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Essent Group Ltd (ESNT) Reports Q3 2023 Earnings, Declares Quarterly Dividend

  • Essent Group Ltd (NYSE:ESNT) reported a net income of $178.0 million for Q3 2023, maintaining the same level as Q3 2022.

  • The company declared a quarterly cash dividend of $0.25 per common share, payable on December 11, 2023.

  • New insurance written for Q3 2023 was $12.5 billion, a decrease from $13.5 billion in Q2 2023 and $17.1 billion in Q3 2022.

  • Net investment income for Q3 2023 was $47.1 million, up 44% from Q3 2022.

Essent Group Ltd (NYSE:ESNT) announced its third-quarter 2023 results on November 2, 2023. The company reported a net income of $178.0 million or $1.66 per diluted share, maintaining the same level as the $178.1 million or $1.66 per diluted share reported for Q3 2022.

Financial Performance

Essent Group Ltd (NYSE:ESNT) also reported that its Board of Directors has declared a quarterly cash dividend of $0.25 per common share, payable on December 11, 2023, to shareholders of record on December 1, 2023.

We are pleased with our third quarter 2023 financial results, as we continue to generate high quality earnings and robust returns, said Mark A. Casale, Chairman and Chief Executive Officer. The credit quality of our portfolio remains strong. Higher interest rates have translated to higher portfolio persistency and increased investment income, supporting our revenues and growth in book value per share.

Despite a decrease in new insurance written for Q3 2023, which was $12.5 billion compared to $13.5 billion in Q2 2023 and $17.1 billion in Q3 2022, the company's net investment income for the third quarter of 2023 was $47.1 million, up 44% from the third quarter of 2022. For the nine months ended September 30, 2023, net investment income was $135.6 million, up 57% from the comparable period in 2022.

Key Financial Highlights

Essent Group Ltd (NYSE:ESNT) completed its previously announced acquisition of Agents National Title Holding Company and Boston National Holdings LLC for $92.6 million on July 1, 2023. The company also closed its 9th insurance-linked note transaction, Radnor Re 2023-1, which provides $281.5 million of collateralized reinsurance coverage for NIW from August 2022 through June 2023. In October 2023, the Board approved a share repurchase plan that authorizes the Company to repurchase $250 million of common shares in the open market between January 1, 2024 and December 31, 2025.

Financial Statements Summary

The company's condensed consolidated statements of comprehensive income showed a total revenue of $296.1 million for Q3 2023, compared to $261.7 million for Q3 2022. The total losses and expenses for Q3 2023 were $86.7 million, significantly higher than the $50.8 million reported for Q3 2022.

The condensed consolidated balance sheets showed total assets of $6.1 billion as of September 30, 2023, compared to $5.7 billion as of December 31, 2022. Total liabilities were $1.3 billion as of September 30, 2023, maintaining the same level as of December 31, 2022. The company's total stockholders' equity increased to $4.8 billion as of September 30, 2023, from $4.5 billion as of December 31, 2022.

The company's U.S Mortgage Insurance Portfolio Historical Quarterly Data showed a decrease in new insurance written for Q3 2023, while the net average premium rate remained steady at 0.35%.

Explore the complete 8-K earnings release (here) from Essent Group Ltd for further details.

This article first appeared on GuruFocus.

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