分组1 - Essent Group reported quarterly earnings of $1.6 per share, missing the Zacks Consensus Estimate of $1.74 per share, representing an earnings surprise of -8.22% [1] - The company posted revenues of $312.4 million for the quarter, surpassing the Zacks Consensus Estimate by 0.45%, but down from $315.03 million year-over-year [2] - Over the last four quarters, Essent Group has surpassed consensus revenue estimates four times [2] 分组2 - The current consensus EPS estimate for the coming quarter is $1.77 on revenues of $311.64 million, and for the current fiscal year, it is $7.37 on revenues of $1.26 billion [7] - The Zacks Industry Rank for Insurance - Property and Casualty is currently in the bottom 41% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8] - The estimate revisions trend for Essent Group was unfavorable ahead of the earnings release, resulting in a Zacks Rank 4 (Sell) for the stock, suggesting expected underperformance in the near future [6]

Financial Performance - For Q4 2025, Essent Group Ltd. reported net income of $155.0 million, or $1.60 per diluted share, a decrease from $167.9 million, or $1.58 per diluted share in Q4 2024[1] - For the full year 2025, net income was $690.0 million, or $6.90 per diluted share, compared to $729.4 million, or $6.85 per diluted share in 2024[1] - Total revenues for Q4 2025 were $312.4 million, compared to $315.0 million in Q4 2024[14] - Total revenues for the year ended December 31, 2025, reached $1,260,935,000, compared to $1,242,904,000 in 2024, indicating a year-over-year increase of 1.5%[23] - Net income for the quarter ended December 31, 2025, was $154,982,000, down from $164,215,000 in the previous quarter, reflecting a decrease of 7.5%[18] Shareholder Returns - The company returned nearly $700 million to shareholders in 2025 through dividends and share repurchases, retiring nearly 10% of outstanding shares[3] - The company repurchased 9.9 million common shares for $576 million in 2025[9] Insurance Operations - New insurance written for Q4 2025 was $11.8 billion, down from $12.2 billion in both Q3 2025 and Q4 2024[9] - As of December 31, 2025, mortgage insurance in force was $248.4 billion, slightly down from $248.8 billion as of September 30, 2025[9] - The loss ratio for the year ended December 31, 2025, was 16.8%, an increase from 8.8% in 2024, indicating a rise in claims relative to premiums earned[23][24] - The expense ratio for the year ended December 31, 2025, was 16.1%, slightly improved from 17.5% in 2024, showing better cost management relative to premiums earned[23][24] Asset Management - Total assets as of December 31, 2025, were $7.44 billion, an increase from $7.11 billion in 2024[16] - Cash and investments available for sale at the holding companies increased to $1,268,579,000 as of December 31, 2025, compared to $1,038,747,000 in the previous quarter, showing improved liquidity[18] - Total cash and investments increased to $6,609,647,000, up from $6,312,101,000 in the previous year, a growth of 4.7%[63] Investment Performance - The yield on cash and investments available for sale was 3.84% for the three months ended December 31, 2025, slightly up from 3.83% for the year ended December 31, 2025[67] - The aggregate yield on total cash and investments was 3.85% in 2025, down from 3.90% in 2024, suggesting a slight decrease in overall investment efficiency[67] - The return on other invested assets decreased to 4.15% in 2025 from 5.06% in 2024, indicating a decline in performance of these assets[67] Risk and Default Metrics - The percentage of loans in default increased to 2.50% in Q4 2025 from 2.27% in Q4 2024, reflecting a rise in loan defaults[35] - The default rate as of December 31, 2025, was 2.50%, compared to 2.27% in the previous year[55] - The average reserve per default increased to $21.3, up from $16.8 in the previous year[55] Future Outlook - The company entered the Lloyd's of London market to reinsure certain property and casualty risks starting in the first quarter of 2026, expanding its business operations[22] - The company anticipates a reduction in PMIERs minimum required assets, with a total of $733,954 expected[45] Geographic Distribution - The geographic distribution of insurance in force shows California at 12.1%, Florida at 12.0%, and Texas at 11.4% as of December 31, 2025[49] - The company’s geographic data indicates a slight decrease in the percentage of insurance in force in California from 12.5% in December 2024 to 12.1% in December 2025[49]

