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Essent Group Ltd. Reports Fourth Quarter and Full Year 2014 Results

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Essent Group Ltd. (NYSE:ESNT) today reported net income for the quarter ended December 31, 2014 of $28.9 million or $0.33 per diluted share. Net income for the full year 2014 was $88.5 million or $1.03 per diluted share.

Primary insurance in force as of December 31, 2014, was $50.8 billion, representing an increase of 58% compared to $32.0 billion of insurance in force as of December 31, 2013. As of December 31, 2014, consolidated stockholders’ equity was $955.7 million and combined statutory capital in the insurance subsidiaries was $705.9 million.

“2014 was another milestone year for Essent and our results reflect the solid progress we have made against our goals,” said Mark Casale, Chairman and Chief Executive Officer. “We continue to expand the breadth and depth of our franchise, both in terms of our domestic business and our reinsurance platform. As a result of our efforts this year, we believe Essent is well positioned and I remain optimistic about Essent’s prospects heading into 2015!”

Financial Highlights:

  • New insurance written for the fourth quarter was $6.5 billion, compared to $8.8 billion in the third quarter and $4.5 billion in the fourth quarter of 2013. For the full year 2014, new insurance written was $24.8 billion, compared to $21.2 billion for 2013.
  • Net premiums earned for the fourth quarter were $67.8 million, compared to $60.3 million in the third quarter and $40.3 million in the fourth quarter of 2013. For the full year 2014, net premiums earned were $223.2 million, compared to $123.4 million for 2013.
  • Income before taxes for the fourth quarter was $44.0 million, compared to $38.8 million in the third quarter and $19.4 million in the fourth quarter of 2013. For the full year 2014, income before taxes was $135.9 million, compared to $58.0 million for 2013.
  • The expense ratio for the fourth quarter was 37.8%, compared to 40.6% in the third quarter and 55.3% in the fourth quarter of 2013. For the full year 2014, the expense ratio was 43.6%, compared to 57.6% for 2013.
  • The provision for losses and LAE for the fourth quarter was $3.0 million, compared to $1.4 million in the third quarter and $0.7 million in the fourth quarter of 2013. For the full year 2014, the provision for losses and LAE was $6.3 million, compared to $2.3 million for 2013.
  • The percentage of loans in default as of December 31, 2014 was 0.20%, compared to 0.15% as of September 30, 2014 and 0.11% as of December 31, 2013.
  • The combined ratio for the fourth quarter was 42.3%, compared to 42.9% in the third quarter and 57.0% in the fourth quarter of 2013. For the full year 2014, the combined ratio was 46.4%, compared to 59.5% for 2013.
  • The consolidated balance of cash and investments at December 31, 2014 was $1.1 billion, including cash and investment balances at Essent Group Ltd. of $126.3 million.
  • The combined risk to capital ratio of the US mortgage insurance business, which includes statutory capital for both Essent Guaranty, Inc. and Essent Guaranty of PA, Inc., was 16.2:1 as of December 31, 2014.
  • Essent Group Ltd. contributed approximately $50 million of capital to Essent Reinsurance, Ltd.
  • Essent Reinsurance, Ltd. was selected by Freddie Mac to participate in Freddie Mac’s Agency Credit Insurance Structure (“ACIS”) 2014-3 transaction and insure $15.5 million of risk that Freddie Mac had retained as part of its STACR2014-DN2 transaction.

Conference Call

Essent management will hold a conference call at 10:00 AM Eastern time today to discuss its results. The conference call will be broadcast live over the Internet at http://ir.essentgroup.com/investors/webcasts-and-presentations/event-calendar/default.aspx. The call may also be accessed by dialing 877-201-0168 inside the U.S., or 647-788-4901 for international callers, using passcode 67143840 or by referencing Essent.

A replay of the webcast will be available on the Essent website approximately two hours after the live broadcast ends for a period of one year. A replay of the conference call will be available approximately two hours after the call ends for a period of two weeks, using the following dial-in numbers and passcode: 855-859-2056 inside the U.S., or 404-537-3406 for international callers, passcode 67143840.

