XML 31 R22.htm IDEA: XBRL DOCUMENT
v3.23.3

Acquisitions | 9 Months Ended
--- | ---
Sep. 30, 2023
Business Combination and Asset Acquisition [Abstract] |
Acquisitions | Acquisitions Effective July 1, 2023, Essent Holdings acquired all of the issued and outstanding shares of capital stock of Agents National Title Holding Company (“Agents National Title”) and the issued and outstanding membership interests of Boston National Holdings LLC (“Boston National Title”) for $92.6 million in cash in a single settlement with the seller. The purchase price is subject to further customary post-closing adjustments as described in a securities purchase agreement among the parties to the transaction. The acquisition provides complementary products and services to our mortgage insurance business, adding a team of seasoned title professionals to Essent and providing a platform to leverage our capital, lender network and operational expertise in a well-established, adjacent real estate sector. The acquired businesses contributed revenues of $23.5 million, principally comprised of $20.6 million of net premiums earned and $2.0 million of settlement services revenues, which are included in other income, and pre-tax net losses of $4.0 million to our results for the three and nine months ended September 30, 2023. The following unaudited pro forma summary presents consolidated information for Essent as if the business combination had occurred on January 1, 2022.
|  | Pro Forma
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
(In thousands) |  | 2023 |  | 2022 |  | 2023 |  | 2022
Revenues |  | $ | 296,108 |  |  | $ | 286,512 |  |  | $ | 856,595 |  |  | $ | 880,321 |
Earnings |  | 178,139 |  |  | 172,799 |  |  | 514,823 |  |  | 675,684 |
We did not have any material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings. These pro forma amounts have been calculated after applying our accounting policies and adjusting the results of Agents National Title and Boston National Title to reflect the additional amortization that would have been charged to earnings assuming the fair value adjustments for the intangible assets acquired had been applied from January 1, 2022, including consequential income tax effects. We incurred $0.2 million and $4.4 million of acquisition-related costs for the three and nine months ended September 30, 2023, respectively, as well as $3 million of acquisition-related costs during the fourth quarter of 2022. These expenses are included in other underwriting and operating expenses on our condensed consolidated income statement and are reflected in pro forma earnings for the three and nine months ended September 30, 2022 in the table above. The following table summarizes the consideration transferred to acquire Agents National Title and Boston National Title and the amounts of identified assets acquired and liabilities assumed at the acquisition date:
Consideration Paid: |  |
Cash |  | $ | 92,625 |
Assets Acquired: |  |
Cash and cash equivalents |  | 5,864 |
Short-term investments |  | 21,108 |
Fixed maturities available for sale |  | 9,668 |
Identifiable intangible assets |  | 26,300 |
Other assets |  | 16,366 |
Liabilities Assumed: |  |
Reserve for losses |  | 14,613 |
Other liabilities |  | 10,399 |
Total Identifiable Net Assets |  | $ | 54,294 |
Goodwill |  | $ | 38,331 |
The intangible assets acquired relate to agency relationships and customer lists, valued at $20.6 million and $5.7 million, respectively. The goodwill is primarily attributable to the workforce and state regulatory licenses associated with the acquired businesses, and $11.6 million of the goodwill is tax deductible. The carrying amount of goodwill was unchanged from July 1, 2023 through September 30, 2023. The fair value of the intangible assets and goodwill is provisional subject to post-closing adjustments and completion of the final valuation.

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationAndAssetAcquisitionAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479907/805-20-50-5 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//805/tableOfContent + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration