Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 01, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Essent Group Ltd. | |
Entity Central Index Key | 1,448,893 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 93,379,636 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments available for sale, at fair value | ||
Fixed maturities (amortized cost: 2017 — $1,619,677; 2016 — $1,497,186) | $ 1,612,153 | $ 1,482,754 |
Short-term investments (amortized cost: 2017 — $112,381; 2016 — $132,352) | 112,380 | 132,348 |
Total investments | 1,724,533 | 1,615,102 |
Cash | 19,713 | 27,531 |
Accrued investment income | 10,191 | 9,488 |
Accounts receivable | 23,479 | 21,632 |
Deferred policy acquisition costs | 13,493 | 13,400 |
Property and equipment (at cost, less accumulated depreciation of $47,544 in 2017 and $46,543 in 2016) | 8,205 | 8,119 |
Prepaid federal income tax | 180,657 | 181,272 |
Other assets | 7,429 | 6,454 |
Total assets | 1,987,700 | 1,882,998 |
Liabilities | ||
Reserve for losses and LAE | 29,468 | 28,142 |
Unearned premium reserve | 221,262 | 219,616 |
Net deferred tax liability | 162,651 | 142,587 |
Revolving credit facility borrowings | 125,000 | 100,000 |
Securities purchases payable | 17,315 | 14,999 |
Other accrued liabilities | 19,252 | 33,881 |
Total liabilities | 574,948 | 539,225 |
Commitments and contingencies (see Note 6) | ||
Common shares, $0.015 par value: | ||
Authorized - 233,333; issued and outstanding - 93,377 shares in 2017 and 93,105 shares in 2016 | 1,401 | 1,397 |
Additional paid-in capital | 915,895 | 918,296 |
Accumulated other comprehensive loss | (7,405) | (12,255) |
Retained earnings | 502,861 | 436,335 |
Total stockholders’ equity | 1,412,752 | 1,343,773 |
Total liabilities and stockholders’ equity | $ 1,987,700 | $ 1,882,998 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property and equipment | ||
Accumulated depreciation | $ 47,544 | $ 46,543 |
Stockholders’ Equity | ||
Common Shares, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common Shares, authorized (in shares) | 233,333,000 | 233,333,000 |
Common Shares, issued (in shares) | 93,377,000 | 93,105,000 |
Common Shares, outstanding (in shares) | 93,377,000 | 93,105,000 |
Investments available for sale | ||
Amortized cost | $ 1,732,058 | $ 1,629,538 |
Fixed maturities | ||
Investments available for sale | ||
Amortized cost | 1,619,677 | 1,497,186 |
Short-term investments | ||
Investments available for sale | ||
Amortized cost | $ 112,381 | $ 132,352 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Net premiums written | $ 119,297 | $ 100,466 |
Increase in unearned premiums | (1,646) | (6,063) |
Net premiums earned | 117,651 | 94,403 |
Net investment income | 8,435 | 6,183 |
Realized investment gains, net | 655 | 471 |
Other income | 851 | 1,409 |
Total revenues | 127,592 | 102,466 |
Losses and expenses: | ||
Provision for losses and LAE | 3,693 | 3,731 |
Other underwriting and operating expenses | 36,332 | 31,388 |
Interest expense | 716 | 0 |
Total losses and expenses | 40,741 | 35,119 |
Income before income taxes | 86,851 | 67,347 |
Income tax expense | 20,253 | 19,396 |
Net income | $ 66,598 | $ 47,951 |
Earnings per share: | ||
Basic (in dollars per share) | $ 0.73 | $ 0.53 |
Diluted (in dollars per share) | $ 0.72 | $ 0.52 |
Weighted average shares outstanding: | ||
Basic (in shares) | 91,258 | 90,785 |
Diluted (in shares) | 93,023 | 91,859 |
Net income | $ 66,598 | $ 47,951 |
Other comprehensive income (loss): | ||
Change in unrealized appreciation of investments, net of tax expense of $2,061 in 2017 and $5,714 in 2016 | 4,850 | 13,359 |
Total other comprehensive income | 4,850 | 13,359 |
Comprehensive income | $ 71,448 | $ 61,310 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Change in unrealized appreciation (depreciation) of investments, tax expense (benefit) | $ 2,061 | $ 5,714 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Common Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Stockholders equity, beginning of period at Dec. 31, 2015 | $ 1,119,241 | $ 1,390 | $ 904,221 | $ (99) | $ 213,729 | $ 0 |
Changes in Stockholders' Equity | ||||||
Net income | 47,951 | |||||
Other comprehensive (loss) income | 13,359 | |||||
Stockholders equity, end of period at Mar. 31, 2016 | 13,260 | |||||
Stockholders equity, beginning of period at Dec. 31, 2015 | 1,119,241 | 1,390 | 904,221 | (99) | 213,729 | 0 |
Changes in Stockholders' Equity | ||||||
Net income | 222,606 | 222,606 | ||||
Other comprehensive (loss) income | (12,156) | (12,156) | ||||
Issuance of management incentive shares | 0 | 10 | (10) | |||
Forfeiture of management incentive shares | 0 | 0 | 0 | |||
Stock-based compensation expense | 16,881 | 16,881 | ||||
Excess tax benefits from stock-based compensation expense | 1,083 | 1,083 | ||||
Treasury stock acquired | (4,024) | (4,024) | ||||
Cancellation of treasury stock | 0 | (3) | (4,021) | 4,024 | ||
Other equity transactions | 142 | 142 | ||||
Stockholders equity, end of period at Dec. 31, 2016 | 1,343,773 | 1,397 | 918,296 | (12,255) | 436,335 | 0 |
Changes in Stockholders' Equity | ||||||
Net income | 66,598 | 66,598 | ||||
Other comprehensive (loss) income | 4,850 | 4,850 | ||||
Issuance of management incentive shares | 0 | 7 | (7) | |||
Stock-based compensation expense | 4,619 | 4,619 | ||||
Treasury stock acquired | (7,127) | (7,127) | ||||
Cancellation of treasury stock | 0 | (3) | (7,124) | 7,127 | ||
Stockholders equity, end of period at Mar. 31, 2017 | 1,412,752 | $ 1,401 | 915,895 | $ (7,405) | 502,861 | $ 0 |
Changes in Stockholders' Equity | ||||||
Cumulative effect of ASU 2016-09 adoption | $ 39 | $ 111 | $ (72) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating Activities | ||
Net income | $ 66,598 | $ 47,951 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Gain on the sale of investments, net | (655) | (471) |
Depreciation and amortization | 1,001 | 1,000 |
Stock-based compensation expense | 4,619 | 3,782 |
Amortization of premium on investment securities | 2,983 | 2,680 |
Deferred income tax provision | 18,042 | 15,245 |
Change in: | ||
Accrued investment income | (703) | (663) |
Accounts receivable | (1,887) | (563) |
Deferred policy acquisition costs | (93) | (157) |
Prepaid federal income tax | 615 | (110) |
Other assets | (975) | 539 |
Reserve for losses and LAE | 1,326 | 2,710 |
Unearned premium reserve | 1,646 | 6,063 |
Other accrued liabilities | (14,629) | (9,509) |
Net cash provided by operating activities | 77,888 | 68,497 |
Investing Activities | ||
Net change in short-term investments | 19,968 | 2,508 |
Purchase of investments available for sale | (200,795) | (146,316) |
Proceeds from maturity of investments available for sale | 18,206 | 1,798 |
Proceeds from sales of investments available for sale | 60,129 | 82,167 |
Purchase of property and equipment | (1,087) | (1,211) |
Net cash used in investing activities | (103,579) | (61,054) |
Financing Activities | ||
Revolving credit facility borrowings | 25,000 | 0 |
Treasury stock acquired | (7,127) | (3,843) |
Net cash provided by (used in) financing activities | 17,873 | (3,843) |
Net (decrease) increase in cash | (7,818) | 3,600 |
Cash at beginning of year | 27,531 | 24,606 |
Cash at end of period | 19,713 | 28,206 |
Supplemental Disclosure of Cash Flow Information | ||
Income tax payments | (1,200) | (1,800) |
Interest payments | $ (701) | $ 0 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Basis of Presentation | Nature of Operations and Basis of Presentation Essent Group Ltd. (“ Essent Group ”) is a Bermuda-based holding company, which, through its wholly-owned subsidiaries, offers private mortgage insurance and reinsurance for mortgages secured by residential properties located in the United States. Mortgage insurance facilitates the sale of low down payment (generally less than 20% ) mortgage loans into the secondary mortgage market, primarily to two government-sponsored enterprises (“ GSEs ”), Fannie Mae and Freddie Mac . The primary mortgage insurance operations are conducted through Essent Guaranty, Inc. (“Essent Guaranty”), a wholly-owned subsidiary approved as a qualified mortgage insurer by the GSEs and is licensed to write mortgage insurance in all 50 states and the District of Columbia. Essent Guaranty reinsures 25% of GSE-eligible new insurance written to Essent Reinsurance Ltd. (“Essent Re”), an affiliated Bermuda domiciled Class 3A Insurer licensed pursuant to Section 4 of the Bermuda Insurance Act 1978 that provides insurance and reinsurance coverage of mortgage credit risk. Essent Re also provides insurance and reinsurance to Freddie Mac and Fannie Mae. In 2016, Essent Re formed Essent Agency (Bermuda) Ltd., a wholly-owned subsidiary, which provides underwriting services to third-party reinsurers. In accordance with certain state law requirements, Essent Guaranty also reinsures that portion of the risk that is in excess of 25% of the mortgage balance with respect to any loan insured, after consideration of other reinsurance, to Essent Guaranty of PA, Inc. (“Essent PA”), an affiliate. In addition to offering mortgage insurance, we provide contract underwriting services on a limited basis through CUW Solutions, LLC ("CUW Solutions"), a Delaware limited liability company, that provides, among other things, mortgage contract underwriting services to lenders and mortgage insurance underwriting services to affiliates. We have prepared the condensed consolidated financial statements included herein pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). We have condensed or omitted certain information and footnote disclosures normally included in consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“ GAAP ”) pursuant to such rules and regulations. In the opinion of management, the statements include all adjustments (which include normal recurring adjustments) required for a fair statement of financial position, results of operations and cash flows for the interim periods presented. These statements should be read in conjunction with the consolidated financial statements and notes thereto, including Note 1 and Note 2 to the consolidated financial statements, included in our Annual Report on Form 10-K for the year ended December 31, 2016 , which discloses the principles of consolidation and a summary of significant accounting policies. The results of operations for the interim periods are not necessarily indicative of the results for the full year. We evaluated the need to recognize or disclose events that occurred subsequent to March 31, 2017 prior to the issuance of these condensed consolidated financial statements. Certain amounts in prior years have been reclassified to conform to the current year presentation. |
Recent Issued Accounting Standa
