10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019

Commission File Number:

001-12251

AMERISAFE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Texas	75-2069407
(State of Incorporation)	(I.R.S. Employer Identification Number)
2301 Highway 190 West, DeRidder, Louisiana	70634
(Address of Principal Executive Offices)	(Zip Code)

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

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		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.    ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐     No  ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common	AMSF	NASDAQ

As of April 30, 2019, there were 19,274,980 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.

TABLE OF CONTENTS

		Page
		No.
FORWARD-LOOKING STATEMENTS		3
PART I - FINANCIAL INFORMATION
Item 1	Financial Statements	4
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4	Controls and Procedures	25
PART II - OTHER INFORMATION
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 6	Exhibits	26

2

FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and 21E of the Securities Exchange Act of 1934. You should not place undue reliance on these statements. These forward-looking statements include statements that reflect the current views of our senior management with respect to our financial performance and future events with respect to our business and the insurance industry in general. Statements that include the words “expect,” “intend,” “plan,” “believe,” “project,” “forecast,” “estimate,” “may,” “should,” “anticipate” and similar statements of a future or forward-looking nature identify forward-looking statements. Forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause our actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, the following:

• the cyclical nature of the workers’ compensation insurance industry;

• increased competition on the basis of types of insurance offered, premium rates, coverage availability, payment terms, claims management, safety services, policy terms, overall financial strength, financial ratings and reputation;

• general economic conditions, including recession, inflation, performance of financial markets, interest rates, unemployment rates and fluctuating asset values;

• changes in relationships with independent agencies;

• developments in capital markets that adversely affect the performance of our investments;

• technology breaches or failures, including those resulting from a malicious cyber attack on the Company or its policyholders and medical providers;

• decreased level of business activity of our policyholders caused by decreased business activity generally, and in particular in the industries we target;

• greater frequency or severity of claims and loss activity than our underwriting, reserving or investment practices anticipate based on historical experience or industry data;

• adverse developments in economic, competitive, judicial or regulatory conditions within the workers’ compensation insurance industry;

• loss of the services of any of our senior management or other key employees;

• changes in regulations, laws, rates, rating factors, or taxes applicable to the Company, its policyholders or the agencies that sell its insurance;

• changes in current accounting standards or new accounting standards;

• changes in legal theories of liability under our insurance policies;

• changes in rating agency policies, practices or ratings;

• changes in the availability, cost or quality of reinsurance and the failure of our reinsurers to pay claims in a timely manner or at all;

• the effects of U.S. involvement in hostilities with other countries and large-scale acts of terrorism, or the threat of hostilities or terrorist acts; and

• other risks and uncertainties described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”).

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements in this report, including under the caption “Risk Factors” in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2018. If one or more events related to these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may differ materially from what we anticipate.

3

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	March 31, 2019			December 31, 2018
	(unaudited)
Assets
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost (fair value    $615,217 and $616,772 in 2019 and 2018, respectively)	$	604,056		$	613,878
Fixed maturity securities—available-for-sale, at fair value (cost $464,740 and    $479,772 in 2019 and 2018, respectively)		471,254			478,730
Equity securities, at fair value (cost $20,769 and $19,962 in 2019    and 2018, respectively)		21,615			18,651
Short-term investments		64,708			14,231
Total investments		1,161,633			1,125,490
Cash and cash equivalents		34,895			40,344
Amounts recoverable from reinsurers		111,182			112,006
Premiums receivable, net of allowance		174,310			162,478
Deferred income taxes		20,057			21,852
Accrued interest receivable		10,917			10,197
Property and equipment, net		6,041			6,258
Deferred policy acquisition costs		20,433			19,734
Other assets		19,514			17,572
Total assets	$	1,558,982		$	1,515,931
Liabilities and shareholders’ equity
Liabilities:
Reserves for loss and loss adjustment expenses	$	800,580		$	798,409
Unearned premiums		155,026			149,296
Amounts held for others		42,468			41,388
Policyholder deposits		46,586			46,795
Insurance-related assessments		28,802			28,258
Federal income tax payable		7,660			3,412
Accounts payable and other liabilities		39,249			38,611
Payable for investments purchased		8,206			—
Total liabilities		1,128,577			1,106,169
Shareholders’ equity:
Common stock:  voting—$0.01 par value authorized shares—50,000,000    in 2019 and 2018; 20,533,230 and 20,528,230 shares issued and 19,274,980    and 19,269,980  shares outstanding in 2019 and 2018, respectively		205			205
Additional paid-in capital		211,700			211,431
Treasury stock, at cost (1,258,250 shares in 2019 and 2018)		(22,370	)		(22,370	)
Accumulated earnings		235,908			221,328
Accumulated other comprehensive income (loss), net		4,962			(832	)
Total shareholders’ equity		430,405			409,762
Total liabilities and shareholders’ equity	$	1,558,982		$	1,515,931

See accompanying notes.

4

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(unaudited)

	Three Months Ended
	March 31,
	2019			2018
Revenues
Gross premiums written	$	93,107		$	97,342
Ceded premiums written		(2,430	)		(2,330	)
Net premiums written	$	90,677		$	95,012
Net premiums earned	$	84,948		$	87,310
Net investment income		8,015			7,209
Net realized gains (losses) on investments		59			(31	)
Net unrealized gains (losses) on equity securities		2,158			(390	)
Fee and other income		10			77
Total revenues		95,190			94,175
Expenses
Loss and loss adjustment expenses incurred		49,614			53,162
Underwriting and certain other operating costs		7,552			7,846
Commissions		6,368			6,494
Salaries and benefits		6,747			5,926
Policyholder dividends		1,100			1,333
Total expenses		71,381			74,761
Income before income taxes		23,809			19,414
Income tax expense		4,409			3,245
Net income	$	19,400		$	16,169
Earnings per share
Basic	$	1.01		$	0.84
Diluted	$	1.01		$	0.84
Shares used in computing earnings per share
Basic		19,229,134			19,187,136
Diluted		19,298,036			19,262,237
Cash dividends declared per common share	$	0.25		$	0.22

See accompanying notes.

5

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2019			2018
Net income	$	19,400		$	16,169
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax		5,992			(5,848	)
Change in deferred tax valuation allowance		(198	)		—
Comprehensive income	$	25,194		$	10,321

See accompanying notes.

6

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except share data)

(unaudited)

	Common Stock				Additional Paid-In		Treasury Stock						Accumulated			Accumulated Other Comprehensive
	Shares		Amounts		Capital		Shares			Amounts			Earnings			Income (Loss)			Total
Balance at December 31, 2018		20,528,230	$	205	$	211,431		(1,258,250	)	$	(22,370	)	$	221,328		$	(832	)	$	409,762
Comprehensive income:
Impact of adoption of    ASU 2016-02		—		—		—		—			—			(1	)		—			(1	)
Net income		—		—		—		—			—			19,400			—			19,400
Other comprehensive    income:
Change in unrealized    losses, net of tax		—		—		—		—			—			—			5,992			5,992
Change in deferred tax    valuation allowance		—		—		—		—			—			—			(198	)		(198	)
Comprehensive income:																				25,194
Common stock issued upon    exercise of options		5,000		—		20		—			—			—			—			20
Share-based compensation		—		—		249		—			—			—			—			249
Dividends to shareholders		—		—		—		—			—			(4,819	)		—			(4,819	)
Balance at March 31, 2019		20,533,230	$	205	$	211,700		(1,258,250	)	$	(22,370	)	$	235,908		$	4,962		$	430,405

See accompanying notes.

7

AMERISAFE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Three Months Ended March 31,
	2019			2018
Operating activities
Net income	$	19,400		$	16,169
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		241			222
Net amortization of investments		2,347			3,151
Deferred income taxes		5			264
Net realized (gains) losses on investments		(59	)		31
Net unrealized (gains) losses on equity securities		(2,158	)		390
Share-based compensation		565			18
Changes in operating assets and liabilities:
Premiums receivable, net		(11,832	)		(12,564	)
Accrued interest receivable		(720	)		(697	)
Deferred policy acquisition costs		(699	)		(1,036	)
Amounts held by others		—			(7,855	)
Other assets		(998	)		2,438
Reserves for loss and loss adjustment expenses		2,171			5,453
Unearned premiums		5,730			7,702
Reinsurance balances		824			(4,040	)
Amounts held for others and policyholder deposits		871			402
Accounts payable and other liabilities		4,588			2,618
Net cash provided by operating activities		20,276			12,666
Investing activities
Purchases of investments held-to-maturity		(26,174	)		(17,925	)
Purchases of investments available-for-sale		(10,394	)		(28,510	)
Purchases of equity securities		(807	)		—
Purchases of short-term investments		(64,320	)		(28,688	)
Proceeds from maturities of investments held-to-maturity		40,578			19,127
Proceeds from sales and maturities of investments available-for-sale		26,365			25,004
Proceeds from sales and maturities of short-term investments		13,959			4,000
Purchases of property and equipment		(22	)		(868	)
Net cash used in investing activities		(20,815	)		(27,860	)
Financing activities
Proceeds from stock option exercises		20			68
Finance lease purchases		(12	)		—
Dividends to shareholders		(4,918	)		(4,361	)
Net cash used in financing activities		(4,910	)		(4,293	)
Change in cash and cash equivalents		(5,449	)		(19,487	)
Cash and cash equivalents at beginning of period		40,344			55,559
Cash and cash equivalents at end of period	$	34,895		$	36,072

See accompanying notes.

8

AMERISAFE, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Basis of Presentation

AMERISAFE, Inc. (the “Company”) is an insurance holding company incorporated in the state of Texas. The accompanying unaudited consolidated financial statements include the accounts of AMERISAFE and its subsidiaries: American Interstate Insurance Company (“AIIC”) and its insurance subsidiaries, Silver Oak Casualty, Inc. (“SOCI”) and American Interstate Insurance Company of Texas (“AIICTX”), Amerisafe Risk Services, Inc. (“RISK”) and Amerisafe General Agency, Inc. (“AGAI”). AIIC and SOCI are property and casualty insurance companies organized under the laws of the state of Nebraska. AIICTX is a property and casualty insurance company organized under the laws of the state of Texas. RISK, a wholly owned subsidiary of the Company, is a claims and safety service company currently servicing only affiliated insurance companies. AGAI, a wholly owned subsidiary of the Company, is a general agent for the Company. AGAI sells insurance, which is underwritten by AIIC, SOCI and AIICTX, as well as by nonaffiliated insurance carriers. The assets and operations of AGAI are not significant to that of the Company and its consolidated subsidiaries.

The terms “AMERISAFE,” the “Company,” “we,” “us” or “our” refer to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires.

The Company provides workers’ compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, agriculture, maritime, and oil and gas. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the three months ended March 31, 2019 and 2018.

In the opinion of management of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, the results of operations and cash flows for the periods presented. The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934 and therefore do not include all information and footnotes to be in conformity with accounting principles generally accepted in the United States (“GAAP”). The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited consolidated financial statements contained herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses and related disclosures.  Some of the estimates result from judgments that can be subjective and complex and, consequently, actual results in future periods might differ from these estimates.

Adopted Accounting Guidance

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The new guidance requires a lessee to recognize a lease liability and a right of use asset for all leases extending beyond twelve months.  This standard was effective for us beginning in the first quarter of 2019. We elected the new transition method under the transition guidance within the new standard. Therefore, prior comparative periods are not adjusted.  We also elected the package of practical expedients, which among other things, allows us to carryforward the historical lease classification.  We made an accounting policy election not to recognize lease assets and lease liabilities for short-term operating leases. Adoption of the new guidance resulted in the Company recognizing right-of-use assets of $0.4 million and lease liabilities of $0.3 million. The cumulative effect adjustment to the opening balance of retained earnings was minimal. Adoption of this new guidance did not have a material effect on the Company’s consolidated financial statements as the Company does not have any significant leases.  

Prospective Accounting Guidance

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses.  The new guidance replaces the methodology of credit loss impairment, which currently, delays the recognition of credit losses until a probable loss has been incurred.  The new guidance requires credit losses for securities measured at amortized cost to be determined using current expected credit loss estimates.  These estimates are to be derived from historical, current and reasonable supporting forecasts, including prepayments and estimates, and will be recorded through a valuation account.  The same method will be used for available-for-sale securities, but the valuation account will be limited to the amount by which the fair value is below amortized cost.  The standard is effective for us in the first quarter of 2020.  Implementation of the new guidance requires a modified retrospective approach without restatement, which means the first cumulative adjustment required will be a charge to retained earnings, with subsequent changes in the valuation account reported in the income statement.  The financial statement impact will be determined by the nature of the portfolio held and the economic conditions at the time of implementation.

9

The Company has formed an internal working group to evaluate the new standard and develop an implementation strategy.  The group has researched data, developed models and methodologies and is working toward implementation.  The Company will continue to monitor and evaluate the financial impact as the implementation date approaches.

All other issued but not yet effective accounting and reporting standards as of March 31, 2019 are either not applicable to the Company or are not expected to have a material impact on the Company.

Note 2. Stock Options and Restricted Stock

As of March 31, 2019, the Company has three equity incentive plans: the AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”), the AMERISAFE Non-Employee Director Restricted Stock Plan (the “Restricted Stock Plan”) and the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). In connection with the approval of the 2012 Incentive Plan by the Company’s shareholders, no further grants will be made under the 2005 Incentive Plan.  All grants made under the 2005 Incentive plan will continue in effect, subject to the terms and conditions of the 2005 Incentive Plan. See Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding the Company’s incentive plans.

