||||||||
Realized gross losses | ( | ( | ||||||||||||
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||
March 31, 2024 (In thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
U.S. agency securities | ( | ( | ||||||||||||||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Municipal debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Non-U.S. government securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Residential and commercial mortgage securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Less than 12 months | 12 months or more | Total | ||||||||||||||||||||||||||||||||||||
December 31, 2023 (In thousands) | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | Fair Value | Gross Unrealized Losses | ||||||||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
U.S. agency securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Municipal debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Non-U.S. government securities | ( | ( | ||||||||||||||||||||||||||||||||||||
Corporate debt securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Residential and commercial mortgage securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Asset-backed securities | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Fixed maturities | $ | $ | ||||||||||||
Short-term investments | ||||||||||||||
Gross investment income | ||||||||||||||
Investment expenses | ( | ( | ||||||||||||
Net investment income | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Net premiums written: | ||||||||||||||
Direct | $ | $ | ||||||||||||
Ceded (1) | ( | ( | ||||||||||||
Net premiums written | $ | $ | ||||||||||||
Net premiums earned: | ||||||||||||||
Direct | $ | $ | ||||||||||||
Ceded (1) | ( | ( | ||||||||||||
Net premiums earned | $ | $ |
QSR Agreement | Coverage Period | Ceding Percentage | Ceding Commission | Profit Commission | |||||||||||||||||||||||||
QSR-2019 | September 1, 2019 - December 31, 2020 | (1) | (2) | ||||||||||||||||||||||||||
QSR-2022 | January 1, 2022 - December 31, 2022 | ||||||||||||||||||||||||||||
QSR-2023 | January 1, 2023 - December 31, 2023 | ||||||||||||||||||||||||||||
QSR-2024 | January 1, 2024 - December 31, 2024 |
(In thousands) | ||||||||||||||||||||||||||||||||
Deal Name | Vintage | Remaining Insurance in Force | Remaining Risk in Force | Remaining Reinsurance in Force | Remaining First Layer Retention | Optional Termination Date | ||||||||||||||||||||||||||
Radnor Re 2021-1 | Aug. 2020 - Mar. 2021 | June 26, 2028 | ||||||||||||||||||||||||||||||
Radnor Re 2021-2 | Apr. 2021 - Sep. 2021 | November 25, 2027 | ||||||||||||||||||||||||||||||
Radnor Re 2022-1 | Oct. 2021 - Jul. 2022 | September 25, 2028 | ||||||||||||||||||||||||||||||
Radnor Re 2023-1 | Aug. 2022 - Jun. 2023 | July 25, 2028 | ||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
(In thousands) | ||||||||||||||||||||||||||||||||||||||
Deal Name | Vintage | Remaining Insurance in Force | Remaining Risk in Force | Remaining Reinsurance in Force | Remaining First Layer Retention | Optional Termination Date | ||||||||||||||||||||||||||||||||
XOL 2019-1 | Jan. 2018 - Dec. 2018 | February 25, 2026 | ||||||||||||||||||||||||||||||||||||
XOL 2020-1 | Jan. 2019 - Dec. 2019 | January 25, 2027 | ||||||||||||||||||||||||||||||||||||
XOL 2022-1 | Oct. 2021 - Dec. 2022 | January 1, 2030 | ||||||||||||||||||||||||||||||||||||
XOL 2023-1 | Jan. 2023 - Dec. 2023 | January 1, 2028 | ||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Maximum Exposure to Loss | ||||||||||||||||||||||||||
(In thousands) | Total VIE Assets | On - Balance Sheet | Off - Balance Sheet | Total | ||||||||||||||||||||||
Radnor Re 2021-1 Ltd. | ( | ( | ||||||||||||||||||||||||
Radnor Re 2021-2 Ltd. | ( | ( | ||||||||||||||||||||||||
Radnor Re 2022-1 Ltd. | ||||||||||||||||||||||||||
Radnor Re 2023-1 Ltd. | ( | |||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( |
(In thousands) | 2024 | 2023 | ||||||||||||
Reserve for losses and LAE at beginning of period | $ | $ | ||||||||||||
Less: Reinsurance recoverables | ||||||||||||||
Net reserve for losses and LAE at beginning of period | ||||||||||||||
Add provision for losses and LAE, net of reinsurance, occurring in: | ||||||||||||||
Current period | ||||||||||||||
Prior years | ( | ( | ||||||||||||
Net incurred losses and LAE during the current period | ( | |||||||||||||
Deduct payments for losses and LAE, net of reinsurance, occurring in: | ||||||||||||||
Current period | ||||||||||||||
Prior years | ||||||||||||||
Net loss and LAE payments during the current period | ||||||||||||||
Net reserve for losses and LAE at end of period | ||||||||||||||
Plus: Reinsurance recoverables | ||||||||||||||
Reserve for losses and LAE at end of period | $ | $ | ||||||||||||
Quarter Ended | 2024 | 2023 | ||||||||||||
March 31 | $ | $ | ||||||||||||
June 30 | — | |||||||||||||
September 30 | — | |||||||||||||
December 31 | — | |||||||||||||
Total dividends per common share declared and paid | $ | $ |
Time and Performance- Based Share Awards | Time-Based Share Awards | Share Units | DEUs | |||||||||||||||||||||||||||||||||||||||||||||||
(Shares in thousands) | Number of Shares | Weighted Average Grant Date Fair Value | Number of Shares | Weighted Average Grant Date Fair Value | Number of Share Units | Weighted Average Grant Date Fair Value | Dividend Equivalent Units | Weighted Average Grant Date Fair Value | ||||||||||||||||||||||||||||||||||||||||||
Outstanding at beginning of year | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Granted | ||||||||||||||||||||||||||||||||||||||||||||||||||
Vested | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Forfeited | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Outstanding at March 31, 2024 | $ | $ | $ | $ |
Relative Total Shareholder Return vs. S&P 1500 Financial Services Index | ||||||||||||||||||||||||||
≤25th percentile | 50th percentile | ≥75th percentile | ||||||||||||||||||||||||
Three-Year Book Value Per Share CAGR | ||||||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Compensation expense | $ | $ | ||||||||||||
Income tax benefit |
Three Months Ended March 31, | ||||||||||||||
(In thousands, except per share amounts) | 2024 | 2023 | ||||||||||||
Net income | $ | $ | ||||||||||||
Basic weighted average shares outstanding | ||||||||||||||
Dilutive effect of nonvested shares | ||||||||||||||
Diluted weighted average shares outstanding | ||||||||||||||
Basic earnings per share | $ | $ | ||||||||||||
Diluted earnings per share | $ | $ |
2024 Performance-Based Grants | 2023 Performance-Based Grants | 2022 Performance-Based Grants | 2021 Performance-Based Grants | |||||||||||||||||||||||||||||||||||||||||||||||
Reporting Date | Percent Issuable Relative to Target | As a Percent of Shares Issued | Percent Issuable Relative to Target | As a Percent of Shares Issued | Percent Issuable Relative to Target | As a Percent of Shares Issued | Percent Issuable Relative to Target | As a Percent of Shares Issued | ||||||||||||||||||||||||||||||||||||||||||
March 31, 2024 | (1) | (1) | ||||||||||||||||||||||||||||||||||||||||||||||||
March 31, 2023 |
Three Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||||||||||||||
(In thousands) | Before Tax | Tax Effect | Net of Tax | Before Tax | Tax Effect | Net of Tax | ||||||||||||||||||||||||||||||||
Balance at beginning of period | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||
Other comprehensive income (loss): | ||||||||||||||||||||||||||||||||||||||
Unrealized holding gains (losses) on investments: | ||||||||||||||||||||||||||||||||||||||
Unrealized holding (losses) gains arising during the period | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Less: Reclassification adjustment for gains included in net income (1) | ( | |||||||||||||||||||||||||||||||||||||
Net unrealized (losses) gains on investments | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Other comprehensive (loss) income | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Balance at end of period | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||||
March 31, 2024 (In thousands) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||||
Recurring fair value measurements | ||||||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. agency securities | ||||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ||||||||||||||||||||||||||
Municipal debt securities | ||||||||||||||||||||||||||
Non-U.S. government securities | ||||||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Residential and commercial mortgage securities | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Total assets at fair value (1) (2) | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2023 (In thousands) | Quoted Prices in Active Markets for Identical Instruments (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||||||||||||
Recurring fair value measurements | ||||||||||||||||||||||||||
Financial Assets: | ||||||||||||||||||||||||||
U.S. Treasury securities | $ | $ | $ | $ | ||||||||||||||||||||||
U.S. agency securities | ||||||||||||||||||||||||||
U.S. agency mortgage-backed securities | ||||||||||||||||||||||||||
Municipal debt securities | ||||||||||||||||||||||||||
Non-U.S. government securities | ||||||||||||||||||||||||||
Corporate debt securities | ||||||||||||||||||||||||||
Residential and commercial mortgage securities | ||||||||||||||||||||||||||
Asset-backed securities | ||||||||||||||||||||||||||
Money market funds | ||||||||||||||||||||||||||
Total assets at fair value (1) (2) | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Essent Guaranty | ||||||||||||||
Statutory net income | $ | $ | ||||||||||||
Essent PA | ||||||||||||||
Statutory net income (loss) | $ | $ | ( |
March 31, | December 31, | |||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Essent Guaranty | ||||||||||||||
