Release Details

HAMILTON, Bermuda--(BUSINESS WIRE)-- Essent Group Ltd. (NYSE: ESNT) today reported net income for the fourth quarter ended December 31, 2013 of $19.0 million. Net income for the full year 2013 was $65.4 million, which included a tax benefit of $7.4 million.

Primary insurance in force as of December 31, 2013, was $32.0 billion, representing an increase of 135% compared to $13.6 billion of insurance in force as of December 31, 2012. As of December 31, 2013, consolidated stockholders’ equity was $722.1 million and combined statutory capital in insurance subsidiaries was $469.4 million.

“2013 was a landmark year for Essent. We achieved investment grade ratings from both S&P and Moody’s and also successfully completed our initial public offering, giving us greater access to capital to support future growth,” said Mark Casale, Chairman and Chief Executive Officer. “In addition, our insurance in force growth fueled a significant increase in our top line revenues, resulting in record earnings for the year.”

Financial Highlights:

• New insurance written for the fourth quarter was $4.5 billion, compared to $4.0 billion in the fourth quarter 2012. For the full year 2013, new insurance written was $21.2 billion, compared to $11.2 billion for 2012.
• Income before taxes for the fourth quarter was $19.4 million compared to $1.4 million for the fourth quarter of 2012. Income before taxes for the full year 2013 was $58.0 million compared to a loss of $13.9 million for 2012.
• Net premiums earned for the fourth quarter were $40.3 million, compared to $16.5 million in the fourth quarter of 2012. For the full year 2013, net premiums earned were $123.4 million, compared to $41.8 million for 2012.
• The expense ratio for the fourth quarter was 55.3%, compared to 100.2% for the fourth quarter of 2012. For the full year, the expense ratio was 57.6%, compared to 146.3% for 2012.
• The provision for losses and LAE for the fourth quarter was $0.7 million, compared to $0.5 million in the fourth quarter of 2012. For the full year 2013, the provision for losses and LAE was $2.3 million, compared to $1.5 million in 2012.
• The percentage of loans in default as of December 31, 2013 was 0.11%, compared to 0.09% as of December 31, 2012.
• The combined ratio for the fourth quarter was 57.0%, compared to 103.2% for the fourth quarter of 2012. For the full year, the combined ratio was 59.5%, compared to 149.8% for 2012.

Additionally, the insurance subsidiaries’ combined risk to capital ratio which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. was 16.5:1 as of December 31, 2013, compared to 15.8:1 as of December 31, 2012.

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 http://ir.essentgroup.com/investors/webcasts-and-presentations/event-calendar/default.aspx. The call may also be accessed by dialing 877-201-0168 inside the U.S., or 647-788-4901 for international callers, using passcode 31467424 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: 855-859-2056 inside the U.S., or 404-537-3406 for international callers, passcode 31467424.

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 http://ir.essentgroup.com/investors/financial-information/quarterly-financial-supplements/default.aspx.

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," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" 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: 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; 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 listed under "Risk Factors" in the prospectus dated as of October 30, 2013 filed pursuant to Rule 424(b)(4) with the Securities and Exchange Commission on November 1, 2013. 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.

Non-GAAP Financial Measures

In presenting Essent Group Ltd.’s results, management has included financial measures, including adjusted book value per share, that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures are referred to as “non-GAAP measures.” These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial supplement in accordance with Regulation G.

About the Company

Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company 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. Additional information regarding Essent may be found at www.essentgroup.com.

Source: Essent Group Ltd.