During the three months ended March 31, 2019 and 2018, options to purchase 5,000 and 15,000 shares of common stock were exercised, respectively. In connection with these exercises, the Company received minimal stock option proceeds in the current year and $0.1 million of stock option proceeds in the same period of 2018.  

The Company recognized share-based compensation expense of $0.6 million in the quarter ended March 31, 2019 and $17.8 thousand in the quarter ended March 31, 2018.  

Note 3. Earnings Per Share

The Company computes earnings per share (“EPS”) in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. The Company has no participating unvested common shares which contain nonforfeitable rights to dividends and applies the treasury stock method in computing basic and diluted earnings per share.

Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the period.

The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options were exercised or restricted stock becomes vested.

	Three Months Ended
	March 31,
	2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	19,400	$	16,169
Basic weighted average common shares		19,229,134		19,187,136
Basic earnings per common share	$	1.01	$	0.84
Diluted EPS:
Net income	$	19,400	$	16,169
Diluted weighted average common shares:
Weighted average common shares		19,229,134		19,187,136
Stock options and restricted stock		68,902		75,101
Diluted weighted average common shares		19,298,036		19,262,237
Diluted earnings per common share	$	1.01	$	0.84

10

Note 4. Investments

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	431,247	$	10,468	$	(242	)	$	441,473
Corporate bonds		102,774		520		(155	)		103,139
U.S. agency-based mortgage-backed securities		9,824		396		(56	)		10,164
U.S. Treasury securities and obligations of U.S.    government agencies		59,210		352		(140	)		59,422
Asset-backed securities		1,001		24		(6	)		1,019
Totals	$	604,056	$	11,760	$	(599	)	$	615,217

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,749	$	6,710	$	(395	)	$	227,064
Corporate bonds		170,375		1,465		(217	)		171,623
U.S. agency-based mortgage-backed securities		12,462		—		(180	)		12,282
U.S. Treasury securities and obligations    of U.S. government agencies		61,154		40		(909	)		60,285
Totals	$	464,740	$	8,215	$	(1,701	)	$	471,254

The gross unrealized gains and losses on, and the cost of equity securities at March 31, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	20,769	$	846	$	—	$	21,615
Total equity securities	$	20,769	$	846	$	—	$	21,615

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	445,922	$	5,109	$	(2,084	)	$	448,947
Corporate bonds		91,762		62		(455	)		91,369
U.S. agency-based mortgage-backed securities		8,102		327		(80	)		8,349
U.S. Treasury securities and obligations    of U.S. government agencies		67,042		340		(339	)		67,043
Asset-backed securities		1,050		22		(8	)		1,064
Totals	$	613,878	$	5,860	$	(2,966	)	$	616,772

11

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	231,848	$	3,515	$	(2,118	)	$	233,245
Corporate bonds		173,904		243		(933	)		173,214
U.S. agency-based mortgage-backed securities		12,835		—		(320	)		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		61,185		—		(1,429	)		59,756
Totals	$	479,772	$	3,758	$	(4,800	)	$	478,730

The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2018 are summarized as follows:

	Cost		Gross Gains		Gross Losses			Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	19,962	$	30	$	(1,341	)	$	18,651
Total equity securities	$	19,962	$	30	$	(1,341	)	$	18,651

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	67,547	$	67,672
After one year through five years		248,804		251,430
After five years through ten years		86,353		88,108
After ten years		190,527		196,824
U.S. agency-based mortgage-backed securities		9,824		10,164
Asset-backed securities		1,001		1,019
Totals	$	604,056	$	615,217

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	68,592	$	68,518
After one year through five years		159,000		159,135
After five years through ten years		47,350		48,152
After ten years		177,336		183,167
U.S. agency-based mortgage-backed securities		12,462		12,282
Totals	$	464,740	$	471,254

12

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
March 31, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	78,248	$	242	$	78,248	$	242
Corporate bonds		3,728		5		37,828		150		41,556		155
U.S. agency-based mortgage-backed securities		—		—		2,248		56		2,248		56
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		40,587		140		40,587		140
Asset-backed securities		—		—		510		6		510		6
Total held-to-maturity securities		3,728		5		159,421		594		163,149		599
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	1,957	$	1	$	27,768	$	394	$	29,725	$	395
Corporate bonds		5,734		7		75,651		210		81,385		217
U.S. agency-based mortgage-backed securities		—		—		12,281		180		12,281		180
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		56,466		909		56,466		909
Total available-for-sale securities		7,691		8		172,166		1,693		179,857		1,701
Total	$	11,419	$	13	$	331,587	$	2,287	$	343,006	$	2,300

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2018
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	28,369	$	59	$	180,550	$	2,025	$	208,919	$	2,084
Corporate bonds		17,448		36		48,315		419		65,763		455
U.S. agency-based mortgage-backed securities		—		—		2,287		80		2,287		80
U.S. Treasury securities and obligations    of U.S. government agencies		2,865		4		46,486		335		49,351		339
Asset-backed securities		—		—		525		8		525		8
Total held-to-maturity securities		48,682		99		278,163		2,867		326,845		2,966
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	16,109	$	81	$	76,255	$	2,037	$	92,364	$	2,118
Corporate bonds		59,099		279		70,306		654		129,405		933
U.S. agency-based mortgage-backed securities		—		—		12,515		320		12,515		320
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		59,756		1,429		59,756		1,429
Total available-for-sale securities		75,208		360		218,832		4,440		294,040		4,800
Total	$	123,890	$	459	$	496,995	$	7,307	$	620,885	$	7,766

13

At March 31, 2019, we held 184 individual fixed maturity securities that were in an unrealized loss position, of which 176 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

During the first quarter of 2019, we recognized through income $2.2 million of net unrealized gains on equity securities held as of March 31, 2019.  For the three months ended March 31, 2018, we recognized through income $0.4 million of net unrealized losses on equity securities held as of March 31, 2018.

Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method.

We regularly review our investment portfolio to evaluate the existence of other-than-temporary declines in the fair value of investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:

• any reduction or elimination of preferred dividends, or nonpayment of scheduled principal or interest payments;

• the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

• how long and by how much the fair value of the security has been below its cost or amortized cost;

• any downgrades of the security by a rating agency;

• our intent not to sell the security for a sufficient time period for it to recover its value;

• the likelihood of being required to sell the security before the recovery of its value; and

• an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. We determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the securities before the recovery of its amortized cost basis.

During the three months ended March 31, 2019 and 2018, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

Net realized gains in the three months ended March 31, 2019 were $0.1 million resulting from the sale of equity and fixed maturity securities classified as available-for-sale.  Net realized gains in the three months ended March 31, 2018 were immaterial.

Note 5. Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of March 31, 2019, the Company established a valuation allowance of $0.2 million against its deferred income tax benefits.  

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions recognized for the periods ended March 31, 2019 and 2018.

Tax years 2015 through 2018 are subject to examination by the federal and state taxing authorities.

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Note 6. Loss Reserves

We record reserves for estimated losses under insurance policies that we write and for loss adjustment expenses related to the investigation and settlement of policy claims. Our reserves for loss and loss adjustment expenses represent the estimated cost of all reported and unreported loss and loss adjustment expenses incurred and unpaid as of a given point in time.  The reserves for loss and loss adjustment expenses are estimated using individual case-basis valuations, statistical analyses and estimates based upon experience for unreported claims and their associated loss and loss adjustment expenses. Such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in these estimates, management believes that the reserves for loss and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Any such adjustments are included in income from current operations.  See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding the Company’s loss and loss adjustment expense development.

The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Balance, beginning of period	$	798,409		$	771,845
Less amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		107,216			84,889
Net balance, beginning of period		691,193			686,956
Add incurred related to:
Current accident year		61,587			62,426
Prior accident years		(11,974	)		(9,264	)
Total incurred		49,613			53,162
Less paid related to:
Current accident year		3,381			4,686
Prior accident years		43,180			47,354
Total paid		46,561			52,040
Net balance, end of period		694,245			688,078
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		106,335			89,220
Balance, end of period	$	800,580		$	777,298

The foregoing reconciliation reflects favorable development of the net reserves at March 31, 2019 and March 31, 2018. The favorable development reduced loss and loss adjustment expenses incurred by $12.0 million and $9.3 million in 2019 and 2018, respectively. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled.  Multiple factors can cause loss development both unfavorable and favorable. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement.

Note 7. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $25.2 million for the three months ended March 31, 2019, compared to $10.3 million for the three months ended March 31, 2018.  The difference between net income as reported and comprehensive income was due to changes in unrealized gains and losses, net of tax on available-for-sale debt securities and in 2019, due to a change in the deferred tax asset valuation allowance of $0.2 million.

15

Comprehensive income includes net income plus unrealized gains (losses) on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statements of comprehensive income, we used a 21 percent tax rate in 2019 and 2018. The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Beginning balance	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,981			(5,634	)
Amounts reclassified from accumulated other    comprehensive income		11			(214	)
Change in deferred tax valuation allowance		(198	)		—
Net current period other comprehensive    income (loss)		5,794			(5,848	)
Ending balance	$	4,962		$	(2,236	)

The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2019			2018
	(in thousands)
Unrealized gains (losses) on available-for-    sale securities	$	(14	)	$	17		Net realized gains (losses) on investments
		(14	)		17		Income before income taxes
		3			(57	)	Income tax expense
	$	(11	)	$	(40	)	Net income

Note 8. Fair Value Measurements

The Company carries available-for-sale securities at fair value in our consolidated financial statements and determines fair value measurements and disclosure in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures.

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

Fair value is defined in ASC Topic 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is the price to sell an asset or transfer a liability and, therefore, represents an exit price, not an entry price. Fair value is the exit price in the principal market (or, if lacking a principal market, the most advantageous market) in which the reporting entity would transact. Fair value is a market-based measurement, not an entity-specific measurement, and, as such, is determined based on the assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date.

ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset, also known as current replacement cost. Valuation techniques used to measure fair value are to be consistently applied.

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In ASC Topic 820, inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable:

• Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.

• Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Valuation techniques used to measure fair value are intended to maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are to be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.

The fair values of the Company’s investments are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2019.

At March 31, 2019, assets measured at fair value on a recurring basis are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	227,064	$	—	$	227,064
Corporate bonds		—		171,623		—		171,623
U.S. agency-based mortgage-backed securities		—		12,282		—		12,282
U.S. Treasury securities		60,285		—		—		60,285
Total securities available-for-sale—fixed maturity		60,285		410,969		—		471,254
Equity securities:
Domestic common stock		21,615		—		—		21,615
Total	$	81,900	$	410,969	$	—	$	492,869

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At March 31, 2019, assets measured at amortized cost are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	441,473	$	—	$	441,473
Corporate bonds		—		103,139		—		103,139
U.S. agency-based mortgage-backed securities		—		10,164		—		10,164
U.S. Treasury securities		8,325		—		—		8,325
Obligations of U.S. government agencies		—		51,097		—		51,097
Asset-backed securities		—		1,019		—		1,019
Total held-to-maturity	$	8,325	$	606,892	$	—	$	615,217

At December 31, 2018, assets measured at fair value on a recurring basis are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	233,245	$	—	$	233,245
Corporate bonds		—		173,214		—		173,214
U.S. agency-based mortgage-backed securities		—		12,515		—		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		59,756		—		—		59,756
Total securities available-for-sale—fixed maturity	$	59,756	$	418,974	$	—	$	478,730
Equity securities:
Domestic common stock		18,651		—		—		18,651
Total	$	78,407	$	418,974	$	—	$	497,381

At December 31, 2018, assets measured at amortized cost are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	448,947	$	—	$	448,947
Corporate bonds		—		91,369		—		91,369
U.S. agency-based mortgage-backed securities		—		8,349		—		8,349
U.S. Treasury securities		7,111		—		—		7,111
Obligations of U.S. government agencies		—		59,932		—		59,932
Asset-backed securities		—		1,064		—		1,064
Total held-to-maturity	$	7,111	$	609,661	$	—	$	616,772

The Company determines fair value amounts for financial instruments using available third-party market information. When such information is not available, the Company determines the fair value amounts using appropriate valuation methodologies. Nonfinancial instruments such as real estate, property and equipment, deferred policy acquisition costs, deferred income taxes and loss and loss adjustment expense reserves are excluded from the fair value disclosure.

At March 31, 2019, the Company held one security measured at fair value on a nonrecurring basis due to a recognized impairment of $100,000. The security was valued using level 2 inputs and had an adjusted amortized cost of $11,000 at March 31, 2019.  The security was valued at fair value at the time of impairment and is currently being carried at the adjusted amortized cost.  The fair value of the security is $31,000 at March 31, 2019.

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Cash and Cash Equivalents —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values, which are characterized as Level 1 assets.

Investments —The fair values for fixed maturity and equity securities are based on prices obtained from an independent pricing service. Equity and treasury securities are characterized as Level 1 assets, as their fair values are based on quoted prices in active markets. Fixed maturity securities, other than treasury securities, are characterized as Level 2 assets, as their fair values are determined using observable market inputs.

Short Term Investments —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values. These securities are characterized as Level 2 assets in the fair value hierarchy.

