Core Insights - Essent Group reported Q2 2025 GAAP EPS of $1.93, exceeding analyst expectations of $1.72, with GAAP revenue at $319.1 million, reflecting a 2.0% increase year-over-year [1][2] - The company experienced a 4.1% decline in net income to $195.3 million compared to Q2 2024, while new insurance written remained flat at $12.5 billion [1][2] Financial Performance - GAAP diluted EPS increased by 1.0% from $1.91 in Q2 2024 [2] - Revenue rose to $319.1 million from $312.9 million in Q2 2024 [2] - Net premiums earned decreased by 1.2% to $248.8 million [2] - New insurance written was unchanged at $12.5 billion [2] - Book value per share increased by 12.6% to $56.98 [5] Investment and Capital Management - Net investment income grew by 5.7% to $59.3 million, supported by a $6.3 billion investment portfolio [5] - The company repurchased 6.8 million shares for $387 million through July 2025, with $260 million remaining under the repurchase program [10] Risk Management and Credit Quality - The loss provision rose to $17.1 million, leading to a loss ratio of 6.6%, up from a negative 0.5% in Q2 2024 [7] - Loans in default increased to 17,255 from 13,954 a year ago [7] - The weighted average FICO credit score across the portfolio was 746, with new business scoring higher at 753 [6] Business Overview and Strategy - Essent Group provides private mortgage insurance, crucial for lenders and homebuyers with low down payments [3] - Key priorities include maintaining relationships with mortgage lenders, adhering to GSE rules, and managing credit risk [4] - The company emphasizes credit quality, capital efficiency, and shareholder returns [4] Title Insurance Segment - In the title insurance segment, Essent Group earned $14.9 million in GAAP net premiums, highlighting the cyclical nature of this business [9] Regulatory and Credit Ratings - Moody's upgraded Essent Guaranty's financial strength rating to A2 and the senior unsecured debt rating to Baa2, with stable outlooks [9] Dividend and Shareholder Returns - The quarterly dividend was maintained at $0.31 per share [10]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported net income of $195 million, a decrease from $204 million a year ago [5] - Diluted earnings per share were $1.93, slightly up from $1.91 a year ago [6] - The return on average equity was 14% for the quarter [6] - Consolidated cash and investments totaled $6.4 billion with an annualized investment yield of 3.9% [10] Business Line Data and Key Metrics Changes - The U.S. Mortgage insurance in force was $247 billion, a 3% increase year-over-year [6] - The weighted average FICO score of the insurance in force was 746, with a weighted average original LTV of 93% [7] - The mortgage insurance net premium earned was $234 million, including $13.6 million from Essent Re [15] - Operating expenses for mortgage insurance were $36.3 million, with an expense ratio of 15.5% [17] Market Data and Key Metrics Changes - The twelve-month persistency rate was 86%, unchanged from the previous quarter [7] - The default rate on the U.S. Mortgage insurance portfolio was 2.12%, down from 2.19% [16] - The risk in force for Essent Re was $2.3 billion for GSE and other risk share [8] Company Strategy and Development Direction - The company aims to maintain a conservative balance sheet while pursuing strategic growth opportunities [11] - The focus remains on supporting affordable homeownership and navigating the current economic environment [21] - The company is actively returning capital to shareholders, with a common dividend of $0.31 approved for 2025 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed a constructive outlook on housing demand driven by demographics [4] - The company believes that the current level of mortgage rates will support elevated persistency in the near term [7] - There is a focus on affordability challenges and the need for access to homeownership [8] Other Important Information - Moody's upgraded Essent Guaranty's insurance financial strength rating to A2 [11] - The company repurchased nearly 7 million shares for approximately $390 million year-to-date through July 31 [12] Q&A Session Summary Question: Expectations on home prices and pricing strategy - Management indicated that home price trends depend on local market conditions, with some areas expected to see price increases while others may weaken [23][24] Question: Insights on new defaults and credit outlook - New defaults were up 9% year-over-year, but management noted this aligns with normal seasoning patterns [31][32] Question: Buyback strategy and excess capital - The buyback pace is characterized as both opportunistic and valuation-sensitive, with a focus on shareholder returns [36][37] Question: Persistency trends by vintage - Management acknowledged that persistency varies by vintage, with natural aging contributing to trends observed [60][63] Question: Impact of AI and fintech on the business - Management does not see significant risk from borrowers canceling MI due to appraisals, viewing it as a minor concern [92][93]