Core Insights - Essent Group Ltd. reported a net income of $155.0 million or $1.60 per diluted share for Q4 2025, a slight decrease from $167.9 million or $1.58 per diluted share in Q4 2024. For the full year 2025, net income was $690.0 million or $6.90 per diluted share, compared to $729.4 million or $6.85 per diluted share in 2024 [1][10]. Financial Performance - The total revenues for Q4 2025 were $312.4 million, down from $315.0 million in Q4 2024. For the full year 2025, total revenues increased to $1.26 billion from $1.24 billion in 2024 [10][26]. - The net premiums earned for Q4 2025 were $242.7 million, compared to $244.5 million in Q4 2024. For the full year, net premiums earned were $983.7 million, slightly down from $990.9 million in 2024 [10][26]. - The company reported a provision for losses and LAE of $56.1 million for Q4 2025, compared to $41.0 million in Q4 2024. For the full year, this figure rose to $149.3 million from $81.2 million in 2024 [10][26]. Shareholder Returns - The Board of Directors declared a quarterly cash dividend of $0.35 per common share, payable on March 23, 2026, to shareholders of record on March 13, 2026 [2]. - In 2025, the company returned nearly $700 million to shareholders through dividends and share repurchases, retiring nearly 10% of its outstanding shares [3][10]. Business Segments - Mortgage insurance new insurance written for Q4 2025 was $11.8 billion, down from $12.2 billion in Q3 2025 and Q4 2024 [9]. - As of December 31, 2025, mortgage insurance in force was $248.4 billion, slightly down from $248.8 billion as of September 30, 2025, and up from $243.6 billion as of December 31, 2024 [9]. Capital Management - The company emphasized its commitment to a balanced capital management strategy, maintaining a strong capital position and cash flow [3].

Core Viewpoint - Essent Group Ltd. will hold a conference call on February 13, 2026, to discuss its fourth quarter 2025 results, which will be announced prior to market opening on the same day [1]. Group 1: Conference Call Details - The conference call will be accessible via live broadcast on the Internet and through dial-in numbers for both U.S. and international callers [2]. - A replay of the webcast will be available on Essent's website approximately two hours after the live broadcast ends for one year, while the conference call replay will be available for two weeks [3]. Group 2: Company Information - Essent Group Ltd. is a Bermuda-based holding company that provides private mortgage insurance, reinsurance, and title insurance and settlement services to the housing finance industry [5].

Company Overview - Essent Group Ltd. is a Bermuda-based holding company that provides private mortgage insurance, reinsurance, title insurance, and settlement services for mortgage lenders, borrowers, and investors [5]. Financial Performance - In Q3 2025, Essent reported a net income of $164 million, with diluted earnings per share (EPS) of $1.67 [3]. - The company's US mortgage insurance in force increased to $249 billion, reflecting a 2% growth from the previous year, while persistency remained strong at 86% [3]. Shareholder Returns - Chairman and CEO Mark Casale emphasized Essent's robust capital position, noting that the company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [4]. - A new share repurchase authorization of $500 million has been announced, which will be effective through year-end 2027, alongside a Q4 dividend of $0.31 per share [4]. Market Outlook - JPMorgan analyst Richard Shane raised the price target for Essent Group to $66 from $65, maintaining a Neutral rating, amid updated ratings and price targets across the consumer finance sector [2]. - The analyst highlighted potential volatility in the sector due to President Trump's proposal to cap credit card interest rates at 10% for one year, which could significantly impact issuer profitability and consumer credit access [2].