The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of  March 31, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	604,056	$	615,217	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		471,254		471,254		478,730		478,730
Equity securities		21,615		21,615		18,651		18,651
Short-term investments		64,708		64,708		14,231		14,231
Cash and cash equivalents		34,895		34,895		40,344		40,344

Note 9. Treasury Stock

The Company’s Board of Directors initiated a share repurchase program in February 2010. In October 2016, the Board reauthorized this program with a limit of $25.0 million with no expiration date.  There were no shares repurchased under this program in the three months ended March 31, 2019 and 2018.

Note 10. Leases

The Company has operating and finance leases for office space and equipment.  Our leases have remaining lease terms of 5 months to 58 months, some of which include options to extend the leases for up to 5 years.  The Company, in determining the present value of lease payments, utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease.

Supplemental balance sheet information related to leases is as follows:

	March 31, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	539		Other assets
Operating lease liabilities	$	539		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(133	)
Property and equipment, net	$	52		Property and equipment, net
Finance lease liabilities	$	90		Accounts payable and other liabilities

Note 11. Subsequent Events

On April 29, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share payable on June 21, 2019 to shareholders of record as of June 7, 2019. The Board considers the payment of a regular cash dividend each calendar quarter.

19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with the accompanying unaudited consolidated financial statements and the related notes included in Item 1 of Part I of this Quarterly Report on Form 10-Q, together with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the year ended December 31, 2018.

We begin our discussion with an overview of our Company to give you an understanding of our business and the markets we serve. We then discuss our critical accounting policies. This is followed with a discussion of our results of operations for the three months ended March 31, 2019 and 2018. This discussion includes an analysis of certain significant period-to-period variances in our consolidated statements of operations. Our cash flows and financial condition are discussed under the caption “Liquidity and Capital Resources.”

Business Overview

AMERISAFE is a holding company that markets and underwrites workers’ compensation insurance through its insurance subsidiaries. Workers’ compensation insurance covers statutorily prescribed benefits that employers are obligated to provide to their employees who are injured in the course and scope of their employment. Our business strategy is focused on providing this coverage to small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, and agriculture. Employers engaged in hazardous industries pay substantially higher than average rates for workers’ compensation insurance compared to employers in other industries, as measured per payroll dollar. The higher premium rates are due to the nature of the work performed and the inherent workplace danger of our target employers. Hazardous industry employers also tend to have less frequent but more severe claims as compared to employers in other industries due to the nature of their businesses. We provide proactive safety reviews of employers’ workplaces. These safety reviews are a vital component of our underwriting process and also promote safer workplaces. We utilize intensive claims management practices that we believe permit us to reduce the overall cost of our claims. In addition, our audit services ensure that our policyholders pay the appropriate premiums required under the terms of their policies and enable us to monitor payroll patterns that cause underwriting, safety or fraud concerns. We believe that the higher premiums typically paid by our policyholders, together with our disciplined underwriting and safety, claims and audit services, provide us with the opportunity to earn attractive returns for our shareholders.

We actively market our insurance in 27 states through independent agencies, as well as through our wholly owned insurance agency subsidiary. We are also licensed in an additional 20 states, the District of Columbia and the U.S. Virgin Islands.

Critical Accounting Policies

Understanding our accounting policies is key to understanding our financial statements. Management considers some of these policies to be very important to the presentation of our financial results because they require us to make significant estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures. Some of the estimates result from judgments that can be subjective and complex and, consequently, actual results in future periods might differ from these estimates.

Management believes that the most critical accounting policies relate to the reporting of reserves for loss and loss adjustment expenses, including losses that have occurred but have not been reported prior to the reporting date, amounts recoverable from reinsurers, premiums receivable, assessments, deferred policy acquisition costs, deferred income taxes, the impairment of investment securities and share-based compensation. These critical accounting policies are more fully described in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2018.

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Results of Operations

The following table summarizes our consolidated financial results for the three months ended March 31, 2019 and 2018.

	Three Months Ended March 31,
	2019			2018
	(dollars in thousands, except per share data)
	(unaudited)
Gross premiums written	$	93,107		$	97,342
Net premiums earned		84,948			87,310
Net investment income		8,015			7,209
Total revenues		95,190			94,175
Total expenses		71,381			74,761
Net income		19,400			16,169
Diluted earnings per common share	$	1.01		$	0.84
Other Key Measures
Net combined ratio (1)		84.0	%		85.6	%
Return on average equity (2)		18.5	%		15.1	%
Book value per share (3)	$	22.33		$	22.43

(1) The net combined ratio is calculated by dividing the sum of loss and loss adjustment expenses incurred, underwriting and certain other operating costs, commissions, salaries and benefits, and policyholder dividends by net premiums earned in the current period.

(2) Return on average equity is calculated by dividing the annualized net income by the average shareholders’ equity for the applicable period.

(3) Book value per share is calculated by dividing shareholders’ equity by total outstanding shares, as of the end of the period.

Consolidated Results of Operations for Three Months Ended March 31, 2019 Compared to March 31, 2018

Gross Premiums Written. Gross premiums written for the quarter ended March 31, 2019 were $93.1 million, compared to $97.3 million for the same period in 2018, a decrease of 4.4%. The decrease was attributable to a $5.2 million decrease in annual premiums on voluntary policies written during the period and a $0.2 million decrease in assumed premium from mandatory pooling arrangements.  The effective loss cost multiplier, or ELCM, for our voluntary business was 1.59 for the first quarter ended March 31, 2019 compared to 1.63 for the same period in 2018.

Net Premiums Written. Net premiums written for the quarter ended March 31, 2019 were $90.7 million, compared to $95.0 million for the same period in 2018, a decrease of 4.6%. The decrease was primarily attributable to the decrease in gross premiums written. As a percentage of gross premiums earned, ceded premiums were 2.8% for the first quarter of 2019 compared to 2.6% for the same period in 2018.  The increase in ceded premiums as a percentage of gross premiums earned reflects additional ceded premium of $0.2 million resulting from a sunset clause charge.  For additional information, see Item 1, “Business—Reinsurance” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Net Premiums Earned. Net premiums earned for the first quarter of 2019 were $84.9 million, compared to $87.3 million for the same period in 2018, a decrease of 2.7%. The decrease was attributable to the decrease in net premiums written during the period.

Net Investment Income. Net investment income for the quarter ended March 31, 2019 was $8.0 million, compared to $7.2 million for the same period in 2018, an increase of 11.2%.  The increase was due to slightly higher investment yields on fixed-income securities.  Average invested assets, including cash and cash equivalents, were $1.2 billion in the quarter ended March 31, 2019 and 2018. The pre-tax investment yield on our investment portfolio was 2.7% per annum during the quarter ended March 31, 2019 compared to 2.4% per annum during the same period in 2018. The tax-equivalent yield on our investment portfolio was 3.1% per annum for the quarter ended March 31, 2019 and 2.9% for the same period in 2018. The tax-equivalent yield is calculated using the effective interest rate and the appropriate marginal tax rate.

Net Realized Gains (Losses) on Investments. Net realized gains on investments for the three months ended March 31, 2019 totaled $0.1 million compared to minimal net realized losses for the same period in 2018. Net realized gains in the first quarter of 2019 were attributable to the sale of fixed maturity securities.

21

Net Unrealized Gains (Losses) on Equity Securities. Net unrealized gains on equity securities for the three months ended March 31, 2019 were $2.2 million compared to net unrealized losses of $0.4 million for the same period in 2018.

Loss and Loss Adjustment Expenses Incurred. Loss and loss adjustment expenses (“LAE”) incurred totaled $49.6 million for the three months ended March 31, 2019, compared to $53.2 million for the same period in 2018, a decrease of $3.5 million, or 6.7%. The current accident year loss and LAE incurred were $61.6 million, or 72.5% of net premiums earned, compared to $62.4 million, or 71.5% of net premiums earned for the same period in 2018. We recorded favorable prior accident year development of $12.0 million in the first quarter of 2019, compared to favorable prior accident year development of $9.3 million in the same period of 2018, as further discussed below in “Prior Year Development.” Our net loss ratio was 58.4% in the first quarter of 2019, compared to 60.9% for the same period of 2018.

Underwriting and Certain Other Operating Costs, Commissions and Salaries and Benefits. Underwriting and certain other operating costs, commissions and salaries and benefits for the quarter ended March 31, 2019 were $20.7 million, compared to $20.3 million for the same period in 2018, an increase of 2.0%. This increase was primarily due to a $0.8 million increase in compensation expense due to higher estimates of variable share price based incentive compensation costs compared with the first quarter of 2018, a $0.2 million increase in insurance related assessments, and a $0.2 million increase in accounts receivable write-offs.  The increases were offset by a $0.2 million decrease in premium taxes, and a $0.2 million increase in contingent profit commission.  Our expense ratio was 24.3% in the first quarter of 2019 compared to 23.2% in the first quarter of 2018.

Income Tax Expense. Income tax expense for the three months ended March 31, 2019 was $4.4 million, compared to $3.2 million for the same period in 2018. The increase was attributable to an increase in the pre-tax income to $23.8 million in the quarter ended March 31, 2019 from $19.4 million in the same period in 2018. The effective tax rate for the Company increased to 18.5% in the quarter ended March 31, 2019 from 16.7% in the same period in 2018. The increase in the effective tax rate is due to a lower proportion of tax-exempt income to underwriting income in the quarter relative to the first quarter of 2018 and an increase of $0.2 million for the change in valuation allowance for deferred tax assets.

Liquidity and Capital Resources

Our principal sources of operating funds are premiums, investment income and proceeds from sales and maturities of investments. Our primary uses of operating funds include payments of claims and operating expenses. Currently, we pay claims using cash flow from operations and invest the remaining funds.

Net cash provided by operating activities was $20.3 million for the three months ended March 31, 2019, which represented a $7.6 million increase from $12.7 million in net cash provided by operating activities for the three months ended March 31, 2018. This increase in operating cash flow was attributable to a $7.9 million decrease in the change in amounts held by others and a $5.5 million decrease in loss and loss adjustment expenses paid.  Offsetting these amounts were a $4.0 million decrease in premiums collected, a $0.8 million increase in dividends paid to policyholders, a $0.5 million increase in underwriting and other operating expenses paid, and a $0.3 million increase in federal income taxes paid.

Net cash used in investing activities was $20.8 million for the three months ended March 31, 2019, compared to net cash used in investment activities of $27.9 million for the same period in 2018. Cash provided by sales and maturities of investments totaled $80.9 million for the three months ended March 31, 2019, compared to $48.1 million for the same period in 2018. A total of $101.7 million in cash was used to purchase investments in the three months ended March 31, 2019, compared to $75.1 million in purchases for the same period in 2018.

Net cash used in financing activities in the three months ended March 31, 2019 was $4.9 million compared to net cash used in financing activities of $4.3 million for the same period in 2018. In the three months ended March 31, 2019, $4.9 million of cash was used for dividends paid to shareholders compared to $4.4 million in the same period of 2018.  

Investment Portfolio

Our investment portfolio, including cash and cash equivalents, totaled $1.2 billion at March 31, 2019 and December 31, 2018. Purchases of fixed maturity securities are classified as available-for-sale or held-to-maturity at the time of purchase based on the individual security. The reported value of our fixed maturity securities classified as held-to-maturity, as defined by FASB ASC Topic 320, Investments-Debt and Equity Securities, was equal to their amortized cost, and thus was not impacted by changing interest rates. Our equity securities and fixed maturity securities classified as available-for-sale were reported at fair value.

22

The composition of our investment portfolio, including cash and cash equivalents, as of March 31, 2019, is shown in the following table:

	Carrying Value		Percentage of Portfolio
	(in thousands)
Fixed maturity securities—held-to-maturity:
States and political subdivisions	$	431,247		36.0	%
Corporate bonds		102,774		8.6	%
U.S. agency-based mortgage-backed securities		9,824		0.8	%
U.S. Treasury securities and obligations of    U.S. government agencies		59,210		5.0	%
Asset-backed securities		1,001		0.1	%
Total fixed maturity securities—held-to-maturity		604,056		50.5	%
Fixed maturity securities—available-for-sale:
States and political subdivisions		227,064		19.0	%
Corporate bonds		171,623		14.4	%
U.S. agency-based mortgage-backed securities		12,282		1.0	%
U.S. Treasury securities and obligations of    U.S. government agencies		60,285		5.0	%
Total fixed maturity securities—available-for-sale		471,254		39.4	%
Equity securities		21,615		1.8	%
Short-term investments		64,708		5.4	%
Cash and cash equivalents		34,895		2.9	%
Total investments, including cash and cash equivalents	$	1,196,528		100.0	%

Our debt securities classified as available-for-sale are “marked to market” as of the end of each calendar quarter. As of that date, unrealized gains and losses are recorded to Accumulated Other Comprehensive Income (Loss), except when such securities are deemed to be other-than-temporarily impaired. For our securities classified as held-to-maturity, unrealized gains and losses are not recorded in the financial statements until realized or until a decline in fair value, below amortized cost, is deemed to be other-than-temporary.  The change in fair value of our equity investments is presented as a component of net income.

During the three months ended March 31, 2019 and 2018, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

Prior Year Development

The Company recorded favorable prior accident year development of $12.0 million in the three months ended March 31, 2019. The table below sets forth the favorable development for the three months ended March 31, 2019 and 2018 for accident years 2014 through 2018 and, collectively, for all accident years prior to 2014.

