Essent Group Ltd. - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - ESSENT GROUP LTD. 8-K - Essent Group Ltd.	a50921275.htm

Exhibit 99.1

Essent Group Ltd. Reports Second Quarter 2014 Results

30% Increase in Net Income versus First Quarter 2014

Essent Reinsurance, Ltd. Executes First Transaction

HAMILTON, Bermuda--(BUSINESS WIRE)--August 8, 2014--Essent Group Ltd. (NYSE: ESNT) today reported net income for the quarter ended June 30, 2014 of $19.6 million or $0.23 per diluted share. As of June 30, 2014, Essent had primary insurance in force of $39.4 billion and consolidated stockholders’ equity of $768.0 million. Essent’s combined risk to capital ratio, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 16.2:1 as of June 30, 2014.

Essent also reported that subsequent to the end of the second quarter 2014 its Bermuda-based reinsurer, Essent Reinsurance, Ltd. (“Essent Re”), insured a portion of Freddie Mac’s most recent Agency Credit Insurance Structure (“ACIS”) transaction. Additionally, Essent reported that its domestic flagship mortgage insurer, Essent Guaranty, Inc., entered into a quota-share agreement with Essent Re to prospectively reinsure 25% of its GSE eligible new insurance written effective July 1, 2014. This agreement, which has received approval from both Freddie Mac and Fannie Mae, remains subject to approval from the Pennsylvania Insurance Department. During the third quarter, Essent Group Ltd. plans to contribute $100 million in capital to Essent Re in support of the affiliate quota share and current and future reinsurance transactions.

“Our strong earnings for the quarter reflect our success in increasing the number of customers doing business with Essent and the growth in our high credit quality insurance portfolio,” said Mark Casale, Chairman and Chief Executive Officer. "Also, we are pleased to have Essent Re execute its first transaction and we believe the affiliate quota share will improve our capital efficiency and provide incremental shareholder value. We remain very excited about Essent’s long term prospects.”

Financial Highlights:

Insurance in force as of June 30, 2014 was $39.4 billion, compared to $34.8 billion as of March 31, 2014 and $22.6 billion as of June 30, 2013.
New insurance written for the second quarter of 2014 was $5.9 billion, compared to $3.6 billion in the first quarter of 2014 and $5.9 billion in the second quarter of 2013.
Income before taxes for the second quarter of 2014 was $29.7 million, compared to $23.5 million for the first quarter of 2014 and $13.4 million for the second quarter of 2013.
Net premiums earned for the second quarter of 2014 were $50.3 million, compared to $44.8 million in the first quarter of 2014 and $27.5 million in the second quarter of 2013.
The expense ratio for the second quarter of 2014 was 47.0%, compared to 52.4% for the first quarter of 2014 and 56.6% for the second quarter of 2013.
The provision for losses and LAE for the second quarter of 2014 was $1.0 million, compared to $0.9 million for the first quarter of 2014 and $0.6 million for the second quarter of 2013.
The percentage of loans in default as of June 30, 2014 was 0.13%, compared to 0.12% as of March 31, 2014 and 0.09% as of June 30, 2013.
The combined ratio for the second quarter of 2014 was 48.9%, compared to 54.4% for the first quarter of 2014 and 58.7% for the second quarter of 2013.
In July, through a competitive bidding process, Essent Guaranty, Inc. was selected by Fannie Mae to be the sole insurer on a pool of loans of approximately $1.5 billion.
Essent had $171.0 million of net cash and investments at the holding company as of June 30, 2014.

Conference Call

Essent management will hold a conference call at 10:00 AM Eastern time today to discuss its results. The conference call will be broadcast live over the Internet at http://ir.essentgroup.com/investors/webcasts-and-presentations/event-calendar/default.aspx. The call may also be accessed by dialing 877-201-0168 inside the U.S., or 647-788-4901 for international callers, using passcode 76436919 or by referencing Essent.

A replay of the webcast will be available on the Essent website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 855-859-2056 inside the U.S., or 404-537-3406 for international callers, passcode 76436919.

In addition to the information provided in the company's earnings news release, other statistical and financial information, which may be referred to during the conference call, will be available on Essent's website at http://ir.essentgroup.com/investors/financial-information/quarterly-financial-supplements/default.aspx.