Recent Issued Accounting Standards | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB delayed the effective date for this update to interim and annual periods beginning after December 15, 2017. In December 2016, the FASB clarified that all contracts that are within the scope of Topic 944, Financial Services-Insurance , are excluded from the scope of ASU 2014-09. Accordingly, this update will not impact the recognition of revenue related to insurance premiums or investments, which represent a significant portion of our total revenues. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company expects a gross-up of its consolidated balance sheets as a result of recognizing lease liabilities and right of use assets. The Company is still evaluating the impact the adoption of this ASU will have on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . This update is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. In addition, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity. Further, the new guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The Company adopted this ASU on January 1, 2017 and recorded a charge of $0.1 million to retained earnings as of that date representing a cumulative-effect adjustment associated with our election to recognize forfeitures as they occur. The classification of excess tax benefits and tax deficiencies as income tax benefit or expense may result in net income volatility in reporting periods subsequent to 2016. Through December 31, 2016, excess tax benefits were recognized in additional paid-in-capital. In the three months ended March 31, 2017 , the Company recorded excess tax benefits of $3.0 million as a reduction of income tax expense. The amount of excess tax benefits or tax deficiencies in future periods will vary based on the market value of the Company’s common stock at the vesting dates of nonvested common share and nonvested common share units. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . This update is intended to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of an allowance for credit losses. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance rather than as a write-down of the amortized cost of the securities. The provisions of this update are effective for annual and interim periods beginning after December 15, 2019. While the Company is still evaluating this ASU, we do not expect it to impact our accounting for insurance losses and loss adjustment expenses ("LAE") as these items are not within the scope of this ASU. |
Investments Available for Sale
Investments Available for Sale | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments Available for Sale | Investments Available for Sale Investments available for sale consist of the following : March 31, 2017 (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 182,445 $ 141 $ (3,843 ) $ 178,743 U.S. agency securities 26,607 — (323 ) 26,284 U.S. agency mortgage-backed securities 362,585 442 (7,788 ) 355,239 Municipal debt securities(1) 358,581 4,967 (2,156 ) 361,392 Corporate debt securities(2) 504,700 3,558 (2,970 ) 505,288 Residential and commercial mortgage securities 64,768 941 (421 ) 65,288 Asset-backed securities 134,984 345 (418 ) 134,911 Money market funds 97,388 — — 97,388 Total investments available for sale $ 1,732,058 $ 10,394 $ (17,919 ) $ 1,724,533 December 31, 2016 (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 195,990 $ 55 $ (4,497 ) $ 191,548 U.S. agency securities 18,785 — (344 ) 18,441 U.S. agency mortgage-backed securities 324,654 335 (8,495 ) 316,494 Municipal debt securities(1) 334,048 3,649 (3,373 ) 334,324 Corporate debt securities(2) 457,842 2,343 (3,828 ) 456,357 Residential and commercial mortgage securities 68,430 488 (582 ) 68,336 Asset-backed securities 127,359 260 (447 ) 127,172 Money market funds 102,430 — — 102,430 Total investments available for sale $ 1,629,538 $ 7,130 $ (21,566 ) $ 1,615,102 March 31, December 31, (1) The following table summarizes municipal debt securities as of : 2017 2016 Special revenue bonds 62.4 % 63.6 % General obligation bonds 31.8 29.7 Certificate of participation bonds 4.5 4.9 Tax allocation bonds 0.7 1.1 Special tax bonds 0.6 0.7 Total 100.0 % 100.0 % March 31, December 31, (2) The following table summarizes corporate debt securities as of : 2017 2016 Financial 42.5 % 40.6 % Consumer, non-cyclical 16.4 18.6 Energy 10.6 9.3 Communications 6.7 6.0 Consumer, cyclical 5.8 6.3 Utilities 5.7 6.0 Technology 5.2 4.3 Industrial 4.7 5.6 Basic materials 2.4 3.3 Total 100.0 % 100.0 % The amortized cost and fair value of investments available for sale at March 31, 2017 , by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories . (In thousands) Amortized Cost Fair Value U.S. Treasury securities: Due in 1 year $ 24,778 $ 24,767 Due after 1 but within 5 years 37,896 37,684 Due after 5 but within 10 years 106,106 103,113 Due after 10 years 13,665 13,179 Subtotal 182,445 178,743 U.S. agency securities: Due in 1 year — — Due after 1 but within 5 years 26,607 26,284 Subtotal 26,607 26,284 Municipal debt securities: Due in 1 year 6,280 6,290 Due after 1 but within 5 years 110,543 110,750 Due after 5 but within 10 years 137,654 139,776 Due after 10 years 104,104 104,576 Subtotal 358,581 361,392 Corporate debt securities: Due in 1 year 54,233 54,253 Due after 1 but within 5 years 269,360 269,941 Due after 5 but within 10 years 176,638 176,686 Due after 10 years 4,469 4,408 Subtotal 504,700 505,288 U.S. agency mortgage-backed securities 362,585 355,239 Residential and commercial mortgage securities 64,768 65,288 Asset-backed securities 134,984 134,911 Money market funds 97,388 97,388 Total investments available for sale $ 1,732,058 $ 1,724,533 Gross gains and losses realized on the sale of investments available for sale were as follows: Three Months Ended March 31, (In thousands) 2017 2016 Realized gross gains $ 681 $ 1,148 Realized gross losses 26 670 The fair value of investments in an unrealized loss position and the related unrealized losses were as follows : Less than 12 months 12 months or more Total March 31, 2017 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 141,980 $ (3,843 ) $ — $ — $ 141,980 $ (3,843 ) U.S. agency securities 26,284 (323 ) — — 26,284 (323 ) U.S. agency mortgage-backed securities 306,786 (7,704 ) 1,780 (84 ) 308,566 (7,788 ) Municipal debt securities 116,284 (2,124 ) 6,651 (32 ) 122,935 (2,156 ) Corporate debt securities 187,801 (2,924 ) 6,098 (46 ) 193,899 (2,970 ) Residential and commercial mortgage securities 13,822 (391 ) 5,930 (30 ) 19,752 (421 ) Asset-backed securities 41,891 (286 ) 28,855 (132 ) 70,746 (418 ) Total $ 834,848 $ (17,595 ) $ 49,314 $ (324 ) $ 884,162 $ (17,919 ) Less than 12 months 12 months or more Total December 31, 2016 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 160,018 $ (4,497 ) $ — $ — $ 160,018 $ (4,497 ) U.S. agency securities 18,441 (344 ) — — 18,441 (344 ) U.S. agency mortgage-backed securities 289,282 (8,402 ) 1,812 (93 ) 291,094 (8,495 ) Municipal debt securities 149,368 (3,351 ) 6,015 (22 ) 155,383 (3,373 ) Corporate debt securities 213,965 (3,704 ) 8,344 (124 ) 222,309 (3,828 ) Residential and commercial mortgage securities 18,026 (434 ) 14,014 (148 ) 32,040 (582 ) Asset-backed securities 28,294 (57 ) 47,597 (390 ) 75,891 (447 ) Total $ 877,394 $ (20,789 ) $ 77,782 $ (777 ) $ 955,176 $ (21,566 ) The gross unrealized losses on these investment securities are principally associated with the changes in market interest rates and credit spreads subsequent to their purchase. Each issuer is current on its scheduled interest and principal payments. We assess our intent to sell these securities and whether we will be required to sell these securities before the recovery of their amortized cost basis when determining whether an impairment is other-than-temporary. There were no other-than-temporary impairments in the three months ended March 31, 2017 . We recorded an other-than-temporary impairment of $7 thousand in the three months ended March 31, 2016 on a security in an unrealized loss position. The impairment resulted from our intent to sell the security subsequent to the reporting date. The fair value of investments deposited with insurance regulatory authorities to meet statutory requirements was $8.5 million as of March 31, 2017 and December 31, 2016 . In connection with its insurance and reinsurance activities, Essent Re is required to maintain assets in trusts for the benefit of its contractual counterparties. The fair value of the investments on deposit in these trusts was $406.9 million at March 31, 2017 and $349.6 million at December 31, 2016 . Net investment income consists of: Three Months Ended March 31, (In thousands) 2017 2016 Fixed maturities $ 9,019 $ 6,655 Short-term investments 59 33 Gross investment income 9,078 6,688 Investment expenses (643 ) (505 ) Net investment income $ 8,435 $ 6,183 |
Reserve for Losses and Loss Adj
Reserve for Losses and Loss Adjustment Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Reserve for Losses and Loss Adjustment Expenses | Reserve for Losses and Loss Adjustment Expenses The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“ LAE ”) for the three months ended March 31 : ($ in thousands) 2017 2016 Reserve for losses and LAE at beginning of period $ 28,142 $ 17,760 Less: Reinsurance recoverables — — Net reserve for losses and LAE at beginning of period 28,142 17,760 Add provision for losses and LAE, net of reinsurance, occurring in: Current period 7,090 5,080 Prior years (3,397 ) (1,349 ) Net incurred losses during the current period 3,693 3,731 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current period 1 1 Prior years 2,366 1,020 Net loss and LAE payments during the current period 2,367 1,021 Net reserve for losses and LAE at end of period 29,468 20,470 Plus: Reinsurance recoverables — — Reserve for losses and LAE at end of period $ 29,468 $ 20,470 Loans in default at end of period 1,777 1,060 For the three months ended March 31, 2017 , $2.4 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There has been a $3.4 million favorable prior year development during the three months ended March 31, 2017 . Reserves remaining as of March 31, 2017 for prior years are $22.4 million as a result of re-estimation of unpaid losses and loss adjustment expenses. For the three months ended March 31, 2016 , $1.0 million was paid for incurred claims and claim adjustment expenses attributable to insured events of prior years. There was a $1.3 million favorable prior year development during the three months ended March 31, 2016 . Reserves remaining as of March 31, 2016 for prior years were $15.4 million as a result of re-estimation of unpaid losses and loss adjustment expenses. In both periods, the favorable prior years' loss development was the result of a re-estimation of amounts ultimately to be paid on prior year defaults in the default inventory, including the impact of previously identified defaults that cured. Original estimates are increased or decreased as additional information becomes known regarding individual claims. |
Debt Obligations
