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Amerisafe Inc (AMSF) SEC Filing 8-K Material Event for the period ending Thursday, April 29, 2021

Amerisafe Inc

CIK: 1018979 Ticker: AMSF

Exhibit 99.1

 

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Neal A. Fuller, EVP & CFO

AMERISAFE

337.463.9052

 

 

 

 

AMERISAFE ANNOUNCES 2021 FIRST QUARTER RESULTS

Reports Net Combined Ratio of 84.6%

DeRidder, LA – April 29, 2021 - AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of workers’ compensation insurance focused on high hazard industries, today announced results for the first quarter ended March 31, 2021.

 

     Three Months Ended
March 31,
       
     2021     2020     % Change  
     (in thousands, except per
share data)
       

Net premiums earned

   $ 70,746     $ 78,990       -10.4

Net investment income

     6,583       7,749       -15.0

Net realized gains on investments (pretax)

     319       992       -67.8

Net unrealized gains (losses) on equity securities (pre-tax)

     5,511       (8,763     NM  

Net income

     19,312       10,800       78.8

Diluted earnings per share

   $ 0.99     $ 0.56       76.8

Operating net income

     14,706       16,939       -13.2

Operating earnings per share

   $ 0.76     $ 0.88       -13.6

Book value per share

   $ 23.16     $ 22.64       2.3

Net combined ratio

     84.6     83.5  

Return on average equity

     17.4     10.0  

G. Janelle Frost, President and Chief Executive Officer, stated, “We are optimistic that vaccination rollout will strengthen the economy and add some normalcy back to daily living. However, optimism alone will not change the trajectory of the workers’ compensation market. The soft market continued in the quarter. Competition remained robust, while loss costs continued to decline. We are pleased to report an 84.6% combined ratio in the quarter through disciplined underwriting, competitive pricing, slight policy growth, and favorable case loss development from prior accident years.”


INSURANCE RESULTS

 

     Three Months Ended
March 31,
   

 

 
     2021     2020     % Change  
     (in thousands)        

Gross premiums written

   $ 81,514     $ 87,071       -6.4
  

 

 

   

 

 

   

Net premiums earned

     70,746       78,990       -10.4

Loss and loss adjustment expenses incurred

     39,517       43,647       -9.5

Underwriting and certain other operating costs, commissions, salaries and benefits

     18,967       21,284       -10.9

Policyholder dividends

     1,350       1,023       32.0
  

 

 

   

 

 

   

Underwriting profit (pre-tax)

   $ 10,912     $ 13,036       -16.3
  

 

 

   

 

 

   

Insurance Ratios:

      

Current accident year loss ratio

     72.0     72.5  

Prior accident year loss ratio

     -16.1     -17.2  
  

 

 

   

 

 

   

Net loss ratio

     55.9     55.3  

Net underwriting expense ratio

     26.8     26.9  

Net dividend ratio

     1.9     1.3  
  

 

 

   

 

 

   

Net combined ratio

     84.6     83.5  
  

 

 

   

 

 

   

 

   

Voluntary premiums written in the quarter were lower by $2.4 million, or 3.0%, compared with the first quarter of 2020.

 

   

Payroll audits and related premium adjustments were lower by $3.3 million than the first quarter of 2020. While audits completed this quarter resulted in positive audit premiums, amounts were lower than the first quarter of 2020. This quarter’s audits included periods of activity impacted by COVID-19. Audits and other adjustments increased premiums written by $0.3 million in the first quarter of 2021, compared to an increase in premiums written of $3.6 million in the first quarter of 2020.

 

   

The current accident year loss ratio for the first quarter was 72.0%, one half point lower than the 72.5% ratio for accident year 2020. During the quarter, the Company experienced favorable net loss development for prior accident years, which reduced loss and loss adjustment expenses by $11.4 million, primarily from accident years 2015 through 2018.

 

   

For the quarter ended March 31, 2021, the underwriting expense ratio was 26.8% compared with 26.9% in the same quarter in 2020. The decrease was primarily due to a decrease in premium and loss-based assessments compared with the first quarter of 2020.

 

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The effective tax rate for the quarter ended March 31, 2021 was 18.3%, largely unchanged from 18.4% for the first quarter of 2020.

INVESTMENT RESULTS

 

     Three Months Ended
March 31,
       
     2021     2020     % Change  
     (in thousands)        

Net investment income

   $ 6,583     $ 7,749       -15.0

Net realized gains on investments (pre-tax)

     319       992       -67.8

Net unrealized gains (losses) on equity securities (pre-tax)

     5,511       (8,763     NM  

Pre-tax investment yield

     2.3     2.6  

Tax-equivalent yield (1)

     2.8     3.0  

 

(1)

The tax equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate.