	Three Months Ended March 31,
	2019		2018
	(in millions)
Accident Year
2018	$	—	$	—
2017		—		—
2016		6.1		—
2015		2.1		6.0
2014		2.0		3.0
Prior to 2014		1.8		0.3
Total net development	$	12.0	$	9.3

23

The table below sets forth the number of open claims as of March 31, 2019 and 2018, and the number of claims reported and closed during the three months then ended.

	Three Months Ended March 31,
	2019			2018
Open claims at beginning of period		5,190			4,982
Claims reported		1,221			1,259
Claims closed		(1,448	)		(1,298	)
Open claims at end of period		4,963			4,943

The number of open claims at March 31, 2019 increased by 20 claims as compared to the number of open claims at March 31, 2018. At March 31, 2019, our incurred amounts for certain accident years, particularly 2016, 2015 and 2014, developed more favorably than management previously expected. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled.  Multiple factors can cause both favorable and unfavorable loss development. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement.

The assumptions we used in establishing our reserves were based on our historical claims data. However, as of March 31, 2019, actual results for certain accident years have been better than our assumptions would have predicted. We do not presently intend to modify our assumptions for establishing reserves in light of recent results. However, if actual results for current and future accident years are consistent with, or different than, our results in these recent accident years, our historical claims data will reflect this change and, over time, will impact the reserves we establish for future claims.

Our reserves for loss and loss adjustment expenses are inherently uncertain and our focus on providing workers’ compensation insurance to employers engaged in hazardous industries results in our receiving relatively fewer but more severe claims than many other workers’ compensation insurance companies. As a result of this focus on higher severity, lower frequency business, our reserve for loss and loss adjustment expenses may have greater volatility than other workers’ compensation insurance companies. For additional information, see Item 1, “Business—Loss Reserves” in our Annual Report on Form 10-K for the year ended December 31, 2018.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of potential economic loss principally arising from adverse changes in the fair value of financial instruments. The major components of market risk affecting us are credit risk, interest rate risk, and equity price risk. We currently have no exposure to foreign currency risk.

Since December 31, 2018, there have been no material changes in the quantitative or qualitative aspect of our market risk profile. For additional information regarding the Company’s exposure to certain market risks, see Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2018.

24

Item 4. Controls and Procedures.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report to provide reasonable assurance that information we are required to disclose in reports that are filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms specified by the SEC. We note that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving the stated goals under all potential future conditions.

Because of its inherent limitations, management does not expect that our disclosure controls and procedures and our internal controls over financial reporting will prevent or detect all misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with policies and procedures may deteriorate. Any control system, no matter how well designed and operated, is based upon certain assumptions and can only provide reasonable, not absolute assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to errors or fraud will not occur or that all control issues and instances of fraud, if any within the Company, have been detected.

There have not been any changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

25

PART II—OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

The Board of Directors initially authorized the Company’s share repurchase program in February 2010. In October 2016, the Board reauthorized this program with no expiration date. As of March 31, 2019, we had repurchased a total of 1,258,250 shares of our outstanding common stock for $22.4 million.  The Company had $25.0 million available for future purchases at March 31, 2019 under this program.  There were no shares repurchased during the three months ended March 31, 2019 and 2018. The purchases may be effected from time to time depending upon market conditions and subject to applicable regulatory considerations.  It is anticipated that future purchases will be funded from available capital.  

Item 6. Exhibits.

Exhibit No.	Description
31.1	Certification of G. Janelle Frost filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Neal A. Fuller filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of G. Janelle Frost and Neal A. Fuller filed pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

26

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 thereunto duly authorized.

	AMERISAFE, INC.
May 3, 2019	/s/ G. Janelle Frost
	G. Janelle Frost
	President, Chief Executive Officer and Director
	(Principal Executive Officer)
May 3, 2019	/s/ Neal A. Fuller
	Neal A. Fuller
	Executive Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

27

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, G. Janelle Frost, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019	/s/ G. Janelle Frost
	G. Janelle Frost
	President and Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Neal A. Fuller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of AMERISAFE, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 3, 2019	/s/ Neal A. Fuller
	Neal A. Fuller
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. § 1350,

AS ADOPTED PURSUANT TO § 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the filing of the Quarterly Report on Form 10-Q of AMERISAFE, Inc., a Texas corporation (the “Company”), for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to such officer’s knowledge:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods expressed in the Report.

Date: May 3, 2019	/s/ G. Janelle Frost
	G. Janelle Frost
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Neal A. Fuller
	Neal A. Fuller
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. § 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	AMSF
Entity Registrant Name	AMERISAFE INC
Entity Central Index Key	0001018979
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		19,274,980

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investments:
Fixed maturity securities—held-to-maturity, at amortized cost (fair value $615,217 and $616,772 in 2019 and 2018, respectively)	$ 604,056	$ 613,878
Fixed maturity securities—available-for-sale, at fair value (cost $464,740 and $479,772 in 2019 and 2018, respectively)	471,254	478,730
Equity securities, at fair value (cost $20,769 and $19,962 in 2019 and 2018, respectively)	21,615	18,651
Short-term investments	64,708	14,231
Total investments	1,161,633	1,125,490
Cash and cash equivalents	34,895	40,344
Amounts recoverable from reinsurers	111,182	112,006
Premiums receivable, net of allowance	174,310	162,478
Deferred income taxes	20,057	21,852
Accrued interest receivable	10,917	10,197
Property and equipment, net	6,041	6,258
Deferred policy acquisition costs	20,433	19,734
Other assets	19,514	17,572
Total assets	1,558,982	1,515,931
Liabilities:
Reserves for loss and loss adjustment expenses	800,580	798,409
Unearned premiums	155,026	149,296
Amounts held for others	42,468	41,388
Policyholder deposits	46,586	46,795
Insurance-related assessments	28,802	28,258
Federal income tax payable	7,660	3,412
Accounts payable and other liabilities	39,249	38,611
Payable for investments purchased	8,206
Total liabilities	1,128,577	1,106,169
Shareholders’ equity:
Common stock: voting—$0.01 par value authorized shares—50,000,000 in 2019 and 2018; 20,533,230 and 20,528,230 shares issued and 19,274,980 and 19,269,980 shares outstanding in 2019 and 2018, respectively	205	205
Additional paid-in capital	211,700	211,431
Treasury stock, at cost (1,258,250 shares in 2019 and 2018)	(22,370)	(22,370)
Accumulated earnings	235,908	221,328
Accumulated other comprehensive income (loss), net	4,962	(832)
Total shareholders’ equity	430,405	409,762
Total liabilities and shareholders’ equity	$ 1,558,982	$ 1,515,931

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Fixed maturity securities, fair value	$ 615,217	$ 616,772
Fixed maturity securities, cost	464,740	479,772
Equity securities, cost	$ 20,769	$ 19,962
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares issued	20,533,230	20,528,230
Common stock, shares outstanding	19,274,980	19,269,980
Treasury stock, shares	1,258,250	1,258,250

XML

Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Gross premiums written	$ 93,107	$ 97,342
Ceded premiums written	(2,430)	(2,330)
Net premiums written	90,677	95,012
Net premiums earned	84,948	87,310
Net investment income	8,015	7,209
Net realized gains (losses) on investments	59	(31)
Net unrealized gains (losses) on equity securities	2,158	(390)
Fee and other income	10	77
Total revenues	95,190	94,175
Expenses
Loss and loss adjustment expenses incurred	49,614	53,162
Underwriting and certain other operating costs	7,552	7,846
Commissions	6,368	6,494
Salaries and benefits	6,747	5,926
Policyholder dividends	1,100	1,333
Total expenses	71,381	74,761
Income before income taxes	23,809	19,414
Income tax expense	4,409	3,245
Net income	$ 19,400	$ 16,169
Earnings per share
Basic	$ 1.01	$ 0.84
Diluted	$ 1.01	$ 0.84
Shares used in computing earnings per share
Basic	19,229,134	19,187,136
Diluted	19,298,036	19,262,237
Cash dividends declared per common share	$ 0.25	$ 0.22

XML

Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 19,400	$ 16,169
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax	5,992	(5,848)
Change in deferred tax valuation allowance	(198)
Comprehensive income	$ 25,194	$ 10,321

XML

Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Treasury Stock [Member]	Accumulated Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Beginning Balance at Dec. 31, 2017						$ 3,612
Comprehensive income:
Net income	$ 16,169
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax	(5,848)
Comprehensive income	$ 10,321
Common stock issued upon exercise of options, Shares	15,000
Ending Balance at Mar. 31, 2018						(2,236)
Beginning Balance at Dec. 31, 2018	$ 409,762	$ 205	$ 211,431	$ (22,370)	$ 221,328	(832)
Beginning Balance, Shares at Dec. 31, 2018	20,528,230	20,528,230
Treasury Stock Beginning Balance, Shares at Dec. 31, 2018	(1,258,250)			(1,258,250)
Comprehensive income:
Impact of adoption of ASU 2016-02 | ASU 2016-02 [Member]	$ (1)				(1)
Net income	19,400				19,400
Other comprehensive income:
Unrealized gain (loss) on debt securities, net of tax	5,992					5,992
Change in deferred tax valuation allowance	(198)					(198)
Comprehensive income	25,194
Common stock issued upon exercise of options	$ 20		20
Common stock issued upon exercise of options, Shares	5,000	5,000
Share-based compensation	$ 249		249
Dividends to shareholders	(4,819)				(4,819)
Ending Balance at Mar. 31, 2019	$ 430,405	$ 205	$ 211,700	$ (22,370)	$ 235,908	$ 4,962
Ending Balance, Shares at Mar. 31, 2019	20,533,230	20,533,230
Treasury Stock Ending Balance, Shares at Mar. 31, 2019	(1,258,250)			(1,258,250)

XML

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Operating activities
Net income	$ 19,400	$ 16,169
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	241	222
Net amortization of investments	2,347	3,151
Deferred income taxes	5	264
Net realized (gains) losses on investments	(59)	31
Net unrealized (gains) losses on equity securities	(2,158)	390
Share-based compensation	565	18
Changes in operating assets and liabilities:
Premiums receivable, net	(11,832)	(12,564)
Accrued interest receivable	(720)	(697)
Deferred policy acquisition costs	(699)	(1,036)
Amounts held by others		(7,855)
Other assets	(998)	2,438
Reserves for loss and loss adjustment expenses	2,171	5,453
Unearned premiums	5,730	7,702
Reinsurance balances	824	(4,040)
Amounts held for others and policyholder deposits	871	402
Accounts payable and other liabilities	4,588	2,618
Net cash provided by operating activities	20,276	12,666
Investing activities
Purchases of investments held-to-maturity	(26,174)	(17,925)
Purchases of investments available-for-sale	(10,394)	(28,510)
Purchases of equity securities	(807)
Purchases of short-term investments	(64,320)	(28,688)
Proceeds from maturities of investments held-to-maturity	40,578	19,127
Proceeds from sales and maturities of investments available-for-sale	26,365	25,004
Proceeds from sales and maturities of short-term investments	13,959	4,000
Purchases of property and equipment	(22)	(868)
Net cash used in investing activities	(20,815)	(27,860)
Financing activities
Proceeds from stock option exercises	20	68
Finance lease purchases	(12)
Dividends to shareholders	(4,918)	(4,361)
Net cash used in financing activities	(4,910)	(4,293)
Change in cash and cash equivalents	(5,449)	(19,487)
Cash and cash equivalents at beginning of period	40,344	55,559
Cash and cash equivalents at end of period	$ 34,895	$ 36,072

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Basis of Presentation

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

Note 1. Basis of Presentation

AMERISAFE, Inc. (the “Company”) is an insurance holding company incorporated in the state of Texas. The accompanying unaudited consolidated financial statements include the accounts of AMERISAFE and its subsidiaries: American Interstate Insurance Company (“AIIC”) and its insurance subsidiaries, Silver Oak Casualty, Inc. (“SOCI”) and American Interstate Insurance Company of Texas (“AIICTX”), Amerisafe Risk Services, Inc. (“RISK”) and Amerisafe General Agency, Inc. (“AGAI”). AIIC and SOCI are property and casualty insurance companies organized under the laws of the state of Nebraska. AIICTX is a property and casualty insurance company organized under the laws of the state of Texas. RISK, a wholly owned subsidiary of the Company, is a claims and safety service company currently servicing only affiliated insurance companies. AGAI, a wholly owned subsidiary of the Company, is a general agent for the Company. AGAI sells insurance, which is underwritten by AIIC, SOCI and AIICTX, as well as by nonaffiliated insurance carriers. The assets and operations of AGAI are not significant to that of the Company and its consolidated subsidiaries.

The terms “AMERISAFE,” the “Company,” “we,” “us” or “our” refer to AMERISAFE, Inc. and its consolidated subsidiaries, as the context requires.

The Company provides workers’ compensation insurance for small to mid-sized employers engaged in hazardous industries, principally construction, trucking, logging and lumber, manufacturing, agriculture, maritime, and oil and gas. Assets and revenues of AIIC and its subsidiaries represent at least 95% of comparable consolidated amounts of the Company for each of the three months ended March 31, 2019 and 2018.

In the opinion of management of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, the results of operations and cash flows for the periods presented. The unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q under the Securities Exchange Act of 1934 and therefore do not include all information and footnotes to be in conformity with accounting principles generally accepted in the United States (“GAAP”). The results for the interim periods are not necessarily indicative of the results of operations that may be expected for the year. The unaudited consolidated financial statements contained herein should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018.

