AMSF 8-K
Amerisafe Inc (AMSF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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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) |
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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. ☐
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 | ||
| Item 2.02. | Results of Operations and Financial Condition. |
On October 27, 2021, AMERISAFE, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ended September 30, 2021. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
On October 27, 2021, AMERISAFE, Inc. (the “Company”) issued a press release announcing a special divided of $4.00 per share. A copy of the Company’s press release is attached as Exhibit 99.2 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 October 27, 2021 (Financial Results) | |
| 99.2 | Press Release of AMERISAFE, Inc. dated October 27, 2021 (Dividend) | |
| 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: October 27, 2021
Exhibit 99.1
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Neal A. Fuller, EVP & CFO AMERISAFE 337.463.9052 |
AMERISAFE ANNOUNCES 2021 THIRD QUARTER RESULTS
Reports Combined Ratio of 71.5%
Declares an Extraordinary Dividend of $4.00 Per Share
DeRidder, LA – October 27, 2021—AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of workers’ compensation insurance focused on high hazard industries, today announced results for the third quarter ended September 30, 2021.
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||
| (in thousands, except per share data) |
(in thousands, except per share data) |
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| Net premiums earned |
$ | 67,626 | $ | 74,771 | -9.6 | % | $ | 208,260 | $ | 229,725 | -9.3 | % | ||||||||||||
| Net investment income |
6,049 | 7,063 | -14.4 | % | 19,362 | 22,136 | -12.5 | % | ||||||||||||||||
| Net realized gains (losses) on investments (pretax) |
(8 | ) | 309 | NM | 1,490 | 1,464 | 1.8 | % | ||||||||||||||||
| Net unrealized gains (losses) on equity securities (pre-tax) |
(771 | ) | 844 | NM | 8,026 | (2,349 | ) | NM | ||||||||||||||||
| Net income |
19,136 | 23,353 | -18.1 | % | 62,215 | 58,101 | 7.1 | % | ||||||||||||||||
| Diluted earnings per share |
$ | 0.99 | $ | 1.21 | -18.2 | % | $ | 3.21 | $ | 3.00 | 7.0 | % | ||||||||||||
| Operating net income |
19,751 | 22,442 | -12.0 | % | 54,697 | 58,800 | -7.0 | % | ||||||||||||||||
| Operating earnings per share |
$ | 1.02 | $ | 1.16 | -12.1 | % | $ | 2.82 | $ | 3.04 | -7.2 | % | ||||||||||||
| Book value per share |
$ | 24.80 | $ | 24.93 | -0.5 | % | $ | 24.80 | $ | 24.93 | -0.5 | % | ||||||||||||
| Net combined ratio |
71.5 | % | 72.8 | % | 76.9 | % | 78.4 | % | ||||||||||||||||
| Return on average equity |
16.1 | % | 19.8 | % | 18.1 | % | 17.0 | % | ||||||||||||||||
G. Janelle Frost, President and Chief Executive Officer, noted, “We were pleased with this quarter’s results as we were able to maintain strong renewal retention and find new business opportunities in a declining rate environment. In addition, claim severity trends for prior accident years continued to show improvement as our claims handling practices reach favorable outcomes.”