Statutory surplus | ||||||||||||||
Contingency reserve liability | ||||||||||||||
Essent PA | ||||||||||||||
Statutory surplus | ||||||||||||||
Contingency reserve liability |
Originally Reported | Measurement Period Adjustments | As Reported | ||||||||||||||||||
Consideration Paid: | ||||||||||||||||||||
Cash | $ | $ | — | $ | ||||||||||||||||
Assets Acquired: | ||||||||||||||||||||
Cash and cash equivalents | — | |||||||||||||||||||
Short-term investments | — | |||||||||||||||||||
Fixed maturities available for sale | — | |||||||||||||||||||
Identifiable intangible assets | ( | |||||||||||||||||||
Other assets | ( | |||||||||||||||||||
Liabilities Assumed: | ||||||||||||||||||||
Reserve for losses | ( | |||||||||||||||||||
Other liabilities | ||||||||||||||||||||
Total Identifiable Net Assets | ( | |||||||||||||||||||
Goodwill | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
IIF, beginning of period | $ | 239,078,262 | $ | 227,062,055 | ||||||||||
NIW - Flow | 8,323,544 | 12,893,789 | ||||||||||||
NIW - Bulk | — | — | ||||||||||||
Cancellations | (8,924,404) | (8,418,429) | ||||||||||||
IIF, end of period | $ | 238,477,402 | $ | 231,537,415 | ||||||||||
Average IIF during the period | $ | 238,595,268 | $ | 228,885,174 | ||||||||||
RIF, end of period | $ | 54,686,533 | $ | 51,469,312 |
($ in thousands) | $ | % | ||||||||||||
2024 (through March 31) | 8,249,238 | 3.5 | % | |||||||||||
2023 | 44,842,520 | 18.8 | % | |||||||||||
2022 | 55,899,907 | 23.4 | ||||||||||||
2021 | 58,766,271 | 24.6 | ||||||||||||
2020 | 43,791,803 | 18.4 | ||||||||||||
2019 | 11,776,711 | 4.9 | ||||||||||||
2018 and prior | 15,150,952 | 6.4 | ||||||||||||
$ | 238,477,402 | 100.0 | % |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Base average premium rate | 0.41 | % | 0.40 | % | ||||||||||
Single premium cancellations | — | — | ||||||||||||
Gross average premium rate | 0.41 | 0.40 | ||||||||||||
Ceded premiums | (0.05) | (0.06) | ||||||||||||
Net average premium rate | 0.36 | % | 0.34 | % |
Summary of Operations | Three Months Ended March 31, | |||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Revenues: | ||||||||||||||
Net premiums written | $ | 238,540 | $ | 205,900 | ||||||||||
Decrease in unearned premiums | 7,050 | 5,358 | ||||||||||||
Net premiums earned | 245,590 | 211,258 | ||||||||||||
Net investment income | 52,085 | 43,236 | ||||||||||||
Realized investment gains (losses), net | (1,140) | (488) | ||||||||||||
Income (loss) from other invested assets | (1,915) | (2,702) | ||||||||||||
Other income | 3,737 | 4,942 | ||||||||||||
Total revenues | 298,357 | 256,246 | ||||||||||||
Losses and expenses: | ||||||||||||||
Provision (benefit) for losses and LAE | 9,913 | (180) | ||||||||||||
Other underwriting and operating expenses | 57,349 | 48,195 | ||||||||||||
Premiums retained by agents | 9,491 | — | ||||||||||||
Interest expense | 7,862 | 6,936 | ||||||||||||
Total losses and expenses | 84,615 | 54,951 | ||||||||||||
Income before income taxes | 213,742 | 201,295 | ||||||||||||
Income tax expense | 32,023 | 30,468 | ||||||||||||
Net income | $ | 181,719 | $ | 170,827 |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Fixed maturities | $ | 46,288 | $ | 43,473 | ||||||||||
Short-term investments | 7,143 | 1,721 | ||||||||||||
Gross investment income | 53,431 | 45,194 | ||||||||||||
Investment expenses | (1,346) | (1,958) | ||||||||||||
Net investment income | $ | 52,085 | $ | 43,236 |
Three Months Ended March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Beginning default inventory | 14,819 | 13,433 | ||||||||||||
Plus: new defaults | 8,260 | 7,015 | ||||||||||||
Less: cures | (8,951) | (7,574) | ||||||||||||
Less: claims paid | (123) | (94) | ||||||||||||
Less: rescissions and denials, net | (13) | (7) | ||||||||||||
Ending default inventory | 13,992 | 12,773 |
As of March 31, | ||||||||||||||
2024 | 2023 | |||||||||||||
Case reserves (in thousands) (1) | $ | 233,884 | $ | 199,108 | ||||||||||
Total reserves (in thousands) (1) | $ | 253,565 | $ | 215,957 | ||||||||||
Ending default inventory | 13,992 | 12,773 | ||||||||||||
Average case reserve per default (in thousands) | $ | 16.7 | $ | 15.6 | ||||||||||
Average total reserve per default (in thousands) | $ | 18.1 | $ | 16.9 | ||||||||||
Default rate | 1.72 | % | 1.57 | % | ||||||||||
Claims received included in ending default inventory | 142 | 113 |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Reserve for losses and LAE at beginning of period | $ | 260,095 | $ | 216,464 | ||||||||||
Less: Reinsurance recoverables | 24,104 | 14,618 | ||||||||||||
Net reserve for losses and LAE at beginning of period | 235,991 | 201,846 | ||||||||||||
Add provision for losses and LAE occurring in: | ||||||||||||||
Current period | 39,396 | 32,694 | ||||||||||||
Prior years | (29,483) | (32,874) | ||||||||||||
Incurred losses and LAE during the current period | 9,913 | (180) | ||||||||||||
Deduct payments for losses and LAE occurring in: | ||||||||||||||
Current period | 404 | — | ||||||||||||
Prior years | 4,846 | 2,001 | ||||||||||||
Loss and LAE payments during the current period | 5,250 | 2,001 | ||||||||||||
Net reserve for losses and LAE at end of period | 240,654 | 199,665 | ||||||||||||
Plus: Reinsurance recoverables | 26,670 | 16,357 | ||||||||||||
Reserve for losses and LAE at end of period | $ | 267,324 | $ | 216,022 |
As of March 31, 2024 | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | Number of Policies in Default | Percentage of Policies in Default | Amount of Reserves | Percentage of Reserves | Defaulted RIF | Reserves as a Percentage of Defaulted RIF | ||||||||||||||||||||||||||||||||
Missed payments: | ||||||||||||||||||||||||||||||||||||||
Three payments or less | 6,527 | 47 | % | $ | 42,354 | 18 | % | $ | 482,151 | 9% | ||||||||||||||||||||||||||||
Four to eleven payments | 5,440 | 39 | 104,123 | 45 | 426,513 | 24 | ||||||||||||||||||||||||||||||||
Twelve or more payments | 1,883 | 13 | 80,025 | 34 | 130,816 | 61 | ||||||||||||||||||||||||||||||||
Pending claims | 142 | 1 | 7,382 | 3 | 8,351 | 88 | ||||||||||||||||||||||||||||||||
Total case reserves (1) | 13,992 | 100 | % | 233,884 | 100 | % | $ | 1,047,831 | 22% | |||||||||||||||||||||||||||||
IBNR | 17,541 | |||||||||||||||||||||||||||||||||||||
LAE | 2,140 | |||||||||||||||||||||||||||||||||||||
Total reserves for losses and LAE (1) | $ | 253,565 |
As of March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | Number of Policies in Default | Percentage of Policies in Default | Amount of Reserves | Percentage of Reserves | Defaulted RIF | Reserves as a Percentage of Defaulted RIF | ||||||||||||||||||||||||||||||||
Missed payments: | ||||||||||||||||||||||||||||||||||||||
Three payments or less | 5,366 | 42 | % | $ | 31,080 | 16 | % | $ | 366,993 | 8% | ||||||||||||||||||||||||||||
Four to eleven payments | 5,106 | 40 | 78,125 | 39 | 363,299 | 22 | ||||||||||||||||||||||||||||||||
Twelve or more payments | 2,188 | 17 | 85,517 | 43 | 130,520 | 66 | ||||||||||||||||||||||||||||||||
Pending claims | 113 | 1 | 4,386 | 2 | 5,004 | 88 | ||||||||||||||||||||||||||||||||
Total case reserves (2) | 12,773 | 100 | % | 199,108 | 100 | % | $ | 865,816 | 23% | |||||||||||||||||||||||||||||
IBNR | 14,933 | |||||||||||||||||||||||||||||||||||||
LAE | 1,916 | |||||||||||||||||||||||||||||||||||||
Total reserves for losses and LAE (2) | $ | 215,957 |
Three Months Ended March 31, | ||||||||||||||
($ in thousands) | 2024 | 2023 | ||||||||||||
Number of claims paid | 123 | 94 | ||||||||||||
Amount of claims paid | $ | 3,605 | $ | 1,959 | ||||||||||
Claim severity | 65 | % | 59 | % |
Three Months Ended March 31, | ||||||||||||||||||||||||||
2024 | 2023 | |||||||||||||||||||||||||
($ in thousands) | $ | % | $ | % | ||||||||||||||||||||||
Compensation and benefits | $ | 34,708 | 61 | % | $ | 26,629 | 55 | % | ||||||||||||||||||
Premium taxes | 4,919 | 9 | 4,653 | 10 | ||||||||||||||||||||||
Other | 17,722 | 30 | 16,913 | 35 | ||||||||||||||||||||||
Total other underwriting and operating expenses | $ | 57,349 | 100 | % | $ | 48,195 | 100 | % | ||||||||||||||||||
Number of employees at end of period | 526 | 337 |
Three Months Ended March 31, | ||||||||||||||
(In thousands) | 2024 | 2023 | ||||||||||||
Net cash provided by operating activities | $ | 216,935 | $ | 184,789 | ||||||||||
Net cash used in investing activities | (151,298) | (149,342) | ||||||||||||
Net cash used in financing activities | (43,169) | (48,054) | ||||||||||||
Net increase (decrease) in cash | $ | 22,468 | $ | (12,607) |
QSR Agreement | Eligible Policy Period | Ceding Percentage | Ceding Commission | Profit Commission | |||||||||||||||||||||||||
QSR-2019 | September 1, 2019 - December 31, 2020 | (1) | 20% | 63% | (2) | ||||||||||||||||||||||||
QSR-2022 | January 1, 2022 - December 31, 2022 | 20% | 20% | 62% | |||||||||||||||||||||||||
QSR-2023 | January 1, 2023 - December 31, 2023 | 17.5% | 20% | 58% | |||||||||||||||||||||||||
QSR-2024 | January 1, 2024 - December 31, 2024 | 15.0% | 20% | 57% |
Combined statutory capital: ($ in thousands) | |||||
Policyholders’ surplus | $ | 1,086,890 | |||
Contingency reserves | 2,366,663 | ||||
Combined statutory capital | $ | 3,453,553 | |||
Combined net risk in force | $ | 34,463,082 | |||
Combined risk-to-capital ratio | 10.0:1 |
Asset Class | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||
($ in thousands) | Fair Value | Percent | Fair Value | Percent | ||||||||||||||||||||||
U.S. Treasury securities | $ | 1,036,787 | 19.3 | % | $ | 996,382 | 18.9 | % | ||||||||||||||||||
U.S. agency securities | 1,573 | 0.1 | 7,195 | 0.1 | ||||||||||||||||||||||
U.S. agency mortgage-backed securities | 787,285 | 14.7 | 821,346 | 15.6 | ||||||||||||||||||||||
Municipal debt securities(1) | 539,678 | 10.1 | 547,258 | 10.5 | ||||||||||||||||||||||
