MacMusic  |  PcMusic  |  440 Software  |  440 Forums  |  440TV  |  Zicos
essent
Search

Essent Group Ltd. Announces Fourth Quarter & Full Year 2020 Results; Declares Quarterly Dividend

Friday February 19, 2021. 03:01 PM , from Digital Pro Sound
Essent Group Ltd. Announces Fourth Quarter & Full Year 2020 Results; Declares Quarterly Dividend
HAMILTON, Bermuda–(BUSINESS WIRE)–Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended December 31, 2020 of $123.6 million or $1.10 per diluted share, compared to $147.0 million or $1.49 per diluted share for the quarter ended December 31, 2019. For the full year 2020, net income was $413.0 million, or $3.88 per diluted share, compared to $555.7 million, or $5.66 per diluted share for 2019.

Essent also announced today that its Board of Directors has declared a quarterly cash dividend of $0.16 per common share. The dividend is payable on March 19, 2021, to shareholders of record on March 10, 2021.

“2020 was a challenging year for our country and economy, however, we were pleased with the confidence that our buy, manage and distribute operating model provides our stakeholders in navigating the COVID-19 environment,” said Mark A. Casale, Chairman and Chief Executive Officer. “During 2020, we were also pleased with housing’s resilience, which remains the bright spot in the economy entering 2021 as supply-demand imbalances and favorable first-time home buying trends persist which are positive for our franchise.”

Fourth Quarter & Full Year 2020 Financial Highlights:

Insurance in force as of December 31, 2020 was $198.9 billion, compared to $190.8 billion as of September 30, 2020 and $164.0 billion as of December 31, 2019.

New insurance written for the fourth quarter was $29.6 billion, compared to $36.7 billion in the third quarter of 2020 and $15.8 billion in the fourth quarter of 2019.

Net premiums earned for the fourth quarter were $222.3 million, compared to $222.3 million in the third quarter of 2020 and $207.7 million in the fourth quarter of 2019.

The expense ratio for the fourth quarter was 16.6%, compared to 16.7% in the third quarter of 2020 and 19.9% in the fourth quarter of 2019.

The provision for losses and LAE for the fourth quarter was $62.1 million, compared to a provision of $55.3 million in the third quarter of 2020 and a provision of $10.9 million in the fourth quarter of 2019.

The percentage of loans in default as of December 31, 2020 was 3.93%, compared to 4.54% as of September 30, 2020 and 0.85% as of December 31, 2019.

As of January 31, 2021, the percentage of loans in default was 3.89%.

The combined ratio for the fourth quarter was 44.5%, compared to 41.6% in the third quarter of 2020 and 25.1% in the fourth quarter of 2019.

The consolidated balance of cash and investments at December 31, 2020 was $4.8 billion, including cash and investment balances at Essent Group Ltd. of $562.7 million.

The combined risk-to-capital ratio of the U.S. mortgage insurance business, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 11.1:1 as of December 31, 2020.

On October 8, 2020, Essent Guaranty, Inc. obtained $399.2 million of fully collateralized excess of loss reinsurance coverage on mortgage insurance policies written by Essent in September 2019 through July 2020 from Radnor Re 2020-2 Ltd., a newly formed Bermuda special purpose insurer. Radnor Re 2020-2 Ltd. is not a subsidiary or an affiliate of Essent Group Ltd.

On October 14, 2020, Essent Group Ltd. entered into an amended and restated credit facility, increasing to $625 million the committed capacity and extending the contractual maturity to October 16, 2023.

Conference Call:

Essent management will hold a conference call at 10:00 AM Eastern time today to discuss its results. The conference call will be broadcast live over the Internet at The call may also be accessed by dialing 833-287-0797 inside the U.S., or 647-689-4456 for international callers, using passcode 4848097 or by referencing Essent.

A replay of the webcast will be available on the Essent website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 800-585-8367 inside the U.S., or 416-621-4642 for international callers, passcode 4848097.

