Release Details

HAMILTON, Bermuda--(BUSINESS WIRE)-- Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended December 31, 2014 of $28.9 million or $0.33 per diluted share. Net income for the full year 2014 was $88.5 million or $1.03 per diluted share.

Primary insurance in force as of December 31, 2014, was $50.8 billion, representing an increase of 58% compared to $32.0 billion of insurance in force as of December 31, 2013. As of December 31, 2014, consolidated stockholders’ equity was $955.7 million and combined statutory capital in the insurance subsidiaries was $705.9 million.

“2014 was another milestone year for Essent and our results reflect the solid progress we have made against our goals,” said Mark Casale, Chairman and Chief Executive Officer. “We continue to expand the breadth and depth of our franchise, both in terms of our domestic business and our reinsurance platform. As a result of our efforts this year, we believe Essent is well positioned and I remain optimistic about Essent’s prospects heading into 2015!”

Financial Highlights:

• New insurance written for the fourth quarter was $6.5 billion, compared to $8.8 billion in the third quarter and $4.5 billion in the fourth quarter of 2013. For the full year 2014, new insurance written was $24.8 billion, compared to $21.2 billion for 2013.
• Net premiums earned for the fourth quarter were $67.8 million, compared to $60.3 million in the third quarter and $40.3 million in the fourth quarter of 2013. For the full year 2014, net premiums earned were $223.2 million, compared to $123.4 million for 2013.
• Income before taxes for the fourth quarter was $44.0 million, compared to $38.8 million in the third quarter and $19.4 million in the fourth quarter of 2013. For the full year 2014, income before taxes was $135.9 million, compared to $58.0 million for 2013.
• The expense ratio for the fourth quarter was 37.8%, compared to 40.6% in the third quarter and 55.3% in the fourth quarter of 2013. For the full year 2014, the expense ratio was 43.6%, compared to 57.6% for 2013.
• The provision for losses and LAE for the fourth quarter was $3.0 million, compared to $1.4 million in the third quarter and $0.7 million in the fourth quarter of 2013. For the full year 2014, the provision for losses and LAE was $6.3 million, compared to $2.3 million for 2013.
• The percentage of loans in default as of December 31, 2014 was 0.20%, compared to 0.15% as of September 30, 2014 and 0.11% as of December 31, 2013.
• The combined ratio for the fourth quarter was 42.3%, compared to 42.9% in the third quarter and 57.0% in the fourth quarter of 2013. For the full year 2014, the combined ratio was 46.4%, compared to 59.5% for 2013.
• The consolidated balance of cash and investments at December 31, 2014 was $1.1 billion, including cash and investment balances at Essent Group Ltd. of $126.3 million.
• The combined risk to capital ratio of the US mortgage insurance business, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 16.2:1 as of December 31, 2014.
• Essent Group Ltd. contributed approximately $50 million of capital to Essent Reinsurance, Ltd.
• Essent Reinsurance, Ltd. was selected by Freddie Mac to participate in Freddie Mac’s Agency Credit Insurance Structure (“ACIS”) 2014-3 transaction and insure $15.5 million of risk that Freddie Mac had retained as part of its STACR2014-DN2 transaction.

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 67143840 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 67143840.

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 described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 10, 2014. 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., (collectively, “Essent”) 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 and rated BBB+ by Standard & Poor’s and Baa2 by Moody’s, 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 and reinsurance through its Bermuda-based subsidiary, Essent Reinsurance Ltd. Additional information regarding Essent may be found at www.essentgroup.com.