8-K

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): October 31, 2019

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))

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

Item 2.02. Results of Operations and Financial Condition.

On October 31, 2019, AMERISAFE, Inc. (the “Company”) issued a press release announcing its financial results for the third quarter ending September 30, 2019. A copy of the Company’s press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

On October 31, 2019, AMERISAFE, Inc. (the “Company”) issued a press release announcing a special dividend of $3.50 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 31, 2019 (Financial Results)
	99.2	Press Release of AMERISAFE, Inc. dated October 31, 2019 (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 31, 2019

EX-99.1

Exhibit 99.1

  NEWS RELEASE   Neal A. Fuller, EVP & CFO AMERISAFE 337.463.9052

AMERISAFE ANNOUNCES 2019 THIRD QUARTER RESULTS

Reports Combined Ratio of 78.4%

DeRidder, LA – October 31, 2019 - 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, 2019.

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2019			2018			% Change			2019			2018			% Change
	(in thousands, except per share data)									(in thousands, except per share data)
Net premiums earned	$	82,712		$	85,184			-2.9	%	$	250,611		$	261,489			-4.2	%
Net investment income		8,264			7,884			4.8	%		24,448			22,396			9.2	%
Net realized losses on investments, pretax		(4	)		(329	)		NM			(27	)		(1,471	)		NM
Net income		21,386			19,701			8.6	%		58,676			52,826			11.1	%
Diluted earnings per share	$	1.11		$	1.02			8.8	%	$	3.04		$	2.74			10.9	%
Operating net income		21,101			19,508			8.2	%		56,197			53,783			4.5	%
Operating earnings per share	$	1.09		$	1.01			7.9	%	$	2.91		$	2.79			4.3	%
Book value per share	$	24.29		$	23.82			2.0	%	$	24.29		$	23.82			2.0	%
Net combined ratio		78.4	%		81.1	%					82.1	%		83.5	%
Return on average equity		18.6	%		17.4	%					17.8	%		15.9	%

G. Janelle Frost, President and Chief Executive Officer, observed, “AMERISAFE continued to produce an attractive return on equity this quarter supported by favorable loss ratios and expense management. Our response to the soft insurance cycle hinged on our providing quality services with disciplined underwriting as competition and declining rates lowered premiums.”

INSURANCE RESULTS

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2019			2018			% Change			2019			2018			% Change
	(in thousands)									(in thousands)
Gross premiums written	$	82,629		$	85,324			-3.2	%	$	262,754		$	276,368			-4.9	%
Net premiums earned		82,712			85,184			-2.9	%		250,611			261,489			-4.2	%
Loss and loss adjustment expenses incurred		44,325			47,598			-6.9	%		142,807			152,836			-6.6	%
Underwriting and certain other operating costs, commissions, salaries and benefits		19,285			20,606			-6.4	%		59,670			62,154			-4.0	%
Policyholder dividends		1,265			865			46.2	%		3,363			3,290			2.2	%
Underwriting profit (pre-tax)	$	17,837		$	16,115			10.7	%	$	44,771		$	43,209			3.6	%
Insurance Ratios:
Current accident year loss ratio		72.5	%		71.5	%					72.5	%		71.5	%
Prior accident year loss ratio		-18.9	%		-15.6	%					-15.5	%		-13.1	%
Net loss ratio		53.6	%		55.9	%					57.0	%		58.4	%
Net underwriting expense ratio		23.3	%		24.2	%					23.8	%		23.8	%
Net dividend ratio		1.5	%		1.0	%					1.3	%		1.3	%
Net combined ratio		78.4	%		81.1	%					82.1	%		83.5	%

• Gross premiums written in the third quarter of 2019 decreased by $2.7 million, or 3.2%, compared with the third quarter of 2018, primarily due to lower voluntary premiums on policies written in the quarter, which were 8.6% lower than the third quarter of 2018.

• Payroll audits and related premium adjustments increased premiums written by $2.0 million in the third quarter of 2019, compared to a decrease in premiums written of $2.1 million in the third quarter of 2018.