Financial Performance - Essent Group Ltd reported net income of $195.3 million for 2Q25, compared to $175.4 million in 1Q25[5] - The annualized Return on Equity (ROE) increased to 13.8% in 2Q25 from 12.5% in 1Q25[5] - The combined ratio for the U S Mortgage Insurance portfolio improved to 22.1% in 2Q25 from 31.8% in 1Q25[5] - The book value per share has grown at an annualized rate of 18.2% since December 31, 2013, reaching $56.98 as of June 2025[9] Portfolio and Risk Management - The U S Mortgage Insurance In Force (IIF) reached $246.8 billion in 2Q25, up from $244.7 billion in 1Q25[5] - New Insurance Written (NIW) increased to $12.5 billion in 2Q25 from $9.9 billion in 1Q25[5] - The portfolio default rate decreased slightly to 2.12% in 2Q25 from 2.19% in 1Q25[5] - 97% of the Insurance In Force (IIF) is subject to reinsurance protection as of June 30, 2025[5,30,33] Capital and Liquidity - Shareholders' equity remained stable at $5.7 billion in both 1Q25 and 2Q25[5] - The company has ample liquidity, with $1.0 billion in cash and investments available for sale at the holding companies[32] - The PMIERs sufficiency ratio was 176% in 2Q25, compared to 172% in 1Q25[5]

[Earnings Release Overview](index=1&type=section&id=Earnings%20Release%20Overview) This section provides an overview of Essent Group Ltd.'s Q2 2025 financial performance, key operational highlights, and corporate information [Q2 2025 Financial Results and Dividend](index=1&type=section&id=Q2%202025%20Financial%20Results%20and%20Dividend) Essent Group Ltd. reported net income of $195.3 million or $1.93 per diluted share for Q2 2025, a decrease from $203.6 million or $1.91 per diluted share in Q2 2024. The Board of Directors declared a quarterly cash dividend of $0.31 per common share | Metric | Q2 2025 | Q2 2024 | | :------------------- | :------ | :------ | | Net Income | $195.3M | $203.6M | | Diluted EPS | $1.93 | $1.91 | | Quarterly Dividend | $0.31 | N/A | - CEO Mark A. Casale highlighted continued strength in credit, elevated portfolio persistency, and increased investment income as drivers for Q2 2025 financial results, emphasizing consistent execution and a resilient operating model[3](index=3&type=chunk) [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) The company reported strong new insurance written (NIW) and insurance in force (IIF) figures, an increase in net investment income, and a credit rating upgrade from Moody's. Essent also executed reinsurance agreements and continued its share repurchase program | Metric | Q2 2025 | Q1 2025 | Q2 2024 | YoY Change (Q2 2025 vs Q2 2024) | | :-------------------------- | :------ | :------ | :------ | :------------------------------ | | New Insurance Written (NIW) | $12.5B | $9.9B | $12.5B | 0% | | Insurance in Force (IIF) | $246.8B | $244.7B | $240.7B | +2.5% | | Net Investment Income (H1) | $117.5M | N/A | $108.17M| +9% | - Moody's Ratings upgraded Essent Guaranty, Inc.'s insurance financial strength rating to **A2 from A3** and Essent Group Ltd.'s senior unsecured debt rating to **Baa2 from Baa3**, with a stable outlook[10](index=10&type=chunk) - Essent entered into two excess of loss reinsurance agreements covering **20% of eligible policies written in 2025 and 2026**, and increased the ceding percentage on its affiliate quota share with Essent Reinsurance Ltd. from **35% to 50%** retroactive to January 1, 2025[10](index=10&type=chunk) - Year-to-date through July 31st, Essent repurchased **6.8 million common shares** for **$387 million**, with **$260 million** remaining under the **$500 million** repurchase plan[10](index=10&type=chunk) [Conference Call Information](index=1&type=section&id=Conference%20Call%20Information) Essent management hosted a conference call on August 8, 2025, to discuss Q2 2025 results. Details for live broadcast, dial-in access, and replays were provided - A live webcast of the conference call was available at http://ir.essentgroup.com/events-and-presentations/events/default.aspx, with replays available for one year[5](index=5&type=chunk)[6](index=6&type=chunk) [Forward-Looking Statements](index=1&type=section&id=Forward-Looking%20Statements) The press release includes forward-looking statements subject to known and unknown risks and uncertainties, which may cause actual results to differ materially from expectations. Key risks include changes to GSEs, competition, economic conditions, and loss reserve estimates - Forward-looking statements are identified by