Non-U.S. government securities | 66,395 | 1.2 | 67,447 | 1.3 | ||||||||||||||||||||||
Corporate debt securities(2) | 1,219,160 | 22.7 | 1,297,055 | 24.7 | ||||||||||||||||||||||
Residential and commercial mortgage securities | 506,780 | 9.4 | 517,940 | 9.8 | ||||||||||||||||||||||
Asset-backed securities | 522,352 | 9.7 | 564,995 | 10.7 | ||||||||||||||||||||||
Money market funds | 689,064 | 12.8 | 444,121 | 8.4 | ||||||||||||||||||||||
Total Investments Available for Sale | $ | 5,369,074 | 100.0 | % | $ | 5,263,739 | 100.0 | % |
March 31, | December 31, | |||||||||||||
(1) The following table summarizes municipal debt securities as of : | 2024 | 2023 | ||||||||||||
Special revenue bonds | 81.7 | % | 81.4 | % | ||||||||||
General obligation bonds | 18.3 | 18.6 | ||||||||||||
Total | 100.0 | % | 100.0 | % |
March 31, | December 31, | |||||||||||||
(2) The following table summarizes corporate debt securities as of : | 2024 | 2023 | ||||||||||||
Financial | 41.8 | % | 42.0 | % | ||||||||||
Consumer, non-cyclical | 15.9 | 15.9 | ||||||||||||
Industrial | 8.0 | 8.1 | ||||||||||||
Consumer, cyclical | 7.2 | 7.1 | ||||||||||||
Communications | 7.1 | 7.2 | ||||||||||||
Utilities | 6.4 | 6.3 | ||||||||||||
Technology | 6.2 | 6.2 | ||||||||||||
Energy | 4.9 | 4.7 | ||||||||||||
Basic Materials | 2.5 | 2.5 | ||||||||||||
Total | 100.0 | % | 100.0 | % |
Rating (1) | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||
($ in thousands) | Fair Value | Percent | Fair Value | Percent | ||||||||||||||||||||||
Aaa | $ | 2,523,003 | 53.9 | % | $ | 2,561,363 | 53.2 | % | ||||||||||||||||||
Aa1 | 107,659 | 2.3 | 104,474 | 2.2 | ||||||||||||||||||||||
Aa2 | 281,505 | 6.0 | 291,501 | 6.0 | ||||||||||||||||||||||
Aa3 | 198,316 | 4.2 | 208,882 | 4.3 | ||||||||||||||||||||||
A1 | 368,360 | 7.9 | 377,188 | 7.8 | ||||||||||||||||||||||
A2 | 285,058 | 6.1 | 329,423 | 6.8 | ||||||||||||||||||||||
A3 | 269,390 | 5.8 | 253,081 | 5.3 | ||||||||||||||||||||||
Baa1 | 199,880 | 4.3 | 220,901 | 4.6 | ||||||||||||||||||||||
Baa2 | 210,558 | 4.5 | 226,449 | 4.7 | ||||||||||||||||||||||
Baa3 | 160,219 | 3.4 | 166,121 | 3.4 | ||||||||||||||||||||||
Below Baa3 | 76,062 | 1.6 | 80,235 | 1.7 | ||||||||||||||||||||||
Total (2) | $ | 4,680,010 | 100.0 | % | $ | 4,819,618 | 100.0 | % |
Effective Duration | March 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||
($ in thousands) | Fair Value | Percent | Fair Value | Percent | ||||||||||||||||||||||
< 1 Year | $ | 2,074,776 | 38.6 | % | $ | 1,892,074 | 35.9 | % | ||||||||||||||||||
1 to < 2 Years | 359,920 | 6.7 | 371,583 | 7.1 | ||||||||||||||||||||||
2 to < 3 Years | 496,204 | 9.2 | 538,775 | 10.2 | ||||||||||||||||||||||
3 to < 4 Years | 364,968 | 6.8 | 402,668 | 7.6 | ||||||||||||||||||||||
4 to < 5 Years | 422,678 | 7.9 | 376,722 | 7.2 | ||||||||||||||||||||||
5 or more Years | 1,650,528 | 30.8 | 1,681,917 | 32.0 | ||||||||||||||||||||||
Total Investments Available for Sale | $ | 5,369,074 | 100.0 | % | $ | 5,263,739 | 100.0 | % |
March 31, 2024 | ||||||||||||||||||||||||||||||||
Rank ($ in thousands) | Security | Fair Value | Amortized Cost | Unrealized Gain (Loss)(1) | Credit Rating(2) | |||||||||||||||||||||||||||
1 | US Treasury Bill 07/11/2024 | $ | 75,078 | $ | 75,100 | $ | (23) | Aaa | ||||||||||||||||||||||||
2 | US Treasury Bill 04/18/2024 | 67,282 | 67,284 | (2) | Aaa | |||||||||||||||||||||||||||
3 | US Treasury Bill 06/20/2024 | 59,439 | 59,444 | (4) | Aaa | |||||||||||||||||||||||||||
4 | US Treasury Bill 09/05/2024 | 47,770 | 47,767 | 3 | Aaa | |||||||||||||||||||||||||||
5 | US Treasury Bill 08/08/2024 | 47,230 | 47,248 | (18) | Aaa | |||||||||||||||||||||||||||
6 | US Treasury 4.000% 01/31/2029 | 40,510 | 40,660 | (150) | Aaa | |||||||||||||||||||||||||||
7 | US Treasury 2.875% 06/15/2025 | 40,269 | 41,094 | (825) | Aaa | |||||||||||||||||||||||||||
8 | US Treasury 1.500% 08/15/2026 | 31,678 | 34,272 | (2,593) | Aaa | |||||||||||||||||||||||||||
9 | GNMA 6.0% 11/20/2053 | 28,569 | 28,743 | (174) | Aaa | |||||||||||||||||||||||||||
10 | US Treasury Bill 07/23/2024 | 28,145 | 28,148 | (4) | Aaa | |||||||||||||||||||||||||||
Total | $ | 465,970 | $ | 469,760 | $ | (3,790) | ||||||||||||||||||||||||||
Percent of Investments Available for Sale | 8.7 | % |
Rank | December 31, 2023 | |||||||||||||
($ in thousands) | Security | Fair Value | ||||||||||||
1 | US Treasury 0.000% 04/18/2024 | $ | 66,405 | |||||||||||
2 | US Treasury 0.000% 07/11/2024 | 55,360 | ||||||||||||
3 | US Treasury 2.875% 06/15/2025 | 40,340 | ||||||||||||
4 | US Treasury 0.000% 08/08/2024 | 34,100 | ||||||||||||
5 | US Treasury 1.500% 08/15/2026 | 31,822 | ||||||||||||
6 | US Treasury 0.000% 06/23/2024 | 29,381 | ||||||||||||
7 | GNMA 30 Year Platinum 6.000% 11/20/2053 | 29,116 | ||||||||||||
8 | US Treasury 0.000% 09/05/2024 | 28,716 | ||||||||||||
9 | FHLMC 30 Year UMBS 5.500% 11/01/2052 | 27,827 | ||||||||||||
10 | US Treasury 0.250% 05/31/2025 | 24,117 | ||||||||||||
Total | $ | 367,184 | ||||||||||||
Percent of Investments Available for Sale | 7.0 | % |
($ in thousands) | Fair Value | Amortized Cost | Credit Rating (1), (2) | |||||||||||||||||
New York | ||||||||||||||||||||
New York City Transitional Fin Auth | $ | 13,376 | $ | 13,777 | Aa2 | |||||||||||||||
Dormitory Authority of State of New York | 9,472 | 9,715 | A1 | |||||||||||||||||
Triborough Bridge & Tunnel Authority | 9,126 | 9,800 | Aa3 | |||||||||||||||||
City of New York | 7,141 | 7,051 | Aa2 | |||||||||||||||||
New York St Urban Dev Corp | 6,536 | 6,797 | Aa1 | |||||||||||||||||
Port Authority of New York and New Jersey | 5,330 | 5,948 | Aa3 | |||||||||||||||||
Monroe Cnty NY Indl Dev Corp | 3,369 | 3,240 | Aa3 | |||||||||||||||||
Metropolitan Transportation Authority | 3,149 | 3,304 | A3 | |||||||||||||||||
New York City Municipal Water Finance Authority | 2,993 | 2,920 | Aa1 | |||||||||||||||||
New York Transportation Development Corp | 2,176 | 2,180 | A1 | |||||||||||||||||
City of Yonkers NY | 2,169 | 2,283 | A2 | |||||||||||||||||
Long Island Power Authority | 1,642 | 1,635 | A2 | |||||||||||||||||
New York St Twy Auth | 1,280 | 1,289 | A1 | |||||||||||||||||
New York (State of) | 702 | 790 | A1 | |||||||||||||||||
Nassau Cnty NY | 270 | 268 | Aa3 | |||||||||||||||||
$ | 68,731 | $ | 70,997 |
($ in thousands) | Fair Value | Amortized Cost | Credit Rating (1), (2) | |||||||||||||||||
California | ||||||||||||||||||||
Bay Area Toll Authority | $ | 9,196 | $ | 10,829 | A1 | |||||||||||||||
State of California | 8,841 | 8,995 | Aa2 | |||||||||||||||||
Los Angeles Unified School District/CA | 6,737 | 7,249 | Aa3 | |||||||||||||||||
San Joaquin Hills Transportation Corridor Agency | 6,717 | 7,725 | A1 | |||||||||||||||||
City of Anaheim CA | 5,801 | 7,725 | A1 | |||||||||||||||||
Community Hospitals of Central California Obligated Group | 5,536 | 7,725 | A1 | |||||||||||||||||
Golden State Tobacco Securitization Corp | 4,124 | 5,033 | A3 | |||||||||||||||||
San Francisco City & County Airport Comm-San Francisco International Airport | 3,729 | 3,616 | A1 | |||||||||||||||||
City of Carson CA | 3,501 | 4,385 | Aa3 | |||||||||||||||||
San Jose Unified School District | 3,259 | 4,090 | Aaa | |||||||||||||||||
Redwoods/The a Community of Seniors | 3,109 | 3,740 | Aa3 | |||||||||||||||||
Tuolumne Wind Project Authority | 2,981 | 3,031 | A2 | |||||||||||||||||
County of Kern CA | 2,728 | 2,743 | Baa2 | |||||||||||||||||
Chabot-Las Positas Community College District | 2,635 | 2,723 | Aa2 | |||||||||||||||||
Port of Oakland | 2,418 | 2,491 | A1 | |||||||||||||||||
City of Inglewood CA | 2,266 | 3,109 | Aa2 | |||||||||||||||||
City of Monterey Park CA | 2,211 | 2,969 | Aa2 | |||||||||||||||||
County of Riverside CA | 2,133 | 2,250 | Aa2 | |||||||||||||||||
State of California Personal Income Tax Revenue | 2,058 | 2,103 | Aa3 | |||||||||||||||||
City of San Francisco CA Public Utilities Commission Water Revenue | 2,020 | 2,331 | Aa2 | |||||||||||||||||
Foothill-Eastern Transportation Corridor Agency | 1,762 | 2,350 | A1 | |||||||||||||||||
Bay Area Water Supply & Conservation Agency | 1,665 | 1,687 | Aa3 | |||||||||||||||||
Riverside County Transportation Commission | 1,316 | 1,665 | A2 | |||||||||||||||||
Regents of the University of California Medical Center Pooled Revenue | 1,300 | 1,360 | Aa3 | |||||||||||||||||
University of California | 1,258 | 1,292 | Aa2 | |||||||||||||||||
City of Torrance CA | 1,144 | 1,237 | Aa2 | |||||||||||||||||
City of El Cajon CA | 975 | 1,282 | Aa2 | |||||||||||||||||
City of El Monte CA | 870 | 1,000 | Aa2 | |||||||||||||||||
Alameda Corridor Transportation Authority | 809 | 852 | A3 | |||||||||||||||||
Cathedral City Redevelopment Agency Successor Agency | 704 | 704 | Aa2 | |||||||||||||||||
Pomona Redevelopment Agency Successor Agency | 681 | 700 | Aa2 | |||||||||||||||||
California Independent System Operator Corp | 568 | 725 | A1 | |||||||||||||||||
County of Sacramento CA | 486 | 483 | A1 | |||||||||||||||||
Los Angeles County Securitization Corp | 435 | 468 | A3 | |||||||||||||||||
California State University | 239 | 250 | Aa2 | |||||||||||||||||
Oxnard Union High School District | 217 | 250 | Aa2 | |||||||||||||||||
City of Los Angeles Department of Airports | 206 | 208 | Aa3 | |||||||||||||||||
City of San Jose CA | 179 | 205 | Aa2 | |||||||||||||||||
City of Riverside CA | 154 | 155 | Aa2 | |||||||||||||||||
Compton Community College District | 115 | 114 | Aa3 | |||||||||||||||||
City of Los Angeles CA | 96 | 110 | Aa3 | |||||||||||||||||
$ | 97,179 | $ | 111,959 |
Period ($ in thousands, except per share amounts) | Total Number of Shares Purchased | Average Price Paid Per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
January 1 - January 31, 2024 | 33,161 | $ | 53.36 | 200 | ||||||||||||||||||||||