Core Insights - Essent Group's Q3 CY2025 results fell short of market expectations, with revenue declining 1.5% year-on-year to $311.8 million and GAAP EPS of $1.67, which was 5.5% below analyst estimates [1][5]. Financial Performance - Revenue: $311.8 million vs analyst estimates of $317 million (1.5% year-on-year decline, 1.6% miss) [5] - EPS (GAAP): $1.67 vs analyst expectations of $1.76 (5.5% miss) [5] - Adjusted Operating Income: $199.2 million vs analyst estimates of $257.6 million (63.9% margin, 22.7% miss) [5] - Operating Margin: 63.9%, down from 65.6% in the same quarter last year [5] - Market Capitalization: $5.96 billion [5] Management Commentary - Management attributed the revenue shortfall to higher loan default provisions and increased claim severity, while maintaining that the underlying credit quality remains strong with a weighted average FICO score of 746 [3][4]. - CEO Mark Casale noted that the increase in default rates was seasonal and there were no concerning geographic or vintage trends impacting credit performance [3][6]. - CFO David Weinstock emphasized the company's strong balance sheet and commitment to a conservative capital strategy to navigate market volatility [3]. Key Operational Insights - Default provisions increased due to larger average loan sizes, not due to deteriorating credit trends [6]. - Claims severity rose modestly but remained below reserves, attributed to timing in claims processing [6]. - The average base premium rate for U.S. mortgage insurance remained stable, reflecting consistent pricing despite market competition [6]. - Significant share repurchase activity and a new $500 million authorization through 2027 were highlighted, along with a quarterly dividend increase [6]. Strategic Adjustments - Essent raised its quota share reinsurance level to 25%, which may increase volatility in ceded premiums and affect reported margins, aimed at optimizing capital efficiency without compromising credit risk management [7].