NSURANCE RESULTS
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||
| September 30, | September 30, | |||||||||||||||||||||||
| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||
| Gross premiums written |
$ | 67,185 | $ | 72,648 | -7.5 | % | $ | 222,423 | $ | 240,008 | -7.3 | % | ||||||||||||
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| Net premiums earned |
67,626 | 74,771 | -9.6 | % | 208,260 | 229,725 | -9.3 | % | ||||||||||||||||
| Loss and loss adjustment expenses incurred |
29,661 | 39,789 | -25.5 | % | 101,601 | 120,966 | -16.0 | % | ||||||||||||||||
| Underwriting and certain other operating costs, commissions, salaries and benefits |
17,915 | 13,902 | 28.9 | % | 55,337 | 56,317 | -1.7 | % | ||||||||||||||||
| Policyholder dividends |
733 | 714 | 2.7 | % | 3,200 | 2,685 | 19.2 | % | ||||||||||||||||
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| Underwriting profit (pre-tax) |
$ | 19,317 | $ | 20,366 | -5.2 | % | $ | 48,122 | $ | 49,757 | -3.3 | % | ||||||||||||
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| Insurance Ratios: |
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| Current accident year loss ratio |
72.0 | % | 72.5 | % | 72.0 | % | 72.5 | % | ||||||||||||||||
| Prior accident year loss ratio |
-28.1 | % | -19.3 | % | -23.2 | % | -19.8 | % | ||||||||||||||||
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| Net loss ratio |
43.9 | % | 53.2 | % | 48.8 | % | 52.7 | % | ||||||||||||||||
| Net underwriting expense ratio |
26.5 | % | 18.6 | % | 26.6 | % | 24.5 | % | ||||||||||||||||
| Net dividend ratio |
1.1 | % | 1.0 | % | 1.5 | % | 1.2 | % | ||||||||||||||||
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| Net combined ratio |
71.5 | % | 72.8 | % | 76.9 | % | 78.4 | % | ||||||||||||||||
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| • | Voluntary premiums were $3.2 million lower, or 4.6%, compared with the third quarter of 2020, due to continued reductions in approved state loss costs, which were 7.0% lower on average for policies we renewed during the quarter. |
| • | Payroll audits and related premium adjustments were $3.2 million lower than last year’s third quarter, decreasing premiums written by $2.1 million in the third quarter of 2021, compared with an increase of $1.1 million in the same period in 2020. |
| • | The current accident year loss ratio for the third quarter was 72.0%, unchanged from the first six months of 2021, and one half point lower than 2020. During the quarter, the Company experienced favorable case reserve development for prior accident years, which reduced loss and loss adjustment expenses by $19.0 million, primarily from accident years 2015 through 2019. |
| • | For the quarter ended September 30, 2021, the underwriting expense ratio was 26.5% compared with 18.6% in the same quarter in 2020. The increase in the expense ratio was primarily due to a benefit in last year’s third quarter of $5.7 million from the termination of an assessment related to a multiple injury fund. |
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| • | The effective tax rate for the quarter ended September 30, 2021 was 22.6%, compared with 18.5% in the third quarter of 2020, due to a higher proportion of income from underwriting and taxable investment income. |
INVESTMENT RESULTS
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2021 | 2020 | % Change | 2021 | 2020 | % Change | |||||||||||||||||||
| (in thousands) | (in thousands) | |||||||||||||||||||||||
| Net investment income |
$ | 6,049 | $ | 7,063 | -14.4 | % | $ | 19,362 | $ | 22,136 | -12.5 | % | ||||||||||||
| Net realized gains (losses) on investments (pre-tax) |
(8 | ) | 309 | NM | 1,490 | 1,464 | 1.8 | % | ||||||||||||||||
| Net unrealized gains (losses) on equity securities (pre-tax) |
(771 | ) | 844 | NM | 8,026 | (2,349 | ) | NM | ||||||||||||||||
| Pre-tax investment yield |
2.1 | % | 2.3 | % | 2.2 | % | 2.5 | % | ||||||||||||||||
| Tax-equivalent yield (1) |
2.5 | % | 2.8 | % | 2.5 | % | 2.8 | % | ||||||||||||||||
| (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 September 30, 2021, decreased 14.4% to $6.0 million from $7.1 million in the third quarter of 2020, due to lower investment yields on fixed-income securities. |
| • | As of September 30, 2021, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion. |
CAPITAL MANAGEMENT
In an accompanying news release, the Company announced a special cash dividend of $4.00 per share, payable on November 17, 2021, to shareholders of record as of November 10, 2021.
In addition, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.29 per share, payable on December 17, 2021 to shareholders of record as of December 3, 2021.
Book value per share at September 30, 2021 was $24.80, an increase of 9.3% from $22.70 at December 31, 2020.
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SUSTAINABILITY DISCLOSURES
The Company recently published additional sustainability disclosures for investors. These disclosures, which follow the Sustainability Accounting Standards Board (SASB) and Task Force on Climate-related Financial Disclosures (TCFD) format, can be found on our website at www.amerisafe.com under Sustainability.