February 1 - February 29, 2024 | 57,208 | $ | 52.29 | 57,208 | ||||||||||||||||||||||
March 1 - March 31, 2024 | 164,015 | $ | 53.60 | 39,703 | ||||||||||||||||||||||
Total | 254,384 | 97,111 | $ | 244,867 |
Votes For | Votes Withheld | Broker Non-Votes | ||||||||||||||||||
Class I Director to Serve Through the 2027 Annual General Meeting of Shareholders: | ||||||||||||||||||||
Aditya Dutt | 90,972,117 | 8,526,961 | 1,406,456 | |||||||||||||||||
Henna Karna | 97,040,804 | 2,458,274 | 1,406,456 | |||||||||||||||||
Roy J. Kasmar | 96,969,523 | 2,529,555 | 1,406,456 |
Votes For | 100,370,851 | |||||||
Votes Against | 508,479 | |||||||
Abstentions | 26,202 |
Votes For | 72,055,922 | |||||||
Votes Against | 27,390,718 | |||||||
Abstentions | 52,434 | |||||||
Broker Non-Votes | 1,406,460 |
Exhibit No. | Description | |||||||
Certification of Chief Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | ||||||||
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||||
101 | The following financial information from this Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets (Unaudited); (ii) the Condensed Consolidated Statements of Comprehensive Income (Unaudited); (iii) the Condensed Consolidated Statements of Changes in Stockholders’ Equity (Unaudited); (iv) the Condensed Consolidated Statements of Cash Flows (Unaudited); and (v) the Notes to Condensed Consolidated Financial Statements (Unaudited). | |||||||
* | Management contract or compensatory plan or arrangement. | |||||||
ESSENT GROUP LTD. | ||||||||
Date: May 6, 2024 | /s/ MARK A. CASALE | |||||||
Mark A. Casale | ||||||||
President, Chief Executive Officer and Chairman (Principal Executive Officer) | ||||||||
Date: May 6, 2024 | /s/ DAVID B. WEINSTOCK | |||||||
David B. Weinstock | ||||||||
Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ MARK A. CASALE | ||||||||
Mark A. Casale | ||||||||
President, Chief Executive Officer and Chairman | ||||||||
(Principal Executive Officer) |
/s/ DAVID B. WEINSTOCK | ||||||||
David B. Weinstock | ||||||||
Senior Vice President and Chief Financial Officer | ||||||||
(Principal Financial Officer) |
/s/ MARK A. CASALE | |||||
Mark A. Casale | |||||
President, Chief Executive Officer and Chairman | |||||
/s/ DAVID B. WEINSTOCK | |||||
David B. Weinstock | |||||
Senior Vice President and Chief Financial Officer |
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) shares in Thousands, $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
---|---|---|
Investments | ||
Amortized cost | $ 5,716,954 | $ 5,586,730 |
Property, Plant and Equipment, Net | ||
Credit Facility Borrowings | 72,080 | 71,168 |
Credit Facility Borrowings | ||
Unamortized deferred costs | $ 2,816 | $ 3,080 |
Stockholders’ Equity | ||
Common shares, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common shares, authorized (in shares) | 233,333 | 233,333 |
Common shares, issued (in shares) | 106,742 | 106,597 |
Common shares, outstanding (in shares) | 106,742 | 106,597 |
Fixed maturities | ||
Investments | ||
Amortized cost | $ 4,519,993 | $ 4,658,168 |
Short-term investments | ||
Investments | ||
Amortized cost | $ 1,196,961 | $ 928,562 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
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Mar. 31, 2024 |
Mar. 31, 2023 |
|
Statement of Comprehensive Income [Abstract] | ||
Change in unrealized appreciation (depreciation) of investments, tax expense (benefit) | $ (3,122) | $ 9,428 |
Nature of Operations and Basis of Presentation |
3 Months Ended |
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Mar. 31, 2024 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Essent Group Ltd. (“Essent Group”) is a Bermuda-based holding company, which, through its wholly-owned subsidiaries, offers private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Mortgage insurance facilitates the sale of low down payment (generally less than 20%) mortgage loans into the secondary mortgage market, primarily to two government-sponsored enterprises (“GSEs”), Fannie Mae and Freddie Mac. The primary mortgage insurance operations are conducted through Essent Guaranty, Inc. (“Essent Guaranty”), which is domiciled in the state of Pennsylvania. Essent Guaranty is headquartered in Radnor, Pennsylvania and maintains an operations center in Winston-Salem, North Carolina. Essent Guaranty is approved as a qualified mortgage insurer by the GSEs and is licensed to write mortgage insurance in all 50 states and the District of Columbia. Essent Guaranty reinsures new insurance written ("NIW") to Essent Reinsurance Ltd. (“Essent Re”), an affiliated Bermuda domiciled Class 3B Insurer licensed pursuant to Section 4 of the Bermuda Insurance Act 1978 that provides insurance and reinsurance coverage of mortgage credit risk. In April 2021, Essent Guaranty and Essent Re agreed to increase the quota share reinsurance coverage provided by Essent Re from 25% to 35% effective January 1, 2021. The quota share reinsurance coverage provided for Essent Guaranty’s NIW prior to January 1, 2021 will continue to be 25%, the quota share percentage in effect at the time NIW was first ceded. Essent Re also provides insurance and reinsurance to Freddie Mac and Fannie Mae. In 2016, Essent Re formed Essent Agency (Bermuda) Ltd., a wholly-owned subsidiary, which provides underwriting consulting services to third-party reinsurers. In accordance with certain state law requirements, Essent Guaranty also reinsures that portion of the risk that is in excess of 25% of the mortgage balance with respect to any loan insured prior to April 1, 2019, after consideration of other reinsurance, to Essent Guaranty of PA, Inc. (“Essent PA”), an affiliate domiciled in the state of Pennsylvania. In addition to offering mortgage insurance, we provide contract underwriting services on a limited basis through CUW Solutions, LLC ("CUW Solutions"), a Delaware limited liability company, that provides, among other things, mortgage contract underwriting services to lenders and mortgage insurance underwriting services to affiliates. CUW Solutions is headquartered in Radnor, Pennsylvania and it maintains an operations center in Winston-Salem, North Carolina that is subleased from Essent Guaranty. As a result of our acquisitions of Agents National Title Insurance Company and Boston National Holdings LLC on July 1, 2023, we now offer title insurance products and title and settlement services. Our title insurance operations are headquartered in Columbia, Missouri, and we operate our title agency operations in Charlotte, North Carolina and Pittsburgh, Pennsylvania. We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) pursuant to such rules and regulations. In the opinion of management, the statements include all adjustments (which include normal recurring adjustments) required for a fair statement of financial position, results of operations and cash flows for the interim periods presented. These statements should be read in conjunction with the consolidated financial statements and notes thereto, including Note 1 and Note 2 to the consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2023, which discloses the principles of consolidation and a summary of significant accounting policies. The results of operations for the interim periods are not necessarily indicative of the results for the full year. We evaluated the need to recognize or disclose events that occurred subsequent to March 31, 2024 prior to the issuance of these condensed consolidated financial statements.
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Recently Issued Accounting Standards |
3 Months Ended |
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Mar. 31, 2024 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards Accounting Standards Adopted During the Period In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU was effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU did not have a material effect on the Company's consolidated operating results or financial position. Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. The ASU requires that public entities disclose significant expense categories and amounts for each reportable segment, which are derived from expenses that are 1) regularly reported to an entity’s chief operating decision-maker (CODM) and 2) included in a segment’s reported measures of profit or loss. Public entities must also disclose an amount for “other segment items,” representing the difference between 1) segment revenue less significant segment expenses and 2) the reportable segment’s profit or loss measures. A description of the composition of “other segment items” also is required as well as the title and position of the CODM and entities must explain how the CODM uses the reported measures of profit or loss to assess segment performance. The ASU also requires interim disclosure of certain segment-related disclosures that previously were required only on an annual basis and clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements under Topic 280. It also clarifies that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis, with early adoption permitted. The Company is currently evaluating the impact that the ASU will have on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid, including taxes paid by jurisdiction. The ASU will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively, with early adoption permitted. The Company is currently evaluating the impact that the ASU will have on our consolidated financial statements.
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Investments |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments Investments available for sale consist of the following:
The amortized cost and fair value of investments available for sale at March 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories.