Forward Looking Statements

This press release may include “forward-looking statements” which are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "plan," "seek," "comfortable with," "will," "expect," "intend," "estimate," "anticipate," "believe" or "continue" or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from our expectations due to a variety of known and unknown risks, uncertainties and other factors. Although it is not possible to identify all of these risks and factors, they include, among others, the following: changes in or to Fannie Mae and Freddie Mac (the “GSEs”), whether through Federal legislation, restructurings or a shift in business practices; failure to continue to meet the mortgage insurer eligibility requirements of the GSEs; competition for customers; lenders or investors seeking alternatives to private mortgage insurance; an increase in the number of loans insured through Federal government mortgage insurance programs, including those offered by the Federal Housing Administration; decline in new insurance written and franchise value due to loss of a significant customer; decline in the volume of low down payment mortgage originations; the definition of "Qualified Mortgage" reducing the size of the mortgage origination market or creating incentives to use government mortgage insurance programs; the definition of "Qualified Residential Mortgage" reducing the number of low down payment loans or lenders and investors seeking alternatives to private mortgage insurance; the implementation of the Basel III Capital Accord discouraging the use of private mortgage insurance; a decrease in the length of time that insurance policies are in force; uncertainty of loss reserve estimates; deteriorating economic conditions; non-U.S. operations becoming subject to U.S. Federal income taxation; becoming considered a passive foreign investment company for U.S. Federal income tax purposes; and other risks and factors described in Part I, Item 1A “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2013 filed with the Securities and Exchange Commission on March 10, 2014. Any forward-looking information presented herein is made only as of the date of this press release, and we do not undertake any obligation to update or revise any forward-looking information to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Non-GAAP Financial Measures

In presenting Essent Group Ltd.’s results, management has included financial measures, including adjusted book value per share, that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). Such measures are referred to as “non-GAAP measures.” These non-GAAP measures may be defined or calculated differently by other companies. Management believes these measures allow for a more complete understanding of the underlying business. These measures are used to monitor our results and should not be viewed as a substitute for those determined in accordance with GAAP. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial supplement in accordance with Regulation G.

About the Company

Essent Group Ltd. (NYSE: ESNT) is a Bermuda-based holding company which, through its wholly-owned subsidiary Essent Guaranty, Inc., offers private mortgage insurance for single-family mortgage loans in the United States. Essent provides private capital to mitigate mortgage credit risk, allowing lenders to make additional mortgage financing available to prospective homeowners. Headquartered in Radnor, Pennsylvania, Essent Guaranty, Inc. is licensed to write mortgage insurance in all 50 states and the District of Columbia, and is approved by Fannie Mae and Freddie Mac. Additional information regarding Essent may be found at www.essentgroup.com.


Essent Group Ltd. and Subsidiaries
Financial Results and Supplemental Information (Unaudited)
Quarter ended June 30, 2014


Exhibit A:		Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Exhibit B:		Condensed Consolidated Balance Sheets (Unaudited)
Exhibit C:		New Insurance Written
Exhibit D:		Insurance in Force and Risk in Force
Exhibit E:		Portfolio Vintage Data
Exhibit F:		Portfolio Geographic Data
Exhibit G:		Defaults, Reserve for Losses and LAE, and Claims
Exhibit H:		Investment Portfolio
Exhibit I:		Insurance Company Capital
Exhibit J:		Historical Quarterly Data
Exhibit K:		Earnings per Share
Exhibit L:		Reconciliation of Non-GAAP Financial Measure - Adjusted Book Value per Share


										Exhibit A

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per share amounts)		2014			2013			2014			2013
Revenues:
Net premiums written	$	63,505		$	44,923		$	115,697		$	78,296
Increase in unearned premiums		(13,163	)		(17,442	)		(20,605	)		(29,551	)
Net premiums earned		50,342			27,481			95,092			48,745
Net investment income		3,080			1,014			4,978			1,744
Realized investment gains, net		68			83			468			93
Other income		793			986			1,566			2,013
Total revenues		54,283			29,564			102,104			52,595

Losses and expenses:
Provision for losses and LAE		966			580			1,868			1,310
Other underwriting and operating expenses		23,648			15,557			47,107			30,519
Total losses and expenses		24,614			16,137			48,975			31,829

Income before income taxes		29,669			13,427			53,129			20,766
Income tax expense (benefit)		10,114			(10,150	)		18,568			(10,011	)
Net income	$	19,555		$	23,577		$	34,561		$	30,777


Earnings per share:
Basic:
Common Shares	$	0.23			N/A		$	0.42			N/A
Class A common shares		N/A		$	0.63			N/A		$	0.88
Class B-2 common shares		N/A			0.40			N/A			0.49
Diluted:
Common Shares	$	0.23			N/A		$	0.41			N/A
Class A common shares		N/A		$	0.62			N/A		$	0.88
Class B-2 common shares		N/A			0.09			N/A			0.09