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

Forward Looking Statements

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

Non-GAAP Financial Measures

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

About the Company

Essent Group Ltd. (NYSE:ESNT) is a Bermuda-based holding company which, through its wholly-owned subsidiary Essent Guaranty, Inc., (collectively, “Essent”) offers private mortgage insurance for single-family mortgage loans in the United States. Essent provides private capital to mitigate mortgage credit risk, allowing lenders to make additional mortgage financing available to prospective homeowners. Headquartered in Radnor, Pennsylvania and rated BBB+ by Standard & Poor’s and Baa2 by Moody’s, Essent Guaranty, Inc. is licensed to write mortgage insurance in all 50 states and the District of Columbia, and is approved by Fannie Mae and Freddie Mac. Essent also offers mortgage-related insurance and reinsurance through its Bermuda-based subsidiary, Essent Reinsurance Ltd. Additional information regarding Essent may be found at www.essentgroup.com.

Essent Group Ltd. and Subsidiaries
Financial Results and Supplemental Information (Unaudited)

Quarter and Year ended December 31, 2014

Exhibit A: Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Exhibit B: Condensed Consolidated Balance Sheets (Unaudited)
Exhibit C: Historical Quarterly Data
Exhibit D: New Insurance Written
Exhibit E: Insurance in Force and Risk in Force
Exhibit F: Other Risk in Force
Exhibit G: Portfolio Vintage Data
Exhibit H: Portfolio Geographic Data
Exhibit I: Defaults, Reserve for Losses and LAE, and Claims
Exhibit J: Investment Portfolio
Exhibit K: Insurance Company Capital
Exhibit L: Earnings per Share
Exhibit M: Reconciliation of Non-GAAP Financial Measure – Adjusted Book Value per Share
Exhibit A
Essent Group Ltd. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
Three Months Ended December 31, Year Ended December 31,

(In thousands, except per share amounts)

2014 2013 2014 2013
Revenues:
Net premiums written $ 83,219 $ 52,878 $ 276,778 $ 186,200
Increase in unearned premiums (15,405 ) (12,534 ) (53,549 ) (62,829 )
Net premiums earned 67,814 40,344 223,229 123,371
Net investment income 3,902 1,228 12,285 4,110
Realized investment gains, net 306 21 925 116
Other income 720 760 3,028 3,806
Total revenues 72,742 42,353 239,467 131,403
Losses and expenses:
Provision for losses and LAE 3,049 692 6,308 2,321
Other underwriting and operating expenses 25,656 22,299 97,232 71,055
Total losses and expenses 28,705 22,991 103,540 73,376
Income before income taxes 44,037 19,362 135,927 58,027
Income tax expense (benefit) 15,171 345 47,430 (7,386 )
Net income $ 28,866 $ 19,017 $ 88,497 $ 65,413
Earnings per Common Share:
Basic $ 0.34 $ 0.23 $ 1.05 $ 0.90
Diluted 0.33 0.22 1.03 0.70
Weighted average Common Shares outstanding:
Basic 86,134 51,741 83,986 14,044
Diluted 87,950 55,130 85,602 18,103
Net income $ 28,866 $ 19,017 $ 88,497 $ 65,413
Other comprehensive income (loss):

Change in unrealized appreciation (depreciation) of investments, net of tax expense (benefit) of $854 and ($236) in the three months ended December 31, 2014 and 2013 and $2,825 and ($2,080) in the year ended December 31, 2014 and 2013

2,125 (439 ) 6,114 (3,861 )
Total other comprehensive income (loss) 2,125 (439 ) 6,114 (3,861 )

Comprehensive income

$ 30,991 $ 18,578 $ 94,611 $ 61,552
Loss ratio 4.5 % 1.7 % 2.8 % 1.9 %
Expense ratio 37.8 % 55.3 % 43.6 % 57.6 %
Combined ratio 42.3 % 57.0 % 46.4 % 59.5 %
Exhibit B
Essent Group Ltd. and Subsidiaries
Condensed Consolidated Balance Sheets (Unaudited)
December 31, December 31,

(In thousands, except per share amounts)

2014 2013
Assets
Investments available for sale, at fair value
Fixed maturities $ 846,925 $ 318,476
Short-term investments 210,688 14,079
Total investments 1,057,613 332,555
Cash 24,411 477,655
Accrued investment income 5,748 1,978
Accounts receivable 15,810 10,006
Deferred policy acquisition costs 9,597 6,173

Property and equipment (at cost, less accumulated depreciation of $39,260 in 2014 and $36,796 in 2013)