SUPPLEMENTAL INFORMATION
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (in thousands, except share and per share data) | ||||||||||||||||
| Net income |
$ | 19,136 | $ | 23,353 | $ | 62,215 | $ | 58,101 | ||||||||
| Less: |
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| Net realized gains (losses) on investments |
(8 | ) | 309 | 1,490 | 1,464 | |||||||||||
| Net unrealized gains (losses) on equity securities |
(771 | ) | 844 | 8,026 | (2,349 | ) | ||||||||||
| Tax effect (1) |
164 | (242 | ) | (1,998 | ) | 186 | ||||||||||
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| Operating net income (2) |
$ | 19,751 | $ | 22,442 | $ | 54,697 | $ | 58,800 | ||||||||
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| Average shareholders’ equity (3) |
$ | 474,261 | $ | 472,353 | $ | 459,486 | $ | 456,063 | ||||||||
| Less: |
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| Average accumulated other comprehensive income |
15,924 | 19,545 | 18,003 | 16,062 | ||||||||||||
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| Average adjusted shareholders’ equity (2) |
$ | 458,337 | $ | 452,808 | $ | 441,483 | $ | 440,001 | ||||||||
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| Diluted weighted average common shares |
19,407,918 | 19,358,682 | 19,392,939 | 19,345,952 | ||||||||||||
| Return on average equity (4) |
16.1 | % | 19.8 | % | 18.1 | % | 17.0 | % | ||||||||
| Operating return on average adjusted equity (2) |
17.2 | % | 19.8 | % | 16.5 | % | 17.8 | % | ||||||||
| Diluted earnings per share |
$ | 0.99 | $ | 1.21 | $ | 3.21 | $ | 3.00 | ||||||||
| Operating earnings per share (2) |
$ | 1.02 | $ | 1.16 | $ | 2.82 | $ | 3.04 | ||||||||
| (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 Thursday October 28, 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 323-794-2423 (Conference Code 2096837) 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 ten 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, agriculture, and manufacturing. 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 | Nine Months Ended | |||||||||||||||
| September 30, | September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenues: |
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| Gross premiums written |
$ | 67,185 | $ | 72,648 | $ | 222,423 | $ | 240,008 | ||||||||
| Ceded premiums written |
(2,407 | ) | (2,473 | ) | (7,410 | ) | (7,928 | ) | ||||||||
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| Net premiums written |
$ | 64,778 | $ | 70,175 | $ | 215,013 | $ | 232,080 | ||||||||
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| Net premiums earned |
$ | 67,626 | $ | 74,771 | $ | 208,260 | $ | 229,725 | ||||||||
| Net investment income |
6,049 | 7,063 | 19,362 | 22,136 | ||||||||||||
| Net realized gains (losses) on investments |
(8 | ) | 309 | 1,490 | 1,464 | |||||||||||
| Net unrealized gains (losses) on equity securities |
(771 | ) | 844 | 8,026 | (2,349 | ) | ||||||||||
| Gain (loss) on disposal of assets |
— | — | 21 | (29 | ) | |||||||||||
| Fee and other income |
149 | 18 | 394 | 309 | ||||||||||||
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| Total revenues |
73,045 | 83,005 | 237,553 | 251,256 | ||||||||||||
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| Expenses: |
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| Loss and loss adjustment expenses incurred |
29,661 | 39,789 | 101,601 | 120,966 | ||||||||||||
| Underwriting and other operating costs |
17,915 | 13,902 | 55,337 | 56,317 | ||||||||||||
| Policyholder dividends |
733 | 714 | 3,200 | 2,685 | ||||||||||||
| Provision for investment related credit loss expense (benefit) |
15 | (69 | ) | (102 | ) | (13 | ) | |||||||||
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| Total expenses |
48,324 | 54,336 | 160,036 | 179,955 | ||||||||||||
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| Income before taxes |
24,721 | 28,669 | 77,517 | 71,301 | ||||||||||||
| Income tax expense |
5,585 | 5,316 | 15,302 | 13,200 | ||||||||||||
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| Net income |
$ | 19,136 | $ | 23,353 | $ | 62,215 | $ | 58,101 | ||||||||
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AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Statements of Income (cont.)