terms like 'may,' 'will,' 'expect,' and 'anticipate,' and are subject to risks such as changes in Fannie Mae and Freddie Mac, competition, and deteriorating economic conditions[8](index=8&type=chunk) [About the Company](index=1&type=section&id=About%20the%20Company) Essent Group Ltd. is a Bermuda-based holding company providing private mortgage insurance, reinsurance, and title insurance and settlement services to the housing finance industry - Essent Group Ltd. (NYSE: ESNT) offers private mortgage insurance, reinsurance, and title insurance and settlement services[9](index=9&type=chunk) [Financial Results and Supplemental Information (Unaudited)](index=3&type=section&id=Financial%20Results%20and%20Supplemental%20Information%20(Unaudited)) This section presents Essent Group Ltd.'s unaudited consolidated financial statements, including income statements, balance sheets, and detailed portfolio data for the second quarter of 2025 [Condensed Consolidated Statements of Comprehensive Income (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Unaudited)) For the three months ended June 30, 2025, Essent Group Ltd. reported total revenues of $319.1 million, a slight increase from $312.9 million in Q2 2024. Net income decreased to $195.3 million from $203.6 million year-over-year, primarily due to a higher provision for losses and LAE | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Premiums Earned | $248,809 | $251,891 | $494,657 | $497,481 | | Net Investment Income | $59,289 | $56,086 | $117,499 | $108,171 | | Total Revenues | $319,143 | $312,942 | $636,701 | $611,299 | | Provision for Losses and LAE | $17,055 | $(334) | $48,342 | $9,579 | | Total Losses and Expenses | $87,968 | $73,717 | $198,527 | $158,332 | | Net Income | $195,339 | $203,609 | $370,772 | $385,328 | | Diluted EPS | $1.93 | $1.91 | $3.62 | $3.61 | - Net investment income increased by **5.7% YoY** for the quarter and **8.6%** for the six months ended June 30, 2025, reflecting improved investment performance[15](index=15&type=chunk) - The provision for losses and LAE significantly increased from a benefit of **$(334) thousand** in Q2 2024 to a provision of **$17,055 thousand** in Q2 2025, impacting net income[15](index=15&type=chunk) [Condensed Consolidated Balance Sheets (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) As of June 30, 2025, total assets increased to $7.22 billion from $7.11 billion at December 31, 2024, driven by growth in total investments. Total stockholders' equity also saw an increase to $5.67 billion, while the return on average equity slightly decreased to 13.2% | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Total Investments | $6,326,360 | $6,180,621 | | Total Assets | $7,220,561 | $7,111,649 | | Reserve for Losses and LAE | $364,749 | $328,866 | | Total Liabilities | $1,547,713 | $1,507,991 | | Total Stockholders' Equity | $5,672,848 | $5,603,658 | | Return on Average Equity | 13.2% | 13.6% | - Accumulated other comprehensive loss improved from **$(303.9) million** at December 31, 2024, to **$(215.6) million** at June 30, 2025, indicating a positive change in unrealized investment appreciation[17](index=17&type=chunk) [Consolidated Historical Quarterly Data](index=6&type=section&id=Consolidated%20Historical%20Quarterly%20Data) This section provides a detailed quarterly breakdown of consolidated financial performance, showing trends in revenues, expenses, net income, and key per-share metrics. Net income for Q2 2025 was $195.3 million, a decrease from $203.6 million in Q2 2024, while book value per share increased to $56.98 | Metric (in thousands, except per share) | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :-------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Net Premiums Earned | $248,809| $245,848| $244,465| $248,936| $251,891| | Net Investment Income | $59,289 | $58,210 | $56,559 | $57,340 | $56,086 | | Total Revenues | $319,143| $317,558| $315,027| $316,578| $312,942| | Provision for Losses and LAE | $17,055 | $31,287 | $40,975 | $30,666 | $(334) | | Net Income | $195,339| $175,433| $167,900| $176,175| $203,609| | Diluted EPS | $1.93 | $1.69 | $1.58 | $1.65 | $1.91 | | Book Value Per Share | $56.98 | $55.22 | $53.36 | $53.11 | $50.58 | | Return on Average Equity (annualized) | 13.8% | 12.5% | 11.9% | 12.8% | 15.4% | - Book value per share has shown consistent growth, increasing from **$50.58** in Q2 2024 to **$56.98** in Q2 2025[19](index=19&type=chunk) - The provision for losses and LAE has fluctuated significantly, moving from a benefit in Q2 2024 to a substantial provision in Q4 2024, Q1 2025, and Q2 2025[19](index=19&type=chunk) [U.S. Mortgage Insurance Portfolio Historical Quarterly Data](index=7&type=section&id=U.S.