Weighted average common shares outstanding:
Basic:
Common Shares		83,276			N/A			83,071			N/A
Class A common shares		N/A			36,793			N/A			34,313
Class B-2 common shares		N/A			1,334			N/A			1,095
Diluted:
Common Shares		84,706			N/A			84,701			N/A
Class A common shares		N/A			36,901			N/A			34,408
Class B-2 common shares		N/A			5,994			N/A			6,004

Net income	$	19,555		$	23,577		$	34,561		$	30,777

Other comprehensive income (loss)
Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $2,095 and $(2,043) in the three months ended June 30, 2014 and 2013 and $2,465 and $(2,182) in the six months ended June 30, 2014 and 2013		4,915			(3,795	)		5,394			(4,053	)
Total other comprehensive income (loss)		4,915			(3,795	)		5,394			(4,053	)
Comprehensive income	$	24,470		$	19,782		$	39,955		$	26,724


Loss ratio		1.9	%		2.1	%		2.0	%		2.7	%
Expense ratio		47.0	%		56.6	%		49.5	%		62.6	%
Combined ratio		48.9	%		58.7	%		51.5	%		65.3	%


			Exhibit B

Essent Group Ltd. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)


	June 30,		December 31,
(In thousands, except per share amounts)		2014		2013
Assets
Investments available for sale, at fair value
Fixed maturities	$	672,699	$	318,476
Short-term investments		173,171		14,079
Total investments		845,870		332,555
Cash		14,180		477,655
Accrued investment income		4,641		1,978
Accounts receivable		12,249		10,006
Deferred policy acquisition costs		7,539		6,173
Property and equipment (at cost, less accumulated depreciation of $38,013 in 2014 and $36,796 in 2013)		4,865		4,411
Prepaid federal income tax		34,000		8,000
Net deferred tax asset		-		10,346
Other assets		2,021		2,846

Total assets	$	925,365	$	853,970

Liabilities and Stockholders' Equity
Liabilities
Reserve for losses and LAE	$	4,506	$	3,070
Unearned premium reserve		124,004		103,399
Amounts due under Asset Purchase Agreement		2,483		4,949
Accrued payroll and bonuses		7,957		13,076
Net deferred tax liability		9,430		-
Other accrued liabilities		9,026		7,335
Total liabilities		157,406		131,829

Commitments and contingencies

Stockholders' Equity
Common Shares, $0.015 par value:
Authorized - 233,333; issued - 86,528 shares in 2014 and 86,491 shares in 2013		1,298		1,297
Additional paid-in capital		760,252		754,390
Accumulated other comprehensive income (loss)		3,947		(1,447	)
Retained earnings (accumulated deficit)		2,462		(32,099	)
Total stockholders' equity		767,959		722,141

Total liabilities and stockholders' equity	$	925,365	$	853,970


																			Exhibit C

Essent Group Ltd. and Subsidiaries
Supplemental Information
New Insurance Written


NIW by Credit Score
	Three months ended										Six months ended
	June 30, 2014					June 30, 2013					June 30, 2014					June 30, 2013
($ in thousands)
>=760	$	2,651,224		45.1	%	$	3,161,194		53.7	%	$	4,265,660		44.9	%	$	5,598,784		54.7	%
740-759		964,322		16.4			1,038,781		17.6			1,601,181		16.8			1,814,340		17.8
720-739		858,348		14.6			791,569		13.4			1,394,819		14.7			1,364,466		13.4
700-719		629,211		10.7			482,263		8.2			1,004,711		10.6			796,736		7.8
680-699		490,259		8.3			331,699		5.6			805,526		8.5			506,558		5.0
<=679		280,970		4.9			89,621		1.5			433,010		4.5			135,799		1.3
Total	$	5,874,334		100.0	%	$	5,895,127		100.0	%	$	9,504,907		100.0	%	$	10,216,683		100.0	%

Weighted-average Credit Score		749					758					749					759



NIW by LTV
	Three months ended										Six months ended
	June 30, 2014					June 30, 2013					June 30, 2014					June 30, 2013
($ in thousands)
85.00% and below	$	671,651		11.4	%	$	879,352		14.9	%	$	1,107,384		11.7	%	$	1,698,838		16.6	%
85.01% to 90.00%		1,976,596		33.6			2,152,742		36.5			3,217,124		33.8			3,787,024		37.1
90.01% to 95.00%		3,204,930		54.6			2,800,064		47.5			5,130,693		54.0			4,638,486		45.4
95.01% and above		21,157		0.4			62,969		1.1			49,706		0.5			92,335		0.9
	$	5,874,334		100.0	%	$	5,895,127		100.0	%	$	9,504,907		100.0	%	$	10,216,683		100.0	%

