Essent Group (ESNT) Q1 2026 earnings summary

Executive summary

• Net income for Q1 2026 was $171.8 million ($1.82 per diluted share), with annualized ROE of 12.0% and book value per share up 11% year-over-year to $61.20.

• Strong cash flow from core mortgage insurance business supported growth and capital returns, including $214 million in share repurchases YTD and a $0.35 per share dividend.

• Shareholders' equity stood at $5.7 billion, with $6.6 billion in total cash and investments.

• Housing market remains paused due to affordability and higher rates, but favorable demographics and supply constraints are expected to drive future demand.

• The company began reinsuring property and casualty risks in 2026, expanding its reinsurance segment.

Financial highlights

• Total revenue for Q1 2026 was $336 million, with net premiums earned of $260.1 million and net investment income of $59.3 million.

• Mortgage insurance in force was $247.9 billion at March 31, 2026, up 1% year-over-year; persistency remained high at 84.7%.

• Provision for losses and LAE was $48.2 million, reflecting property and casualty reinsurance and aging mortgage defaults.

• Consolidated cash and investments totaled $6.6 billion, with a 4.2% annualized yield and new money yields near 5%.

• Debt-to-capital ratio was 8.07% at March 31, 2026, with $500 million in senior unsecured notes outstanding.

Outlook and guidance

• Defaults are expected to increase due to portfolio seasoning, not credit deterioration.

• Persistency and elevated interest rates are expected to support investment income but may dampen mortgage origination volumes.

• Favorable demographic trends and a growing first-time homebuyer population are expected to support housing demand over the next five years.

• Ongoing share repurchases and dividend payments are anticipated, with $414.7 million remaining under the current repurchase authorization.

• P&C reinsurance earnings impact expected to be immaterial in 2026, with potential for longer-term growth.