%20Mortgage%20Insurance%20Portfolio%20Historical%20Quarterly%20Data) The U.S. Mortgage Insurance Portfolio shows consistent growth in insurance in force, reaching $246.8 billion by June 30, 2025. New insurance written remained strong at $12.5 billion for Q2 2025, matching Q2 2024 levels. The percentage of loans in default increased to 2.12% from 1.71% YoY | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | New Insurance Written | $12,544,731 | $9,945,336 | $12,220,968 | $12,513,695 | $12,503,125 | | Insurance in Force (EOP) | $246,797,619 | $244,692,492 | $243,645,423 | $242,976,043 | $240,669,165 | | Loans in Default (count) | 17,255 | 17,759 | 18,439 | 15,906 | 13,954 | | Percentage of Loans in Default | 2.12% | 2.19% | 2.27% | 1.95% | 1.71% | | Annual Persistency | 85.8% | 85.7% | 85.7% | 86.6% | 86.7% | - The net average premium rate remained stable at **0.36%** in Q2 2025, consistent with Q2 2024[22](index=22&type=chunk) [New Insurance Written - U.S. Mortgage Insurance Portfolio](index=8&type=section&id=New%20Insurance%20Written%20-%20U.S.%20Mortgage%20Insurance%20Portfolio) New insurance written (NIW) for Q2 2025 totaled $12.5 billion, with a significant portion (50%) attributed to borrowers with credit scores of 760 or higher, an increase from 43.6% in Q2 2024. The majority of NIW (92.6%) was for purchase mortgages, and monthly premium policies dominated at 98.7% | NIW by Credit Score | Q2 2025 (%) | Q2 2024 (%) | | :------------------ | :---------- | :---------- | | >=760 | 50.0% | 43.6% | | <=679 | 4.9% | 4.8% | | Weighted Avg. Score | 753 | 748 | | NIW by LTV | Q2 2025 (%) | Q2 2024 (%) | | :------------------ | :---------- | :---------- | | 90.01% to 95.00% | 50.9% | 55.0% | | 95.01% and above | 16.5% | 18.8% | | Weighted Avg. LTV | 93% | 93% | | NIW by Type | Q2 2025 (%) | Q2 2024 (%) | | :------------------ | :---------- | :---------- | | Monthly Premium | 98.7% | 98.7% | | Purchase | 92.6% | 97.8% | | Refinance | 7.4% | 2.2% | [Insurance in Force and Risk in Force - U.S. Mortgage Insurance Portfolio](index=9&type=section&id=Insurance%20in%20Force%20and%20Risk%20in%20Force%20-%20U.S.%20Mortgage%20Insurance%20Portfolio) As of June 30, 2025, total insurance in force (IIF) reached $246.8 billion, with 41.1% of the portfolio having a FICO score of 760 or higher. The weighted average credit score remained stable at 746, and the weighted average LTV was 93% | Portfolio by Credit Score (IIF) | June 30, 2025 (%) | June 30, 2024 (%) | | :------------------------------ | :---------------- | :---------------- | | >=760 | 41.1% | 40.6% | | <=679 | 4.7% | 4.7% | | Weighted Avg. Credit Score | 746 | 746 | | Portfolio by LTV (IIF) | June 30, 2025 (%) | June 30, 2024 (%) | | :------------------------------ | :---------------- | :---------------- | | 90.01% to 95.00% | 52.7% | 51.3% | | 95.01% and above | 17.4% | 16.0% | | Weighted Avg. LTV | 93% | 93% | - The majority of the IIF (**97.8%**) consists of Fixed Rate Mortgages (FRM) with 30 years and higher amortization periods[27](index=27&type=chunk) [Other Risk in Force](index=10&type=section&id=Other%20Risk%20in%20Force) Essent's GSE and other risk share portfolio reported $2.32 billion in risk in force as of June 30, 2025, with a weighted average credit score of 751 and LTV of 83% | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :-------------------- | :------------ | :------------- | :---------------- | :----------------- | :------------ | | Risk in Force | $2,321,008 | $2,220,477 | $2,240,284 | $2,254,726 | $2,304,885 | | Reserve for Losses and LAE | $88 | $52 | $51 | $37 | $33 | | Weighted Avg. Credit Score | 751 | 751 | 751 | 750 | 750 | | Weighted Avg. LTV | 83% | 82% | 82% | 82% | 82% | - Essent Reinsurance Ltd. provides insurance or reinsurance for loans in reference pools acquired by Freddie Mac and Fannie Mae[29](index=29&type=chunk) [U.S. Mortgage Insurance Portfolio Vintage Data](index=11&type=section&id=U.S.%20Mortgage%20Insurance%20Portfolio%20Vintage%20Data) The vintage data for the U.S. Mortgage Insurance Portfolio as of June 30, 2025, shows that newer vintages (2022-2025) have a higher percentage of remaining insurance in force and generally higher incurred loss ratios compared to older vintages, reflecting the seasoning of the portfolio and recent economic conditions | Year | Original Insurance Written ($ thousands) | Remaining Insurance in Force ($ thousands) | % Remaining | Incurred Loss Ratio (Inception to Date) | Number of Loans in Default | Percentage of Loans in Default | | :--- | :--------------------------------------- | :----------------------------------------- | :---------- | :-------------------------------------- | :------------------------- | :----------------------------- | | 2010-2015 | $86,862,507 | $1,602,905 | 1.8% | 2.3% | 367 | 4.15% | | 2021 | $84,218,250 | $45,343,252 | 53.8% | 6.3% | 3,489 | 2.25% | | 2022 | $63,061,262 | $48,421,149 | 76.8% | 18.3% | 3,486 | 2.46% | | 2023 | $47,666,852 | $38,646,995 | 81.1% | 19.7% | 2,518 | 2.27% | | 2024 | $45,561,332 | $41,260,566 | 90.6% | 16.8% | 1,179 | 1.06% | | 2025 (through June 30) | $22,490,067 | $21,981,050 | 97.7% | 5.6% | 52 | 0.09% | - The total portfolio has a weighted average coupon of **5.08%** and a **92.3%** purchase mortgage composition[31](index=31&type=chunk) [U.S. Mortgage Insurance Portfolio Reinsurance Vintage Data](index=12&type=section&id=U.S.