Weighted-average LTV		92	%				91	%				92	%				91	%



NIW by Product
	Three months ended										Six months ended
	June 30, 2014					June 30, 2013					June 30, 2014					June 30, 2013
Single Premium policies				18.6	%				20.4	%				18.5	%				19.7	%
Monthly Premium policies				81.4					79.6					81.5					80.3
				100.0	%				100.0	%				100.0	%				100.0	%



NIW by Purchase vs. Refinance
	Three months ended										Six months ended
	June 30, 2014					June 30, 2013					June 30, 2014					June 30, 2013
Purchase				86.6	%				67.5	%				86.0	%				61.5	%
Refinance				13.4					32.5					14.0					38.5
				100.0	%				100.0	%				100.0	%				100.0	%


														Exhibit D

Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance in Force and Risk in Force


Portfolio by Credit Score
Total IIF by FICO score	June 30, 2014					March 31, 2014					June 30, 2013
($ in thousands)
>=760	$	20,157,165		51.2	%	$	18,212,476		52.3	%	$	12,579,842		55.7	%
740-759		6,963,735		17.7			6,218,225		17.9			4,011,141		17.8
720-739		5,502,718		14.0			4,804,322		13.8			3,022,359		13.4
700-719		3,481,564		8.8			2,955,696		8.5			1,704,037		7.5
680-699		2,368,613		6.0			1,940,162		5.6			994,955		4.5
<=679		906,084		2.3			647,176		1.9			263,966		1.1
Total	$	39,379,879		100.0	%	$	34,778,057		100.0	%	$	22,576,300		100.0	%

Weighted-average Credit Score		756					757					760


Total RIF by FICO score	June 30, 2014					March 31, 2014					June 30, 2013
($ in thousands)
>=760	$	4,913,013		50.6	%	$	4,403,362		51.9	%	$	2,954,484		55.2	%
740-759		1,722,247		17.8			1,527,784		18.0			957,841		17.9
720-739		1,376,538		14.2			1,192,630		14.0			728,822		13.6
700-719		855,985		8.8			717,501		8.4			400,692		7.5
680-699		601,426		6.2			488,405		5.8			241,489		4.6
<=679		231,340		2.4			164,180		1.9			65,589		1.2
Total	$	9,700,549		100.0	%	$	8,493,862		100.0	%	$	5,348,917		100.0	%




Portfolio by LTV
Total IIF by LTV	June 30, 2014					March 31, 2014					June 30, 2013
($ in thousands)
85.00% and below	$	4,928,612		12.5	%	$	4,540,795		13.1	%	$	3,392,450		15.0	%
85.01% to 90.00%		14,516,271		36.9			13,054,922		37.5			8,937,420		39.6
90.01% to 95.00%		19,489,901		49.5			16,748,932		48.2			10,097,956		44.7
95.01% and above		445,095		1.1			433,408		1.2			148,474		0.7
	$	39,379,879		100.0	%	$	34,778,057		100.0	%	$	22,576,300		100.0	%

Weighted-average LTV		91	%				91	%				91	%


Total RIF by LTV	June 30, 2014					March 31, 2014					June 30, 2013
($ in thousands)
85.00% and below	$	550,950		5.7	%	$	503,315		5.9	%	$	368,071		6.9	%
85.01% to 90.00%		3,434,553		35.4			3,074,541		36.2			2,080,074		38.9
90.01% to 95.00%		5,567,538		57.4			4,770,413		56.2			2,851,732		53.3
95.01% and above		147,508		1.5			145,593		1.7			49,040		0.9
	$	9,700,549		100.0	%	$	8,493,862		100.0	%	$	5,348,917		100.0	%




Portfolio by Loan Amortization Period
Total IIF by Loan Amortization Period	June 30, 2014					March 31, 2014					June 30, 2013
($ in thousands)
FRM 30 years and higher	$	34,103,315		86.6	%	$	29,906,738		85.9	%	$	18,901,211		83.7	%
FRM 20-25 years		1,150,105		2.9			1,105,372		3.2			917,020		4.1
FRM 15 years		2,434,151		6.2			2,383,315		6.9			1,940,110		8.6
ARM 5 years and higher		1,692,308		4.3			1,382,632		4.0			817,959		3.6
Total	$	39,379,879		100.0	%	$	34,778,057		100.0	%	$	22,576,300		100.0	%


																	Exhibit E

Essent Group Ltd. and Subsidiaries
Supplemental Information
Portfolio Vintage Data

	Original		Remaining
	Insurance		Insurance		% Remaining of		Insurance in Force as of June 30, 2014
Origination year	Written ($ in thousands)		in Force ($ in thousands)		Original Insurance		% Purchase		>90% LTV		>95% LTV		FICO < 700		FICO >= 760		% FRM