 

   

Net investment income for the quarter ended March 31, 2021, decreased 15.0% to $6.6 million from $7.7 million in the first quarter of 2020, due to lower investment yields on fixed-income securities.

 

   

Net realized gains on securities sold were $0.3 million for the first quarter of 2021, compared to $1.0 million in the first quarter of 2020.

 

   

As of March 31, 2021, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.

CAPITAL MANAGEMENT

During the first quarter of 2021, the Company paid a regular quarterly cash dividend of $0.29 per share on March 26, 2021 which represented an 7.4% increase in the quarterly dividend compared with 2020. On April 27, 2021 the Company’s Board of Directors declared a quarterly cash dividend of $0.29 per share, payable on June 25, 2021 to shareholders of record as of June 18, 2021.

Book value per share at March 31, 2021 was $23.16, an increase of 2.0% from $22.70 at December 31, 2020.

 

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SUPPLEMENTAL INFORMATION

 

     Three Months Ended
March 31,
 
     2021     2020  
     (in thousands, except share and
per share data)
 

Net income

   $ 19,312     $ 10,800  

Less:

    

Net realized gains on investments

     319       992  

Net unrealized gains (losses) on equity securities

     5,511       (8,763

Tax effect (1)

     (1,224     1,632  
  

 

 

   

 

 

 

Operating net income (2)

   $ 14,706     $ 16,939  
  

 

 

   

 

 

 

Average shareholders’ equity (3)

   $ 443,221     $ 433,586  

Less:

    

Average accumulated other comprehensive income

     18,495       12,953  
  

 

 

   

 

 

 

Average adjusted shareholders’ equity (2)

   $ 424,726     $ 420,633  
  

 

 

   

 

 

 

Diluted weighted average common shares

     19,408,804       19,352,245  

Return on average equity (4)

     17.4     10.0

Operating return on average adjusted equity (2)

     13.9     16.1

Diluted earnings per share

   $ 0.99     $ 0.56  

Operating earnings per share (2)

   $ 0.76     $ 0.88  

 

(1)

The tax effect of net realized losses on investments and net unrealized gains (losses) on equity securities is calculated with an effective tax rate of 21%.

(2)

Operating net income, operating return on average adjusted equity and operating earnings per share are non-GAAP financial measures. Management believes that investors’ understanding of core operating performance is enhanced by AMERISAFE’s disclosure of these financial measures.

(3)

Average shareholders’ equity is calculated by taking the average of the beginning and ending shareholders’ equity.

(4)

Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity.

 

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CONFERENCE CALL INFORMATION

AMERISAFE has scheduled a conference call for April 30, 2021, at 10:30 a.m. Eastern Time to discuss the results for the quarter and comment on future periods. To participate in the conference call, dial 323-794-2093 (Conference Code 9686208) at least ten minutes before the call begins.

Investors, analysts and the general public will also have the opportunity to listen to the conference call over the Internet by visiting http://www.amerisafe.com. To listen to the live call on the web, please visit the website at least fifteen minutes before the call begins to register, download and install any necessary audio software. For those who cannot listen to the live webcast, an archive will be available shortly after the call at http://www.amerisafe.com.

ABOUT AMERISAFE

AMERISAFE, Inc. is a specialty provider of workers’ compensation insurance focused on small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture. AMERISAFE actively markets workers’ compensation insurance in 27 states.

 

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FORWARD LOOKING STATEMENTS

Statements made in this press release that are not historical facts, including statements accompanied by words such as “will,” “believe,” “anticipate,” “expect,” “estimate,” or similar words are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding AMERISAFE’s plans and performance. These statements are based on management’s estimates, assumptions and projections as of the date of this release and are not guarantees of future performance and include statements regarding management’s views and expectations of the workers’ compensation market, the Company’s growth opportunities, underwriting margins and actions by competitors. Actual results may differ materially from the results expressed or implied in these statements if the underlying assumptions prove to be incorrect or as the results of risks, uncertainties and other factors. Other factors that may affect our results are set forth in the Company’s filings with the Securities and Exchange Commission, including AMERISAFE’s Annual Report on Form 10-K for the year ended December 31, 2020. AMERISAFE cautions you not to place undue reliance on the forward-looking statements contained in this release. AMERISAFE does not undertake any obligation to publicly update or revise any forward-looking statements to reflect future events, information or circumstances that arise after the date of this release.