5,841 4,411
Prepaid federal income tax 59,673 8,000
Net deferred tax asset 10,346
Other assets 2,768 2,846
Total assets $ 1,181,461 $ 853,970
Liabilities and Stockholders’ Equity
Liabilities
Reserve for losses and LAE $ 8,427 $ 3,070
Unearned premium reserve 156,948 103,399
Amounts due under Asset Purchase Agreement 4,949
Accrued payroll and bonuses 14,585 13,076
Net deferred tax liability 37,092
Other accrued liabilities 8,671 7,335
Total liabilities 225,723 131,829
Commitments and contingencies
Stockholders’ Equity
Common Shares, $0.015 par value:
Authorized – 233,333; issued – 92,546 shares in 2014 and 86,491 shares in 2013 1,388 1,297
Additional paid-in capital 893,285 754,390
Accumulated other comprehensive income (loss) 4,667 (1,447 )
Retained earnings (accumulated deficit) 56,398 (32,099 )
Total stockholders’ equity 955,738 722,141
Total liabilities and stockholders’ equity $ 1,181,461 $ 853,970
Exhibit C
Essent Group Ltd. and Subsidiaries
Supplemental Information
Historical Quarterly Data
2014 2013
Selected Income Statement Data December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31

(In thousands, except per share amounts)

Revenues:
Net premiums written $ 83,219 $ 77,862 $ 63,505 $ 52,192 $ 52,878 $ 55,026 $ 44,923 $ 33,373
Net premiums earned 67,814 60,323 50,342 44,750 40,344 34,282 27,481 21,264
Other revenues 4,928 4,298 3,941 3,071 2,009 2,173 2,083 1,767
Total revenues 72,742 64,621 54,283 47,821 42,353 36,455 29,564 23,031
Losses and expenses:
Provision for losses and LAE 3,049 1,391 966 902 692 319 580 730
Other underwriting and operating expenses 25,656 24,469 23,648 23,459 22,299 18,237 15,557 14,962
Total losses and expenses 28,705 25,860 24,614 24,361 22,991 18,556 16,137 15,692
Income before income taxes 44,037 38,761 29,669 23,460 19,362 17,899 13,427 7,339
Income tax expense (benefit) 15,171 13,691 10,114 8,454 345 2,280 (10,150 ) 139
Net income $ 28,866 $ 25,070 $ 19,555 $ 15,006 $ 19,017 $ 15,619 $ 23,577 $ 7,200
Earnings per share:
Basic:
Common Shares $ 0.34 $ 0.30 $ 0.23 $ 0.18 $ 0.23 N/A N/A N/A
Class A common shares N/A N/A N/A N/A N/A $ 0.36 $ 0.63 $ 0.23
Class B-2 common shares N/A N/A N/A N/A N/A 0.07 0.40
Diluted:
Common Shares $ 0.33 $ 0.29 $ 0.23 $ 0.18 $ 0.22 N/A N/A N/A
Class A common shares N/A N/A N/A N/A N/A $ 0.35 $ 0.62 $ 0.23
Class B-2 common shares N/A N/A N/A N/A N/A 0.02 0.09
Weighted average common shares outstanding:
Basic:
Common Shares 86,134 83,640 83,276 82,864 51,741 N/A N/A N/A
Class A common shares N/A N/A N/A N/A N/A 43,616 36,793 31,805
Class B-2 common shares N/A N/A N/A N/A N/A 1,822 1,334 853
Diluted:
Common Shares 87,950 85,028 84,706 84,696 55,130 N/A N/A N/A
Class A common shares N/A N/A N/A N/A N/A 43,788 36,901 31,864
Class B-2 common shares N/A N/A N/A N/A N/A 6,054 5,994 6,009
Other Data:

($ in thousands)

Loss ratio (1) 4.5 % 2.3 % 1.9 % 2.0 % 1.7 % 0.9 % 2.1 % 3.4 %
Expense ratio (2) 37.8 % 40.6 % 47.0 % 52.4 % 55.3 % 53.2 % 56.6 % 70.4 %
Combined ratio 42.3 % 42.9 % 48.9 % 54.4 % 57.0 % 54.1 % 58.7 % 73.8 %

(1)

Loss ratio is calculated by dividing the provision for loss and loss adjustment expenses by net premiums earned.

(2)

Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.