2010	$	245,898	$	91,810	37.3	%	72.4	%	35.1	%	0.0	%	3.0	%	59.6	%	98.0	%
2011		3,229,720		1,527,938	47.3		70.8		40.0		0.3		4.2		57.6		92.8
2012		11,241,161		8,832,491	78.6		68.0		47.6		0.5		5.2		56.1		96.7
2013		21,152,638		19,547,594	92.4		73.2		51.0		1.8		7.8		51.5		96.4
2014 (through June 30)		9,504,907		9,380,046	98.7		86.0		54.6		0.5		13.1		44.8		93.7
Total	$	45,374,324	$	39,379,879	86.8		75.0		50.6		1.1		8.3		51.2		95.7


			Exhibit F

Essent Group Ltd. and Subsidiaries
Supplemental Information
Portfolio Geographic Data

IIF by State
	As of June 30, 2014	As of March 31, 2014	As of June 30, 2013
CA	11.0%	11.2%	11.2%
TX	8.5	8.3	8.1
FL	5.1	4.9	4.2
NC	4.3	4.3	4.4
WA	4.0	3.7	3.4
IL	3.9	3.9	4.1
NJ	3.5	3.7	3.9
AZ	3.5	3.5	3.5
GA	3.5	3.5	3.5
CO	3.4	3.4	3.4
All Others	49.3	49.6	50.3
TOTAL	100.0%	100.0%	100.0%



RIF by State
	As of June 30, 2014	As of March 31, 2014	As of June 30, 2013
CA	10.4%	10.6%	10.6%
TX	8.3	8.1	7.9
FL	5.3	5.0	4.4
NC	4.4	4.4	4.6
WA	4.0	3.8	3.5
IL	4.0	3.9	4.2
GA	3.6	3.7	3.7
NJ	3.4	3.6	3.8
PA	3.4	3.5	3.8
AZ	3.3	3.3	3.2
All Others	49.9	50.1	50.3
TOTAL	100.0%	100.0%	100.0%


										Exhibit G

Essent Group Ltd. and Subsidiaries
Supplemental Information
Defaults, Reserve for Losses and LAE, and Claims


Rollforward of Insured Loans in Default
	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
		2014			2013			2014			2013
Beginning default inventory		192			75			159			56
Plus: new defaults		151			65			318			135
Less: cures		(98	)		(46	)		(226	)		(95	)
Less: claims paid		(10	)		(4	)		(16	)		(6	)
Ending default inventory		235			90			235			90



Rollforward of Reserve for Losses and LAE
	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
($ in thousands)		2014			2013			2014			2013
Reserve for losses and LAE at beginning of period	$	3,804		$	2,164		$	3,070		$	1,499
Add provision for losses and LAE occurring in:
Current year		1,166			511			2,452			1,435
Prior years		(200	)		69			(584	)		(125	)
Incurred losses during the period		966			580			1,868			1,310
Deduct payments for losses and LAE occurring in:
Current year		-			3			-			4
Prior years		264			193			432			257
Loss and LAE payments during the period		264			196			432			261
Reserve for losses and LAE at end of period	$	4,506		$	2,548		$	4,506		$	2,548



Claims
	Three months ended						Six months ended
	June 30,			June 30,			June 30,			June 30,
		2014			2013			2014			2013
Number of claims paid		10			4			16			6
Total amount paid for claims (in thousands)	$	263		$	191		$	422		$	248
Average amount paid per claim (in thousands)	$	26		$	48		$	26		$	41
Severity		54	%		81	%		62	%		86	%


											Exhibit G, continued

Essent Group Ltd. and Subsidiaries
Supplemental Information
Defaults, Reserve for Losses and LAE, and Claims


	As of June 30, 2014
	Number of Policies in Default		Percentage of Policies in Default		Amount of Reserves		Percentage of Reserves		Defaulted RIF		Reserves as a Percentage of RIF
($ in thousands)
Missed Payments:
Three payments or less	121		51	%	$	1,266	31	%	$	6,316	20	%
Four to eleven payments	92		39			2,026	48			4,083	50
Twelve or more payments	20		9			724	18			990	73
Pending claims	2		1			105	3			103	102
TOTAL	235		100	%		4,121	100	%	$	11,492	36
IBNR						309
LAE						76
TOTAL					$	4,506