In addition to the information provided in the company’s earnings news release, other statistical and financial information, which may be referred to during the conference call, will be available on Essent’s website at

Forward-Looking Statements:

This press release may include “forward-looking statements” which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” or “potential” or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: the impact of COVID-19 and related economic conditions; changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; decline in new insurance written and franchise value due to loss of a significant customer; decline in the volume of low down payment mortgage originations; the definition of “Qualified Mortgage” reducing the size of the mortgage origination market or creating incentives to use government mortgage insurance programs; the definition of “Qualified Residential Mortgage” reducing the number of low down payment loans or lenders and investors seeking alternatives to private mortgage insurance; the implementation of the Basel III Capital Accord discouraging the use of private mortgage insurance; a decrease in the length of time that insurance policies are in force; uncertainty of loss reserve estimates; deteriorating economic conditions; our non-U.S. operations becoming subject to U.S. Federal income taxation; becoming considered a passive foreign investment company for U.S. Federal income tax purposes; and other risks and factors described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission on February 18, 2020, as subsequently updated through other reports we file with the Securities and Exchange Commission. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

About the Company:

Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company (collectively with its subsidiaries, “Essent”) which, through its wholly-owned subsidiary, Essent Guaranty, Inc., offers private mortgage insurance for single-family mortgage loans in the United States. Essent provides private capital to mitigate mortgage credit risk, allowing lenders to make additional mortgage financing available to prospective homeowners. Headquartered in Radnor, Pennsylvania, Essent Guaranty, Inc. is licensed to write mortgage insurance in all 50 states and the District of Columbia, and is approved by Fannie Mae and Freddie Mac. Essent also offers mortgage-related insurance, reinsurance and advisory services through its Bermuda-based subsidiary, Essent Reinsurance Ltd. Essent is committed to supporting environmental, social and governance (“ESG”) initiatives that are relevant to the company and align with the companywide dedication to responsible corporate citizenship that positively impacts the community and people served. Additional information regarding Essent may be found at www.essentgroup.com and www.essent.us.

Source: Essent Group Ltd.

Essent Group Ltd. and Subsidiaries

Financial Results and Supplemental Information (Unaudited)

Quarter and Year Ended December 31, 2020

 

 

 

 

 

 

Exhibit A

 

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

Exhibit B

 

Condensed Consolidated Balance Sheets (Unaudited)

Exhibit C

 

Historical Quarterly Data

Exhibit D

 

New Insurance Written

Exhibit E

 

Insurance in Force and Risk in Force

Exhibit F

 

Other Risk in Force

Exhibit G

 

Portfolio Vintage Data

Exhibit H

 

Reinsurance Vintage Data

Exhibit I

 

Portfolio Geographic Data

Exhibit J

 

Defaults, Reserve for Losses and LAE, and Claims

Exhibit K

 

Investments Available for Sale

Exhibit L

 

Insurance Company Capital

Exhibit M

 

Reconciliation of Non-GAAP Financial Measure – Adjusted Book Value per Share

Exhibit A

 

 

 

 

 

 

 

 

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Year Ended December 31,

(In thousands, except per share amounts)

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

Direct premiums written

$

245,437

 

 

$

207,263

 

 

$

922,851

 

 

$

796,344

 

Ceded premiums

(31,194

)

 

(10,770

)

 

(88,738

)

 

(35,499

)

Net premiums written

214,243

 

 

196,493

 

 

834,113

 

 

760,845

 

Decrease in unearned premiums

8,096

 

 

11,178

 

 

28,451

 

 

16,580

 

Net premiums earned

222,339

 

 

207,671

 

 

862,564

 

 

777,425

 

Net investment income

20,949

 

 

21,977

 

 

80,087

 

 

83,542

 

Realized investment gains, net

564

 

 

833

 

 

2,697

 

 

3,229

 

Other income (loss)

3,347

 

 

(1,719

)

 

9,806

 

 

3,371

 

Total revenues

247,199

 

 

228,762

 

 

955,154

 

 

867,567

 

 

 

 

 

 

 

 

 

Losses and expenses:

 

 

 

 

 

 

 

Provision for losses and LAE

62,073

 

 

10,929

 

 

301,293

 

 

32,986

 

Other underwriting and operating expenses

36,825

 

 

41,231

 

 

154,691

 

 

165,369

 

Interest expense

2,149

 

 

2,218

 

 

9,074

 

 

10,151

 

Total losses and expenses

101,047

 

 

54,378

 

 

465,058

 

 

208,506

 

 

 

 

 

 

 

 

 

Income before income taxes

146,152

 

 

174,384

 

 

490,096

 

 

