Declares an Extraordinary Dividend of $3.25 per share

DERIDDER, La., Oct. 26, 2016 (GLOBE NEWSWIRE) -- AMERISAFE, Inc. (Nasdaq:AMSF), a specialty provider of hazardous workers’ compensation insurance, today announced results for the third quarter ended September 30, 2016.

	Three Months Ended										Nine Months Ended
	September 30,										September 30,
		2016			2015		% Change					2016			2015		% Change
	(in thousands, except per share data)										(in thousands, except per share data)
Net premiums earned	$	89,918		$	90,504			-0.6	%		$	276,607		$	280,860			-1.5	%
Net investment income		8,006			6,923			15.6	%			20,251			20,646			-1.9	%
Net realized gains (losses) on
investments  (pre-tax)		181			40			NM				974			(2,518	)		NM
Net income		17,896			17,940			-0.2	%			58,792			47,389			24.1	%
Diluted earnings per share	$	0.93		$	0.94			-1.1	%		$	3.06		$	2.48			23.4	%
Operating net income		17,778			17,914			-0.8	%			58,159			49,026			18.6	%
Operating earnings per share	$	0.93		$	0.94			-1.1	%		$	3.03		$	2.57			17.9	%
Book value per share	$	26.51		$	25.69			3.2	%		$	26.51		$	25.69			3.2	%
Net combined ratio		80.3	%		79.1	%						77.0	%		82.6	%
Return on average equity		14.2	%		14.9	%						16.3	%		13.5	%

G. Janelle Frost, President and Chief Executive Officer noted, “AMERISAFE continued to report favorable underwriting results this quarter, a testament to our discipline.  This long- standing focus has positioned the Company appropriately as the workers’ compensation market faces declining loss costs and industry wide reserve deficiencies.”

Insurance Results

	Three Months Ended											Nine Months Ended
	September 30,											September 30,
		2016				2015			% Change				2016				2015			% Change
	(in thousands)											(in thousands)
Gross premiums written	$	88,837			$	91,061			-2.4	%		$	292,443			$	297,872			-1.8	%
Net premiums earned		89,918				90,504			-0.6	%			276,607				280,860			-1.5	%
Loss and loss adjustment expenses incurred		50,526				48,942			3.2	%			146,413				166,252			-11.9	%
Underwriting and certain other operating costs,
commissions, salaries and benefits		20,764				22,267			-6.7	%			63,459				64,719			-1.9	%
Policyholder dividends		889				371			NM				3,195				1,024			NM
Underwriting profit (pre-tax)	$	17,739			$	18,924			-6.3	%		$	63,540			$	48,865			30.0	%
Insurance Ratios:
Current accident year loss ratio		67.9	%			69.8	%						67.9	%			69.8	%
Prior accident year loss ratio		-11.7	%			-15.7	%						-15.0	%			-10.6	%
Net loss ratio		56.2	%			54.1	%						52.9	%			59.2	%
Net underwriting expense ratio		23.1	%			24.6	%						22.9	%			23.0	%
Net dividend ratio		1.0	%			0.4	%						1.2	%			0.4	%
Net combined ratio		80.3	%			79.1	%						77.0	%			82.6	%

• Gross premiums written in the quarter decreased by $2.2 million, or 2.4%.  Payroll audits and related premium adjustments decreased premiums written by $1.2 million in the third quarter of 2016, compared with no impact in the third quarter of 2015.

• Voluntary premium for policies written during the quarter ended September 30, 2016 decreased $0.8 million, or 0.9%, compared with the third quarter of 2015.

• Net premiums earned during the quarter ended September 30, 2016 decreased 0.6% compared with the third quarter of 2015.

• The current accident year loss ratio for the third quarter was 67.9%, a decrease of 1.9 percentage points from 69.8% in the third quarter of 2015.  During the quarter, the Company experienced favorable loss development for prior accident years which reduced loss and loss adjustment expenses by $10.5 million, mostly attributable to accident years 2014, 2013, and 2008.  These results reflect improved trends for both closing claims and claims severity and were driven by favorable case reserve development on claims that were closed during the third quarter.
  
  
• For the quarter ended September 30, 2016, the underwriting expense ratio was 23.1% compared to 24.6% in the same quarter in 2015.  The decrease in the quarter was primarily due to decreases in assessments and commissions compared with the third quarter of last year. 

• The effective tax rate for the quarter ended September 30, 2016 was 31.2% compared with 30.7% for the third quarter of 2015.  The increase in the tax rate resulted from a higher proportion of underwriting income to tax-exempt income relative to the third quarter of 2015.

Investment Results

	Three Months Ended										Nine Months Ended
	September 30,										September 30,
		2016			2015		% Change					2016			2015		% Change
	(in thousands)										(in thousands)
Net investment income	$	8,006		$	6,923			15.6	%		$	20,251		$	20,646			-1.9	%
Net realized gains (losses) on
investments (pre-tax)		181			40			NM				974			(2,518	)		NM
Pre-tax investment yield		2.7	%		2.4	%						2.4	%		2.4	%
Tax-equivalent yield (1)		3.2	%		3.3	%						3.2	%		3.3	%
________________________________

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

• Net investment income for the quarter ending September 30, 2016, increased 15.6% to $8.0 million from $6.9 million in the third quarter of 2015, largely due to the increase in value of an investment in a limited partnership hedge fund where the change in value is recorded in investment income each quarter.
  
  
• As of September 30, 2016, the carrying and fair value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.  