The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of our assets, liabilities, revenues and expenses and related disclosures.  Some of the estimates result from judgments that can be subjective and complex and, consequently, actual results in future periods might differ from these estimates.

Adopted Accounting Guidance

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The new guidance requires a lessee to recognize a lease liability and a right of use asset for all leases extending beyond twelve months.  This standard was effective for us beginning in the first quarter of 2019. We elected the new transition method under the transition guidance within the new standard. Therefore, prior comparative periods are not adjusted.  We also elected the package of practical expedients, which among other things, allows us to carryforward the historical lease classification.  We made an accounting policy election not to recognize lease assets and lease liabilities for short-term operating leases. Adoption of the new guidance resulted in the Company recognizing right-of-use assets of $0.4 million and lease liabilities of $0.3 million. The cumulative effect adjustment to the opening balance of retained earnings was minimal. Adoption of this new guidance did not have a material effect on the Company’s consolidated financial statements as the Company does not have any significant leases.  

Prospective Accounting Guidance

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses.  The new guidance replaces the methodology of credit loss impairment, which currently, delays the recognition of credit losses until a probable loss has been incurred.  The new guidance requires credit losses for securities measured at amortized cost to be determined using current expected credit loss estimates.  These estimates are to be derived from historical, current and reasonable supporting forecasts, including prepayments and estimates, and will be recorded through a valuation account.  The same method will be used for available-for-sale securities, but the valuation account will be limited to the amount by which the fair value is below amortized cost.  The standard is effective for us in the first quarter of 2020.  Implementation of the new guidance requires a modified retrospective approach without restatement, which means the first cumulative adjustment required will be a charge to retained earnings, with subsequent changes in the valuation account reported in the income statement.  The financial statement impact will be determined by the nature of the portfolio held and the economic conditions at the time of implementation.

The Company has formed an internal working group to evaluate the new standard and develop an implementation strategy.  The group has researched data, developed models and methodologies and is working toward implementation.  The Company will continue to monitor and evaluate the financial impact as the implementation date approaches.

All other issued but not yet effective accounting and reporting standards as of March 31, 2019 are either not applicable to the Company or are not expected to have a material impact on the Company.

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Stock Options and Restricted Stock

3 Months Ended

Mar. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock Options and Restricted Stock

Note 2. Stock Options and Restricted Stock

As of March 31, 2019, the Company has three equity incentive plans: the AMERISAFE 2005 Equity Incentive Plan (the “2005 Incentive Plan”), the AMERISAFE Non-Employee Director Restricted Stock Plan (the “Restricted Stock Plan”) and the AMERISAFE 2012 Equity and Incentive Compensation Plan (the “2012 Incentive Plan”). In connection with the approval of the 2012 Incentive Plan by the Company’s shareholders, no further grants will be made under the 2005 Incentive Plan.  All grants made under the 2005 Incentive plan will continue in effect, subject to the terms and conditions of the 2005 Incentive Plan. See Note 12 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding the Company’s incentive plans.

During the three months ended March 31, 2019 and 2018, options to purchase 5,000 and 15,000 shares of common stock were exercised, respectively. In connection with these exercises, the Company received minimal stock option proceeds in the current year and $0.1 million of stock option proceeds in the same period of 2018.  

The Company recognized share-based compensation expense of $0.6 million in the quarter ended March 31, 2019 and $17.8 thousand in the quarter ended March 31, 2018.  

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Earnings Per Share

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Note 3. Earnings Per Share

The Company computes earnings per share (“EPS”) in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share. The Company has no participating unvested common shares which contain nonforfeitable rights to dividends and applies the treasury stock method in computing basic and diluted earnings per share.

Basic EPS is calculated by dividing net income by the weighted-average number of common shares outstanding during the period.

The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options were exercised or restricted stock becomes vested.

	Three Months Ended
	March 31,
	2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	19,400	$	16,169
Basic weighted average common shares		19,229,134		19,187,136
Basic earnings per common share	$	1.01	$	0.84
Diluted EPS:
Net income	$	19,400	$	16,169
Diluted weighted average common shares:
Weighted average common shares		19,229,134		19,187,136
Stock options and restricted stock		68,902		75,101
Diluted weighted average common shares		19,298,036		19,262,237
Diluted earnings per common share	$	1.01	$	0.84

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Investments

3 Months Ended

Mar. 31, 2019

Investments Debt And Equity Securities [Abstract]

Investments

Note 4. Investments

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	431,247	$	10,468	$	(242	)	$	441,473
Corporate bonds		102,774		520		(155	)		103,139
U.S. agency-based mortgage-backed securities		9,824		396		(56	)		10,164
U.S. Treasury securities and obligations of U.S.    government agencies		59,210		352		(140	)		59,422
Asset-backed securities		1,001		24		(6	)		1,019
Totals	$	604,056	$	11,760	$	(599	)	$	615,217

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,749	$	6,710	$	(395	)	$	227,064
Corporate bonds		170,375		1,465		(217	)		171,623
U.S. agency-based mortgage-backed securities		12,462		—		(180	)		12,282
U.S. Treasury securities and obligations    of U.S. government agencies		61,154		40		(909	)		60,285
Totals	$	464,740	$	8,215	$	(1,701	)	$	471,254

The gross unrealized gains and losses on, and the cost of equity securities at March 31, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	20,769	$	846	$	—	$	21,615
Total equity securities	$	20,769	$	846	$	—	$	21,615

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	445,922	$	5,109	$	(2,084	)	$	448,947
Corporate bonds		91,762		62		(455	)		91,369
U.S. agency-based mortgage-backed securities		8,102		327		(80	)		8,349
U.S. Treasury securities and obligations    of U.S. government agencies		67,042		340		(339	)		67,043
Asset-backed securities		1,050		22		(8	)		1,064
Totals	$	613,878	$	5,860	$	(2,966	)	$	616,772

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	231,848	$	3,515	$	(2,118	)	$	233,245
Corporate bonds		173,904		243		(933	)		173,214
U.S. agency-based mortgage-backed securities		12,835		—		(320	)		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		61,185		—		(1,429	)		59,756
Totals	$	479,772	$	3,758	$	(4,800	)	$	478,730

The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2018 are summarized as follows:

	Cost		Gross Gains		Gross Losses			Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	19,962	$	30	$	(1,341	)	$	18,651
Total equity securities	$	19,962	$	30	$	(1,341	)	$	18,651

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	67,547	$	67,672
After one year through five years		248,804		251,430
After five years through ten years		86,353		88,108
After ten years		190,527		196,824
U.S. agency-based mortgage-backed securities		9,824		10,164
Asset-backed securities		1,001		1,019
Totals	$	604,056	$	615,217

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	68,592	$	68,518
After one year through five years		159,000		159,135
After five years through ten years		47,350		48,152
After ten years		177,336		183,167
U.S. agency-based mortgage-backed securities		12,462		12,282
Totals	$	464,740	$	471,254

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
March 31, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	78,248	$	242	$	78,248	$	242
Corporate bonds		3,728		5		37,828		150		41,556		155
U.S. agency-based mortgage-backed securities		—		—		2,248		56		2,248		56
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		40,587		140		40,587		140
Asset-backed securities		—		—		510		6		510		6
Total held-to-maturity securities		3,728		5		159,421		594		163,149		599
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	1,957	$	1	$	27,768	$	394	$	29,725	$	395
Corporate bonds		5,734		7		75,651		210		81,385		217
U.S. agency-based mortgage-backed securities		—		—		12,281		180		12,281		180
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		56,466		909		56,466		909
Total available-for-sale securities		7,691		8		172,166		1,693		179,857		1,701
Total	$	11,419	$	13	$	331,587	$	2,287	$	343,006	$	2,300

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2018
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	28,369	$	59	$	180,550	$	2,025	$	208,919	$	2,084
Corporate bonds		17,448		36		48,315		419		65,763		455
U.S. agency-based mortgage-backed securities		—		—		2,287		80		2,287		80
U.S. Treasury securities and obligations    of U.S. government agencies		2,865		4		46,486		335		49,351		339
Asset-backed securities		—		—		525		8		525		8
Total held-to-maturity securities		48,682		99		278,163		2,867		326,845		2,966
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	16,109	$	81	$	76,255	$	2,037	$	92,364	$	2,118
Corporate bonds		59,099		279		70,306		654		129,405		933
U.S. agency-based mortgage-backed securities		—		—		12,515		320		12,515		320
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		59,756		1,429		59,756		1,429
Total available-for-sale securities		75,208		360		218,832		4,440		294,040		4,800
Total	$	123,890	$	459	$	496,995	$	7,307	$	620,885	$	7,766

At March 31, 2019, we held 184 individual fixed maturity securities that were in an unrealized loss position, of which 176 individual fixed maturity securities were in a continuous unrealized loss position for longer than 12 months.

During the first quarter of 2019, we recognized through income $2.2 million of net unrealized gains on equity securities held as of March 31, 2019.  For the three months ended March 31, 2018, we recognized through income $0.4 million of net unrealized losses on equity securities held as of March 31, 2018.

Investment income is recognized as it is earned. The discount or premium on fixed maturity securities is amortized using the “constant yield” method. Anticipated prepayments, where applicable, are considered when determining the amortization of premiums or discounts. Realized investment gains and losses are determined using the specific identification method.

We regularly review our investment portfolio to evaluate the existence of other-than-temporary declines in the fair value of investments. We consider various factors in determining if a decline in the fair value of an individual security is other-than-temporary. The key factors we consider are:

• any reduction or elimination of preferred dividends, or nonpayment of scheduled principal or interest payments;

• the financial condition and near-term prospects of the issuer of the applicable security, including any specific events that may affect its operations or earnings;

• how long and by how much the fair value of the security has been below its cost or amortized cost;

• any downgrades of the security by a rating agency;

• our intent not to sell the security for a sufficient time period for it to recover its value;

• the likelihood of being required to sell the security before the recovery of its value; and

• an evaluation as to whether there are any credit losses on debt securities.

We reviewed all securities with unrealized losses in accordance with the impairment policy described above. We determined that the unrealized losses in the fixed maturity securities portfolio related primarily to changes in market interest rates since the date of purchase, current conditions in the capital markets and the impact of those conditions on market liquidity and prices generally. We expect to recover the carrying value of these securities as it is not more likely than not that we will be required to sell the securities before the recovery of its amortized cost basis.

During the three months ended March 31, 2019 and 2018, there were no impairment losses recognized for other-than-temporary declines in the fair value of our investments.

Net realized gains in the three months ended March 31, 2019 were $0.1 million resulting from the sale of equity and fixed maturity securities classified as available-for-sale.  Net realized gains in the three months ended March 31, 2018 were immaterial.

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Income Taxes

3 Months Ended

Mar. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Note 5. Income Taxes

In accordance with FASB ASC Topic 740, “Income Taxes,” we provide for the recognition and measurement of deferred income tax benefits based on the likelihood of their realization in future years. As of March 31, 2019, the Company established a valuation allowance of $0.2 million against its deferred income tax benefits.  

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. There were no uncertain tax positions recognized for the periods ended March 31, 2019 and 2018.

Tax years 2015 through 2018 are subject to examination by the federal and state taxing authorities.

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Loss Reserves

3 Months Ended

Mar. 31, 2019

Insurance [Abstract]

Loss Reserves

Note 6. Loss Reserves

We record reserves for estimated losses under insurance policies that we write and for loss adjustment expenses related to the investigation and settlement of policy claims. Our reserves for loss and loss adjustment expenses represent the estimated cost of all reported and unreported loss and loss adjustment expenses incurred and unpaid as of a given point in time.  The reserves for loss and loss adjustment expenses are estimated using individual case-basis valuations, statistical analyses and estimates based upon experience for unreported claims and their associated loss and loss adjustment expenses. Such estimates may be more or less than the amounts ultimately paid when the claims are settled. The estimates are subject to the effects of trends in loss severity and frequency. Although considerable variability is inherent in these estimates, management believes that the reserves for loss and loss adjustment expenses are adequate. The estimates are continually reviewed and adjusted as necessary as experience develops or new information becomes known. Any such adjustments are included in income from current operations.  See Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for additional information regarding the Company’s loss and loss adjustment expense development.

The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Balance, beginning of period	$	798,409		$	771,845
Less amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		107,216			84,889
Net balance, beginning of period		691,193			686,956
Add incurred related to:
Current accident year		61,587			62,426
Prior accident years		(11,974	)		(9,264	)
Total incurred		49,613			53,162
Less paid related to:
Current accident year		3,381			4,686
Prior accident years		43,180			47,354
Total paid		46,561			52,040
Net balance, end of period		694,245			688,078
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		106,335			89,220
Balance, end of period	$	800,580		$	777,298

The foregoing reconciliation reflects favorable development of the net reserves at March 31, 2019 and March 31, 2018. The favorable development reduced loss and loss adjustment expenses incurred by $12.0 million and $9.3 million in 2019 and 2018, respectively. The revisions to the Company’s reserves reflect new information gained by claims adjusters in the normal course of adjusting claims and is reflected in the financial statements when the information becomes available. It is typical for more serious claims to take several years or longer to settle and the Company continually revises estimates as more information about claimants’ medical conditions and potential disability becomes known and the claims get closer to being settled.  Multiple factors can cause loss development both unfavorable and favorable. The favorable loss development we experienced across accident years was largely due to favorable case reserve development from closed claims and claims where the worker had reached maximum medical improvement.