Exhibit C, continued
Essent Group Ltd. and Subsidiaries
Supplemental Information
Historical Quarterly Data
2014 2013
Other Data, continued: December 31 September 30 June 30 March 31 December 31 September 30 June 30 March 31

($ in thousands)

Flow:
New insurance written $ 6,204,821 $ 7,283,169 $ 5,874,334 $ 3,630,573 $ 4,527,900 $ 6,408,055 $ 5,895,127 $ 4,321,556
New risk written 1,523,527 1,802,408 1,477,547 907,257 1,147,560 1,584,267 1,409,905 991,011
Bulk:
New insurance written $ 300,008 $ 1,506,529 $ $ $ $ $ $
New risk written 35,007 30,131
Consolidated:
Average premium rate (3) 0.56 % 0.55 % 0.54 % 0.54 % 0.54 % 0.54 % 0.55 % 0.55 %
New insurance written $ 6,504,829 $ 8,789,698 $ 5,874,334 $ 3,630,573 $ 4,527,900 $ 6,408,055 $ 5,895,127 $ 4,321,556
New risk written $ 1,558,534 $ 1,832,539 $ 1,477,547 $ 907,257 $ 1,147,560 $ 1,584,267 $ 1,409,905 $ 991,011
Insurance in force (end of period) $ 50,762,594 $ 46,428,526 $ 39,379,879 $ 34,778,057 $ 32,028,196 $ 28,198,722 $ 22,576,300 $ 17,430,810
Risk in Force (end of period) $ 12,227,270 $ 11,152,497 $ 9,700,549 $ 8,493,862 $ 7,768,605 $ 6,764,997 $ 5,348,917 $ 4,100,835
Policies in force 229,721 209,841 175,773 154,451 141,417 123,737 98,818 76,455
Weighted-average coverage (4) 24.1 % 24.0 % 24.6 % 24.4 % 24.3 % 24.0 % 23.7 % 23.5 %
Annual persistency 86.4 % 88.5 % 89.1 % 87.9 % 86.1 % 83.1 % 80.1 % 80.9 %
Loans in default (count) 457 312 235 192 159 116 90 75
Percentage of loans in default 0.20 % 0.15 % 0.13 % 0.12 % 0.11 % 0.09 % 0.09 % 0.10 %

(3)

Average premium rate is calculated by dividing net premium earned by average insurance in force for the period.

(4)

Weighted average coverage is calculated by dividing end of period risk in force by insurance in force.

Exhibit D
Essent Group Ltd. and Subsidiaries
Supplemental Information
New Insurance Written: Flow
NIW by Credit Score
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013

($ in thousands)

>=760 $ 2,618,070 42.2 % $ 2,135,772 47.2 % $ 10,045,373 43.7 % $ 10,989,279 51.9 %
740-759 1,017,384 16.4 802,262 17.7 3,808,163 16.6 3,775,108 17.8
720-739 868,254 14.0 651,269 14.4 3,314,333 14.4 2,909,199 13.8
700-719 692,036 11.2 465,611 10.3 2,475,271 10.8 1,851,773 8.8
680-699 576,830 9.3 341,968 7.5 2,020,177 8.8 1,231,297 5.8
<=679 432,247 6.9 131,018 2.9 1,329,580 5.7 395,982 1.9
Total $ 6,204,821 100.0 % $ 4,527,900 100.0 % $ 22,992,897 100.0 % $ 21,152,638 100.0 %
Weighted-average credit score 745 752 747 756
NIW by LTV
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013

($ in thousands)

85.00% and below $ 931,067 15.0 % $ 488,218 10.8 % $ 2,991,324 13.0 % $ 2,963,619 14.0 %
85.01% to 90.00% 2,057,770 33.2 1,528,857 33.8 7,694,465 33.5 7,627,333 36.1
90.01% to 95.00% 3,176,124 51.2 2,372,909 52.4 12,147,728 52.8 10,189,658 48.1
95.01% and above 39,860 0.6 137,916 3.0 159,380 0.7 372,028 1.8
$ 6,204,821 100.0 % $ 4,527,900 100.0 % $ 22,992,897 100.0 % $ 21,152,638 100.0 %
Weighted-average LTV 91 % 92 % 92 % 91 %
NIW by Product
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013
Single Premium policies 22.8 % 19.2 % 20.1 % 20.0 %
Monthly Premium policies 77.2 80.8 79.9 80.0
100.0 % 100.0 % 100.0 % 100.0 %
NIW by Purchase vs. Refinance
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013
Purchase 77.7 % 86.9 % 82.9 % 72.1 %
Refinance 22.3 13.1 17.1 27.9
100.0 % 100.0 % 100.0 % 100.0 %
Exhibit D, continued
Essent Group Ltd. and Subsidiaries
Supplemental Information
New Insurance Written: Bulk
NIW by Credit Score
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013

