Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2022

Condensed Financial Information Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant

Schedule II—Condensed Financial Information of Registrant

Parent Company Only


	December 31,
(In thousands)	2022		2021
Assets
Investments
Fixed maturities available for sale, at fair value (amortized cost: 2022 — $249,284; 2021 — $355,700)	$	226,718	$	356,592
Short-term investments available for sale, at fair value (amortized cost: 2022 — $67,783; 2021 — $162,610)	67,622		162,611
Total investments available for sale	294,340		519,203
Other invested assets	2,166		—
Cash	6,160		10,073
Due from affiliates	840		837
Investment in consolidated subsidiaries	4,577,128		4,123,426
Other assets	5,834		7,537
Total Assets	$	4,886,468	$	4,661,076

Liabilities and stockholders' equity
Liabilities
Due to affiliates	$	752	$	940
Credit facility borrowings (at carrying value, less unamortized deferred costs of $4,136 in 2022 and $5,177 in 2021)	420,864		419,823
Other accrued liabilities	2,543		4,199
Total liabilities	424,159		424,962
Commitments and contingencies
Stockholders' Equity
Common shares	1,615		1,641
Additional paid-in capital	1,350,377		1,428,952
Accumulated other comprehensive income	(382,790)		50,707
Retained earnings	3,493,107		2,754,814
Total stockholders' equity	4,462,309		4,236,114
Total liabilities and stockholders' equity	$	4,886,468	$	4,661,076

See accompanying supplementary notes to Parent Company condensed

financial information and the consolidated financial statements and notes thereto.

Schedule II—Condensed Financial Information of Registrant

Condensed Statements of Comprehensive Income

Parent Company Only


	Year Ended December 31,
(In thousands)	2022		2021		2020
Revenues:
Net investment income	$	6,433	$	5,378	$	1,181
Realized investment losses, net	(12,170)		(108)		(10)
Administrative service fees from subsidiaries	642		682		872
Total revenues	(5,095)		5,952		2,043
Expenses:
Administrative service fees to subsidiaries	3,908		4,338		3,728
Other operating expenses	7,614		7,193		5,929
Interest expense	15,609		5,889		6,446
Total expenses	27,131		17,420		16,103
Loss before income taxes and equity in undistributed net income in subsidiaries	(32,226)		(11,468)		(14,060)
Loss before equity in undistributed net income of subsidiaries	(32,226)		(11,468)		(14,060)
Equity in undistributed net income of subsidiaries	863,579		693,251		427,101
Net income	$	831,353	$	681,783	$	413,041
Other comprehensive income (loss):
Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $(75,013) in 2022, $(15,477) in 2021 and $16,836 in 2020	(433,497)		(87,567)		82,087
Total other comprehensive (loss) income	(433,497)		(87,567)		82,087
Comprehensive income	$	397,856	$	594,216	$	495,128

See accompanying supplementary notes to Parent Company condensed

financial information and the consolidated financial statements and notes thereto.

Schedule II—Condensed Financial Information of Registrant

Condensed Statements of Cash Flows

Parent Company Only


	Year Ended December 31,
(In thousands)	2022		2021		2020
Operating Activities
Net income	$	831,353	$	681,783	$	413,041
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in net income of subsidiaries	(863,579)		(693,251)		(427,101)
Loss on the sale of investments, net	12,170		108		10
Stock-based compensation expense	927		917		935
Amortization of premium on investment securities	800		1,438		435
Changes in assets and liabilities:
Other assets	1,775		312		(319)
Other accrued liabilities	19,232		21,447		18,208
Net cash provided by operating activities	2,678		12,754		5,209
Investing Activities
Net change in short-term investments	94,988		189,804		(255,884)
Investments in subsidiaries	—		—		—
Purchase of investments available for sale	(157,468)		(273,747)		(205,668)
Proceeds from maturities and paydowns of investments available for sale	81,351		18,384		838
Proceeds from sales of investments available for sale	164,733		101,618		3,386
Net cash provided by (used in) investing activities	183,604		36,059		(457,328)
Financing Activities
Issuance of common shares, net of costs	—		—		439,962
Credit facility borrowings	—		200,000		200,000
Credit facility repayments	—		—		(100,000)
Treasury stock acquired	(97,914)		(163,855)		(6,354)
Payment of issuance costs for credit facility	(154)		(5,849)		(5,236)

Dividends paid	(92,128)		(77,724)		(69,410)
Net cash (used in) provided by financing activities	(190,196)		(47,428)		458,962
Net increase (decrease) in cash	(3,914)		1,385		6,843
Cash at beginning of year	10,073		8,688		1,845
Cash at end of year	$	6,159	$	10,073	$	8,688

Supplemental Disclosure of Cash Flow Information
Interest payments	$	(13,595)	$	(4,792)	$	(5,714)

Noncash Transactions
Repayment of borrowings with term loan proceeds	$	—	$	(225,000)	$	(225,000)

See accompanying supplementary notes to Parent Company condensed

financial information and the consolidated financial statements and notes thereto.

Schedule II—Condensed Financial Information of Registrant

Parent Company Only

Supplementary Notes

Note A

The accompanying Parent Company financial statements should be read in conjunction with the consolidated financial statements and notes to consolidated financial statements. These financial statements have been prepared on the same basis and using the same accounting policies as described in the consolidated financial statements included herein, except that the Parent Company uses the equity method of accounting for its majority-owned subsidiaries.

Note B

Under the insurance laws of the Commonwealth of Pennsylvania, the insurance subsidiaries may pay dividends during any 12-month period in an amount equal to the greater of (i) 10% of the preceding year-end statutory policyholders' surplus or (ii) the preceding year's statutory net income. The Pennsylvania statute also requires that dividends and other distributions be paid out of positive unassigned surplus without prior approval. As of December 31, 2022, Essent Guaranty had unassigned surplus of approximately $314.7 million. Essent PA had unassigned surplus of approximately $13.6 million as of December 31, 2022. As of January 1, 2023, Essent Guaranty has dividend capacity of $314.7 million and Essent PA has dividend capacity of $5.3 million.

During the years ended December 31, 2022 and 2021, the Parent Company did not receive any dividends from its subsidiaries. During the year ended December 31, 2020, the Parent Company received dividends from Essent Re totaling $55.0 million.