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Comprehensive Income and Accumulated Other Comprehensive Income

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Comprehensive Income and Accumulated Other Comprehensive Income

Note 7. Comprehensive Income and Accumulated Other Comprehensive Income

Comprehensive income was $25.2 million for the three months ended March 31, 2019, compared to $10.3 million for the three months ended March 31, 2018.  The difference between net income as reported and comprehensive income was due to changes in unrealized gains and losses, net of tax on available-for-sale debt securities and in 2019, due to a change in the deferred tax asset valuation allowance of $0.2 million.

Comprehensive income includes net income plus unrealized gains (losses) on our available-for-sale investment securities, net of tax. In reporting comprehensive income on a net basis in the statements of comprehensive income, we used a 21 percent tax rate in 2019 and 2018. The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Beginning balance	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,981			(5,634	)
Amounts reclassified from accumulated other    comprehensive income		11			(214	)
Change in deferred tax valuation allowance		(198	)		—
Net current period other comprehensive    income (loss)		5,794			(5,848	)
Ending balance	$	4,962		$	(2,236	)

The sale or other-than-temporary impairment of an available-for-sale security results in amounts being reclassified from accumulated other comprehensive income to current period net income. The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2019			2018
	(in thousands)
Unrealized gains (losses) on available-for-    sale securities	$	(14	)	$	17		Net realized gains (losses) on investments
		(14	)		17		Income before income taxes
		3			(57	)	Income tax expense
	$	(11	)	$	(40	)	Net income

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Fair Value Measurements

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

Note 8. Fair Value Measurements

The Company carries available-for-sale securities at fair value in our consolidated financial statements and determines fair value measurements and disclosure in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures.

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

Fair value is defined in ASC Topic 820 as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is the price to sell an asset or transfer a liability and, therefore, represents an exit price, not an entry price. Fair value is the exit price in the principal market (or, if lacking a principal market, the most advantageous market) in which the reporting entity would transact. Fair value is a market-based measurement, not an entity-specific measurement, and, as such, is determined based on the assumptions that market participants would use in pricing the asset or liability. The exit price objective of a fair value measurement applies regardless of the reporting entity’s intent and/or ability to sell the asset or transfer the liability at the measurement date.

ASC Topic 820 requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present value amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset, also known as current replacement cost. Valuation techniques used to measure fair value are to be consistently applied.

In ASC Topic 820, inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value (such as a pricing model) and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable:

• Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the reporting entity.

• Unobservable inputs are inputs that reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Valuation techniques used to measure fair value are intended to maximize the use of observable inputs and minimize the use of unobservable inputs. ASC Topic 820 establishes a fair value hierarchy that prioritizes the use of inputs used in valuation techniques into the following three levels:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability, or inputs that are derived principally from or corroborated by observable market data.

• Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs are to be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date.

In general, fair value is based upon quoted market prices, where available. If such quoted market prices are not available, fair value is based upon internally developed models that primarily use, as inputs, observable market-based parameters.

The fair values of the Company’s investments are based upon prices provided by an independent pricing service. The Company has reviewed these prices for reasonableness and has not adjusted any prices received from the independent provider. Securities reported at fair value utilizing Level 1 inputs represent assets whose fair value is determined based upon observable unadjusted quoted market prices for identical assets in active markets. Level 2 securities represent assets whose fair value is determined using observable market information such as previous day trade prices, quotes from less active markets or quoted prices of securities with similar characteristics. There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2019.

At March 31, 2019, assets measured at fair value on a recurring basis are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	227,064	$	—	$	227,064
Corporate bonds		—		171,623		—		171,623
U.S. agency-based mortgage-backed securities		—		12,282		—		12,282
U.S. Treasury securities		60,285		—		—		60,285
Total securities available-for-sale—fixed maturity		60,285		410,969		—		471,254
Equity securities:
Domestic common stock		21,615		—		—		21,615
Total	$	81,900	$	410,969	$	—	$	492,869

At March 31, 2019, assets measured at amortized cost are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	441,473	$	—	$	441,473
Corporate bonds		—		103,139		—		103,139
U.S. agency-based mortgage-backed securities		—		10,164		—		10,164
U.S. Treasury securities		8,325		—		—		8,325
Obligations of U.S. government agencies		—		51,097		—		51,097
Asset-backed securities		—		1,019		—		1,019
Total held-to-maturity	$	8,325	$	606,892	$	—	$	615,217

At December 31, 2018, assets measured at fair value on a recurring basis are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	233,245	$	—	$	233,245
Corporate bonds		—		173,214		—		173,214
U.S. agency-based mortgage-backed securities		—		12,515		—		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		59,756		—		—		59,756
Total securities available-for-sale—fixed maturity	$	59,756	$	418,974	$	—	$	478,730
Equity securities:
Domestic common stock		18,651		—		—		18,651
Total	$	78,407	$	418,974	$	—	$	497,381

At December 31, 2018, assets measured at amortized cost are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	448,947	$	—	$	448,947
Corporate bonds		—		91,369		—		91,369
U.S. agency-based mortgage-backed securities		—		8,349		—		8,349
U.S. Treasury securities		7,111		—		—		7,111
Obligations of U.S. government agencies		—		59,932		—		59,932
Asset-backed securities		—		1,064		—		1,064
Total held-to-maturity	$	7,111	$	609,661	$	—	$	616,772

The Company determines fair value amounts for financial instruments using available third-party market information. When such information is not available, the Company determines the fair value amounts using appropriate valuation methodologies. Nonfinancial instruments such as real estate, property and equipment, deferred policy acquisition costs, deferred income taxes and loss and loss adjustment expense reserves are excluded from the fair value disclosure.

At March 31, 2019, the Company held one security measured at fair value on a nonrecurring basis due to a recognized impairment of $100,000. The security was valued using level 2 inputs and had an adjusted amortized cost of $11,000 at March 31, 2019.  The security was valued at fair value at the time of impairment and is currently being carried at the adjusted amortized cost.  The fair value of the security is $31,000 at March 31, 2019.

Cash and Cash Equivalents —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values, which are characterized as Level 1 assets.

Investments —The fair values for fixed maturity and equity securities are based on prices obtained from an independent pricing service. Equity and treasury securities are characterized as Level 1 assets, as their fair values are based on quoted prices in active markets. Fixed maturity securities, other than treasury securities, are characterized as Level 2 assets, as their fair values are determined using observable market inputs.

Short Term Investments —The carrying amounts reported in the accompanying consolidated balance sheets for these financial instruments approximate their fair values. These securities are characterized as Level 2 assets in the fair value hierarchy.

The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of  March 31, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	604,056	$	615,217	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		471,254		471,254		478,730		478,730
Equity securities		21,615		21,615		18,651		18,651
Short-term investments		64,708		64,708		14,231		14,231
Cash and cash equivalents		34,895		34,895		40,344		40,344

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Treasury Stock

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Treasury Stock

Note 9. Treasury Stock

The Company’s Board of Directors initiated a share repurchase program in February 2010. In October 2016, the Board reauthorized this program with a limit of $25.0 million with no expiration date.  There were no shares repurchased under this program in the three months ended March 31, 2019 and 2018.

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Leases

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Leases

Note 10. Leases

The Company has operating and finance leases for office space and equipment.  Our leases have remaining lease terms of 5 months to 58 months, some of which include options to extend the leases for up to 5 years.  The Company, in determining the present value of lease payments, utilizes either the rate implicit in the lease if that rate is readily determinable or the Company’s incremental secured borrowing rate commensurate with the term of the underlying lease.

Supplemental balance sheet information related to leases is as follows:

	March 31, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	539		Other assets
Operating lease liabilities	$	539		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(133	)
Property and equipment, net	$	52		Property and equipment, net
Finance lease liabilities	$	90		Accounts payable and other liabilities

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Subsequent Events

3 Months Ended

Mar. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

Note 11. Subsequent Events

On April 29, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.25 per share payable on June 21, 2019 to shareholders of record as of June 7, 2019. The Board considers the payment of a regular cash dividend each calendar quarter.

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Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Adopted Accounting Guidance

Adopted Accounting Guidance

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842).  The new guidance requires a lessee to recognize a lease liability and a right of use asset for all leases extending beyond twelve months.  This standard was effective for us beginning in the first quarter of 2019. We elected the new transition method under the transition guidance within the new standard. Therefore, prior comparative periods are not adjusted.  We also elected the package of practical expedients, which among other things, allows us to carryforward the historical lease classification.  We made an accounting policy election not to recognize lease assets and lease liabilities for short-term operating leases. Adoption of the new guidance resulted in the Company recognizing right-of-use assets of $0.4 million and lease liabilities of $0.3 million. The cumulative effect adjustment to the opening balance of retained earnings was minimal. Adoption of this new guidance did not have a material effect on the Company’s consolidated financial statements as the Company does not have any significant leases.  

Prospective Accounting Guidance

Prospective Accounting Guidance

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses.  The new guidance replaces the methodology of credit loss impairment, which currently, delays the recognition of credit losses until a probable loss has been incurred.  The new guidance requires credit losses for securities measured at amortized cost to be determined using current expected credit loss estimates.  These estimates are to be derived from historical, current and reasonable supporting forecasts, including prepayments and estimates, and will be recorded through a valuation account.  The same method will be used for available-for-sale securities, but the valuation account will be limited to the amount by which the fair value is below amortized cost.  The standard is effective for us in the first quarter of 2020.  Implementation of the new guidance requires a modified retrospective approach without restatement, which means the first cumulative adjustment required will be a charge to retained earnings, with subsequent changes in the valuation account reported in the income statement.  The financial statement impact will be determined by the nature of the portfolio held and the economic conditions at the time of implementation.

The Company has formed an internal working group to evaluate the new standard and develop an implementation strategy.  The group has researched data, developed models and methodologies and is working toward implementation.  The Company will continue to monitor and evaluate the financial impact as the implementation date approaches.

All other issued but not yet effective accounting and reporting standards as of March 31, 2019 are either not applicable to the Company or are not expected to have a material impact on the Company.

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Fair Value Measurements (Policies)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements

The Company carries available-for-sale securities at fair value in our consolidated financial statements and determines fair value measurements and disclosure in accordance with FASB ASC Topic 820, Fair Value Measurements and Disclosures.

The Company determines the fair values of its financial instruments based on the fair value hierarchy established in ASC Topic 820, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard defines fair value, describes three levels of inputs that may be used to measure fair value, and expands disclosures about fair value measurements.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings Per Share

The diluted EPS calculation includes potential common shares assumed issued under the treasury stock method, which reflects the potential dilution that would occur if any outstanding options were exercised or restricted stock becomes vested.

	Three Months Ended
	March 31,
	2019		2018
	(in thousands, except share and per share amounts)
Basic EPS:
Net income	$	19,400	$	16,169
Basic weighted average common shares		19,229,134		19,187,136
Basic earnings per common share	$	1.01	$	0.84
Diluted EPS:
Net income	$	19,400	$	16,169
Diluted weighted average common shares:
Weighted average common shares		19,229,134		19,187,136
Stock options and restricted stock		68,902		75,101
Diluted weighted average common shares		19,298,036		19,262,237
Diluted earnings per common share	$	1.01	$	0.84

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Investments (Tables)

3 Months Ended

Mar. 31, 2019

Gross Unrealized Gains and Losses and Amortized Cost and Fair Value of Investments Classified as Held-to-maturity

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	431,247	$	10,468	$	(242	)	$	441,473
Corporate bonds		102,774		520		(155	)		103,139
U.S. agency-based mortgage-backed securities		9,824		396		(56	)		10,164
U.S. Treasury securities and obligations of U.S.    government agencies		59,210		352		(140	)		59,422
Asset-backed securities		1,001		24		(6	)		1,019
Totals	$	604,056	$	11,760	$	(599	)	$	615,217

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as held-to-maturity at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	445,922	$	5,109	$	(2,084	)	$	448,947
Corporate bonds		91,762		62		(455	)		91,369
U.S. agency-based mortgage-backed securities		8,102		327		(80	)		8,349
U.S. Treasury securities and obligations    of U.S. government agencies		67,042		340		(339	)		67,043
Asset-backed securities		1,050		22		(8	)		1,064
Totals	$	613,878	$	5,860	$	(2,966	)	$	616,772

Gross Unrealized Gains and Losses and Cost or Amortized Cost and Fair Value of Investments Classified as Available-for-sale

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at March 31, 2019 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	220,749	$	6,710	$	(395	)	$	227,064
Corporate bonds		170,375		1,465		(217	)		171,623
U.S. agency-based mortgage-backed securities		12,462		—		(180	)		12,282
U.S. Treasury securities and obligations    of U.S. government agencies		61,154		40		(909	)		60,285
Totals	$	464,740	$	8,215	$	(1,701	)	$	471,254

The gross unrealized gains and losses on, and the amortized cost and fair value of, those investments classified as available-for-sale at December 31, 2018 are summarized as follows:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
States and political subdivisions	$	231,848	$	3,515	$	(2,118	)	$	233,245
Corporate bonds		173,904		243		(933	)		173,214
U.S. agency-based mortgage-backed securities		12,835		—		(320	)		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		61,185		—		(1,429	)		59,756
Totals	$	479,772	$	3,758	$	(4,800	)	$	478,730

Gross Unrealized Gains and Losses and Cost of Equity

The gross unrealized gains and losses on, and the cost of equity securities at March 31, 2019 are summarized as follows:

	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	20,769	$	846	$	—	$	21,615
Total equity securities	$	20,769	$	846	$	—	$	21,615