($ in thousands)

>=760 $ 203,901 68.0 % $ 0.0 % $ 694,882 38.5 % $ 0.0 %
740-759 51,590 17.2 286,790 15.9
720-739 34,077 11.4 269,065 14.9
700-719 10,440 3.4 244,314 13.5
680-699 190,009 10.5
<=679 121,477 6.7
Total $ 300,008 100.0 % $ 0.0 % $ 1,806,537 100.0 % $ 0.0 %

Weighted-average credit score

771

N/A

742

N/A

NIW by LTV
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013

($ in thousands)

85.00% and below $ 10,706 3.6 % $ 0.0 % $ 62,316 3.4 % $ 0.0 %
85.01% to 90.00% 151,608 50.5 273,390 15.1
90.01% to 95.00% 137,694 45.9 855,547 47.4
95.01% and above 615,284 34.1
$ 300,008 100.0 % $ 0.0 % $ 1,806,537 100.0 % $ 0.0 %
Weighted-average LTV 91 % N/A 93 % N/A
NIW by Product
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013
Single Premium policies 100.0 % 0.0 % 16.6 % 0.0 %
Monthly Premium policies 83.4
100.0 % 0.0 % 100.0 % 0.0 %
NIW by Purchase vs. Refinance
Three months ended Year ended
December 31, 2014 December 31, 2013 December 31, 2014 December 31, 2013
Purchase 90.0 % 0.0 % 86.5 % 0.0 %
Refinance 10.0 13.5
100.0 % 0.0 % 100.0 % 0.0 %
Exhibit E
Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance in Force and Risk in Force: Consolidated
Portfolio by Credit Score
Total IIF by FICO score December 31, 2014 September 30, 2014 December 31, 2013

($ in thousands)

>=760 $ 24,546,571 48.4 % $ 22,859,418 49.2 % $ 17,102,961 53.3 %
740-759 8,804,454 17.3 8,102,165 17.5 5,724,933 17.9
720-739 7,185,175 14.2 6,561,002 14.1 4,380,452 13.7
700-719 4,849,412 9.6 4,342,161 9.4 2,646,717 8.3
680-699 3,540,811 7.0 3,102,261 6.7 1,665,196 5.2
<=679 1,836,171 3.5 1,461,519 3.1 507,937 1.6
Total $ 50,762,594 100.0 % $ 46,428,526 100.0 % $ 32,028,196 100.0 %
Weighted-average credit score 753 754 758
Total RIF by FICO score December 31, 2014 September 30, 2014 December 31, 2013

($ in thousands)

>=760 $ 5,900,373 48.3 % $ 5,490,591 49.2 % $ 4,106,913 52.9 %
740-759 2,135,891 17.4 1,960,787 17.6 1,399,308 18.0
720-739 1,750,232 14.3 1,593,492 14.3 1,081,286 13.9
700-719 1,145,431 9.4 1,019,259 9.1 637,086 8.2
680-699 859,436 7.0 745,744 6.7 415,414 5.3
<=679 435,907 3.6 342,624 3.1 128,598 1.7
Total $ 12,227,270 100.0 % $ 11,152,497 100.0 % $ 7,768,605 100.0 %
Portfolio by LTV
Total IIF by LTV December 31, 2014 September 30, 2014 December 31, 2013

($ in thousands)

85.00% and below $ 6,100,274 12.0 % $ 5,581,330 12.0 % $ 4,322,612 13.5 %
85.01% to 90.00% 17,719,816 34.9 16,358,760 35.2 12,171,460 38.0
90.01% to 95.00% 25,832,106 50.9 23,383,926 50.4 15,121,279 47.2
95.01% and above 1,110,398 2.2 1,104,510 2.4 412,845 1.3

$

50,762,594 100 %

$

46,428,526 100.0 % $ 32,028,196 100.0 %
Weighted-average LTV 92 % 92 % 91 %
Total RIF by LTV December 31, 2014 September 30, 2014 December 31, 2013

($ in thousands)