%20Mortgage%20Insurance%20Portfolio%20Reinsurance%20Vintage%20Data) Essent utilizes various reinsurance structures, including Insurance Linked Notes (ILNs), Excess of Loss, and Quota Share agreements, to manage risk and reduce PMIERs Minimum Required Assets. As of June 30, 2025, these agreements collectively reduced PMIERs Minimum Required Assets by over $1.7 million | Reinsurance Type | Remaining Insurance in Force ($ thousands) | Remaining Risk in Force ($ thousands) | Reduction in PMIERs Minimum Required Assets ($ thousands) | | :----------------- | :--------------------------------------- | :------------------------------------ | :-------------------------------------------------------- | | ILNs | $127,822,754 | $35,400,791 | $875,568 | | Excess of Loss | $141,472,015 | $38,833,403 | $229,027 | | Quota Share | $181,450,323 | $49,766,596 | $675,994 | - The most recent Quota Share agreement (Jan. 2025 - Dec. 2025) has a ceding percentage of **25%** and contributes **$97.1 million** to PMIERs Minimum Required Assets reduction[35](index=35&type=chunk) [U.S. Mortgage Insurance Portfolio Geographic Data](index=13&type=section&id=U.S.%20Mortgage%20Insurance%20Portfolio%20Geographic%20Data) California, Florida, and Texas continue to represent the largest concentrations of Essent's insurance in force (IIF) and gross risk in force (RIF) as of June 30, 2025, collectively accounting for over 35% of the portfolio | State | IIF by State (June 30, 2025) | Gross RIF by State (June 30, 2025) | | :---- | :--------------------------- | :--------------------------------- | | CA | 12.3% | 12.3% | | FL | 12.0% | 12.2% | | TX | 11.3% | 11.5% | | CO | 4.0% | 4.0% | | AZ | 3.9% | 4.0% | | GA | 3.8% | 3.9% | - The geographic distribution of both IIF and Gross RIF has remained relatively stable compared to March 31, 2025, and June 30, 2024[39](index=39&type=chunk) [Rollforward of Defaults and Reserve for Losses and LAE - U.S. Mortgage Insurance Portfolio](index=14&type=section&id=Rollforward%20of%20Defaults%20and%20Reserve%20for%20Losses%20and%20LAE%20-%20U.S.%20Mortgage%20Insurance%20Portfolio) The number of insured loans in default decreased slightly to 17,255 at June 30, 2025, from 17,759 at March 31, 2025. The cure rate for new defaults was 26% in Q2 2025, a significant decrease from 66% in Q1 2025. The net reserve for losses and LAE increased to $304.0 million at the end of Q2 2025 | Metric | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | | :-------------------------- | :------ | :------ | :------ | :------ | :------ | | Beginning Default Inventory | 17,759 | 18,439 | 15,906 | 13,954 | 13,992 | | New Defaults | 8,810 | 9,664 | 11,136 | 9,984 | 8,119 | | Cures | (9,078) | (10,173)| (8,408) | (7,819) | (7,956) | | Ending Default Inventory | 17,255 | 17,759 | 18,439 | 15,906 | 13,954 | | Cure Rate | 26% | 66% | 77% | 83% | 88% | | Total Paid for Claims ($k) | $9,007 | $6,330 | $7,740 | $5,749 | $5,566 | | Severity | 67% | 70% | 68% | 58% | 60% | | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :------------ | | Net Reserve for Losses and LAE (EOP) | $303,986 | $297,777 | $273,501 | $220,085 | | Incurred Losses and LAE (period) | $15,323 | $30,720 | $37,236 | $(1,227) | [Detail of Reserves by Default Delinquency - U.S. Mortgage Insurance Portfolio](index=15&type=section&id=Detail%20of%20Reserves%20by%20Default%20Delinquency%20-%20U.S.%20Mortgage%20Insurance%20Portfolio) As of June 30, 2025, the total case reserves for losses and LAE were $319.4 million across 17,255 defaulted policies. Policies with four or more missed payments account for a significant portion of both defaulted policies (52%) and case reserves (79%). The overall default rate was 2.12% | Missed Payments | Number of Policies in Default (June 30, 2025) | Percentage of Policies in Default (June 30, 2025) | Amount of Reserves ($ thousands) (June 30, 2025) | Percentage of Reserves (June 30, 2025) | | :---------------- | :-------------------------------------------- | :------------------------------------------------ | :----------------------------------------------- | :------------------------------------- | | Two payments | 5,634 | 33% | $29,534 | 9% | | Three payments | 2,375 | 14% | $23,028 | 