• The current accident year loss ratio for the third quarter was 72.5%, unchanged from the first half of 2019, and an increase of 1.0 percentage point from the 71.5% ratio for accident year 2018. During the quarter, the Company experienced favorable net loss development for prior accident years, which reduced loss and loss adjustment expenses by $15.6 million, primarily from accident years 2014 through 2017.

2

• For the quarter ended September 30, 2019, the underwriting expense ratio was 23.3% compared with 24.2% in the same quarter in 2018. The decrease in the expense ratio was due to lower loss based assessments, premium based assessments and commissions compared with the third quarter of 2018.

• The effective tax rate for the quarter ended September 30, 2019 was 19.6%, compared with 19.5% for the third quarter of 2018.

INVESTMENT RESULTS

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
	2019			2018			% Change			2019			2018			% Change
	(in thousands)									(in thousands)
Net investment income	$	8,264		$	7,884			4.8	%	$	24,448		$	22,396			9.2	%
Net realized losses on investments (pre-tax)		(4	)		(329	)		NM			(27	)		(1,471	)		NM
Net unrealized gains on equity securities (pre-tax)		365			573			-36.3	%		3,165			259			NM
Pre-tax investment yield		2.7	%		2.6	%					2.7	%		2.5	%
Tax-equivalent yield (1)		3.1	%		3.0	%					3.1	%		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 September 30, 2019, increased 4.8% to $8.3 million from $7.9 million in the third quarter of 2018, due to slightly higher investment yields on fixed-income securities.

• As of September 30, 2019, the carrying value of AMERISAFE’s investment portfolio, including cash and cash equivalents, was $1.2 billion.

CAPITAL MANAGEMENT

In an accompanying press release the Company announced a special cash dividend of $3.50 per share, payable on November 20, 2019, to shareholders of record as of November 13, 2019.

In addition, the Company’s Board of Directors declared a regular quarterly cash dividend of $0.25 per share, payable on December 27, 2019 to shareholders of record as of December 13, 2019.

3

Book value per share at September 30, 2019 was $24.29, an increase of 14.3% from $21.26 at December 31, 2018.

SUPPLEMENTAL INFORMATION

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	(in thousands, except share and per share data)
Net income	$	21,386		$	19,701		$	58,676		$	52,826
Less:
Net realized losses on investments		(4	)		(329	)		(27	)		(1,471	)
Net unrealized gains on equity securities		365			573			3,165			259
Tax effect (1)		(76	)		(51	)		(659	)		255
Operating net income (2)	$	21,101		$	19,508		$	56,197		$	53,783
Average shareholders’ equity (3)	$	459,086		$	452,194		$	439,246		$	442,210
Less:
Average accumulated other comprehensive income (loss)		11,378			(3,142	)		5,892			(295	)
Average adjusted shareholders’ equity	$	447,708		$	455,336		$	433,354		$	442,505
Diluted weighted average common shares		19,302,551			19,272,984			19,320,199			19,281,036
Return on average equity (4)		18.6	%		17.4	%		17.8	%		15.9	%
Operating return on average adjusted equity (2)		18.9	%		17.1	%		17.3	%		16.2	%
Diluted earnings per share	$	1.11		$	1.02		$	3.04		$	2.74
Operating earnings per share (2)	$	1.09		$	1.01		$	2.91		$	2.79

(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.

4

CONFERENCE CALL INFORMATION

AMERISAFE has scheduled a conference call for November 1, 2019, 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 323-794-2588 (Conference Code 2913228) 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 the “Investor Relations Home” page of the “Investors” section of the Company’s website (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 the same website location.

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.