Debt Obligations | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations Revolving Credit Facility On April 19, 2016, Essent Group and its subsidiaries, Essent Irish Intermediate Holdings Limited and Essent US Holdings, Inc. (collectively, the "Borrowers"), entered into a three -year, secured revolving credit facility with a committed capacity of $200 million (the “Facility”). Borrowings under the Facility may be used for working capital and general corporate purposes, including, without limitation, capital contributions to Essent’s insurance and reinsurance subsidiaries. Borrowings accrue interest at a floating rate tied to a standard short-term borrowing index, selected at the Company’s option, plus an applicable margin. A commitment fee is due quarterly on the average daily amount of the undrawn revolving commitment. The applicable margin and the commitment fee are based on the senior unsecured debt rating or long-term issuer rating of Essent Group to the extent available, or the insurer financial strength rating of Essent Guaranty. The current annual commitment fee rate is 0.35% . The obligations under the Facility are secured by certain assets of the Borrowers, excluding the stock and assets of its insurance and reinsurance subsidiaries. The Facility contains several covenants, including financial covenants relating to minimum net worth, capital and liquidity levels, maximum debt to capitalization level and Essent Guaranty's compliance with the PMIERS (see Note 11 ). This description is not intended to be complete in all respects and is qualified in its entirety by the terms of the Facility, including its covenants. As of March 31, 2017 , the Company was in compliance with the covenants and $125 million had been borrowed under the Facility with a weighted average interest rate of 2.96% . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Obligations under Guarantees Under the terms of CUW Solutions' contract underwriting agreements with lenders and subject to contractual limitations on liability, we agree to indemnify certain lenders against losses incurred in the event that we make an error in determining whether loans processed meet specified underwriting criteria, to the extent that such error materially restricts or impairs the salability of such loan, results in a material reduction in the value of such loan or results in the lender repurchasing the loan. The indemnification may be in the form of monetary or other remedies. We paid $4,775 and $0 related to remedies for the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 , management believes any potential claims for indemnification related to contract underwriting services through March 31, 2017 are not material to our consolidated financial position or results of operations. In addition to the indemnifications discussed above, in the normal course of business, we enter into agreements or other relationships with third parties pursuant to which we may be obligated under specified circumstances to indemnify the counterparties with respect to certain matters. Our contractual indemnification obligations typically arise in the context of agreements entered into by us to, among other things, purchase or sell services, finance our business and business transactions, lease real property and license intellectual property. The agreements we enter into in the normal course of business generally require us to pay certain amounts to the other party associated with claims or losses if they result from our breach of the agreement, including the inaccuracy of representations or warranties. The agreements we enter into may also contain other indemnification provisions that obligate us to pay amounts upon the occurrence of certain events, such as the negligence or willful misconduct of our employees, infringement of third-party intellectual property rights or claims that performance of the agreement constitutes a violation of law. Generally, payment by us under an indemnification provision is conditioned upon the other party making a claim, and typically we can challenge the other party’s claims. Further, our indemnification obligations may be limited in time and/or amount, and in some instances, we may have recourse against third parties for certain payments made by us under an indemnification agreement or obligation. As of March 31, 2017 , contingencies triggering material indemnification obligations or payments have not occurred historically and are not expected to occur. The nature of the indemnification provisions in the various types of agreements and relationships described above are believed to be low risk and pervasive, and we consider them to have a remote risk of loss or payment. We have not recorded any provisions on the condensed consolidated balance sheets related to indemnifications. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table summarizes nonvested common share and nonvested common share unit activity for the three months ended March 31, 2017 : Time and Performance- Based Share Awards Time-Based Share Awards Share Units (Shares in thousands) Number of Shares Weighted Number of Shares Weighted Average Grant Date Fair Value Number of Share Units Weighted Outstanding at beginning of year 1,503 $ 15.41 605 $ 16.32 493 $ 19.24 Granted 140 36.29 91 36.29 366 33.21 Vested (48 ) 22.48 (264 ) 16.56 (253 ) 18.40 Forfeited — N/A — N/A (8 ) 28.53 Outstanding at March 31, 2017 1,595 $ 17.03 432 $ 20.35 598 $ 28.02 In February 2017, certain members of senior management were granted nonvested common shares under the Essent Group Ltd. 2013 Long-Term Incentive Plan ("2013 Plan") that were subject to time-based and performance-based vesting. The time-based share awards granted in February 2017 vest in three equal installments on March 1, 2018, 2019 and 2020. The performance-based share awards granted in February 2017 vest based upon our compounded annual book value per share growth percentage during a three -year performance period that commenced on January 1, 2017 and vest on March 1, 2020. The portion of the nonvested performance-based share awards that will be earned based upon the achievement of compounded annual book value per share growth is as follows: Performance level Compounded Annual Book Value Nonvested Common <16 % 0 % Threshold 16 % 25 % 17 % 50 % 18 % 75 % Maximum ≥19 % 100 % In the event that the compounded annual book value per share growth falls between the performance levels shown above, the nonvested common shares earned will be determined on a straight-line basis between the respective levels shown. In January 2017, time-based share units were issued to all vice president and staff level employees and vest in three equal installments on January 2018, 2019, and 2020. In connection with our incentive program covering bonus awards for performance year 2016, in February 2017, time-based share awards and share units were issued to certain employees that vest in three equal installments on March 1, 2018, 2019 and 2020. In May 2017, 21,021 time-based share units were granted to non-employee directors that vest one year from the date of grant. Amendments to our 2013 Plan were approved by shareholders and effective as of May 3, 2017. These amendments included a reduction in the maximum number of shares and share units available for issuance to 7.5 million under the Amended and Restated 2013 Plan (inclusive of approximately 2.6 million nonvested shares and share units outstanding as of May 3, 2017), down from the approximately 14.7 million maximum number of shares and share units available for issuance under the 2013 Plan. The total fair value on the vesting date of nonvested shares or share units that vested was $19.0 million and $11.9 million for the three months ended March 31, 2017 and 2016 , respectively. As of March 31, 2017 , there was $32.0 million of total unrecognized compensation expense related to nonvested shares or share units outstanding at March 31, 2017 and we expect to recognize the expense over a weighted average period of 2.2 years. Employees have the option to tender shares to Essent Group to pay the minimum employee statutory withholding taxes associated with shares upon vesting. Common shares tendered by employees to pay employee withholding taxes totaled 211,412 in the three months ended March 31, 2017 . The tendered shares were recorded at cost and included in treasury stock. All treasury stock has been cancelled as of March 31, 2017 . Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows: Three Months Ended March 31, (In thousands) 2017 2016 Compensation expense $ 4,619 $ 3,782 Income tax benefit 1,483 1,212 |
Earnings per Share (EPS)
Earnings per Share (EPS) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share (EPS) | Earnings per Share (EPS) The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share: Three Months Ended (In thousands, except per share amounts) 2017 2016 Net income $ 66,598 $ 47,951 Less: dividends declared — — Net income available to common shareholders $ 66,598 $ 47,951 Basic earnings per share $ 0.73 $ 0.53 Diluted earnings per share $ 0.72 $ 0.52 Basic weighted average shares outstanding 91,258 90,785 Dilutive effect of nonvested shares 1,765 1,074 Diluted weighted average shares outstanding 93,023 91,859 There were 162,930 and 347,611 antidilutive shares for the three months ended March 31, 2017 and 2016 , respectively. The nonvested performance-based share awards are considered contingently issuable for purposes of the EPS calculation. Based on the compounded annual book value per share growth as of March 31, 2017 and 2016 , 100% of the dilutive performance-based share awards would be issuable under the terms of the arrangements at each date if March 31 was the end of the contingency period. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table presents the rollforward of accumulated other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, 2017 (In thousands) Before Tax Tax Effect Net of Tax Balance at beginning of period $ (14,436 ) $ 2,181 $ (12,255 ) Other comprehensive income (loss): Unrealized holding gains arising during the period 7,566 (2,289 ) 5,277 Less: Reclassification adjustment for gains included in net income (1) (655 ) 228 (427 ) Net unrealized gains on investments 6,911 (2,061 ) 4,850 Other comprehensive income 6,911 (2,061 ) 4,850 Balance at end of period $ (7,525 ) $ 120 $ (7,405 ) Three Months Ended March 31, 2016 (In thousands) Before Tax Tax Effect Net of Tax Balance at beginning of period $ 661 $ (760 ) $ (99 ) Other comprehensive income (loss): Unrealized holding gains arising during the period 19,551 (5,845 ) 13,706 Less: Reclassification adjustment for gains included in net income (1) (478 ) 131 (347 ) Net unrealized gains on investments 19,073 (5,714 ) 13,359 Other comprehensive income 19,073 (5,714 ) 13,359 Balance at end of period $ 19,734 $ (6,474 ) $ 13,260 (1) Included in net realized investment gains on our condensed consolidated statements of comprehensive income. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments We carry certain of our financial instruments at fair value. We define fair value as the current amount that would be exchanged to sell an asset or transfer a liability, other than in a forced liquidation. Fair Value Hierarchy ASC No. 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect our market assumptions. The level within the fair value hierarchy to measure the financial instrument shall be determined based on the lowest level input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows: • Level 1 — Quoted prices for identical instruments in active markets accessible at the measurement date. • Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and valuations in which all significant inputs are observable in active markets. Inputs are observable for substantially the full term of the financial instrument. • Level 3 — Valuations derived from one or more significant inputs that are unobservable. Determination of Fair Value When available, we generally use quoted market prices to determine fair value and classify the financial instrument in Level 1. In cases where quoted market prices for similar financial instruments are available, we utilize these inputs for valuation techniques and classify the financial instrument in Level 2. In cases where quoted market prices are not available, fair values are based on estimates using discounted cash flows, present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows and we classify the financial instrument in Level 3. