Essent Group Ltd. (NYSE:ESNT) Q4 2018 Earnings Conference Call Transcript
Feb 08, 2019 • 10:00 am ET
Good morning. My name is Lindsey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Essent Group Limited Fourth Quarter 2018 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator instructions)
Mr.Chris Curran, Senior Vice President of Investor Relations, you may begin your conference.
Christopher G. Curran
Thank you, Lindsey. Good morning, everyone, and welcome to our call. Joining me today are Mark Casale, Chairman and CEO; and Larry McAlee, Chief Financial Officer. Our press release, which contains Essent's financial results for the fourth quarter and for full-year 2018, was issued earlier today and is available on our website at essentgroup.com in the Investors section. Our press release also includes non-GAAP financial measures that may be discussed during today's call. The complete description of these measures and their reconciliation to GAAP may be found in Exhibit L of our press release.
Prior to getting started, I would like to remind participants that today's discussions are being recorded and will include the use of forward-looking statements. These statements are based on current expectations, estimates, projections and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially. For a discussion of these risks and uncertainties, please review the cautionary language regarding forward-looking statements in today's press release, the risk factors included in our Form 10-K filed with the SEC on February 20, 2018, and any other reports and registration statements filed with the SEC, which are also available on our website.
Now, let me turn the call over to Mark.
Thanks, Chris. Good morning, everyone, and thank you for joining us. Earlier today, we released our fourth quarter and full-year results, and I'm pleased to report that 2018 was a very successful year for the Essent franchise. During the year, we continue to grow our high credit quality and profitable mortgage insurance portfolio, while also increasing net income and generating strong returns. In addition, we began to take steps to strengthen Essent's business model by increasing our sophistication around risk origination and risk distribution. Key highlights pertaining to this include the successful pilot of our EssentEDGE risk based pricing engine and executing two reinsurance transactions on our 2017 book of business.
Now, let me touch on our results. Our insurance in force grew 25% to $138 billion at year-end, compared to $110 billion at the end of 2017. For the quarter, we earned $129 million or $1.31 per diluted share. On a full-year basis, we earned $467 million, or $4.77 per diluted share. Our results for both periods reflect a $9.9 million, or $0.08 per diluted share reduction in our loan loss provision. This reduction relates to updated expectations on defaults associated with Hurricanes Harvey and Irma that hit the US in 2017. Larry will discuss reserves in more detail in a few minutes.
Our balance sheet remains strong, ending the year