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Essent Group (ESNT) Q4 Earnings Beat, Rise Y/Y, Dividend Up
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Essent Group Ltd. (ESNT - Free Report) reported fourth-quarter 2021 operating net income per share of $1.64, which beat the Zacks Consensus Estimate by 13.1%. The bottom line improved 49% year over year.
The quarter witnessed higher revenues driven by an increase in income from other invested assets, though new insurance written declined. Losses and expenses dropped attributable to benefits for losses and LAE. There was a decline in the percentage of loans in default during the reported quarter.
Essent Group Ltd. Price, Consensus and EPS Surprise
Total revenues of $257 million improved 4% year over year, driven by a more than seven-fold year-over-year increase in income from other invested assets.
New insurance written dropped 45% year over year to $16.4 billion.
As of Dec 31, 2021, insurance in force climbed 4.2% year over year to $207.2 billion.
As of Dec 31, 2021, the percentage of loans in default was 2.16%, a decline from 3.93% at the year-ago level.
During the quarter, new insurance written dropped 45% year over year to $16.4 billion.
Total losses and expenses of $39.9 million decreased 60.5% year over year due to benefits for losses and LAE against provision for losses and LAE in the year-ago quarter.
The combined ratio came in at 17.4, which improved 2710 bps year over year. The loss ratio was (1.6) against 27.9 in the year-ago quarter. The expense ratio improved 240 bps year over year to 19 in the quarter under review.
Full-Year Highlights
Operating net income per share of $6.11 improved 57.5% year over year.
Total revenues of $1 billion increased 7.7% year over year. Net premiums written declined 3.2% to $807.5 million.
Loss ratio of 3.6 improved from 34.9 in 2020.
Financial Update
Essent Group exited 2021 with a cash balance of $81.5 million, down 20.6% from the 2020-end level. As of Dec 31, 2021, total stockholders' equity of $4.2 billion, up 9.7% from the figure at 2020 end.
Book value per share came in at $38.73 as of Dec 31, 2021, up 12.7% from the year-ago end level.
Annualized return on average equity in 2021 expanded 470 bps year over year to 16.8%.
Across the U.S. mortgage insurance business encompassing statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., the combined risk-to-capital ratio came in at 10.4:1.
On Dec 10, 2021, Essent Group entered into an amended and restated credit facility, increasing to $825 million in the committed capacity and extending the contractual maturity to Dec 10, 2026.
Dividend Update
The board of directors approved an increase in the quarterly dividend to 20 cents per share compared with the prior payout of 16 cents. The increased dividend will be paid out on Mar 21 to shareholders of record as of Mar 10.
The fourth-quarter bottom line of MGIC Investment Corporation (MTG - Free Report) , The Travelers Companies (TRV - Free Report) and RenaissanceRe Holdings Ltd. (RNR - Free Report) beat the respective Zacks Consensus Estimate.
MGIC Investment’s adjusted net operating income per share of 61 cents beat the Zacks Consensus Estimate by 35.6% and increased 41.9% year over year, reflecting a high quality of increased insurance in force, which benefited from a strong housing market and improved economic conditions.
MTG’s insurance in force improved 11.3%. There was a decline of 42.3% in primary delinquency to 33,290 loans.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year.
TRV’s net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share.
RNR’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.
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Essent Group (ESNT) Q4 Earnings Beat, Rise Y/Y, Dividend Up
Essent Group Ltd. (ESNT - Free Report) reported fourth-quarter 2021 operating net income per share of $1.64, which beat the Zacks Consensus Estimate by 13.1%. The bottom line improved 49% year over year.
The quarter witnessed higher revenues driven by an increase in income from other invested assets, though new insurance written declined. Losses and expenses dropped attributable to benefits for losses and LAE. There was a decline in the percentage of loans in default during the reported quarter.
Essent Group Ltd. Price, Consensus and EPS Surprise
Essent Group Ltd. price-consensus-eps-surprise-chart | Essent Group Ltd. Quote
Operational Update
Total revenues of $257 million improved 4% year over year, driven by a more than seven-fold year-over-year increase in income from other invested assets.
New insurance written dropped 45% year over year to $16.4 billion.
As of Dec 31, 2021, insurance in force climbed 4.2% year over year to $207.2 billion.
As of Dec 31, 2021, the percentage of loans in default was 2.16%, a decline from 3.93% at the year-ago level.
During the quarter, new insurance written dropped 45% year over year to $16.4 billion.
Total losses and expenses of $39.9 million decreased 60.5% year over year due to benefits for losses and LAE against provision for losses and LAE in the year-ago quarter.
The combined ratio came in at 17.4, which improved 2710 bps year over year. The loss ratio was (1.6) against 27.9 in the year-ago quarter. The expense ratio improved 240 bps year over year to 19 in the quarter under review.
Full-Year Highlights
Operating net income per share of $6.11 improved 57.5% year over year.
Total revenues of $1 billion increased 7.7% year over year. Net premiums written declined 3.2% to $807.5 million.
Loss ratio of 3.6 improved from 34.9 in 2020.
Financial Update
Essent Group exited 2021 with a cash balance of $81.5 million, down 20.6% from the 2020-end level. As of Dec 31, 2021, total stockholders' equity of $4.2 billion, up 9.7% from the figure at 2020 end.
Book value per share came in at $38.73 as of Dec 31, 2021, up 12.7% from the year-ago end level.
Annualized return on average equity in 2021 expanded 470 bps year over year to 16.8%.
Across the U.S. mortgage insurance business encompassing statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., the combined risk-to-capital ratio came in at 10.4:1.
On Dec 10, 2021, Essent Group entered into an amended and restated credit facility, increasing to $825 million in the committed capacity and extending the contractual maturity to Dec 10, 2026.
Dividend Update
The board of directors approved an increase in the quarterly dividend to 20 cents per share compared with the prior payout of 16 cents. The increased dividend will be paid out on Mar 21 to shareholders of record as of Mar 10.
Zacks Rank
Essent Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Finance Sector Releases
The fourth-quarter bottom line of MGIC Investment Corporation (MTG - Free Report) , The Travelers Companies (TRV - Free Report) and RenaissanceRe Holdings Ltd. (RNR - Free Report) beat the respective Zacks Consensus Estimate.
MGIC Investment’s adjusted net operating income per share of 61 cents beat the Zacks Consensus Estimate by 35.6% and increased 41.9% year over year, reflecting a high quality of increased insurance in force, which benefited from a strong housing market and improved economic conditions.
MTG’s insurance in force improved 11.3%. There was a decline of 42.3% in primary delinquency to 33,290 loans.
Travelers’ core income of $5.20 per share surpassed the Zacks Consensus Estimate of $3.86 and increased 6% year over year.
TRV’s net written premiums increased 10% year over year to a record $8 billion. The combined ratio deteriorated 130 bps year over year to 88.
RenaissanceRe’s operating earnings per share of $4.71 surpassed the Zacks Consensus Estimate by 27% and rebounded from the year-ago loss of $1.59 per share.
RNR’s gross premiums written surged 40.4% year over year to $1.3 billion. The combined ratio improved 3530 bps year over year to 79.4.