85.00% and below $ 681,908 5.6 % $ 621,083 5.6 % $ 474,763 6.1 %
85.01% to 90.00% 4,174,743 34.1 3,859,783 34.6 2,858,683 36.8
90.01% to 95.00% 7,203,270 58.9 6,502,875 58.3 4,296,135 55.3
95.01% and above 167,349 1.4 168,756 1.5 139,024 1.8
$ 12,227,270 100 % $ 11,152,497 100.0 % $ 7,768,605 100.0 %
Portfolio by Loan Amortization Period
Total IIF by Loan Amortization Period December 31, 2014 September 30, 2014 December 31, 2013

($ in thousands)

FRM 30 years and higher $ 44,503,607 87.7 % $ 40,633,185 87.5 % $ 27,364,633 85.4 %
FRM 20-25 years 1,273,086 2.5 1,208,777 2.6 1,086,120 3.4
FRM 15 years 2,637,970 5.2 2,555,323 5.5 2,354,656 7.4
ARM 5 years and higher 2,347,931 4.6 2,031,241 4.4 1,222,787 3.8
Total $ 50,762,594 100.0 % $ 46,428,526 100.0 % $ 32,028,196 100.0 %
Exhibit F
Essent Group Ltd. and Subsidiaries
Supplemental Information
Other Risk in Force

($ in thousands)

December 31, 2014 September 30, 2014 December 31, 2013
ACIS (A) $ 43,733 $ 28,398 $

(A) Essent Reinsurance, Ltd. provides insurance or reinsurance in connection with Freddie Mac’s Agency Credit Insurance Structure (“ACIS”) program, and covers the risk in force on the loans in the reference pools associated with the STACR 2014 DN-1 notes issued by Freddie Mac in February 2014 and the STACR 2014 DN-2 notes issued by Freddie Mac in April 2014.

Exhibit G
Essent Group Ltd. and Subsidiaries
Supplemental Information
Portfolio Vintage Data: Consolidated
Original Remaining
Insurance Insurance % Remaining of Insurance in Force as of December 31, 2014
Origination year Written

($ in thousands)

in Force

($ in thousands)

Original

Insurance

% Purchase >90% LTV >95% LTV FICO < 700 FICO >= 760 % FRM
2010 $ 245,898 $ 77,194 31.4 % 72.8 % 37.2 % 0.0 % 2.7 % 60.0 % 98.0 %
2011 3,229,720 1,298,063 40.2 72.1 40.5 0.2 4.3 57.5 93.5
2012 11,241,161 7,780,072 69.2 69.5 48.9 0.5 5.2 55.9 96.8
2013 21,152,638 17,907,693 84.7 74.2 52.0 1.8 7.7 51.4 96.5
2014 24,799,434 23,699,572 95.6 83.5 56.0 3.2 14.9 43.0 94.1
Total $ 60,668,851 $ 50,762,594 83.7 77.8 53.1 2.2 10.6 48.4 95.4
Exhibit H
Essent Group Ltd. and Subsidiaries
Supplemental Information
Portfolio Geographic Data: Consolidated
IIF by State
As of December 31, 2014 As of September 30, 2014 As of December 31, 2013
CA 10.2% 10.4% 11.1%
TX 8.3 8.3 8.2
FL 5.3 5.1 4.6
WA 4.3 4.1 3.6
NC 4.0 4.0 4.3
IL 3.9 3.8 4.0
MA 3.9 4.1 2.8
PA 3.4 3.5 3.6
NJ 3.4 3.4 3.8
GA 3.3 3.3 3.5
All Others 50.0 50.0 50.5
TOTAL 100.0% 100.0% 100.0%
RIF by State
As of December 31, 2014 As of September 30, 2014 As of December 31, 2013
CA 9.8% 10.0% 10.5%
TX 8.5 8.4 8.0
FL 5.6 5.4 4.8
WA 4.4 4.2 3.6
NC 4.2 4.3 4.4
IL 4.0 4.0 4.0
GA 3.5 3.6 3.6
NJ 3.4 3.4 3.7
PA 3.2 3.3 3.6
AZ 3.2 3.3 3.3
All Others 50.2 50.1 50.5
TOTAL 100.0% 100.0% 100.0%
Exhibit I
Essent Group Ltd. and Subsidiaries
Supplemental Information
Defaults, Reserve for Losses and LAE, and Claims
Rollforward of Insured Loans in Default
Three months ended Year ended
December 31, December 31, December 31, December 31,
2014 2013 2014 2013
Beginning default inventory 312 116 159 56
Plus: new defaults 349 108 904 327
Less: cures (196 ) (57 ) (578 ) (208 )
Less: claims paid (8 ) (8 ) (28 ) (16 )
Ending default inventory 457 159 457 159
Rollforward of Reserve for Losses and LAE
Three months ended Year ended
December 31, December 31, December 31, December 31,

