Essent Group (ESNT) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 was $203.6 million ($1.91 per diluted share), up from $172.2 million ($1.61 per share) year-over-year, with annualized ROE reaching 15.4%.

• Book value per share rose to $50.58 at June 30, 2024, reflecting an 18.7% annualized growth rate since 2013.

• U.S. mortgage insurance in force grew to $240.7 billion, with persistency at 86.7%.

• Credit quality remains strong, with a weighted average FICO of 746 and original LTV of 93%.

• Board declared a $0.28 per share quarterly dividend, payable in Q3 2024.

Financial highlights

• Total revenues for Q2 2024 were $312.9 million, up from $260.1 million in Q2 2023; net premiums earned were $251.9 million.

• Net investment income rose to $56.1 million in Q2 2024, with a 22% year-over-year increase for the first half of 2024.

• Benefit for losses and LAE was $0.3 million in Q2 2024, compared to a provision of $1.3 million a year ago.

• Combined ratio for Q2 2024 was 26.0%.

• Book value per share rose to $50.58 at June 30, 2024.

Outlook and guidance

• Management remains constructive on housing and business outlook, citing favorable demographics and constrained supply supporting home prices.

• Persistency is expected to remain elevated for the rest of 2024 due to current mortgage rate levels.

• Entered into an excess of loss reinsurance transaction covering 15% of eligible 2024 NIW, effective July 1.

• Sufficient liquidity and capital are expected to meet obligations and support growth over the next 12 months.

• No material impact from recent U.S. tax reform or Bermuda's new corporate income tax until at least 2030.