(in thousands, except per share amounts)
| Three Months Ended September 30, |
Nine Months Ended September 30, |
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| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Basic EPS: |
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| Net income |
$ | 19,136 | $ | 23,353 | $ | 62,215 | $ | 58,101 | ||||||||
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| Basic weighted average common shares |
19,344,636 | 19,299,921 | 19,328,041 | 19,282,263 | ||||||||||||
| Basic earnings per share |
$ | 0.99 | $ | 1.21 | $ | 3.22 | $ | 3.01 | ||||||||
| Diluted EPS: |
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| Net income |
$ | 19,136 | $ | 23,353 | $ | 62,215 | $ | 58,101 | ||||||||
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| Diluted weighted average common shares: |
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| Weighted average common shares |
19,344,636 | 19,299,921 | 19,328,041 | 19,282,263 | ||||||||||||
| Restricted stock and stock options |
63,282 | 58,761 | 64,898 | 63,689 | ||||||||||||
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| Diluted weighted average common shares |
19,407,918 | 19,358,682 | 19,392,939 | 19,345,952 | ||||||||||||
| Diluted earnings per share |
$ | 0.99 | $ | 1.21 | $ | 3.21 | $ | 3.00 | ||||||||
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AMERISAFE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
| September 30, 2021 |
December 31, 2020 |
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| (unaudited) | ||||||||
| Assets |
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| Investments |
$ | 1,034,187 | $ | 1,088,744 | ||||
| Cash and cash equivalents |
123,128 | 61,757 | ||||||
| Amounts recoverable from reinsurers |
108,394 | 105,803 | ||||||
| Premiums receivable, net |
154,517 | 156,760 | ||||||
| Deferred income taxes |
14,738 | 13,665 | ||||||
| Deferred policy acquisition costs |
18,580 | 17,810 | ||||||
| Other assets |
26,379 | 26,316 | ||||||
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| $ | 1,479,923 | $ | 1,470,855 | |||||
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| Liabilities and Shareholders’ Equity |
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| Liabilities: |
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| Reserves for loss and loss adjustment expenses |
$ | 720,789 | $ | 760,561 | ||||
| Unearned premiums |
136,013 | 129,260 | ||||||
| Insurance-related assessments |
18,907 | 17,995 | ||||||
| Other liabilities |
124,058 | 124,223 | ||||||
| Shareholders’ equity |
480,156 | 438,816 | ||||||
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| Total liabilities and shareholders’ equity |
$ | 1,479,923 | $ | 1,470,855 | ||||
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# # #
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9 |
Exhibit 99.2
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Neal A. Fuller, EVP & CFO AMERISAFE 337.463.9052 |
AMERISAFE DECLARES SPECIAL DIVIDEND OF $4.00 PER SHARE
AND REGULAR QUARTERLY DIVIDEND
DeRidder, LA – October 27, 2021—AMERISAFE, Inc. (Nasdaq: AMSF), a specialty provider of workers’ compensation insurance focused on high hazard industries, today announced that its Board of Directors had declared a special cash dividend of $4.00 per share.
The special cash dividend will be payable on November 17, 2021 to shareholders of record as of November 10, 2021. The Board of Directors also declared a regular quarterly dividend of $0.29 per share, payable on December 17, 2021 to shareholders of record as of December 3, 2021.
“We are pleased to announce this special dividend which reflects our operational consistency and discipline. Returning excess capital to shareholders via special dividends is a key component of AMERISAFE’s capital management strategy,” said G. Janelle Frost, President and Chief Executive Officer.
Over the past nine years, the Company has declared $32.79 per share in dividends, comprising $7.04 in regular dividends and $25.75 in special dividends per share.
More information on the dividend and information on the company’s third quarter earnings can be found in AMERISAFE’s accompanying earnings release issued today.
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, agriculture, and manufacturing. AMERISAFE actively markets workers’ compensation insurance in 27 states.