($ in thousands)

2014 2013 2014 2013
Reserve for losses and LAE at beginning of period $ 5,682 $ 2,727 $ 3,070 $ 1,499
Add provision for losses and LAE occurring in:
Current year 2,923 903 6,877 2,986
Prior years 126 (211 ) (569 ) (665 )
Incurred losses during the period 3,049 692 6,308 2,321
Deduct payments for losses and LAE occurring in:
Current year 137 144 138 239
Prior years 167 205 813 511
Loss and LAE payments during the period 304 349 951 750
Reserve for losses and LAE at end of period $ 8,427 $ 3,070 $ 8,427 $ 3,070
Claims
Three months ended Year ended
December 31, December 31, December 31, December 31,
2014 2013 2014 2013
Number of claims paid 8 8 28 16
Total amount paid for claims (in thousands) $ 292 $ 343 $ 929 $ 720
Average amount paid per claim (in thousands) $ 37 $ 43 $ 33 $ 45
Severity 98 % 87 % 79 % 90 %
Exhibit I, continued
Essent Group Ltd. and Subsidiaries
Supplemental Information
Defaults, Reserve for Losses and LAE, and Claims
As of December 31, 2014

Number of

Percentage of

Amount of Percentage of

Reserves as a

Policies in Default

Policies in Default

Reserves Reserves

Defaulted RIF

Percentage of RIF

($ in thousands)

Missed Payments:
Three payments or less 247 54 % $ 2,381 31 % $ 13,059 18 %
Four to eleven payments 167 37 3,748 49 8,132 46
Twelve or more payments 34 7 1,147 15 1,510 76
Pending claims 9 2 424 5 419 101
TOTAL 457 100 % 7,700 100 % $ 23,120 33

IBNR 578
LAE 149
TOTAL $

8,427

Average reserve per default:
Case $ 16.8
Total $ 18.4
Default Rate 0.20 %
As of December 31, 2013

Number of

Percentage of

Amount of Percentage of

Reserves as a

Policies in Default

Policies in Default

Reserves Reserves

Defaulted RIF

Percentage of RIF

($ in thousands)

Missed Payments:
Three payments or less 88 56 % $ 841 30 % $ 3,972 21 %
Four to eleven payments 56 35 1,497 53 2,672 56
Twelve or more payments 10 6 300 11 447 67
Pending claims 5 3 169 6 166 102
TOTAL 159 100 % 2,807 100 % $ 7,257 39

IBNR 211
LAE 52
TOTAL $ 3,070
Average reserve per default:
Case $ 17.7
Total $ 19.3
Default Rate 0.11 %
Exhibit J
Essent Group Ltd. and Subsidiaries
Supplemental Information
Investment Portfolio
Investment Portfolio by Asset Class
Asset Class December 31, 2014 December 31, 2013

($ in thousands)

Fair Value Percent Fair Value Percent
U.S. Treasury securities $ 74,216 7.0 % $ 59,187 17.8 %
U.S. agency securities 4,520 0.4 14,839 4.5
U.S. agency mortgage-backed securities 83,540 7.9 22,241 6.7
Municipal debt securities 195,546 18.5 57,650 17.3
Corporate debt securities 296,829 28.1 125,593 37.8
Mortgage-backed securities 66,086 6.3 18,581 5.6
Asset-backed securities 126,188 11.9 20,385 6.1
Money market investments 210,688 19.9 14,079 4.2
Total Investments $ 1,057,613 100.0 % $ 332,555 100.0 %
Investment Portfolio by Credit Rating
Rating (1) December 31, 2014 December 31, 2013

($ in thousands)