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. We used the following methods and assumptions in estimating fair values of financial instruments: • Investments available for sale — Investments available for sale are valued using quoted market prices in active markets, when available, and those investments are classified as Level 1 of the fair value hierarchy. Level 1 investments available for sale include investments such as U.S. Treasury securities and money market funds. Investments available for sale are classified as Level 2 of the fair value hierarchy if quoted market prices are not available and fair values are estimated using quoted prices of similar securities or recently executed transactions for the securities. U.S. agency securities, U.S. agency mortgage-backed securities, municipal debt securities, corporate debt securities, residential and commercial mortgage securities and asset-backed securities are classified as Level 2 investments. We use independent pricing sources to determine the fair value of securities available for sale in Level 1 and Level 2 of the fair value hierarchy. We use one primary pricing service to provide individual security pricing based on observable market data and receive one quote per security. To ensure securities are appropriately classified in the fair value hierarchy, we review the pricing techniques and methodologies of the independent pricing service and believe that their policies adequately consider market activity, either based on specific transactions for the issue valued or based on modeling of securities with similar credit quality, duration, yield and structure that were recently traded. U.S. agency securities, U.S. agency residential and commercial mortgage securities, municipal and corporate debt securities are valued by our primary vendor using recently executed transactions and proprietary models based on observable inputs, such as interest rate spreads, yield curves and credit risk. Residential and commercial mortgage securities and asset-backed securities are valued by our primary vendor using proprietary models based on observable inputs, such as interest rate spreads, prepayment speeds and credit risk. As part of our evaluation of investment prices provided by our primary pricing service, we obtained and reviewed their pricing methodologies which include a description of how each security type is evaluated and priced. We review the reasonableness of prices received from our primary pricing service by comparison to prices obtained from additional pricing sources. We have not made any adjustments to the prices obtained from our primary pricing service. • Derivative liabilities — Through June 30, 2016, certain of our Freddie Mac Agency Credit Insurance Structure ("ACIS") contracts were accounted for as derivatives. In determining an exit market, we considered the fact that there is not a principal market for these contracts. In the absence of a principal market, we valued these ACIS contracts in a hypothetical market where market participants, and potential counterparties, included other mortgage guaranty insurers or reinsurers with similar credit quality to us. We believed that in the absence of a principal market, this hypothetical market provides the most relevant information with respect to fair value estimates. These ACIS contracts were classified as Level 3 of the fair value hierarchy. During the quarter ended September 30, 2016, these contracts were amended and are now accounted for as insurance contracts rather than derivatives. Through June 30, 2016, we determined the fair value of our derivative instruments primarily using internally-generated models. We utilized market observable inputs, such as the performance of the underlying pool of mortgages, mortgage prepayment speeds and pricing spreads on the reference STACR notes issued by Freddie Mac, whenever they were available. There was a high degree of uncertainty about our fair value estimates since our contracts were not traded or exchanged, which made external validation and corroboration of our estimates difficult. Considerable judgment was required to interpret market data to develop the estimates of fair value. Accordingly, the estimates may not have been indicative of amounts we could have realized in a market exchange or negotiated termination. The use of different market assumptions or estimation methodologies may have had a material effect on the estimated fair value amounts. Assets and Liabilities Measured at Fair Value All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. March 31, 2017 (In thousands) Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 178,743 $ — $ — $ 178,743 U.S. agency securities — 26,284 — 26,284 U.S. agency mortgage-backed securities — 355,239 — 355,239 Municipal debt securities — 361,392 — 361,392 Corporate debt securities — 505,288 — 505,288 Residential and commercial mortgage securities — 65,288 — 65,288 Asset-backed securities — 134,911 — 134,911 Money market funds 97,388 — — 97,388 Total assets at fair value $ 276,131 $ 1,448,402 $ — $ 1,724,533 December 31, 2016 (In thousands) Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 191,548 $ — $ — $ 191,548 U.S. agency securities — 18,441 — 18,441 U.S. agency mortgage-backed securities — 316,494 — 316,494 Municipal debt securities — 334,324 — 334,324 Corporate debt securities — 456,357 — 456,357 Residential and commercial mortgage securities — 68,336 — 68,336 Asset-backed securities — 127,172 — 127,172 Money market funds 102,430 — — 102,430 Total assets at fair value $ 293,978 $ 1,321,124 $ — $ 1,615,102 Changes in Level 3 Recurring Fair Value Measurements The following table presents changes during the three months ended March 31, 2016 in Level 3 liabilities measured at fair value on a recurring basis, and the net realized and unrealized losses (gains) related to the Level 3 liabilities in the condensed consolidated balance sheets at March 31, 2016 . During the three months ended March 31, 2017 , and in the year ended December 31, 2016 , we had no Level 3 assets. Three Months Ended (In thousands) 2016 Level 3 Liabilities Fair value of derivative liabilities at beginning of period $ 1,232 Net realized and unrealized losses (gains) included in income (677 ) Other comprehensive (income) loss — Purchases, sales, issues and settlements, net 343 Gross transfers in — Gross transfers out — Fair value of derivative liabilities at end of period $ 898 Changes in net unrealized losses (gains) included in income on instruments held at end of period $ (677 ) |
Statutory Accounting
Statutory Accounting | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Statutory Accounting | Statutory Accounting Our U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with the accounting practices prescribed or permitted by their respective state’s department of insurance, which is a comprehensive basis of accounting other than GAAP. We did not use any prescribed or permitted statutory accounting practices (individually or in the aggregate) that resulted in reported statutory surplus or capital that was significantly different from the statutory surplus or capital that would have been reported had National Association of Insurance Commissioners’ statutory accounting practices been followed. The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the three months ended March 31 : (In thousands) 2017 2016 Essent Guaranty Statutory net income $ 60,806 $ 48,486 Statutory surplus 595,102 532,199 Contingency reserve liability 525,256 353,063 Essent PA Statutory net income $ 2,805 $ 3,516 Statutory surplus 43,299 44,469 Contingency reserve liability 38,219 29,898 Net income determined in accordance with statutory accounting practices differs from GAAP. In 2017 and 2016 , the more significant differences between net income determined under statutory accounting practices and GAAP for Essent Guaranty and Essent PA relate to policy acquisition costs and income taxes. Under statutory accounting practices, policy acquisition costs are expensed as incurred while such costs are capitalized and amortized to expense over the life of the policy under GAAP. We are eligible for a tax deduction, subject to certain limitations for amounts required by state law or regulation to be set aside in statutory contingency reserves when we purchase non-interest-bearing United States Mortgage Guaranty Tax and Loss Bonds (“T&L Bonds”) issued by the Treasury Department. Under statutory accounting practices, this deduction reduces the tax provision recorded by Essent Guaranty and Essent PA and, as a result, increases statutory net income and surplus as compared to net income and equity determined in accordance with GAAP. At March 31, 2017 and 2016 , the statutory capital of our U.S. insurance subsidiaries, which is defined as the total of statutory surplus and contingency reserves, was in excess of the statutory capital necessary to satisfy their regulatory requirements. Effective December 31, 2015, Fannie Mae and Freddie Mac, at the direction of the Federal Housing Finance Agency ("FHFA"), implemented new coordinated Private Mortgage Insurer Eligibility Requirements, which we refer to as the "PMIERs." The PMIERs represent the standards by which private mortgage insurers are eligible to provide mortgage insurance on loans owned or guaranteed by Fannie Mae and Freddie Mac. The PMIERs include financial strength requirements incorporating a risk-based framework that require approved insurers to have a sufficient level of liquid assets from which to pay claims. The PMIERs also include enhanced operational performance expectations and define remedial actions that apply should an approved insurer fail to comply with these requirements. As of March 31, 2017 and December 31, 2016 , Essent Guaranty, our GSE-approved mortgage insurance company, was in compliance with the PMIERs. Statement of Statutory Accounting Principles No. 58 , Mortgage Guaranty Insurance, requires mortgage insurers to establish a special contingency reserve for statutory accounting purposes included in total liabilities equal to 50% of earned premium for that year. During the three months ended March 31, 2017 , Essent Guaranty increased its contingency reserve by $44.4 million and Essent PA increased its contingency reserve by $1.8 million . This reserve is required to be maintained for a period of 120 months to protect against the effects of adverse economic cycles. After 120 months , the reserve is released to unassigned funds. In the event an insurer’s loss ratio in any calendar year exceeds 35% , however, the insurer may, after regulatory approval, release from its contingency reserves an amount equal to the excess portion of such losses. Essent Guaranty and Essent PA did not release any amounts from their contingency reserves in the three months ended March 31, 2017 or 2016 . Under The Insurance Act 1978, as amended, and related regulations of Bermuda (the "Insurance Act"), Essent Re is required to annually prepare statutory financial statements and a statutory financial return in accordance with the financial reporting provisions of the Insurance Act, which is a basis other than GAAP. The Insurance Act also requires that Essent Re maintain minimum share capital of $1 million and must ensure that the value of its general business assets exceeds the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margins and enhanced capital requirement pertaining to its general business. At December 31, 2016 , all such requirements were met. Essent Re's statutory capital and surplus was $452.4 million as of March 31, 2017 and $401.1 million as of December 31, 2016 . Essent Re's statutory net income was $20.2 million and $9.4 million for the three months ended March 31, 2017 and 2016 , respectively. Statutory capital and surplus as of March 31, 2017 and statutory net income in the three months ended March 31, 2017 determined in accordance with statutory accounting practices were not significantly different than the amounts determined under GAAP. |