Average reserve per default:
Case					$	17.5
Total					$	19.2

Default Rate	0.13	%



	As of December 31, 2013
	Number of Policies in Default		Percentage of Policies in Default		Amount of Reserves		Percentage of Reserves		Defaulted RIF		Reserves as a Percentage of RIF
($ in thousands)
Missed Payments:
Three payments or less	88		56	%	$	841	30	%	$	3,972	21	%
Four to eleven payments	56		35			1,497	53			2,672	56
Twelve or more payments	10		6			300	11			447	67
Pending claims	5		3			169	6			166	102
TOTAL	159		100	%		2,807	100	%	$	7,257	39
IBNR						211
LAE						52
TOTAL					$	3,070

Average reserve per default:
Case					$	17.7
Total					$	19.3

Default Rate	0.11	%



	As of June 30, 2013
	Number of Policies in Default		Percentage of Policies in Default		Amount of Reserves		Percentage of Reserves		Defaulted RIF		Reserves as a Percentage of RIF
($ in thousands)
Missed Payments:
Three payments or less	49		55	%	$	740	32	%	$	2,559	29	%
Four to eleven payments	34		38			1,154	50			1,762	66
Twelve or more payments	4		4			215	9			287	75
Pending claims	3		3			206	9			196	105
TOTAL	90		100	%		2,315	100	%	$	4,804	48
IBNR						174
LAE						59
TOTAL					$	2,548

Average reserve per default:
Case					$	25.7
Total					$	28.3

Default Rate	0.09	%


									Exhibit H

Essent Group Ltd. and Subsidiaries
Supplemental Information
Investment Portfolio


Investment Portfolio by Asset Class
Asset Class	June 30, 2014						December 31, 2013
($ in thousands)	Fair Value			Percent			Fair Value		Percent
U.S. Treasury securities	$	66,719			7.9	%	$	59,187	17.8	%
U.S. Agency securities		8,165			1.0			14,839	4.5
U.S. Agency Mortgage-backed securities		60,928			7.2			22,241	6.7
Municipal debt securities		170,795			20.2			57,650	17.3
Corporate debt securities		241,874			28.5			125,593	37.8
Mortgage-backed securities		54,207			6.4			18,581	5.6
Asset-backed securities		88,710			10.5			20,385	6.1
Money market investments		154,472			18.3			14,079	4.2
Total Investments	$	845,870			100.0	%	$	332,555	100.0	%



Investment Portfolio by Credit Rating
Rating (1)	June 30, 2014						December 31, 2013
($ in thousands)	Fair Value			Percent			Fair Value		Percent
Aaa	$	436,451			51.7	%	$	147,862	44.5	%
Aa1		34,913			4.1			21,570	6.5
Aa2		41,658			4.9			15,464	4.6
Aa3		31,776			3.8			11,902	3.6
A1		67,136			7.9			26,541	8.0
A2		46,785			5.5			17,045	5.1
A3		56,170			6.6			29,886	9.0
Baa1		52,043			6.2			24,441	7.3
Baa2		68,474			8.1			30,782	9.3
Baa3		10,464			1.2			7,062	2.1
Below Baa3		-			-			-	-
Total Investments	$	845,870			100.0	%	$	332,555	100.0	%

(1) Based on ratings issued by Moody's, if available. S&P rating utilized if Moody's not available.



Portfolio by Duration and Book Yield
Effective Duration	June 30, 2014						December 31, 2013
($ in thousands)	Fair Value			Percent			Fair Value		Percent
< 1 Year	$	261,123			30.8	%	$	65,092	19.6	%
1 to < 2 Years		64,615			7.6			19,093	5.7
2 to < 3 Years		97,011			11.5			74,335	22.4
3 to < 4 Years		109,829			13.0			63,214	19.0
4 to < 5 Years		62,328			7.4			66,230	19.9
5 or more Years		250,964			29.7			44,591	13.4
Total Investments	$	845,870			100.0	%	$	332,555	100.0	%

Pre-tax investment income yield:
Three months ended June 30, 2014		1.60	%
Six months ended June 30, 2014		1.31	%


Net cash and Investments at holding company Essent Group Ltd. ($ in thousands):
As of June 30, 2014				$	170,982
As of December 31, 2013				$	246,220


			Exhibit I

Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance Company Capital

	As of
	June 30, 2014		December 31, 2013

Combined statutory capital ($ in thousands) (A)	$	599,928	$	469,424

Risk to capital ratios: (B)
Essent Guaranty, Inc.		16.1:1		16.6:1
Essent Guaranty of PA, Inc.		17.6:1		17.1:1
Combined (C)		16.2:1		16.5:1

(A) Combined statutory capital equals the sum of statutory capital of Essent Guaranty, Inc. plus Essent Guaranty of PA, Inc., after eliminating the impact of intercompany transactions. Statutory capital is computed based on accounting practices prescribed or permitted by the Pennsylvania Insurance Department.