7% | | Four to eleven payments | 6,644 | 38% | $134,497 | 42% | | Twelve or more payments | 2,388 | 14% | $118,154 | 37% | | Total Case Reserves | 17,255 | 100% | $319,408 | 100% | | Total Reserves for Losses and LAE | N/A | N/A | $345,952 | N/A | | Default Rate | 2.12% | N/A | N/A | N/A | - The average reserve per default (total) increased to **$20.0 thousand** at June 30, 2025, from **$16.8 thousand** at December 31, 2024[46](index=46&type=chunk) [Investments Available for Sale](index=16&type=section&id=Investments%20Available%20for%20Sale) Essent's total investments available for sale increased to $5.97 billion at June 30, 2025, from $5.88 billion at December 31, 2024. Corporate debt securities represent the largest asset class (32.0%), and the portfolio maintains a high credit quality, with 54.4% rated Aa1 or higher | Asset Class (in thousands) | June 30, 2025 (Fair Value) | June 30, 2025 (Percent) | December 31, 2024 (Fair Value) | December 31, 2024 (Percent) | | :------------------------- | :------------------------- | :---------------------- | :----------------------------- | :-------------------------- | | Corporate debt securities | $1,908,167 | 32.0% | $1,783,046 | 30.3% | | U.S. agency mortgage-backed securities | $1,172,715 | 19.7% | $1,125,436 | 19.2% | | Asset-backed securities | $796,065 | 13.4% | $631,959 | 10.8% | | Total investments available for sale | $5,966,537 | 100.0% | $5,876,721 | 100.0% | | Credit Rating (in thousands) | June 30, 2025 (Fair Value) | June 30, 2025 (Percent) | December 31, 2024 (Fair Value) | December 31, 2024 (Percent) | | :--------------------------- | :------------------------- | :---------------------- | :----------------------------- | :-------------------------- | | Aaa | $816,766 | 15.2% | $2,513,014 | 48.1% | | Aa1 | $1,815,159 | 33.7% | $101,809 | 2.0% | | Aa2 | $297,712 | 5.5% | $301,080 | 5.8% | | Total (excluding money market funds) | $5,385,573 | 100.0% | $5,219,116 | 100.0% | - The pre-tax investment income yield for the three months ended June 30, 2025, was **3.85%**[52](index=52&type=chunk) [U.S. Mortgage Insurance Company Capital](index=17&type=section&id=U.S.%20Mortgage%20Insurance%20Company%20Capital) Essent's U.S. Mortgage Insurance Subsidiaries reported combined statutory capital of $3.71 billion at June 30, 2025, with a PMIERs sufficiency ratio of 176%. Essent Guaranty, Inc.'s risk-to-capital ratio was 9.2:1, indicating a strong capital position | Metric (in thousands) | June 30, 2025 | March 31, 2025 | December 31, 2024 | June 30, 2024 | | :-------------------------- | :------------ | :------------- | :---------------- | :------------ | | Combined Statutory Capital | $3,714,146 | $3,642,374 | $3,594,381 | $3,530,462 | | Combined Net Risk in Force | $33,986,508 | $34,968,089 | $35,159,976 | $34,812,227 | | Essent Guaranty, Inc. Risk-to-Capital Ratio | 9.2:1 | 9.6:1 | 9.8:1 | 10.2:1 | | PMIERs Available Assets | $3,654,460 | $3,628,675 | $3,612,993 | $3,513,609 | | PMIERs Minimum Required Assets | $2,075,409 | $2,107,620 | $2,029,738 | $2,052,135 | | PMIERs Sufficiency Ratio | 176% | 172% | 178% | 171% | | Essent Reinsurance Ltd. Stockholder's Equity (GAAP) | $1,751,720 | $1,780,924 | $1,773,044 | $1,793,777 | - Essent Guaranty of PA, Inc. commuted its outstanding risk in force back to Essent Guaranty and surrendered its insurance license effective December 31, 2024, consolidating capital reporting to Essent Guaranty only[57](index=57&type=chunk) [Historical Quarterly Segment Information](index=18&type=section&id=Historical%20Quarterly%20Segment%20Information) The Mortgage Insurance segment reported total revenues of $289.8 million in Q2 2025, with an income before income tax expense of $238.2 million. The Corporate & Other segment, which includes title insurance and holding company operations, reported a loss before income tax expense of $(7.0) million | Metric (in thousands) | Mortgage Insurance (Q2 2025) | Corporate & Other (Q2 2025) | Consolidated (Q2 2025) | | :-------------------------- | :--------------------------- | :-------------------------- | :--------------------- | | Net Premiums Earned | $233,907 | $14,902 | $248,809 | | Net Investment Income | $48,892 | $10,397 | $59,289 | | Total Revenues | $289,817 | $29,326 | $319,143 | | Provision for Losses and LAE | $15,359 | $1,696 | $17,055 | | Income (Loss) before Income Tax Expense | $238,206 | $(7,031) | $231,175 | | Loss Ratio | 6.6% | N/A | N/A | | Expense Ratio | 15.5% | N/A | N/A | | Combined Ratio | 22.1% | N/A | N/A | - The Mortgage Insurance segment's combined ratio improved to **22.1%** in Q2 2025 from **31.8%** in Q1 2025, primarily due to a lower loss ratio[60](index=60&type=chunk)