Recent Issued Accounting Stan19
Recent Issued Accounting Standards (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . This update is intended to provide a consistent approach in recognizing revenue. In accordance with the new standard, recognition of revenue occurs when a customer obtains control of promised goods or services in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the new standard requires that reporting companies disclose the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. In July 2015, the FASB delayed the effective date for this update to interim and annual periods beginning after December 15, 2017. In December 2016, the FASB clarified that all contracts that are within the scope of Topic 944, Financial Services-Insurance , are excluded from the scope of ASU 2014-09. Accordingly, this update will not impact the recognition of revenue related to insurance premiums or investments, which represent a significant portion of our total revenues. The adoption of this ASU is not expected to have a material effect on the Company's consolidated operating results or financial position. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This update will require organizations that lease assets to recognize on the balance sheet the assets and liabilities for the rights and obligations created by those leases. The new guidance will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. The provisions of this update are effective for annual and interim periods beginning after December 15, 2018. The Company expects a gross-up of its consolidated balance sheets as a result of recognizing lease liabilities and right of use assets. The Company is still evaluating the impact the adoption of this ASU will have on the consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . This update is intended to simplify several aspects of the accounting for share-based payment award transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The new guidance requires all excess tax benefits and tax deficiencies to be recognized as income tax expense or benefit in the income statement and treated as discrete items in the reporting period. In addition, excess tax benefits are required to be classified along with other income tax cash flows as an operating activity. Further, the new guidance allows for a policy election to account for forfeitures as they occur rather than on an estimated basis. The Company adopted this ASU on January 1, 2017 and recorded a charge of $0.1 million to retained earnings as of that date representing a cumulative-effect adjustment associated with our election to recognize forfeitures as they occur. The classification of excess tax benefits and tax deficiencies as income tax benefit or expense may result in net income volatility in reporting periods subsequent to 2016. Through December 31, 2016, excess tax benefits were recognized in additional paid-in-capital. In the three months ended March 31, 2017 , the Company recorded excess tax benefits of $3.0 million as a reduction of income tax expense. The amount of excess tax benefits or tax deficiencies in future periods will vary based on the market value of the Company’s common stock at the vesting dates of nonvested common share and nonvested common share units. In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (Topic 326) . This update is intended to provide financial statement users with more information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. The amendments in this ASU replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The new guidance requires financial assets measured at amortized cost to be presented at the net amount expected to be collected through the use of an allowance for credit losses. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance rather than as a write-down of the amortized cost of the securities. The provisions of this update are effective for annual and interim periods beginning after December 15, 2019. While the Company is still evaluating this ASU, we do not expect it to impact our accounting for insurance losses and loss adjustment expenses ("LAE") as these items are not within the scope of this ASU. |
Investments Available for Sale
Investments Available for Sale (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of investments available for sale | Investments available for sale consist of the following : March 31, 2017 (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 182,445 $ 141 $ (3,843 ) $ 178,743 U.S. agency securities 26,607 — (323 ) 26,284 U.S. agency mortgage-backed securities 362,585 442 (7,788 ) 355,239 Municipal debt securities(1) 358,581 4,967 (2,156 ) 361,392 Corporate debt securities(2) 504,700 3,558 (2,970 ) 505,288 Residential and commercial mortgage securities 64,768 941 (421 ) 65,288 Asset-backed securities 134,984 345 (418 ) 134,911 Money market funds 97,388 — — 97,388 Total investments available for sale $ 1,732,058 $ 10,394 $ (17,919 ) $ 1,724,533 December 31, 2016 (In thousands) Amortized Cost Unrealized Gains Unrealized Losses Fair Value U.S. Treasury securities $ 195,990 $ 55 $ (4,497 ) $ 191,548 U.S. agency securities 18,785 — (344 ) 18,441 U.S. agency mortgage-backed securities 324,654 335 (8,495 ) 316,494 Municipal debt securities(1) 334,048 3,649 (3,373 ) 334,324 Corporate debt securities(2) 457,842 2,343 (3,828 ) 456,357 Residential and commercial mortgage securities 68,430 488 (582 ) 68,336 Asset-backed securities 127,359 260 (447 ) 127,172 Money market funds 102,430 — — 102,430 Total investments available for sale $ 1,629,538 $ 7,130 $ (21,566 ) $ 1,615,102 March 31, December 31, (1) The following table summarizes municipal debt securities as of : 2017 2016 Special revenue bonds 62.4 % 63.6 % General obligation bonds 31.8 29.7 Certificate of participation bonds 4.5 4.9 Tax allocation bonds 0.7 1.1 Special tax bonds 0.6 0.7 Total 100.0 % 100.0 % March 31, December 31, (2) The following table summarizes corporate debt securities as of : 2017 2016 Financial 42.5 % 40.6 % Consumer, non-cyclical 16.4 18.6 Energy 10.6 9.3 Communications 6.7 6.0 Consumer, cyclical 5.8 6.3 Utilities 5.7 6.0 Technology 5.2 4.3 Industrial 4.7 5.6 Basic materials 2.4 3.3 Total 100.0 % 100.0 % |
Schedule of amortized cost and fair value of investments available for sale by contractual maturity | The amortized cost and fair value of investments available for sale at March 31, 2017 , by contractual maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Because most U.S. agency mortgage-backed securities, residential and commercial mortgage securities and asset-backed securities provide for periodic payments throughout their lives, they are listed below in separate categories . (In thousands) Amortized Cost Fair Value U.S. Treasury securities: Due in 1 year $ 24,778 $ 24,767 Due after 1 but within 5 years 37,896 37,684 Due after 5 but within 10 years 106,106 103,113 Due after 10 years 13,665 13,179 Subtotal 182,445 178,743 U.S. agency securities: Due in 1 year — — Due after 1 but within 5 years 26,607 26,284 Subtotal 26,607 26,284 Municipal debt securities: Due in 1 year 6,280 6,290 Due after 1 but within 5 years 110,543 110,750 Due after 5 but within 10 years 137,654 139,776 Due after 10 years 104,104 104,576 Subtotal 358,581 361,392 Corporate debt securities: Due in 1 year 54,233 54,253 Due after 1 but within 5 years 269,360 269,941 Due after 5 but within 10 years 176,638 176,686 Due after 10 years 4,469 4,408 Subtotal 504,700 505,288 U.S. agency mortgage-backed securities 362,585 355,239 Residential and commercial mortgage securities 64,768 65,288 Asset-backed securities 134,984 134,911 Money market funds 97,388 97,388 Total investments available for sale $ 1,732,058 $ 1,724,533 |
Schedule of realized gross gains and losses on sale of investments available for sale | Gross gains and losses realized on the sale of investments available for sale were as follows: Three Months Ended March 31, (In thousands) 2017 2016 Realized gross gains $ 681 $ 1,148 Realized gross losses 26 670 |
Schedule of fair value of investments in an unrealized loss position and related unrealized losses | The fair value of investments in an unrealized loss position and the related unrealized losses were as follows : Less than 12 months 12 months or more Total March 31, 2017 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 141,980 $ (3,843 ) $ — $ — $ 141,980 $ (3,843 ) U.S. agency securities 26,284 (323 ) — — 26,284 (323 ) U.S. agency mortgage-backed securities 306,786 (7,704 ) 1,780 (84 ) 308,566 (7,788 ) Municipal debt securities 116,284 (2,124 ) 6,651 (32 ) 122,935 (2,156 ) Corporate debt securities 187,801 (2,924 ) 6,098 (46 ) 193,899 (2,970 ) Residential and commercial mortgage securities 13,822 (391 ) 5,930 (30 ) 19,752 (421 ) Asset-backed securities 41,891 (286 ) 28,855 (132 ) 70,746 (418 ) Total $ 834,848 $ (17,595 ) $ 49,314 $ (324 ) $ 884,162 $ (17,919 ) Less than 12 months 12 months or more Total December 31, 2016 (In thousands) Fair Gross Fair Gross Fair Gross U.S. Treasury securities $ 160,018 $ (4,497 ) $ — $ — $ 160,018 $ (4,497 ) U.S. agency securities 18,441 (344 ) — — 18,441 (344 ) U.S. agency mortgage-backed securities 289,282 (8,402 ) 1,812 (93 ) 291,094 (8,495 ) Municipal debt securities 149,368 (3,351 ) 6,015 (22 ) 155,383 (3,373 ) Corporate debt securities 213,965 (3,704 ) 8,344 (124 ) 222,309 (3,828 ) Residential and commercial mortgage securities 18,026 (434 ) 14,014 (148 ) 32,040 (582 ) Asset-backed securities 28,294 (57 ) 47,597 (390 ) 75,891 (447 ) Total $ 877,394 $ (20,789 ) $ 77,782 $ (777 ) $ 955,176 $ (21,566 ) |
Schedule of net investment income | Net investment income consists of: Three Months Ended March 31, (In thousands) 2017 2016 Fixed maturities $ 9,019 $ 6,655 Short-term investments 59 33 Gross investment income 9,078 6,688 Investment expenses (643 ) (505 ) Net investment income $ 8,435 $ 6,183 |
Reserve for Losses and Loss A21
Reserve for Losses and Loss Adjustment Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Liability for Future Policy Benefits and Unpaid Claims and Claims Adjustment Expense [Abstract] | |
Schedule of reconciliation of beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | The following table provides a reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (“ LAE ”) for the three months ended March 31 : ($ in thousands) 2017 2016 Reserve for losses and LAE at beginning of period $ 28,142 $ 17,760 Less: Reinsurance recoverables — — Net reserve for losses and LAE at beginning of period 28,142 17,760 Add provision for losses and LAE, net of reinsurance, occurring in: Current period 7,090 5,080 Prior years (3,397 ) (1,349 ) Net incurred losses during the current period 3,693 3,731 Deduct payments for losses and LAE, net of reinsurance, occurring in: Current period 1 1 Prior years 2,366 1,020 Net loss and LAE payments during the current period 2,367 1,021 Net reserve for losses and LAE at end of period 29,468 20,470 Plus: Reinsurance recoverables — — Reserve for losses and LAE at end of period $ 29,468 $ 20,470 Loans in default at end of period 1,777 1,060 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of nonvested Common Share and nonvested Common Share unit activity | The following table summarizes nonvested common share and nonvested common share unit activity for the three months ended March 31, 2017 : Time and Performance- Based Share Awards Time-Based Share Awards Share Units (Shares in thousands) Number of Shares Weighted Number of Shares Weighted Average Grant Date Fair Value Number of Share Units Weighted Outstanding at beginning of year 1,503 $ 15.41 605 $ 16.32 493 $ 19.24 Granted 140 36.29 91 36.29 366 33.21 Vested (48 ) 22.48 (264 ) 16.56 (253 ) 18.40 Forfeited — N/A — N/A (8 ) 28.53 Outstanding at March 31, 2017 1,595 $ 17.03 432 $ 20.35 598 $ 28.02 |