- Tables to Follow -

 

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AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands)

 

     Three Months Ended
March 31,
 
     2021     2020  
     (unaudited)  

Revenues:

    

Gross premiums written

   $ 81,514     $ 87,071  

Ceded premiums written

     (2,517     (2,783
  

 

 

   

 

 

 

Net premiums written

   $ 78,997     $ 84,288  
  

 

 

   

 

 

 

Net premiums earned

   $ 70,746     $ 78,990  

Net investment income

     6,583       7,749  

Net realized gains on investments

     319       992  

Net unrealized gains (losses) on equity securities

     5,511       (8,763

Fee and other income

     192       201  
  

 

 

   

 

 

 

Total revenues

     83,351       79,169  
  

 

 

   

 

 

 

Expenses:

    

Loss and loss adjustment expenses incurred

     39,517       43,647  

Underwriting and other operating costs

     18,967       21,284  

Policyholder dividends

     1,350       1,023  

Provision for investment related credit loss benefit

     (108     (26
  

 

 

   

 

 

 

Total expenses

     59,726       65,928  
  

 

 

   

 

 

 

Income before taxes

     23,625       13,241  

Income tax expense

     4,313       2,441  
  

 

 

   

 

 

 

Net income

   $ 19,312     $ 10,800  
  

 

 

   

 

 

 

 

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AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Statements of Income (cont.)

(in thousands, except per share amounts)

 

     Three Months Ended
March 31,
 
     2021      2020  
     (unaudited)  

Basic EPS:

     

Net income

   $ 19,312      $ 10,800  
  

 

 

    

 

 

 

Basic weighted average common shares

     19,311,710        19,266,016  

Basic earnings per share

   $ 1.00      $ 0.56  

Diluted EPS:

     

Net income

   $ 19,312      $ 10,800  
  

 

 

    

 

 

 

Diluted weighted average common shares:

     

Weighted average common shares

     19,311,710        19,266,016  

Restricted stock and stock options

     97,094        86,229  
  

 

 

    

 

 

 

Diluted weighted average common shares

     19,408,804        19,352,245  

Diluted earnings per share

   $ 0.99      $ 0.56  

 

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AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

 

     March 31,
2021
     December 31,
2020
 
     (unaudited)         

Assets

     

Investments

   $ 1,125,134      $ 1,088,744  

Cash and cash equivalents

     33,074        61,757  

Amounts recoverable from reinsurers

     110,717        105,803  

Premiums receivable, net

     165,170        156,760  

Deferred income taxes

     14,506        13,665  

Deferred policy acquisition costs

     18,684        17,810  

Other assets

     27,294        26,316  
  

 

 

    

 

 

 
   $ 1,494,579      $ 1,470,855  
  

 

 

    

 

 

 

Liabilities and Shareholders’ Equity

     

Liabilities:

     

Reserves for loss and loss adjustment expenses

   $ 759,758      $ 760,561  

Unearned premiums

     137,511        129,260  

Insurance-related assessments

     18,441        17,995  

Other liabilities

     131,243        124,223  

Shareholders’ equity

     447,626        438,816  
  

 

 

    

 

 

 

Total liabilities and shareholders’ equity

   $ 1,494,579      $ 1,470,855  
  

 

 

    

 

 

 

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): April 29, 2021

 

 

AMERISAFE, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

 

Texas   001-12251   75-2069407
(State or Other Jurisdiction
of Incorporation)
  (Commission
File Number)
  (IRS Employer
Identification No.)

2301 Highway 190 West

DeRidder, Louisiana 70634

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (337) 463-9052

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered or to be registered pursuant to Section 12(b) of the Act.

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.01 per share   AMSF   Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On April 29, 2021, AMERISAFE, Inc. (the “Company”) issued a press release announcing its financial results for the first quarter ended March 31, 2021. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No.

  

Description

99.1    Press Release of AMERISAFE, Inc. dated April 29, 2021 (Financial Results)
104    Cover Page Interactive Data File (embedded within the Inline XBRL document)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AMERISAFE, INC.
    By:  

/s/ Neal A. Fuller

  Neal A. Fuller, Executive Vice President and Chief Financial Officer

Date: April 29, 2021

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Ticker: AMSF
CIK: 1018979
Form Type: 8-K Corporate News
Accession Number: 0001193125-21-140627
Submitted to the SEC: Thu Apr 29 2021 4:40:54 PM EST
Accepted by the SEC: Thu Apr 29 2021
Period: Thursday, April 29, 2021
Industry: Fire Marine And Casualty Insurance
Events:
  1. Earnings Release
  2. Financial Exhibit

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