The components of realized investment (losses) gains, net on the condensed consolidated statements of comprehensive income were as follows:
The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows:
At March 31, 2024 and December 31, 2023, we held 2,216 and 2,256 individual investment securities, respectively, that were in an unrealized loss position. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether to record an impairment on the securities in an unrealized loss position. In assessing whether the decline in the fair value at March 31, 2024 of any of these securities resulted from a credit loss or other factors, we made inquiries of our investment managers to determine that each issuer was current on its scheduled interest and principal payments. We reviewed the credit rating of these securities noting that approximately 98% of the securities at March 31, 2024 had investment-grade ratings. We concluded that gross unrealized losses noted above were primarily associated with the changes in interest rates subsequent to purchase rather than due to credit impairment. There were no impairments recorded in the three months ended March 31, 2024 or 2023. The Company's other invested assets at March 31, 2024 and December 31, 2023 totaled $279.6 million and $277.2 million, respectively. Other invested assets are principally comprised of limited partnership interests which are generally accounted for under the equity method or fair value using net asset value (or its equivalent) as a practical expedient. Our proportionate share of earnings or losses or changes in fair value are reported in income from other invested assets on the condensed consolidated statements of comprehensive income. For entities accounted for under the equity method that follow industry-specific guidance for investment companies, our proportionate share of earnings or losses includes changes in the fair value of the underlying assets of these entities. Due to the timing of receiving financial information from these partnerships, the results are generally reported on a one month or quarter lag. Other invested assets that are accounted for at fair value using the net asset value (or its equivalent) as a practical expedient totaled $134.7 million as of March 31, 2024. The majority of these investments were in limited partnerships invested in real estate or consumer credit. At March 31, 2024, maximum future funding commitments were $46.4 million. For limited partnership investments that have a contractual expiration date, we expect the liquidation of the underlying assets to occur over the next to nine years. For certain of these investments, the Company does not have the contractual option to redeem but receives distributions based on the liquidation of the underlying assets. In addition, the Company generally does not have the ability to sell or transfer these investments without the consent from the general partner of individual limited partnerships. The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $9.1 million at March 31, 2024 and $9.2 million at December 31, 2023. In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $1.0 billion at March 31, 2024 and $1.1 billion at December 31, 2023. Essent Guaranty is also required to maintain assets on deposit for the benefit of the sponsor of a fixed income investment commitment. The fair value of the assets on deposit was $9.6 million at March 31, 2024 and $9.2 million at December 31, 2023. Net investment income consists of:
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Reinsurance |
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Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance | Reinsurance In the ordinary course of business, our insurance subsidiaries may use reinsurance to provide protection against adverse loss experience and to expand our capital sources. Reinsurance recoverables are recorded as assets and included in other assets on our condensed consolidated balance sheets, predicated on a reinsurer's ability to meet their obligations under the reinsurance agreements. If the reinsurers are unable to satisfy their obligations under the agreements, our insurance subsidiaries would be liable for such defaulted amounts. The effect of reinsurance on net premiums written and earned is as follows:
(1)Net of profit commission. Quota Share Reinsurance Essent Guaranty has entered into quota share reinsurance agreements with a panels of third-party reinsurers ("QSR" agreements). Each of the third-party reinsurers has an insurer financial strength rating of A- or better by S&P Global Ratings, A.M. Best or both. Under each QSR agreement, Essent Guaranty will cede premiums earned on all eligible policies written during a specified period, in exchange for reimbursement of ceded claims and claims expenses on covered policies, a specified ceding commission, and a profit commission that varies directly and inversely with ceded claims. Essent Guaranty has certain termination rights under each QSR agreement, including the option to terminate each QSR agreement subject to a termination fee. The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of March 31, 2024:
_______________________________________________________________________________ (1)Under QSR-2019, Essent Guaranty cedes 40% of premiums on singles policies and 20% on all other policies. (2)The original profit commission on QSR-2019 was up to 60%; however because Essent Guaranty did not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn increased to 63% in 2022 and thereafter. Total RIF ceded under the QSR agreements was $8.2 billion as of March 31, 2024. Excess of Loss Reinsurance Essent Guaranty has entered into fully collateralized reinsurance agreements ("Radnor Re Transactions") with unaffiliated special purpose insurers domiciled in Bermuda. For the reinsurance coverage periods, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and a Radnor Re special purpose insurer will then provide second layer coverage up to the outstanding reinsurance coverage amount. Essent Guaranty and its affiliates retain losses in excess of the outstanding reinsurance coverage amount. The reinsurance premium due to each Radnor Re special purpose insurer is calculated by multiplying the outstanding reinsurance coverage amount at the beginning of a period by a coupon rate, which is the sum of one-month SOFR plus a risk margin, and then subtracting actual investment income collected on the assets in the related reinsurance trust during that period. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate the Radnor Re Transactions. The Radnor Re entities collateralized the coverage by issuing mortgage insurance-linked notes ("ILNs") in an aggregate amount equal to the initial coverage to unaffiliated investors. The notes have ten-year legal maturities and are non-recourse to any assets of Essent Guaranty or its affiliates. The proceeds of the notes were deposited into reinsurance trusts for the benefit of Essent Guaranty and will be the source of reinsurance claim payments to Essent Guaranty and principal repayments on the ILNs. Essent Guaranty has also entered into reinsurance agreements with panels of reinsurers that provide aggregate excess of loss coverage immediately above or pari-passu to the coverage provided by the Radnor Re Transactions. The aggregate excess of loss reinsurance coverage decreases over a ten-year period as the underlying covered mortgages amortize. Essent Guaranty has rights to terminate these reinsurance agreements. Essent Guaranty has entered into reinsurance agreements with a panels of reinsurers that provides excess of loss coverage on new insurance written from October 1, 2021 through December 31, 2022 and from January 1, 2023 through December 31, 2023. For the reinsurance coverage periods, Essent Guaranty and its affiliates retain the first layer of the respective aggregate losses, and the reinsurance panels will then provide second layer coverage up to the outstanding reinsurance coverage amounts. Essent Guaranty and its affiliates retain losses in excess of the outstanding reinsurance coverage amounts. The following table summarizes Essent Guaranty's excess of loss coverages and retentions provided by insurance linked notes as of March 31, 2024:
The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions provided by panels of reinsurers as of March 31, 2024:
The amount of monthly reinsurance premiums ceded to the Radnor Re entities will fluctuate due to changes in one-month SOFR and changes in money market rates that affect investment income collected on the assets in the reinsurance trusts. As the reinsurance premium will vary based on changes in these rates, we concluded that the Radnor Re Transactions contain embedded derivatives that will be accounted for separately like freestanding derivatives. The change in the fair value of the embedded derivatives is reported in earnings and included in other income. In connection with the Radnor Re Transactions, we concluded that the risk transfer requirements for reinsurance accounting were met as each Radnor Re entity is assuming significant insurance risk and a reasonable possibility of a significant loss. In addition, we assessed whether each Radnor Re entity was a variable interest entity ("VIE") and the appropriate accounting for the Radnor Re entities if they were VIEs. A VIE is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support or is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights or do not substantively participate in the gains and losses of the entity. A VIE is consolidated by its primary beneficiary. The primary beneficiary is the entity that has both (1) the power to direct the activities of the VIE that most significantly affect the entity’s economic performance and (2) the obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. While also considering these factors, the consolidation conclusion depends on the breadth of the decision-making ability and ability to influence activities that significantly affect the economic performance of the VIE. We concluded that the Radnor Re entities are VIEs. However, given that Essent Guaranty (1) does not have the unilateral power to direct the activities that most significantly affect their economic performance and (2) does not have the obligation to absorb losses or the right to receive benefits that could be potentially significant to these entities, the Radnor Re entities are not consolidated in these financial statements. The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivatives, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our condensed consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of March 31, 2024:
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Reserve for Losses and Loss Adjustment Expenses |
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Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“LAE”) for the three months ended March 31:
For the three months ended March 31, 2024, $4.8 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $29.5 million favorable prior year development during the three months ended March 31, 2024. Reserves remaining as of March 31, 2024 for prior years are $201.7 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the three months ended March 31, 2023, $2.0 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $32.9 million favorable prior year development during the three months ended March 31, 2023. Reserves remaining as of March 31, 2023 for prior years were $167.0 million as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the favorable prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year defaults in the default inventory, including the impact of previously identified defaults that cured. Original estimates are increased or decreased as additional information becomes known regarding individual claims. The Federal Reserve increased the target federal funds rate several times during 2022 and 2023 in an effort to reduce consumer price inflation. These rate increases have resulted in higher mortgage interest rates which may lower home sale activity and affect the options available to delinquent borrowers. It is reasonably possible that our estimate of losses could change in the near term as a result of changes in the economic environment, the impact of elevated mortgage interest rates on home sale activity, housing inventory and home prices.
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Debt Obligations |
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Mar. 31, 2024 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Credit Facility Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), are parties to a five-year secured credit facility with a committed capacity of $825 million (the Credit Facility"). The Credit Facility also provides for up to $175 million aggregate principal amount of uncommitted incremental term loan and/or revolving credit facilities that may be exercised at the Borrowers’ option so long as the Borrowers receive commitments from the lenders. Borrowings under the Credit Facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries. Borrowings accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. A commitment fee is due quarterly on the average daily amount of the undrawn revolving commitment. The applicable margin and the commitment fee are based on the senior unsecured debt rating or long-term issuer rating of Essent Group to the extent available, or the insurer financial strength rating of Essent Guaranty. The annual commitment fee rate at March 31, 2024 was 0.25%. The obligations under the Credit Facility are secured by certain assets of the Borrowers, excluding the stock and assets of its insurance and reinsurance subsidiaries. The Credit Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and Essent Guaranty's compliance with the PMIERs (see Note 14). The borrowings under the Credit Facility contractually mature on December 10, 2026. As of March 31, 2024, the Company was in compliance with the covenants and $425 million had been borrowed under the term loan portion of the Credit Facility with a weighted average interest rate of 7.06%. As of December 31, 2023, $425 million had been borrowed with a weighted average interest rate of 7.11%.
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Obligations under Guarantees Under the terms of CUW Solutions' contract underwriting agreements with lenders and subject to contractual limitations on liability, we agree to indemnify certain lenders against losses incurred in the event that we make an error in determining whether loans processed meet specified underwriting criteria, to the extent that such error materially restricts or impairs the salability of such loan, results in a material reduction in the value of such loan or results in the lender repurchasing the loan. The indemnification may be in the form of monetary or other remedies. We paid less than $0.1 million in remedy payments in the three months ended March 31, 2024, and we made no remedy payments in the three months ended March 31, 2023. As of March 31, 2024, management believes any potential claims for indemnification related to contract underwriting services through March 31, 2024 are not material to our consolidated financial position or results of operations. In addition to the indemnifications discussed above, in the normal course of business, we enter into agreements or other relationships with third parties pursuant to which we may be obligated under specified circumstances to indemnify the counterparties with respect to certain matters. Our contractual indemnification obligations typically arise in the context of agreements entered into by us to, among other things, purchase or sell services, finance our business and business transactions, lease real property and license intellectual property. The agreements we enter into in the normal course of business generally require us to pay certain amounts to the other party associated with claims or losses if they result from our breach of the agreement, including the inaccuracy of representations or warranties. The agreements we enter into may also contain other indemnification provisions that obligate us to pay amounts upon the occurrence of certain events, such as the negligence or willful misconduct of our employees, infringement of third-party intellectual property rights or claims that performance of the agreement constitutes a violation of law. Generally, payment by us under an indemnification provision is conditioned upon the other party making a claim, and typically we can challenge the other party’s claims. Further, our indemnification obligations may be limited in time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us under an indemnification agreement or obligation. As of March 31, 2024, contingencies triggering material indemnification obligations or payments have not occurred historically and are not expected to occur. The nature of the indemnification provisions in the various types of agreements and relationships described above are believed to be low risk and pervasive, and we consider them to have a remote risk of loss or payment. We have not recorded any provisions on the condensed consolidated balance sheets related to indemnifications.