Schedule of portion of nonvested Common Shares earned based upon achievement of compounded annual book value per share growth | The portion of the nonvested performance-based share awards that will be earned based upon the achievement of compounded annual book value per share growth is as follows: Performance level Compounded Annual Book Value Nonvested Common <16 % 0 % Threshold 16 % 25 % 17 % 50 % 18 % 75 % Maximum ≥19 % 100 % |
Schedule of compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares | Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares was as follows: Three Months Ended March 31, (In thousands) 2017 2016 Compensation expense $ 4,619 $ 3,782 Income tax benefit 1,483 1,212 |
Earnings per Share (EPS) (Table
Earnings per Share (EPS) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of net income and weighted average common shares outstanding used in computations of basic and diluted earnings per common share | The following table reconciles the net income and the weighted average common shares outstanding used in the computations of basic and diluted earnings per common share: Three Months Ended (In thousands, except per share amounts) 2017 2016 Net income $ 66,598 $ 47,951 Less: dividends declared — — Net income available to common shareholders $ 66,598 $ 47,951 Basic earnings per share $ 0.73 $ 0.53 Diluted earnings per share $ 0.72 $ 0.52 Basic weighted average shares outstanding 91,258 90,785 Dilutive effect of nonvested shares 1,765 1,074 Diluted weighted average shares outstanding 93,023 91,859 |
Accumulated Other Comprehensi24
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Rollforward of accumulated other comprehensive income (loss) | The following table presents the rollforward of accumulated other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 : Three Months Ended March 31, 2017 (In thousands) Before Tax Tax Effect Net of Tax Balance at beginning of period $ (14,436 ) $ 2,181 $ (12,255 ) Other comprehensive income (loss): Unrealized holding gains arising during the period 7,566 (2,289 ) 5,277 Less: Reclassification adjustment for gains included in net income (1) (655 ) 228 (427 ) Net unrealized gains on investments 6,911 (2,061 ) 4,850 Other comprehensive income 6,911 (2,061 ) 4,850 Balance at end of period $ (7,525 ) $ 120 $ (7,405 ) Three Months Ended March 31, 2016 (In thousands) Before Tax Tax Effect Net of Tax Balance at beginning of period $ 661 $ (760 ) $ (99 ) Other comprehensive income (loss): Unrealized holding gains arising during the period 19,551 (5,845 ) 13,706 Less: Reclassification adjustment for gains included in net income (1) (478 ) 131 (347 ) Net unrealized gains on investments 19,073 (5,714 ) 13,359 Other comprehensive income 19,073 (5,714 ) 13,359 Balance at end of period $ 19,734 $ (6,474 ) $ 13,260 (1) Included in net realized investment gains on our condensed consolidated statements of comprehensive income. |
Fair Value of Financial Instr25
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair vale on a recurring basis | All assets measured at fair value are categorized in the table below based upon the lowest level of significant input to the valuations. All fair value measurements at the reporting date were on a recurring basis. March 31, 2017 (In thousands) Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 178,743 $ — $ — $ 178,743 U.S. agency securities — 26,284 — 26,284 U.S. agency mortgage-backed securities — 355,239 — 355,239 Municipal debt securities — 361,392 — 361,392 Corporate debt securities — 505,288 — 505,288 Residential and commercial mortgage securities — 65,288 — 65,288 Asset-backed securities — 134,911 — 134,911 Money market funds 97,388 — — 97,388 Total assets at fair value $ 276,131 $ 1,448,402 $ — $ 1,724,533 December 31, 2016 (In thousands) Quoted Prices in Active Markets for Identical Instruments (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Recurring fair value measurements Financial Assets: U.S. Treasury securities $ 191,548 $ — $ — $ 191,548 U.S. agency securities — 18,441 — 18,441 U.S. agency mortgage-backed securities — 316,494 — 316,494 Municipal debt securities — 334,324 — 334,324 Corporate debt securities — 456,357 — 456,357 Residential and commercial mortgage securities — 68,336 — 68,336 Asset-backed securities — 127,172 — 127,172 Money market funds 102,430 — — 102,430 Total assets at fair value $ 293,978 $ 1,321,124 $ — $ 1,615,102 |
Schedule of changes during period in Level 3 liabilities measured at fair value on a recurring basis, and realized and unrealized gains (losses) related to Level 3 liabilities | The following table presents changes during the three months ended March 31, 2016 in Level 3 liabilities measured at fair value on a recurring basis, and the net realized and unrealized losses (gains) related to the Level 3 liabilities in the condensed consolidated balance sheets at March 31, 2016 . During the three months ended March 31, 2017 , and in the year ended December 31, 2016 , we had no Level 3 assets. Three Months Ended (In thousands) 2016 Level 3 Liabilities Fair value of derivative liabilities at beginning of period $ 1,232 Net realized and unrealized losses (gains) included in income (677 ) Other comprehensive (income) loss — Purchases, sales, issues and settlements, net 343 Gross transfers in — Gross transfers out — Fair value of derivative liabilities at end of period $ 898 Changes in net unrealized losses (gains) included in income on instruments held at end of period $ (677 ) |
Statutory Accounting (Tables)
Statutory Accounting (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Insurance [Abstract] | |
Schedule of statutory net income, statutory surplus and contingency reserve liability | The following table presents Essent Guaranty’s and Essent PA’s statutory net income, statutory surplus and contingency reserve liability as of and for the three months ended March 31 : (In thousands) 2017 2016 Essent Guaranty Statutory net income $ 60,806 $ 48,486 Statutory surplus 595,102 532,199 Contingency reserve liability 525,256 353,063 Essent PA Statutory net income $ 2,805 $ 3,516 Statutory surplus 43,299 44,469 Contingency reserve liability 38,219 29,898 |
Nature of Operations and Basi27
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2017state | |
Essent Guaranty | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Number of states in which the entity is licensed to write mortgage insurance | 50 |
Essent Guaranty | Essent Re | Quota share reinsurance | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Reinsurance percentage | 25.00% |
Essent Guaranty | Essent PA | Reinsurance for mortgage insurance coverage in excess of 25% | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Reinsurance for mortgage insurance coverage threshold (in excess of) | 25.00% |
Maximum | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Residential mortgage down payment percentage for which mortgage insurance is generally required (less than) | 20.00% |
Recent Issued Accounting Stan28
Recent Issued Accounting Standards Recently Issued Accounting Standards (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Jan. 01, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of ASU 2016-09 adoption | $ 39 | |
Share-based compensation, excess tax benefit, amount | 3,000 | |
Retained Earnings | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of ASU 2016-09 adoption | $ (72) | |
Retained Earnings | Accounting Standards Update 2016-09 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect of ASU 2016-09 adoption | $ 100 |
Investments Available for Sal29
Investments Available for Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Investments available for sale | ||
Amortized Cost | $ 1,732,058 | $ 1,629,538 |
Unrealized Gains | 10,394 | 7,130 |
Unrealized Losses | (17,919) | (21,566) |
Fair Value | 1,724,533 | 1,615,102 |
U.S. Treasury securities | ||
Investments available for sale | ||
Amortized Cost | 182,445 | 195,990 |
Unrealized Gains | 141 | 55 |
Unrealized Losses | (3,843) | (4,497) |
Fair Value | 178,743 | 191,548 |
U.S. agency securities | ||
Investments available for sale | ||
Amortized Cost | 26,607 | 18,785 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | (323) | (344) |
Fair Value | 26,284 | 18,441 |
Municipal debt securities | ||
Investments available for sale | ||
Amortized Cost | 358,581 | 334,048 |
Unrealized Gains | 4,967 | 3,649 |
Unrealized Losses | (2,156) | (3,373) |
Fair Value | 361,392 | 334,324 |
Corporate debt securities | ||
Investments available for sale | ||
Amortized Cost | 504,700 | 457,842 |
Unrealized Gains | 3,558 | 2,343 |
Unrealized Losses | (2,970) | (3,828) |
Fair Value | 505,288 | 456,357 |
Residential and commercial mortgage securities | ||
Investments available for sale | ||
Amortized Cost | 64,768 | 68,430 |
Unrealized Gains | 941 | 488 |
Unrealized Losses | (421) | (582) |
Fair Value | 65,288 | 68,336 |
Asset-backed securities | ||
Investments available for sale | ||
Amortized Cost | 134,984 | 127,359 |
Unrealized Gains | 345 | 260 |
Unrealized Losses | (418) | (447) |
Fair Value | 134,911 | 127,172 |
Money market funds | ||
Investments available for sale | ||
Amortized Cost | 97,388 | 102,430 |
Unrealized Gains | 0 | 0 |
Unrealized Losses | 0 | 0 |
Fair Value | 97,388 | 102,430 |
U.S. Agency | U.S. agency mortgage-backed securities | ||
Investments available for sale | ||
Amortized Cost | 362,585 | 324,654 |
Unrealized Gains | 442 | 335 |
Unrealized Losses | (7,788) | (8,495) |
Fair Value | $ 355,239 | $ 316,494 |
Investments Available for Sal30
Investments Available for Sale (Details 2) | Mar. 31, 2017 | Dec. 31, 2016 |
Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 100.00% | 100.00% |
Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 100.00% | 100.00% |
Financial | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 42.50% | 40.60% |
Consumer, non-cyclical | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 16.40% | 18.60% |
Energy | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 10.60% | 9.30% |
Communications | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 6.70% | 6.00% |
Consumer, cyclical | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 5.80% | 6.30% |
Utilities | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 5.70% | 6.00% |
Technology | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 5.20% | 4.30% |
Industrial | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 4.70% | 5.60% |
Basic materials | Corporate debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 2.40% | 3.30% |
Special revenue bonds | Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 62.40% | 63.60% |
General obligation bonds | Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 31.80% | 29.70% |
Certificate of participation bonds | Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 4.50% | 4.90% |
Tax allocation bonds | Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 0.70% | 1.10% |
Special tax bonds | Municipal debt securities | ||
Investments available for sale | ||