Fair Value Percent Fair Value Percent
Aaa $ 545,807 51.6 % $ 147,862 44.5 %
Aa1 47,792 4.5 21,570 6.5
Aa2 51,958 4.9 15,464 4.6
Aa3 48,261 4.6 11,902 3.6
A1 74,161 7.0 26,541 8.0
A2 67,413 6.4 17,045 5.1
A3 71,964 6.8 29,886 9.0
Baa1 60,399 5.7 24,441 7.3
Baa2 79,727 7.5 30,782 9.3
Baa3 10,131 1.0 7,062 2.1
Below Baa3
Total Investments $ 1,057,613 100.0 % $ 332,555 100.0 %
(1) Based on ratings issued by Moody’s, if available. S&P rating utilized if Moody’s not available.
Portfolio by Duration and Book Yield
Effective Duration December 31, 2014 December 31, 2013

($ in thousands)

Fair Value Percent Fair Value Percent
< 1 Year $ 332,399 31.4 % $ 65,092 19.6 %
1 to < 2 Years 85,971 8.1 19,093 5.7
2 to < 3 Years 167,504 15.8 74,335 22.4
3 to < 4 Years 106,432 10.1 63,214 19.0
4 to < 5 Years 80,300 7.6 66,230 19.9
5 or more Years 285,007 27.0 44,591 13.4
Total Investments $ 1,057,613 100.0 % $ 332,555 100.0 %
Pre-tax investment income yield:
Three months ended December 31, 2014 1.71 %
Year ended December 31, 2014 1.51 %

Net cash and investments at holding company, Essent Group Ltd. ($ in thousands):

As of December 31, 2014 $ 126,327
As of December 31, 2013 $ 246,220
Exhibit K
Essent Group Ltd. and Subsidiaries
Supplemental Information
Insurance Company Capital
As of
December 31, 2014 December 31, 2013

($ in thousands)

US Mortgage Insurance Business:
Combined statutory capital (A) $ 705,890 $ 469,424
Combined net risk in force (B) $ 11,426,748 $ 7,765,586
Risk to capital ratios: (C)
Essent Guaranty, Inc. 16.4:1 16.6:1
Essent Guaranty of PA, Inc. 14.6:1 17.1:1
Combined (D) 16.2:1 16.5:1
Essent Reinsurance, Ltd. Mortgage Insurance Business:

Stockholder’s equity (GAAP basis)

$ 155,123 $ 389
Net risk in force (B) $ 835,976 N/A
(A) Combined statutory capital equals the sum of statutory capital of Essent Guaranty, Inc. plus Essent Guaranty of PA, Inc., after eliminating the impact of intercompany transactions. Statutory capital is computed based on accounting practices prescribed or permitted by the Pennsylvania Insurance Department.
(B) Net risk in force represents total risk in force, net of reinsurance ceded and net of exposures on policies for which loss reserves have been established.
(C) The risk to capital ratio is calculated as the ratio of net risk in force to statutory capital.
(D) The combined risk to capital ratio equals the sum of the net risk in force of Essent Guaranty, Inc. and Essent Guaranty of PA, Inc. divided by the combined statutory capital.
Exhibit L
Essent Group Ltd. and Subsidiaries
Supplemental Information
Earnings per Share
Three months ended December 31, Year ended December 31,
2014 2013 2014 2013

(In thousands, except per share amounts)

Net income $ 28,866 $ 19,017 $ 88,497 $ 65,413
Less: Common Shares dividends declared
Less: Class A dividends declared N/A N/A
Less: Class B-2 dividends declared N/A N/A
Undistributed net income $ 28,866 $ 19,017 $ 88,497 $ 65,413
Net income allocable to Common Shares $ 28,866 $ 12,037 $ 88,497 $ 12,706
Net income allocable to Class A common shares N/A $ 6,980 N/A $ 52,707
Earnings per Common Share:
Basic $ 0.34 $ 0.23 $ 1.05 $ 0.90
Diluted 0.33 0.22 1.03 0.70
Weighted average Common Shares outstanding:
Basic 86,134 51,741 83,986 14,044
Diluted 87,950 55,130 85,602 18,103

Note:

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

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

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

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

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

(In thousands, except per share amounts)

December 31, 2014 December 31, 2013
Numerator:
Total Stockholders’ Equity (Book Value) $ 955,738 $ 722,141
Subtract: Accumulated Other Comprehensive Income (Loss) 4,667 (1,447 )
Adjusted Book Value $ 951,071 $ 723,588
Denominator:
Total Outstanding Common Shares 92,546 86,491
Add: Outstanding Restricted Share Units 664 528
Total Outstanding Common Shares and Restricted Share Units 93,210 87,019
Adjusted Book Value per Share $ 10.20 $ 8.32

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