Capital Management and Extraordinary Dividend

The company paid a regular quarterly cash dividend of $0.18 per share on September 23, 2016.  On October 25, 2016 the Company’s Board of Directors declared a quarterly cash dividend of $0.18 per share, payable on December 29, 2016 to shareholders of record as of December 15, 2016.

In addition, on October 25, 2016 the Company’s Board of Directors declared an extraordinary dividend of $3.25 per share, payable on December 29, 2016 to shareholders of record as of December 15, 2016.

During the quarter, no shares were repurchased under the Company’s share repurchase plan. 

Supplemental Information

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2016			2015			2016			2015
	(in thousands, except share and per share data)
Net income	$	17,896		$	17,940		$	58,792		$	47,389
Less: Net realized gains (losses) on investments		181			40			974			(2,518	)
Tax effect (1)		(63	)		(14	)		(341	)		881
Operating net income (2)	$	17,778		$	17,914		$	58,159		$	49,026
Average shareholders’ equity (3)	$	502,845		$	481,687		$	481,862		$	468,772
Less: Average accumulated other comprehensive income		7,453			2,706			4,592			3,085
Average adjusted shareholders’ equity	$	495,392		$	478,981		$	477,270		$	465,687
Diluted weighted average common shares		19,190,191			19,096,259			19,186,398			19,088,140
Return on average equity (4)		14.2	%		14.9	%		16.3	%		13.5	%
Operating return on average adjusted equity (2)		14.4	%		15.0	%		16.2	%		14.0	%
Diluted earnings per share	$	0.93		$	0.94		$	3.06		$	2.48
Operating earnings per share (2)	$	0.93		$	0.94		$	3.03		$	2.57
________________________________

(1) The tax effect of net realized capital gains is calculated assuming an annual tax rate of 35%.

(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.

Conference Call Information

AMERISAFE has scheduled a conference call for Thursday October 27, 2016, at 10:30 a.m. Eastern Time to discuss the results for the quarter, as well as the outlook for future periods.  To participate in the conference call dial 877-225-7695 (Domestic) or 720-545-0027 (International) at least ten minutes before the call begins and ask for the AMERISAFE conference call.  A replay of the call will be available approximately two hours after the live broadcast ends and will be accessible through November 3, 2016.  To access the replay, dial 855-859-2056 or 404-537-3406 and use the pass code 85111412#.

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, manufacturing, agriculture and oil and gas.  AMERISAFE actively markets workers’ compensation insurance in 27 states. 

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 as the results of risks, uncertainties and other factors including the factors 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, 2015.  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 -

AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2016			2015			2016			2015
	(unaudited)						(unaudited)
Revenues:
Gross premiums written	$	88,837		$	91,061		$	292,443		$	297,872
Ceded premiums written		(2,945	)		(4,232	)		(8,046	)		(9,317	)
Net premiums written	$	85,892		$	86,829		$	284,397		$	288,555
Net premiums earned	$	89,918		$	90,504		$	276,607		$	280,860
Net investment income		8,006			6,923			20,251			20,646
Net realized gains (losses) on investments		181			40			974			(2,518	)
Fee and other income		101			3			272			206
Total revenues		98,206			97,470			298,104			299,194
Expenses:
Loss and loss adjustment expenses incurred		50,526			48,942			146,413			166,252
Underwriting and other operating costs		20,764			22,267			63,459			64,719
Policyholder dividends		889			371			3,195			1,024
Total expenses		72,179			71,580			213,067			231,995
Income before taxes		26,027			25,890			85,037			67,199
Income tax expense		8,131			7,950			26,245			19,810
Net income	$	17,896		$	17,940		$	58,792		$	47,389

AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (cont.)
(in thousands, except per share amounts)
	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2016			2015			2016			2015
	(unaudited)						(unaudited)
Basic EPS:
Net income	$	17,896		$	17,940		$	58,792		$	47,389
Basic weighted average common shares		19,121,947			18,968,718			19,092,298			18,911,675
Basic earnings per share	$	0.94		$	0.95		$	3.08		$	2.51
Diluted EPS:
Net income	$	17,896		$	17,940		$	58,792		$	47,389
Diluted weighted average common shares:
Weighted average common shares		19,121,947			18,968,718			19,092,298			18,911,675
Stock options and performance shares		68,244			127,541			94,100			176,465
Diluted weighted average common shares		19,190,191			19,096,259			19,186,398			19,088,140
Diluted earnings per  share	$	0.93		$	0.94		$	3.06		$	2.48

AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
	September 30,			December 31,
		2016			2015
	(unaudited)
Assets
Investments	$	1,095,634		$	1,045,152
Cash and cash equivalents		86,612			69,481
Amounts recoverable from reinsurers		102,815			91,077
Premiums receivable, net		200,987			185,364
Deferred income taxes		28,278			29,905
Deferred policy acquisition costs		20,363			20,412
Other assets		65,489			60,654
	$	1,600,178		$	1,502,045
Liabilities and Shareholders’ Equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	736,276		$	718,033
Unearned premiums		175,773			167,983
Insurance-related assessments		35,875			32,329
Other liabilities		142,511			129,719
Shareholders’ equity		509,743			453,981
Total liabilities and shareholders’ equity	$	1,600,178		$	1,502,045

 

Contact:
Neal A Fuller, EVP & CFO 
AMERISAFE, Inc. 
337-463-9052

Legal Disclaimer:

EIN Presswire provides this news content "as is" without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the author above.