Percentage of debt securities | 0.60% | 0.70% |
Investments Available for Sal31
Investments Available for Sale (Details 3) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Amortized Cost | ||
Amortized Cost | $ 1,732,058 | $ 1,629,538 |
Fair Value | ||
Total investments | 1,724,533 | 1,615,102 |
U.S. Treasury securities | ||
Amortized Cost | ||
Due in 1 year | 24,778 | |
Due after 1 but within 5 years | 37,896 | |
Due after 5 but within 10 years | 106,106 | |
Due after 10 years | 13,665 | |
Subtotal | 182,445 | |
Amortized Cost | 182,445 | 195,990 |
Fair Value | ||
Due in 1 year | 24,767 | |
Due after 1 but within 5 years | 37,684 | |
Due after 5 but within 10 years | 103,113 | |
Due after 10 years | 13,179 | |
Subtotal | 178,743 | |
Total investments | 178,743 | 191,548 |
U.S. agency securities | ||
Amortized Cost | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 26,607 | |
Subtotal | 26,607 | |
Amortized Cost | 26,607 | 18,785 |
Fair Value | ||
Due in 1 year | 0 | |
Due after 1 but within 5 years | 26,284 | |
Subtotal | 26,284 | |
Total investments | 26,284 | 18,441 |
Municipal debt securities | ||
Amortized Cost | ||
Due in 1 year | 6,280 | |
Due after 1 but within 5 years | 110,543 | |
Due after 5 but within 10 years | 137,654 | |
Due after 10 years | 104,104 | |
Subtotal | 358,581 | |
Amortized Cost | 358,581 | 334,048 |
Fair Value | ||
Due in 1 year | 6,290 | |
Due after 1 but within 5 years | 110,750 | |
Due after 5 but within 10 years | 139,776 | |
Due after 10 years | 104,576 | |
Subtotal | 361,392 | |
Total investments | 361,392 | 334,324 |
Corporate debt securities | ||
Amortized Cost | ||
Due in 1 year | 54,233 | |
Due after 1 but within 5 years | 269,360 | |
Due after 5 but within 10 years | 176,638 | |
Due after 10 years | 4,469 | |
Subtotal | 504,700 | |
Amortized Cost | 504,700 | 457,842 |
Fair Value | ||
Due in 1 year | 54,253 | |
Due after 1 but within 5 years | 269,941 | |
Due after 5 but within 10 years | 176,686 | |
Due after 10 years | 4,408 | |
Subtotal | 505,288 | |
Total investments | 505,288 | 456,357 |
Residential and commercial mortgage securities | ||
Amortized Cost | ||
Amortized Cost | 64,768 | 68,430 |
Fair Value | ||
Total investments | 65,288 | 68,336 |
Asset-backed securities | ||
Amortized Cost | ||
Amortized Cost | 134,984 | 127,359 |
Fair Value | ||
Total investments | 134,911 | 127,172 |
Money market funds | ||
Amortized Cost | ||
Amortized Cost | 97,388 | 102,430 |
Fair Value | ||
Total investments | 97,388 | 102,430 |
U.S. Agency | U.S. agency mortgage-backed securities | ||
Amortized Cost | ||
Amortized Cost | 362,585 | 324,654 |
Fair Value | ||
Total investments | $ 355,239 | $ 316,494 |
Investments Available for Sal32
Investments Available for Sale (Details 4) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Realized gross gains and losses on the sale of investments available for sale | |||
Realized gross gains | $ 681 | $ 1,148 | |
Realized gross losses | 26 | 670 | |
Fair Value | |||
Less than 12 months | 834,848 | $ 877,394 | |
12 months or more | 49,314 | 77,782 | |
Total | 884,162 | 955,176 | |
Gross Unrealized Losses | |||
Less than 12 months | (17,595) | (20,789) | |
12 months or more | (324) | (777) | |
Total | (17,919) | (21,566) | |
Other information | |||
Other-than-temporary impairments | $ 7 | ||
Fair value of investments deposited with insurance regulatory authorities | 8,500 | 8,500 | |
U.S. Treasury securities | |||
Fair Value | |||
Less than 12 months | 141,980 | 160,018 | |
12 months or more | 0 | 0 | |
Total | 141,980 | 160,018 | |
Gross Unrealized Losses | |||
Less than 12 months | (3,843) | (4,497) | |
12 months or more | 0 | 0 | |
Total | (3,843) | (4,497) | |
Municipal debt securities | |||
Fair Value | |||
Less than 12 months | 116,284 | 149,368 | |
12 months or more | 6,651 | 6,015 | |
Total | 122,935 | 155,383 | |
Gross Unrealized Losses | |||
Less than 12 months | (2,124) | (3,351) | |
12 months or more | (32) | (22) | |
Total | (2,156) | (3,373) | |
Corporate debt securities | |||
Fair Value | |||
Less than 12 months | 187,801 | 213,965 | |
12 months or more | 6,098 | 8,344 | |
Total | 193,899 | 222,309 | |
Gross Unrealized Losses | |||
Less than 12 months | (2,924) | (3,704) | |
12 months or more | (46) | (124) | |
Total | (2,970) | (3,828) | |
Residential and commercial mortgage securities | |||
Fair Value | |||
Less than 12 months | 13,822 | 18,026 | |
12 months or more | 5,930 | 14,014 | |
Total | 19,752 | 32,040 | |
Gross Unrealized Losses | |||
Less than 12 months | (391) | (434) | |
12 months or more | (30) | (148) | |
Total | (421) | (582) | |
Asset-backed securities | |||
Fair Value | |||
Less than 12 months | 41,891 | 28,294 | |
12 months or more | 28,855 | 47,597 | |
Total | 70,746 | 75,891 | |
Gross Unrealized Losses | |||
Less than 12 months | (286) | (57) | |
12 months or more | (132) | (390) | |
Total | (418) | (447) | |
U.S. Agency | U.S. agency securities | |||
Fair Value | |||
Less than 12 months | 26,284 | 18,441 | |
12 months or more | 0 | 0 | |
Total | 26,284 | 18,441 | |
Gross Unrealized Losses | |||
Less than 12 months | (323) | (344) | |
12 months or more | 0 | 0 | |
Total | (323) | (344) | |
U.S. Agency | U.S. agency mortgage-backed securities | |||
Fair Value | |||
Less than 12 months | 306,786 | 289,282 | |
12 months or more | 1,780 | 1,812 | |
Total | 308,566 | 291,094 | |
Gross Unrealized Losses | |||
Less than 12 months | (7,704) | (8,402) | |
12 months or more | (84) | (93) | |
Total | (7,788) | (8,495) | |
Essent Re | |||
Other information | |||
Fair value of the required investments on deposit in trusts | $ 406,900 | $ 349,600 |
Investments Available for Sal33
Investments Available for Sale (Details 5) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Components of net investment income | ||
Gross investment income | $ 9,078 | $ 6,688 |
Investment expenses | (643) | (505) |
Net investment income | 8,435 | 6,183 |
Fixed maturities | ||
Components of net investment income | ||
Gross investment income | 9,019 | 6,655 |
Short-term investments | ||
Components of net investment income | ||
Gross investment income | $ 59 | $ 33 |
Reserve for Losses and Loss A34
Reserve for Losses and Loss Adjustment Expenses (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)loan | Mar. 31, 2016USD ($)loan | |
Reconciliation of the beginning and ending reserve balances for losses and loss adjustment expenses (LAE) | ||
Reserve for losses and LAE at beginning of period | $ 28,142 | $ 17,760 |
Net reserve for losses and LAE at beginning of period | 28,142 | 17,760 |
Add provision for losses and LAE, net of reinsurance, occurring in: | ||
Current period | 7,090 | 5,080 |
Prior years | (3,397) | (1,349) |
Net incurred losses during the current period | 3,693 | 3,731 |
Deduct payments for losses and LAE, net of reinsurance, occurring in: | ||
Current period | 1 | 1 |
Prior years | 2,366 | 1,020 |
Net loss and LAE payments during the current period | 2,367 | 1,021 |
Net reserve for losses and LAE at end of period | 29,468 | 20,470 |
Reserve for losses and LAE at end of period | $ 29,468 | $ 20,470 |
Loans in default at end of period | loan | 1,777 | 1,060 |
Reserve for losses and LAE, for prior years | $ 22,400 | $ 15,400 |
Debt Obligations (Details)
Debt Obligations (Details) - USD ($) | Apr. 19, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Line of Credit Facility [Line Items] | |||
Revolving credit facility borrowings | $ 125,000,000 | $ 100,000,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Line of credit, term | 3 years | ||
Line of credit, borrowing capacity | $ 200,000,000 | ||
Line of credit, commitment fee rate | 0.35% | ||
Revolving credit facility borrowings | $ 125,000,000 | ||
Weighted average interest during period | 2.96% |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Indemnifications related to contract underwriting services | ||
Loss Contingencies [Line Items] | ||
Amount paid for remedies | $ 4,775 | $ 0 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) shares in Thousands | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Nonvested share units | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 493 |
Granted (in shares) | 366 |
Vested (in shares) | (253) |
Forfeited (in shares) | (8) |
Outstanding at end of period (in shares) | 598 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 19.24 |
Granted (in dollars per share) | $ / shares | 33.21 |
Vested (in dollars per share) | $ / shares | 18.40 |
Forfeited (in dollars per share) | $ / shares | 28.53 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 28.02 |
Time and Performance- Based Share Awards | Nonvested shares | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 1,503 |
Granted (in shares) | 140 |
Vested (in shares) | (48) |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 1,595 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 15.41 |
Granted (in dollars per share) | $ / shares | 36.29 |
Vested (in dollars per share) | $ / shares | 22.48 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 17.03 |
Time-Based Share Awards | Nonvested shares | |
Number of Shares | |
Outstanding at beginning of year (in shares) | 605 |
Granted (in shares) | 91 |
Vested (in shares) | (264) |
Forfeited (in shares) | 0 |
Outstanding at end of period (in shares) | 432 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of year (in dollars per share) | $ / shares | $ 16.32 |
Granted (in dollars per share) | $ / shares | 36.29 |
Vested (in dollars per share) | $ / shares | 16.56 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 20.35 |
Stock-Based Compensation (Det38
Stock-Based Compensation (Details 2) | 1 Months Ended | |
Feb. 28, 2017 | Jan. 31, 2017 | |
2013 Plan | Performance -Based | Nonvested shares | Certain members of senior management | ||
Stock-based compensation | ||
Performance period | 3 years | |
First Vesting Period | 2013 Plan | Time-Based | Nonvested shares | Certain members of senior management | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Second Vesting Period | 2013 Plan | Time-Based | Nonvested shares | Certain members of senior management | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Third Vesting Period | 2013 Plan | Time-Based | Nonvested shares | Certain members of senior management | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Incentive Program Bonus Award Fiscal Year Performance | First Vesting Period | Time-Based | Nonvested shares | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Incentive Program Bonus Award Fiscal Year Performance | First Vesting Period | Time-Based | Nonvested share units | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | 33.33% |
Incentive Program Bonus Award Fiscal Year Performance | Second Vesting Period | Time-Based | Nonvested shares | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Incentive Program Bonus Award Fiscal Year Performance | Second Vesting Period | Time-Based | Nonvested share units | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | 33.33% |
Incentive Program Bonus Award Fiscal Year Performance | Third Vesting Period | Time-Based | Nonvested shares | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | |
Incentive Program Bonus Award Fiscal Year Performance | Third Vesting Period | Time-Based | Nonvested share units | Employee | ||
Stock-based compensation | ||
Vesting (as a percent) | 33.33% | 33.33% |
Stock-Based Compensation (Det39
Stock-Based Compensation (Details 3) - Nonvested shares | 3 Months Ended |
Mar. 31, 2017 | |
Compounded Annual Book Value Per Share Growth 16% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 25.00% |