(B) The risk to capital ratio is calculated as the ratio of net risk in force to statutory capital. Net risk in force represents total risk in force, net of reinsurance ceded and net of exposures on policies for which loss reserves have been established.

(C) The combined risk to capital ratio equals the sum of the net risk in force of Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. divided by the combined statutory capital.


																Exhibit J
Essent Group Ltd. and Subsidiaries
Supplemental Information
Historical Quarterly Data


	2014						2013
Selected Income Statement Data	June 30			March 31			December 31			September 30			June 30			March 31
(In thousands, except per share amounts)
Revenues:
Net premiums written	$	63,505		$	52,192		$	52,878		$	55,026		$	44,923		$	33,373

Net premiums earned		50,342			44,750			40,344			34,282			27,481			21,264
Other revenues		3,941			3,071			2,009			2,173			2,083			1,767
Total revenues		54,283			47,821			42,353			36,455			29,564			23,031

Losses and expenses:
Provision for losses and LAE		966			902			692			319			580			730
Other underwriting and operating expenses		23,648			23,459			22,299			18,237			15,557			14,962
Total losses and expenses		24,614			24,361			22,991			18,556			16,137			15,692

Income before income taxes		29,669			23,460			19,362			17,899			13,427			7,339
Income tax expense (benefit)		10,114			8,454			345			2,280			(10,150	)		139
Net income	$	19,555		$	15,006		$	19,017		$	15,619		$	23,577		$	7,200

Earnings per share:
Basic:
Common Shares	$	0.23		$	0.18		$	0.23			N/A			N/A			N/A
Class A common shares		N/A			N/A			N/A		$	0.36		$	0.63		$	0.23
Class B-2 common shares		N/A			N/A			N/A			0.07			0.40			-

Diluted:
Common Shares	$	0.23		$	0.18		$	0.22			N/A			N/A			N/A
Class A common shares		N/A			N/A			N/A		$	0.35		$	0.62		$	0.23
Class B-2 common shares		N/A			N/A			N/A			0.02			0.09			-

Weighted average common shares outstanding:
Basic:
Common Shares		83,276			82,864			51,741			N/A			N/A			N/A
Class A common shares		N/A			N/A			N/A			43,616			36,793			31,805
Class B-2 common shares		N/A			N/A			N/A			1,822			1,334			853

Diluted:
Common Shares		84,706			84,696			55,130			N/A			N/A			N/A
Class A common shares		N/A			N/A			N/A			43,788			36,901			31,864
Class B-2 common shares		N/A			N/A			N/A			6,054			5,994			6,009

Other Data:
($ in thousands)

Loss ratio (1)		1.9	%		2.0	%		1.7	%		0.9	%		2.1	%		3.4	%
Expense ratio (2)		47.0	%		52.4	%		55.3	%		53.2	%		56.6	%		70.4	%
Combined ratio		48.9	%		54.4	%		57.0	%		54.1	%		58.7	%		73.8	%

New insurance written	$	5,874,334		$	3,630,573		$	4,527,900		$	6,408,055		$	5,895,127		$	4,321,556
New risk written		1,477,547			907,257			1,147,560			1,584,267			1,409,905			991,011
Average premium rate (3)		0.54	%		0.54	%		0.54	%		0.54	%		0.55	%		0.55	%
Insurance in force (end of period)	$	39,379,879		$	34,778,057		$	32,028,196		$	28,198,722		$	22,576,300		$	17,430,810
Policies in force		175,773			154,451			141,417			123,737			98,818			76,455
Weighted-average coverage (4)		24.6	%		24.4	%		24.3	%		24.0	%		23.7	%		23.5	%
Annual persistency		89.1	%		87.9	%		86.1	%		83.1	%		80.1	%		80.9	%

Loans in default (count)		235			192			159			116			90			75
Percentage of loans in default		0.13	%		0.12	%		0.11	%		0.09	%		0.09	%		0.10	%


(1)		Loss ratio is calculated by dividing the provision for loss and loss adjustment expenses by net premiums earned.
(2)		Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.
(3)		Average premium rate is net premium earned as a percentage of average insurance in force for the period.
(4)		Weighted-average coverage is end of period risk in force divided by insurance in force.