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Capital Stock | Capital Stock Our authorized share capital consists of 233.3 million shares of a single class of common shares. The common shares have no preemptive rights or other rights to subscribe for additional shares, and no rights of redemption, conversion or exchange. Under certain circumstances and subject to the provisions of Bermuda law and our bye-laws, we may be required to make an offer to repurchase shares held by members. The common shares rank pari passu with one another in all respects as to rights of payment and distribution. In general, holders of common shares will have one vote for each common share held by them and will be entitled to vote, on a non-cumulative basis, at all meetings of shareholders. In the event that a shareholder is considered a 9.5% Shareholder under our bye-laws, such shareholder's votes will be reduced by whatever amount is necessary so that after any such reduction the votes of such shareholder will not result in any other person being treated as a 9.5% Shareholder with respect to the vote on such matter. Under these provisions certain shareholders may have their voting rights limited to less than one vote per share, while other shareholders may have voting rights in excess of one vote per share. Dividends The following table presents the amounts declared and paid per common share each quarter:
In April 2024, the Board of Directors declared a quarterly cash dividend of $0.28 per common share payable on June 10, 2024 to shareholders of record on May 31, 2024. Share Repurchase Plan In October 2023, the Board of Directors approved a share repurchase plan that authorizes the Company to repurchase $250 million of common shares in the open market between January 1, 2024 and December 31, 2025. Through March 31, 2024, the Company repurchased 97,111 common shares at a cost of $5.1 million under the 2023 plan, leaving $244.9 million remaining unused under the authorized repurchase plan as of March 31, 2024.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation In 2013, Essent Group's Board of Directors adopted, and Essent Group's shareholders approved, the Essent Group Ltd. 2013 Long-Term Incentive Plan (the "2013 Plan"), which was effective upon completion of the initial public offering. The 2013 Plan was most recently amended effective upon shareholder approval in May 2023 to increase the number of shares available for issuance under the 2013 Plan by 2 million shares. The types of awards available under the 2013 Plan include nonvested shares, nonvested share units, non-qualified share options, incentive stock options, share appreciation rights, and other share-based or cash-based awards. Nonvested shares and nonvested share units granted under the 2013 Plan have rights to dividends, which entitle holders to the same dividend value per share as holders of common shares in the form of dividend equivalent units ("DEUs"). DEUs are subject to the same vesting and other terms and conditions as the corresponding nonvested shares and nonvested share units. DEUs vest when the underlying shares or share units vest and are forfeited if the underlying share or share units forfeit prior to vesting. The maximum number of shares and share units available for issuance is 7.5 million under the 2013 Plan, as amended. As of March 31, 2024, there were 3.3 million common shares available for future grant under the 2013 Plan. The following table summarizes nonvested common share, nonvested common share unit and DEU activity for the three months ended March 31, 2024:
In February 2024, certain members of senior management were granted nonvested common shares under the 2013 Plan that were subject to time-based and performance-based vesting. The time-based share awards granted in February 2024 vest in equal installments commencing on March 1 of the year following the grant year. The performance-based share awards granted in February 2024 vest based upon our compounded annual book value per share growth percentage and relative total shareholder return during a three-year performance period that commenced on January 1, 2024 and vest on March 1, 2027. Shares were issued at the maximum 200% of target. The portion of these nonvested performance-based share awards that will be earned is as follows:
In the event that the compounded annual book value per share growth or the relative total shareholder return falls between the performance levels shown above, the nonvested common shares earned will be determined on a straight-line basis between the respective levels shown. In February 2024, nonvested common share units were issued to certain vice president and staff level employees and are subject to time-based vesting in equal installments on January 6, 2025 and 2026. In connection with our incentive program covering bonus awards for performance year 2023, in February 2024, time-based share units were issued to certain employees that vest in equal installments on March 1, 2025, 2026 and 2027. Also in February 2024, time-based share units were granted to certain vice president and staff level employee that vest in equal installments on March 1, 2027, 2028 and 2029. Quoted market prices are used for the valuation of common shares granted that do not contain a market condition under ASC 718. The performance-based share awards granted in February 2022, 2023 and 2024 contain a market condition and were valued based on analysis provided by a third-party valuation firm using a risk neutral simulation taking into effect the vesting conditions of the grant. The total fair value on the vesting date of nonvested shares, share units or DEUs that vested was $8.4 million and $13.2 million for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, there was $42.4 million of total unrecognized compensation expense related to nonvested shares or share units outstanding at March 31, 2024 and we expect to recognize the expense over a weighted average period of 2.6 years. Employees have the option to tender shares to Essent Group to pay the minimum employee statutory withholding taxes associated with shares upon vesting. Common shares tendered by employees to pay employee withholding taxes totaled 157,273 in the three months ended March 31, 2024. The tendered shares were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of March 31, 2024. Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows:
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Dividends Restrictions |
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Mar. 31, 2024 | |
Statutory Accounting Practices, Statutory Amount Available for Dividend Payments [Abstract] | |
Dividends Restrictions | Dividends Restrictions Our U.S. insurance subsidiaries are subject to certain capital and dividend rules and regulations as prescribed by jurisdictions in which they are authorized to operate. Under the insurance laws of the Commonwealth of Pennsylvania, Essent Guaranty and Essent PA may pay dividends during any 12-month period in an amount equal to the greater of (i) 10% of the preceding year-end statutory policyholders' surplus or (ii) the preceding year's statutory net income. The Pennsylvania statute also specifies that dividends and other distributions can be paid out of positive unassigned surplus without prior approval. At March 31, 2024, Essent Guaranty had unassigned surplus of approximately $325.5 million and Essent PA had unassigned surplus of approximately $17.1 million. In three months ended March 31, 2024 and 2023, Essent Guaranty paid dividends of $45 million and $90 million to its parent, Essent US Holdings, Inc. Essent PA did not pay a dividend in the three months ended March 31, 2024 or 2023. As of March 31, 2024, Essent Guaranty and Essent PA could pay additional ordinary dividends in 2023 of $325.5 million and $5.4 million, respectively. Essent Re is subject to certain dividend restrictions as prescribed by the Bermuda Monetary Authority and under certain agreements with counterparties. In connection with the quota share reinsurance agreement with Essent Guaranty, Essent Re has agreed to maintain a minimum total equity of $100 million. As of March 31, 2024, Essent Re had total equity of $1.8 billion. At March 31, 2024, our insurance subsidiaries were in compliance with these rules, regulations and agreements.
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Earnings per Share (EPS) |
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Earnings per Share (EPS) | Earnings per Share (EPS) The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share:
There were 167,730 and 111,870 antidilutive shares for the three months ended March 31, 2024 and 2023, respectively. Nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. The 2024, 2023, and 2022 performance-based share awards vest based upon our compounded annual book value per share growth percentage and relative total shareholder return during a three-year performance period. The following table summarizes the performance-based shares issuable if the reporting date was the end of the contingency period.
(1) The 2021 performance based awards vested at 133% relative to target on March 1, 2024.
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Accumulated Other Comprehensive Income (Loss) |
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Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the rollforward of accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023:
(1)Included in net realized investment losses on our condensed consolidated statements of comprehensive income.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments We carry certain of our financial instruments at fair value. We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability, other than in a forced liquidation. Fair Value Hierarchy ASC No. 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The level within the fair value hierarchy to measure the financial instrument shall be determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: •Level 1 — Quoted prices for identical instruments in active markets accessible at the measurement date. •Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and valuations in which all significant inputs are observable in active markets. Inputs are observable for substantially the full term of the financial instrument. •Level 3 — Valuations derived from one or more significant inputs that are unobservable. Determination of Fair Value When available, we generally use quoted market prices to determine fair value and classify the financial instrument in Level 1. In cases where quoted market prices for similar financial instruments are available, we utilize these inputs for valuation techniques and classify the financial instrument in Level 2. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flows, present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows and we classify the financial instrument in Level 3. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. We used the following methods and assumptions in estimating fair values of financial instruments: •Investments available for sale — Investments available for sale are valued using quoted market prices in active markets, when available, and those investments are classified as Level 1 of the fair value hierarchy. Level 1 investments available for sale include investments such as U.S. Treasury securities and money market funds. Investments available for sale are classified as Level 2 of the fair value hierarchy if quoted market prices are not available and fair values are estimated using quoted prices of similar securities or recently executed transactions for the securities. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities, corporate debt securities, residential and commercial mortgage securities and asset-backed securities are classified as Level 2 investments. We use independent pricing sources to determine the fair value of securities available for sale in Level 1 and Level 2 of the fair value hierarchy. We use one primary pricing service to provide individual security pricing based on observable market data and receive one quote per security. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing service and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, non-U.S. government securities and corporate debt securities are valued by our primary vendor using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Residential and commercial mortgage securities and asset-backed securities are valued by our primary vendor using proprietary models based on observable inputs, such as interest rate spreads, prepayment speeds and credit risk. As part of our evaluation of investment prices provided by our primary pricing service, we obtained and reviewed their pricing methodologies which include a description of how each security type is evaluated and priced. We review the reasonableness of prices received from our primary pricing service by comparison to prices obtained from additional pricing sources. We have not made any adjustments to the prices obtained from our primary pricing service. Assets and Liabilities Measured at Fair Value All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis.
(1)Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our condensed consolidated balance sheet. See Note 4 for more information. (2)Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy.
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Statutory Accounting |
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Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Statutory Accounting | Statutory Accounting Our U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with the accounting practices prescribed or permitted by their respective state’s department of insurance, which is a comprehensive basis of accounting other than GAAP. We did not use any prescribed or permitted statutory accounting practices (individually or in the aggregate) that resulted in reported statutory surplus or capital that was significantly different from the statutory surplus or capital that would have been reported had National Association of Insurance Commissioners’ statutory accounting practices been followed. The following tables present Essent Guaranty’s and Essent PA’s statutory net income for the three months ended March 31, 2024 and 2023 as well as statutory surplus and contingency reserve liability at March 31, 2024 and December 31, 2023:
Net income determined in accordance with statutory accounting practices differs from GAAP. In 2024 and 2023, the more significant differences between net income determined under statutory accounting practices and GAAP for Essent Guaranty and Essent PA relate to policy acquisition costs and income taxes. Under statutory accounting practices, policy acquisition costs are expensed as incurred while such costs are capitalized and amortized to expense over the life of the policy under GAAP. We are eligible for a tax deduction, subject to certain limitations for amounts required by state law or regulation to be set aside in statutory contingency reserves when we purchase non-interest-bearing United States Mortgage Guaranty Tax and Loss Bonds (“T&L Bonds”) issued by the Treasury Department. Under statutory accounting practices, this deduction reduces the tax provision recorded by Essent Guaranty and Essent PA and, as a result, increases statutory net income and surplus as compared to net income and equity determined in accordance with GAAP. At March 31, 2024 and December 31, 2023, the statutory capital of our U.S. insurance subsidiaries, which is defined as the total of statutory surplus and contingency reserves, was in excess of the statutory capital necessary to satisfy their regulatory requirements. Effective December 31, 2015, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency, implemented new coordinated Private Mortgage Insurer Eligibility Requirements, which we refer to as the "PMIERs." The PMIERs represent the standards by which private mortgage insurers are eligible to provide mortgage insurance on loans owned or guaranteed by Fannie Mae and Freddie Mac. The PMIERs include financial strength requirements incorporating a risk-based framework that require approved insurers to have a sufficient level of liquid assets from which to pay claims. The PMIERs also include enhanced operational performance expectations and define remedial actions that apply should an approved insurer fail to comply with these requirements. In 2018, the GSEs released revised PMIERs framework ("PMIERs 2.0") which became effective on March 31, 2019. As of March 31, 2024, Essent Guaranty, our GSE-approved mortgage insurance company, was in compliance with PMIERs 2.0. Statement of Statutory Accounting Principles No. 58, Mortgage Guaranty Insurance, requires mortgage insurers to establish a special contingency reserve for statutory accounting purposes included in total liabilities equal to 50% of earned premium for that year. This reserve is required to be maintained for a period of 120 months to protect against the effects of adverse economic cycles. After 120 months, the reserve is released to unassigned funds. In the event an insurer’s loss ratio in any calendar year exceeds 35%, however, the insurer may, after regulatory approval, release from its contingency reserves an amount equal to the excess portion of such losses. During the three months ended March 31, 2024, Essent Guaranty increased its contingency reserve by $50.6 million and Essent PA decreased its contingency reserve by $1.9 million. During the three months ended March 31, 2024 and 2023, Essent Guaranty released contingency reserves of $20.4 million and $9.8 million, respectively, and Essent PA released contingency reserves of $2.0 million and $0.8 million, respectively, to unassigned funds upon completion of the 120 month holding period. Under The Insurance Act 1978, as amended, and related regulations of Bermuda (the "Insurance Act"), Essent Re is required to annually prepare statutory financial statements and a statutory financial return in accordance with the financial reporting provisions of the Insurance Act, which is a basis other than GAAP. The Insurance Act also requires that Essent Re maintain minimum share capital of $1 million and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2023, all such requirements were met. Essent Re's statutory capital and surplus was $1.8 billion as of March 31, 2024 and $1.9 billion as of December 31, 2023. Essent Re's statutory net income was $82.2 million and $72.6 million for the three months ended March 31, 2024 and 2023, respectively. Statutory capital and surplus as of March 31, 2024 and December 31, 2023 and statutory net income in the three months ended March 31, 2024 and 2023 determined in accordance with statutory accounting practices were not significantly different than the amounts determined under GAAP.