The gross unrealized gains and losses on, and the cost of equity securities at December 31, 2018 are summarized as follows:

	Cost		Gross Gains		Gross Losses			Fair Value
	(in thousands)
Equity securities:
Domestic common stock	$	19,962	$	30	$	(1,341	)	$	18,651
Total equity securities	$	19,962	$	30	$	(1,341	)	$	18,651

Investment Securities Continuous Unrealized Loss Position

The following table summarizes the fair value and gross unrealized losses on securities, aggregated by major investment category and length of time that the individual securities have been in a continuous unrealized loss position:

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
March 31, 2019
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	—	$	—	$	78,248	$	242	$	78,248	$	242
Corporate bonds		3,728		5		37,828		150		41,556		155
U.S. agency-based mortgage-backed securities		—		—		2,248		56		2,248		56
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		40,587		140		40,587		140
Asset-backed securities		—		—		510		6		510		6
Total held-to-maturity securities		3,728		5		159,421		594		163,149		599
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	1,957	$	1	$	27,768	$	394	$	29,725	$	395
Corporate bonds		5,734		7		75,651		210		81,385		217
U.S. agency-based mortgage-backed securities		—		—		12,281		180		12,281		180
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		56,466		909		56,466		909
Total available-for-sale securities		7,691		8		172,166		1,693		179,857		1,701
Total	$	11,419	$	13	$	331,587	$	2,287	$	343,006	$	2,300

	Less Than 12 Months				12 Months or Greater				Total
	Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses		Fair Value of Investments with Unrealized Losses		Gross Unrealized Losses
	(in thousands)
December 31, 2018
Held-to-Maturity
Fixed maturity securities:
States and political subdivisions	$	28,369	$	59	$	180,550	$	2,025	$	208,919	$	2,084
Corporate bonds		17,448		36		48,315		419		65,763		455
U.S. agency-based mortgage-backed securities		—		—		2,287		80		2,287		80
U.S. Treasury securities and obligations    of U.S. government agencies		2,865		4		46,486		335		49,351		339
Asset-backed securities		—		—		525		8		525		8
Total held-to-maturity securities		48,682		99		278,163		2,867		326,845		2,966
Available-for-Sale
Fixed maturity securities:
States and political subdivisions	$	16,109	$	81	$	76,255	$	2,037	$	92,364	$	2,118
Corporate bonds		59,099		279		70,306		654		129,405		933
U.S. agency-based mortgage-backed securities		—		—		12,515		320		12,515		320
U.S. Treasury securities and obligations    of U.S. government agencies		—		—		59,756		1,429		59,756		1,429
Total available-for-sale securities		75,208		360		218,832		4,440		294,040		4,800
Total	$	123,890	$	459	$	496,995	$	7,307	$	620,885	$	7,766

Held-to-Maturity Securities [Member]

Summary of Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as held-to-maturity at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	67,547	$	67,672
After one year through five years		248,804		251,430
After five years through ten years		86,353		88,108
After ten years		190,527		196,824
U.S. agency-based mortgage-backed securities		9,824		10,164
Asset-backed securities		1,001		1,019
Totals	$	604,056	$	615,217

Available-for-Sale Securities [Member]

Summary of Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, by Contractual Maturity

A summary of the amortized cost and fair value of investments in fixed maturity securities, classified as available-for-sale at March 31, 2019, by contractual maturity, is as follows:

	Amortized Cost		Fair Value
	(in thousands)
Maturity:
Within one year	$	68,592	$	68,518
After one year through five years		159,000		159,135
After five years through ten years		47,350		48,152
After ten years		177,336		183,167
U.S. agency-based mortgage-backed securities		12,462		12,282
Totals	$	464,740	$	471,254

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Loss Reserves (Tables)

3 Months Ended

Mar. 31, 2019

Insurance [Abstract]

Liability for Unpaid Loss and Loss Adjustment Expenses, Net of Related Amounts Recoverable from Reinsurers

The following table provides the Company’s liability for unpaid loss and loss adjustment expenses, net of related amounts recoverable from reinsurers, for the three months ended March 31, 2019 and 2018:

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Balance, beginning of period	$	798,409		$	771,845
Less amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		107,216			84,889
Net balance, beginning of period		691,193			686,956
Add incurred related to:
Current accident year		61,587			62,426
Prior accident years		(11,974	)		(9,264	)
Total incurred		49,613			53,162
Less paid related to:
Current accident year		3,381			4,686
Prior accident years		43,180			47,354
Total paid		46,561			52,040
Net balance, end of period		694,245			688,078
Add amounts recoverable from reinsurers    on unpaid loss and loss adjustment expenses		106,335			89,220
Balance, end of period	$	800,580		$	777,298

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Comprehensive Income and Accumulated Other Comprehensive Income (Tables)

3 Months Ended

Mar. 31, 2019

Equity [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Income (AOCI)

The following table illustrates the changes in the balance of each component of accumulated other comprehensive income for each period presented in the interim financial statements.

	Three Months Ended March 31,
	2019			2018
	(in thousands)
Beginning balance	$	(832	)	$	3,612
Other comprehensive income (loss) before    reclassification		5,981			(5,634	)
Amounts reclassified from accumulated other    comprehensive income		11			(214	)
Change in deferred tax valuation allowance		(198	)		—
Net current period other comprehensive    income (loss)		5,794			(5,848	)
Ending balance	$	4,962		$	(2,236	)

Reclassification Out of Accumulated Other Comprehensive Income

The effects of reclassifications out of accumulated other comprehensive income by the respective line items of net income are presented in the following table.

Component of Accumulated Other Comprehensive Income	Three Months Ended March 31,						Affected line item in the statement of income
	2019			2018
	(in thousands)
Unrealized gains (losses) on available-for-    sale securities	$	(14	)	$	17		Net realized gains (losses) on investments
		(14	)		17		Income before income taxes
		3			(57	)	Income tax expense
	$	(11	)	$	(40	)	Net income

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on Recurring Basis

At March 31, 2019, assets measured at fair value on a recurring basis are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as a part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	227,064	$	—	$	227,064
Corporate bonds		—		171,623		—		171,623
U.S. agency-based mortgage-backed securities		—		12,282		—		12,282
U.S. Treasury securities		60,285		—		—		60,285
Total securities available-for-sale—fixed maturity		60,285		410,969		—		471,254
Equity securities:
Domestic common stock		21,615		—		—		21,615
Total	$	81,900	$	410,969	$	—	$	492,869

At December 31, 2018, assets measured at fair value on a recurring basis are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Financial instruments carried at fair value, classified as part of:
Securities available-for-sale—fixed maturity:
States and political subdivisions	$	—	$	233,245	$	—	$	233,245
Corporate bonds		—		173,214		—		173,214
U.S. agency-based mortgage-backed securities		—		12,515		—		12,515
U.S. Treasury securities and obligations    of U.S. government agencies		59,756		—		—		59,756
Total securities available-for-sale—fixed maturity	$	59,756	$	418,974	$	—	$	478,730
Equity securities:
Domestic common stock		18,651		—		—		18,651
Total	$	78,407	$	418,974	$	—	$	497,381

Schedule of Assets Measured at Amortized Cost

At March 31, 2019, assets measured at amortized cost are summarized below:

	March 31, 2019
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	441,473	$	—	$	441,473
Corporate bonds		—		103,139		—		103,139
U.S. agency-based mortgage-backed securities		—		10,164		—		10,164
U.S. Treasury securities		8,325		—		—		8,325
Obligations of U.S. government agencies		—		51,097		—		51,097
Asset-backed securities		—		1,019		—		1,019
Total held-to-maturity	$	8,325	$	606,892	$	—	$	615,217

At December 31, 2018, assets measured at amortized cost are summarized below:

	December 31, 2018
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
	(in thousands)
Securities held-to-maturity—fixed maturity:
States and political subdivisions	$	—	$	448,947	$	—	$	448,947
Corporate bonds		—		91,369		—		91,369
U.S. agency-based mortgage-backed securities		—		8,349		—		8,349
U.S. Treasury securities		7,111		—		—		7,111
Obligations of U.S. government agencies		—		59,932		—		59,932
Asset-backed securities		—		1,064		—		1,064
Total held-to-maturity	$	7,111	$	609,661	$	—	$	616,772

Summary of Carrying Values and Corresponding Fair Values for Financial Instruments

The following table summarizes the carrying values and corresponding fair values for financial instruments:

	As of  March 31, 2019				As of  December 31, 2018
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(in thousands)
Assets:
Fixed maturity securities—held-to-maturity	$	604,056	$	615,217	$	613,878	$	616,772
Fixed maturity securities—available-for-sale		471,254		471,254		478,730		478,730
Equity securities		21,615		21,615		18,651		18,651
Short-term investments		64,708		64,708		14,231		14,231
Cash and cash equivalents		34,895		34,895		40,344		40,344

XML

Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases [Abstract]

Schedule of Supplemental Balance Sheet Information Related to Leases

Supplemental balance sheet information related to leases is as follows:

	March 31, 2019			Balance Sheet Classification
	(in thousands)
Operating leases:
Operating lease right-of-use assets	$	539		Other assets
Operating lease liabilities	$	539		Accounts payable and other liabilities
Finance leases:
Finance lease right-of-use assets	$	185
Finance lease accumulated amortization    right-of-use assets		(133	)
Property and equipment, net	$	52		Property and equipment, net
Finance lease liabilities	$	90		Accounts payable and other liabilities

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Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Percentage of comparable consolidated amounts	95.00%	95.00%
Right-of-use assets	$ 539
Operating lease liabilities	539
ASU 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Right-of-use assets	400
Operating lease liabilities	$ 300

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Stock Options and Restricted Stock - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) Incentive_Plan shares	Mar. 31, 2018 USD ($) shares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Number of equity incentive plans | Incentive_Plan	3
Stock options exercised, Shares | shares	5,000	15,000
Proceeds from stock option exercises	$ 20,000	$ 68,000
Share-based compensation expense	$ 600,000	$ 17,800

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Earnings Per Share - Calculation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Earnings Per Share Basic [Abstract]
Net income	$ 19,400	$ 16,169
Basic weighted average common shares	19,229,134	19,187,136
Basic earnings per common share	$ 1.01	$ 0.84
Net income	$ 19,400	$ 16,169
Weighted average common shares	19,229,134	19,187,136
Stock options and restricted stock	68,902	75,101
Diluted weighted average common shares	19,298,036	19,262,237
Diluted earnings per common share	$ 1.01	$ 0.84

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Investments - Gross Unrealized Gains and Losses and Amortized Cost and Fair Value of Investments Classified as Held-to-Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	$ 604,056	$ 613,878
Held-to-Maturity, Gross Unrealized Gains	11,760	5,860
Held-to-Maturity, Gross Unrealized Losses	(599)	(2,966)
Held-to-Maturity, Fair Value	615,217	616,772
States and Political Subdivisions [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	431,247	445,922
Held-to-Maturity, Gross Unrealized Gains	10,468	5,109
Held-to-Maturity, Gross Unrealized Losses	(242)	(2,084)
Held-to-Maturity, Fair Value	441,473	448,947
Corporate Bonds [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	102,774	91,762
Held-to-Maturity, Gross Unrealized Gains	520	62
Held-to-Maturity, Gross Unrealized Losses	(155)	(455)
Held-to-Maturity, Fair Value	103,139	91,369
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	9,824	8,102
Held-to-Maturity, Gross Unrealized Gains	396	327
Held-to-Maturity, Gross Unrealized Losses	(56)	(80)
Held-to-Maturity, Fair Value	10,164	8,349
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	59,210	67,042
Held-to-Maturity, Gross Unrealized Gains	352	340
Held-to-Maturity, Gross Unrealized Losses	(140)	(339)
Held-to-Maturity, Fair Value	59,422	67,043
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost, Totals	1,001	1,050
Held-to-Maturity, Gross Unrealized Gains	24	22
Held-to-Maturity, Gross Unrealized Losses	(6)	(8)
Held-to-Maturity, Fair Value	$ 1,019	$ 1,064

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Investments - Gross Unrealized Gains and Losses and Cost or Amortized Cost and Fair Value of Investments Classified as Available-for-Sale (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Totals, Amortized Cost	$ 464,740	$ 479,772
Totals, Gross Unrealized Gains	8,215	3,758
Totals, Gross Unrealized Losses	(1,701)	(4,800)
Totals, Fair Value	471,254	478,730
States and Political Subdivisions [Member]
Investment [Line Items]
Totals, Amortized Cost	220,749	231,848
Totals, Gross Unrealized Gains	6,710	3,515
Totals, Gross Unrealized Losses	(395)	(2,118)
Totals, Fair Value	227,064	233,245
Corporate Bonds [Member]
Investment [Line Items]
Totals, Amortized Cost	170,375	173,904
Totals, Gross Unrealized Gains	1,465	243
Totals, Gross Unrealized Losses	(217)	(933)
Totals, Fair Value	171,623	173,214
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Totals, Amortized Cost	12,462	12,835
Totals, Gross Unrealized Losses	(180)	(320)
Totals, Fair Value	12,282	12,515
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Investment [Line Items]
Totals, Amortized Cost	61,154	61,185
Totals, Gross Unrealized Gains	40
Totals, Gross Unrealized Losses	(909)	(1,429)
Totals, Fair Value	$ 60,285	$ 59,756