Compounded Annual Book Value Per Share Growth 16% | Maximum | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 16.00% |
Nonvested Common Shares Earned | 0.00% |
Compounded Annual Book Value Per Share Growth 17% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 17.00% |
Nonvested Common Shares Earned | 50.00% |
Compounded Annual Book Value Per Share Growth 18% | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 18.00% |
Nonvested Common Shares Earned | 75.00% |
Compounded Annual Book Value Per Share Growth 19% | Minimum | |
Stock-based compensation | |
Compounded Annual Book Value Per Share Growth | 19.00% |
Nonvested Common Shares Earned | 100.00% |
Stock-Based Compensation (Det40
Stock-Based Compensation (Details 4) - shares | May 05, 2017 | Feb. 28, 2017 | Jan. 31, 2017 | Mar. 31, 2017 |
Nonvested share units | ||||
Stock-based compensation | ||||
Shares granted (in shares) | 366,000 | |||
Time-Based | Nonvested shares | ||||
Stock-based compensation | ||||
Shares granted (in shares) | 91,000 | |||
Employee | First Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested shares | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Employee | First Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested share units | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | 33.33% | ||
Employee | Second Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested shares | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Employee | Second Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested share units | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | 33.33% | ||
Employee | Third Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested shares | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | |||
Employee | Third Vesting Period | Incentive Program Bonus Award Fiscal Year Performance | Time-Based | Nonvested share units | ||||
Stock-based compensation | ||||
Vesting (as a percent) | 33.33% | 33.33% | ||
Subsequent Event | Director | Time-Based | Nonvested share units | ||||
Stock-based compensation | ||||
Shares granted (in shares) | 21,021 | |||
Subsequent Event | Maximum | Director | Time-Based | Nonvested share units | ||||
Stock-based compensation | ||||
Award vesting period | 1 year |
Stock-Based Compensation (Det41
Stock-Based Compensation (Details 5) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | May 03, 2017 | Dec. 31, 2016 | |
Stock-based compensation | ||||
Shares tendered by employees to pay employee withholding taxes (in shares) | 211,412 | |||
Compensation expense, net of forfeitures, and related tax effects recognized in connection with nonvested shares | ||||
Compensation expense | $ 4,619 | $ 3,782 | ||
Income tax benefit | 1,483 | 1,212 | ||
Nonvested shares | ||||
Stock-based compensation | ||||
Total fair value of shares vested | 19,000 | $ 11,900 | ||
Total unrecognized compensation expense | $ 32,000 | |||
Expected weighted average period for recognition of expense | 2 years 2 months 27 days | |||
2013 Plan | ||||
Stock-based compensation | ||||
Number of shares authorized | 14,700,000 | |||
Subsequent Event | ||||
Stock-based compensation | ||||
Outstanding (in shares) | 2,600,000 | |||
Subsequent Event | 2013 Plan | ||||
Stock-based compensation | ||||
Number of shares authorized | 7,500,000 |
Earnings per Share (EPS) (Detai
Earnings per Share (EPS) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | |||
Net income | $ 66,598 | $ 47,951 | |
Less: dividends declared | 0 | 0 | |
Net income | $ 66,598 | $ 47,951 | $ 222,606 |
Basic earnings per share (in dollars per share) | $ 0.73 | $ 0.53 | |
Diluted earnings per share (in dollars per share) | $ 0.72 | $ 0.52 | |
Basic weighted average shares outstanding (in shares) | 91,258 | 90,785 | |
Dilutive effect of nonvested shares (in shares) | 1,765 | 1,074 | |
Diluted weighted average shares outstanding (in shares) | 93,023 | 91,859 |
Earnings per Share (EPS) (Det43
Earnings per Share (EPS) (Details 2) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Contingently issuable awards | ||
Antidilutive nonvested shares (in shares) | 162,930 | 347,611 |
Performance-based share awards | ||
Contingently issuable awards | ||
Percentage of award issuable if current period end were end of contingency period | 100.00% | 100.00% |
Accumulated Other Comprehensi44
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Other comprehensive income (loss): | ||
Other comprehensive income (loss), before tax | $ 6,911 | $ 19,073 |
Other comprehensive income (loss): | ||
Other comprehensive income (loss), tax (expense) benefit | (2,061) | (5,714) |
Net of Tax | ||
Stockholders equity, beginning of period | 1,343,773 | 1,119,241 |
Other comprehensive income (loss): | ||
Other comprehensive income (loss), net of tax | 4,850 | 13,359 |
Stockholders equity, end of period | 1,412,752 | |
Accumulated Other Comprehensive Income (Loss) | ||
Before Tax | ||
AOCI before tax, beginning of period | (14,436) | 661 |
Other comprehensive income (loss): | ||
AOCI before tax, end of period | (7,525) | 19,734 |
Tax Effect | ||
AOCI tax effect, beginning of period | 2,181 | (760) |
Other comprehensive income (loss): | ||
AOCI tax effect, end of period | 120 | (6,474) |
Net of Tax | ||
Stockholders equity, beginning of period | (12,255) | (99) |
Other comprehensive income (loss): | ||
Stockholders equity, end of period | (7,405) | 13,260 |
Accumulated Net Investment Gains (Losses) On Investments | ||
Other comprehensive income (loss): | ||
Unrealized holding gains arising during the period, before tax | 7,566 | 19,551 |
Less: Reclassification adjustment for gains included in net income | (655) | (478) |
Other comprehensive income (loss), before tax | 6,911 | 19,073 |
Other comprehensive income (loss): | ||
Unrealized holding gains arising during the period, tax (expense) benefit | (2,289) | (5,845) |
Less: Reclassification adjustment for losses included in net income | 228 | 131 |
Other comprehensive income (loss), tax (expense) benefit | (2,061) | (5,714) |
Other comprehensive income (loss): | ||
Unrealized holding gains arising during the period. net of tax | 5,277 | 13,706 |
Less: Reclassification adjustment for losses included in net income | (427) | (347) |
Other comprehensive income (loss), net of tax | $ 4,850 | $ 13,359 |
Fair Value of Financial Instr45
Fair Value of Financial Instruments (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Financial Assets: | ||
Total investments | $ 1,724,533,000 | $ 1,615,102,000 |
U.S. Treasury securities | ||
Financial Assets: | ||
Total investments | 178,743,000 | 191,548,000 |
U.S. agency securities | ||
Financial Assets: | ||
Total investments | 26,284,000 | 18,441,000 |
Municipal debt securities | ||
Financial Assets: | ||
Total investments | 361,392,000 | 334,324,000 |
Corporate debt securities | ||
Financial Assets: | ||
Total investments | 505,288,000 | 456,357,000 |
Residential and commercial mortgage securities | ||
Financial Assets: | ||
Total investments | 65,288,000 | 68,336,000 |
Asset-backed securities | ||
Financial Assets: | ||
Total investments | 134,911,000 | 127,172,000 |
Money market funds | ||
Financial Assets: | ||
Total investments | 97,388,000 | 102,430,000 |
U.S. Agency | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Total investments | 355,239,000 | 316,494,000 |
Recurring basis | ||
Financial Assets: | ||
Assets fair value | 1,724,533,000 | 1,615,102,000 |
Recurring basis | U.S. Treasury securities | ||
Financial Assets: | ||
Total investments | 178,743,000 | 191,548,000 |
Recurring basis | U.S. agency securities | ||
Financial Assets: | ||
Total investments | 26,284,000 | 18,441,000 |
Recurring basis | Municipal debt securities | ||
Financial Assets: | ||
Total investments | 361,392,000 | 334,324,000 |
Recurring basis | Corporate debt securities | ||
Financial Assets: | ||
Total investments | 505,288,000 | 456,357,000 |
Recurring basis | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Total investments | 65,288,000 | 68,336,000 |
Recurring basis | Asset-backed securities | ||
Financial Assets: | ||
Total investments | 134,911,000 | 127,172,000 |
Recurring basis | Money market funds | ||
Financial Assets: | ||
Total investments | 97,388,000 | 102,430,000 |
Recurring basis | U.S. Agency | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Total investments | 355,239,000 | 316,494,000 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Recurring basis | ||
Financial Assets: | ||
Assets fair value | 276,131,000 | 293,978,000 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Recurring basis | U.S. Treasury securities | ||
Financial Assets: | ||
Total investments | 178,743,000 | 191,548,000 |
Quoted Prices in Active Markets for Identical Instruments (Level 1) | Recurring basis | Money market funds | ||
Financial Assets: | ||
Total investments | 97,388,000 | 102,430,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | ||
Financial Assets: | ||
Assets fair value | 1,448,402,000 | 1,321,124,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | U.S. agency securities | ||
Financial Assets: | ||
Total investments | 26,284,000 | 18,441,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | Municipal debt securities | ||
Financial Assets: | ||
Total investments | 361,392,000 | 334,324,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | Corporate debt securities | ||
Financial Assets: | ||
Total investments | 505,288,000 | 456,357,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | Residential and commercial mortgage securities | ||
Financial Assets: | ||
Total investments | 65,288,000 | 68,336,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | Asset-backed securities | ||
Financial Assets: | ||
Total investments | 134,911,000 | 127,172,000 |
Significant Other Observable Inputs (Level 2) | Recurring basis | U.S. Agency | U.S. agency mortgage-backed securities | ||
Financial Assets: | ||
Total investments | 355,239,000 | 316,494,000 |
Significant Unobservable Inputs (Level 3) | Recurring basis | ||
Financial Assets: | ||
Assets fair value | $ 0 | $ 0 |
Fair Value of Financial Instr46
Fair Value of Financial Instruments (Details 2) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Fair value of derivative liabilities at beginning of period | $ 1,232,000 | ||
Net realized and unrealized losses (gains) included in income | (677,000) | ||
Purchases, Sales, Issues and Settlements, Net | 343,000 | ||
Fair value of derivative liabilities at end of period | 898,000 | ||
Changes in net unrealized losses (gains) included in income on instruments held at end of period | $ (677,000) | ||
Recurring basis | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets fair value | $ 1,724,533,000 | $ 1,615,102,000 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assets fair value | $ 0 | $ 0 |
Statutory Accounting (Details)
Statutory Accounting (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Essent Guaranty | |||
Dividends Restrictions | |||
Statutory net income | $ 60,806 | $ 48,486 | |
Statutory surplus | 595,102 | 532,199 | |
Contingency reserve liability | 525,256 | 353,063 | |
Increase in contingency reserve | 44,400 | ||
Essent PA | |||
Dividends Restrictions | |||
Statutory net income | 2,805 | 3,516 | |
Statutory surplus | 43,299 | 44,469 | |
Contingency reserve liability | 38,219 | 29,898 | |
Increase in contingency reserve | 1,800 | ||
Essent Re | |||
Dividends Restrictions | |||
Statutory net income | 20,200 | $ 9,400 | |
Statutory capital and surplus | $ 452,400 | $ 401,100 |