Core Viewpoint - Essent Group Ltd. is expected to report a decline in quarterly earnings while showing slight revenue growth in the upcoming earnings release [1]. Financial Performance - The company is projected to report earnings of $1.71 per share for the second quarter, down from $1.91 per share in the same period last year [1]. - Quarterly revenue is expected to be $317.85 million, compared to $312.94 million a year earlier [1]. - Essent Group had previously posted better-than-expected earnings for the first quarter on May 9 [1]. Stock Performance - Essent Group shares fell by 1.4%, closing at $57.02 on Thursday [2]. - Analysts have provided various ratings and price targets for the stock, indicating mixed sentiments among them [4]. Analyst Ratings - Keefe, Bruyette & Woods downgraded the stock from Outperform to Market Perform, raising the price target from $65 to $67 [4]. - Compass Point maintained a Buy rating and increased the price target from $62 to $69 [4]. - JP Morgan upgraded the stock from Neutral to Overweight with a price target of $60 [4]. - RBC Capital reiterated an Outperform rating with a price target of $67 [4]. - Goldman Sachs maintained a Neutral rating and cut the price target from $68 to $60 [4].

Company Overview - Essent Group (ESNT) is expected to report a year-over-year decline in earnings of 12% with an EPS of $1.68 for the quarter ended June 2025, while revenues are projected to increase by 1.4% to $317.15 million [3][12]. Earnings Expectations - The consensus EPS estimate has been revised down by 0.85% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][12]. - The Earnings ESP for Essent Group is -0.30%, suggesting a lower Most Accurate Estimate compared to the Zacks Consensus Estimate, which complicates the prediction of an earnings beat [12]. Historical Performance - In the last reported quarter, Essent Group exceeded the consensus EPS estimate of $1.66 by delivering earnings of $1.69, resulting in a surprise of +1.81% [13]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [14]. Industry Context - In the broader insurance industry, Ambac Financial Group (AMBC) is expected to report a loss of $0.24 per share, reflecting a significant year-over-year decline of 233.3%, with revenues anticipated to drop by 47.1% to $55.59 million [18][19]. - Ambac's consensus EPS estimate has been revised 25% higher recently, leading to a positive Earnings ESP of +12.5%, indicating a likelihood of beating the consensus EPS estimate [19][20].

Financial Data and Key Metrics Changes - Revenue for H1 2025 was GBP 152.4 million, reflecting a 1.1% decrease on a constant currency basis [6][8] - Adjusted operating profit was GBP 16.5 million, with a margin of 10.8% [6][8] - Adjusted earnings per share stood at 3.4p, with a cash conversion rate of 105.5% [7][8] - Net debt to adjusted EBITDA ratio increased to 1.5x, while return on invested capital was 9.3% [7][8] Business Line Data and Key Metrics Changes - EMEA region experienced a 4.5% decline in revenue, but showed sequential improvement [12][24] - Americas region returned to growth with a 0.7% increase in revenue, despite tariff challenges [12][29] - APAC region performed strongly with a 9.5% revenue increase [12][35] Market Data and Key Metrics Changes - The overall market remains choppy with macroeconomic challenges impacting performance [2][4] - Sequential revenue and order intake improvements were noted, particularly in energy transition and digital infrastructure markets [3][4] - FX translation negatively impacted revenue by 3.5%, equating to approximately GBP 5.5 million [13] Company Strategy and Development Direction - The company is focused on winning new business in positive markets, particularly in energy transition and digital infrastructure [3][4] - There is an emphasis on new product introductions and operational initiatives to drive growth [3][4] - The company aims for a long-term adjusted operating margin target of 18% by 2030, with current expectations for margin improvement in H2 2025 [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the second half of 2025, expecting improvements in trading conditions and margins [52][54] - The company remains well-positioned to navigate market uncertainties and capitalize on growth opportunities as they arise [4][54] - Management highlighted the importance of maintaining flexibility in operations to respond to market dynamics [45][54] Other Important Information - An interim dividend of 0.8p per share was declared, to be paid in October [7] - The company is actively pursuing M&A opportunities, with a focus on accretive transactions [48][49] - Sustainability initiatives are progressing, with the launch of a 100% post-consumer recycled product [46] Q&A Session Summary Question: Can you elaborate on the pricing initiatives and dynamic pricing strategies? - Management