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

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net income of $164 million, down from $176 million a year ago, while diluted earnings per share increased to $1.67 from $1.65 [4][9] - The year-to-date return on equity was 13% as of September 30, 2025 [4] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [6][7] Business Line Data and Key Metrics Changes - The U.S. mortgage insurance in force was $249 billion, a 2% increase year-over-year [5][9] - The mortgage insurance net premium earned for Q3 2025 was $232 million, including $15.9 million from Essent Re [10] - The average base premium rate for the U.S. mortgage insurance portfolio remained at 41 basis points, while the average net premium rate decreased by one basis point to 35 basis points [10] Market Data and Key Metrics Changes - The 12-month persistency rate was 86%, unchanged from the previous quarter [5][9] - The default rate on the U.S. mortgage insurance portfolio increased to 2.29%, up 17 basis points from the previous quarter [10] Company Strategy and Development Direction - The company maintains a conservative capital strategy to navigate market volatility while allowing for strategic growth investments [7][14] - A new $500 million share repurchase authorization was approved, running through year-end 2027, indicating a commitment to returning capital to shareholders [8][14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the current interest rate environment [4] - The company anticipates that the current level of mortgage rates will support elevated persistency in the near term [5] - Management highlighted the strong credit quality of the insurance in force, with a weighted average FICO of 746 [5] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31, 2025 [8] - The estimated annual effective tax rate was increased from 15.4% to 16.2% due to withholding taxes incurred on a dividend [11] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased, which impacts provisions when larger loans default [16] Question: Claims amount and severity - Management indicated that fluctuations in claims are dependent on document processing and that severity remains below reserves [18] Question: Seeded premiums and reinsurance transactions - Management explained that seeded premiums will vary based on default and provision activity, with seasonal trends expected [22] Question: Tax rate expectations - Management suggested a tax rate of around 16% going forward, influenced by capital distributions to shareholders [24] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, the overall risk remains low, and they are well-capitalized to handle potential losses [30][34] Question: Underwriting guardrails and credit score changes - Management reassured that current underwriting standards remain stringent and that any changes in credit score requirements by GSEs have not yet been implemented [42][45] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends from the MI subsidiary, with potential for a larger dividend in Q4 [48] Question: Diversification and growth avenues - Management discussed the performance of the Title business and indicated that while it is still small, it is being developed as a potential growth area [50]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported net income of $164 million, a decrease from $176 million a year ago [4] - Diluted earnings per share were $1.67, compared to $1.65 a year ago [5] - The year-to-date return on equity was 13% through Q3 [5] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [7] Business Line Data and Key Metrics Changes - The U.S. Mortgage insurance in force was $249 billion, a 2% increase year-over-year [5] - The mortgage insurance net premium earned for 2025 was $232 million [13] - The average base premium rate for the U.S. Mortgage insurance portfolio was 41 basis points, consistent with the previous quarter [14] - The default rate on the U.S. Mortgage insurance portfolio was 2.29%, up from 2.12% in the previous quarter [15] Market Data and Key Metrics Changes - The twelve-month persistency rate was 86%, flat from the previous quarter [6] - The weighted average FICO score was 746, and the weighted average original LTV was 93% [6] Company Strategy and Development Direction - The company maintains a conservative capital strategy to navigate market volatility while allowing for strategic growth investments [8] - A new $500 million share repurchase authorization was approved, running through year-end 2027 [9] - The company is focused on returning capital to shareholders while balancing investments in the business [19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the interest rate environment [4] - The company believes that the substantial home equity embedded in its in-force book will mitigate ultimate claims [6] - Management indicated that the credit quality remains strong, with no significant concerns at the current time [25] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [8] - The average loan size has increased to close to $300,000, impacting provisions for losses [24] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased, which affects provisions for losses, but there are no significant concerns regarding credit quality [24][25] Question: Claims amount and severity - Management indicated that fluctuations in claims are normal and that severity continues to be below reserves [27] Question: Ceded premiums and reinsurance transactions - Management explained that ceded premiums will fluctuate based on seasonal activity and the quota share increase [30][32] Question: Tax rate changes - The increase in the estimated annual effective tax rate was attributed to withholding taxes on dividends [34] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, they do not expect a significant rise in the long term [41][42] Question: Underwriting guardrails and credit score requirements - Management confirmed that current GSE systems have not changed, and there are no signs of loosening credit standards [62][66] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends from the MI subsidiary, with potential for a larger dividend in Q4 [70][71] Question: Title business performance and growth avenues - Management stated that the title business is performing as expected and remains focused on the MI business for cash flow [73][78]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported a net income of $164 million, down from $176 million a year ago, while diluted earnings per share increased to $1.67 from $1.65 a year ago [4][5] - The year-to-date return on equity was 13% through Q3 2025 [4] - Consolidated cash and investments totaled $6.6 billion with an annualized investment yield of 3.9% [5][6] Business Line Data and Key Metrics Changes - The U.S. mortgage insurance in force was $249 billion, a 2% increase year-over-year [5] - The mortgage insurance net premium earned for Q3 2025 was $232 million, including $15.9 million from third-party business [9] - The average base premium rate for the U.S. mortgage insurance portfolio remained at 41 basis points, while the average net premium rate decreased by one basis point to 35 basis points [9] Market Data and Key Metrics Changes - The portfolio default rate increased to 2.29%, up 17 basis points from the previous quarter [9] - The weighted average FICO score of the insurance in force was 746, with a weighted average original loan-to-value (LTV) of 93% [5] Company Strategy and Development Direction - The company continues to focus on a prudent capital strategy, maintaining a strong balance sheet while returning capital to shareholders [6][12] - A new $500 million share repurchase authorization was approved, running through year-end 2027 [7] - The company is committed to investing in strategic growth while balancing shareholder returns [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business, benefiting from favorable credit trends and the interest rate environment [4] - The company anticipates that current mortgage rates will support elevated persistency in the near term [5] - Management highlighted the strong credit quality of the insurance portfolio and the substantial home equity embedded in the in-force book as mitigating factors for potential claims [5][6] Other Important Information - The company repurchased nearly 9 million shares for over $500 million year-to-date through October 31 [7] - The board approved a common dividend of $0.31 for Q4 2025 [7] - The statutory capital of Essent Guarantee was $3.7 billion, with a risk-to-capital ratio of 8.9 to 1 [11] Q&A Session Summary Question: Credit trends and provisions - Management noted that the average loan size has increased to nearly $300,000, which affects provisions when defaults occur [15] Question: Claims amount and severity - Management indicated that fluctuations in claims are dependent on document processing and adjudication, with severity remaining below reserves [17] Question: Seeded premiums and reinsurance transactions - Management explained that seeded premiums will fluctuate based on default and provision activity, with seasonal trends expected [19][20] Question: Tax rate changes - The increase in the estimated annual effective tax rate was attributed to withholding taxes on dividends, with expectations of a rate around 16% going forward [21][22] Question: Severity rates and long-term expectations - Management stated that while severity rates have increased, the overall risk remains low, and they are conservative in provisioning [26][27] Question: Underwriting guardrails and credit score requirements - Management confirmed that current systems have not changed significantly, and lenders are focused on managing origination costs [39][40] Question: Upstreaming capital from MI subsidiary - Management indicated plans for consistent dividends, potentially larger in Q4, while maintaining a focus on upstreaming cash [42] Question: Title business performance and growth avenues - Management noted that the Title business is still in early stages, with a focus on lender relationships and potential future growth [43][44]