Essent posts higher net income at year's midpoint
Essent Group reported second-quarter net income of $72.1 million, an improvement from the $52.3 million for the same period last year.
As of June 30, Essent had insurance in force of $95.5 billion and consolidated stockholders’ equity of $1.5 billion.
In Q1, Essent realized a 39% net income increase on new policy growth. It reported first-quarter net income of $66.6 million.
Essent's expense ratio declined three percentage points in Q2 2017, dropping from 31.2% to 28.2% from the previous year. The private mortgage insurer's consolidated balance of cash and investments was $1.9 billion, including $27.2 million in cash and investment balances at Essent Group.
New insurance written for the second quarter was $11.4 billion, retaining its position as the fourth largest private mortgage insurer by topping the $9.8 billion written by Genworth for the period. For the second quarter last year, Essent did $8.7 billion.
"We are pleased with our strong second-quarter results and continuing to build a high credit quality and profitable mortgage insurance portfolio," said Mark Casale, chairman and chief executive officer at Essent, in a press release.
"We believe that Essent is well positioned in both the U.S. and Bermuda to continue growing our portfolio and generating high quality earnings and strong returns for our shareholders," Casale continued.
In the second quarter of 2017, Essent Reinsurance reinsured $53 million of risk in government-sponsored enterprise share transactions.
The company's provision for losses and loss adjustment expense was $1.8 million, improving from last year's projections of $3.0 million. Its percentage of loans in default rose from 0.36% in last year's second quarter to 0.41% in this year's 2Q.
The combined risk-to-capital ratio of the U.S. mortgage insurance business, including statutory capital for Essent Guaranty and Essent Guaranty of PA, was 14.9:1.