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Acquisitions |
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Acquisitions | Acquisitions Effective July 1, 2023, Essent Holdings acquired all of the issued and outstanding shares of capital stock of Agents National Title Holding Company (“Agents National Title”) and the issued and outstanding membership interests of Boston National Holdings LLC (“Boston National Title”) for $92.6 million in cash in a single settlement with the seller. The purchase price is subject to further customary post-closing adjustments as described in a securities purchase agreement among the parties to the transaction. The acquisition provides complementary products and services to our mortgage insurance business, adding a team of seasoned title professionals to Essent and providing a platform to leverage our capital, lender network and operational expertise in a well-established, adjacent real estate sector. The acquired businesses contributed revenues of $17.9 million, principally comprised of $15.3 million of net premiums earned and $1.4 million of settlement services revenues, which are included in other income, and pre-tax net losses of $4.0 million to our results for the three months ended March 31, 2024. We incurred $3.4 million of acquisition-related costs for the three months ended March 31, 2023. These expenses are included in other underwriting and operating expenses on our condensed consolidated income statement. The acquisition of Agents National Title and Boston National Title was accounted for as a business combination using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date. The excess of consideration transferred over the fair value of net assets acquired was recorded as goodwill. The Company allocated the goodwill to its Title operating segment. The following table summarizes the consideration transferred to acquire Agents National Title and Boston National Title and the amounts of identified assets acquired and liabilities assumed, including purchase accounting adjustments that have been recorded by Essent during the measurement period:
Adjustments to Goodwill were primarily related to the fair value of claims reserve liabilities, agency relationship intangible assets and other assets. While the valuation of acquired assets and liabilities is substantially completed, fair value estimates related to the assets and liabilities from Agents National Title and Boston National Title are subject to adjustment for up to one year after the closing date of the acquisition as additional information becomes available. Valuations subject to adjustment include, but are not limited to, agency relationship and customer list intangibles, reserves, and deferred income taxes as management continues to review the estimated fair values and evaluate the assumed tax position. When the valuation is final, any changes to the preliminary valuation of acquired assets and liabilities could result in adjustments to identified intangibles and goodwill. The fair values of assets acquired and liabilities assumed is expected to be finalized during the remeasurement period, which ends one year from the closing date, or July 1, 2024. In addition, the consideration paid still remains subject to potential purchase price adjustments between Essent and the seller. The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition, and represents the excess purchase price over the estimated fair value of the net assets acquired from Agents National Title and Boston National Title. As of March 31, 2024, intangible assets were $22.4 million, net of $1.1 million of accumulated amortization.
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Pay vs Performance Disclosure - USD ($) $ in Thousands |
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Mar. 31, 2024 |
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Pay vs Performance Disclosure | ||
Net income | $ 181,719 | $ 170,827 |
Insider Trading Arrangements - David Weinstock [Member] |
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Mar. 31, 2024
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Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | On March 11, 2024, David Weinstock, the Company’s Senior Vice President and Chief Financial Officer, entered into a 10b5-1 sales plan (the “Plan”) intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act. The Plan provides for the sale of up to an aggregate of 4,000 shares of the Company’s common stock beneficially owned by Mr. Weinstock during the term of the Plan and will be in effect until the earlier of (1) February 8, 2025 and (2) the date on which an aggregate of 4,000 shares of the Company’s common stock have been sold under the Plan.
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Name | David Weinstock |
Title | Senior Vice President and Chief Financial Office |
Rule 10b5-1 Arrangement Adopted | true |
Non-Rule 10b5-1 Arrangement Adopted | false |
Adoption Date | March 11, 2024 |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Arrangement Duration | 334 days |
Aggregate Available | 4,000 |
Recently Issued Accounting Standards (Policies) |
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Accounting Policies [Abstract] | |
Accounting Standards Adopted During the Period And Accounting Standards Not Yet Adopted | Accounting Standards Adopted During the Period In June 2022, the FASB issued ASU No. 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions. This update clarifies the guidance in ASC 820 on the fair value measurement of an equity security that is subject to a contractual sale restriction and requires specific disclosures related to such an equity security. The update clarifies that a contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security and is not included in the equity security's unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value. The update also requires specific disclosures related to equity securities that are subject to contractual sale restrictions, including (1) the fair value of such equity securities reflected in the balance sheet, (2) the nature and remaining duration of the corresponding restrictions, and (3) any circumstances that could cause a lapse in the restrictions. The ASU was effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted. The adoption of this ASU did not have a material effect on the Company's consolidated operating results or financial position. Accounting Standards Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments’ significant expenses on an interim and annual basis. The ASU requires that public entities disclose significant expense categories and amounts for each reportable segment, which are derived from expenses that are 1) regularly reported to an entity’s chief operating decision-maker (CODM) and 2) included in a segment’s reported measures of profit or loss. Public entities must also disclose an amount for “other segment items,” representing the difference between 1) segment revenue less significant segment expenses and 2) the reportable segment’s profit or loss measures. A description of the composition of “other segment items” also is required as well as the title and position of the CODM and entities must explain how the CODM uses the reported measures of profit or loss to assess segment performance. The ASU also requires interim disclosure of certain segment-related disclosures that previously were required only on an annual basis and clarifies that entities with a single reportable segment are subject to both new and existing segment reporting requirements under Topic 280. It also clarifies that an entity is permitted to disclose multiple measures of segment profit or loss, provided that certain criteria are met. The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Entities must adopt the changes to the segment reporting guidance on a retrospective basis, with early adoption permitted. The Company is currently evaluating the impact that the ASU will have on our consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures. The standard requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on income taxes paid, including taxes paid by jurisdiction. The ASU will be effective for annual periods beginning after December 15, 2024. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively, with early adoption permitted. The Company is currently evaluating the impact that the ASU will have on our consolidated financial statements.
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Investments (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments Available for Sale | Investments available for sale consist of the following:
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Schedule of Amortized Cost and Fair Value of Investments Available for Sale by Contractual Maturity | The amortized cost and fair value of investments available for sale at March 31, 2024, by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories.
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Schedule of Realized Gross Gains and Losses on Sale of Investments Available for Sale | The components of realized investment (losses) gains, net on the condensed consolidated statements of comprehensive income were as follows:
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Schedule of Fair Value of Investments in an Unrealized Loss Position and Related Unrealized Losses | The fair value of investments available for sale in an unrealized loss position and the related unrealized losses for which no allowance for credit loss has been recorded were as follows:
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Schedule of Net Investment Income | Net investment income consists of:
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Reinsurance (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reinsurance Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Effects of Reinsurance | The effect of reinsurance on net premiums written and earned is as follows:
(1)Net of profit commission. The following tables summarizes Essent Guaranty's quota share reinsurance agreements as of March 31, 2024:
_______________________________________________________________________________ (1)Under QSR-2019, Essent Guaranty cedes 40% of premiums on singles policies and 20% on all other policies. (2)The original profit commission on QSR-2019 was up to 60%; however because Essent Guaranty did not exercise its option to terminate the QSR Agreement on December 31, 2021, the maximum profit commission that Essent Guaranty could earn increased to 63% in 2022 and thereafter.
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Schedule of Coverages and Retentions | The following table summarizes Essent Guaranty's excess of loss coverages and retentions provided by insurance linked notes as of March 31, 2024:
The following table summarizes Essent Guaranty's excess of loss reinsurance coverages and retentions provided by panels of reinsurers as of March 31, 2024:
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Schedule of VIE Assets and Total Maximum Exposure to Loss | The following table presents total assets of each Radnor Re special purpose insurer as well as our maximum exposure to loss associated with each Radnor Re entity, representing the fair value of the embedded derivatives, using observable inputs in active markets (Level 2), included in other assets (other accrued liabilities) on our condensed consolidated balance sheet and the estimated net present value of investment earnings on the assets in the reinsurance trusts, each as of March 31, 2024:
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Reserve for Losses and Loss Adjustment Expenses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Beginning and Ending Reserve Balances for Losses and Loss Adjustment Expenses (LAE) | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“LAE”) for the three months ended March 31:
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Capital Stock (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Dividends Declared and Paid | The following table presents the amounts declared and paid per common share each quarter:
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Stock-Based Compensation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Common Share and Nonvested Common Share Unit Activity | The following table summarizes nonvested common share, nonvested common share unit and DEU activity for the three months ended March 31, 2024:
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Schedule of Portion of Nonvested Common Shares Earned based upon Achievement of Compounded Annual Book Value per share Growth | The portion of these nonvested performance-based share awards that will be earned is as follows:
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Schedule of Compensation Expense, Net of Forfeitures, and Related Tax Effects Recognized in Connection with Nonvested shares | Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows:
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Earnings per Share (EPS) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Net Income and Weighted Average Common Shares Outstanding used in Computations of Basic and Diluted Earnings per Common Share | The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share:
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Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The following table summarizes the performance-based shares issuable if the reporting date was the end of the contingency period.
(1) The 2021 performance based awards vested at 133% relative to target on March 1, 2024.
|
Accumulated Other Comprehensive Income (Loss) (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Rollforward of Accumulated Other Comprehensive Loss | The following table presents the rollforward of accumulated other comprehensive loss for the three months ended March 31, 2024 and 2023:
(1)Included in net realized investment losses on our condensed consolidated statements of comprehensive income.
|
Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Vale on a Recurring Basis | All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis.