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Investments - Gross Unrealized Gains and Losses and Cost of Equity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Equity securities, Cost	$ 20,769	$ 19,962
Equity securities, Gross Unrealized Gains	846	30
Equity securities, Gross Unrealized Losses		(1,341)
Equity securities, Fair Value	21,615	18,651
Domestic Common Stock [Member]
Investment [Line Items]
Equity securities, Cost	20,769	19,962
Equity securities, Gross Unrealized Gains	846	30
Equity securities, Gross Unrealized Losses		(1,341)
Equity securities, Fair Value	$ 21,615	$ 18,651

XML

Investments - Summary of Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, Classified as Held-to-Maturity (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Within one year, Amortized Cost	$ 67,547
After one year through five years, Amortized Cost	248,804
After five years through ten years, Amortized Cost	86,353
After ten years, Amortized Cost	190,527
Held-to-maturity, Amortized Cost, Totals	604,056	$ 613,878
Within one year, Fair Value	67,672
After one year through five years, Fair Value	251,430
After five years through ten years, Fair Value	88,108
After ten years, Fair Value	196,824
Held-to-maturity, Fair Value, Totals	615,217	616,772
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	9,824
Held-to-maturity, Amortized Cost, Totals	9,824	8,102
Held-to-maturity, Fair Value	10,164
Held-to-maturity, Fair Value, Totals	10,164	8,349
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity, Amortized Cost	1,001
Held-to-maturity, Amortized Cost, Totals	1,001	1,050
Held-to-maturity, Fair Value	1,019
Held-to-maturity, Fair Value, Totals	$ 1,019	$ 1,064

XML

Investments - Summary of Amortized Cost and Fair Value of Investments in Fixed Maturity Securities, Classified as Available-for-Sale (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Within one year, Amortized Cost	$ 68,592
After one year through five years, Amortized Cost	159,000
After five years through ten years, Amortized Cost	47,350
After ten years, Amortized Cost	177,336
Totals, Amortized Cost	464,740	$ 479,772
Within one year, Fair Value	68,518
After one year through five years, Fair Value	159,135
After five years through ten years, Fair Value	48,152
After ten years, Fair Value	183,167
Total, Fair Value	471,254	478,730
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Available-for-sale securities, Amortized Cost	12,462
Totals, Amortized Cost	12,462	12,835
Available-for-sale securities, Fair value	12,282
Total, Fair Value	$ 12,282	$ 12,515

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Investments - Investment Securities Continuous Unrealized Loss Position (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months	$ 3,728	$ 48,682
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months	5	99
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	159,421	278,163
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	594	2,867
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	163,149	326,845
Held-to-maturity securities, Gross Unrealized Losses, Total	599	2,966
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	7,691	75,208
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	8	360
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	172,166	218,832
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	1,693	4,440
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	179,857	294,040
Available-for Sale, Gross Unrealized Losses, Total	1,701	4,800
Fair Value of Investments with Unrealized Losses, Less Than 12 months	11,419	123,890
Gross Unrealized Loss, Less Than 12 Months	13	459
Fair Value of Investments with Unrealized Losses, 12 Months or Greater	331,587	496,995
Gross Unrealized Losses, 12 Months or Greater	2,287	7,307
Fair Value of Investments with Unrealized Losses, Total	343,006	620,885
Gross Unrealized Losses, Total	2,300	7,766
States and Political Subdivisions [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months		28,369
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months		59
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	78,248	180,550
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	242	2,025
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	78,248	208,919
Held-to-maturity securities, Gross Unrealized Losses, Total	242	2,084
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	1,957	16,109
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	1	81
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	27,768	76,255
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	394	2,037
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	29,725	92,364
Available-for Sale, Gross Unrealized Losses, Total	395	2,118
Corporate Bonds [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months	3,728	17,448
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months	5	36
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	37,828	48,315
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	150	419
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	41,556	65,763
Held-to-maturity securities, Gross Unrealized Losses, Total	155	455
Available-for Sale, Fair value of Investments with Unrealized Losses, Less Than 12 Months	5,734	59,099
Available-for Sale, Gross Unrealized Losses, Less Than 12 Months	7	279
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	75,651	70,306
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	210	654
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	81,385	129,405
Available-for Sale, Gross Unrealized Losses, Total	217	933
U.S. Agency-Based Mortgage-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	2,248	2,287
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	56	80
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	2,248	2,287
Held-to-maturity securities, Gross Unrealized Losses, Total	56	80
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	12,281	12,515
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	180	320
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	12,281	12,515
Available-for Sale, Gross Unrealized Losses, Total	180	320
U.S. Treasury Securities and Obligations of U.S. Government Agencies [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Less Than 12 Months		2,865
Held-to-maturity securities, Gross Unrealized Losses, Less Than 12 Months		4
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	40,587	46,486
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	140	335
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	40,587	49,351
Held-to-maturity securities, Gross Unrealized Losses, Total	140	339
Available-for Sale, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	56,466	59,756
Available-for Sale, Gross Unrealized Losses, 12 Months or Greater	909	1,429
Available-for Sale, Fair Value of Investments with Unrealized Losses, Total	56,466	59,756
Available-for Sale, Gross Unrealized Losses, Total	909	1,429
Asset-Backed Securities [Member]
Investment [Line Items]
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, 12 Months or Greater	510	525
Held-to-maturity securities, Gross Unrealized Losses, 12 Months or Greater	6	8
Held-to-maturity securities, Fair Value of Investments with Unrealized Losses, Total	510	525
Held-to-maturity securities, Gross Unrealized Losses, Total	$ 6	$ 8

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Investments - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019 USD ($) Security	Mar. 31, 2018 USD ($)
Investments Schedule [Abstract]
Individual fixed maturity held in unrealized loss position | Security	184
Individual fixed maturity held in unrealized loss position longer than 12 months | Security	176
Net unrealized gains (losses) on equity securities	$ 2,200,000	$ (400,000)
Impairment losses recognized	0	0
Net realized gain on sale of equity and fixed maturity securities classified as available-for-sale	$ 59,000	$ (31,000)

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Income Taxes - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Valuation allowance	$ 200,000
Company recognized uncertain tax positions	$ 0	$ 0

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Loss Reserves - Liability for Unpaid Loss and Loss Adjustment Expenses, Net of Related Amounts Recoverable from Reinsurers (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Roll Forward In Liability For Unpaid Claims And Claims Adjustment Expense [Abstract]
Balance, beginning of period	$ 798,409	$ 771,845
Less amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses	107,216	84,889
Net balance, beginning of period	691,193	686,956
Add incurred related to:
Current accident year	61,587	62,426
Prior accident years	(11,974)	(9,264)
Total incurred	49,613	53,162
Less paid related to:
Current accident year	3,381	4,686
Prior accident years	43,180	47,354
Total paid	46,561	52,040
Net balance, end of period	694,245	688,078
Add amounts recoverable from reinsurers on unpaid loss and loss adjustment expenses	106,335	89,220
Balance, end of period	$ 800,580	$ 777,298

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Loss Reserves - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Insurance [Abstract]
Loss and LAE Related to Prior Periods	$ 11,974	$ 9,264

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]
Comprehensive income	$ 25,194	$ 10,321
Change in deferred tax asset valuation allowance	$ 198
Comprehensive income tax rate	21.00%	21.00%

XML

Comprehensive Income and Accumulated Other Comprehensive Income - Schedule of Changes in Accumulated Other Comprehensive Income (AOCI) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	$ 409,762
Change in deferred tax valuation allowance	(198)
Ending Balance	430,405
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning Balance	(832)	$ 3,612
Other comprehensive income (loss) before reclassification	5,981	(5,634)
Amounts reclassified from accumulated other comprehensive income	11	(214)
Change in deferred tax valuation allowance	(198)
Net current period other comprehensive income (loss)	5,794	(5,848)
Ending Balance	$ 4,962	$ (2,236)

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Comprehensive Income and Accumulated Other Comprehensive Income - Reclassification Out of Accumulated Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on available-for-sale securities	$ 2,200	$ (400)
Income before income taxes	23,809	19,414
Income tax expense	(4,409)	(3,245)
Net income	19,400	16,169
Unrealized Gains (losses) on Available-for-Sale Securities [Member] | Reclassification Out of Accumulated Other Comprehensive Income [Member]
Reclassification Adjustment Out Of Accumulated Other Comprehensive Income [Line Items]
Unrealized gains (losses) on available-for-sale securities	(14)	17
Income before income taxes	(14)	17
Income tax expense	3	(57)
Net income	$ (11)	$ (40)

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Fair Value Measurements - Schedule of Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	$ 471,254	$ 478,730
Equity securities, Fair Value	21,615	18,651
Fair Value, Measurements, Recurring [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	471,254	478,730
Total	492,869	497,381
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	60,285	59,756
Total	81,900	78,407
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	410,969	418,974
Total	410,969	418,974
Fair Value, Measurements, Recurring [Member] | States and Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	227,064	233,245
Fair Value, Measurements, Recurring [Member] | States and Political Subdivisions [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	227,064	233,245
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	171,623	173,214
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	171,623	173,214
Fair Value, Measurements, Recurring [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	12,282	12,515
Fair Value, Measurements, Recurring [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	12,282	12,515
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	60,285	59,756
Fair Value, Measurements, Recurring [Member] | U.S. Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale—fixed maturity, Fair Value	60,285	59,756
Fair Value, Measurements, Recurring [Member] | Common Stock [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity securities, Fair Value	21,615	18,651
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Equity securities, Fair Value	$ 21,615	$ 18,651

XML

Fair Value Measurements - Schedule of Assets Measured at Amortized Cost (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	$ 615,217	$ 616,772
States and Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	441,473	448,947
Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	103,139	91,369
U.S. Agency-Based Mortgage-Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	10,164	8,349
U.S. Treasury Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	8,325	7,111
Obligations of U.S. Government Agencies [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	51,097	59,932
Asset-Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	1,019	1,064
Fair Value, Inputs, Level 1 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	8,325	7,111
Fair Value, Inputs, Level 1 [Member] | U.S. Treasury Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	8,325	7,111
Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	606,892	609,661
Fair Value, Inputs, Level 2 [Member] | States and Political Subdivisions [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	441,473	448,947
Fair Value, Inputs, Level 2 [Member] | Corporate Bonds [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	103,139	91,369
Fair Value, Inputs, Level 2 [Member] | U.S. Agency-Based Mortgage-Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	10,164	8,349
Fair Value, Inputs, Level 2 [Member] | Obligations of U.S. Government Agencies [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	51,097	59,932
Fair Value, Inputs, Level 2 [Member] | Asset-Backed Securities [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held-to-maturity-fixed maturity, Fair Value	$ 1,019	$ 1,064

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Fair Value Measurements - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Securities held to maturity, carrying value	$ 604,056,000	$ 613,878,000
Fair Value, Measurements, Nonrecurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Recognized impairment	100,000
Securities held to maturity, carrying value	11,000
Securities held to maturity, fair value	$ 31,000

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Fair Value Measurements - Summary of Carrying Values and Corresponding Fair Values for Financial Instruments (Detail) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—held to maturity	$ 604,056	$ 613,878
Fixed maturity securities—held to maturity	615,217	616,772
Fixed maturity securities—available-for-sale	471,254	478,730
Equity securities	21,615	18,651
Short-term investments	64,708	14,231
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—held to maturity	615,217	616,772
Fixed maturity securities—available-for-sale	471,254	478,730
Equity securities	21,615	18,651
Short-term investments	64,708	14,231
Cash and cash equivalents	34,895	40,344
Carrying Amount [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fixed maturity securities—available-for-sale	471,254	478,730
Equity securities	21,615	18,651
Short-term investments	64,708	14,231
Cash and cash equivalents	$ 34,895	$ 40,344

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Treasury Stock - Additional Information (Detail) - USD ($)	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Oct. 31, 2016
Equity [Abstract]
Share repurchase program, new limit amount			$ 25,000,000
Shares repurchased under the program	0	0

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Leases - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2019
Lessee Lease Description [Line Items]
Operating lease, existence of option to extend	true
Finance lease, existence of option to extend	true
Minimum [Member]
Lessee Lease Description [Line Items]
Operating lease, remaining lease term	5 months
Finance lease, remaining lease term	5 months
Maximum [Member]
Lessee Lease Description [Line Items]
Operating lease, remaining lease term	58 months
Finance lease, remaining lease term	58 months
Operating lease, options to extend lease term	5 years
Finance lease, options to extend lease term	5 years

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Leases - Schedule of Supplemental Balance Sheet Information Related to Leases (Detail) $ in Thousands	Mar. 31, 2019 USD ($)
Leases [Abstract]
Operating lease right-of-use assets	$ 539
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssets
Operating lease liabilities	$ 539
Operating Lease, Liability, Statement of Financial Position [Extensible List]	amsf:AccountsPayableAndOtherLiabilities
Finance lease right-of-use assets	$ 185
Finance lease accumulated amortization right-of-use assets	(133)
Property and equipment, net	$ 52
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:PropertyPlantAndEquipmentNet
Finance lease liabilities	$ 90
Finance Lease, Liability, Statement of Financial Position [Extensible List]	amsf:AccountsPayableAndOtherLiabilities

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Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] - Dividend Declared [Member]	Apr. 29, 2019 $ / shares
Subsequent Event [Line Items]
Cash dividend per share	$ 0.25
Date of payment to shareholders entitled to dividends	Jun. 21, 2019
Date of record of shareholders entitled to dividends	Jun. 07, 2019