							Exhibit K
Essent Group Ltd. and Subsidiaries
Supplemental Information
Earnings per Share



	Three months ended June 30,				Six months ended June 30,
	2014		2013		2014		2013
(In thousands, except per share amounts)
Net income	$	19,555	$	23,577	$	34,561	$	30,777
Less: Class A dividends declared		N/A		-		N/A		-
Less: Class B-2 dividends declared		N/A		-		N/A		-
Undistributed net income	$	19,555	$	23,577	$	34,561	$	30,777
Net income allocable to Common Shares	$	19,555		N/A	$	34,561		N/A
Net income allocable to Class A common shares		N/A	$	23,037		N/A	$	30,237
Net income allocable to Class B-2 common shares		N/A		540		N/A		540

Basic earnings per common share:
Common Shares	$	0.23		N/A	$	0.42		N/A
Class A common shares		N/A	$	0.63		N/A	$	0.88
Class B-2 common shares		N/A		0.40		N/A		0.49

Diluted earnings per common share:
Common Shares	$	0.23		N/A	$	0.41		N/A
Class A common shares		N/A	$	0.62		N/A	$	0.88
Class B-2 common shares		N/A		0.09		N/A		0.09

Basic weighted average common shares outstanding:
Common Shares		83,276		N/A		83,071		N/A
Class A common shares		N/A		36,793		N/A		34,313
Class B-2 common shares		N/A		1,334		N/A		1,095

Diluted weighted average common shares outstanding:
Common Shares		84,706		N/A		84,701		N/A
Class A common shares		N/A		36,901		N/A		34,408
Class B-2 common shares		N/A		5,994		N/A		6,004


Note:		Prior to the Company’s initial public offering on November 5, 2013 (“IPO”), the Company had two classes of common shares outstanding: Class A common shares and Class B-2 common shares. Upon the completion of the IPO, all of the Class A common shares and the Class B-2 common shares converted into a single class of common shares of the Company (the “Common Shares”), as more fully described in the Company’s prospectus dated October 30, 2013. Earnings Per Share (“EPS”) was calculated and presented prior to the IPO using the “two-class” method which provides that earnings and losses are allocated to each class of common shares according to the dividends declared or unpaid cumulative dividends earned, with the remaining undistributed earnings allocated according to each share’s respective participation rights.


						Exhibit L
Essent Group Ltd. and Subsidiaries
Supplemental Information
Reconciliation of Non-GAAP Financial Measure - Adjusted Book Value per Share

We believe that long-term growth in Adjusted Book Value per Share is an important measure of our financial performance and is a measure used to determine vesting on certain restricted stock granted to senior management under the Company’s long-term incentive plan. Adjusted Book Value per Share is a financial measure that is not calculated under standards or rules that comprise accounting principles generally accepted in the United States (GAAP) and is referred to as a non-GAAP measure. Adjusted Book Value per Share may be defined or calculated differently by other companies. Adjusted Book Value per Share is one measure used to monitor our results and should not be viewed as a substitute for those measures determined in accordance with GAAP.

Adjusted Book Value per Share is calculated by dividing Adjusted Book Value by Common Shares and Share Units Outstanding. Adjusted Book Value is defined as consolidated stockholders’ equity of the Company, excluding accumulated other comprehensive income (loss) plus the proceeds, if any, from the assumed exercise of all in the money options, warrants and similar instruments. Common Shares and Outstanding Restricted Share Units is defined as total common shares outstanding plus all equity instruments (including Restricted Stock Units) issued to management and the Board of Directors and any in the money options, warrants and similar instruments. Accumulated other comprehensive income (loss) includes unrealized gains and losses that arise from changes in the market value of the Company’s investments that are classified as available for sale. The Company does not view these unrealized gains and losses to be indicative of our fundamental operating performance. As of June 30, 2014 and December 31, 2013, the Company does not have any options, warrants and similar instruments outstanding.

The following table sets forth the reconciliation of adjusted book value to the most comparable GAAP amount as of June 30, 2014 and December 31, 2013 in accordance with Regulation G:


(In thousands, except per share amounts)	June 30, 2014		December 31, 2013

Numerator:
Total Stockholders' Equity (Book Value)	$	767,959	$	722,141

Subtract: Accumulated Other Comprehensive Income (Loss)		3,947		(1,447	)

Adjusted Book Value	$	764,012	$	723,588

Denominator:
Total Outstanding Common Shares		86,528		86,491

Add: Outstanding Restricted Share Units		678		528

Total Outstanding Common Shares and Restricted Share Units		87,206		87,019

Adjusted Book Value per Share	$	8.76	$	8.32

CONTACT:
Media Contact
JD Walker Communications, LLC
Janice Daue Walker, 610-230-0556
media@essentgroup.com
or
Investor Relations Contact
855-809-ESNT
ir@essentgroup.com

Essent Group Ltd. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - August 8, 2014

Attached files

Essent Group Ltd. Reports