659,061

 

Income tax expense

22,550

 

 

27,426

 

 

77,055

 

 

103,348

 

Net income

$

123,602

 

 

$

146,958

 

 

$

413,041

 

 

$

555,713

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

Basic

$

1.10

 

 

$

1.50

 

 

$

3.89

 

 

$

5.68

 

Diluted

1.10

 

 

1.49

 

 

3.88

 

 

5.66

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

Basic

111,908

 

 

97,830

 

 

106,098

 

 

97,762

 

Diluted

112,310

 

 

98,376

 

 

106,376

 

 

98,227

 

 

 

 

 

 

 

 

 

Net income

$

123,602

 

 

$

146,958

 

 

$

413,041

 

 

$

555,713

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

Change in unrealized appreciation (depreciation) of investments

5,840

 

 

(6,540

)

 

82,087

 

 

85,180

 

Total other comprehensive income (loss)

5,840

 

 

(6,540

)

 

82,087

 

 

85,180

 

Comprehensive income

$

129,442

 

 

$

140,418

 

 

$

495,128

 

 

$

640,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss ratio

27.9

%

 

5.3

%

 

34.9

%

 

4.2

%

Expense ratio

16.6

 

 

19.9

 

 

17.9

 

 

21.3

 

Combined ratio

44.5

%

 

25.1

%

 

52.9

%

 

25.5

%

Exhibit B

 

 

 

 

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

 

 

 

 

 

 

December 31,

 

December 31,

(In thousands, except per share amounts)

2020

 

2019

Assets

 

 

 

Investments

 

 

 

Fixed maturities available for sale, at fair value

$

3,838,513

 

 

$

3,035,385

 

Short-term investments available for sale, at fair value

726,860

 

 

315,362

 

Total investments available for sale

4,565,373

 

 

3,350,747

 

Other invested assets

88,904

 

 

78,873

 

Total investments

4,654,277

 

 

3,429,620

 

Cash

102,830

 

 

71,350

 

Accrued investment income

19,948

 

 

18,535

 

Accounts receivable

50,140

 

 

40,655

 

Deferred policy acquisition costs

17,005

 

 

15,705

 

Property and equipment

15,095

 

 

17,308

 

Prepaid federal income tax

302,636

 

 

261,885

 

Other assets

40,793

 

 

18,367

 

 

 

 

 

Total assets

$

5,202,724

 

 

$

3,873,425

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

Liabilities

 

 

 

Reserve for losses and LAE

$

374,941

 

 

$

69,362

 

Unearned premium reserve

250,436

 

 

278,887

 

Net deferred tax liability

305,109

 

 

249,620

 

Credit facility borrowings, net of deferred costs

321,720

 

 

224,237

 

Other accrued liabilities

87,885

 

 

66,474

 

Total liabilities

1,340,091

 

 

888,580

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

Common shares, $0.015 par value:

 

 

 

Authorized – 233,333; issued and outstanding – 112,423 shares in 2020 and 98,394 shares in 2019

1,686

 

 

1,476

 

Additional paid-in capital

1,571,163

 

 

1,118,655

 

Accumulated other comprehensive income

138,274

 

 

56,187

 

Retained earnings

2,151,510

 

 

1,808,527

 

Total stockholders’ equity

3,862,633

 

 

2,984,845

 

 

 

 

 

Total liabilities and stockholders’ equity

$

5,202,724

 

 

$

3,873,425

 

 

 

 

 

Return on average equity

12.1

%

 

20.8

%

Exhibit C

Essent Group Ltd. and Subsidiaries

Supplemental Information

Historical Quarterly Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2020

 

2019

Selected Income Statement Data

 

December 31

 

September 30

 

June 30

 

March 31

 

December 31

 

September 30

 

June 30

 

March 31

(In thousands, except per share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums written

 

$

214,243

 

 

$

222,223

 

 

$

205,904

 

 

$

191,743

 

 

$

196,493

 

 

$

198,304

 

 

$

188,404

 

 

$

177,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net premiums earned
digitalmedianet.com/essent-group-ltd-announces-fourth-quarter-declares-quarterly-dividend/

Related News

News copyright owned by their original publishers | Copyright © 2004 - 2021 Zicos / 440Network
115 sources
Current Date
Feb, Thu 25 - 05:12 CET