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Acquisitions | 3 Months Ended
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Mar. 31, 2024
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 $17.9 million, principally comprised of $15.3 million of net premiums earned and $1.4 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 months ended March 31, 2024. We incurred $3.4 million of acquisition-related costs for the three months ended March 31, 2023. These expenses are included in other underwriting and operating expenses on our condensed consolidated income statement. The acquisition of Agents National Title and Boston National Title was accounted for as a business combination using the acquisition method of accounting and, accordingly, the assets acquired, liabilities assumed and consideration transferred were recorded at their estimated fair values as of the acquisition date. The excess of consideration transferred over the fair value of net assets acquired was recorded as goodwill. The Company allocated the goodwill to its Title operating segment. 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, including purchase accounting adjustments that have been recorded by Essent during the measurement period:
|  | Originally Reported |  | Measurement Period Adjustments |  | As Reported
Consideration Paid: |  |  |  |  |  |
Cash |  | $ | 92,625 |  |  | $ | — |  |  | $ | 92,625 |
Assets Acquired: |  |  |  |  |  |
Cash and cash equivalents |  | 5,864 |  |  | — |  |  | 5,864 |
Short-term investments |  | 21,108 |  |  | — |  |  | 21,108 |
Fixed maturities available for sale |  | 9,668 |  |  | — |  |  | 9,668 |
Identifiable intangible assets |  | 26,300 |  |  | (2,800) |  |  | 23,500 |
Other assets |  | 16,366 |  |  | (2,677) |  |  | 13,689 |
Liabilities Assumed: |  |  |  |  |  |
Reserve for losses |  | 14,613 |  |  | (464) |  |  | 14,149 |
Other liabilities |  | 10,399 |  |  | 6,512 |  |  | 16,911 |
Total Identifiable Net Assets |  | 54,294 |  |  | (11,525) |  |  | 42,769 |
Goodwill |  | $ | 38,331 |  |  | $ | 11,525 |  |  | $ | 49,856 |
Adjustments to Goodwill were primarily related to the fair value of claims reserve liabilities, agency relationship intangible assets and other assets. While the valuation of acquired assets and liabilities is substantially completed, fair value estimates related to the assets and liabilities from Agents National Title and Boston National Title are subject to adjustment for up to one year after the closing date of the acquisition as additional information becomes available. Valuations subject to adjustment include, but are not limited to, agency relationship and customer list intangibles, reserves, and deferred income taxes as management continues to review the estimated fair values and evaluate the assumed tax position. When the valuation is final, any changes to the preliminary valuation of acquired assets and liabilities could result in adjustments to identified intangibles and goodwill. The fair values of assets acquired and liabilities assumed is expected to be finalized during the remeasurement period, which ends one year from the closing date, or July 1, 2024. In addition, the consideration paid still remains subject to potential purchase price adjustments between Essent and the seller. The amount of goodwill recorded reflects the increased market share and related synergies that are expected to result from the acquisition, and represents the excess purchase price over the estimated fair value of the net assets acquired from Agents National Title and Boston National Title. As of March 31, 2024, intangible assets were $22.4 million, net of $1.1 million of accumulated amortization.

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- 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
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