Schedule II - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2023

Condensed Financial Information Disclosure [Abstract]

Schedule II - Condensed Financial Information of Registrant

Schedule II—Condensed Financial Information of Registrant

Condensed Balance Sheets

Parent Company Only


	December 31,
(In thousands)	2023		2022
Assets
Investments
Fixed maturities available for sale, at fair value (amortized cost: 2023 — $94,221; 2022 — $249,284)	$	86,558	$	226,718
Short-term investments available for sale, at fair value (amortized cost: 2023 — $81,993; 2022 — $67,783)	81,992		67,622
Total investments available for sale	168,550		294,340
Other invested assets	2,166		2,166
Cash	4,073		6,160
Due from affiliates	1,487		840
Investment in consolidated subsidiaries	5,346,888		4,577,128
Other assets	4,283		5,834
Total Assets	$	5,527,447	$	4,886,468

Liabilities and stockholders' equity
Liabilities
Due to affiliates	$	415	$	752
Credit facility borrowings (at carrying value, less unamortized deferred costs of $3,080 in 2023 and $4,136 in 2022)	421,920		420,864
Other accrued liabilities	2,562		2,543
Total liabilities	424,897		424,159
Commitments and contingencies
Stockholders' Equity
Common shares	1,599		1,615
Additional paid-in capital	1,299,869		1,350,377
Accumulated other comprehensive income	(280,496)		(382,790)
Retained earnings	4,081,578		3,493,107
Total stockholders' equity	5,102,550		4,462,309
Total liabilities and stockholders' equity	$	5,527,447	$	4,886,468

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)	2023		2022		2021
Revenues:
Net investment income	$	5,663	$	6,433	$	5,378
Realized investment losses, net	(11,722)		(12,170)		(108)
Administrative service fees from subsidiaries	710		642		682
Total revenues	(5,349)		(5,095)		5,952
Expenses:
Administrative service fees to subsidiaries	3,738		3,908		4,338
Other operating expenses	7,010		7,614		7,193
Interest expense	30,137		15,609		5,889
Total expenses	40,885		27,131		17,420
Loss before income taxes and equity in undistributed net income in subsidiaries	(46,234)		(32,226)		(11,468)
Income tax expense (benefit)	(181)		—		—
Loss before equity in undistributed net income of subsidiaries	(46,053)		(32,226)		(11,468)
Equity in undistributed net income of subsidiaries	742,439		863,579		693,251
Net income	$	696,386	$	831,353	$	681,783
Other comprehensive income (loss):
Change in unrealized (depreciation) appreciation of investments, net of tax (benefit) expense of $17,944 in 2023, $(75,013) in 2022 and $(15,477) in 2021	102,294		(433,497)		(87,567)
Total other comprehensive income (loss)	102,294		(433,497)		(87,567)
Comprehensive income	$	798,680	$	397,856	$	594,216

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)	2023		2022		2021
Operating Activities
Net income	$	696,386	$	831,353	$	681,783
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Equity in net income of subsidiaries	(742,439)		(863,579)		(693,251)
Loss on the sale of investments, net	11,722		12,170		108
Dividends from subsidiaries	60,000
Stock-based compensation expense	1,000		927		917
Amortization of premium on investment securities	324		800		1,438
Deferred income taxes	(181)		—		—
Changes in assets and liabilities:
Other assets	816		1,775		312
Other accrued liabilities	18,365		19,232		21,447
Net cash (used in) provided by operating activities	45,993		2,678		12,754
Investing Activities
Net change in short-term investments	(14,370)		94,988		189,804
Purchase of investments available for sale	(9,860)		(157,468)		(273,747)
Proceeds from maturities and paydowns of investments available for sale	24,787		81,351		18,384
Proceeds from sales of investments available for sale	128,249		164,733		101,618
Net cash provided by investing activities	128,806		183,604		36,059
Financing Activities

Credit facility borrowings	—		—		200,000

Treasury stock acquired	(70,670)		(97,914)		(163,855)
Payment of issuance costs for credit facility	—		(154)		(5,849)

Dividends paid	(106,215)		(92,128)		(77,724)
Net cash used in financing activities	(176,885)		(190,196)		(47,428)
Net (decrease) increase in cash	(2,086)		(3,914)		1,385
Cash at beginning of year	6,159		10,073		8,688
Cash at end of year	$	4,073	$	6,159	$	10,073

Supplemental Disclosure of Cash Flow Information
Interest payments	$	(28,574)	$	(13,595)	$	(4,792)

Noncash Transactions
Repayment of borrowings with term loan proceeds	$	—	$	—	$	(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, 2023, Essent Guaranty had unassigned surplus of approximately $298.8 million. Essent PA had unassigned surplus of approximately $15.0 million as of December 31, 2023. As of January 1, 2024, Essent Guaranty has dividend capacity of $298.8 million and Essent PA has dividend capacity of $5.4 million.

During the year ended December 31, 2023, the Parent Company received dividends from Essent Re totaling $60.0 million. During the years ended December 31, 2022 and 2021, the Parent Company did not receive any dividends from its subsidiaries.