5

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 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, 2018. 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 -

6

AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Statements of Income

(in thousands)

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2019			2018			2019			2018
	(unaudited)						(unaudited)
Revenues:
Gross premiums written	$	82,629		$	85,324		$	262,754		$	276,368
Ceded premiums written		(2,170	)		(2,283	)		(6,804	)		(6,982	)
Net premiums written	$	80,459		$	83,041		$	255,950		$	269,386
Net premiums earned	$	82,712		$	85,184		$	250,611		$	261,489
Net investment income		8,264			7,884			24,448			22,396
Net realized losses on investments		(4	)		(329	)		(27	)		(1,471	)
Net unrealized gains on equity securities		365			573			3,165			259
Fee and other income		151			217			234			411
Total revenues		91,488			93,529			278,431			283,084
Expenses:
Loss and loss adjustment expenses incurred		44,325			47,598			142,807			152,836
Underwriting and other operating costs		19,285			20,606			59,670			62,154
Policyholder dividends		1,265			865			3,363			3,290
Total expenses		64,875			69,069			205,840			218,280
Income before taxes		26,613			24,460			72,591			64,804
Income tax expense		5,227			4,759			13,915			11,978
Net income	$	21,386		$	19,701		$	58,676		$	52,826

7

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,
	2019		2018		2019		2018
	(unaudited)				(unaudited)
Basic EPS:
Net income	$	21,386	$	19,701	$	58,676	$	52,826
Basic weighted average common shares		19,256,069		19,216,545		19,243,689		19,204,196
Basic earnings per share	$	1.11	$	1.03	$	3.05	$	2.75
Diluted EPS:
Net income	$	21,386	$	19,701	$	58,676	$	52,826
Diluted weighted average common shares:
Weighted average common shares		19,256,069		19,216,545		19,243,689		19,204,196
Stock options and restricted stock		46,482		56,439		76,510		76,840
Diluted weighted average common shares		19,302,551		19,272,984		19,320,199		19,281,036
Diluted earnings per share	$	1.11	$	1.02	$	3.04	$	2.74

8

AMERISAFE, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

	September 30,		December 31,
	2019		2018
	(unaudited)
Assets
Investments	$	1,091,278	$	1,125,490
Cash and cash equivalents		125,870		40,344
Amounts recoverable from reinsurers		102,866		112,006
Premiums receivable, net		170,649		162,478
Deferred income taxes		18,480		21,852
Deferred policy acquisition costs		20,341		19,734
Other assets		45,055		34,027
	$	1,574,539	$	1,515,931
Liabilities and Shareholders’ Equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	790,812	$	798,409
Unearned premiums		154,635		149,296
Insurance-related assessments		29,035		28,258
Other liabilities		131,328		130,206
Shareholders’ equity		468,729		409,762
Total liabilities and shareholders’ equity	$	1,574,539	$	1,515,931

# # #

9

EX-99.2

Exhibit 99.2

  NEWS RELEASE   Neal A. Fuller, EVP & CFO AMERISAFE 337.463.9052

AMERISAFE DECLARES SPECIAL DIVIDEND OF $3.50 PER SHARE AND REGULAR QUARTERLY DIVIDEND

DeRidder, LA – October 31, 2019 - 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 $3.50 per share.

The special cash dividend will be payable on November 20, 2019 to shareholders of record as of November 13, 2019. The Board of Directors also declared a regular quarterly dividend of $0.25 per share, payable on December 27, 2019 to shareholders of record as of December 13, 2019.

“AMERISAFE has shown a strong commitment to creating shareholder value through our operational consistency and long-term capital adequacy. We are pleased to continue to share the rewards of that commitment through an extraordinary dividend,” said G. Janelle Frost, President and Chief Executive Officer.

Over the past seven years, the Company has declared $23.05 per share in dividends, comprising $4.80 in regular dividends and $18.25 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, manufacturing, and agriculture. AMERISAFE actively markets workers’ compensation insurance in 27 states.

XML

Document and Entity Information	Oct. 31, 2019
Cover [Abstract]
Entity Registrant Name	AMERISAFE INC
Amendment Flag	false
Entity Central Index Key	0001018979
Document Type	8-K
Document Period End Date	Oct. 31, 2019
Entity Incorporation State Country Code	TX
Entity File Number	001-12251
Entity Tax Identification Number	75-2069407
Entity Address, Address Line One	2301 Highway 190 West
Entity Address, City or Town	DeRidder
Entity Address, State or Province	LA
Entity Address, Postal Zip Code	70634
City Area Code	(337)
Local Phone Number	463-9052
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Security 12b Title	Common Stock, par value $0.01 per share
Trading Symbol	AMSF
Security Exchange Name	NASDAQ