(1)Does not include the fair value of embedded derivatives, which we have accounted for separately as freestanding derivatives and included in other assets or other accrued liabilities in our condensed consolidated balance sheet. See Note 4 for more information. (2)Does not include certain other invested assets that are measured at fair value using the net asset value per share (or its equivalent) as a practical expedient, as applicable accounting standards do not provide for classification within the fair value hierarchy.
|
Statutory Accounting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Insurance [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Statutory Net Income, Statutory Surplus and Contingency Reserve Liability | The following tables present Essent Guaranty’s and Essent PA’s statutory net income for the three months ended March 31, 2024 and 2023 as well as statutory surplus and contingency reserve liability at March 31, 2024 and December 31, 2023:
|
Acquisitions (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the consideration transferred to acquire Agents National Title and Boston National Title and the amounts of identified assets acquired and liabilities assumed, including purchase accounting adjustments that have been recorded by Essent during the measurement period:
|
Nature of Operations and Basis of Presentation (Details) - state |
3 Months Ended | |||
---|---|---|---|---|
Jan. 01, 2021 |
Dec. 31, 2020 |
Mar. 31, 2019 |
Mar. 31, 2024 |
|
Affiliated Entity | Essent Guaranty | ||||
Insurance Premium Revenue Recognition | ||||
Number of states in which the entity is licensed to write mortgage insurance | 50 | |||
Affiliated Entity | Essent Re | Quota share reinsurance | ||||
Insurance Premium Revenue Recognition | ||||
Reinsurance percentage | 35.00% | 25.00% | ||
Affiliated Entity | Essent PA | Reinsurance for mortgage insurance coverage in excess of 25% | ||||
Insurance Premium Revenue Recognition | ||||
Reinsurance for mortgage insurance coverage threshold (in excess of) | 25.00% | |||
Maximum | ||||
Insurance Premium Revenue Recognition | ||||
Residential mortgage down payment percentage for which mortgage insurance is generally required (less than) | 20.00% |
Investments - Net Investment Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Components of net investment income | ||
Gross investment income | $ 53,431 | $ 45,194 |
Investment expenses | (1,346) | (1,958) |
Net investment income | 52,085 | 43,236 |
Fixed maturities | ||
Components of net investment income | ||
Gross investment income | 46,288 | 43,473 |
Short-term investments | ||
Components of net investment income | ||
Gross investment income | $ 7,143 | $ 1,721 |
Reinsurance - Effect on Net Premiums Written and Earned (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Net premiums written: | ||
Direct | $ 268,931 | $ 239,491 |
Ceded | (30,391) | (33,591) |
Net premiums written | 238,540 | 205,900 |
Net premiums earned: | ||
Direct | 275,981 | 244,849 |
Ceded | (30,391) | (33,591) |
Net premiums earned | $ 245,590 | $ 211,258 |
Reinsurance - Quota Share Reinsurance (Details) - Reinsurance Policy, Type [Axis]: Quota Share Reinsurance - USD ($) $ in Billions |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Dec. 31, 2021 |
Mar. 31, 2024 |
Dec. 31, 2022 |
|
QSR-2019 | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceding Percentage | 20.00% | ||
Ceding Commission | 20.00% | ||
Profit Commission | 60.00% | 63.00% | |
Ceded premiums earned related to percent of risk on eligible single premium policies | 40.00% | ||
QSR-2022 | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceding Percentage | 20.00% | ||
Ceding Commission | 20.00% | ||
Profit Commission | 62.00% | 63.00% | |
RIF ceded | $ 8.2 | ||
QSR-2023 | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceding Percentage | 17.50% | ||
Ceding Commission | 20.00% | ||
Profit Commission | 58.00% | ||
QSR-2024 | |||
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |||
Ceding Percentage | 15.00% | ||
Ceding Commission | 20.00% | ||
Profit Commission | 57.00% |
Reinsurance - Excess of Loss Reinsurance (Details) - Reinsurance Policy, Type [Axis]: Mortgage Insurance |
3 Months Ended |
---|---|
Mar. 31, 2024 | |
Other Reinsurance | Essent Guaranty | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
VIE | Mortgage Insurance Linked Notes | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Reinsurance retention policy, debt issued to cover insurance, term | 10 years |
VIE | Radnor Re | |
SEC Schedule, 12-17, Insurance Companies, Reinsurance [Line Items] | |
Amortization period | 10 years |
Reserve for Losses and Loss Adjustment Expenses - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | ||
Incurred claims and claim adjustment expenses | $ 4,846 | $ 2,001 |
Favorable prior year development | 29,483 | 32,874 |
Reserve for losses and LAE, for prior years | $ 201,700 | $ 167,000 |
Debt Obligations (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
|
Credit Facility [Line Items] | |||
Credit facility expiration period | 5 years | ||
Committed capacity | $ 825,000,000 | $ 825,000,000 | |
Amount outstanding, gross | $ 425,000,000 | $ 425,000,000 | $ 425,000,000 |
Weighted average interest rate during period | 7.06% | 7.06% | 7.11% |
Revolving Credit Facility | |||
Credit Facility [Line Items] | |||
Line of credit facility, accordion feature | $ 175,000,000 | $ 175,000,000 | |
Credit facility, commitment fee rate | 0.25% |
Commitments and Contingencies - (Details) - USD ($) $ in Millions |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Indemnifications related to contract underwriting services | ||
Loss Contingencies [Line Items] | ||
Amount paid for remedies (less than in three months ended March 31, 2024) | $ 0.1 | $ 0.0 |
Capital Stock - Dividends (Details) - $ / shares |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|
Jun. 10, 2024 |
Apr. 30, 2024 |
Mar. 31, 2024 |
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Dec. 31, 2024 |
Dec. 31, 2023 |
|
Dividends Payable [Line Items] | |||||||||
Quarterly cash dividends paid (in dollars per share) | $ 0.28 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.00 | |||
Quarterly cash dividends declared (in dollars per share) | $ 0.28 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 1.00 | |||
Subsequent Event | |||||||||
Dividends Payable [Line Items] | |||||||||
Quarterly cash dividends declared (in dollars per share) | $ 0.28 | ||||||||
Forecast | |||||||||
Dividends Payable [Line Items] | |||||||||
Quarterly cash dividends paid (in dollars per share) | $ 0.28 | $ 0.28 | |||||||
Quarterly cash dividends declared (in dollars per share) | $ 0.28 |
Stock-Based Compensation - Summary of Compensation Expense, Net of Forfeitures (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Share-Based Payment Arrangement [Abstract] | ||
Compensation expense | $ 6,820 | $ 5,106 |
Income tax benefit | $ 1,378 | $ 1,018 |
Dividends Restrictions (Details) - USD ($) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Dividends Restrictions | |||
Total equity | $ 5,226,154,000 | $ 4,648,941,000 | $ 5,102,550,000 |
Related Party | Essent Guaranty | |||
Dividends Restrictions | |||
Amount available for dividend distribution | 325,500,000 | ||
Related Party | Essent PA | |||
Dividends Restrictions | |||
Unassigned surplus | 17,100,000 | ||
Amount available for dividend distribution | 5,400,000 | ||
Affiliated Entity | Essent Guaranty | |||
Dividends Restrictions | |||
Dividends paid to parent company | 45,000,000 | 90,000,000 | |
Affiliated Entity | Essent PA | |||
Dividends Restrictions | |||
Dividends paid to parent company | 0 | $ 0 | |
Affiliated Entity | Essent Re | |||
Dividends Restrictions | |||
Total equity | 1,800,000,000 | ||
Affiliated Entity | Essent Re | Minimum | Quota share reinsurance | |||
Dividends Restrictions | |||
Total equity | $ 100,000,000 |
Earnings per Share (EPS) - Reconciliation of Net Income and Weighted Average Common Shares Outstanding (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Earnings Per Share [Abstract] | ||
Net income | $ 181,719 | $ 170,827 |
Basic weighted average shares outstanding (in shares) | 105,697 | 106,943 |
Dilutive effect of nonvested shares (in shares) | 1,073 | 642 |
Diluted weighted average shares outstanding (in shares) | 106,770 | 107,585 |
Basic earnings per share (in dollars per share) | $ 1.72 | $ 1.60 |
Diluted earnings per share (in dollars per share) | $ 1.70 | $ 1.59 |
Earnings per Share (EPS) - Narrative (Details) - shares |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
|
Stock-based compensation | ||||
Antidilutive nonvested shares (in shares) | 167,730 | 111,870 | ||
Performance-based share awards | ||||
Stock-based compensation | ||||
Vesting period | 3 years | 3 years | 3 years |
Statutory Accounting - Schedule of Statutory Net Income, Statutory Surplus and Contingency Reserve Liability (Details) - Affiliated Entity - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
Essent Guaranty | ||
Dividends Restrictions | ||
Statutory net income (loss) | $ 125,356 | $ 123,936 |
Statutory surplus | 1,030,779 | 1,004,104 |
Contingency reserve liability | 2,316,323 | 2,265,713 |
Essent PA | ||
Dividends Restrictions | ||
Statutory net income (loss) | 153 | (112) |
Statutory surplus | 56,101 | 54,044 |
Contingency reserve liability | $ 50,340 | $ 52,244 |
Statutory Accounting - Narrative (Details) - Affiliated Entity - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
Essent Guaranty | |||
Dividends Restrictions | |||
Increase in contingency reserve | $ 50,600 | ||
Released contingency reserve | 20,400 | $ 9,800 | |
Statutory net income | 125,356 | 123,936 | |
Essent PA | |||
Dividends Restrictions | |||
Increase in contingency reserve | (1,900) | ||
Released contingency reserve | 2,000 | 800 | |
Statutory net income | 153 | (112) | |
Essent Re | |||
Dividends Restrictions | |||
Statutory capital and surplus | 1,800,000 | $ 1,900,000 | |
Statutory net income | $ 82,200 | $ 72,600 |
Acquisitions - Narrative (Details) - Boston National Title - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Jul. 01, 2023 |
Mar. 31, 2024 |
Mar. 31, 2024 |
|
Business Acquisition [Line Items] | |||
Payments in cash | $ 92,600 | $ 92,625 | |
Contributed revenues | $ 17,900 | ||
Net losses | (4,000) | ||
Acquisition related costs | 3,400 | ||
Intangible assets | 22,400 | 22,400 | |
Accumulated amortization | 1,100 | $ 1,100 | |
Net Premium Earned | |||
Business Acquisition [Line Items] | |||
Contributed revenues | 15,300 | ||
Settlement Services Revenues | |||
Business Acquisition [Line Items] | |||
Contributed revenues | $ 1,400 |
Acquisitions - Schedule of Preliminary Valuation of Identifiable Assets Acquired and Liabilities Assumed (Details) - Boston National Title - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Jul. 01, 2023 |
Mar. 31, 2024 |
|
Consideration Paid: | ||
Cash | $ 92,600 | $ 92,625 |
Assets Acquired: | ||
Cash and cash equivalents | 5,864 | 5,864 |
Short-term investments | 21,108 | 21,108 |
Fixed maturities available for sale | 9,668 | 9,668 |
Identifiable intangible assets | 26,300 | 23,500 |
Other assets | 16,366 | 13,689 |
Measurement Period Adjustments | ||
Identifiable intangible assets | (2,800) | |
Other assets | (2,677) | |
Reserve for losses | (464) | |
Other liabilities | 6,512 | |
Total Identifiable Net Assets | (11,525) | |
Goodwill | 11,525 | |
Liabilities Assumed: | ||
Reserve for losses | 14,613 | 14,149 |
Other liabilities | 10,399 | 16,911 |
Total Identifiable Net Assets | 54,294 | 42,769 |
Goodwill | $ 38,331 | $ 49,856 |