discussed a detailed approach to pricing control, focusing on discount management and average selling prices to enhance overall pricing strategy [58][60] Question: What is the status of the ERP rollout? - The ERP rollout is progressing well, with the UK planned for December and Turkey expected to follow in summer 2026 [63][64] Question: How is the defense market progressing for the company? - The company is seeing some wins in the defense sector, particularly in access hardware for specialized vehicles, although it remains a small segment [65][66] Question: How much of the pricing benefits are from pricing sophistication versus passing on inflation? - Management indicated that while it is challenging to differentiate, the new pricing tools should help outperform inflation more effectively than in the past [69][71] Question: What is the expected EBIT margin benefit from closing facilities in Costa Rica and Japan? - The closure of these facilities is expected to yield annualized benefits of approximately GBP 1 million to GBP 1.5 million [81] Question: Can you provide context on the situation in Turkey during the first half? - Management noted that high minimum wage increases and sluggish domestic demand impacted margins, but improvements were seen in Q2 [87][88]

Financial Performance - Total revenue decreased to £152.4 million, compared to £159.7 million in H1 2024[10, 11] - Adjusted operating profit decreased to £16.5 million, compared to £21.8 million in H1 2024[10, 11] - Adjusted operating profit margin decreased to 10.8%, compared to 13.7% in H1 2024[10, 11] - Adjusted basic EPS decreased to 3.4p, compared to 4.6p in H1 2024[10, 11] - Adjusted profit before tax decreased to £12.5 million, compared to £17.7 million in H1 2024[11] Regional Performance - EMEA revenue decreased to £82.0 million, compared to £89.4 million in H1 2024[31] - Americas revenue decreased to £50.0 million, compared to £51.3 million in H1 2024[34] - APAC revenue increased to £20.4 million, compared to £19.0 million in H1 2024[37] Strategic Initiatives - The company is targeting a medium-term adjusted operating margin of approximately 18%[25, 26] - The company is focused on market share growth and delivering on elements within its control[60] - The company is driving operational excellence to ensure enhanced levels of customer service[61] - The company is increasing its product offering in faster-growing end-markets, including selective bolt-on M&A[61]

Company Overview - Essent Group (ESNT) is based in Hamilton and operates in the Finance sector, with a year-to-date share price change of 9.39% [3] - The company currently pays a dividend of $0.31 per share, resulting in a dividend yield of 2.08%, which is significantly higher than the Insurance - Property and Casualty industry's yield of 0.58% and the S&P 500's yield of 1.53% [3] Dividend Performance - Essent Group's current annualized dividend of $1.24 represents a 10.7% increase from the previous year [4] - Over the past five years, the company has increased its dividend five times, achieving an average annual increase of 16.21% [4] - The current payout ratio is 18%, indicating that the company paid out 18% of its trailing 12-month earnings per share as dividends [4] Earnings Growth Expectations - For the fiscal year, Essent Group anticipates solid earnings growth, with the Zacks Consensus Estimate for 2025 projected at $6.87 per share, reflecting a year-over-year earnings growth rate of 0.29% [5] Investment Considerations - The company is viewed as a compelling investment opportunity due to its attractive dividend and strong Zacks Rank of 2 (Buy) [6] - Income investors are particularly interested in dividends as they enhance stock investing profits and reduce overall portfolio risk [5]

Core Viewpoint - The article compares Essent Group (ESNT) and Cincinnati Financial (CINF) to determine which stock is more attractive to value investors [1] Valuation Metrics - Both ESNT and CINF currently have a Zacks Rank of 2 (Buy), indicating a positive earnings outlook due to favorable analyst estimate revisions [3] - Value investors utilize various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share to assess undervaluation [4] Specific Valuation Comparisons - ESNT has a forward P/E ratio of 8.66, while CINF has a significantly higher forward P/E of 27.65 [5] - The PEG ratio for ESNT is 3.44, compared to CINF's PEG ratio of 9.70, indicating ESNT may be more attractive based on expected earnings growth [5] - ESNT's P/B ratio stands at 1.09, while CINF's P/B ratio is 1.66, suggesting ESNT is more favorably valued in terms of market value versus book value [6] Overall Assessment - Based on the valuation metrics analyzed, ESNT is considered the superior value option compared to CINF [7]